Orion Properties Inc.

Previous wording

•the risk of rising interest rates, including that our borrowing costs may increase and we may be unable to extend or refinance our debt obligations on favorable terms and in a timely manner, or at all;

Current wording

•the risk of rising interest rates, including that our borrowing costs may increase and we may be unable to extend or refinance our debt obligations on favorable terms and in a timely manner, or at all, including our Revolving Facility which has no remaining extension options;

Previous wording

•our assumption concerning tenant utilization and renewal probability of dedicated use assets, and our ability to successfully execute on our strategy to shift our portfolio concentration over time away from traditional office properties, towards more dedicated use assets;

Current wording

•our assumptions concerning tenant utilization and renewal probability of dedicated use assets, and our ability to successfully execute on our strategy to shift our portfolio concentration over time away from traditional office properties, towards more dedicated use assets;

Previous wording

All forward-looking statements should be read in light of the risks identified in Part I, Item 1A. Risk Factors in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

Current wording

All forward-looking statements should be read in light of the risks identified in Part I, Item 1A. Risk Factors in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, as may be updated from time to time in any of the Company’s Quarterly Reports filed during the year ended December 31, 2025.

Previous wording

Under a “net lease”, the tenant occupying the leased property (usually as a single tenant) does so in much the same manner as if the tenant were the owner of the property. There are various forms of net leases, most typically classified as triple net or double net. Triple net leases typically require that the tenant pay all expenses associated with the property (e.g., real estate taxes, insurance, maintenance and repairs in accordance with the lease terms). Double net leases typically require that the tenant pay all operating expenses associated with the property (e.g., real estate taxes, insurance and maintenance), but excludes some or all major repairs (e.g., roof, structure and parking lot, in each case, as further defined in the applicable lease). Accordingly, the owner receives the rent “net” of these expenses, rendering the cash flow associated with the lease predictable for the term of the lease.

Current wording

Under a “net lease”, the tenant occupying the leased property (usually as a single tenant) does so in much the same manner as if the tenant was the owner of the property. There are various forms of net leases, most typically classified as triple net or double net. Triple net leases typically require that the tenant pay all expenses associated with the property (e.g., real estate taxes, insurance, maintenance and repairs in accordance with the lease terms). Double net leases typically require that the tenant pay all operating expenses associated with the property (e.g., real estate taxes, insurance and maintenance), but excludes some or all major repairs (e.g., roof, structure and parking lot, in each case, as further defined in the applicable lease). Accordingly, the owner receives the rent “net” of these expenses, rendering the cash flow associated with the lease predictable for the term of the lease.

Previous wording

As of March 31, 2025, we owned and operated 68 operating properties with an aggregate of 7.8 million leasable square feet located in 29 states with an occupancy rate of 73.7% and a weighted average remaining lease term of 5.2 years. As of March 31, 2025, we had eight properties designated as non-operating properties. We also owned a 20% equity interest in the Arch Street Joint Venture, which as of March 31, 2025, owned a portfolio of six properties with an aggregate of 1.0 million leasable square feet located in six states with an occupancy rate of 100% and a weighted average remaining lease term of 7.1 years. Including our proportionate share of leasable square feet and annualized base rent from the Arch Street Joint Venture, we owned an aggregate of 8.0 million leasable square feet with an occupancy rate of 74.3%, or 75.2% adjusted for three operating properties that are currently under agreements to be sold or have been sold following March 31, 2025, and a weighted average remaining lease term of 5.2 years, as of March 31, 2025.

Current wording

As of June 30, 2025, we owned and operated 66 operating properties with an aggregate of 7.6 million leasable square feet located in 29 states with an occupancy rate of 76.8% and a weighted average remaining lease term of 5.5 years. As of June 30, 2025, we had six properties designated as non-operating properties. We also owned a 20% equity interest in the Arch Street Joint Venture, which as of June 30, 2025, owned a portfolio of six properties with an aggregate of 1.0 million leasable square feet located in six states with an occupancy rate of 100% and a weighted average remaining lease term of 6.8 years. Including our proportionate share of leasable square feet and annualized base rent from the Arch Street Joint Venture, we owned an aggregate of 7.8 million leasable square feet with an occupancy rate of 77.4%, or 77.7% adjusted for five traditional office operating properties that are currently under agreements to be sold, and a weighted average remaining lease term of 5.5 years, as of June 30, 2025.

Previous wording

Our portfolio comprises primarily single-tenant leases, and tenant retention remains a significant challenge, as we have faced and will continue to face significant lease expirations the next few years. For example, leases representing approximately 11.3% and 11.1% of our annualized base rent are scheduled to expire during the remainder of 2025 and in 2026, respectively, and we may be unable to renew leases or find replacement tenants. Certain changes in office space utilization, including increased remote and hybrid work arrangements and tenants consolidating their real estate footprint, continue to impact the office leasing market. The utilization and demand for office space continue to face headwinds and the duration and ultimate impact of current trends on the demands for office space at our properties remains uncertain and subject to change. Accordingly, we do not yet know what the full extent of the impacts will be on our or our tenants’ businesses and operations or the long-term outlook for leasing our properties. Higher interest rates, inflationary pressures, geopolitical hostilities and tensions, changes in United States trade policy and the imposition of new tariffs and concerns that the United States economy may enter an economic recession have caused disruptions in the financial markets and these factors could adversely affect our and our tenants’ financial condition and the ability or willingness of our current and prospective tenants to renew their leases, enter into new leases or pay rent to us.

