- Office REIT Orion Properties is reviewing strategic options, potentially including a sale.
- Kawa Capital, a 10% stakeholder, will participate in the process but cannot acquire more shares or pursue a takeover.
- Orion owns 63 office-focused properties totaling nearly 8M SF with a 72.8% occupancy.
- Recent REIT mergers signal industry shift as public firms weigh going private.
Strategic Review Underway
Bisnow reports that Orion Properties, a Phoenix-based office REIT, has launched a formal review of its strategic options following months of investor pressure. The company has signed a cooperation agreement with Kawa Capital Management, one of its largest shareholders, enabling Kawa to access confidential information and submit proposals related to potential transactions.
Kawa’s Role and Restrictions
As part of the agreement, Kawa Capital—already holding a roughly 10% stake—agreed to a standstill that bars it from increasing its ownership or launching a takeover bid during the review. The process could result in a sale or another transaction, though there is no set deadline or guarantee of a buyout.
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Portfolio and Performance Snapshot
Orion Properties’ portfolio covers nearly 8M SF across 63 assets, with an occupancy of 72.8% as of Q3. The holdings are mainly traditional office properties but also include government, medical, and industrial spaces. Orion was spun off from Realty Income in 2021 and has endured stock price pressures common in the current office REIT sector.
Broader Office REIT Landscape
The agreement comes amid a wave of consolidation among office REITs whose stock values have lagged their underlying assets. Multiple public REITs, including City Office REIT and Plymouth Industrial REIT, are considering or executing go-private deals as the sector faces ongoing challenges. This trend reflects a broader shift, as many REITs turn to private market alternatives to bridge valuation gaps and unlock shareholder value.
