Service Properties Trust(US:SVC)2025-05-06 20:30Company Overview - As of March 31, 2025, the company owned 941 properties across 46 states, the District of Columbia, Canada, and Puerto Rico[101]. - The company owned 739 service-focused retail properties leased to 175 tenants, with TA being the largest tenant, leasing 175 travel centers[109]. - The hotel portfolio includes 145 distinct brands across 22 industries, with a total of 201 comparable hotels[161]. - As of March 31, 2025, the company operates net lease tenants across 21 distinct industries within the U.S. service-focused retail sector[171]. Financial Performance - For the three months ended March 31, 2025, hotel operating revenues decreased by 0.4% to $334,963,000 compared to $336,236,000 in 2024[112]. - The company's net loss for the three months ended March 31, 2025, was $116,435,000, an increase of 48.5% from a net loss of $78,383,000 in 2024[122]. - Revenues for the three months ended March 31, 2025, were $369,833, while expenses were $451,361, resulting in a net loss of $81,528[156]. - Funds From Operations (FFO) for the three months ended March 31, 2025, is $10,186,000, down from $21,104,000 in 2024[180]. - Normalized FFO for the same period is $10,836,000, compared to $21,106,000 in 2024[180]. Occupancy and Revenue Metrics - The average daily rate (ADR) for comparable hotels increased by 1.3% to $144.61 in Q1 2025, while revenue per available room (RevPAR) increased by 2.6% to $83.67[107]. - The average occupancy rate for comparable hotels is 57.9%, an increase of 0.8 percentage points from the previous year[163]. - The overall occupancy rate for all hotels was 57.8%, reflecting a 0.8 percentage point increase from the previous year[164]. - The retained hotels segment had an average occupancy of 56.4%, with a RevPAR of $98.59, representing a 3.9% increase[164]. Asset Management - The net lease portfolio was 97.8% occupied as of March 31, 2025, with annual minimum rents totaling $380,568,000[109]. - The company is in the process of selling 119 hotels with a total of 15,912 keys and a combined net carrying value of $945,100,000, expected to be completed in 2025[103]. - The company sold seven properties for a total sales price of $22,700 in Q1 2025, with additional pending sales of four hotels for $26,500[132]. - Lease renewals for 31,607 rentable square feet were completed at an average rent increase of 18.0% compared to prior rents[165]. - New leases for 1,685 rentable square feet were signed at a rent increase of 15.7% over prior rents[165]. Debt and Financing - As of March 31, 2025, the total outstanding fixed rate debt is $5,681,122, with an annual interest expense of $361,831[182]. - The company had $50,000 outstanding under its $650,000 revolving credit facility, with $600,000 available for borrowings[136]. - The annual interest rate on borrowings under the revolving credit facility was 6.91% as of March 31, 2025, down from 7.84% in 2024[136]. - Debt maturities as of March 31, 2025, totaled $5,681,122, with significant maturities in 2026 ($801,958) and 2027 ($851,958)[140]. - The company amended its revolving credit facility to reduce the required debt service coverage ratio from 1.50 times to 1.30 times, effective for Q4 2024[138]. Market Risks and Interest Rates - The company is exposed to market risks associated with interest rate changes, managing this exposure by monitoring financing alternatives[181]. - A one percentage point increase in interest rates would raise the annual floating rate interest expense from $6,232 to $7,182 based on current outstanding amounts[186]. - Changes in market interest rates will affect the fair value of fixed rate debt obligations, with a hypothetical one percentage point change potentially altering fair value by approximately $180,112[182]. - The company may consider hedge arrangements in the future to mitigate exposure to interest rate fluctuations[189]. Distributions and Shareholder Returns - The company declared a quarterly distribution of $0.01 per common share, totaling approximately $1,666, to be paid on May 15, 2025[134]. - The company declared distributions of $0.01 per share for the three months ended March 31, 2025, down from $0.20 per share in 2024[180].