Greetings. Welcome to Orion Properties Year End 2025 Earnings Call. As a reminder, this conference is being recorded. I would now like to turn the call over to Emma Little, Investor Relations. Thank you. You may begin.

Thank you and good morning, everyone. Yesterday, Orion released its results for the quarter and year ended December 31, 2025, filed its 2025 Form 10-K with the Securities and Exchange Commission and posted its earnings supplement to its website at onlreit.com. During the call today, we will be discussing Orion's guidance estimates for calendar year 2026 and other forward-looking statements, which are based on management's current expectations and are subject to certain risks that could cause actual results to differ materially from our estimates. The risks are discussed in our earnings release as well as in our Form 10-K and other SEC filings, and Orion undertakes no duty to update any forward-looking statements made during this call. We will also be discussing non-GAAP financial measures, such as Funds from Operations, or FFO, and Core Funds from Operations, or Core FFO. These non-GAAP financial measures are not a substitute for financial information presented in accordance with GAAP, and Orion's earnings release and supplement include a reconciliation of our non-GAAP financial measures to the most directly comparable GAAP measure. Hosting the call today are Orion's Chief Executive Officer, Paul McDowell, and Chief Financial Officer, Devin Brandon. And joining us for the Q&A session will be Chris Day, our Chief Operating Officer. With that, I am now going to turn the call over to Paul McDowell.

