Seven Hills Realty Trust
For the period ended Jun 30, 2026. Filed Jul 28, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2026 · Filed Jul 28, 2026
SEVN$6.63-1.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-03-31; filed 2026-04-28.
0001452477-26-000021
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-07-28.
0001452477-26-000029
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 101 previous paragraphs and 114 current paragraphs.
72 unchanged; 25 reworded; 10 added; 3 removed; 1 previous and 7 current paragraphs rearranged.
Tables are not compared: 9 previous and 11 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (10)
Current report
During the second quarter of 2026, CRE capital markets continued to improve, however ongoing geopolitical uncertainty and renewed inflationary pressures are causing considerable volatility in U.S. Treasury yields. These conditions are again weighing on market participants’ buy, sell or refinance decision making process.
Current report
To that end, CRE financing activity remains robust, but market activity is more heavily weighted toward refinancings with lower than usual acquisition financing volume. However, an abundance of upcoming loan maturities coupled with many lenders’ decreased tolerance for loan extensions may lead to higher transaction volume in the second half of 2026.
Current report
The outlook for U.S. monetary policy remains uncertain. The Federal Open Market Committee held rates steady during the quarter, however, updated projections indicate increased concern regarding persistent inflation and the potential need for policy tightening. As a result, the timing and direction of future interest rate decisions will depend on incoming inflation data, labor market conditions, energy prices and the broader economic impact of geopolitical developments. While CRE capital markets remain relatively well positioned, transaction volume, valuation trends and borrowing costs may remain subject to volatility if inflation proves persistent, geopolitical risks intensify or interest rates remain elevated for longer than currently expected.
Current report
(4)In July 2026, the maturity date of this loan was extended by two years to July 1, 2028.
Current report
Incentive fees. We recognize management incentive fees payable to Tremont in accordance with our management agreement. The increase in management incentive fees was due to the incentive fee for the 12 month period ended June 30, 2026 exceeding the fee paid for the previous three calendar quarters by a higher margin, as compared to the fee for the 12 month period ended March 31, 2026.
Current report
General and administrative expenses. The increase in general and administrative expenses was primarily due to an increase in share based compensation resulting from shares awarded to our Trustees during the three months ended June 30, 2026.
Current report
Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025:
Current report
Interest and related income. The increase in interest and related income was primarily due to a higher weighted average principal balance resulting from loan origination activity during the six months ended June 30, 2026, partially offset by declines in the SOFR index rate. The weighted average principal balance of our loan investments was approximately $705,000 for the six months ended June 30, 2026 compared to approximately $642,000 for the six months ended June 30, 2025. The weighted average coupon rate was approximately 7.31% during the six months ended June 30, 2026 compared to approximately 8.03% during the six months ended June 30, 2025.
Current report
Interest and related expenses. The decrease in interest and related expenses was primarily the result of declines in the SOFR index rate, offset by a higher weighted average principal balance during the six months ended June 30, 2026 as compared to the six months ended June 30, 2025. The weighted average coupon rate was approximately 5.80% during the six months ended June 30, 2026 compared to approximately 6.51% during the six months ended June 30, 2025. The weighted average principal balance of our repurchase loans was approximately $465,000 for the six months ended June 30, 2026 compared to approximately $432,000 for the six months ended June 30, 2025.
Current report
Expenses from real estate owned. Expenses from real estate owned represent expenses from the operations of an office property located in Yardley, PA that was transferred to real estate owned through a deed in lieu of foreclosure in June 2023. The decrease in expenses from real estate owned was primarily due to lease related assets becoming fully amortized resulting in lower amortization expense during the six months ended June 30, 2026 as compared to the six months ended June 30, 2025.
Removed paragraphs (3)
Previous report
More recent geopolitical developments in the Middle East have the potential to affect U.S. economic conditions and has complicated the outlook for U.S. monetary policy. The potential for future Federal Open Markets Committee, or FOMC, interest rate cuts in the near term is lower today than at the beginning of the year. However, the FOMC has indicated it intends to remain patient as it evaluates the potential impact of these events on oil prices and, in turn, U.S. economic growth and labor market conditions.
