Office Properties Income Trust (OPI) came out with quarterly funds from operations (FFO) of $0.79 per share, missing the Zacks Consensus Estimate of $0.81 per share. This compares to FFO of $1.09 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an FFO surprise of -2.47%. A quarter ago, it was expected that this company would post FFO of $0.98 per share when it actually produced FFO of $0.95, delivering a surprise of -3.06%.Over the last four quarters, ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2024 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 1-34364 OFFICE PROPERTIES INCOME TRUST (Exact Name of Registrant as Specified in Its Charter) Maryland 26-4273474 (State or Other Jurisdiction of Incorporation ...

[Quarterly Results](index=3&type=section&id=QUARTERLY%20RESULTS) This section presents the company's first quarter 2024 financial performance, highlighting key operational and financial achievements [First Quarter 2024 Financial Results Announcement](index=4&type=section&id=Office%20Properties%20Income%20Trust%20Announces%20First%20Quarter%202024%20Financial%20Results) Office Properties Income Trust (OPI) announced its Q1 2024 financial results, highlighting significant leasing activity with a positive rent roll-up - Completed **488,000 square feet** of new and renewal leasing at a **10.2% roll-up in rent** with a weighted average lease term of **9.3 years**[7](index=7&type=chunk) - Refinanced its revolving credit facility with **$425 million** in new facilities and issued **$300 million** of senior secured notes to pay off all 2024 debt maturities[8](index=8&type=chunk) - Generated **$39 million** from asset sales during the quarter[8](index=8&type=chunk) - Declared a quarterly dividend of **$0.01 per common share**[10](index=10&type=chunk) [First Quarter 2024 Highlights](index=5&type=section&id=First%20Quarter%202024%20Highlights) This section summarizes OPI's key achievements in Q1 2024 across portfolio management, financial performance, investment, and financing activities - Executed **488,000 sq. ft.** of leasing with rental rates **10.2% higher** than prior rates[14](index=14&type=chunk) - Same property portfolio occupancy stood at **88.2%**[14](index=14&type=chunk) - Weighted average lease term for the portfolio is **6.6 years** by annualized revenue[14](index=14&type=chunk) Financial Performance | Financial Metric | Q1 2024 Value | Per Share | | :--- | :--- | :--- | | Net Loss | $5.2 million | $0.11 | | Normalized FFO | $38.3 million | $0.79 | | Same property cash basis NOI | $67.9 million | N/A | - Sold one property in Chicago, IL for **$38.5 million**[14](index=14&type=chunk) - Refinanced revolving credit facility with a new **$325 million** secured facility and a **$100 million** secured term loan[14](index=14&type=chunk) - Issued **$300 million** of 9.0% senior secured notes due 2029[14](index=14&type=chunk) - Redeemed all **$350 million** of 4.25% senior unsecured notes due 2024[14](index=14&type=chunk) [Financials](index=6&type=section&id=FINANCIALS) This section provides a comprehensive overview of the company's financial statements, debt structure, and capital expenditures [Key Financial Data](index=7&type=section&id=Key%20Financial%20Data) This section presents a five-quarter overview of OPI's key financial data, showing a net loss of $5.2 million and Normalized FFO of $38.3 million in Q1 2024 Selected Income Statement Data | Selected Income Statement Data (in thousands) | 3/31/2024 | 12/31/2023 | 3/31/2023 | | :--- | :--- | :--- | :--- | | Rental income | $139,435 | $133,773 | $132,422 | | Net loss | $(5,184) | $(37,151) | $(446) | | Adjusted EBITDAre | $73,799 | $76,216 | $78,487 | | Normalized FFO | $38,317 | $45,872 | $52,746 | | CAD | $22,340 | $8,560 | $31,178 | Per Common Share Data | Per Common Share Data | 3/31/2024 | 12/31/2023 | 3/31/2023 | | :--- | :--- | :--- | :--- | | Net loss | $(0.11) | $(0.77) | $(0.01) | | Normalized FFO | $0.79 | $0.95 | $1.09 | | CAD | $0.46 | $0.18 | $0.65 | [Condensed Consolidated Statements of Income (Loss)](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income%20%28Loss%29) For Q1 2024, OPI reported a net loss of $5.2 million, an increase from Q1 2023, primarily due to higher interest expense and a loss on real estate sales Income Statement | Income Statement (in thousands) | Three