Orion Properties Inc (ONL) 2025 Q2 法說會逐字稿

Greetings. Welcome to Orion Properties' second-quarter 2025 earnings call. As a reminder, this conference is being recorded.

問候。歡迎參加 Orion Properties 2025 年第二季財報電話會議。提醒一下，本次會議正在錄製中。

I would now like to turn the call over to Paul Hughes, General Counsel for Orion. Thank you. You may begin.

現在我想將電話轉給 Orion 總法律顧問 Paul Hughes。謝謝。你可以開始了。

Thank you, and good morning, everyone. Yesterday, Orion released its results for the quarter ended June 30, 2025, filed its Form 10-Q with the Securities and Exchange Commission and posted its earnings supplement to its website at onlreit.com.

謝謝大家，早安。昨天，Orion 公佈了截至 2025 年 6 月 30 日的季度業績，向美國證券交易委員會提交了 10-Q 表，並將其收益補充資訊發佈在其網站 onlreit.com 上。

During the call today, we will be discussing Orion's guidance estimates for calendar year 2025 and other forward-looking statements, which are based on management's current expectations and are subject to certain risks that could cause actual results to differ materially from our estimates. The risks are discussed in our earnings release as well as in our Form 10-Q and other SEC filings, and Orion undertakes no duty to update any forward-looking statements made during this call.

在今天的電話會議中，我們將討論 Orion 對 2025 日曆年的指導估計和其他前瞻性陳述，這些陳述基於管理層當前的預期，並受某些風險的影響，可能導致實際結果與我們的估計存在重大差異。這些風險已在我們的收益報告以及 10-Q 表和其他 SEC 文件中進行了討論，Orion 不承擔更新本次電話會議中所做的任何前瞻性陳述的義務。

Today, on the call, we will be discussing funds from operations or FFO, and core funds from operations or core FFO and other non-GAAP financial measures. These non-GAAP financial measures are not a substitute for financial information presented in accordance with GAAP, and Orion's earnings release and supplement include a reconciliation of our non-GAAP financial measures to the most directly comparable GAAP measure.

今天，在電話會議上，我們將討論營運資金或 FFO、核心營運資金或核心 FFO 以及其他非 GAAP 財務指標。這些非 GAAP 財務指標不能取代依照 GAAP 呈現的財務信息，且 Orion 的收益報告和補充報告包括我們的非 GAAP 財務指標與最直接可比較的 GAAP 指標的對帳。

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

今天主持電話會議的是 Orion 執行長 Paul McDowell 和財務長 Gavin Brandon。我們的營運長 Chris Day 將參加我們的問答環節。

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

現在，我將把電話轉給保羅‧麥克道爾 (Paul McDowell)。

Good morning, everyone, and thank you for joining us on Orion Properties' second quarter earnings call. Today, I will highlight the continued progress we are making on our new business strategy and discuss our second quarter performance and operations. Importantly, leasing momentum continues, and we are energized that the marketplace has been receptive to our accelerated asset sales. Following my remarks, Gavin will review our financial results and provide our improved outlook for the rest of the year.

大家早安，感謝您參加 Orion Properties 第二季財報電話會議。今天，我將重點介紹我們在新業務策略上的持續進展，並討論我們第二季的業績和營運情況。重要的是，租賃勢頭持續，我們很高興看到市場對我們加速資產銷售的接受度。在我發言之後，加文將回顧我們的財務業績，並對今年剩餘時間的業績做出更好的展望。

With 639,000 square feet of leasing completed as of July 31, we are successfully building on last year's strong momentum that saw Orion lease 1.1 million square feet. Specifically, the 639,000 square feet of leasing is a combination of new and renewal transactions with a weighted average lease term of 6.4 years. Included in this total for the second quarter and shortly thereafter are three new leases, a 15.7-year agreement for 46,000 square feet at our Parsippany, New Jersey property, a 5.4-year agreement for 80,000 square feet at our Kennesaw, Georgia property and a 7.6-year agreement for 23,000 square feet at our Plano, Texas property.

截至 7 月 31 日，Orion 已完成 639,000 平方英尺的租賃，我們成功地延續了去年 Orion 租賃 110 萬平方英尺的強勁勢頭。具體而言，639,000 平方英尺的租賃是新租和續租交易的組合，加權平均租賃期限為 6.4 年。第二季及之後不久的總數包括三份新租約，一份是位於新澤西州帕西帕尼的 46,000 平方英尺物業的 15.7 年協議，一份是位於佐治亞州肯尼索的 80,000 平方英尺物業的 5.4 年協議，以及一份位於德克薩斯州普萊諾的 23,000 平方英尺物業的 7.6 年協議。

The Kennesaw, Georgia property is currently leased to Home Depot for almost three more years, making the combined lease term more than eight years. Additionally, we signed 110,000 square feet of short-term lease extensions at two properties during the quarter at over 6% positive lease spreads on average.

