Orion Properties Reports $25.1 Million Net Loss in Q2 2025, Revenue Declines

Orion Properties Inc. reported a net loss of $25.1 million for the second quarter of 2025, a decrease from the $33.8 million loss recorded in the same period of 2024. Total revenues for the quarter were $37.3 million, down from $40.1 million year-over-year, primarily due to a decline in rental income, which fell to $37.1 million from $39.9 million. The company attributed this decrease to a reduction in occupied square footage resulting from lease expirations and a lack of reimbursements from previous tenants, which were not recognized in 2025.

In terms of operational metrics, Orion Properties owned and operated 66 properties with a total of 7.6 million leasable square feet as of June 30, 2025, reflecting a decrease from 69 properties and 8.0 million square feet a year earlier. The occupancy rate improved to 76.8% from 73.7% in the prior year, while the weighted average remaining lease term increased to 5.5 years. The company also reported a significant increase in impairments, with charges of $19.5 million for the quarter, compared to $5.7 million in the same quarter of 2024.

Strategically, Orion Properties has shifted its focus from traditional office properties to dedicated use assets, which include governmental and medical office spaces. This transition was highlighted by the company's name change from Orion Office REIT Inc. to Orion Properties Inc. in March 2025. The company has also been active in leasing, completing approximately 559,000 square feet of lease renewals and new leases during the first half of 2025, with a weighted average lease term of 6.5 years.

Financially, Orion Properties faced challenges with its debt obligations, reporting total consolidated debt of $483 million as of June 30, 2025. The company has a revolving credit facility maturing on May 12, 2026, with $110 million outstanding, and substantial doubt exists regarding its ability to refinance this debt. Management is exploring options to extend or refinance the facility, but as of August 6, 2025, no agreements had been reached. The company’s liquidity is further constrained by its cash position of $17.4 million and the need to fund capital expenditures and leasing costs.

Looking ahead, Orion Properties remains cautious about its financial outlook, given the uncertainties surrounding its ability to refinance its debt and the ongoing challenges in the commercial real estate market. The company is focused on maintaining occupancy levels and managing its portfolio effectively while navigating the evolving landscape of tenant needs and market conditions.