The RMR Group Inc.

What they do

RMR manages four publicly traded equity REITs (DHC, ILPT, SVC, OPI) and provides advisory services to mortgage REIT Seven Hills Realty Trust (SEVN) through its subsidiary Tremont Realty Capital LLC. It also manages private capital clients and, as of September 30, 2025, had $39.0 billion in assets under management. The Managed Equity REITs have no employees, and RMR provides all necessary personnel and day-to-day management services. RMR Inc. has no employees; services are provided by RMR LLC.

Revenue drivers

• Business management fees from Managed Equity REITs — Fees are based on the lesser of each REIT's average historical cost of properties or market capitalization, except for OPI which has a fixed annual fee of $14.0 million for the first two years under its amended agreement.
• Property management fees — Fees are based on a percentage of gross rents collected at certain managed properties, excluding rents from hotels, senior living communities, travel centers and wellness centers.
• Construction supervision fees — Fees earned as a percentage of construction costs for construction activities at properties owned by the Managed Equity REITs (5% for OPI under the new agreement).
• Advisory fees, incentive fees and other revenue — Includes advisory services to SEVN and other clients, plus incentive fees based on client performance and other revenue sources not detailed in the excerpts.

Recent performance

For fiscal 2025 (ended September 30, 2025), revenue was $182.7 million and net income was $17.6 million, with diluted EPS of $1.03. In the quarter ended June 30, 2026, revenue was $45.5 million, down from $66.7 million in the quarter ended December 31, 2025. Operating cash flow for fiscal 2025 was $75.7 million. As of June 30, 2026, the company had cash and equivalents of $58.2 million and shareholder equity of $224.2 million.

Strategy

Management seeks to maintain and grow its client base by balancing capital recycling and restructurings on behalf of clients, and by repositioning portfolios when warranted. The company is actively investing in capital formation capabilities and engaging with institutional investors seeking to deploy capital into North American commercial real estate. RMR is also focused on growing its RMR Residential business and value-add retail investments, and on integrating acquired businesses and realizing expected returns. The amended agreements with OPI, effective after its bankruptcy emergence on June 17, 2026, provide a five-year term with a fixed annual fee for the first two years, signaling stability in that client relationship.

Risks

• Client concentration — Most revenues come from a limited number of clients (the four Managed Equity REITs and SEVN), so loss or underperformance of any one client could materially hurt revenue.
• Fee base variability — Management fees are generally tied to asset values, market capitalizations, rents or revenues; declines in client business activity or real estate values would reduce fees.
• Management agreement terminations — The Managed Equity REITs can terminate management agreements, and OPI's amended agreement is terminable without payment of a termination fee after the first two years.
• Interest rate and macroeconomic uncertainty — Sustained high interest rates and economic uncertainty can adversely impact clients, potentially reducing demand for properties and RMR's fee revenue.

Outlook

Despite some macroeconomic uncertainty, management expects to continue balancing growth pursuits with sensible capital recycling and restructurings to help clients manage leverage and operating costs. The company is actively working to expand its business through new ventures and additional investments, including in North American commercial real estate. The OPI amended agreements provide a stable revenue base for at least two years, but the broader outlook depends on the performance of the Managed Equity REITs and overall real estate market conditions.