Current wording

Our portfolio comprises primarily single-tenant leases, and tenant retention remains a significant challenge, as we have faced and will continue to face significant lease expirations the next few years. For example, leases representing approximately 5.6% and 10.7% of our annualized base rent are scheduled to expire during the remainder of 2025 and in 2026, respectively, and we may be unable to renew leases or find replacement tenants. Certain changes in office space utilization, including increased remote and hybrid work arrangements and tenants consolidating their real estate footprint, continue to impact the office leasing market. The utilization and demand for office space continue to face headwinds and the duration and ultimate impact of current trends on the demand for office space at our properties remains uncertain and subject to change. Accordingly, we do not yet know what the full extent of the impacts will be on our or our tenants’ businesses and operations or the long-term outlook for leasing our properties. Higher interest rates, inflationary pressures, geopolitical hostilities and tensions, changes in United States trade policy and the imposition of new tariffs and concerns that the United States economy may enter an economic recession have caused disruptions in the financial markets and these factors could adversely affect our and our tenants’ financial condition and the ability or willingness of our current and prospective tenants to renew their leases, enter into new leases or pay rent to us.

Previous wording

Our leasing and asset disposition activity since the completion of our distribution from Realty Income continues to be adversely impacted by a variety of market and property specific conditions. The COVID-19 pandemic and its aftermath has significantly reduced demand for office space and changes in space usage in the office leasing market, as tenants seek to attract employees back to the office, in newer, renovated properties with more amenities. As of March 31, 2025, 63.7%, 31.1% and 5.2% of our properties by rentable square feet were classified as class A, class B and class C, respectively, as determined primarily by the most recent appraisals of the properties. As of March 31, 2025, our class B and class C properties collectively included the following 10% or greater geographic concentrations as measured by rentable square feet: Texas (17.9%) and California (11.7%); and the following 10% or greater property type concentrations as measured by rentable square feet: traditional office (65.7%), flex/industrial (18.9%) and governmental (10.1%). In the current office environment, class B and class C properties generally have been experiencing reduced demand and lease or sell at discounts to class A properties and our tenants and prospective new tenants across our portfolio sometimes compare the cost and the value of leasing space in our property to the value of newer space with more amenities asking higher rent in other properties in the market. The class of buildings we own may be negatively impacting our leasing velocity and pushing our leasing costs higher and may also be negatively impacting our sales price on non-core asset sales.

Current wording

Our leasing and asset disposition activity since the completion of our distribution from Realty Income continues to be adversely impacted by a variety of market and property specific conditions. The COVID-19 pandemic and its aftermath has significantly reduced demand for office space and changes in space usage in the office leasing market, as tenants seek to attract employees back to the office, in newer, renovated properties with more amenities.

Previous wording

We have incurred significant amounts of indebtedness and, therefore, are subject to the risks normally associated with debt financing, including that we may be unable to extend, refinance or repay our debt obligations as they come due. Deteriorating office fundamentals, high interest rates, market sentiment towards the office sector and recent changes in United States trade policy and the imposition of new tariffs may adversely impact us or our lenders restrict our access to, and increase our cost of, capital as we seek to extend, refinance or repay our debts. Our nearest debt maturity is the non-recourse mortgage notes associated with the Arch Street Joint Venture, which are scheduled to mature on November 27, 2025. As of March 31, 2025, our proportionate share of the non-recourse mortgage notes associated with the Arch Street Joint Venture was $26.2 million. The Arch Street Joint Venture has one remaining option to extend the maturity date for an additional 12 months until November 27, 2026, subject to satisfaction of certain conditions, including satisfaction of certain financial and operating covenants. We cannot provide any assurance the Arch Street Joint Venture will be able to satisfy the extension conditions for the second loan extension or otherwise extend or refinance this debt obligation prior to maturity. If the Arch Street Joint Venture is unable to extend or refinance the mortgage notes, our investment in the Arch Street Joint Venture could be materially adversely affected.

Current wording

We have incurred significant amounts of indebtedness and, therefore, are subject to the risks normally associated with debt financing, including that we may be unable to extend, refinance or repay our debt obligations as they come due. Deteriorating office fundamentals, high interest rates, market sentiment towards the office sector and recent changes in United States trade policy and the imposition of new tariffs may adversely impact us or our lenders restrict our access to, and increase our cost of, capital as we seek to extend, refinance or repay our debts. Our nearest debt maturity is the non-recourse mortgage notes associated with the Arch Street Joint Venture, which are scheduled to mature on November 27, 2025. As of June 30, 2025, our proportionate share of the non-recourse mortgage notes associated with the Arch Street Joint Venture was $26.0 million. The Arch Street Joint Venture has one remaining option to extend the maturity date for an additional 12 months until November 27, 2026, subject to satisfaction of certain conditions, including satisfaction of certain financial and operating covenants. We cannot provide any assurance the Arch Street Joint Venture will be able to satisfy the extension conditions for the second loan extension or otherwise extend or refinance this debt obligation prior to maturity. If the Arch Street Joint Venture is unable to extend or refinance the mortgage notes, our investment in the Arch Street Joint Venture could be materially adversely affected.