Previous report
To date, demand for CRE debt in the U.S. has not been materially impacted by geopolitical events and there continues to be a significant amount of maturing CRE debt to be refinanced in the coming year. While the duration and ultimate economic impact of the Middle East conflict remain uncertain, continued volatility in energy prices and financial markets could influence inflation trends, interest‑rate expectations, and economic growth, all of which may affect commercial real estate investment conditions in 2026.
Previous report
(4)This loan was repaid in April 2026.
Reworded paragraphs (25)
Previous wording
Market Conditions. During the first quarter of 2026, CRE market conditions reflected a continuation of the stabilization trends that emerged in the second half of 2025. CRE transaction activity continued to show signs of recovery early this quarter, supported by improving property‑level fundamentals, substantial liquidity in debt capital markets and increased confidence in underwriting assumptions.
Current wording
Market Conditions. The first quarter of 2026 reflected a continuation of the stabilization trends that emerged in the second half of 2025, supported by improving underlying property fundamentals along with relative interest rate stability allowing for greater confidence in underwriting assumptions going forward.
Previous wording
The relative value of CRE debt investments today compared to alternative corporate or private debt investments continues to drive demand from lenders, including banks, securitized lenders, life insurance companies, private debt funds and mortgage REITs. This increased competition amongst lenders has led to a tightening of credit spreads and lower overall borrowing costs for CRE debt investors across all property sectors.
Current wording
The relative value of CRE debt investments compared to alternative fixed income, corporate credit and private credit investments continues to attract capital from banks, securitized lenders, life insurance companies, private debt funds and mortgage REITs. Increased competition among lenders has contributed to tighter credit spreads, more flexible loan terms and lower all-in borrowing costs for high-quality, well-structured CRE debt investments, although lender appetite remains differentiated by property type, market, sponsorship and leverage profile. Overall, borrowers are the beneficiaries of this competition among lenders.
Previous wording
The interest income on our loans and interest expense on our borrowings float with benchmark rates, such as SOFR. Because we generally intend to leverage up to 80% of the amount of our investments, as benchmark rates increase above the floors of our loans, our income from investments, net of interest and related expenses, will increase. Decreases in benchmark rates are mitigated by interest rate floor provisions in all but one of our loan agreements with borrowers, ranging from 0.25% to 4.34% with a weighted average floor of 2.83%; therefore, changes to income from investments, net, may not move proportionately with the increase or decrease in benchmark rates. As of March 31, 2026, SOFR was 3.66%, and as a result, seven of our loan investments had an active interest rate floor.
Current wording
The interest income on our loans and interest expense on our borrowings float with benchmark rates, such as SOFR. Because we generally intend to leverage up to 80% of the amount of our investments, as benchmark rates increase above the floors of our loans, our income from investments, net of interest and related expenses, will increase. Decreases in benchmark rates are mitigated by interest rate floor provisions in all but one of our loan agreements with borrowers, ranging from 0.25% to 4.34% with a weighted average floor of 2.96%; therefore, changes to income from investments, net, may not move proportionately with the increase or decrease in benchmark rates. As of June 30, 2026, SOFR was 3.65%, and as a result, six of our loan investments had an active interest rate floor.
Previous wording
As of March 31, 2026, we had $775,958 in aggregate loan commitments, consisting of a diverse portfolio, geographically and by property type, of 26 first mortgage loans. As of March 31, 2026, we had five loans representing approximately 22% of the amortized cost of our loan portfolio with a loan risk rating of “4” or “higher risk”. We have no “5” or “loss likely” rated loans.
Current wording
As of June 30, 2026, we had $765,343 in aggregate loan commitments, consisting of a diverse portfolio, geographically and by property type, of 27 first mortgage loans. As of June 30, 2026, we had five loans representing approximately 22% of the amortized cost of our loan portfolio with a loan risk rating of “4” or “higher risk”.
Previous wording
In May 2025, we amended the agreement governing our loan secured by an office property in Downers Grove, IL. As part of this amendment, the borrower repaid $3,000 of the outstanding principal balance and the maturity date was extended by one year to May 22, 2026. As of March 31, 2026, this loan had an amortized cost of $26,650 and a risk rating of 3.
Current wording
In July 2026, we amended the agreement governing our loan secured by an office property in Plano, TX. As part of this amendment, the maturity date was extended by two years to July 1, 2028. As of June 30, 2026, this loan had an amortized cost of $26,637 and a risk rating of 4.
