Orion Properties Inc.
For the period ended Mar 31, 2026. Filed May 7, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2026 · Filed May 7, 2026
ONL$2.69+14.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-09-30; filed 2025-11-06.
0001873923-25-000130
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-07.
0001873923-26-000082
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 243 previous paragraphs and 243 current paragraphs.
124 unchanged; 67 reworded; 51 added; 46 removed; 6 previous and 1 current paragraphs rearranged.
Tables are not compared: 19 previous and 16 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (51)
Current report
•our strategic review process is and will continue to be costly and time-consuming and may not result in a transaction, and any transaction that occurs may not increase stockholder value;
Current report
Historically, the we have included our proportionate share of the Unconsolidated Joint Venture’s financial statement line items and operating metrics in our non-GAAP financial results and other operating metrics. This includes among other line items and metrics, our proportionate share of annualized base rent, occupied square feet, rentable square feet and weighted average remaining lease term from the six Unconsolidated Joint Venture properties. Due to the uncertainty with regard to the recovery of our investment in the Unconsolidated Joint Venture, beginning January 1, 2026, we will no longer include the proportionate share of the joint venture’s financial statement line items and operating metrics in our non-GAAP financial results and other operating metrics.
Current report
Cooperation Agreement and Strategic Review Process
Current report
On January 26, 2026, we entered into a cooperation agreement (the “Cooperation Agreement”) with one of the Company’s stockholders, The Kawa Fund Limited and its affiliate, Kawa Capital Management, Inc. (collectively, “Kawa”).
Current report
Also on January 26, 2026, pursuant to the Cooperation Agreement, we commenced a review of strategic options for the Company, which review may include, without limitation, the consideration of potential acquisition and merger targets, the potential sale of the Company and continuing to operate as an independent publicly traded entity. The Cooperation Agreement does not obligate the Company to pursue or consummate any such transaction or require our Board of Directors to take any action that it determines in good faith is inconsistent with its duties under applicable law.
Current report
The Cooperation Agreement contains customary standstill and non-disparagement provisions. The Cooperation Agreement will terminate on September 1, 2026. Pursuant to the Cooperation Agreement, Kawa withdrew its notice of intent to nominate director candidates for election to our Board of Directors at the Company’s 2026 annual meeting of stockholders, and Kawa must cause all shares of common stock pursuant to which it has the sole or shared power to direct the voting to be present for quorum purposes at our 2026 annual meeting of stockholders and to refrain from “withholding” or voting “against” the directors nominated by our Board of Directors for election at such annual meeting.
Current report
Real Estate Portfolio
Current report
As of March 31, 2026, we owned and operated 59 operating properties with an aggregate of 6.6 million leasable square feet and annualized base rent of $115.2 million, located within 27 states and an occupancy rate of 83.1% and a weighted average remaining lease term of 5.9 years. As of March 31, 2026, we had six non-operating properties, all of which were sold during April 2026.
Current report
We will lose our emerging growth company status on December 31, 2026. As such, we will be subject to the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act for our annual report on Form 10-K for the year ended December 31, 2026, and the requirements to hold a non-binding advisory vote on executive compensation for our 2027 annual meeting of stockholders.
Current report
We are also a “smaller reporting company” as defined in Regulation S-K under the Securities Act. We may continue to be a smaller reporting company even after we are no longer an emerging growth company and as such may elect to take advantage of certain scaled disclosures available to smaller reporting companies.
Current report
•During February 2026, we acquired one 75,000 square foot property in Northbrook, Illinois for a gross purchase price of $15.0 million. The property is fully leased to a single tenant through December 2036.
Current report
•Subsequent to the three months ended March 31, 2026, we closed on the sale of the 37.4 acre Deerfield, Illinois properties for a gross sales price of $13.1 million, where we completed the demolition of the six buildings during the three months ended December 31, 2025, and the 120,000 square foot property in Glen Burnie, Maryland for a gross sales price of $22.5 million.
Current report
•On February 18, 2026, the Company entered into a credit agreement for the New Revolving Facility and the Original Revolving Facility was terminated and the indebtedness thereunder discharged and paid in full with borrowings under the New Revolving Facility. Among other things, the New Revolving Facility extended the maturity date under the Original Revolving Facility until February 18, 2028, subject to two six-month borrower extension options until February 18, 2029 if we satisfy certain conditions, reduced the lenders’ commitment to $215.0 million to more closely align with our business plan, reduced the interest rate margin on our borrowings by 50-basis points and eliminated the 10-basis point SOFR adjustment. See “Liquidity and Capital Resources - Credit Agreements” below for more information about the New Revolving Facility.
