Cover
Cover - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Mar. 03, 2023 | Jun. 30, 2022 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2022 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Transition Report | false | ||
Entity File Number | 001-40873 | ||
Entity Registrant Name | Orion Office REIT Inc. | ||
Entity Incorporation, State or Country Code | MD | ||
Entity Tax Identification Number | 87-1656425 | ||
Entity Address, Address Line One | 2398 E. Camelback Road, Suite 1060 | ||
Entity Address, City or Town | Phoenix | ||
Entity Address, State or Province | AZ | ||
Entity Address, Postal Zip Code | 85016 | ||
City Area Code | (602) | ||
Local Phone Number | 698-1002 | ||
Title of 12(b) Security | Common Stock | ||
Trading Symbol | ONL | ||
Security Exchange Name | NYSE | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | false | ||
ICFR Auditor Attestation Flag | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 620.4 | ||
Entity Common Stock, Shares Outstanding | 56,639,040 | ||
Documents Incorporated by Reference | Portions of the registrant’s definitive proxy statement to be delivered to stockholders in connection with the registrant’s 2023 Annual Meeting of Stockholders (the “Proxy Statement”) are incorporated by reference into Part III of this Annual Report on Form 10-K. The registrant intends to file the Proxy Statement within 120 days after its fiscal year end. Only those portions of the Proxy Statement which are specifically incorporated by reference herein shall constitute a part of this Annual Report on Form 10-K. | ||
Entity Central Index Key | 0001873923 | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2022 | |
Auditor [Line Items] | |
Auditor Name | KPMG LLP |
Auditor Location | San Diego, CA |
Auditor Firm ID | 185 |
VEREIT Office Assets | |
Auditor [Line Items] | |
Auditor Name | Deloitte & Touche LLP |
Auditor Location | Tempe, AZ |
Auditor Firm ID | 34 |
ORION OFFICE REIT, CONSOLIDATED
ORION OFFICE REIT, CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Real estate investments, at cost: | ||
Land | $ 238,225 | $ 250,194 |
Buildings, fixtures and improvements | 1,128,400 | 1,231,551 |
Total real estate investments, at cost | 1,366,625 | 1,481,745 |
Less: accumulated depreciation | 133,379 | 128,109 |
Total real estate investments, net | 1,233,246 | 1,353,636 |
Accounts receivable, net | 21,641 | 17,916 |
Intangible lease assets, net | 202,832 | 298,107 |
Cash and cash equivalents | 20,638 | 29,318 |
Real estate assets held for sale, net | 2,502 | 0 |
Other assets, net | 90,214 | 60,501 |
Total assets | 1,571,073 | 1,759,478 |
LIABILITIES AND EQUITY | ||
Bridge facility, net | 0 | 354,357 |
Mortgages payable, net | 352,167 | 0 |
Accounts payable and accrued expenses | 26,161 | 17,379 |
Below-market lease liabilities, net | 14,068 | 20,609 |
Distributions payable | 5,664 | 0 |
Other liabilities, net | 23,340 | 16,355 |
Total liabilities | 595,215 | 671,190 |
Common stock, $0.001 par value, 100,000,000 shares authorized 56,639,040 and 56,625,650 shares issued and outstanding as of each of December 31, 2022 and December 31, 2021, respectively | 57 | 57 |
Additional paid-in capital | 1,147,014 | 1,145,278 |
Accumulated other comprehensive income | 6,308 | 299 |
Accumulated deficit | (178,910) | (58,715) |
Total stockholders’ equity | 974,469 | 1,086,919 |
Non-controlling interest | 1,389 | 1,369 |
Total equity | 975,858 | 1,088,288 |
Total liabilities and equity | 1,571,073 | 1,759,478 |
Credit facility term loan, net | ||
LIABILITIES AND EQUITY | ||
Credit facilities | 173,815 | 172,490 |
Credit facility revolver | ||
LIABILITIES AND EQUITY | ||
Credit facilities | $ 0 | $ 90,000 |
ORION OFFICE REIT, CONSOLIDAT_2
ORION OFFICE REIT, CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 56,639,040 | 56,625,650 |
Common stock, shares outstanding (in shares) | 56,639,040 | 56,625,650 |
ORION OFFICE REIT, CONSOLIDAT_3
ORION OFFICE REIT, CONSOLIDATED AND COMBINED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Total revenues | $ 208,118 | $ 79,731 | $ 53,474 |
Operating expenses: | |||
Property operating | 61,519 | 13,411 | 5,770 |
General and administrative | 15,908 | 3,832 | 2,051 |
Depreciation and amortization | 131,367 | 43,922 | 25,950 |
Impairments | 66,359 | 49,859 | 18,671 |
Transaction related | 675 | 0 | 0 |
Spin related | 964 | 7,909 | 0 |
Total operating expenses | 276,792 | 118,933 | 52,442 |
Other (expenses) income: | |||
Interest expense, net | (30,171) | (4,267) | (2,931) |
Gain on disposition of real estate assets | 2,352 | 0 | 0 |
Loss on extinguishment of debt, net | (468) | (3,782) | 0 |
Other income, net | 223 | 0 | 0 |
Equity in loss of unconsolidated joint venture, net | (524) | (56) | 0 |
Total other (expenses) income, net | (28,588) | (8,105) | (2,931) |
Loss before taxes | (97,262) | (47,307) | (1,899) |
Provision for income taxes | (212) | (157) | 0 |
Net loss | (97,474) | (47,464) | (1,899) |
Net income attributable to non-controlling interest | (20) | (17) | 0 |
Net loss attributable to common stockholders | $ (97,494) | $ (47,481) | $ (1,899) |
Weighted-average shares outstanding - basic (in shares) | 56,631,826 | 56,625,650 | 56,625,650 |
Weighted-average shares outstanding - diluted (in shares) | 56,631,826 | 56,625,650 | 56,625,650 |
Basic loss per share attributable to common stockholders (in dollars per share) | $ (1.72) | $ (0.84) | $ (0.03) |
Diluted loss per share attributable to common stockholders (in dollars per share) | $ (1.72) | $ (0.84) | $ (0.03) |
Rental | |||
Total revenues | $ 207,353 | $ 79,460 | $ 53,474 |
Fee income from unconsolidated joint venture | |||
Total revenues | $ 765 | $ 271 | $ 0 |
ORION OFFICE REIT, CONSOLIDAT_4
ORION OFFICE REIT, CONSOLIDATED AND COMBINED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Statement of Comprehensive Income [Abstract] | |||
Net loss | $ (97,474) | $ (47,464) | $ (1,899) |
Total other comprehensive income (loss) | |||
Unrealized gain on interest rate derivatives | 7,802 | 209 | 0 |
Reclassification of previous unrealized (gain) loss on interest rate derivatives into net (loss) income | (1,793) | 90 | 0 |
Total other comprehensive income | 6,009 | 299 | 0 |
Total comprehensive loss | (91,465) | (47,165) | (1,899) |
Comprehensive income attributable to non-controlling interest | (20) | (17) | 0 |
Total comprehensive loss | $ (91,485) | $ (47,182) | $ (1,899) |
ORION OFFICE REIT, CONSOLIDAT_5
ORION OFFICE REIT, CONSOLIDATED AND COMBINED STATEMENTS OF EQUITY - USD ($) $ in Thousands | Total | Total Stockholders’ and Parent Company Equity | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income | Accumulated Deficit | Net Parent Investment | Non-Controlling Interest |
Beginning balance (in shares) at Dec. 31, 2019 | 0 | |||||||
Beginning balance at Dec. 31, 2019 | $ 508,006 | $ 508,006 | $ 0 | $ 0 | $ 0 | $ 0 | $ 508,006 | $ 0 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net loss | (1,899) | (1,899) | (1,899) | |||||
Distributions to parent company, net | (8,989) | (8,989) | (8,989) | |||||
Other comprehensive income, net | 0 | |||||||
Ending balance (in shares) at Dec. 31, 2020 | 0 | |||||||
Ending balance at Dec. 31, 2020 | 497,118 | 497,118 | $ 0 | 0 | 0 | 0 | 497,118 | 0 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net loss | (47,464) | (47,481) | (58,715) | 11,234 | 17 | |||
Contributions from parent company, net | 635,002 | 633,650 | 633,650 | 1,352 | ||||
Issuance of common stock, net (in shares) | 56,625,650 | |||||||
Issuance of common stock, net | 0 | 0 | $ 57 | 1,141,945 | (1,142,002) | |||
Grant of stock warrants | 3,269 | 3,269 | 3,269 | |||||
Equity-based compensation, net (in shares) | 0 | |||||||
Equity-based compensation, net | 64 | 64 | 64 | |||||
Other comprehensive income, net | 299 | 299 | 299 | |||||
Ending balance (in shares) at Dec. 31, 2021 | 56,625,650 | |||||||
Ending balance at Dec. 31, 2021 | 1,088,288 | 1,086,919 | $ 57 | 1,145,278 | 299 | (58,715) | 0 | 1,369 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net loss | (97,474) | (97,494) | (97,494) | 20 | ||||
Distributions | (22,701) | (22,701) | (22,701) | |||||
Repurchases of common stock to settle tax obligations (in shares) | (2,177) | |||||||
Repurchases of common stock to settle tax obligations | (20) | (20) | (20) | |||||
Equity-based compensation, net (in shares) | 15,567 | |||||||
Equity-based compensation, net | 1,756 | 1,756 | 1,756 | |||||
Other comprehensive income, net | 6,009 | 6,009 | 6,009 | |||||
Ending balance (in shares) at Dec. 31, 2022 | 56,639,040 | |||||||
Ending balance at Dec. 31, 2022 | $ 975,858 | $ 974,469 | $ 57 | $ 1,147,014 | $ 6,308 | $ (178,910) | $ 0 | $ 1,389 |
ORION OFFICE REIT, CONSOLIDAT_6
ORION OFFICE REIT, CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Cash flows from operating activities: | |||
Net loss | $ (97,474) | $ (47,464) | $ (1,899) |
Adjustments to reconcile net loss to net cash provided by operating activities: | |||
Depreciation and amortization | 131,367 | 43,922 | 25,950 |
Non-cash revenue adjustments, net | 171 | (1,315) | (406) |
Amortization of net premiums on mortgages payable | 0 | (60) | (411) |
Impairments | 66,359 | 49,859 | 18,671 |
Gain on disposition of real estate assets | (2,352) | 0 | 0 |
Loss on extinguishment of debt, net | 468 | 3,782 | 0 |
Amortization of deferred financing costs | 4,364 | 728 | 0 |
Equity-based compensation | 1,756 | 65 | 0 |
Equity in loss of unconsolidated joint venture, net | 524 | 56 | 0 |
Changes in assets and liabilities: | |||
Accounts receivable, net and other assets, net | 2,247 | (5,017) | 613 |
Accounts payable, accrued expenses and other liabilities, net | 6,802 | 11,552 | (191) |
Net cash provided by operating activities | 114,232 | 56,108 | 42,327 |
Cash flows from investing activities: | |||
Capital expenditures and leasing costs | (11,624) | (9,916) | (464) |
Proceeds from disposition of real estate | 31,854 | 0 | 0 |
Investment in unconsolidated joint venture | 0 | (2,478) | 0 |
Return of investment from unconsolidated joint venture | 2,247 | 133 | 0 |
Net cash provided by (used in) investing activities | 22,477 | (12,261) | (464) |
Cash flows from financing activities: | |||
Repayment of bridge facility, including debt extinguishment costs | (355,026) | 0 | 0 |
Proceeds from mortgages payable | 355,000 | 0 | 0 |
Payments on mortgages payable | 0 | (36,476) | (32,678) |
Repayments of credit facility revolver | (160,000) | 0 | 0 |
Payments of deferred financing costs | (3,096) | (10,514) | 0 |
Repurchases of common stock to settle tax obligations | (20) | 0 | 0 |
Payments of deferred equity offering costs | (535) | 0 | 0 |
Distributions paid | (16,991) | 0 | 0 |
Distributions to parent company, net | 0 | (587,156) | (8,989) |
Other financing activities | (48) | 0 | 0 |
Payments upon extinguishment of mortgages payable | 0 | (4,298) | 0 |
Net cash used in financing activities | (110,716) | (18,444) | (41,667) |
Net change in cash and cash equivalents and restricted cash | 25,993 | 25,403 | 196 |
Cash and cash equivalents and restricted cash at the beginning of the period | 29,318 | 3,915 | 3,719 |
Cash and cash equivalents and restricted cash at the end of the period | 55,311 | 29,318 | 3,915 |
Reconciliation of Cash and Cash Equivalents and Restricted Cash | |||
Cash and cash equivalents at beginning of period | 29,318 | 0 | 0 |
Restricted cash at beginning of period | 0 | 3,915 | 3,719 |
Cash and cash equivalents and restricted cash at the beginning of the period | 29,318 | 3,915 | 3,719 |
Cash and cash equivalents at end of period | 20,638 | 29,318 | 0 |
Restricted cash at the end of the period | 34,673 | 0 | 3,915 |
Cash and cash equivalents and restricted cash at the end of the period | 55,311 | 29,318 | 3,915 |
Bridge facility | |||
Cash flows from financing activities: | |||
Proceeds from lines of credit | 0 | 355,000 | 0 |
Credit facility term loan, net | |||
Cash flows from financing activities: | |||
Proceeds from lines of credit | 0 | 175,000 | 0 |
Credit facility revolver | |||
Cash flows from financing activities: | |||
Proceeds from lines of credit | $ 70,000 | $ 90,000 | $ 0 |
VEREIT OFFICE ASSETS, COMBINED
VEREIT OFFICE ASSETS, COMBINED AND CONSOLIDATED BALANCE SHEET $ in Thousands | Oct. 31, 2021 USD ($) |
VEREIT Office Assets | |
Real estate investments, at cost: | |
Land | $ 163,295 |
Buildings, fixtures and improvements | 1,303,038 |
Intangible lease assets | 184,560 |
Total real estate investments, at cost | 1,650,893 |
Less: accumulated depreciation and amortization | 528,167 |
Total real estate investments, net | 1,122,726 |
Operating lease right-of-use assets | 5,361 |
Investment in unconsolidated joint venture | 14,466 |
Restricted cash | 8 |
Rent and tenant receivables and other assets, net | 35,035 |
Goodwill | 159,129 |
Total assets | 1,336,725 |
LIABILITIES AND EQUITY | |
Below-market lease liabilities, net | 5,308 |
Accounts payable and accrued expenses | 5,763 |
Deferred rent and other liabilities | 8,001 |
Operating lease liabilities | 5,359 |
Total liabilities | 24,431 |
Commitments and contingencies (Note 4) | |
Net parent investment | 1,311,167 |
Non-controlling interest | 1,127 |
Total equity | 1,312,294 |
Total liabilities and equity | $ 1,336,725 |
VEREIT OFFICE ASSETS, COMBINE_2
VEREIT OFFICE ASSETS, COMBINED AND CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 10 Months Ended | 12 Months Ended |
Oct. 31, 2021 | Dec. 31, 2020 | |
Total revenues | $ 53,474 | |
Operating expenses: | ||
Property operating (including reimbursable) | 5,770 | |
General and administrative | 2,051 | |
Impairments | 18,671 | |
Other (expenses) income: | ||
Other income, net | 0 | |
Gain on disposition of real estate assets, net | 0 | |
Loss on extinguishment of debt, net | 0 | |
Equity in income of unconsolidated joint venture | 0 | |
Total other (expenses) income, net | (2,931) | |
Income before taxes | (1,899) | |
Provision for income taxes | 0 | |
Net income | (1,899) | |
Net income attributable to non-controlling interest | 0 | |
Net income attributable to VEREIT Office Assets | (1,899) | |
VEREIT Office Assets | ||
Total revenues | $ 135,394 | 170,900 |
Operating expenses: | ||
Property operating (including reimbursable) | 36,173 | 46,597 |
General and administrative | 5,602 | 7,029 |
Depreciation and amortization | 48,938 | 62,662 |
Impairments | 28,064 | 9,306 |
Total operating expenses | 118,777 | 125,594 |
Other (expenses) income: | ||
Other income, net | 152 | 158 |
Interest expense | (5,961) | (9,905) |
Gain on disposition of real estate assets, net | 0 | 9,765 |
Loss on extinguishment of debt, net | (5,294) | (1,686) |
Equity in income of unconsolidated joint venture | 697 | 535 |
Total other (expenses) income, net | (10,406) | (1,133) |
Income before taxes | 6,211 | 44,173 |
Provision for income taxes | (520) | (640) |
Net income | 5,691 | 43,533 |
Net income attributable to non-controlling interest | 62 | 60 |
Net income attributable to VEREIT Office Assets | 5,753 | 43,593 |
Rental revenue (including reimbursable) | ||
Total revenues | 53,474 | |
Rental revenue (including reimbursable) | VEREIT Office Assets | ||
Total revenues | 134,740 | 170,304 |
Fee income from unconsolidated joint venture | ||
Total revenues | 0 | |
Fee income from unconsolidated joint venture | VEREIT Office Assets | ||
Total revenues | $ 654 | $ 596 |
VEREIT OFFICE ASSETS, COMBINE_3
VEREIT OFFICE ASSETS, COMBINED AND CONSOLIDATED STATEMENTS OF EQUITY - USD ($) $ in Thousands | Total | VEREIT Office Assets |
Beginning balance at Dec. 31, 2019 | $ 1,310,129 | |
Increase (Decrease) in Partners' Capital [Roll Forward] | ||
Distributions, net | $ (8,989) | (192,228) |
Net income | $ (1,899) | 43,533 |
Ending balance at Dec. 31, 2020 | 1,161,434 | |
Increase (Decrease) in Partners' Capital [Roll Forward] | ||
Contributions, net | 145,169 | |
Net income | 5,691 | |
Ending balance at Oct. 31, 2021 | $ 1,312,294 |
VEREIT OFFICE ASSETS COMBINED A
VEREIT OFFICE ASSETS COMBINED AND CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 10 Months Ended | 12 Months Ended | |
Oct. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
Cash flows from operating activities: | |||
Net income | $ (47,464) | $ (1,899) | |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 43,922 | 25,950 | |
Impairments | 49,859 | 18,671 | |
Loss on extinguishment of debt, net | 3,782 | 0 | |
Equity in loss of unconsolidated joint venture, net | 56 | 0 | |
Changes in assets and liabilities: | |||
Accounts payable and accrued expenses | 11,552 | (191) | |
Net cash provided by operating activities | 56,108 | 42,327 | |
Cash flows from investing activities: | |||
Capital expenditures and leasing costs | (9,916) | (464) | |
Investment in unconsolidated joint venture | (2,478) | 0 | |
Return of investment from unconsolidated joint venture | 133 | 0 | |
Net cash provided by (used in) investing activities | (12,261) | (464) | |
Cash flows from financing activities: | |||
Proceeds from mortgages payable | 0 | 0 | |
Payments on mortgages payable | (36,476) | (32,678) | |
Net cash used in financing activities | (18,444) | (41,667) | |
Net change in cash and cash equivalents and restricted cash | 25,403 | 196 | |
Cash and cash equivalents and restricted cash at the beginning of the period | $ 3,915 | 3,915 | 3,719 |
Cash and cash equivalents and restricted cash at the end of the period | 29,318 | 3,915 | |
Reconciliation of Cash and Cash Equivalents and Restricted Cash | |||
Cash and cash equivalents at beginning of period | 0 | 0 | 0 |
Restricted cash at beginning of period | 3,915 | 3,915 | 3,719 |
Cash and cash equivalents and restricted cash at the beginning of the period | 3,915 | 3,915 | 3,719 |
Cash and cash equivalents at end of period | 29,318 | 0 | |
Restricted cash at the end of the period | 0 | 3,915 | |
Cash and cash equivalents and restricted cash at the end of the period | 29,318 | 3,915 | |
Supplemental disclosures: | |||
Cash paid for interest | 2,412 | 3,479 | |
VEREIT Office Assets | |||
Cash flows from operating activities: | |||
Net income | 5,691 | 43,533 | |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 48,894 | 62,225 | |
Impairments | 28,064 | 9,306 | |
Gain on disposition of real estate assets, net | 0 | (9,765) | |
Loss on extinguishment of debt, net | 5,294 | 1,686 | |
Equity in loss of unconsolidated joint venture, net | (697) | (535) | |
Distributions from unconsolidated joint venture | 697 | 524 | |
Changes in assets and liabilities: | |||
Rents and tenant receivables, operating lease right-of-use and other assets, net | 803 | 613 | |
Accounts payable and accrued expenses | (4,860) | 2,525 | |
Deferred rent, operating lease and other liabilities | (156) | (1,593) | |
Net cash provided by operating activities | 83,730 | 108,519 | |
Cash flows from investing activities: | |||
Capital expenditures and leasing costs | (8,019) | (7,427) | |
Real estate developments | (259) | (1,327) | |
Proceeds from disposition of real estate | 0 | 116,360 | |
Investment in unconsolidated joint venture | (2,180) | (2,669) | |
Return of investment from unconsolidated joint venture | 1,147 | 718 | |
Principal repayments received on other investments | 0 | 5,768 | |
Proceeds from the settlement of property-related insurance claims | 70 | 10 | |
Net cash provided by (used in) investing activities | (9,241) | 111,433 | |
Cash flows from financing activities: | |||
Proceeds from mortgages payable | 0 | 1,032 | |
Payments on mortgages payable | (223,064) | (28,233) | |
Net contributions from (distributions to) parent | 145,169 | (192,228) | |
Net cash used in financing activities | (77,895) | (219,429) | |
Net change in cash and cash equivalents and restricted cash | (3,406) | 523 | |
Cash and cash equivalents and restricted cash at the beginning of the period | 3,414 | 3,414 | 2,891 |
Cash and cash equivalents and restricted cash at the end of the period | 8 | 3,414 | |
Reconciliation of Cash and Cash Equivalents and Restricted Cash | |||
Cash and cash equivalents at beginning of period | 400 | 400 | 190 |
Restricted cash at beginning of period | 3,014 | 3,014 | 2,701 |
Cash and cash equivalents and restricted cash at the beginning of the period | 3,414 | $ 3,414 | 2,891 |
Cash and cash equivalents at end of period | 0 | 400 | |
Restricted cash at the end of the period | 8 | 3,014 | |
Cash and cash equivalents and restricted cash at the end of the period | 8 | 3,414 | |
Supplemental disclosures: | |||
Cash paid for interest | 6,521 | 10,491 | |
Non-cash investing and financing activities: | |||
Real estate contributions to unconsolidated joint venture | 0 | 17,240 | |
Accrued capital expenditures and real estate developments | $ (2,033) | $ (288) |
Orion Office REIT, Organization
Orion Office REIT, Organization | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | Note 1 – Organization Organization Orion Office REIT Inc. (the “Company”, “Orion”, “we” or “us”) was incorporated in the state of Maryland on July 1, 2021 and was capitalized on July 15, 2021. On April 29, 2021, Realty Income Corporation (“Realty Income”) entered into an Agreement and Plan of Merger (as amended, the “Merger Agreement”) with VEREIT, Inc. (“VEREIT”), its operating partnership, VEREIT Operating Partnership, L.P. (“VEREIT OP”), Rams MD Subsidiary I, Inc., a wholly owned subsidiary of Realty Income (“Merger Sub 1”), and Rams Acquisition Sub II, LLC, a wholly owned subsidiary of Realty Income (“Merger Sub 2”). On November 1, 2021, pursuant to the Merger Agreement, Merger Sub 2 merged with and into VEREIT OP, with VEREIT OP continuing as the surviving partnership, and immediately thereafter, VEREIT merged with and into Merger Sub 1, with Merger Sub 1 continuing as the surviving corporation (together, the “Mergers”, and such effective time of the Mergers, the “Merger Effective Time”). Upon the Merger Effective Time, as part of the Mergers, Realty Income acquired certain office real properties and related assets previously owned by subsidiaries of VEREIT (collectively, “VEREIT Office Assets”). Following the Merger Effective Time, in accordance with the Merger Agreement, Realty Income contributed the portion of the combined business comprising certain office real properties and related assets previously owned by subsidiaries of Realty Income (collectively, “Realty Income Office Assets”) and VEREIT Office Assets (the “Separation”) to the Company and its operating partnership, Orion Office REIT LP (“Orion OP”). On November 12, 2021, following the Separation, in accordance with the Merger Agreement and that certain Separation and Distribution Agreement dated as of November 11, 2021, by and among Realty Income, the Company and Orion OP (the “Separation and Distribution Agreement”), Realty Income effected a special distribution to its stockholders (including the former holders of VEREIT common stock and certain former VEREIT OP common unitholders prior to the Mergers) of all of the outstanding shares of common stock of the Company (the “Distribution”). Approximately $595.0 million was distributed by the Company to Realty Income in accordance with the Separation and Distribution Agreement. Following the Distribution, the Company became independent and publicly traded and has been operating in a manner so as to qualify and has elected to be taxed as a REIT, commencing with the Company’s initial taxable year ended December 31, 2021. The Company’s common stock, par value $0.001 per share, trades on the New York Stock Exchange (the “NYSE”) under the symbol “ONL”. As of December 31, 2022, the Company owned and operated 81 office properties and related assets totaling approximately 9.5 million leasable square feet located within 29 states. In addition, the Company owns an equity interest in OAP/VER Venture, LLC (the “Arch Street Joint Venture”), an unconsolidated joint venture with an affiliate of Arch Street Capital Partners, LLC (“Arch Street Capital Partners”). As of December 31, 2022, the Arch Street Joint Venture owned a portfolio consisting of six office properties totaling approximately 1.0 million leasable square feet located within six states. |
Orion Office REIT, Summary of S
Orion Office REIT, Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 2 – Summary of Significant Accounting Policies Basis of Accounting The consolidated and combined statements of the Company presented herein include the accounts of the Company and its consolidated subsidiaries. All intercompany transactions have been eliminated upon consolidation. The financial statements are prepared on the accrual basis of accounting in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”). Principles of Consolidation and Combination and Basis of Presentation The consolidated and combined statements of the Company include the accounts of Realty Income Office Assets presented on a combined basis for the period from January 1, 2021 to October 31, 2021 and for the year ended December 31, 2020, as the ownership interests were under common control and ownership of Realty Income during the respective periods. From and after the Merger Effective Time, the consolidated and combined financial statements include the accounts of the Company and its consolidated subsidiaries and a consolidated joint venture, which accounts include the Realty Income Office Assets and the VEREIT Office Assets. The portion of the consolidated joint venture not owned by the Company is presented as non-controlling interest in the Company’s consolidated and combined balance sheets, statements of operations, statements of comprehensive income (loss) and statements of equity. For periods presented prior to the date of the Distribution, the historical consolidated and combined results for the Company reflect charges for certain legal, accounting and other costs related to the Distribution, which were incurred and paid by Realty Income on the Company’s behalf and are reflected as capital contributions. For legal entities being evaluated for consolidation, the Company must first determine whether the interests that it holds and fees it receives qualify as variable interests in the entity. A variable interest is an investment or other interest that will absorb portions of an entity’s expected losses or receive portions of the entity’s expected residual returns. The Company’s evaluation includes consideration of fees paid to the Company where the Company acts as a decision maker or service provider to the entity being evaluated. If the Company determines that it holds a variable interest in an entity, it evaluates whether that entity is a variable interest entity (“VIE”). VIEs are entities where investors lack sufficient equity at risk for the entity to finance its activities without additional subordinated financial support or where equity investors, as a group, lack one or more of the following characteristics: (a) the power to direct the activities that most significantly impact the entity’s economic performance, (b) the obligation to absorb the expected losses of the entity, or (c) the right to receive the expected returns of the entity. The Company consolidates entities that are not VIEs if it has a majority voting interest or other rights that result in effectively controlling the entity. The Company then qualitatively assesses whether it is (or is not) the primary beneficiary of a VIE, which is generally defined as the party who has a controlling financial interest in the VIE. Consideration of various factors include, but are not limited to, the Company’s ability to direct the activities that most significantly impact the entity’s economic performance and its obligation to absorb losses from or right to receive benefits of the VIE that could potentially be significant to the VIE. The Company continually evaluates the need to consolidate VIEs based on standards set forth in U.S. GAAP. Per Share Data Income (loss) per basic share of common stock is calculated by dividing net income (loss) by the weighted-average number of shares of common stock issued and outstanding during such period. Diluted income (loss) per share of common stock considers the effect of potentially dilutive shares of common stock outstanding during the period. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Management makes significant estimates regarding real estate investment impairments. Reclassification Acquisition, disposition, and leasing deal related costs incurred by the Company, previously included in the acquisition related line on the consolidated and combined statements of operations, have been presented in the transaction related line for prior periods presented to be consistent with the current period presentation. Spin related costs are costs incurred by the Company in connection with the Separation and the Distribution. These costs were previously included in the transaction costs line on the consolidated and combined statements of operations and have been presented in the spin related line for prior periods presented to be consistent with the current period presentation. These reclassifications had no effect on the reported results of operations. Spin Related Spin related expenses are expensed as incurred. Such expenses are primarily comprised of the legal and professional fees associated with the formation and organization of the Company, the Mergers and the Distribution. Such costs also include expenses related to the fair value of the warrants issued to the Arch Street Partner and one of its affiliates during the year ended December 31, 2021. Leases Lessor At the inception of a new lease arrangement for which the Company is the lessor, including new leases that arise from amendments, the Company assesses the terms and conditions to determine the proper lease classification. When the terms of a lease effectively transfer control of the underlying asset, the lease is classified as a sales-type lease. When a lease does not effectively transfer control of the underlying asset to the lessee, but the Company obtains a guarantee for the value of the asset from a third party, the Company classifies the lease as a direct financing lease. All other leases are classified as operating leases. As of December 31, 2022, none of the Company’s leases were classified as sales-type leases or direct financing leases. Lessee To account for leases for which the Company is the lessee, contracts must be analyzed upon inception to determine if the arrangement is, or contains, a lease. A lease conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Lease classification tests and measurement procedures are performed at the lease commencement date. When the terms of a lease effectively transfer control of the underlying asset, the lease is classified as finance lease, otherwise it is classified as an operating lease. The lease liability is initially measured as the present value of the lease payments over the lease term, discounted using the interest rate implicit in the lease, if that rate is readily determinable; otherwise, the lessee’s incremental borrowing rate is used. The incremental borrowing rate is determined based on the estimated rate of interest that the lessee would pay to borrow on a collateralized basis over a similar term at an amount equal to the lease payments in a similar economic environment. The lease term is the noncancelable period of the lease and includes any renewal and termination options the Company is reasonably certain to exercise. The lease liability balance is amortized using the effective interest method. The lease liability is remeasured when the contract is modified, upon the resolution of a contingency such that variable payments become fixed or if the assessment of exercising an extension, termination or purchase option changes. The right-of-use (“ROU”) asset balance is initially measured as the lease liability amount, adjusted for any lease payments made prior to the commencement date, initial direct costs, estimated costs to dismantle, remove, or restore the underlying asset and incentives received. Revenue Recognition Rental Revenue The Company continually reviews receivables related to rent, straight-line rent and property operating expense reimbursements and determines collectability by taking into consideration the tenant’s payment history, the financial condition of the tenant, business conditions in the industry in which the tenant operates and economic conditions in the area in which the property is located. The review includes a binary assessment of whether or not substantially all of the amounts due under a tenant’s lease agreement are probable of collection. For leases that are deemed probable of collection, revenue continues to be recorded on a straight-line basis over the lease term. For leases that are deemed not probable of collection, revenue is recorded as cash is received and the Company reduces rental revenue for any straight-line rent receivables. The Company recognizes all changes in the collectability assessment for an operating lease as an adjustment to rental revenue. During the year ended December 31, 2022, the Company recorded a reduction to rental revenue of $1.5 million for income not probable of collection. During the years ended December 31, 2021 and 2020, the Company did not record any reductions to rental revenue for amounts not probable of collection. For operating leases with minimum scheduled rent increases, the Company recognizes rental revenue on a straight-line basis, including the effect of any free rent periods, over the lease term when collectability of lease payments is probable. Variable lease payments are recognized as rental revenue in the period when the changes in facts and circumstances on which the variable lease payments are based occur. Variable lease payments, including contingent rent, which is paid by a tenant when the tenant’s sales exceed an agreed upon minimum amount, are recognized once tenant sales exceed contractual tenant lease thresholds and is calculated by multiplying the sales in excess of the minimum amount by a percentage defined in the lease. Certain of the Company’s leases also contain provisions for tenants to reimburse the Company for real estate taxes, insurance and maintenance and other property operating expenses. Such reimbursements are included in rental revenue and amounts paid directly by tenants are recorded on a net basis, as applicable (i.e., the property operating expenses paid directly by tenants are not included in the Company’s consolidated and combined financial statements). Rental revenue also includes lease termination income collected from tenants to allow for tenants to settle their lease obligations and/or vacate their space prior to their scheduled termination dates, as well as amortization of above and below-market leases and lease incentives. During the years ended December 31, 2022 and 2021, the Company recognized $1.4 million and $0.3 million, respectively, of lease termination income. During the year ended December 31, 2020, the Company did not recognize any lease termination income. Fee Income from Unconsolidated Joint Venture The Company provides various services to the Arch Street Joint Venture in exchange for market-based fees. Total asset and property management fees earned in connection with this entity was $0.8 million and $0.3 million for the years ended December 31, 2022 and 2021, respectively. No such fee income was earned for the year ended December 31, 2020. Real Estate Investments The Company records acquired real estate at cost when such acquisitions qualify as asset acquisitions and makes assessments as to the useful lives of depreciable assets. The Company considers the period of future benefit of the asset to determine the appropriate useful lives. Depreciation is computed using a straight-line method over the estimated useful life of 35 years for buildings, five Allocation of Purchase Price of Real Estate Acquisitions For acquisitions that qualify as asset acquisitions, the Company allocates the purchase price of acquired properties to tangible and identifiable intangible assets and liabilities acquired based on their relative fair values. Tangible assets include land, buildings, fixtures and improvements on an as-if vacant basis. The Company utilizes various estimates, processes and information to determine the as-if vacant property value. Identifiable intangible assets and liabilities include amounts allocated to acquired leases for above-market and below-market lease rates and the value of in-place leases. In estimating fair values for purposes of allocating purchase price, the Company utilizes a number of sources, including independent appraisals that may be obtained in connection with the acquisition or financing of the respective property and other market data. The Company also considers information obtained about each property as a result of its pre-acquisition due diligence, as well as subsequent marketing and leasing activities, in estimating the fair value of the tangible and intangible assets acquired and intangible liabilities assumed. The aggregate value of intangible assets related to in-place leases is primarily the difference between the property valued with existing in-place leases adjusted to market rental rates and the property valued as if vacant. Factors considered by the Company in its analysis of the in-place leases include an estimate of carrying costs during the expected lease-up period for each property, taking into account current market conditions and costs to execute similar leases. In estimating carrying costs, the Company includes real estate taxes, insurance and other operating expenses and estimates of lost rentals at market rates during the expected lease-up period. The Company also estimates costs to execute similar leases, including leasing commissions, legal and other related expenses. The value of in-place leases is amortized over the remaining non-cancelable term of the respective leases at acquisition. If a tenant terminates its lease, then the unamortized portion of the in-place lease value is charged to expense. Above-market and below-market in-place lease values for owned properties are recorded based on the present value (using an interest rate which reflects the risks associated with the leases acquired) of the difference between the contractual amounts to be paid pursuant to the in-place leases and management’s estimate of fair market lease rates for the corresponding in-place leases, measured over a period equal to the remaining non-cancelable term of the lease, including any bargain renewal periods. A bargain renewal period is provision in a lease which allows a lessee, at its option, to renew a lease at a rate that is sufficiently lower than fair market lease rates at the date such option is exercisable such that exercise of the option appears, at the inception of the lease, to be reasonably certain. Above-market leases are amortized as a reduction to rental revenue over the remaining terms of the respective leases. Below-market leases are amortized as an increase to rental revenue over the remaining terms of the respective leases, including any bargain renewal periods. The determination of the fair values of the real estate assets and liabilities acquired requires the use of significant assumptions with regard to the current market rental rates, rental growth rates, capitalization and discount rates, interest rates and other variables. The use of alternative estimates may result in a different allocation of the Company’s purchase price, which could materially impact the Company’s results of operations. Assets Held for Sale The Company classifies a real estate investment as held for sale when certain criteria are met in accordance with U.S. GAAP. Upon classifying a real estate investment as held for sale, the Company will no longer recognize depreciation or amortization expense related to the depreciable assets of the property. Assets held for sale are recorded at the lower of carrying value or estimated fair value, less the estimated cost to dispose of the assets. See Note 3 – Real Estate Investments and Related Intangibles for further discussion regarding properties held for sale. If circumstances arise that the Company previously considered unlikely and, as a result, the Company decides not to sell a property previously classified as held for sale, the Company will reclassify the property as held and used. The Company measures and records a property that is classified as held and used at the lower of (i) its carrying value before the property was classified as held for sale, adjusted for any depreciation and amortization expense that would have been recognized had the property been continuously classified as held and used or (ii) the estimated fair value at the date of the subsequent decision not to sell. Investment in Unconsolidated Joint Venture The Company accounts for its investment in the Arch Street Joint Venture arrangement using the equity method of accounting as the Company has the ability to exercise significant influence, but not control, over the operating and financing policies of the investment. The equity method of accounting requires the investment to be initially recorded at cost and subsequently adjusted for the Company’s share of equity in the joint venture’s earnings and distributions. The Company records its proportionate share of net income (loss) from the Arch Street Joint Venture in equity in loss of unconsolidated joint venture, net in the consolidated statements of operations. See Note 3 – Real Estate Investments and Related Intangibles for further discussion on the Company’s investment in the Arch Street Joint Venture. The Company is required to determine whether an event or change in circumstances has occurred that may have a significant adverse effect on the fair value of its investment in the Arch Street Joint Venture. If an event or change in circumstance has occurred, the Company is required to evaluate its investment in the Arch Street Joint Venture for potential impairment and determine if the carrying value of its investment exceeds its fair value. An impairment charge is recorded when an impairment is deemed to be other-than-temporary. To determine whether an impairment is other-than-temporary, the Company considers whether it has the intent and ability to hold the investment until the carrying value is fully recovered. The evaluation of an investment in an unconsolidated joint venture for potential impairment requires the Company’s management to exercise significant judgment and to make certain assumptions. The use of different judgments and assumptions could result in different conclusions. No impairments of the Arch Street Joint Venture were identified during the years ended December 31, 2022 and 2021. Prior to the Distribution, the Company did not own any investments in an unconsolidated joint venture. Impairments Real Estate Assets The Company performs impairment review procedures, primarily through continuous monitoring of events and changes in circumstances that could indicate the carrying value of its real estate assets may not be recoverable. Impairment indicators that the Company considers include, but are not limited to, decrease in a property’s net operating cash flows, bankruptcy or other credit concerns of a property’s major tenant or tenants, such as history of late payments, rental concessions and other factors, as well as significant decreases in a property’s revenues due to lease terminations, vacancies or reduced lease rates. When impairment indicators are identified or if a property is considered to have a more likely than not probability of being disposed, the Company assesses the recoverability of the assets by determining whether the carrying value of the assets will be recovered through the undiscounted future cash flows expected from the use of the assets and their eventual disposition. U.S. GAAP requires us to utilize the Company’s expected holding period of our properties when assessing recoverability. In the event that such expected undiscounted future cash flows do not exceed the carrying value, the Company will adjust the real estate assets to their respective fair values and recognize any impairment loss. Generally, fair value is determined using a discounted cash flow analysis and recent comparable sales or leasing transactions. The assumptions and uncertainties utilized in the evaluation of the impairment of real estate assets are discussed in Note 5 – Fair Value Measures. Right of Use Assets The Company’s impairment assessment for ROU assets is consistent with the impairment analysis for the Company’s other long-lived assets. No impairments of ROU assets were identified during the years ended December 31, 2022, 2021, and 2020. See Note 5 – Fair Value Measures for further discussion. Cash and Cash Equivalents Cash and cash equivalents include cash in bank accounts, as well as investments in highly-liquid funds with original maturities of three months or less. The Company deposits cash with high quality financial institutions. These deposits are guaranteed by the Federal Deposit