Orion Properties Inc (ONL) 2022 Q4 法說會逐字稿

Greetings, and welcome to Orion Office REIT's Fourth Quarter and Full Year 2022 Earnings Call. This conference call is being recorded.

您好，歡迎來到 Orion Office REIT 的第四季度和 2022 年全年收益電話會議。正在錄製此電話會議。

I'd now like to turn the call over to your host, Paul Hughes, General Counsel for Orion. Please go ahead, Paul.

我現在想把電話轉給你的主人，獵戶座的總法律顧問保羅休斯。請繼續，保羅。

Thank you, operator. Good morning, everyone. Yesterday, Orion released its financial results for the quarter and year ended December 31, 2022, filed its Form 10-K with the Securities and Exchange Commission and posted its earnings supplement to its website. These documents are available in the Investors section of the company's website at www.onlreit.com.

謝謝你，運營商。大家，早安。昨天，Orion 發布了截至 2022 年 12 月 31 日的季度和年度財務業績，向美國證券交易委員會提交了 10-K 表格，並在其網站上發布了收益補充資料。這些文件可在公司網站 www.onlreit.com 的投資者部分獲得。

Forward-looking statements made during today's call such as the company's guidance for calendar year 2023, are subject to a number of risks and uncertainties that could cause actual results to differ materially from our expectations. These risks and uncertainties are discussed in our earnings release as well as in our Form 10-K and other SEC filings. The company undertakes no duty to update any forward-looking statements that may be made during today's call.

在今天的電話會議上做出的前瞻性陳述，例如公司對 2023 日曆年的指導，受到許多風險和不確定性的影響，這些風險和不確定性可能導致實際結果與我們的預期存在重大差異。這些風險和不確定性在我們的收益發布以及我們的 10-K 表格和其他 SEC 文件中進行了討論。公司不承擔更新今天電話會議期間可能做出的任何前瞻性陳述的義務。

Additionally, during the conference today, we will be discussing certain non-GAAP financial measures, such as funds from operations, or FFO, and core funds from operations, or core FFO. The company's earnings release and supplement include a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP measure. As discussed in the company's earnings release and Form 10-K, we will be revising our definition of core FFO beginning in 2023 to exclude certain noncash amortization charges, which do not reflect the ongoing performance of our business.

此外，在今天的會議期間，我們將討論某些非 GAAP 財務指標，例如來自運營的資金或 FFO，以及來自運營的核心資金或核心 FFO。公司的收益發布和補充包括將這些非 GAAP 財務指標與最直接可比的 GAAP 指標進行調節。正如公司的收益發布和 10-K 表格中所討論的，我們將從 2023 年開始修改我們對核心 FFO 的定義，以排除某些非現金攤銷費用，這些費用不能反映我們業務的持續表現。

Hosting the call today are Paul McDowell, the company's Chief Executive Officer; Gavin Brandon, the company's Chief Financial Officer. And joining us for the Q&A session are Gary Landriau, our Chief Investment Officer; and Chris Day, our Chief Operating Officer.

今天主持電話會議的是公司首席執行官 Paul McDowell；公司首席財務官加文·布蘭登 (Gavin Brandon)。加入我們的問答環節的是我們的首席投資官 Gary Landriau；和我們的首席運營官 Chris Day。

With that, I am now going to turn the call over to Paul McDowell. Paul?

有了這個，我現在要把電話轉給保羅麥克道爾。保羅？

Thank you, Paul. Good morning, everyone, and welcome to Orion Office REIT's earnings call. On behalf of our team, I want to thank you all for joining us. On the call today, I will discuss our performance in the fourth quarter and full year 2022, touch on our first full year of operations and highlight the ongoing progress we are making on Orion's portfolio. I will then turn the call over to Gavin to provide an update on our financial results and guidance.

謝謝你，保羅。大家早上好，歡迎來到 Orion Office REIT 的財報電話會議。我代表我們的團隊，感謝大家加入我們。在今天的電話會議上，我將討論我們在第四季度和 2022 年全年的業績，談到我們的第一個全年運營，並強調我們在 Orion 產品組合方面取得的持續進展。然後我會把電話轉給加文，提供我們財務業績和指導的最新情況。

As I mentioned, 2022 was our first full year of operations following our spin-off from Realty Income. During the year, we made significant progress in our core strategy that focuses on owning mission-critical suburban office properties located in high-quality suburban markets throughout the United States. These accomplishments came against the backdrop of an evolving and challenging economic environment for real estate in general and office properties in particular.