Current report
•Also during February 2026, the Company entered into an amendment to the CMBS Loan which, among other things, extended the maturity date two years until February 11, 2029, subject to two borrower extension options for a total of 18 months until August 11, 2030 if certain conditions have been satisfied. The fixed interest rate on the CMBS Loan is unchanged during the extension terms. See “Liquidity and Capital Resources - Credit Agreements” below for more information about the amendment to the CMBS Loan.
Current report
(1)As of January 1, 2026, the Company no longer includes the proportionate share of the Unconsolidated Joint Venture’s financial statement line items and operating metrics in its non-GAAP metrics and other operating metrics. This change has been applied retrospectively to rentable square feet, annualized base rent, occupancy rate, leased rate, investment-grade tenants and weighted average remaining lease term as of December 31, 2025, for comparison purposes.
Current report
(1)Firm term includes the non-cancellable portion of the lease term and any cancellable portion of the lease term if the tenant's right to cancel requires payment of a termination fee. Non-firm term includes the firm term plus the portion of the lease term, principally under our United States Government leases, where the tenant has the right to terminate without payment of a termination fee.
Current report
The decrease in rental revenue of $1.7 million during the three months ended March 31, 2026 as compared to the same period in 2025 was primarily due to the impact of decreasing overall occupied square footage resulting from the expiration of leases of $4.3 million and dispositions of certain non-core assets of $0.5 million. The decrease in revenues was partially offset by $3.1 million of rental revenue during the three months ended March 31, 2026 related to leasing activity that occurred during the comparative periods. We had 59 operating properties with an aggregate of 5.5 million occupied square feet as of March 31, 2026, as compared to 68 operating properties with an aggregate of 5.8 million occupied square feet as of March 31, 2025.
Current report
Depreciation and amortization expenses decreased $2.9 million during the three months ended March 31, 2026 as compared to the same period in 2025 due to the impact of full amortization of certain intangible assets as a result of leases expiring in accordance with their terms and early lease terminations of $2.6 million, depreciation and amortization expenses from disposed properties of $1.0 million, offset by the depreciation and amortization from capital expenditures and leasing costs of $0.8 million.
Current report
Transaction related expenses
Current report
Transaction related expense increased $0.2 million during the three months ended March 31, 2026 as compared to the same period in 2025, primarily due to costs from terminated transactions of $0.1 million.
Current report
We expect our overall debt levels to increase as we continue to re-invest in our property portfolio and execute on our shift in portfolio concentration away from traditional office properties. We are also exposed to changes in market interest rates on our floating rate borrowings, including those under our New Revolving Facility.
Current report
Other expenses
Current report
Other expenses recognized during the three months ended March 31, 2026 primarily related to $3.0 million of costs incurred for professional services rendered in connection with the February 2026 amendment to the CMBS Loan.
Current report
Recovery of reserve on Member Loan
Current report
During the three months ended March 31, 2026, we received $1.1 million of repayments on the Member Loan, of which $0.4 million was previously reserved and is recognized in recovery of reserve on Member Loan in the accompanying consolidated statements of operations during the three months ended March 31, 2026.
Current report
We account for our investment in the Unconsolidated Joint Venture under the equity method of accounting and during the year ended December 31, 2025, our share of losses exceeded the carrying amount of our investment. Accordingly, we have suspended recognition of our share of additional losses and will resume recognizing our share of earnings only after the Unconsolidated Joint Venture generates net income that exceeds the previously recognized losses. We have not recognized any further losses in excess of our investment in the Unconsolidated Joint Venture during three months ended March 31, 2026.
Current report
The non-recourse mortgage notes associated with the Unconsolidated Joint Venture experienced a payment default at maturity during February 2026. The lenders’ agent under the loan has issued a default notice and has informed the joint venture that it intends to seek to compel a sale of the properties in the joint venture in order to repay the loan. As a result of the ongoing default, the lenders have various rights and remedies that are customary in a non-recourse mortgage financing, such as to implement an excess cash flow sweep, collect default interest, institute a proceeding for foreclosure and apply for the appointment of a receiver. The joint venture remains in discussions with the lenders about next steps which may include a short-term extension and restructuring of the debt with a lender excess cash flow sweep and the requirement to sell one or more properties and utilize the net proceeds to prepay principal outstanding under the debt. We cannot provide any assurance that the Unconsolidated Joint Venture will be able to extend or refinance this debt obligation or that the lenders will not seek to enforce their remedies due to the ongoing payment default.