Insurance Corporation (“FDIC”) up to an insurance limit of $250,000. At times, the Company’s cash and cash equivalents may exceed federally insured levels. Although the Company bears risk on amounts in excess of those insured by the FDIC, it has not experienced and does not anticipate any losses due to the high quality of the institutions where the deposits are held. Restricted Cash The Company had $34.7 million in restricted cash as of December 31, 2022, primarily comprised of reserves held by the lender under the CMBS Loan (as defined in Note 6 – Debt, Net) for future rent concessions and tenant improvement allowances. The Company did not have any restricted cash balances as of December 31, 2021. The Company had $3.9 million in restricted cash as of December 31, 2020, which primarily consisted of mortgage impounds and security deposits related to mortgages payable. In accordance with certain debt agreements that were outstanding as of December 31, 2020, rent from certain of the Company’s tenants was deposited directly into a lockbox account, from which the monthly debt service payments were disbursed to the lender and the excess funds were then disbursed to the Company. Included in the restricted cash as of December 31, 2020 was $3.4 million in mortgage impounds related to mortgages payable and $0.5 million in security deposits related to mortgages payable. Restricted cash is included in other assets, net on the Company’s consolidated balance sheets. Deferred Financing Costs Deferred financing costs represent commitment fees, legal fees and other costs associated with obtaining commitments for financing. D eferred financing costs, other than those associated with the Revolving Facility (as defined in Note 6 – Debt, Net ), are presented on the consolidated balance sheets as a direct deduction from the carrying value of the related debt liability rather than as an asset . Deferred financing costs related to the Revolving Facility are included in other assets, net in the accompanying consolidated balance sheets. Deferred financing costs are amortized to interest expense over the terms of the respective financing agreements using the effective interest method. Unamortized deferred financing costs are written off when the associated debt is refinanced or repaid before maturity. Costs incurred in connection with potential financial transactions that are not completed are expensed in the period in which it is determined the financing will not be completed. Derivative Instruments The Company may use derivative financial instruments, including interest rate swaps, caps, collars, treasury locks, options and forwards to hedge all or a portion of the interest rate risk associated with its borrowings. The Company’s interest rate management objectives are intended to limit the impact of interest rate fluctuations on earnings and cash flows and to manage the Company’s overall borrowing costs. To accomplish this objective, the Company has used and intends to continue to use interest rate swaps as part of its cash flow hedging strategy. The Company does not intend to utilize derivatives for trading or speculative purposes or for purposes other than interest rate risk management. The use of derivative financial instruments carries certain risks, including the risk that the counterparties to these contractual arrangements are not able to perform under the agreements. To mitigate this risk, the Company only enters into derivative financial instruments with counterparties with high credit ratings and with major financial institutions with which the Company may also have other financial relationships. The Company does not anticipate that any of the counterparties will fail to meet their obligations. The Company records all derivatives on the consolidated balance sheets at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary under U.S. GAAP to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. The accounting for subsequent changes in the fair value of these derivatives depends on whether each has been designated and qualifies for hedge accounting treatment. If the Company elects not to apply hedge accounting treatment, any changes in the fair value of these derivative instruments is recognized immediately in other income, net in the consolidated and combined statements of operations and consolidated and combined statements of comprehensive income (loss). If the derivative is designated and qualifies for cash flow hedge accounting treatment, the change in fair value of the derivative is recorded in other comprehensive income (loss). Unrealized gains and losses in other comprehensive income (loss) are reclassified to interest expense when the related hedged items impact earnings. Loss Contingencies The Company records a liability in the consolidated and combined statements for loss contingencies when a loss is known or considered probable and the amount is reasonably estimable. If the reasonable estimate of a known or probable loss is a range, and no amount within the range is a better estimate than any other, the minimum amount of the range is accrued. If a material loss is reasonably possible but not known or probable, and is reasonably estimable, the estimated loss or range of loss is disclosed. Income Taxes The Company has been operating in a manner so to qualify and has elect to be taxed as a REIT for U.S. federal income tax purposes under Sections 856 through 860 of the Internal Revenue Code, as amended (the “Code”), commencing with the taxable year ended December 31, 2021. To maintain the Company’s qualification as a REIT, the Company must meet a number of organizational and operational requirements, including a requirement that it distribute annually at least 90% of its REIT taxable income, subject to certain adjustments and excluding any net capital gain to its stockholders. However, Orion OP is still subject to certain state and local income, franchise, property, and other taxes in the various jurisdictions in which it operates. The Company may also be subject to federal income taxes on certain income and federal excise taxes on its undistributed income. The Company provides for income taxes in accordance with current authoritative accounting and tax guidance. The tax provision or benefit related to significant or unusual items is recognized in the quarter in which those items occur. In addition, the effect of changes in enacted tax laws, rates or tax status is recognized in the quarter in which the change occurs. The accounting estimates used to compute the provision for or benefit from income taxes may change as new events occur, additional information is obtained or the tax environment changes. During both the years ended December 31, 2022 and 2021, the Company recognized state and local income and franchise tax expense of $0.2 million, which is included in provision for income taxes in the accompanying consolidated and combined statements of operations. The Company regularly analyzes its income tax positions in the jurisdictions in which it operates and only recognizes the income tax effect in the financial statements when certain criteria regarding uncertain tax positions have been met. The Company believes that its material income tax positions would more likely than not be sustained upon examination by the relevant taxing authorities. Therefore, no provisions related to material uncertain income tax positions have been recognized in the accompanying consolidated and combined financial statements during the years ended December 31, 2022 and 2021. Any interest and penalties related to unrecognized tax benefits would be recognized in provision for income taxes in the accompanying consolidated and combined statements of operations. For periods presented prior to the Merger Effective Time, Realty Income Office Assets was owned by Realty Income, a Maryland corporation which had elected to be taxed as a REIT, under the Code. Under the REIT operating structure, Realty Income was permitted to deduct dividends paid to its stockholders in determining its taxable income. Assuming Realty Income’s dividends equaled or exceeded its taxable net income, it was generally not required to pay federal corporate income taxes on such income. Accordingly, no provision was made for federal income taxes in the accompanying consolidated and combined financial statements of the Company for such prior periods. The properties in the consolidated and combined financial statements which comprised Realty Income Office Assets were previously owned directly or indirectly by limited partnerships or limited liability companies of Realty Income and, as a result, the allocated share of income for periods presented prior to the Merger Effective Time are included in the consolidated income tax return of Realty Income. Segment Reporting The Company operates in one business segment: direct ownership and operation of commercial real estate. Recent Accounting Pronouncements In March 2020, the FASB issued ASU 2020-04 establishing Topic 848, Reference Rate Reform. ASU 2020-04 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance is optional and is effective between March 12, 2020 and December 31, 2022. The FASB issued ASU 2022-06 in December 2022, in association with Topic 848, to extend the sunset date from December 31, 2022 to December 31, 2024. The guidance under Topic 848 may be elected over time as reference rate reform activities occur. As of December 31, 2022, all of our debt and derivative instruments have been converted from the London Interbank Offered Rate, commonly referred to as LIBOR, to the Secured Overnight Financing Rate, commonly referred to as SOFR. In connection with the transition of the benchmark rate for borrowings under the Revolver/Term Loan Credit Agreement (as defined in Note 6 – Debt, Net) from LIBOR to SOFR, the Company terminated the existing interest rate swap agreements and entered into new interest rate swap agreements during the three months ended December 31, 2022. The new interest rate swap agreements continue to be accounted for as a cash flow hedge. The adoption of ASU 2020-04 did not have a material impact on our consolidated and combined financial statements. |
Orion Office REIT, Real Estate
Orion Office REIT, Real Estate Investments and Related Intangibles | 12 Months Ended |
Dec. 31, 2022 | |
Real Estate [Abstract] | |
Real Estate Investments and Related Intangibles | Note 3 – Real Estate Investments and Related Intangibles Property Acquisitions During the year ended December 31, 2022, the Company acquired for no consideration the fee interest in one parcel of land in connection with the maturity of the tax advantaged bond and ground lease structure. As a result of the transaction, $4.7 million that was previously classified as a finance lease right-of-use asset with respect to such land parcel previously subject to the ground lease was reclassified from other assets, net to real estate investments in the Company’s consolidated balance sheets as of December 31, 2022. The Company did not have any other acquisitions during the year ended December 31, 2022 and during the years ended December 31, 2021 and 2020, the Company had no acquisitions. Property Dispositions and Real Estate Assets Held for Sale The following table summarizes the Company’s property dispositions for the years ended December 31, 2022, 2021 and 2020 (dollars in thousands) : Year Ended December 31, 2022 2021 2020 Total dispositions 11 — — Aggregate gross sales price $ 33,098 $ — $ — Gain on disposition of real estate assets $ 2,352 $ — $ — Property count 5 — — Impairments on disposition of real estate assets $ 5,089 $ — $ — Property count 6 — — As of December 31, 2022, there was one property classified as held for sale, which the Company expected to be sold in the next 12 months as part of its portfolio management strategy. The property had a carrying value of $2.5 million primarily comprised of land of $0.6 million and building, fixtures and improvements, net of $1.9 million, included in real estate assets held for sale, net in the accompanying consolidated and balance sheets. During the year ended December 31, 2022, the Company recorded a loss of $6.0 million related to held for sale properties, which is included in impairments in the accompanying consolidated and combined statements of operations. Intangible Lease Assets and Liabilities Intangible lease assets consisted of the following (in thousands, except weighted-average useful life): Weighted-Average Useful Life (Years) December 31, 2022 December 31, 2021 Intangible lease assets: In-place leases, net of accumulated amortization of $144,798 and $65,247, respectively 5.4 $ 177,698 $ 272,743 Leasing commissions, net of accumulated amortization of $1,553 and $456, respectively 12.4 13,614 10,349 Above-market lease assets, net of accumulated amortization of $11,391 and $6,239, respectively 5.5 9,826 15,015 Deferred lease incentives, net of accumulated amortization of $116 4.7 1,694 — Total intangible lease assets, net $ 202,832 $ 298,107 Intangible lease liabilities: Below-market leases, net of accumulated amortization of $17,249 and $14,459, respectively 8.4 $ 14,068 $ 20,609 The aggregate amount of amortization of above-market and below-market leases included as a net increase to rental revenue was $1.2 million, $1.0 million and $0.8 million for the years ended December 31, 2022, 2021 and 2020, respectively. The aggregate amount of amortization of deferred lease incentives included as a net decrease to rental revenue was $0.1 million for the year ended December 31, 2022 as compared to no impact to rental revenue for the years ended December 31, 2021 and 2020. The aggregate amount of in-place leases, leasing commissions and other lease intangibles amortized and included in depreciation and amortization expense was $95.4 million, $23.1 million and $7.9 million for the years ended December 31, 2022, 2021 and 2020, respectively. The following table provides the projected amortization expense and adjustments to rental revenue related to the intangible lease assets and liabilities for the next five years as of December 31, 2022 (in thousands) : 2023 2024 2025 2026 2027 In-place leases: Total projected to be included in amortization expense $ 73,501 $ 49,185 $ 21,652 $ 15,499 $ 7,441 Leasing commissions: Total projected to be included in amortization expense $ 1,340 $ 1,297 $ 1,229 $ 1,229 $ 1,226 Above-market lease assets: Total projected to be deducted from rental revenue $ 4,776 $ 2,995 $ 860 $ 682 $ 237 Deferred lease incentives: Total projected to be deducted from rental revenue $ 403 $ 403 $ 386 $ 288 $ 212 Below-market lease liabilities: Total projected to be added to rental revenue $ 5,994 $ 3,786 $ 1,036 $ 817 $ 655 Consolidated Joint Venture The Company had an interest in one consolidated joint venture that owned one property as of December 31, 2022 and 2021. As of December 31, 2022 and 2021, the consolidated joint venture had total assets of $27.7 million and $27.4 million, respectively, of which $24.9 million and $26.1 million, respectively, were real estate investments, net of accumulated depreciation and amortization. The joint venture partner is the managing member of the joint venture. However, in accordance with the joint venture agreement, the Company has the ability to control the operating and financing policies of the consolidated joint venture and the joint venture partner must obtain the Company’s approval for any major transactions. The Company and the joint venture partner are subject to the provisions of the joint venture agreement, which includes provisions for when additional contributions may be required to fund certain cash shortfalls. Investment in Unconsolidated Joint Venture The following is a summary of the Company’s investment in the Arch Street Joint Venture, as of December 31, 2022 and 2021 and for the year ended December 31, 2022 and 2021 (dollars in thousands): Ownership % (1) Number of Properties Carrying Value of Equity in Loss, Net Year Ended (2) Investment December 31, 2022 December 31, 2022 December 31, 2021 December 31, 2022 December 31, 2021 December 31, 2020 Arch Street Joint Venture (3) (4) 20% 6 $ 15,824 $ 18,631 $ (524) $ (56) $ — ____________________________________ (1) The Company’s ownership interest reflects its legal ownership interest. The Company’s legal ownership interest may, at times, not equal the Company’s economic interest because of various provisions in the joint venture agreement regarding capital contributions, distributions of cash flow based on capital account balances and allocations of profits and losses. As a result, the Company’s actual economic interest (as distinct from its legal ownership interest) in certain of the properties could fluctuate from time to time and may not wholly align with its legal ownership interest. (2) The interest in the Arch Street Joint Venture was acquired by Realty Income as part of the Mergers and was transferred to the Company upon the consummation of the Distribution. Therefore, the Company’s equity in loss, net reflects operations following the Merger Effective Time. (3) During the year ended December 31, 2022, the Arch Street Joint Venture did not acquire any properties. During the year ended December 31, 2021, the Arch Street Joint Venture acquired one property from a third party for a purchase price of $30.5 million. (4) The total carrying value of the Company’s investment in the Arch Street Joint Venture was greater than the underlying equity in net assets by $0.9 million and $2.1 million as of December 31, 2022 and 2021, respectively. This difference is related to a step up in the fair value of the investment in the Arch Street Joint Venture in connection with the Mergers. The step up in fair value was allocated based on the underlying assets and liabilities of the Arch Street Joint Venture and is being amortized over the estimated useful lives of the respective assets and liabilities in accordance with the Company’s accounting policies. |
Orion Office REIT, Receivables
Orion Office REIT, Receivables and Other Assets | 12 Months Ended |
Dec. 31, 2022 | |
Receivables [Abstract] | |
Receivables and Other Assets | Note 4 – Receivables and Other Assets : Accounts receivable, net consisted of the following as of December 31, 2022 and 2021 (in thousands): December 31, 2022 December 31, 2021 Accounts receivable, net $ 10,461 $ 10,194 Straight-line rent receivable, net 11,180 7,722 Total $ 21,641 $ 17,916 Other assets, net consisted of the following as of December 31, 2022 and 2021 (in thousands): December 31, 2022 December 31, 2021 Restricted cash $ 34,673 $ — Right-of-use assets, net (1) 26,422 30,958 Investment in unconsolidated joint venture 15,824 18,631 Derivative assets 6,308 299 Deferred costs, net (2) 4,619 6,246 Prepaid expenses 1,305 3,730 Other assets, net 1,063 637 Total $ 90,214 $ 60,501 ____________________________________ (1) Amortization expense for below market right-of-use asset was $0.2 million and less than $0.1 million for the years ended December 31, 2022 and 2021, respectively. There was no amortization expense for below market right-of-use asset for the year ended December 31, 2020. Includes right-of-use finance leases of $9.0 million and $13.8 million, right-of-use operating leases of $10.6 million and $10.2 million, and a below-market right-of-use asset, net of $6.8 million and $7.1 million, as of December 31, 2022 and 2021, respectively. (2) Amortization expense for deferred costs related to the Revolving Facility totaled $2.2 million and $0.3 million for the years ended December 31, 2022 and 2021, respectively, as compared to no amortization expense for deferred costs for the year ended December 31, 2020. Accumulated amortization for deferred costs related to the Revolving Facility was $2.5 million and $0.3 million as of December 31, 2022 and 2021, respectively. Includes outstanding deferred equity offering costs of $0.5 million, which will be offset against additional paid in capital for future issuances of shares of the Company’s common stock, as of December 31, 2022. There was no such balance as of December 31, 2021. |
Orion Office REIT, Fair Value M
Orion Office REIT, Fair Value Measures | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measures | Note 5 – Fair Value Measures Items Measured at Fair Value on a Recurring Basis The following tables present information about the Company’s assets and liabilities measured at fair value on a recurring basis as of December 31, 2022 and 2021, aggregated by the level in the fair value hierarchy within which those instruments fall (in thousands): Level 1 Level 2 Level 3 Balance as of December 31, 2022 Derivative assets $ — $ 6,308 $ — $ 6,308 Level 1 Level 2 Level 3 Balance as of December 31, 2021 Derivative assets $ — $ 299 $ — $ 299 Derivative Assets – The Company’s derivative financial instruments relate to interest rate swap agreements entered into in order to hedge interest rate volatility with respect to the Company’s borrowings under the Term Loan Facility (as defined in Note 6 – Debt, Net). The valuation of derivative instruments is determined using a discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, as well as observable market-based inputs, including interest rate curves and implied volatilities. In addition, credit valuation adjustments are incorporated into the fair values to account for the Company’s potential nonperformance risk and the performance risk of the counterparties. Although the Company determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with those derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by the Company and its counterparties. However, as of December 31, 2022 and 2021, the Company assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and determined that the credit valuation adjustments are not significant to the overall valuation of the Company’s derivatives. As a result, the Company determined that its derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy. Items Measured at Fair Value on a Non-Recurring Basis Certain financial and nonfinancial assets and liabilities are measured at fair value on a non-recurring basis and are subject to fair value adjustments in certain circumstances, such as when there is evidence of impairment. Real Estate and Other Investments – The Company performs quarterly impairment review procedures for real estate investments, and property and equipment, right of use assets and its investment in the Arch Street Joint Venture, primarily through continuous monitoring of events and changes in circumstances that could indicate the carrying value of such assets may not be recoverable. As part of the Company’s impairment review procedures, net real estate assets representing 18 and 10 properties were deemed to be impaired during the years ended December 31, 2022 and 2021, respectively, resulting in impairment charges of $66.4 million and $49.9 million during the years ended December 31, 2022 and 2021, respectively. The impairment charges relate to adjustments to expected sales prices for certain non-core assets which have been identified by management for potential sale or management determined would not be re-leased by the existing tenant. During the year ended December 31, 2020, the Company analyzed a unique triggering event related to one property that had a near term lease expiration, combined with a mortgage loan maturity. The estimated future undiscounted cash flows of this property indicated that carrying value was not expected to be recovered, and after estimating the fair value, an impairment charge of $18.7 million was recorded for the year ended December 31, 2020. The fair value measurement for this property was determined by applying a sales price based on market comparable sales provided by a third party. This input is categorized as level two on the valuation hierarchy. The Company also identified the impact of the COVID-19 pandemic as an impairment triggering event during the year ended December 31, 2020. However, after performing review procedures, the Company did not identify additional carrying values of properties impacted by the COVID-19 pandemic during the year ended December 31, 2020. The following table summarizes our provisions for impairment during the periods indicated below (dollars in thousands): Year Ended December 31, 2022 2021 2020 Number of properties 18 10 1 Carrying value of impaired properties $ 142,748 $ 109,197 $ 29,129 Provisions for impairment (66,359) (49,859) (18,671) Estimated fair value $ 76,389 $ 59,338 $ 10,458 The Company estimates fair values using Level 2 and Level 3 inputs and uses a combined income and market approach, specifically using discounted cash flow analysis and/or recent comparable sales transactions. The evaluation of real estate assets for potential impairment requires the Company’s management to exercise significant judgment and make certain key assumptions, including the following: (1) capitalization rate; (2) discount rates; (3) number of years the property will be held; (4) property operating expenses; and (5) re-leasing assumptions including number of months to re-lease, market rental revenue and required tenant improvements. There are inherent uncertainties in making these estimates such as market conditions and performance and sustainability of the Company’s tenants. For the Company’s impairment tests for the real estate assets during the year ended December 31, 2022, the fair value measurement for 17 impaired properties was determined by applying an estimated sales price based on market data and one impaired property by applying a weighted average discount rate of 8.5% and capitalization rate of 8.0%. During the year ended December 31, 2022, impairment charges of $39.5 million were recorded for held and used properties For the Company’s impairment tests for the real estate assets during the year ended December 31, 2021, the fair value measurement for all 10 impaired properties was determined by applying an estimated sales price based on market data. During the year ended December 31, 2021, impairment charges of $49.9 million were recorded for held and used properties, and no impairment charges were recorded for held for sale properties or disposed properties. The following tables present certain of the Company’s assets measured at fair value on a non-recurring basis as of December 31, 2022 and 2021, aggregated by the level in the fair value hierarchy within which those assets fall (in thousands): Level 1 Level 2 (1) Level 3 (1) Balance as of December 31, 2022 Assets of properties held and used $ — $ 38,900 $ 11,957 $ 50,857 Assets of properties held for sale — 2,502 — 2,502 $ — $ 41,402 $ 11,957 $ 53,359 Level 1 Level 2 (1) Level 3 (1) Balance as of December 31, 2021 Assets of properties held and used $ — $ — $ 59,339 $ 59,339 Assets of properties held for sale — — — — $ — $ — $ 59,339 $ 59,339 ____________________________________ (1) The fair value of the level 2 category was derived using negotiated sales prices and the fair value of the level 3 category was derived using discounted cash flow analysis and management estimates of selling prices. Fair Value of Financial Instruments The fair value of short-term financial instruments such as cash and cash equivalents, restricted cash, accounts receivable, and accounts payable approximate their carrying value in the accompanying consolidated balance sheets due to their short-term nature. The fair values of the Company’s long-term financial instruments are reported below (dollars in thousands): Level Carrying Value at December 31, 2022 Fair Value at December 31, 2022 Carrying Value at December 31, 2021 Fair Value at December 31, 2021 Liabilities (1) : Bridge facility 2 — — $ 355,000 $ 355,000 Mortgages payable 2 355,000 332,323 — — Credit facility term loan 2 175,000 175,000 175,000 175,000 Credit facility revolver (2) 2 — — 90,000 90,000 Total $ 530,000 $ 507,323 $ 620,000 $ 620,000 ____________________________________ (1) Current and prior period liabilities’ carrying and fair values exclude net deferred financing costs. (2) As of December 31, 2022, the Company did not have any amounts outstanding under its $425.0 million Revolving Facility. Debt – The fair value is estimated by an independent third party using a discounted cash flow analysis, based on management’s estimates of credit spreads and observable market interest rates, representing level 2 on the fair value hierarchy. |
Orion Office REIT, Debt, Net
Orion Office REIT, Debt, Net | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Debt, Net | Note 6 – Debt, Net As of December 31, 2022, the Company had $526.0 million of debt outstanding, including net deferred financing costs, with a weighted-average years to maturity of 3.0 years and a weighted-average interest rate of 4.38%. The following table summarizes the carrying value of debt as of December 31, 2022 and 2021, and the debt activity for the year ended December 31, 2022 (in thousands): Year Ended December 31, 2022 Balance as of December 31, 2021 Debt Issuances Repayments, Extinguishment and Assumptions Accretion and Amortization Balance as of December 31, 2022 Mortgages payable: Outstanding balance $ — $ 355,000 $ — $ — $ 355,000 Deferred costs — (3,446) — 613 (2,833) Mortgages payable, net — 351,554 — 613 352,167 Bridge facility: Outstanding balance 355,000 — (355,000) — — Deferred costs (643) — 442 201 — Bridge facility, net 354,357 — (354,558) 201 — Credit facility term loan: Outstanding balance 175,000 — — — 175,000 Deferred costs (2,510) (44) — 1,369 (1,185) Credit facility term loan, net 172,490 (44) — 1,369 173,815 Credit facility revolver: Outstanding balance 90,000 70,000 (160,000) — — Credit facility revolver 90,000 70,000 (160,000) — — Total debt $ 616,847 $ 421,510 $ (514,558) $ 2,183 $ 525,982 The following table summarizes the scheduled aggregate principal repayments due on the Company’s debt outstanding as of December 31, 2022 (in thousands): Total 2023 $ 175,000 2024 — 2025 — 2026 — 2027 355,000 Total $ 530,000 Credit Agreement In connection with the Separation and the Distribution, on November 12, 2021, the Company, as parent, and Orion OP, as borrower, entered into (i) a credit agreement (the “Revolver/Term Loan Credit Agreement”) providing for a three-year, $425 million senior revolving credit facility (the “Revolving Facility”), including a $25 million letter of credit sub-facility, and a two-year, $175.0 million senior term loan facility (the “Term Loan Facility,” and together with the Revolving Facility, the “Revolver/Term Loan Facilities”) with Wells Fargo Bank, National Association, as administrative agent, and the lenders and issuing banks party thereto and (ii) a credit agreement (the “Bridge Credit Agreement,” and together with the Revolver/Term Loan Credit Agreement, the “Credit Agreements”) providing for a 6-month, $355.0 million senior bridge term loan facility (the “Bridge Facility,” and together with the Revolver/Term Loan Facilities, the “Facilities”) with Wells Fargo Bank, National Association, as administrative agent, and the lenders party thereto. The Term Loan Facility is scheduled to mature on November 12, 2023, and the Revolving Facility is scheduled to mature on November 12, 2024. The Company expects to extend, repay or refinance (or some combination of the foregoing) the Revolver/Term Loan Facilities on or prior to maturity. The Company has sufficient available capacity under the Revolving Facility to repay the Term Loan Facility, if needed. On November 12, 2021, Orion OP borrowed $90.0 million under the Revolving Facility, and each of the Term Loan Facility and the Bridge Facility was fully drawn. Approximately $595.0 million of the net proceeds of the Facilities was distributed by the Company to Realty Income in accordance with the Separation and Distribution Agreement. Orion OP retained the remaining net proceeds of such borrowings as working capital for the general corporate purposes of the Company, Orion OP and Orion OP’s subsidiaries. In February 2022, as further described below, the Company refinanced the Bridge Facility in full with the $355.0 million CMBS Loan, and the Bridge Credit Agreement was terminated. As of December 31, 2022, the Company did not have any borrowings under the Revolving Facility and, therefore, had $425.0 million of availability under the Revolving Facility. The interest rate applicable to the loans under the Revolver/Term Loan Facilities was initially determined, at the election of Orion OP, on the basis of LIBOR or a base rate, in either case, plus an applicable margin. On December 1, 2022, the Company, as parent, and Orion OP, as borrower, entered into that certain First Amendment to the Revolver/Term Loan Credit Agreement (the “Amendment”). The Amendment, among other things, (i) changed the benchmark rate under the Revolver/Term Loan Credit Agreement for borrowings from LIBOR to SOFR (the secured overnight financing rate as administered by the Federal Reserve Bank of New York), subject to certain adjustments specified in the Revolver/Term Loan Credit Agreement, and (ii) updated certain other provisions regarding successor interest rates to LIBOR. Following the effectiveness of the Amendment, the interest rate applicable to the loans under the Revolver/Term Loan Facilities may be determined, at the election of Orion OP, on the basis of Daily Simple SOFR, Term SOFR or a base rate, in the case of a SOFR loan, plus a SOFR adjustment of 0.10% per annum, and in the case of a SOFR loan or a base rate loan, plus an applicable margin. This applicable margin was not adjusted as a result of the Amendment other than the change from LIBOR to SOFR and is now (1) in the case of the Revolving Facility, 2.50% for SOFR loans and 1.50% for base rate loans, and (2) in the case of the Term Loan Facility, 2.50% for SOFR loans and 1.50% for base rate loans. Loans under the Revolver/Term Loan Facilities may be prepaid, and unused commitments under the Revolver/Term Loan Facilities may be reduced, at any time, in whole or in part, without premium or penalty (except for LIBOR breakage costs). To the extent that amounts under the Revolving Facility remain unused, Orion OP is required to pay a quarterly commitment fee on the unused portion of the Revolving Facility in an amount equal to 0.25% per annum of the unused portion of the Revolving Facility. The Revolver/Term Loan Facilities are guaranteed pursuant to a Guaranty (the “Revolver/Term Loan Guaranty”) by the Company and, subject to certain exceptions, substantially all of Orion OP’s existing and future subsidiaries (including substantially all of its subsidiaries that directly or indirectly own unencumbered real properties), other than certain joint ventures and subsidiaries that own real properties subject to certain other indebtedness (such subsidiaries of Orion OP, the “Subsidiary Guarantors”). The Revolver/Term Loan Facilities are secured by, among other things, first priority pledges of the equity interests in the Subsidiary Guarantors. The Revolver/Term Loan Facilities require that Orion OP comply with various covenants, including, covenants restricting, subject to certain exceptions, liens, investments, mergers, asset sales and the payment of certain dividends. In addition, the Revolver/Term Loan Facilities require that Orion OP satisfy the following financial covenants: • ratio of total debt to total asset value of not more than 0.60 to 1.00; • ratio of adjusted EBITDA to fixed charges of not less than 1.50 to 1.00; • ratio of secured debt to total asset value of not more than 0.45 to 1.00; • ratio of unsecured debt to unencumbered asset value of not more than 0.60 to 1.00; and • ratio of net operating income from all unencumbered real properties to unsecured interest expense of not less than 2.00 to 1.00. As of December 31, 2022, Orion OP was in compliance with these financial covenants. The Revolver/Term Loan Facilities include customary representations and warranties of the Company and Orion OP, which must be true and correct in all material respects as a condition to future extensions of credit under the Revolver/Term Loan Facilities. The Revolver/Term Loan Facilities also include customary events of default, the occurrence of which, following any applicable grace period, would permit the lenders to, among other things, declare the principal, accrued interest and other obligations of Orion OP under the Revolver/Term Loan Facilities to be immediately due and payable and foreclose on the collateral securing the Revolver/Term Loan Facilities. CMBS Loan On February 10, 2022, certain indirect subsidiaries of the Company (the “Mortgage Borrowers”) obtained a $355.0 million fixed rate mortgage loan (the “CMBS Loan”) from Wells Fargo Bank, National Association (together with its successor, the “Lender”), which is secured by the Mortgage Borrowers’ fee simple or ground lease interests in 19 properties owned indirectly by the Company (collectively, the “Mortgaged Properties”). During March 2022, Wells Fargo effected a securitization of the CMBS Loan. The CMBS Loan bears interest at a fixed rate of 4.971% per annum and matures on February 11, 2027. The CMBS Loan requires monthly payments of interest only and all principal is due at maturity. The proceeds of the CMBS Loan were used to repay the Bridge Facility. Upon closing of the CMBS Loan, the Mortgage Borrowers funded $35.5 million of loan reserves primarily for future rent concessions and tenant improvement allowances under the leases with respect to the 19 Mortgaged Properties. These amounts, as well as the transaction expenses incurred in connection with the CMBS Loan, were funded with cash on hand and borrowings under the Company’s Revolving Facility. The CMBS Loan is secured by, among other things, first priority mortgages and deeds of trust granted by the Mortgage Borrowers and encumbering the Mortgaged Properties. The CMBS Loan is generally not freely prepayable by the Mortgage Borrowers without payment of certain prepayment premiums and costs. The CMBS Loan may be prepaid in whole, but not in part, except as provided in the loan agreement governing the CMBS Loan (the “CMBS Loan Agreement”), at any time following the Prepayment Lockout Release Date (as defined in the CMBS Loan Agreement) (generally in March 2024, two years after the CMBS Loan has been fully securitized), subject to the payment of a yield maintenance premium and the satisfaction of other terms and conditions set forth in the CMBS Loan Agreement. Further, releases of individual properties are permitted in connection with an arms’ length third party sale upon repayment of the Release Price (as defined in the CMBS Loan Agreement) for the applicable individual property and subject to payment of the applicable yield maintenance premium and the satisfaction of other terms and conditions set forth in the CMBS Loan Agreement. The CMBS Loan Agreement also contains customary cash management provisions, including certain trigger events (such as failure of the Mortgage Borrowers to satisfy a minimum debt yield) which allow the Lender to retain any excess cash flow as additional collateral for the Loan, until such trigger event is cured. In connection with the CMBS Loan Agreement, the Company (as the guarantor) delivered a customary non-recourse carveout guaranty to the Lender (the “Guaranty”), under which the Company guaranteed the obligations and liabilities of the Mortgage Borrowers to the Lender with respect to certain non-recourse carveout events and the circumstances under which the CMBS Loan will be fully recourse to the Mortgage Borrowers, and which includes requirements for the Company to maintain a net worth of no less than $355.0 million and liquid assets of no less than $10.0 million, in each case, exclusive of the values of the collateral for the CMBS Loan. As of December 31, 2022, the Company was in compliance with these financial covenants. The Mortgage Borrowers and the Company also provided a customary environmental indemnity agreement, pursuant to which the Mortgage Borrowers and the Company agreed to protect, defend, indemnify, release and hold harmless the Lender from and against certain environmental liabilities relating to the Mortgaged Properties. The CMBS Loan Agreement includes customary representations, warranties and covenants of the Mortgage Borrowers and the Company. The CMBS Loan Agreement also includes customary events of default, the occurrence of which, following any applicable grace period, would permit the Lender to, among other things, declare the principal, accrued interest and other obligations of the Mortgage Borrowers to be immediately due and payable and foreclose on the Mortgaged Properties. The Company’s mortgages payable consisted of the following as of December 31, 2022 (dollars in thousands): Encumbered Properties Net Carrying Value of Collateralized Properties (1) Outstanding Balance Weighted-Average Weighted-Average Years to Maturity Fixed-rate debt 19 $ 465,098 $ 355,000 4.97 % 4.1 ____________________________________ (1) Net carrying value is real estate assets, including right-of-use assets, net of real estate liabilities. The table above does not include mortgage notes associated with the Arch Street Joint Venture of $136.7 million as of December 31, 2022. |
Orion Office REIT, Derivative a
Orion Office REIT, Derivative and Hedging Activities | 12 Months Ended |
Dec. 31, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative and Hedging Activities | Note 7 – Derivatives and Hedging Activities Cash Flow Hedges of Interest Rate Risk As of each of December 31, 2022 and 2021, the Company had interest rate swap agreements with an aggregate notional amount of $175.0 million, which were designated as cash flow hedges under U.S. GAAP. The interest rate swap agreements were entered into in order to hedge interest rate volatility with respect to the Company’s borrowings under the Term Loan Facility. The initial interest rate swap agreements were effective on December 1, 2021 and were scheduled to terminate on November 12, 2023. During the year ended December 31, 2022, in connection with the transition of the benchmark rate for borrowings under the Revolver/Term Loan Credit Agreement from LIBOR to SOFR, the Company terminated the initial interest rate swap agreements and entered into new interest rate swap agreements with an aggregate notional amount of $175.0 million, effective on December 1, 2022 and terminating on November 12, 2023. The table below presents the fair value of the Company’s derivative financial instrument designated as a cash flow hedge as well as its classification in the Company’s consolidated balance sheets as of December 31, 2022 and 2021 (in thousands): Derivatives Designated as Hedging Instruments Balance Sheet Location December 31, 2022 December 31, 2021 Interest rate swaps Other assets, net $ 6,308 $ 299 During the years ended December 31, 2022 and 2021, the Company recorded unrealized gains of $7.8 million and $0.2 million, respectively, for changes in the fair value of its cash flow hedge in accumulated other comprehensive income. There were no similar amounts recorded during the year ended December 31, 2020, as the interest rate swap agreement did not exist during that period. During the years ended December 31, 2022 and 2021, the Company reclassified previous gains of $1.8 million and previous losses of $0.1 million, respectively, from accumulated other comprehensive income into interest expense as a result of the hedged transactions impacting earnings. There were no similar amounts recorded during the year ended December 31, 2020. During the next twelve months, the Company estimates that an additional $6.3 million will be reclassified from other comprehensive income as a decrease to interest expense. Derivatives Not Designated as Hedging Instruments As of each of December 31, 2022 and 2021, the Company had no interest rate swaps that were not designated as qualifying hedging relationships. Tabular Disclosure of Offsetting Derivatives The table below details a gross presentation, the effects of offsetting and a net presentation of the Company’s derivatives as of December 31, 2022 and 2021 (in thousands). The net amounts of derivative assets or liabilities can be reconciled to the tabular disclosure of fair value. Offsetting of Derivative Assets and Liabilities Gross Amounts of Recognized Assets Gross Amounts of Recognized Liabilities Gross Amounts Offset in the Consolidated Balance Sheets Net Amounts of Assets Presented in the Consolidated Balance Sheets Net Amounts of Liabilities Presented in the Consolidated Balance Sheets Financial Instruments Cash Collateral Received Net Amount December 31, 2022 $ 6,308 $ — $ — $ 6,308 $ — $ — $ — $ 6,308 December 31, 2021 $ 299 $ — $ — $ 299 $ — $ — $ — $ 299 |
Orion Office REIT, Supplemental
Orion Office REIT, Supplemental Cash Flow Disclosures | 12 Months Ended |
