Orion Properties Sells $48.7M Portfolio, Acquires $15M Office in Northbrook, IL

Orion Properties Inc. (NYSE: ONL), a Phoenix-based real estate investment trust focused on single-tenant net lease office properties, reported first quarter 2026 results on May 7, disclosing a series of property transactions totaling approximately $48.7 million in dispositions alongside a $15 million office acquisition in suburban Chicago.

Northbrook Office Acquisition

In February 2026, Orion Properties completed the acquisition of a 75,000-square-foot dedicated use asset in Northbrook, Illinois for $15.0 million, or approximately $200 per square foot. The property is fully leased to a single tenant through December 2036, providing more than a decade of remaining lease term. The acquisition aligns with the company's stated strategy of shifting its portfolio concentration away from traditional office properties toward what it calls "Dedicated Use Assets", or DUAs — a category that includes governmental, medical office, flex/laboratory, R&D, and flex/industrial properties.

As of March 31, 2026, DUAs accounted for 37.1% of Orion Properties' annualized base rent across its portfolio.

Portfolio Dispositions: Completed and Pending Sales

During the first quarter, Orion Properties closed on two non-operating property dispositions totaling approximately 516,000 square feet for an aggregate gross sales price of $13.1 million. Subsequent to quarter end, the company closed on the sale of a 37.4-acre site in Deerfield, Illinois — where six buildings were demolished in the fourth quarter of 2025 — for a gross sales price of $13.1 million, and a 120,000-square-foot property in Glen Burnie, Maryland for $22.5 million.

As of May 7, 2026, Orion Properties had agreements in place to sell three additional properties for an aggregate gross sales price of $46.0 million. Those pending transactions include an approximately 140,000-square-foot traditional office property for $35.0 million, with proceeds earmarked to pay down outstanding principal on the company's CMBS loan; an approximately 35,000-square-foot near-term vacant property for $3.4 million; and a proportionate share of one unconsolidated joint venture property for $7.7 million, with proceeds expected to reduce the joint venture's non-recourse mortgage notes. The company cautioned that pending sale agreements are subject to conditions outside its control, including buyer due diligence, and may not close on agreed terms or at all.

Q1 2026 Financial Results

Orion Properties generated total revenues of $36.3 million in the first quarter of 2026, compared to $38.0 million in the same quarter of 2025. The company reported a net loss attributable to common stockholders of $13.6 million, or $0.24 per share, versus a net loss of $9.4 million, or $0.17 per share, in the prior-year period. Core FFO — a non-GAAP measure commonly used in the REIT industry — was $11.7 million, or $0.21 per diluted share, up from $10.7 million, or $0.19 per diluted share, in the first quarter of 2025.

EBITDA was $6.9 million, EBITDAre was $13.2 million, and Adjusted EBITDA was $17.2 million for the quarter. Net Debt to Annualized Most Recent Quarter Adjusted EBITDA stood at 6.36x.

Leasing Activity

The company completed approximately 355,000 square feet of leasing during the first quarter. Notable transactions included a new 12-year lease for 172,000 square feet in Irving, Texas commencing November 2026; a three-year extension for 160,000 square feet in Buffalo, New York through March 2039; and a new 10.5-year lease for 23,000 square feet in Phoenix, Arizona commencing March 2026. Orion Properties said it has leased more than 2.0 million square feet over the past two years.

Balance Sheet and Financing

As of March 31, 2026, Orion Properties had total principal outstanding of $497.3 million, comprising a $352.3 million CMBS loan collateralized by 19 properties, $127.0 million drawn on its credit facility revolver, and an $18.0 million mortgage loan secured by its San Ramon, California property. The company had $148.5 million of total liquidity, including $60.5 million in cash and restricted cash and $88.0 million of available capacity on its revolving credit facility.

In February 2026, Orion Properties entered into a new credit facility revolver that extends the maturity date to February 2028, with two six-month borrower extension options potentially extending it to February 2029. The new facility reduces lender commitments to $215.0 million, lowers the interest rate margin by 50 basis points, and eliminates a 10-basis-point SOFR adjustment. The company also amended its CMBS loan, extending its maturity two years to February 11, 2029, with additional extension options totaling 18 months. The fixed annual interest rate of 4.971% on the CMBS loan remains unchanged. Under the amendment, the lender will sweep monthly excess cash flows from the 19 collateral properties — after interest and operating expenses — to prepay principal and fund an all-purpose reserve.

Portfolio Overview and Strategic Review

As of March 31, 2026, Orion Properties' real estate portfolio consisted of 59 operating properties and six non-operating properties, the latter of which were sold during April 2026. Annualized base rent was $115.2 million, with 64.8% derived from investment-grade tenants. The portfolio occupancy rate was 83.1% and the weighted average remaining lease term was 5.9 years.

The company is continuing a strategic options review announced January 26, 2026, which may include consideration of potential acquisition and merger targets, a potential sale of the company, or continuing to operate as an independent publicly traded entity. No timetable has been set for completion of the review.

Paul McDowell, Orion's Chief Executive Officer, said in a statement: "We continue to execute on our strategy to stabilize the portfolio through increased leasing activity and the timely disposition of non-core assets in order to drive Core FFO per share growth in 2026 and beyond. To that point, during the quarter we continued to build on the 2.0 million square feet we leased over the past two years, as we completed approximately 355,000 square feet and further reduced the carrying costs of vacant assets through property sales. We also continue to evaluate strategic options with our advisors and board of directors in our ongoing pursuit to maximize value for stockholders."

For full-year 2026, Orion Properties reaffirmed guidance of Core FFO per share of $0.69 to $0.76, net debt to adjusted EBITDA of 6.5x to 7.3x, and general and administrative expense of $19.8 million to $20.8 million. The company's board declared a quarterly cash dividend of $0.02 per share for the second quarter of 2026, payable July 15, 2026, to stockholders of record as of June 30, 2026.

Sources: Orion Properties Inc. Q1 2026 Press Release (Business Wire, May 7, 2026); onlreit.com