Orion Office REIT Inc. (ONL): Business Model Canvas [Dec-2025 Updated]

You're looking at Orion Office REIT Inc. (ONL) and wondering how they plan to navigate the tricky office market; well, the core engine here isn't just renting space, it's a calculated portfolio transformation. Honestly, the strategy boils down to aggressive capital recycling-they've already pulled in $64.4 million from non-core sales year-to-date 2025-to fund a shift toward specialized Dedicated Use Assets (DUAs) that promise more stable, net-lease cash flow. To see if this de-risking move, supported by $273.0 million in liquidity as of September 30, 2025, can overcome the $508.9 million total debt and hit their $0.74-$0.76 Core FFO guidance for 2025, you need to see the full Business Model Canvas below.

Orion Office REIT Inc. (ONL) - Canvas Business Model: Key Partnerships

You're looking at the core relationships Orion Office REIT Inc. (ONL) relies on to manage its portfolio and capital structure as of late 2025. These partnerships are critical, especially given the ongoing portfolio transformation.

Arch Street Capital Partners Joint Venture for 6 unconsolidated properties

Orion Office REIT Inc. holds a 20% equity interest in the Unconsolidated Joint Venture with an affiliate of Arch Street Capital Partners, LLC, referred to as the Arch Street Joint Venture. As of December 31, 2024, this JV owned six real estate properties.

The performance of these joint venture assets shows strong occupancy, with the properties maintaining a 100% Occupancy Rate as of June 30, 2025. The Weighted Average Remaining Lease Term for the JV properties was 6.8 years as of June 30, 2025. Regarding tenant quality within the JV, 40.2% of the Annualized Base Rent (ABR) was derived from Investment-Grade Tenants as of March 31, 2025.

Financially, Orion supported the JV with an additional member loan of $8.3 million in February 2025 to cover leasing costs for a renewal at the Lincolnshire, Illinois property. As of December 31, 2024, Orion's proportionate share of the JV's mortgage indebtedness was $26.3 million.

Here are the key metrics for the Arch Street Joint Venture properties:

Commercial banks and lenders for the $508.9 million total debt structure

Orion Office REIT Inc. relies on commercial banks and lenders to support its capital structure, which stood at a total debt of $508.9 million as of September 30, 2025. This is down from $518.3 million as of December 31, 2024. The company's Net Debt to Annualized Year-to-Date Adjusted EBITDA was 6.75x as of the end of Q3 2025.

The components of this debt structure as of September 30, 2025, are detailed below:

The credit facility revolver had an available capacity of $218.0 million as of March 31, 2025.

Real estate brokers and agents for property dispositions and leasing

Brokers and agents facilitate Orion Office REIT Inc.'s aggressive portfolio rationalization and leasing efforts. Year-to-date through September 30, 2025, the company completed leasing activity of 639,000 square feet. This included 303,000 square feet in the third quarter alone. Since the spin, Orion has completed 3.8 million square feet in leasing activity.

On the disposition side, eight properties totaling an aggregate gross sales price of $64.4 million were sold year-to-date through September 30, 2025. Specifically in Q3 2025, three properties were sold for $21.8 million. Since the spin, Orion has sold 27 properties totaling 2.7 million square feet.

Leasing and disposition statistics for 2025:

• Leasing activity YTD (through Q3 2025): 639,000 square feet
• Properties sold YTD (through Q3 2025): 8
• Gross sales proceeds YTD (through Q3 2025): $64.4 million
• Properties sold in Q3 2025: 3
• Gross sales proceeds from Q3 2025 dispositions: $21.8 million

Third-party service providers for property maintenance and operations

Orion Office REIT Inc. uses third-party providers for various operational needs, including property maintenance. The company monitors these providers for risks, such as cybersecurity coverage. Operational spending data gives a proxy for these service costs, though direct line items for general maintenance aren't explicitly detailed in the latest summaries.

