Seven Hills Realty Trust (NasdaqCM:SEVN) Q4 2025 Earnings call February 19, 2026 11:00 AM ET Company ParticipantsChristopher Nolan - Managing Director, Equity ResearchJared Lewis - VPJason Weaver - Managing Director, Head Specialty Finance and Real Estate ResearchMatt Brown - CFO and TreasurerMatt Murphy - Manager of Investor RelationsTom Lorenzini - President and Chief Investment OfficerOperatorGood day, and welcome to the Seven Hills Realty Trust's fourth quarter 2025 earnings call. All participants will ...

Financial Data and Key Metrics Changes - Distributable Earnings for Q4 2025 were reported at $4.6 million, or $0.28 per share, with an adjusted figure of $0.31 per share when accounting for the rights offering dilution [4][16] - The company raised $61.5 million in net proceeds from a rights offering, increasing investment capacity by over $200 million [4][5] - For the full year of 2025, distributable earnings were $1.21 per share, with a run rate annual dividend of $1.12 per share, representing a 93% payout ratio [16][19] Business Line Data and Key Metrics Changes - The loan portfolio increased by $83 million year-over-year, reaching total commitments of $724.5 million across 24 floating-rate first mortgage loans [8] - The weighted average all-in yield was reported at 7.92%, with a weighted average risk rating improving to 2.8 [8] - The company invested in three new loans totaling $101.3 million during Q4 2025, including loans secured by student housing, a hotel, and an industrial property [5][7] Market Data and Key Metrics Changes - Market conditions improved in Q4 2025, with two additional 25 basis point rate cuts, bringing the target Fed funds rate to 350-375 basis points [11] - Office transaction volume increased by 25% year-over-year, indicating a recovery in the market [12] - Demand for short-term floating rate bridge loans remains strong, with a broad range of transactions being evaluated [13][14] Company Strategy and Development Direction - The company aims to capitalize on middle-market lending opportunities with enhanced liquidity following the rights offering [9] - There is a focus on deploying capital selectively into attractive opportunities across various property types and geographies [13] - The strategy remains centered on senior secured positions, avoiding riskier junior tranches for the time being [26] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about transaction activity continuing to increase in 2026, driven by improving market conditions and increased financing activity [12][13] - The company expects first quarter distributable earnings to be in the range of $0.22 to $0.24 per share, with a temporary drag on earnings due to the rights offering [18] - The expectation is to reach close to $1 billion in total loan portfolio size by year-end 2026, with quarterly new originations targeted at $200 million [34] Other Important Information - The company ended Q4 2025 with $123 million in cash and extended the maturities of two secured financing facilities, increasing capacity to $377 million [19][20] - The CECL reserve remains modest at 130 basis points of total loan commitments, indicating a conservative risk profile [19] Q&A Session Summary Question: How is the company finding pockets of inefficiency in the current competitive environment? - Management noted that while multifamily contributes significantly to activity, they are focusing on sectors like storage, industrial, and medical office for better risk-adjusted returns [24][25] Question: Are there opportunities outside of the first lien space being evaluated? - Management confirmed that the focus remains on senior secured positions, with no current plans to explore mezzanine or preferred equity [26] Question: Does the distributable EPS guidance assume full deployment of the rights offering capital? - Management clarified that the guidance does not assume full deployment by the end of Q1, but expects earnings to recover by year-end [29] Question: Is the current dividend secure through the end of 2026? - Management affirmed commitment to the $0.28 per quarter dividend, despite temporary earnings drag from the rights offering [33] Question: What is the expected portfolio growth following the rights offering? - Management anticipates reaching close to $1 billion in total loan portfolio size by year-end, with significant new originations expected in the coming quarters [34]