正如我提到的，2022 年是我們從 Realty Income 分拆出來後的第一個完整運營年。在這一年中，我們在核心戰略方面取得了重大進展，該戰略側重於擁有位於全美優質郊區市場的任務關鍵型郊區辦公物業。這些成就是在一般房地產，尤其是寫字樓的經濟環境不斷變化和充滿挑戰的背景下取得的。

Our mission, as we have communicated since inception is to own high-quality stabilized assets in the right markets and that will require, we resolve pending lease maturities and vacancies across a large portion of our portfolio in the coming years. To do so, we are intensively managing our assets, including making thoughtful capital allocation decisions in order to effectively address these issues.

正如我們自成立以來所傳達的那樣，我們的使命是在正確的市場擁有高質量的穩定資產，這將需要我們在未來幾年解決我們大部分投資組合中未決的租賃到期和空缺問題。為此，我們正在集中管理我們的資產，包括做出深思熟慮的資本分配決策，以有效解決這些問題。

The ongoing economic environment of rising interest rates, persistent inflation, recession fears and many tenants in action on mandating a return to the office is impacting the timing around signing new and/or extending current leases in our properties. We have faced many of these headwinds since our spin. However, given the quality of our core assets, we have confidence that our approach to unlock long-term value from owning a large suburban net lease office portfolio in attractive markets will persevere with time.

利率上升、持續通貨膨脹、經濟衰退擔憂以及許多要求返回辦公室的租戶的持續經濟環境正在影響我們簽署新租約和/或延長現有租約的時間。自從我們旋轉以來，我們遇到了許多這樣的逆風。然而，鑑於我們核心資產的質量，我們有信心我們通過在有吸引力的市場擁有大型郊區淨租賃辦公室組合來釋放長期價值的方法將隨著時間的推移而持續下去。

Many of us in Orion's senior management team have effectively navigated these cycles before. We believe that as conditions inevitably improve, the long-term demographic trends and the changing workplace to position our core properties to serve as the base to spur Orion's growth.

我們 Orion 高級管理團隊中的許多人以前都曾有效地駕馭過這些週期。我們相信，隨著條件不可避免地改善，長期的人口趨勢和不斷變化的工作場所將定位我們的核心資產，作為刺激 Orion 增長的基礎。

As of year-end and including the disposition of 6 noncore properties in the fourth quarter, we owned 81 properties and 6 unconsolidated joint venture properties, representing 9.7 million square feet. That was 89% occupied, up slightly from 88.2% last quarter.

截至年底，包括第四季度 6 處非核心物業的處置，我們擁有 81 處物業和 6 處未合併的合資物業，總面積為 970 萬平方英尺。這是 89% 的佔用率，略高於上一季度的 88.2%。

It is important to stress the strengths that our core portfolio possesses. Our properties are leased to creditworthy tenants, primarily on a net lease basis. As a percentage of annualized base rent, there was 73.3% Investment Grade tenancy across the portfolio and approximately 83.4% of our leases are either triple or double net. Our portfolio's weighted average remaining lease term ended 2022 at 4.1 years, steady with 1 year ago. Our assets are also diversified by tenant, tenant industry and geography. No tenant industry makes up more than 13.4% of annualized base rent, and no single tenant makes up more than 11.9% of annualized base rent.

重要的是要強調我們的核心產品組合所具有的優勢。我們的物業主要以淨租賃為基礎出租給信譽良好的租戶。作為年化基本租金的百分比，整個投資組合中有 73.3% 的投資級租賃，我們約 83.4% 的租賃是三重或雙淨。截至 2022 年，我們投資組合的加權平均剩餘租期為 4.1 年，與 1 年前持平。我們的資產也因租戶、租戶行業和地域而多樣化。沒有一個租戶行業佔年化基本租金的 13.4% 以上，沒有一個租戶佔年化基本租金的 11.9% 以上。

Our largest markets by state are Texas and New Jersey, which represents 15% and 12% of annualized base rent, respectively. And approximately 33% of our annualized base rent is derived from Sunbelt markets, a proportion we intend to grow over time.

