Financial Data and Key Metrics Changes - Annualized revenue decreased to $398 million, down $85 million or nearly 18% year-over-year [7] - Interest expense increased to $53 million, up $14 million or 37% year-over-year [7] - Normalized FFO for Q2 was $9.4 million or $0.13 per share, compared to $4.4 million or $0.06 per share for the same quarter last year [11] Business Line Data and Key Metrics Changes - Same property occupancy stood at 85.2% as of June 30, 2025 [5] - Executed 15 leases totaling 416,000 square feet with a weighted average lease term of 5.4 years, at rental rates 6.4% higher than prior rates [8] - Concessions and capital commitments declined by 24% quarter-over-quarter to $3.53 per square foot per year [8] Market Data and Key Metrics Changes - Approximately 59% of revenues come from investment-grade rated tenants or their subsidiaries, with the U.S. Government as the largest tenant, representing 17.1% of annualized revenue [6] - 1.3 million square feet of leases are scheduled to expire through 2026, representing $30 million or 7.6% of annualized rental income [9] Company Strategy and Development Direction - The company suspended the quarterly dividend to preserve approximately $3 million of cash annually [8] - Focus on leasing and operating properties while exploring options to address financial commitments and reduce costs [7] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that financial performance has materially declined due to ongoing leasing challenges in the office sector [6] - For Q3 2025, normalized FFO is expected to be between $0.07 and $0.09 per share, with a projected decrease in same property cash basis NOI of 7% to 9% compared to 2024 [12] Other Important Information - Total liquidity is currently $90 million in cash, with projected cash from operations being a use of $45 million to $55 million during the remainder of 2025 [14] - The company has three properties under agreement to sell for $28.9 million, with expected closings in September 2025 and 2027 [13] Q&A Session Summary - No specific questions or answers were provided in the content regarding the Q&A session.

Financial Results and Supplemental Information SECOND QUARTER 2025 July 30, 2025 Table of Contents QUARTERLY RESULTS | Office Properties Income Trust Announces Second Quarter 2025 Financial Results | | 4 | | --- | --- | --- | | Second Quarter 2025 Summary | | 5 | | FINANCIALS | | | | Key Financial Data | | 7 | | Condensed Consolidated Statements of Income (Loss) | | 8 | | Condensed Consolidated Balance Sheets | | 9 | | Debt Summary | | 10 | | Debt Maturity Schedule | | 11 | | Leverage Ratios, Coverage Ratio ...

PART I. Financial Information [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) Unaudited Q2 2025 financials show declining assets, a net loss, negative operating cash flow, and substantial going concern doubt [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) | Balance Sheet Items | June 30, 2025 ($ thousands) | December 31, 2024 ($ thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Total real estate properties, net | 2,990,023 | 3,038,909 | -1.6% | | Cash and cash equivalents | 78,176 | 261,318 | -70.1% | | **Total assets** | **3,560,949** | **3,822,286** | **-6.8%** | | Unsecured debt, net | 488,754 | 662,277 | -26.2% | | Secured debt, net | 1,876,439 | 1,872,357 | +0.2% | | **Total liabilities** | **2,495,021** | **2,669,482** | **-6.5%** | | **Total shareholders' equity** | **1,065,928** | **1,152,804** | **-7.5%** | [Condensed Consolidated Statements of Comprehensive Income (Loss)](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) | Income Statement Items | Three Months Ended June 30, 2025 ($ thousands) | Three Months Ended June 30, 2024 ($ thousands) | Six Months Ended June 30, 2025 ($ thousands) | Six Months Ended June 30, 2024 ($ thousands) | | :--- | :--- | :--- | :--- | :--- | | Rental income | 114,499 | 123,686 | 228,114 | 263,121 | | Total expenses | 104,051 | 235,053 | 205,948 | 342,458 | | **Net (loss) income** | **(41,186)** | **76,171** | **(87,053)** | **70,987** | | **Net (loss) income per share** | **($0.58)** | **$1.56** | **($1.24)** | **$1.45** | - The company experienced a significant swing from a net income of **$76.2 million** in Q2 2024 to a net loss of **$41.2 million** in Q2 2025, primarily due to lower rental income and the absence of a large gain on early extinguishment of debt that occurred in the prior-year period[11](index=11&type=chunk) [Condensed Consolidated Statements of Shareholders' Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Shareholders%27%20Equity) - Total shareholders' equity decreased from **$1.15 billion** at the end of 2024 to **$1.07 billion** as of June 30, 2025, primarily driven by a net loss of **$87.1 million** for the six-month period[13](index=13&type=chunk)[11](index=11&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) | Cash Flow Items (Six Months Ended June 30) | 2025 ($ thousands) | 2024 ($ thousands) | | :--- | :--- | :--- | | Net cash provided by operating activities | 3,811 | 58,499 | | Net cash provided by (used in) investing activities | 4,506 | (21,282) | | Net cash used in financing activities | (191,528) | (29,544) | | **(Decrease) increase in cash** | **(183,211)** | **7,673** | | Cash, cash equivalents and restricted cash at end of period | 91,954 | 34,387 | - Net cash from operating activities plummeted by **93.5% YoY** for the first six months of 2025, dropping from **$58.5 million** to **$3.8 million**, reflecting deteriorating operational performance[15](index=15&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) - The company has concluded that there is substantial doubt about its ability to continue as a going concern due to adverse market conditions, limited financing alternatives for upcoming debt obligations, and the possibility of considering a bankruptcy reorganization if refinancing is unsuccessful[22](index=22&type=chunk)[23](index=23&type=chunk) - During the first six months of 2025, OPI sold three properties for an aggregate price of **$26.9 million**, with three additional properties under agreement to be sold for a total of **$28.9 million** as of July 29, 2025[29](index=29&type=chunk)[31](index=31&type=chunk) - On July 10, 2025, the company announced the suspension of its quarterly distribution on common shares in order to preserve cash[57](index=57&type=chunk) - In March 2025, the company initiated an "at the market" (ATM) offering program to sell up to **$100 million** in common shares, selling approximately **4.2 million shares** for net proceeds of **$1.1 million** through June 30, 2025[58](index=58&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=21&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses severe market headwinds, declining occupancy, and constrained liquidity, raising substantial doubt about going concern [Overview](index=21&type=section&id=Overview) - As of June 30, 2025, OPI's portfolio consisted of **125 wholly-owned properties**, with the U.S. government as the largest tenant, accounting for **17.1%** of annualized rental income[79](index=79&type=chunk) - Management reiterates substantial doubt about the company's ability to continue as a going concern due to limited financing alternatives, illiquid assets, and covenant constraints, with bankruptcy reorganization a possibility if refinancing efforts fail[81](index=81&type=chunk) [Property Operations](index=21&type=section&id=Property%20Operations) | Occupancy Metrics | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Total Properties | 125 | 151 | | Total Rentable Square Feet (thousands) | 17,270 | 20,293 | | Percent Leased | 81.2% | 83.5% | - For the six months ended June 30, 2025, the company entered into new and renewal leases for **639,000 square feet** with a weighted average rental rate increase of **8.8%** and committed **$18.6 million** in tenant leasing costs and concessions[89](index=89&type=chunk) - A significant portion of leases are set to expire in the near to medium term, with **12.6%** of annualized rental income expiring in 2027 and **38.1%** expiring in 2034 and thereafter[97](index=97&type=chunk) [Results of Operations](index=27&type=section&id=Results%20of%20Operations) | Metric (Three Months Ended June 30) | 2025 ($ thousands) | 2024 ($ thousands) | % Change | | :--- | :--- | :--- | :--- | | Rental Income | 114,499 | 123,686 | -7.4% | | Total Operating Expenses | 49,031 | 47,640 | +2.9% | | Net Operating Income (NOI) | 65,468 | 76,046 | -13.9% | | Net (Loss) Income | (41,186) | 76,171 | -154.1% | - The decrease in Q2 2025 rental income was driven by property dispositions and increased vacancies, while the significant drop in net income was largely due to the absence of a **$225.8 million** gain on early debt extinguishment recorded in Q2 2024[110](index=110&type=chunk)[119](index=119&type=chunk) [Non-GAAP Financial Measures](index=31&type=section&id=Non-GAAP%20Financial%20Measures) | Per Share Data (Three Months Ended June 30) | 2025 | 2024 | | :--- | :--- | :--- | | Net (loss) income | ($0.58) | $1.56 | | FFO | $0.08 | $5.32 | | Normalized FFO | $0.13 | $0.68 | - Normalized Funds from Operations (Normalized FFO), a key metric of operating performance for REITs, declined sharply to **$0.13 per share** in Q2 2025 from **$0.68 per share** in Q2 2024, reflecting the deterioration in core operations[142](index=142&type=chunk) [Liquidity and Capital Resources](index=32&type=section&id=Liquidity%20and%20Capital%20Resources) - As of July 30, 2025, the company's liquidity consisted of **$90.1 million** in cash, with its **$325 million** revolving credit facility fully drawn[148](index=148&type=chunk)[156](index=156&type=chunk) Debt Maturities ($ thousands) | Debt Maturities ($ thousands) | Amount | | :--- | :--- | | 2025 | 13,000 | | 2026 | 279,460 | | 2027 | 346,298 | | 2028 | 123,487 | | 2029 | 910,278 | | 2030 and thereafter | 332,395 | | **Total** | **2,004,918** | - The company is in compliance with its debt covenants as of June 30, 2025, but notes its ability to incur additional debt is limited due to the narrow margin of compliance[162](index=162&type=chunk)[163](index=163&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=37&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company, as a smaller reporting company, is not required to provide disclosures under this item - As a smaller reporting company, OPI is not required to make disclosures under Item 3 regarding market risk[171](index=171&type=chunk) [Item 4. Controls and Procedures](index=37&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of the end of the quarter, with no material changes to internal control over financial reporting during the period - Management's evaluation concluded that the company's disclosure controls and procedures are effective as of June 30, 2025[172](index=172&type=chunk) PART II. Other Information [Item 1A. Risk Factors](index=40&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the company's 2024 Annual Report on Form 10-K - No material changes to risk factors from the 2024 Annual Report were reported[183](index=183&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=40&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During the quarter ended June 30, 2025, the company purchased a total of 18,065 of its own common shares at a weighted average price of $0.31 per share to satisfy tax withholding obligations for a former officer and certain former employees of RMR in connection with the vesting of share awards Unregistered Sales of Equity Securities and Use of Proceeds | Calendar Month (2025) | Number of Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | April | 5,300 | $0.41 | | May | 7,406 | $0.33 | | June | 5,359 | $0.20 | | **Total** | **18,065** | **$0.31** | [Item 6. Exhibits](index=40&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including corporate governance documents, indentures related to various senior notes, and officer certifications

[Quarterly Results](index=3&type=section&id=QUARTERLY%20RESULTS) This section provides an overview of Office Properties Income Trust's (OPI) financial performance and operational highlights for the second quarter of 2025 [Q2 2025 Financial Results Announcement](index=4&type=section&id=Office%20Properties%20Income%20Trust%20Announces%20Second%20Quarter%202025%20Financial%20Results) OPI announced Q2 2025 financial results, notably suspending its quarterly cash distribution on common shares to preserve cash - On July 10, 2025, OPI suspended its quarterly cash distribution on common shares to preserve cash[11](index=11&type=chunk) - OPI is a national REIT focused on owning and leasing office properties to high credit quality tenants, owning **125 properties** with approximately **17.3 million square feet** as of June 30, 2025[13](index=13&type=chunk) - Approximately **59% of OPI's revenues** were from investment-grade rated tenants as of the end of the quarter[13](index=13&type=chunk) [Second Quarter 2025 Summary](index=5&type=section&id=Second%20Quarter%202025%20Summary) OPI reported a **net loss of $41.2 million** and **Normalized FFO of $9.4 million** in Q2 2025, with **85.2% same property occupancy** and **$90.1 million in cash**, while expressing substantial doubt about its going concern ability Q2 2025 Key Metrics | Metric | Value | | :--- | :--- | | Net Loss | $41.2 million ($0.58/share) | | Normalized FFO | $9.4 million ($0.13/share) | | Same Property Cash Basis NOI | $55.0 million | | Total Leasing Executed | 416,000 sq. ft. | | Same Property Occupancy | 85.2% | | Weighted Average Lease Term | 6.8 years | - In July 2025, OPI sold one property of approximately **56,000 square feet** for **$2.2 million**[14](index=14&type=chunk) - As of July 30, 2025, total available liquidity was **$90.1 million in cash**, and the company continues to conclude there is substantial doubt about its ability to continue as a going concern[14](index=14&type=chunk) [Financials](index=6&type=section&id=FINANCIALS) This section details OPI's financial performance, including key financial data, income statements, balance sheets, debt summaries, capital expenditures, property dispositions, and joint venture investments [Key Financial Data](index=7&type=section&id=Key%20Financial%20Data) OPI's Q2 2025 key financial data shows a **net loss of $41.2 million** and **Normalized FFO of $9.4 million**, with **$78.2 million in total liquidity** from fully drawn credit facilities Selected Financial Data (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Rental Income | $114.5M | $123.7M | | Net (Loss) Income | ($41.2M) | $76.2M | | Normalized FFO | $9.4M | $33.2M | | CAD | ($6.2M) | ($1.1M) | | Net (Loss) Income per Share | ($0.58) | $1.56 | | Normalized FFO per Share | $0.13 | $0.68 | - Total liquidity as of June 30, 2025, was **$78.2 million**, comprised solely of cash and cash equivalents, with the **$325 million** secured revolving credit facility being fully drawn[18](index=18&type=chunk) [Condensed Consolidated Statements of Income (Loss)](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income%20%28Loss%29) OPI reported a **net loss of $41.2 