Dec. 31, 2022 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplemental Cash Flow Disclosures | Note 8 – Supplemental Cash Flow Disclosures Supplemental cash flow information was as follows during the periods indicated below (in thousands): Year Ended December 31, 2022 2021 2020 Supplemental disclosures: Cash paid for interest $ 25,108 $ 2,412 $ 3,479 Cash paid for income taxes $ 634 $ 98 $ — Non-cash investing and financing activities: Accrued capital expenditures and leasing costs $ 3,243 $ 286 $ — Accrued deferred financing costs $ 25 $ — $ — Non-cash assets and liabilities contributed by parent company $ — $ 1,142,002 $ — Establishment of right-of-use assets and lease liabilities $ 1,193 $ 989 $ — Distributions declared and unpaid $ 5,664 $ — $ — Land acquired upon finance lease termination $ 4,707 $ — $ — |
Orion Office REIT, Accounts Pay
Orion Office REIT, Accounts Payable and Accrued Expenses | 12 Months Ended |
Dec. 31, 2022 | |
Payables and Accruals [Abstract] | |
Accounts Payable and Accrued Expenses | Note 9 – Accounts Payable and Accrued Expenses Accounts payable and accrued expenses consisted of the following as of December 31, 2022 and 2021 (in thousands): December 31, 2022 December 31, 2021 Accrued real estate and other taxes $ 10,191 $ 10,322 Accrued operating and other 10,034 4,127 Accrued capital expenditures and leasing costs 2,333 32 Accrued interest 1,810 1,093 Accounts payable 1,793 1,805 Total $ 26,161 $ 17,379 |
Orion Office REIT, Commitment a
Orion Office REIT, Commitment and Contingencies | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 10 – Commitments and Contingencies Leasing As part of its ordinary re-leasing activities, the Company has agreed and anticipates that it will continue to agree to provide rent concessions to tenants and incur leasing costs with respect to its properties, including amounts paid directly to tenants to improve their space and/or building systems, or tenant improvement allowances, landlord agreements to perform and pay for certain improvements, and leasing commissions. These rent concession and leasing cost commitments could be significant and are expected to vary due to factors such as competitive market conditions for leasing of commercial office space and the volume of square footage subject to re-leasing by the Company. As of December 31, 2022, the Company had total commitments of $51.2 million outstanding for tenant improvement allowances and $0.3 million for leasing commissions. The timing of the Company’s cash outlay for tenant improvement allowances is significantly uncertain and will depend upon the applicable tenant’s schedule for the improvements and corresponding use of capital, if any. For assets financed on the CMBS Loan, the Company has funded reserves with the lender for tenant improvement allowances and rent concession commitments. The restricted cash included in the reserve totaled $34.7 million as of December 31, 2022, including $23.6 million for tenant improvement allowances and $11.1 million for rent concession commitments, and is included in other assets, net in the Company’s consolidated balance sheets. Litigation From time to time, the Company may be party to various legal proceedings which it believes are routine in nature and incidental to the operation of its business. The Company does not believe that any such legal proceedings will have a material adverse effect upon its consolidated and combined position or results of operations. Environmental Matters In connection with the ownership and operation of real estate, the Company may potentially be liable for costs and damages related to environmental matters. The Company has not been notified by any governmental authority of any non-compliance, liability or other claim, and is not aware of any other environmental condition, in each case, that it believes will have a material adverse effect upon its consolidated and combined position or results of operations. |
Orion Office REIT, Leases
Orion Office REIT, Leases | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Leases | Note 11 – Leases Lessor As of December 31, 2022, the Company’s operating leases have non-cancelable lease terms ranging from 0.2 years to 15.3 years. Certain leases with tenants include tenant options to extend or terminate the lease agreements or to purchase the underlying assets. Lease agreements may also contain rent increases that are based on an index or rate (e.g., the consumer price index). The following table presents future minimum base rent payments due to the Company over the next five years and thereafter as of December 31, 2022 (in thousands). Future Minimum 2023 $ 137,833 2024 110,559 2025 72,868 2026 69,771 2027 50,342 Thereafter 184,574 Total $ 625,947 Lessee The Company is the lessee under ground lease arrangements and corporate office leases, which meet the criteria under U.S. GAAP for an operating lease. As of December 31, 2022, the Company’s operating leases had remaining lease terms ranging from 0.9 years to 62.0 years, which includes options to extend. Under the operating leases, the Company pays rent and may also pay variable costs, including property operating expenses and common area maintenance. The weighted-average discount rate used to measure the lease liability for the Company’s operating leases was 3.49% as of December 31, 2022. As the Company’s leases do not provide an implicit rate, the Company used an estimated incremental borrowing rate based on the information available at the lease commencement date, lease guidance adoption date or the Merger Effective Time, as applicable, in determining the present value of lease payments. Operating lease costs were $1.0 million, $0.3 million, and $0.1 million for the years ended December 31, 2022, 2021 and 2020, respectively. No cash paid for operating lease liabilities was capitalized. The following table reflects the maturity analysis of payments due from the Company over the next five years and thereafter for ground and corporate office lease obligations as of December 31, 2022 (in thousands). Future Minimum Lease Payments 2023 $ 1,134 2024 883 2025 892 2026 478 2027 445 Thereafter 12,939 Total 16,771 Less: imputed interest 6,079 Total $ 10,692 |
Leases | Note 11 – Leases Lessor As of December 31, 2022, the Company’s operating leases have non-cancelable lease terms ranging from 0.2 years to 15.3 years. Certain leases with tenants include tenant options to extend or terminate the lease agreements or to purchase the underlying assets. Lease agreements may also contain rent increases that are based on an index or rate (e.g., the consumer price index). The following table presents future minimum base rent payments due to the Company over the next five years and thereafter as of December 31, 2022 (in thousands). Future Minimum 2023 $ 137,833 2024 110,559 2025 72,868 2026 69,771 2027 50,342 Thereafter 184,574 Total $ 625,947 Lessee The Company is the lessee under ground lease arrangements and corporate office leases, which meet the criteria under U.S. GAAP for an operating lease. As of December 31, 2022, the Company’s operating leases had remaining lease terms ranging from 0.9 years to 62.0 years, which includes options to extend. Under the operating leases, the Company pays rent and may also pay variable costs, including property operating expenses and common area maintenance. The weighted-average discount rate used to measure the lease liability for the Company’s operating leases was 3.49% as of December 31, 2022. As the Company’s leases do not provide an implicit rate, the Company used an estimated incremental borrowing rate based on the information available at the lease commencement date, lease guidance adoption date or the Merger Effective Time, as applicable, in determining the present value of lease payments. Operating lease costs were $1.0 million, $0.3 million, and $0.1 million for the years ended December 31, 2022, 2021 and 2020, respectively. No cash paid for operating lease liabilities was capitalized. The following table reflects the maturity analysis of payments due from the Company over the next five years and thereafter for ground and corporate office lease obligations as of December 31, 2022 (in thousands). Future Minimum Lease Payments 2023 $ 1,134 2024 883 2025 892 2026 478 2027 445 Thereafter 12,939 Total 16,771 Less: imputed interest 6,079 Total $ 10,692 |
Orion Office REIT, Stockholders
Orion Office REIT, Stockholders' Equity | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Stockholders' Equity | Note 12 – Stockholders’ Equity Common Stock The Company was initially capitalized on July 15, 2021 with the issuance of 100,000 shares of common stock to Realty Income for a total of $1,000. On November 10, 2021, the Company issued 56,525,650 additional shares of common stock to Realty Income, such that Realty Income owned 56,625,650 shares of the Company’s common stock. On November 12, 2021, Realty Income effected the Distribution. During the year ended December 31, 2022, the Company’s Board of Directors declared quarterly cash dividends on shares of the Company’s common stock as follows (in thousands, except per share data): Declaration Date Record Date Paid Date Distributions Per Share March 22, 2022 March 31, 2022 April 15, 2022 $ 0.10 May 3, 2022 June 30, 2022 July 15, 2022 $ 0.10 August 2, 2022 September 30, 2022 October 17, 2022 $ 0.10 November 1, 2022 December 30, 2022 January 17, 2023 $ 0.10 The following table sets forth the federal income tax characterization of dividends paid on a percentage basis on the Company’s common stock for the year ended December 31, 2022: Year Ended December 31, 2022 Ordinary dividends — % Capital gain distributions — % Nondividend distributions 100.0 % Total 100.0 % Stock Warrants On November 12, 2021, in connection with the Distribution, Orion OP entered into an Amended and Restated Limited Liability Company Agreement (the “LLCA”) of the Arch Street Joint Venture, by and between Orion OP and OAP Holdings LLC (the “Arch Street Partner”), an affiliate of Arch Street Capital Partners, pursuant to which the Arch Street Partner consented to the transfer of the equity interests of the Arch Street Joint Venture previously held by VEREIT Real Estate, L.P. to Orion OP. |
Orion Office REIT, Equity-Based
Orion Office REIT, Equity-Based Compensation | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Equity-Based Compensation | Note 13 - Equity-Based Compensation The Company has an equity-based incentive award plan (the “Equity Plan”) for officers, other employees, non-employee directors and consultants who provide services to the Company. Awards under the Equity Plan are accounted for under U.S. GAAP as share-based payments. The expense for such awards is recognized over the requisite service period, which is generally the vesting period. Under the Equity Plan, the Company may grant various types of awards, including restricted stock units that will vest if the recipient maintains employment with the Company over the requisite service period (the “Time-Based RSUs”) and restricted stock units that may vest in a number ranging from 0% to 100% of the total number of units granted, based on the Company’s total shareholder return measured on an absolute basis (“TSR-Based RSUs”) and certain operational performance metrics (“Metrics-Based RSUs” and collectively with the TSR-Based RSUs, “Performance Based RSUs”), in each case during a three-year performance period, subject to the recipient’s continued service with the Company. During the year ended December 31, 2021, the Company granted Time-Based RSUs to non-employee directors and officers of the Company. During the year ended December 31, 2022, the Company granted Time-Based RSUs and/or Performance-Based RSUs to non-employee directors and officers and other employees of the Company. The fair value of the Time-Based RSUs is determined using the closing stock price on the grant date and is expensed over the requisite service period on a straight-line basis. The fair value of the TSR-Based RSUs is determined using a Monte Carlo simulation which takes into account multiple input variables that determine the probability of satisfying the required total shareholder return, and such fair value is expensed over the performance period. The fair value of the Metrics-Based RSUs is determined using the closing stock price on the grant date and is expensed over the requisite service period to the extent that the likelihood of achieving the performance metrics is probable. As of December 31, 2022, the Company determined that the likelihood of achieving some of the performance metrics was probable and, accordingly, the Company began recognizing compensation expense for such Metrics-Based RSUs and determined that the likelihood of achieving the remaining performance metrics was improbable and the Company recognized no compensation expense for the remaining Metrics-Based RSUs. Time-Based RSUs and Performance-Based RSUs do not provide for any rights of a common stockholder prior to the vesting of such restricted stock units. Equity-based compensation expense related to Orion Time-Based RSUs and Performance-Based RSUs for the years ended December 31, 2022 and 2021 was $1.4 million and $0.1 million, respectively. As of December 31, 2022 and 2021, total unrecognized compensation expense related to Time-Based RSUs and Performance-Based RSUs was approximately $2.7 million and $0.5 million, respectively, with an aggregate weighted-average remaining term of 2.0 years and 2.2 years, respectively. The following table details the activity of the Time-Based RSUs during the year ended December 31, 2022: Time-Based RSUs Weighted-Average Grant Date Fair Value Unvested units, December 31, 2021 27,920 $ 20.96 Granted 144,594 $ 16.81 Vested (15,567) $ 21.10 Forfeited — $ — Unvested units, December 31, 2022 156,947 $ 17.12 The following table details the activity of the Performance-Based RSUs during the year ended December 31, 2022: Performance-Based RSUs Weighted-Average Grant Date Fair Value Unvested units, December 31, 2021 — $ — Granted 212,154 $ 13.65 Vested — $ — Forfeited — $ — Unvested units, December 31, 2022 212,154 $ 13.65 The Company is also required under U.S. GAAP to recognize equity-based compensation expense for awards to its employees of Realty Income time-based restricted stock units and stock options granted in connection with the Mergers. Equity-based compensation expense for the years ended December 31, 2022 and 2021, related to such Realty Income equity-based compensation awards, was $0.4 million and $0.1 million. As of December 31, 2022 and 2021, total unrecognized compensation expense related to Realty Income time-based restricted stock units and stock options was approximately $0.2 million and $0.6 million, respectively, with an aggregate weighted-average remaining term of 1.0 year and 1.7 years, respectively. |
Orion Office REIT, Net Income (
Orion Office REIT, Net Income (Loss) Per Share | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Net Income (Loss) Per Share | Note 14 - Net Income (Loss) Per Share The computation of basic and diluted earnings per share is as follows for the year ended December 31, 2022, 2021 and 2020 (in thousands, except share and per share data): Year Ended December 31, 2022 2021 2020 Net loss $ (97,474) $ (47,464) $ (1,899) Income attributable to non-controlling interests (20) (17) — Net loss available to common stockholders used in basic and diluted net income per share (97,494) (47,481) (1,899) Weighted average shares of common stock outstanding - basic 56,631,826 56,625,650 56,625,650 Effect of dilutive securities (1) — — — Weighted average shares of common stock - diluted 56,631,826 56,625,650 56,625,650 Basic and diluted loss per share attributable to common stockholders $ (1.72) $ (0.84) $ (0.03) ____________________________________ (1) As of December 31, 2022, 2021 and 2020, there were no adjustments to the weighted average common shares outstanding used in the diluted calculation given there were no potentially dilutive shares. The following were excluded from diluted net loss per share attributable to common stockholders, as the effect would have been antidilutive: Year Ended December 31, 2022 2021 2020 Weighted average unvested Time-Based RSUs and Performance-Based RSUs (1) — — — Weighted average stock warrants 1,120,000 1,120,000 — ____________________________________ (1) Net of assumed repurchases in accordance with the treasury stock method. |
Orion Office REIT, Subsequent E
Orion Office REIT, Subsequent Events | 12 Months Ended |
Dec. 31, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 15 – Subsequent Events Distributions On March 7, 2023, the Company’s Board of Directors declared a quarterly cash dividend of $0.10 per share for the first quarter of 2023, payable on April 17, 2023, to stockholders of record as of March 31, 2023. |
Schedule III - Real Estate and
Schedule III - Real Estate and Accumulated Depreciation | 12 Months Ended |
Dec. 31, 2022 | |
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation Disclosure [Abstract] | |
Schedule III - Real Estate and Accumulated Depreciation | Schedule III – Real Estate and Accumulated Depreciation Initial Costs (1) Adjustments Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2022 (3) (4) Accumulated Depreciation (3) (5) Property Encumbrances at December 31, 2022 Land Buildings, Fixtures and Improvements Date Acquired Date of Construction Food, Beverage & Tobacco - St. Charles, MO $ — $ 3,675 $ 13,828 $ — $ 17,503 $ (6,212) 4/1/2011 1993 Telecommunication Services - Brownsville, TX — 1,740 11,571 — 13,311 (5,198) 4/1/2011 2007 Telecommunication Services - Augusta, GA — — 11,128 — 11,128 (4,999) 4/1/2011 2007 Telecommunication Services - Salem, OR — 1,722 10,074 — 11,796 (4,300) 6/22/2011 2000 Financial Institutions - Mount Pleasant, SC — 10,803 25,511 — 36,314 (7,259) 1/22/2013 2003 Health Care Equipment & Services - St. Louis, MO 12,041 — 38,799 (36) 38,763 (11,022) 1/22/2013 2009 Transportation - Uniontown, OH — 2,238 53,114 (43,452) 11,900 (111) 1/22/2013 2003 Government & Public Services - Brownsville, TX 1,345 321 6,803 28 7,152 (1,993) 1/22/2013 2008 Government & Public Services - Parkersburg, WV — 494 12,902 1 13,397 (3,672) 1/22/2013 2009 Government & Public Services - Paris, TX 2,292 274 5,392 246 5,912 (1,540) 1/22/2013 2010 Government & Public Services - Eagle Pass, TX — 146 2,086 (8) 2,224 (639) 1/22/2013 2002 Government & Public Services - Dallas, TX — 399 9,748 (4) 10,143 (2,813) 1/22/2013 2011 Government & Public Services - Redding, CA — 676 20,553 (173) 21,056 (5,874) 1/22/2013 2003 Government & Public Services - Minneapolis, MN — 1,046 8,588 — 9,634 (2,443) 1/22/2013 2005 Government & Public Services - Malone, NY 5,134 824 9,485 40 10,349 (2,794) 1/22/2013 2011 Government & Public Services - Sioux City, IA — 77 4,761 (5) 4,833 (1,380) 1/22/2013 2011 Government & Public Services - Knoxville, TN — 761 9,041 154 9,956 (2,611) 1/22/2013 2011 Government & Public Services - New Port Richey, FL — 780 10,111 (5,991) 4,900 — 1/22/2013 2000 Health Care Equipment & Services - Bedford, TX 34,167 1,608 56,219 — 57,827 (15,996) 1/22/2013 2010 Vacant - Tucson, AZ — 3,800 6,554 (42) 10,312 (271) 1/22/2013 1999 Government & Public Services - Eagle Pass, TX — 68 811 (52) 827 (236) 1/22/2013 2002 Transportation - Memphis, TN 17,114 3,570 16,601 276 20,447 (4,798) 2/27/2013 1999 Transportation - Columbus, OH 16,014 — 19,637 — 19,637 (5,353) 6/19/2013 2012 Food & Staples Retailing - Deerfield, IL — 4,093 11,511 (9,362) 6,242 — 8/27/2013 1984 Food & Staples Retailing - Deerfield, IL — 4,262 11,988 (9,750) 6,500 — 8/27/2013 1984 Food & Staples Retailing - Deerfield, IL — 4,082 11,484 (9,340) 6,226 — 8/27/2013 1984 Food & Staples Retailing - Deerfield, IL — 4,089 11,503 (9,355) 6,237 — 8/27/2013 1984 Food & Staples Retailing - Deerfield, IL — 2,586 7,275 (5,917) 3,944 — 8/27/2013 1976 Food & Staples Retailing - Deerfield, IL — 3,181 8,947 (7,277) 4,851 — 8/27/2013 1976 Capital Goods - Cedar Rapids, IA 7,000 1,000 12,981 — 13,981 (3,415) 10/10/2013 2013 Consumer Durables & Apparel - Providence, RI — 2,550 21,779 — 24,329 (5,579) 1/31/2014 1985 Materials - East Windsor, NJ 10,391 240 13,446 (6) 13,680 (3,340) 4/30/2014 2008 Media & Entertainment - East Syracuse, NY 11,002 880 15,817 — 16,697 (3,935) 4/30/2014 2000 Government & Public Services - Cocoa, FL — 450 949 62 1,461 (35) 11/1/2021 2009 Vacant - Berkeley, MO — — 9,163 4,752 13,915 (375) 11/1/2021 2011 Initial Costs (1) Adjustments Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2022 (3) (4) Accumulated Depreciation (3) (5) Property Encumbrances at December 31, 2022 Land Buildings, Fixtures and Improvements Date Acquired Date of Construction Government & Public Services - Grangeville, ID $ — $ 1,385 $ 3,436 $ 22 $ 4,843 $ (165) 11/1/2021 2007 Government & Public Services - Fort Worth, TX — 572 3,985 — 4,557 (139) 11/1/2021 2010 Government & Public Services - Plattsburgh, NY — 1,136 2,486 — 3,622 (99) 11/1/2021 2008 Financial Institutions - Warwick, RI — 1,358 3,982 — 5,340 (142) 11/1/2021 1995 Energy - Longmont, CO — 2,106 12,543 — 14,649 (435) 11/1/2021 1993 Health Care Equipment & Services - Waukegan, IL — 636 4,136 204 4,976 (140) 11/1/2021 1980 Health Care Equipment & Services - Fresno, CA — 4,454 17,292 — 21,746 (599) 11/1/2021 1984 Telecommunication Services - Richardson, TX — 1,187 21,037 28 22,252 (702) 11/1/2021 1986 Health Care Equipment & Services - San Antonio, TX — 2,125 15,425 367 17,917 (543) 11/1/2021 2008 Energy - Tulsa, OK — 6,865 34,716 — 41,581 (1,158) 11/1/2021 1995 Vacant - Englewood, CO — 2,291 2,989 323 5,603 (132) 11/1/2021 2011 Consumer Durables & Apparel - Denver, CO — 5,707 36,047 1,068 42,822 (1,247) 11/1/2021 2001 Vacant - Richardson, TX — 2,047 12,733 7 14,787 (478) 11/1/2021 2008 Commercial & Professional Services - Lawrence, KS — 3,576 2,996 — 6,572 (132) 11/1/2021 1997 Commercial & Professional Services - Lawrence, KS — 3,334 3,449 — 6,783 (149) 11/1/2021 2003 Materials - The Woodlands, TX — 5,772 14,236 2,234 22,242 (562) 11/1/2021 2009 Consumer Durables & Apparel - Englewood, CO 20,537 3,354 14,714 463 18,531 (545) 11/1/2021 2009 Vacant - Malvern, PA — 3,853 25,296 — 29,149 (895) 11/1/2021 1999 Media & Entertainment - Milwaukee, WI — 2,727 18,083 — 20,810 (607) 11/1/2021 2001 Telecommunication Services - Nashville, TN 9,291 2,588 9,587 337 12,512 (358) 11/1/2021 2002 Commercial & Professional Services - The Woodlands, TX — 2,550 17,481 715 20,746 (620) 11/1/2021 2014 Retailing - Santee, CA — — 9,859 337 10,196 (353) 11/1/2021 2003 Materials - Glen Burnie, MD — 3,095 11,466 611 15,172 (395) 11/1/2021 1984 Health Care Equipment & Services - Irving, TX — 9,267 19,853 — 29,120 (683) 11/1/2021 1997 Capital Goods - Tulsa, OK — 1,904 1,238 — 3,142 (52) 11/1/2021 1982 Government & Public Services - Covington, KY — 4,087 56,991 466 61,544 (1,917) 11/1/2021 2002 Software & Services - Amherst, NY — 3,561 3,186 — 6,747 (165) 11/1/2021 1986 Commercial & Professional Services - Dublin, OH — 1,287 4,688 — 5,975 (169) 11/1/2021 1997 Capital Goods - Sterling, VA 29,094 10,515 25,393 — 35,908 (901) 11/1/2021 2011 Capital Goods - Malvern, PA 11,552 2,607 10,844 — 13,451 (414) 11/1/2021 2014 Health Care Equipment & Services - Indianapolis, IN — 1,430 4,386 80 5,896 (163) 11/1/2021 1993 Health Care Equipment & Services - Plano, TX — 9,834 35,893 45 45,772 (1,249) 11/1/2021 2009 Capital Goods - Blair, NE — 558 1,210 — 1,768 (54) 11/1/2021 2009 Commercial & Professional Services - Schaumburg, IL — 3,313 6,532 — 9,845 (251) 11/1/2021 1986 Insurance - Oklahoma City, OK — 3,393 22,998 — 26,391 (817) 11/1/2021 2009 Software & Services - Lincoln, NE — — 6,587 — 6,587 (267) 11/1/2021 2009 Initial Costs (1) Adjustments Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2022 (3) (4) Accumulated Depreciation (3) (5) Property Encumbrances at December 31, 2022 Land Buildings, Fixtures and Improvements Date Acquired Date of Construction Insurance - Buffalo, NY $ — $ 4,710 $ 36,740 $ — $ 41,450 $ (1,253) 11/1/2021 2007 Insurance - Urbana, MD 23,165 4,028 19,888 — 23,916 (709) 11/1/2021 2011 Health Care Equipment & Services - Nashville, TN — 1,165 11,749 — 12,914 (415) 11/1/2021 2010 Retailing - Kennesaw, GA 11,430 — 11,141 — 11,141 (431) 11/1/2021 2012 Capital Goods - Duluth, GA 14,669 3,684 14,786 — 18,470 (525) 11/1/2021 1999 Pharmaceuticals, Biotechnology & Life Sciences - Parsippany, NJ — 9,537 9,174 — 18,711 (387) 11/1/2021 2009 Software & Services - Bedford, MA — 22,381 26,029 4 48,414 (1,017) 11/1/2021 2001 Financial Institutions - Hopewell, NJ 92,663 19,325 57,846 524 77,695 (1,977) 11/1/2021 2001 Health Care Equipment & Services - Phoenix, AZ 26,099 4,786 21,346 844 26,976 (775) 11/1/2021 2012 $ 355,000 $ 246,525 $ 1,206,632 $ (86,532) $ 1,366,625 $ (133,379) ____________________________________ (1) Initial costs exclude subsequent impairment charges. (2) Consists of capital expenditures and real estate development costs, net of condemnations, easements, impairment charges and other adjustments. (3) Gross intangible lease assets of $360.7 million and the associated accumulated amortization of $157.9 million are not reflected in the table above. (4) The aggregate cost for Federal income tax purposes of land, buildings, fixtures and improvements as of December 31, 2022 was approximately $2.2 billion. (5) Depreciation is computed using the straight-line method over the estimated useful lives of up to 35 years for buildings and five The following is a reconciliation of the gross real estate activity for the years ended December 31, 2022, 2021 and 2020 (in thousands): Year Ended December 31, 2022 2021 2020 Balance, beginning of year $ 1,481,745 $ 634,019 $ 659,441 Additions: Acquisitions/improvements 13,203 927,001 457 Deductions/Other Sold or disposed of (18,548) (657) (119) Impairments (87,834) (77,636) (25,760) Reclassified to real estate assets held or sale, net (21,941) — — Other — (982) — Balance, end of year $ 1,366,625 $ 1,481,745 $ 634,019 The following is a reconciliation of the accumulated depreciation for the years ended December 31, 2022, 2021 and 2020 (in thousands): Year Ended December 31, 2022 2021 2020 Balance, beginning of year $ 128,109 $ 136,143 $ 125,311 Additions: Depreciation expense 35,855 20,805 18,040 Deductions/Other Sold or disposed of (169) (657) (119) Impairments (21,757) (27,947) (7,089) Reclassified to real estate assets held for sale, net (8,659) — — Other — (235) — Balance, end of year $ 133,379 $ 128,109 $ 136,143 |
VEREIT Office Assets, Organizat
VEREIT Office Assets, Organization and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2022 | |
Entity Information [Line Items] | |
Organization and Summary of Significant Accounting Policies | Note 1 – Organization Organization Orion Office REIT Inc. (the “Company”, “Orion”, “we” or “us”) was incorporated in the state of Maryland on July 1, 2021 and was capitalized on July 15, 2021. On April 29, 2021, Realty Income Corporation (“Realty Income”) entered into an Agreement and Plan of Merger (as amended, the “Merger Agreement”) with VEREIT, Inc. (“VEREIT”), its operating partnership, VEREIT Operating Partnership, L.P. (“VEREIT OP”), Rams MD Subsidiary I, Inc., a wholly owned subsidiary of Realty Income (“Merger Sub 1”), and Rams Acquisition Sub II, LLC, a wholly owned subsidiary of Realty Income (“Merger Sub 2”). On November 1, 2021, pursuant to the Merger Agreement, Merger Sub 2 merged with and into VEREIT OP, with VEREIT OP continuing as the surviving partnership, and immediately thereafter, VEREIT merged with and into Merger Sub 1, with Merger Sub 1 continuing as the surviving corporation (together, the “Mergers”, and such effective time of the Mergers, the “Merger Effective Time”). Upon the Merger Effective Time, as part of the Mergers, Realty Income acquired certain office real properties and related assets previously owned by subsidiaries of VEREIT (collectively, “VEREIT Office Assets”). Following the Merger Effective Time, in accordance with the Merger Agreement, Realty Income contributed the portion of the combined business comprising certain office real properties and related assets previously owned by subsidiaries of Realty Income (collectively, “Realty Income Office Assets”) and VEREIT Office Assets (the “Separation”) to the Company and its operating partnership, Orion Office REIT LP (“Orion OP”). On November 12, 2021, following the Separation, in accordance with the Merger Agreement and that certain Separation and Distribution Agreement dated as of November 11, 2021, by and among Realty Income, the Company and Orion OP (the “Separation and Distribution Agreement”), Realty Income effected a special distribution to its stockholders (including the former holders of VEREIT common stock and certain former VEREIT OP common unitholders prior to the Mergers) of all of the outstanding shares of common stock of the Company (the “Distribution”). Approximately $595.0 million was distributed by the Company to Realty Income in accordance with the Separation and Distribution Agreement. Following the Distribution, the Company became independent and publicly traded and has been operating in a manner so as to qualify and has elected to be taxed as a REIT, commencing with the Company’s initial taxable year ended December 31, 2021. The Company’s common stock, par value $0.001 per share, trades on the New York Stock Exchange (the “NYSE”) under the symbol “ONL”. As of December 31, 2022, the Company owned and operated 81 office properties and related assets totaling approximately 9.5 million leasable square feet located within 29 states. In addition, the Company owns an equity interest in OAP/VER Venture, LLC (the “Arch Street Joint Venture”), an unconsolidated joint venture with an affiliate of Arch Street Capital Partners, LLC (“Arch Street Capital Partners”). As of December 31, 2022, the Arch Street Joint Venture owned a portfolio consisting of six office properties totaling approximately 1.0 million leasable square feet located within six states. |
VEREIT Office Assets | |
Entity Information [Line Items] | |
Organization and Summary of Significant Accounting Policies | Organization and Summary of Significant Accounting Policies Organization On April 29, 2021, Realty Income Corporation (“Realty Income”) entered into an Agreement and Plan of Merger (as amended, the “Merger Agreement”) with VEREIT, Inc. (“VEREIT”), its operating partnership, VEREIT Operating Partnership, L.P. (“VEREIT OP”), Rams MD Subsidiary I, Inc., a wholly owned subsidiary of Realty Income (“Merger Sub 1”), and Rams Acquisition Sub II, LLC, a wholly owned subsidiary of Realty Income (“Merger Sub 2”). On November 1, 2021, pursuant to the Merger Agreement, Merger Sub 2 merged with and into VEREIT OP, with VEREIT OP continuing as the surviving partnership, and immediately thereafter, VEREIT merged with and into Merger Sub 1, with Merger Sub 1 continuing as the surviving corporation (together, the “Mergers”, and such effective time of the Mergers, the “Merger Effective Time”). Upon the Merger Effective Time, as part of the Mergers, Realty Income acquired certain office real properties and related assets previously owned by subsidiaries of VEREIT (collectively, “VEREIT Office Assets”). Following the Merger Effective Time, in accordance with the Merger Agreement, Realty Income contributed the portion of the combined business which comprised certain office real properties and related assets previously owned by subsidiaries of Realty Income (collectively, “Realty Income Office Assets”) and the VEREIT Office Assets (the “Separation”) to Orion Office REIT Inc. (the “Company”) and its operating partnership, Orion Office REIT LP (“Orion OP”). On November 12, 2021, following the Separation, in accordance with the Merger Agreement and that certain Separation and Distribution Agreement dated as of November 11, 2021, by and among Realty Income, the Company and Orion OP, Realty Income effected a special distribution to its stockholders (including the former holders of VEREIT common stock and certain former VEREIT OP common unitholders prior to the Mergers) of all of the outstanding shares of common stock of the Company (the “Distribution”). VEREIT Office Assets included the combined accounts related to certain of the office properties of VEREIT, historically operated through subsidiaries of VEREIT, and contained certain corporate costs. As of October 31, 2021, VEREIT Office Assets had one reportable segment which owned 52 properties, which included one property owned by a consolidated joint venture, totaling approximately 7.6 million leasable square feet located in 25 states in the United States and Puerto Rico, and an investment in one unconsolidated joint venture that owned five office properties totaling approximately 0.8 million leasable square feet located within five states. As of October 31, 2021, VEREIT Office Assets had not conducted any business as a separate legal entity and had no other material assets or liabilities. Summary of Significant Accounting Policies Principles of Combination and Basis of Accounting and Presentation The accompanying combined and consolidated financial statements were prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”) and include the accounts of VEREIT Office Assets on a combined and consolidated basis as the ownership interests were under common control and ownership of VEREIT, including a consolidated joint venture. Any applicable intercompany accounts and transactions have been eliminated in consolidation and combination. The portion of the consolidated joint venture not previously owned by VEREIT, is presented as non-controlling interest in VEREIT Office Assets’ combined and consolidated balance sheet and statements of operations. The results of operations for the ten months ended October 31, 2021 are not necessarily indicative of the results for the entire year. For legal entities being evaluated for consolidation, VEREIT Office Assets must have first determined whether the interests that it held and fees it received qualified as variable interests in the entity. A variable interest is an investment or other interest that would absorb portions of an entity’s expected losses or receive portions of the entity’s expected residual returns. VEREIT Office Assets’ evaluation included consideration of fees paid to VEREIT Office Assets where VEREIT’s management, on behalf of VEREIT Office Assets, acted as a decision maker or service provider to the entity being evaluated. If VEREIT Office Assets determined that it held a variable interest in an entity, it evaluated whether that entity is a variable interest entity (“VIE”). VIEs are entities where investors lack sufficient equity at risk for the entity to finance its activities without additional subordinated financial support or where equity investors, as a group, lack one of the following characteristics: (a) the power to direct the activities that most significantly impact the entity’s economic performance, (b) the obligation to absorb the expected losses of the entity, or (c) the right to receive the expected returns of the entity. VEREIT Office Assets consolidated entities that are not VIEs if it had a majority voting interest or other rights that resulted in effectively controlling the entity. VEREIT Office Assets then qualitatively assessed whether it is (or is not) the primary beneficiary of a VIE, which is generally defined as the party who has a controlling financial interest in the VIE. Consideration of various factors included, but were not limited to, VEREIT Office Assets’ ability to direct the activities that most significantly impacted the entity’s economic performance and its obligation to absorb losses from or right to receive benefits of the VIE that could potentially be significant to the VIE. VEREIT Office Assets consolidated any VIEs when the Company is determined to be the primary beneficiary of the VIE and the difference between consolidating the VIE and accounting for it using the equity method could be material to VEREIT Office Assets’ combined and consolidated financial statements. VEREIT Office Assets continually evaluated the need to consolidate these VIEs based on standards set forth in U.S. GAAP. These combined and consolidated financial statements were derived from the books and records of VEREIT and were carved out from VEREIT at a carrying value reflective of historical cost in such VEREIT records. VEREIT Office Assets’ historical financial results reflect charges for certain corporate costs and we believe such charges are reasonable. Costs of the services that were charged to VEREIT Office Assets were based on either actual costs incurred or a proportion of costs estimated to be applicable to this entity, based on VEREIT Office Assets’ pro rata share of VEREIT’s annualized rental income. Annualized rental income is rental revenue on a straight-line basis, which includes the effect of rent escalations and any tenant concessions, such as free rent, and excludes any adjustments to rental income due to changes in the collectability assessment, contingent rent, such as percentage rent, and operating expense reimbursements. The historical combined and consolidated financial information presented may therefore not be indicative of the results of operations, financial position or cash flows that would have been obtained if there had been an independent, stand-alone public company during the periods presented or of the Company’s future performance as an independent, stand-alone company. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Real Estate Investments Real estate and related assets acquired were recorded at cost and accumulated depreciation and amortization were assessed based on the period of future benefit of the asset. Depreciation and amortization were computed using a straight-line method over the estimated useful life of 40 years for buildings and building improvements, 15 years for land improvements and the remaining lease term for tenant improvements and intangible lease assets. VEREIT management performed quarterly impairment review procedures, primarily through continuous monitoring of events and changes in circumstances that could have indicated the carrying value of its real estate assets may not be recoverable. Impairment indicators that VEREIT management considered included, but were not limited to, decrease in operating income, bankruptcy or other credit concerns of a property’s major tenant or tenants or a significant decrease in a property’s revenues due to lease terminations, vacancies or reduced lease rates. When impairment indicators were identified or if a property was considered to have a more likely than not probability of being disposed of within the next 12 to 24 months, VEREIT management assessed the recoverability of the assets by determining whether the carrying value of the assets would be recovered through the undiscounted future cash flows expected from the use of the assets and their eventual disposition. U.S. GAAP required VEREIT Office Assets to utilize the expected holding period of its properties when assessing recoverability. In the event that such expected undiscounted future cash flows did not exceed the carrying value, the real estate assets were adjusted to their respective fair values and an impairment loss was recognized. There were inherent uncertainties in making estimates of expected future cash flows such as market conditions and performance and sustainability of the tenants. Investment in Unconsolidated Joint Venture As of October 31, 2021, VEREIT Office Assets owned a 20% ownership interest in an unconsolidated joint venture, the Arch Street Joint Venture, that owned five properties with total real estate investments, at cost, of $196.2 million and total debt outstanding of $118.4 million, which was non-recourse to VEREIT Office Assets. VEREIT Office Assets accounted for its investment in the Arch Street Joint Venture using the equity method of accounting as VEREIT Office Assets had the ability to exercise significant influence, but not control, over operating and financing policies of the joint venture. The equity method of accounting required the investment to be initially recorded at cost and subsequently adjusted for VEREIT Office Assets’ share of equity in the joint venture’s earnings and distributions. VEREIT Office Assets recorded its proportionate share of net income (loss) from the Arch Street Joint Venture in equity in income of unconsolidated joint venture in the combined and consolidated statements of operations. VEREIT Office Assets was required to determine whether an event or change in circumstances had occurred that may have had a significant adverse effect on the fair value of its investment in the Arch Street Joint Venture. If an event or change in circumstance had occurred, VEREIT Office Assets’ management was required to evaluate its investment in the Arch Street Joint Venture for potential impairment and determine if the carrying value of its investment exceeded its fair value. An impairment charge was recorded when an impairment was deemed to be other-than-temporary. To determine whether an impairment was other-than-temporary, VEREIT Office Assets’ management considered whether it had the ability and intent to hold the investment until the carrying value was fully recovered. The evaluation of an investment in an unconsolidated joint venture for potential impairment required VEREIT Office Assets’ management to exercise significant judgment and to make certain assumptions. The use of different judgments and assumptions could have resulted in different conclusions. No impairments of the investment in the Arch Street Joint Venture were identified during the ten months ended October 31, 2021 or year ended December 31, 2020. Goodwill Impairment VEREIT evaluated goodwill for impairment annually or more frequently when an event occurred or circumstances changed that indicated the carrying value may not be recoverable. To determine whether it was necessary to perform a quantitative goodwill impairment test, VEREIT first assessed qualitative factors, including macro-economic conditions such as deterioration in the entity’s operating environment or industry or market considerations; entity-specific events such as increasing costs, declining financial performance, or loss of key personnel; or other events such as an expectation that a reporting unit would be sold or sustained decrease in VEREIT’s stock price on either an absolute basis or relative to peers. If VEREIT believed, as a result of its qualitative assessment, that it was more-likely-than-not (i.e., greater than 50% chance) that the fair value of a reporting unit was less than its carrying value, the quantitative impairment test was required. Otherwise, no quantitative testing was required. If VEREIT determined, as a result of the qualitative assessment, that it was more-likely-than-not that the fair value was less than the carrying value, the provisions of guidance required that the fair value be compared to the carrying value. Goodwill was considered impaired if the carrying value exceeds the fair value. No impairments of VEREIT’s goodwill were recorded during the ten months ended October 31, 2021 or year ended December 31, 2020. The results of the VEREIT impairment tests carried over to VEREIT Office Assets, therefore no impairments were recorded in the accompanying combined and consolidated statements of operations. Cash and Cash Equivalents VEREIT Office Assets considered all highly liquid instruments with maturities when purchased of three months or less to be cash equivalents. VEREIT Office Assets considered investments in highly liquid money market accounts to be cash equivalents. Restricted Cash As of October 31, 2021, restricted cash included $8,000 in lender reserves. Rent and Tenant Receivables and Other Assets, Net Rent and tenant receivables and other assets, net primarily included amounts to be collected in future periods related to the recognition of rental income on a straight-line basis over the lease term and cost recoveries due from tenants. Prepaid expenses as of the balance sheet date related to future periods and will be expensed or reclassified to another account during the period to which the costs related. Any amounts with no future economic benefit were charged to earnings when identified. Deferred Financing Costs Deferred financing costs represented commitment fees, legal fees and other costs associated with obtaining commitments for financing. Deferred financing costs were presented on the combined and consolidated balance sheet as a direct deduction from the carrying value of the related debt liability. These costs were amortized to interest expense over the terms of the respective financing agreements and used the straight-line method, which approximated the effective interest method. Unamortized deferred financing costs were written off when the associated debt was refinanced or repaid before maturity. Costs incurred in connection with potential financing transactions that were not completed were expensed in the period in which it is determined the financing