Current report
Due to the uncertainties with regard to recovery of our investments in the Unconsolidated Joint Venture, we recorded an other-than-temporary impairment loss on our investment in the Unconsolidated Joint Venture as of December 31, 2025, thereby reducing the carrying value of our investment to zero, and have recorded a loan loss reserve for the entire outstanding principal of our member loan to the Unconsolidated Joint Venture (the “Member Loan”). Beginning January 1, 2026, we are recording management fees from the Unconsolidated Joint Venture and interest income on the Member Loan on a cash basis rather than an accrual basis.
Current report
Our prior $350.0 million senior revolving credit facility (the “Original Revolving Facility”) was scheduled to mature on May 12, 2026. As described in more detail below, the Original Revolving Facility was refinanced with a new $215.0 million senior secured revolving credit facility during February 2026 (the “New Revolving Facility”).
Current report
On February 18, 2026, the Company, as parent, and Orion OP, as borrower, entered into a credit agreement for the New Revolving Facility. The credit agreement for the New Revolving Facility includes the following terms and conditions, among others:
Current report
•The Original Revolving Facility has been terminated and the indebtedness thereunder has been discharged and paid in full with borrowings under the New Revolving Facility.
Current report
•The maturity date of the New Revolving Facility is February 18, 2028, subject to Orion OP’s right to further extend the maturity date for two additional option periods of six months each, upon satisfaction of certain conditions.
Current report
•Orion OP and the Company have agreed to grant the lenders first priority mortgages and deeds of trust on a pool of 28 of the Company’s properties and on any additional properties acquired in the future by the Company and approved by the administrative agent (the “Collateral Properties”), and to provide other customary collateral associated with a first lien on commercial office properties. Collateral Properties may only be released from the applicable lien in connection with a sale of such property to a third party or qualified financing and 100% of the net cash proceeds must be applied to repay borrowings under the New Revolving Facility.
Current report
•Orion OP’s borrowings under the New Revolving Facility are guaranteed pursuant to a guaranty by each of the Company, Orion Properties Holdings I LLC and the Subsidiary Guarantors.
Current report
•Orion OP and the lenders agreed that the financial covenants set forth below must be satisfied by Orion OP under the New Revolving Facility.
Current report
◦The ratio of total debt to total asset value must be not more than 0.60 to 1.00.
Current report
◦The ratio of adjusted EBITDA to fixed charges must be not less than 1.50 to 1.00.
Current report
◦Orion OP’s consolidated tangible net worth must be not less than $740.6 million plus 75% of the net proceeds from any equity offering after the date of the New Revolving Facility.
Current report
◦Collateral Property Availability must be at least $215.0 million. For this purpose, Collateral Property Availability means 60% of the aggregate as-is appraised value of all Collateral Properties.
Current report
◦Collateral Property Debt Yield must be at least 13%.
Showing the first 40 of 51 passages. Open the source sections for the rest.
Removed paragraphs (46)
Previous report
•uncertainties regarding future actions that may be taken by Kawa Capital Management, Inc. in furtherance of its unsolicited proposal;
Previous report
•uncertainty as to whether the new Department of Government Efficiency, or DOGE, will lead to efforts by the General Services Administration to exercise termination options under or otherwise seek to terminate our leases with the United States Government or make it more likely the United States Government terminates the applicable lease at lease expiration;
Previous report
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 report
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 report
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 report
•During October 2025, we completed a 1.5-year lease renewal for approximately 50,000 square feet at our property in San Antonio, Texas. During November 2025, we completed a 5.5-year new lease for approximately 7,000 square feet at one of our properties in The Woodlands, Texas.
Previous report
•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 report
•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 report
•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. As of September 30, 2025, our proportionate share of the aforementioned mortgage note was $25.9 million.
Previous report
Unsolicited Indication of Interest
Previous report
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 report
The Company does not undertake any obligation to provide any updates with respect to the proposals received from Kawa or any other proposal received from any other person, except as required by applicable law or other regulatory requirements. There can be no assurance that any transaction will result from the proposals received from Kawa or any other person, or, if so, the timing, terms and conditions of any such transaction.
Previous report
(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 report
(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 report
(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 report
(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 report
(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 report
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 report
Our market rent estimates are based on a variety of assumptions which are subject to change, and we cannot provide any assurance that we will be able to re-let vacant space to new tenants on these or any other terms, in a timely manner, or at all. Our plans with respect to vacant properties are subject to change.
Previous report
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 report
Other items impacting the quarter over quarter rental revenue results were a $0.3 million decline in reimbursement income of real estate taxes in the 2025 period due to lower property values, offset by a $0.8 million increase in rental revenue in the 2025 period from the property we acquired in September 2024 and a $1.2 million increase in lease termination income and reimbursement income for end of lease obligations in the 2025 period.
