Orion Properties Inc.

Previous wording

This Quarterly Report on Form 10-Q includes “forward-looking statements” which reflect Orion Properties Inc.’s (the “Company”, “Orion”, “we”, or “us”) expectations and projections regarding future events and plans, future financial condition, results of operations, liquidity and business, including leasing and occupancy, acquisitions, dispositions, rent receipts, expected borrowings and financing costs and the payment of future dividends. Generally, the words “anticipates,” “assumes,” “believes,” “continues,” “could,” “estimates,” “expects,” “goals,” “intends,” “may,” “plans,” “projects,” “seeks,” “should,” “targets,” “will,” “guidance,” variations of such words and similar expressions identify forward-looking statements. These forward-looking statements are based on information currently available to us and involve a number of known and unknown assumptions and risks, uncertainties and other factors, which may be difficult to predict and beyond the Company’s control, that could cause actual events and plans or could cause our business, financial condition, liquidity and results of operations to differ materially from those expressed or implied in the forward-looking statements. These factors include, among other things, those discussed below. Information regarding historical rent collections should not serve as an indication of future rent collections. We disclaim any obligation to publicly update or revise any forward-looking statements, whether as a result of changes in underlying assumptions or factors, new information, future events or otherwise, except as may be required by law.

Current wording

This Quarterly Report on Form 10-Q includes “forward-looking statements” which reflect Orion Properties Inc.’s (the “Company”, “Orion”, “we”, or “us”) expectations and projections regarding future events and plans, future financial condition, results of operations, liquidity and business, including leasing and occupancy, acquisitions, dispositions, rent receipts, expected borrowings and financing costs and the payment of future dividends. Generally, the words “anticipates,” “assumes,” “believes,” “continues,” “could,” “estimates,” “expects,” “goals,” “intends,” “may,” “plans,” “projects,” “seeks,” “should,” “targets,” “will,” “guidance,” variations of such words and similar expressions identify forward-looking statements. These forward-looking statements are based on information currently available to us and involve a number of known and unknown assumptions and risks, uncertainties and other factors, which may be difficult to predict and beyond the Company’s control, that could cause actual events and plans or could cause our business, financial condition, liquidity and results of operations to differ materially from those expressed or implied in the forward-looking statements. These factors include, among other things, those discussed below. Information regarding historical rent collections should not serve as an indicator of future rent collections. We disclaim any obligation to publicly update or revise any forward-looking statements, whether as a result of changes in underlying assumptions or factors, new information, future events or otherwise, except as may be required by law.

Previous 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.

Current wording

As of September 30, 2025, we owned and operated 63 operating properties with an aggregate of 7.4 million leasable square feet located in 28 states with an occupancy rate of 72.1% and a weighted average remaining lease term of 5.8 years. As of September 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 September 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 6.6 years. Including our proportionate share of leasable square feet and annualized base rent from the Arch Street Joint Venture, we owned an aggregate of 7.6 million leasable square feet with an occupancy rate of 72.8%, or 74.5% adjusted for five operating properties that are currently under agreements to be sold or have been sold following September 30, 2025, and a weighted average remaining lease term of 5.8 years, as of September 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 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.

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 2.9% and 9.5% 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; in addition, the impact of a prolonged federal government shutdown may cause increased government budgetary pressures and uncertainty surrounding budgetary priorities. 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

As of June 30, 2025, 65.9%, 28.8% and 5.3% 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 June 30, 2025, our class B and class C properties collectively included the following 10% or greater geographic concentrations and property type concentrations as measured by rentable square feet:

Current wording

As of September 30, 2025, 66.8%, 27.8% and 5.4% 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 September 30, 2025, our class B and class C properties collectively included the following 10% or greater geographic concentrations and property type concentrations as measured by rentable square feet:

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 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.

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 with one remaining option to extend the maturity for an additional 12 months until November 27, 2026. As of September 30, 2025, our proportionate share of the non-recourse mortgage notes associated with the Arch Street Joint Venture was $25.9 million. During September 2025, the Arch Street Joint Venture exercised the remaining option to extend the maturity date of the mortgage notes until November 27, 2026, and the lenders are working to confirm all extension conditions are met, including a maximum loan-to-value of 60% which may require the Arch Street Joint Venture to partially repay the mortgage notes to satisfy this condition. We cannot provide any assurance that the Arch Street Joint Venture will be able to satisfy the conditions to extend the maturity date of this debt obligation, including that our joint venture partner will be able to contribute its share of capital requirements to partially repay the mortgage notes if required to satisfy the loan-to-value condition, 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

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 is scheduled to mature on May 12, 2026 and has no remaining extension options. We do not expect to generate sufficient cash from operations to repay the principal outstanding on the Revolving Facility, which was $110.0 million as of June 30, 2025, on this 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 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.

