The following is a summary of the Orion Office REIT Inc. (ONL) Q4 2023 Earnings Call Transcript:
Financial Performance:
Orion Office REIT reported a Q4 2023 revenue of $43.8 million, compared to $50.3 million in Q4 of the previous year.
The net loss for Q4 was $16.2 million or $0.29 per share. Core funds from operations for the quarter reached $18.5 million or $0.33 per share and adjusted EBITDA was $24.6 million.
Total revenue for the full year was $195 million, with a net loss of $57.3 million or a loss of $1.02 per share. Core funds from operations totaled $94.8 million or $1.68 per share and adjusted EBITDA was $118.5 million.
Addressed debt reduction in 2023 by overseeing the sales of 17 non-core properties, generating total gross proceeds of $59 million, which majorly contributed towards repaying debt, and successfully reducing overall debt by over $145 million.
Orion continues to hold $332.1 million in liquidity and outstanding debt standing at $498.3 million.
Business Progress:
Orion successfully renewed and secured new leases across 2023, including a 10-year early lease renewal in Memphis and a five-year early lease renewal at a Minnesota property.
New long-term lease transactions with the United States Government were signed post the end of the year 2023.
They continue to prioritize spending towards improving building assets and lease incentives to retain existing tenants while also attracting new ones.
Orion is keen on divesting non-core properties aiming to maximize the long-term value of the remaining elements within the portfolio and gear for future profitable growth.
Leasing pipeline shows increased activity with discussions for over 1 million square feet of space.
For 2024, Orion expects lesser revenue and increased vacancy costs due to anticipated significant lease expirations. Core FFO for 2024 is expected to range from $0.93 to $1.01 per share.
Their firm strategic pillars include retaining existing tenants, populating empty spaces, and the planned sale of non-core properties. They remain open to adapting the business plan based on market dynamics.
More details: Orion Office Reit IR
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