位於喬治亞州肯尼索的這處房產目前租給了一家家得寶公司，租期將近三年，總租期超過八年。此外，本季我們簽署了兩處物業 110,000 平方英尺的短期租賃延期協議，平均租賃利差超過 6%。

We are encouraged by our strong leasing activity to date and the momentum that has continued to build in our future pipeline, including various longer duration renewals and new leases with terms greater than the average of our portfolio. We are working hard to get a substantial portion of this more than 800,000 square foot pipeline of leasing activity, which includes transactions in both the discussion and documentation stage to the finish line by year end.

我們對迄今為止強勁的租賃活動以及未來業務持續增強的勢頭感到鼓舞，其中包括各種長期續約和期限高於我們投資組合平均水平的新租約。我們正在努力爭取在年底前完成超過 800,000 平方英尺的租賃活動的大部分內容，其中包括處於討論和文件階段的交易。

Orion's operating property occupancy rate was 77.4% at quarter end, an increase of 310 basis points sequentially. And the operating property lease rate was 79.1%, an increase of 170 basis points sequentially. And the weighted average lease term increased to 5.5 years from 5.2 years last quarter and 4.2 years this time last year. We do anticipate tenant retention will continue to fluctuate due to the smaller size of our portfolio and the timing of certain expected move-outs in the remainder of the year.

本季末，Orion 的經營物業入住率為 77.4%，比上一季增加 310 個基點。經營性物業租賃率為79.1%，較上一季增加170個基點。加權平均租賃期限從上一季的 5.2 年和去年同期的 4.2 年增加到 5.5 年。我們確實預期租戶留任率將持續波動，因為我們的投資組合規模較小，並且預計某些租戶的遷出時間將在今年剩餘時間內。

We continue to expect that our portfolio occupancy will rise after 2025 as we lease vacant space, sell vacant properties that do not meet our long-term goals, and generally labor to overcome the significant lease expirations and rollovers of the past few years. This will be important as we continue to work to reduce property operating costs. One area that is particularly noteworthy is the increasing pace of property dispositions we have been able to achieve this year at strong prices when compared to previous years.

我們繼續預計，隨著我們租賃空置空間、出售不符合我們長期目標的空置物業，並努力克服過去幾年大量租約到期和展期的問題，我們的投資組合入住率將在 2025 年後上升。這對於我們繼續努力降低物業營運成本至關重要。特別值得一提的是，與前幾年相比，今年我們能夠以強勁的價格實現房地產處置的速度加快。

During the second quarter, we closed on the sale of four vacant properties totaling 434,000 square feet for a gross sales price of $26.9 million or approximately $62 per square foot. Additionally, we have agreements in place to sell five traditional office properties, which includes one vacant property, three near-term vacant properties, and one stabilized property totaling 540,000 square feet for $57 million or $106 per square foot and are expected to close in the second half of the year.

第二季度，我們完成了四處空置房產的銷售，總面積為 434,000 平方英尺，總售價為 2,690 萬美元，約合每平方英尺 62 美元。此外，我們已達成協議，以 5,700 萬美元或每平方英尺 106 美元的價格出售五處傳統辦公物業，其中包括一處空置物業、三處近期空置物業和一處穩定物業，總面積為 540,000 平方英尺，預計將於今年下半年完成。

For comparison, we sold just two properties last year totaling 164,000 square feet for about $5.3 million. All four properties sold so far this year have been vacant noncore buildings, and we believe the additional sale transactions we are working on will provide very attractive exits and avoid the uncertainty and significant capital investment and carrying cost to re-tenant the assets. These transactions demonstrate our continued ability to monetize noncore assets and redeploy capital while improving the overall quality and durability of our remaining portfolio as demonstrated by our increasing WALT. We expect to have additional dispositions throughout the remainder of the year and into next.