million** for Q2 2025, a significant decline from Q2 2024's net income, primarily due to lower rental income and higher interest expense Income Statement Highlights (Three Months Ended June 30) | (in thousands) | 2025 | 2024 | | :--- | :--- | :--- | | Rental Income | $114,499 | $123,686 | | Total Expenses | $104,051 | $235,053 | | Interest Expense | ($52,507) | ($38,349) | | Net Gain (Loss) on Early Extinguishment of Debt | $148 | $225,798 | | **Net (Loss) Income** | **($41,186)** | **$76,171** | [Condensed Consolidated Balance Sheets](index=9&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, OPI's **total assets were $3.56 billion**, **total liabilities $2.50 billion**, and **total shareholders' equity $1.07 billion**, all showing decreases from year-end 2024 Balance Sheet Summary | (in thousands) | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Total Real Estate Properties, net | $2,990,023 | $3,038,909 | | Cash and Cash Equivalents | $78,176 | $261,318 | | **Total Assets** | **$3,560,949** | **$3,822,286** | | Total Debt, net (Unsecured + Secured) | $2,365,193 | $2,534,634 | | **Total Liabilities** | **$2,495,021** | **$2,669,482** | | **Total Shareholders' Equity** | **$1,065,928** | **$1,152,804** | [Debt Summary](index=10&type=section&id=Debt%20Summary) As of June 30, 2025, OPI's total debt was approximately **$2.43 billion** with a **weighted average interest rate of 8.40%** and **4.5 years to maturity**, primarily composed of secured debt Total Debt Overview (as of June 30, 2025) | Metric | Value | | :--- | :--- | | Total Principal Balance | $2,429,918 thousand | | Weighted Average Interest Rate | 8.395% | | Weighted Average Years to Maturity | 4.5 years | - The debt is comprised of **$425 million** in secured floating-rate debt, **$1.51 billion** in secured fixed-rate debt, and **$491 million** in unsecured fixed-rate debt[25](index=25&type=chunk) - The **$325 million** secured revolving credit facility was fully drawn as of June 30, 2025[26](index=26&type=chunk) [Debt Maturity Schedule](index=11&type=section&id=Debt%20Maturity%20Schedule) OPI's debt maturity schedule indicates significant upcoming maturities in **2026, 2027, and 2029**, with **79.8% of debt secured** and **82.5% fixed-rate** as of Q2 2025 Debt Maturities by Year (Principal in thousands) | Year | Amount Due | | :--- | :--- | | 2026 | $145,531 | | 2027 | $910,278 | | 2028 | $123,487 | | 2029 | $267,992 | | 2030 and thereafter | $278,841 | - Debt composition is **79.8% secured** and **20.2% unsecured**, with **82.5% fixed-rate** and **17.5% variable-rate** by type[28](index=28&type=chunk) [Leverage and Debt Covenants](index=12&type=section&id=Leverage%20Ratios%2C%20Coverage%20Ratios%20and%20Public%20Debt%20Covenants) OPI's leverage ratios deteriorated in Q2 2025, with **net debt to Adjusted EBITDAre at 9.3x**, yet the company remains in compliance with public debt covenants, albeit with minimal margin on some Key Ratios and Covenants (as of June 30, 2025) | Ratio / Covenant | Q2 2025 Value | Requirement | | :--- | :--- | :--- | | Net debt / total gross assets | 55.6% | N/A | | Net debt / rolling four quarter Adjusted EBITDAre | 9.3x | N/A | | Total unencumbered assets / unsecured debt | 161.6% | min 150.0% | | Secured debt / adjusted total assets | 39.8% | max 40.0% | | Consolidated income available for debt service / debt service | 1.51x | min 1.50x | [Capital Expenditures Summary](index=13&type=section&id=Capital%20Expenditures%20Summary) Total capital expenditures for Q2 2025 amounted to **$13.7 million**, predominantly comprising **$13.2 million in recurring capital expenditures** for lease-related costs and building improvements Capital Expenditures (Three Months Ended June 30, 2025) | Category | Amount (in thousands) | | :--- | :--- | | Lease related costs | $8,830 | | Building improvements | $4,327 | | **Recurring capital expenditures** | **$13,157** | | Development, redevelopment and other | $565 | | **Total capital expenditures** | **$13,722** | [Property Dispositions](index=14&type=section&id=Property%20Dispositions) Since January 1, 2025, OPI has sold three properties totaling **305,000 square feet** for a gross sales price of **$29.05 million**, averaging **$95.25 per square foot** Dispositions Since January 1, 2025 | Date Sold | Location | Sq. Ft. (thousands) | Gross Sales Price (thousands) | | :--- | :--- | :--- | :--- | | 2/7/2025 | Parsippany, NJ | 100 | $5,750 | | 2/26/2025 | Santa Clara, CA | 149 | $21,150 | | 7/8/2025 | Detroit, MI | 56 | $2,150 | | **Total** | | **305** | **$29,050** | [Investment in Unconsolidated Joint Venture](index=15&type=section&id=Investment%20in%20Unconsolidated%20Joint%20Venture) OPI holds a **51% interest** in the Prosperity Metro Plaza joint venture, valued at **$17.0 million**, with the JV having a **$49.6 million mortgage** where OPI's proportionate share is **$25.3 million** - OPI owns a **51% interest** in the Prosperity Metro Plaza joint venture, with an investment of **$16,990 thousand**[39](index=39&type=chunk) - The joint venture property is **346,000 sq. ft.**, has an occupancy of **77.6%**, and a weighted average remaining lease term of **3.8 years**[39](index=39&type=chunk) - The JV has a **$49.6 million** mortgage note with a **4.090% interest rate**, maturing in December 2029, where OPI's share of this principal is **$25.3 million**, though the debt is non-recourse to OPI[40](index=40&type=chunk) [Portfolio Information](index=16&type=section&id=PORTFOLIO%20INFORMATION) This section provides detailed information on OPI's property portfolio, including same-property results, occupancy, leasing activity, tenant diversity, and lease expiration schedules [Summary Same Property Results](index=17&type=section&id=Summary%20Same%20Property%20Results) OPI's same-property portfolio experienced a decline in Q2 2025, with **Same Property NOI decreasing by 6.1%** and **Cash Basis NOI by 10.3%**, driven by a drop in occupancy to **85.2%** Same Property Performance (Three Months Ended June 30) | Metric | 2025 | 2024 | % Change | | :--- | :--- | :--- | :--- | | Percent Leased | 85.2% | 91.4% | N/A | | Same Property NOI | $62.4M | $66.4M | (6.1%) | | Same Property Cash Basis NOI | $55.0M | $61.3M | (10.3%) | [Occupancy and Leasing Summary](index=18&type=section&id=Occupancy%20and%20Leasing%20Summary) As of Q2 2025, OPI's total portfolio was **81.2% leased**, with **416,000 square feet of leasing executed** during the quarter at a **6.4% positive change in GAAP rent** Q2 2025 Leasing Activity | Leasing Metric | New Leases | Renewals | Total | | :--- | :--- | :--- | :--- | | Square Feet | 138,000 | 278,000 | 416,000 | | % Change in GAAP Rent | 8.5% | 5.2% | 6.4% | | W.A. Lease Term (Years) | 4.7 | 5.8 | 5.4 | - Total portfolio occupancy was **81.2%** at the end of Q2 2025, slightly down from **81.3%** in the prior quarter[47](index=47&type=chunk) [Tenant Diversity and Credit Characteristics](index=19&type=section&id=Tenant%20Diversity%20and%20Credit%20Characteristics) OPI's tenant base as of June 30, 2025, shows **58.7% of rental income from investment-grade tenants**, with the **U.S. Government as the largest tenant** category at **17.1%** - By credit rating, tenants are segmented as: **Investment Grade (58.7%)**, Not Rated (**34.5%**), and Non-Investment Grade (**6.8%**)[51](index=51&type=chunk) - The top tenant industries by annualized rental income are **U.S. Government (17.1%)**, Real Estate & Financial (**16.0%**), and Technology & Communications (**15.4%**)[51](index=51&type=chunk) [Top