Good morning, everyone, and thank you for joining us on Orion Properties 2025 year-end earnings call. As recently announced, Orion has begun a strategic options review process as management and the board of directors continue to explore pathways to unlock value for our shareholders. Since this process is in the early stages, we will focus today's call on our operating performance and the tremendous progress we made further stabilizing the portfolio and executing our business plan during 2025, which has now positioned us for core FFO earnings growth in 2026 and beyond, starting with leasing. We completed over 900,000 square feet of leasing in 2025, on top of the 1.1 million square feet we leased in 2024, reflecting an improving market backdrop. We also signed an additional 183,000 square feet after year-end. These are meaningful volumes, particularly given the reduced size of our portfolio, and have really moved the needle to enhance the quality and stability of our lease role. One critical metric to measure our success is Weighted Average Lease Term, or WALT, which averaged nearly 10 years on new leases signed in 2025. This is nearly double our portfolio average walt. Overall, the average walt for all leasing activity in 2025 was 7.5 years, which continues to move in the right direction and is approaching six years for the total portfolio. Cash rent spreads on fourth quarter renewals We're up for the third straight quarter at 12.8%, though overall 2025 rent spreads remained volatile and we're down 7.1% for the year, but we're up an average of 3.7% when comparing ending rents in the current term versus ending rents in the renewal term. Importantly, our 2025 leasing momentum and non-core dispositions translated into a 600 basis point improvement in our leased rate year over year to over 80% at year end, and a 500 basis point improvement in our occupancy rate to 78.7% at year end. Equally significant, our lease rollover profile has improved, and we entered 2026 with scheduled lease expirations totaling just $11.4 million of annualized base rent in 2026. This is relative to the nearly $16.2 million of annualized base rent that was scheduled to expire in 2025 and $39.4 million in 2024. This positions us to drive further occupancy gains and stabilize revenues as we continue to lease, sell vacant properties, and selectively recycle capital into new cash-flowing assets throughout this year and into next. Leasing momentum remains constructive so far in 2026. Our pipeline is robust, and we have over 1 million square feet in either discussion or documentation stages, which includes several full building leases as well as longer-duration renewals and new leases with terms materially greater than the average of our portfolio. Our accelerating portfolio improvement through increased disposition activity was another key story for the year. During 2025, we sold 10 properties totaling more than 960,000 square feet for approximately $81 million of gross proceeds, which included two vacant traditional office properties and one stabilized traditional office property sold in the fourth quarter for $32 million. dollars. Subsequent to year-end, we sold two more vacant properties in Bedford, Massachusetts and Malvern, Pennsylvania, totaling an additional 516,000 square feet for over 13 million dollars and are under contract to sell additional non-core properties for gross proceeds of roughly 36 million in the near term, including the 37.4-acre Deerfield, Illinois property where we completed the demolition of the six buildings formerly leased to Walgreen during the fourth quarter. While the per square foot price of these sales varied from $17 per square foot to $216 per square foot, our focus was on selling properties where we felt the releasing prospects did not outweigh the burden of continuing to carry them. These sale transactions will substantially reduce the estimated carry costs associated with these vacant properties by a combined $10.3 million annually. Our 2025 and near-term dispositions will generate a total of roughly $130 million, which has allowed us to maintain reasonable debt levels while still funding vital tenant improvement allowances, leasing commissions, and other capital expenditures to support our strong leasing activity. We are also actively evaluating opportunities to recycle a modest percentage of these proceeds into acquisitions as we continue to shift our portfolio concentration away from traditional suburban office properties and toward dedicated use assets, or DUAs, where our tenants perform work that cannot be replicated from home or relocated to a generic office setting. These property types include medical, lab, R&D, flex, and government properties, all of which we already own. Our experience is that these assets tend to exhibit stronger renewal trends, higher tenant investment, and more durable cash flows. A terrific example of this strategy is the Barilla America's Headquarters building we just purchased at the end of last week in Northbrook, Illinois. In addition to serving as Barilla's headquarters, the building also houses their sole test kitchen and R&D facility in the U.S. Worldwide, the Barilla Group is the world's largest maker of pasta, and their pasta and sauces are a familiar sight on U.S. grocery shelves. The 75,000-square-foot building is subject to a 10.8-year lease with current net rents at approximately $15.30 per square foot and growing 2.5% annually. We bought the property for $15 million, equating to a going-in cash capitalization rate of 8.1% and an average capitalization rate over the approximately 11-year lease term of 9%. At year end, approximately 35.8% of our portfolio by annualized base rent consisted of dedicated use assets versus 31.8% at the end of 2024. And we expect this percentage will continue to increase over time through disposition activity and targeted acquisitions. We recognize as a small cap REIT that G&A expense is a very important consideration, and we remain disciplined on expenses at the corporate level. In 2025 and early 2026, we reduced headcount by more than 10%, including at the executive and senior vice president levels, and managed controllable G&A. We estimate these initiatives will generate about $1.8 million of annualized savings. These efforts are, however, offset by inevitable inflation, expected increased accounting fees associated with SOPS 404 internal control audit requirements beginning in 2026 for us, and legal and other expenses associated with managing an activist investor. Turning very briefly to the balance sheet, as Gavin will give more detail in his remarks, in February, we were able to deal with both our major debt maturities that had been scheduled to come due within the next year. First, with the support of our existing lenders, we entered into a new $215 million secured revolving facility, which will mature in February 2029, inclusive of two six-month extension options. Second, we extended our existing $355 million CMBS loan by three and a half years to August 2030, inclusive of two extension options totaling 18 months. These very significant achievements give us the financial flexibility and term to continue to execute on our business plan. A final note on our strategic options process. While we have increasing confidence in our standalone prospects, over the past three years, as we have consistently disclosed, management and the board have devoted time to considering avenues for Orion to potentially pursue in addition to our business plan. Our ongoing public strategic options review process will provide further opportunity to consider with our board and our financial advisors what could be a range of potential strategic alternatives to maximize stockholder value. And as we've said before, we remain very open to pursuing any actionable proposals. To sum up, the progress we've made over the past four years and which progress accelerated in 2025 has materially de-risked and stabilized our portfolio, and we are finally set for meaningful growth from a core FFO standpoint over the next several years. Our priorities in 2026 remain improve portfolio quality, lengthen wall, renew tenants and fill vacant space, reduce risk, lower expenses, prudently manage leverage, and position Orion with a more stable and durable earnings profile. We believe these are the right steps to unlock long-term value, which will make Orion attractive to investors and potential strategic partners alike. With that, I'll turn the call over to Gavin. Thanks, Paul.