我們最大的州市場是德克薩斯州和新澤西州，分別佔年化基本租金的 15% 和 12%。我們約 33% 的年化基本租金來自 Sunbelt 市場，我們打算隨著時間的推移增加這一比例。

From a leasing perspective, we look to begin renewal negotiations proactively with our existing tenants as early as we can. However, the uncertain economy and the continuing hesitancy to return to the office is resulting in the constant recalibration of businesses around the country as companies realign their expectations for space and growth. The consequence we have found is that our tenants continue to push leasing decisions out, are shrinking their space needs and new tenants are waiting to commit to new space. This dynamic is not unique to Orion nor our assets, but a symptom of the wider environment facing every office landlord.

從租賃的角度來看，我們希望儘早與現有租戶積極開始續約談判。然而，隨著公司重新調整對辦公空間和增長的預期，不確定的經濟和對重返辦公室的持續猶豫導致全國各地的企業不斷重新調整。我們發現的結果是我們的租戶繼續推遲租賃決定，正在縮小他們的空間需求，而新租戶正在等待承諾新的空間。這種動態並非 Orion 或我們的資產所獨有，而是每個辦公室業主面臨的更廣泛環境的症狀。

Importantly, we maintained leasing momentum throughout the year. In the fourth quarter, we had 2, 10-year lease renewals for a total of 213,000 square feet at 2 of the company's properties in New York; 1, 5-year lease renewal for 90,000 square feet at one of the company's properties in Lawrence, Kansas; and 1, 5.4-year lease renewal for 4,000 square feet at one of the company's properties in The Woodlands in Houston, Texas.

重要的是，我們全年保持租賃勢頭。第四季度，我們在紐約的 2 個公司物業中續簽了 2 個 10 年租約，總面積為 213,000 平方英尺； 1、公司位於堪薩斯州勞倫斯的一處物業，續租 90,000 平方英尺，為期 5 年； 1、公司在得克薩斯州休斯敦 The Woodlands 的一處 4,000 平方英尺的租約續約 5.4 年。

The company also signed a new 5.4-year lease for 78,000 square feet at one of its properties in Brownsville, Texas. For the year, we leased 805,000 square feet of space at positive cash rent spreads of more than 4% and with a weighted average lease term of more than 7 years. As we look back on our progress in only our first 14 months of being public, we have completed approximately 1.5 million square feet of lease renewals, expansions and new leases. As we look ahead, we continue to have an active pipeline of several hundred thousand square feet of leases in various stages of negotiation and documentation.

該公司還在其位於得克薩斯州布朗斯維爾的一處物業簽署了一份為期 5.4 年的新租約，租用面積為 78,000 平方英尺。這一年，我們以超過 4% 的正現金租金利差租賃了 805,000 平方英尺的空間，加權平均租期超過 7 年。回顧上市後僅前 14 個月的進展，我們已經完成了約 150 萬平方英尺的續租、擴建和新租約。展望未來，在談判和文件的各個階段，我們將繼續擁有數十萬平方英尺的活躍租約。

Given the nature of our lease expirations, tenant retention will continue to be lumpy quarter-to-quarter and year-to-year. Specifically, we had 3 scheduled lease expirations during the fourth quarter, totaling about 286,000 square feet, and we own 5 vacant assets at year-end. 2023 will present a variety of challenges for retention, particularly given that we have more than 750,000 square feet of space expiring in suburban Chicago, including the Walgreens campus.

鑑於我們租約到期的性質，租戶保留率將繼續按季度和按年波動。具體來說，我們在第四季度有 3 個預定的租賃到期，總計約 286,000 平方英尺，我們在年底擁有 5 個空置資產。 2023 年將面臨各種保留挑戰，特別是考慮到我們在芝加哥郊區有超過 750,000 平方英尺的空間到期，包括沃爾格林校園。

That said, we focus intently on addressing vacancy in the portfolio on commercially reasonable terms in regards to the timing and expense. At year end, our vacant space represented about 11% or 1.1 million square feet of the overall portfolio, and we incur annual operating expenses of roughly $7.50 per square foot on average to keep that space. Accordingly, one of our main asset management strategies has been to sell vacant and identify noncore assets that do not fit our long-term investment objectives to both reduce carry costs and avoid the uncertainty and significant capital expenditures associated with retenanting.