Months Ended 3/31/2024 | Three Months Ended 3/31/2023 | | :--- | :--- | :--- | | Rental income | $139,435 | $132,422 | | Total expenses | $107,405 | $109,485 | | Interest expense | $(35,476) | $(25,231) | | (Loss) gain on sale of real estate | $(2,384) | $2,548 | | **Net loss** | **$(5,184)** | **$(446)** | | **Net loss per share** | **$(0.11)** | **$(0.01)** | [Condensed Consolidated Balance Sheets](index=9&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2024, OPI's balance sheet shows total assets of $3.96 billion and total liabilities of $2.71 billion, with a shift from unsecured to secured debt Balance Sheet | Balance Sheet (in thousands) | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Total real estate properties, net | $3,400,973 | $3,415,500 | | **Total assets** | **$3,957,930** | **$3,989,669** | | Unsecured debt, net | $1,847,664 | $2,400,478 | | Secured debt, net | $731,563 | $172,131 | | **Total liabilities** | **$2,707,566** | **$2,733,990** | | **Total shareholders' equity** | **$1,250,364** | **$1,255,679** | [Debt Summary](index=10&type=section&id=Debt%20Summary) As of March 31, 2024, OPI's total debt was $2.63 billion, with a weighted average interest rate of 5.426% and a weighted average maturity of 4.9 years Debt Composition | Debt Category | Principal Balance (in thousands) | Weighted Avg. Interest Rate | Weighted Avg. Years to Maturity | | :--- | :--- | :--- | :--- | | Secured Floating Rate Debt | $290,000 | 8.910% | 2.8 | | Secured Fixed Rate Debt | $477,320 | 9.550% | 5.3 | | Unsecured Fixed Rate Debt | $1,862,000 | 3.827% | 5.1 | | **Total** | **$2,629,320** | **5.426%** | **4.9** | [Debt Maturity Schedule](index=11&type=section&id=Debt%20Maturity%20Schedule) The debt maturity schedule indicates significant upcoming obligations, with $650 million of unsecured debt maturing in 2025 - OPI has the following significant near-term debt maturities (in thousands): - **2025:** **$650,000** (Unsecured) - **2026:** **$300,000** (Unsecured) - **2027:** **$290,000** (Secured Floating) + **$350,000** (Unsecured) = **$640,000** total[24](index=24&type=chunk) [Leverage Ratios, Coverage Ratios and Public Debt Covenants](index=12&type=section&id=Leverage%20Ratios%2C%20Coverage%20Ratios%20and%20Public%20Debt%20Covenants) Leverage and coverage ratios show increased financial risk compared to the prior year, though the company remains in compliance with public debt covenants Financial Ratios | Ratio | 3/31/2024 | 3/31/2023 | | :--- | :--- | :--- | | **Leverage Ratios:** | | | | Net debt / total gross assets | 56.2% | 54.1% | | Secured debt / total assets | 19.4% | 1.2% | | **Coverage Ratios:** | | | | Adj. EBITDAre / interest expense | 2.6x | 3.2x | | Net debt / Adj. EBITDAre | 8.4x | 7.7x | - The company is in compliance with its public debt covenants, including Total unencumbered assets / unsecured debt at **178.1%** (minimum 150.0%) and Total debt / adjusted total assets at **49.6%** (maximum 60.0%)[27](index=27&type=chunk) [Capital Expenditures Summary and Significant Redevelopment Information](index=13&type=section&id=Capital%20Expenditures%20Summary%20and%20Significant%20Redevelopment%20Information) Total capital expenditures for Q1 2024 were $28.2 million, allocated to lease-related costs, building improvements, and redevelopment activities Capital Expenditures | Capital Expenditures (in thousands) | Q1 2024 | Q4 2023 | Q1 2023 | | :--- | :--- | :--- | :--- | | Lease related costs | $16,768 | $18,497 | $13,041 | | Building improvements | $4,474 | $10,877 | $4,582 | | Development, redevelopment | $6,911 | $19,371 | $49,471 | | **Total capital expenditures** | **$28,153** | **$48,745** | **$67,094** | - The significant redevelopment project at Elliott Ave West in Seattle, WA, is reported as substantially complete as of March 31, 2024[30](index=30&type=chunk)[31](index=31&type=chunk) [Property Dispositions](index=14&type=section&id=Property%20Dispositions) During the first quarter of 2024, OPI completed the disposition of one property located in Chicago, IL Property Sold | Date Sold | Location | Sq. Ft. (thousands) | Gross Sales Price (thousands) | Price Per Sq. Ft. | | :--- | :--- | :--- | :--- | :--- | | 3/21/2024 | Chicago, IL | 248 | $38,500 | $155.24 | [Investments in Unconsolidated Joint Ventures](index=15&type=section&id=Investments%20in%20Unconsolidated%20Joint%20Ventures) As of March 31, 2024, OPI holds investments in two unconsolidated joint ventures totaling $17.9 million, owning three properties with 59.3% weighted average occupancy Joint Venture Investments | Joint Venture | OPI Ownership | OPI Investment (thousands) | Location | Occupancy | Remaining Lease Term | | :--- | :--- | :--- | :--- | :--- | :--- | | Prosperity Metro Plaza | 51% | $17,898 | Fairfax, VA | 68.0% | 3.5 years | | 1750 H Street, NW | 50% | - | Washington, D.C. | 35.0% | 9.2 years | | **Total / Weighted Avg.