相比之下，去年我們僅售出兩處房產，總面積為 164,000 平方英尺，售價約 530 萬美元。今年迄今出售的所有四處房產都是空置的非核心建築，我們相信，我們正在進行的額外銷售交易將提供非常有吸引力的退出方式，並避免重新租賃資產的不確定性和大量的資本投資和持有成本。這些交易證明了我們持續將非核心資產貨幣化和重新部署資本的能力，同時提高了我們剩餘投資組合的整體品質和耐用性，正如我們不斷增加的 WALT 所證明的那樣。我們預計在今年剩餘時間和明年將有更多處置。

Finally, the demolition of the outdated office buildings on our former Walgreens campus in Deerfield, Illinois, is well underway and should be completed before the year-end, which will allow us to lower carrying costs materially and make the property more attractive to potential investors while we continue to evaluate our alternatives for this approximately 37.4 acre site.

最後，我們位於伊利諾伊州迪爾菲爾德的前沃爾格林園區內過時辦公大樓的拆除工作正在順利進行中，預計將於年底前完成，這將使我們能夠大幅降低持有成本，並使該物業對潛在投資者更具吸引力，同時我們將繼續評估這塊約 37.4 英畝土地的替代方案。

As we shared on our year-end 2024 results call, we are continuing to shift our portfolio concentration away from traditional generic suburban office properties and towards dedicated use assets or DUA properties, where our tenants perform work that cannot be replicated from home or relocated to a generic office setting. These property types include medical, lab, R&D flex, and non-CBD government properties, all of which we already own. Our experience is that these assets tend to exhibit stronger renewal trends, higher tenant investment, and more durable cash flows. As we continue to recycle capital, we are continuing to look carefully at DUA acquisition opportunities. At quarter end, approximately 32.2% of our portfolio by annualized base rent and approximately 25.3% by square footage were DUA properties, and this percentage will increase over time through disposition activity and targeted acquisitions.

正如我們在 2024 年年終業績電話會議上所分享的那樣，我們將繼續將投資組合重點從傳統的通用郊區辦公物業轉向專用資產或 DUA 物業，在這些物業中，我們的租戶所從事的工作無法在家中複製或遷移到通用辦公環境。這些財產類型包括醫療、實驗室、研發彈性和非 CBD 政府財產，所有這些財產都是我們已經擁有的。我們的經驗是，這些資產往往表現出更強勁的更新趨勢、更高的租戶投資和更持久的現金流。隨著我們繼續回收資本，我們將繼續仔細尋找 DUA 收購機會。截至季度末，按年化基本租金計算，我們投資組合中約有 32.2% 為 DUA 物業，按平方英尺計算，約有 25.3% 為 DUA 物業，並且這一比例將透過處置活動和有針對性的收購隨著時間的推移而增加。

Turning to the balance sheet. Orion has been very proactive in maintaining significant liquidity to support our ongoing leasing efforts. To do so, we have sold vacant properties, used sale proceeds and cash flow to pay down debt, manage G&A, have been highly selective and targeted on acquisitions, and aligned our dividend policy. As a result, our net debt to annualized year-to-date adjusted EBITDA was 6.93 times at quarter end. We do expect this ratio to rise modestly in the coming year, which we expect to be offset by anticipated earnings growth in subsequent years.

轉向資產負債表。Orion 一直積極主動地維持大量流動性，以支持我們正在進行的租賃工作。為此，我們出售了空置房產，利用銷售收益和現金流償還債務、管理一般及行政費用，對收購進行嚴格篩選和定向，並調整了股息政策。因此，季末我們的淨負債與年初至今年度化調整後 EBITDA 的比率為 6.93 倍。我們確實預計這一比率在未來一年將小幅上升，但我們預計這一上升將被隨後幾年預期的獲利成長所抵消。

As we head into the third quarter, we have a solid leasing pipeline and remain focused on investing in our well-located properties within target markets. To support this, we will continue to fund capital expenditures that enhance asset value that enable us to lease space, retain tenants, and attract new ones. Our disciplined approach to capital allocation, including maintaining a low leverage balance sheet over the past several years has positioned us to navigate the current environment even as we face continued cash flow pressure from higher interest rates, elevated vacancy from recent lease roll and the impact of the 23 properties we've sold since the spin.