Previous wording
We did not have any outstanding past due loans or nonaccrual loans as of March 31, 2026. However, our borrowers' businesses, operations and liquidity may be materially adversely impacted by current inflationary pressures, interest rate fluctuations, supply chain issues or a prolonged economic slowdown or recession could amplify those negative impacts. As a result, they may become unable to pay their debt service obligations owed and due to us, which may result in an increased allowance for credit losses and/or recognition of income on a nonaccrual basis. For further information regarding our loan portfolio and risk rating policy, see Note 3 to our Unaudited Condensed Consolidated Financial Statements included in Part I, Item 1, "—Factors Affecting our Operating Results" and "Warning Concerning Forward-Looking Statements" elsewhere in this Quarterly Report on Form 10-Q and the risk factors identified in Part I, Item 1A, “Risk Factors”, of our 2025 Annual Report.
Current wording
We did not have any outstanding past due loans or nonaccrual loans as of June 30, 2026. However, our borrowers' businesses, operations and liquidity may be materially adversely impacted by current inflationary pressures, interest rate fluctuations, supply chain issues or a prolonged economic slowdown or recession, any of which could amplify those negative impacts. As a result, they may become unable to pay their debt service obligations owed and due to us, which may result in an increased allowance for credit losses and/or recognition of income on a nonaccrual basis. For further information regarding our loan portfolio and risk rating policy, see Note 3 to our Unaudited Condensed Consolidated Financial Statements included in Part I, Item 1, "—Factors Affecting Operating Results" and "Warning Concerning Forward-Looking Statements" elsewhere in this Quarterly Report on Form 10-Q and the risk factors identified in Part I, Item 1A, “Risk Factors”, of our 2025 Annual Report.
Previous wording
As of March 31, 2026, outstanding advancements under our Secured Financing Facilities had a weighted average interest rate of 5.84% per annum, excluding associated fees and expenses. As of March 31, 2026 and April 24, 2026, we had a $467,469 and $463,157, respectively, aggregate outstanding principal balance under our Secured Financing Facilities.
Current wording
As of June 30, 2026, outstanding advancements under our Secured Financing Facilities had a weighted average interest rate of 5.78% per annum, excluding associated fees and expenses. As of June 30, 2026 and July 24, 2026, we had a $471,744 and $488,944, respectively, aggregate outstanding principal balance under our Secured Financing Facilities.
Previous wording
Interest and related income. The increase in interest and related income was primarily due to a higher weighted average principal balance due to loan origination activity during the three months ended March 31, 2026 as compared to the three months ended December 31, 2025, offset by declines in the SOFR index rate. The weighted average principal balance of our loan investments was approximately $712,000 for the three months ended March 31, 2026 compared to approximately $656,000 for the three months ended December 31, 2025. The weighted average coupon rate was approximately 7.33% during the three months ended March 31, 2026 compared to approximately 7.60% during the three months ended December 31, 2025.
Current wording
Interest and related income. The decrease in interest and related income was primarily due to a lower weighted average principal balance due to loan repayment activity during the three months ended June 30, 2026. The weighted average principal balance of our loan investments was approximately $699,000 for the three months ended June 30, 2026 compared to approximately $712,000 for the three months ended March 31, 2026. The weighted average coupon rate was approximately 7.25% during the three months ended June 30, 2026 compared to approximately 7.33% during the three months ended March 31, 2026.
Previous wording
Interest and related expenses. The decrease in interest and related expenses was primarily the result of a lower weighted average SOFR index rate during the three months ended March 31, 2026 as compared to the three months ended December 31, 2025 and the repayment of $40,931 under our Secured Financing Facilities related to our investment loan secured by a multifamily property in Olmsted Falls, OH in January 2026, partially offset by increased borrowings under our Secured Financing Facilities related to loan origination activity. The weighted average coupon rate was approximately 5.86% during the three months ended March 31, 2026 compared to approximately 6.08% during the three months ended December 31, 2025.
Current wording
Interest and related expenses. The decrease in interest and related expenses was primarily the result of lower weighted average coupon rates, partially offset by a higher weighted average principal balance during the three months ended June 30, 2026. The weighted average coupon rate was approximately 5.81% during the three months ended June 30, 2026 compared to approximately 5.86% during the three months ended March 31, 2026. The weighted average principal balance of our repurchase loans was approximately $468,000 for the three months ended June 30, 2026 compared to approximately $462,000 for the three months ended March 31, 2026.