Previous report
Other items impacting the year-to-date rental revenue results were a $2.2 million decrease in lease termination income and reimbursement income for end of lease obligations in the 2025 period and a $0.3 million decline in reimbursement income for real estate taxes in the 2025 period due to lower property values, offset by a $2.8 million increase in rental revenue in the 2025 period from the property we acquired in September 2024.
Previous report
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 report
Depreciation and amortization expenses decreased $5.2 million and $37.4 million during the three and nine months ended September 30, 2025, respectively, as compared to the same periods in 2024. The decrease in depreciation and amortization expense in the three month period was primarily driven by the $6.1 million impact from the full amortization of certain intangible assets and the $0.3 million impact of property dispositions, partially offset by $0.6 million related to capitalized real estate assets and intangible lease assets and $0.3 million related to the property we acquired in September 2024.
Previous report
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 report
Gain on disposition of real estate assets
Previous report
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 report
Other (expense) income, net
Previous report
Other (expense) income, net decreased $1.0 million and $0.8 million during the three and nine months ended September 30, 2025, respectively, as compared to the same periods in 2024, primarily due to the loss on deferred offering costs of $0.6 million recognized during the three and nine months ended September 30, 2025 in connection with the scheduled expiration of our universal shelf registration statement on Form S-3 with the SEC during November 2025 and expenses in connection with the retirement of Gary Landriau as Chief Investment Officer of $0.3 million.
Previous report
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 report
Equity in loss of the unconsolidated joint venture, net remained relatively consistent during the three months ended September 30, 2025 as compared to the same period in 2024.
Previous report
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 September 30, 2025, there was $129.5 million outstanding under the mortgage notes and our proportionate share 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 report
During November 2024, we provided a member loan to the Arch Street Joint Venture of $1.4 million in connection with the partial repayment of the Arch Street Joint Venture mortgage notes to satisfy the maximum 60% loan-to-value extension condition. 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 $6.7 million receivable as of September 30, 2025, earns interest at 15% and is non-recourse and unsecured, 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 report
Substantial doubt about our ability to continue as a going concern exists 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 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 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.
Previous report
In connection with the Separation and the Distribution, on November 12, 2021, we, as parent, and Orion OP, as borrower, entered into a credit agreement (the “Credit Agreement”) providing for a three-year, $425.0 million senior revolving credit facility (the “Revolving Facility”), including a $25.0 million letter of credit sub-facility, and a two-year, $175.0 million senior term loan facility (the “Term Loan Facility”) with Wells Fargo Bank, National Association, as administrative agent, and the lenders and issuing banks party thereto. In June 2023, as further described below, the Term Loan Facility was repaid and retired with borrowings under the Revolving Facility.
Previous report
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 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.
Previous report
The Revolving Facility is guaranteed pursuant to a guaranty by us and, subject to certain exceptions, substantially all of Orion OP’s existing and future subsidiaries (including substantially all of its subsidiaries that directly or indirectly own unencumbered real properties), other than certain joint ventures and subsidiaries that own real properties subject to certain other indebtedness (such subsidiaries of Orion OP, the “Subsidiary Guarantors”).
Previous report
(1)If the ratio of unsecured debt to unencumbered asset value exceeds 35% as of the end of two consecutive fiscal quarters, Orion OP will be required, within 90 days and subject to cure rights, to grant the administrative agent a first priority lien on all the properties included in the pool of unencumbered assets (other than properties identified for disposition by us so long as such properties are sold within one year of such identification).
Previous report
The CMBS Loan Agreement also contains customary cash management provisions, including certain trigger events (such as failure of the Mortgage Borrowers to satisfy a minimum debt yield test of 8.0%) which allow the Lender to retain any excess cash flow as additional collateral for the Loan, until such trigger event is cured.
Previous report
During the year ended December 31, 2021, we entered into interest rate swap agreements with an aggregate notional amount of $175.0 million, effective on December 1, 2021 and terminating on November 12, 2023, which were designated as cash flow hedges, in order to hedge interest rate volatility. During the year ended December 31, 2022, in connection with the transition of the benchmark rate for borrowings under the Credit Agreement from LIBOR to SOFR, we terminated the interest rate swap agreements that had been entered into during the year ended December 31, 2021, and entered into new interest rate swap agreements with an aggregate notional amount of $175.0 million, effective on December 1, 2022 and terminating on November 12, 2023, which were designated as cash flow hedges, to hedge interest rate volatility with respect to our borrowings under the Term Loan Facility. These swap agreements remained in effect for the $175.0 million of borrowings under the Revolving Facility used to pay down the Term Loan Facility 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% and no lower than 4.20% on $25.0 million, and no higher than 5.50% and no lower than 4.035% 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 would 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. As of September 30, 2025, the weighted average effective interest rate of the Revolving Facility was 7.47%.
