Contradictions Unveiled: Analyzing Property Strategy and Financial Performance in 2025 Q2 Earnings Call

Leasing Momentum and Occupancy Improvement:
- Orion Properties reported leasing of 639,000 square feet in Q2 2025, with a weighted average lease term of 6.4 years.
- The operating property occupancy rate increased to 77.4%, an increase of 310 basis points sequentially.
- The strong leasing activity was driven by new and renewal transactions, including long-term leases with Home Depot and other tenants.

Asset Sales and Portfolio Dispositions:
- Orion sold 4 vacant properties totaling 434,000 square feet for $26.9 million or approximately $62 per square foot.
- They have agreements to sell 5 traditional office properties totaling 540,000 square feet for $57 million or $106 per square foot.
- The increase in asset sales and dispositions is due to the monetization of non-core assets, allowing for capital redeployment and portfolio enhancement.

Financial Performance and Guidance Adjustment:
- Core FFO for Q2 was $11.5 million or $0.20 per share, with a narrowed and raised range for 2025 core FFO expectations of $0.67 to $0.71 per diluted share.
- The net debt to adjusted EBITDA ratio is expected to range from 7.3x to 8.3x.
- The improvements in guidance are attributed to onetime items such as lease termination income, property tax appeals, and improved leasing activity.