RMR Group (NASDAQ: RMR) boosts H1 2026 profit on incentive fees and cost cuts
Filing Impact
Filing Sentiment
Form Type
10-Q
The RMR Group Inc. reported mixed results for the quarter ended March 31, 2026. Quarterly revenues fell to $145.6M from $166.7M, and net income attributable to RMR Inc. dropped to $1.0M, or $0.05 per diluted share, from $3.6M a year earlier.
For the first six months, total revenues declined to $326.1M from $386.1M, but net income attributable to RMR Inc. increased to $13.2M, or $0.77 per diluted share, versus $10.0M in the prior year period. Strong incentive fees of $23.6M and lower reimbursable costs helped offset weaker management revenues and higher interest expense.
Positive
- None.
Negative
- None.
Insights
Higher half-year profit driven by incentive fees despite softer core revenues.
RMR saw six-month revenues fall to $326.1M from $386.1M, mainly as reimbursable costs and management services declined with AlerisLife’s wind down and lower activity at certain clients. However, incentive fees surged to $23.6M, lifting operating income.
Cost controls were evident: compensation and benefits expenses for the half-year decreased by $7.0M, and reimbursable costs dropped by $82.3M. At the same time, interest expense more than tripled to $5.3M due to new mortgage debt on recently acquired properties.
Capital deployment continued, including increasing the SEVN stake to about 20.3% and acquiring additional residential interests, while a secured financing facility was fully repaid. Future filings will show how recurring incentive fees and new investments balance against lower traditional management revenues and higher financing costs.
Key Figures
Q2 2026 total revenues: $145.6M
H1 2026 total revenues: $326.1M
H1 2026 net income attributable to RMR Inc.: $13.2M
+5 more
8 metrics
Q2 2026 total revenues
$145.6M
Three months ended March 31, 2026 vs $166.7M in 2025
H1 2026 total revenues
$326.1M
Six months ended March 31, 2026 vs $386.1M in 2025
H1 2026 net income attributable to RMR Inc.
$13.2M
Six months ended March 31, 2026 vs $10.0M in 2025
Incentive fees
$23.6M
Six months ended March 31, 2026 vs $0.1M in 2025
Operating cash flow
$59.6M
Net cash provided by operating activities in H1 2026 vs $38.0M in 2025
Investment in SEVN at fair value
$37.6M
Market value as of March 31, 2026; about 20.3% ownership
Quarterly dividend per share
$0.45
Dividends per Class A and B-1 share for each quarter in H1 2026
Cash and cash equivalents
$80.1M
Total cash as of March 31, 2026 across RMR Inc. and RMR LLC
Key Terms
Managed Equity REITs, incentive business management fees, reimbursable costs, secured financing facility, +2 more
6 terms
Managed Equity REITs financial
"RMR LLC provides management services to four publicly traded equity real estate investment trusts, or REITs: Diversified Healthcare Trust..."
incentive business management fees financial
"We also may earn annual incentive business management fees from the Managed Equity REITs under the business management agreements."
Incentive business management fees are extra payments made to the people who run a business or investment on top of their regular fee when they meet specific performance targets—think of it like a bonus for hitting agreed goals. For investors this matters because such fees reduce net returns but can also align managers’ efforts with value creation; the exact targets, payout timing and caps determine whether they encourage healthy growth or risky short-term moves.
reimbursable costs financial
"Total reimbursable costs | 98,497 | 119,092 | 206,659 | 289,008"
secured financing facility financial
"we settled our outstanding obligations under our secured financing facility of $45,070, excluding accrued interest."
interest rate caps financial
"For certain of our mortgage loan agreements, we have interest rate cap agreements to manage our interest rate risk exposure."
An interest rate cap is a contractual ceiling that limits how high an interest rate can rise on a loan, bond or other floating-rate exposure, and can also be bought as a financial contract that pays if rates exceed a set level. It matters to investors because it reduces the risk of sharply higher borrowing costs or falling bond prices—think of it as a protective roof that keeps payments or losses from climbing past a known limit.
fair value hierarchy financial
"We determine the estimated fair value of financial assets and liabilities using the three-tier fair value hierarchy established by GAAP..."
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
For the quarterly period ended March 31, 2026
OR
Commission file number 001-37616
THE RMR GROUP INC.
(Exact Name of Registrant as Specified in Its Charter)
| (State of Organization) | (IRS Employer Identification No.) | ||||
(Address of Principal Executive Offices) (Zip Code)
Registrant’s Telephone Number, Including Area Code 617 -796-8230
Securities registered pursuant to Section 12(b) of the Act:
| Title Of Each Class | Trading Symbol | Name Of Each Exchange On Which Registered | ||||||||||||
| (Nasdaq Capital Market) | ||||||||||||||
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | ☒ | ||||||||||||
| Non-accelerated filer | ☐ | Smaller reporting company | ||||||||||||
| Emerging growth company | ||||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of May 1, 2026, there were 16,093,381 shares of Class A common stock, par value $0.001 per share, 1,000,000 shares of Class B-1 common stock, par value $0.001 per share, and 15,000,000 shares of Class B-2 common stock, par value $0.001 per share outstanding.
Table of Contents
THE RMR GROUP INC.
FORM 10-Q
March 31, 2026
Table of Contents
| Page | ||||||||
PART I. | Financial Information | |||||||
Item 1. | Financial Statements (unaudited) | |||||||
Condensed Consolidated Balance Sheets — March 31, 2026 and September 30, 2025 | 3 | |||||||
Condensed Consolidated Statements of Comprehensive Income — Three and Six Months Ended March 31, 2026 and 2025 | 4 | |||||||
Condensed Consolidated Statements of Shareholders’ Equity — Three and Six Months Ended March 31, 2026 and 2025 | 5 | |||||||
Condensed Consolidated Statements of Cash Flows — Six Months Ended March 31, 2026 and 2025 | 6 | |||||||
Notes to Condensed Consolidated Financial Statements | 7 | |||||||
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 25 | ||||||
Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 35 | ||||||
Item 4. | Controls and Procedures | 36 | ||||||
Warning Concerning Forward-Looking Statements | 37 | |||||||
PART II. | Other Information | |||||||
Item 1A. | Risk Factors | 39 | ||||||
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 39 | ||||||
Item 6. | Exhibits | 40 | ||||||
Signatures | 41 | |||||||
2
Table of Contents
PART I. Financial Information
Item 1. Financial Statements
The RMR Group Inc.
Condensed Consolidated Balance Sheets
(dollars in thousands, except per share amounts)
(unaudited)
| March 31, | September 30, | |||||||||||||
| 2026 | 2025 | |||||||||||||
| Assets | ||||||||||||||
| Cash and cash equivalents held by The RMR Group Inc. | $ | $ | ||||||||||||
| Cash and cash equivalents held by The RMR Group LLC | ||||||||||||||
| Due from related parties | ||||||||||||||
| Prepaid and other current assets | ||||||||||||||
Loans held for investment, net of allowance for credit losses of $ | ||||||||||||||
| Total current assets | ||||||||||||||
Loans held for investment, net of allowance for credit losses of $ | ||||||||||||||
Property and equipment, net of accumulated depreciation of $ | ||||||||||||||
| Due from related parties, net of current portion | ||||||||||||||
| Investments | ||||||||||||||
| Goodwill | ||||||||||||||
Intangible assets, net of accumulated amortization of $ | ||||||||||||||
| Operating lease right of use assets | ||||||||||||||
| Deferred tax asset | ||||||||||||||
Other assets, net of accumulated amortization of $ | ||||||||||||||
| Total assets | $ | $ | ||||||||||||
| Liabilities and Equity | ||||||||||||||
| Reimbursable accounts payable and accrued expenses | $ | $ | ||||||||||||
| Accounts payable and accrued expenses | ||||||||||||||
| Current portion of Earnout liability | ||||||||||||||
| Operating lease liabilities | ||||||||||||||
| Current portion of secured financing facility, net | ||||||||||||||
| Total current liabilities | ||||||||||||||
| Operating lease liabilities, net of current portion | ||||||||||||||
| Amounts due pursuant to tax receivable agreement, net of current portion | ||||||||||||||
| Employer compensation liability, net of current portion | ||||||||||||||
| Secured financing facility, net of current portion | ||||||||||||||
| Mortgage notes payable, net | ||||||||||||||
| Total liabilities | ||||||||||||||
| Commitments and contingencies | ||||||||||||||
| Equity: | ||||||||||||||
Class A common stock, $ | ||||||||||||||
Class B-1 common stock, $ | ||||||||||||||
Class B-2 common stock, $ | ||||||||||||||
| Additional paid in capital | ||||||||||||||
| Retained earnings | ||||||||||||||
| Cumulative other comprehensive income (loss) | ( | |||||||||||||
| Cumulative common distributions | ( | ( | ||||||||||||
| Total shareholders’ equity | ||||||||||||||
| Noncontrolling interest in The RMR Group LLC | ||||||||||||||
| Noncontrolling interest in other consolidated entities | ||||||||||||||
| Total noncontrolling interests | ||||||||||||||
| Total equity | ||||||||||||||
| Total liabilities and equity | $ | $ | ||||||||||||
See accompanying notes.