也就是說，我們專注於在時間和費用方面以商業上合理的條款解決投資組合中的空缺問題。年底時，我們的空置空間約佔整個投資組合的 11% 或 110 萬平方英尺，我們每年平均為保留該空間產生大約每平方英尺 7.50 美元的運營費用。因此，我們的主要資產管理策略之一是出售空置資產並確定不符合我們長期投資目標的非核心資產，以降低持有成本並避免與續租相關的不確定性和重大資本支出。

In 2022, we deliberately focused our resources on this strategy and closed on 11 sales of approximately 900,000 square feet for approximately $33 million. This equated to a price per square foot of about $36, both reducing existing vacancy and avoiding near-term vacancy as the leases expire. 8 of the 11 properties were vacant as of the date of sale and the remaining 3 had near-term lease expirations where we knew the tenants were not renewing. We estimated the sale of these 11 assets will allow us to save annual vacant property carrying costs of about $7.5 million. If the 2 properties we sold in Illinois at auction in the fourth quarter excluded, our average sales price per square foot for the year was about $50, in line with our expectations at the beginning of the year.

2022 年，我們有意將資源集中在這一戰略上，以約 3300 萬美元的價格完成了 11 筆交易，面積約為 900,000 平方英尺。這相當於每平方英尺約 36 美元的價格，既減少了現有的空置率，又避免了租約到期時的近期空置率。截至出售之日，11 處房產中有 8 處空置，其餘 3 處的租約即將到期，我們知道租戶不會續約。我們估計出售這 11 項資產將使我們每年節省約 750 萬美元的空置財產持有成本。如果剔除第四季度我們在伊利諾伊州拍賣出售的 2 處房產，我們全年每平方英尺的平均售價約為 50 美元，符合我們年初的預期。

For the year, we disposed of over 400,000 square feet in Illinois, a decidedly slow growth, high tax state with accompanying poor suburban office fundamentals. Additionally, we have entered into a definitive agreement to sell our 574,000 square foot six property corporate Walgreens campus in Illinois, where the Walgreens leases will expire in August 2023, and the tenant will not be renewing. The sale is scheduled to close in early 2024 and is subject to completion of the buyer's entitlement process. We have determined to sell these properties given the upcoming vacancy, high carry costs and our focus on locating our portfolio in the right markets.

這一年，我們在伊利諾伊州出售了超過 400,000 平方英尺的土地，這是一個增長緩慢、稅收高且郊區辦公室基本面較差的州。此外，我們已達成最終協議，出售我們位於伊利諾伊州的 574,000 平方英尺六處物業公司 Walgreens 園區，Walgreens 租約將於 2023 年 8 月到期，租戶將不再續約。此次銷售計劃於 2024 年初結束，並取決於買方的權利流程是否完成。鑑於即將到來的空置率、高持有成本以及我們專注於在正確的市場定位我們的投資組合，我們決定出售這些房產。

To that point, all of our sales have moved closer -- the portfolio closer to our long-term targets. Including the Walgreens campus, we have 7 properties totaling about 584,000 square feet currently under contract for sale an aggregate sale price of approximately $36.6 million or $63 per square foot.

到那時，我們所有的銷售額都接近了——產品組合更接近我們的長期目標。包括 Walgreens 校區在內，我們有 7 處房產，總面積約為 584,000 平方英尺，目前正在簽訂銷售合同，總售價約為 3660 萬美元或每平方英尺 63 美元。

We are also actively marketing a number of other assets for sale totaling over 500,000 square feet that are currently vacant and/or have short-term leases where we know the tenant will not renew. We believe selling these assets is the right decision for the long-term value we are looking to create.

我們還積極營銷一些其他待售資產，總面積超過 500,000 平方英尺，這些資產目前空置和/或我們知道租戶不會續約的短期租約。我們相信出售這些資產是我們希望創造的長期價值的正確決定。

During 2022, we took a very deliberate approach to our balance sheet. Rather than quickly grow the portfolio with debt-funded acquisitions in a market where values were changing rapidly as rates rose, we focused on selling vacant and noncore assets to reduce carry cost and use the proceeds to pay down debt. Our current debt is largely hedged at attractive rates. We have no borrowings on our revolver and overall net debt to gross real estate investments is a conservative 31%.

