- Orion Properties rejected five board nominees submitted by Kawa Capital Management, citing noncompliance with corporate bylaws and a closed nomination window.
- Kawa, which owns about 10% of Orion, made a $141M buyout offer in July that the board unanimously rejected.
- The Phoenix-based REIT has struggled financially, reporting a $105M YTD loss and warning about its ability to continue as a going concern.
- Orion’s board is up for election at the 2026 annual meeting, though a date has yet to be announced.
A Shareholder Challenge Rebuffed
Orion Properties, a Phoenix office REIT, rejected Kawa Capital’s attempt to nominate five new board directors, reports Bisnow. South Florida firm sought to replace Orion’s board after its failed $2.50-per-share takeover bid in July for the struggling REIT.
On Wednesday, Orion’s board declared Kawa’s nomination notice invalid. It said the notice failed to meet procedural requirements under the company’s bylaws. The board also stated the notice was submitted after the nomination window had closed.
REIT Under Pressure
The public dispute comes as Orion continues to battle mounting financial pressure. The firm has posted $105M in losses so far in 2025 and is managing liquidity concerns tied to a $110M revolving credit facility maturing in May 2026.
Orion’s stock has had a rocky year, dropping from over $4 to as low as $2 following a dividend cut in March. Shares are now trading near $2.25, reflecting investor concerns over the REIT’s solvency and future strategy.
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Take-Private Tensions
Kawa’s rejected $2.50-per-share buyout offer in July would have valued Orion at roughly $141M. While the board dismissed the proposal, citing undervaluation, the offer came just weeks after Orion disclosed “going concern” risks in its Q2 financials—a red flag for creditors and shareholders alike.
As the REIT reiterates those risks in recent filings, Kawa’s activism may not be over. The annual shareholder meeting—likely in mid-2026—could bring another round of proxy battles.
Why It Matters
Struggling REITs are becoming acquisition targets for capital-rich buyers aiming to scoop up discounted real estate portfolios. Orion’s standoff with Kawa reflects a broader pattern: REITs trading below asset value are being eyed for take-private deals amid a depressed office market.
In a notable example, Rithm Capital agreed in September to acquire Paramount Group for $1.6B, betting on long-term value in high-profile office holdings.