3
Table of Contents
The RMR Group Inc.
Condensed Consolidated Statements of Comprehensive Income
(amounts in thousands, except per share amounts)
(unaudited)
| Three Months Ended | Six Months Ended | |||||||||||||||||||||||||
| March 31, | March 31, | |||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
| Revenues: | ||||||||||||||||||||||||||
| Management services | $ | $ | $ | $ | ||||||||||||||||||||||
| Incentive fees | ||||||||||||||||||||||||||
| Advisory services | ||||||||||||||||||||||||||
| Total management, incentive and advisory services revenues | ||||||||||||||||||||||||||
| Income from loan investments, net | ||||||||||||||||||||||||||
| Rental property revenues | ||||||||||||||||||||||||||
| Reimbursable compensation and benefits | ||||||||||||||||||||||||||
| Reimbursable equity based compensation | ||||||||||||||||||||||||||
| Other reimbursable expenses | ||||||||||||||||||||||||||
| Total reimbursable costs | ||||||||||||||||||||||||||
| Total revenues | ||||||||||||||||||||||||||
| Expenses: | ||||||||||||||||||||||||||
| Compensation and benefits | ||||||||||||||||||||||||||
| Equity based compensation | ||||||||||||||||||||||||||
| Separation costs | ||||||||||||||||||||||||||
| Total compensation and benefits expense | ||||||||||||||||||||||||||
| General and administrative | ||||||||||||||||||||||||||
| Other reimbursable expenses | ||||||||||||||||||||||||||
| Rental property expenses | ||||||||||||||||||||||||||
| Transaction and acquisition related costs | ||||||||||||||||||||||||||
| Depreciation and amortization | ||||||||||||||||||||||||||
| Total expenses | ||||||||||||||||||||||||||
| Operating income | ||||||||||||||||||||||||||
| Interest income | ||||||||||||||||||||||||||
| Interest expense | ( | ( | ( | ( | ||||||||||||||||||||||
| Change in fair value of Earnout liability | ||||||||||||||||||||||||||
| Loss on investments | ( | ( | ( | ( | ||||||||||||||||||||||
| Loss on extinguishment of debt | ( | |||||||||||||||||||||||||
| Gain on sale of real estate | ||||||||||||||||||||||||||
| Income before income tax expense | ||||||||||||||||||||||||||
| Income tax expense | ( | ( | ( | ( | ||||||||||||||||||||||
| Net income | ||||||||||||||||||||||||||
| Net income attributable to noncontrolling interest in The RMR Group LLC | ( | ( | ( | ( | ||||||||||||||||||||||
| Net loss attributable to other noncontrolling interests | ||||||||||||||||||||||||||
| Net income attributable to The RMR Group Inc. | $ | $ | $ | $ | ||||||||||||||||||||||
| Other comprehensive income: | ||||||||||||||||||||||||||
| Unrealized gain on derivatives | ||||||||||||||||||||||||||
| Less: unrealized gain on derivatives attributable to noncontrolling interest in The RMR Group LLC | ( | ( | ||||||||||||||||||||||||
| Other comprehensive income attributable to The RMR Group Inc. | ||||||||||||||||||||||||||
| Comprehensive income attributable to The RMR Group Inc. | $ | $ | $ | $ | ||||||||||||||||||||||
| Weighted average common shares outstanding - basic | ||||||||||||||||||||||||||
| Weighted average common shares outstanding - diluted | ||||||||||||||||||||||||||
| Net income attributable to The RMR Group Inc. per common share - basic | $ | $ | $ | $ | ||||||||||||||||||||||
| Net income attributable to The RMR Group Inc. per common share - diluted | $ | $ | $ | $ | ||||||||||||||||||||||
Substantially all revenues are earned from related parties. See accompanying notes.
4
Table of Contents
The RMR Group Inc.
Condensed Consolidated Statements of Shareholders’ Equity
(dollars in thousands)
(unaudited)
| Noncontrolling Interests in: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Class A Common Stock | Class B-1 Common Stock | Class B-2 Common Stock | Additional Paid in Capital | Retained Earnings | Cumulative Other Comprehensive Income (Loss) | Cumulative Common Distributions | Total Shareholders' Equity | The RMR Group LLC | Other Consolidated Entities | Total Equity | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at September 30, 2025 | $ | $ | $ | $ | $ | $ | ( | $ | ( | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Share awards, net | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Tax distributions to member | — | — | — | — | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common share distributions | — | — | — | — | — | — | ( | ( | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive loss | — | — | — | — | — | ( | — | ( | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2025 | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Share awards, net | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Tax distributions to member | — | — | — | — | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common share distributions | — | — | — | — | — | — | ( | ( | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Capital contributions | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at March 31, 2026 | $ | $ | $ | $ | $ | $ | $ | ( | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at September 30, 2024 | $ | $ | $ | $ | $ | $ | $ | ( | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Share awards, net | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Tax distributions to member | — | — | — | — | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common share distributions | — | — | — | — | — | — | ( | ( | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Consolidation of investments | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2024 | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Share awards, net | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Tax distributions to member | — | — | — | — | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common share distributions | — | — | — | — | — | — | ( | ( | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Member distributions upon sale of 260 Woodstock | — | — | — | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at March 31, 2025 | $ | $ | $ | $ | $ | $ | $ | ( | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
See accompanying notes.
5
Table of Contents
The RMR Group Inc.
Condensed Consolidated Statements of Cash Flows
(dollars in thousands)
(unaudited)
| Six Months Ended March 31, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| Cash Flows from Operating Activities: | ||||||||||||||
| Net income | $ | $ | ||||||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||
| Depreciation and amortization | ||||||||||||||
| Amortization of interest rate caps | ||||||||||||||
| Straight line office rent | ( | |||||||||||||
| Amortization expense related to other assets | ||||||||||||||
| Reversal of credit losses | ( | ( | ||||||||||||
| Provision for deferred income taxes | ||||||||||||||
| Gain on sale of real estate | ( | |||||||||||||
| Change in fair value of Earnout liability | ( | ( | ||||||||||||
| Operating expenses paid in The RMR Group Inc. common shares | ||||||||||||||
| Distributions from investments | ||||||||||||||
| Loss on investments | ||||||||||||||
| Loss on extinguishment of debt | ||||||||||||||
| Changes in assets and liabilities: | ||||||||||||||
| Due from related parties | ( | |||||||||||||
| Prepaid and other current assets | ( | ( | ||||||||||||
| Reimbursable accounts payable and accrued expenses | ( | |||||||||||||
| Accounts payable and accrued expenses | ||||||||||||||
| Net cash provided by operating activities | ||||||||||||||
| Cash Flows from Investing Activities: | ||||||||||||||
| Proceeds from sale of loan investments | ||||||||||||||
| Additional funding of loan investments | ( | |||||||||||||
| Purchase of property and equipment | ( | ( | ||||||||||||
| Investment in residential fund | ( | ( | ||||||||||||
| Investment in joint ventures | ( | |||||||||||||
| Investment in Seven Hills Realty Trust | ( | |||||||||||||
| Proceeds from sale of property | ||||||||||||||
| Net cash provided by (used in) investing activities | ( | |||||||||||||
| Cash Flows from Financing Activities: | ||||||||||||||
| Repayments of secured financing facility | ( | |||||||||||||
| Proceeds from mortgage notes payable | ||||||||||||||
| Payment of deferred financing fees | ( | |||||||||||||
| Distributions to noncontrolling interests | ( | ( | ||||||||||||
| Distributions to common shareholders | ( | ( | ||||||||||||
| Capital contributions from noncontrolling interests | ||||||||||||||
| Member distributions upon sale of 260 Woodstock | ( | |||||||||||||
| Repurchase of common shares | ( | ( | ||||||||||||
| Net cash used in financing activities | ( | ( | ||||||||||||
| Increase (decrease) in cash and cash equivalents | ( | |||||||||||||
| Cash and cash equivalents at beginning of period | ||||||||||||||
| Cash and cash equivalents at end of period | $ | $ | ||||||||||||
| Supplemental Disclosures: | ||||||||||||||
| Income taxes paid | $ | $ | ||||||||||||
| Interest paid | $ | $ | ||||||||||||
| Non-cash investing and financing activities: | ||||||||||||||
| Recognition of right of use assets and related lease liabilities | $ | $ | ||||||||||||
| Property and equipment accrued, not paid | $ | $ | ||||||||||||
See accompanying notes.
6
Table of Contents
The RMR Group Inc.
Notes to Condensed Consolidated Financial Statements
(dollars in thousands, except per share amounts)
Note 1. Organization
The RMR Group Inc., or RMR Inc., is a holding company and substantially all of its business is conducted by its majority owned subsidiary, The RMR Group LLC, or RMR LLC. RMR Inc. is a Maryland corporation and RMR LLC is a Maryland limited liability company. RMR Inc. serves as the sole managing member of RMR LLC and, in that capacity, operates and controls the business and affairs of RMR LLC. In these condensed consolidated financial statements, unless otherwise indicated, “we”, “us” and “our” refer to RMR Inc. and its direct and indirect subsidiaries, including RMR LLC.