Previous wording
Revenue from real estate owned. Revenue from real estate owned represents revenue from the operations of an office property located in Yardley, PA that was transferred to real estate owned through a deed in lieu of foreclosure in June 2023. The increase in revenue from real estate owned was primarily due to higher operating expense reimbursements during the three months ended March 31, 2026 as compared to the three months ended December 31, 2025.
Current wording
Revenue from real estate owned. Revenue from real estate owned represents revenue from the operations of an office property located in Yardley, PA that was transferred to real estate owned through a deed in lieu of foreclosure in June 2023. The decrease in revenue from real estate owned was primarily due to lower operating expense reimbursements during the three months ended June 30, 2026 as compared to the three months ended March 31, 2026.
Previous wording
Provision for (reversal of) credit losses. The provision for credit losses represents the change in the allowance for credit losses on our loan portfolio and unfunded commitments. The increase in the allowance for credit losses during the three months ended March 31, 2026 reflects an increased loan investment balance as of March 31, 2026 and increased allowances for certain of our office loans, partially offset by loans nearing maturity.
Current wording
Provision for credit losses. The provision for credit losses represents the change in the allowance for credit losses on our loan portfolio and unfunded commitments. The increase in the allowance for credit losses during the three months ended June 30, 2026 is primarily due to increased allowances for certain of our “4” rated office loans with near-term maturities, and primarily reflects lower estimated collateral values for these loans within the office sector.
Previous wording
Expenses from real estate owned. Expenses from real estate owned represent expenses from the operations of an office property located in Yardley, PA that was transferred to real estate owned through a deed in lieu of foreclosure in June 2023. The increase in expenses from real estate owned was primarily due to higher utility expenses during the three months ended March 31, 2026 as compared to the three months ended December 31, 2025.
Current wording
Expenses from real estate owned. Expenses from real estate owned represent expenses from the operations of an office property located in Yardley, PA that was transferred to real estate owned through a deed in lieu of foreclosure in June 2023. The decrease in expenses from real estate owned was primarily due to lower utility expenses during the three months ended June 30, 2026 as compared to the three months ended March 31, 2026.
Previous wording
General and administrative expenses. The increase in general and administrative expenses was primarily due to higher legal costs during the three months ended March 31, 2026 as compared to the three months ended December 31, 2025.
Current wording
General and administrative expenses. The increase in general and administrative expenses was primarily due to an increase in share based compensation to our trustees during the six months ended June 30, 2026 as compared to the six months ended June 30, 2025.
Previous wording
Income tax expense. Income tax expense represents income taxes paid or payable by us in certain jurisdictions where we are subject to state income taxes.
Current wording
Income tax benefit (expense). Income tax expense represents income taxes paid or payable by us in certain jurisdictions where we are subject to state income taxes.
Previous wording
We present Adjusted Book Value, Adjusted Book Value per common share, Distributable Earnings and Distributable Earnings per common share, which are considered “non-GAAP financial measures” within the meaning of the applicable SEC rules. These non-GAAP financial measures do not represent book value, book value per common share, net income, net income per common share or cash generated from operating activities and should not be considered as alternatives to book value, book value per common share, net income or net income per common share determined in accordance with GAAP or as an indication of our cash flows from operations determined in accordance with U.S. generally accepted accounting principles, or GAAP, a measure of our capital adequacy, liquidity or operating performance or an indication of funds available for our cash needs. In addition, our methodologies for calculating these non-GAAP financial measures may differ from the methodologies employed by other companies to calculate the same or similar supplemental capital adequacy or performance measures; therefore, our reported Adjusted Book Value, Adjusted Book Value per common share, Distributable Earnings, and Distributable Earnings per common share may not be comparable to adjusted book value, adjusted book value per common share, distributable earnings and distributable earnings per common share as reported by other companies.