Showing the first 40 of 46 passages. Open the source sections for the rest.
Reworded paragraphs (67)
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, including our Revolving Facility which has no remaining extension options;
Current wording
•the risk of increases in 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;
Previous wording
•our ability to access the capital markets to raise additional equity or refinance maturing debt on favorable terms and in a timely manner, or at all;
Current wording
•our ability to access the capital markets to raise additional equity or refinance maturing debt on favorable terms and in a timely manner, or at all, or that the lenders may seek to enforce their remedies due to the existing payment default under the Unconsolidated Joint Venture mortgage notes;
Previous wording
•risks accompanying our investment in and the management of OAP/VER Venture, LLC (the “Arch Street Joint Venture”), our unconsolidated joint venture, in which we hold a non-controlling ownership interest, including that our joint venture partner may not be able to contribute its share of capital requirements;
Current wording
•risks accompanying our investment in and the management of OAP/VER Venture, LLC (the “Unconsolidated Joint Venture”), our unconsolidated joint venture, in which we hold a non-controlling ownership interest, including that our joint venture partner may be unable or unwilling to contribute its share of capital requirements and we may be unable to recover our investment in the Unconsolidated Joint Venture;
Previous wording
When we refer to “annualized base rent,” we mean the monthly aggregate cash amount charged to tenants under our leases (including monthly base rent receivables and certain fixed contractually obligated reimbursements by our tenants), as of September 30, 2025, multiplied by 12, including the Company’s proportionate share of such amounts related to the Arch Street Joint Venture, the Company’s unconsolidated joint venture with an affiliate of Arch Street Capital Partners, LLC (“Arch Street Capital Partners”). Annualized base rent is not indicative of future performance.
Current wording
When we refer to “annualized base rent,” we mean the monthly aggregate cash amount charged to tenants under our leases (including monthly base rent receivables and certain fixed contractually obligated reimbursements by our tenants), as of March 31, 2026, multiplied by 12. Annualized base rent is not indicative of future performance.
Previous wording
Orion is an internally managed real estate investment trust (“REIT”) engaged in the ownership, acquisition, and management of a diversified portfolio of office properties located in high-quality suburban markets across the United States and leased primarily on a single-tenant net lease basis to creditworthy tenants. Our portfolio is comprised of traditional office properties, as well as governmental, medical office, flex/laboratory and R&D and flex/industrial properties. On March 5, 2025, we changed our name from Orion Office REIT Inc. to Orion Properties Inc. to better describe our broader investment strategy to shift our portfolio concentration over time away from traditional office properties, towards more dedicated use assets that have an office component. We define dedicated use assets as those that include a substantial specialized use component such as government, medical, laboratory and research and development, and flex operations, and would therefore not be considered traditional office properties.
Current wording
Orion is an internally managed real estate investment trust (“REIT”) engaged in the ownership, acquisition, and management of a diversified portfolio of office properties located in high-quality suburban markets across the United States and leased primarily on a single-tenant net lease basis to creditworthy tenants. Our portfolio is comprised of traditional office properties, as well as governmental, medical office, flex/laboratory and R&D and flex/industrial properties. As part of our investment strategy, we intend to shift our portfolio concentration over time away from traditional office properties, towards more dedicated use assets with specialized uses that include an office component.
Previous wording
The Company was initially formed as a wholly owned subsidiary of Realty Income Corporation (“Realty Income”). Following completion of the merger transaction involving Realty Income and VEREIT, Inc. (“VEREIT”) on November 1, 2021, Realty Income contributed the combined business comprising certain office real properties and related assets previously owned by subsidiaries of Realty Income, and certain office real properties and related assets previously owned by subsidiaries of VEREIT (the “Separation”), to the Company and its operating partnership, Orion Properties LP (“Orion OP”), and on November 12, 2021, effected a special distribution to its stockholders of all the outstanding shares of common stock of the Company (the “Distribution”).
Current wording
The Company was initially formed as a wholly owned subsidiary of Realty Income Corporation (“Realty Income”). Following completion of the merger transaction involving Realty Income and VEREIT, Inc. (“VEREIT”) on November 1, 2021, Realty Income contributed the combined business comprising certain office real properties and related assets previously owned by subsidiaries of Realty Income, and certain office real properties and related assets previously owned by subsidiaries of VEREIT (the “Separation”), to the Company and its operating partnership, Orion Properties LP (“Orion OP”), and on November 12, 2021, effected a special distribution to Realty Income’s stockholders of all the outstanding shares of common stock of the Company (the “Distribution”).
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 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.