would not be completed. Leases - Lessor At the inception of a new lease arrangement, including new leases that arise from amendments, the terms and conditions were assessed to determine the proper lease classification. When the terms of a lease effectively transferred control of the underlying asset, the lease was classified as a sales-type lease. When a lease did not effectively transfer control of the underlying asset to the lessee, but a guarantee was obtained for the value of the asset from a third party, the lease was classified as a direct financing lease. All other leases were classified as operating leases. As of October 31, 2021, VEREIT Office Assets did not classify any leases as sales-type or direct financing leases. For operating leases with minimum scheduled rent increases, rental revenue was recognized on a straight-line basis, including the effect of any free rent periods, over the lease term when collectability of lease payments was probable. Variable lease payments were recognized as rental revenue in the period when the changes in facts and circumstances on which the variable lease payments were based occur. VEREIT Office Assets adopted Accounting Standards Codification Topic 842, Leases effective as of January 1, 2019. Two separate lease components were identified as follows: (i) land lease component and (ii) single property lease component comprised of building, land improvements and tenant improvements. The leases also contained provisions for tenants to reimburse VEREIT Office Assets for real estate taxes and insurance, which are considered noncomponents of the lease, and maintenance and other property operating expenses, which were considered to be non-lease components. VEREIT Office Assets elected the practical expedient to combine lease and non-lease components and the non-lease components were included with the single property lease component as the predominant component. VEREIT Office Assets continually reviewed receivables related to rent, straight-line rent and property operating expense reimbursements and determined collectability by taking into consideration the tenant’s payment history, the financial condition of the tenant, business conditions in the industry in which the tenant operates and economic conditions in the area in which the property was located. The review included a binary assessment of whether or not substantially all of the amounts due under a tenant’s lease agreement were probable of collection. For leases that were deemed probable of collection, revenue continued to be recorded on a straight-line basis over the lease term. For leases that were deemed not probable of collection, revenue was recorded as cash was received. All changes in the collectability assessment for an operating lease were recognized as an adjustment to rental income. During the year ended December 31, 2020, there was a global outbreak of a new strain of coronavirus, COVID-19. The global and domestic response to the COVID-19 outbreak continued to evolve during the ten months ended October 31, 2021 and year ended December 31, 2020. Federal, state, and local authorities responded in a variety of ways, including temporary closure of or imposed limitations on the operations of certain non-essential businesses. Since the COVID-19 outbreak began, each of VEREIT Office Assets’ tenants almost entirely continued to meet its payment obligations under its respective lease. In consideration of each tenant’s payment history, among other factors, there were no changes in the collectability assessment for any of VEREIT Office Assets’ operating leases. Though the COVID-19 outbreak did not have a material impact on VEREIT Office Assets’ results of operations, cash flows or financial condition for the ten months ended October 31, 2021 and year ended December 31, 2020, it could negatively impact tenant operations at VEREIT Office Assets’ properties in the future, which could result in a material impact to VEREIT Office Assets’ future results of operations, cash flows and financial condition. Leases - Lessee To account for leases for which VEREIT Office Assets is the lessee, contracts must have been analyzed upon inception to determine if the arrangement was, or contained, a lease. A lease conveyed the right to control the use of an identified asset for a period of time in exchange for consideration. Lease classification tests and measurement procedures were performed at the lease commencement date. The lease liability was initially measured as the present value of the lease payments over the lease term, discounted using the interest rate implicit in the lease, if that rate was readily determinable; otherwise, the lessee’s incremental borrowing rate was used. The incremental borrowing rate was determined based on the estimated rate of interest that the lessee would pay to borrow on a collateralized basis over a similar term at an amount equal to the lease payments in a similar economic environment. The lease term was the noncancelable period of the lease and included any renewal and termination options VEREIT Office Assets was reasonably certain to exercise. The lease liability balance was amortized using the effective interest method. The lease liability was remeasured when the contract was modified, upon the resolution of a contingency such that variable payments became fixed or if the assessment of exercising an extension, termination or purchase option changed. The operating lease right-of-use (“ROU”) asset balance was initially measured as the lease liability amount, adjusted for any lease payments made prior to the commencement date, initial direct costs, estimated costs to dismantle, remove, or restore the underlying asset and incentives received. Income Taxes As of October 31, 2021, VEREIT Office Assets was owned by VEREIT, which had elected to be taxed as a REIT for U.S. federal income tax purposes under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended, commencing with the taxable year ended December 31, 2011. VEREIT believed it was organized and operating in such a manner as to qualify to be taxed as a REIT for the taxable year ended December 31, 2021. As a REIT, VEREIT was generally not subject to federal income tax on taxable income that it distributed to its stockholders so long as it had distributed annually at least 90% of its REIT taxable income (computed without regard to the deduction for dividends paid and excluding net capital gains). Accordingly, no provision was made for federal income taxes in the accompanying combined and consolidated financial statements of VEREIT Office Assets. During the ten months ended October 31, 2021 and year ended December 31, 2020, VEREIT Office Assets recognized state and local income and franchise tax expense of approximately $0.5 million and $0.6 million, respectively. Amounts were included in provision for income taxes in the accompanying combined and consolidated statements of operations. VEREIT Office Assets had no unrecognized tax benefits as of or during the ten months ended October 31, 2021 and year ended December 31, 2020. Any interest and penalties related to unrecognized tax benefits were recognized in provision for income taxes in the accompanying combined and consolidated statements of operations. As of October 31, 2021, VEREIT Office Assets had no material uncertain income tax positions. |
VEREIT Office Assets, Real Esta
VEREIT Office Assets, Real Estate Investments and Related Intangibles | 12 Months Ended |
Dec. 31, 2022 | |
Entity Information [Line Items] | |
Real Estate Investments and Related Intangibles | Note 3 – Real Estate Investments and Related Intangibles Property Acquisitions During the year ended December 31, 2022, the Company acquired for no consideration the fee interest in one parcel of land in connection with the maturity of the tax advantaged bond and ground lease structure. As a result of the transaction, $4.7 million that was previously classified as a finance lease right-of-use asset with respect to such land parcel previously subject to the ground lease was reclassified from other assets, net to real estate investments in the Company’s consolidated balance sheets as of December 31, 2022. The Company did not have any other acquisitions during the year ended December 31, 2022 and during the years ended December 31, 2021 and 2020, the Company had no acquisitions. Property Dispositions and Real Estate Assets Held for Sale The following table summarizes the Company’s property dispositions for the years ended December 31, 2022, 2021 and 2020 (dollars in thousands) : Year Ended December 31, 2022 2021 2020 Total dispositions 11 — — Aggregate gross sales price $ 33,098 $ — $ — Gain on disposition of real estate assets $ 2,352 $ — $ — Property count 5 — — Impairments on disposition of real estate assets $ 5,089 $ — $ — Property count 6 — — As of December 31, 2022, there was one property classified as held for sale, which the Company expected to be sold in the next 12 months as part of its portfolio management strategy. The property had a carrying value of $2.5 million primarily comprised of land of $0.6 million and building, fixtures and improvements, net of $1.9 million, included in real estate assets held for sale, net in the accompanying consolidated and balance sheets. During the year ended December 31, 2022, the Company recorded a loss of $6.0 million related to held for sale properties, which is included in impairments in the accompanying consolidated and combined statements of operations. Intangible Lease Assets and Liabilities Intangible lease assets consisted of the following (in thousands, except weighted-average useful life): Weighted-Average Useful Life (Years) December 31, 2022 December 31, 2021 Intangible lease assets: In-place leases, net of accumulated amortization of $144,798 and $65,247, respectively 5.4 $ 177,698 $ 272,743 Leasing commissions, net of accumulated amortization of $1,553 and $456, respectively 12.4 13,614 10,349 Above-market lease assets, net of accumulated amortization of $11,391 and $6,239, respectively 5.5 9,826 15,015 Deferred lease incentives, net of accumulated amortization of $116 4.7 1,694 — Total intangible lease assets, net $ 202,832 $ 298,107 Intangible lease liabilities: Below-market leases, net of accumulated amortization of $17,249 and $14,459, respectively 8.4 $ 14,068 $ 20,609 The aggregate amount of amortization of above-market and below-market leases included as a net increase to rental revenue was $1.2 million, $1.0 million and $0.8 million for the years ended December 31, 2022, 2021 and 2020, respectively. The aggregate amount of amortization of deferred lease incentives included as a net decrease to rental revenue was $0.1 million for the year ended December 31, 2022 as compared to no impact to rental revenue for the years ended December 31, 2021 and 2020. The aggregate amount of in-place leases, leasing commissions and other lease intangibles amortized and included in depreciation and amortization expense was $95.4 million, $23.1 million and $7.9 million for the years ended December 31, 2022, 2021 and 2020, respectively. The following table provides the projected amortization expense and adjustments to rental revenue related to the intangible lease assets and liabilities for the next five years as of December 31, 2022 (in thousands) : 2023 2024 2025 2026 2027 In-place leases: Total projected to be included in amortization expense $ 73,501 $ 49,185 $ 21,652 $ 15,499 $ 7,441 Leasing commissions: Total projected to be included in amortization expense $ 1,340 $ 1,297 $ 1,229 $ 1,229 $ 1,226 Above-market lease assets: Total projected to be deducted from rental revenue $ 4,776 $ 2,995 $ 860 $ 682 $ 237 Deferred lease incentives: Total projected to be deducted from rental revenue $ 403 $ 403 $ 386 $ 288 $ 212 Below-market lease liabilities: Total projected to be added to rental revenue $ 5,994 $ 3,786 $ 1,036 $ 817 $ 655 Consolidated Joint Venture The Company had an interest in one consolidated joint venture that owned one property as of December 31, 2022 and 2021. As of December 31, 2022 and 2021, the consolidated joint venture had total assets of $27.7 million and $27.4 million, respectively, of which $24.9 million and $26.1 million, respectively, were real estate investments, net of accumulated depreciation and amortization. The joint venture partner is the managing member of the joint venture. However, in accordance with the joint venture agreement, the Company has the ability to control the operating and financing policies of the consolidated joint venture and the joint venture partner must obtain the Company’s approval for any major transactions. The Company and the joint venture partner are subject to the provisions of the joint venture agreement, which includes provisions for when additional contributions may be required to fund certain cash shortfalls. Investment in Unconsolidated Joint Venture The following is a summary of the Company’s investment in the Arch Street Joint Venture, as of December 31, 2022 and 2021 and for the year ended December 31, 2022 and 2021 (dollars in thousands): Ownership % (1) Number of Properties Carrying Value of Equity in Loss, Net Year Ended (2) Investment December 31, 2022 December 31, 2022 December 31, 2021 December 31, 2022 December 31, 2021 December 31, 2020 Arch Street Joint Venture (3) (4) 20% 6 $ 15,824 $ 18,631 $ (524) $ (56) $ — ____________________________________ (1) The Company’s ownership interest reflects its legal ownership interest. The Company’s legal ownership interest may, at times, not equal the Company’s economic interest because of various provisions in the joint venture agreement regarding capital contributions, distributions of cash flow based on capital account balances and allocations of profits and losses. As a result, the Company’s actual economic interest (as distinct from its legal ownership interest) in certain of the properties could fluctuate from time to time and may not wholly align with its legal ownership interest. (2) The interest in the Arch Street Joint Venture was acquired by Realty Income as part of the Mergers and was transferred to the Company upon the consummation of the Distribution. Therefore, the Company’s equity in loss, net reflects operations following the Merger Effective Time. (3) During the year ended December 31, 2022, the Arch Street Joint Venture did not acquire any properties. During the year ended December 31, 2021, the Arch Street Joint Venture acquired one property from a third party for a purchase price of $30.5 million. (4) The total carrying value of the Company’s investment in the Arch Street Joint Venture was greater than the underlying equity in net assets by $0.9 million and $2.1 million as of December 31, 2022 and 2021, respectively. This difference is related to a step up in the fair value of the investment in the Arch Street Joint Venture in connection with the Mergers. The step up in fair value was allocated based on the underlying assets and liabilities of the Arch Street Joint Venture and is being amortized over the estimated useful lives of the respective assets and liabilities in accordance with the Company’s accounting policies. |
VEREIT Office Assets | |
Entity Information [Line Items] | |
Real Estate Investments and Related Intangibles | Note 2 – Real Estate Investments and Related Intangibles Property Dispositions During the year ended December 31, 2020, VEREIT Office Assets disposed of three properties, selling them to the Arch Street Joint Venture for an aggregate net sales price of $135.5 million. The dispositions resulted in proceeds of $116.4 million after closing costs and VEREIT Office Assets recorded a net gain of $9.8 million related to the dispositions, which was included in gain on disposition of real estate assets, net in the accompanying combined and consolidated statements of operations. Intangible Lease Assets and Liabilities Intangible lease assets consisted of the following (in thousands, except weighted-average useful life): Weighted-Average Useful Life (Years) October 31, 2021 Intangible lease assets: In-place leases, net of accumulated amortization of $119,604 10.1 $ 29,091 Leasing commissions, net of accumulated amortization of $5,679 9.1 8,744 Above-market lease assets and deferred lease incentives, net of accumulated amortization of $14,793 9.8 6,649 Total intangible lease assets, net $ 44,484 Intangible lease liabilities: Below-market leases, net of accumulated amortization of $18,504 10.3 $ 5,308 The aggregate amount of amortization of above-market and below-market leases and deferred lease incentives included as a net decrease to rental revenue was $29,000 for the ten months ended October 31, 2021 and $67,000 for the year ended December 31, 2020. The aggregate amount of in-place leases, leasing commissions and other lease intangibles amortized and included in depreciation and amortization expense was $13.0 million for the ten months ended October 31, 2021 and $17.8 million for the year ended December 31, 2020. The following table provides the projected amortization expense and adjustments to rental revenue related to the intangible lease assets and liabilities for the next five years as of October 31, 2021 (in thousands) : Remainder of 2021 2022 2023 2024 2025 In-place leases: Total projected to be included in amortization expense $ 2,191 $ 10,475 $ 9,142 $ 5,512 $ 1,156 Leasing commissions: Total projected to be included in amortization expense $ 288 $ 1,692 $ 1,290 $ 1,201 $ 1,020 Above-market lease assets and deferred lease incentives: Total projected to be deducted from rental revenue $ 373 $ 2,223 $ 2,186 $ 1,104 $ 354 Below-market lease liabilities: Total projected to be included in rental revenue $ 345 $ 2,003 $ 1,878 $ 854 $ 208 Consolidated Joint Venture VEREIT Office Assets had an interest in one consolidated joint venture that owned one property as of October 31, 2021. As of October 31, 2021, the consolidated joint venture had total assets of $30.7 million, of which $27.7 million were real estate investments, net of accumulated depreciation and amortization. The property was secured by a mortgage note payable, which was non-recourse to VEREIT Office Assets and had a net balance of $14.8 million as of December 31, 2020. During the ten months ended October 31, 2021, VEREIT, on behalf of VEREIT Office Assets, repaid the balance of the mortgage note in full and there were no amounts outstanding as of October 31, 2021. The joint venture partner was the managing member of the joint venture. However, in accordance with the joint venture agreement, VEREIT Office Assets had the ability to control operating and financing policies of the consolidated joint venture and the joint venture partner was required to obtain VEREIT Office Assets’ approval for any major transactions. VEREIT Office Assets and the joint venture partner were subject to the provisions of the joint venture agreement, which included provisions for when additional contributions may be required to fund certain cash shortfalls. Impairments VEREIT management performed quarterly impairment review procedures for real estate investments, leasehold improvements and property and equipment and right of use assets, primarily through continuous monitoring of events and changes in circumstances that could indicate the carrying value of its real estate assets may not be recoverable. As part of VEREIT management’s quarterly impairment review procedures, net real estate assets representing four and two properties of VEREIT Office Assets were deemed to be impaired resulting in impairment charges of $28.1 million and $9.3 million during the ten months ended October 31, 2021 and year ended December 31, 2020, respectively. The impairment charges related to properties that VEREIT management identified for potential sale or were determined, based on discussions with the current tenants, would not be re-leased by the tenant and VEREIT management believed the properties would not be leased to another tenant at a rental rate that supported the book value. VEREIT estimated fair values using Level 3 inputs and used a combined income and market approach, specifically using discounted cash flow analysis and recent comparable sales transactions. The evaluation of real estate assets for potential impairment required VEREIT’s management to exercise significant judgment and make certain key assumptions, which included the following: (1) capitalization rate; (2) discount rates; (3) number of years the property will be held; (4) property operating expenses; and (5) re-leasing assumptions, including number of months to re-lease, market rental revenue and required tenant improvements. There were inherent uncertainties in making these estimates such as market conditions and performance and sustainability of VEREIT Office Assets’ tenants. For VEREIT’s impairment tests for the real estate assets during the ten months ended October 31, 2021, VEREIT used a weighted-average discount rate of 9.0% and a weighted-average capitalization rate of 8.5%. For VEREIT’s impairment tests for the real estate assets during the year ended December 31, 2020, VEREIT used a weighted-average discount rate of 8.9% and a weighted-average capitalization rate of 8.4%. |
VEREIT Office Assets, Mortgage
VEREIT Office Assets, Mortgage Notes Payable, Net | 12 Months Ended |
Dec. 31, 2022 | |
Entity Information [Line Items] | |
Mortgage Notes Payable, Net | Note 6 – Debt, Net As of December 31, 2022, the Company had $526.0 million of debt outstanding, including net deferred financing costs, with a weighted-average years to maturity of 3.0 years and a weighted-average interest rate of 4.38%. The following table summarizes the carrying value of debt as of December 31, 2022 and 2021, and the debt activity for the year ended December 31, 2022 (in thousands): Year Ended December 31, 2022 Balance as of December 31, 2021 Debt Issuances Repayments, Extinguishment and Assumptions Accretion and Amortization Balance as of December 31, 2022 Mortgages payable: Outstanding balance $ — $ 355,000 $ — $ — $ 355,000 Deferred costs — (3,446) — 613 (2,833) Mortgages payable, net — 351,554 — 613 352,167 Bridge facility: Outstanding balance 355,000 — (355,000) — — Deferred costs (643) — 442 201 — Bridge facility, net 354,357 — (354,558) 201 — Credit facility term loan: Outstanding balance 175,000 — — — 175,000 Deferred costs (2,510) (44) — 1,369 (1,185) Credit facility term loan, net 172,490 (44) — 1,369 173,815 Credit facility revolver: Outstanding balance 90,000 70,000 (160,000) — — Credit facility revolver 90,000 70,000 (160,000) — — Total debt $ 616,847 $ 421,510 $ (514,558) $ 2,183 $ 525,982 The following table summarizes the scheduled aggregate principal repayments due on the Company’s debt outstanding as of December 31, 2022 (in thousands): Total 2023 $ 175,000 2024 — 2025 — 2026 — 2027 355,000 Total $ 530,000 Credit Agreement In connection with the Separation and the Distribution, on November 12, 2021, the Company, as parent, and Orion OP, as borrower, entered into (i) a credit agreement (the “Revolver/Term Loan Credit Agreement”) providing for a three-year, $425 million senior revolving credit facility (the “Revolving Facility”), including a $25 million letter of credit sub-facility, and a two-year, $175.0 million senior term loan facility (the “Term Loan Facility,” and together with the Revolving Facility, the “Revolver/Term Loan Facilities”) with Wells Fargo Bank, National Association, as administrative agent, and the lenders and issuing banks party thereto and (ii) a credit agreement (the “Bridge Credit Agreement,” and together with the Revolver/Term Loan Credit Agreement, the “Credit Agreements”) providing for a 6-month, $355.0 million senior bridge term loan facility (the “Bridge Facility,” and together with the Revolver/Term Loan Facilities, the “Facilities”) with Wells Fargo Bank, National Association, as administrative agent, and the lenders party thereto. The Term Loan Facility is scheduled to mature on November 12, 2023, and the Revolving Facility is scheduled to mature on November 12, 2024. The Company expects to extend, repay or refinance (or some combination of the foregoing) the Revolver/Term Loan Facilities on or prior to maturity. The Company has sufficient available capacity under the Revolving Facility to repay the Term Loan Facility, if needed. On November 12, 2021, Orion OP borrowed $90.0 million under the Revolving Facility, and each of the Term Loan Facility and the Bridge Facility was fully drawn. Approximately $595.0 million of the net proceeds of the Facilities was distributed by the Company to Realty Income in accordance with the Separation and Distribution Agreement. Orion OP retained the remaining net proceeds of such borrowings as working capital for the general corporate purposes of the Company, Orion OP and Orion OP’s subsidiaries. In February 2022, as further described below, the Company refinanced the Bridge Facility in full with the $355.0 million CMBS Loan, and the Bridge Credit Agreement was terminated. As of December 31, 2022, the Company did not have any borrowings under the Revolving Facility and, therefore, had $425.0 million of availability under the Revolving Facility. The interest rate applicable to the loans under the Revolver/Term Loan Facilities was initially determined, at the election of Orion OP, on the basis of LIBOR or a base rate, in either case, plus an applicable margin. On December 1, 2022, the Company, as parent, and Orion OP, as borrower, entered into that certain First Amendment to the Revolver/Term Loan Credit Agreement (the “Amendment”). The Amendment, among other things, (i) changed the benchmark rate under the Revolver/Term Loan Credit Agreement for borrowings from LIBOR to SOFR (the secured overnight financing rate as administered by the Federal Reserve Bank of New York), subject to certain adjustments specified in the Revolver/Term Loan Credit Agreement, and (ii) updated certain other provisions regarding successor interest rates to LIBOR. Following the effectiveness of the Amendment, the interest rate applicable to the loans under the Revolver/Term Loan Facilities may be determined, at the election of Orion OP, on the basis of Daily Simple SOFR, Term SOFR or a base rate, in the case of a SOFR loan, plus a SOFR adjustment of 0.10% per annum, and in the case of a SOFR loan or a base rate loan, plus an applicable margin. This applicable margin was not adjusted as a result of the Amendment other than the change from LIBOR to SOFR and is now (1) in the case of the Revolving Facility, 2.50% for SOFR loans and 1.50% for base rate loans, and (2) in the case of the Term Loan Facility, 2.50% for SOFR loans and 1.50% for base rate loans. Loans under the Revolver/Term Loan Facilities may be prepaid, and unused commitments under the Revolver/Term Loan Facilities may be reduced, at any time, in whole or in part, without premium or penalty (except for LIBOR breakage costs). To the extent that amounts under the Revolving Facility remain unused, Orion OP is required to pay a quarterly commitment fee on the unused portion of the Revolving Facility in an amount equal to 0.25% per annum of the unused portion of the Revolving Facility. The Revolver/Term Loan Facilities are guaranteed pursuant to a Guaranty (the “Revolver/Term Loan Guaranty”) by the Company and, subject to certain exceptions, substantially all of Orion OP’s existing and future subsidiaries (including substantially all of its subsidiaries that directly or indirectly own unencumbered real properties), other than certain joint ventures and subsidiaries that own real properties subject to certain other indebtedness (such subsidiaries of Orion OP, the “Subsidiary Guarantors”). The Revolver/Term Loan Facilities are secured by, among other things, first priority pledges of the equity interests in the Subsidiary Guarantors. The Revolver/Term Loan Facilities require that Orion OP comply with various covenants, including, covenants restricting, subject to certain exceptions, liens, investments, mergers, asset sales and the payment of certain dividends. In addition, the Revolver/Term Loan Facilities require that Orion OP satisfy the following financial covenants: • ratio of total debt to total asset value of not more than 0.60 to 1.00; • ratio of adjusted EBITDA to fixed charges of not less than 1.50 to 1.00; • ratio of secured debt to total asset value of not more than 0.45 to 1.00; • ratio of unsecured debt to unencumbered asset value of not more than 0.60 to 1.00; and • ratio of net operating income from all unencumbered real properties to unsecured interest expense of not less than 2.00 to 1.00. As of December 31, 2022, Orion OP was in compliance with these financial covenants. The Revolver/Term Loan Facilities include customary representations and warranties of the Company and Orion OP, which must be true and correct in all material respects as a condition to future extensions of credit under the Revolver/Term Loan Facilities. The Revolver/Term Loan Facilities also include customary events of default, the occurrence of which, following any applicable grace period, would permit the lenders to, among other things, declare the principal, accrued interest and other obligations of Orion OP under the Revolver/Term Loan Facilities to be immediately due and payable and foreclose on the collateral securing the Revolver/Term Loan Facilities. CMBS Loan On February 10, 2022, certain indirect subsidiaries of the Company (the “Mortgage Borrowers”) obtained a $355.0 million fixed rate mortgage loan (the “CMBS Loan”) from Wells Fargo Bank, National Association (together with its successor, the “Lender”), which is secured by the Mortgage Borrowers’ fee simple or ground lease interests in 19 properties owned indirectly by the Company (collectively, the “Mortgaged Properties”). During March 2022, Wells Fargo effected a securitization of the CMBS Loan. The CMBS Loan bears interest at a fixed rate of 4.971% per annum and matures on February 11, 2027. The CMBS Loan requires monthly payments of interest only and all principal is due at maturity. The proceeds of the CMBS Loan were used to repay the Bridge Facility. Upon closing of the CMBS Loan, the Mortgage Borrowers funded $35.5 million of loan reserves primarily for future rent concessions and tenant improvement allowances under the leases with respect to the 19 Mortgaged Properties. These amounts, as well as the transaction expenses incurred in connection with the CMBS Loan, were funded with cash on hand and borrowings under the Company’s Revolving Facility. The CMBS Loan is secured by, among other things, first priority mortgages and deeds of trust granted by the Mortgage Borrowers and encumbering the Mortgaged Properties. The CMBS Loan is generally not freely prepayable by the Mortgage Borrowers without payment of certain prepayment premiums and costs. The CMBS Loan may be prepaid in whole, but not in part, except as provided in the loan agreement governing the CMBS Loan (the “CMBS Loan Agreement”), at any time following the Prepayment Lockout Release Date (as defined in the CMBS Loan Agreement) (generally in March 2024, two years after the CMBS Loan has been fully securitized), subject to the payment of a yield maintenance premium and the satisfaction of other terms and conditions set forth in the CMBS Loan Agreement. Further, releases of individual properties are permitted in connection with an arms’ length third party sale upon repayment of the Release Price (as defined in the CMBS Loan Agreement) for the applicable individual property and subject to payment of the applicable yield maintenance premium and the satisfaction of other terms and conditions set forth in the CMBS Loan Agreement. The CMBS Loan Agreement also contains customary cash management provisions, including certain trigger events (such as failure of the Mortgage Borrowers to satisfy a minimum debt yield) which allow the Lender to retain any excess cash flow as additional collateral for the Loan, until such trigger event is cured. In connection with the CMBS Loan Agreement, the Company (as the guarantor) delivered a customary non-recourse carveout guaranty to the Lender (the “Guaranty”), under which the Company guaranteed the obligations and liabilities of the Mortgage Borrowers to the Lender with respect to certain non-recourse carveout events and the circumstances under which the CMBS Loan will be fully recourse to the Mortgage Borrowers, and which includes requirements for the Company to maintain a net worth of no less than $355.0 million and liquid assets of no less than $10.0 million, in each case, exclusive of the values of the collateral for the CMBS Loan. As of December 31, 2022, the Company was in compliance with these financial covenants. The Mortgage Borrowers and the Company also provided a customary environmental indemnity agreement, pursuant to which the Mortgage Borrowers and the Company agreed to protect, defend, indemnify, release and hold harmless the Lender from and against certain environmental liabilities relating to the Mortgaged Properties. The CMBS Loan Agreement includes customary representations, warranties and covenants of the Mortgage Borrowers and the Company. The CMBS Loan Agreement also includes customary events of default, the occurrence of which, following any applicable grace period, would permit the Lender to, among other things, declare the principal, accrued interest and other obligations of the Mortgage Borrowers to be immediately due and payable and foreclose on the Mortgaged Properties. The Company’s mortgages payable consisted of the following as of December 31, 2022 (dollars in thousands): Encumbered Properties Net Carrying Value of Collateralized Properties (1) Outstanding Balance Weighted-Average Weighted-Average Years to Maturity Fixed-rate debt 19 $ 465,098 $ 355,000 4.97 % 4.1 ____________________________________ (1) Net carrying value is real estate assets, including right-of-use assets, net of real estate liabilities. The table above does not include mortgage notes associated with the Arch Street Joint Venture of $136.7 million as of December 31, 2022. |
VEREIT Office Assets | |
Entity Information [Line Items] | |
Mortgage Notes Payable, Net | Note 3 – Mortgage Notes Payable, Net As of October 31, 2021, VEREIT Office Assets had no mortgage notes payable as all amounts were repaid in conjunction with the Separation. |
VEREIT Office Assets, Commitmen
VEREIT Office Assets, Commitment and Contingencies | 12 Months Ended |
Dec. 31, 2022 | |
Entity Information [Line Items] | |
Commitments and Contingencies | Note 10 – Commitments and Contingencies Leasing As part of its ordinary re-leasing activities, the Company has agreed and anticipates that it will continue to agree to provide rent concessions to tenants and incur leasing costs with respect to its properties, including amounts paid directly to tenants to improve their space and/or building systems, or tenant improvement allowances, landlord agreements to perform and pay for certain improvements, and leasing commissions. These rent concession and leasing cost commitments could be significant and are expected to vary due to factors such as competitive market conditions for leasing of commercial office space and the volume of square footage subject to re-leasing by the Company. As of December 31, 2022, the Company had total commitments of $51.2 million outstanding for tenant improvement allowances and $0.3 million for leasing commissions. The timing of the Company’s cash outlay for tenant improvement allowances is significantly uncertain and will depend upon the applicable tenant’s schedule for the improvements and corresponding use of capital, if any. For assets financed on the CMBS Loan, the Company has funded reserves with the lender for tenant improvement allowances and rent concession commitments. The restricted cash included in the reserve totaled $34.7 million as of December 31, 2022, including $23.6 million for tenant improvement allowances and $11.1 million for rent concession commitments, and is included in other assets, net in the Company’s consolidated balance sheets. Litigation From time to time, the Company may be party to various legal proceedings which it believes are routine in nature and incidental to the operation of its business. The Company does not believe that any such legal proceedings will have a material adverse effect upon its consolidated and combined position or results of operations. Environmental Matters In connection with the ownership and operation of real estate, the Company may potentially be liable for costs and damages related to environmental matters. The Company has not been notified by any governmental authority of any non-compliance, liability or other claim, and is not aware of any other environmental condition, in each case, that it believes will have a material adverse effect upon its consolidated and combined position or results of operations. |
VEREIT Office Assets | |
Entity Information [Line Items] | |
Commitments and Contingencies | Note 4 – Commitments and Contingencies Litigation VEREIT Office Assets was party to various legal proceedings which it believed are routine in nature and incidental to the operation of its business. VEREIT Office Assets did not believe that any of these outstanding claims against it were expected to have a material adverse effect upon its consolidated financial position or results of operations. Environmental Matters In connection with the ownership and operation of real estate, VEREIT Office Assets may have potentially been liable for costs and damages related to environmental matters. VEREIT Office Assets was not notified by any governmental authority of any non-compliance, liability or other claim, and was not aware of any other environmental condition, in each case, that it believed would have a material adverse effect upon its results of operations. |
VEREIT Office Assets, Leases
VEREIT Office Assets, Leases | 12 Months Ended |
Dec. 31, 2022 | |
Entity Information [Line Items] | |
Leases | Note 11 – Leases Lessor As of December 31, 2022, the Company’s operating leases have non-cancelable lease terms ranging from 0.2 years to 15.3 years. Certain leases with tenants include tenant options to extend or terminate the lease agreements or to purchase the underlying assets. Lease agreements may also contain rent increases that are based on an index or rate (e.g., the consumer price index). The following table presents future minimum base rent payments due to the Company over the next five years and thereafter as of December 31, 2022 (in thousands). Future Minimum 2023 $ 137,833 2024 110,559 2025 72,868 2026 69,771 2027 50,342 Thereafter 184,574 Total $ 625,947 Lessee The Company is the lessee under ground lease arrangements and corporate office leases, which meet the criteria under U.S. GAAP for an operating lease. As of December 31, 2022, the Company’s operating leases had remaining lease terms ranging from 0.9 years to 62.0 years, which includes options to extend. Under the operating leases, the Company pays rent and may also pay variable costs, including property operating expenses and common area maintenance. The weighted-average discount rate used to measure the lease liability for the Company’s operating leases was 3.49% as of December 31, 2022. As the Company’s leases do not provide an implicit rate, the Company used an estimated incremental borrowing rate based on the information available at the lease commencement date, lease guidance adoption date or the Merger Effective Time, as applicable, in determining the present value of lease payments. Operating lease costs were $1.0 million, $0.3 million, and $0.1 million for the years ended December 31, 2022, 2021 and 2020, respectively. No cash paid for operating lease liabilities was capitalized. The following table reflects the maturity analysis of payments due from the Company over the next five years and thereafter for ground and corporate office lease obligations as of December 31, 2022 (in thousands). Future Minimum Lease Payments 2023 $ 1,134 2024 883 2025 892 2026 478 2027 445 Thereafter 12,939 Total 16,771 Less: imputed interest 6,079 Total $ 10,692 |
Leases | Note 11 – Leases Lessor As of December 31, 2022, the Company’s operating leases have non-cancelable lease terms ranging from 0.2 years to 15.3 years. Certain leases with tenants include tenant options to extend or terminate the lease agreements or to purchase the underlying assets. Lease agreements may also contain rent increases that are based on an index or rate (e.g., the consumer price index). The following table presents future minimum base rent payments due to the Company over the next five years and thereafter as of December 31, 2022 (in thousands). Future Minimum 2023 $ 137,833 2024 110,559 2025 72,868 2026 69,771 2027 50,342 Thereafter 184,574 Total $ 625,947 Lessee The Company is the lessee under ground lease arrangements and corporate office leases, which meet the criteria under U.S. GAAP for an operating lease. As of December 31, 2022, the Company’s operating leases had remaining lease terms ranging from 0.9 years to 62.0 years, which includes options to extend. Under the operating leases, the Company pays rent and may also pay variable costs, including property operating expenses and common area maintenance. The weighted-average discount rate used to measure the lease liability for the Company’s operating leases was 3.49% as of December 31, 2022. As the Company’s leases do not provide an implicit rate, the Company used an estimated incremental borrowing rate based on the information available at the lease commencement date, lease guidance adoption date or the Merger Effective Time, as applicable, in determining the present value of lease payments. Operating lease costs were $1.0 million, $0.3 million, and $0.1 million for the years ended December 31, 2022, 2021 and 2020, respectively. No cash paid for operating lease liabilities was capitalized. The following table reflects the maturity analysis of payments due from the Company over the next five years and thereafter for ground and corporate office lease obligations as of December 31, 2022 (in thousands). Future Minimum Lease Payments 2023 $ 1,134 2024 883 2025 892 2026 478 2027 445 Thereafter 12,939 Total 16,771 Less: imputed interest 6,079 Total $ 10,692 |
VEREIT Office Assets | |
Entity Information [Line Items] | |
Leases | Note 5 – Leases Lessor As of October 31, 2021, VEREIT Office Assets was the lessor for its 52 office properties. VEREIT Office Assets’ operating leases have non-cancelable lease terms ranging from 0.17 years to 11.59 years as of October 31, 2021. Certain leases with tenants included tenant options to extend or terminate the lease agreements or to purchase the underlying assets. Lease agreements may have also contained rent increases that were based on an index or rate (e.g., the consumer price index). VEREIT Office Assets believed the residual value risk was not a primary risk because of the long-lived nature of the assets. The components of rental revenue from VEREIT Office Assets’ operating leases were as follows (in thousands): Ten Months Ended October 31, Year Ended December 31, 2021 2020 Fixed: Cash rent $ 109,582 $ 132,402 Straight-line rent (4,889) (869) Lease intangible amortization (29) (67) Property operating cost reimbursements 3,270 3,794 Total fixed 107,934 135,260 Variable (1) 26,806 35,044 Total rental revenue $ 134,740 $ 170,304 ____________________________________ (1) Includes costs reimbursed related to property operating expenses, common area maintenance and percentage rent. The following table presents future minimum operating lease payments due to VEREIT Office Assets over the next five years and thereafter as of October 31, 2021 (in thousands). Future Minimum November 1, 2021 - December 31, 2021 $ 15,683 2022 110,872 2023 95,130 2024 72,361 2025 38,980 2026 29,951 Thereafter 34,357 Total $ 397,334 Lessee VEREIT Office Assets was the lessee under one ground lease arrangement, which met the criteria of an operating lease. As of October 31, 2021, VEREIT Office Assets’ lease had a remaining lease term of 35.8 years, which included options to extend. Under the ground lease arrangement, VEREIT Office Assets paid variable costs, which included property operating expenses and common area maintenance. The discount rate for VEREIT Office Assets’ operating lease was 5.17% as of October 31, 2021. As VEREIT Office Assets’ lease did not provide an implicit rate, VEREIT Office Assets used an estimated incremental borrowing rate based on the information available at the adoption date in determining the present value of lease payments. Operating lease costs for the ten months ended October 31, 2021 and for the year ended December 31, 2020 were $0.2 million and $0.3 million, respectively. No cash paid for operating lease liabilities was capitalized. The following table reflects the maturity analysis of payments due from VEREIT Office Assets over the next five years and thereafter for ground lease obligations as of October 31, 2021 (in thousands). Future Minimum Lease Payments November 1, 2021 - December 31, 2021 $ 55 2022 329 2023 329 2024 329 2025 329 2026 329 Thereafter 10,062 Total 11,762 Less: imputed interest 6,403 Total $ 5,359 |