Previous wording

We will remain an emerging growth company until the earliest of (i) the last day of the first fiscal year in which our annual gross revenues exceed $1.235 billion, (ii) the last day of the fiscal year following the fifth anniversary of the date of the first sale of our common equity securities pursuant to an effective registration statement under the Securities Act, (iii) the date that we become a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act, which would occur on the last day of the fiscal year in which the market value of our common stock that is held by non-affiliates exceeds $700.0 million as of the last business day of our most recently completed second fiscal quarter, or (iv) the date on which we have issued more than $1.0 billion in non-convertible debt during the preceding three-year period. As of June 30, 2024, the market value of our common stock held by non-affiliates was less than $700.0 million, and therefore, we expect to remain an “emerging growth company” at least until the next measuring date, which is June 30, 2025.

Current wording

We will remain an emerging growth company until the earliest of (i) the last day of the first fiscal year in which our annual gross revenues exceed $1.235 billion, (ii) the last day of the fiscal year following the fifth anniversary of the date of the first sale of our common equity securities pursuant to an effective registration statement under the Securities Act, (iii) the date that we become a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act, which would occur on the last day of the fiscal year in which the market value of our common stock that is held by non-affiliates exceeds $700.0 million as of the last business day of our most recently completed second fiscal quarter, or (iv) the date on which we have issued more than $1.0 billion in non-convertible debt during the preceding three-year period. As of June 30, 2025, the market value of our common stock held by non-affiliates was less than $700.0 million, and therefore, we will remain an “emerging growth company” for the year ended December 31, 2025; however, the fiscal year following the fifth anniversary of the date of the first sale of common equity securities of the Company will be the year ended December 31, 2026 and, therefore, as of December 31, 2026, we will no longer qualify as an emerging growth company.

Previous wording

The consolidated financial statements of the Company for the three months ended March 31, 2025 and 2024, include the accounts of the Company and its consolidated subsidiaries, including Orion OP, and a consolidated joint venture. All intercompany transactions have been eliminated upon consolidation.

Current wording

The consolidated financial statements of the Company for the three and six months ended June 30, 2025 and 2024, include the accounts of the Company and its consolidated subsidiaries, including Orion OP, and a consolidated joint venture. All intercompany transactions have been eliminated upon consolidation.

Previous wording

•During the three months ended March 31, 2025, we completed approximately 380,000 square feet of lease renewals and new leases across four different properties with a weighted average lease term of 6.7 years.

Current wording

•During the six months ended June 30, 2025, we completed approximately 559,000 square feet of lease renewals and new leases across eight different properties, which includes one Arch Street Joint Venture property, and a weighted average lease term of 6.5 years.

Previous wording

•During February 2025, we made an additional member loan of $8.3 million to fund leasing costs related to a lease extension that was completed for one of the properties in the Arch Street Joint Venture portfolio. As of March 31, 2025, the outstanding principal balance of the member loan was $8.9 million.

Current wording

•During February 2025, we made an additional member loan of $8.3 million to fund leasing costs related to a lease extension that was completed for one of the properties in the Arch Street Joint Venture portfolio. As of June 30, 2025, the outstanding principal balance of the member loan was $7.6 million.

Previous wording

•In April 2025, we closed on the sale of three vacant properties totaling approximately 287,000 square feet for an aggregate gross sales price of $19.1 million. In connection with two of the property dispositions, we provided aggregate sales price credits to the buyers of $2.4 million. As of May 7, 2025, we had pending agreements in place to sell two operating properties for an aggregate gross sales price of $27.3 million. Our pending sale agreements are subject to a variety of conditions outside of our control, such as the buyer’s satisfactory completion of its due diligence and therefore, we cannot provide any assurance the transaction will close on the agreed upon price or other terms, or at all.

Current wording

•During the six months ended June 30, 2025, we closed on the sale of four vacant properties totaling approximately 434,000 square feet for an aggregate gross sales price of $26.9 million. In connection with three of the property dispositions, we provided aggregate sales price credits to the buyers of $2.9 million. As of August 6, 2025, we had pending agreements in place to sell five traditional office operating properties for an aggregate gross sales price of $56.9 million. Our pending sale agreements are subject to a variety of conditions outside of our control, such as the buyer’s satisfactory completion of its due diligence and therefore, we cannot provide any assurance the transaction will close on the agreed upon price or other terms, or at all.

Previous wording

•The Company’s Board of Directors declared a quarterly cash dividend of $0.02 per share for the first quarter of 2025 which was paid on April 15, 2025.

Current wording

•The Company’s Board of Directors declared a quarterly cash dividend of $0.02 per share for the first and second quarters of 2025 which were paid on April 15, 2025 and July 15, 2025.

Previous wording

•On May 6, 2025 the Company’s Board of Directors declared a quarterly cash dividend of $0.02 per share for the second quarter of 2025, payable on July 15, 2025, to stockholders of record as of June 30, 2025.

Current wording

•On August 5, 2025 the Company’s Board of Directors declared a quarterly cash dividend of $0.02 per share for the third quarter of 2025, payable on October 15, 2025, to stockholders of record as of September 30, 2025.

Previous wording

(2)Occupancy rate equals the sum of occupied square feet divided by rentable square feet of operating properties. Adjusting for three operating properties that are currently under agreements to be sold or have been sold following March 31, 2025, the occupancy rate as of March 31, 2025 would be 75.2%.

Current wording

(2)Occupancy rate equals the sum of occupied square feet divided by rentable square feet of operating properties. Adjusting for five traditional office operating properties that are currently under agreements to be sold, the occupancy rate as of June 30, 2025 would be 77.7%.

