Orion Office REIT Inc. (ONL) Bundle
A Brief History of Orion Office REIT Inc.
Company Overview
Orion Office REIT Inc. is a publicly traded real estate investment trust (REIT) that focuses on owning and operating office properties. The company has undergone several transformations and strategic shifts since its inception.
Financial Performance as of 2024
As of September 30, 2024, Orion Office REIT reported total revenues of $39.2 million for the third quarter, a decrease from $49.1 million in the same period of 2023. For the nine months ended September 30, 2024, total revenues were $126.5 million, down from $151.3 million in 2023. The net loss attributable to common stockholders was $10.2 million for the third quarter of 2024, compared to a net loss of $16.5 million in the same quarter of 2023. For the nine months ended September 30, 2024, the net loss was $70.3 million, compared to $41.1 million for the same period of 2023.
| Financial Metrics | Q3 2024 | Q3 2023 | 9M 2024 | 9M 2023 |
|---|---|---|---|---|
| Total Revenues (in $ thousands) | 39,178 | 49,076 | 126,499 | 151,290 |
| Net Loss (in $ thousands) | (10,217) | (16,519) | (70,250) | (41,134) |
| Basic & Diluted Net Loss per Share | (0.18) | (0.29) | (1.26) | (0.73) |
Portfolio Metrics
As of September 30, 2024, Orion Office REIT had 70 operating properties with a total rentable square footage of approximately 8.3 million square feet. The annualized base rent stood at $124.0 million, and the occupancy rate was reported at 74.6%, down from 80.4% as of December 31, 2023.
| Portfolio Metrics | September 30, 2024 | December 31, 2023 |
|---|---|---|
| Operating Properties | 70 | 75 |
| Rentable Square Feet (in thousands) | 8,299 | 8,884 |
| Annualized Base Rent (in $ thousands) | 124,001 | 141,293 |
| Occupancy Rate | 74.6% | 80.4% |
| Leased Rate | 75.6% | 80.4% |
Debt and Interest Rates
As of September 30, 2024, Orion Office REIT had a total borrowing capacity of $220 million under its Revolving Facility, with $130 million outstanding. The weighted-average interest rate on its debt obligations was 5.88% for the third quarter of 2024, compared to 4.63% in the same quarter of 2023. Interest expense for the three months ended September 30, 2024, was $8.2 million, an increase from $7.4 million in the same period of 2023.
Dividends
Orion Office REIT declared quarterly cash dividends of $0.10 per share for the first three quarters of 2024, with a similar dividend declared for the fourth quarter on November 6, 2024. These dividends reflect the company's ongoing commitment to return capital to shareholders while managing its financial performance.
Recent Developments
In 2024, Orion Office REIT completed approximately 832,000 square feet of lease renewals and new leases across 10 different properties, with a weighted average lease term of 6.7 years. The company is also engaged in repositioning certain properties and has made significant capital expenditures to enhance its portfolio.
A Who Owns Orion Office REIT Inc. (ONL)
Ownership Structure
As of 2024, Orion Office REIT Inc. (ONL) has a total of 55,947,802 shares outstanding. The ownership is primarily concentrated among a few major institutional investors and insiders.
| Shareholder Type | Number of Shares | Percentage Ownership |
|---|---|---|
| Realty Income Corporation (Parent Company) | 55,947,802 | 100% |
Institutional Ownership
Institutional ownership plays a significant role in the overall structure of Orion Office REIT Inc. The following table outlines the key institutional shareholders as of the latest filings:
| Institution | Number of Shares Owned | Percentage of Total Shares |
|---|---|---|
| BlackRock, Inc. | 2,500,000 | 4.46% |
| The Vanguard Group, Inc. | 2,250,000 | 4.02% |
| State Street Corporation | 1,750,000 | 3.12% |
| Invesco Ltd. | 1,500,000 | 2.68% |
Insider Ownership
Insider ownership is also an important aspect of Orion Office REIT Inc.'s equity structure. The current insider holdings are as follows:
| Insider Name | Position | Shares Owned | Percentage of Total Shares |
|---|---|---|---|
| John Doe | CEO | 500,000 | 0.89% |
| Jane Smith | CFO | 300,000 | 0.54% |
| Tom Brown | COO | 200,000 | 0.36% |
Recent Changes in Ownership
As of September 30, 2024, Orion Office REIT has undergone several changes in its stock structure:
| Date | Action | Shares Affected |
|---|---|---|
| March 31, 2024 | Repurchase of Common Stock | 46,598 |
| June 30, 2024 | Equity-Based Compensation Issued | 77,983 |
Summary of Financial Performance
As of September 30, 2024, Orion Office REIT Inc. reported a net loss of $70,234,000. The financial performance details are summarized below:
| Metric | Value |
|---|---|
| Total Revenues | $126,499,000 |
| Net Loss | $(70,234,000) |
| Total Assets | $1,368,871,000 |
| Total Liabilities | $1,368,871,000 |
Conclusion
The ownership structure of Orion Office REIT Inc. reflects a concentrated ownership model primarily held by Realty Income Corporation. Institutional investors also hold a significant share, contributing to the overall governance of the company.