For the fourth quarter of 2025, compared to the fourth quarter of 2024, Orion had total revenues of $35.2 million as compared to $38.4 million. Core FFO of $0.19 per share as compared to $0.18 per share. As expected, we recognized $0.03 per share of lease termination income in the fourth quarter of 2025 associated with the Fresno, California asset sale. Adjusted EBITDA of $16.1 million versus $16.6 million. The year-over-year changes in operative income are primarily related to current year vacancies and costs incurred for the Deerfield demolition, offset by income from our San Ramon property acquired in 2024, and carrying cost savings from dispositions of vacant assets. G&A came in as expected at $6 million compared to $6.1 million. CapEx and leasing costs were $17.8 million compared to $8.2 million, which primarily relates to work performed at our Buffalo, New York property, where our new 160,000-square-foot lease with Ingram Micro is expected to commence in April 2026, and at our Lincoln, Nebraska property, where our new 86,000-square-foot lease with the United States government commenced in February 2026. For the full year 2025 compared to 2024, Orion had total revenues of $147.6 million as compared to $164.9 million. Core FFO of $0.78 per share, which included approximately $0.09 per share of income from lease terminations and end-of-lease obligations. This compares a core FFO of $1.01 in 2024, which included $0.04 per share of lease termination income. Adjusted EBITDA was $69 million versus $82.8 million. The year-over-year decreases in operating income are primarily related to current year vacancies and costs incurred for the demolition discussed earlier, offset by income from our 2024 acquisition and carry cost savings from dispositions of vacant assets, as well as successful property tax appeals. G&A came in as expected at $20.3 million as compared to $20.1 million in 2024. 2025 G&A includes $423,000 in legal and other expenses related to managing an activist investor. CapEx and leasing costs were $60 million compared to $24.1 million in the prior year. The increase in CapEx in 2025 was driven by completion of landlord and tenant improvement work related to the acceleration in our leasing activity. As we have previously discussed, CapEx timing is dependent on when leases are executed and work is completed on lease properties. We expect to allocate more capital to CapEx over time as leases roll and new and existing tenants draw upon their tenant improvement allowances. Our net debt to full-year adjusted EBITDA was a relatively conservative 6.8 times at year-end, and on a modified basis, net of restricted cash was approximately 6.2 times. As of December 31, 2025, and as adjusted for our new secured $215 million revolver, We had total liquidity of $145.9 million, including $22.9 million of cash and cash equivalents and $123 million of available revolver capacity. We also had $39.9 million of restricted cash, including our pro rata share of the joint venture's restricted cash. Orion continues to manage leverage while maintaining significant liquidity to support our ongoing leasing efforts and provide the financial flexibility needed to execute on our business plan for the next several years. Since our spin, we have repaid a net $173 million of outstanding debt as of year-end while supporting our current business plan. As Paul mentioned, on February 18th, we entered into a credit agreement for a new senior secured credit facility revolver, which refinances our original credit facility revolver. The new credit facility revolver extends maturity date until February 2029, including two six-month borrower extension options. It reduces the lender's commitment to $215 million to more closely align with our business plan, reduces the interest rate margin on our borrowings by 50 basis points to SOFR plus 2.75%, and eliminates the 10 basis point SOFR adjustment, which will help to lower future interest expense. As of March 5, 2026, we had $127 million outstanding and $88 million of borrowing capacity under our new credit facility revolver. We appreciate the continued support from our lending group and the timeliness of executing the credit agreement prior to our 10-K filing, which alleviated any accounting disclosures