** | | **$17,898** | | **59.3%** | **4.7 years** | [Portfolio Information](index=16&type=section&id=PORTFOLIO%20INFORMATION) This section details the company's property portfolio, including occupancy, leasing activity, and tenant characteristics [Summary Same Property Results](index=17&type=section&id=Summary%20Same%20Property%20Results) OPI's same-property portfolio experienced a decline in performance in Q1 2024 compared to Q1 2023, with occupancy dropping to 88.2% Same Property Performance | Same Property Results | Q1 2024 | Q1 2023 | % Change | | :--- | :--- | :--- | :--- | | Percent leased | 88.2% | 94.2% | N/A | | Same Property NOI (in thousands) | $73,319 | $81,658 | (10.2%) | | Same Property Cash Basis NOI (in thousands) | $67,852 | $77,102 | (12.0%) | | Same Property NOI % margin | 60.8% | 64.0% | N/A | [Occupancy and Leasing Summary](index=18&type=section&id=Occupancy%20and%20Leasing%20Summary) In Q1 2024, OPI executed 488,000 square feet of total leasing, resulting in a 10.2% increase in GAAP rent for the same space, despite an overall portfolio occupancy decline Leasing Activity | Leasing Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Total Leasing Activity (sq. ft.) | 488,000 | 203,000 | | % Change in GAAP Rent (Total) | 10.2% | (18.5%) | | Weighted Avg. Lease Term (Total) | 9.3 years | 6.8 years | | Percentage Leased (end of period) | 85.6% | 90.5% | [Tenant Diversity and Credit Characteristics](index=19&type=section&id=Tenant%20Diversity%20and%20Credit%20Characteristics) OPI's portfolio relies heavily on government tenants, comprising 27.6% of total annualized rental income, with diversification across other industries - Government tenants are the largest source of rental income: - U.S. Government: **20.2%** - Other Government: **7.4%**[45](index=45&type=chunk) - The portfolio is diversified across several other industries, including Financials (**16.2%**), Technology & Communications (**15.5%**), and Legal & Other Professional Services (**13.7%**)[45](index=45&type=chunk) [Tenants Representing 1% or More of Total Annualized Rental Income](index=20&type=section&id=Tenants%20Representing%201%25%20or%20More%20of%20Total%20Annualized%20Rental%20Income) The U.S. Government is the largest tenant, occupying 20.3% of leased square footage, with the top 20 tenants collectively occupying 55.1% of total leased space Top Tenants by Leased Square Footage | Rank | Tenant | Credit Rating | % of Leased Sq. Ft. | | :--- | :--- | :--- | :--- | | 1 | U.S. Government | Investment Grade | 20.3% | | 2 | Alphabet Inc. (Google) | Investment Grade | 2.2% | | 3 | Shook, Hardy & Bacon L.L.P. | Not Rated | 3.4% | | 4 | IG Investments Holdings LLC | Not Rated | 2.0% | | 5 | Bank of America Corporation | Investment Grade | 3.3% | [Lease Expiration Schedule](index=21&type=section&id=Lease%20Expiration%20Schedule) The lease expiration schedule indicates near-term rollover risk, with 13.1% of leased square feet expiring in the remainder of 2024 and 10.8% in 2025 Lease Expirations | Year of Expiration | % of Total Leased Square Feet | % of Total Annualized Rental Income | | :--- | :--- | :--- | | 2024 | 13.1% | 13.0% | | 2025 | 10.8% | 8.6% | | 2026 | 8.3% | 8.1% | | 2027 | 11.9% | 10.7% | | 2028 | 3.8% | 6.2% | - The weighted average remaining lease term for the portfolio is **6.6 years** based on annualized rental income[48](index=48&type=chunk)[51](index=51&type=chunk) [Appendix](index=22&type=section&id=APPENDIX) This section includes company background, governance details, and reconciliations of non-GAAP financial measures [Company Profile and Research Coverage](index=23&type=section&id=Company%20Profile%20and%20Research%20Coverage) This section provides a brief company profile, noting OPI is managed by The RMR Group, and lists its equity