Slide 1: Investor Presentation
Investor Presentation May 2023
Slide 2: Legal Disclaimer
Legal Disclaimer Certain statements in this presentation and the accompanying oral commentary are forward-looking statements. These statements relate to future events or the future performance of Orion Office REIT Inc. (the “Company”), as well as its business strategy and plans and objectives for fu
Slide 3: The Orion Office REIT Story
The Orion Office REIT Story ▪ Formed as a result of spin-off from the Realty Income and VEREIT merger ▪ Portfolio comprised of substantially all the office properties of both companies History ▪ High-quality, diversified portfolio of primarily mission-critical headquarters locations with favorable e
Slide 4: Proven Leadership
Proven Leadership Seasoned leadership team with significant net lease office and public REIT experience Paul McDowell Gavin Brandon Chris Day Paul Hughes Gary Landriau CHIEF EXECUTIVE OFFICER, DIRECTOR EVP, CHIEF FINANCIAL OFFICER EVP, CHIEF OPERATING OFFICER GENERAL COUNSEL AND SECRETARY EVP, CHIEF
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 Lieb Gregory J. Whyte Paul McDowell CHAIRMAN OF THE BOARD INDEPENDENT DIRECT
Slide 6: Investment Highlights
1 Differentiated Opportunity to Invest into Improving Suburban Office Fundamentals 2 Operationally Essential Net Lease Office Portfolio with Attractive Investment Grade Credit Unique Investment Strategy Focused on the Investment 3 Intersection of Suburban Office and Net Lease Highlights 4 Value Crea
Slide 7: Large Opportunity in Suburban Net Lease Office
Large Opportunity in Suburban Net Lease Office Continued De-Urbanization Tailwinds for Sun Belt Markets Corporate Office Repositioning Ongoing population shift from urban Sun Belt continues to benefit from migration, Large corporations focused on locations that neighborhoods to non-urban communities
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: Compelling Net Lease Investment Profile
Compelling Net Lease Investment Profile Orion seeks stable cash flows primarily from long-term leases with high credit quality tenants and inflation protection from embedded rent growth ▪ Investment grade and non-investment grade tenants Tenant Credit ▪ Strong underlying credit quality based on inde
Slide 10: Favorable Market Characteristics Drive Office Demand and Rent Growth
Favorable Market Characteristics Drive Office Demand and Rent Growth Phoenix Dallas/Forth Worth San Diego Atlanta ▪ Residential population grew 20% ▪ Texas is the national leader for ▪ Industry-leading mature hub for life ▪ Large tech company expansions in from 2010 to 2022 Fortune 500 company headq
Slide 11: High-Quality, Diversified Portfolio
High-Quality, Diversified Portfolio Single-tenant suburban office focused with strong occupancy and high investment grade tenancy 81 6 9,732 87.5% Unconsolidated Joint Venture Wholly-Owned Properties Rentable Square Feet (000s) Occupancy % Properties Orion Office REIT Inc. All rights reserved. $156,
Slide 12: 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 13.5% 1 AA+ 12.1% G
Slide 13: 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) Color Classifications (% of ABR): Texas 15.2% > 10.0% New Jersey 12.3% > 5.0% New York 8.7% > 2.5% Illinois 7.3% < 2.5% K
Slide 14: Lease Maturities Present Value Creation Opportunities
Lease Maturities Present Value Creation Opportunities Strong, demonstrated track record of value creation via re-leasing / renewing at attractive rents and extended lease terms Portfolio has demonstrated a strong track record of leasing Lease Expiration Schedule (by ABR) success In-house leasing tea
Slide 15: 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 o
Slide 16: 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 17: Additional Growth Source - Arch Street Joint Venture
Additional Growth Source - 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 Locat
Slide 18: Balance Sheet Strategy
Balance Sheet Strategy Balance sheet provides ample liquidity for potential growth Capitalization Seeking to maintain a conservative leverage profile Wtd. Avg. 3/31/2023 ▪ Conservative balance sheet strategy opens up access to multiple Maturity (Years) Interest Rate (1) Balance ($000s) capital sourc
Slide 19: Q1 2023 Accomplishments
Q1 2023 Accomplishments Ongoing portfolio transformation continues to progress ▪ Leased more than 80 thousand square feet of renewal, expansion and new leases in 2023, and executed more than 1.5 Leasing million since inception ▪ Weighted average rental rate change on leasing activity was approximate
Slide 20: 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 21: Investment Highlights
1 Differentiated Opportunity to Invest into Improving Suburban Office Fundamentals 2 Operationally Essential Net Lease Office Portfolio with Attractive Investment Grade Credit Unique Investment Strategy Focused on the Investment 3 Intersection of Suburban Office and Net Lease Highlights 4 Value Crea
Slide 22: Proven Investment Evaluation Framework
Proven Investment Evaluation Framework Guided by a four-pronged framework to assess investment opportunities Tenant Credit Underwriting Net Lease Characteristics NT Utilize credit underwriting A Structure and review leases to EN expertise to discern underlying ensure high-quality, durable credit qua
Slide 23: 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 24: Real Estate Attributes
Real Estate Attributes Dedicated to acquiring properties with high-quality real estate characteristics Real Estate Use ✓ Mission-critical and/or headquarters locations Location within Suburban Market ✓ Easy access to commuter routes and public transit Leasing Track Record ✓ Expectation of “sticky” l
Slide 25: Vacant Property Operating Expenses
Vacant Property Operating Expenses For the three months ended March 31, 2023 (unaudited, in thousands) Vacant Square Feet Total Expenses (1) Fully Vacant Properties 864 $1,265 Partially Vacant Properties (2) 353 517 Total 1,217 $1,782 (1) The Company had six fully vacant properties for the entire qu