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 9.7% and 11.7% of our annualized base rent are scheduled to expire during the remainder of 2026 and in 2027, 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 future prolonged federal government shutdown, similar to the shutdown that began in the third quarter of 2025 and the partial shutdown that began in the first quarter of 2026, 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 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:
Current wording
As of March 31, 2026, 69.2%, 24.6% and 6.2% 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, 2026, 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 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.
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 or restrict our access to, and increase our cost of, capital as we seek to extend, refinance or repay our debts. See “Liquidity and Capital Resources - Credit Agreements” below for more information about our indebtedness.
Previous wording
We are an “emerging growth company” as defined in the Jumpstart Our Business Startups Act (the “JOBS Act”). As such, we are eligible to take advantage of certain exemptions from various reporting requirements that apply to other public companies that are not emerging growth companies, including compliance with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act and the requirements to hold a non-binding advisory vote on executive compensation and any golden parachute payments not previously approved. We cannot predict if investors will find our common stock less attractive because we rely on the exemptions available to us as an emerging growth company. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile.
Current wording
We have been an “emerging growth company” as defined in the Jumpstart Our Business Startups Act (the “JOBS Act”) since the public Distribution of our common stock in November 2021. As such, we are eligible to take advantage of certain exemptions from various reporting requirements that apply to other public companies that are not emerging growth companies, including compliance with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act and the requirements to hold a non-binding advisory vote on executive compensation and any golden parachute payments not previously approved. We cannot predict if investors will find our common stock less attractive because we rely on the exemptions available to us as an emerging growth company. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile.
Previous 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.
Current wording
The consolidated financial statements of the Company for the three months ended March 31, 2026 and 2025, 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 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.
Current wording
•During the three months ended March 31, 2026, we completed approximately 355,000 square feet of lease extensions and new leases across three different properties and a weighted average lease term of 7.8 years.
Previous wording
•During the nine months ended September 30, 2025, we closed on the sale of seven properties totaling approximately 634,000 square feet for an aggregate gross sales price of $48.7 million. In connection with four of the property dispositions, we provided aggregate sales price credits to the buyers of $3.0 million.
Current wording
•During the three months ended March 31, 2026, we closed on the sale of two non-operating properties totaling approximately 516,000 square feet for an aggregate gross sales price of $13.1 million.
Previous 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.
Current wording
•As of May 7, 2026, we have pending agreements in place to sell three additional properties for an aggregate gross sales price of $46.0 million, including an approximately 140,000 square foot traditional office property for a gross sales price of $35.0 million with proceeds expected to be used to paydown outstanding principal on the Company’s CMBS Loan (as defined below), an approximately 35,000 square foot near-term vacant property for a gross sales price of $3.4 million, and our proportionate share of the gross sales price of one Unconsolidated Joint Venture property of $7.7 million with proceeds expected to be used to paydown outstanding principal on the Unconsolidated Joint Venture non-recourse mortgage notes. 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, second and third quarters of 2025 which were paid on April 15, 2025, July 15, 2025 and October 15, 2025.
Current wording
•The Company’s Board of Directors declared a quarterly cash dividend of $0.02 per share for the first quarter of 2026 (record date March 31, 2026), which was paid on April 15, 2026.
Previous 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.
Current wording
•On May 5, 2026 the Company’s Board of Directors declared a quarterly cash dividend of $0.02 per share for the second quarter of 2026, payable on July 15, 2026 to stockholders of record as of June 30, 2026.
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 dates 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 consolidated operating properties as of the dates indicated below:
Previous wording
(1)Represents leasable square feet of operating properties and the Company’s proportionate share of leasable square feet of properties owned by the Arch Street Joint Venture.
Current wording
(2)Represents leasable square feet of operating properties.
Previous 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%.
Current wording
(3)Occupancy rate equals the sum of occupied square feet divided by rentable square feet of operating properties.
Previous wording
(3)Leased rate equals the sum of leased square feet divided by rentable square feet of operating properties.
Current wording
(4)Leased rate equals the sum of leased square feet divided by rentable square feet of operating properties.
Previous wording
(4)Based on annualized base rent of our real estate portfolio, including the Company’s proportionate share of annualized base rent for properties owned by the Arch Street Joint Venture, as of September 30, 2025. Investment-grade tenants are those with a credit rating of BBB- or higher by Standard & Poor’s Financial Services LLC or a credit rating of Baa3 or higher by Moody’s Investor Service, Inc. The ratings may reflect those assigned by Standard & Poor’s Financial Services LLC or Moody’s Investor Service, Inc. to the lease guarantor or the parent company, as applicable.
