REIT Qualification and Taxation - The company must distribute at least 90% of its annual REIT taxable income to qualify for taxation as a REIT, limiting its ability to retain cash for operations and investments[37] - The company has elected to be taxed as a REIT under Sections 856 through 860 of the IRC, effective from the 2009 taxable year[64] - The company believes it has operated in a manner that qualifies it for REIT taxation since 2009 and will continue to do so[66] - If the company fails to qualify as a REIT, it would be subject to federal income tax as a C corporation, potentially leading to significant tax liabilities and reduced cash available for distribution[68] - The company must distribute at least 85% of its REIT ordinary income and 95% of its REIT capital gain net income to avoid a 4% nondeductible excise tax[70] - The company is subject to various qualification tests under the IRC, and failure to meet these could result in significant tax liabilities[68] - The company’s subsidiaries that are C corporations will be required to pay federal corporate income tax on their earnings[72] - The company has not received a ruling from the IRS regarding its REIT status, which could lead to differing interpretations and potential tax liabilities[60] - The company’s counsel believes it will continue to meet the requirements for qualification and taxation as a REIT based on current operations and investments[66] - Future legislative or regulatory changes could impact the company’s REIT status and tax obligations[61] - The company must derive at least 75% of its gross income from real property-related investments to maintain REIT qualification[84] - At least 95% of the company's gross income must consist of qualifying income for the 75% gross income test[84] - The company is permitted to own up to 20% of the total value of its assets in taxable REIT subsidiaries (TRSs) at the end of each quarter[81] - The company has made protective TRS elections to avoid cascading REIT failures if subsidiary REITs do not qualify[80] - The company is subject to a $50,000 penalty for each excused failure to meet REIT qualification conditions, rather than disqualification[76] - The company must comply with Treasury regulations regarding share ownership to maintain REIT status[74] - The company has invested in real estate through partnerships, treating its proportionate share of income and assets as its own[78] - The company’s TRSs can perform services for tenants without disqualifying rental income under the gross income tests[82] - The company’s subsidiary REITs must meet various qualification requirements to avoid regular U.S. corporate income tax[79] - The company is required to request annual ownership information from significant shareholders to comply with share ownership requirements[74] - The company believes that all or substantially all of its rents and related service charges have qualified as "rents from real property" for purposes of Section 856 of the IRC[87] - The company intends to own its assets for investment with a view to long-term income production and capital appreciation[92] - The company aims to satisfy the 75% and 95% gross income tests on a continuing basis beginning with its first taxable year as a REIT[94] - At least 75% of the value of the company's total assets must consist of "real estate assets" as defined by the IRC[96] - Not more than 25% of the value of the company's total assets may be represented by securities other than those that count favorably toward the 75% asset test[96] - The company may utilize its TRSs in transactions to avoid recognizing dealer gains subject to a 100% penalty tax[89] - The company believes that any gain recognized in connection with asset dispositions will generally qualify as income satisfying the 75% and 95% gross income tests[90] - The company must satisfy asset percentage tests at the close of each calendar quarter to qualify for taxation as a REIT[94] - The company has established restrictions to maintain its qualification for taxation as a REIT under the IRC[86] - The company cannot guarantee that it will be able to monitor and enforce ownership restrictions effectively[86] - The company has maintained records of asset values to comply with REIT asset tests and intends to take corrective actions within thirty days if tests are not satisfied[99] - To qualify as a REIT, the company must distribute at least 90% of its "real estate investment trust taxable income" to shareholders, which is defined under Section 857 of the IRC[100] - The company has made an election to be treated as a real property trade or business, thus not subject to limitations on net interest expense deductions[101] - If the company fails to meet distribution requirements, it may be subject to a 4% nondeductible excise tax on undistributed amounts[102] - The company may need to arrange new debt or equity financing to meet distribution requirements if it lacks sufficient cash or liquid assets[104] - The company can rectify a failure to pay sufficient dividends by issuing "deficiency dividends" in a later year, which may incur an interest