在 2022 年期間，我們對資產負債表採取了非常謹慎的方法。在價值隨著利率上升而迅速變化的市場中，我們沒有通過債務融資收購來快速擴大投資組合，而是專注於出售空置和非核心資產以降低持有成本，並利用所得款項償還債務。我們目前的債務主要以有吸引力的利率進行了對沖。我們的循環貸款沒有借款，整體淨債務與房地產投資總額之比保守地說是 31%。

In 2022, we made tremendous progress on our business plan. Our proactive asset management and disposition activities, along with good leasing momentum, moved our portfolio meaningfully in the right long-term direction. We finished our first full year as a public company with a portfolio of producing positive net cash flow and our available capital to execute our business plan is more than sufficient.

2022 年，我們的業務計劃取得了巨大進展。我們積極的資產管理和處置活動，以及良好的租賃勢頭，使我們的投資組合朝著正確的長期方向有意義地發展。作為一家上市公司，我們完成了第一個完整的年度，其投資組合產生了正的淨現金流，我們的可用資本足以執行我們的業務計劃。

Our financial capacity, the underlying strength of many of the properties we own in the portfolio, along with our proven ability over the past 30 years operating this asset class provides us with the confidence that Orion will emerge as a net lease office for us in the coming years.

我們的財務能力、我們在投資組合中擁有的許多物業的潛在實力，以及我們在過去 30 年經營該資產類別的成熟能力，使我們有信心 Orion 將成為我們在未來幾年。

With that, I will now turn the call over to Gavin.

有了這個，我現在將把電話轉給加文。

Thanks, Paul. I will begin by discussing Orion's GAAP results for the fourth quarter of 2022 and highlight some key metrics for the full year. Orion generated total revenues for the quarter of $50.3 million and reported net loss attributable to common stockholders of $19 million or a loss of $0.33 per share. Core funds from operations was $23.2 million or $0.41 per share, and adjusted EBITDA was $30.7 million.

謝謝，保羅。我將首先討論 Orion 2022 年第四季度的 GAAP 結果，並強調全年的一些關鍵指標。 Orion 本季度的總收入為 5030 萬美元，歸屬於普通股股東的淨虧損為 1900 萬美元或每股虧損 0.33 美元。來自運營的核心資金為 2320 萬美元或每股 0.41 美元，調整後的 EBITDA 為 3070 萬美元。

For the full year, Orion's total revenues were $208.1 million and a net loss attributable to common stockholders was $97.5 million or a loss of $1.72 per share. Core funds from operations was $101.8 million or $1.80 per share and exceeded the high end of the company's 2022 guidance by $0.02 per share. Adjusted EBITDA for the full year was $132.2 million.

全年，Orion 的總收入為 2.081 億美元，歸屬於普通股股東的淨虧損為 9750 萬美元或每股虧損 1.72 美元。來自運營的核心資金為 1.018 億美元或每股 1.80 美元，超出公司 2022 年指引的上限每股 0.02 美元。全年調整後的 EBITDA 為 1.322 億美元。

G&A in the fourth quarter was $4.4 million, while CapEx, tenant and property improvements and leasing costs were $6.1 million. As our leases roll and given the uncertain timing of when leases are signed and when work is completed on our properties, as we have discussed, CapEx timing will vary quarter-to-quarter and year-to-year. We do expect to incur meaningfully more CapEx in 2023 than we did in 2022, tenants begin to draw on previously agreed on tenant improvement allowances. G&A for the full year was $15.9 million, which is slightly below the company's 2022 guidance range for G&A expenses of $16 million to $16.5 million, and CapEx and tenant improvements and leasing costs were $14.6 million.

第四季度的 G&A 為 440 萬美元，而資本支出、租戶和物業改善以及租賃成本為 610 萬美元。正如我們所討論的那樣，隨著我們的租約滾動以及租約簽署時間和物業工作完成時間的不確定性，資本支出時間將逐季和逐年變化。我們確實預計 2023 年的資本支出將比 2022 年多得多，租戶開始利用之前商定的租戶改善津貼。全年 G&A 為 1590 萬美元，略低於公司 2022 年 G&A 費用 1600 萬至 1650 萬美元的指導範圍，資本支出和租戶改善及租賃成本為 1460 萬美元。

Turning to the balance sheet. We ended the year with $557.3 million of outstanding debt, including Orion's proportionate share in the joint venture. During the fourth quarter, we utilized a combination of proceeds from asset dispositions and cash flows from operations to repay $31 million outstanding on our revolving credit facility. As of December 31, 2022, we had no outstanding borrowings on our $425 million revolving credit facility.

