Who is Orion Office REIT?

Orion Office REIT specializes in the ownership, acquisition and management of a diversified portfolio of mission-critical and corporate headquarters office buildings in high-quality suburban markets across the U.S. The portfolio is leased primarily on a single-tenant net lease basis to creditworthy tenants.

The company’s team of experienced industry leaders employs a proven, cycle-tested investment evaluation framework which serves as the lens through which capital allocation decisions are made for the current portfolio and future acquisitions.

When does Orion Office REIT’s fiscal year end?

Orion Office REIT has a December 31st fiscal year end.

Who are the members of Orion Office REIT’s management team?

Orion Office REIT’s management team collectively has over 100 years of experience and extensive knowledge of the single-tenant suburban office real estate sector, including operations, leasing, acquisitions, development and disposition of assets through all stages of the real estate life cycle. This team has in-depth market experience, long-standing relationships with local, regional and national industry participants and a proven track record of execution. More information on the individual management team members can be found here: The Orion Team :: Orion Office REIT Inc. (ONL) (onlreit.com)

What is Orion Office REIT's stock symbol?

Our stock is traded on the NYSE under the symbol ONL.

When was Orion Office REIT spun-off, and when did its shares start trading?

Orion Office REIT was spun-off on November 12, 2021, and its shares started trading on November 15, 2021.

Where is Orion Office REIT located?

New York Office:
19 West 44th Street
Suite 1401
New York, NY 10036

Phoenix Office:
2325 East Camelback Road
Suite 850
Phoenix, AZ 85016

Does Orion Office REIT have a direct stock purchase plan?

No, at this time, Orion does not offer a direct stock purchase plan.

Does Orion Office REIT have a dividend reinvestment program purchase plan (DRIP)?

No, at this time, Orion does not offer a DRIP program.

What are Orion Office REIT’s values?

The company’s reputation for integrity and serving its stockholders responsibly is of critical importance. Orion is committed to managing the company for the benefit of stockholders and is focused on maintaining strong corporate governance.

All of the Orion Office REIT directors have a reputation for integrity, honesty, and adherence to high ethical standards. Each director has demonstrated business acumen and an ability to exercise sound judgment, as well as a commitment of service to Orion Office REIT and the Board of Directors.

How do I contact Orion Office REIT’s investor relations team?

You can contact Orion Office REIT’s investor relations team with any questions or comments via email (investors@onlreit.com) or phone (602-675-0338).

How do I purchase Orion Office REIT stock?

To purchase Orion Office REIT stock, please contact a brokerage firm.

Who is Orion Office REIT's transfer agent?
By Mail By Overnight Delivery
Computershare Trust Company, N.A.
c/o Computershare Investor Services
P.O. Box 505000
Louisville, KY 40233-5000

Computershare Trust Company, N.A
c/o Computershare Investor Services
462 South 4th Street, Suite 1600
Louisville, KY 40202

Phone: 1-800-736-3001 (Toll Free)
              1-781-575-3100 (International)
Email: web.queries@computershare.com
Website: https://www.computershare.com
Investor Site: https://www-us.computershare.com/Investor
Was Orion Office REIT’s spin-off from Realty Income considered taxable transaction for U.S. federal income tax purposes?

Yes, Orion Office REIT’s spin-off from Realty Income was a taxable transaction for U.S. federal income tax purposes. Realty Income will provide its stockholders with tax information on an IRS Form 1099-DIV, informing them of the amount and character of its distributions during the taxable year, including the spin-off. For a discussion of certain U.S. federal income tax considerations related to the spin-off, see the final information statement filed as Exhibit 99.1 to Orion’s Current Report on Form 8-K filed on October 25, 2021. 

What was the value ascribed to the shares of Orion Office REIT for purposes of determining the amount of the distribution?

Realty Income will provide its stockholders with tax information on an IRS Form 1099-DIV, informing them of the amount and character of its distributions during the taxable year, including the spin-off. Realty Income will determine the value to ascribe to the Orion Office REIT shares for purposes of reporting the distribution on IRS Form 1099-DIV. Please reach out to Realty Income with questions on this matter: https://www.realtyincome.com/contact-us/default.aspx.

Why is Orion Office REIT focusing on suburban net lease office properties?

The Company believes macroeconomic and demographic trends point to a positive outlook for suburban office properties. In recent years, de-urbanization has caused a population shift away from Gateway cities towards smaller primary and secondary markets and non-urban communities, while large corporations have continued to announce relocations and/or new corporate campuses in suburban markets – people are increasingly choosing to live in the suburbs, and many employers are moving there too. The Company believes this trend has been accelerated by the pandemic.  Additionally, Orion Office REIT has a seasoned leadership team with significant experience in this sector and a proven ability to create value through asset management, capital recycling and external growth. The Company has a differentiated strategy as the only net lease REIT dedicated to suburban office and has a high-quality portfolio with significant investment grade tenancy and many corporate headquarters and mission-critical office properties.

