Office Properties Income Trust

What they do

OPI owns and leases office properties across 29 states and Washington, D.C., totaling approximately 17.1 million rentable square feet as of June 30, 2026. It also holds a 51% noncontrolling interest in an unconsolidated joint venture owning two properties with about 346,000 rentable square feet. The company is managed by The RMR Group and is headquartered in Newton, Massachusetts.

Revenue drivers

• Office rental income from wholly owned properties — Base rents and recurring expense reimbursements from 122 wholly owned properties leased to 211 tenants; this is essentially all of reported revenue, which was $108.9 million in the quarter ended March 31, 2026.
• U.S. government tenancy — The U.S. government is the largest tenant, representing approximately 18.0% of annualized rental income as of June 30, 2026, up from 17.2% at year-end 2025.
• Investment grade tenant base — Approximately 62% of revenues were from investment grade rated tenants as of June 30, 2026, per the second quarter 2026 earnings release.
• Joint venture interest — A 51% noncontrolling interest in an unconsolidated joint venture holding two properties (about 346,000 square feet), which is not consolidated into wholly owned property results.

Recent performance

Latest reported quarterly revenue was $108.9 million for the quarter ended March 31, 2026, following $105.3 million in the December 2025 quarter, $109.1 million in September 2025 and $114.5 million in June 2025. Annual revenue declined from $502.0 million in 2024 to $442.6 million in 2025. Annual net loss widened from $136.1 million in 2024 to $272.4 million in 2025, with diluted EPS of -$3.79 versus -$2.63. Operating cash flow turned negative in 2025 at -$6.6 million, and the quarterly dividend was $0.02 per share for 2025. As of June 30, 2026, total assets were $2.37 billion, total liabilities $1.86 billion, shareholder equity $511.5 million, cash $50.8 million and long-term debt $1.68 billion.

Strategy

OPI's stated direction is to complete its court-supervised restructuring: the Fourth Amended Joint Chapter 11 Plan was filed April 21, 2026 and confirmed April 22, 2026, and the Debtors emerged from Chapter 11 on the Effective Date after conditions were satisfied. The Plan converts September 2029 Notes into new 10.000% senior secured notes due 2031 and notes due 2029, reducing aggregate debt by approximately $714 million and extending weighted average maturities. Management says it is actively working with a bank to refinance the $425.0 million credit agreement maturing January 2027 and to refinance the term loan. It has identified 32 properties for sale; two were sold in July 2026 for aggregate gross proceeds of $58.5 million.

Risks

• Going concern and leverage — The company concluded substantial doubt existed about its ability to continue as a going concern prior to and during Chapter 11, and post-emergence debt leverage may remain at or above expected levels indefinitely.
• Lease rollover and office demand — Leases representing approximately $59.7 million, or 14.4%, of annualized rental income expire on or before December 31, 2027, and remote work, tenant consolidation and declining rents in markets such as Washington, D.C. pressure reletting.
• Government and single-tenant concentration — The U.S. government is the largest tenant at roughly 18.0% of annualized rental income, exposing OPI to government budget pressures and potential reductions of U.S. federal office leases.
• Refinancing and capital access — OPI must refinance a $425.0 million credit agreement maturing January 2027 and make $50.0 million of principal payments on the 2029 Secured Exit Notes in the next twelve months, relying on cash, operating cash flow, asset sales and potential capital markets transactions.

Outlook

Management states that the restructuring reduced indebtedness by approximately $714 million and extended debt maturities, improving financial flexibility, alleviating near-term refinancing pressure and restoring access to capital market alternatives unavailable before emergence. The company expects to meet the January 2027 credit agreement maturity and near-term note amortization through existing cash, operating cash flows, asset sales and potential capital market transactions, and is working with a bank on refinancing options. It has identified 32 properties for sale, two of which sold in July 2026 for $58.5 million gross. Management continues to flag uncertainty in office demand, government spending and leasing conditions.