Previous wording

We remain highly focused on leasing activity, given the 5.2 year weighted average remaining lease term and the significant lease maturities which will occur across the portfolio over the next few years. If our tenants decide not to renew their leases, terminate their leases early or default on their leases, we will seek to re-lease the space to new tenants. We may not, however, be able to re-lease the space to suitable replacement tenants on a timely basis, or at all. Our properties may not be as attractive to existing or new tenants as properties owned by our competitors due to age of buildings, physical condition, lack of amenities or other similar factors. Even if we are able to renew leases with existing tenants or enter into new leases with replacement tenants, the terms of renewals or new leases, including the cost of required renovations, improvements or concessions to tenants, may be less favorable to us than current lease terms. As a result, our net income and ability to pay dividends to stockholders could be materially adversely affected. Further, if any of our properties cannot be leased on terms and conditions favorable to us, we may seek to dispose of the property; however, such property may not be marketable at a suitable price without substantial capital improvements, alterations, or at all, which could inhibit our ability to effectively dispose of those properties and could require us to expend capital to fund necessary capital improvements or alterations. In general, when we sell properties that are vacant or soon to be vacant, the valuation will be discounted to reflect that the new owner will bear carrying costs until the property has been leased up and take the risk that the property may not be leased up on a timely basis, favorable terms or at all.

Current wording

We remain highly focused on leasing activity, given the 5.5 year weighted average remaining lease term and the significant lease maturities which will occur across the portfolio over the next few years. If our tenants decide not to renew their leases, terminate their leases early or default on their leases, we will seek to re-lease the space to new tenants. We may not, however, be able to re-lease the space to suitable replacement tenants on a timely basis, or at all. Our properties may not be as attractive to existing or new tenants as properties owned by our competitors due to age of buildings, physical condition, lack of amenities or other similar factors. Even if we are able to renew leases with existing tenants or enter into new leases with replacement tenants, the terms of renewals or new leases, including the cost of required renovations, improvements or concessions to tenants, may be less favorable to us than current lease terms. As a result, our net income and ability to pay dividends to stockholders could be materially adversely affected. Further, if any of our properties cannot be leased on terms and conditions favorable to us, we may seek to dispose of the property; however, such property may not be marketable at a suitable price without substantial capital improvements, alterations, or at all, which could inhibit our ability to effectively dispose of those properties and could require us to expend capital to fund necessary capital improvements or alterations. In general, when we sell properties that are vacant or soon to be vacant, the valuation will be discounted to reflect that the new owner will bear carrying costs until the property has been leased up and take the risk that the property may not be leased up on a timely basis, favorable terms or at all.

Previous wording

(3)Includes additional allowances of $3.6 million provided within the respective lease agreements, which require election by the tenant in exchange for additional rental income through the remaining term of the lease.

Current wording

(3)Includes additional allowances of $3.6 million provided within the respective lease agreements, which require election by the tenant in exchange for additional rental income through the remaining term of the lease as well as $1.4 million for our proportionate share of a tenant improvement allowance outstanding with an Arch Street Joint Venture tenant.

Previous wording

We have funded and intend to continue to fund our outstanding leasing costs with cash on hand, which may include proceeds from dispositions. For assets financed on our CMBS Loan, we have funded reserves with the lender for tenant improvement allowances and rent concessions. As of March 31, 2025, total restricted cash of $38.8 million was reserved for outstanding leasing costs, including $29.3 million for tenant improvement allowances and $9.5 million for rent concession commitments, and is included in other assets, net in our consolidated balance sheets.

Current wording

We have funded and intend to continue to fund our outstanding leasing costs with cash on hand, which may include proceeds from dispositions. For assets financed on our CMBS Loan, we have funded reserves with the lender for tenant improvement allowances and rent concessions. As of June 30, 2025, total restricted cash of $35.8 million was reserved for outstanding leasing costs, including $29.1 million for tenant improvement allowances and $6.7 million for rent concession commitments, and is included in other assets, net in our consolidated balance sheets.

Previous wording

(3)Excludes one new lease for approximately 160,000 square feet and two new leases for approximately 92,000 square feet for the three months ended March 31, 2025 and 2024, respectively, that had been or will be vacant for more than 12 months at the time the new lease commences.

Current wording

(2)Excludes two new leases for approximately 69,000 square feet and two new leases for approximately 57,000 square feet for the three months ended June 30, 2025 and 2024, respectively, that had been or will be vacant for more than 12 months at the time the new lease commences.

Previous wording

(4)Includes tenant improvement allowances and base building allowances, certain reimbursable and non-reimbursable landlord funded improvements, leasing commissions and rent concessions (includes estimates of property operating expenses, where applicable). For our multi-tenant properties, we have allocated the estimated cost of landlord funded improvements that benefit the property generally and/or the common areas and not the tenant’s premises in particular, to the applicable lease based on square footage of the related tenant.

Current wording

(3)Includes tenant improvement allowances and base building allowances, certain reimbursable and non-reimbursable landlord funded improvements, leasing commissions and rent concessions (includes estimates of property operating expenses, where applicable). For our multi-tenant properties, we have allocated the estimated cost of landlord funded improvements that benefit the property generally and/or the common areas and not the tenant’s premises in particular, to the applicable lease based on square footage of the related tenant.

Previous wording

(6)Weighted average lease term does not include specified periods of the stated lease term during which a tenant has the right to terminate their space without a termination fee, or “non-firm terms”. The total weighted average lease term for new leases and renewals executed during the three months ended March 31, 2025 and 2024 would be 6.7 years and 14.2 years, respectively if such non-firm terms were included.

