Greetings. Welcome to Orion Properties' First Quarter 2025 Earnings Call. As a reminder, this conference is being recorded. I would now like to turn the call over to Paul Hughes, General Counsel for Orion. Thank you. You may begin.

Thank you and good morning everyone. Yesterday, Orion released its results for the quarter ended March 31, 2025, filed its Form 10-Q 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 2025 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-Q and other SEC filings, and Orion undertakes no duty to update any forward-looking statements made during this call. Today, on the call, we will be discussing funds from operations, or FFO, and core funds from operations or core FFO and other non-GAAP financial measures. 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, Gavin Brandon. And joining us for the Q&A session are Gary Landriau, our Chief Investment Officer; and 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 first quarter earnings call. Today, I will highlight the progress we are making executing on our new business strategy and discuss our first quarter performance and operations. Following my remarks, Gavin will review our financial results and provide our outlook for the rest of the year. With over 450,000 square feet of leasing completed as of May 6, we are successfully building on last year's strong leasing momentum that saw Orion lease 1.1 million square feet. Specifically, the over 450,000 square feet of leasing is a combination of new and renewal transactions with a weighted average lease term of 7.4 years. Included in this total is a 15.7-year lease for 46,000 square feet at our Parsippany, New Jersey property, bringing that formerly vacant building to more than 60% leased to two tenants. In addition, we signed a new 10-year lease for 160,000 square feet in Buffalo, New York with Ingram Micro, who will be relocating from our Amhurst, New York property. We are encouraged by the strong leasing activity to start the year as it reflects the slowly improving market tone we started to see last year. We continue to work hard to sustain this momentum. However, we cannot control the impact from the very significant macroeconomic uncertainty that has been injected into the broader markets recently. Given the smaller size of our portfolio, there will be significant variability in leasing spreads quarter-to-quarter and even year-to-year as we lease individual properties. To that point, initial rent spreads on renewal leases during the first quarter were off about 18%, primarily related to the particular dynamics of the properties renewed in specific markets. To give a more rounded picture, when measured on all leasing activity since the spin, our initial…

Thanks Paul. Orion generated total revenues of $38 million in the first quarter as compared to $47.2 million in the same quarter of the prior year. We reported a net loss attributable to common stockholders of $9.4 million or $0.17 per share as compared to a net loss of $26.2 million or $0.47 per share reported in the first quarter of 2024. Core FFO for the quarter was $10.7 million or $0.19 per share as compared to $20.4 million or $0.36 in the same quarter of 2024. Adjusted EBITDA was $17.4 million versus $26.7 million in the same quarter of 2024. The changes year-over-year are primarily related to vacancies and timing of leasing activity. G&A in the first quarter came in as expected at $4.9 million, consistent with the same quarter of 2024. Savings to G&A brought on by our restructuring efforts Paul mentioned earlier, will begin to contribute in the third and fourth quarters of this year. CapEx in the first quarter was $8.3 million compared to $3.4 million in the same quarter of 2024. As we have previously discussed, CapEx timing is dependent on when leases are signed and work is completed on properties. CapEx will likely increase over time as leases roll and new and existing tenants draw upon tenant improvement allowances. Turning to the balance sheet. At quarter end, we had total liquidity of $227.8 million, comprised of $9.8 million cash and cash equivalents, including the company's pro rata share of cash from the Arch Street joint venture and $218 million available capacity on the credit facility revolver. As Paul discussed, we intend to maintain significant liquidity on the balance sheet for the foreseeable future to fund expected capital commitments to support our future leasing efforts and provide the financial flexibility needed to execute on our…

Thank you. We will now be conducting a question-and-answer session. [Operator Instructions] Our first question comes from the line of Mitch Germain with Citizens Bank. Please proceed with your question.

Good morning. I'm curious about tone of discussions with prospects and if you're seeing any sort of lengthening of the deal pipeline for leases?

Good morning Mitch. And by lengthening, you mean the decision-making period from -- for a tenant to make a decision to stay in the property?

Exactly. I know it's been longer than typical, and I'm curious if that's shifted even more unfavorably.

Well, it has been long. Ever since the sort of the collapse in the market, we've experienced long delays in tenants making decisions. I'd say our portfolio is a little idiosyncratic in that we've got a small number of properties. So, any given renewal in any given quarter has an outsized impact. I would say that we have not yet noticed a big change in the decision-making speed, but that decision-making speed has still been quite long for the past six months or a year. We have had -- on the GSA front, we've had a little bit of interaction with the GSA. And as I mentioned in my prepared remarks, we did have a delay there of an approval from the GSA that we expected to happen relatively quickly. But in fact, it took about 50 days to occur, but then it did, in fact, happen, and we're off to the races. So, haven't yet seen a big impact on the current environment of the decision-making.

That's helpful. Curious about -- I think you made some opportunistic property sales of occupied assets. Is there any sort of background that you can share on, I think, one closed in April and one is pending for the fourth quarter? Anything you could share there?

Yes, I mean the assets we sold were vacant and we have a couple that are pending, one that continues to be occupied, but that has a very, very short lease term. I would say we have been quite pleased with the ability to get properties sold and the absolute value at which we've been able to sell them. And that includes some of the ones that are in the future, the ones we have this year, we've got some -- what we think is favorable pricing from an average perspective as compared to where we have been selling properties. But again, each property is individual in nature, and it has its own characteristics. And our buyers, for the most part, are focused on these individual properties and willing to pay what we think are good prices for them. On a going-forward basis, I think we will look to sell -- we may look to sell stabilized properties if we think that we can recycle that capital into dedicated use assets that gives us longer duration and more stabilized cash flows.

Got you. So, three sold, two under contract, how -- are you testing waters now with vacant and occupied assets? Is that how we should consider how this process may play out?

Yes. That's exactly how you should consider it, Mitch. We are -- in fact, we have a number of properties, what I would characterize as in the market. And by that, I mean, we have brokers engaged who are looking to gauge where the potential sales could be, and that's for both for vacant properties and for occupied properties. And look, I would say that pretty much every time we have a vacant property that's for lease, we also advertise it for sale at the same time. So, we're always constantly evaluating the market. Our anticipation is that we will have some additional sales this year, but we have to see where the pricing comes out.

Got you. Last one for me. I have to apologize for my memory. What's happening with the former Walgreens assets?

I'm going to let Gary Landriau answer that one.

Yes, Mitch. So, we are under an agreement with an institutional group that is currently marketing the site, trying to develop a list of prospects that would anchor the site. And it will ultimately be converted to -- my expectation is some retail and entertainment combination of users. We've also gotten the green light to begin work to demolish the existing office buildings. So, that work is starting. It's done mostly to reduce our carry cost, but also because we expect the development to start sometime in 2026 is our expectation, although obviously subject to a lot of factors.

So, the deal would be subject to them being able to execute on some sort of lease, right? Is that the way to think about it?

That's correct. They're in due diligence right now on the site, on the prospects, and on the feasibility of the business plan that they're developing.

Excellent. And congrats to you, Gary, on fantastic career and appreciate your time guys. Thank you.

Thank you very much Mitch.

Thank you. And we have reached the end of the question-and-answer session and I would like to turn the call back over to the management for closing comments.

Okay. Thank you all very much. We appreciate you taking the time this morning and we look forward to further updating you at the conclusion of the second quarter. Thank you.

Thank you. This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.