Key operational and expense figures for context:

• General and Administrative (G&A) expense guidance for full year 2025: $19.5 million to $20.5 million
• Capital Expenditures (CapEx) for Q1 2025: $8.3 million
• Total revenues for Q3 2025: $37.1 million

Orion Office REIT Inc. (ONL) - Canvas Business Model: Key Activities

You're looking at the core actions Orion Properties Inc. is taking right now to reshape its asset base and secure its financial footing as of late 2025. This is all about execution on the strategic shift.

Executing the strategic portfolio shift to Dedicated Use Assets (DUAs)

Orion Properties Inc. is actively moving away from traditional office space toward assets with specialized components. This is a key activity defining their current operations. As of September 30, 2025, the portfolio's shift is measurable:

• 33.9% of Annualized Base Rent (ABR) came from properties deemed dedicated use assets (DUAs) as of September 30, 2025.
• This represents an increase from approximately 31.8% of ABR derived from DUAs at the end of 2024.

The company's portfolio as of September 30, 2025, consisted of 63 Operating Properties plus a 20% interest in the Arch Street Joint Venture, which held six properties.

Leasing and re-leasing activity, totaling 919,000 square feet year-to-date 2025

A major focus is locking in tenants for the remaining space, especially on longer terms. Year-to-date (YTD) through November 6, 2025, Orion Properties Inc. completed significant leasing volume.

The leasing activity for the year-to-date 2025 period includes:

• Total leasing activity completed year-to-date: 919,000 square feet.
• Leasing activity during the third quarter of 2025: 303,000 square feet.
• Additional leasing signed subsequent to the September 30, 2025, quarter end: 57,000 square feet.
• The weighted average lease term (WALT) on the 303,000 square feet leased in Q3 was over 10 years.

Honestly, that YTD number is a big jump from the 1.1 million square feet they did in all of 2024.

Capital recycling via non-core asset sales, generating $64.4 million year-to-date

Recycling capital by selling non-core, traditional office assets is a critical activity supporting the DUA shift. This activity generated substantial proceeds year-to-date 2025.

Key disposition metrics through November 6, 2025:

They also had agreements in place to sell another four properties for an aggregate gross sales price of $46.6 million as of November 6, 2025.

Managing long-term, single-tenant net leases across the portfolio

The core of Orion Properties Inc.'s revenue comes from managing these single-tenant net leases. Stability in lease term and tenant quality is paramount to their strategy.

• Weighted Average Remaining Lease Term (WALTR) for the portfolio as of September 30, 2025: 5.8 years.
• This WALTR is a significant improvement from roughly 3.5 years at the time of the spin.
• Percentage of Annualized Base Rent (ABR) from Investment-Grade Tenants as of September 30, 2025: 67.0%.

Securing and managing debt, including the $355 million CMBS loan

Managing the balance sheet, especially debt maturities, is a constant key activity. As of September 30, 2025, the company's debt structure looked like this:

The $355.0 million CMBS Loan is collateralized by 19 properties. You'll note the Arch Street Joint Venture debt matures in November 2025, which is a near-term item they addressed by exercising an extension option in September 2025.

Finance: draft 13-week cash view by Friday.

Orion Office REIT Inc. (ONL) - Canvas Business Model: Key Resources

The foundation of Orion Office REIT Inc.'s business model rests on its physical assets and the financial strength supporting them. As of September 30, 2025, the real estate portfolio is comprised of 63 wholly-owned Operating Properties alongside a 20% ownership interest in the Arch Street Joint Venture, which itself contains six properties.

Here's a quick look at the portfolio metrics as of that date:

The management structure is a key intangible resource. Orion Office REIT Inc. is an internally managed entity, and its executive team brings significant depth to the net lease space. The collective experience of the Orion executive team is cited as over 100 years across operations, leasing, acquisitions, development, and dispositions within the single-tenant suburban office real estate sector.

The asset composition reflects a strategic shift toward specialized real estate, which is a core differentiator. This focus is quantified by the portion of ABR derived from these specialized assets:

• ABR derived from Dedicated Use Assets (DUAs): 33.9%
• DUA Types Include: Medical, Lab, R&D, and Government

Financial flexibility is maintained through strong liquidity. As of September 30, 2025, Orion Office REIT Inc. reported total liquidity of $273.0 million. This liquidity is composed of $33.0 million of cash and cash equivalents and $240.0 million of available capacity on the credit facility revolver.

