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Dec 31, 2024
Orion Office REIT Q4 2024 Earnings Report
Orion Office REIT reported a decline in revenue and a larger net loss in Q4 2024 due to higher impairments and lower rental income.
Key Takeaways
Orion Office REIT posted Q4 2024 revenue of $38.4 million, down from $43.8 million in the prior year. The company reported a net loss of $32.8 million, driven by higher impairments and reduced occupancy. Core FFO declined to $10.2 million, while Adjusted EBITDA stood at $16.6 million. The company continued to execute on its strategy to transition toward dedicated-use assets, including a key acquisition in California.
Total revenue declined 12.3% YoY to $38.4 million.
Net loss widened to $32.8 million from $16.2 million in Q4 2023.
Core FFO declined to $10.2 million, or $0.18 per share.
Adjusted EBITDA fell to $16.6 million from $24.7 million in Q4 2023.
Forward Guidance
Orion expects to stabilize Core FFO in 2025, with a focus on increasing dedicated-use asset exposure and optimizing expenses.
Positive Outlook
- Core FFO per share guidance set between $0.61 and $0.70.
- Projected general and administrative savings of $1.0 million annually.
- Portfolio transition toward dedicated-use assets continues.
- Leasing pipeline remains strong with robust activity expected in 2025.
- Expected capital improvements to enhance tenant retention.
Challenges Ahead
- Higher interest expense impacting profitability.
- Continued pressure on rental income due to lower occupancy.
- Potential for further asset impairments in transitioning portfolio.
- Market uncertainty regarding office demand.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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