Tenants](index=20&type=section&id=Tenants%20Representing%201%25%20or%20More%20of%20Total%20Annualized%20Rental%20Income) The **U.S. Government** is OPI's largest tenant, contributing **17.1% of total annualized rental income**, with the top 21 tenants collectively representing **60.5%** Top 5 Tenants by Annualized Rental Income | Tenant | Credit Rating | % of Total Annualized Rental Income | | :--- | :--- | :--- | | U.S. Government | Investment Grade | 17.1% | | Alphabet Inc. (Google) | Investment Grade | 5.8% | | IG Investments Holdings LLC | Not Rated | 4.7% | | Bank of America Corporation | Investment Grade | 4.4% | | Shook, Hardy & Bacon L.L.P. | Not Rated | 3.4% | [Lease Expiration Schedule](index=21&type=section&id=Lease%20Expiration%20Schedule) OPI faces significant lease expirations, with **20.2% of annualized rental income** set to expire by the end of **2027**, and a **weighted average remaining lease term of 6.8 years** Cumulative Lease Expirations (% of Annualized Rental Income) | Year | % Expiring in Year | Cumulative % Expiring | | :--- | :--- | :--- | | 2025 | 3.6% | 3.6% | | 2026 | 4.0% | 7.6% | | 2027 | 12.6% | 20.2% | | 2028 | 7.2% | 27.4% | | 2029 | 8.3% | 35.7% | - The weighted average remaining lease term is **6.6 years** based on square footage and **6.8 years** based on annualized rental income[55](index=55&type=chunk) [Appendix](index=22&type=section&id=APPENDIX) This section includes supplementary information such as company profile, governance details, and reconciliations of non-GAAP financial measures [Company Profile and Governance Information](index=23&type=section&id=Company%20Profile%20and%20Governance%20Information) OPI is externally managed by The RMR Group, an alternative asset management company with approximately **$40 billion in real estate assets under management** - OPI is managed by The RMR Group, which had approximately **$40 billion** of real estate assets under management as of June 30, 2025[62](index=62&type=chunk) [Reconciliation of NOI and Cash Basis NOI](index=24&type=section&id=Calculation%20and%20Reconciliation%20of%20NOI%20and%20Cash%20Basis%20NOI) This section reconciles GAAP Net (Loss) Income to non-GAAP measures, showing a **Q2 2025 Net Loss of $41.2 million** reconciled to an **NOI of $65.5 million** and a **Cash Basis NOI of $58.1 million** Q2 2025 Reconciliation Summary (in thousands) | Metric | Value | | :--- | :--- | | Net (Loss) Income | ($41,186) | | **NOI** | **$65,468** | | **Cash Basis NOI** | **$58,078** | [Reconciliation of Same Property NOI](index=25&type=section&id=Reconciliation%20and%20Calculation%20of%20Same%20Property%20NOI%20and%20Same%20Property%20Cash%20Basis%20NOI) This section reconciles total NOI to Same Property NOI, adjusting **Q2 2025 total NOI of $65.5 million** to a **Same Property NOI of $62.4 million** and a **Same Property Cash Basis NOI of $55.0 million** Q2 2025 Same Property Reconciliation (in thousands) | Metric | Value | | :--- | :--- | | NOI | $65,468 | | Less: NOI of properties not in same property results | ($3,066) | | **Same Property NOI** | **$62,402** | | **Same Property Cash Basis NOI** | **$55,016** | [Property Details (by Collateral Pool)](index=26&type=section&id=Property%20Details%20%28by%20Collateral%20Pool%29) This section details OPI's **125 properties** by collateral pool, indicating **98 encumbered properties** totaling **14.46 million square feet** and **27 unencumbered properties** totaling **2.81 million square feet** Portfolio Summary by Collateral Status | Category | Number of Properties | Sq. Ft. (thousands) | Occupancy | Gross Book Value (thousands) | | :--- | :--- | :--- | :--- | :--- | | Subtotal Secured | 98 | 14,459 | 85.0% | $3,944,894 | | Subtotal Unencumbered | 27 | 2,811 | 61.4% | $657,207 | | **Total** | **125** | **17,270** | **81.2%** | **$4,602,101** | [Reconciliation of EBITDA, EBITDAre, and Adjusted EBITDAre](index=34&type=section&id=Calculation%20of%20EBITDA%2C%20EBITDAre%20and%20Adjusted%20EBITDAre) This section details the calculation of EBITDA, EBITDAre, and Adjusted EBITDAre, reconciling OPI's **Q2 2025 Net Loss of $41.2 million** to an **Adjusted EBITDAre of $61.6 million** Q2 2025 EBITDAre Reconciliation (in thousands) | Metric | Value | | :--- | :--- | | Net (Loss) Income | ($41,186) | | EBITDA | $55,253 | | EBITDAre | $57,648 | | **Adjusted EBITDAre** | **$61,645** | [Reconciliation of FFO, Normalized FFO, and CAD](index=35&type=section&id=Calculation%20of%20FFO%2C%20Normalized%20FFO%20and%20CAD) This section calculates FFO, Normalized FFO, and CAD, reporting **Q2 2025 FFO of $5.6 million**, **Normalized FFO of $9.4 million**, and a **CAD deficit of $6.2 million** Q2 2025 FFO and CAD Reconciliation (in thousands) | Metric | Per Share | Total Amount | | :--- | :--- | :--- | | Net (Loss) Income | ($0.58) | ($41,186) | | FFO | $0.08 | $5,627 | | Normalized FFO | $0.13 | $9,419 | | CAD | ($0.09) | ($6,208) | [Non-GAAP Financial Measures and Certain Definitions](index=36&type=section&id=Non-GAAP%20Financial%20Measures%20and%20Certain%20Definitions) This section defines key non-GAAP financial measures like NOI, FFO, and CAD, explaining their utility for performance evaluation, along with other important report terms - Provides definitions for key non-GAAP metrics such as NOI, FFO, and CAD, explaining that they are used to provide results more closely related to property-level operations and to facilitate performance comparisons[85](index=85&type=chunk)[86](index=86&type=chunk)[88](index=88&type=chunk)[89](index=89&type=chunk) - Defines other key terms used in the report, such as Annualized Rental Income, Gross Book Value, and Same Properties criteria[92](index=92&type=chunk)[94](index=94&type=chunk)[98](index=98&type=chunk)

Financial Data and Key Metrics Changes - Annualized revenue decreased by $93 million or 19% to $405 million compared to the previous year [8] - Interest expense increased by $17.9 million to $53.4 million, representing a 50% year-over-year increase [8] - Normalized FFO for Q1 was $4.4 million or $0.06 per share, down from $20.9 million or $0.36 per share in Q4 2024 [13] Business Line Data and Key Metrics Changes - The company executed 11 leases totaling 223,000 square feet with a weighted average lease term of 10.3 years and a 13.5% roll-up in rent [9] - Concessions and capital commitments declined by 22% quarter over quarter to $4.62 per square foot per year [9] Market Data and Key Metrics Changes - Same property occupancy was reported at 85.4% as of March 31, 2025 [5] - The market vacancy rate in Washington, D.C. exceeded 23%, worsened by federal leasing uncertainty [7] Company Strategy and Development Direction - The company is exploring options to address financial commitments while managing properties and leasing [9] - There is a focus on enhancing corporate sustainability practices and advancing initiatives that benefit tenants and communities [12] Management's Comments on Operating Environment and Future Outlook - The office sector is facing headwinds from work-from-home trends and macroeconomic uncertainties [6] - The company expects normalized FFO for Q2 to be between $0.09 and $0.11 per share, driven by higher NOI from lower seasonal operating expenses [14] Other Important Information - The company has $280 million in debt principal payments due in 2026 and limited liquidity of $73 million in cash [9][16] - Upcoming lease expirations through 2026 total 1.6 million square feet, representing $45 million or 11% of annualized rental income [11] Q&A Session Summary - No specific questions or answers were provided in the content regarding the Q&A session.