research and credit rating coverage - OPI is managed by The RMR Group (Nasdaq: RMR), which had over **$41 billion** of real estate assets under management as of March 31, 2024[54](index=54&type=chunk) - The company's credit is rated by Moody's (**Caa2/Caa1**) and S&P (**B/B-**)[56](index=56&type=chunk) [Governance Information](index=24&type=section&id=Governance%20Information) This page lists the members of OPI's Board of Trustees and its executive officers, including key leadership figures - Key leadership includes Adam D. Portnoy (Chair of the Board & Managing Trustee), Yael Duffy (President and Chief Operating Officer), and Brian E. Donley (Chief Financial Officer and Treasurer)[58](index=58&type=chunk) [Calculation and Reconciliation of NOI and Cash Basis NOI](index=25&type=section&id=Calculation%20and%20Reconciliation%20of%20NOI%20and%20Cash%20Basis%20NOI) This section provides a detailed reconciliation of Net Loss to Net Operating Income (NOI) and Cash Basis NOI for the last five quarters NOI and Cash Basis NOI Reconciliation | Reconciliation (in thousands) | Q1 2024 | Q4 2023 | Q1 2023 | | :--- | :--- | :--- | :--- | | Net loss | $(5,184) | $(37,151) | $(446) | | ... adjustments ... | | | | | **NOI** | **$88,248** | **$80,871** | **$83,772** | | ... non-cash adjustments ... | | | | | **Cash Basis NOI** | **$68,270** | **$70,066** | **$79,300** | [Reconciliation and Calculation of Same Property NOI and Same Property Cash Basis NOI](index=26&type=section&id=Reconciliation%20and%20Calculation%20of%20Same%20Property%20NOI%20and%20Same%20Property%20Cash%20Basis%20NOI) This table reconciles the total portfolio NOI to the Same Property NOI and Same Property Cash Basis NOI for Q1 2024 and Q1 2023 Same Property NOI Reconciliation | Reconciliation (in thousands) | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | NOI | $88,248 | $83,772 | | Less: NOI of properties not in same property | $(14,929) | $(2,114) | | **Same Property NOI** | **$73,319** | **$81,658** | | ... non-cash adjustments ... | | | | | **Same Property Cash Basis NOI** | **$67,852** | **$77,102** | [Operating Metrics by Collateral Pool](index=27&type=section&id=Operating%20Metrics%20by%20Collateral%20Pool) This section breaks down key operating metrics by the type of collateral securing the company's debt, showing high occupancy for secured properties Operating Metrics by Collateral Pool | Collateral Pool | Number of Properties | Sq. Ft. (thousands) | Occupancy | Weighted Avg. Lease Term | | :--- | :--- | :--- | :--- | :--- | | Subtotal Secured | 43 | 7,063 | 98.8% | 8.9 years | | Unsecured Properties | 108 | 13,230 | 78.6% | 4.7 years | | **Total / Weighted Avg.** | **151** | **20,293** | **85.6%** | **6.6 years** | [Calculation of EBITDA, EBITDAre and Adjusted EBITDAre](index=28&type=section&id=Calculation%20of%20EBITDA%2C%20EBITDAre%20and%20Adjusted%20EBITDAre) This table details the calculation of EBITDA, EBITDAre, and Adjusted EBITDAre, starting from Net Loss for the past five quarters EBITDA, EBITDAre and Adjusted EBITDAre Calculation | Calculation (in thousands) | Q1 2024 | Q4 2023 | Q1 2023 | | :--- | :--- | :--- | :--- | | Net loss | $(5,184) | $(37,151) | $(446) | | ... adjustments ... | | | | | **EBITDA** | **$80,689** | **$46,615** | **$76,507** | | ... adjustments ... | | | | | **EBITDAre** | **$83,303** | **$74,545** | **$74,793** | | ... adjustments ... | | | | | **Adjusted EBITDAre** | **$73,799** | **$76,216** | **$78,487** | [Calculation of FFO, Normalized FFO and CAD](index=29&type=section&id=Calculation%20of%20FFO%2C%20Normalized%20FFO%20and%20CAD) This section provides a detailed reconciliation from Net Loss to key REIT performance metrics: FFO, Normalized FFO, and CAD FFO, Normalized FFO and CAD Calculation | Calculation (in thousands) | Q1 2024 | Q4 2023 | Q1 2023 | | :--- | :--- | :--- | :--- | | Net loss | $(5,184) | $(37,151) | $(446) | | ... adjustments ... | | | | | **FFO** | **$48,183** | **$44,590** | **$49,528** | | ... adjustments ... | | | | | **Normalized FFO** | **$38,317** | **$45,872** | **$52,746** | | ... adjustments ... | | | | | **CAD** | **$22,340** | **$8,560** | **$31,178** | Per Share Amounts | Per Share Amounts | Q1 2024 | Q4 2023 | Q1 2023 | | :--- | :--- | :--- | :--- | | FFO | $0.99 | $0.92 | $1.02 | | Normalized FFO | $0.79 | $0.95 | $1.09 | | CAD | $0.46 | $0.18 | $0.65 | [Non-GAAP Financial Measures and Certain Definitions](index=30&type=section&id=Non-GAAP%20Financial%20Measures%20and%20Certain%20Definitions) This section defines the non-GAAP financial measures used throughout the report, explaining their calculation and utility for investors - Provides definitions for non-GAAP measures including NOI, Cash Basis NOI, EBITDA, EBITDAre, Adjusted EBITDAre, FFO, Normalized FFO, and CAD, explaining why management considers them appropriate supplemental measures of operating performance for a REIT[71](index=71&type=chunk)[72](index=72&type=chunk)[73](index=73&type=chunk) - Defines other key operational and financial terms used in the report, such as 'Same properties', 'Investment grade tenants', 'Annualized rental income', and 'Lease related costs'[78](index=78&type=chunk)[79](index=79&type=chunk)[81](index=81&type=chunk)

Table of Contents FORM 10-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number 1-34364 OFFICE PROPERTIES INCOME TRUST (Exact Name of Registrant as Specified in Its Charter) Maryland 26-4273474 (State of Organization) (I.R.S. Employer Identific ...

Financial Data and Key Metrics Changes - Normalized FFO for Q3 2023 was $1.02 per share, exceeding the high end of guidance by $0.01, compared to $1.11 per share in Q2 2023, reflecting a decrease primarily due to higher interest expenses and lower NOI [5][21] - Same-property cash basis NOI decreased by 9.2% year-over-year, aligning with guidance of a decline between 8% to 10% [49] - The company expects normalized FFO for Q4 2023 to be between $0.96 and $0.98 per share, driven by increased interest expenses and operating costs [22] Business Line Data and Key Metrics Changes - The company executed 586,000 square feet of new and renewal leasing, with an average lease term of 7.4 years and a rent roll-down of 2.7% [5][7] - New leasing accounted for 104,000 square feet with a roll-up of 1.9%, increasing total activity for the year to over 390,000 square feet [14] - Concessions and capital commitments declined year-over-year to $5.89 per square foot, per lease year [14] Market Data and Key Metrics Changes - Portfolio occupancy was approximately 89.9% at quarter end, a decrease of 70 basis points from the previous quarter, largely due to a known downsizing of a primary tenant [5] - The leasing environment remains challenging with elevated vacancy and sublease levels, although there are encouraging signs of a return to office mandates across industries [6] Company Strategy and Development Direction - The company is focused on upcoming lease expirations and existing vacancies, as well as managing maturing credit facilities and debt maturities [40] - An active leasing pipeline of close to 2.8 million square feet is in place, with 25% associated with 2024 renewals [12] - The company is evaluating properties for potential sales and is considering a range of financing options to manage debt maturities [53] Management's Comments on Operating Environment and Future Outlook - Management noted that the investment sales market has been slow due to rising interest rates, but they are optimistic about properties with strong fundamentals [13] - The company anticipates continued pressure on tenant retention as they evaluate their space needs, with 12% of annualized rental income represented by lease expirations in 2024 [18] - Management expressed confidence in the ongoing construction of the Life Science Tree Development in Seattle, which is 28% pre-leased [19] Other Important Information - The company sold one property for $10.5 million in Q3, bringing total asset sales to $23.6 million for the year [5][26] - The company declared a regular quarterly distribution of $0.25 per share, representing a trailing four-quarter CAD payout ratio of 65% [49] Q&A Session Summary Question: Is there anything particular going on with asset sales? - Management confirmed a one-time item in Q3 related to a successful multiyear tax appeal, which will not recur in Q4 [28] Question: Are you actively marketing assets for sale? - Management indicated they are evaluating the market and expect to be more active in Q4 with additional assets [29][57] Question: What is the strategy for addressing upcoming debt maturities? - Management is exploring various options, including asset sales and secured financing, to manage the $350 million of senior notes due in May 2024 [31][53] Question: Can you provide details on the remaining capital spend for development projects? - Management stated that $25 million to $30 million will be spent by the end of Q1 2024, primarily for construction capital and tenant improvement allowances [74]