Current wording

(5)Weighted average lease term does not include specified periods of the stated lease term during which a tenant has the right to terminate their space without a termination fee, or “non-firm terms”. The total weighted average lease term for new leases and renewals executed during the three months ended June 30, 2025 and 2024 would be 6.0 years and 5.3 years, respectively if such non-firm terms were included.

Previous wording

(5)Includes reimbursable landlord funded improvements and reimbursable tenant improvement allowances per rentable square foot of $10.00 for new leases and $4.23 in total for the three months ended March 31, 2025. Includes reimbursable landlord funded improvements per rentable square foot of $51.89 for new leases, $17.09 for renewals and $46.77 in total for the three months ended March 31, 2024.

Current wording

(5)Includes reimbursable tenant improvement allowances per rentable square foot of $6.98 for new leases and $2.87 in total for the six months ended June 30, 2025. Includes reimbursable landlord funded improvements and tenant improvement allowances per rentable square foot of $45.07 for new leases, $0.63 for renewals and $12.11 in total for the six months ended June 30, 2024.

Previous wording

(3)Building, fixtures and improvements generally include expenditures to replace obsolete building or land components, expenditures that extend the useful life of existing assets and expenditures to construct landlord owned improvements.

Current wording

(3)Building, fixtures and improvements generally include expenditures to replace obsolete building or land components, expenditures that extend the useful life of existing assets, expenditures to construct landlord owned improvements and any capitalized interest charges associated with such expenditures.

Previous wording

The results of operations discussed in this section include the accounts of the Company and its consolidated subsidiaries for the three months ended March 31, 2025 and 2024.

Current wording

The results of operations discussed in this section include the accounts of the Company and its consolidated subsidiaries for the three and six months ended June 30, 2025 and 2024.

Previous wording

The decrease in rental revenue of $9.2 million during the three months ended March 31, 2025 as compared to the same period in 2024 was primarily due to the impact from a decrease in our overall occupied square footage from expiration of leases totaling $7.1 million in rental revenues. Additionally, $2.7 million of reimbursements from previous tenants for certain end of lease obligations was recognized during the three months ended March 31, 2024 compared to no such amount during the same period in 2025. We had 68 operating properties with an aggregate of 7.8 million leasable square feet and an occupancy rate of 73.7% as of March 31, 2025, as compared to 75 operating properties with an aggregate of 8.7 million leasable square feet and an occupancy rate of 75.3% as of March 31, 2024. The decrease in revenues was partially offset by $1.3 million of rental revenue during the three months ended March 31, 2025 from the property we acquired during September 2024.

Current wording

The decreases in rental revenues of $2.8 million and $12.0 million during the three and six months ended June 30, 2025, respectively, as compared to the same periods in 2024 was primarily due to the impact of decreasing overall occupied square footage from expiration of leases totaling $4.1 million and $10.7 million in rental revenues during the three and six months ended June 30, 2025, respectively. We had 66 operating properties with an aggregate of 7.6 million leasable square feet and an occupancy rate of 76.8% as of June 30, 2025, as compared to 69 operating properties with an aggregate of 8.0 million leasable square feet and an occupancy rate of 79.2% as of June 30, 2024. Additionally, $2.7 million of reimbursements from previous tenants for certain end of lease obligations was recognized during the six months ended June 30, 2024, compared to no such amounts during the same period in 2025. The decrease in rental revenue during the three and six months ended June 30, 2025, as compared to the same periods in 2024, was partially offset by rental revenue from the property we acquired during September 2024 of $1.0 million and $2.0 million, respectively.

Previous wording

Property operating expenses such as taxes, insurance, ground rent and maintenance include both reimbursable and non-reimbursable property expenses. Property operating expenses increased $0.5 million during the three months ended March 31, 2025 as compared to the same period in 2024. The increase is the result of property operating expenses of $1.1 million from additional property vacancies and $0.2 million from the property we acquired in September 2024, offset by the timing of certain operating expenses of $0.6 million and decreases in property operating expenses resulting from property dispositions of $0.3 million.

Current wording

Property operating expenses such as taxes, insurance, ground rent and maintenance include both reimbursable and non-reimbursable property expenses. Property operating expenses increased $0.1 million and $0.6 million during the three and six months ended June 30, 2025, respectively, as compared to the same periods in 2024. The increase during the three months ended June 30, 2025 compared to the same period in 2024 is primarily the result of property operating expenses of $0.6 million from additional property vacancies, $0.5 million in relation to the ongoing demolition of the buildings on the six-property campus in Deerfield, Illinois and $0.2 million from the property we acquired during September 2024, offset by the timing of certain property operating expenses of $0.7 million and decreases in property operating expenses resulting from property dispositions of $0.6 million.

Previous wording

General and administrative expenses remained relatively consistent during the three months ended March 31, 2025 as compared to the same period in 2024.

Current wording

General and administrative expenses remained consistent during the three and six months ended June 30, 2025, as compared to the same periods in 2024.

Previous wording

Impairments decreased $18.0 million during the three months ended March 31, 2025 as compared to the same period in 2024. The impairment charges of $1.7 million in the three months ended March 31, 2025, include a total of two properties and the charges reflect management’s estimates of lease renewal probability, timing and terms of such renewals, carrying costs for vacant properties, sale probability and estimates of sale proceeds. Impairment charges totaling $19.7 million with respect to two properties were recorded during the same period in 2024. See Note 5 - Fair Value Measures for further information.

