Greetings. Welcome to Orion Office REIT's First Quarter 2024 Earnings Call. As a reminder, this conference is being recorded. I would now like to turn the call over to Mr. Paul Hughes, General Counsel for Orion. Thank you, and you may now begin.

Thank you, and good morning, everyone. Yesterday, Orion released its financial results for the quarter ended March 31, 2024, filed its Form 10-Q with the Securities and Exchange Commission, and posted its earnings supplement to its website. These documents are available in the Investors section of the company's website at onlreit.com. Certain statements made during the call today are not strictly historical information and constitute forward-looking statements. These statements include the company's guidance estimates for calendar year 2024 and 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 10-Q and other SEC filings. The company undertakes no duty to update any forward-looking statements made during this call. Additionally, during the call today, we will be discussing certain non-GAAP financial measures, such as funds from operations, or FFO, and core funds from operations or core FFO. The company's earnings release and supplement include a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP measure. Our presentation of this information is not a substitute for the financial information presented in accordance with GAAP. Hosting the call today are Paul McDowell, the company's Chief Executive Officer; and Gavin Brandon, the company's Chief Financial Officer. And joining us for the Q&A session are Gary Landriau, our Chief Investment Officer; and Chris Day, our Chief Operating Officer. With that, I am now going to turn the call over to Paul McDowell.

Good morning, everyone, and thank you for joining us on Orion Office REIT's First Quarter 2024 Earnings Call. Today, I will highlight the progress we are making executing on our business strategy and discuss our first quarter performance and operations. Following my remarks, Gavin will review our financial results and provide our outlook for the rest of the year. We own 75 properties and 6 unconsolidated joint venture properties, comprising 8.9 million rentable square feet that were 75.8% occupied at the end of the first quarter. Adjusted for properties that are currently under agreement to be sold, our occupancy rate was 83.2% at quarter end. The properties in the portfolio are predominantly either triple or double net leased to creditworthy tenants. As a percentage of annualized base rent as of March 31, 70.1% of our tenants were investment grade. Our portfolio of assets remains well diversified by tenant, tenant industry and geography. The United States government is our largest tenant by annualized base rent, and our 2 largest tenant industries are health care and government. Over 35% of our annualized base rent is derived from Sun Belt markets. Our largest markets by state are Texas, New Jersey and New York. At the end of Q1, our portfolio's weighted average lease term remained steady at 4.1 years. The story of the first quarter and into the beginning of the second has been leasing momentum. As of today, we've completed 522,000 square feet of new and renewal leasing this year, more than doubling the amount we executed last year. During the first quarter, we gained traction on renewals and new leases, signing 2 long-term lease transactions with the United States government, a 17-year lease renewal for 9,000 square feet at one of our Eagle Pass, Texas properties and a new 15-year lease…

Thanks, Paul. Orion generated total revenues of $47.2 million in the first quarter as compared to $50.2 million in the same quarter of the prior year. Importantly, we benefited from $3.8 million of onetime revenues in the quarter from real estate tax reimbursements and end of lease obligation payments for former tenants. Of the onetime revenues, $1.6 million of tax reimbursements were not expected to be received until next year. We reported a net loss attributable to common stockholders of $26.2 million or $0.47 per share as compared to a net loss of $8.9 million or $0.16 per share reported in the first quarter of 2023. Core funds from operations for the quarter was $20.4 million or $0.36 per share as compared to $25.3 million or $0.45 per share in the same quarter of 2023. Adjusted EBITDA was $26.7 million versus $31.2 million in the first quarter of 2023. G&A in the first quarter was $4.9 million compared to $4.3 million in the same quarter of 2023 due primarily to the timing of corporate-related expenses and higher compensation expense as a result of an additional year of noncash stock-based compensation expense. CapEx in the quarter was $3.4 million compared to $3.3 million in the same quarter of 2023. As we have previously discussed, CapEx timing is dependent on when leases are signed and work is completed on the properties. CapEx will likely increase over time as leases roll and new and existing tenants draw upon tenant improvement allowances. We ended the first quarter with $498.3 million of outstanding debt, including $355 million under the fixed rate nonrecourse CMBS loan due February 2027, $116 million of floating rate debt on the revolving credit facility and $27.3 million, representing our share of the Arch Street joint venture debt, which is swapped to…

[Operator Instructions] And our first question is from the line of Mitch Germain with JMP Securities.

This is Jyoti on for Mitch. Congratulations on the leasing this year. So do you feel more conviction now towards tenant decision making?

Yes. Thank. Our forward leasing pipeline continues to look pretty healthy. The leasing we've done this year, some of it was expected leasing that is we expected the renewals that we've received, but still took quite a bit of work to get it done. And some of it was some new leases on vacant space. And I'd say that's where we feel where we're seeing some of the best traction now that is we're starting to see tenants interested in some of our vacant space and transferring that interest from just straight interest to actually sign lease sell. We feel pretty good about the forward pipeline, but I also want to stress that the conditions remain very tough out there and competition is very high for new tenants. So I don't want to read too much into it, but we definitely feel better about the forward pipeline from there.

That's fair. So just a little bit, if you can give some background on the U.S. government leases. When did those negotiations pick in? I think for one, you said it was a year-long process, but how is it playing out now?

Well, I mean the government -- the property that we renewed in Covington, Kentucky, leased to the federal government is a large facility. And so we had a lot of conversations with the government about that property, their needs of that property, what type of capital we needed to put into the property. So we worked with them for quite a long period of time. So I think since some last summer, in general, our interactions with the federal government take anywhere from a month to up to a year. It just depends a little bit on the property, the government's needs of that property and frankly, the contracting officer that's running the lease negotiations. So we're prepared, I guess, for all eventualities.

Yes, that's fair. And just switching on here, the last question. On the Arch Street venture. Could you give some insight on like if there's any term on that and like expectations or some history?

Yes. With respect to the Arch Street joint venture, we have a nonrecourse mortgage loan facility, which expires in November of this year. The portfolio assets are all fully occupied, are all fully performing and cash flowing. So the assets in that portfolio comfortably support the outstanding debt. At the conclusion of the initial term we're required to meet several covenants among them, our loan-to-value and weighted average lease term, which we are working to get to that level so that we can extend the debt. So our plan with that facility right at the moment is to hopefully extend the debt with the existing lenders or if not, to refinance the portfolio away. But the portfolio itself is performing well and is a strong portfolio.

Thank you. At this time, I'll hand the floor back to Mr. Paul McDowell for any further remarks.

Thank you all for joining us today on our first quarter call, and we look forward to you joining us on our second quarter call later this summer. Thank you. Bye-bye.

Thank you. This will conclude today's conference. You may now disconnect your lines at this time. We thank you for your participation, and have a wonderful day.