Current wording
(5)Based on annualized base rent of our real estate portfolio as of March 31, 2026. Investment-grade tenants are those with a credit rating of BBB- or higher by Standard & Poor’s Financial Services LLC or a credit rating of Baa3 or higher by Moody’s Investor Service, Inc. The ratings may reflect those assigned by Standard & Poor’s Financial Services LLC or Moody’s Investor Service, Inc. to the lease guarantor or the parent company, as applicable.
Previous 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.
Current wording
We remain highly focused on leasing activity, given the 5.9 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 of the above factors, 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
As of September 30, 2025, we had the following estimated total outstanding rent concessions and leasing costs commitments, including our proportionate share of the commitments of the Arch Street Joint Venture (in thousands, except per square foot amounts):
Current wording
As of March 31, 2026, we had the following estimated total outstanding rent concessions and leasing costs commitment (in thousands, except per square foot amounts):
Previous wording
(4)Landlord work represents specific improvements agreed to within the lease agreement to be performed by us, as landlord, as a new non-recurring obligation and in order to induce the tenant to enter into a new lease or lease renewal or extension. Outstanding commitments for reimbursable and non-reimbursable landlord work amounts include estimates and are subject to change.
Current wording
(3)Landlord work represents specific improvements agreed to within the lease agreement to be performed by us, as landlord, as a new non-recurring obligation and in order to induce the tenant to enter into a new lease or lease renewal or extension. Outstanding commitments for reimbursable and non-reimbursable landlord work amounts include estimates and are subject to change.
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 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.
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 the CMBS Loan, we have funded an all-purpose reserve with the lender which had total cash reserves of $46.1 million as of March 31, 2026 and may be used for leasing costs and capital expenditures.
Previous 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.
Current wording
(3)Excludes two new leases for approximately 195,000 square feet for the three months ended March 31, 2026 that had been or will be vacant for more than 12 months at the time the new lease commences. Excludes one new lease for approximately 160,000 square feet during the three months ended March 31, 2025.
Previous 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.
Current 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 its multi-tenant properties, the Company has 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
(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.
Current wording
(5)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 March 31, 2026. Tenant rent concessions and leasing costs per rentable square foot for the three months ended March 31, 2025 and attributable to new leases have been retrospectively updated to reduce the amount of tenant improvement allowance by $1.00 per rentable square foot per year pursuant to the terms of a subsequent lease amendment entered into during the three months ended March 31, 2026.
Previous wording
(1)Includes the Company’s proportionate share of rentable square feet and tenant rent concessions and leasing costs for one 163,000 square foot renewal at a property owned by the Company’s Arch Street Joint Venture.
Current wording
(6)Includes the Company's proportionate share of rentable square feet and tenant rent concessions and leasing costs for one 163,000 square foot renewal at a property owned by the Company's Unconsolidated Joint Venture.
Previous 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.
Current 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, 2026 and 2025.
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 $0.6 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.
Current wording
Property operating expenses such as taxes, insurance, ground rent and maintenance include both reimbursable and non-reimbursable property expenses. Property operating expenses decreased $1.7 million during the three months ended March 31, 2026 as compared to the same period in 2025, primarily due to decreases in property operating expenses resulting from property dispositions of $1.8 million and a decrease in real estate taxes due to lower property values of $1.2 million, offset by costs of $0.7 million incurred in connection with the demolition of the buildings on the six-property campus in Deerfield, Illinois, increased operating expenses from our leasing efforts to increase occupancy at certain properties of $0.4 million, and the timing of certain operating expenses of $0.2 million.
Previous 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.
Current wording
General and administrative expenses increased during the three months ended March 31, 2026 as compared to the same period in 2025, driven by $0.1 million of legal expenses related to the ongoing strategic options review process and activist shareholders.
Previous 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.
Current wording
Impairments increased $4.6 million during the three months ended March 31, 2026 as compared to the same period in 2025. The impairment charges of $6.3 million in the three months ended March 31, 2026, include one property and the charges reflect management’s estimates of lease renewal probability, timing and terms of such renewal, carrying costs for vacant properties, sale probability and estimates of sale proceeds. Impairment charges totaling $1.7 million with respect to two properties were recorded during the same period in 2025. See Note 5 - Fair Value Measures for further information.
Previous wording
Other (Expense) Income and Provision for Income Taxes
Current wording
Other (Expenses) Income and Provision for Income Taxes
Previous 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.
Current wording
Interest expense, net decreased $0.9 million during the three months ended March 31, 2026 as compared to the same period in 2025. The Company’s average debt outstanding was $481.1 million for the three months ended March 31, 2026 compared to $498.5 million during the same period in 2025. The Company’s weighted average interest rate on its debt obligations was 5.39% for the three months ended March 31, 2026 and 5.69% for the same period in 2025. Interest expense, net was offset by capitalized interest of $0.3 million during the three months ended March 31, 2026, and there was no capitalized interest during the three months ended March 31, 2025.