轉向資產負債表。年底，我們的未償債務為 5.573 億美元，其中包括 Orion 在合資企業中所佔的份額。第四季度，我們結合資產處置收益和運營現金流償還了 3100 萬美元的循環信貸額度。截至 2022 年 12 月 31 日，我們的 4.25 億美元循環信貸額度沒有未償還的借款。

It is worth noting that in our first 14 months of operations, we have reduced debt by approximately $90 million or 15%. At year-end, we had total liquidity of $446.2 million, consisting of $425 million available capacity on our revolving credit facility and $21.2 million in cash and cash equivalents, including Orion's proportionate share in the Arch Street joint venture.

值得注意的是，在我們運營的前 14 個月中，我們減少了大約 9000 萬美元或 15% 的債務。截至年底，我們的流動資金總額為 4.462 億美元，包括 4.25 億美元的循環信貸額度和 2120 萬美元的現金及現金等價物，包括 Orion 在 Arch Street 合資企業中所佔的股份。

100% of our currently outstanding debt is fixed rate or swapped to fixed rate. Our net debt to adjusted EBITDA was 4.06x for the year ended December 31, 2022, which is 0.64x lower than the company's guidance of 4.7x to 5.0x.

我們目前未償還債務的 100% 是固定利率或掉期為固定利率。截至 2022 年 12 月 31 日止年度，我們的淨債務與調整後 EBITDA 之比為 4.06 倍，比公司 4.7 至 5.0 倍的指引低 0.64 倍。

Our $175 million credit on facility is scheduled to mature in November 2023 and the revolving credit facility is scheduled to mature in November 2024. We expect to extend, repay or refinance these facilities on or prior to maturity. Our focus has been running the enterprise this past year on a low leverage basis, while limiting our need to use our revolving credit facility which gives us good flexibility to execute on our business plan moving forward.

我們的 1.75 億美元信貸額度計劃於 2023 年 11 月到期，循環信貸額度計劃於 2024 年 11 月到期。我們希望在到期時或之前延長、償還或再融資這些貸款。過去一年，我們的重點一直是在低杠桿的基礎上運營企業，同時限制我們使用循環信貸額度的需要，這使我們能夠靈活地執行我們未來的業務計劃。

Now turning to our dividend. The Orion Board of Directors declared a quarterly cash dividend of $0.10 per share for the first quarter of 2023 to be paid on April 17, 2023, to stockholders of record as of March 31, 2023. With our current liquidity anticipated proceeds from dispositions and the cash the business is generating itself, we believe we are in a strong financial position to achieve our near and longer-term objectives. Partially to maintain maximum liquidity in the current environment, the company did not repurchase any shares in the fourth quarter through its previously announced $50 million open market repurchase program.

現在轉向我們的紅利。 Orion 董事會宣布將於 2023 年 4 月 17 日向截至 2023 年 3 月 31 日登記在冊的股東派發 2023 年第一季度每股 0.10 美元的季度現金股息。根據我們目前的流動性預期，處置收益和由於業務本身產生的現金，我們相信我們的財務狀況良好，可以實現我們的近期和長期目標。部分為了在當前環境下保持最大流動性，公司在第四季度沒有通過其先前宣布的 5000 萬美元公開市場回購計劃回購任何股票。

Turning to the outlook of 2023. We again want to highlight we have added disclosure regarding revisions to our core FFO definition beginning in 2023. The new definition will exclude certain noncash amortization charges which do not reflect the ongoing operating performance of our business. We produced strong core FFO in 2022 of $1.80 per diluted share. As we have stated in the past, we benefited in 2022 from a number of items that will not carry forward. In the next 2 years, our financial results will be impacted by a large number of lease expirations. This will result in a reduction in revenue quarter-to-quarter due to the smaller portfolio size and be further impacted by vacancy carry costs and the time to release as well as the required investment to secure longer-term leases.

談到 2023 年的前景。我們要再次強調，我們已經增加了關於從 2023 年開始修訂我們的核心 FFO 定義的披露。新定義將排除某些非現金攤銷費用，這些費用不能反映我們業務的持續經營業績。我們在 2022 年產生了強大的核心 FFO，每股攤薄收益為 1.80 美元。正如我們過去所說，我們在 2022 年受益於一些不會結轉的項目。未來兩年，我們的財務業績將受到大量租約到期的影響。由於投資組合規模較小，這將導致收入環比減少，並進一步受到空置成本和釋放時間以及確保長期租賃所需投資的影響。

G&A will also rise in 2023 as compared to 2022 as subsidies provided by Realty Income at the spin-off expire. We amortized an additional year of noncash compensation and our public company costs will increase. Given those assumptions, our core FFO for 2023 is expected to range from $1.55 to $1.63 per diluted share. Additionally, our G&A for 2023 is anticipated to range from a $18.75 million to $19.75 million and net debt to adjusted EBITDA is expected to range from 4.3x to 5.3x.

