What changed in this filing

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Item 1. Business

2026-03-05 compared with 2025-03-05 · 38 added, 33 removed, 97 unchanged (42% of the section changed)

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Our portfolio is comprised of traditional office properties, as well as governmental, medical office, flex/laboratory and R&D and flex/industrial properties.

On March 5, 2025, we changed our name from Orion Office REIT Inc.

to Orion Properties Inc.

to better describe our broader investment strategy to shift our portfolio concentration over time away from traditional office properties, towards more dedicated use assets that have an office component.

We define dedicated use assets as those that include a substantial specialized use component such as government, medical, laboratory and research and development, and flex operations, and would therefore not be considered traditional office properties.

Orion was initially formed as a wholly-owned subsidiary of Realty Income Corporation (“Realty Income”).

As part of our investment strategy, we intend to shift our portfolio concentration over time away from traditional office properties, towards more dedicated use assets with specialized uses that include an office component.

The Company was initially formed as a wholly owned subsidiary of Realty Income Corporation (“Realty Income”).

Following completion of the merger transaction involving Realty Income and VEREIT, Inc.

(“VEREIT”) on November 1, 2021, Realty Income contributed the combined business comprising certain office real properties and related assets previously owned by subsidiaries of Realty Income, and certain office real properties and related assets previously owned by subsidiaries of VEREIT (the “Separation”), to the Company and its operating partnership, Orion Properties LP (“Orion OP”), and on November 12, 2021, effected a special distribution to the Company’s stockholders of all the outstanding shares of common stock of the Company (the “Distribution”).

Following the Distribution, we became an independent and publicly traded company, and our common stock, par value $0.001 per share, trades on the New York Stock Exchange (the “NYSE”) under the symbol “ONL.” The Company has elected to be taxed as a REIT for U.S.

(“VEREIT”) on November 1, 2021, Realty Income contributed the combined business comprising certain office real properties and related assets previously owned by subsidiaries of Realty Income, and certain office real properties and related assets previously owned by subsidiaries of VEREIT (the “Separation”), to the Company and its operating partnership, Orion Properties LP (“Orion OP”), and on November 12, 2021, effected a special distribution to Realty Income’s stockholders of all the outstanding shares of common stock of the Company (the “Distribution”).

Following the Distribution, we became an independent and publicly traded company, and our common stock, par value $0.001, trades on the New York Stock Exchange (the “NYSE”) under the symbol “ONL”.

The Company has elected to be taxed as a REIT for U.S.

federal income tax purposes, commencing with its initial taxable year ended December 31, 2021.

Cooperation Agreement and Strategic Review Process

On January 26, 2026, we entered into a cooperation agreement (the “Cooperation Agreement”) with one of our stockholders, The Kawa Fund Limited and its affiliate, Kawa Capital Management, Inc.

(collectively, “Kawa”).

Also on January 26, 2026, pursuant to the Cooperation Agreement, we commenced a review of strategic options for the Company, which review may include, without limitation, the consideration of potential acquisition and merger targets, the potential sale of the Company and continuing to operate as an independent publicly traded entity.

The Cooperation Agreement does not obligate the Company to pursue or consummate any such transaction or require our Board of Directors to take any action that it determines in good faith is inconsistent with its duties under applicable law.

The Cooperation Agreement contains customary standstill and non-disparagement provisions and will terminate on September 1, 2026.

Pursuant to the Cooperation Agreement, Kawa withdrew its notice of intent to nominate director candidates for election to our Board of Directors at our 2026 annual meeting of stockholders, and Kawa must cause all shares of common stock pursuant to which it has the sole or shared power to direct the voting to be present for quorum purposes at our 2026 annual meeting of stockholders and to refrain from “withholding” or voting “against” the directors nominated by our Board of Directors for election at such annual meeting.

Real Estate Portfolio

As of December 31, 2025, we owned and operated 58 operating properties with an aggregate of 6.5 million leasable square feet located in 26 states with an occupancy rate of 78.1% and a weighted average remaining lease term of 5.6 years.

As of December 31, 2025, we had eight properties designated as non-operating properties.

We also owned a 20% equity interest in the Arch Street Joint Venture, which as of December 31, 2025, owned a portfolio of six properties with an aggregate of 1.0 million leasable square feet located in six states with an occupancy rate of 100% and a weighted average remaining lease term of 6.3 years.

Including our proportionate share of leasable square feet and annualized base rent from the Arch Street Joint Venture, we owned an aggregate of 8.1 million leasable square feet with an occupancy rate of 73.7%, or 73.1% adjusted for two operating properties that are currently under agreements to be sold, and a weighted-average remaining lease term of 5.2 years as of December 31, 2024.

As of December 31, 2024, one tenant exceeded 10% of our annualized base rent:

the General Services Administration at 16.3%.

As of December 31, 2024, we had a total of 15 leases with the General Services Administration with a weighted average remaining lease term of 4.7 years.