with respect to near-term debt maturities. On February 17th, we amended our CMBS loan. The Loan Modification Agreement extends maturity date by two years to February 2029, subject to two borrower extension options for a total of 18 months until August 2030. During this time, the fixed interest rate on the CMBS loan of 4.971% will remain unchanged and excess cash flows after payment of interest and property operating expenses will be swept by the lender to be applied to a combination of prepaying the outstanding principal balance of the CMBS loan and funding reserves which we can access principally for capital expenditures. As part of the loan modification, we negotiate favorable release provisions for certain assets in the pool that we may dispose of and repay principal. Additionally, yield maintenance premiums will no longer apply to principal payments made during the term. Potential property dispositions, as well as amortizing nature of the CMBS loan, will repay principal and reduced interest expense during the term, further lowering leverage over the next several years. As of March 5, 2026, we had $353 million outstanding under the CMBS loan and $37.7 million in an all-purpose reserve. Turning to the Arc Street joint venture, the non-recourse mortgage debt was $128.8 million as of year-end, and our 20% share of that was $25.8 million. Due to the capital constraints of our joint venture partner, the joint venture was unable to make an approximately $16 million loan principal prepayment to satisfy the 60% loan-to-value condition to extend this debt obligation until November 27, 2026. The lenders have been providing short-term extensions, while the joint venture remains in active, cooperative discussions with the lenders with respect to the plans of the portfolio and an additional extension. Further, the joint venture has entered into a contract to sell one of the assets out of the portfolio and is in active discussions with the lenders on an additional asset sales to repay debt. Due to the uncertainties regarding the R Street joint venture investments, As of December 31, 2025, we reduced the carrying value of our investment to zero and recorded a loan loss reserve against our member loan to the R Street Joint Venture. The impairments are driven by accounting rules, which are focused on the probable recoverability of our investment in and collection of the member loan based on facts and circumstances as of December 31, 2025. The Arc Street Joint Venture contributed approximately $0.05 of Core FFO in 2025, which primarily related to interest income from our member loan and management fees. We have not included income from the JV in our outlook for this year past February 2026. While we have written our investment in the JV down due to the uncertainty around the debt financing and our partner's ability to meet capital calls, we continue to believe that the portfolio, which is performing with an occupancy rate of 100% and a way to average lease term of 6.3 years, has positive equity. We expect to continue to work with the JV's lenders and our JV partner to find a way to collect our member loan in full and unlock our equity. As for the dividend, on March 4, 2026, Orion's Board of Directors declared a quarterly cash dividend of $0.02 per share for the first quarter of 2026. Turning to our 2026 outlook, as previewed last quarter, 2025 represented a trough for our core FFO, excluding lease-related termination income, as our recent leasing and capital initiatives begin to translate into improved recurring earnings power over 2026 and beyond. Core FFO for the year is expected to range from $0.69 to $0.76 per diluted share. As a reminder, core FFO for 2025 would have been 69 cents, excluding 9 cents of lease termination income. G&A is expected to range from $19.8 to $20.8 million. Excluding non-cash compensation, we expect 2026 G&A will be in line or slightly better than 2025. We also do not expect G&A to rise significantly in the outer years, including non-cash compensation. As a percentage of revenue and total assets, our G&A remains in line with other similarly sized public REITs. Net debt to adjust EBITDA is expected to range from 6.5 times to 7.3 times. With that, we will open the line for questions. Operator?

