OFFICE PROPERTIES INCOME TRUST (OPI)·Q3 2025 Earnings Summary

Executive Summary

• OPI did not furnish a standard Q3 2025 earnings press release or hold a Q3 earnings call in our search window; instead, on Oct 30–31 the company announced a Restructuring Support Agreement (RSA) and filed for voluntary Chapter 11 to implement it, with ~$1B of notes to be equitized and a commitment for up to $125M in DIP financing to support operations; RMR remains manager and operations continue uninterrupted .
• The restructuring and court‑supervised process superseded normal quarterly cadence and is the primary stock catalyst; a plan term sheet in the cleansing materials contemplates existing equity being extinguished, subject to court approval and negotiations .
• Prior quarter trends continued to deteriorate into Q3: OPI had already suspended its common dividend in July to preserve cash (~$3.0M annually) and warned of “substantial doubt” about going concern and tight covenants; liquidity at July 30 was $90.1M cash .
• From Q2’s outlook for Q3: management had guided normalized FFO per share to $0.07–$0.09 alongside lower NOI on vacancies and seasonally weaker hotel contribution; cash interest run‑rate ~$41M per quarter plus ~$11M non‑cash amortization .

What Went Well and What Went Wrong

• What Went Well
  • Court‑supervised restructuring path established: RSA reached with an ad hoc group of 2029 noteholders to materially delever via equitizing ~$1B of notes and provide DIP financing up to $125M to fund operations; RMR to continue managing assets .
  • Operational continuity: OPI stated it will honor agreements with tenants, brokers, and vendors during the process, limiting disruption to property operations .
  • Cost preservation action already taken pre‑quarter: suspension of common dividend to preserve approximately $3.0M annually .
• What Went Wrong
  • Financial distress escalated: formal Chapter 11 filing in the Southern District of Texas to implement the RSA, reflecting tightening liquidity and covenant constraints previously disclosed .
  • Equity risk heightened: plan term materials in cleansing documents indicate “Existing Equity Extinguished,” a negative outcome for common shareholders if confirmed .
  • Continued leasing and capital markets headwinds: prior‑quarter materials cited “substantial doubt” about going concern and limited refinancing capacity; nearly $280M of 2026 principal repayments highlighted on Q2 call .

Financial Results

Note: No standard Q3 2025 earnings release or transcript was located; OPI instead filed an 8‑K with cleansing materials and restructuring information on Oct 31, 2025 . Prior‑quarter figures provided below for trend context.

KPIs and balance sheet context (latest reported)

• Percent leased: 81.3% (Q1) → 81.2% (Q2) .
• Q2 leasing: 416k sq ft signed; WALT 5.4 years; +6.4% GAAP rent; renewals two‑thirds of volume .
• Liquidity: $78.2M cash at 6/30; $90.1M cash as of July 30 (post‑quarter update) .
• Same‑property cash basis NOI margin: 57.4% in Q2 (vs 61.0% prior‑year Q2), reflecting demand weakness .

Guidance Changes

Note: The October 31 cleansing materials include business plan projections explicitly labeled “NOT FINANCIAL GUIDANCE” and “PRELIMINARY DRAFT,” and should not be treated as guidance .

Earnings Call Themes & Trends

Management Commentary

• “As we have long telegraphed, OPI’s financial performance has materially declined as leasing challenges in the office sector have persisted… We have little room under our debt covenants.” – Yael Duffy, President & COO (Q2 call) .
• “We reported normalized FFO of $0.13 per share… For Q3, we expect normalized FFO to be between $0.07 and $0.09 per share… recurring G&A ~$5M; quarterly interest expense run rate ~$52M (cash ~$41M; non‑cash ~$11M).” – Brian Donley, CFO (Q2 call) .
• “OPI continues to conclude there is substantial doubt about its ability to continue as a going concern.” – Q2 earnings materials .
• “RMR will Continue as Manager and Operations will Continue Uninterrupted During Restructuring.” – RSA/Chapter 11 press release .

Q&A Highlights

• The available Q1 and Q2 transcripts contain prepared remarks; Q&A exchanges were not included in the retrieved transcripts, and we did not locate a Q3 call transcript. No Q&A highlights available from our sources – –.

Estimates Context

• We requested S&P Global consensus for Q3 2025 revenue and EPS; no consensus data was available in our feed, likely reflecting limited/withdrawn coverage around the restructuring. As such, no comparisons versus Street estimates are provided (GetEstimates returned no values for Q3 2025 for OPI).

Key Takeaways for Investors

• The quarter was eclipsed by the Oct 30–31 RSA and voluntary Chapter 11 filing to equitize ~$1B of notes and secure up to $125M of DIP financing; operations are expected to continue during the process .
• Cleansing materials indicate a contemplated outcome where existing equity is extinguished, underscoring severe downside risk to the common if that plan is confirmed .
• Liquidity and covenant constraints disclosed in prior quarters culminated in the in‑court solution; management had already suspended the dividend to preserve cash .
• Pre‑restructuring outlook for Q3 called for lower sequential normalized FFO ($0.07–$0.09), reflecting vacancies and seasonality; debt service burden remains high (quarterly interest expense run‑rate ~$52M) .
• Trading implications: equity value appears most sensitive to plan negotiations and court outcomes rather than near‑term operating metrics; debt instruments and DIP terms will drive recoveries by class – .
• Medium‑term thesis centers on post‑reorg capital structure and asset‑level leasing progress; near‑term property operations expected to continue under RMR management during the case .

Sources

• Oct 31, 2025 8‑K (Item 2.02 referencing Item 7.01 Cleansing Materials) and exhibits .
• RSA/Chapter 11 press release (Exhibit 99.1) .
• Q2 2025 results and supplemental (press materials and 8‑K exhibits): key financials, liquidity, leasing, margins .
• Q2 2025 earnings call (prepared remarks) .
• Q1 2025 earnings call (prepared remarks) –.
• Dividend suspension press release (July 10, 2025) .
• DIP term sheets and plan term materials in Cleansing Documents – .