Current wording
We present Adjusted Book Value, Adjusted Book Value per common share, Distributable Earnings and Distributable Earnings per common share, which are considered “non-GAAP financial measures” within the meaning of the applicable SEC rules. These non-GAAP financial measures do not represent book value, book value per common share, net (loss) income, net (loss) income per common share or cash generated from operating activities and should not be considered as alternatives to book value, book value per common share, net (loss) income or net (loss) income per common share determined in accordance with GAAP or as an indication of our cash flows from operations determined in accordance with GAAP, a measure of our capital adequacy, liquidity or operating performance or an indication of funds available for our cash needs. In addition, our methodologies for calculating these non-GAAP financial measures may differ from the methodologies employed by other companies to calculate the same or similar supplemental capital adequacy or performance measures; therefore, our reported Adjusted Book Value, Adjusted Book Value per common share, Distributable Earnings, and Distributable Earnings per common share may not be comparable to adjusted book value, adjusted book value per common share, distributable earnings and distributable earnings per common share as reported by other companies.
Previous wording
We believe that Adjusted Book Value and Adjusted Book Value per common share is a meaningful measure of our capital adequacy because it excludes the impact of certain non-cash estimates or adjustments, including our allowance for credit losses for our loan portfolio and unfunded loan commitments. The table below calculates our book value, Adjusted Book Value and Adjusted Book Value per common share:
Current wording
We believe that Adjusted Book Value and Adjusted Book Value per common share are meaningful measures of our capital adequacy because they exclude the impact of certain non-cash estimates or adjustments, including our allowance for credit losses for our loan portfolio and unfunded loan commitments.
Previous wording
In order to maintain our qualification for taxation as a REIT, we are generally required to distribute substantially all of our taxable income, subject to certain adjustments, to our shareholders. We believe that one of the factors that investors consider important in deciding whether to buy or sell securities of a REIT is its distribution rate. Over time, Distributable Earnings and Distributable Earnings per common share may be useful indicators of distributions to our shareholders and are measures that are considered by our Board of Trustees when determining the amount of distributions. We believe that Distributable Earnings and Distributable Earnings per common share provide meaningful information to consider in addition to net income, net income per common share and cash flows from operating activities determined in accordance with GAAP. These measures help us to evaluate our performance excluding the effects of certain transactions and GAAP adjustments that we believe are not necessarily indicative of our current loan portfolio and operations. In addition, Distributable Earnings, excluding incentive fees, is used in determining the amount of base management and management incentive fees payable by us to Tremont under our management agreement.
Current wording
In order to maintain our qualification for taxation as a REIT, we are generally required to distribute substantially all of our taxable income, subject to certain adjustments, to our shareholders. We believe that one of the factors that investors consider important in deciding whether to buy or sell securities of a REIT is its distribution rate. Over time, Distributable Earnings and Distributable Earnings per common share may be useful indicators of distributions to our shareholders and are measures that are considered by our Board of Trustees when determining the amount of distributions. We believe that Distributable Earnings and Distributable Earnings per common share provide meaningful information to consider in addition to net (loss) income, net (loss) income per common share and cash flows from operating activities determined in accordance with GAAP. These measures help us to evaluate our performance excluding the effects of certain transactions and GAAP adjustments that we believe are not necessarily indicative of our current loan portfolio and operations. In addition, Distributable Earnings, excluding incentive fees, is used in determining the amount of base management and management incentive fees payable by us to Tremont under our management agreement.
Previous wording
We calculate Distributable Earnings and Distributable Earnings per common share as net income and net income per common share, respectively, computed in accordance with GAAP, including realized losses not otherwise included in net income determined in accordance with GAAP, and excluding: (a) depreciation and amortization of real estate owned and related intangible assets, if any; (b) non-cash equity compensation expense; (c) unrealized gains, losses and other similar non-cash items that are included in net income for the period of the calculation (regardless of whether such items are included in or deducted from net income or in other comprehensive income under GAAP), if any; and (d) one-time events pursuant to changes in GAAP and certain non-cash items, if any. Distributable Earnings are reduced for realized losses on loan investments when amounts are deemed uncollectable. This is generally at the time a loan is repaid, or in the case of foreclosure, when the underlying asset is sold, but may also be when, in our determination, it is nearly certain that all amounts due will not be collected. The realized loss amount reflected in Distributable Earnings will equal the difference between the cash received or expected to be received and the carrying value of the loan.