Financial Data and Key Metrics Changes - Distributable Earnings for Q4 2025 were reported at $4.6 million, or $0.28 per share, with an adjusted figure of $0.31 per share when accounting for the rights offering dilution [4][16] - The full year 2025 distributable earnings were $1.21 per share, with a run rate annual dividend of $1.12 per share, representing a 93% payout ratio [16][19] - The weighted average all-in yield was 7.92%, and the weighted average risk rating improved to 2.8 [8] Business Line Data and Key Metrics Changes - The company invested in three new loans totaling $101.3 million during Q4 2025, including a $37.3 million loan for student housing, a $37 million hotel loan, and a $27 million industrial property loan [5] - Total commitments as of December 31, 2025, were $724.5 million across 24 floating-rate first mortgage loans, with a year-over-year increase of $83 million, or approximately 13% [8] Market Data and Key Metrics Changes - Market conditions improved in Q4 2025, with two 25 basis point rate cuts bringing the target Fed funds rate to 350-375 basis points, leading to increased financing activity [11] - Office transaction volume increased by 25% year-over-year, indicating a recovery in the market [12] Company Strategy and Development Direction - The company aims to capitalize on middle-market lending opportunities with enhanced liquidity following the rights offering and a focus on disciplined capital deployment [9] - The strategy includes diversifying investments beyond multifamily and industrial sectors to include medical office, necessity-based retail, and hospitality [13] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about transaction activity continuing to increase in 2026, driven by recovering acquisition and refinancing volumes [12] - The company expects first quarter distributable earnings to be in the range of $0.22 to $0.24 per share, reflecting temporary impacts from the rights offering [18] Other Important Information - The company ended Q4 2025 with $123 million in cash and extended the maturities of two secured financing facilities, increasing the maximum size of one facility by $125 million [19][20] - The CECL reserve remains modest at 130 basis points of total loan commitments, down 20 basis points from the previous quarter [19] Q&A Session Summary Question: How is the company finding pockets of inefficiency in the current competitive environment? - Management noted that while multifamily remains liquid, they are focusing on sectors like storage, industrial, and medical office for better risk-adjusted returns [22][25] Question: Does the $0.22-$0.24 distributable EPS guidance assume full deployment of the raised capital? - Management clarified that the guidance does not assume full deployment by the end of Q1, as some loans are still in the pipeline [31] Question: Is the current dividend secure through the end of 2026? - Management confirmed commitment to the $0.28 per quarter dividend, despite temporary earnings drag from the rights offering [35] Question: What is the expected portfolio size by year-end? - Management anticipates reaching close to $1 billion in total loan portfolio size by year-end, depending on repayments and new originations [36]

Financial Results and Supplemental Information FOURTH QUARTER 2025 February 18, 2026 Seven Hills Realty Trust Announces Fourth Quarter 2025 Results "Seven Hills delivered a strong fourth quarter, reflecting the strength of our fully performing loan portfolio and the quality of our disciplined underwriting. We generated Distributable Earnings of $0.28 per share, fully covering our quarterly distribution, while investing $101.3 million in new loans during the quarter and an additional $30.5 million since year ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2025 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number 001-34383 Seven Hills Realty Trust (Exact Name of Registrant as Specified in Its Charter) Maryland 20-4649929 (State of Organization) (IRS Employer Identification No.) Two Newton Pla ...

LS Financial Results and Supplemental Information FOURTH QUARTER 2025 February 18, 2026 Exhibit 99.2 Seven Hills Realty Trust Announces Fourth Quarter 2025 Results "Seven Hills delivered a strong fourth quarter, reflecting the strength of our fully performing loan portfolio and the quality of our disciplined underwriting. We generated Distributable Earnings of $0.28 per share, fully covering our quarterly distribution, while investing $101.3 million in new loans during the quarter and an additional $30.5 mi ...

We recently published an article titled 11 High Growth Micro-cap Stocks to Buy.  On January 7, Ladenburg initiated coverage of Seven Hills Realty Trust (NASDAQ:SEVN) with a Buy rating and a $10 price target, highlighting improving forward visibility following recent balance sheet actions and portfolio growth initiatives. The initiation comes after a volatile period for the stock, during which shares declined sharply despite management executing on previously outlined strategic objectives. A key catalyst ...

Group 1 - Seven Hills Realty Trust (SEVN) shares have declined nearly 30% in 2025 due to Federal Reserve easing impacting net interest margins, leading to a reduction in its distribution [2] - The company is part of a portfolio managed by Simplified Asset Management, which focuses on small and mid-cap stocks with significant insider purchases [2] Group 2 - The Insiders Forum portfolio aims to outperform the Russell 2000 benchmark over time, consisting of 12-25 top stocks across various sectors [2]