進入第三季度，我們擁有穩固的租賃管道，並繼續專注於投資目標市場內位置優越的物業。為了支持這一點，我們將繼續資助資本支出，以提高資產價值，使我們能夠租用空間、留住租戶並吸引新租戶。我們嚴謹的資本配置方法，包括在過去幾年中維持低槓桿資產負債表，使我們能夠應對當前環境，即使我們面臨來自更高利率的持續現金流壓力、近期租賃滾動導致的空置率上升以及自分拆以來我們出售的 23 處房產的影響。

With another strong quarter of leasing and asset sales behind us and a healthy leasing and disposition pipeline ahead of us, we are encouraged that Orion's transformation is accelerating. I want to take a moment to reiterate and emphasize that our approach to unlocking value has not wavered. We remain committed to disciplined execution and continued portfolio stabilization and enhancement. It takes time to evolve a net lease office portfolio, but we have made incredibly strong progress. And as we look ahead, beyond repositioning the portfolio, management and the Board will continuously evaluate the best path forward to maximize value for all our shareholders.

隨著我們經歷了另一個強勁的租賃和資產銷售季度，以及未來健康的租賃和處置管道，我們很高興看到 Orion 的轉型正在加速。我想花點時間重申並強調，我們釋放價值的方法並沒有動搖。我們將繼續致力於嚴格執行並持續穩定和增強投資組合。發展淨租賃辦公室組合需要時間，但我們已經取得了令人難以置信的強勁進展。展望未來，除了重新定位投資組合之外，管理階層和董事會還將不斷評估最佳前進道路，以實現所有股東的價值最大化。

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

說完這些，我將把電話轉給加文 (Gavin)。加文？

Thanks, Paul. Orion generated total revenues of $37.3 million in the second quarter as compared to $40.1 million in the same quarter of the prior year. Core FFO for the quarter was $11.5 million or $0.20 per share as compared to $14.2 million or $0.25 per share in the same quarter of 2024. Adjusted EBITDA was $18 million versus $20.5 million in the same quarter of 2024. The changes year over year are primarily related to vacancies, a smaller portfolio and timing of leasing activity.

謝謝，保羅。Orion 第二季總營收為 3,730 萬美元，而去年同期為 4,010 萬美元。本季核心 FFO 為 1,150 萬美元或每股 0.20 美元，而 2024 年同期為 1,420 萬美元或每股 0.25 美元。調整後的 EBITDA 為 1,800 萬美元，而 2024 年同期為 2,050 萬美元。年比變化主要與空置率、投資組合規模縮小以及租賃活動時間有關。

G&A in the second quarter came in as expected at $4.8 million compared to $4.5 million in the same quarter of 2024. As mentioned on prior calls, savings to G&A brought on by our restructuring efforts, including headcount reductions, will begin to contribute in the third and fourth quarters of this year.

第二季的 G&A 費用達到預期的 480 萬美元，而 2024 年同期為 450 萬美元。如同先前的電話會議中所提到的，我們透過重組努力（包括裁員）所節省的一般及行政費用將在今年第三季和第四季開始產生效益。

CapEx and leasing costs in the second quarter were $15.6 million compared to $6.3 million in the same quarter of 2024. The increase in CapEx in 2025 period was driven by the acceleration in leasing activity. As we have previously discussed, CapEx timing is dependent on when leases are executed, and work is completed on properties. We expect to allocate more capital to CapEx over time as leases roll and new and existing tenants draw upon their tenant improvement allowances.

第二季的資本支出和租賃成本為 1,560 萬美元，而 2024 年同期為 630 萬美元。2025 年資本支出的成長是由租賃活動的加速所推動的。正如我們之前所討論的，資本支出時間取決於租賃的執行時間以及房產工作的完成時間。隨著租約的延續以及新舊租戶使用其租戶改善津貼，我們預計會隨著時間的推移為資本支出分配更多資金。

Turning to the balance sheet. At quarter end, we had total liquidity of $257.7 million comprised of $17.7 million cash and cash equivalents, including the company's pro rata share of cash from the Arch Street joint venture and $240 million of available capacity on the credit facility revolver. We intend to maintain significant liquidity on the balance sheet for the foreseeable future to fund expected capital commitments to support our future leasing efforts and provide the financial flexibility needed to execute on our business plan for the next several years.

轉向資產負債表。截至季末，我們的總流動資金為 2.577 億美元，包括 1,770 萬美元的現金和現金等價物，其中包括公司從 Arch Street 合資企業按比例獲得的現金和 2.4 億美元的信貸額度循環信貸可用容量。我們打算在可預見的未來保持資產負債表上的大量流動性，以資助預期的資本承諾，支持我們未來的租賃工作，並提供執行未來幾年業務計劃所需的財務靈活性。

We ended the quarter with $509 million of outstanding debt, including our nonrecourse $355 million CMBS loan that is a securitized mortgage loan collateralized by 19 properties maturing in February of 2027, $110 million of floating rate debt on the credit facility revolver maturing in May of 2026, $18 million under the mortgage loan for our San Ramon property maturing in December of 2031, and $26 million representing our share of the Arch Street joint venture mortgage debt maturing in November of 2025 with a borrower option to extend for an additional 12 months until November of 2026. Our net debt to gross real estate assets was 32% at the end of the quarter.