Current wording

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 is scheduled to mature on May 12, 2026 and has no remaining extension options. We do not expect to generate sufficient cash from operations to repay the principal outstanding under the Revolving Facility, which was $110.0 million as of September 30, 2025 and $92.0 million as of November 6, 2025, on this 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 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 November 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. See Part II, Item 1A. “Risk Factors” of this Quarterly Report on Form 10-Q for risks related to our potential inability to extend or refinance the Revolving Facility.

Previous 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.

Current wording

The consolidated financial statements of the Company for the three and nine months ended September 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

Our accounting policies have been established to conform with U.S. GAAP. The preparation of financial statements in conformity with U.S. GAAP requires us to use judgment in the application of accounting policies, including making estimates and assumptions. These judgments affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Management believes that we have made these estimates and assumptions in an appropriate manner and in a way that accurately reflects our financial condition. We continually test and evaluate these estimates and assumptions using our historical knowledge of the business, expectations and projections regarding future events and plans, as well as other factors, to ensure that they are reasonable for reporting purposes. However, actual results may differ from these estimates and assumptions. If our judgment or interpretation of the facts and circumstances relating to the various transactions had been different, it is possible that different accounting estimates would have been applied, thus resulting in a different presentation of the financial statements. Additionally, other companies may utilize different assumptions or estimates that may impact comparability of our results of operations to those of companies in similar businesses. We believe the critical accounting policies described below involve significant judgments and estimates used in the preparation of our financial statements, which should be read in conjunction with the more complete discussion of our accounting policies and procedures included in Note 2 – Summary of Significant Accounting Policies to our consolidated financial statements.

Current wording

Our accounting policies have been established to conform with U.S. GAAP. The preparation of financial statements in conformity with U.S. GAAP requires us to use judgment in the application of accounting policies, including making estimates and assumptions. These judgments affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Management believes that it has made these estimates and assumptions in an appropriate manner and in a way that accurately reflects our financial condition. We continually test and evaluate these estimates and assumptions using our historical knowledge of the business, expectations and projections regarding future events and plans, as well as other factors, to ensure that they are reasonable for reporting purposes. However, actual results may differ from these estimates and assumptions. If our judgment or interpretation of the facts and circumstances relating to the various transactions had been different, it is possible that different accounting estimates would have been applied, thus resulting in a different presentation of the financial statements. Additionally, other companies may utilize different assumptions or estimates that may impact comparability of our results of operations to those of companies in similar businesses. We believe the critical accounting policies described below involve significant judgments and estimates used in the preparation of our financial statements, which should be read in conjunction with the more complete discussion of our accounting policies and procedures included in Note 2 – Summary of Significant Accounting Policies to our consolidated financial statements.

Previous 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.

Current wording

•During the nine months ended September 30, 2025, we completed approximately 862,000 square feet of lease renewals and new leases across 13 different properties, which includes one Arch Street Joint Venture property, and a weighted average lease term of 7.8 years.

Previous 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.

Current wording

•During October 2025, we closed on the simultaneous sale and lease termination for one property located in Fresno, California for approximately 127,000 square feet and a gross sales price of $15.7 million. As of November 6, 2025, we had pending agreements in place to sell four operating properties for an aggregate gross sales price of $46.6 million, which includes three vacant or near-term vacant properties and one stabilized traditional office property. 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

•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.

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 September 30, 2025, the outstanding principal balance of the member loan was $6.7 million.

Previous wording

•During the six months ended June 30, 2025, four leases expired or were downsized comprising a total reduction in occupied square feet of 277,000 square feet. As of June 30, 2025, we had a total of eight fully vacant operating properties.

Current wording

•During the nine months ended September 30, 2025, six leases expired or were downsized comprising a total reduction in occupied square feet of approximately 681,000 square feet. As of September 30, 2025, we had a total of eight fully vacant operating properties.

Previous wording

•On May 9, 2025, we entered into 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.

Current wording

•On May 9, 2025, we entered into 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% and no lower than 3.28% on a total notional amount of $75.0 million, effective from May 12, 2025 to May 12, 2026.

Previous 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.

Current wording

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

Previous 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.

Current wording

•On November 5, 2025 the Company’s Board of Directors declared a quarterly cash dividend of $0.02 per share for the fourth quarter of 2025, payable on January 15, 2026, to stockholders of record as of December 31, 2025.

