Orion Properties Inc. Reports 15.5% Revenue Decline and $103M Net Loss for Fiscal Year 2024

Orion Properties Inc. reported a significant decline in financial performance for the fiscal year ending December 31, 2024, with total revenues of $164.9 million, a decrease of 15.5% from $195.0 million in 2023. The company experienced a net loss attributable to common stockholders of $103.0 million, compared to a loss of $57.3 million in the previous year. This downturn was primarily driven by lease expirations and increased property operating expenses, which rose by 7.2% to $65.2 million, largely due to the costs associated with vacant properties.

In terms of operational metrics, Orion owned and operated 69 properties with a total of 7.9 million leasable square feet as of December 31, 2024, reflecting a decrease in occupancy to 73.0% from 80.4% in 2023. The weighted average remaining lease term was 5.2 years. The company also reported that it had 11 fully vacant properties, which contributed to the overall decline in revenue. Notably, the company completed approximately 1.1 million square feet of lease renewals and new leases during the year, marking the highest volume since its inception.

Strategically, Orion Properties is shifting its focus from traditional office properties to dedicated use assets, which include government, medical, and laboratory facilities. In September 2024, the company acquired a 97,000 square foot flex/laboratory facility in San Ramon, California, for $34.6 million, fully leased to a high-quality tenant. This acquisition aligns with Orion's strategy to enhance its portfolio with assets that have higher tenant utilization and renewal probabilities.

The company also took steps to strengthen its balance sheet, including a reduction in its revolving credit facility from $425 million to $350 million and extending its maturity to May 2026. As of December 31, 2024, Orion had $492 million in total consolidated debt, with a weighted average interest rate of 5.85%. The company maintained a cash balance of $15.6 million and had $231 million available under its revolving credit facility, indicating a focus on liquidity amid challenging market conditions.

Looking ahead, Orion Properties anticipates continued challenges in the office leasing market, particularly due to evolving workplace practices and economic uncertainties. The company has adjusted its dividend policy, reducing the quarterly cash dividend to $0.02 per share, which will allow it to retain approximately $17.9 million in cash annually. This decision reflects a strategic shift to prioritize financial stability and support ongoing investments in its portfolio.