Thank you. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. And for participants using speaker equipment, it may be necessary to pick up the handset before pressing the star keys. Our first question is from Mitch Germain with Citizens JMP. Please proceed.

Thank you. Um, what is, it seems like your leasing pipeline is almost two times higher relative to last quarter. Is just, is that just an overall conviction that you're seeing in, in, uh, office leasing? Is it really kind of the tide really turning a bit more positively here?

Uh, good morning, Mitch. Um, I think it's probably a little bit of both, frankly. You know, we have a, you know, our portfolio is not very big. So the numbers can move pretty dramatically if we start to get some leasing momentum on one or two properties, which is exactly the case that's occurred from last quarter to this quarter. And then, and I would characterize that leasing momentum that we've gotten is as a result of the market improving somewhat. So I think it's a bit of both, but I, you know, I would, you know, I would reemphasize that the number may be volatile quarter over quarter.

And from a historical context, and I know that, what is that, three, four years for you guys, like when you look at your leasing pipeline and compare that to the success rate that you've had, you know, I don't know, maybe if you've thought about like what the percentage is that you've seen historically in your ability to, you know, take the pipeline into a lease.

And we haven't calculated that specifically, but I will tell you, Mitch, that our success rate has improved very significantly over the past two years. I think, you know, the first in 2023, as you might remember, we only leased 230,000 square feet of space and we didn't have any new leases. and you know last year we did 1.5 in 24 we did 1.1 million square feet and in 25 we did 900,000 square feet and 183,000 square feet so far this year with a pretty strong pipeline so I would say that you know we're our ability to turn inquiry into signed leases has really improved a lot And I'd say that the decision-making process at Tenants has also shortened up quite significantly, where they're now looking at space, deciding it meets their needs, and then entering into lease negotiations with us.

That's helpful. Last one for me, the Barilla transaction. Maybe, you know, I don't know, was that a broker that brought it to you? Was it a relationship? Um, I do understand some of the criteria, um, as to why you consider it, um, you know, a stronghold, uh, or an investment, you know, maybe what percentage of the asset is office versus, you know, non-traditional or more like industrial space. If you can provide some context there.

Sure. Um, well, the, the transaction came to us through the, through the broke, you know, it was brokered. It was a, it was a marketed transaction. So, you know, we saw it as well as other market participants. Stephanie Peacher, who works for us, she's the one who does acquisitions. And so she keeps close eye on the market. And so she brought that in from the brokerage community. The property itself contains the test kitchens and R&D facilities for the Barilla operations here in North America and South America as well. So very important. From a percentage perspective, about half roughly is their test in R&D and the half is office.

Thank you.

Our next question is from Matthew Erdner with Jones Trading. Please proceed.

Hey, good morning, guys, and thanks for taking the question. You know, it's good to see you guys back in the market acquiring properties. You know, how should we think about, you know, the pace of the remaining, I guess, vacant properties being disposed of throughout the year? And then, you know, what should we look for for you guys to kind of, you know, go out and acquire more properties?

Yeah, that's a great question. We've sold on the vacant property side. It's important to note that we had a huge amount of activity in 2025, obviously selling down 10 properties in 25 and then two additional vacant properties in the beginning of 26. And then we have pending, you know, a couple of additional sales, including our vacant land in Illinois, in Deerfield, Illinois. Anyway, with respect to the pace of vacant sales in the future, you know, we don't have that much vacancy left. But as we generate, as vacancy comes online, we are going to take a hard look and we'll make a judgment about whether or not we sell those properties or whether we hold them for lease up. You know, some of the vacancy that we have now, we feel pretty confident about our ability to lease it up. So that's the primary focus. With respect to acquisitions, you know, we've been very judicious. This is only our second acquisition since the spin. But we do want to recycle capital. And so when we have capital recycled from sale of either vacant properties or stabilized properties, both of which we did last year, we look at that capital and we can allocate it towards debt repayment. We can allocate it towards our existing asset base for tenant improvements and leasing commissions and building improvements and the like, or we can allocate it towards acquisitions, all of which we expect to do during the course of this year.

Got it. That's very helpful. And then, you know, I guess just looking at the upcoming lease maturities, you know, it looks like through 2028, there's a little under 46% that's scheduled to roll over. You know, what kind of opportunities does this present to you guys, you know, in terms of being able to go out there and kind of grow these cash spreads and, you know, generate that FFO growth?

Well, I think, you know, we do expect core FFO to grow meaningfully in the coming years, you know, as the portfolio stabilizes and as we rent stuff up. We've had, I would characterize it, which is, I think, reflective of the broader market as a mixed renewal rent increases or decreases. You know, sometimes we require, market requires us to lower rents for renewal because that's just what the market will bear. But as we've seen at the end of last year, where we had three quarters in a row of increases in renewal rents, you know, we hope that continues into 26 and 27 as the market gradually recovers. But I think it's going to be volatile quarter over quarter.

Got it. That's helpful. Thank you, guys.

Thank you very much.

There are no further questions at this time. I would like to turn the conference back over to Paul for closing remarks.

Okay. Thank you, everyone, for joining us today on the call. We had a terrific year in 2025, and we're hoping to have just as good a year in 2026. We look forward to updating you on our first quarter later in the year. Thank you.

Thank you. This will conclude today's conference. You may disconnect at this time, and thank you for your participation.