Orion Office REIT Inc. (ONL) - Canvas Business Model: Value Propositions

You're looking at the core reasons why Orion Properties Inc. believes its assets hold value right now, especially as the company actively transforms its portfolio. The value proposition centers on stability derived from specific lease structures and a strategic pivot toward specialized real estate.

Stable, contractual cash flow from single-tenant net leases is the foundation. This structure means tenants handle most property operating expenses, which helps stabilize the net operating income stream for Orion Properties Inc. The visibility on this cash flow is quite good, given the current lease duration metrics.

The portfolio's lease maturity profile provides a clear runway for revenue.

• Weighted Average Remaining Lease Term (WALRT) for Operating Properties as of September 30, 2025: 5.8 years.
• WALRT for the Arch Street Joint Venture properties as of September 30, 2025: 6.6 years.
• New leasing activity in 2025 included a 15.7-year lease and a 10.0-year lease.

Credit quality assurance with a majority of rent from investment-grade tenants backs up that contractual cash flow. You want to know the tenants can pay, and Orion Properties Inc. emphasizes this high credit bar.

Here's a look at the tenant quality as of the third quarter of 2025:

Portfolio de-risking through a shift to specialized, mission-critical DUAs (Dedicated Use Assets) is the strategic differentiator. Orion Properties Inc. is moving away from traditional office space toward properties with specific, essential functions.

This strategic focus is quantified by the DUA concentration:

• Percentage of Annualized Base Rent derived from Dedicated Use Assets (DUAs) as of September 30, 2025: 33.9%.
• DUA types include governmental, medical office, flex/laboratory, R&D, and flex/industrial assets.

Properties located in high-quality, growth-oriented suburban markets is where Orion Properties Inc. concentrates its assets. The strategy targets locations that support the specialized tenants and benefit from broader economic trends outside of central business districts.

Finally, the minimal operating expense responsibility for tenants under net lease terms is a direct benefit of the lease structure itself. Under a net lease, the tenant is typically responsible for property taxes, insurance, and maintenance, which reduces the variable operating expense burden on Orion Properties Inc.

Finance: review the impact of the 5.8 year WALRT on 2026 revenue projections by next Tuesday.

Orion Office REIT Inc. (ONL) - Canvas Business Model: Customer Relationships

You're managing a portfolio primarily leased on a single-tenant net lease basis, which inherently defines the baseline customer relationship as contractual and relatively low-touch for day-to-day operations.

Orion Properties Inc. is leased primarily on a single-tenant net lease basis to creditworthy clients across its portfolio of mission-critical and headquarters office buildings. This structure places many property responsibilities, like operating expenses, on the tenant, which simplifies the direct property management interaction for Orion Properties Inc. The quality of this customer base is a key relationship metric; as of the second quarter of 2025, 68.5% of Annualized Base Rent (ABR) came from Investment-Grade Tenants. This is down slightly from 74.4% of ABR derived from Investment-Grade Tenants as of December 31, 2024.

The relationship shifts to a more direct engagement when leases are up for renewal or when new tenants require significant upfront investment for customization.

The company is actively executing a strategic shift toward Dedicated Use Assets (DUAs), which offer what management views as enhanced defensive characteristics. As of Q1 2025, DUAs accounted for 32% of the portfolio by Annualized Base Rent. This transition requires direct engagement for new tenant build-outs, which contributed to $8.3 million in Capital Expenditures (CapEx) during Q1 2025, primarily for tenant improvement allowances and property enhancements.

Leasing activity in 2025 shows a focus on securing longer-term commitments, which is where the high-touch renewal process is critical. Here's a look at the leasing performance through the third quarter of 2025:

The Investor Relations function manages the communication cadence with the public shareholders, providing regular updates on the portfolio transformation and financial performance. The leadership team marked a significant milestone by ringing the Opening Bell at the New York Stock Exchange on August 5th. The company hosts regular calls, such as the Third Quarter 2025 Earnings Conference Call held on November 7, 2025.

