Realty Income Q2 FY2025 Earnings Call Transcript
Realty Income Corp. (NYSE:O) reported its second-quarter financial results after Wednesday’s closing bell.
Below are the transcripts from the Q2 earnings call.
This transcript is brought to you by Benzinga APIs. For real-time access to our entire catalog, please visit https://www.benzinga.com/apis/ for a consultation.
OPERATOR
Greetings. Welcome to Orion Properties second quarter 2025 earnings call. As a reminder, this conference is being recorded. I would now like to turn the call over to Paul Hughes, General Counsel for Orion. Thank you. You may begin.
Paul Hughes (General Counsel)
Thank you and good morning everyone. Yesterday Orion released its results for the quarter ended June 30, 2025, filed its Form 10Q with the Securities and Exchange Commission and posted its earnings supplement to its website at onlreit.com during the call today we will be discussing Orion’s guidance estimates for calendar year 2025 and other forward looking statements which are based on management’s current expectations and are subject to certain risks that could cause actual results to differ materially from our estimates. The risks are discussed in our earnings release as well as in our Form 10Q and other SEC filings and Orion undertakes no duty to update any forward looking statements made during this call today. On the call we will be discussing funds from operations or FFO and core funds from operations or core FFO and other non GAAP financial measures. These non GAAP financial measures are not a substitute for financial information presented in accordance with GAAP and Orion’s earnings release and supplement include a reconciliation of our non GAAP financial measures to the most directly comparable GAAP measure.
Hosting the call today are Orion’s chief executive officer Paul McDowell and chief financial officer Gavin Branden. And joining us for the Q&A session will be Chris Day, our Chief Operating Officer. With that, I am now going to turn the call over to Paul McDowell.
Paul McDowell (Chief Executive Officer)
Good morning everyone and thank you for joining us on Orion Properties second quarter earnings call. Today I will highlight the continued progress we are making on our new business strategy and discuss our second quarter performance and operations. Importantly, leasing momentum continues and we are energized that the marketplace has been receptive to our accelerated asset sales. Following my remarks, Gavin will review our financial results and provide our improved outlook for the rest of the year. With 639,000 square feet of leasing completed as of July 31, we are successfully building on last year’s strong momentum that saw Orion lease 1.1 million square feet. Specifically, the 639,000 square feet of leasing is a combination of new and renewal transactions with a weighted average lease term of 6.4 years. Included in this total for the second quarter and shortly thereafter are three new leases, a 15.7 year agreement for 46,000 square feet at our Parsippany, New Jersey property, a 5.4 year agreement for 80,000 square feet at our Kennesaw, Georgia property, and a 7.6 year agreement for 23,000 square feet at our Plano, Texas property.
The Kennesaw, Georgia property is currently leased to Home Depot for almost three more years making the combined lease term more than eight years. Additionally, we signed 110,000 square feet of short term lease extensions at two properties during the quarter at over 6% positive lease spreads on average. We are encouraged by our strong leasing activity to date and the momentum that has continued to build in our future pipeline including various longer duration renewals and new leases with terms greater than the average of our portfolio. We are working hard to get a substantial portion of this more than 800,000 square foot pipeline of leasing activity which includes transactions in both the discussion and documentation stage to the finish line. By year end, Orion’s operating property occupancy rate was 77.4% at quarter end, an increase of 310 basis points sequentially and the operating property lease rate was 79.1%, an increase of 170 basis points sequentially and the weighted average lease term increased to 5.5 years from 5.2 years last quarter and 4.2 years this time last year. We do anticipate tenant retention will continue to fluctuate due to the smaller size of our portfolio and the timing of certain expected move outs in the remainder of the year. We continue to expect that our portfolio occupancy will rise after 2025 as we lease vacant ...