Leases | Note 5 – Leases Lessor As of October 31, 2021, VEREIT Office Assets was the lessor for its 52 office properties. VEREIT Office Assets’ operating leases have non-cancelable lease terms ranging from 0.17 years to 11.59 years as of October 31, 2021. Certain leases with tenants included tenant options to extend or terminate the lease agreements or to purchase the underlying assets. Lease agreements may have also contained rent increases that were based on an index or rate (e.g., the consumer price index). VEREIT Office Assets believed the residual value risk was not a primary risk because of the long-lived nature of the assets. The components of rental revenue from VEREIT Office Assets’ operating leases were as follows (in thousands): Ten Months Ended October 31, Year Ended December 31, 2021 2020 Fixed: Cash rent $ 109,582 $ 132,402 Straight-line rent (4,889) (869) Lease intangible amortization (29) (67) Property operating cost reimbursements 3,270 3,794 Total fixed 107,934 135,260 Variable (1) 26,806 35,044 Total rental revenue $ 134,740 $ 170,304 ____________________________________ (1) Includes costs reimbursed related to property operating expenses, common area maintenance and percentage rent. The following table presents future minimum operating lease payments due to VEREIT Office Assets over the next five years and thereafter as of October 31, 2021 (in thousands). Future Minimum November 1, 2021 - December 31, 2021 $ 15,683 2022 110,872 2023 95,130 2024 72,361 2025 38,980 2026 29,951 Thereafter 34,357 Total $ 397,334 Lessee VEREIT Office Assets was the lessee under one ground lease arrangement, which met the criteria of an operating lease. As of October 31, 2021, VEREIT Office Assets’ lease had a remaining lease term of 35.8 years, which included options to extend. Under the ground lease arrangement, VEREIT Office Assets paid variable costs, which included property operating expenses and common area maintenance. The discount rate for VEREIT Office Assets’ operating lease was 5.17% as of October 31, 2021. As VEREIT Office Assets’ lease did not provide an implicit rate, VEREIT Office Assets used an estimated incremental borrowing rate based on the information available at the adoption date in determining the present value of lease payments. Operating lease costs for the ten months ended October 31, 2021 and for the year ended December 31, 2020 were $0.2 million and $0.3 million, respectively. No cash paid for operating lease liabilities was capitalized. The following table reflects the maturity analysis of payments due from VEREIT Office Assets over the next five years and thereafter for ground lease obligations as of October 31, 2021 (in thousands). Future Minimum Lease Payments November 1, 2021 - December 31, 2021 $ 55 2022 329 2023 329 2024 329 2025 329 2026 329 Thereafter 10,062 Total 11,762 Less: imputed interest 6,403 Total $ 5,359 |
VEREIT Office Assets, Subsequen
VEREIT Office Assets, Subsequent Events | 12 Months Ended |
Dec. 31, 2022 | |
Entity Information [Line Items] | |
Subsequent Events | Note 15 – Subsequent Events Distributions On March 7, 2023, the Company’s Board of Directors declared a quarterly cash dividend of $0.10 per share for the first quarter of 2023, payable on April 17, 2023, to stockholders of record as of March 31, 2023. |
VEREIT Office Assets | |
Entity Information [Line Items] | |
Subsequent Events | Note 6 – Subsequent Events VEREIT Office Assets evaluated subsequent events and no items have come to the attention of management that require recognition or disclosure, except as set forth below. |
Orion Office REIT, Summary of_2
Orion Office REIT, Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of Accounting, Principles of Consolidation and Combination and Basis of Presentation | Basis of Accounting The consolidated and combined statements of the Company presented herein include the accounts of the Company and its consolidated subsidiaries. All intercompany transactions have been eliminated upon consolidation. The financial statements are prepared on the accrual basis of accounting in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”). Principles of Consolidation and Combination and Basis of Presentation The consolidated and combined statements of the Company include the accounts of Realty Income Office Assets presented on a combined basis for the period from January 1, 2021 to October 31, 2021 and for the year ended December 31, 2020, as the ownership interests were under common control and ownership of Realty Income during the respective periods. From and after the Merger Effective Time, the consolidated and combined financial statements include the accounts of the Company and its consolidated subsidiaries and a consolidated joint venture, which accounts include the Realty Income Office Assets and the VEREIT Office Assets. The portion of the consolidated joint venture not owned by the Company is presented as non-controlling interest in the Company’s consolidated and combined balance sheets, statements of operations, statements of comprehensive income (loss) and statements of equity. For periods presented prior to the date of the Distribution, the historical consolidated and combined results for the Company reflect charges for certain legal, accounting and other costs related to the Distribution, which were incurred and paid by Realty Income on the Company’s behalf and are reflected as capital contributions. For legal entities being evaluated for consolidation, the Company must first determine whether the interests that it holds and fees it receives qualify as variable interests in the entity. A variable interest is an investment or other interest that will absorb portions of an entity’s expected losses or receive portions of the entity’s expected residual returns. The Company’s evaluation includes consideration of fees paid to the Company where the Company acts as a decision maker or service provider to the entity being evaluated. If the Company determines that it holds a variable interest in an entity, it evaluates whether that entity is a variable interest entity (“VIE”). VIEs are entities where investors lack sufficient equity at risk for the entity to finance its activities without additional subordinated financial support or where equity investors, as a group, lack one or more of the following characteristics: (a) the power to direct the activities that most significantly impact the entity’s economic performance, (b) the obligation to absorb the expected losses of the entity, or (c) the right to receive the expected returns of the entity. The Company consolidates entities that are not VIEs if it has a majority voting interest or other rights that result in effectively controlling the entity. The Company then qualitatively assesses whether it is (or is not) the primary beneficiary of a VIE, which is generally defined as the party who has a controlling financial interest in the VIE. Consideration of various factors include, but are not limited to, the Company’s ability to direct the activities that most significantly impact the entity’s economic performance and its obligation to absorb losses from or right to receive benefits of the VIE that could potentially be significant to the VIE. The Company continually evaluates the need to consolidate VIEs based on standards set forth in U.S. GAAP. |
Per Share Data | Per Share Data Income (loss) per basic share of common stock is calculated by dividing net income (loss) by the weighted-average number of shares of common stock issued and outstanding during such period. Diluted income (loss) per share of common stock considers the effect of potentially dilutive shares of common stock outstanding during the period. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Management makes significant estimates regarding real estate investment impairments. |
Reclassification | Reclassification Acquisition, disposition, and leasing deal related costs incurred by the Company, previously included in the acquisition related line on the consolidated and combined statements of operations, have been presented in the transaction related line for prior periods presented to be consistent with the current period presentation. Spin related costs are costs incurred by the Company in connection with the Separation and the Distribution. These costs were previously included in the transaction costs line on the consolidated and combined statements of operations and have been presented in the spin related line for prior periods presented to be consistent with the current period presentation. These reclassifications had no effect on the reported results of operations. |
Spin Related | Spin Related Spin related expenses are expensed as incurred. Such expenses are primarily comprised of the legal and professional fees associated with the formation and organization of the Company, the Mergers and the Distribution. Such costs also include expenses related to the fair value of the warrants issued to the Arch Street Partner and one of its affiliates during the year ended December 31, 2021. |
Leases - Lessor | Leases Lessor At the inception of a new lease arrangement for which the Company is the lessor, including new leases that arise from amendments, the Company assesses the terms and conditions to determine the proper lease classification. When the terms of a lease effectively transfer control of the underlying asset, the lease is classified as a sales-type lease. When a lease does not effectively transfer control of the underlying asset to the lessee, but the Company obtains a guarantee for the value of the asset from a third party, the Company classifies the lease as a direct financing lease. All other leases are classified as operating leases. As of December 31, 2022, none of the Company’s leases were classified as sales-type leases or direct financing leases. |
Leases - Lessee | Lessee To account for leases for which the Company is the lessee, contracts must be analyzed upon inception to determine if the arrangement is, or contains, a lease. A lease conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Lease classification tests and measurement procedures are performed at the lease commencement date. When the terms of a lease effectively transfer control of the underlying asset, the lease is classified as finance lease, otherwise it is classified as an operating lease. The lease liability is initially measured as the present value of the lease payments over the lease term, discounted using the interest rate implicit in the lease, if that rate is readily determinable; otherwise, the lessee’s incremental borrowing rate is used. The incremental borrowing rate is determined based on the estimated rate of interest that the lessee would pay to borrow on a collateralized basis over a similar term at an amount equal to the lease payments in a similar economic environment. The lease term is the noncancelable period of the lease and includes any renewal and termination options the Company is reasonably certain to exercise. The lease liability balance is amortized using the effective interest method. The lease liability is remeasured when the contract is modified, upon the resolution of a contingency such that variable payments become fixed or if the assessment of exercising an extension, termination or purchase option changes. The right-of-use (“ROU”) asset balance is initially measured as the lease liability amount, adjusted for any lease payments made prior to the commencement date, initial direct costs, estimated costs to dismantle, remove, or restore the underlying asset and incentives received. |
Revenue Recognition | Revenue Recognition Rental Revenue The Company continually reviews receivables related to rent, straight-line rent and property operating expense reimbursements and determines collectability by taking into consideration the tenant’s payment history, the financial condition of the tenant, business conditions in the industry in which the tenant operates and economic conditions in the area in which the property is located. The review includes a binary assessment of whether or not substantially all of the amounts due under a tenant’s lease agreement are probable of collection. For leases that are deemed probable of collection, revenue continues to be recorded on a straight-line basis over the lease term. For leases that are deemed not probable of collection, revenue is recorded as cash is received and the Company reduces rental revenue for any straight-line rent receivables. The Company recognizes all changes in the collectability assessment for an operating lease as an adjustment to rental revenue. During the year ended December 31, 2022, the Company recorded a reduction to rental revenue of $1.5 million for income not probable of collection. During the years ended December 31, 2021 and 2020, the Company did not record any reductions to rental revenue for amounts not probable of collection. For operating leases with minimum scheduled rent increases, the Company recognizes rental revenue on a straight-line basis, including the effect of any free rent periods, over the lease term when collectability of lease payments is probable. Variable lease payments are recognized as rental revenue in the period when the changes in facts and circumstances on which the variable lease payments are based occur. Variable lease payments, including contingent rent, which is paid by a tenant when the tenant’s sales exceed an agreed upon minimum amount, are recognized once tenant sales exceed contractual tenant lease thresholds and is calculated by multiplying the sales in excess of the minimum amount by a percentage defined in the lease. Certain of the Company’s leases also contain provisions for tenants to reimburse the Company for real estate taxes, insurance and maintenance and other property operating expenses. Such reimbursements are included in rental revenue and amounts paid directly by tenants are recorded on a net basis, as applicable (i.e., the property operating expenses paid directly by tenants are not included in the Company’s consolidated and combined financial statements). Rental revenue also includes lease termination income collected from tenants to allow for tenants to settle their lease obligations and/or vacate their space prior to their scheduled termination dates, as well as amortization of above and below-market leases and lease incentives. During the years ended December 31, 2022 and 2021, the Company recognized $1.4 million and $0.3 million, respectively, of lease termination income. During the year ended December 31, 2020, the Company did not recognize any lease termination income. Fee Income from Unconsolidated Joint Venture The Company provides various services to the Arch Street Joint Venture in exchange for market-based fees. Total asset and property management fees earned in connection with this entity was $0.8 million and $0.3 million for the years ended December 31, 2022 and 2021, respectively. No such fee income was earned for the year ended December 31, 2020. |
Real Estate Investments and Allocation of Purchase Price of Real Estate Acquisitions | Real Estate Investments The Company records acquired real estate at cost when such acquisitions qualify as asset acquisitions and makes assessments as to the useful lives of depreciable assets. The Company considers the period of future benefit of the asset to determine the appropriate useful lives. Depreciation is computed using a straight-line method over the estimated useful life of 35 years for buildings, five Allocation of Purchase Price of Real Estate Acquisitions For acquisitions that qualify as asset acquisitions, the Company allocates the purchase price of acquired properties to tangible and identifiable intangible assets and liabilities acquired based on their relative fair values. Tangible assets include land, buildings, fixtures and improvements on an as-if vacant basis. The Company utilizes various estimates, processes and information to determine the as-if vacant property value. Identifiable intangible assets and liabilities include amounts allocated to acquired leases for above-market and below-market lease rates and the value of in-place leases. In estimating fair values for purposes of allocating purchase price, the Company utilizes a number of sources, including independent appraisals that may be obtained in connection with the acquisition or financing of the respective property and other market data. The Company also considers information obtained about each property as a result of its pre-acquisition due diligence, as well as subsequent marketing and leasing activities, in estimating the fair value of the tangible and intangible assets acquired and intangible liabilities assumed. The aggregate value of intangible assets related to in-place leases is primarily the difference between the property valued with existing in-place leases adjusted to market rental rates and the property valued as if vacant. Factors considered by the Company in its analysis of the in-place leases include an estimate of carrying costs during the expected lease-up period for each property, taking into account current market conditions and costs to execute similar leases. In estimating carrying costs, the Company includes real estate taxes, insurance and other operating expenses and estimates of lost rentals at market rates during the expected lease-up period. The Company also estimates costs to execute similar leases, including leasing commissions, legal and other related expenses. The value of in-place leases is amortized over the remaining non-cancelable term of the respective leases at acquisition. If a tenant terminates its lease, then the unamortized portion of the in-place lease value is charged to expense. Above-market and below-market in-place lease values for owned properties are recorded based on the present value (using an interest rate which reflects the risks associated with the leases acquired) of the difference between the contractual amounts to be paid pursuant to the in-place leases and management’s estimate of fair market lease rates for the corresponding in-place leases, measured over a period equal to the remaining non-cancelable term of the lease, including any bargain renewal periods. A bargain renewal period is provision in a lease which allows a lessee, at its option, to renew a lease at a rate that is sufficiently lower than fair market lease rates at the date such option is exercisable such that exercise of the option appears, at the inception of the lease, to be reasonably certain. Above-market leases are amortized as a reduction to rental revenue over the remaining terms of the respective leases. Below-market leases are amortized as an increase to rental revenue over the remaining terms of the respective leases, including any bargain renewal periods. The determination of the fair values of the real estate assets and liabilities acquired requires the use of significant assumptions with regard to the current market rental rates, rental growth rates, capitalization and discount rates, interest rates and other variables. The use of alternative estimates may result in a different allocation of the Company’s purchase price, which could materially impact the Company’s results of operations. |
Assets Held for Sale, | Assets Held for Sale The Company classifies a real estate investment as held for sale when certain criteria are met in accordance with U.S. GAAP. Upon classifying a real estate investment as held for sale, the Company will no longer recognize depreciation or amortization expense related to the depreciable assets of the property. Assets held for sale are recorded at the lower of carrying value or estimated fair value, less the estimated cost to dispose of the assets. See Note 3 – Real Estate Investments and Related Intangibles for further discussion regarding properties held for sale. |
Investment in Unconsolidated Entity | Investment in Unconsolidated Joint Venture The Company accounts for its investment in the Arch Street Joint Venture arrangement using the equity method of accounting as the Company has the ability to exercise significant influence, but not control, over the operating and financing policies of the investment. The equity method of accounting requires the investment to be initially recorded at cost and subsequently adjusted for the Company’s share of equity in the joint venture’s earnings and distributions. The Company records its proportionate share of net income (loss) from the Arch Street Joint Venture in equity in loss of unconsolidated joint venture, net in the consolidated statements of operations. See Note 3 – Real Estate Investments and Related Intangibles for further discussion on the Company’s investment in the Arch Street Joint Venture. The Company is required to determine whether an event or change in circumstances has occurred that may have a significant adverse effect on the fair value of its investment in the Arch Street Joint Venture. If an event or change in circumstance has occurred, the Company is required to evaluate its investment in the Arch Street Joint Venture for potential impairment and determine if the carrying value of its investment exceeds its fair value. An impairment charge is recorded when an impairment is deemed to be other-than-temporary. To determine whether an impairment is other-than-temporary, the Company considers whether it has the intent and ability to hold the investment until the carrying value is fully recovered. The evaluation of an investment in an unconsolidated joint venture for potential impairment requires the Company’s management to exercise significant judgment and to make certain assumptions. The use of different judgments and assumptions could result in different conclusions. No impairments of the Arch Street Joint Venture were identified during the years ended December 31, 2022 and 2021. Prior to the Distribution, the Company did not own any investments in an unconsolidated joint venture. |
Impairments | Impairments Real Estate Assets The Company performs impairment review procedures, primarily through continuous monitoring of events and changes in circumstances that could indicate the carrying value of its real estate assets may not be recoverable. Impairment indicators that the Company considers include, but are not limited to, decrease in a property’s net operating cash flows, bankruptcy or other credit concerns of a property’s major tenant or tenants, such as history of late payments, rental concessions and other factors, as well as significant decreases in a property’s revenues due to lease terminations, vacancies or reduced lease rates. When impairment indicators are identified or if a property is considered to have a more likely than not probability of being disposed, the Company assesses the recoverability of the assets by determining whether the carrying value of the assets will be recovered through the undiscounted future cash flows expected from the use of the assets and their eventual disposition. U.S. GAAP requires us to utilize the Company’s expected holding period of our properties when assessing recoverability. In the event that such expected undiscounted future cash flows do not exceed the carrying value, the Company will adjust the real estate assets to their respective fair values and recognize any impairment loss. Generally, fair value is determined using a discounted cash flow analysis and recent comparable sales or leasing transactions. The assumptions and uncertainties utilized in the evaluation of the impairment of real estate assets are discussed in Note 5 – Fair Value Measures. Right of Use Assets The Company’s impairment assessment for ROU assets is consistent with the impairment analysis for the Company’s other long-lived assets. No impairments of ROU assets were identified during the years ended December 31, 2022, 2021, and 2020. See Note 5 – Fair Value Measures for further discussion. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents include cash in bank accounts, as well as investments in highly-liquid funds with original maturities of three months or less. The Company deposits cash with high quality financial institutions. These deposits are guaranteed by the Federal Deposit Insurance Corporation (“FDIC”) up to an insurance limit of $250,000. At times, the Company’s cash and cash equivalents may exceed federally insured levels. Although the Company bears risk on amounts in excess of those insured by the FDIC, it has not experienced and does not anticipate any losses due to the high quality of the institutions where the deposits are held. |
Restricted cash | Restricted Cash The Company had $34.7 million in restricted cash as of December 31, 2022, primarily comprised of reserves held by the lender under the CMBS Loan (as defined in Note 6 – Debt, Net) for future rent concessions and tenant improvement allowances. The Company did not have any restricted cash balances as of December 31, 2021. The Company had $3.9 million in restricted cash as of December 31, 2020, which primarily consisted of mortgage impounds and security deposits related to mortgages payable. In accordance with certain debt agreements that were outstanding as of December 31, 2020, rent from certain of the Company’s tenants was deposited directly into a lockbox account, from which the monthly debt service payments were disbursed to the lender and the excess funds were then disbursed to the Company. Included in the restricted cash as of December 31, 2020 was $3.4 million in mortgage impounds related to mortgages payable and $0.5 million in security deposits related to mortgages payable. Restricted cash is included in other assets, net on the Company’s consolidated balance sheets. |
Deferred Financing Costs | Deferred Financing Costs Deferred financing costs represent commitment fees, legal fees and other costs associated with obtaining commitments for financing. D eferred financing costs, other than those associated with the Revolving Facility (as defined in Note 6 – Debt, Net ), are presented on the consolidated balance sheets as a direct deduction from the carrying value of the related debt liability rather than as an asset . Deferred financing costs related to the Revolving Facility are included in other assets, net in the accompanying consolidated balance sheets. Deferred financing costs are amortized to interest expense over the terms of the respective financing agreements using the effective interest method. Unamortized deferred financing costs are written off when the associated debt is refinanced or repaid before maturity. Costs incurred in connection with potential |
Derivative Instruments | Derivative Instruments The Company may use derivative financial instruments, including interest rate swaps, caps, collars, treasury locks, options and forwards to hedge all or a portion of the interest rate risk associated with its borrowings. The Company’s interest rate management objectives are intended to limit the impact of interest rate fluctuations on earnings and cash flows and to manage the Company’s overall borrowing costs. To accomplish this objective, the Company has used and intends to continue to use interest rate swaps as part of its cash flow hedging strategy. The Company does not intend to utilize derivatives for trading or speculative purposes or for purposes other than interest rate risk management. The use of derivative financial instruments carries certain risks, including the risk that the counterparties to these contractual arrangements are not able to perform under the agreements. To mitigate this risk, the Company only enters into derivative financial instruments with counterparties with high credit ratings and with major financial institutions with which the Company may also have other financial relationships. The Company does not anticipate that any of the counterparties will fail to meet their obligations. The Company records all derivatives on the consolidated balance sheets at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary under U.S. GAAP to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. The accounting for subsequent changes in the fair value of these derivatives depends on whether each has been designated and qualifies for hedge accounting treatment. If the Company elects not to apply hedge accounting treatment, any changes in the fair value of these derivative instruments is recognized immediately in other income, net in the consolidated and combined statements of operations and consolidated and combined statements of comprehensive income (loss). If the derivative is designated and qualifies for cash flow hedge accounting treatment, the change in fair value of the derivative is recorded in other |
Loss Contingencies | Loss ContingenciesThe Company records a liability in the consolidated and combined statements for loss contingencies when a loss is known or considered probable and the amount is reasonably estimable. If the reasonable estimate of a known or probable loss is a range, and no amount within the range is a better estimate than any other, the minimum amount of the range is accrued. If a material loss is reasonably possible but not known or probable, and is reasonably estimable, the estimated loss or range of loss is disclosed. |
Income Taxes | Income Taxes The Company has been operating in a manner so to qualify and has elect to be taxed as a REIT for U.S. federal income tax purposes under Sections 856 through 860 of the Internal Revenue Code, as amended (the “Code”), commencing with the taxable year ended December 31, 2021. To maintain the Company’s qualification as a REIT, the Company must meet a number of organizational and operational requirements, including a requirement that it distribute annually at least 90% of its REIT taxable income, subject to certain adjustments and excluding any net capital gain to its stockholders. However, Orion OP is still subject to certain state and local income, franchise, property, and other taxes in the various jurisdictions in which it operates. The Company may also be subject to federal income taxes on certain income and federal excise taxes on its undistributed income. The Company provides for income taxes in accordance with current authoritative accounting and tax guidance. The tax provision or benefit related to significant or unusual items is recognized in the quarter in which those items occur. In addition, the effect of changes in enacted tax laws, rates or tax status is recognized in the quarter in which the change occurs. The accounting estimates used to compute the provision for or benefit from income taxes may change as new events occur, additional information is obtained or the tax environment changes. During both the years ended December 31, 2022 and 2021, the Company recognized state and local income and franchise tax expense of $0.2 million, which is included in provision for income taxes in the accompanying consolidated and combined statements of operations. The Company regularly analyzes its income tax positions in the jurisdictions in which it operates and only recognizes the income tax effect in the financial statements when certain criteria regarding uncertain tax positions have been met. The Company believes that its material income tax positions would more likely than not be sustained upon examination by the relevant taxing authorities. Therefore, no provisions related to material uncertain income tax positions have been recognized in the accompanying consolidated and combined financial statements during the years ended December 31, 2022 and 2021. Any interest and penalties related to unrecognized tax benefits would be recognized in provision for income taxes in the accompanying consolidated and combined statements of operations. For periods presented prior to the Merger Effective Time, Realty Income Office Assets was owned by Realty Income, a Maryland corporation which had elected to be taxed as a REIT, under the Code. Under the REIT operating structure, Realty Income was permitted to deduct dividends paid to its stockholders in determining its taxable income. Assuming Realty Income’s dividends equaled or exceeded its taxable net income, it was generally not required to pay federal corporate income taxes on such income. Accordingly, no provision was made for federal income taxes in the accompanying consolidated and combined financial statements of the Company for such prior periods. The properties in the consolidated and combined financial statements which comprised Realty Income Office Assets were previously owned directly or indirectly by limited partnerships or limited liability companies of Realty Income and, as a result, the allocated share of income for periods presented prior to the Merger Effective Time are included in the consolidated income tax return of Realty Income. |
Segment Reporting | Segment Reporting The Company operates in one business segment: direct ownership and operation of commercial real estate. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In March 2020, the FASB issued ASU 2020-04 establishing Topic 848, Reference Rate Reform. ASU 2020-04 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance is optional and is effective between March 12, 2020 and December 31, 2022. The FASB issued ASU 2022-06 in December 2022, in association with Topic 848, to extend the sunset date from December 31, 2022 to December 31, 2024. The guidance under Topic 848 may be elected over time as reference rate reform activities occur. As of December 31, 2022, all of our debt and derivative instruments have been converted from the London Interbank Offered Rate, commonly referred to as LIBOR, to the Secured Overnight Financing Rate, commonly referred to as SOFR. In connection with the transition of the benchmark rate for borrowings under the Revolver/Term Loan Credit Agreement (as defined in Note 6 – Debt, Net) from LIBOR to SOFR, the Company terminated the existing interest rate swap agreements and entered into new interest rate swap agreements during the three months ended December 31, 2022. The new interest rate swap agreements continue to be accounted for as a cash flow hedge. The adoption of ASU 2020-04 did not have a material impact on our consolidated and combined financial statements. |
VEREIT Office Assets, Organiz_2
VEREIT Office Assets, Organization and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Entity Information [Line Items] | |
Basis of Accounting and Presentation | Basis of Accounting The consolidated and combined statements of the Company presented herein include the accounts of the Company and its consolidated subsidiaries. All intercompany transactions have been eliminated upon consolidation. The financial statements are prepared on the accrual basis of accounting in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”). Principles of Consolidation and Combination and Basis of Presentation The consolidated and combined statements of the Company include the accounts of Realty Income Office Assets presented on a combined basis for the period from January 1, 2021 to October 31, 2021 and for the year ended December 31, 2020, as the ownership interests were under common control and ownership of Realty Income during the respective periods. From and after the Merger Effective Time, the consolidated and combined financial statements include the accounts of the Company and its consolidated subsidiaries and a consolidated joint venture, which accounts include the Realty Income Office Assets and the VEREIT Office Assets. The portion of the consolidated joint venture not owned by the Company is presented as non-controlling interest in the Company’s consolidated and combined balance sheets, statements of operations, statements of comprehensive income (loss) and statements of equity. For periods presented prior to the date of the Distribution, the historical consolidated and combined results for the Company reflect charges for certain legal, accounting and other costs related to the Distribution, which were incurred and paid by Realty Income on the Company’s behalf and are reflected as capital contributions. For legal entities being evaluated for consolidation, the Company must first determine whether the interests that it holds and fees it receives qualify as variable interests in the entity. A variable interest is an investment or other interest that will absorb portions of an entity’s expected losses or receive portions of the entity’s expected residual returns. The Company’s evaluation includes consideration of fees paid to the Company where the Company acts as a decision maker or service provider to the entity being evaluated. If the Company determines that it holds a variable interest in an entity, it evaluates whether that entity is a variable interest entity (“VIE”). VIEs are entities where investors lack sufficient equity at risk for the entity to finance its activities without additional subordinated financial support or where equity investors, as a group, lack one or more of the following characteristics: (a) the power to direct the activities that most significantly impact the entity’s economic performance, (b) the obligation to absorb the expected losses of the entity, or (c) the right to receive the expected returns of the entity. The Company consolidates entities that are not VIEs if it has a majority voting interest or other rights that result in effectively controlling the entity. The Company then qualitatively assesses whether it is (or is not) the primary beneficiary of a VIE, which is generally defined as the party who has a controlling financial interest in the VIE. Consideration of various factors include, but are not limited to, the Company’s ability to direct the activities that most significantly impact the entity’s economic performance and its obligation to absorb losses from or right to receive benefits of the VIE that could potentially be significant to the VIE. The Company continually evaluates the need to consolidate VIEs based on standards set forth in U.S. GAAP. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Management makes significant estimates regarding real estate investment impairments. |
Real Estate Investments | Real Estate Investments The Company records acquired real estate at cost when such acquisitions qualify as asset acquisitions and makes assessments as to the useful lives of depreciable assets. The Company considers the period of future benefit of the asset to determine the appropriate useful lives. Depreciation is computed using a straight-line method over the estimated useful life of 35 years for buildings, five Allocation of Purchase Price of Real Estate Acquisitions For acquisitions that qualify as asset acquisitions, the Company allocates the purchase price of acquired properties to tangible and identifiable intangible assets and liabilities acquired based on their relative fair values. Tangible assets include land, buildings, fixtures and improvements on an as-if vacant basis. The Company utilizes various estimates, processes and information to determine the as-if vacant property value. Identifiable intangible assets and liabilities include amounts allocated to acquired leases for above-market and below-market lease rates and the value of in-place leases. In estimating fair values for purposes of allocating purchase price, the Company utilizes a number of sources, including independent appraisals that may be obtained in connection with the acquisition or financing of the respective property and other market data. The Company also considers information obtained about each property as a result of its pre-acquisition due diligence, as well as subsequent marketing and leasing activities, in estimating the fair value of the tangible and intangible assets acquired and intangible liabilities assumed. The aggregate value of intangible assets related to in-place leases is primarily the difference between the property valued with existing in-place leases adjusted to market rental rates and the property valued as if vacant. Factors considered by the Company in its analysis of the in-place leases include an estimate of carrying costs during the expected lease-up period for each property, taking into account current market conditions and costs to execute similar leases. In estimating carrying costs, the Company includes real estate taxes, insurance and other operating expenses and estimates of lost rentals at market rates during the expected lease-up period. The Company also estimates costs to execute similar leases, including leasing commissions, legal and other related expenses. The value of in-place leases is amortized over the remaining non-cancelable term of the respective leases at acquisition. If a tenant terminates its lease, then the unamortized portion of the in-place lease value is charged to expense. Above-market and below-market in-place lease values for owned properties are recorded based on the present value (using an interest rate which reflects the risks associated with the leases acquired) of the difference between the contractual amounts to be paid pursuant to the in-place leases and management’s estimate of fair market lease rates for the corresponding in-place leases, measured over a period equal to the remaining non-cancelable term of the lease, including any bargain renewal periods. A bargain renewal period is provision in a lease which allows a lessee, at its option, to renew a lease at a rate that is sufficiently lower than fair market lease rates at the date such option is exercisable such that exercise of the option appears, at the inception of the lease, to be reasonably certain. Above-market leases are amortized as a reduction to rental revenue over the remaining terms of the respective leases. Below-market leases are amortized as an increase to rental revenue over the remaining terms of the respective leases, including any bargain renewal periods. The determination of the fair values of the real estate assets and liabilities acquired requires the use of significant assumptions with regard to the current market rental rates, rental growth rates, capitalization and discount rates, interest rates and other variables. The use of alternative estimates may result in a different allocation of the Company’s purchase price, which could materially impact the Company’s results of operations. |
Investment in Unconsolidated Joint Venture | Investment in Unconsolidated Joint Venture The Company accounts for its investment in the Arch Street Joint Venture arrangement using the equity method of accounting as the Company has the ability to exercise significant influence, but not control, over the operating and financing policies of the investment. The equity method of accounting requires the investment to be initially recorded at cost and subsequently adjusted for the Company’s share of equity in the joint venture’s earnings and distributions. The Company records its proportionate share of net income (loss) from the Arch Street Joint Venture in equity in loss of unconsolidated joint venture, net in the consolidated statements of operations. See Note 3 – Real Estate Investments and Related Intangibles for further discussion on the Company’s investment in the Arch Street Joint Venture. The Company is required to determine whether an event or change in circumstances has occurred that may have a significant adverse effect on the fair value of its investment in the Arch Street Joint Venture. If an event or change in circumstance has occurred, the Company is required to evaluate its investment in the Arch Street Joint Venture for potential impairment and determine if the carrying value of its investment exceeds its fair value. An impairment charge is recorded when an impairment is deemed to be other-than-temporary. To determine whether an impairment is other-than-temporary, the Company considers whether it has the intent and ability to hold the investment until the carrying value is fully recovered. The evaluation of an investment in an unconsolidated joint venture for potential impairment requires the Company’s management to exercise significant judgment and to make certain assumptions. The use of different judgments and assumptions could result in different conclusions. No impairments of the Arch Street Joint Venture were identified during the years ended December 31, 2022 and 2021. Prior to the Distribution, the Company did not own any investments in an unconsolidated joint venture. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents include cash in bank accounts, as well as investments in highly-liquid funds with original maturities of three months or less. The Company deposits cash with high quality financial institutions. These deposits are guaranteed by the Federal Deposit Insurance Corporation (“FDIC”) up to an insurance limit of $250,000. At times, the Company’s cash and cash equivalents may exceed federally insured levels. Although the Company bears risk on amounts in excess of those insured by the FDIC, it has not experienced and does not anticipate any losses due to the high quality of the institutions where the deposits are held. |