與 2022 年相比，G&A 也將在 2023 年增加，因為 Realty Income 在分拆時提供的補貼到期。我們攤銷了額外一年的非現金補償，我們的上市公司成本將會增加。鑑於這些假設，我們 2023 年的核心 FFO 預計將在每股攤薄後 1.55 美元至 1.63 美元之間。此外，我們 2023 年的 G&A 預計在 1875 萬美元到 1975 萬美元之間，淨債務與調整後 EBITDA 的比率預計在 4.3 倍到 5.3 倍之間。

With that, we will open the line for questions. Operator?

有了這個，我們將打開問題熱線。操作員？

(Operator Instructions)

（操作員說明）

Our first question is coming from Mitch Germain from JMP Securities.

我們的第一個問題來自 JMP Securities 的 Mitch Germain。

So how should I think about the trajectory of G&A, obviously, as you continue to sell assets and the portfolio size shrinks? I guess, for at least a temporary period of time, how should I think about G&A on a forward basis? .

那麼，隨著您繼續出售資產和投資組合規模縮小，我應該如何考慮 G&A 的軌跡？我想，至少在暫時的一段時間內，我應該如何考慮未來的 G&A？ .

Yes. Mitch, this is Gavin. So G&A -- we're essentially normalized in terms of staffing. As we look to sell properties that are vacant, we always will challenge our G&A structure. As far as next year goes, we're going to have another additional year of stock-based compensation. So 2023 will be normalized with an exception of a 2024, 1-year more tranche of G&A impact by that stock-based compensation.

是的。米奇，這是加文。所以 G&A——我們在人員配置方面基本上是標準化的。當我們希望出售空置的房產時，我們總是會挑戰我們的 G&A 結構。就明年而言，我們將再增加一年的基於股票的薪酬。因此，2023 年將正常化，但 2024 年除外，基於股票的薪酬對 G&A 的影響會增加 1 年。

Right. So the large increase in G&A between last year and this year, Mitch, is a function of the subsidies going away from Realty Income, we don't expect to be increasing G&A materially beyond what Gavin just mentioned in the coming years.

正確的。因此，米奇，去年和今年之間 G&A 的大幅增加是補貼從房地產收入中消失的一個函數，我們預計未來幾年 G&A 的增長不會超過加文剛才提到的實質性增長。

Got you. Okay. That's helpful. I think you mentioned an auction sale. Is that something that drove down pricing? Is that -- did I hear that correctly?

明白了好的。這很有幫助。我想你提到了拍賣。這是壓低價格的原因嗎？那是——我沒聽錯嗎？

Yes. I mean in the -- we've sold properties through a variety of channels during the course of 2022, both directly to end users or to investors, and we've also sold a number of properties through the auction process, which is very efficient and gets the properties done quickly, but may have an impact on pricing. .

是的。我的意思是 - 我們在 2022 年期間通過各種渠道直接向最終用戶或投資者出售了房產，我們還通過拍賣過程出售了一些房產，這是非常有效的并快速完成屬性，但可能會對定價產生影響。 .

Understood. How much of the 500,000 square feet that is queued up for sale, how much of that is being sold a more traditional way or how much of that is now being sold through the auction process?

明白了。在排隊出售的 500,000 平方英尺中，有多少以更傳統的方式出售，或者現在通過拍賣過程出售了多少？

I think we're looking at that now. Most of it is being sold through the traditional process at the moment. However, if we don't get it done in the traditional process, we may turn to the auction process. .

我想我們現在正在考慮這個問題。目前大部分是通過傳統工藝銷售的。但是，如果我們不能在傳統流程中完成，我們可能會轉向拍賣流程。 .

Got you. Okay. That's helpful. And then finally, is there any -- I mean, how should we think about the ability to refi that tranche of debt later this year? I mean where is the market for that these days? I'm curious in terms of kind of some guidance of how we should consider that tranche of debt?