Previous wording

On June 20, 2025, the Company announced that its Board of Directors received an unsolicited, non-binding indication of interest from Kawa Capital Management, Inc. (“Kawa”) to potentially acquire all of the outstanding shares of the Company’s common stock not already owned by Kawa for cash consideration of $2.50 per share (the “First Proposal”). On July 9, 2025, the Company’s Board of Directors unanimously rejected the First Proposal after it concluded the First Proposal undervalues the Company and was not in the best interest of the Company and its stockholders.

Current wording

During June and July 2025, the Company’s Board of Directors received two separate unsolicited, non-binding indication of interest from Kawa Capital Management, Inc. (“Kawa”) to potentially acquire all of the outstanding shares of the Company’s common stock not already owned by Kawa for cash consideration of $2.50 per share and $2.75 per share, respectively. The Company’s Board of Directors unanimously rejected both proposals after it concluded the proposals undervalued the Company and were not in the best interest of the Company and its stockholders.

Previous wording

Our financial performance is impacted by the timing of acquisitions and dispositions and the operating performance of our properties. The following table shows the property statistics of our operating properties as of the periods indicated below, including our proportionate share of the applicable statistics of the properties owned by the Arch Street Joint Venture:

Current wording

Our financial performance is impacted by the timing of acquisitions and dispositions and the operating performance of our properties. The following table shows the property statistics of our operating properties as of the dates indicated below, including our proportionate share of the applicable statistics of the properties owned by the Arch Street Joint Venture:

Previous 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%.

Current wording

(2)Occupancy rate equals the sum of occupied square feet divided by rentable square feet of operating properties. Adjusting for five operating properties that are currently under agreements to be sold or have been sold following September 30, 2025, the occupancy rate as of September 30, 2025 would be 74.5%.

Previous 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.

Current wording

We remain highly focused on leasing activity, given the 5.8 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

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.

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 September 30, 2025, total restricted cash of $30.0 million was reserved for outstanding leasing costs, including $15.3 million for tenant improvement allowances and $14.7 million for rent concession commitments, and is included in restricted cash in our consolidated balance sheets.

Previous 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.

Current wording

(2)Excludes one new lease for approximately 3,000 square feet for the three months ended September 30, 2025 that had been or will be vacant for more than 12 months at the time the new lease commences. There were no new leases excluded during the three months ended September 30, 2024.

Previous wording

(4)Includes reimbursable landlord funded improvements and tenant improvement allowances per rentable square foot of $34.09 for new leases and $4.14 in total for the three months ended June 30, 2024. There were no reimbursable landlord funded improvements or tenant improvement allowances included in the tenant rent concessions and leasing costs for the three months ended June 30, 2025.

Current wording

(4)There were no reimbursable landlord funded improvements or tenant improvement allowances included in the tenant rent concessions and leasing costs for the three months ended September 30, 2025 and 2024.

Previous 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.

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 September 30, 2025 and 2024 would be 10.3 years and 8.9 years, respectively, if such non-firm terms were included.

Previous wording

(3)Excludes three new leases for approximately 229,000 square feet and four new leases for approximately 149,000 square feet of space for the six months ended June 30, 2025 and 2024, respectively, that had been vacant for more than 12 months at the time the new lease was executed.

Current wording

(3)Excludes four new leases for approximately 232,000 square feet and four new leases for approximately 149,000 square feet of space for the nine months ended September 30, 2025 and 2024, respectively, that had been vacant for more than 12 months at the time the new lease commences.

Previous 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.

Current wording

(5)Includes reimbursable tenant improvement allowances per rentable square foot of $5.12 for new leases and $1.86 in total for the nine months ended September 30, 2025. Includes reimbursable landlord funded improvements and tenant improvement allowances per rentable square foot of $45.07 for new leases, $0.40 for renewals and $8.41 in total for the nine months ended September 30, 2024.

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 six months ended June 30, 2025 and 2024, would be 6.5 years and 7.0 years, respectively, if such non-firm terms were included.

Current 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 nine months ended September 30, 2025 and 2024, would be 7.8 years and 7.6 years, respectively, if such non-firm terms were included.