Current wording
We calculate Distributable Earnings and Distributable Earnings per common share as net (loss) income and net (loss) income per common share, respectively, computed in accordance with GAAP, including realized losses not otherwise included in net (loss) income determined in accordance with GAAP, and excluding: (a) depreciation and amortization of real estate owned and related intangible assets, if any; (b) non-cash equity compensation expense; (c) unrealized gains, losses and other similar non-cash items that are included in net (loss) income for the period of the calculation (regardless of whether such items are included in or deducted from net (loss) income or in other comprehensive income under GAAP), if any; and (d) one-time events pursuant to changes in GAAP and certain non-cash items, if any. Distributable Earnings are reduced for realized losses on loan investments when amounts are deemed uncollectable. This is generally at the time a loan is repaid, or in the case of foreclosure, when the underlying asset is sold, but may also be when, in our determination, it is nearly certain that all amounts due will not be collected. The realized loss amount reflected in Distributable Earnings will equal the difference between the cash received or expected to be received and the carrying value of the loan.
Previous wording
The table below demonstrates how we calculate Distributable Earnings and Distributable Earnings per common share, which are non-GAAP financial measures, and provides a reconciliation of these non-GAAP financial measures to net income:
Current wording
The table below demonstrates how we calculate Distributable Earnings and Distributable Earnings per common share, which are non-GAAP financial measures, and provides a reconciliation of these non-GAAP financial measures to net (loss) income:
Previous wording
Loans issued under the BMO Facility are coterminous with the corresponding pledged mortgage loan investments, are not subject to margin calls and allow for up to an 80% advance rate, subject to certain loan to cost and LTV limits. Interest on advancements under the BMO Facility are calculated at SOFR plus a premium. Loans issued under the BMO Facility are secured by a security interest and collateral assignment of the underlying loans to our borrowers which are secured by real property underlying such loans. We are required to pay an upfront fee equal to a percentage of the aggregate amount of the facility loan, such percentage to be determined at the time of approval of the separate facility loan agreements with BMO, or the BMO Facility Loan Agreements.
Current wording
Loans issued under the BMO Facility are coterminous with the corresponding pledged mortgage loan investments, are not subject to margin calls and allow for up to an 80% advance rate, subject to certain loan to cost and LTV limits. Interest on advancements under the BMO Facility is calculated at SOFR plus a premium. Loans issued under the BMO Facility are secured by a security interest and collateral assignment of the underlying loans to our borrowers which are secured by real property underlying such loans. We are required to pay an upfront fee equal to a percentage of the aggregate amount of the facility loan, such percentage to be determined at the time of approval of the separate facility loan agreements with BMO, or the BMO Facility Loan Agreements.
Previous wording
The increase in cash provided by operating activities for the 2026 period compared to the 2025 period was primarily due to higher net interest income resulting from an increased loan portfolio size and favorable changes in working capital. The decrease in cash used in investing activities was primarily due to higher loan repayment activity, partially offset by higher loan origination activity during the 2026 period. The change in cash provided by financing activities to cash used in financing activities was primarily due to higher repayments on our Secured Financing Facilities in the 2026 period.
Current wording
The increase in cash provided by operating activities for the 2026 period compared to the 2025 period was primarily due to higher net interest income resulting from an increased loan portfolio size and favorable changes in working capital. The increase in cash used in investing activities was primarily due to higher loan origination activity, partially offset by higher loan repayment activity during the 2026 period. The increase in cash used in financing activities was primarily due to higher repayments on our Secured Financing Facilities in the 2026 period.
Previous wording
During the three months ended March 31, 2026, we declared and paid regular quarterly distributions to our common shareholders totaling $6,327, or $0.28 per common share, using cash on hand.
Current wording
During the six months ended June 30, 2026, we declared and paid regular quarterly distributions to our common shareholders totaling $12,654, or $0.56 per common share, using cash on hand.
Previous wording
On April 9, 2026, we declared a regular quarterly distribution of $0.28 per common share, or $6,327, to shareholders of record on April 21, 2026. We expect to pay this distribution to our common shareholders on or about May 14, 2026 using cash on hand.
Current wording
On July 9, 2026, we declared a regular quarterly distribution of $0.28 per common share, or $6,346, to shareholders of record on July 20, 2026. We expect to pay this distribution to our common shareholders on or about August 13, 2026 using cash on hand.
