Real Estate Properties

6 Months Ended

Jun. 30, 2025

As of June 30, 2025, our 125 wholly owned properties contained approximately 17,270,000 rentable square feet, with an undepreciated carrying value of $3,676,919, including $16,313 classified as held for sale. We also had a noncontrolling ownership interest of 51% in an unconsolidated joint venture that owned two properties containing approximately 346,000 rentable square feet. We generally lease space at our properties on a gross lease, modified gross lease or net lease basis pursuant to fixed term contracts expiring between 2025 and 2044. Some of our leases generally require us to pay all or some property operating expenses and to provide all or most property management services. During the three months ended June 30, 2025, we entered into 15 leases for approximately 416,000 rentable square feet for a weighted (by rentable square feet) average lease term of 5.4 years, and we made commitments of $7,974 for leasing related costs. During the six months ended June 30, 2025, we entered into 26 leases for approximately 639,000 rentable square feet for a weighted (by rentable square feet) average lease term of 7.1 years, and we made commitments of $18,597 for leasing related costs. As of June 30, 2025, we had estimated unspent leasing related obligations of $72,394.

We regularly evaluate whether events or changes in circumstances have occurred that could indicate an impairment in the value of long lived assets. Impairment indicators may include declining tenant occupancy, lack of progress re-leasing vacant space, tenant bankruptcies, low long term prospects for improvement in property performance, weak or declining tenant profitability, cash flow or liquidity, our decision to dispose of an asset before the end of its estimated useful life and legislative, market or industry changes that could permanently reduce the value of a property. If there is an indication that the carrying value of an asset is not recoverable, we estimate the projected undiscounted cash flows to determine if an impairment loss should be recognized. The future net undiscounted cash flows are subjective and are based in part on assumptions regarding hold periods, market rents and terminal capitalization rates. We determine the amount of any impairment loss by comparing the historical carrying value to estimated fair value. We estimate fair value through an evaluation of recent financial performance and projected discounted cash flows using standard industry valuation techniques. In addition to consideration of impairment upon the events or changes in circumstances described above, we regularly evaluate the remaining useful lives of our long lived assets. If we change our estimate of the remaining useful lives, we allocate the carrying value of the affected assets over their revised remaining useful lives.

Disposition Activities

During the six months ended June 30, 2025, we sold three properties containing approximately 249,000 rentable square feet for an aggregate sales price of $26,900, excluding closing costs. The sales of these properties, as presented in the table below, do not represent a strategic shift in our business. As a result, the results of operations of these properties are included in continuing operations through the date of sale in our condensed consolidated statements of comprehensive income (loss).


Date of Sale	Number of Properties	Location	Rentable Square Feet	Gross Sales Price (1)		Gain (Loss) on Sale of Real Estate
February 2025	1	Parsippany, NJ	100,000	$	5,750	$	(4,620)
February 2025	2	Santa Clara, CA	149,000	21,150		42





	3		249,000	$	26,900	$	(4,578)

(1)Gross sales price is the contract price, excluding closing costs.

As of June 30, 2025, we had three properties classified as held for sale in our condensed consolidated balance sheet. In July 2025, we sold one of these properties for a sales price of $2,150, excluding closing costs. We recorded a loss on impairment of real estate of $2,426 to reduce the carrying value of this property during the six months ended June 30, 2025 to its fair value less estimated costs to sell. As of July 29, 2025, we had three properties, including two properties classified as held for sale, under agreement to sell for an aggregate sales price of $28,863, excluding closing costs, as summarized below:


Date of Sale Agreement	Number of Properties	Location	Rentable Square Feet	Gross Sales Price (1)
October 2024	2	Tempe, AZ	101,000	$	10,738
December 2024	1	Reston, VA(2)	275,000	18,125










	3		376,000	$	28,863

(1)Gross sales price is the contract price, excluding closing costs.

(2)Property did not meet held for sale criteria as of June 30, 2025.

The pending sales in the preceding table are subject to conditions; accordingly, we cannot be sure that we will complete these sales or that these sales will not be delayed or the pricing will not change. See Note 8 for more information regarding our properties held for sale.

Unconsolidated Joint Venture

As of June 30, 2025, we owned an interest in one joint venture that owned two properties. We accounted for this investment under the equity method of accounting.

As of June 30, 2025 and December 31, 2024, our investment in our unconsolidated joint venture is as follows:


		OPI Carrying Value of Investment at
Joint Venture	OPI Ownership	June 30, 2025		December 31, 2024		Number of Properties	Location	Rentable Square Feet
Prosperity Metro Plaza	51%	$	16,990	$	17,370	2	Fairfax, VA	346

As of June 30, 2025 and December 31, 2024, the mortgage debt of our unconsolidated joint venture is as follows:


Joint Venture	Interest Rate (1)	Maturity Date	Principal Balance at June 30, 2025 (2)		Principal Balance at December 31, 2024 (2)
Prosperity Metro Plaza	4.09%	12/1/2029	$	49,557	$	50,000

(1)Includes the effect of mark to market purchase accounting.

(2)Reflects the entire balance of the debt secured by the properties and is not adjusted to reflect the interest in the joint venture we did not own. None of the debt is recourse to us.

As of June 30, 2025, the unamortized basis difference of our joint venture of $659 was primarily attributable to the difference between the amount we paid to purchase our interest in the joint venture, including transaction costs, and the historical carrying value of the net assets of the joint venture. The difference is being amortized over the remaining useful life of the related property and the resulting amortization expense is included in equity in net losses of investees in our condensed consolidated statements of comprehensive income (loss).