As of March 31, 2026, RMR Inc. owned 16,093,798 class A membership units of RMR LLC, or Class A Units, and 1,000,000 class B membership units of RMR LLC, or Class B Units. The aggregate RMR LLC membership units RMR Inc. owns represented 53.3 % of the economic interest of RMR LLC as of March 31, 2026. We refer to economic interest as the right of a holder of a Class A Unit or Class B Unit to share in distributions made by RMR LLC and, upon liquidation, dissolution or winding up of RMR LLC, to share in the assets of RMR LLC after payments to creditors. A wholly owned subsidiary of ABP Trust, a Maryland statutory trust, owns 15,000,000 redeemable Class A Units, representing 46.7 % of the economic interest of RMR LLC as of March 31, 2026, which is presented as noncontrolling interest in The RMR Group LLC within the condensed consolidated financial statements. Adam Portnoy, Chair of our Board, one of our Managing Directors and our President and Chief Executive Officer, is the sole trustee, an officer and the controlling shareholder of our controlling shareholder, ABP Trust, and owns all of ABP Trust’s voting securities.
RMR LLC provides management services to four publicly traded equity real estate investment trusts, or REITs: Diversified Healthcare Trust, or DHC, which owns senior living communities, medical office and life science properties and other healthcare related properties; Industrial Logistics Properties Trust, or ILPT, which owns and leases industrial and logistics properties; Office Properties Income Trust, or OPI, which owns and leases office properties primarily to single tenants and those with high credit quality characteristics; and Service Properties Trust, or SVC, which owns a diverse portfolio of service-focused retail net lease properties and hotels. DHC, ILPT, OPI and SVC are collectively referred to as the Managed Equity REITs.
RMR LLC’s wholly owned subsidiary, Tremont Realty Capital LLC, or Tremont, an investment adviser registered with the Securities and Exchange Commission, or SEC, provides advisory services for Seven Hills Realty Trust, or SEVN. SEVN is a publicly traded mortgage REIT that focuses on originating and investing in first mortgage loans secured by middle market and transitional commercial real estate.
RMR LLC provides management services to Sonesta International Hotels Corporation, or Sonesta, a privately owned franchisor and operator of hotels, resorts and cruise ships in the United States, Canada, Latin America, the Caribbean and the Middle East, and many of the U.S. hotels that Sonesta operates are owned by SVC.
RMR LLC also provides management services to AlerisLife Inc., or AlerisLife, which operated senior living communities, many of which were owned by DHC. In September 2025, AlerisLife announced that it had entered into agreements to transition the management of its senior living communities to third party operators and in January 2026 completed the sale of all of its assets. AlerisLife will continue to wind down its business and operations. RMR LLC will continue to provide management services through the wind down period.
RMR LLC provides management services through certain of its subsidiaries to multiple private funds, joint ventures and the underlying residential real estate assets of the funds, as well as property management services to third party owners. The residential real estate we manage through these subsidiaries are presented as RMR Residential in these condensed consolidated financial statements.
In addition, RMR LLC provides management services to other private capital vehicles, including ABP Trust and other private entities that own commercial real estate, of which certain of our Managed Equity REITs may own minority equity interests. These other private clients, along with Sonesta, AlerisLife and clients of RMR Residential are collectively referred to as the Private Capital clients.
7
Table of Contents
The RMR Group Inc.
Notes to Condensed Consolidated Financial Statements
(dollars in thousands, except per share amounts)
Note 2. Basis of Presentation
The accompanying condensed consolidated financial statements are unaudited. Certain information and disclosures required by U.S. generally accepted accounting principles, or GAAP, for complete financial statements have been condensed or omitted. We believe the disclosures made are adequate to make the information presented not misleading. However, the accompanying condensed consolidated financial statements should be read in conjunction with the financial statements and notes contained in our Annual Report on Form 10-K for the fiscal year ended September 30, 2025, or our 2025 Annual Report. In the opinion of management, all adjustments considered necessary for a fair statement of results for the interim period have been included. All intercompany transactions and balances with or among our consolidated subsidiaries have been eliminated. Our operating results for interim periods are not necessarily indicative of the results that may be expected for the full year.
Preparation of these condensed consolidated financial statements in conformity with GAAP requires our management to make certain estimates and assumptions that may affect the amounts reported in these condensed consolidated financial statements and related notes. Significant estimates in the accompanying condensed consolidated financial statements include the revenue recognized during the reporting periods, the estimation of fair values of certain assets and liabilities and purchase price allocations. The actual results could differ from these estimates.
Income Taxes. On December 14, 2023, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires public entities to enhance their annual income tax disclosures by requiring i) consistent categories and greater disaggregation of information in the rate reconciliation and ii) income taxes paid disaggregated by jurisdiction. The implementation of this ASU will not have a material impact on our consolidated financial statements and we will apply the requirements of ASU 2023-09 for our fiscal year ending September 30, 2026.
Comprehensive Income. In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires public entities to disclose specific expense categories such as employee compensation, depreciation and intangible asset amortization. These details must be presented in a tabular format in the notes to financial statements for both interim and annual reporting periods. ASU 2024-03 is required to be applied prospectively but may be applied retrospectively, and is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted. We are currently evaluating the impact that ASU 2024-03 will have on our consolidated financial statements.
Internal Use Software. In September 2025, the FASB issued ASU 2025-06, Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software, which requires companies to start capitalizing eligible software costs when management has authorized and committed to funding the software project, and it is probable that the project will be completed and the software will be used to perform the function intended. ASU 2025-06 is effective for annual reporting periods beginning after December 15, 2027 and interim reporting periods within those annual reporting periods, with early adoption permitted. We are currently evaluating the impact that ASU 2025-06 will have on our consolidated financial statements.
Derivatives and Hedging. In September 2025, the FASB issued ASU 2025-07, Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606), which clarifies the application of derivative accounting to certain contracts and updates the guidance for share based noncash consideration received from a customer in exchange for goods and services. Specifically, this ASU stipulates that entities should apply the guidance in Topic 606 to contracts with share based noncash consideration from a customer unless and until the entity’s right to receive or retain the share based noncash consideration is unconditional. ASU 2025-07 is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods within those annual reporting periods, with early adoption permitted. We are currently evaluating the impact that ASU 2025-07 will have on our consolidated financial statements.
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The RMR Group Inc.
Notes to Condensed Consolidated Financial Statements
(dollars in thousands, except per share amounts)
Derivatives and Hedging. In November 2025, the FASB issued ASU 2025-09, Derivatives and Hedging (Topic 815), which expands the hedged risks permitted to be aggregated in a group of individual forecasted transactions in a cash flow hedge, provides a model to facilitate the application of cash flow hedge accounting to forecasted interest payments on variable rate debt instruments and expands hedge accounting for forecasted purchases and sales of nonfinancial assets, among other improvements. ASU 2025-09 is effective for the annual reporting periods beginning after December 15, 2026 and interim reporting periods within those annual reporting periods, with early adoption permitted. We are currently evaluating the impact that ASU 2025-09 will have on our consolidated financial statements.
Note 3. Related Person Transactions
Adam Portnoy, Chair of our Board, one of our Managing Directors and our President and Chief Executive Officer, is the sole trustee, an officer and the controlling shareholder of our controlling shareholder, ABP Trust, and owns all of ABP Trust’s voting securities. Certain of RMR Inc.’s executive officers serve as trustees or directors of certain companies to which we provide management services. Jeffrey C. Leer, an Executive Vice President of RMR LLC, became a co-chief executive officer of Sonesta effective April 1, 2026. For more information regarding these relationships, please see our definitive Proxy Statement for our 2026 Annual Meeting of Shareholders.
The Managed Equity REITs and SEVN have no employees. RMR LLC provides or arranges for all the personnel, overhead and services required for the operation of the Managed Equity REITs pursuant to management agreements with them. All but one of the officers of the Managed Equity REITs are officers or employees of RMR LLC. All the officers, overhead and required office space of SEVN are provided or arranged by Tremont. All of SEVN’s officers are officers or employees of Tremont or RMR LLC. One of the executive officers of AlerisLife and one of the executive officers of Sonesta are officers and employees of RMR LLC. Certain of our executive officers are also managing trustees of the Managed Equity REITs and SEVN.
Additional information about our related person transactions appears in Note 11, Shareholders’ Equity, and in our 2025 Annual Report.
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The RMR Group Inc.