(1) Includes capitalized interest and other operating costs of $13,207 since July 1, 2022. (2) Estimated project costs include future, estimated lease related costs associated with achieving stabilized occupancy that will be incurred subsequent to the estimated completion date. (3) Estimated completion date can depend on various factors, including when lease agreements are signed with tenants. Therefore, the actual completion dates may vary. (4) Physical improvements made at this project were substantially ...

Property and Occupancy - As of September 30, 2023, the company owned 154 properties with a total of approximately 20,705,000 rentable square feet, leased to 263 tenants[78]. - The occupancy rate for all properties decreased to 89.9% as of September 30, 2023, down from 90.7% in 2022[83]. - The average effective rental rate per square foot for all properties increased slightly to $29.37 for the three months ended September 30, 2023, compared to $29.19 in 2022[85]. - The U.S. government is the largest tenant, accounting for approximately 20.0% of the company's annualized rental income as of September 30, 2023[78]. - The company derived 21.6% of its annualized rental income from properties located in the metropolitan Washington, D.C. market area as of September 30, 2023[102]. - Tenants contributing 53.6% of annualized rental income were investment grade rated, with an additional 10.4% from subsidiaries of investment grade rated parents[103]. - As of September 30, 2023, the company had leases totaling approximately 2,614,820 rentable square feet scheduled to expire through September 30, 2024, with 1,832,201 square feet expected to expire, excluding re-leased space[97]. - The weighted average remaining lease term is 6.0 years, with 350 leases expiring in total[99]. - In 2023, 5.9% of leases expiring were in 2023, while 13.5% are scheduled for 2024[99]. Financial Performance - Rental income for the three months ended September 30, 2023, was $133,361, a decrease of $4,322 or 3.1% compared to $137,683 in the same period of 2022[110]. - Net operating income for the three months ended September 30, 2023, was $83,698, down $1,848 or 2.2% from $85,546 in the prior year[110]. - Total operating expenses for the three months ended September 30, 2023, were $49,663, a decrease of $2,474 or 4.7% compared to $52,137 in 2022[110]. - The company recorded a net loss of $19,593 for the three months ended September 30, 2023, compared to a net income of $16,964 in the same period of 2022, representing a change of $36,557[110]. - For the nine months ended September 30, 2023, rental income was $399,780, a decrease of $26,573 or 6.2% from $426,353 in the same period of 2022[124]. - Net loss for the nine months ended September 30, 2023, was $32,281, an increase of $19,782 or 158.3% compared to a net loss of $12,499 in 2022[124]. - Net Operating Income (NOI) for the nine months ended September 30, 2023, was $253,190, down from $274,443 in 2022, reflecting a decrease of approximately 7.8%[142]. - Funds From Operations (FFO) for the nine months ended September 30, 2023, was $125,329, compared to $175,146 in 2022, indicating a decline of about 28.5%[144]. - Normalized FFO for the nine months ended September 30, 2023, was $155,863, down from $175,447 in 2022, representing a decrease of approximately 11.2%[144]. Capital Expenditures and Investments - Total capital expenditures for the nine months ended September 30, 2023, amounted to $193.655 million, compared to $172.799 million in 2022[93]. - The company has estimated unspent leasing-related obligations of $137.223 million, with $73.666 million expected to be spent over the next 12 months[96]. - The company sold six properties containing approximately 376,000 rentable square feet for an aggregate sales price of $23,575,000 during the nine months ended September 30, 2023[106]. - As of October 27, 2023, the company has entered into agreements to sell two properties containing approximately 177,000 rentable square feet