Restricted Cash | Restricted Cash The Company had $34.7 million in restricted cash as of December 31, 2022, primarily comprised of reserves held by the lender under the CMBS Loan (as defined in Note 6 – Debt, Net) for future rent concessions and tenant improvement allowances. The Company did not have any restricted cash balances as of December 31, 2021. The Company had $3.9 million in restricted cash as of December 31, 2020, which primarily consisted of mortgage impounds and security deposits related to mortgages payable. In accordance with certain debt agreements that were outstanding as of December 31, 2020, rent from certain of the Company’s tenants was deposited directly into a lockbox account, from which the monthly debt service payments were disbursed to the lender and the excess funds were then disbursed to the Company. Included in the restricted cash as of December 31, 2020 was $3.4 million in mortgage impounds related to mortgages payable and $0.5 million in security deposits related to mortgages payable. Restricted cash is included in other assets, net on the Company’s consolidated balance sheets. |
Deferred Financing Costs | Deferred Financing Costs Deferred financing costs represent commitment fees, legal fees and other costs associated with obtaining commitments for financing. D eferred financing costs, other than those associated with the Revolving Facility (as defined in Note 6 – Debt, Net ), are presented on the consolidated balance sheets as a direct deduction from the carrying value of the related debt liability rather than as an asset . Deferred financing costs related to the Revolving Facility are included in other assets, net in the accompanying consolidated balance sheets. Deferred financing costs are amortized to interest expense over the terms of the respective financing agreements using the effective interest method. Unamortized deferred financing costs are written off when the associated debt is refinanced or repaid before maturity. Costs incurred in connection with potential |
Leases - Lessor | Leases Lessor At the inception of a new lease arrangement for which the Company is the lessor, including new leases that arise from amendments, the Company assesses the terms and conditions to determine the proper lease classification. When the terms of a lease effectively transfer control of the underlying asset, the lease is classified as a sales-type lease. When a lease does not effectively transfer control of the underlying asset to the lessee, but the Company obtains a guarantee for the value of the asset from a third party, the Company classifies the lease as a direct financing lease. All other leases are classified as operating leases. As of December 31, 2022, none of the Company’s leases were classified as sales-type leases or direct financing leases. |
Leases - Lessee | Lessee To account for leases for which the Company is the lessee, contracts must be analyzed upon inception to determine if the arrangement is, or contains, a lease. A lease conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Lease classification tests and measurement procedures are performed at the lease commencement date. When the terms of a lease effectively transfer control of the underlying asset, the lease is classified as finance lease, otherwise it is classified as an operating lease. The lease liability is initially measured as the present value of the lease payments over the lease term, discounted using the interest rate implicit in the lease, if that rate is readily determinable; otherwise, the lessee’s incremental borrowing rate is used. The incremental borrowing rate is determined based on the estimated rate of interest that the lessee would pay to borrow on a collateralized basis over a similar term at an amount equal to the lease payments in a similar economic environment. The lease term is the noncancelable period of the lease and includes any renewal and termination options the Company is reasonably certain to exercise. The lease liability balance is amortized using the effective interest method. The lease liability is remeasured when the contract is modified, upon the resolution of a contingency such that variable payments become fixed or if the assessment of exercising an extension, termination or purchase option changes. The right-of-use (“ROU”) asset balance is initially measured as the lease liability amount, adjusted for any lease payments made prior to the commencement date, initial direct costs, estimated costs to dismantle, remove, or restore the underlying asset and incentives received. |
Income Taxes | Income Taxes The Company has been operating in a manner so to qualify and has elect to be taxed as a REIT for U.S. federal income tax purposes under Sections 856 through 860 of the Internal Revenue Code, as amended (the “Code”), commencing with the taxable year ended December 31, 2021. To maintain the Company’s qualification as a REIT, the Company must meet a number of organizational and operational requirements, including a requirement that it distribute annually at least 90% of its REIT taxable income, subject to certain adjustments and excluding any net capital gain to its stockholders. However, Orion OP is still subject to certain state and local income, franchise, property, and other taxes in the various jurisdictions in which it operates. The Company may also be subject to federal income taxes on certain income and federal excise taxes on its undistributed income. The Company provides for income taxes in accordance with current authoritative accounting and tax guidance. The tax provision or benefit related to significant or unusual items is recognized in the quarter in which those items occur. In addition, the effect of changes in enacted tax laws, rates or tax status is recognized in the quarter in which the change occurs. The accounting estimates used to compute the provision for or benefit from income taxes may change as new events occur, additional information is obtained or the tax environment changes. During both the years ended December 31, 2022 and 2021, the Company recognized state and local income and franchise tax expense of $0.2 million, which is included in provision for income taxes in the accompanying consolidated and combined statements of operations. The Company regularly analyzes its income tax positions in the jurisdictions in which it operates and only recognizes the income tax effect in the financial statements when certain criteria regarding uncertain tax positions have been met. The Company believes that its material income tax positions would more likely than not be sustained upon examination by the relevant taxing authorities. Therefore, no provisions related to material uncertain income tax positions have been recognized in the accompanying consolidated and combined financial statements during the years ended December 31, 2022 and 2021. Any interest and penalties related to unrecognized tax benefits would be recognized in provision for income taxes in the accompanying consolidated and combined statements of operations. For periods presented prior to the Merger Effective Time, Realty Income Office Assets was owned by Realty Income, a Maryland corporation which had elected to be taxed as a REIT, under the Code. Under the REIT operating structure, Realty Income was permitted to deduct dividends paid to its stockholders in determining its taxable income. Assuming Realty Income’s dividends equaled or exceeded its taxable net income, it was generally not required to pay federal corporate income taxes on such income. Accordingly, no provision was made for federal income taxes in the accompanying consolidated and combined financial statements of the Company for such prior periods. The properties in the consolidated and combined financial statements which comprised Realty Income Office Assets were previously owned directly or indirectly by limited partnerships or limited liability companies of Realty Income and, as a result, the allocated share of income for periods presented prior to the Merger Effective Time are included in the consolidated income tax return of Realty Income. |
VEREIT Office Assets | |
Entity Information [Line Items] | |
Basis of Accounting and Presentation | The accompanying combined and consolidated financial statements were prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”) and include the accounts of VEREIT Office Assets on a combined and consolidated basis as the ownership interests were under common control and ownership of VEREIT, including a consolidated joint venture. Any applicable intercompany accounts and transactions have been eliminated in consolidation and combination. The portion of the consolidated joint venture not previously owned by VEREIT, is presented as non-controlling interest in VEREIT Office Assets’ combined and consolidated balance sheet and statements of operations. The results of operations for the ten months ended October 31, 2021 are not necessarily indicative of the results for the entire year. |
Principles of Combination | For legal entities being evaluated for consolidation, VEREIT Office Assets must have first determined whether the interests that it held and fees it received qualified as variable interests in the entity. A variable interest is an investment or other interest that would absorb portions of an entity’s expected losses or receive portions of the entity’s expected residual returns. VEREIT Office Assets’ evaluation included consideration of fees paid to VEREIT Office Assets where VEREIT’s management, on behalf of VEREIT Office Assets, acted as a decision maker or service provider to the entity being evaluated. If VEREIT Office Assets determined that it held a variable interest in an entity, it evaluated whether that entity is a variable interest entity (“VIE”). VIEs are entities where investors lack sufficient equity at risk for the entity to finance its activities without additional subordinated financial support or where equity investors, as a group, lack one of the following characteristics: (a) the power to direct the activities that most significantly impact the entity’s economic performance, (b) the obligation to absorb the expected losses of the entity, or (c) the right to receive the expected returns of the entity. VEREIT Office Assets consolidated entities that are not VIEs if it had a majority voting interest or other rights that resulted in effectively controlling the entity. VEREIT Office Assets then qualitatively assessed whether it is (or is not) the primary beneficiary of a VIE, which is generally defined as the party who has a controlling financial interest in the VIE. Consideration of various factors included, but were not limited to, VEREIT Office Assets’ ability to direct the activities that most significantly impacted the entity’s economic performance and its obligation to absorb losses from or right to receive benefits of the VIE that could potentially be significant to the VIE. VEREIT Office Assets consolidated any VIEs when the Company is determined to be the primary beneficiary of the VIE and the difference between consolidating the VIE and accounting for it using the equity method could be material to VEREIT Office Assets’ combined and consolidated financial statements. VEREIT Office Assets continually evaluated the need to consolidate these VIEs based on standards set forth in U.S. GAAP. These combined and consolidated financial statements were derived from the books and records of VEREIT and were carved out from VEREIT at a carrying value reflective of historical cost in such VEREIT records. VEREIT Office Assets’ historical financial results reflect charges for certain corporate costs and we believe such charges are reasonable. Costs of the services that were charged to VEREIT Office Assets were based on either actual costs incurred or a proportion of costs estimated to be applicable to this entity, based on VEREIT Office Assets’ pro rata share of VEREIT’s annualized rental income. Annualized rental income is rental revenue on a straight-line basis, which includes the effect of rent escalations and any tenant concessions, such as free rent, and excludes any adjustments to rental income due to changes in the collectability assessment, contingent rent, such as percentage rent, and operating expense reimbursements. The historical combined and consolidated financial information presented may therefore not be indicative of the results of operations, financial position or cash flows that would have been obtained if there had been an independent, stand-alone public company during the periods presented or of the Company’s future performance as an independent, stand-alone company. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Real Estate Investments | Real Estate Investments Real estate and related assets acquired were recorded at cost and accumulated depreciation and amortization were assessed based on the period of future benefit of the asset. Depreciation and amortization were computed using a straight-line method over the estimated useful life of 40 years for buildings and building improvements, 15 years for land improvements and the remaining lease term for tenant improvements and intangible lease assets. VEREIT management performed quarterly impairment review procedures, primarily through continuous monitoring of events and changes in circumstances that could have indicated the carrying value of its real estate assets may not be recoverable. Impairment indicators that VEREIT management considered included, but were not limited to, decrease in operating income, bankruptcy or other credit concerns of a property’s major tenant or tenants or a significant decrease in a property’s revenues due to lease terminations, vacancies or reduced lease rates. When impairment indicators were identified or if a property was considered to have a more likely than not probability of being disposed of within the next 12 to 24 months, VEREIT management assessed the recoverability of the assets by determining whether the carrying value of the assets would be recovered through the undiscounted future cash flows expected from the use of the assets and their eventual disposition. U.S. GAAP required VEREIT Office Assets to utilize the expected holding period of its properties when assessing recoverability. In the event that such expected undiscounted future cash flows did not exceed the carrying value, the real estate assets were adjusted to their respective fair values and an impairment loss was recognized. There were inherent uncertainties in making estimates of expected future cash flows such as market conditions and performance and sustainability of the tenants. |
Investment in Unconsolidated Joint Venture | Investment in Unconsolidated Joint Venture As of October 31, 2021, VEREIT Office Assets owned a 20% ownership interest in an unconsolidated joint venture, the Arch Street Joint Venture, that owned five properties with total real estate investments, at cost, of $196.2 million and total debt outstanding of $118.4 million, which was non-recourse to VEREIT Office Assets. VEREIT Office Assets accounted for its investment in the Arch Street Joint Venture using the equity method of accounting as VEREIT Office Assets had the ability to exercise significant influence, but not control, over operating and financing policies of the joint venture. The equity method of accounting required the investment to be initially recorded at cost and subsequently adjusted for VEREIT Office Assets’ share of equity in the joint venture’s earnings and distributions. VEREIT Office Assets recorded its proportionate share of net income (loss) from the Arch Street Joint Venture in equity in income of unconsolidated joint venture in the combined and consolidated statements of operations. |
Goodwill Impairment | Goodwill Impairment VEREIT evaluated goodwill for impairment annually or more frequently when an event occurred or circumstances changed that indicated the carrying value may not be recoverable. To determine whether it was necessary to perform a quantitative goodwill impairment test, VEREIT first assessed qualitative factors, including macro-economic conditions such as deterioration in the entity’s operating environment or industry or market considerations; entity-specific events such as increasing costs, declining financial performance, or loss of key personnel; or other events such as an expectation that a reporting unit would be sold or sustained decrease in VEREIT’s stock price on either an absolute basis or relative to peers. If VEREIT believed, as a result of its qualitative assessment, that it was more-likely-than-not (i.e., greater than 50% chance) that the fair value of a reporting unit was less than its carrying value, the quantitative impairment test was required. Otherwise, no quantitative testing was required. If VEREIT determined, as a result of the qualitative assessment, that it was more-likely-than-not that the fair value was less than the carrying value, the provisions of guidance required that the fair value be compared to the carrying value. Goodwill was considered impaired if the carrying value exceeds the fair value. No impairments of VEREIT’s goodwill were recorded during the ten months ended October 31, 2021 or year ended December 31, 2020. The results of the VEREIT impairment tests carried over to VEREIT Office Assets, therefore no impairments were recorded in the accompanying combined and consolidated statements of operations. |
Cash and Cash Equivalents | Cash and Cash Equivalents VEREIT Office Assets considered all highly liquid instruments with maturities when purchased of three months or less to be cash equivalents. VEREIT Office Assets considered investments in highly liquid money market accounts to be cash equivalents. |
Restricted Cash | Restricted CashAs of October 31, 2021, restricted cash included $8,000 in lender reserves. |
Rent and Tenant Receivables and Other Assets, Net | Rent and Tenant Receivables and Other Assets, Net Rent and tenant receivables and other assets, net primarily included amounts to be collected in future periods related to the recognition of rental income on a straight-line basis over the lease term and cost recoveries due from tenants. Prepaid expenses as of the balance sheet date related to future periods and will be expensed or reclassified to another account during the period to which the costs related. Any amounts with no future economic benefit were charged to earnings when identified. |
Deferred Financing Costs | Deferred Financing Costs Deferred financing costs represented commitment fees, legal fees and other costs associated with obtaining commitments for financing. Deferred financing costs were presented on the combined and consolidated balance sheet as a direct deduction from the carrying value of the related debt liability. These costs were amortized to interest expense over the terms of the respective financing agreements and used the straight-line method, which approximated the effective interest method. Unamortized deferred financing costs were written off when the associated debt was refinanced or repaid before maturity. Costs incurred in connection with potential financing transactions that were not completed were expensed in the period in which it is determined the financing would not be completed. |
Leases - Lessor | Leases - Lessor At the inception of a new lease arrangement, including new leases that arise from amendments, the terms and conditions were assessed to determine the proper lease classification. When the terms of a lease effectively transferred control of the underlying asset, the lease was classified as a sales-type lease. When a lease did not effectively transfer control of the underlying asset to the lessee, but a guarantee was obtained for the value of the asset from a third party, the lease was classified as a direct financing lease. All other leases were classified as operating leases. As of October 31, 2021, VEREIT Office Assets did not classify any leases as sales-type or direct financing leases. For operating leases with minimum scheduled rent increases, rental revenue was recognized on a straight-line basis, including the effect of any free rent periods, over the lease term when collectability of lease payments was probable. Variable lease payments were recognized as rental revenue in the period when the changes in facts and circumstances on which the variable lease payments were based occur. VEREIT Office Assets adopted Accounting Standards Codification Topic 842, Leases effective as of January 1, 2019. Two separate lease components were identified as follows: (i) land lease component and (ii) single property lease component comprised of building, land improvements and tenant improvements. The leases also contained provisions for tenants to reimburse VEREIT Office Assets for real estate taxes and insurance, which are considered noncomponents of the lease, and maintenance and other property operating expenses, which were considered to be non-lease components. VEREIT Office Assets elected the practical expedient to combine lease and non-lease components and the non-lease components were included with the single property lease component as the predominant component. VEREIT Office Assets continually reviewed receivables related to rent, straight-line rent and property operating expense reimbursements and determined collectability by taking into consideration the tenant’s payment history, the financial condition of the tenant, business conditions in the industry in which the tenant operates and economic conditions in the area in which the property was located. The review included a binary assessment of whether or not substantially all of the amounts due under a tenant’s lease agreement were probable of collection. For leases that were deemed probable of collection, revenue continued to be recorded on a straight-line basis over the lease term. For leases that were deemed not probable of collection, revenue was recorded as cash was received. All changes in the collectability assessment for an operating lease were recognized as an adjustment to rental income. During the year ended December 31, 2020, there was a global outbreak of a new strain of coronavirus, COVID-19. The global and domestic response to the COVID-19 outbreak continued to evolve during the ten months ended October 31, 2021 and year ended December 31, 2020. Federal, state, and local authorities responded in a variety of ways, including temporary closure of or imposed limitations on the operations of certain non-essential businesses. Since the COVID-19 outbreak began, each of VEREIT Office Assets’ tenants almost entirely continued to meet its payment obligations under its respective lease. In consideration of each tenant’s payment history, among other factors, there were no changes in the collectability assessment for any of VEREIT Office Assets’ operating leases. Though the COVID-19 outbreak did not have a material impact on VEREIT Office Assets’ results of operations, cash flows or financial condition for the ten months ended October 31, 2021 and year ended December 31, 2020, it could negatively impact tenant operations at VEREIT Office Assets’ properties in the future, which could result in a material impact to VEREIT Office Assets’ future results of operations, cash flows and financial condition. |
Leases - Lessee | Leases - Lessee To account for leases for which VEREIT Office Assets is the lessee, contracts must have been analyzed upon inception to determine if the arrangement was, or contained, a lease. A lease conveyed the right to control the use of an identified asset for a period of time in exchange for consideration. Lease classification tests and measurement procedures were performed at the lease commencement date. The lease liability was initially measured as the present value of the lease payments over the lease term, discounted using the interest rate implicit in the lease, if that rate was readily determinable; otherwise, the lessee’s incremental borrowing rate was used. The incremental borrowing rate was determined based on the estimated rate of interest that the lessee would pay to borrow on a collateralized basis over a similar term at an amount equal to the lease payments in a similar economic environment. The lease term was the noncancelable period of the lease and included any renewal and termination options VEREIT Office Assets was reasonably certain to exercise. The lease liability balance was amortized using the effective interest method. The lease liability was remeasured when the contract was modified, upon the resolution of a contingency such that variable payments became fixed or if the assessment of exercising an extension, termination or purchase option changed. |
Income Taxes | Income Taxes As of October 31, 2021, VEREIT Office Assets was owned by VEREIT, which had elected to be taxed as a REIT for U.S. federal income tax purposes under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended, commencing with the taxable year ended December 31, 2011. VEREIT believed it was organized and operating in such a manner as to qualify to be taxed as a REIT for the taxable year ended December 31, 2021. As a REIT, VEREIT was generally not subject to federal income tax on taxable income that it distributed to its stockholders so long as it had distributed annually at least 90% of its REIT taxable income (computed without regard to the deduction for dividends paid and excluding net capital gains). Accordingly, no provision was made for federal income taxes in the accompanying combined and consolidated financial statements of VEREIT Office Assets. During the ten months ended October 31, 2021 and year ended December 31, 2020, VEREIT Office Assets recognized state and local income and franchise tax expense of approximately $0.5 million and $0.6 million, respectively. Amounts were included in provision for income taxes in the accompanying combined and consolidated statements of operations. VEREIT Office Assets had no unrecognized tax benefits as of or during the ten months ended October 31, 2021 and year ended December 31, 2020. Any interest and penalties related to unrecognized tax benefits were recognized in provision for income taxes in the accompanying combined and consolidated statements of operations. As of October 31, 2021, VEREIT Office Assets had no material uncertain income tax positions. |
Orion Office REIT, Real Estat_2
Orion Office REIT, Real Estate Investments and Related Intangibles (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Real Estate [Abstract] | |
Schedule of Real Estate Properties | The following table summarizes the Company’s property dispositions for the years ended December 31, 2022, 2021 and 2020 (dollars in thousands) : Year Ended December 31, 2022 2021 2020 Total dispositions 11 — — Aggregate gross sales price $ 33,098 $ — $ — Gain on disposition of real estate assets $ 2,352 $ — $ — Property count 5 — — Impairments on disposition of real estate assets $ 5,089 $ — $ — Property count 6 — — |
Schedule of Finite-Lived Intangible Assets | Intangible lease assets consisted of the following (in thousands, except weighted-average useful life): Weighted-Average Useful Life (Years) December 31, 2022 December 31, 2021 Intangible lease assets: In-place leases, net of accumulated amortization of $144,798 and $65,247, respectively 5.4 $ 177,698 $ 272,743 Leasing commissions, net of accumulated amortization of $1,553 and $456, respectively 12.4 13,614 10,349 Above-market lease assets, net of accumulated amortization of $11,391 and $6,239, respectively 5.5 9,826 15,015 Deferred lease incentives, net of accumulated amortization of $116 4.7 1,694 — Total intangible lease assets, net $ 202,832 $ 298,107 Intangible lease liabilities: Below-market leases, net of accumulated amortization of $17,249 and $14,459, respectively 8.4 $ 14,068 $ 20,609 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | The following table provides the projected amortization expense and adjustments to rental revenue related to the intangible lease assets and liabilities for the next five years as of December 31, 2022 (in thousands) : 2023 2024 2025 2026 2027 In-place leases: Total projected to be included in amortization expense $ 73,501 $ 49,185 $ 21,652 $ 15,499 $ 7,441 Leasing commissions: Total projected to be included in amortization expense $ 1,340 $ 1,297 $ 1,229 $ 1,229 $ 1,226 Above-market lease assets: Total projected to be deducted from rental revenue $ 4,776 $ 2,995 $ 860 $ 682 $ 237 Deferred lease incentives: Total projected to be deducted from rental revenue $ 403 $ 403 $ 386 $ 288 $ 212 Below-market lease liabilities: Total projected to be added to rental revenue $ 5,994 $ 3,786 $ 1,036 $ 817 $ 655 |
Schedule of Company's Investment in Unconsolidated Joint Venture | The following is a summary of the Company’s investment in the Arch Street Joint Venture, as of December 31, 2022 and 2021 and for the year ended December 31, 2022 and 2021 (dollars in thousands): Ownership % (1) Number of Properties Carrying Value of Equity in Loss, Net Year Ended (2) Investment December 31, 2022 December 31, 2022 December 31, 2021 December 31, 2022 December 31, 2021 December 31, 2020 Arch Street Joint Venture (3) (4) 20% 6 $ 15,824 $ 18,631 $ (524) $ (56) $ — ____________________________________ (1) The Company’s ownership interest reflects its legal ownership interest. The Company’s legal ownership interest may, at times, not equal the Company’s economic interest because of various provisions in the joint venture agreement regarding capital contributions, distributions of cash flow based on capital account balances and allocations of profits and losses. As a result, the Company’s actual economic interest (as distinct from its legal ownership interest) in certain of the properties could fluctuate from time to time and may not wholly align with its legal ownership interest. (2) The interest in the Arch Street Joint Venture was acquired by Realty Income as part of the Mergers and was transferred to the Company upon the consummation of the Distribution. Therefore, the Company’s equity in loss, net reflects operations following the Merger Effective Time. (3) During the year ended December 31, 2022, the Arch Street Joint Venture did not acquire any properties. During the year ended December 31, 2021, the Arch Street Joint Venture acquired one property from a third party for a purchase price of $30.5 million. (4) The total carrying value of the Company’s investment in the Arch Street Joint Venture was greater than the underlying equity in net assets by $0.9 million and $2.1 million as of December 31, 2022 and 2021, respectively. This difference is related to a step up in the fair value of the investment in the Arch Street Joint Venture in connection with the Mergers. The step up in fair value was allocated based on the underlying assets and liabilities of the Arch Street Joint Venture and is being amortized over the estimated useful lives of the respective assets and liabilities in accordance with the Company’s accounting policies. |
Orion Office REIT, Receivable_2
Orion Office REIT, Receivables and Other Assets (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Receivables [Abstract] | |
Schedule of Accounts Receivables, Net | Accounts receivable, net consisted of the following as of December 31, 2022 and 2021 (in thousands): December 31, 2022 December 31, 2021 Accounts receivable, net $ 10,461 $ 10,194 Straight-line rent receivable, net 11,180 7,722 Total $ 21,641 $ 17,916 |
Schedule of Other Assets, Net | Other assets, net consisted of the following as of December 31, 2022 and 2021 (in thousands): December 31, 2022 December 31, 2021 Restricted cash $ 34,673 $ — Right-of-use assets, net (1) 26,422 30,958 Investment in unconsolidated joint venture 15,824 18,631 Derivative assets 6,308 299 Deferred costs, net (2) 4,619 6,246 Prepaid expenses 1,305 3,730 Other assets, net 1,063 637 Total $ 90,214 $ 60,501 ____________________________________ (1) Amortization expense for below market right-of-use asset was $0.2 million and less than $0.1 million for the years ended December 31, 2022 and 2021, respectively. There was no amortization expense for below market right-of-use asset for the year ended December 31, 2020. Includes right-of-use finance leases of $9.0 million and $13.8 million, right-of-use operating leases of $10.6 million and $10.2 million, and a below-market right-of-use asset, net of $6.8 million and $7.1 million, as of December 31, 2022 and 2021, respectively. (2) Amortization expense for deferred costs related to the Revolving Facility totaled $2.2 million and $0.3 million for the years ended December 31, 2022 and 2021, respectively, as compared to no amortization expense for deferred costs for the year ended December 31, 2020. Accumulated amortization for deferred costs related to the Revolving Facility was $2.5 million and $0.3 million as of December 31, 2022 and 2021, respectively. Includes outstanding deferred equity offering costs of $0.5 million, which will be offset against additional paid in capital for future issuances of shares of the Company’s common stock, as of December 31, 2022. There was no such balance as of December 31, 2021. |
Orion Office REIT, Fair Value_2
Orion Office REIT, Fair Value Measures (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value Measurements, Recurring | The following tables present information about the Company’s assets and liabilities measured at fair value on a recurring basis as of December 31, 2022 and 2021, aggregated by the level in the fair value hierarchy within which those instruments fall (in thousands): Level 1 Level 2 Level 3 Balance as of December 31, 2022 Derivative assets $ — $ 6,308 $ — $ 6,308 Level 1 Level 2 Level 3 Balance as of December 31, 2021 Derivative assets $ — $ 299 $ — $ 299 |
Schedule of Provisions for Impairment | The following table summarizes our provisions for impairment during the periods indicated below (dollars in thousands): Year Ended December 31, 2022 2021 2020 Number of properties 18 10 1 Carrying value of impaired properties $ 142,748 $ 109,197 $ 29,129 Provisions for impairment (66,359) (49,859) (18,671) Estimated fair value $ 76,389 $ 59,338 $ 10,458 |
Schedule of Assets Measured at Fair Value on a Non-recurring Basis | The following tables present certain of the Company’s assets measured at fair value on a non-recurring basis as of December 31, 2022 and 2021, aggregated by the level in the fair value hierarchy within which those assets fall (in thousands): Level 1 Level 2 (1) Level 3 (1) Balance as of December 31, 2022 Assets of properties held and used $ — $ 38,900 $ 11,957 $ 50,857 Assets of properties held for sale — 2,502 — 2,502 $ — $ 41,402 $ 11,957 $ 53,359 Level 1 Level 2 (1) Level 3 (1) Balance as of December 31, 2021 Assets of properties held and used $ — $ — $ 59,339 $ 59,339 Assets of properties held for sale — — — — $ — $ — $ 59,339 $ 59,339 ____________________________________ (1) The fair value of the level 2 category was derived using negotiated sales prices and the fair value of the level 3 category was derived using discounted cash flow analysis and management estimates of selling prices. |
Schedule of Fair Value, by Balance Sheet Grouping | The fair values of the Company’s long-term financial instruments are reported below (dollars in thousands): Level Carrying Value at December 31, 2022 Fair Value at December 31, 2022 Carrying Value at December 31, 2021 Fair Value at December 31, 2021 Liabilities (1) : Bridge facility 2 — — $ 355,000 $ 355,000 Mortgages payable 2 355,000 332,323 — — Credit facility term loan 2 175,000 175,000 175,000 175,000 Credit facility revolver (2) 2 — — 90,000 90,000 Total $ 530,000 $ 507,323 $ 620,000 $ 620,000 ____________________________________ (1) Current and prior period liabilities’ carrying and fair values exclude net deferred financing costs. (2) As of December 31, 2022, the Company did not have any amounts outstanding under its $425.0 million Revolving Facility. |
Orion Office REIT, Debt, Net (T
Orion Office REIT, Debt, Net (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | The following table summarizes the carrying value of debt as of December 31, 2022 and 2021, and the debt activity for the year ended December 31, 2022 (in thousands): Year Ended December 31, 2022 Balance as of December 31, 2021 Debt Issuances Repayments, Extinguishment and Assumptions Accretion and Amortization Balance as of December 31, 2022 Mortgages payable: Outstanding balance $ — $ 355,000 $ — $ — $ 355,000 Deferred costs — (3,446) — 613 (2,833) Mortgages payable, net — 351,554 — 613 352,167 Bridge facility: Outstanding balance 355,000 — (355,000) — — Deferred costs (643) — 442 201 — Bridge facility, net 354,357 — (354,558) 201 — Credit facility term loan: Outstanding balance 175,000 — — — 175,000 Deferred costs (2,510) (44) — 1,369 (1,185) Credit facility term loan, net 172,490 (44) — 1,369 173,815 Credit facility revolver: Outstanding balance 90,000 70,000 (160,000) — — Credit facility revolver 90,000 70,000 (160,000) — — Total debt $ 616,847 $ 421,510 $ (514,558) $ 2,183 $ 525,982 |
Schedule of Maturities of Long-term Debt | The following table summarizes the scheduled aggregate principal repayments due on the Company’s debt outstanding as of December 31, 2022 (in thousands): Total 2023 $ 175,000 2024 — 2025 — 2026 — 2027 355,000 Total $ 530,000 |
Schedule of Mortgage Notes Payable | The Company’s mortgages payable consisted of the following as of December 31, 2022 (dollars in thousands): Encumbered Properties Net Carrying Value of Collateralized Properties (1) Outstanding Balance Weighted-Average Weighted-Average Years to Maturity Fixed-rate debt 19 $ 465,098 $ 355,000 4.97 % 4.1 ____________________________________ (1) Net carrying value is real estate assets, including right-of-use assets, net of real estate liabilities. |
Orion Office REIT, Derivative_2
Orion Office REIT, Derivative and Hedging Activities (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments | The table below presents the fair value of the Company’s derivative financial instrument designated as a cash flow hedge as well as its classification in the Company’s consolidated balance sheets as of December 31, 2022 and 2021 (in thousands): Derivatives Designated as Hedging Instruments Balance Sheet Location December 31, 2022 December 31, 2021 Interest rate swaps Other assets, net $ 6,308 $ 299 |
Schedule of Derivative Offsetting Assets | The table below details a gross presentation, the effects of offsetting and a net presentation of the Company’s derivatives as of December 31, 2022 and 2021 (in thousands). The net amounts of derivative assets or liabilities can be reconciled to the tabular disclosure of fair value. Offsetting of Derivative Assets and Liabilities Gross Amounts of Recognized Assets Gross Amounts of Recognized Liabilities Gross Amounts Offset in the Consolidated Balance Sheets Net Amounts of Assets Presented in the Consolidated Balance Sheets Net Amounts of Liabilities Presented in the Consolidated Balance Sheets Financial Instruments Cash Collateral Received Net Amount December 31, 2022 $ 6,308 $ — $ — $ 6,308 $ — $ — $ — $ 6,308 December 31, 2021 $ 299 $ — $ — $ 299 $ — $ — $ — $ 299 |
Schedule of Derivative Offsetting Liabilities | The table below details a gross presentation, the effects of offsetting and a net presentation of the Company’s derivatives as of December 31, 2022 and 2021 (in thousands). The net amounts of derivative assets or liabilities can be reconciled to the tabular disclosure of fair value. Offsetting of Derivative Assets and Liabilities Gross Amounts of Recognized Assets Gross Amounts of Recognized Liabilities Gross Amounts Offset in the Consolidated Balance Sheets Net Amounts of Assets Presented in the Consolidated Balance Sheets Net Amounts of Liabilities Presented in the Consolidated Balance Sheets Financial Instruments Cash Collateral Received Net Amount December 31, 2022 $ 6,308 $ — $ — $ 6,308 $ — $ — $ — $ 6,308 December 31, 2021 $ 299 $ — $ — $ 299 $ — $ — $ — $ 299 |
Orion Office REIT, Supplement_2
Orion Office REIT, Supplemental Cash Flow Disclosures (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Supplemental Cash Flow Elements [Abstract] | |
Schedule of Supplemental Cash Flow Information | Supplemental cash flow information was as follows during the periods indicated below (in thousands): Year Ended December 31, 2022 2021 2020 Supplemental disclosures: Cash paid for interest $ 25,108 $ 2,412 $ 3,479 Cash paid for income taxes $ 634 $ 98 $ — Non-cash investing and financing activities: Accrued capital expenditures and leasing costs $ 3,243 $ 286 $ — Accrued deferred financing costs $ 25 $ — $ — Non-cash assets and liabilities contributed by parent company $ — $ 1,142,002 $ — Establishment of right-of-use assets and lease liabilities $ 1,193 $ 989 $ — Distributions declared and unpaid $ 5,664 $ — $ — Land acquired upon finance lease termination $ 4,707 $ — $ — |
Orion Office REIT, Accounts P_2
Orion Office REIT, Accounts Payable and Accrued Expenses (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Payables and Accruals [Abstract] | |
Schedule of Accounts Payable and Accrued Expenses | Accounts payable and accrued expenses consisted of the following as of December 31, 2022 and 2021 (in thousands): December 31, 2022 December 31, 2021 Accrued real estate and other taxes $ 10,191 $ 10,322 Accrued operating and other 10,034 4,127 Accrued capital expenditures and leasing costs 2,333 32 Accrued interest 1,810 1,093 Accounts payable 1,793 1,805 Total $ 26,161 $ 17,379 |
Orion Office REIT, Leases (Tabl
Orion Office REIT, Leases (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Schedule of Operating Lease Payments to be Received | The following table presents future minimum base rent payments due to the Company over the next five years and thereafter as of December 31, 2022 (in thousands). Future Minimum 2023 $ 137,833 2024 110,559 2025 72,868 2026 69,771 2027 50,342 Thereafter 184,574 Total $ 625,947 |
Schedule of Operating Lease Liability, Maturity | The following table reflects the maturity analysis of payments due from the Company over the next five years and thereafter for ground and corporate office lease obligations as of December 31, 2022 (in thousands). Future Minimum Lease Payments 2023 $ 1,134 2024 883 2025 892 2026 478 2027 445 Thereafter 12,939 Total 16,771 Less: imputed interest 6,079 Total $ 10,692 |
Orion Office REIT, Stockholde_2
Orion Office REIT, Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Schedule of Dividends Declared | During the year ended December 31, 2022, the Company’s Board of Directors declared quarterly cash dividends on shares of the Company’s common stock as follows (in thousands, except per share data): Declaration Date Record Date Paid Date Distributions Per Share March 22, 2022 March 31, 2022 April 15, 2022 $ 0.10 May 3, 2022 June 30, 2022 July 15, 2022 $ 0.10 August 2, 2022 September 30, 2022 October 17, 2022 $ 0.10 November 1, 2022 December 30, 2022 January 17, 2023 $ 0.10 The following table sets forth the federal income tax characterization of dividends paid on a percentage basis on the Company’s common stock for the year ended December 31, 2022: Year Ended December 31, 2022 Ordinary dividends — % Capital gain distributions — % Nondividend distributions 100.0 % Total 100.0 % |
Orion Office REIT, Equity-Bas_2
Orion Office REIT, Equity-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Nonvested Restricted Stock Units Activity | The following table details the activity of the Time-Based RSUs during the year ended December 31, 2022: Time-Based RSUs Weighted-Average Grant Date Fair Value Unvested units, December 31, 2021 27,920 $ 20.96 Granted 144,594 $ 16.81 Vested (15,567) $ 21.10 Forfeited — $ — Unvested units, December 31, 2022 156,947 $ 17.12 The following table details the activity of the Performance-Based RSUs during the year ended December 31, 2022: Performance-Based RSUs Weighted-Average Grant Date Fair Value Unvested units, December 31, 2021 — $ — Granted 212,154 $ 13.65 Vested — $ — Forfeited — $ — Unvested units, December 31, 2022 212,154 $ 13.65 |
Orion Office REIT, Net Income_2
