Service Properties Trust(SVC) - 2025 Q1 - Quarterly Results

Financial Performance - Service Properties Trust reported a net loss of $116.4 million, or $0.70 per common share, for the first quarter of 2025[14]. - The total revenues for the quarter were $435.2 million, down from $456.6 million in the previous quarter[17]. - Total revenues for Q1 2025 were $435,179, a slight decrease of 0.25% from $436,250 in Q1 2024[18]. - Net loss for Q1 2025 was $116,435, compared to a net loss of $78,383 in Q1 2024, representing a 48.6% increase in losses year-over-year[18]. - Total expenses increased to $447,302 in Q1 2025, up from $415,873 in Q1 2024, marking a 7.5% rise[18]. - Cash and cash equivalents decreased to $80,147 as of March 31, 2025, down from $143,482 at the end of 2024, a decline of 44.6%[22]. - Total assets decreased to $6,976,079 as of March 31, 2025, compared to $7,119,558 at the end of 2024, a reduction of 2.0%[22]. - Total shareholders' equity decreased to $734,573 as of March 31, 2025, down from $851,873 at the end of 2024, a decline of 13.8%[22]. - Funds from Operations (FFO) for the three months ended March 31, 2025, was $10,186,000, down from $18,946,000 in the previous quarter[87]. - Normalized FFO for the same period was $10,836,000, compared to $28,617,000 in the previous quarter[87]. - EBITDA for the three months ended March 31, 2025, was $75,025,000, a decrease from $116,958,000 in the previous quarter[89]. Hotel Operations - The company achieved a 2.6% increase in comparable hotel RevPAR, reaching $83.52, despite revenue displacement from hotel renovations[8]. - Hotel operating revenues decreased to $334,963 in Q1 2025 from $336,236 in Q1 2024, a decline of 0.38%[18]. - The average occupancy rate for all hotels increased to 57.9% in Q1 2025, up from 57.1% in Q1 2024, representing a 0.8 percentage point increase[60]. - The average daily rate (ADR) for all hotels rose to $144.61 in Q1 2025, a 1.3% increase from $142.74 in Q1 2024[60]. - The full-service segment's average occupancy was 53.5% in Q1 2025, down from 54.5% in Q1 2024, a decrease of 1.0 percentage point[60]. - The extended stay and select service segment achieved an average occupancy of 64.6% in Q1 2025, up from 56.6% in Q1 2024, an increase of 8.0 percentage points[60]. - The adjusted hotel EBITDA for retained hotels decreased by 20.2% to $17.696 million in Q1 2025 from $22.164 million in Q1 2024[60]. - Room revenues for Q1 2025 were $266,439, a decrease of 4.5% from $278,614 in Q4 2024[91]. - Total hotel operating expenses for Q1 2025 were $313,309, slightly down from $321,127 in Q4 2024[91]. Asset Management - The net lease occupancy rate was 97.8% as of March 31, 2025, with a net lease rent coverage of 2.07x[14]. - The company sold four hotels and three net lease properties for net proceeds exceeding $20 million, ending the quarter with over $680 million in liquidity[8]. - Service Properties Trust plans to sell 123 hotels for a total of $1.1 billion this year, with four hotels under agreements to be sold for $26.5 million[9]. - Capital expenditures for the quarter amounted to $45.8 million[14]. - The company owns 202 hotels and 739 service-focused retail net lease properties as of March 31, 2025[13]. - The company has 739 net lease properties, with a total investment of $5,031,881, accounting for 44.3% of total investments[42]. - The average lease term for acquired properties is 18.5 years, with a weighted average lease coverage of 2.14x[38]. - The company disposed of 3 hotel properties in Q1 2025 for a total sales price of $15,100, averaging $35,952 per room[38]. - The company reported a net gain on the sale of real estate of $746 in Q1 2025, in connection with the sale of four hotels and three net lease properties[94]. Investment and Portfolio - As of March 31, 2025, the total investment in the net lease portfolio is $5,031,881,000, with an annualized minimum rent of $380,568,000, resulting in a rent coverage ratio of 2.07x[65]. - TravelCenters of America Inc. is the largest tenant, accounting for 65.0% of total investment at $3,270,106,000 and generating an annualized minimum rent of $259,080,000[69]. - The travel center industry represents 65.8% of the total investment in the portfolio, with 178 properties and an annualized minimum rent of $262,392,000[65]. - The average investment per property across 111 distinct brands is $2,651, with an average annual minimum rent of $176 per property[64]. - The top 10 tenants account for 76.0% of total investment, with a combined annualized minimum rent of $299,895,000[69]. - The portfolio includes 739 properties with a total square footage of 13,189,476, indicating a diverse range of tenants and industries[65]. - The weighted average lease term for the portfolio is 7.4 years[72]. Management and Strategy - The company is managed by The RMR Group, which has approximately $40 billion of real estate assets under management[80]. - Forward-looking statements indicate SVC's plans for hotel sales to enhance liquidity and optimize its portfolio, though these are subject to various risks and uncertainties[123]. - SVC's ability to maintain sufficient liquidity and manage debt is critical for its operational stability and growth[123]. - The company faces risks from market conditions, including interest rate fluctuations and economic downturns, which could impact its performance[123]. - SVC's management agreements include provisions for minimum returns, with certain payments secured by guarantees, enhancing revenue predictability[117].