Previous 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.
Current wording
Loss on extinguishment of debt, net during the three months ended March 31, 2026 related to the write-off of deferred financing costs in connection with the refinancing of the Original Revolving Facility with the New Revolving Facility and resulting net reduction in total borrowing capacity discussed in Note 6 – Debt, Net. There were no such costs incurred during the three months ended March 31, 2025.
Previous wording
Funds From Operations (“FFO”) and Core Funds From Operations (“Core FFO”) Attributable to Orion
Current wording
Funds From Operations (“FFO”) and Core Funds From Operations (“Core FFO”) Attributable to Common Stockholders
Previous wording
Nareit defines FFO as net income (loss) computed in accordance with U.S. GAAP adjusted for gains or losses from disposition of real estate assets, depreciation and amortization of real estate assets, impairment write-downs on real estate, and our proportionate share of FFO adjustments related to the unconsolidated joint venture. We calculate FFO in accordance with Nareit’s definition described above.
Current wording
Nareit defines FFO as net income (loss) computed in accordance with U.S. GAAP adjusted for gains or losses from disposition of real estate assets, depreciation and amortization of real estate assets, impairment write-downs on real estate and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity. For periods prior to January 1, 2026, we also adjust for our proportionate share of FFO adjustments related to the Unconsolidated Joint Venture. We calculate FFO in accordance with Nareit’s definition described above.
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, 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, for periods prior to January 1, 2026, our proportionate share of Core FFO adjustments related to the Unconsolidated Joint Venture.
Previous wording
For all of these reasons, we believe FFO and Core FFO, in addition to net income (loss), as determined under U.S. GAAP, are helpful supplemental performance measures and useful in understanding the various ways in which our management evaluates the performance of the Company over time. However, not all REITs calculate FFO and Core FFO the same way, so comparisons with other REITs may not be meaningful. FFO and Core FFO should not be considered as alternatives to net income (loss) and are not intended to be used as a liquidity measure indicative of cash flow available to fund our cash needs.
Current wording
For all of these reasons, we believe FFO and Core FFO, in addition to net income (loss), as determined under U.S. GAAP, are helpful supplemental performance measures and useful in understanding the various ways in which our management evaluates the performance of the Company over time. However, not all REITs calculate FFO and Core FFO the same way, so comparisons with other REITs may not be meaningful. FFO and Core FFO should not be considered as alternatives to net income (loss) and are not intended to be used as a liquidity measure indicative of cash flow available to fund our cash needs. Neither the SEC, Nareit, nor any other regulatory body has evaluated the acceptability of the exclusions used to adjust FFO in order to calculate Core FFO and its use as a non-GAAP financial performance measure.
Showing the first 40 of 67 pairs. Open the source sections for the rest.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
The New Revolving Facility includes customary representations and warranties of the Company and Orion OP, which must be true and correct in all material respects as a condition to future extensions of credit under the New Revolving Facility. The
Rearranged previous paragraphs (6)
Previous report — wording carried elsewhere
•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 report — wording carried elsewhere
(1)Represents weighted average percentage increase or decrease in (i) the annualized monthly cash amount charged to the applicable tenants (including monthly base rent receivables and certain fixed contractually obligated reimbursements by the applicable tenants, which may include estimates) as of the commencement date of the new lease term (excluding any full or partial rent abatement period) compared to (ii) the annualized monthly cash amount charged to the applicable tenants (including the monthly base rent receivables and certain fixed contractually obligated reimbursements by the applicable tenants, which may include estimates) as of the expiration date of the prior lease term. Contractually obligated reimbursements include estimated amortization of certain landlord funded improvements under our United States Government leases. If a space has been or will be vacant for more than 12 months prior to the commencement of a new lease, was previously otherwise not generating full cash rental revenue or if the lease types are not comparable, the lease will be excluded from the rental rate change calculation.
Previous report — wording carried elsewhere
During the periods indicated below, we entered into new and renewal leases as summarized in the following table (dollars and square feet in thousands):
Previous report — wording carried elsewhere
(4)Includes tenant improvement allowances and base building allowances, leasing commissions and free rent (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 report — wording carried elsewhere
There were no impairment charges recorded during the three months ended September 30, 2024. Impairment charges totaling $25.4 million with respect to eight properties were recorded during the nine months ended September 30, 2024. See Note 5 - Fair Value Measures for further information.
Previous report — wording carried elsewhere
Neither the SEC, Nareit, nor any other regulatory body has evaluated the acceptability of the exclusions used to adjust FFO in order to calculate Core FFO and its use as a non-GAAP financial performance measure.