Orion Properties Inc. · NYSE:ONL
Orion Properties — Q4 2023 Earnings Presentation
20 slides from Orion Properties's earnings presentation, Feb 28, 2024
Slide 1: Investor Presentation
Investor Presentation February 2024
Slide 2: Legal Disclaimer
Legal Disclaimer This Investor Presentation includes “forward-looking statements” which reflect Orion Office REIT Inc.’s (the “Company”, “Orion”, “we”, or “us”) expectations and projections regarding future events and plans, future financial condition, results of operations, liquidity and business,
Slide 3: The Orion Office REIT Story
The Orion Office REIT Story ▪ Spun off from Realty Income following the merger of VEREIT with Realty Income ▪ Orion Portfolio comprised of substantially all the office properties of both companies History ▪ High-quality core portfolio including headquarters and solid operating properties on long lea
Slide 4: Proven Leadership
Proven Leadership Seasoned leadership team with significant net lease and public REIT experience Paul McDowell Gavin Brandon Chris Day Gary Landriau Paul Hughes CHIEF EXECUTIVE OFFICER, DIRECTOR EVP, CHIEF FINANCIAL OFFICER EVP, CHIEF OPERATING OFFICER EVP, CHIEF INVESTMENT OFFICER GENERAL COUNSEL A
Slide 5: Board of Directors
Board of Directors In addition to Paul McDowell, Orion’s Board is comprised of four independent directors, each possessing diverse backgrounds with significant experience Reginald H. Gilyard Kathleen R. Allen, Ph.D. Richard J. Lieb Gregory J. Whyte Paul McDowell CHAIRMAN OF THE BOARD INDEPENDENT DIR
Slide 6: Investment Highlights
1 Low Leverage, Ample Liquidity And Fully Developed Platform To Support Business Plan 2 Experienced Team With Successful Track Record Of Acquiring, Managing And Selling Target Sectors Properties Differentiated Opportunity To Selectively Invest In Target Sectors Investment 3 Assets At Attractive Risk
Slide 7: Shifting Opportunity in Suburban Net Lease
Shifting Opportunity in Suburban Net Lease For these reasons, Orion is focusing on assets where the tenant's operations require high workday building head count, the on-site operation is of high value to the tenant, continuing investment by tenant in the operation is likely, that we anticipate will
Slide 8: Attractive Suburban Market Features
Attractive Suburban Market Features Focused on key suburban growth markets with strong fundamentals and demographic tailwinds Highly Educated Office-Using Population Growth Workforce Employment Growth Limited New Office Supply of Affordable Access to Mass Transit Supply Housing Orion Office REIT Inc
Slide 9: Portfolio Highlights
Portfolio Highlights Focused on building and maintaining a sustainable investment-grade tenant base 75 6 8,884 80.4% Wholly-Owned Properties Arch Street Joint Venture Properties Rentable Square Feet (000s) Occupancy % Orion Office REIT Inc. All rights reserved. $141,293 $15.90 70.6% 4.0 years ABR ($
Slide 10: Robust Industry and Tenant Diversification
Robust Industry and Tenant Diversification Portfolio well-diversified across economically resilient industries and primarily investment-grade tenants Top 10 Tenant Industries (% of ABR) Top 10 Tenants (% of ABR) # Tenant Credit Rating (1) % of ABR Health Care Equipment & Services 15.3% 1 AA+ 13.5% G
Slide 11: National Portfolio Well-Diversified by Geography
National Portfolio Well-Diversified by Geography National portfolio with concentrations in strong suburban office markets Top 10 States (% of ABR) Geographic Footprint (% of ABR) Texas 17.2% New Jersey 10.2% New York 10.2% Kentucky 7.3% Colorado 5.7% Massachusetts 5.6% Orion Office REIT Inc. All rig
Slide 12: Case Study: Leasing
Case Study: Leasing Value Creation through Dynamic Leasing Strategy ▪ Property in Buffalo, NY MSA fully leased to privately owned IT industry company with 30,000 global employees and annual revenues in excess of $50 billion under a legacy lease expiring in Q4 2023 Background ▪ Facing low physical oc
Slide 13: Key Value Creation Drivers to Spur Growth
Key Value Creation Drivers to Spur Growth Seek to generate growth via active asset management, portfolio optimization through capital recycling and pursuit of accretive acquisitions ▪ In-house asset management allows control over entire leasing process ▪ Develop favorable relationships with tenants
Slide 14: Arch Street Joint Venture
Arch Street Joint Venture The joint venture enhances portfolio quality, lowers cost of capital and provides an additional capital source Joint Venture Highlights Properties (2) Arch Street Credentials (1) Joint Venture Summary Pro Rata Credit Pro Rata Pro Rata Tenant Location Debt ▪ Leading advisor
Slide 15: Balance Sheet Strategy
Balance Sheet Strategy Balance sheet provides ample liquidity for potential growth Debt Capital Structure Seeking to maintain a conservative leverage profile Wtd. Avg. 12/31/2023 ▪ Conservative balance sheet strategy opens up access to multiple Maturity (Years) Interest Rate (1) Balance ($000s) capi
Slide 16: 2023 Accomplishments
2023 Accomplishments Ongoing portfolio transformation to establish a high-quality right-sized property base ▪ Leased more than 260,000 square feet of renewal, expansion and new leases during 2023 and executed more than 1.7 million square feet since inception Leasing ▪ Weighted average rental rate ch
Slide 17: ESG Commitment
ESG Commitment Committed to fulfilling our responsibility as an outstanding corporate citizen Our Commitment Committed to following environmentally friendly practices with regard to energy and water efficiency, alternative power sources, waste management and other initiatives that will help us and o
Slide 18: Proven Investment Evaluation Framework
Proven Investment Evaluation Framework Guided by a four-pronged framework to assess investment opportunities Tenant Credit Underwriting Lease Characteristics NT Utilize credit underwriting A Structure and review leases to EN expertise to discern underlying ensure high-quality, durable credit quality
Slide 19: Tenant Credit Underwriting
Tenant Credit Underwriting Utilize a multi-faceted credit underwriting approach to diligently determine the underlying credit quality of every tenant 1 2 Conduct Independent Credit Analysis and Evaluate Credit Ratings From Major Determine Shadow Rating Agencies (S&P and Moody’s) 3 4 Regularly Review
Slide 20: Real Estate Attributes
Real Estate Attributes Dedicated to acquiring properties with high-quality real estate characteristics Real Estate Use ✓ Traditional office, governmental office, medical office, and office/flex properties Location within Suburban Market ✓ Easy access to commuter routes and public transit Leasing Tra