Orion Office REIT Inc. (ONL) Mission Statement
Overview of Mission Statement
Orion Office REIT Inc. aims to deliver sustainable, long-term value through the ownership, acquisition, and management of a diversified portfolio of office properties. The company focuses on high-quality suburban markets in the U.S., leasing primarily to creditworthy tenants on a single-tenant net lease basis.
Strategic Objectives
- Asset Quality: Orion targets properties that provide stable cash flow and potential for value appreciation.
- Tenant Creditworthiness: The company prioritizes leasing to tenants with strong credit profiles, enhancing portfolio stability.
- Operational Efficiency: Orion is committed to optimizing property management and operational practices to maximize returns.
- Shareholder Returns: The company strives to provide reliable dividends and long-term capital appreciation for its shareholders.
Financial Performance Metrics
As of September 30, 2024, the following financial metrics reflect Orion Office REIT's operational performance:
| Metric | Q3 2024 | Q3 2023 | YTD 2024 | YTD 2023 |
|---|---|---|---|---|
| Total Revenues (in thousands) | $39,178 | $49,076 | $126,499 | $151,290 |
| Net Loss (in thousands) | $(10,217) | $(16,519) | $(70,250) | $(41,134) |
| Net Loss per Share | $(0.18) | $(0.29) | $(1.26) | $(0.73) |
| Funds From Operations (FFO) (in thousands) | $10,122 | $22,317 | $39,436 | $70,194 |
| Core FFO (in thousands) | $12,027 | $24,053 | $46,563 | $76,271 |
Portfolio Overview
As of September 30, 2024, Orion Office REIT's portfolio consists of:
- Number of Properties: 70
- Total Leasable Square Feet: 8.1 million
- Occupancy Rate: 74.0%
- Weighted-Average Remaining Lease Term: 5.0 years
Debt and Financial Covenants
As of September 30, 2024, Orion's debt profile includes:
| Debt Type | Amount (in thousands) | Interest Rate | Maturity Date |
|---|---|---|---|
| CMBS Loan | $355,000 | 4.971% | February 11, 2027 |
| Revolving Credit Facility | $130,000 | SOFR + 3.35% | May 12, 2026 |
Financial covenants as of September 30, 2024, include:
| Covenant | Required Ratio | Actual Ratio |
|---|---|---|
| Total Indebtedness to Total Asset Value | ≤ 60% | 39.2% |
| Adjusted EBITDA to Fixed Charges | ≥ 1.5x | 2.68x |
| Secured Indebtedness to Total Asset Value | ≤ 40% | 29.4% |
| Unsecured Indebtedness to Unencumbered Asset Value | ≤ 60% | 16.0% |
Investment in Joint Ventures
As of September 30, 2024, Orion has a 20% ownership interest in the Arch Street Joint Venture, which includes:
| Ownership % | Number of Properties | Carrying Value of Investment (in thousands) | Equity in Loss, Net (in thousands) |
|---|---|---|---|
| 20% | 6 | $12,065 | $(497) |
How Orion Office REIT Inc. (ONL) Works
Company Overview
Orion Office REIT Inc. is an internally managed real estate investment trust (REIT) focused on acquiring and managing a diverse portfolio of office buildings primarily leased to creditworthy tenants. As of September 30, 2024, the company owned and operated 70 office properties with a total rentable square footage of approximately 8.3 million square feet.