Financial Data and Key Metrics Changes - Annualized revenue decreased by $93 million or 19% to $405 million compared to the previous year [8] - Interest expense increased by $17.9 million to $53.4 million, representing a 50% year-over-year increase [8] - Normalized FFO for Q1 2025 was $4.4 million or $0.06 per share, down from $20.9 million or $0.36 per share in Q4 2024 [13] Business Line Data and Key Metrics Changes - The company executed 11 leases totaling 223,000 square feet with a weighted average lease term of 10.3 years and a 13.5% roll-up in rent [9] - Concessions and capital commitments declined by 22% quarter-over-quarter to $4.62 per square foot per year [9] - Lease expirations through 2026 total 1.6 million square feet, representing $45 million or 11% of annualized rental income [11] Market Data and Key Metrics Changes - Same property occupancy was reported at 85.4% as of March 31, 2025 [5] - The market vacancy rate in Washington, D.C., where the company has a concentration, is over 23% [7] - The U.S. Government is the largest tenant, representing 16.8% of annualized revenue [6] Company Strategy and Development Direction - The company is exploring options to address financial commitments while managing properties [9] - There is a focus on enhancing corporate sustainability practices and advancing initiatives that benefit tenants and communities [12] - The company is evaluating disposition opportunities to mitigate occupancy risk and carry costs associated with vacant properties [12] Management's Comments on Operating Environment and Future Outlook - The office sector is facing headwinds from work-from-home trends and macroeconomic uncertainties [6] - The company anticipates a decrease in same property cash basis NOI by 10% to 12% compared to Q2 2024 due to tenant vacancies and increased free rent [14] - Management is closely monitoring government efficiency measures that may impact office space requirements [10] Other Important Information - The company sold three properties totaling 249,000 square feet for $26.9 million during the quarter [12] - Total liquidity is currently limited to $73 million in cash [9] - Upcoming debt principal payments of $280 million are due in 2026 [9] Q&A Session Summary Question: What are the expectations for future leasing activity? - Management noted that leasing demand is concentrated towards trophy assets, and new leasing interest has been minimal due to the age of the properties [7] Question: How is the company addressing its financial commitments? - The company is exploring all options to manage its financial commitments while operating and leasing properties [9] Question: What is the outlook for normalized FFO in Q2 2025? - The company expects normalized FFO to be between $0.09 and $0.11 per share for Q2 2025, driven by higher NOI from lower seasonal operating expenses [13]

PART I. Financial Information [Financial Statements (unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20%28unaudited%29) Q1 2025 unaudited financials show increased net loss, decreased assets, negative operating cash flow, and going concern doubt [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2025, total assets decreased to **$3.57 billion**, with liabilities also falling, leading to lower shareholders' equity Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | **$3,569,759** | **$3,822,286** | | Total real estate properties, net | $3,009,671 | $3,038,909 | | Cash and cash equivalents | $63,745 | $261,318 | | **Total Liabilities** | **$2,463,096** | **$2,669,482** | | Unsecured debt, net | $488,556 | $662,277 | | Secured debt, net | $1,872,355 | $1,872,357 | | **Total Shareholders' Equity** | **$1,106,663** | **$1,152,804** | [Condensed Consolidated Statements of Comprehensive Income (Loss)](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20%28Loss%29) Q1 2025 net loss widened significantly to **$45.9 million** due to decreased rental income and increased interest expense Statement of Comprehensive Income (Loss) Highlights (in thousands, except per share data) | Account | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Rental income | $113,615 | $139,435 | | Total expenses | $101,897 | $107,405 | | Interest expense | ($53,378) | ($35,476) | | **Net loss** | **($45,867)** | **($5,184)** | | **Net loss per share** | **($0.66)** | **($0.11)** | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Q1 2025 saw **$28.6 million** net cash used in operations and **$185.0 million** in financing, significantly decreasing total cash Cash Flow Summary (in thousands) | Activity | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | ($28,588) | $26,632 | | Net cash provided by (used in) investing activities | $15,034 | ($4,362) | | Net cash used in financing activities | ($184,957) | ($4,878) | | **(Decrease) increase in cash** | **($198,511)** | **$17,392** | | **Cash at end of period** | **$76,654** | **$44,106** | [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes highlight a "Going Concern" warning due to debt maturities, property sales, tenant concentration, and new equity programs - The company has concluded there is **substantial doubt** about its ability to continue as a **going concern** due to **upcoming debt obligations**, **limited financing alternatives**, and the **illiquid nature** of its real estate assets. The Board may consider a **bankruptcy reorganization** if refinancing is unsuccessful[23](index=23&type=chunk) - During Q1 2025, the company sold three properties for an aggregate price of **$26.9 million**, resulting in a net loss on sale of **$4.7 million**[29](index=29&type=chunk)[30](index=30&type=chunk) - The U.S. government remains the largest tenant, representing **16.8%** of annualized rental income as of March 31, 2025, down from **20.2%** a year prior[39](index=39&type=chunk) - In March 2025, the company initiated an 'at the market' (ATM) program to sell up to **$100 million** in common shares. In Q1, it sold **238,343 shares** for net proceeds of **$145,000**[55](index=55&type=chunk) - Effective January 1, 2025, the company **terminated its lease** with related party Sonesta and entered into a long-term **management agreement** for the same mixed-use property[66](index=66&type=chunk)[67](index=67&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=18&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management highlights severe office sector headwinds, declining occupancy, a **30.4%** NOI drop, and going concern doubt - Management reiterates that there is **substantial doubt** about the company's ability to continue as a **going concern** due to **limited financing alternatives** to refinance maturing debt. The Board may consider **bankruptcy** if these efforts fail[77](index=77&type=chunk) Key Performance Indicators (in millions, except percentages and per share data) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Percent Leased (All Properties) | 81.3% | 85.6% | | Percent Leased (Comparable) | 85.4% | 91.4% | | Net Operating Income (NOI) | $61.4M | $88.2M | | Normalized FFO | $4.4M | $38.3M | | Normalized FFO per share | $0.06 | $0.79 | - The company faces significant lease expirations, with **8.5%** of leased square feet expiring in 2025 and another **3.1%** in 2026[93](index=93&type=chunk) [Property Operations](index=18&type=section&id=Property%20Operations) Q1 2025 portfolio occupancy declined to **81.3%**, with new leases seeing a **3.5%** rental rate decrease despite **19.3%** increases in renewals Portfolio Occupancy (in thousands of square feet, except percentages) | Metric | March 31, 2025 | March 31, 2024 | | :--- | :--- | :--- | | Total Properties | 125 | 151 | | Total Rentable Square Feet (thousands) | 17,274 | 20,293 | | Percent Leased (All Properties) | 81.3% | 85.6% | | Percent Leased (Comparable Properties) | 85.4% | 91.4% | Q1 2025 Leasing Activity (in thousands of square feet, except percentages and years) | Leasing Metric | New Leases | Renewals | Total | | :--- | :--- | :--- | :--- | | Rentable square feet leased (thousands) | 50 | 173 | 223 | | Weighted average rental rate change | (3.5%) | 19.3% | 13.5% | | Weighted average lease term (years) | 10.3 | 10.3 | 10.3 | - Capital expenditures