Orion Office REIT, Net Income (Loss) Per Share (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The computation of basic and diluted earnings per share is as follows for the year ended December 31, 2022, 2021 and 2020 (in thousands, except share and per share data): Year Ended December 31, 2022 2021 2020 Net loss $ (97,474) $ (47,464) $ (1,899) Income attributable to non-controlling interests (20) (17) — Net loss available to common stockholders used in basic and diluted net income per share (97,494) (47,481) (1,899) Weighted average shares of common stock outstanding - basic 56,631,826 56,625,650 56,625,650 Effect of dilutive securities (1) — — — Weighted average shares of common stock - diluted 56,631,826 56,625,650 56,625,650 Basic and diluted loss per share attributable to common stockholders $ (1.72) $ (0.84) $ (0.03) ____________________________________ (1) As of December 31, 2022, 2021 and 2020, there were no adjustments to the weighted average common shares outstanding used in the diluted calculation given there were no potentially dilutive shares. |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following were excluded from diluted net loss per share attributable to common stockholders, as the effect would have been antidilutive: Year Ended December 31, 2022 2021 2020 Weighted average unvested Time-Based RSUs and Performance-Based RSUs (1) — — — Weighted average stock warrants 1,120,000 1,120,000 — ____________________________________ (1) Net of assumed repurchases in accordance with the treasury stock method. |
VEREIT Office Assets, Real Es_2
VEREIT Office Assets, Real Estate Investments and Related Intangibles (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Entity Information [Line Items] | |
Schedule of Finite-Lived Intangible Assets | Intangible lease assets consisted of the following (in thousands, except weighted-average useful life): Weighted-Average Useful Life (Years) December 31, 2022 December 31, 2021 Intangible lease assets: In-place leases, net of accumulated amortization of $144,798 and $65,247, respectively 5.4 $ 177,698 $ 272,743 Leasing commissions, net of accumulated amortization of $1,553 and $456, respectively 12.4 13,614 10,349 Above-market lease assets, net of accumulated amortization of $11,391 and $6,239, respectively 5.5 9,826 15,015 Deferred lease incentives, net of accumulated amortization of $116 4.7 1,694 — Total intangible lease assets, net $ 202,832 $ 298,107 Intangible lease liabilities: Below-market leases, net of accumulated amortization of $17,249 and $14,459, respectively 8.4 $ 14,068 $ 20,609 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | The following table provides the projected amortization expense and adjustments to rental revenue related to the intangible lease assets and liabilities for the next five years as of December 31, 2022 (in thousands) : 2023 2024 2025 2026 2027 In-place leases: Total projected to be included in amortization expense $ 73,501 $ 49,185 $ 21,652 $ 15,499 $ 7,441 Leasing commissions: Total projected to be included in amortization expense $ 1,340 $ 1,297 $ 1,229 $ 1,229 $ 1,226 Above-market lease assets: Total projected to be deducted from rental revenue $ 4,776 $ 2,995 $ 860 $ 682 $ 237 Deferred lease incentives: Total projected to be deducted from rental revenue $ 403 $ 403 $ 386 $ 288 $ 212 Below-market lease liabilities: Total projected to be added to rental revenue $ 5,994 $ 3,786 $ 1,036 $ 817 $ 655 |
VEREIT Office Assets | |
Entity Information [Line Items] | |
Schedule of Finite-Lived Intangible Assets | Intangible lease assets consisted of the following (in thousands, except weighted-average useful life): Weighted-Average Useful Life (Years) October 31, 2021 Intangible lease assets: In-place leases, net of accumulated amortization of $119,604 10.1 $ 29,091 Leasing commissions, net of accumulated amortization of $5,679 9.1 8,744 Above-market lease assets and deferred lease incentives, net of accumulated amortization of $14,793 9.8 6,649 Total intangible lease assets, net $ 44,484 Intangible lease liabilities: Below-market leases, net of accumulated amortization of $18,504 10.3 $ 5,308 |
Schedule of Finite Lived Intangible Liabilities | Intangible lease assets consisted of the following (in thousands, except weighted-average useful life): Weighted-Average Useful Life (Years) October 31, 2021 Intangible lease assets: In-place leases, net of accumulated amortization of $119,604 10.1 $ 29,091 Leasing commissions, net of accumulated amortization of $5,679 9.1 8,744 Above-market lease assets and deferred lease incentives, net of accumulated amortization of $14,793 9.8 6,649 Total intangible lease assets, net $ 44,484 Intangible lease liabilities: Below-market leases, net of accumulated amortization of $18,504 10.3 $ 5,308 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | The following table provides the projected amortization expense and adjustments to rental revenue related to the intangible lease assets and liabilities for the next five years as of October 31, 2021 (in thousands) : Remainder of 2021 2022 2023 2024 2025 In-place leases: Total projected to be included in amortization expense $ 2,191 $ 10,475 $ 9,142 $ 5,512 $ 1,156 Leasing commissions: Total projected to be included in amortization expense $ 288 $ 1,692 $ 1,290 $ 1,201 $ 1,020 Above-market lease assets and deferred lease incentives: Total projected to be deducted from rental revenue $ 373 $ 2,223 $ 2,186 $ 1,104 $ 354 Below-market lease liabilities: Total projected to be included in rental revenue $ 345 $ 2,003 $ 1,878 $ 854 $ 208 |
VEREIT Office Assets, Leases (T
VEREIT Office Assets, Leases (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Entity Information [Line Items] | |
Schedule of Operating Lease Payments to be Received | The following table presents future minimum base rent payments due to the Company over the next five years and thereafter as of December 31, 2022 (in thousands). Future Minimum 2023 $ 137,833 2024 110,559 2025 72,868 2026 69,771 2027 50,342 Thereafter 184,574 Total $ 625,947 |
Schedule of Operating Lease Liability, Maturity | The following table reflects the maturity analysis of payments due from the Company over the next five years and thereafter for ground and corporate office lease obligations as of December 31, 2022 (in thousands). Future Minimum Lease Payments 2023 $ 1,134 2024 883 2025 892 2026 478 2027 445 Thereafter 12,939 Total 16,771 Less: imputed interest 6,079 Total $ 10,692 |
VEREIT Office Assets | |
Entity Information [Line Items] | |
Schedule of Lease Income | The components of rental revenue from VEREIT Office Assets’ operating leases were as follows (in thousands): Ten Months Ended October 31, Year Ended December 31, 2021 2020 Fixed: Cash rent $ 109,582 $ 132,402 Straight-line rent (4,889) (869) Lease intangible amortization (29) (67) Property operating cost reimbursements 3,270 3,794 Total fixed 107,934 135,260 Variable (1) 26,806 35,044 Total rental revenue $ 134,740 $ 170,304 ____________________________________ (1) Includes costs reimbursed related to property operating expenses, common area maintenance and percentage rent. |
Schedule of Operating Lease Payments to be Received | The following table presents future minimum operating lease payments due to VEREIT Office Assets over the next five years and thereafter as of October 31, 2021 (in thousands). Future Minimum November 1, 2021 - December 31, 2021 $ 15,683 2022 110,872 2023 95,130 2024 72,361 2025 38,980 2026 29,951 Thereafter 34,357 Total $ 397,334 |
Schedule of Operating Lease Liability, Maturity | The following table reflects the maturity analysis of payments due from VEREIT Office Assets over the next five years and thereafter for ground lease obligations as of October 31, 2021 (in thousands). Future Minimum Lease Payments November 1, 2021 - December 31, 2021 $ 55 2022 329 2023 329 2024 329 2025 329 2026 329 Thereafter 10,062 Total 11,762 Less: imputed interest 6,403 Total $ 5,359 |
Orion Office REIT, Organizati_2
Orion Office REIT, Organization (Details) $ / shares in Units, ft² in Millions, $ in Millions | Nov. 12, 2021 USD ($) | Dec. 31, 2022 ft² state property $ / shares | Dec. 31, 2021 $ / shares |
Real Estate Properties [Line Items] | |||
Distributions to realty income | $ | $ 595 | ||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | |
Number of Properties | property | 81 | ||
Area of real estate property | ft² | 9.5 | ||
Number of states with real estate properties owned | state | 29 | ||
Arch Street Joint Venture | |||
Real Estate Properties [Line Items] | |||
Number of Properties | property | 6 | ||
Area of real estate property | ft² | 1 | ||
Number of states with real estate properties owned | state | 6 |
Orion Office REIT, Summary of_3
Orion Office REIT, Summary of Significant Accounting Policies (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Entity Information [Line Items] | ||||
Reduction to rental revenue | $ 1,500,000 | $ 0 | $ 0 | |
Lease termination income | 1,400,000 | 300,000 | 0 | |
Property management fee revenue | 800,000 | 300,000 | 0 | |
Impairment of unconsolidated joint venture | 0 | 0 | ||
Impairments of ROU assets | 0 | 0 | 0 | |
Restricted cash | 34,673,000 | 0 | 3,915,000 | $ 3,719,000 |
Franchise and state and local tax expense | 200,000 | 200,000 | ||
Provisions related to material uncertain income tax positions | $ 0 | $ 0 | ||
Impounds Related To Mortgages Payable | ||||
Entity Information [Line Items] | ||||
Restricted cash | 3,400,000 | |||
Security Deposits Related To Mortgages Payable | ||||
Entity Information [Line Items] | ||||
Restricted cash | $ 500,000 | |||
Building | ||||
Entity Information [Line Items] | ||||
Real estate assets, useful life | 35 years | |||
Building, Fixtures And Improvements | Minimum | ||||
Entity Information [Line Items] | ||||
Real estate assets, useful life | 5 years | |||
Building, Fixtures And Improvements | Maximum | ||||
Entity Information [Line Items] | ||||
Real estate assets, useful life | 15 years |
Orion Office REIT, Real Estat_3
Orion Office REIT, Real Estate Investments and Related Intangibles - Property Acquisitions (Details) | 12 Months Ended | ||
Dec. 31, 2022 USD ($) landParcel | Dec. 31, 2021 acquistion | Dec. 31, 2020 acquistion | |
Real Estate [Abstract] | |||
Payments to acquire property | $ 0 | ||
Number of properties acquired | landParcel | 1 | ||
Finance lease ROU asset reclassified to real estate investments | $ 4,700,000 | ||
Number of real estate acquisitions | acquistion | 0 | 0 |
Orion Office REIT, Real Estat_4
Orion Office REIT, Real Estate Investments and Related Intangibles - Property Dispositions (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 USD ($) property | Dec. 31, 2021 USD ($) property | Dec. 31, 2020 USD ($) property | |
Real Estate [Line Items] | |||
Impairments on disposition of real estate assets | $ 66,359 | $ 49,859 | $ 18,671 |
Disposal Group, Held-for-sale or Disposed of by Sale, Not Discontinued Operations | |||
Real Estate [Line Items] | |||
Total dispositions | property | 11 | 0 | 0 |
Aggregate gross sales price | $ 33,098 | $ 0 | $ 0 |
Gain on disposition of real estate assets | $ 2,352 | $ 0 | $ 0 |
Property count | property | 5 | 0 | 0 |
Impairments on disposition of real estate assets | $ 5,089 | $ 0 | $ 0 |
Property count | property | 6 | 0 | 0 |
Orion Office REIT, Real Estat_5
Orion Office REIT, Real Estate Investments and Related Intangibles - Real Estate Assets Held for Sale (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 USD ($) property | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Property, Plant and Equipment [Line Items] | |||
Number of properties held for sale | property | 1 | ||
Real estate assets held for sale, net | $ 2,502 | $ 0 | |
Impairments | 66,359 | $ 49,859 | $ 18,671 |
Held-for-sale | |||
Property, Plant and Equipment [Line Items] | |||
Impairments | 6,000 | ||
Land | |||
Property, Plant and Equipment [Line Items] | |||
Real estate assets held for sale, net | 600 | ||
Building, Fixtures And Improvements | |||
Property, Plant and Equipment [Line Items] | |||
Real estate assets held for sale, net | $ 1,900 |
Orion Office REIT, Real Estat_6
Orion Office REIT, Real Estate Investments and Related Intangibles - Intangible Lease Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Real Estate [Line Items] | |||
Intangible lease assets, net | $ 202,832 | $ 298,107 | |
Below market-leases accumulated amortization | $ 17,249 | 14,459 | |
Weighted-Average Useful Life (Years) | 8 years 4 months 24 days | ||
Below-market lease liabilities, net | $ 14,068 | 20,609 | |
Amortization of deferred lease incentives | 100 | 0 | $ 0 |
In-place leases: | |||
Real Estate [Line Items] | |||
Accumulated amortization | $ 144,798 | 65,247 | |
Finite-Lived Intangible Asset, Useful Life | 5 years 4 months 24 days | ||
Intangible lease assets, net | $ 177,698 | 272,743 | |
Leasing commissions: | |||
Real Estate [Line Items] | |||
Accumulated amortization | $ 1,553 | 456 | |
Finite-Lived Intangible Asset, Useful Life | 12 years 4 months 24 days | ||
Intangible lease assets, net | $ 13,614 | 10,349 | |
Above-market lease assets: | |||
Real Estate [Line Items] | |||
Accumulated amortization | $ 11,391 | 6,239 | |
Finite-Lived Intangible Asset, Useful Life | 5 years 6 months | ||
Intangible lease assets, net | $ 9,826 | 15,015 | |
Deferred lease incentives | |||
Real Estate [Line Items] | |||
Accumulated amortization | $ 116 | ||
Finite-Lived Intangible Asset, Useful Life | 4 years 8 months 12 days | ||
Intangible lease assets, net | $ 1,694 | 0 | |
Above‑ and below-market leases | |||
Real Estate [Line Items] | |||
Amortization expense | 1,200 | 1,000 | 800 |
In-place leases, leasing commissions and other lease intangibles | |||
Real Estate [Line Items] | |||
Amortization expense | $ 95,400 | $ 23,100 | $ 7,900 |
Orion Office REIT, Real Estat_7
Orion Office REIT, Real Estate Investments and Related Intangibles - Intangible Lease Assets and Liabilities (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Below-market lease liabilities: | |
2023 | $ 5,994 |
2024 | 3,786 |
2025 | 1,036 |
2026 | 817 |
2027 | 655 |
In-place leases: | |
Projected asset amortization expense [Abstract] | |
2023 | 73,501 |
2024 | 49,185 |
2025 | 21,652 |
2026 | 15,499 |
2027 | 7,441 |
Leasing commissions: | |
Projected asset amortization expense [Abstract] | |
2023 | 1,340 |
2024 | 1,297 |
2025 | 1,229 |
2026 | 1,229 |
2027 | 1,226 |
Above-market lease assets: | |
Projected asset amortization expense [Abstract] | |
2023 | 4,776 |
2024 | 2,995 |
2025 | 860 |
2026 | 682 |
2027 | 237 |
Deferred lease incentives: | |
Projected asset amortization expense [Abstract] | |
2023 | 403 |
2024 | 403 |
2025 | 386 |
2026 | 288 |
2027 | $ 212 |
Orion Office REIT, Real Estat_8
Orion Office REIT, Real Estate Investments and Related Intangibles - Consolidated Joint Venture (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 USD ($) property joint_venture | Dec. 31, 2021 USD ($) joint_venture property | |
Real Estate [Line Items] | ||
Number of Properties | property | 81 | |
Assets | $ 1,571,073 | $ 1,759,478 |
Real estate investments, net | $ 1,233,246 | $ 1,353,636 |
Joint ventures | ||
Real Estate [Line Items] | ||
Number of joint ventures | joint_venture | 1 | 1 |
Number of Properties | property | 1 | 1 |
Assets | $ 27,700 | $ 27,400 |
Real estate investments, net | $ 24,900 | $ 26,100 |
Orion Office REIT, Real Estat_9
Orion Office REIT, Real Estate Investments and Related Intangibles - Schedule of Company's Investment in Unconsolidated Joint Venture (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 USD ($) property | Dec. 31, 2021 USD ($) property | Dec. 31, 2020 USD ($) | |
Schedule of Equity Method Investments [Line Items] | |||
Number of Properties | property | 81 | ||
Equity in loss of unconsolidated joint venture, net | $ (524) | $ (56) | $ 0 |
Arch Street Joint Venture | |||
Schedule of Equity Method Investments [Line Items] | |||
Number of unconsolidated joint ventures | property | 1 | ||
Ownership | 20% | ||
Number of Properties | property | 6 | ||
Carrying Value of Investment | $ 15,824 | $ 18,631 | |
Equity in loss of unconsolidated joint venture, net | (524) | (56) | $ 0 |
Purchase price | 30,500 | ||
Difference between carrying amount and underlying equity | $ 900 | $ 2,100 |
Orion Office REIT, Receivable_3
Orion Office REIT, Receivables and Other Assets - Accounts Receivable, Net (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Receivables [Abstract] | ||
Accounts receivable, net | $ 10,461 | $ 10,194 |
Straight-line rent receivable, net | 11,180 | 7,722 |
Total | $ 21,641 | $ 17,916 |
Orion Office REIT, Receivable_4
Orion Office REIT, Receivables and Other Assets - Other Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Receivables [Abstract] | ||||
Restricted cash | $ 34,673 | $ 0 | $ 3,915 | $ 3,719 |
Operating lease, right-of-use asset, statement of financial position [Extensible Enumeration] | Total | Total | ||
Finance lease, right-of-use asset, statement of financial position [Extensible Enumeration] | Total | Total | ||
Right-of-use assets, net | $ 26,422 | $ 30,958 | ||
Investment in unconsolidated joint venture | 15,824 | 18,631 | ||
Derivative assets | 6,308 | 299 | ||
Deferred costs, net | 4,619 | 6,246 | ||
Prepaid expenses | 1,305 | 3,730 | ||
Other assets, net | 1,063 | 637 | ||
Total | 90,214 | 60,501 | ||
Amortization expense for below market right-of-use, less than | 200 | 100 | 0 | |
Finance lease, right-of-use asset, after accumulated amortization | 9,000 | 13,800 | ||
Operating lease right-of-use assets | 10,600 | 10,200 | ||
Below market lease, right-of-use asset | 6,800 | 7,100 | ||
Amortization of deferred costs | 2,200 | 300 | $ 0 | |
Accumulated amortization of deferred costs | 2,500 | 300 | ||
Deferred equity offering costs | $ 500 | $ 0 |
Orion Office REIT, Fair Value_3
Orion Office REIT, Fair Value Measures - Items Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets | $ 6,308 | $ 299 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets | 0 | 0 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets | 6,308 | 299 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets | $ 0 | $ 0 |
Orion Office REIT, Fair Value_4
Orion Office REIT, Fair Value Measures - Narrative (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 USD ($) property | Dec. 31, 2021 USD ($) property | Dec. 31, 2020 USD ($) property | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Number of properties | property | 18 | 10 | 1 |
Impairments | $ 66,359 | $ 49,859 | $ 18,671 |
Impairment Long Lived Asset Held For Use Statement Of Income Or Comprehensive Income Extensible Enumeration Not Disclosed Flag | Impairments | Impairments | |
Assets Impaired During The Twelve Months Ended December 31 2022 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Impairment, long-lived asset, held-for-use | $ 39,500 | ||
Impairment of properties held for sale | 200 | ||
Impairment of properties disposed of | $ 26,700 | ||
Assets Impaired During The Twelve Months Ended December 31 2022 | Estimated Sales Price | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Number of properties | property | 17 | ||
Assets Impaired During The Twelve Months Ended December 31 2022 | Discount Rate and Capitalization Rate | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Number of properties | property | 1 | ||
Assets Impaired During The Twelve Months Ended December 31 2022 | Weighted Average | Discount Rate | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Alternative investment, measurement input | 0.085 | ||
Assets Impaired During The Twelve Months Ended December 31 2022 | Weighted Average | Capitalization Rate | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Alternative investment, measurement input | 0.080 | ||
Assets Impaired During The Twelve Months Ended December 31 2021 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Impairment, long-lived asset, held-for-use | $ 49,900 | ||
Impairment of properties held for sale | 0 | ||
Impairment of properties disposed of | $ 0 | ||
Assets Impaired During The Twelve Months Ended December 31 2021 | Estimated Sales Price | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Number of properties | property | 10 |
Orion Office REIT, Fair Value_5
Orion Office REIT, Fair Value Measures - Provisions for Impairment (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 USD ($) property | Dec. 31, 2021 USD ($) property | Dec. 31, 2020 USD ($) property | |
Fair Value Disclosures [Abstract] | |||
Number of properties | property | 18 | 10 | 1 |
Carrying value of impaired properties | $ 142,748 | $ 109,197 | $ 29,129 |
Provisions for impairment | (66,359) | (49,859) | (18,671) |
Estimated fair value | $ 76,389 | $ 59,338 | $ 10,458 |
Orion Office REIT, Fair Value_6
Orion Office REIT, Fair Value Measures - Assets at Fair Value Measured on a Non-recurring Basis (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets of properties held and used | $ 50,857 | $ 59,339 |
Assets of properties held for sale | 2,502 | 0 |
Assets | 53,359 | 59,339 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets of properties held and used | 0 | 0 |
Assets of properties held for sale | 0 | 0 |
Assets | 0 | 0 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets of properties held and used | 38,900 | 0 |
Assets of properties held for sale | 2,502 | 0 |
Assets | 41,402 | 0 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets of properties held and used | 11,957 | 59,339 |
Assets of properties held for sale | 0 | 0 |
Assets | $ 11,957 | $ 59,339 |
Orion Office REIT, Fair Value_7
Orion Office REIT, Fair Value Measures - Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Carrying Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of debt | $ 530,000 | $ 620,000 |
Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of debt | 507,323 | 620,000 |
Level 2 | Bridge facility | Carrying Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of debt | 0 | 355,000 |
Level 2 | Bridge facility | Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of debt | 0 | 355,000 |
Level 2 | Mortgages payable | Carrying Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of debt | 355,000 | 0 |
Level 2 | Mortgages payable | Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of debt | 332,323 | 0 |
Level 2 | Credit facility term loan | Carrying Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of debt | 175,000 | 175,000 |
Level 2 | Credit facility term loan | Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of debt | 175,000 | 175,000 |
Level 2 | Credit facility revolver | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Line of credit facility, amount outstanding | 425,000 | |
Level 2 | Credit facility revolver | Carrying Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of debt | 0 | 90,000 |
Level 2 | Credit facility revolver | Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of debt | $ 0 | $ 90,000 |
Orion Office REIT, Debt, Net -
Orion Office REIT, Debt, Net - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Debt Disclosure [Abstract] | ||
Total debt outstanding | $ 525,982 | $ 616,847 |
Debt instrument, term | 3 years | |
Weighted-average interest rate | 4.38% |
Orion Office REIT, Debt, Net _2
Orion Office REIT, Debt, Net - Schedule of Debt (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Debt [Roll Forward] | |
Total debt, beginning balance | $ 616,847 |
Debt issuance principal amount | 421,510 |
Repayments, extinguishment and assumptions of debt, net | (514,558) |
Amortization of deferred financing costs | 2,183 |
Total debt, ending balance | 525,982 |
Mortgages payable | |
Debt [Roll Forward] | |
Outstanding balance, beginning | 0 |
Deferred costs, beginning balance | 0 |
Total debt, beginning balance | 0 |
Debt issuance outstanding balance amount | 355,000 |
Debt issuance, deferred cost | (3,446) |
Debt issuance principal amount | 351,554 |
Repayments, extinguishment and assumptions outstanding balance amount | 0 |
Repayments, extinguishment and assumptions of debt, deferred costs, amount | 0 |
Repayments, extinguishment and assumptions of debt, net | 0 |
Amortization of debt issuance costs | 613 |
Amortization of deferred financing costs | 613 |
Outstanding balance, ending | 355,000 |
Deferred costs, ending balance | (2,833) |
Total debt, ending balance | 352,167 |
Bridge facility | |
Debt [Roll Forward] | |
Outstanding balance, beginning | 355,000 |
Deferred costs, beginning balance | (643) |
Total debt, beginning balance | 354,357 |
Debt issuance outstanding balance amount | 0 |
Debt issuance, deferred cost | 0 |
Debt issuance principal amount | 0 |
Repayments, extinguishment and assumptions outstanding balance amount | (355,000) |
Repayments, extinguishment and assumptions of debt, deferred costs, amount | 442 |
Repayments, extinguishment and assumptions of debt, net | (354,558) |
Amortization of debt issuance costs | 201 |
Amortization of deferred financing costs | 201 |
Outstanding balance, ending | 0 |
Deferred costs, ending balance | 0 |
Total debt, ending balance | 0 |
Credit facility term loan | |
Debt [Roll Forward] | |
Outstanding balance, beginning | 175,000 |
Deferred costs, beginning balance | (2,510) |
Total debt, beginning balance | 172,490 |
Debt issuance outstanding balance amount | 0 |
Debt issuance, deferred cost | (44) |
Debt issuance principal amount | (44) |
Repayments, extinguishment and assumptions outstanding balance amount | 0 |
Repayments, extinguishment and assumptions of debt, deferred costs, amount | 0 |
Repayments, extinguishment and assumptions of debt, net | 0 |
Amortization of debt issuance costs | 1,369 |
Amortization of deferred financing costs | 1,369 |
Outstanding balance, ending | 175,000 |
Deferred costs, ending balance | (1,185) |
Total debt, ending balance | 173,815 |
Credit facility revolver | |
Debt [Roll Forward] | |
Outstanding balance, beginning | 90,000 |
Total debt, beginning balance | 90,000 |
Debt issuance outstanding balance amount | 70,000 |
Debt issuance principal amount | 70,000 |
Repayments, extinguishment and assumptions outstanding balance amount | (160,000) |
Repayments, extinguishment and assumptions of debt, net | (160,000) |
Amortization of deferred financing costs | 0 |
Outstanding balance, ending | 0 |
Total debt, ending balance | $ 0 |
Orion Office REIT, Debt, Net _3
Orion Office REIT, Debt, Net - Scheduled Aggregate Principal Repayments Due (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Debt Disclosure [Abstract] | |
2023 | $ 175,000 |
2024 | 0 |
2025 | 0 |
2026 | 0 |
2027 | 355,000 |
Total | $ 530,000 |
Orion Office REIT, Debt, Net _4
Orion Office REIT, Debt, Net - Credit Agreement (Details) | 12 Months Ended | ||||
Nov. 12, 2021 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | Feb. 10, 2022 USD ($) | |
Debt Instrument [Line Items] | |||||
Debt instrument, term | 3 years | ||||
Distributions to realty income | $ 595,000,000 | ||||
Mortgages payable | CMBS Loan | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, face amount | $ 355,000,000 | ||||
Credit facility revolver | |||||
Debt Instrument [Line Items] | |||||
Borrowing capacity | 425,000,000 | ||||
Proceeds from lines of credit | $ 90,000,000 | $ 70,000,000 | $ 90,000,000 | $ 0 | |
Credit facilities | 0 | 90,000,000 | |||
Remaining borrowing capacity | $ 425,000,000 | ||||
Commitment fee percentage | 0.25% | ||||
Credit facility revolver | Line of Credit | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, term | 3 years | ||||
Covenant, total debt to total asset value, maximum | 0.60 | ||||
Covenant, adjusted EBITDA to fixed charges, minimum | 1.50 | ||||
Covenant, secured debt to total asset value, maximum | 0.45 | ||||
Covenant, unsecured debt to unencumbered asset value, maximum | 0.60 | ||||
Covenant, unencumbered real properties to unsecured interest expense, minimum | 2 | ||||
Credit facility revolver | Line of Credit | SOFR | |||||
Debt Instrument [Line Items] | |||||
Variable rate | 0.10% | 2.50% | |||
Credit facility revolver | Line of Credit | Base Rate | |||||
Debt Instrument [Line Items] | |||||
Variable rate | 1.50% | ||||
Letter of Credit | |||||
Debt Instrument [Line Items] | |||||
Borrowing capacity | $ 25,000,000 | ||||
Credit facility term loan, net | |||||
Debt Instrument [Line Items] | |||||
Borrowing capacity | $ 175,000,000 | ||||
Proceeds from lines of credit | $ 0 | 175,000,000 | 0 | ||
Credit facilities | $ 173,815,000 | 172,490,000 | |||
Credit facility term loan, net | Line of Credit | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, term | 2 years | ||||
Credit facility term loan, net | Line of Credit | SOFR | |||||
Debt Instrument [Line Items] | |||||
Variable rate | 2.50% | ||||
Credit facility term loan, net | Line of Credit | Base Rate | |||||
Debt Instrument [Line Items] | |||||
Variable rate | 1.50% | ||||
Bridge facility | |||||
Debt Instrument [Line Items] | |||||
Borrowing capacity | $ 355,000,000 | ||||
Proceeds from lines of credit | $ 0 | $ 355,000,000 | $ 0 | ||
Bridge facility | Line of Credit | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, term | 6 months |
Orion Office REIT, Debt, Net _5
Orion Office REIT, Debt, Net - CMBS Loan (Details) $ in Millions | Feb. 10, 2022 USD ($) property | Dec. 31, 2022 USD ($) |
Unconsolidated Joint Venture | ||
Debt Instrument [Line Items] | ||
Consolidated debt outstanding | $ 136.7 | |
CMBS Loan | ||
Debt Instrument [Line Items] | ||
Number properties used to secure debt | property | 19 | |
Debt Instrument, Interest Rate, Stated Percentage | 4.971% | |
Loan reserves, amount funded | $ 35.5 | |
Prepayment lockout period | 2 years | |
Covenant, net worth requirement, minimum | $ 355 | |
Covenant, liquid asset requirement, minimum | 10 | |
CMBS Loan | CMBS Loan | ||
Debt Instrument [Line Items] | ||
Debt instrument, face amount | $ 355 |
Orion Office REIT, Debt, Net _6
Orion Office REIT, Debt, Net - Schedule of Mortgage Notes Payable (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 USD ($) property | Dec. 31, 2021 USD ($) | |
Debt Instrument [Line Items] | ||
Net Carrying Value of Collateralized Properties | $ 1,233,246 | $ 1,353,636 |
Weighted-Average Interest Rate | 4.38% | |
Weighted-Average Years to Maturity | 3 years | |
Mortgages payable | ||
Debt Instrument [Line Items] | ||
Encumbered Properties | property | 19 | |
Net Carrying Value of Collateralized Properties | $ 465,098 | |
Outstanding Balance | $ 355,000 | |
Weighted-Average Interest Rate | 4.97% | |
Weighted-Average Years to Maturity | 4 years 1 month 6 days |
Orion Office REIT, Derivative_3
Orion Office REIT, Derivative and Hedging Activities - Narrative (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 USD ($) derivative_instrument | Dec. 31, 2021 USD ($) derivative_instrument | Dec. 31, 2020 USD ($) | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Unrealized gain on interest rate derivatives | $ 7,802 | $ 209 | $ 0 |
Reclassification of pervious unrealized gain on interest rate derivatives | 1,793 | (90) | 0 |
Amount to be reclassified in next twelve months | 6,300 | ||
Designated as Hedging Instrument | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Unrealized gain on interest rate derivatives | 7,800 | 200 | 0 |
Reclassification of pervious unrealized gain on interest rate derivatives | 1,800 | (100) | $ 0 |
Interest rate swaps | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Derivative, notional amount | 175,000 | ||
Interest rate swaps | Designated as Hedging Instrument | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Derivative, notional amount | $ 175,000 | $ 175,000 | |
Interest rate swaps | Not Designated as Hedging Instrument | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Number of interest rate swaps not designated as qualifying hedging relationships | derivative_instrument | 0 | 0 |
Orion Office REIT, Derivative_4
Orion Office REIT, Derivative and Hedging Activities - Derivatives Designated as Hedging Instruments (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Interest rate swaps | Other assets, net | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Cash flow hedges derivative instruments at fair value, net | $ 6,308 | $ 299 |
Orion Office REIT, Derivative_5
Orion Office REIT, Derivative and Hedging Activities - Offsetting of Derivative Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Gross Amounts of Recognized Assets | $ 6,308 | $ 299 |
Gross Amounts of Recognized Liabilities | 0 | 0 |
Gross Amounts Offset in the Consolidated Balance Sheets | 0 | 0 |
Net Amounts of Assets Presented in the Consolidated Balance Sheets | 6,308 | 299 |
Net Amounts of Liabilities Presented in the Consolidated Balance Sheets | 0 | 0 |
Financial Instruments | 0 | 0 |
Cash Collateral Received | 0 | 0 |
Net Amount | $ 6,308 | $ 299 |
Orion Office REIT, Supplement_3
Orion Office REIT, Supplemental Cash Flow Disclosures (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Supplemental disclosures: | |||
Cash paid for interest | $ 25,108 | $ 2,412 | $ 3,479 |
Cash paid for income taxes | 634 | 98 | 0 |
Non-cash investing and financing activities: | |||
Accrued capital expenditures and leasing costs | 3,243 | 286 | 0 |
Accrued deferred financing costs | 25 | 0 | 0 |
Non-cash assets and liabilities contributed by parent company | 0 | 1,142,002 | 0 |
Establishment of right-of-use assets and lease liabilities | 1,193 | 989 | 0 |
Distributions declared and unpaid | 5,664 | 0 | 0 |
Land acquired upon finance lease termination | $ 4,707 | $ 0 | $ 0 |
Orion Office REIT, Accounts P_3
Orion Office REIT, Accounts Payable and Accrued Expenses (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Payables and Accruals [Abstract] | ||
Accrued real estate and other taxes | $ 10,191 | $ 10,322 |
Accrued operating and other | 10,034 | 4,127 |
Accrued capital expenditures and leasing costs | 2,333 | 32 |
Accrued interest | 1,810 | 1,093 |
Accounts payable | 1,793 | 1,805 |
Total | $ 26,161 | $ 17,379 |
Orion Office REIT, Commitment_2
Orion Office REIT, Commitment and Contingencies (Details) $ in Millions | Dec. 31, 2022 USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Commitment outstanding | $ 51.2 |
Leasing commissions | 0.3 |
Total leasing commitment | 34.7 |
Tenant improvement allowance | 23.6 |
Rent concession | $ 11.1 |
Orion Office REIT, Leases - Les
Orion Office REIT, Leases - Lessor Narrative (Details) | Dec. 31, 2022 |
Minimum | |
Lessor, Lease, Description [Line Items] | |
Lessor, operating leases, term | 2 months 12 days |
Maximum | |
Lessor, Lease, Description [Line Items] | |
Lessor, operating leases, term | 15 years 3 months 18 days |
Orion Office REIT, Leases - Fut
Orion Office REIT, Leases - Future Minimum Base Rent Payments (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Leases [Abstract] | |
2023 | $ 137,833 |
2024 | 110,559 |
2025 | 72,868 |
2026 | 69,771 |
2027 | 50,342 |
Thereafter | 184,574 |
Total | $ 625,947 |
Orion Office REIT, Leases - L_2
Orion Office REIT, Leases - Lessee Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Lessee, Lease, Description [Line Items] | |||
Lessee, operating lease, discount rate | 3.49% | ||
Operating lease, cost | $ 1 | $ 0.3 | $ 0.1 |
Minimum | |||
Lessee, Lease, Description [Line Items] | |||
Lessee, operating lease, remaining lease term | 10 months 24 days | ||
Maximum | |||
Lessee, Lease, Description [Line Items] | |||
Lessee, operating lease, remaining lease term | 62 years |
Orion Office REIT, Leases - F_2
Orion Office REIT, Leases - Future Minimum Lease Payments (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Leases [Abstract] | |
2023 | $ 1,134 |
2024 | 883 |
2025 | 892 |
2026 | 478 |
2027 | 445 |
Thereafter | 12,939 |
Total | 16,771 |
Less: imputed interest | 6,079 |
Total | $ 10,692 |
Orion Office REIT, Stockholde_3
Orion Office REIT, Stockholders' Equity - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | Nov. 12, 2021 | Nov. 10, 2021 | Jul. 15, 2021 |
Class of Stock [Line Items] | |||
Issuance of common stock, net (in shares) | 56,525,650 | 100,000 | |
Proceeds from issuance of common stock | $ 1 | ||
Warrants to purchase (in shares) | 1,120,000 | ||
Warrant, exercise price (in dollars per share) | $ 22.42 | ||
Maximum | |||
Class of Stock [Line Items] | |||
Warrants expire term | 10 years | ||
Minimum | |||
Class of Stock [Line Items] | |||
Warrants expire term | 7 years | ||
Realty Income | |||
Class of Stock [Line Items] | |||
Common stock, shares owned by realty income (in shares) | 56,625,650 |
Orion Office REIT, Stockholde_4
Orion Office REIT, Stockholders' Equity - Schedule of Dividends Payable (Details) - $ / shares | 12 Months Ended | ||||
Jan. 17, 2023 | Oct. 17, 2022 | Jul. 15, 2022 | Apr. 15, 2022 | Dec. 31, 2022 | |
Distributions Per Share (in dollars per share) | $ 0.10 | $ 0.10 | $ 0.10 | ||
Dividends paid on percentage | 100% | ||||
Ordinary Dividends | |||||
Dividends paid on percentage | 0% | ||||
Capital Gain Distributions | |||||
Dividends paid on percentage | 0% | ||||
Non-Dividend Distributions | |||||
Dividends paid on percentage | 100% | ||||
Subsequent Event | |||||
Distributions Per Share (in dollars per share) | $ 0.10 |
Orion Office REIT, Equity-Bas_3
Orion Office REIT, Equity-Based Compensation - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Time-Based Restricted Stock Units and Restricted Stock Units | Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting rights, percentage | 0% | |
Time-Based Restricted Stock Units and Restricted Stock Units | Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting rights, percentage | 100% | |
Performance-Based RSUs | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Performance period | 3 years | |
Time-Based Restricted Stock Units and Performance-Based Restricted Stock Units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Equity-based compensation expense | $ 1.4 | $ 0.1 |
Unrecognized compensation expense | $ 2.7 | $ 0.5 |
Weighted-average remaining term (in years) | 2 years | 2 years 2 months 12 days |
Realty Income Time-Based Restricted Stock Units and Stock Options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Equity-based compensation expense | $ 0.4 | $ 0.1 |
Unrecognized compensation expense | $ 0.2 | $ 0.6 |
Weighted-average remaining term (in years) | 1 year | 1 year 8 months 12 days |
Orion Office REIT, Equity-Bas_4
Orion Office REIT, Equity-Based Compensation - Schedule of Share-Based Payment Award (Details) | 12 Months Ended |
Dec. 31, 2022 $ / shares shares | |
Time-Based RSUs | |
Number of Shares | |
Unvested units, beginning balance (in shares) | shares | 27,920 |
Granted (in shares) | shares | 144,594 |
Vested (in shares) | shares | (15,567) |
Forfeited (in shares) | shares | 0 |
Unvested units, ending balance (in shares) | shares | 156,947 |
Weighted-Average Grant Date Fair Value | |
Unvested units, beginning balance (in dollars per share) | $ / shares | $ 20.96 |
Granted (in dollars per share) | $ / shares | 16.81 |
Vested (in dollars per share) | $ / shares | 21.10 |
Forfeited (in dollars per share) | $ / shares | 0 |
Unvested units, ending balance (in dollars per share) | $ / shares | $ 17.12 |
Performance-Based RSUs | |
Number of Shares | |
Unvested units, beginning balance (in shares) | shares | 0 |
Granted (in shares) | shares | 212,154 |
Vested (in shares) | shares | 0 |
Forfeited (in shares) | shares | 0 |
Unvested units, ending balance (in shares) | shares | 212,154 |
Weighted-Average Grant Date Fair Value | |
Unvested units, beginning balance (in dollars per share) | $ / shares | $ 0 |
Granted (in dollars per share) | $ / shares | 13.65 |
Vested (in dollars per share) | $ / shares | 0 |
Forfeited (in dollars per share) | $ / shares | 0 |
Unvested units, ending balance (in dollars per share) | $ / shares | $ 13.65 |
Orion Office REIT, Net Income_3
Orion Office REIT, Net Income (Loss) Per Share - Computation of Basic and Diluted EPS (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Earnings Per Share [Abstract] | |||
Net loss | $ (97,474) | $ (47,464) | $ (1,899) |
Income attributable to non-controlling interests | (20) | (17) | 0 |
Net loss available to common stockholders used in basic net income per share | (97,494) | (47,481) | (1,899) |
Net loss available to common stockholders used in diluted net income per share | $ (97,494) | $ (47,481) | $ (1,899) |
Weighted average shares of common stock outstanding - basic (in shares) | 56,631,826 | 56,625,650 | 56,625,650 |
Effect of dilutive securities (in shares) | 0 | 0 | 0 |
Weighted average shares of common stock - diluted (in shares) | 56,631,826 | 56,625,650 | 56,625,650 |
Basic loss per share attributable to common stockholders (in dollars per share) | $ (1.72) | $ (0.84) | $ (0.03) |
Diluted loss per share attributable to common stockholders (in dollars per share) | $ (1.72) | $ (0.84) | $ (0.03) |
Orion Office REIT, Net Income_4
Orion Office REIT, Net Income (Loss) Per Share - Schedule of Antidilutive (Details) - shares | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Weighted average unvested Time-Based RSUs and Performance-Based RSUs | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share (in shares) | 0 | 0 | 0 |
Weighted average stock warrants | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share (in shares) | 1,120,000 | 1,120,000 | 0 |
Orion Office REIT, Subsequent_2
Orion Office REIT, Subsequent Events (Details) | Mar. 07, 2023 $ / shares |
Subsequent Event | |
Subsequent Event [Line Items] | |
Common stock, dividends, per share, declared (in dollars per share) | $ 0.10 |
Schedule III - Real Estate an_2
Schedule III - Real Estate and Accumulated Depreciation (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Write-down or Reserve [Line Items] | ||||
Amount of encumbrances | $ 355,000 | |||
Initial Costs, Land | 246,525 | |||
Initial Costs, Buildings, Fixtures and Improvements | 1,206,632 | |||
Adjustments Subsequent to Acquisition | (86,532) | |||
Gross Amount carried | 1,366,625 | $ 1,481,745 | $ 634,019 | $ 659,441 |
Accumulated Depreciation | (133,379) | $ (128,109) | $ (136,143) | $ (125,311) |
Tax basis of aggregate land, buildings and improvements | $ 2,200,000 | |||
Building | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Write-down or Reserve [Line Items] | ||||
Estimated useful lives | 35 years | |||
Furniture and Fixtures | Minimum | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Write-down or Reserve [Line Items] | ||||
Estimated useful lives | 5 years | |||
Furniture and Fixtures | Maximum | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Write-down or Reserve [Line Items] | ||||
Estimated useful lives | 15 years | |||
Lease Agreements | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Write-down or Reserve [Line Items] | ||||
Intangible lease assets | $ 360,700 | |||
Accumulated amortization | 157,900 | |||
Food, Beverage & Tobacco - St. Charles, MO | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Write-down or Reserve [Line Items] | ||||
Amount of encumbrances | 0 | |||
Initial Costs, Land | 3,675 | |||
Initial Costs, Buildings, Fixtures and Improvements | 13,828 | |||
Adjustments Subsequent to Acquisition | 0 | |||
Gross Amount carried | 17,503 | |||
Accumulated Depreciation | (6,212) | |||
Telecommunication Services - Brownsville, TX | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Write-down or Reserve [Line Items] | ||||
Amount of encumbrances | 0 | |||
Initial Costs, Land | 1,740 | |||
Initial Costs, Buildings, Fixtures and Improvements | 11,571 | |||
Adjustments Subsequent to Acquisition | 0 | |||
Gross Amount carried | 13,311 | |||
Accumulated Depreciation | (5,198) | |||
Telecommunication Services - Augusta, GA | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Write-down or Reserve [Line Items] | ||||
Amount of encumbrances | 0 | |||
Initial Costs, Land | 0 | |||
Initial Costs, Buildings, Fixtures and Improvements | 11,128 | |||
Adjustments Subsequent to Acquisition | 0 | |||
Gross Amount carried | 11,128 | |||
Accumulated Depreciation | (4,999) | |||
Telecommunication Services - Salem, OR | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Write-down or Reserve [Line Items] | ||||
Amount of encumbrances | 0 | |||
Initial Costs, Land | 1,722 | |||
Initial Costs, Buildings, Fixtures and Improvements | 10,074 | |||
Adjustments Subsequent to Acquisition | 0 | |||
Gross Amount carried | 11,796 | |||
Accumulated Depreciation | (4,300) | |||
Financial Institutions - Mount Pleasant, SC | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Write-down or Reserve [Line Items] | ||||
Amount of encumbrances | 0 | |||
Initial Costs, Land | 10,803 | |||
Initial Costs, Buildings, Fixtures and Improvements | 25,511 | |||
Adjustments Subsequent to Acquisition | 0 | |||
Gross Amount carried | 36,314 | |||
Accumulated Depreciation | (7,259) | |||
Health Care Equipment & Services - St. Louis, MO | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Write-down or Reserve [Line Items] | ||||
Amount of encumbrances | 12,041 | |||
Initial Costs, Land | 0 | |||
Initial Costs, Buildings, Fixtures and Improvements | 38,799 | |||
Adjustments Subsequent to Acquisition | (36) | |||
Gross Amount carried | 38,763 | |||
Accumulated Depreciation | (11,022) | |||
Transportation - Uniontown, OH | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Write-down or Reserve [Line Items] | ||||
Amount of encumbrances | 0 | |||
Initial Costs, Land | 2,238 | |||
Initial Costs, Buildings, Fixtures and Improvements | 53,114 | |||
Adjustments Subsequent to Acquisition | (43,452) | |||
Gross Amount carried | 11,900 | |||
