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. 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. For the balance sheet, OPI had approximately $51 million of unrestricted cash and approximately $53 million of restricted cash. For 2026, management expects capital expenditures of $55 million to $65 million and G&A of $20 million to $22 million. Looking ahead, OPI said it is working on refinancing the $425 million credit facility due in January 2027, and expects to fund upcoming note principal payments with cash on hand and asset-sale proceeds.

Yael Duffy framed the quarter around the successful emergence from Chapter 11 and the resulting reset of the balance sheet and governance. She emphasized the $714 million debt reduction, the extended maturity profile, the continued role of RMR under new 5-year agreements, and the addition of a refreshed board. Her tone was constructive and strategic, focused on using leasing, selective dispositions, and tenant relationships to grow free cash flow and create long-term value.

Brian Donley highlighted the quarter’s operating metrics and the new capital structure under fresh-start accounting. He cited $19 million of normalized FFO, $65 million of adjusted EBITDAre, 11.9% growth in same-property cash NOI to $55 million, $48.8 million of property operating expenses, and $5.5 million of G&A, with full-year G&A guided to $20 million to $22 million. He also detailed liquidity and leverage, noting $51 million of unrestricted cash, $53 million of restricted cash, $1.7 billion of debt at a 9% weighted average interest rate, and annualized cash interest expense of $154 million before future paydowns or sale proceeds.

There was no analyst Q&A in the transcript, so the main discussion centered on management’s prepared remarks and the near-term funding plan. Management specifically addressed refinancing the $425 million credit facility maturing in January 2027, saying it is actively working with the bank on options. They also explained that the next principal payments on the 8.375% notes are expected to be covered by cash on hand and proceeds from asset sales.