Current wording

Impairments increased $13.8 million and decreased $4.2 million during the three and six months ended June 30, 2025, respectively, as compared to the same periods in 2024. Impairment charges totaling $19.5 million and $21.2 million with respect to four and six properties were recorded during the three and six months ended June 30, 2025, respectively, and were incurred primarily with respect to real estate assets sold or expected to be sold and reflect management’s estimates of lease renewal probability, timing and terms of such renewals, carrying costs for vacant properties, sale probability and estimates of sale proceeds. Impairment charges totaling $5.7 million and $25.4 million with respect to seven and eight properties were recorded during the three and six months ended June 30, 2024, respectively. See Note 5 - Fair Value Measures for further information.

Previous wording

Interest expense, net remained relatively consistent at $8.2 million during the three months ended March 31, 2025 as compared to the same period in 2024. The Company’s average debt outstanding was $498.5 million for the three months ended March 31, 2025 compared to $471.0 million during the same period in 2024. The Company’s weighted average interest rate on its debt obligations was 5.69% for the three months ended March 31, 2025 and 5.88% for the same period in 2024.

Current wording

Interest expense, net remained consistent at $8.0 million and $16.2 million during the three and six months ended June 30, 2025, respectively, as compared to the same periods in 2024. Our average debt outstanding was $494.0 million and $487.5 million for the three and six months ended June 30, 2025, respectively, compared to $471.0 million and $466.5 million for each of the same periods in 2024. The weighted average interest rate on our debt obligations was 5.67% and 5.68% for the three and six months ended June 30, 2025, respectively, and 5.87% for the three and six months ended June 30, 2024. Interest expense, net for the three and six months ended June 30, 2025 was offset by capitalized interest of $0.2 million. No interest expense was capitalized during the three and six months ended June 30, 2024.

Previous wording

(1)Dilutive securities include unvested restricted stock units net of assumed repurchases in accordance with the treasury stock method and exclude Performance-Based RSUs for which the performance thresholds have not been met by the end of the applicable reporting period. Such dilutive securities are not included when calculating net loss per diluted share applicable to the Company for the three months ended March 31, 2025 and 2024 as the effect would be antidilutive.

Current wording

(1)Dilutive securities include unvested restricted stock units net of assumed repurchases in accordance with the treasury stock method and exclude Performance-Based RSUs for which the performance thresholds have not been met by the end of the applicable reporting period. Such dilutive securities are not included when calculating net loss per diluted share applicable to the Company for the three and six months ended June 30, 2025 and 2024 as the effect would be antidilutive.

Previous wording

Our principal liquidity needs for the next twelve months are to: (i) fund operating expenses; (ii) pay interest on our debt; (iii) pay dividends to our stockholders; (iv) fund capital expenditures and leasing costs at properties we own; (v) fund capital contributions to the Arch Street Joint Venture and (vi) fund new acquisitions. We believe that our principal sources of short-term liquidity, which are our cash and cash equivalents on hand, cash flows from operations, proceeds from real estate dispositions, and borrowings under the Revolving Facility (as defined below), are sufficient to meet our liquidity needs for the next twelve months. As of March 31, 2025, we had $9.4 million of cash and cash equivalents and $218.0 million of borrowing capacity under the Revolving Facility.

Current wording

Our principal liquidity needs for the next twelve months are to: (i) fund operating expenses; (ii) pay interest on our debt; (iii) pay dividends to our stockholders; (iv) fund capital expenditures and leasing costs at properties we own; (v) fund capital contributions to the Arch Street Joint Venture; (vi) fund new acquisitions and (vii) extend, refinance or repay debt at or prior to maturity. We believe that our principal sources of short-term liquidity, which are our cash and cash equivalents on hand, cash flows from operations, proceeds from real estate dispositions, and borrowings under the Revolving Facility (as defined below) as it may be extended or refinanced, are sufficient to meet our liquidity needs for the next twelve months, other than the impending maturity of the Revolving Facility, as further discussed below. As of June 30, 2025, we had $17.4 million of cash and cash equivalents and $240.0 million of borrowing capacity under the Revolving Facility.

Previous wording

The non-recourse mortgage notes associated with the Arch Street Joint Venture are scheduled to mature on November 27, 2025, with one remaining option to extend the maturity for an additional 12 months until November 27, 2026. As of March 31, 2025, there was $130.9 million outstanding under the mortgage notes and our proportionate share was $26.2 million. The mortgage notes have a variable interest rate and the spread on a SOFR (the secured overnight financing rate as administered by the Federal Reserve Bank of New York) loan is 2.60% per annum, and the spread on a base rate loan is 0.50% per annum. The Arch Street Joint Venture has entered into an interest rate cap agreement that caps the SOFR rate at 5.50% per annum.

Current wording

The non-recourse mortgage notes associated with the Arch Street Joint Venture are scheduled to mature on November 27, 2025, with one remaining option to extend the maturity for an additional 12 months until November 27, 2026. As of June 30, 2025, there was $130.2 million outstanding under the mortgage notes and our proportionate share was $26.0 million. The mortgage notes have a variable interest rate and the spread on a SOFR (the secured overnight financing rate as administered by the Federal Reserve Bank of New York) loan is 2.60% per annum, and the spread on a base rate loan is 0.50% per annum. The Arch Street Joint Venture has entered into an interest rate cap agreement that caps the SOFR rate at 5.50% per annum.

