Orion Office REIT Inc. (NYSE:ONL) Q3 2023 Earnings Call Transcript

Paul McDowell: I guess I have a couple of responses to that, Mitch. One is, I certainly hope this is the bottom. It’s certainly been painful getting to where we are today and the overall market is under a fair amount of stress with a lot of vacancy across the office markets. For Orion, we’re a little different. And by that, I only mean because of our size, and we have single tenants, we’re so granular. So we’ve got a lot of lease roll in 2024, a couple of several properties of our larger properties where the tenant has said they’re going to move out. So that we have some pain to come looking forward. But when we think about refilling that vacancy, I would say we’re more optimistic about that today than we probably were six months ago. So hopefully, both for Orion and for the industry at large, if we’re not at the bottom, maybe we can see it from here.

Mitch Germain: Got you. Okay. Last one for me. Your guidance implies a pretty significant deceleration in the fourth quarter. You get the benefit of the lower share count. Obviously, you’re offsetting that against some of those vacancies or Walgreens and Experian not being in the full quarter some new vacancies. I’m just trying to understand, I mean, how do you bridge me from 3Q to 4Q to get to kind of midpoint of your guidance?

Paul McDowell: Yes. I mean I think we’ve got a fair amount of deceleration in revenues as a result of Walgreens being moved out. And we also were helped recently with some onetime items that won’t be recurring. We did a little bit better on some tax appeals and some property expenses. So there are a number of items that sort of have helped us in the past and won’t be helping us in the fourth quarter. Obviously, the share repurchase will continue to help us to some degree. But I think it’s really the things I just mentioned that is deceleration in revenues, coupled with the positive impacts of some onetime items that won’t be recurring.

Mitch Germain: Great. Appreciate it. Thank you.

Paul McDowell: Thanks, Mitch.

Operator: [Operator Instructions] And we have reached the end of the question-and-answer session. And I’ll turn the call back over to Paul McDowell for closing remarks.

Paul McDowell: Thank you all for joining us today on our third quarter call, and we look forward to updating you further in the beginning of next year. Thank you.

Operator: And this concludes today’s conference, and you may disconnect your lines at this time. Thank you for your participation.