onl-20240331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2024


			OR
☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
			For the transition period from _________ to __________

Commission file number: 001-40873


Orion Office REIT Inc.
(Exact name of registrant as specified in its charter)

Maryland

87-1656425

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

2398 E. Camelback Road, Suite 1060

Phoenix

85016

(Address of principal executive offices)

(Zip Code)


(602)			698-1002
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:

Title of each class:

Trading Symbol(s):

Name of each exchange on which registered:

Common Stock

$0.001 par value per share

ONL

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”) during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

There were 55,869,819 shares of common stock of Orion Office REIT Inc. outstanding as of May 3, 2024.

ORION OFFICE REIT INC.

For the quarterly period ended March 31, 2024


						Page
PART I
Item 1. Unaudited Financial Statements						3

Orion Office REIT Inc. Consolidated Balance Sheets as of March 3 1 , 202 4 and December 31, 20 23						3
Orion Office REIT Inc. Consolidated Statements of Operations for the Three Months Ended March 3 1 , 202 4 and 202 3						4
Orion Office REIT Inc. Consolidated Statements of Comprehensive Income (Loss) for the Three Months Ended March 3 1 , 202 4 and 202 3						5
Orion Office REIT Inc. Consolidated Statements of Equity for the Thre e Months Ended March 3 1 , 202 4 and 202 3						6
Orion Office REIT Inc. Consolidated Statements of Cash Flows for the Three Months Ended March 3 1 , 202 4 and 202 3						7
Notes to Orion Office REIT Inc. Consolidated Financial Statements						8



Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations						26
Item 3. Quantitative and Qualitative Disclosures About Market Risk						45
Item 4. Controls and Procedures						46
PART II
Item 1. Legal Proceedings						47
Item 1A. Risk Factors						47
Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities						48
Item 3. Defaults Upon Senior Securities						48
Item 4. Mine Safety Disclosures						48
Item 5. Other Information						48
Item 6. Exhibits						49
Signatures						50

Table of Contents

PART I — FINANCIAL INFORMATION

Item 1. Unaudited Financial Statements.

ORION OFFICE REIT INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except for share and per share data) (Unaudited)


	March 31, 2024		December 31, 2023
ASSETS
Real estate investments, at cost:
Land	$	223,439	$	223,264
Buildings, fixtures and improvements	1,081,788		1,097,132
Total real estate investments, at cost	1,305,227		1,320,396
Less: accumulated depreciation	165,490		158,791
Total real estate investments, net	1,139,737		1,161,605
Accounts receivable, net	24,942		24,663
Intangible lease assets, net	110,145		126,364
Cash and cash equivalents	23,618		22,473

Other assets, net	87,077		88,828
Total assets	$	1,385,519	$	1,423,933

LIABILITIES AND EQUITY
Mortgages payable, net	$	353,028	$	352,856

Credit facility revolver	116,000		116,000
Accounts payable and accrued expenses	23,732		30,479
Below-market lease liabilities, net	6,753		8,074
Distributions payable	5,587		5,578
Other liabilities, net	24,468		23,943
Total liabilities	529,568		536,930

Common stock, $0.001 par value, 100,000,000 shares authorized 55,869,819 and 55,783,548 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively	56		56
Additional paid-in capital	1,145,264		1,144,636
Accumulated other comprehensive loss	(45)		(264)
Accumulated deficit	(290,710)		(258,805)
Total stockholders’ equity	854,565		885,623
Non-controlling interest	1,386		1,380
Total equity	855,951		887,003
Total liabilities and equity	$	1,385,519	$	1,423,933

The accompanying notes are an integral part of these statements.

Table of Contents

ORION OFFICE REIT INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except for per share data) (Unaudited)


	Three Months Ended March 31,
	2024		2023
Rental	$	46,995	$	49,990
Fee income from unconsolidated joint venture	202		200
Total revenues	47,197		50,190
Operating expenses:
Property operating	15,999		15,344
General and administrative	4,949		4,309
Depreciation and amortization	24,504		28,166
Impairments	19,685		3,754
Transaction related	110		105
Total operating expenses	65,247		51,678
Other (expenses) income:
Interest expense, net	(8,146)		(7,139)



Other income, net	163		36
Equity in loss of unconsolidated joint venture, net	(116)		(123)
Total other (expenses) income, net	(8,099)		(7,226)
Loss before taxes	(26,149)		(8,714)
Provision for income taxes	(77)		(160)
Net loss	(26,226)		(8,874)
Net income attributable to non-controlling interest	(6)		(11)
Net loss attributable to common stockholders	$	(26,232)	$	(8,885)

Weighted-average shares outstanding - basic and diluted	55,803		56,642
Basic and diluted net loss per share attributable to common stockholders	$	(0.47)	$	(0.16)

The accompanying notes are an integral part of these statements.

Table of Contents

ORION OFFICE REIT INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In thousands) (Unaudited)


	Three Months Ended March 31,
	2024		2023
Net loss	$	(26,226)

SEC Form 10-Q filed by Orion Office REIT Inc.