Shareholder returns are managed through dividends and guidance adjustments:

• The quarterly cash dividend declared for the third quarter of 2025 was $0.02 per share.
• Full-year 2025 Core FFO guidance was initially $0.61 to $0.70 per diluted share (Q1 2025), later improved to a range of $0.74-$0.76 per share (Q3 2025).
• The expected Net Debt to Adjusted EBITDA range for 2025 was tightened to 6.7x to 7.2x as of Q3 2025.

The long-term focus is clearly on tenant retention, which is directly reflected in the Weighted Average Remaining Lease Term (WALRT) metrics. Maintaining a long duration is key to stabilizing cash flows, especially while transitioning the portfolio away from traditional office space.

Key duration metrics as of mid-to-late 2025 include:

• WALRT for the entire portfolio as of June 30, 2025, was 5.5 years.
• WALRT for the entire portfolio as of Q3 2025 (through November 6) was 5.8 years.
• The Arch Street Joint Venture properties had a WALRT of 6.8 years as of June 30, 2025.

Management has indicated that the next one to two years are expected to be a low point for revenue and Core FFO, with growth anticipated to accelerate beginning in 2027. Finance: finalize the Q4 2025 cash flow forecast by December 15th.

Orion Office REIT Inc. (ONL) - Canvas Business Model: Channels

You're looking at how Orion Properties Inc. (formerly Orion Office REIT Inc.) gets its value proposition to the market and its capital to the business as of late 2025. It's a mix of direct engagement and third-party facilitation, which makes sense for a REIT actively transforming its portfolio.

Internal leasing team for direct tenant negotiations and renewals

The internal team drives direct engagement for securing and extending occupancy. This channel focuses on securing longer-term, stable cash flows, which is critical given the portfolio transformation strategy. Leasing activity has been strong, with management highlighting momentum.

• Leasing completed year-to-date through November 6, 2025: 919,000 sq ft.
• Leasing completed in Q3 2025: 303,000 sq ft.
• Weighted Average Lease Term (WALT) for the portfolio as of November 6, 2025: 5.8 years.
• Average lease term for Q1 2025 leasing: 7.4 years.
• Rent spreads on renewals in Q3 2025: +2%.
• Operating property occupancy rate as of Q3 2025: 72.8%.

The leasing pipeline remains active, indicating continued direct channel focus heading into 2026.

• Leasing pipeline as of November 6, 2025: Over 500,000 sq ft.

Corporate website and investor relations for capital market access

This channel is how Orion Properties Inc. communicates its financial health, strategic direction, and access to funding sources to the investment community. The company's market valuation reflects current market sentiment, though management suggests intrinsic value is higher.

The company's public communication also addresses significant corporate actions, such as the rejection of a takeover bid, which serves as a signal to the market about perceived asset value.

• Rejected cash offer price: $2.50/share.
• Liquidity backdrop cited during bid rejection: $227.8 million.

Commercial real estate brokers for marketing property dispositions

Brokers are utilized to execute the strategy of selling non-core assets to recycle capital and shift the portfolio mix. Disposition activity is accelerating to achieve this transformation.

Specific sales metrics give a sense of pricing achieved through these channels.

• Sale price for a Denver property conversion: $101 per square foot.

Direct property ownership for control over asset quality and tenant experience

Direct ownership provides Orion Properties Inc. complete control over asset management, capital expenditure allocation, and tenant relations, which directly impacts the quality of the revenue stream. This control is being used to pivot the portfolio composition.

The portfolio composition metrics show the direct result of this ownership strategy as of mid-2025.

The company's focus is clearly on increasing the quality and durability of its assets through this direct control.

• DUA concentration in Q1 2025: 32% of portfolio by ABR.
• Investment-Grade Tenant concentration in July 2025 estimate: 72.3%.

Finance: draft 13-week cash view by Friday.