Previous wording

During February 2025, we made an additional member loan of $8.3 million to fund leasing costs related to a lease extension that was completed for one of the properties in the Arch Street Joint Venture portfolio. Our member loan to the Arch Street Joint Venture, which had $8.9 million receivable as of March 31, 2025, earns interest at 15% per annum and is non-recourse and unsecured, and structurally subordinate to the Arch Street Joint Venture mortgage notes and matures on November 27, 2026. Interest and principal are payable monthly solely out of the excess cash from the joint venture after payment of property operating expenses, interest and principal on the Arch Street mortgage notes and other joint venture expenses and excess proceeds from the sale of any of the joint venture properties.

Current wording

During February 2025, we made an additional member loan of $8.3 million to fund leasing costs related to a lease extension that was completed for one of the properties in the Arch Street Joint Venture portfolio. Our member loan to the Arch Street Joint Venture, which had $7.6 million receivable as of June 30, 2025, earns interest at 15% per annum and is non-recourse and unsecured, and structurally subordinate to the Arch Street Joint Venture mortgage notes and matures on November 27, 2026. Interest and principal are payable monthly solely out of the excess cash from the joint venture after payment of property operating expenses, interest and principal on the Arch Street mortgage notes and other joint venture expenses and excess proceeds from the sale of any of the joint venture properties.

Previous wording

Our principal liquidity needs beyond the next twelve months are to: (i) extend, refinance or repay debt at or prior to maturity; (ii) pay dividends to our stockholders; (iii) fund capital expenditures and leasing costs at properties we own; and (iv) fund new acquisitions. We generally believe we will be able to satisfy these liquidity needs by a combination of cash flows from operations, borrowings under the Revolving Facility, proceeds from real estate dispositions, new borrowings such as bank term loans or other secured or unsecured debt, and issuances of equity securities. We believe we will be successful in either repaying or refinancing our debt obligations at or prior to maturity, but we cannot provide any assurance we will be able to do so. Our ability to extend, refinance or repay debt, raise capital and/or sell assets will be affected by various factors existing at the relevant time, such as capital and credit market conditions, the state of the national and regional economies, commercial real estate market conditions, available interest rate levels, the lease terms for and equity in and value of any related collateral, our financial condition and the operating history of the collateral, if any.

Current wording

Our principal liquidity needs beyond the next twelve months are to: (i) extend, refinance or repay debt at or prior to maturity; (ii) pay dividends to our stockholders; (iii) fund capital expenditures and leasing costs at properties we own; and (iv) fund new acquisitions. We generally believe we will be able to satisfy these liquidity needs by a combination of cash flows from operations, borrowings under the Revolving Facility, as it may be extended or refinanced, proceeds from real estate dispositions, new borrowings such as bank term loans or other secured or unsecured debt, and issuances of equity securities. We believe we will be successful in either repaying or refinancing our debt obligations at or prior to maturity, but we cannot provide any assurance we will be able to do so. Our ability to extend, refinance or repay debt, raise capital and/or sell assets will be affected by various factors existing at the relevant time, such as capital and credit market conditions, the state of the national and regional economies, commercial real estate market conditions, available interest rate levels, the lease terms for and equity in and value of any related collateral, our financial condition and the operating history of the collateral, if any.

Previous wording

As of March 31, 2025, we had $505.0 million of total consolidated debt outstanding, consisting of a $355.0 million fixed rate mortgage note collateralized by 19 properties (the “CMBS Loan”), $132.0 million borrowed under our $350.0 million senior revolving credit facility (the “Revolving Facility”) and an $18.0 million fixed rate mortgage note secured by our San Ramon, California property (the “San Ramon Loan”). The following is a summary of the interest rate and scheduled maturities of our consolidated debt obligations as of March 31, 2025 (in thousands):

Current wording

As of June 30, 2025, we had $483.0 million of total consolidated debt outstanding, consisting of a $355.0 million fixed rate mortgage note collateralized by 19 properties (the “CMBS Loan”), $110.0 million borrowed under our $350.0 million senior revolving credit facility (the “Revolving Facility”) and an $18.0 million fixed rate mortgage note secured by our San Ramon, California property (the “San Ramon Loan”). The following is a summary of the interest rate and scheduled maturities of our consolidated debt obligations as of June 30, 2025 (in thousands):

Previous wording

(2)Includes interest rate margin of 3.25% plus SOFR adjustment of 0.10%. As of March 31, 2025, a total of $60.0 million of the debt outstanding under the Revolving Facility was subject to interest rate collar agreements to hedge against interest rate volatility. Under the agreements, the benchmark rate for the Revolving Facility will float between 5.50% per annum and 4.20% per annum on $25.0 million, and 5.50% per annum and 4.035% per annum on $35.0 million, effective from November 13, 2023 until May 12, 2025.

Current wording

(2)Includes interest rate margin of 3.25% plus SOFR adjustment of 0.10%. As of June 30, 2025, a total of $75.0 million of the debt outstanding under the Revolving Facility was subject to an interest rate collar agreement to hedge against interest rate volatility. Under the agreement, the benchmark rate for the Revolving Facility will float between no higher than 4.29% per annum and no lower than 3.28% per annum on a total notional amount of $75.0 million, effective from May 12, 2025 to May 12, 2026.

Previous wording

(4)Does not include non-recourse mortgage notes associated with the Arch Street Joint Venture of $130.9 million, of which our proportionate share was $26.2 million, as of March 31, 2025.