As of December 31, 2024, properties located in the following states accounted for over 10% of our annualized base rent:

Including our proportionate share of leasable square feet and annualized base rent from the Arch Street Joint Venture, we owned an aggregate of 6.7 million leasable square feet with an occupancy rate of 78.7%, or 78.2% adjusted for one consolidated operating property and our proportionate share of the square footage of one Arch Street Joint Venture operating property that are currently under agreements to be sold, and a weighted average remaining lease term of 5.7 years as of December 31, 2025.

As of December 31, 2025, two tenants accounted for 10% or more of our annualized base rent:

the General Services Administration at 17.8% and Merrill Lynch at 10.0%.

As of December 31, 2025, we had a total of 15 leases with the General

Services Administration with a weighted average remaining lease term of 4.0 years and one lease with Merrill Lynch with a weighted average remaining lease term of 9.9 years.

As of December 31, 2025, properties located in the following states accounted for 10% or more of our annualized base rent:

Geographic Concentration % of Total Annualized Base Rent

New Jersey 13.4%

As of December 31, 2024, tenants in the following industries accounted for over 10% of our annualized base rent:

New York 10.0%

As of December 31, 2025, tenants in the following industries accounted for 10% or more of our annualized base rent:

Tenant Industry Concentration % of Total Annualized Base Rent

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Health Care Equipment & Services 13.7%

Financial Institutions 11.4%

Capital Goods 10.8%

Financial Institutions 10.0%

Investment Strategy

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Our experience is that these properties have greater tenant utilization and higher renewal probability, given their generally specialized uses and general inability for the tenant’s employees to conduct business at these sites on a remote or hybrid basis.

Consistent with the foregoing capital recycling strategy, during the year ended December 31, 2024, we acquired an approximately 97,000 square foot flex/laboratory and R&D facility in San Ramon, California for a gross purchase price of $34.6 million.

The property is fully leased to a high credit quality tenant through August 2039.

As of December 31, 2025, approximately 35.8% of our annualized base rent was derived from properties we deemed dedicated use assets.

We will continue to invest in the properties we own today when we believe those properties will produce attractive risk-adjusted yields on our investment plus any incremental capital we must invest and we will consider adding traditional office properties to the portfolio when we expect those properties to produce attractive, risk adjusted yields during our hold period through disposition but we intend to increase our focus on and exposure to dedicated use assets.

Suburban Market Features.

Preferred Market Features.

We primarily own commercial real properties located in suburban markets and seek to capitalize on de-urbanization trends amplified by the migration of millennials to the suburbs in the post-COVID environment.

39.2% of our annualized base rent as of December 31, 2024 was from Sun Belt markets.

We believe these markets will continue to benefit from an increasing number of corporate relocations from urban coastal markets to inland secondary markets, as companies and employees alike seek a lower cost of living, business-friendly tax and regulatory environments, less density, and better weather.

Additionally, we believe there are a variety of markets outside the Sun Belt which possess similar attractive characteristics and will benefit from similar trends.

We possess a geographical preference for Sun Belt markets, which we believe will continue to benefit from an increasing number of corporate relocations from urban coastal markets to inland secondary markets, as companies and employees alike seek a lower cost of living, business-friendly tax and regulatory environments, less density, and better weather.

Additionally, we believe there are a variety of markets outside the Sun Belt which possess similar attractive characteristics and will benefit

from similar trends.

We will look to opportunistically emphasize both Sun Belt and other similar high-quality markets to the extent we are able to grow our portfolio.

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Our portfolio includes regional and corporate headquarters office locations and other properties that are well-located with easy access to commuting routes and on-site amenities that enhance the tenant’s propensity to renew.

As part of our asset management efforts, we expect to increase the quality and desirability of our portfolio by continuing to make capital investments in our properties to add amenities and to create more modern floor plans configured to optimize collaboration and enhance employee productivity.

As part of our asset management efforts, we expect to increase the quality and desirability of our portfolio by continuing to make select capital investments in our properties to add tenant amenities ( e.g.

, cafe, lounge, gym, conference center) or other building features intended to augment the asset’s attractiveness to its marketplace of commercial users and/or the incumbent occupant.

External Growth.

We intend to grow our portfolio by acquiring properties that fit the characteristics defined in our investment evaluation framework, including dedicated use assets that have an office component, through multiple sourcing channels, leveraging our management team’s extensive relationship network with an average of over 25 years of experience

transacting in the single-tenant net lease market.

We intend to grow our portfolio by acquiring properties that fit the characteristics defined in our investment evaluation framework, including dedicated use assets that have an office component, through multiple sourcing channels, while leveraging our management team’s extensive relationship network and decades of experience transacting in the single-tenant net lease market.

We intend to pursue both individual assets as well as portfolio opportunities sourced from a wide range of marketed and off-market transactions.

As described in more detail in the section in this report entitled “Risk Factors”, our acquisition strategy is subject to risks, including that we may not be in a position or have the opportunity in the future, to make suitable property acquisitions on advantageous terms and/or that such acquisitions will fail to perform as expected.

