opi-20250331

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, 2025

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 001-34364

OFFICE PROPERTIES INCOME TRUST

(Exact Name of Registrant as Specified in Its Charter)


Maryland						26-4273474
(State or Other Jurisdiction of Incorporation or Organization)						(IRS Employer Identification No.)

Two Newton Place, 255 Washington Street, Suite 300, Newton, Massachusetts 02458-1634

(Address of Principal Executive Offices) (Zip Code)

617-219-1440

(Registrant’s Telephone Number, Including Area Code)

Securities Registered Pursuant to Section 12(b) of the Act:

Title of Each Class

Trading Symbol(s)

Name Of Each Exchange On Which Registered

Common Shares of Beneficial Interest

OPI

The Nasdaq Stock Market LLC

6.375% Senior Notes due 2050

OPINL

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☐

Accelerated filer

☒

Non-accelerated filer

☐

Smaller reporting company

☒

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Number of registrant’s common shares of beneficial interest, $.01 par value per share, outstanding as of April 29, 2025: 70,894,950

Table of Contents

OFFICE PROPERTIES INCOME TRUST

FORM 10-Q

March 31, 2025

INDEX


		Page
PART I.	Financial Information

Item 1.	Financial Statements (unaudited)

	Condensed Consolidated Balance Sheets — March 31, 2025 and December 31, 2024	3

	Condensed Consolidated Statements of Comprehensive Income (Loss) — Three Months Ended March 31, 2025 and 2024	4

	Condensed Consolidated Statements of Shareholders’ Equity — Three Months Ended March 31, 2025 and 2024	5

	Condensed Consolidated Statements of Cash Flows — Three Months Ended March 31, 2025 and 2024	6

	Notes to Condensed Consolidated Financial Statements	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	33

Item 4.	Controls and Procedures	33

	Warning Concerning Forward-Looking Statements	33

	Statement Concerning Limited Liability	34

PART II.	Other Information



Item 1A.	Risk Factors	36

Item 6.	Exhibits	36

	Signatures	38

References in this Quarterly Report on Form 10-Q to “the Company”, “OPI”, “we”, “us” or “our” include Office Properties Income Trust and its consolidated subsidiaries unless otherwise expressly stated or the context indicates otherwise.

Table of Contents

PART I. Financial Information

Item 1. Financial Statements

OFFICE PROPERTIES INCOME TRUST

CONDENSED CONSOLIDATED BALANCE SHEETS

(dollars in thousands, except per share data)

(unaudited)



	March 31, 2025		December 31, 2024
ASSETS
Real estate properties:
Land	$	706,623	$	711,039
Buildings and improvements	2,946,137		2,946,520
Total real estate properties, gross	3,652,760		3,657,559
Accumulated depreciation	(643,089)		(618,650)
Total real estate properties, net	3,009,671		3,038,909
Assets of properties held for sale	11,070		32,199

Investment in unconsolidated joint venture	17,118		17,370
Acquired real estate leases, net	180,803		193,739
Cash and cash equivalents	63,745		261,318
Restricted cash	12,909		13,847
Rents receivable	150,678		155,668
Due from related persons	853		—
Deferred leasing costs, net	99,070		97,642
Other assets, net	23,842		11,594
Total assets	$	3,569,759	$	3,822,286

LIABILITIES AND SHAREHOLDERS’ EQUITY
Unsecured debt, net	$	488,556	$	662,277
Secured debt, net	1,872,355		1,872,357
Liabilities of properties held for sale	652		765
Accounts payable and other liabilities	87,499		118,689
Due to related persons	4,815		5,869
Assumed real estate lease obligations, net	9,219		9,525
Total liabilities	2,463,096		2,669,482

Commitments and contingencies

Shareholders’ equity:
Common shares of beneficial interest, $.01 par value: 250,000,000 authorized, 70,063,086 and 69,824,743 shares issued and outstanding, respectively	701		698
Additional paid in capital	2,656,969		2,656,548
Cumulative net loss	(81,800)		(35,933)

Cumulative common distributions	(1,469,207)		(1,468,509)


Total shareholders’ equity	1,106,663		1,152,804
Total liabilities and shareholders’ equity	$	3,569,759	$	3,822,286

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Table of Contents

OFFICE PROPERTIES INCOME TRUST

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(amounts in thousands, except per share data)

(unaudited)