Previous wording

During the six months ended June 30, 2025, four leases expired or were downsized comprising a total reduction in occupied square feet of 277,000 square feet. During the three months ended June 30, 2025, three leases expired or were downsized comprising a total reduction in occupied square feet of 141,000 square feet. We closed on the sale of one of these properties totaling approximately 108,000 square feet during the three months ended June 30, 2025 and have an agreement in place to sell the property where the lease was downsized. We currently intend to re-let the remaining vacancy from the three months ended June 30, 2025. The expired base rent per square foot and our market rent estimates for this vacancy is as follows (square feet in thousands):

Current wording

During the nine months ended September 30, 2025, six leases expired or were downsized comprising a total reduction in occupied square feet of approximately 681,000 square feet. During the three months ended September 30, 2025, two leases expired or were downsized comprising a total reduction in occupied square feet of approximately 404,000 square feet. We currently intend to re-let the vacancies from the three months ended September 30, 2025. The expired base rent per square foot and our market rent estimates for these vacancies are as follows (square feet in thousands):

Previous 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.

Current wording

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

Previous 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.

Current wording

The decreases in rental revenues of $2.1 million and $14.1 million during the three and nine months ended September 30, 2025, as compared to the same periods in 2024, respectively, were primarily due to the impact of decreasing overall occupied square footage from expiration of leases totaling $3.4 million and $15.4 million in rental revenues during the three and nine months ended September 30, 2025, respectively. We had 63 operating properties with an aggregate of 7.4 million leasable square feet and an occupancy rate of 72.1% as of September 30, 2025, as compared to 70 operating properties with an aggregate of 8.1 million leasable square feet and an occupancy rate of 74.0% as of September 30, 2024.

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 $0.1 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.

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 $0.6 million and $1.2 million during the three and nine months ended September 30, 2025, as compared to the same periods in 2024, respectively. The increase during the three months ended September 30, 2025 compared to the same period in 2024 is primarily the result of the ongoing demolition of the buildings on the six-property campus in Deerfield, Illinois of $1.3 million, offset by decreases in property operating expenses resulting from property dispositions of $0.6 million.

Previous wording

The increase during the six months ended June 30, 2025 compared to the same period in 2024 is the result of property vacancies of $1.2 million, $0.6 million in relation to the ongoing demolition of the buildings on the six-property campus in Deerfield, Illinois and $0.5 million from the property we acquired during September 2024, offset by the timing of certain operating expenses of $1.1 million and decreases in property operating expenses resulting from property dispositions of $0.6 million.

Current wording

The increase during the nine months ended September 30, 2025 compared to the same period in 2024 is primarily the result of the ongoing demolition of the buildings on the six-property campus in Deerfield, Illinois of $1.8 million, property vacancies of $0.8 million and $0.7 million from our property acquired in September 2024, offset by decreases in property operating expenses resulting from property dispositions of $1.9 million and the timing of certain operating expenses of $0.5 million.

Previous 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.

Current wording

General and administrative expenses increased $0.1 million and $0.4 million during the three and nine months ended September 30, 2025, as compared to the same periods in 2024, respectively, primarily due to increased compensation expenses.

Previous wording

Depreciation and amortization expenses decreased $23.7 million and $32.2 million during the three and six months ended June 30, 2025, respectively, as compared to the same periods in 2024, due to the full depreciation of $15.9 million during the three and six months ended June 30, 2024 of the buildings on the six-property campus in Deerfield, Illinois. This accelerated depreciation was the result of the adjustment to the useful life of the assets due to management’s plans to demolish the buildings. The decrease during the three and six months ended June 30, 2025 compared to the same period in 2024 was also due to the $8.0 million and $17.3 million impact of full amortization of certain intangible assets, respectively.

Current wording

The decrease in depreciation and amortization expenses in the nine month period was primarily driven by the $21.7 million impact from the full amortization of certain intangible assets, the $15.9 million impact from the full depreciation of the buildings on the six-property campus in Deerfield, Illinois in the 2024 period as a result of management’s plans to demolish the buildings, the $1.9 million impact of impairments and the $0.8 million impact of property dispositions, partially offset by a $1.1 million increase in depreciation and amortization expenses in the 2025 period related to the property we acquired in September 2024 and $1.1 million related to capitalized real estate assets and intangible lease assets.

Previous 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.

Current wording

Impairments increased $63.7 million and $59.5 million during the three and nine months ended September 30, 2025, respectively, as compared to the same periods in 2024. Impairment charges totaling $63.7 million and $84.9 million with respect to eight and 11 properties were recorded during the three and nine months ended September 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.

Previous 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.