明白了好的。這很有幫助。最後，有沒有——我的意思是，我們應該如何考慮在今年晚些時候再融資那部分債務的能力？我的意思是這些天市場在哪裡？我很好奇我們應該如何考慮那筆債務的一些指導？

So -- yes, it's a good question, Mitch. We're obviously in pretty continuous discussions with our banks. Wells Fargo is our lead manager, and that's a group of folks we've worked with for a long time. We have full capacity on our revolving credit facility. So we have more than enough. We have the ability to pay off the term loan with utilization of the revolver, if necessary. And indeed, that's one of the reasons why we've been so careful with the balance sheet in the past year by reducing debt and by lowering our overall leverage and by having as much capacity as we possibly can so that when we come to either refinancing or paying down the term loan, we have more than enough capacity to do so.

所以——是的，這是個好問題，米奇。顯然，我們正在與我們的銀行進行持續不斷的討論。富國銀行是我們的首席經理，我們與他們合作了很長時間。我們有充分的循環信貸額度。所以我們有足夠多的。如有必要，我們有能力使用左輪手槍還清定期貸款。事實上，這就是為什麼我們在過去一年中通過減少債務和降低我們的整體槓桿率以及盡可能多的能力來如此謹慎地處理資產負債表的原因之一，以便當我們進行再融資時或償還定期貸款，我們有足夠的能力這樣做。

Our next question is coming from Gaurav Mehta from EF Hutton.

我們的下一個問題來自 EF Hutton 的 Gaurav Mehta。

I wanted to ask you on your 2023 guidance. I was wondering if you could provide any color on what you are underwriting for occupancy and rental rate spreads during the year?

我想問你 2023 年的指導。我想知道您是否可以提供有關您在這一年中承保的入住率和租金差價的任何顏色？

Sure, Gaurav. Nice to talk with you this morning. I think we're -- we expect occupancy to remain relatively stable during the course of the year, potentially with some decline as we have some leases that we discussed earlier, expiring, for example, in August, we have the Walgreens leases expiring, which is 574,000 square feet. So that obviously will have a negative impact on occupancy. Positive impacts to occupancy would be our sale of vacant properties. So to the extent that we have to hold Walgreens' vacant through the end of the year before it sells in the beginning of next year, we'll have a temporary dip in occupancy towards the end of the year.

當然，高拉夫。很高興今天早上和你交談。我認為我們 - 我們預計入住率在這一年中將保持相對穩定，可能會有所下降，因為我們有一些我們之前討論過的租約到期，例如，8 月，我們的 Walgreens 租約到期，這是574,000平方英尺。因此，這顯然會對入住率產生負面影響。對入住率的積極影響將是我們出售空置物業。因此，就我們必須在明年年初出售 Walgreens 之前將其空置到今年年底的程度而言，我們將在年底前暫時下降入住率。

Okay. You also talked about marketing additional 500,000 square feet of properties. Are you expecting any sales this year or your expectation is that majority of the sales would be next year?

好的。您還談到營銷另外 500,000 平方英尺的物業。您是否預計今年會有任何銷售，或者您預計大部分銷售將在明年進行？

No, no. We expect to have a relatively significant number of sales this year. And then next year, the big sale candidate would be the Walgreens and we've discussed and we hope we'll sell in the very beginning of 2024. But in 2023, we have a number of properties currently in the market, and we expect to sell a relatively significant number of those during the course of the year.

不，不。我們預計今年會有相對可觀的銷售額。然後明年，最大的銷售候選者將是 Walgreens，我們已經討論過，我們希望我們能在 2024 年初出售。但到 2023 年，我們目前在市場上有許多房產，我們預計在這一年中出售相對重要的數量。

We reached the end of our question-and-answer session. I'd like to turn the floor back over to Paul for any further closing comments.

我們的問答環節結束了。我想將發言權轉回給 Paul，讓他發表進一步的結束評論。

Thank you all for joining us today, and we look forward to updating everyone with our first quarter call in May. Thank you.

感謝大家今天加入我們，我們期待著在 5 月份的第一季度電話會議上向大家通報最新情況。謝謝。

Thank you. That does conclude today's teleconference and webcast. You may disconnect your line at this time, and have a wonderful day. We thank you for your participation today.

謝謝。今天的電話會議和網絡廣播到此結束。您可以在此時斷開您的線路，並度過美好的一天。感謝您今天的參與。