for the quarter totaled **$13.8 million**, a significant decrease from **$28.2 million** in the prior-year period, primarily due to lower spending on lease-related costs and development activities[87](index=87&type=chunk) [Results of Operations](index=24&type=section&id=Results%20of%20Operations) Q1 2025 rental income decreased **18.5%**, NOI fell **30.4%**, and interest expense surged **50.5%**, leading to a **$45.9 million** net loss Results of Operations Comparison (in thousands) | Account | Q1 2025 | Q1 2024 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Rental income | $113,615 | $139,435 | ($25,820) | (18.5%) | | Total operating expenses | $52,230 | $51,187 | $1,043 | 2.0% | | Net operating income (NOI) | $61,385 | $88,248 | ($26,863) | (30.4%) | | Interest expense | ($53,378) | ($35,476) | ($17,902) | 50.5% | | **Net loss** | **($45,867)** | **($5,184)** | **($40,683)** | n/m | - The decrease in rental income was primarily driven by **property dispositions** (non-comparable properties) and **increased vacancies** at comparable properties[106](index=106&type=chunk) - The increase in interest expense was due to **higher weighted average interest rates** resulting from **financing activities** undertaken in 2024[112](index=112&type=chunk) [Non-GAAP Financial Measures](index=26&type=section&id=Non-GAAP%20Financial%20Measures) Key non-GAAP metrics deteriorated in Q1 2025, with NOI decreasing **30.4%** to **$61.4 million** and Normalized FFO falling sharply Reconciliation of Net Loss to NOI (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net loss | ($45,867) | ($5,184) | | Add back various non-property level items... | ... | ... | | **NOI** | **$61,385** | **$88,248** | FFO and Normalized FFO Reconciliation (in thousands, except per share data) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net loss | ($45,867) | ($5,184) | | Depreciation and amortization | $44,361 | $50,983 | | Loss on sale of real estate | $4,737 | $2,384 | | **FFO** | **$3,231** | **$48,183** | | Adjustments | $1,119 | ($9,866) | | **Normalized FFO** | **$4,350** | **$38,317** | | **Normalized FFO per share** | **$0.06** | **$0.79** | [Liquidity and Capital Resources](index=27&type=section&id=Liquidity%20and%20Capital%20Resources) The company faces severe liquidity pressure with **$73.1 million** cash and significant debt maturities, leading to a "going concern" warning - As of April 30, 2025, total available liquidity was **$73.1 million** in cash, with the revolving credit facility **fully drawn**[134](index=134&type=chunk) Debt Maturities (in thousands) | Year | Debt Maturities | | :--- | :--- | | 2025 | $19,500 | | 2026 | $279,460 | | 2027 | $346,298 | | 2028 | $123,487 | | 2029 | $910,278 | | 2030 and thereafter | $332,395 | | **Total** | **$2,011,418** | - The company is actively pursuing strategies to address debt obligations, including **asset sales**, **debt exchanges**, and **equity issuances**, but warns there is **substantial doubt** about its ability to continue as a **going concern**[134](index=134&type=chunk) [Debt Covenants](index=32&type=section&id=Debt%20Covenants) As of March 31, 2025, the company complied with most debt covenants but reached the maximum **40.0%** secured debt ratio, restricting additional secured debt Debt Covenant Compliance as of March 31, 2025 | Covenant | Requirement | Actual | | :--- | :--- | :--- | | Total unencumbered assets / unsecured debt | >= 150.0% | 159.0% | | Total debt / adjusted total assets | <= 60.0% | 50.2% | | **Secured debt / adjusted total assets** | **<= 40.0%** | **40.0%** | | Debt service coverage ratio | >= 1.50x | 1.54x | - Because the secured debt to adjusted total assets ratio is at the **maximum level**, the company is **unable to incur additional secured debt**, **restricting** a key avenue for refinancing[139](index=139&type=chunk)[140](index=140&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=33&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exempt from providing market risk disclosures as it qualifies as a smaller reporting company - The company is **exempt** from this disclosure requirement as it qualifies as a **smaller reporting company**[149](index=149&type=chunk) [Controls and Procedures](index=33&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls were effective as of March 31, 2025, with no material changes to internal control - Management concluded that the company's disclosure controls and procedures are **effective** as of the end of the reporting period[150](index=150&type=chunk) - **No material changes** were made to the internal control over financial reporting during the first quarter of 2025[151](index=151&type=chunk) PART II. Other Information [Risk Factors](index=36&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the company's risk factors have occurred since the filing of its 2024 Annual Report on Form 10-K - **No material changes** to risk factors have occurred since the filing of the 2024 Annual Report[161](index=161&type=chunk) [Exhibits](index=36&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including corporate governance documents, debt indentures, and officer certifications - The exhibits include various **legal and financial documents**, such as **indentures for senior notes**, the **ATM sales agreement**, and **required certifications** by company officers[162](index=162&type=chunk)[164](index=164&type=chunk)

[Quarterly Results](index=3&type=section&id=QUARTERLY%20RESULTS) [First Quarter 2025 Financial Results Announcement](index=4&type=section&id=Office%20Properties%20Income%20Trust%20Announces%20First%20Quarter%202025%20Financial%20Results) OPI reported significant Q1 2025 operational challenges, including tenant non-renewals and increased debt service costs, while executing leasing and property dispositions - Management acknowledges ongoing operational challenges from tenant non-renewals, headwinds in key markets, and increased debt service costs from re-financing activities[7](index=7&type=chunk) - Completed **223,000 square feet** of new and renewal leasing at a **13.5% roll-up in rent** and a weighted average lease term of over 10 years[8](index=8&type=chunk) - Sold **three properties** for **$26.9 million** and has agreements to sell three more for **$28.9 million**[8](index=8&type=chunk) - Declared a quarterly common share distribution of **$0.01 per share**[10](index=10&type=chunk) [First Quarter 2025 Summary](index=5&type=section&id=First%20Quarter%202025%20Summary) Q1 2025 highlights include a **$45.9 million net loss**, **$26.9 million in property sales**, and reiterated substantial doubt about OPI's going concern due to limited liquidity Q1 2025 Key Financial Results | Metric | Value | | :--- | :--- | | Net Loss | $45.9 million ($0.66/share) | | Normalized FFO | $4.4 million ($0.06/share) | | Same property Cash Basis NOI | $52.9 million | - Financing activities included redeeming **$113.3 million** of 4.50% senior unsecured notes due 2025 and exchanging **$21.0 million** of existing notes for new 8.0% senior priority guaranteed unsecured notes due 2030[13](index=13&type=chunk) - As of April 30, 2025, total available liquidity was **$73.1 million** in cash. The company continues to conclude there is substantial doubt about its ability to continue as a going concern[13](index=13&type=chunk) [Financials](index=6&type=section&id=FINANCIALS) [Key Financial Data](index=7&type=section&id=Key%20Financial%20Data) Key financial data for the last five quarters ending March 31, 2025, shows declining performance metrics and constrained liquidity with the revolving credit facility fully drawn Selected Financial Data (Q1 2024 vs Q1 2025) | Metric | Q1 2024 (thousands) | Q1 2025 (thousands) | | :--- | :--- | :--- | | Rental Income | $139,435 | $113,615 | | Net (Loss) Income | ($5,184) | ($45,867) | | Normalized FFO | $38,317 | $4,350 | | CAD | $22,340 | ($11,209) | - Total liquidity as of March 31, 2025, consisted of **$63.7 million** in cash and cash equivalents, with no availability under the **$325 million** secured revolving credit facility as it was fully drawn[16](index=16&type=chunk) [Condensed Consolidated Statements of Income (Loss)](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income%20(Loss)) Q1 