What kind of assets will Orion Office REIT look to buy? What property characteristics is the Company looking for?

The Company will focus on investments in generally single tenant mission-critical and corporate headquarters office properties in well-located suburban locations leased long-term to investment grade and other creditworthy tenants. 

As described in the information statement included as Exhibit 99.1 to the Company’s Form 10 (link to filing here) and investor presentation available on the Orion Office REIT website (link to presentation here), we believe macroeconomic and demographic trends point to a positive outlook for suburban office real estate. 

What investment returns are acceptable/attractive for assets Orion Office REIT is looking to buy?

There are many considerations with respect to attractive valuation including a property’s real estate attributes, tenant credit and lease duration, but generally speaking, property capitalization rates will need to be at a long-term premium to the Company’s overall cost of capital. The market for high quality suburban office properties is competitive; however, properties are available, especially for those buyers with competitive advantages, such as Orion Office REIT.

What competitive advantages does Orion Office REIT have versus other bidders?

Orion Office REIT’s competitive advantages include significant liquidity, a conservative balance sheet and a highly experienced management team with a successful history of operating publicly traded REITs, significant expertise in the U.S. single-tenant suburban office markets and extensive relationships with industry participants, combined with the Company’s vertically-integrated platform handling investment, finance, property management and leasing.   

Where can investors find Orion Office REIT’s property/asset list?

The respective Schedule IIIs in the information statement included as Exhibit 99.1 to the Company’s Form 10 (link to filing here) detail the assets from VEREIT, Inc. (page F-51) and Realty Income Corporation (page F-21) that comprise the 92-propety Orion Office REIT portfolio. There is additional portfolio-level information starting on page 11 of this filing for reference.

Of the 92 properties in the Orion Office REIT portfolio as of June 30, 2021, how many came from the Realty Income portfolio versus the VEREIT portfolio?

52 of Orion Office REIT’s properties came from the VEREIT portfolio, while the remaining 40 came from the Realty Income portfolio.

How many vacant properties does Orion Office REIT currently have? What is the Company's plan for these properties?

Orion Office REIT had six office properties that were vacant as of June 30, 2021. We expect this number to rise given the Company’s lease maturity schedule. 

The Company believes that lease maturities may represent a value creation opportunity in the coming years for Orion Office REIT. The Company will employ active asset management strategies and leverage its tenant relationships to attract and retain high-quality creditworthy tenants, drive re-leasing and renewal activity and maximize tenant retention rates.

If Orion Office REIT is unable to retain existing tenants, the Company intends to re-lease assets to new tenants, including potentially converting the space to multi-tenant office use in the event that the management team considers conversion to be the value-maximizing alternative for the subject property. In certain circumstances the Company will sell assets where the properties do not fit the Company’s long term investment strategies. 

Is Orion Office REIT looking to sell properties? What valuation is the Company looking for when selling properties?

Orion Office REIT expects to selectively dispose of certain non-core properties in its current portfolio when the Company determines that they do not fit the long-term investment strategy. Proceeds from dispositions are expected to be redeployed to fund new acquisitions as well as capital investment into Orion Office REIT’s existing portfolio to further enhance the quality of the Company’s portfolio and stability of its cash flows.

Will Orion Office REIT keep its revolver and term loan and refinance its bridge loan?

Yes, the Company intends to keep its revolver and term loan and refinance its bridge loan. 

When will Orion Office REIT refinance its bridge loan? With what debt instrument? What kind of weighted average cost of debt should be expected after refinancing?

The Company expects to refinance its bridge loan during the first quarter of 2022 with fixed rate CMBS debt, which will be at market rates.

What kind of leverage profile does Orion Office REIT target?

The Company intends to employ a conservative leverage strategy.

What is Orion Office REIT’s interest rate on its revolver and term loan borrowings?

The interest rate applicable to the Company’s revolver and term loan borrowings may, at the election of Orion Office REIT, be determined on the basis of LIBOR or a base rate, in either case, plus an applicable margin. The applicable margin is 2.50% for LIBOR loans and 1.50% for base rate loans. The Company employs an interest rate hedging strategy to convert certain borrowing costs from floating to fixed, and the above interest rates do not include the cost of any interest rate hedge or deferred financing costs.

How much capital will Orion Office REIT have available to deploy for growth post the refinancing, and what are the Company’s sources of capital?

The Company’s primary sources of capital are cash flow from operations, borrowings from the revolver and capital recycling/sale of non-core assets. The Company expects to grow its portfolio by purchasing assets, both directly and through the Company’s Arch Street Joint Venture.

When will Orion Office REIT start paying dividends? What is the dividend policy?

Orion Office REIT’s dividend policy will be established by its Board of Directors. The Company expects to announce its dividend policy during the first quarter of 2022. Orion Office REIT expects its initial dividend to be sized to permit meaningful free cash flow for reinvestment into its current portfolio and for accretive investments and to comply with the requirements to maintain REIT status.

