Deep Value Report —ONL
Executive Summary
ONL is a property-by-property work-out migrating away from commodity office toward dedicated-use assets (government, medical office, flex/lab-R&D, flex/industrial). As of Q2-2025, the company reported 66 operating properties (plus six in a fully-leased JV), ABR $118.9m, occupancy 77.4% (77.7% adjusted for assets under agreement), and WALT 5.5 years. Q2 GAAP loss was $(25.1)m ( $(0.45)/sh ) on non-cash impairments. By early August, leasing reached 639k sf YTD, four vacant assets sold for $26.9m, and five more were under sale agreements totaling $56.9m. The board rejected unsolicited all-cash proposals at $2.50 and $2.75 in June/July 2025 as undervaluing the company. On 6/30/25, equity was $728.0m and net lease intangibles $85.3m; on ~56.3m diluted shares, that implies tangible equity ≈ $642.7m or ~$11.4 TBVPS.
The core idea is straightforward: if ONL closes pending sales, prints a credible Deerfield land transaction, and lands more long-dated leases ahead of the refinancing window, the steep discount to TBV should compress. If not, impairments and more punitive refi terms dominate.
Company Overview
ONL (formerly Orion Office REIT) rebranded on Mar 5, 2025 to Orion Properties Inc. in order to reflect the strategic pivot toward dedicated-use assets and away from legacy traditional office. Investor cadence in 2025: Q2 news release Aug 6, investor presentation Aug 5, call Aug 7; Q3 scheduled Nov 7, 2025. Despite the corporate rename to “Inc.,” the company continues to present as a REIT in its filings and investor materials.
Ownership Structure (who owns it, and why)
The institutional mix is a blend of index complexes (Vanguard/BlackRock and factor sleeves), quants/value, and event-driven funds. In mid-2025, Kawa Capital publicly pursued a control bid at $2.50 (June 20) and $2.75 (July 17), both rejected by ONL’s board on July 9 and July 28 as undervaluing the company. Practically, the holder base reflects three motives: mandated index exposure, statistical cheapness vs TBV, and live work-out optionality with a public “floor debate” created by Kawa’s process.
Operating Snapshot (Q2-2025)
At quarter-end, ONL reported 66 operating properties plus a 20% stake in a six-asset JV at 100% occupancy; ABR $118.9m; occupancy 77.4% (77.7% adjusted) and WALT 5.5 years. Year-to-date leasing totaled ~639k sf by early August; long-dated transactions highlighted included Parsippany (~15.7 years) and Plano (~7.6 years), and Kennesaw (80k sf) with a sublease bridge beginning Sep-2025 and lease commencement in Apr-2028. Four vacant assets sold for $26.9m; five assets under agreements totaled $56.9m. Dividend remains a token $0.02/sh during the work-out period.
What’s next is the vault: scenario TBV, value grids (Deerfield, 5-asset, JV), the liquidity runway, the re-rating math, and a catalyst checklist — the numbers that move the stock, not the noise. ⚡📊
Read now, before the prints hit and the market wakes up. ⏳🔥
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