Notes to Condensed Consolidated Financial Statements
(dollars in thousands, except per share amounts)
Revenues from Related Parties
For the three months ended March 31, 2026 and 2025, we recognized revenues from related parties as set forth in the following table:
| Three Months Ended March 31, 2026 | Three Months Ended March 31, 2025 | |||||||||||||||||||||||||||||||||||||
| Total | Total | |||||||||||||||||||||||||||||||||||||
| Management, | Management, | |||||||||||||||||||||||||||||||||||||
| Incentive | Incentive | |||||||||||||||||||||||||||||||||||||
| and Advisory | Total | and Advisory | Total | |||||||||||||||||||||||||||||||||||
| Services | Reimbursable | Total | Services | Reimbursable | Total | |||||||||||||||||||||||||||||||||
| Revenues | Costs | Revenues | Revenues | Costs | Revenues | |||||||||||||||||||||||||||||||||
| Perpetual Capital: | ||||||||||||||||||||||||||||||||||||||
| DHC | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
| ILPT | ||||||||||||||||||||||||||||||||||||||
| OPI | ||||||||||||||||||||||||||||||||||||||
| SVC | ||||||||||||||||||||||||||||||||||||||
| Total Managed Equity REITs | ||||||||||||||||||||||||||||||||||||||
| SEVN | ||||||||||||||||||||||||||||||||||||||
| Private Capital: | ||||||||||||||||||||||||||||||||||||||
| Sonesta | ||||||||||||||||||||||||||||||||||||||
RMR Residential | ||||||||||||||||||||||||||||||||||||||
| Other private entities | ||||||||||||||||||||||||||||||||||||||
| Total revenues from related parties | ||||||||||||||||||||||||||||||||||||||
| Income from loan investments, net | — | — | — | — | ||||||||||||||||||||||||||||||||||
| Rental property revenues | — | — | — | — | ||||||||||||||||||||||||||||||||||
| Total revenues from unrelated parties | ||||||||||||||||||||||||||||||||||||||
| Total revenues | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
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Notes to Condensed Consolidated Financial Statements
(dollars in thousands, except per share amounts)
For the six months ended March 31, 2026 and 2025, we recognized revenues from related parties as set forth in the following table:
| Six Months Ended March 31, 2026 | Six Months Ended March 31, 2025 | |||||||||||||||||||||||||||||||||||||
| Total | Total | |||||||||||||||||||||||||||||||||||||
| Management, | Management, | |||||||||||||||||||||||||||||||||||||
| Incentive | Incentive | |||||||||||||||||||||||||||||||||||||
| and Advisory | Total | and Advisory | Total | |||||||||||||||||||||||||||||||||||
| Services | Reimbursable | Total | Services | Reimbursable | Total | |||||||||||||||||||||||||||||||||
| Revenues | Costs | Revenues | Revenues | Costs | Revenues | |||||||||||||||||||||||||||||||||
| Perpetual Capital: | ||||||||||||||||||||||||||||||||||||||
| DHC | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
| ILPT | ||||||||||||||||||||||||||||||||||||||
| OPI | ||||||||||||||||||||||||||||||||||||||
| SVC | ||||||||||||||||||||||||||||||||||||||
| Total Managed Equity REITs | ||||||||||||||||||||||||||||||||||||||
| SEVN | ||||||||||||||||||||||||||||||||||||||
| Private Capital: | ||||||||||||||||||||||||||||||||||||||
| Sonesta | ||||||||||||||||||||||||||||||||||||||
RMR Residential | ||||||||||||||||||||||||||||||||||||||
| Other private entities | ||||||||||||||||||||||||||||||||||||||
| Total revenues from related parties | ||||||||||||||||||||||||||||||||||||||
| Income from loan investments, net | — | — | — | — | ||||||||||||||||||||||||||||||||||
| Rental property revenues | — | — | — | — | ||||||||||||||||||||||||||||||||||
| Total revenues from unrelated parties | ||||||||||||||||||||||||||||||||||||||
| Total revenues | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
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The RMR Group Inc.
Notes to Condensed Consolidated Financial Statements
(dollars in thousands, except per share amounts)
Amounts Due from Related Parties
The following table presents amounts due from related parties as of the dates indicated:
| March 31, 2026 | September 30, 2025 | |||||||||||||||||||||||||||||||||||||
| Accounts | Reimbursable | Accounts | Reimbursable | |||||||||||||||||||||||||||||||||||
| Receivable | Costs | Total | Receivable | Costs | Total | |||||||||||||||||||||||||||||||||
| Perpetual Capital: | ||||||||||||||||||||||||||||||||||||||
| DHC | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
| ILPT | ||||||||||||||||||||||||||||||||||||||
| OPI | ||||||||||||||||||||||||||||||||||||||
| SVC | ||||||||||||||||||||||||||||||||||||||
| Total Managed Equity REITs | ||||||||||||||||||||||||||||||||||||||
| SEVN | ||||||||||||||||||||||||||||||||||||||
| Private Capital: | ||||||||||||||||||||||||||||||||||||||
RMR Residential | ||||||||||||||||||||||||||||||||||||||
| Sonesta | ||||||||||||||||||||||||||||||||||||||
| Other private entities | ||||||||||||||||||||||||||||||||||||||
| $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||
Leases
As of March 31, 2026, RMR LLC leased office space for use as our headquarters and local offices from ABP Trust and certain of our Managed Equity REITs. We incurred rental expense under related party leases aggregating $1,346 and $1,334 for the three months ended March 31, 2026 and 2025, respectively, and $2,725 and $2,732 for the six months ended March 31, 2026 and 2025, respectively.
Tax-Related Payments
Pursuant to our tax receivable agreement with ABP Trust, RMR Inc. pays to ABP Trust 85.0 % of the amount of cash savings, if any, in U.S. federal, state and local income tax or franchise tax that RMR Inc. realizes as a result of (a) the increases in tax basis attributable to RMR Inc.’s dealings with ABP Trust and (b) tax benefits related to imputed interest deemed to be paid by RMR Inc. as a result of the tax receivable agreement. As of March 31, 2026, our condensed consolidated balance sheet reflects a liability related to the tax receivable agreement of $18,478 , including $2,552 classified as a current liability in accounts payable and accrued expenses that we expect to pay to ABP Trust during the fourth quarter of fiscal year 2026.
Pursuant to the RMR LLC operating agreement, RMR LLC made required quarterly tax distributions to holders of its membership units based on each membership unit holder’s respective ownership percentage at the time of distribution as follows:
| Three Months Ended March 31, | Six Months Ended March 31, | |||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
| Tax distributions to RMR Inc. | $ | $ | $ | $ | ||||||||||||||||||||||
| Tax distributions to ABP Trust | ||||||||||||||||||||||||||
| $ | $ | $ | $ | |||||||||||||||||||||||
The amounts distributed to us were eliminated in our condensed consolidated financial statements, and the amounts distributed to ABP Trust reduced its noncontrolling interest. We use funds from these distributions to pay certain of our U.S. federal and state income tax liabilities and to pay part of our obligations under the tax receivable agreement.
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The RMR Group Inc.
Notes to Condensed Consolidated Financial Statements
(dollars in thousands, except per share amounts)
Separation Arrangements
We may enter into retirement agreements with certain of our former executive officers. Pursuant to these agreements, we make various cash payments and accelerate the vesting of unvested shares of RMR Inc. previously awarded to these retiring officers. We may also enter into separation arrangements from time to time with executive and non-executive officers and employees of ours. Certain costs associated with separation arrangements, for which there remain no substantive performance obligations, are recognized in our condensed consolidated statements of comprehensive income as separation costs.
For the three months ended March 31, 2026 and 2025, we recognized separation costs for certain officers and employees of $1,293 and $3,455 , respectively, including cash separation costs of $1,269 and $3,178 , respectively, and equity based separation costs of $24 and $277 , respectively. For the six months ended March 31, 2026 and 2025, we recognized separation costs for certain officers and employees of $2,672 and $3,455 , respectively, including cash separation costs of $2,619 and $3,178 , respectively, and equity based separation costs of $53 and $277 , respectively.
Purchase of SVC Common Shares
In connection with an underwritten public offering of SVC common shares of beneficial interest, $.01 par value per share, or SVC Common Shares, by SVC pursuant to an underwriting agreement, dated as of March 31, 2026, between SVC and Yorkville Securities, LLC, as representative of the underwriters named therein, or the SVC Offering, we, through RMR LLC, purchased, in April 2026, 41,666,666 SVC Common Shares from the underwriters at a price equal to the public offering price of $1.20 per share, for an aggregate purchase price of approximately $50,000 . In connection with the SVC Offering, RMR LLC entered into a lock-up agreement with the underwriters, pursuant to which RMR LLC has agreed, without the prior written consent of Yorkville Securities, LLC and subject to certain exceptions, not to sell, transfer or otherwise dispose of any of SVC Common Shares for a period of 90 days after March 31, 2026, the date of the underwriting agreement. As of April 2, 2026, RMR LLC beneficially owned approximately 6.4 % of the outstanding SVC Common Shares and Adam Portnoy, including through ABP Trust, beneficially owned approximately 6.8 % of the outstanding SVC Common Shares.
Note 4. Revenue Recognition
Revenues from services we provide are recognized as earned over time as the services provided represent performance obligations that are satisfied over time. Substantially all revenues are earned from related parties.
Management Agreements
We are party to a business management and a property management agreement with each Managed Equity REIT. We also may earn annual incentive business management fees from the Managed Equity REITs under the business management agreements. We earn management fees from the Private Capital clients pursuant to management agreements with ABP Trust regarding AlerisLife and Sonesta and from certain other Private Capital clients, as prescribed in the applicable management agreements. Tremont is primarily compensated pursuant to its management agreement with SEVN and may also earn an incentive fee under that agreement.