Why does Orion Office REIT own a 20% interest in the Arch Street Joint Venture? Who owns the rest? What are the Company’s future plans for this Joint Venture?

Orion Office REIT owns a 20% interest in the Joint Venture and an affiliate of Arch Street Capital Advisors own the remaining 80%. The Arch Street Joint Venture is an investment vehicle that has acquired and will continue to invest in office assets within the Company’s and the Joint Venture’s investment framework. 

By investing through the Joint Venture, Orion Office REIT is able to execute on a modest growth strategy while benefiting from an attractive cost of capital and generating fee income. The Company expects to continue to purchase office properties, as appropriate, through the Joint Venture. 

How does management plan to increase Orion Office REIT’s stock price to reflect the value of the Company?

The Company plans to drive shareholder valuation by executing on Orion Office REIT’s long-term investment strategies and capitalize on the Company’s competitive advantages. These are described above and in more detail in the information statement included as Exhibit 99.1 to the Company’s Form 10 (link to filing here) and investor presentation available on the Orion Office REIT website (link to presentation here).

How does management plan to address the outsized percentage of Orion Office REIT’s leases that are set to expire over the next three years? Does the Company believe there is any way to notably change the portfolio’s weighted average lease term much earlier than the end of 2024?

As previously highlighted, management believes that these lease maturities represent a potential value creation opportunity for Orion Office REIT. The Company will employ active asset management strategies and leverage its tenant relationships to attract and retain high-quality creditworthy tenants, drive re-leasing and renewal activity and maximize tenant retention rates. If Orion Office REIT is unable to retain existing tenants, the Company intends to re-lease assets to new tenants, including potentially converting the space to multi-tenant office use or sell assets.

This will require a long-term approach and methodical execution of the Company’s strategy, and while management is very focused on increasing the average lease term in the portfolio, this will take time. 

What is Orion Office REIT’s pro forma annualized base rent (ABR) as of June 30, 2021? Is ABR different than rental revenue per GAAP?

The Company previously disclosed pro forma annualized base rent (ABR) as of June 30, 2021 in the information statement included as Exhibit 99.1 to the Company’s Form 10 (link to filing here). Pro forma ABR is not the same as rental revenue per GAAP. The Company defines ABR as the monthly aggregate cash amount charged to tenants under its leases (including monthly base rent receivables and certain contractually obligated reimbursements by its tenants), as of the final date of the applicable period, multiplied by 12. The Company has not disclosed an updated ABR as of any subsequent period as of the date hereof.

What is Orion Office REIT’s pro forma rental revenue?

The Company also previously disclosed pro forma rental revenue in the information statement included as Exhibit 99.1 to the Company’s Form 10. The Company defines pro forma rental revenue as the Company’s rental revenue for a given period, after giving pro forma effect to our spin-off from Realty Income as if it occurred at the beginning of the period, including contractually obligated reimbursements by its tenants, as adjusted for proforma estimates of GAAP adjustments, such as amortization of above or below market lease intangibles, straight-line rent and deferred lease incentives. See the information statement included as Exhibit 99.1 to the Company’s Form 10 under the caption “Unaudited Pro Forma Condensed Consolidated Financial Statements” for more information link to filing here)

Have the financial statements for the VEREIT Office Assets and the Realty Income Office Assets included in Orion Office REIT’s Form 10-Q for the quarter ended September 30, 2021 been restated for asset sales that occurred during 2020 and first nine months of 2021?

No, the financial statements for the VEREIT Office Assets and the Realty Income Office Assets have not been restated for asset sales. The results presented for each period in these financial statements reflect the performance of all assets that were part of the respective VEREIT Office Assets and Realty Income Office Assets portfolios as of the applicable balance sheet date (e.g., September 30, 2021). 

Statements in the above FAQs that are not strictly historical are “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended, including with respect to future performance. These forward-looking statements are based on management’s current expectations and beliefs, but they involve a number of risks and uncertainties that could cause actual results or events to differ materially from those indicated by such forward-looking statements, including, but not limited include, among others: Orion’s clients’ ability to adequately manage their commitments and fulfill their respective lease obligations to Orion; conditions associated with the global market, including an oversupply of office space, client credit risk and general economic conditions; Orion’s ability to enter into new leases or renewal leases on favorable terms; the potential for termination of existing leases pursuant to client termination rights; and the effects of pandemics or global outbreaks of contagious diseases or fear of such outbreaks, including the COVID-19 pandemic and the measures taken to limit its impact, as well as any other risks reflected in Orion’s filings with the Securities and Exchange Commission. Consequently, forward-looking statements should be regarded solely as reflections of Orion’s plans, projections and estimates as of the date set forth above. Actual results may differ materially from what is expressed or forecast as of the date set forth above. Orion undertakes no obligation to publicly release the results of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date these statements were made.