Orion Office Reit Inc.
11/27/2024 | Press release | Distributed by Public on 11/27/2024 15:12
Material Event Form 8 K
Item 8.01. Other Events.
On November 27, 2024, Orion Office REIT Inc. (the "Company") provided certain updates with respect to the Company's unconsolidated joint venture with an affiliate of Arch Street Capital Partners, LLC (the "Arch Street Joint Venture") and the non-recourse mortgage notes associated with the Arch Street Joint Venture. The mortgage notes were scheduled to mature on November 27, 2024 with two successive one-year options to extend the maturity until November 27, 2026. On November 22, 2024, the Arch Street Joint Venture repaid $3.4 million of principal on the mortgage notes to satisfy the 60% maximum loan-to-value extension condition and effected the first loan extension option, which extended the maturity date of the mortgage notes 12 months to November 27, 2025. The mortgage notes have a variable interest rate and during the 12-month extension term the spread on a SOFR (the secured overnight financing rate as administered by the Federal Reserve Bank of New York) loan will increase to 2.60% per annum (from 1.60% per annum). The Arch Street Joint Venture has entered into an interest rate cap agreement that caps the SOFR rate at 5.50% per annum during the 12-month extension term.
The Company provided a member loan to the Arch Street Joint Venture of $1.4 million in connection with the partial repayment of the Arch Street Joint Venture mortgage notes to satisfy the maximum loan-to-value extension condition. The member loan bears interest at 15% per annum and is non-recourse and unsecured, structurally subordinate to the Arch Street Joint Venture mortgage notes, and interest and principal is payable solely out of excess cash from the joint venture after payment of property operating expenses, interest and principal on the Arch Street Joint Venture mortgage notes and other joint venture expenses, which excess cash will be distributed monthly to the Company to pay interest and principal on the member loan. The Company also committed to make an additional member loan of up to $13.5 million to fund estimated leasing costs related to a lease extension that is under negotiation for one of the properties in the Arch Street Joint Venture portfolio.