charge[105] - Following a corporate acquisition, the company must distribute all inherited C corporation earnings and profits by the end of the taxable year[110] - The company may elect to retain some net capital gain and pay income tax on retained amounts, allowing shareholders to include their share in taxable income[107] - The company expects to make distributions that may include cash and property, with tax treatment varying based on shareholder status[114] - Distributions not designated as capital gain dividends will generally be treated as ordinary income dividends to the extent of available earnings and profits[117] Environmental and Sustainability Efforts - As of December 31, 2024, the company had 50 properties with LEED designations, totaling 7.6 million rentable square feet, representing 37.6% of total properties[51] - The company achieved approximately $2.1 million in annual savings through its real-time energy monitoring program, which covers 42 properties and accounts for 73% of its annual electricity spend[48] - The company was recognized as an Energy Star Partner of the Year for the seventh consecutive year and a Sustained Excellence honoree for the fifth consecutive year as of December 31, 2024[49] - The company focuses on minimizing its environmental impact and enhancing operational efficiency through sustainability practices[46] Corporate Governance - The Board of Trustees consists of nine members, with seven independent trustees, four (approximately 44%) being female, and one (approximately 11%) from under-represented communities[52] - The company relies on RMR for management and administrative services, with RMR employing approximately 1,000 full-time employees as of December 31, 2024[41] Market Competition - The company competes against various public and private REITs and financial institutions, with no dominant position in any geographic market[53] Lease Agreements - The company has leases with government entities, including the U.S. government, which may allow tenants to vacate leased premises early under certain conditions[54] Shareholder Tax Implications - Distributions to shareholders are generally included in their income as dividends, with no portion eligible for the dividends received deduction for corporate shareholders[65] - U.S. shareholders recognizing a loss exceeding $10 million in a single year may trigger reporting requirements to the IRS[125] - Non-U.S. shareholders generally will not be subject to U.S. federal income taxation on gains from the sale of shares if the shares are listed on a U.S. national securities exchange[137] - A distribution to a non-U.S. shareholder not designated as a capital gain dividend will be treated as ordinary income and subject to a 30% withholding tax[131] - Tax-exempt U.S. shareholders receiving distributions from the company should not have those amounts treated as UBTI if certain conditions are met[128] - U.S. shareholders are subject to a 3.8% Medicare tax on net investment income, including dividends and gains from the sale of shares[122] - Noncorporate U.S. shareholders may face limitations on interest deductions related to borrowed funds for acquiring shares[126] - The company expects to maintain its status as a "domestically controlled" REIT, ensuring non-U.S. shareholders are not taxed on gains from share sales[139] - Shareholders recognizing capital gains will increase their adjusted basis in shares by the amount of retained net capital gains[123] - The maximum penalty for failing to disclose a reportable transaction is $10,000 for individuals and $50,000 for other entities[125] - Non-U.S. shareholders may seek refunds from the IRS for amounts withheld on distributions exceeding their allocable share of current and accumulated earnings[132] - Non-U.S. shareholders may be subject to backup withholding unless they certify their non-U.S. status using IRS Form W-8[143] - A 30% U.S. withholding tax may apply to payments to non-U.S. persons if they fail to comply with reporting and certification requirements[144] - Legislative changes could retroactively affect tax treatment for the company and its shareholders, impacting REIT qualification[145] ERISA Compliance - Fiduciaries of ERISA Plans must ensure investments in the company's shares meet diversification and prudence requirements[147] - The company’s shares are expected to remain "widely held" and "freely transferable," satisfying regulatory definitions[152][156] - The company is not an investment company registered under the Investment Company Act of 1940, which affects asset classification[150] - The company’s shares have been registered under the Exchange Act within the required timeframe, ensuring compliance[151] - Restrictions on share transfer do not impede the shares from being considered "freely transferable" under regulations[154] - The company’s counsel believes that its shares will not be deemed "plan assets" for ERISA Plans or Non-ERISA Plans acquiring shares in a public offering[156] - As a smaller reporting company, the company is not required to disclose quantitative and qualitative market risk information[352]