Orion Office REIT Inc. (ONL) - Canvas Business Model: Customer Segments

You're analyzing Orion Office REIT Inc. (ONL) customer base as of late 2025. The strategy centers on single-tenant net lease properties, primarily in high-quality suburban markets across the United States, targeting tenants with durable credit profiles.

The core customer base is segmented by size, credit quality, and asset specialization, reflecting the ongoing portfolio transformation toward Dedicated Use Assets (DUAs).

Large, creditworthy corporations, including Government Services Administration (17.4% of ABR)

Orion Office REIT Inc. prioritizes leasing to large, creditworthy entities. As of September 30, 2025, the portfolio derived 67.0% of its Annualized Base Rent (ABR) from Investment-Grade Tenants. This focus on high-credit tenants is key to cash flow stability. The company has secured leases with government entities; for instance, a 15-year extension was signed in the third quarter of 2025 with the U.S. government for 16,000 square feet in Fort Worth. While the specific figure for the Government Services Administration segment is noted as 17.4% of ABR per the outline, the total ABR for the portfolio at that date was $113.9 million.

Tenants in resilient sectors like Health Care, Financial Institutions, and Telecommunications

The leasing activity shows Orion Office REIT Inc. successfully attracting tenants in sectors perceived as more resilient to economic shifts. Telecommunications is represented by a 7-year extension with T-Mobile for 69,000 square feet in Nashville signed in Q3 2025. The portfolio also includes medical office properties, such as one with a 15.7-year lease in Parsippany, New Jersey. The portfolio composition as of September 30, 2025, shows a clear strategic pivot, with 33.9% of ABR coming from DUAs, which include medical and governmental uses.

The leasing pipeline demonstrates a commitment to longer-term, stable tenancies:

• Completed 919,000 square feet of leasing year-to-date through November 6, 2025.
• Weighted Average Remaining Lease Term (WALTR) stood at 5.8 years as of September 30, 2025.
• Rent spreads on renewals were positive, over 2% for renewals and over 4% for total leasing activity in Q3 2025.

Single-tenant occupants requiring specialized, dedicated-use facilities

A primary characteristic of Orion Office REIT Inc.'s customer base is the single-tenant net lease structure, meaning the tenant is responsible for most property operating expenses. This model is applied to specialized facilities. The company is actively increasing its concentration in Dedicated Use Assets (DUAs), which are often specialized facilities. As of September 30, 2025, 33.9% of ABR was derived from these DUAs. This segment includes governmental offices, medical offices, and laboratories. The strategy is to shift the portfolio toward these assets for enhanced cash flow durability.

Companies seeking suburban office locations across the United States

Orion Office REIT Inc. focuses on owning and managing properties in high-quality suburban markets throughout the U.S.. This geographic focus aligns with perceived tailwinds favoring suburban office locations. The portfolio is diversified geographically, with leasing activity noted in locations like Duluth, Nashville, and Fort Worth in Q3 2025 alone.

Here's a quick look at the portfolio composition as of September 30, 2025, which defines the customer base's underlying asset quality:

The portfolio is designed to serve tenants who value long-term, dedicated space in suburban hubs. If onboarding takes 14+ days, churn risk rises, though recent leasing activity shows long-term commitment, like the 15-year AGCO renewal. Finance: draft 13-week cash view by Friday.

Orion Office REIT Inc. (ONL) - Canvas Business Model: Cost Structure

When you look at the Cost Structure for Orion Office REIT Inc. (now Orion Properties Inc.), you see the direct financial weight of managing a portfolio in transition. The costs reflect both the ongoing operations of the real estate and the significant capital required for the strategic pivot away from traditional office space.

Interest Expense on Debt Load

A major fixed cost is the interest expense tied to the balance sheet. As of September 30, 2025, Orion Office REIT Inc. carried $508.9 million in total outstanding debt. This debt structure includes a $355.0 million CMBS loan maturing in February 2027, and $110.0 million on a credit facility revolver due in May 2026. You have to factor in the cost of servicing this debt, especially given the higher interest rate environment that puts pressure on REIT cash flows.