for an aggregate sales price of $21,299,000[107]. - The company completed the redevelopment of a property in Washington, D.C., with total project costs estimated at $227,000, and the property is currently 55% leased[157]. - The company is redeveloping a three-property campus in Seattle, WA, with estimated costs of $162,000 and completion expected in Q1 2024, currently 28% pre-leased[158]. Debt and Interest Expenses - The company issued six mortgage notes totaling $177,320 with a weighted average interest rate of 7.8% during the nine months ended September 30, 2023[154]. - As of September 30, 2023, the company had total debt maturities of $2,389,320, with $350,000 due in 2024 and $650,000 due in 2025[155]. - The company has a $750,000 revolving credit facility, with $200,000 outstanding as of September 30, 2023, and $550,000 available for borrowing[151]. - Interest expense increased by $3,866 or 15.5% to $28,835 in the three months ended September 30, 2023, compared to $24,969 in 2022[110]. - The annual interest expense for the floating rate debt at September 30, 2023, is $13,800, which would increase to $15,800 with a one percentage point rise in interest rates[178]. - A one percentage point increase in interest rates would increase the annual interest cost of fixed rate debt by approximately $23,893[171]. - A hypothetical one percentage point increase in interest rates would decrease the fair value of fixed rate debt obligations by approximately $68,555[172]. - The company’s fixed rate debt arrangements may allow for early repayments, potentially mitigating refinancing risks[173]. Strategic Decisions and Market Conditions - The company terminated its merger agreement with DHC on September 1, 2023, which may impact future strategic decisions[81]. - The company faces challenges in office space demand due to trends such as increased remote work and tenant consolidations, creating uncertainty in the leasing market[79]. - Inflationary pressures and rising interest rates have raised concerns about potential economic recession, which could adversely affect the company's financial condition and tenant operations[80]. - The company is focused on tenant retention and may incur significant costs to renew leases with current tenants[101]. - The company continues to evaluate its portfolio and may seek to sell additional properties in the future[107]. - The company expects future cash flows to depend on the ability to collect rent, maintain occupancy, control expenses, and successfully sell properties[146]. Risk Factors - The company acknowledges potential risks from competition within the commercial real estate industry, particularly in its property locations[192]. - The company notes the impact of U.S. government actions, such as shutdowns or debt ceiling issues, on rent collection and operational expenses[192]. - The company identifies risks related to compliance with federal, state, and local laws, as well as changes in accounting and tax regulations[192]. - The company is aware of risks from external factors such as terrorism, pandemics, and climate change that could disrupt operations[192]. - There have been no significant changes in critical accounting estimates since December 31, 2022[168]. - There have been no material changes to the risk factors disclosed in the 2022 Annual Report[193].

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 1-34364 | Title of Each Class | Trading Symbol(s) | Name Of Each Exchange On Which Registered | | --- | --- | --- | | Common Shares of Beneficial Interest | OPI ...

Office Properties Income Trust (NASDAQ:OPI) Q1 2023 Earnings Conference Call April 27, 2023 10:00 AM ET Company Participants Kevin Barry - Director, IR Christopher Bilotto - President & COO Matthew Brown - CFO & Treasurer Conference Call Participants Bryan Maher - B. Riley Securities Tamim Sarwary - Morgan Stanley Operator Good morning, and welcome to the Office Properties Income Trust First Quarter 2023 Earnings Conference Call. [Operator Instructions]. I would now like to turn the call over to Kevin Barry ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q 617-219-1440 ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 1-34364 OFFICE PROPERTIES INCOME TRUST (Exact Name of Registrant as Specified in Its Charter) (State or Other Jurisdiction of Incorporation or Org ...