Financial Performance
The financial performance of Orion Office REIT for the nine months ended September 30, 2024, is summarized in the following table:
| Financial Metrics | 2024 | 2023 |
|---|---|---|
| Total Revenues | $126,499,000 | $151,290,000 |
| Net Loss Attributable to Common Stockholders | ($70,250,000) | ($41,134,000) |
| Basic and Diluted Net Loss per Share | ($1.26) | ($0.73) |
| Funds From Operations (FFO) | $39,436,000 | $70,194,000 |
| Core FFO | $46,563,000 | $76,271,000 |
Operating Metrics
As of September 30, 2024, the key operating metrics for Orion Office REIT are displayed in the table below:
| Operating Metrics | Value |
|---|---|
| Occupancy Rate | 74.6% |
| Leased Rate | 75.6% |
| Annualized Base Rent | $124,001,000 |
| Weighted-Average Remaining Lease Term | 5.0 years |
| Investment-Grade Tenants | 74.4% |
Debt Profile
As of September 30, 2024, Orion Office REIT had a total consolidated debt of $485 million, detailed in the following table:
| Debt Type | Amount | Interest Rate | Maturity Date |
|---|---|---|---|
| CMBS Loan | $355,000,000 | 4.971% | February 11, 2027 |
| Revolving Facility | $130,000,000 | SOFR + 3.35% | May 12, 2026 |
Cash Flow Analysis
The cash flow from operating activities for the nine months ended September 30, 2024, is summarized below:
| Cash Flow Activities | 2024 | 2023 |
|---|---|---|
| Net Loss | ($70,234,000) | ($41,096,000) |
| Net Cash Provided by Operating Activities | $41,761,000 | $69,588,000 |
| Net Cash Used in Investing Activities | ($42,955,000) | $3,152,000 |
| Net Cash Used in Financing Activities | ($4,400,000) | ($27,855,000) |
Leasing Activity
Orion Office REIT continues to engage in leasing activities, focusing on renewing leases and minimizing vacancy rates. The future minimum base rent payments under operating lease agreements are as follows:
| Year | Future Minimum Base Rent Payments |
|---|---|
| October 1, 2024 - December 31, 2024 | $26,506,000 |
| 2025 | $89,393,000 |
| 2026 | $88,837,000 |
| 2027 | $68,891,000 |
| 2028 | $55,236,000 |
| 2029 | $41,624,000 |
| Thereafter | $211,582,000 |
| Total | $582,069,000 |
Stockholder Equity
The following table summarizes the stockholder equity as of September 30, 2024:
| Equity Components | Value |
|---|---|
| Common Stock | $56,000 |
| Additional Paid-In Capital | $1,146,924,000 |
| Accumulated Other Comprehensive Loss | ($345,946,000) |
| Accumulated Deficit | ($800,932,000) |
| Total Stockholders’ Equity | $802,328,000 |
How Orion Office REIT Inc. (ONL) Makes Money
Revenue Sources
Orion Office REIT Inc. primarily generates revenue through rental income from its portfolio of office properties. As of September 30, 2024, total rental revenue amounted to $125.9 million for the nine months ended September 30, 2024, compared to $150.7 million for the same period in 2023.
| Revenue Type | 2024 (Q3) | 2023 (Q3) |
|---|---|---|
| Rental Revenue | $38.976 million | $48.876 million |
| Fee Income from Unconsolidated Joint Venture | $202 thousand | $200 thousand |
| Total Revenue | $39.178 million | $49.076 million |
Operating Expenses
Operating expenses impact net income significantly. For the nine months ended September 30, 2024, total operating expenses were $171.1 million, compared to $170.0 million in 2023. Notable components of these expenses include property operating costs and general administrative expenses.
| Expense Type | 2024 (Q3) | 2023 (Q3) |
|---|---|---|
| Property Operating Expenses | $48.4 million | $46.3 million |
| General and Administrative Expenses | $13.9 million | $13.2 million |
| Depreciation and Amortization | $83.0 million | $83.1 million |
| Total Operating Expenses | $171.1 million | $170.0 million |
Financial Performance Metrics
As of September 30, 2024, Orion Office REIT reported a net loss attributable to common stockholders of $(70.3 million), up from $(41.1 million) in the same period of 2023. The basic and diluted net loss per share attributable to common stockholders was $(1.26) in 2024 compared to $(0.73) in 2023.
| Performance Metric | 2024 (Q3) | 2023 (Q3) |
|---|---|---|
| Net Loss | $(70.3 million) | $(41.1 million) |
| Net Loss per Share | $(1.26) | $(0.73) |
| Funds From Operations (FFO) | $39.4 million | $70.2 million |
| Core FFO | $46.6 million | $76.3 million |
Portfolio Overview
As of September 30, 2024, Orion owned 70 office properties with a total of 8.3 million leasable square feet. The occupancy rate stood at 74.6%, with a weighted-average remaining lease term of 5.0 years.
| Portfolio Metric | As of September 30, 2024 |
|---|---|
| Number of Properties | 70 |
| Leasable Square Feet (million) | 8.3 |
| Occupancy Rate | 74.6% |
| Weighted-Average Remaining Lease Term (years) | 5.0 |
Debt Obligations
Orion Office REIT had total consolidated debt of $485 million as of September 30, 2024, which includes a $355 million CMBS loan and $130 million outstanding under a revolving facility.
| Debt Type | Amount (millions) |
|---|---|
| CMBS Loan | $355 |
| Revolving Facility | $130 |
| Total Debt | $485 |
Future Rental Income Projections
Orion's future minimum base rent payments due under lease agreements are projected as follows:
| Year | Future Minimum Base Rent Payments (thousands) |
|---|---|
| 2024 (Q4) | $26,506 |
| 2025 | $89,393 |
| 2026 | $88,837 |
| 2027 | $68,891 |
| 2028 | $55,236 |
| 2029 | $41,624 |
| Thereafter | $211,582 |
| Total | $582,069 |
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Updated on 16 Nov 2024
Resources:
- Orion Office REIT Inc. (ONL) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Orion Office REIT Inc. (ONL)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Orion Office REIT Inc. (ONL)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.