2025 condensed consolidated income statement shows a significant increase in net loss to **$45.9 million** from **$5.2 million** year-over-year, driven by decreased rental income and increased interest expense Income Statement Comparison (in thousands) | Line Item | Q1 2025 (thousands) | Q1 2024 (thousands) | | :--- | :--- | :--- | | Rental income | $113,615 | $139,435 | | Total expenses | $101,897 | $107,405 | | Interest expense | ($53,378) | ($35,476) | | **Net loss** | **($45,867)** | **($5,184)** | | Net loss per share | ($0.66) | ($0.11) | [Condensed Consolidated Balance Sheets](index=9&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The March 31, 2025, balance sheet reflects a reduction in assets and liquidity, with total assets decreasing to **$3.57 billion** and cash declining from **$261.3 million** to **$63.7 million** Balance Sheet Comparison (in thousands) | Line Item | March 31, 2025 (thousands) | December 31, 2024 (thousands) | | :--- | :--- | :--- | | Total assets | $3,569,759 | $3,822,286 | | Cash and cash equivalents | $63,745 | $261,318 | | Total liabilities | $2,463,096 | $2,669,482 | | Total shareholders' equity | $1,106,663 | $1,152,804 | [Debt Summary](index=10&type=section&id=Debt%20Summary) As of March 31, 2025, OPI's total debt principal balance was **$2.44 billion** with an **8.407%** weighted average interest rate and **4.8 years** weighted average maturity, with the revolving credit facility fully drawn Debt Overview as of March 31, 2025 | Metric | Value | | :--- | :--- | | Total Principal Balance | $2,436,418 thousand | | Weighted Average Interest Rate | 8.407% | | Weighted Average Years to Maturity | 4.8 years | - The company's **$325 million** secured revolving credit facility and **$100 million** secured term loan both mature in January 2027[23](index=23&type=chunk) - As of March 31, 2025, OPI was fully drawn on its revolving credit facility[24](index=24&type=chunk) [Debt Maturity Schedule](index=11&type=section&id=Debt%20Maturity%20Schedule) The debt maturity schedule highlights significant upcoming obligations, particularly in 2027, with the company's debt predominantly secured (**79.8%**) and fixed-rate (**82.6%**) - A large portion of debt matures in 2027, totaling approximately **$910 million**[26](index=26&type=chunk) Debt Composition | Type | Percentage | | :--- | :--- | | Secured Debt | 79.8% | | Unsecured Debt | 20.2% | | Fixed Rate Debt | 82.6% | | Variable Rate Debt | 17.4% | [Leverage Ratios, Coverage Ratios and Public Debt Covenants](index=12&type=section&id=Leverage%20Ratios%2C%20Coverage%20Ratios%20and%20Public%20Debt%20Covenants) Key leverage and coverage ratios deteriorated in Q1 2025, with Net Debt to Adjusted EBITDAre at **9.0x** and secured debt to adjusted total assets reaching its **40.0%** covenant limit, restricting additional secured debt Key Ratio Trends | Ratio | 3/31/2024 | 3/31/2025 | | :--- | :--- | :--- | | Net debt / rolling four quarter Adjusted EBITDAre | 8.4x | 9.0x | | Secured debt / total assets | 19.4% | 54.5% | | Total unencumbered assets / unsecured debt | 178.1% | 159.0% | - As of March 31, 2025, OPI's ratio of secured debt to adjusted total assets was at the **40.0%** maximum allowed under its debt covenants, restricting its ability to incur additional secured debt[28](index=28&type=chunk)[30](index=30&type=chunk) [Capital Expenditures Summary](index=13&type=section&id=Capital%20Expenditures%20Summary) Total capital expenditures for Q1 2025 amounted to **$13.8 million**, a significant decrease from **$36.1 million** in Q4 2024, with the majority allocated to recurring capital expenditures Capital Expenditures (in thousands) | Category | Q1 2025 (thousands) | Q4 2024 (thousands) | | :--- | :--- | :--- | | Recurring capital expenditures | $13,738 | $33,336 | | Development, redevelopment and other | $83 | $2,813 | | **Total capital expenditures** | **$13,821** | **$36,149** | [Property Dispositions](index=14&type=section&id=Property%20Dispositions) Since January 1, 2025, OPI sold two properties totaling **249,000 square feet** for gross sales proceeds of **$26.9 million** Dispositions Since January 1, 2025 | Date Sold | Location | Sq. Ft. (thousands) | Gross Sales Price (thousands) | | :--- | :--- | :--- | :--- | | 2/7/2025 | Parsippany, NJ | 100 | $5,750 | | 2/26/2025 | Santa Clara, CA | 149 | $21,150 | | **Total** | | **249** | **$26,900** | [Investment in Unconsolidated Joint Venture](index=15&type=section&id=Investment%20in%20Unconsolidated%20Joint%20Venture) OPI holds a **51%** ownership in the Prosperity Metro Plaza joint venture, with the property having **77.6%** occupancy and **$49.8 million** in outstanding debt - OPI has a **51%** ownership in the Prosperity Metro Plaza joint venture, with an investment value of **$17.1 million**[39](index=39&type=chunk) - The joint venture's property has an occupancy of **77.6%** and is encumbered by a **$49.8 million** mortgage note maturing in December 2029[39](index=39&type=chunk)[40](index=40&type=chunk) [Portfolio Information](index=16&type=section&id=PORTFOLIO%20INFORMATION) [Summary Same Property Results](index=17&type=section&id=Summary%20Same%20Property%20Results) The same-property portfolio experienced a decline in Q1 2025 performance, with occupancy dropping from **91.4%** to **85.4%**, leading to a **7.3%** decrease in Same Property NOI Same Property Results Comparison | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Percent leased | 85.4% | 91.4% | | Same Property NOI (thousands) | $60,482 | $65,269 | | Same Property Cash Basis NOI (thousands) | $52,904 | $59,115 | | Same Property NOI % change | (7.3%) | N/A | | Same Property Cash Basis NOI % change | (10.5%) | N/A | [Occupancy and Leasing Summary](index=18&type=section&id=Occupancy%20and%20Leasing%20Summary) As of Q1 2025, OPI's portfolio occupancy was **81.3%**, a decrease from **85.6%** year-over-year, with **223,000 square feet** of new and renewal leases executed at a **13.5%** GAAP rent increase Portfolio Occupancy Trend | Quarter | Percentage Leased | | :--- | :--- | | 3/31/2024 | 85.6% | | 6/30/2024 | 83.5% | | 9/30/2024 | 82.8% | | 12/31/2024 | 85.0% | | 3/31/2025 | 81.3% | - In Q1 2025, total leasing activity was **223,000 sq. ft.**, with a **13.5%** positive change in GAAP rent and a weighted average lease term of **10.3 years**[48](index=48&type=chunk) [Tenant Diversity and Credit Characteristics](index=19&type=section&id=Tenant%20Diversity%20and%20Credit%20Characteristics) As of March 31, 2025, OPI's portfolio has a strong credit profile with **59.9%** of annualized rental income from investment-grade tenants, diversified across industries including Real Estate & Financial (**17.1%**) and U.S. Government (**16.8%**) - Investment grade tenants account for **59.9%** of total annualized rental income[51](index=51&type=chunk) - The top three tenant industries by annualized rental income are Real Estate & Financial (**17.1%**), U.S. Government (**16.8%**), and Technology & Communications (**15.5%**)[51](index=51&type=chunk) [Top Tenants](index=20&type=section&id=Tenants%20Representing%201%25%20or%20More%20of%20Total%20Annualized%20Rental%20Income) Revenue is concentrated among top tenants, with the **23 largest** accounting for **62.5%** of total annualized rental income, led by the U.S. Government at **16.8%** and Alphabet Inc. (Google) at **5.7%** Top 5 Tenants by Annualized Rental Income | Tenant | Credit Rating | % of Annualized Rental Income | | :--- | :--- | :--- | | U.S. Government | Investment Grade | 16.8% | | Alphabet Inc. (Google) | Investment Grade | 5.7% | | IG Investments Holdings LLC | Not Rated | 4.6% | | Bank of America Corporation | Investment Grade | 4.3% | | Shook, Hardy & Bacon L.L.P. | Not Rated | 3.4% | - The top **23 tenants** collectively represent **62.5%** of the total annualized rental income[52](index=52&type=chunk) [Lease Expiration Schedule](index=21&type=section&id=Lease%20Expiration%20Schedule) The lease expiration schedule indicates significant rollover risk, with a cumulative **24.3%** of leased square footage (**22.9%** of annualized rental income) expiring by the end of 2027 - A cumulative **24.3%** of leased square