The following table summarizes the fees we earned pursuant to our management agreements with the Managed Equity REITs and SEVN:
| Three Months Ended March 31, | Six Months Ended March 31, | |||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
| Base business management revenues | $ | $ | $ | $ | ||||||||||||||||||||||
| Property management revenues | ||||||||||||||||||||||||||
| Construction supervision revenues | ||||||||||||||||||||||||||
| Incentive business management revenues | ||||||||||||||||||||||||||
| Advisory services revenues | ||||||||||||||||||||||||||
| $ | $ | $ | $ | |||||||||||||||||||||||
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The RMR Group Inc.
Notes to Condensed Consolidated Financial Statements
(dollars in thousands, except per share amounts)
Amendment to Business Management Agreement with SVC — Effective January 1, 2026, RMR LLC and SVC amended their business management agreement to replace the benchmark index used in the calculation of incentive business management fees. Pursuant to this amendment, for periods beginning on or after January 1, 2026, the MSCI U.S. REIT Diversified Index will be used to calculate benchmark returns per share for purposes of determining any incentive business management fee payable by SVC to RMR LLC, and for periods ending prior to January 1, 2026, the MSCI U.S. REIT/Hotel & Resort REIT Index will continue to be used.
The following table summarizes the fees we earned pursuant to our management agreements with the Private Capital clients:
| Three Months Ended March 31, | Six Months Ended March 31, | |||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
| Base business management revenues | $ | $ | $ | $ | ||||||||||||||||||||||
| Property management revenues | ||||||||||||||||||||||||||
| Construction supervision revenues | ||||||||||||||||||||||||||
| $ | $ | $ | $ | |||||||||||||||||||||||
Reimbursable Costs — We determined we control the services provided by third parties for certain of our clients and therefore account for the cost of these services and the related reimbursement revenue on a gross basis. These revenues include reimbursements for the cost of services our employees provide pursuant to our property management agreements, awards of common shares by our clients directly to certain of our officers and employees and certain other reimbursable expenses.
Other Revenues
We may also enter into arrangements or agreements that earn certain other revenues, such as acquisition fees and carried interest revenues.
Acquisition fee revenues are recognized in management services in our condensed consolidated statements of comprehensive income and we recognized $664 not
We did not recognize any carried interest revenues for the three or six months ended March 31, 2026 and 2025.
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The RMR Group Inc.
Notes to Condensed Consolidated Financial Statements
(dollars in thousands, except per share amounts)
Note 5. Loans Held for Investment, Net
In July 2024, we originated two floating rate mortgage loans secured by properties in Revere, MA and Wayne, PA. In November 2025, we sold these loans to SEVN for $61,733 , excluding closing costs, and used $45,070 to settle our outstanding obligations under our secured financing facility. For further information regarding the secured financing facility, see Note 6, Indebtedness.
The table below provides overall statistics for our loan portfolio as of September 30, 2025. There were no loans outstanding at March 31, 2026.
| September 30, 2025 | ||||||||||||||
| Number of loans | ||||||||||||||
| Total loan commitments | $ | |||||||||||||
Unfunded loan commitments (1) | $ | |||||||||||||
| Principal balance | $ | |||||||||||||
| Weighted average coupon rate | % | |||||||||||||
Weighted average all in yield (2) | % | |||||||||||||
| Weighted average floor | % | |||||||||||||
Weighted average maximum maturity (years) (3) | ||||||||||||||
(1)Unfunded loan commitments are primarily used to finance property improvements and leasing capital and are generally funded over the term of the loan.
(2)All in yield represents the yield on a loan, including amortization of deferred fees over the initial term of the loan.
(3)Maximum maturity assumed all borrower loan extension options had been exercised, which options are subject to the borrower meeting certain conditions.
Note 6. Indebtedness
Mortgage Notes Payable, Net
As of March 31, 2026, three of our residential properties were encumbered by mortgage notes with an aggregate principal amount of $139,757 . These mortgage loans require monthly payments of interest only until maturity. Deferred financing fees incurred in connection with these mortgage financings are amortized over the term of the respective mortgage agreement and are recognized as a component of interest expense in our condensed consolidated statements of comprehensive income. For further information regarding the interest rate caps on certain of our mortgage notes, see Note 7, Derivatives and Hedging Activities, and Note 10, Fair Value of Financial Instruments.
Senior Secured Revolving Credit Facility
We maintain a $100,000 senior secured revolving credit facility, or our revolving credit facility, governed by a credit agreement, or our credit agreement. Our revolving credit facility is secured by certain of our assets and existing management agreements and provides us with enhanced financial flexibility as we continue to invest in our private capital initiatives and position ourselves to capitalize on long term growth opportunities. We can borrow, repay and reborrow funds available under our revolving credit facility until maturity, and no principal repayments on borrowings under our credit agreement are due until maturity. The maturity date of our credit agreement is January 22, 2028 and, subject to the payment of an extension fee and meeting certain other requirements, we can extend the maturity date of our revolving credit facility by one year . Interest is payable on borrowings under our credit agreement at a rate of the Secured Overnight Financing Rate, or SOFR, plus a margin of 225 basis points. We are also required to pay a fee of 50 basis points per annum on the amount of unused lending commitments. Our credit agreement contains a number of covenants, including covenants that require us to maintain certain financial ratios and restrict our ability to incur additional debt in excess of calculated amounts. Availability of borrowings under our credit agreement is subject to our satisfying certain financial covenants and other credit facility conditions. As of March 31, 2026 and May 1, 2026, we had $0 and $25,000 , respectively, outstanding on our revolving credit facility.
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The RMR Group Inc.
Notes to Condensed Consolidated Financial Statements
(dollars in thousands, except per share amounts)
Secured Financing Facility, Net
In September 2024, we, through our Tremont managed vehicle, entered into a master repurchase agreement with UBS AG, or UBS, or our UBS Master Repurchase Agreement, for a facility with an aggregate maximum capacity of $200,000 , pursuant to which we could sell to UBS, and later repurchase, commercial mortgage loans.
The table below summarizes our secured financing facility as of September 30, 2025:
| Principal Balance | Carrying Value (1) | Coupon Rate (2) | Remaining Maturity (years) | Maturity Date | Collateral Principal Balance | |||||||||||||||||||||||||||||||||
| Revere, MA (Hotel) | $ | $ | % | 7/1/2026 | $ | |||||||||||||||||||||||||||||||||
| Wayne, PA (Industrial) | % | 7/18/2027 | ||||||||||||||||||||||||||||||||||||
| Total/weighted average | $ | $ | % | $ | ||||||||||||||||||||||||||||||||||
(1)Deferred financing costs of $484 remained unamortized as of September 30, 2025.
(2)The coupon rate was determined using SOFR plus a spread ranging from 2.85 % to 2.90 %, as applicable, for the respective borrowings under our secured financing facility as of the applicable date.
As of September 30, 2025, we were in compliance with the covenants and other terms of the agreements that govern our secured financing facility.
In November 2025, we settled our outstanding obligations under our secured financing facility of $45,070 , excluding accrued interest. We terminated our secured financing facility and recognized a loss on extinguishment of debt of $452 during the six months ended March 31, 2026.
Note 7. Derivatives and Hedging Activities
For certain of our mortgage loan agreements, we have interest rate cap agreements to manage our interest rate risk exposure. The only risk currently managed by us using derivative instruments is our interest rate risk. The use of derivative financial instruments carries certain risks, including the risk that the counterparties to these contractual arrangements are not able to perform under the agreements. To mitigate this risk, we only enter into derivative financial instruments with counterparties with high credit ratings and with major financial institutions with which we or our related parties may also have other financial relationships. We do not anticipate that any of the counterparties will fail to meet their obligations.
Our interest rate cap agreements are designated as cash flow hedges of interest rate risk and are measured on a recurring basis at fair value. See Note 10, Fair Value of Financial Instruments for further information regarding the fair value of our interest rate caps. The following table summarizes the terms of our outstanding interest rate cap agreements as reported in prepaid and other current assets on our condensed consolidated balance sheets:
| Fair Value at | ||||||||||||||||||||||||||||||||
| Underlying Instrument | Maturity Date | Strike Rate | Notional Amount | March 31, 2026 | September 30, 2025 | |||||||||||||||||||||||||||
| Raleigh, NC mortgage loan | 8/15/2028 | $ | $ | $ | ||||||||||||||||||||||||||||
| Orlando, FL mortgage loan | 10/1/2028 | $ | ||||||||||||||||||||||||||||||
| $ | $ | |||||||||||||||||||||||||||||||
Interest rate caps designated as cash flow hedges involve the receipt of variable amounts from a counterparty if interest rates rise above the strike rate on the contract for an upfront premium. For derivatives designated and qualifying as cash flow hedges of interest rate risk, the gain or loss on the derivative is recognized in cumulative other comprehensive income and subsequently reclassified into interest expense in the same period during which the hedge transaction affects earnings. Gains and losses on the derivative representing the hedge components excluded from the assessment of effectiveness are recognized over the life of the hedge on a systematic and rational basis, as documented at hedge inception in accordance with our accounting policy election. The earnings recognition of excluded components is presented in interest expense. Amounts reported in cumulative other comprehensive income related to derivatives will be reclassified to interest expense as payments are made on our applicable debt. Over the next 12 months, we estimate that an additional $48 will be reclassified from other comprehensive income as a decrease to interest expense.