Accumulated Depreciation | (111) | |||
Government & Public Services - Brownsville, TX | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Write-down or Reserve [Line Items] | ||||
Amount of encumbrances | 1,345 | |||
Initial Costs, Land | 321 | |||
Initial Costs, Buildings, Fixtures and Improvements | 6,803 | |||
Adjustments Subsequent to Acquisition | 28 | |||
Gross Amount carried | 7,152 | |||
Accumulated Depreciation | (1,993) | |||
Government & Public Services - Parkersburg, WV | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Write-down or Reserve [Line Items] | ||||
Amount of encumbrances | 0 | |||
Initial Costs, Land | 494 | |||
Initial Costs, Buildings, Fixtures and Improvements | 12,902 | |||
Adjustments Subsequent to Acquisition | 1 | |||
Gross Amount carried | 13,397 | |||
Accumulated Depreciation | (3,672) | |||
Government & Public Services - Paris, TX | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Write-down or Reserve [Line Items] | ||||
Amount of encumbrances | 2,292 | |||
Initial Costs, Land | 274 | |||
Initial Costs, Buildings, Fixtures and Improvements | 5,392 | |||
Adjustments Subsequent to Acquisition | 246 | |||
Gross Amount carried | 5,912 | |||
Accumulated Depreciation | (1,540) | |||
Government & Public Services - Eagle Pass, TX | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Write-down or Reserve [Line Items] | ||||
Amount of encumbrances | 0 | |||
Initial Costs, Land | 146 | |||
Initial Costs, Buildings, Fixtures and Improvements | 2,086 | |||
Adjustments Subsequent to Acquisition | (8) | |||
Gross Amount carried | 2,224 | |||
Accumulated Depreciation | (639) | |||
Government & Public Services - Dallas, TX | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Write-down or Reserve [Line Items] | ||||
Amount of encumbrances | 0 | |||
Initial Costs, Land | 399 | |||
Initial Costs, Buildings, Fixtures and Improvements | 9,748 | |||
Adjustments Subsequent to Acquisition | (4) | |||
Gross Amount carried | 10,143 | |||
Accumulated Depreciation | (2,813) | |||
Government & Public Services - Redding, CA | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Write-down or Reserve [Line Items] | ||||
Amount of encumbrances | 0 | |||
Initial Costs, Land | 676 | |||
Initial Costs, Buildings, Fixtures and Improvements | 20,553 | |||
Adjustments Subsequent to Acquisition | (173) | |||
Gross Amount carried | 21,056 | |||
Accumulated Depreciation | (5,874) | |||
Government & Public Services - Minneapolis, MN | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Write-down or Reserve [Line Items] | ||||
Amount of encumbrances | 0 | |||
Initial Costs, Land | 1,046 | |||
Initial Costs, Buildings, Fixtures and Improvements | 8,588 | |||
Adjustments Subsequent to Acquisition | 0 | |||
Gross Amount carried | 9,634 | |||
Accumulated Depreciation | (2,443) | |||
Government & Public Services - Malone, NY | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Write-down or Reserve [Line Items] | ||||
Amount of encumbrances | 5,134 | |||
Initial Costs, Land | 824 | |||
Initial Costs, Buildings, Fixtures and Improvements | 9,485 | |||
Adjustments Subsequent to Acquisition | 40 | |||
Gross Amount carried | 10,349 | |||
Accumulated Depreciation | (2,794) | |||
Government & Public Services - Sioux City, IA | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Write-down or Reserve [Line Items] | ||||
Amount of encumbrances | 0 | |||
Initial Costs, Land | 77 | |||
Initial Costs, Buildings, Fixtures and Improvements | 4,761 | |||
Adjustments Subsequent to Acquisition | (5) | |||
Gross Amount carried | 4,833 | |||
Accumulated Depreciation | (1,380) | |||
Government & Public Services - Knoxville, TN | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Write-down or Reserve [Line Items] | ||||
Amount of encumbrances | 0 | |||
Initial Costs, Land | 761 | |||
Initial Costs, Buildings, Fixtures and Improvements | 9,041 | |||
Adjustments Subsequent to Acquisition | 154 | |||
Gross Amount carried | 9,956 | |||
Accumulated Depreciation | (2,611) | |||
Government & Public Services - New Port Richey, FL | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Write-down or Reserve [Line Items] | ||||
Amount of encumbrances | 0 | |||
Initial Costs, Land | 780 | |||
Initial Costs, Buildings, Fixtures and Improvements | 10,111 | |||
Adjustments Subsequent to Acquisition | (5,991) | |||
Gross Amount carried | 4,900 | |||
Accumulated Depreciation | 0 | |||
Health Care Equipment & Services - Bedford, TX | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Write-down or Reserve [Line Items] | ||||
Amount of encumbrances | 34,167 | |||
Initial Costs, Land | 1,608 | |||
Initial Costs, Buildings, Fixtures and Improvements | 56,219 | |||
Adjustments Subsequent to Acquisition | 0 | |||
Gross Amount carried | 57,827 | |||
Accumulated Depreciation | (15,996) | |||
Vacant - Tucson, AZ | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Write-down or Reserve [Line Items] | ||||
Amount of encumbrances | 0 | |||
Initial Costs, Land | 3,800 | |||
Initial Costs, Buildings, Fixtures and Improvements | 6,554 | |||
Adjustments Subsequent to Acquisition | (42) | |||
Gross Amount carried | 10,312 | |||
Accumulated Depreciation | (271) | |||
Government & Public Services - Eagle Pass, TX | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Write-down or Reserve [Line Items] | ||||
Amount of encumbrances | 0 | |||
Initial Costs, Land | 68 | |||
Initial Costs, Buildings, Fixtures and Improvements | 811 | |||
Adjustments Subsequent to Acquisition | (52) | |||
Gross Amount carried | 827 | |||
Accumulated Depreciation | (236) | |||
Transportation - Memphis, TN | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Write-down or Reserve [Line Items] | ||||
Amount of encumbrances | 17,114 | |||
Initial Costs, Land | 3,570 | |||
Initial Costs, Buildings, Fixtures and Improvements | 16,601 | |||
Adjustments Subsequent to Acquisition | 276 | |||
Gross Amount carried | 20,447 | |||
Accumulated Depreciation | (4,798) | |||
Transportation - Columbus, OH | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Write-down or Reserve [Line Items] | ||||
Amount of encumbrances | 16,014 | |||
Initial Costs, Land | 0 | |||
Initial Costs, Buildings, Fixtures and Improvements | 19,637 | |||
Adjustments Subsequent to Acquisition | 0 | |||
Gross Amount carried | 19,637 | |||
Accumulated Depreciation | (5,353) | |||
Food & Staples Retailing - Deerfield, IL | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Write-down or Reserve [Line Items] | ||||
Amount of encumbrances | 0 | |||
Initial Costs, Land | 4,093 | |||
Initial Costs, Buildings, Fixtures and Improvements | 11,511 | |||
Adjustments Subsequent to Acquisition | (9,362) | |||
Gross Amount carried | 6,242 | |||
Accumulated Depreciation | 0 | |||
Food & Staples Retailing - Deerfield, IL | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Write-down or Reserve [Line Items] | ||||
Amount of encumbrances | 0 | |||
Initial Costs, Land | 4,262 | |||
Initial Costs, Buildings, Fixtures and Improvements | 11,988 | |||
Adjustments Subsequent to Acquisition | (9,750) | |||
Gross Amount carried | 6,500 | |||
Accumulated Depreciation | 0 | |||
Food & Staples Retailing - Deerfield, IL | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Write-down or Reserve [Line Items] | ||||
Amount of encumbrances | 0 | |||
Initial Costs, Land | 4,082 | |||
Initial Costs, Buildings, Fixtures and Improvements | 11,484 | |||
Adjustments Subsequent to Acquisition | (9,340) | |||
Gross Amount carried | 6,226 | |||
Accumulated Depreciation | 0 | |||
Food & Staples Retailing - Deerfield, IL | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Write-down or Reserve [Line Items] | ||||
Amount of encumbrances | 0 | |||
Initial Costs, Land | 4,089 | |||
Initial Costs, Buildings, Fixtures and Improvements | 11,503 | |||
Adjustments Subsequent to Acquisition | (9,355) | |||
Gross Amount carried | 6,237 | |||
Accumulated Depreciation | 0 | |||
Food & Staples Retailing - Deerfield, IL | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Write-down or Reserve [Line Items] | ||||
Amount of encumbrances | 0 | |||
Initial Costs, Land | 2,586 | |||
Initial Costs, Buildings, Fixtures and Improvements | 7,275 | |||
Adjustments Subsequent to Acquisition | (5,917) | |||
Gross Amount carried | 3,944 | |||
Accumulated Depreciation | 0 | |||
Food & Staples Retailing - Deerfield, IL | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Write-down or Reserve [Line Items] | ||||
Amount of encumbrances | 0 | |||
Initial Costs, Land | 3,181 | |||
Initial Costs, Buildings, Fixtures and Improvements | 8,947 | |||
Adjustments Subsequent to Acquisition | (7,277) | |||
Gross Amount carried | 4,851 | |||
Accumulated Depreciation | 0 | |||
Capital Goods - Cedar Rapids, IA | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Write-down or Reserve [Line Items] | ||||
Amount of encumbrances | 7,000 | |||
Initial Costs, Land | 1,000 | |||
Initial Costs, Buildings, Fixtures and Improvements | 12,981 | |||
Adjustments Subsequent to Acquisition | 0 | |||
Gross Amount carried | 13,981 | |||
Accumulated Depreciation | (3,415) | |||
Consumer Durables & Apparel - Providence, RI | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Write-down or Reserve [Line Items] | ||||
Amount of encumbrances | 0 | |||
Initial Costs, Land | 2,550 | |||
Initial Costs, Buildings, Fixtures and Improvements | 21,779 | |||
Adjustments Subsequent to Acquisition | 0 | |||
Gross Amount carried | 24,329 | |||
Accumulated Depreciation | (5,579) | |||
Materials - East Windsor, NJ | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Write-down or Reserve [Line Items] | ||||
Amount of encumbrances | 10,391 | |||
Initial Costs, Land | 240 | |||
Initial Costs, Buildings, Fixtures and Improvements | 13,446 | |||
Adjustments Subsequent to Acquisition | (6) | |||
Gross Amount carried | 13,680 | |||
Accumulated Depreciation | (3,340) | |||
Media & Entertainment - East Syracuse, NY | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Write-down or Reserve [Line Items] | ||||
Amount of encumbrances | 11,002 | |||
Initial Costs, Land | 880 | |||
Initial Costs, Buildings, Fixtures and Improvements | 15,817 | |||
Adjustments Subsequent to Acquisition | 0 | |||
Gross Amount carried | 16,697 | |||
Accumulated Depreciation | (3,935) | |||
Government & Public Services - Cocoa, FL | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Write-down or Reserve [Line Items] | ||||
Amount of encumbrances | 0 | |||
Initial Costs, Land | 450 | |||
Initial Costs, Buildings, Fixtures and Improvements | 949 | |||
Adjustments Subsequent to Acquisition | 62 | |||
Gross Amount carried | 1,461 | |||
Accumulated Depreciation | (35) | |||
Vacant - Berkeley, MO | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Write-down or Reserve [Line Items] | ||||
Amount of encumbrances | 0 | |||
Initial Costs, Land | 0 | |||
Initial Costs, Buildings, Fixtures and Improvements | 9,163 | |||
Adjustments Subsequent to Acquisition | 4,752 | |||
Gross Amount carried | 13,915 | |||
Accumulated Depreciation | (375) | |||
Government & Public Services - Grangeville, ID | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Write-down or Reserve [Line Items] | ||||
Amount of encumbrances | 0 | |||
Initial Costs, Land | 1,385 | |||
Initial Costs, Buildings, Fixtures and Improvements | 3,436 | |||
Adjustments Subsequent to Acquisition | 22 | |||
Gross Amount carried | 4,843 | |||
Accumulated Depreciation | (165) | |||
Government & Public Services - Fort Worth, TX | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Write-down or Reserve [Line Items] | ||||
Amount of encumbrances | 0 | |||
Initial Costs, Land | 572 | |||
Initial Costs, Buildings, Fixtures and Improvements | 3,985 | |||
Adjustments Subsequent to Acquisition | 0 | |||
Gross Amount carried | 4,557 | |||
Accumulated Depreciation | (139) | |||
Government & Public Services - Plattsburgh, NY | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Write-down or Reserve [Line Items] | ||||
Amount of encumbrances | 0 | |||
Initial Costs, Land | 1,136 | |||
Initial Costs, Buildings, Fixtures and Improvements | 2,486 | |||
Adjustments Subsequent to Acquisition | 0 | |||
Gross Amount carried | 3,622 | |||
Accumulated Depreciation | (99) | |||
Financial Institutions - Warwick, RI | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Write-down or Reserve [Line Items] | ||||
Amount of encumbrances | 0 | |||
Initial Costs, Land | 1,358 | |||
Initial Costs, Buildings, Fixtures and Improvements | 3,982 | |||
Adjustments Subsequent to Acquisition | 0 | |||
Gross Amount carried | 5,340 | |||
Accumulated Depreciation | (142) | |||
Energy - Longmont, CO | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Write-down or Reserve [Line Items] | ||||
Amount of encumbrances | 0 | |||
Initial Costs, Land | 2,106 | |||
Initial Costs, Buildings, Fixtures and Improvements | 12,543 | |||
Adjustments Subsequent to Acquisition | 0 | |||
Gross Amount carried | 14,649 | |||
Accumulated Depreciation | (435) | |||
Health Care Equipment & Services - Waukegan, IL | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Write-down or Reserve [Line Items] | ||||
Amount of encumbrances | 0 | |||
Initial Costs, Land | 636 | |||
Initial Costs, Buildings, Fixtures and Improvements | 4,136 | |||
Adjustments Subsequent to Acquisition | 204 | |||
Gross Amount carried | 4,976 | |||
Accumulated Depreciation | (140) | |||
Health Care Equipment & Services - Fresno, CA | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Write-down or Reserve [Line Items] | ||||
Amount of encumbrances | 0 | |||
Initial Costs, Land | 4,454 | |||
Initial Costs, Buildings, Fixtures and Improvements | 17,292 | |||
Adjustments Subsequent to Acquisition | 0 | |||
Gross Amount carried | 21,746 | |||
Accumulated Depreciation | (599) | |||
Telecommunication Services - Richardson, TX | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Write-down or Reserve [Line Items] | ||||
Amount of encumbrances | 0 | |||
Initial Costs, Land | 1,187 | |||
Initial Costs, Buildings, Fixtures and Improvements | 21,037 | |||
Adjustments Subsequent to Acquisition | 28 | |||
Gross Amount carried | 22,252 | |||
Accumulated Depreciation | (702) | |||
Health Care Equipment & Services - San Antonio, TX | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Write-down or Reserve [Line Items] | ||||
Amount of encumbrances | 0 | |||
Initial Costs, Land | 2,125 | |||
Initial Costs, Buildings, Fixtures and Improvements | 15,425 | |||
Adjustments Subsequent to Acquisition | 367 | |||
Gross Amount carried | 17,917 | |||
Accumulated Depreciation | (543) | |||
Energy - Tulsa, OK | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Write-down or Reserve [Line Items] | ||||
Amount of encumbrances | 0 | |||
Initial Costs, Land | 6,865 | |||
Initial Costs, Buildings, Fixtures and Improvements | 34,716 | |||
Adjustments Subsequent to Acquisition | 0 | |||
Gross Amount carried | 41,581 | |||
Accumulated Depreciation | (1,158) | |||
Vacant - Englewood, CO | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Write-down or Reserve [Line Items] | ||||
Amount of encumbrances | 0 | |||
Initial Costs, Land | 2,291 | |||
Initial Costs, Buildings, Fixtures and Improvements | 2,989 | |||
Adjustments Subsequent to Acquisition | 323 | |||
Gross Amount carried | 5,603 | |||
Accumulated Depreciation | (132) | |||
Consumer Durables & Apparel - Denver, CO | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Write-down or Reserve [Line Items] | ||||
Amount of encumbrances | 0 | |||
Initial Costs, Land | 5,707 | |||
Initial Costs, Buildings, Fixtures and Improvements | 36,047 | |||
Adjustments Subsequent to Acquisition | 1,068 | |||
Gross Amount carried | 42,822 | |||
Accumulated Depreciation | (1,247) | |||
Vacant - Richardson, TX | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Write-down or Reserve [Line Items] | ||||
Amount of encumbrances | 0 | |||
Initial Costs, Land | 2,047 | |||
Initial Costs, Buildings, Fixtures and Improvements | 12,733 | |||
Adjustments Subsequent to Acquisition | 7 | |||
Gross Amount carried | 14,787 | |||
Accumulated Depreciation | (478) | |||
Commercial & Professional Services - Lawrence, KS | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Write-down or Reserve [Line Items] | ||||
Amount of encumbrances | 0 | |||
Initial Costs, Land | 3,576 | |||
Initial Costs, Buildings, Fixtures and Improvements | 2,996 | |||
Adjustments Subsequent to Acquisition | 0 | |||
Gross Amount carried | 6,572 | |||
Accumulated Depreciation | (132) | |||
Commercial & Professional Services - Lawrence, KS | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Write-down or Reserve [Line Items] | ||||
Amount of encumbrances | 0 | |||
Initial Costs, Land | 3,334 | |||
Initial Costs, Buildings, Fixtures and Improvements | 3,449 | |||
Adjustments Subsequent to Acquisition | 0 | |||
Gross Amount carried | 6,783 | |||
Accumulated Depreciation | (149) | |||
Materials - The Woodlands, TX | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Write-down or Reserve [Line Items] | ||||
Amount of encumbrances | 0 | |||
Initial Costs, Land | 5,772 | |||
Initial Costs, Buildings, Fixtures and Improvements | 14,236 | |||
Adjustments Subsequent to Acquisition | 2,234 | |||
Gross Amount carried | 22,242 | |||
Accumulated Depreciation | (562) | |||
Consumer Durables & Apparel - Englewood, CO | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Write-down or Reserve [Line Items] | ||||
Amount of encumbrances | 20,537 | |||
Initial Costs, Land | 3,354 | |||
Initial Costs, Buildings, Fixtures and Improvements | 14,714 | |||
Adjustments Subsequent to Acquisition | 463 | |||
Gross Amount carried | 18,531 | |||
Accumulated Depreciation | (545) | |||
Vacant - Malvern, PA | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Write-down or Reserve [Line Items] | ||||
Amount of encumbrances | 0 | |||
Initial Costs, Land | 3,853 | |||
Initial Costs, Buildings, Fixtures and Improvements | 25,296 | |||
Adjustments Subsequent to Acquisition | 0 | |||
Gross Amount carried | 29,149 | |||
Accumulated Depreciation | (895) | |||
Media & Entertainment - Milwaukee, WI | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Write-down or Reserve [Line Items] | ||||
Amount of encumbrances | 0 | |||
Initial Costs, Land | 2,727 | |||
Initial Costs, Buildings, Fixtures and Improvements | 18,083 | |||
Adjustments Subsequent to Acquisition | 0 | |||
Gross Amount carried | 20,810 | |||
Accumulated Depreciation | (607) | |||
Telecommunication Services - Nashville, TN | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Write-down or Reserve [Line Items] | ||||
Amount of encumbrances | 9,291 | |||
Initial Costs, Land | 2,588 | |||
Initial Costs, Buildings, Fixtures and Improvements | 9,587 | |||
Adjustments Subsequent to Acquisition | 337 | |||
Gross Amount carried | 12,512 | |||
Accumulated Depreciation | (358) | |||
Commercial & Professional Services - The Woodlands, TX | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Write-down or Reserve [Line Items] | ||||
Amount of encumbrances | 0 | |||
Initial Costs, Land | 2,550 | |||
Initial Costs, Buildings, Fixtures and Improvements | 17,481 | |||
Adjustments Subsequent to Acquisition | 715 | |||
Gross Amount carried | 20,746 | |||
Accumulated Depreciation | (620) | |||
Retailing - Santee, CA | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Write-down or Reserve [Line Items] | ||||
Amount of encumbrances | 0 | |||
Initial Costs, Land | 0 | |||
Initial Costs, Buildings, Fixtures and Improvements | 9,859 | |||
Adjustments Subsequent to Acquisition | 337 | |||
Gross Amount carried | 10,196 | |||
Accumulated Depreciation | (353) | |||
Materials - Glen Burnie, MD | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Write-down or Reserve [Line Items] | ||||
Amount of encumbrances | 0 | |||
Initial Costs, Land | 3,095 | |||
Initial Costs, Buildings, Fixtures and Improvements | 11,466 | |||
Adjustments Subsequent to Acquisition | 611 | |||
Gross Amount carried | 15,172 | |||
Accumulated Depreciation | (395) | |||
Health Care Equipment & Services - Irving, TX | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Write-down or Reserve [Line Items] | ||||
Amount of encumbrances | 0 | |||
Initial Costs, Land | 9,267 | |||
Initial Costs, Buildings, Fixtures and Improvements | 19,853 | |||
Adjustments Subsequent to Acquisition | 0 | |||
Gross Amount carried | 29,120 | |||
Accumulated Depreciation | (683) | |||
Capital Goods - Tulsa, OK | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Write-down or Reserve [Line Items] | ||||
Amount of encumbrances | 0 | |||
Initial Costs, Land | 1,904 | |||
Initial Costs, Buildings, Fixtures and Improvements | 1,238 | |||
Adjustments Subsequent to Acquisition | 0 | |||
Gross Amount carried | 3,142 | |||
Accumulated Depreciation | (52) | |||
Government & Public Services - Covington, KY | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Write-down or Reserve [Line Items] | ||||
Amount of encumbrances | 0 | |||
Initial Costs, Land | 4,087 | |||
Initial Costs, Buildings, Fixtures and Improvements | 56,991 | |||
Adjustments Subsequent to Acquisition | 466 | |||
Gross Amount carried | 61,544 | |||
Accumulated Depreciation | (1,917) | |||
Software & Services - Amherst, NY | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Write-down or Reserve [Line Items] | ||||
Amount of encumbrances | 0 | |||
Initial Costs, Land | 3,561 | |||
Initial Costs, Buildings, Fixtures and Improvements | 3,186 | |||
Adjustments Subsequent to Acquisition | 0 | |||
Gross Amount carried | 6,747 | |||
Accumulated Depreciation | (165) | |||
Commercial & Professional Services - Dublin, OH | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Write-down or Reserve [Line Items] | ||||
Amount of encumbrances | 0 | |||
Initial Costs, Land | 1,287 | |||
Initial Costs, Buildings, Fixtures and Improvements | 4,688 | |||
Adjustments Subsequent to Acquisition | 0 | |||
Gross Amount carried | 5,975 | |||
Accumulated Depreciation | (169) | |||
Capital Goods - Sterling, VA | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Write-down or Reserve [Line Items] | ||||
Amount of encumbrances | 29,094 | |||
Initial Costs, Land | 10,515 | |||
Initial Costs, Buildings, Fixtures and Improvements | 25,393 | |||
Adjustments Subsequent to Acquisition | 0 | |||
Gross Amount carried | 35,908 | |||
Accumulated Depreciation | (901) | |||
Capital Goods - Malvern, PA | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Write-down or Reserve [Line Items] | ||||
Amount of encumbrances | 11,552 | |||
Initial Costs, Land | 2,607 | |||
Initial Costs, Buildings, Fixtures and Improvements | 10,844 | |||
Adjustments Subsequent to Acquisition | 0 | |||
Gross Amount carried | 13,451 | |||
Accumulated Depreciation | (414) | |||
Health Care Equipment & Services - Indianapolis, IN | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Write-down or Reserve [Line Items] | ||||
Amount of encumbrances | 0 | |||
Initial Costs, Land | 1,430 | |||
Initial Costs, Buildings, Fixtures and Improvements | 4,386 | |||
Adjustments Subsequent to Acquisition | 80 | |||
Gross Amount carried | 5,896 | |||
Accumulated Depreciation | (163) | |||
Health Care Equipment & Services - Plano, TX | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Write-down or Reserve [Line Items] | ||||
Amount of encumbrances | 0 | |||
Initial Costs, Land | 9,834 | |||
Initial Costs, Buildings, Fixtures and Improvements | 35,893 | |||
Adjustments Subsequent to Acquisition | 45 | |||
Gross Amount carried | 45,772 | |||
Accumulated Depreciation | (1,249) | |||
Capital Goods - Blair, NE | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Write-down or Reserve [Line Items] | ||||
Amount of encumbrances | 0 | |||
Initial Costs, Land | 558 | |||
Initial Costs, Buildings, Fixtures and Improvements | 1,210 | |||
Adjustments Subsequent to Acquisition | 0 | |||
Gross Amount carried | 1,768 | |||
Accumulated Depreciation | (54) | |||
Commercial & Professional Services - Schaumburg, IL | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Write-down or Reserve [Line Items] | ||||
Amount of encumbrances | 0 | |||
Initial Costs, Land | 3,313 | |||
Initial Costs, Buildings, Fixtures and Improvements | 6,532 | |||
Adjustments Subsequent to Acquisition | 0 | |||
Gross Amount carried | 9,845 | |||
Accumulated Depreciation | (251) | |||
Insurance - Oklahoma City, OK | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Write-down or Reserve [Line Items] | ||||
Amount of encumbrances | 0 | |||
Initial Costs, Land | 3,393 | |||
Initial Costs, Buildings, Fixtures and Improvements | 22,998 | |||
Adjustments Subsequent to Acquisition | 0 | |||
Gross Amount carried | 26,391 | |||
Accumulated Depreciation | (817) | |||
Software & Services - Lincoln, NE | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Write-down or Reserve [Line Items] | ||||
Amount of encumbrances | 0 | |||
Initial Costs, Land | 0 | |||
Initial Costs, Buildings, Fixtures and Improvements | 6,587 | |||
Adjustments Subsequent to Acquisition | 0 | |||
Gross Amount carried | 6,587 | |||
Accumulated Depreciation | (267) | |||
Insurance - Buffalo, NY | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Write-down or Reserve [Line Items] | ||||
Amount of encumbrances | 0 | |||
Initial Costs, Land | 4,710 | |||
Initial Costs, Buildings, Fixtures and Improvements | 36,740 | |||
Adjustments Subsequent to Acquisition | 0 | |||
Gross Amount carried | 41,450 | |||
Accumulated Depreciation | (1,253) | |||
Insurance - Urbana, MD | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Write-down or Reserve [Line Items] | ||||
Amount of encumbrances | 23,165 | |||
Initial Costs, Land | 4,028 | |||
Initial Costs, Buildings, Fixtures and Improvements | 19,888 | |||
Adjustments Subsequent to Acquisition | 0 | |||
Gross Amount carried | 23,916 | |||
Accumulated Depreciation | (709) | |||
Health Care Equipment & Services - Nashville, TN | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Write-down or Reserve [Line Items] | ||||
Amount of encumbrances | 0 | |||
Initial Costs, Land | 1,165 | |||
Initial Costs, Buildings, Fixtures and Improvements | 11,749 | |||
Adjustments Subsequent to Acquisition | 0 | |||
Gross Amount carried | 12,914 | |||
Accumulated Depreciation | (415) | |||
Retailing - Kennesaw, GA | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Write-down or Reserve [Line Items] | ||||
Amount of encumbrances | 11,430 | |||
Initial Costs, Land | 0 | |||
Initial Costs, Buildings, Fixtures and Improvements | 11,141 | |||
Adjustments Subsequent to Acquisition | 0 | |||
Gross Amount carried | 11,141 | |||
Accumulated Depreciation | (431) | |||
Capital Goods - Duluth, GA | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Write-down or Reserve [Line Items] | ||||
Amount of encumbrances | 14,669 | |||
Initial Costs, Land | 3,684 | |||
Initial Costs, Buildings, Fixtures and Improvements | 14,786 | |||
Adjustments Subsequent to Acquisition | 0 | |||
Gross Amount carried | 18,470 | |||
Accumulated Depreciation | (525) | |||
Pharmaceuticals, Biotechnology & Life Sciences - Parsippany, NJ | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Write-down or Reserve [Line Items] | ||||
Amount of encumbrances | 0 | |||
Initial Costs, Land | 9,537 | |||
Initial Costs, Buildings, Fixtures and Improvements | 9,174 | |||
Adjustments Subsequent to Acquisition | 0 | |||
Gross Amount carried | 18,711 | |||
Accumulated Depreciation | (387) | |||
Software & Services - Bedford, MA | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Write-down or Reserve [Line Items] | ||||
Amount of encumbrances | 0 | |||
Initial Costs, Land | 22,381 | |||
Initial Costs, Buildings, Fixtures and Improvements | 26,029 | |||
Adjustments Subsequent to Acquisition | 4 | |||
Gross Amount carried | 48,414 | |||
Accumulated Depreciation | (1,017) | |||
Financial Institutions - Hopewell, NJ | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Write-down or Reserve [Line Items] | ||||
Amount of encumbrances | 92,663 | |||
Initial Costs, Land | 19,325 | |||
Initial Costs, Buildings, Fixtures and Improvements | 57,846 | |||
Adjustments Subsequent to Acquisition | 524 | |||
Gross Amount carried | 77,695 | |||
Accumulated Depreciation | (1,977) | |||
Health Care Equipment & Services - Phoenix, AZ | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Write-down or Reserve [Line Items] | ||||
Amount of encumbrances | 26,099 | |||
Initial Costs, Land | 4,786 | |||
Initial Costs, Buildings, Fixtures and Improvements | 21,346 | |||
Adjustments Subsequent to Acquisition | 844 | |||
Gross Amount carried | 26,976 | |||
Accumulated Depreciation | $ (775) |
Schedule III - Real Estate an_3
Schedule III - Real Estate and Accumulated Depreciation - Gross Real Estate Activity (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate [Roll Forward] | |||
Balance, beginning of year | $ 1,481,745 | $ 634,019 | $ 659,441 |
Additions: | |||
Acquisitions/improvements | 13,203 | 927,001 | 457 |
Deductions/Other | |||
Sold or disposed of | (18,548) | (657) | (119) |
Impairments | (87,834) | (77,636) | (25,760) |
Reclassified to real estate assets held or sale, net | (21,941) | 0 | 0 |
Other | 0 | (982) | 0 |
Balance, end of year | $ 1,366,625 | $ 1,481,745 | $ 634,019 |
Schedule III - Real Estate an_4
Schedule III - Real Estate and Accumulated Depreciation - Reconciliation of Accumulated Depreciation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Accumulated Depreciation [Roll Forward] | |||
Beginning balance | $ 128,109 | $ 136,143 | $ 125,311 |
Additions: | |||
Depreciation expense | 35,855 | 20,805 | 18,040 |
Deductions/Other | |||
Sold or disposed of | (169) | (657) | (119) |
Impairments | (21,757) | (27,947) | (7,089) |
Reclassified to real estate assets held for sale, net | (8,659) | 0 | 0 |
Other | 0 | (235) | 0 |
Ending balance | $ 133,379 | $ 128,109 | $ 136,143 |
VEREIT Office Assets, Organiz_3
VEREIT Office Assets, Organization and Summary of Significant Accounting Policies (Details) ft² in Millions | 10 Months Ended | 12 Months Ended | |||
Oct. 31, 2021 USD ($) ft² property segment state jointVenture | Dec. 31, 2022 USD ($) ft² state property | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | Dec. 31, 2019 USD ($) | |
Real Estate Properties [Line Items] | |||||
Number of Properties | property | 81 | ||||
Area of real estate property | ft² | 9.5 | ||||
Number of states with real estate properties owned | state | 29 | ||||
Total real estate investments, at cost | $ 1,366,625,000 | $ 1,481,745,000 | |||
Total debt outstanding | 525,982,000 | 616,847,000 | |||
Restricted cash | 34,673,000 | 0 | $ 3,915,000 | $ 3,719,000 | |
Franchise and state and local tax expense | $ 200,000 | $ 200,000 | |||
Arch Street Joint Venture | |||||
Real Estate Properties [Line Items] | |||||
Number of Properties | property | 6 | ||||
Ownership | 20% | ||||
VEREIT Office Assets | |||||
Real Estate Properties [Line Items] | |||||
Number of reportable segments | segment | 1 | ||||
Number of Properties | property | 52 | ||||
Number of states with real estate properties owned | state | 25 | ||||
Number of equity method investments | jointVenture | 1 | ||||
Total real estate investments, at cost | $ 1,650,893,000 | ||||
Goodwill, impairment loss | 0 | 0 | |||
Restricted cash | 8,000 | 3,014,000 | $ 2,701,000 | ||
Franchise and state and local tax expense | $ (500,000) | 600,000 | |||
VEREIT Office Assets | Arch Street Joint Venture | |||||
Real Estate Properties [Line Items] | |||||
Ownership | 20% | ||||
VEREIT Office Assets | Minimum | |||||
Real Estate Properties [Line Items] | |||||
Impairment considerations, disposal period (more likely than not) | 12 months | ||||
VEREIT Office Assets | Maximum | |||||
Real Estate Properties [Line Items] | |||||
Impairment considerations, disposal period (more likely than not) | 24 months | ||||
VEREIT Office Assets | Building and Building Improvements | |||||
Real Estate Properties [Line Items] | |||||
Real estate assets, useful life | 40 years | ||||
VEREIT Office Assets | Land Improvements | |||||
Real Estate Properties [Line Items] | |||||
Real estate assets, useful life | 15 years | ||||
VEREIT Office Assets | Consolidated Joint Venture | |||||
Real Estate Properties [Line Items] | |||||
Number of Properties | property | 1 | ||||
Area of real estate property | ft² | 7.6 | ||||
VEREIT Office Assets | Unconsolidated Joint Venture | |||||
Real Estate Properties [Line Items] | |||||
Area of real estate property | ft² | 0.8 | ||||
Number of states with real estate properties owned | state | 5 | ||||
Arch Street Joint Venture | Unconsolidated Joint Venture | |||||
Real Estate Properties [Line Items] | |||||
Number of Properties | property | 5 | ||||
Total real estate investments, at cost | $ 196,200,000 | ||||
Total debt outstanding | 118,400,000 | ||||
VEREIT, Inc. | |||||
Real Estate Properties [Line Items] | |||||
Goodwill, impairment loss | $ 0 | $ 0 |
VEREIT Office Assets, Real Es_3
VEREIT Office Assets, Real Estate Investments and Related Intangibles - Property Dispositions (Details) $ in Thousands | 10 Months Ended | 12 Months Ended | ||
Oct. 31, 2021 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) property | |
Real Estate [Line Items] | ||||
Gain on disposition of real estate assets | $ 2,352 | $ 0 | $ 0 | |
VEREIT Office Assets | ||||
Real Estate [Line Items] | ||||
Number of real estate properties disposed | property | 3 | |||
Aggregate sales price | $ 135,500 | |||
Net proceeds from sale of real estate | 116,400 | |||
Gain on disposition of real estate assets | $ 0 | $ 9,765 |
VEREIT Office Assets, Real Es_4
VEREIT Office Assets, Real Estate Investments and Related Intangibles - Intangible Lease Assets and Liabilities (Details) - USD ($) $ in Thousands | 10 Months Ended | 12 Months Ended | ||
Oct. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Finite-Lived Intangible Assets, Net [Abstract] | ||||
Intangible lease assets, net | $ 202,832 | $ 298,107 | ||
Below Market Lease, Net [Abstract] | ||||
Weighted-Average Useful Life (Years) | 8 years 4 months 24 days | |||
Below Market Lease, Net | $ 14,068 | 20,609 | ||
Below market-leases accumulated amortization | $ 17,249 | 14,459 | ||
In-place leases: | ||||
Finite-Lived Intangible Assets, Net [Abstract] | ||||
Finite-Lived Intangible Asset, Useful Life | 5 years 4 months 24 days | |||
Intangible lease assets, net | $ 177,698 | 272,743 | ||
Accumulated amortization | $ 144,798 | 65,247 | ||
Leasing commissions: | ||||
Finite-Lived Intangible Assets, Net [Abstract] | ||||
Finite-Lived Intangible Asset, Useful Life | 12 years 4 months 24 days | |||
Intangible lease assets, net | $ 13,614 | 10,349 | ||
Accumulated amortization | $ 1,553 | 456 | ||
Above-market lease assets: | ||||
Finite-Lived Intangible Assets, Net [Abstract] | ||||
Finite-Lived Intangible Asset, Useful Life | 5 years 6 months | |||
Intangible lease assets, net | $ 9,826 | 15,015 | ||
Accumulated amortization | 11,391 | 6,239 | ||
Above‑ and below-market leases | ||||
Below Market Lease, Net [Abstract] | ||||
Amortization expense | 1,200 | 1,000 | $ 800 | |
In-place leases, leasing commissions and other lease intangibles | ||||
Below Market Lease, Net [Abstract] | ||||
Amortization expense | $ 95,400 | $ 23,100 | 7,900 | |
VEREIT Office Assets | ||||
Finite-Lived Intangible Assets, Net [Abstract] | ||||
Intangible lease assets, net | $ 44,484 | |||
Below Market Lease, Net [Abstract] | ||||
Weighted-Average Useful Life (Years) | 10 years 3 months 18 days | |||
Below Market Lease, Net | $ 5,308 | |||
Below market-leases accumulated amortization | 18,504 | |||
Amortization expense | $ 29 | 67 | ||
VEREIT Office Assets | In-place leases: | ||||
Finite-Lived Intangible Assets, Net [Abstract] | ||||
Finite-Lived Intangible Asset, Useful Life | 10 years 1 month 6 days | |||
Intangible lease assets, net | $ 29,091 | |||
Accumulated amortization | $ 119,604 | |||
VEREIT Office Assets | Leasing commissions: | ||||
Finite-Lived Intangible Assets, Net [Abstract] | ||||
Finite-Lived Intangible Asset, Useful Life | 9 years 1 month 6 days | |||
Intangible lease assets, net | $ 8,744 | |||
Accumulated amortization | $ 5,679 | |||
VEREIT Office Assets | Above-market lease assets: | ||||
Finite-Lived Intangible Assets, Net [Abstract] | ||||
Finite-Lived Intangible Asset, Useful Life | 9 years 9 months 18 days | |||
Intangible lease assets, net | $ 6,649 | |||
Accumulated amortization | 14,793 | |||
VEREIT Office Assets | Above‑ and below-market leases | ||||
Below Market Lease, Net [Abstract] | ||||
Amortization expense | 29 | 67 | ||
VEREIT Office Assets | In-place leases, leasing commissions and other lease intangibles | ||||
Below Market Lease, Net [Abstract] | ||||
Amortization expense | $ 13,000 | $ 17,800 |
VEREIT Office Assets, Real Es_5
VEREIT Office Assets, Real Estate Investments and Related Intangibles - Projected Amortization Expense and Adjustments (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Oct. 31, 2021 |
Below-market lease liabilities: | ||
2022 | $ 5,994 | |
2023 | 3,786 | |
2024 | 1,036 | |
2025 | 817 | |
In-place leases: | ||
Finite-Lived Intangible Assets, Amortization Expense, Maturity Schedule [Abstract] | ||
2022 | 73,501 | |
2023 | 49,185 | |
2024 | 21,652 | |
2025 | 15,499 | |
Leasing commissions: | ||
Finite-Lived Intangible Assets, Amortization Expense, Maturity Schedule [Abstract] | ||
2022 | 1,340 | |
2023 | 1,297 | |
2024 | 1,229 | |
2025 | $ 1,229 | |
VEREIT Office Assets | ||
Below-market lease liabilities: | ||
Remainder of 2021 | $ 345 | |
2022 | 2,003 | |
2023 | 1,878 | |
2024 | 854 | |
2025 | 208 | |
VEREIT Office Assets | In-place leases: | ||
Finite-Lived Intangible Assets, Amortization Expense, Maturity Schedule [Abstract] | ||
Remainder of 2021 | 2,191 | |
2022 | 10,475 | |
2023 | 9,142 | |
2024 | 5,512 | |
2025 | 1,156 | |
VEREIT Office Assets | Leasing commissions: | ||
Finite-Lived Intangible Assets, Amortization Expense, Maturity Schedule [Abstract] | ||
Remainder of 2021 | 288 | |
2022 | 1,692 | |
2023 | 1,290 | |
2024 | 1,201 | |
2025 | 1,020 | |
VEREIT Office Assets | Above-market lease assets and deferred lease incentives: | ||
Finite-Lived Intangible Assets, Amortization Expense, Maturity Schedule [Abstract] | ||
Remainder of 2021 | 373 | |
2022 | 2,223 | |
2023 | 2,186 | |
2024 | 1,104 | |
2025 | $ 354 |
VEREIT Office Assets, Real Es_6
VEREIT Office Assets, Real Estate Investments and Related Intangibles - Consolidated Joint Ventures Narrative (Details) $ in Thousands | 10 Months Ended | 12 Months Ended | ||
Oct. 31, 2021 USD ($) jointVenture property | Dec. 31, 2022 USD ($) property joint_venture | Dec. 31, 2021 USD ($) joint_venture property | Dec. 31, 2020 USD ($) | |
Schedule of Equity Method Investments [Line Items] | ||||
Number of properties | property | 81 | |||
Assets | $ 1,571,073 | $ 1,759,478 | ||
Real estate investments, net | $ 1,233,246 | $ 1,353,636 | ||
Joint ventures | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Number of joint ventures | joint_venture | 1 | 1 | ||
Number of properties | property | 1 | 1 | ||
Assets | $ 27,700 | $ 27,400 | ||
Real estate investments, net | $ 24,900 | $ 26,100 | ||
VEREIT Office Assets | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Number of properties | property | 52 | |||
Assets | $ 1,336,725 | |||
Real estate investments, net | $ 1,122,726 | |||
VEREIT Office Assets | Joint ventures | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Number of joint ventures | jointVenture | 1 | |||
Number of properties | property | 1 | |||
Assets | $ 30,700 | |||
Real estate investments, net | $ 27,700 | |||
VEREIT Office Assets | Joint ventures | Mortgages payable | Consolidated Properties | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Net balance of mortgage note payable | $ 14,800 |
VEREIT Office Assets, Real Es_7
VEREIT Office Assets, Real Estate Investments and Related Intangibles - Impairments (Details) $ in Thousands | 10 Months Ended | 12 Months Ended | ||
Oct. 31, 2021 USD ($) property | Dec. 31, 2022 USD ($) property | Dec. 31, 2021 USD ($) property | Dec. 31, 2020 USD ($) property | |
Real Estate Properties [Line Items] | ||||
Number of properties | property | 18 | 10 | 1 | |
Provisions for impairment | $ | $ 66,359 | $ 49,859 | $ 18,671 | |
VEREIT Office Assets | ||||
Real Estate Properties [Line Items] | ||||
Number of properties | property | 4 | 2 | ||
Provisions for impairment | $ | $ 28,064 | $ 9,306 | ||
VEREIT Office Assets | Discount Rate | Assets impaired during the ten months ended October 31, 2021 | Weighted Average | ||||
Real Estate Properties [Line Items] | ||||
Alternative investment, measurement input | 0.090 | |||
VEREIT Office Assets | Discount Rate | Assets Impaired During The Twelve Months Ended December 31 2020 | Weighted Average | ||||
Real Estate Properties [Line Items] | ||||
Alternative investment, measurement input | 0.089 | |||
VEREIT Office Assets | Capitalization Rate | Assets impaired during the ten months ended October 31, 2021 | Weighted Average | ||||
Real Estate Properties [Line Items] | ||||
Alternative investment, measurement input | 0.085 | |||
VEREIT Office Assets | Capitalization Rate | Assets Impaired During The Twelve Months Ended December 31 2020 | Weighted Average | ||||
Real Estate Properties [Line Items] | ||||
Alternative investment, measurement input | 0.084 |
VEREIT Office Assets, Mortgag_2
VEREIT Office Assets, Mortgage Notes Payable, Net - Narrative (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Oct. 31, 2021 |
Debt Instrument [Line Items] | ||
Mortgages outstanding | $ 530,000 | |
VEREIT Office Assets | Mortgages payable | ||
Debt Instrument [Line Items] | ||
Mortgages outstanding | $ 0 |
VEREIT Office Assets, Leases -
VEREIT Office Assets, Leases - Narrative (Details) $ in Millions | 10 Months Ended | 12 Months Ended | ||
Oct. 31, 2021 USD ($) segment property | Dec. 31, 2022 USD ($) property | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Lessor, Lease, Description [Line Items] | ||||
Number of Properties | property | 81 | |||
Lessee, operating lease, discount rate | 3.49% | |||
Operating lease, cost | $ | $ 1 | $ 0.3 | $ 0.1 | |
Minimum | ||||
Lessor, Lease, Description [Line Items] | ||||
Lessor, operating leases, term | 2 months 12 days | |||
Lessee, operating lease, remaining lease term | 10 months 24 days | |||
Maximum | ||||
Lessor, Lease, Description [Line Items] | ||||
Lessor, operating leases, term | 15 years 3 months 18 days | |||
Lessee, operating lease, remaining lease term | 62 years | |||
VEREIT Office Assets | ||||
Lessor, Lease, Description [Line Items] | ||||
Number of Properties | property | 52 | |||
Number of properties subject to ground leases | segment | 1 | |||
Lessee, operating lease, remaining lease term | 35 years 9 months 18 days | |||
Lessee, operating lease, discount rate | 5.17% | |||
Operating lease, cost | $ | $ 0.2 | $ 0.3 | ||
VEREIT Office Assets | Minimum | ||||
Lessor, Lease, Description [Line Items] | ||||
Lessor, operating leases, term | 2 months 1 day | |||
VEREIT Office Assets | Maximum | ||||
Lessor, Lease, Description [Line Items] | ||||
Lessor, operating leases, term | 11 years 7 months 2 days |
VEREIT Office Assets, Leases _2
VEREIT Office Assets, Leases - Rental Revenue (Details) - USD ($) $ in Thousands | 10 Months Ended | 12 Months Ended |
Oct. 31, 2021 | Dec. 31, 2020 | |
Lessor, Lease, Description [Line Items] | ||
Operating Lease Income Comprehensive Income Extensible List Not Disclosed Flag | Total rental revenue | |
VEREIT Office Assets | ||
Lessor, Lease, Description [Line Items] | ||
Cash rent | $ 109,582 | $ 132,402 |
Straight-line rent | (4,889) | (869) |
Lease intangible amortization | (29) | (67) |
Property operating cost reimbursements | 3,270 | 3,794 |
Total fixed | 107,934 | 135,260 |
Variable | 26,806 | 35,044 |
Total rental revenue | $ 134,740 | $ 170,304 |
VEREIT Office Assets, Leases _3
VEREIT Office Assets, Leases - Maturities of Lease Payments Receivable (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Oct. 31, 2021 |
Future Minimum Operating Lease Payments | ||
2022 | $ 137,833 | |
2023 | 110,559 | |
2024 | 72,868 | |
2025 | 69,771 | |
2026 | 50,342 | |
Thereafter | 184,574 | |
Total | $ 625,947 | |
VEREIT Office Assets | ||
Future Minimum Operating Lease Payments | ||
November 1, 2021 - December 31, 2021 | $ 15,683 | |
2022 | 110,872 | |
2023 | 95,130 | |
2024 | 72,361 | |
2025 | 38,980 | |
2026 | 29,951 | |
Thereafter | 34,357 | |
Total | $ 397,334 |
VEREIT Office Assets, Leases _4
VEREIT Office Assets, Leases - Future Minimum Lease Payments (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Oct. 31, 2021 |
Lessee, Lease, Description [Line Items] | ||
2022 | $ 1,134 | |
2023 | 883 | |
2024 | 892 | |
2025 | 478 | |
2026 | 445 | |
Thereafter | 12,939 | |
Total | 16,771 | |
Less: imputed interest | 6,079 | |
Total | $ 10,692 | |
VEREIT Office Assets | ||
Lessee, Lease, Description [Line Items] | ||
November 1, 2021 - December 31, 2021 | $ 55 | |
2022 | 329 | |
2023 | 329 | |
2024 | 329 | |
2025 | 329 | |
2026 | 329 | |
Thereafter | 10,062 | |
Total | 11,762 | |
Less: imputed interest | 6,403 | |
Total | $ 5,359 |