Current wording

Interest expense, net decreased $0.3 million during the three and nine months ended September 30, 2025, respectively, as compared to the same periods in 2024. Our average debt outstanding was $483.0 million and $487.5 million for the three and nine months ended September 30, 2025, respectively, compared to $473.5 million and $478.0 million for each of the same periods in 2024. The weighted average interest rate on our debt obligations was 5.62% and 5.66% for the three and nine months ended September 30, 2025, respectively, and 5.88% for the three and nine months ended September 30, 2024. Interest expense, net for the three and nine months ended September 30, 2025 was offset by capitalized interest of $0.2 million and $0.3 million, respectively. No interest expense was capitalized during the three and nine months ended September 30, 2024.

Previous wording

Gains on disposition of real estate assets were $0.9 million for the three and six months ended June 30, 2025 as compared to no gains on disposition of real estate assets recognized during the same periods in 2024. The gain recognized during the three and six months ended June 30, 2025 was related to three of our dispositions. These properties were subject to cumulative impairment losses of $12.2 million in prior periods.

Current wording

Gains on disposition of real estate assets were $3.3 million and $4.2 million for the three and nine months ended September 30, 2025 as compared to no gains on disposition of real estate assets recognized during the same periods in 2024. The gains recognized during the three and nine months ended September 30, 2025 were related to one and four of our dispositions, respectively. Of the four dispositions with gains recognized during the nine months ended September 30, 2025, two were subject to cumulative impairment losses of $12.2 million in prior periods.

Previous wording

Loss on extinguishment of debt, net during the three and six months ended June 30, 2024 related to the proportionate write off of deferred financing costs due to the permanent reduction of the borrowing capacity of the Revolving Facility of $75.0 million in connection with the third amendment to the Credit Agreement, as defined below and discussed in Note 6 – Debt, Net. There were no such costs incurred during the three and six months ended June 30, 2025.

Current wording

Loss on extinguishment of debt, net during the nine months ended September 30, 2024 related to the proportionate write off of deferred financing costs due to the permanent reduction of the borrowing capacity of the Revolving Facility of $75.0 million in connection with the Third Amendment to the Credit Agreement, as defined below and discussed in Note 6 – Debt, Net. There were no such costs incurred during the three and nine months ended September 30, 2025.

Previous wording

Equity in loss of the unconsolidated joint venture, net increased $0.1 million and $0.2 million during the three and six months ended June 30, 2025, respectively, as compared to the same periods in 2024, which was primarily due to an increase in interest expense following the expiration of an interest rate swap agreement on the Arch Street Joint Venture non-recourse mortgage notes on May 27, 2024.

Current wording

Equity in loss of the unconsolidated joint venture, net increased $0.3 million during the nine months ended September 30, 2025 as compared to the same period in 2024, primarily due to an increase in interest expense following the expiration of an interest rate swap agreement on the Arch Street Joint Venture non-recourse mortgage notes on May 27, 2024.

Previous wording

Due to certain unique operating characteristics of real estate companies, as discussed below, the National Association of Real Estate Investment Trusts, Inc. (“Nareit”), an industry trade group, has promulgated a supplemental performance measure known as funds from operations (“FFO”), which we believe to be an appropriate supplemental performance measure to reflect the operating performance of the Company. FFO is not equivalent to our net income (loss) as determined under U.S. GAAP.

Current wording

Due to certain unique operating characteristics of real estate companies, as discussed below, the National Association of Real Estate Investment Trusts, Inc. (“Nareit”), an industry trade group, has promulgated a supplemental performance measure known as FFO, which we believe to be an appropriate supplemental performance measure to reflect the operating performance of the Company. FFO is not equivalent to our net income (loss) as determined under U.S. GAAP.

Previous wording

In addition to FFO, we use Core FFO as a non-GAAP supplemental financial performance measure to evaluate the operating performance of the Company. Core FFO, as defined by the Company, excludes from FFO items that we believe do not reflect the ongoing operating performance of our business such as transaction related expenses, spin related expenses, amortization of deferred financing costs, amortization of deferred lease incentives, net, equity-based compensation, amortization of premiums and discounts on debt, net and gains or losses on extinguishment of swaps and/or debt, and our proportionate share of Core FFO adjustments related to the unconsolidated joint venture.

Current wording

In addition to FFO, we use Core FFO as a non-GAAP supplemental financial performance measure to evaluate the operating performance of the Company. Core FFO, as defined by the Company, excludes from FFO items that we believe do not reflect the ongoing operating performance of our business such as transaction related expenses, amortization of deferred financing costs, amortization of deferred lease incentives, net, equity-based compensation, amortization of premiums and discounts on debt, net and gains or losses on extinguishment of swaps and/or debt, and our proportionate share of Core FFO adjustments related to the unconsolidated joint venture.