Here’s Why Orion Office (ONL) Remains a ‘Shaky Low Conviction Hold’ for Clark Street Value

Clark Street Value, an investment management firm, published its fourth-quarter 2021 investor letter – a copy of which can be seen here. An annual portfolio return of 74.99% was recorded by the fund for the year 2021, versus 28.71% for the S&P 500, and an IRR since the inception of 29.12%.  over the same period. Spare some time to check the fund’s top 5 holdings to have a clue about their top bets for 2022.

Clark Street Value, in its Q4 2021 investor letter, mentioned Orion Office REIT Inc. (NYSE: ONL) and discussed its stance on the firm. Orion Office REIT Inc. is a Phoenix, Arizona-based real estate investment trust company with a $990.9 million market capitalization. ONL delivered a -5.73% return since the beginning of the year and it closed at $17.50 per share on January 12, 2022.

Here is what Clark Street Value has to say about Orion Office REIT Inc. in its Q4 2021 investor letter:

“Orion Office REIT (ONL) is a shaky low conviction hold for me, the setup of being a merger-spin out of a heavily retail owned stock and the resulting forced selling tempted me enough to start a position.  A dividend initiation should help recruit a little wider investor base in the near future, but my current thought is I’m unlikely to own this for the long term as I’m still personally bearish about return to office.  There are countless examples, but near me, Allstate recently sold their suburban headquarters campus to investors who plan on turning it into logistics/warehouses  — when old line type companies are making drastic switches away from large corporate campuses, makes me worried for the sector, especially with an average lease term under 3.5 years.”

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Our calculations show that Orion Office REIT Inc. (NYSE: ONL) failed to obtain a mark in our list of the 30 Most Popular Stocks Among Hedge Funds. You can find other letters from hedge funds and prominent investors on our hedge fund investor letters 2021 Q4 page.

Disclosure: None. This article is originally published at Insider Monkey.