Orion Office REIT Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Orion Office REIT, Real Estate Investments and Related Intangibles (Tables)

Orion Office REIT, Real Estate Investments and Related Intangibles (Tables)

3 Months Ended

Mar. 31, 2022

Schedule of Finite-Lived Intangible Assets

Intangible lease assets consisted of the following (amounts in thousands, except weighted-average useful life):


	Weighted-Average Useful Life (Years)	March 31, 2022		December 31, 2021
Intangible lease assets:
In-place leases, net of accumulated amortization of $90,129 and $65,247, respectively	4.9	$	247,807	$	272,743
Leasing commissions, net of accumulated amortization of $694 and $456, respectively	13.0	11,097		10,349
Above-market lease assets, net of accumulated amortization of $7,535 and $6,239, respectively	5.1	13,719		15,015
Total intangible lease assets, net		$	272,623	$	298,107

Intangible lease liabilities:
Below-market leases, net of accumulated amortization of $16,075 and $14,459, respectively	7.6	$	18,993	$	20,609

Schedule of Finite-Lived Intangible Assets, Future Amortization Expense

The following table provides the projected amortization expense and adjustments to rental revenue related to the intangible lease assets and liabilities for the next five years as of March 31, 2022 (amounts in thousands):


	Remainder of 2022		2023		2024		2025		2026		2027
In-place leases:
Total projected to be included in amortization expense	$	69,724	$	73,858	$	49,213	$	21,652	$	15,499	$	7,441
Leasing commissions:
Total projected to be included in amortization expense	$	759	$	1,012	$	969	$	901	$	901	$	901
Above-market lease assets and deferred lease incentives:
Total projected to be deducted from rental revenue	$	3,874	$	4,791	$	2,998	$	860	$	682	$	237
Below-market lease liabilities:
Total projected to be added to rental revenue	$	4,828	$	6,091	$	3,786	$	1,036	$	817	$	655

Real Estate Investment Financial Statements, Disclosure

The following is a summary of the Company’s investment in one unconsolidated entity, Arch Street Joint Venture, as of March 31, 2022 and for the three months ended March 31, 2022 (dollar amounts in thousands):


	Ownership % (1)	Number of Properties	Carrying Amount of Investment			Equity in Income
						Three Months Ended (2)
Investment	March 31, 2022		March 31, 2022		December 31, 2021	March 31, 2022		March 31, 2021
Arch Street Joint Venture (3) (4)	20%	6	$	17,952	18,631	$	(41)	—

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(1)The Company’s ownership interest reflects its legal ownership interest. Legal ownership may, at times, not equal the Company’s economic interest because of various provisions in the joint venture agreement regarding capital contributions, distributions of cash flow based on capital account balances and allocations of profits and losses. As a result, the Company’s actual economic interest (as distinct from its legal ownership interest) in certain of the properties could fluctuate from time to time and may not wholly align with its legal ownership interests.

(2)The interest in the Arch Street Joint Venture was acquired by Realty Income as part of the Mergers, and was transferred to the Company upon the consummation of the Distribution. Therefore, the Company’s equity in income reflects operations following the Merger Effective Time.

(3)During three months ended March 31, 2022, the Arch Street Joint Venture did not acquire any properties.

(4)The total carrying amount of the Company’s investment in the unconsolidated joint venture was greater than the underlying equity in net assets by $1.7 million as of March 31, 2022. This difference is related to a step up in the fair value of the investment in the unconsolidated joint venture in connection with the Mergers. The step up in fair value was allocated to the Company’s investment in the unconsolidated joint venture and is being amortized in accordance with the Company’s depreciation policy.