Orion Properties (ONL) risk factors, FY2025 10-K

Risks Related to Our Properties and Business

1. 01If global market and economic conditions deteriorate, our business, financial condition and results of operations could be materially adversely affected
2. 02Our strategic review process will be costly and time-consuming and may not result in our identification or completion of a strategic transaction, which could have an adverse effect on our stock price and our businessNew
3. 03Changes in workplace practices and office space utilization, including remote and hybrid work arrangements, have reduced the demand for office space at our properties and may continue to do so27% rewritten
4. 04Leases representing approximately 10.2% of our annualized base rent are scheduled to expire in 2026 and we could experience difficulties or delays renewing leases or re-leasing vacant space, which will increase our costs to operate and maintain such properties without receiving income21% rewritten
5. 05We expect to continue to convert certain vacant properties to multi-tenant use, and cannot provide any assurance that the investments we make of time and capital to do so will increase the value of the subject properties
6. 06Government budgetary pressures and priorities, and trends in government employment and office leasing may adversely impact our business59% rewritten
7. 07We have made equity and member loan investments in the Arch Street Joint Venture which may not be recoverableNew
8. 08The Arch Street Joint Venture and any other joint venture investments we make could be adversely affected by the lack of sole decision-making authority, reliance on joint venture partners’ financial condition and any disputes that may arise between us and our joint venture partners
9. 09The United States Government’s “green lease” policies may adversely affect us
10. 10We may be unable to successfully execute on our strategy to shift our portfolio concentration over time away from traditional office properties, towards more dedicated use assets21% rewritten
11. 11Competition for acquisitions may reduce the number of acquisition opportunities available to us and increase the costs of those acquisitions22% rewritten
12. 12We may suffer adverse effects from acquisitions of commercial real estate properties
13. 13Our performance is subject to risks inherent in owning real estate investments
14. 14We face considerable competition in the leasing market and may be unable to renew existing leases or re-let space on terms similar to our existing leases, or we may expend significant capital in our efforts to re-lease space, which may adversely affect our business, financial condition and results of operations
15. 15Tenant payment defaults may have a material adverse effect on our business, financial condition and results of operations
16. 16Some of our leases provide tenants with the right to terminate their leases early, which may have a material adverse effect on our business, financial condition and results of operations40% rewritten
17. 17We have a significant amount of indebtedness and may need to incur more in the future75% rewritten
18. 18Financial covenants could materially adversely affect our ability to conduct our business55% rewritten
19. 19We depend on external sources of capital that are outside of our control, which may affect our ability to achieve our business strategies
20. 20Our expenses may remain constant or increase, even if our revenues decrease, which may have a material adverse effect on our business, financial condition and results of operations
21. 21Real estate taxes may increase without notice26% rewritten
22. 22Real estate property investments are illiquid. We may not be able to dispose of properties when desired or on favorable terms
23. 23We, our tenants and our properties are subject to various federal, state and local regulatory requirements, such as environmental laws, state and local fire and safety requirements, building codes and land use regulations
24. 24We are subject to risks associated with climate change
25. 25Compliance or failure to comply with the Americans with Disabilities Act could result in substantial costs
26. 26Our assets may be subject to impairment charges
27. 27Uninsured and underinsured losses may adversely affect our operations
28. 28Our business could be materially adversely affected by security breaches through cyber-attacks, cyber intrusions or otherwise
29. 29Our business could be adversely impacted if there are deficiencies in our disclosure controls and procedures or internal control over financial reporting
30. 30The success of our business depends on retaining officers and employees
31. 31Failure to hedge effectively against interest rate changes may have a material adverse effect on our business, financial condition and results of operations
32. 32We may amend our investment strategy and business policies without stockholder approval
33. 33The New Revolving Facility may limit our ability to pay dividends on our common stock, including repurchasing shares of our common stock
34. 34The market price of our common stock may vary substantially

Risks Related to Our Status as a REIT

1. 35Our failure to maintain our qualification as a REIT for U.S. federal income tax purposes could have a material adverse effect on us
2. 36If either Realty Income or VEREIT failed to qualify as a REIT during certain periods prior to the Distribution, we would be prevented from electing to qualify as a REIT
3. 37If certain of our subsidiaries, including our operating partnership, fail to qualify as partnerships or disregarded entities for federal income tax purposes, we would cease to qualify as a REIT and would suffer other adverse consequences
4. 38Any taxable REIT subsidiaries owned by us are subject to corporate-level taxes and our dealings with our taxable REIT subsidiaries may be subject to 100% excise tax
5. 39Distribution requirements imposed by law limit our flexibility
6. 40We may make distributions on our common stock in common stock and/or cash. Our stockholders may sell shares of our common stock to pay tax on such dividends, placing downward pressure on the market price of our common stock
7. 41The tax imposed on REITs engaging in “prohibited transactions” may limit our ability to engage in transactions which would be treated as sales for federal income tax purposes
8. 42Legislative or other actions affecting REITs could have a negative effect on us or our investors

Risks Related to an Investment in Our Common Stock

1. 43Limitations on the ownership of our common stock and other provisions of our charter may preclude the acquisition or change of control of our Company
2. 44minimize administrative burdens. However, the ownership limits on our common stock also might delay, defer or prevent a transaction or a change in control of our company that might involve a premium price for shares of our common stock or otherwise be in the best interest of our stockholdersNew
3. 45Maryland law may limit the ability of a third party to acquire control of us
4. 46Market interest rates may have an effect on the value of our common stock
5. 47The number of shares of our common stock available for future issuance or sale could adversely affect the per share trading price of our common stock and may be dilutive to current stockholders
6. 48Future offerings of debt securities, which would be senior to our common stock upon liquidation, or preferred equity securities which may be senior to our common stock for purposes of dividends or upon liquidation, may materially adversely affect the per share trading price of our common stock
7. 49Our ability to pay dividends is limited by the requirements of Maryland law
8. 50We may change our dividend policy