Core Insights - The lending environment is becoming more active as short-term rates decline, leading to increased borrower engagement and transaction volume, which is expected to continue growing in the coming quarters [1][6][10] - The company's portfolio consists of $642 million in floating rate first mortgage commitments with a weighted average yield of 8.2% and a loan-to-value ratio of 67% [2] - A quarterly dividend of $0.28 per share was declared, reflecting an annualized yield of 11% [3] Financial Performance - Distributable earnings for the third quarter were reported at $4.2 million or $0.29 per share, aligning with the high end of guidance [4][11] - Loan repayments impacted distributable earnings by $0.06 per share, while loan originations contributed $0.03 per share [11] - The expectation for fourth quarter distributable earnings is between $0.29 to $0.31 per share [12] Market Trends - Market sentiment improved following the Fed's rate cut in September, driving new financing activity and increasing transaction volumes [6][10] - Demand for floating rate bridge financing remains strong, particularly due to maturing loans from 2021 and 2022 [6][7] - The company is seeing a shift towards acquisition financing, indicating renewed market confidence [10] Competitive Landscape - The tightening of corporate bond spreads has made real estate credit an attractive investment, leading to increased competition among lenders [8] - The company remains selective in new originations, focusing on opportunities in industrial, necessity-based retail, hospitality, and student housing [8][9] - Larger banks are active in the multifamily debt markets, while smaller regional banks are more selective [23] Pipeline and Future Outlook - The company is evaluating over $1 billion in loan opportunities, with a robust and diversified pipeline [10] - Anticipated loan repayments are primarily expected in 2026, with only one additional loan expected to be repaid before year-end [2][15] - The company expects to close 3 to 4 more loans by the end of the year [18]

Financial Data and Key Metrics Changes - Distributable earnings for Q3 2025 were $4.2 million or $0.29 per share, at the high end of guidance [4][12] - A regular quarterly dividend of $0.28 per share was declared, equating to an annualized yield of 11% [4] - The company ended the quarter with $77 million in cash and $310 million in capacity on secured financing facilities [14][15] Business Line Data and Key Metrics Changes - The portfolio consisted of $642 million in floating-rate first mortgage commitments across 22 loans, with a weighted average all-in yield of 8.2% and a weighted average loan-to-value of 67% [5] - The weighted average risk rating at quarter end was 2.9, with all loans current on debt service and no non-accrual balances [6][15] Market Data and Key Metrics Changes - Market sentiment improved following the Federal Reserve's rate cut in September, driving new financing activity [9] - Demand for floating-rate bridge financing remains strong, particularly due to 2021 and 2022 vintage floating-rate multifamily loan maturities [9][10] - The company is currently evaluating over $1 billion of loan opportunities, with a shift towards a higher proportion of acquisition financing [11] Company Strategy and Development Direction - The company aims to deploy capital into opportunities that offer the best relative value in the current environment, focusing on disciplined capital deployment [8] - The strategy includes maintaining strong sponsor relationships and leveraging underwriting and asset management expertise to generate attractive risk-adjusted returns [8] Management's Comments on Operating Environment and Future Outlook - Management noted that competition remains elevated, but they continue to find compelling opportunities that meet return thresholds [8] - Expectations of further rate cuts before year-end are anticipated to enhance borrower engagement and transaction volume [7][9] - The company expects fourth-quarter distributable earnings to be in the range of $0.29-$0.31 per share [13] Other Important Information - The company reported full repayment of two loans totaling $53.8 million during the quarter, with expectations for additional repayments in 2026 [7] - The CECL reserve remains modest at 150 basis points of total loan commitments, unchanged from the previous quarter [15] Q&A Session Summary Question: Expected repayments for the remainder of the year - Management confirmed that the only expected repayment before year-end is $15.3 million, with the majority of repayments scheduled for 2026 [17] Question: Sourcing of new loans and competition - Management indicated that most transactions come from traditional channels like mortgage banking, with a solid reputation helping to win loans [19] Question: Impact of lower SOFR on CECL reserve - Management explained that while lower SOFR could impact the CECL reserve, many factors influence it, and they maintain a conservative approach [23][24] Question: Demand for multifamily equity - Management noted that there is always demand for equity capital, especially with many loan maturities requiring additional equity [25][26] Question: Activity of banks in multifamily debt markets - Management observed that larger banks are active in the multifamily space, while smaller regional banks are more selective [28] Question: Cash balance increase - Management attributed the increase in cash balance to timing of repayments and the expectation of new loan originations [31] Question: NIM compression outlook - Management believes they are at the trough of NIM compression and expects to identify appropriate transactions for better returns [35]