Property Operating Expenses

Property operating expenses are a constant drain, though some of this is offset by tenant reimbursements. For the three months ended September 30, 2025, the reported Property operating expense was $17,284 thousand ($17.284 million). Looking at the year-to-date performance through the third quarter of 2025, these expenses totaled $49,629 thousand ($49.629 million). Remember that the prompt mentions that some of these expenses are reimbursable, which means the net cost to Orion Office REIT Inc. is lower than the gross figure reported.

General and Administrative (G&A) Expenses

Management has been very focused on controlling overhead as the portfolio shrinks before the expected growth phase. For the full fiscal year 2025, the guidance for General and Administrative expenses is set between $19.5 million and $20.5 million. To give you a quarterly snapshot, the G&A for the third quarter of 2025 came in at $4,607 thousand ($4.607 million). This level of spending is necessary to operate as a public company and manage the asset-intensive transformation strategy, even with internal cost-saving measures like salary freezes and headcount adjustments.

Capital Expenditures and Leasing Costs

The costs associated with keeping and attracting tenants are substantial, especially with the accelerated leasing activity. Capital expenditures and leasing costs for the third quarter of 2025 reached $18.3 million. This was a significant jump compared to the $6.1 million reported in the same quarter of 2024, driven by tenant improvement allowances for new and renewed leases. This is a necessary investment to secure longer Weighted Average Lease Terms (WALT) and shift the portfolio quality.

Costs Associated with Asset Dispositions and Portfolio Transformation

The portfolio transformation-selling non-core assets to focus on Dedicated Use Assets (DUAs)-incurs specific costs, often realized through impairments or transaction costs. For the third quarter of 2025, Orion Office REIT Inc. recorded a significant non-cash charge: $63,698 thousand ($63.7 million) in Impairment charges. This is a direct reflection of writing down the value of assets being shed or repositioned. Separately, the disposition activity itself generated gross sales proceeds, such as $21.8 million from three properties sold in Q3 2025, but the associated costs, like transaction fees or write-offs, feed into the overall transformation expense profile.

Here's a quick look at the key operating cost components for the third quarter of 2025:

You can see the CapEx and leasing costs of $18.3 million in Q3 2025 were higher than the G&A for the same period, showing where capital is being actively deployed to secure future revenue streams.

Orion Properties Inc. (ONL) - Canvas Business Model: Revenue Streams

The revenue streams for Orion Properties Inc. are fundamentally tied to its single-tenant net lease portfolio and its ongoing strategic asset disposition program.

Rental income from single-tenant net leases forms the core of the top line. For the third quarter ended September 30, 2025, Orion Properties Inc. generated total revenues of \$37.1 million.

The components of rental revenue, based on Q2 2025 data, show how this income is structured:

• Fixed Cash rental revenue: \$22,890 thousand (Three Months Ended June 30, 2025).
• Total Fixed rental revenue: \$27,926 thousand (Three Months Ended June 30, 2025).
• Total Variable rental revenue: \$9,176 thousand (Three Months Ended June 30, 2025).

Reimbursements from tenants for property operating expenses are a significant part of the variable revenue. For the three months ended June 30, 2025, these included:

• Fixed property operating cost reimbursements: \$1,519 thousand.
• Variable property operating cost reimbursements: \$8,580 thousand.

Lease-related termination income provides non-recurring boosts to Core FFO. For the nine months ended September 30, 2025, this income contributed approximately \$0.05 per diluted share to Core FFO. Specifically, the third quarter included \$0.02 per share from a property disposition and early lease termination in Fresno, California, with an expected additional \$0.03 per share recognized in the fourth quarter.

Proceeds from the sale of non-core properties are a key component supporting the portfolio transformation strategy. Year-to-date through the third quarter of 2025, Orion Properties Inc. closed on the sale of eight properties totaling \$64.4 million in gross sales price.

The overall financial outlook is reflected in the updated full-year guidance:

The Core FFO guidance for 2025 is \$0.74-\$0.76 per share.

The Q3 2025 Core FFO was \$11.0 million, or \$0.19 per diluted share.