Orion Office REIT (US:ONL)2022-08-03 20:41Property Portfolio - As of June 30, 2022, the company owns 91 office properties with a total of 10.4 million leasable square feet and an occupancy rate of 86.4%[203] - The weighted-average remaining lease term for the properties is 4.0 years, and including the company's joint venture, the total leasable square feet increases to 10.5 million with an occupancy rate of 86.7%[203] - The occupancy rate as of June 30, 2022, was 86.7%, down from 94.4% when including VEREIT Office Assets[232] - As of June 30, 2022, the company had a total of 91 operating properties with an aggregate of 10.5 million rentable square feet[223] - As of June 30, 2022, the company had 91 office properties with an aggregate of 10.4 million leasable square feet, compared to 40 properties with approximately 3.0 million leasable square feet at June 30, 2021[287] Financial Performance - Total revenues for the three months ended June 30, 2022, were $52.8 million, an increase of $40.3 million compared to the same period in 2021[231] - Net loss for the three months ended June 30, 2022, was $(15.6) million, resulting in a basic and diluted net loss per share of $(0.27)[227] - Funds from operations (FFO) attributable to common stockholders for the three months ended June 30, 2022, were $26.5 million, or $0.47 per diluted share[227] - The company reported a net loss attributable to common stockholders of $15.6 million for the three months ended June 30, 2022, compared to a net income of $4.3 million in 2021[252] - Funds from Operations (FFO) attributable to common stockholders was $26.5 million for the three months ended June 30, 2022, compared to $10.3 million in 2021[252] - Core Funds from Operations (Core FFO) attributable to common stockholders was $26.8 million for the three months ended June 30, 2022, compared to $10.3 million in 2021[252] Debt and Financing - Total consolidated debt outstanding was approximately $601.0 million as of June 30, 2022, consisting of a $355.0 million CMBS Loan, a $175.0 million Term Loan Facility, and $71.0 million under a $425.0 million Revolving Facility[258] - The company refinanced a $355.0 million Bridge Facility with a CMBS Loan at a fixed rate of 4.971%, maturing on February 11, 2027[222] - The company refinanced the Bridge Facility in full with a $355.0 million CMBS Loan in February 2022[257] - The ratio of total indebtedness to total asset value was 32.5%, well below the required maximum of 60%[264] - The ratio of adjusted EBITDA to fixed charges was 4.89x, exceeding the required minimum of 1.5x[264] - The company obtained a $355.0 million fixed rate CMBS Loan with an interest rate of 4.971% per annum, maturing on February 11, 2027[266] - Monthly payments for the CMBS Loan are interest-only, with all principal due at maturity[267] - The company has $175.0 million of variable rate debt on the Credit Facility Term Loan, effectively fixed through interest rate swap agreements[285] - The company intends to maintain a net worth of no less than $355.0 million and liquid assets of no less than $10.0 million as part of the CMBS Loan Agreement[271] Operational Risks - The company faces risks from rising interest rates, inflation, and potential tenant defaults, which could materially affect its financial condition and results[197] - The company is exposed to risks associated with the management of its joint ventures and the integration of acquired assets[204] - Credit risk is concentrated among tenants engaged in similar business activities or geographic regions, which could materially affect cash flows[298] Dividends and Shareholder Returns - The company declared quarterly dividends of $0.10 per share for the first and second quarters of 2022[221] - The company declared a quarterly dividend of $0.10 per share for the first quarter of 2022, paid on April 15, 2022[281] Cash Flow and Expenses - Net cash provided by operating activities increased by $30.4 million to $51,794 million for the six months ended June 30, 2022, compared to $21,348 million in the same period of 2021[287] - Net cash provided by investing activities increased by $1.4 million to $1,284 million for the six months ended June 30, 2022, primarily due to proceeds from real estate dispositions[288] - Net cash used in financing activities increased by $3.2 million to $27,831 million for the six months ended June 30, 2022, primarily due to net repayments of the revolving credit facility and dividends to stockholders[289] - Property operating expenses increased by $13.7 million during the three months ended June 30, 2022, primarily due to the increase in portfolio size[235] Asset Management - Impairments recorded during the three months ended June 30, 2022, amounted to $7.8 million, reflecting management's identification of non-core assets for potential sale[238] - The company closed on the sale of one non-core office property for net proceeds of approximately $3.5 million during the three months ended June 30, 2022[222] Market Conditions - A 100 basis point increase in market interest rates would decrease the fair value of fixed-rate debt by $13.6 million[292] - A 100 basis point increase in variable interest rates would decrease the fair value of the variable-rate debt swapped-to-fixed by $0.2 million[293] - The company’s interest rate swaps had a fair value resulting in net assets of $5.9 million as of June 30, 2022[295]