Orion Properties Inc.ONL

Orion Properties Inc. Leases Disclosure

10-KFiled Mar 5, 20262 min read
Note 11 – Leases
Lessor
As of December 31, 2025, the Company’s operating leases have non-cancelable lease terms ranging from 0.2 years to 15.6 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 components of rental revenue from the Company’s operating leases during the periods indicated below were as follows (in thousands):
Year Ended December 31,
202520242023
Fixed:
Cash rental revenue$88,373 $117,953 $141,471 
Straight-line rental revenue13,125 (210)5,649 
Lease intangible amortization769 637 894 
Fixed property operating cost reimbursements6,100 5,881 5,956 
Other fixed rental revenue4,810 1,128 865 
Total fixed113,177 125,389 154,835 
Variable:
Variable property operating cost reimbursements31,314 35,897 36,010 
Other variable rental revenue2,336 2,769 3,396 
Total variable33,650 38,666 39,406 
Total rental revenue$146,827 $164,055 $194,241 
The following table presents future minimum base rent payments due to the Company under the terms of its operating lease agreements, excluding expense reimbursements, over the next five years and thereafter as of December 31, 2025 (in thousands).
Future Minimum
Base Rent Payments
2026
$85,124 
202776,919 
202867,923 
202951,859 
203049,840 
Thereafter259,054 
Total$590,719 
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, 2025, the Company’s operating leases had remaining lease terms ranging from 0.1 years to 59.0 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 3.57% as of December 31, 2025. 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 or the lease guidance adoption date, as applicable, in determining the present value of lease payments.
Operating lease costs were $1.2 million, $1.2 million and $1.3 million for the years ended December 31, 2025, 2024 and 2023, respectively. No cash paid for operating lease liabilities was capitalized during the years ended December 31, 2025, 2024 and 2023.
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, 2025 (in thousands).
Future Minimum Lease Payments
2026
$778 
2027752 
2028761 
2029473 
2030447 
Thereafter11,597 
Total14,808 
Less: imputed interest5,170 
Total$9,638 

Historical Timeline

Fiscal YearFiled
2025Mar 5, 2026Showing above
2024Mar 5, 2025
2023Feb 27, 2024
2022Mar 8, 2023
2021Mar 24, 2022

About Leases Disclosures

Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.

Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.

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