	Three Months Ended March 31,
	2025		2024


Rental income	$	113,615	$	139,435




Expenses:
Real estate taxes	13,458		15,709
Utility expenses	7,567		8,151
Other operating expenses	31,205		27,327

Depreciation and amortization	43,733		50,341

Transaction related costs	876		233
General and administrative	5,058		5,644
Total expenses	101,897		107,405

Loss on sale of real estate	(4,737)		(2,384)


Interest and other income	1,162		1,357
Interest expense (including net amortization of debt premiums, discounts and issuance costs of $11,919 and $3,444, respectively)	(53,378)		(35,476)
Net loss on early extinguishment of debt	(243)		(425)
Loss before income tax expense and equity in net losses of investees	(45,478)		(4,898)
Income tax expense	(137)		(56)
Equity in net losses of investees	(252)		(230)






Net loss	(45,867)		(5,184)

Weighted average common shares outstanding (basic and diluted)	69,257		48,466


Per common share amounts (basic and diluted):
Net loss	$	(0.66)	$	(0.11)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Table of Contents

OFFICE PROPERTIES INCOME TRUST

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(dollars in thousands)

(unaudited)


	Number of Shares	Common Shares		Additional Paid In Capital		Cumulative Net Income		Cumulative Common Distributions		Total Shareholders’ Equity
Balance at December 31, 2024	69,824,743	$	698	$	2,656,548	$	(35,933)	$	(1,468,509)	$	1,152,804
Issuance of common shares, net	238,343	3		142		—		—		145
Common share grants	—	—		279		—		—		279

Net loss	—	—		—		(45,867)		—		(45,867)
Distributions to common shareholders	—	—		—		—		(698)		(698)
Balance at March 31, 2025	70,063,086	$	701	$	2,656,969	$	(81,800)	$	(1,469,207)	$	1,106,663


	Number of Shares	Common Shares		Additional Paid In Capital		Cumulative Net Income		Cumulative Common Distributions		Total Shareholders’ Equity
Balance at December 31, 2023	48,755,415	$	488	$	2,621,493	$	100,174	$	(1,466,476)	$	1,255,679
Common share grants	—	—		362		—		—		362
Common share forfeitures and repurchases	(869)	—		(6)		—		—		(6)
Net loss	—	—		—		(5,184)		—		(5,184)
Distributions to common shareholders	—	—		—		—		(487)		(487)
Balance at March 31, 2024	48,754,546	$	488	$	2,621,849	$	94,990	$	(1,466,963)	$	1,250,364

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Table of Contents

OFFICE PROPERTIES INCOME TRUST

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(dollars in thousands)

(unaudited)


	Three Months Ended March 31,
	2025		2024
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(45,867)	$	(5,184)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation	29,461		29,699
Net amortization of debt premiums, discounts and issuance costs	11,919		3,444
Amortization of acquired real estate leases and assumed real estate lease obligations, net	11,449		17,669
Amortization of deferred leasing costs	3,325		3,408
Loss on sale of real estate	4,737		2,384

(Gain) loss on early extinguishment of debt	(1,430)		425
Straight line rental income	(6,856)		(7,379)
Other non-cash expenses, net	115		90


Equity in net losses of investees	252		230


Changes in assets and liabilities:
Rents receivable	366		2,934
Due from related persons	(853)		—
Deferred leasing costs	(8,397)		(3,342)
Other assets	(1,357)		(773)
Accounts payable and other liabilities	(24,398)		(17,207)
Due to related persons	(1,054)		234

Net cash (used in) provided by operating activities	(28,588)		26,632

CASH FLOWS FROM INVESTING ACTIVITIES:

Real estate improvements	(11,229)		(40,034)



Proceeds from sale of property, net	26,263		35,672




Net cash provided by (used in) investing activities	15,034		(4,362)

CASH FLOWS FROM FINANCING ACTIVITIES:



Repayment of senior unsecured notes	(171,600)		(350,000)
Proceeds from issuance of senior secured notes	—		280,500
Repayment of senior secured notes	(11,969)		—
Borrowings on revolving credit facility	—		232,000
Repayments on revolving credit facility	—		(247,000)
Borrowings on secured term loan	—		100,000
Payment of debt issuance costs	(835)		(19,885)
Proceeds from issuance of common shares, net	145		—
Repurchases of common shares	—

SEC Form 10-Q filed by Office Properties Income Trust