footage (**22.9%** of annualized rental income) expires by the end of 2027[54](index=54&type=chunk) Upcoming Lease Expirations (% of Total Leased Sq. Ft.) | Year | % Expiring | | :--- | :--- | | 2025 | 8.5% | | 2026 | 3.1% | | 2027 | 12.7% | - The weighted average remaining lease term is **6.9 years** by annualized rental income[54](index=54&type=chunk) [Appendix](index=22&type=section&id=APPENDIX) [Company Profile and Governance Information](index=23&type=section&id=Company%20Profile%20and%20Governance%20Information) This section provides corporate details, noting OPI is managed by The RMR Group, and lists Board members, executive officers, and credit rating agencies - OPI is managed by The RMR Group (Nasdaq: RMR), which had approximately **$40 billion** of real estate assets under management as of March 31, 2025[60](index=60&type=chunk) [Calculation and Reconciliation of NOI and Cash Basis NOI](index=24&type=section&id=Calculation%20and%20Reconciliation%20of%20NOI%20and%20Cash%20Basis%20NOI) This section reconciles Net Income (Loss) to non-GAAP NOI and Cash Basis NOI, showing Q1 2025 NOI of **$61.4 million** and Cash Basis NOI of **$53.8 million** from a **$45.9 million** net loss Q1 2025 NOI Reconciliation (in thousands) | Metric | Value (thousands) | | :--- | :--- | | Net (loss) income | ($45,867) | | ... adjustments ... | ... | | **NOI** | **$61,385** | | ... non-cash adjustments ... | ... | | **Cash Basis NOI** | **$53,834** | [Reconciliation and Calculation of Same Property NOI and Same Property Cash Basis NOI](index=25&type=section&id=Reconciliation%20and%20Calculation%20of%20Same%20Property%20NOI%20and%20Same%20Property%20Cash%20Basis%20NOI) This section details the calculation of Same Property NOI and Same Property Cash Basis NOI, showing Q1 2025 Same Property NOI of **$60.5 million** and Same Property Cash Basis NOI of **$52.9 million** Q1 2025 Same Property NOI Calculation (in thousands) | Metric | Value (thousands) | | :--- | :--- | | NOI | $61,385 | | Less: NOI of properties not in same property results | ($903) | | **Same Property NOI** | **$60,482** | | ... non-cash adjustments ... | ... | | **Same Property Cash Basis NOI** | **$52,904** | [Property Details (by Collateral Pool)](index=26&type=section&id=Property%20Details%20(by%20Collateral%20Pool)) This section provides a detailed breakdown of OPI's **125 properties**, organized by the debt they collateralize, including data on square footage, occupancy, lease terms, and gross book value - The property portfolio is detailed by the specific debt instruments they secure, providing transparency into which assets are encumbered[68](index=68&type=chunk)[69](index=69&type=chunk)[72](index=72&type=chunk) Portfolio Summary by Collateral Status | Category | Number of Properties | Total Sq. Ft. (thousands) | Gross Book Value (thousands) | | :--- | :--- | :--- | :--- | | Subtotal Secured | 98 | 14,462 | $3,938,141 | | Subtotal Unencumbered | 27 | 2,812 | $674,854 | | **Total** | **125** | **17,274** | **$4,612,995** | [Calculation of EBITDA, EBITDAre and Adjusted EBITDAre](index=34&type=section&id=Calculation%20of%20EBITDA%2C%20EBITDAre%20and%20Adjusted%20EBITDAre) This section details the calculation of EBITDA, EBITDAre, and Adjusted EBITDAre, showing Q1 2025 Adjusted EBITDAre at **$57.8 million**, a decrease from **$73.8 million** in Q1 2024 Adjusted EBITDAre Trend (in thousands) | Quarter | Adjusted EBITDAre (thousands) | | :--- | :--- | | 3/31/2024 | $73,799 | | 6/30/2024 | $71,469 | | 9/30/2024 | $65,001 | | 12/31/2024 | $68,152 | | 3/31/2025 | $57,768 | [Calculation of FFO, Normalized FFO and CAD](index=35&type=section&id=Calculation%20of%20FFO%2C%20Normalized%20FFO%20and%20CAD) This section details the calculation of FFO, Normalized FFO, and CAD, showing Q1 2025 Normalized FFO of **$4.4 million** (**$0.06 per share**) and a negative CAD of **-$11.2 million** (**-$0.16 per share**) Q1 2025 FFO and CAD Calculation (in thousands) | Metric | Per Share | Total (thousands) | | :--- | :--- | :--- | | Net (loss) income | ($0.66) | ($45,867) | | FFO | $0.05 | $3,231 | | Normalized FFO | $0.06 | $4,350 | | CAD | ($0.16) | ($11,209) | [Non-GAAP Financial Measures and Certain Definitions](index=36&type=section&id=Non-GAAP%20Financial%20Measures%20and%20Certain%20Definitions) This section defines non-GAAP financial measures used in the report, including NOI, EBITDAre, FFO, and CAD, explaining their purpose and calculation methodologies - Provides definitions and calculation methodologies for key non-GAAP metrics including NOI, EBITDAre, FFO, and CAD, clarifying how they differ from GAAP net income[82](index=82&type=chunk)[83](index=83&type=chunk)[84](index=84&type=chunk)[85](index=85&type=chunk) [Warning Concerning Forward-Looking Statements](index=38&type=section&id=WARNING%20CONCERNING%20FORWARD-LOOKING%20STATEMENTS) This section contains a standard safe harbor statement, highlighting key risks related to OPI's ability to continue as a going concern, manage debt maturities, liquidity constraints, and tenant retention - The forward-looking statements highlight significant risks, including the company's ability to continue as a going concern, manage debt maturities and liquidity, and address challenges in tenant retention and leasing[99](index=99&type=chunk)[100](index=100&type=chunk)

Financial Data and Key Metrics Changes - For Q4 2024, the company reported normalized FFO of $20.9 million or $0.36 per share, which was $0.01 above guidance, compared to $22.1 million or $0.43 per share in Q3 2024 [30] - Same property cash basis NOI was $60.9 million, representing a 4.9% increase compared to Q4 2023, driven by lower operating expenses and the sale of certain vacant properties [31] Business Line Data and Key Metrics Changes - The portfolio consisted of 128 properties totaling 17.8 million square feet, generating $428 million of annualized revenue, down from $513 million a year ago [13] - Total leasing volume increased more than 20% year-over-year, with 52 leases signed for over 2 million square feet at a weighted average lease term of nearly nine years and a rental rate increase of 6.3% [19] Market Data and Key Metrics Changes - In Washington, D.C., the company's largest MSA, vacancy is nearly 33%, with leasing conditions remaining challenging [16] - The company anticipates that at least one agency, the Department of Safety and Environmental Enforcement, may terminate its lease in Q2 2025, impacting revenue [17] Company Strategy and Development Direction - The company has taken steps to address debt maturities and liquidity constraints, completing $1.8 billion in secured financings and reducing total debt principal by nearly $200 million compared to the prior year [9][10] - The company is evaluating additional disposition opportunities to mitigate occupancy risk and associated carry costs of vacant properties [28] Management's Comments on Operating Environment and Future Outlook - Management noted that while there are positive trends in the office sector, these have not yet materialized in the company's portfolio [14] - The company expects normalized FFO for Q1 2025 to be between $0.08 and $0.10 per share, primarily driven by lower NOI due to asset sales and tenant vacancies [32] Other Important Information - The company has launched a debt exchange offer for up to $175 million of new senior guaranteed unsecured notes to address upcoming debt maturities [12][38] - The company reported a total liquidity of $113 million in cash and projected a cash burn of $60 million to $70 million from operations in 2025 [37] Summary of Q&A Session - The company did not take questions during the call due to the ongoing debt exchange offer [8][40]

Office Properties Income Trust Fourth Quarter 2024 Financial Results and Supplemental Information February 13, 2025 Richland, WA Table of Contents QUARTERLY RESULTS | Office Properties Income Trust Announces Fourth Quarter 2024 Financial Results | 4 | | --- | --- | | Fourth Quarter 2024 Highlights | 5 | | FINANCIALS | | | Key Financial Data | 7 | | Consolidated Statements of Income (Loss) | 8 | | Consolidated Balance Sheets | 9 | | Debt Summary | 10 | | Debt Maturity Schedule | 11 | | Leverage Ratios, Cover ...