About Paul Mcdowell
In a September 2024 interview at Nareit's REITweek, Paul McDowell, president and CEO of Orion Office REIT, discussed the company's strategy amid what he described as a "historic meltdown in office demand," which he likened to a "nuclear winter." McDowell stated that since the company's spin-off in 2022, Orion has focused on rationalizing its portfolio by selling over 20 assets and repaying debt, actions he said have placed the company on a "very firm footing." He noted that the company has kept its leverage low, with debt to EBITDA around four times.
McDowell said that in the second half of 2024, Orion was beginning to see potential acquisition opportunities involving "good pricing with good assets and long-duration leases." He expressed that there is "a tremendous amount of embedded value" in the company's shares that he believes shareholders need to recognize. McDowell added that the company aims to be well-positioned for a market recovery, which he said "inevitably will" occur.
Source: AI-verified profile updated from Paul Mcdowell's recent appearances.
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Transcript (9 segments)
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Paul Mcdowell0:00
We've sold more than 20 assets, we've repaid a lot of debt. We've really put this company in the very tough market conditions onto a very firm footing. So I think when you look at the work we've done versus where our shares trade, there's a tremendous amount of embedded value there that we just need shareholders to see.
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Interviewer0:24
I'm here today with Paul McDow, president and CEO of Orion Office REIT. Paul, thanks for joining us today.
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Paul Mcdowell0:30
Thanks for having me.
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Interviewer0:32
Where do you see the greatest growth potential for Orion Office REIT in the second half of the year and into 2025?
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Paul Mcdowell0:39
Our challenge at Orion has been a historic meltdown in office demand. Since our spin in 2022, our challenge has been really rationalizing our portfolio, which we've been doing over the past couple of years, selling assets that we don't think will produce long-term income, leasing assets to the greatest extent that we can. We've recycled a tremendous amount of capital in the past few years, and so now we're starting to see in the second half of this year some opportunities potentially for acquisition, good pricing with good assets with long-duration leases. So I think we've tried to set the company up so that we can take advantage of those opportunities as they arise.
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Interviewer1:23
And is there a particular project or initiative currently underway at Orion that you are especially excited about in terms of its ability to generate growth and enhance shareholder value?
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Paul Mcdowell1:34
Well, for us, the goal, as I said, has been to sort of rationalize our portfolio. I think what the market doesn't understand with respect to Orion is how much work we've really done. We've sold more than 20 assets, we've repaid a lot of debt. We've really put this company in the very tough market conditions onto a very firm footing. So I think when you look at the work we've done versus where our shares trade, there's a tremendous amount of embedded value there that we just need shareholders to see.
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Interviewer2:06
And how would you describe the macro operating environment for Orion and how are you positioned to react?
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Paul Mcdowell2:13
Well, as I said, the office environment has gone through literally a historic meltdown in demand. I like to call it nuclear winter sometimes. So it's a very challenging environment, one we sort of saw coming. It's been coming for a while, and it's not news; everyone knows, read the front page of the Wall Street Journal, it's there every day. So what we've done is worked hard to sell vacant properties that we just don't think will release. We've kept our leverage very low, so our debt to EBITDA is four times. We've kept leverage low, we've repaid borrowings, we've tried to position the company on as firm a financial footing as we can so that when the market recovery occurs, as it inevitably will, we'll be in a good position, and we feel like we are.