We employ prudent amounts of leverage and use debt as a means of providing additional funds for asset management and other general corporate purposes.

We expect to use leverage prudently, assessing the appropriateness of new equity or debt capital based on market conditions, including reasonable assumptions regarding future cash flow, the creditworthiness of tenants and future rental rates.

We use debt as a means of providing additional funds for asset management and other general corporate purposes.

We believe we have used and expect to continue to use leverage prudently, assessing the appropriateness of new equity or debt capital based on market conditions, including reasonable assumptions regarding future cash flow, the creditworthiness of tenants and future rental rates.

If our Board of Directors determines to seek additional capital, we may raise such capital by offering equity or debt securities, creating joint ventures with existing ownership interests in properties, entering into joint venture arrangements for new development projects, retaining cash flows or a combination of any of these methods.

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Such securities may be senior to the outstanding class of common stock.

In November 2022, we established an “at the market” offering program for our common stock (the “ATM Program”), although we have not utilized this program to sell any shares of our common stock to date.

Pursuant to the ATM Program, we may from time to time offer and sell shares of our common stock, having an aggregate offering price of up to $100.0 million.

Such offers or sales of shares of our common stock may be made in privately negotiated transactions, including block trades, brokers’ transactions that are deemed to be “at the market” offerings as defined in Rule 415 under the Securities Act, including sales made directly on the NYSE, or through forward transactions under separate master forward sale confirmations and related supplemental confirmations for the sale of shares of our common stock on a forward basis.

As of December 31, 2024, we had $492.0 million of total consolidated debt outstanding, consisting of a $355.0 million fixed rate securitized mortgage note collateralized by 19 properties (the “CMBS Loan”), $119.0 million borrowed under our $350.0 million senior revolving credit facility (the “Revolving Facility”) and an $18.0 million fixed rate mortgage note on the San Ramon, California property we acquired in September 2024 (the “San Ramon Loan”).

In May 2024, in connection with the election of our option to extend the maturity of the Revolving Facility to May 12, 2026, we agreed to reduce the borrowing capacity of the Revolving Facility to $350.0 million from $425.0 million and to certain financial covenant changes.

Additionally, our proportionate share of the non-recourse mortgage notes associated with the Arch Street Joint Venture was $26.3 million as of December 31, 2024.

As of December 31, 2025, we had $465.0 million of total consolidated debt outstanding, consisting of a $355.0 million fixed rate securitized mortgage loan collateralized by 19 properties (the “CMBS Loan”), $92.0 million borrowed under our $350.0 million senior revolving credit facility (the “Original Revolving Facility”) which was refinanced with a new $215.0 million senior secured revolving credit facility during February 2026 (the “New Revolving Facility”), and an $18.0 million fixed rate mortgage note secured by our San Ramon, California property (the “San Ramon Loan”).

Additionally, our proportionate share of the non-recourse mortgage notes associated with the Arch Street Joint Venture was $25.8 million as of December 31, 2025 (the “Arch Street Joint Venture Mortgage Debt”).

See “Management’s Discussion and Analysis of Results of Operations and Financial Condition - Liquidity and Capital Resources” for additional information about our debt obligations, including the New Revolving Facility, a recent amendment entered into with respect to the CMBS Loan and the Arch Street Joint Venture Mortgage Debt.

We believe our prudent leverage and liquidity will enable us to continue to make the capital investments needed to enhance the quality of our existing portfolio and stability of our cash flows, as well as opportunistically take advantage of high-quality acquisition opportunities as market conditions permit.

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• If global market and economic conditions deteriorate, our business, financial condition and results of operations could be materially adversely affected.

• Our strategic review process will be costly and time-consuming and may not result in our identification or completion of a strategic transaction, which could have an adverse effect on our stock price and our business.

• Changes in workplace practices and office space utilization, including remote and hybrid work arrangements, have reduced the demand for office space at our properties and may continue to do so.

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• Government budgetary pressures and priorities, and trends in government employment and office leasing may adversely impact our business.

• Our partner in the Arch Street Joint Venture has not had access to sufficient liquidity to contribute its share of the capital requirements that have recently arisen, thereby exposing us to liabilities in excess of our share of the joint venture and other risks.

• We have made equity and member loan investments in the Arch Street Joint Venture which may not be recoverable.

• We may be unable to successfully execute on our strategy to shift our portfolio concentration over time away from traditional office properties, towards more dedicated use assets.

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• We have a significant amount of indebtedness and may need to incur more in the future.

• We have existing debt and refinancing risks that could have a material adverse effect on our business, financial condition and results of operations, including the risk that we will be unable to extend or refinance some or all of our debt, or that the lenders will not seek to enforce their remedies due to the existing payment default under the Arch Street Joint Venture mortgage notes.

• Financial covenants could materially adversely affect our ability to conduct our business.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business