Office Properties Income Trust

In the second quarter, normalized FFO was $19 million and adjusted EBITDAre was $65 million. Same-property cash basis NOI increased 11.9% year over year to $55 million. Property operating expenses were $48.8 million, down 40 basis points versus the prior year, and G&A was $5.5 million for the quarter. As of June 30, annualized rental income was $413 million, including $307 million of cash rents, $23 million of straight-line rent adjustments, and $83 million of recurring expense reimbursements. On the balance sheet, OPI had about $51 million of unrestricted cash and about $53 million of restricted cash, with $35 million of restricted cash held for restructuring professional fees. The company said it eliminated about $714 million of debt in the restructuring and ended with about $1.7 billion of debt at a 9% weighted average interest rate and 3-year weighted average maturity. Management expects full-year 2026 G&A of $20 million to $22 million and full-year 2026 capital spending of about $55 million to $65 million, consisting of $9 million to $11 million of building capital and $46 million to $54 million of leasing capital.

Yael Duffy framed the quarter around the completed restructuring and the company’s now-more-flexible balance sheet, saying OPI has a runway that did not exist a year ago. She emphasized that the portfolio remains anchored by strong-credit tenants, that the company is focused on leasing, asset sales, and cash flow growth, and that OPI is approaching dispositions as a value-maximizing process. Her tone was constructive but pragmatic, stressing that significant work remains even though OPI is in a much stronger position than a year ago.

Brian Donley highlighted the fresh-start accounting transition and then focused on operating metrics and the capital structure. He cited $19 million of normalized FFO, $65 million of adjusted EBITDAre, and $55 million of same-property cash basis NOI, which benefited from higher cash rents and the end of abatements on certain leases. He also laid out liquidity and debt details, including $51 million of unrestricted cash, $53 million of restricted cash, $154 million of annualized cash interest expense before paydowns or sale proceeds, and a $425 million credit facility due in January 2027 that the company is actively working to refinance.

This call did not include a live analyst Q&A, so there were no analyst challenges or follow-up answers to summarize. The most notable forward-looking discussion was management’s plan to refinance the $425 million credit facility, meet scheduled principal payments on the 8.375% notes with cash on hand and asset-sale proceeds, and continue selling properties to strengthen liquidity. Management also said the disposition process is attracting interest from owner-users, value-add investors, and redevelopment buyers, with pricing in many cases at or above internal estimates and third-party appraisals.