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The RMR Group Inc.
Notes to Condensed Consolidated Financial Statements
(dollars in thousands, except per share amounts)
The following table summarizes the activity related to our cash flow hedges within cumulative other comprehensive income for the three and six months ended March 31, 2026. There was no activity related to our cash flow hedges within other comprehensive income for the three and six months ended March 31, 2025 as these mortgages were entered into in the fourth fiscal quarter of 2025:
| Three Months Ended March 31, 2026 | Six Months Ended March 31, 2026 | |||||||||||||
| Amount of gain recognized on derivatives in other comprehensive income | $ | $ | ||||||||||||
| Amount of gain reclassified from cumulative other comprehensive income (loss) into interest expense | $ | $ | ||||||||||||
| Total amount of interest expense presented in the consolidated statements of comprehensive income | $ | ( | $ | ( | ||||||||||
Note 8. Investments
Seven Hills Realty Trust
In November 2025, SEVN commenced a transferable rights offering to raise gross proceeds of approximately $65,200 whereby shareholders of record of its common shares of beneficial interest, or SEVN common shares, received, at no charge, one transferable subscription right for every one SEVN common share held, pursuant to which such shareholders could purchase, at a specified subscription price, one SEVN common share for every two subscription rights held. We, through Tremont, participated in the rights offering by (i) exercising our pro rata subscription rights based on our existing ownership in SEVN by purchasing 854,029 shares for $7,387 and (ii) purchasing 2,015,748 additional SEVN common shares not otherwise sold in the rights offering for $17,436 , subject to the terms and conditions of a backstop agreement.
As of March 31, 2026, Tremont owned 4,577,835 , or approximately 20.3 %, of SEVN’s outstanding common shares. We account for our investment in SEVN using the equity method of accounting because we are deemed to exert significant influence, but not control, over SEVN’s most significant activities. We elected the fair value option to account for our investment in SEVN and determined fair value using the closing price of SEVN’s common shares as of the end of the period, which is a Level 1 fair value input. The aggregate market value of our investment in SEVN as of March 31, 2026 and September 30, 2025, based on quoted market prices, was $37,630 and $17,610 , respectively. The unrealized loss in our condensed consolidated statements of comprehensive income related to our investment in SEVN was $1,831 and $409 for the three months ended March 31, 2026 and 2025, respectively, and $3,044 and $990 for the six months ended March 31, 2026 and 2025, respectively. We received distributions from SEVN of $1,282 and $598 for the three months ended March 31, 2026 and 2025 and $1,760 and $1,196 for the six months ended March 31, 2026 and 2025.
Carroll MF VII, LLC and Carroll Multifamily Venture VII, LP
As of March 31, 2026, we owned a 14.3 % investment in Carroll MF VII, LLC, or MF VII, a co-investment vehicle managed by RMR Residential. We consolidated the financial position and results of operations for MF VII for the three and six months ended March 31, 2026 and 2025 because we are deemed to exert significant influence and control over MF VII’s most significant activities. In March 2026, we funded a capital call of $851 to MF VII and certain of our employees made capital contributions to MF VII of $139 . These contributions fully offset an outstanding contributions receivable to MF VII of $714 .
As of March 31, 2026 and September 30, 2025, MF VII owned a $2,517 and $3,156 , respectively, investment in Carroll Multifamily Venture VII, LP, or Fund VII. MF VII accounts for its investment in Fund VII using the equity method of accounting because it is deemed to exert significant influence, but not control, over Fund VII’s most significant activities. MF VII elected the fair value option to account for its investment in Fund VII and determines fair value using unobservable Level 3 inputs. The unrealized loss in our condensed consolidated statements of comprehensive income related to MF VII’s investment in Fund VII was $467 and $300 for the three months ended March 31, 2026 and 2025, respectively, and $915 and $790 for the six months ended March 31, 2026 and 2025, respectively.
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The RMR Group Inc.
Notes to Condensed Consolidated Financial Statements
(dollars in thousands, except per share amounts)
Joint Ventures
We own equity interests in two joint ventures: (i) a 225 -unit residential community in Pompano Beach, FL, or the Pompano JV, and (ii) a 400 -unit residential community in Sunrise, FL, or the Sunrise JV, which were acquired for an aggregate purchase price of $190,100 . As general partner of both joint ventures, we made aggregate equity contributions of $11,151 with institutional investors funding the remaining equity. We are entitled to construction supervision and property management fees pursuant to management agreements with these joint ventures and are also entitled to a carried interest if we meet certain investment returns. We account for our investments in the Pompano JV and Sunrise JV using the equity method of accounting because we are deemed to exert significant influence, but not control, over these joint ventures’ most significant activities. We elected the fair value option to account for our investments and determined their fair values using unobservable Level 3 inputs. There was no change in the fair value of our investments in the Pompano JV and Sunrise JV for the three and six months ended March 31, 2026 and 2025.
In April 2026, we closed a joint venture acquisition of a 406 -unit residential portfolio in Greenwich, CT for a purchase price of approximately $350,000 . As a co-general partner, we acquired a 5 % interest, or an equity contribution of $6,418 , with an institutional investor and a co-general partner funding the remaining equity. In conjunction with this transaction, we are entitled to an acquisition fee, as well as ongoing asset management, construction management and property management fees. We are also entitled to a carried interest if we meet certain investment returns.
For further information regarding the fair value of these investments and the inputs used, see Note 10, Fair Value of Financial Instruments. For further information regarding our investment in SVC in April 2026, see Note 3, Related Person Transactions.
Note 9. Income Taxes
We are the sole managing member of RMR LLC. We are a corporation subject to U.S. federal and state income tax with respect to our allocable share of any taxable income of RMR LLC and its tax consolidated subsidiaries. RMR LLC is treated as a partnership for U.S. federal and most applicable state and local income tax purposes. As a partnership, RMR LLC is generally not subject to U.S. federal and most state income taxes. Any taxable income or loss generated by RMR LLC is passed through to and included in the taxable income or loss of its members, including RMR Inc. and ABP Trust, based on each member’s respective ownership percentage. During the three and six months ended March 31, 2026 and 2025, all of our income before taxes was derived solely from domestic operations.
For the three months ended March 31, 2026 and 2025, we recognized estimated income tax expense of $589 and $1,378 , respectively, which includes $437 and $986 , respectively, of U.S. federal income tax and $152 and $392 , respectively, of state income taxes. For the six months ended March 31, 2026 and 2025, we recognized estimated income tax expense of $5,250 and $3,854 , respectively, which includes $3,867 and $2,798 , respectively, of U.S. federal income tax and $1,383 and $1,056 , respectively, of state income taxes.
A reconciliation of the statutory income tax rate to the effective tax rate is as follows:
| Three Months Ended March 31, | Six Months Ended March 31, | |||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
| Income taxes computed at the federal statutory rate | % | % | % | % | ||||||||||||||||||||||
| State taxes, net of federal benefit | % | % | % | % | ||||||||||||||||||||||
| Permanent items | % | % | % | % | ||||||||||||||||||||||
| Uncertain tax position reserve, net of federal benefit | % | % | % | % | ||||||||||||||||||||||
| Net income attributable to noncontrolling interest | ( | % | ( | % | ( | % | ( | % | ||||||||||||||||||
| Total | % | % | % | % | ||||||||||||||||||||||
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The RMR Group Inc.
Notes to Condensed Consolidated Financial Statements
(dollars in thousands, except per share amounts)
The components of the deferred tax assets as of March 31, 2026 and 2025 are entirely comprised of the outside basis difference in our partnership interest in RMR LLC.
ASC 740, Income Taxes, provides a model for how a company should recognize, measure and present in its financial statements uncertain tax positions that have been taken or are expected to be taken with respect to all open years and in all significant jurisdictions. Pursuant to this topic, we recognize a tax benefit only if it is “more likely than not” that a particular tax position will be sustained upon examination or audit. To the extent the “more likely than not” standard has been satisfied, the benefit associated with a tax position is measured as the largest amount that is greater than 50.0% likely to be realized upon settlement.
We continue to be subject to federal, state, and local income tax audit examinations for open periods, which can lead to adjustments to our provision for income taxes, the resolution of which may be highly uncertain. We have accrued an uncertain tax position reserve related to an ongoing examination with a state jurisdiction for the fiscal years ending September 30, 2019 and thereafter, the impact of which is not significant to our condensed consolidated financial statements. Our policy is to include interest expense related to unrecognized tax benefits within the provision for income taxes in our condensed consolidated statements of comprehensive income. We do not reasonably expect any significant changes relating to our unrecognized tax benefits within the next twelve months.
Note 10. Fair Value of Financial Instruments
We determine the estimated fair value of financial assets and liabilities using the three-tier fair value hierarchy established by GAAP, which prioritizes observable inputs in active markets when measuring fair value. The three levels of inputs that may be used to measure fair value in order of priority are as follows:
Level 1 — Inputs include quoted prices in active markets for identical assets or liabilities that we have the ability to access.
