Orion Properties Inc.

For Q2 2026, Orion reported total revenues of $34.3 million versus $37.3 million in Q2 2025. Net income was $24.6 million, or $0.43 per share, including a $28.8 million gain from opportunistic property sales. Core FFO was $11.8 million, or $0.20 per share, basically flat versus the prior-year quarter, and adjusted EBITDA was $17.2 million versus $18.0 million a year ago. G&A improved to $4.6 million from $4.8 million, and CapEx and leasing costs were $8.9 million versus $15.6 million. Net debt to annualized adjusted EBITDA was 5.4x at quarter end, down from 6.4x a year ago, and total liquidity was $177 million, including $63.5 million of cash and restricted cash and $113 million of revolver capacity. For 2026, Orion raised core FFO guidance to $0.72 to $0.77 per diluted share from $0.69 to $0.76, lowered net debt to adjusted EBITDA guidance to 6.0x to 6.8x from 6.5x to 7.3x, and kept G&A guidance unchanged at $19.8 million to $20.8 million. The board also declared a $0.02 per share quarterly cash dividend for Q3 2026.

Paul H. McDowell emphasized the ongoing strategic review, saying Orion is still working through diligence with multiple parties and will announce the outcome when it is reached, including if the company decides to continue independently. He framed the operating strategy around four priorities: stabilizing the portfolio through leasing, selling noncore assets, managing leverage, and recycling capital into dedicated use assets. His tone was constructive and confident, highlighting steady improvement in WALT, occupancy trends, and the company’s ability to create long-term value through portfolio reshaping.

Gavin Brandon focused on the financial improvements from dispositions, debt repayment, and lower expenses. He cited Q2 revenues of $34.3 million, core FFO of $11.8 million or $0.20 per share, adjusted EBITDA of $17.2 million, G&A of $4.6 million, and CapEx and leasing costs of $8.9 million. He also noted $70.6 million of Q2 gross sales, roughly $61 million of debt repaid, interest expense down $700 thousand in the quarter and $1.6 million year to date, and debt outstanding of $436.6 million versus $483 million a year ago. He said annual guidance was raised because of lower operating costs, better leasing expectations, lease termination income, and property tax appeals/refunds, while G&A guidance stayed unchanged.

Analysts pressed management on how it decides whether to sell or retain properties, especially government-leased assets and vacant buildings. Management said the process is asset-specific and depends on long-term demand, re-tenanting costs, and whether a property has durable leasing prospects; they cited Tulsa and Buffalo as examples where they are willing to invest, while a remote government-leased asset with downsizing risk was marked for sale. Questions also focused on the mix shift toward dedicated use assets and on capital needs, with management saying the long-term goal is to have well more than a majority of the portfolio in DUA assets, though the pace depends on access to outside capital. On CapEx, management said about $27 million had been spent year to date and that the remainder of 2026 could add another $30 million to $40 million.