Previous wording
In November 2025, we commenced the Rights Offering, pursuant to which we issued transferable rights to our shareholders of record as of November 10, 2025. The record date shareholders received one transferable right for each outstanding common share they owned on the record date, which entitled them to purchase one new common share for every two rights held. The Rights Offering was fully backstopped by Tremont. In December 2025, we completed the Rights Offering, in which 7,532,861 common shares were issued at $8.65 per share, generating net proceeds of $61,494, after offering costs. For further information regarding distributions, see Note 9 to our Unaudited Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q
Current wording
In November 2025, we commenced the Rights Offering, pursuant to which we issued transferable rights to our shareholders of record as of November 10, 2025. The record date shareholders received one transferable right for each outstanding common share they owned on the record date, which entitled them to purchase one new common share for every two rights held. The Rights Offering was fully backstopped by Tremont. In December 2025, we completed the Rights Offering, in which 7,532,861 common shares were issued at $8.65 per share, generating net proceeds of $61,494, after offering costs. For further information regarding the Rights Offering, see Notes 7 and 9 to our Unaudited Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q
Previous wording
As of March 31, 2026, we had a $382,437 aggregate outstanding principal balance under our Master Repurchase Facilities. Our Master Repurchase Agreements are structured with risk mitigation mechanisms, including a cash flow sweep, which would allow UBS, Citibank and Wells Fargo, as applicable, to control interest payments from our borrowers under our loans that are financed under our respective Master Repurchase Facilities, and the ability to accelerate dates of repurchase and institute margin calls, which may require us to pay down balances associated with one or more of our loans that are financed under our Master Repurchase Facilities.
Current wording
As of June 30, 2026, we had a $386,712 aggregate outstanding principal balance under our Master Repurchase Facilities. Our Master Repurchase Agreements are structured with risk mitigation mechanisms, including a cash flow sweep, which would allow UBS, Citibank and Wells Fargo, as applicable, to control interest payments from our borrowers under our loans that are financed under our respective Master Repurchase Facilities, and the ability to accelerate dates of repurchase and institute margin calls, which may require us to pay down balances associated with one or more of our loans that are financed under our Master Repurchase Facilities.
Rearranged current paragraphs (7)
Current report — wording carried from elsewhere
The table below details our Secured Financing Facilities activities during the six months ended June 30, 2026:
Current report — wording carried from elsewhere
Base management fees. We recognize base management fees payable to Tremont in accordance with our management agreement. The decrease in base management fees was due to lower “equity” as defined in our management agreement.
Current report — wording carried from elsewhere
Income tax benefit (expense). Income tax benefit (expense) represents income taxes paid or payable by us in certain jurisdictions where we are subject to state income taxes.
Current report — wording carried from elsewhere
Net (loss) income and net (loss) income per common share - basic and diluted. The decrease in net (loss) income during the three months ended June 30, 2026 as compared to the three months ended March 31, 2026 was due to the changes noted above.
Current report — wording carried from elsewhere
Revenue from real estate owned. Revenue from real estate owned represents revenue from the operations of an office property located in Yardley, PA that was transferred to real estate owned through a deed in lieu of foreclosure in June 2023. The increase in revenue from real estate owned was primarily due to higher operating expense reimbursements and higher rental rates from lease renewal activity during the six months ended June 30, 2026 as compared to the six months ended June 30, 2025.
Current report — wording carried from elsewhere
Reimbursement of shared services expenses. Reimbursement of shared services expenses represents reimbursement of the costs for the services that Tremont arranges on our behalf from RMR.
Current report — wording carried from elsewhere
Provision for credit losses. The provision for credit losses represents the change in the allowance for credit losses on our loan portfolio and unfunded commitments. The increase in the allowance for credit losses during the six months ended June 30, 2026 is primarily due to increased allowances for certain of our “4” rated office loans with near-term maturities, and primarily reflects lower estimated collateral values for these loans within the office sector.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
In April 2025, we amended the agreement governing our loan secured by an office property in Bellevue, WA. As part of this amendment, the borrower was required to contribute $1,625 to cash reserves, the coupon rate was reduced from SOFR + 3.85% to SOFR + 2.85% and the maturity date was extended by three years to April 7, 2028. As of March 31, 2026, this loan had an amortized cost of $20,817 and a risk rating of 4.