Level 2 — Inputs include quoted prices in markets that are less active or inactive or for which all significant inputs are observable, either directly or indirectly.
Level 3 — Inputs include unobservable prices and are supported by little or no market activity and are significant to the overall fair value measurement.
As of March 31, 2026 and September 30, 2025, the fair values of our financial instruments, which include cash and cash equivalents, amounts due from related parties, accounts payable and accrued expenses and reimbursable accounts payable and accrued expenses, were not materially different from their carrying values due to the short term nature of these financial instruments.
We estimate the fair value of our fixed rate mortgage note payable, loans held for investment and, until its termination in November 2025, outstanding principal balances under our secured financing facility using significant unobservable inputs (Level 3), including discounted cash flow analyses and prevailing market interest rates.
The table below provides information regarding these financial instruments not carried at fair value in our condensed consolidated balance sheets as of March 31, 2026 and September 30, 2025:
As of March 31, 2026 | As of September 30, 2025 | |||||||||||||||||||||||||
Carrying Value | Fair Value | Carrying Value | Fair Value | |||||||||||||||||||||||
Loans held for investment | $ | $ | $ | $ | ||||||||||||||||||||||
Secured financing facility (1) | $ | $ | $ | $ | ||||||||||||||||||||||
Mortgage notes payable (2) | $ | $ | $ | $ | ||||||||||||||||||||||
(1)This facility was terminated in November 2025.
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The RMR Group Inc.
Notes to Condensed Consolidated Financial Statements
(dollars in thousands, except per share amounts)
On a recurring basis, we measure certain financial assets and financial liabilities at fair value based upon quoted market prices.
The following tables present our financial assets and liabilities that have been measured at fair value on a recurring basis:
| March 31, 2026 | ||||||||||||||||||||||||||||||||
| Total | Level 1 | Level 2 | Level 3 | |||||||||||||||||||||||||||||
| Due from related parties related to equity based payment awards | $ | $ | $ | $ | ||||||||||||||||||||||||||||
| Investment in SEVN | $ | $ | $ | $ | ||||||||||||||||||||||||||||
| Investment in Fund VII | $ | $ | $ | $ | ||||||||||||||||||||||||||||
Investment in joint ventures | $ | $ | $ | $ | ||||||||||||||||||||||||||||
| Employer compensation liability related to equity based payment awards | $ | $ | $ | $ | ||||||||||||||||||||||||||||
| Interest rate caps | $ | $ | $ | $ | ||||||||||||||||||||||||||||
| September 30, 2025 | ||||||||||||||||||||||||||
| Total | Level 1 | Level 2 | Level 3 | |||||||||||||||||||||||
| Due from related parties related to equity based payment awards | $ | $ | $ | $ | ||||||||||||||||||||||
| Investment in SEVN | $ | $ | $ | $ | ||||||||||||||||||||||
| Investment in Fund VII | $ | $ | $ | $ | ||||||||||||||||||||||
| Investment in joint ventures | $ | $ | $ | $ | ||||||||||||||||||||||
| Employer compensation liability related to equity based payment awards | $ | $ | $ | $ | ||||||||||||||||||||||
| Interest rate caps | $ | $ | $ | $ | ||||||||||||||||||||||
| Earnout liability | $ | $ | $ | $ | ||||||||||||||||||||||
The fair values of our interest rate caps are based on prevailing market prices in secondary markets for similar derivative contracts as of the measurement date.
The following tables present additional information about the valuation techniques and significant unobservable inputs for financial assets and liabilities that are measured at fair value and categorized within Level 3:
| March 31, 2026 | |||||||||||||||||||||||
Fair Value | Valuation Technique | Unobservable Input | Range | ||||||||||||||||||||
| Investment in Fund VII | $ | Discounted cash flow | Discount rates | ||||||||||||||||||||
Exit capitalization rates | |||||||||||||||||||||||
Holding period | |||||||||||||||||||||||
Investment in joint ventures | $ | Discounted cash flow | Discount rate | ||||||||||||||||||||
| Exit capitalization rates | |||||||||||||||||||||||
| Holding period | |||||||||||||||||||||||
| September 30, 2025 | |||||||||||||||||||||||
Fair Value | Valuation Technique | Unobservable Input | Range | ||||||||||||||||||||
| Investment in Fund VII | $ | Discounted cash flow | Discount rates | ||||||||||||||||||||
Exit capitalization rates | |||||||||||||||||||||||
Holding period | |||||||||||||||||||||||
Investment in joint ventures | $ | Discounted cash flow | Unlevered IRR | ||||||||||||||||||||
| Exit capitalization rates | |||||||||||||||||||||||
| Holding period | |||||||||||||||||||||||
Earnout liability | $ | Monte Carlo | Capital deployment volatility | ||||||||||||||||||||
Discount rate | |||||||||||||||||||||||
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The RMR Group Inc.
Notes to Condensed Consolidated Financial Statements
(dollars in thousands, except per share amounts)
The tables below present a summary of the changes in fair value of our investment in Fund VII and Earnout liability measured on a recurring basis:
| Three Months Ended March 31, | Six Months Ended March 31, | |||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
Beginning balance | $ | $ | $ | $ | ||||||||||||||||||||||
| Contributions, net of receivable | ||||||||||||||||||||||||||
Changes in fair value for our investment in Fund VII | ( | ( | ( | |||||||||||||||||||||||
Ending balance | $ | $ | $ | $ | ||||||||||||||||||||||
| Three Months Ended March 31, | Six Months Ended March 31, | |||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
Beginning balance | $ | $ | $ | $ | ||||||||||||||||||||||
Changes in fair value for our Earnout liability | ( | ( | ( | |||||||||||||||||||||||
Ending balance | $ | $ | $ | $ | ||||||||||||||||||||||
Note 11. Shareholders’ Equity
On March 26, 2026, we awarded 6,426 of our Class A Common Shares, valued at $15.56 per share, the closing price of our Class A Common Shares on The Nasdaq Stock Market LLC, or Nasdaq, on that day, to each of our six Directors as part of his or her annual compensation for serving as a Director. For the three and six months ended March 31, 2026, we recognized general and administrative expense of $600
Equity based compensation expense related to shares awarded to certain officers and employees was $623 and $474 for the three months ended March 31, 2026 and 2025, respectively, and $1,243 and $1,030 for the six months ended March 31, 2026 and 2025.
The aggregate value of 2,935 and 1,377 Class A Common Shares repurchased during the three months ended March 31, 2026 and 2025 was $46 and $23 , respectively. The aggregate value of 5,263 and 1,671 Class A Common Shares repurchased during the six months ended March 31, 2026 and 2025 was $81 and $29 , respectively. We recognize the repurchase of Class A Common Shares as a decrease to additional paid in capital included in shareholders’ equity in our condensed consolidated balance sheets.
Distributions
During the six months ended March 31, 2026 and 2025, we declared and paid dividends on our Class A Common Shares and Class B-1 common stock, or Class B-1 Common Shares, as follows:
| Declaration | Record | Paid | Distributions | Total | ||||||||||||||||||||||
| Date | Date | Date | Per Common Share | Distributions | ||||||||||||||||||||||
| Six Months Ended March 31, 2026 | ||||||||||||||||||||||||||
| 10/9/2025 | 10/27/2025 | 11/13/2025 | $ | $ | ||||||||||||||||||||||
| 1/15/2026 | 1/26/2026 | 2/19/2026 | ||||||||||||||||||||||||
| $ | $ | |||||||||||||||||||||||||
| Six Months Ended March 31, 2025 | ||||||||||||||||||||||||||
| 10/16/2024 | 10/28/2024 | 11/14/2024 | $ | $ | ||||||||||||||||||||||
| 1/16/2025 | 1/27/2025 | 2/20/2025 | ||||||||||||||||||||||||
| $ | $ | |||||||||||||||||||||||||
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The RMR Group Inc.
Notes to Condensed Consolidated Financial Statements
(dollars in thousands, except per share amounts)
These dividends were funded by cash accumulated at RMR Inc. and by distributions from RMR LLC to holders of its membership units as follows:
| Distributions Per | Total | RMR LLC | RMR LLC | |||||||||||||||||||||||||||||||||||
| Declaration | Record | Paid | RMR LLC | RMR LLC | Distributions | Distributions | ||||||||||||||||||||||||||||||||
| Date | Date | Date | Membership Unit | Distributions | to RMR Inc. | to ABP Trust | ||||||||||||||||||||||||||||||||
| Six Months Ended March 31, 2026 | ||||||||||||||||||||||||||||||||||||||
| 10/9/2025 | 10/27/2025 | 11/13/2025 | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
| 1/15/2026 | 1/26/2026 | 2/19/2026 | ||||||||||||||||||||||||||||||||||||
| $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||
| Six Months Ended March 31, 2025 | ||||||||||||||||||||||||||||||||||||||
| 10/16/2024 | 10/28/2024 | 11/14/2024 | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
| 1/16/2025 | 1/27/2025 | 2/20/2025 | ||||||||||||||||||||||||||||||||||||
| $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||
As of March 31, 2026 and September 30, 2025, we had cash and cash equivalents of $80,104 and $62,297 , respectively, of which $17,380 and $19,478 , respectively, was held by RMR Inc., and $62,724 and $42,819 , respectively, was held by RMR LLC and its subsidiaries.