截至本季末，我們的未償還債務為 5.09 億美元，其中包括 3.55 億美元的無追索權 CMBS 貸款，該貸款是以 19 處房產作為抵押的證券化抵押貸款，將於 2027 年 2 月到期；1.1 億美元的浮動利率信貸額度債務，將於 2026 年 2 月到期；1.1 億美元的浮動利率2000 萬美元12 月到期；以及 2,600 萬美元的 Arch Street 合資企業抵押貸款債務，該債務將於 2025 年 11 月到期，借款人可選擇再延長 12 個月至 2026 年 11 月。本季末，我們的淨債務與房地產總資產的比率為 32%。

Regarding our credit facility revolver, as mentioned, the scheduled maturity date for this obligation is in May 2026, and we have no remaining extension options. We are in discussions with our lenders about extending and/or refinancing this debt obligation in keeping with our current business plan. Extending this debt obligation is among our highest priorities, and we expect to be successful, and we will share more information about our progress on this front in future quarters. There are additional disclosures regarding our credit facility in our Form 10-Q. On August 5, 2025, Orion's Board of Directors declared a quarterly cash dividend of $0.02 per share for the third quarter of 2025.

關於我們的信貸額度循環信貸，如上所述，該債務的預定到期日為 2026 年 5 月，且我們沒有剩餘的延期選擇。我們正在與貸方討論根據我們目前的業務計劃延長和/或再融資此債務事宜。延長債務期限是我們的首要任務之一，我們期待能夠成功，並且我們將在未來幾季分享更多有關我們在這方面取得的進展的資訊。我們的 10-Q 表中還有關於我們信貸安排的額外揭露。2025 年 8 月 5 日，Orion 董事會宣布 2025 年第三季每股發放 0.02 美元的季度現金股利。

Moving to our outlook for 2025. We are now narrowing and raising the range for our core FFO and lowering the range for our net debt to adjusted EBITDA and reaffirming our expectations for G&A.

展望 2025 年。我們現在正在縮小並提高核心 FFO 的範圍，降低淨債務至調整後 EBITDA 的範圍，並重申我們對 G&A 的預期。

Core FFO is now expected to range from $0.67 to $0.71 per diluted share, up from $0.61 to $0.70 per diluted share. Net debt to adjusted EBITDA is now expected to range from 7.3 times to 8.3 times, down from 8.0 times to 8.8 times. These improvements in our guidance for the year are driven by a number of factors, including onetime items such as lease termination income, property tax appeals and refunds, as well as improved leasing versus our initial expectations.

目前預計核心 FFO 範圍為每股稀釋後 0.67 美元至 0.71 美元，高於每股稀釋後 0.61 美元至 0.70 美元。目前預期淨債務與調整後 EBITDA 比率將在 7.3 倍至 8.3 倍之間，低於 8.0 倍至 8.8 倍。我們對今年指引的改進受到多種因素的推動，包括租賃終止收入、財產稅申訴和退稅等一次性項目，以及相對於我們最初預期的租賃改善。

Our G&A range of $19.5 million to $20.5 million is unchanged. Excluding noncash compensation, we expect 2025 G&A will be in line or slightly better than 2024.

我們的 G&A 範圍為 1950 萬美元至 2050 萬美元，保持不變。不包括非現金薪酬，我們預計 2025 年的 G&A 將與 2024 年持平或略好。

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

接下來，我們將開放問答熱線。操作員？

(Operator Instructions) There are no questions at this time. I would like to turn the call back over to Paul McDowell for closing remarks.

（操作員指示）目前沒有問題。我想將電話轉回給保羅麥克道爾 (Paul McDowell) 做最後發言。

Okay. Well, thank you very much. We appreciate everyone joining us today, and we look forward to updating you next quarter.

好的。嗯，非常感謝。我們感謝今天加入我們的各位，我們期待下個季度為您帶來最新消息。

Thank you. This will conclude today's conference. You may disconnect your lines at this time and thank you for your participation.

謝謝。今天的會議到此結束。現在您可以斷開您的線路了，感謝您的參與。