OFFICE PROPERTIES INCOME TRUST 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 | | | | Fourth Quarter 2024 Highlights | 5 | | | FINANCIALS | | | | Key Financial Data | 7 | Trading ! | | Consolidated Statements of Income (Loss). | 8 | Common | | Consolidated Balance Sheets | 9 | Senior ...

Office Properties Income Trust (OPI) came out with quarterly funds from operations (FFO) of $0.43 per share, missing the Zacks Consensus Estimate of $0.47 per share. This compares to FFO of $1.02 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an FFO surprise of -8.51%. A quarter ago, it was expected that this company would post FFO of $0.64 per share when it actually produced FFO of $0.68, delivering a surprise of 6.25%. Over the last four quarters ...

bauhaus1000/E+ via Getty Images Office Properties Income Trust (NASDAQ:OPI) faces a $500 million debt repayment in February 2025, five months away. This forms 21% of the REIT's total debt balance of $2.14 billion and is one of the single largest debt maturing payable in a single year across OPI's debt maturity ladder. I first bought a position in the baby bonds (NASDAQ:OPINL) in late 2023 with the view that they would see some yield compression on what was then a near 50% discount to liquidation value. That ...

imaginima We have written about Office Properties Income Trust (NASDAQ:OPI) multiple times over the last few years. The general writing tone here has been the same. The stock is risky, and you were not getting paid nearly enough for the risks. Over time, the stock has dropped substantially. In our last article, we looked at the immediate risks from upcoming debt maturities and gave our two cents on the outlook. The stock is down since then, but in all honesty, we expected it to be near 50 cents (price, not ...

Office Properties Income Trust (OPI) came out with quarterly funds from operations (FFO) of $0.68 per share, beating the Zacks Consensus Estimate of $0.64 per share. This compares to FFO of $1.11 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an FFO surprise of 6.25%. A quarter ago, it was expected that this company would post FFO of $0.81 per share when it actually produced FFO of $0.79, delivering a surprise of -2.47%. Over the last four quarters ...

YCharts This is an extremely high-risk security, and I'd recommend most investors stay away. I'm chasing possible upside from a reset of solvency expectations and Fed rate cuts, but OPI faces a Sisyphean challenge ahead in managing declining occupancy, upcoming lease expiration, and its entirely front-loaded debt maturity schedule. The office REIT's market cap at $112 million is down 70% year-to-date, with the common shares trading hands for $2.20 per share. OPI had a total outstanding debt balance of $2.6 ...

FangXiaNuo Last week, Office Properties Income Trust (NASDAQ:OPI) reported first quarter earnings. The commercial office REIT surprised analysts to the positive on the revenue side, but disappointed on FFO. Along with the earnings announcement, Office Properties announced a proposed debt exchange. Due to the debt exchange proposal, shares rallied, and short-term bonds tanked. The latest earnings report, combined with the need for a debt exchange is keeping me out of investing in Office Properties’ stock ...

Office Properties Income Trust (OPI) reported $139.44 million in revenue for the quarter ended March 2024, representing a year-over-year increase of 5.3%. EPS of $0.79 for the same period compares to -$0.01 a year ago.The reported revenue compares to the Zacks Consensus Estimate of $128.28 million, representing a surprise of +8.70%. The company delivered an EPS surprise of -2.47%, with the consensus EPS estimate being $0.81.While investors closely watch year-over-year changes in headline numbers -- revenue ...

| --- | --- | |-----------------------------------------------------------------------------------------------------|-------| | | | | "Despite significant operational headwinds that | | | continue to impact the office sector, during the first | | | quarter OPI completed 488,000 square feet of new | | | and renewal leasing at a 10.2% roll-up in rent and a | | | weighted average lease term of 9.3 years. | | | | | | Additionally, OPI continued to advance its objectives by refinancing its revolving credit facil ...