Orion Properties Inc. (ONL) is a suburban office REIT with 59 operating properties and 6.6M leasable square feet as of March 31, 2026. Under a liquidation lens, recovery to equity is structurally negative. MFFAIS reports CLV, LLV, and OLV all at negative $499M, consistent with this analysis. Total assets of $1.19B are dominated by real estate investment property net of depreciation ($965M carrying value), which under a 50-70% liquidation haircut yields approximately $483-675M in recoverable value. Applying a midpoint 60% haircut to gross real estate at cost of $1.16B (less accumulated depreciation of $197M, net $965M) produces roughly $579M in asset recovery. Land ($179M tagged separately) recovers at a higher rate, partially offsetting building haircuts. Intangible lease assets net ($82M) receive a 0% recovery in liquidation. Restricted cash ($50M, largely the CMBS all-purpose reserve held by lender) is not freely available to equity; the CMBS Loan modification requires excess cash sweeps to service debt principal. Unrestricted cash is only $10.3M. Total face-value liabilities of $578M include $497M of long-term debt at par: a $352M CMBS Loan (maturing 2029, interest-only), $127M drawn on the New Revolving Facility (maturing 2028), and $18M San Ramon mortgage (maturing 2031). Additional operating lease liabilities ($12M) and accounts payable and accruals ($35M) stack above equity. The Unconsolidated Joint Venture presents off-balance-sheet risk: its non-recourse mortgage notes defaulted in February 2026 ($128M total, ONL proportionate share $26M). ONL's equity investment was written to zero at year-end 2025, and the Member Loan is fully reserved; the filing discloses the lender intends to compel a property sale and has triggered excess cash flow sweep. No consolidated liability for the JV debt is recognized on ONL's balance sheet, which is appropriate for non-recourse structure, but reputational and operational exposure remains. Since the prior 10-K (December 31, 2025), the material change is the February 2026 debt restructuring: the CMBS Loan was extended two years but now carries a mandatory cash sweep of 50% of excess property cash flows during the extension period, and 100% of property sale net proceeds must be applied to CMBS principal paydown before any equity realization. The New Revolving Facility reduced capacity from $350M to $215M and added first-priority mortgage liens on 28 properties. Outstanding rent concession and leasing cost commitments of $62M (not separately XBRL-tagged, disclosed in MD&A only) represent unfunded off-balance-sheet obligations that would need to be settled or rejected in a wind-down. Impairments of $6.3M in Q1 2026 versus $1.7M in Q1 2025 signal continued downward pressure on appraised values. Book equity of $609M is largely illusory under liquidation haircuts; net recovery to common equity is estimated deeply negative, consistent with MFFAIS CLV of negative $499M.
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