Current wording

(4)Does not include non-recourse mortgage notes associated with the Arch Street Joint Venture of $130.2 million, of which our proportionate share was $26.0 million, as of June 30, 2025.

Previous wording

We have entered into three amendments to the Credit Agreement. The purpose of the first amendment entered into in December 2022 was to change the benchmark rate for borrowings under the Credit Agreement from LIBOR (the London interbank offered rate as administered by the ICE Benchmark Administration) to SOFR (the secured overnight financing rate as administered by the Federal Reserve Bank of New York). The purpose of the second amendment entered into in June 2023 was to repay and retire $175.0 million of outstanding borrowings under the Term Loan Facility with borrowings from the Revolving Facility (which was undrawn at the time of the second amendment), provide us with the option to extend the maturity of the Revolving Facility for an additional 18 months to May 12, 2026 from November 12, 2024 and to effect certain other modifications. On May 3, 2024, we entered into the Third Amendment, which resulted in a permanent $75.0 million reduction in the capacity of the Revolving Facility to $350.0 million from $425.0 million, while making a proportional reduction in the minimum value of the unencumbered asset pool required under the Credit Agreement to $500.0 million from $600.0 million and certain other modifications to financial covenants. On May 16, 2024, we elected its option to extend the maturity of the Revolving Facility to May 12, 2026.

Current wording

We have entered into three amendments to the Credit Agreement. The purpose of the first amendment entered into in December 2022 was to change the benchmark rate for borrowings under the Credit Agreement from LIBOR (the London interbank offered rate as administered by the ICE Benchmark Administration) to SOFR (the secured overnight financing rate as administered by the Federal Reserve Bank of New York). The purpose of the second amendment entered into in June 2023 was to repay and retire $175.0 million of outstanding borrowings under the Term Loan Facility with borrowings from the Revolving Facility (which was undrawn at the time of the second amendment), provide us with the option to extend the maturity of the Revolving Facility for an additional 18 months to May 12, 2026 from November 12, 2024 and to effect certain other modifications. On May 3, 2024, we entered into the third amendment, which resulted in a permanent $75.0 million reduction in the capacity of the Revolving Facility to $350.0 million from $425.0 million, while making a proportional reduction in the minimum value of the unencumbered asset pool required under the Credit Agreement to $500.0 million from $600.0 million and certain other modifications to financial covenants. On May 16, 2024, we exercised the option under the Credit Agreement to extend the maturity of the Revolving Facility to May 12, 2026. Substantial doubt exists about our ability to continue as a going concern for at least one year from the issuance of the consolidated financial statements included in this Quarterly Report on Form 10-Q due to uncertainty with regard to our ability to extend or refinance the Revolving Facility. The Revolving Facility has no remaining extension options and the Company does not expect to generate sufficient cash from operations to repay the principal outstanding under the Revolving Facility on its scheduled maturity date. Management is evaluating strategies to extend or refinance the borrowings under the Revolving Facility and has had preliminary discussions with the administrative agent of the Revolving Facility to potentially amend the Credit Agreement to extend the maturity date and/or refinance all or a portion of the Revolving Facility with replacement debt. If an agreement is not reached with one or more of the lenders to extend and/or refinance all or a portion of the Revolving Facility, management’s plans include, but are not limited to, obtaining funding through alternative debt or equity instruments, disposing of properties and continuing its leasing efforts on existing properties. As of August 6, 2025, no such agreements have been reached and, therefore, there can be no assurance the Company will be able to extend the Revolving Facility maturity date and/or refinance all or a portion of the Revolving Facility or obtain additional liquidity when needed or under acceptable terms, if at all.

Previous wording

In December 2022, we entered into interest rate swap agreements with an aggregate notional amount of $175.0 million, which effectively fixed the interest rate on $175.0 million of principal under the Revolving Facility at 3.92% per annum until November 12, 2023. Upon the scheduled expiration of the interest rate swap agreements, we entered into interest rate collar agreements on a total notional amount of $60.0 million to hedge against interest rate volatility on the Revolving Facility. Under the agreements, the benchmark rate for the Revolving Facility will float between 5.50% per annum and 4.20% per annum on $25.0 million, and 5.50% per annum and 4.035% per annum on $35.0 million, effective from November 13, 2023 until May 12, 2025.

Current wording

In December 2022, we entered into interest rate swap agreements with an aggregate notional amount of $175.0 million, which effectively fixed the interest rate on $175.0 million of principal under the Revolving Facility at 3.92% per annum until November 12, 2023. Upon the scheduled expiration of the interest rate swap agreements, we entered into interest rate collar agreements on a total notional amount of $60.0 million to hedge against interest rate volatility on the Revolving Facility. Under the agreements, the benchmark rate for the Revolving Facility floated between no higher than 5.50% per annum and no lower than 4.20% per annum on $25.0 million, and no higher than 5.50% per annum and no lower than 4.035% per annum on $35.0 million, effective from November 13, 2023 until May 12, 2025. Upon the scheduled expiration of the interest rate collar agreements, the Company entered into an interest rate collar agreement to hedge against interest rate volatility on the Revolving Facility. Under the agreement, the benchmark rate for the Revolving Facility will float between no higher than 4.29% per annum and no lower than 3.28% per annum on a total notional amount of $75.0 million, effective from May 12, 2025 to May 12, 2026. As of June 30, 2025, the weighted average effective interest rate of the Revolving Facility was 7.64%.