Summary of OPI's Q2 2026 Earnings Call

1Key Financial Results and Metrics

Normalized FFO:: $19 million

Adjusted EBITDAre:: $65 million

Same-property cash basis NOI:: Increased 11.9% year-over-year to $55 million.

Annualized rental income:: $413 million, comprising:

Cash rents: $307 million

Straight-line rent adjustments: $23 million

Recurring expense reimbursements: $83 million

Property operating expenses:: $48.8 million, down 40 basis points from the prior year.

G&A expenses:: $5.5 million for the quarter; projected $20 million to $22 million for the full year.

Debt:: Approximately $1.7 billion with a weighted average interest rate of 9% and average maturity of 3 years.

Cash position:: $51 million unrestricted cash and $53 million restricted cash.

2Strategic Updates and Business Highlights

OPI emerged from Chapter 11 on June 17, 2026, reducing total debt by approximately $714 million and reshaping its debt maturity profile.

The portfolio consists of 122 properties totaling 17.1 million square feet, with over 60% of revenue from tenants with strong credit profiles.

Leasing activity included 176,000 square feet signed at an average term of over 7 years, primarily lease renewals.

A significant leasing pipeline of over 2.4 million square feet exists, with 1.4 million square feet related to renewals.

OPI plans to sell 32 properties totaling 3.7 million square feet, expected to generate over $275 million in gross proceeds to enhance liquidity.

3Forward Guidance and Outlook

For 2026, OPI expects capital expenditures of $55 million to $65 million, primarily for leasing and building maintenance.

The company is focused on increasing free cash flow, optimizing its office portfolio, and maintaining strong tenant relationships.

OPI is actively working on refinancing its $425 million credit facility maturing in January 2027.

4Bad News, Challenges, or Points of Concern

Approximately 2 million square feet of leases, representing 14% of annualized revenue, are set to expire by the end of 2027, with 660,000 square feet expected to vacate or downsize.

The company faces a significant debt load with a high interest rate and upcoming principal payments, including $15 million due in November 2026.

The need to address near-term maturities and improve cash flows remains a priority, indicating potential liquidity pressures.

5Notable Q&A Insights

Management emphasized the importance of maintaining strong tenant relationships and operational efficiency to navigate the current market.

There was discussion on the competitive landscape and how OPI plans to leverage its institutional investor base and operational expertise to enhance its market position.

Concerns were raised about the potential impact of economic conditions on leasing activity and tenant retention, particularly in markets identified for asset sales. Overall, OPI's Q2 2026 results reflect a significant restructuring and a strategic focus on enhancing financial flexibility and portfolio optimization, despite challenges related to lease expirations and debt management.