On April 9, 2026, we declared a quarterly dividend on our Class A Common Shares and Class B-1 Common Shares to our shareholders of record as of April 21, 2026, in the amount of $0.45 per Class A Common Share and Class B-1 Common Share, or $7,692 . This dividend will be partially funded by a distribution from RMR LLC to holders of its membership units in the amount of $0.32 per unit, or $10,270 , of which $5,470 will be distributed to us based on our aggregate ownership of 17,093,798 membership units of RMR LLC and $4,800 will be distributed to ABP Trust based on its ownership of 15,000,000 membership units of RMR LLC. The remainder of this dividend will be funded with cash held by RMR Inc. We expect to pay this dividend on or about May 14, 2026.
Note 12. Per Common Share Amounts
We calculate basic earnings per share using the two-class method. Unvested Class A Common Shares awarded to our employees are deemed participating securities for purposes of calculating basic earnings per common share because they have dividend rights. Under the two-class method, we allocate earnings proportionately to vested Class A Common Shares and Class B-1 Common Shares outstanding and unvested Class A Common Shares outstanding for the period. Accordingly, earnings attributable to unvested Class A Common Shares are excluded from basic earnings per share under the two-class method. Our Class B-2 common stock of RMR Inc., or Class B-2 Common Shares, which are paired with ABP Trust’s Class A Units, have no independent economic interest in RMR Inc. and thus are not included as common shares outstanding for purposes of calculating basic earnings per common share.
Diluted earnings per share is calculated using the treasury stock method for unvested Class A Common Shares and the if-converted method for Class B-2 Common Shares. The 15,000,000 Class A Units that we do not own may be redeemed for our Class A Common Shares on a one -for-one basis, or upon such redemption, we may elect to pay cash instead of issuing Class A Common Shares. Upon redemption of a Class A Unit, the Class B-2 Common Share “paired” with such unit is canceled for no additional consideration and the related noncontrolling interest is eliminated, which may be dilutive. For the three months ended March 31, 2026 and 2025 and the six months ended March 31, 2026, the assumed redemption is anti-dilutive to earnings per share. For the six months ended March 31, 2025, the assumed redemption is dilutive to earnings per share.
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The RMR Group Inc.
Notes to Condensed Consolidated Financial Statements
(dollars in thousands, except per share amounts)
The calculation of basic and diluted earnings per share for the three and six months ended March 31, 2026 and 2025, is as follows (amounts in thousands, except per share amounts):
| Three Months Ended March 31, | Six Months Ended March 31, | |||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
| Numerators: | ||||||||||||||||||||||||||
| Net income attributable to The RMR Group Inc. | $ | $ | $ | $ | ||||||||||||||||||||||
| Less: income attributable to unvested participating securities | ( | ( | ( | ( | ||||||||||||||||||||||
Net income attributable to The RMR Group Inc. used in calculating basic EPS | ||||||||||||||||||||||||||
| Effect of dilutive securities: | ||||||||||||||||||||||||||
| Add back: income attributable to unvested participating securities | ||||||||||||||||||||||||||
Add back: net income attributable to noncontrolling interest in The RMR Group LLC (1) | ||||||||||||||||||||||||||
Add back: income tax expense | ||||||||||||||||||||||||||
Less: income tax expense assuming redemption of noncontrolling interest’s Class A Units for Class A Common Shares (2) | ( | |||||||||||||||||||||||||
| Net income used in calculating diluted EPS | $ | $ | $ | $ | ||||||||||||||||||||||
| Denominators: | ||||||||||||||||||||||||||
| Common shares outstanding | ||||||||||||||||||||||||||
| Less: unvested participating securities and incremental impact of weighted average | ( | ( | ( | ( | ||||||||||||||||||||||
Weighted average common shares outstanding - basic | ||||||||||||||||||||||||||
| Effect of dilutive securities: | ||||||||||||||||||||||||||
| Add: assumed redemption of noncontrolling interest’s Class A Units for Class A Common Shares | ||||||||||||||||||||||||||
| Add: incremental unvested shares | ||||||||||||||||||||||||||
| Weighted average common shares outstanding - diluted | ||||||||||||||||||||||||||
Net income attributable to The RMR Group Inc. per common share - basic | $ | $ | $ | $ | ||||||||||||||||||||||
| Net income attributable to The RMR Group Inc. per common share - diluted | $ | $ | $ | $ | ||||||||||||||||||||||
(1)Net loss attributable to other noncontrolling interests is not adjusted when calculating diluted earnings per share.
(2)Income tax expense assumes the hypothetical conversion of the noncontrolling interest in RMR LLC, which results in an estimated tax rate of 28.9 % for the six months ended March 31, 2025.
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The RMR Group Inc.
Notes to Condensed Consolidated Financial Statements
(dollars in thousands, except per share amounts)
Note 13. Net Income Attributable to RMR Inc.
Net income attributable to RMR Inc. for the three and six months ended March 31, 2026 and 2025, is calculated as follows:
| Three Months Ended March 31, | Six Months Ended March 31, | |||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
| Income before income tax expense | $ | $ | $ | $ | ||||||||||||||||||||||
| RMR Inc. franchise tax expense and interest income | ( | ( | ( | ( | ||||||||||||||||||||||
| Net income before noncontrolling interest | ||||||||||||||||||||||||||
| Net income attributable to noncontrolling interest in The RMR Group LLC | ( | ( | ( | ( | ||||||||||||||||||||||
| Net loss attributable to other noncontrolling interests | ||||||||||||||||||||||||||
| Net income attributable to RMR Inc. before income tax expense | ||||||||||||||||||||||||||
| Income tax expense attributable to RMR Inc. | ( | ( | ( | ( | ||||||||||||||||||||||
| RMR Inc. franchise tax expense and interest income | ||||||||||||||||||||||||||
| Net income attributable to RMR Inc. | $ | $ | $ | $ | ||||||||||||||||||||||
Note 14. Segment Reporting
We manage our business on a consolidated basis and therefore have one
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following information should be read in conjunction with our condensed consolidated financial statements and accompanying notes included in Part I, Item 1 of this Quarterly Report on Form 10-Q and with our 2025 Annual Report.
OVERVIEW (dollars in thousands)
RMR Inc. is a holding company and substantially all of its business is conducted by RMR LLC. RMR Inc. has no employees, and the personnel and various services it requires to operate are provided by RMR LLC. RMR LLC manages a diverse portfolio of real estate and real estate related businesses.
Business Environment and Outlook
The continuation and growth of our business depends upon our ability to manage the Managed Equity REITs, SEVN and our private capital clients so as to maintain, grow and increase the value of their businesses and to successfully expand our business through the execution of new business ventures and additional investments. Our business and the businesses of our clients generally follow the business cycle of the U.S. real estate industry, but with certain property type and regional geographic variations. Typically, as the general U.S. economy expands, commercial real estate occupancies increase and new real estate development occurs; new development frequently leads to increased real estate supply and reduced occupancies; and then the cycle repeats. These general trends can be impacted by property type characteristics or regional factors; for example, demographic factors such as the aging U.S. population, the growth of e-commerce retail sales or net population migration across different geographic regions can slow, accelerate, overwhelm or otherwise impact general cyclical trends. Because of such multiple factors, we believe it is often possible to grow real estate based businesses in selected property types or geographic areas despite general national trends.
Despite some macroeconomic uncertainty, both we and our clients will continue to balance our pursuit of growth of our and our clients’ businesses by executing, on behalf of our clients, sensible capital recycling or business arrangement restructurings in an attempt to help our clients prudently manage leverage and increased operating costs. We also look to reposition their portfolios and businesses when circumstances warrant such changes or when other more desirable opportunities are identified.
We are also actively investing in our capital formation capabilities and continuously engaging with institutional investors seeking to deploy capital into North American commercial real estate.
Managed Equity REITs
The base business management fees we earn from the Managed Equity REITs are calculated monthly in accordance with the applicable business management agreement and are based on a percentage of the lower of (i) the average historical cost of each REIT’s properties and (ii) each REIT’s average market capitalization. The property management fees we earn from the Managed Equity REITs are principally based on a percentage of the gross rents collected at certain managed properties owned by the Managed Equity REITs, excluding rents or other revenues from hotels, senior living communities, travel centers and wellness centers, which are separately managed by Sonesta or a third party. Also, under the terms of the property management agreements, we receive construction supervision fees in connection with certain construction activities undertaken at the properties owned by the Managed Equity REITs based on a percentage of the cost of such construction. In connection with OPI’s voluntary chapter 11 petitions on October 30, 2025, we entered into a restructuring support agreement with OPI and certain of its lenders pursuant to which we have agreed to terms for new management agreements with OPI to take effect upon the effectiveness of OPI’s plan of reorganization. Pursuant to the management agreement term sheet, the initial term of the new management agreements will be five years, RMR LLC will be paid an annual fee under the new business management agreement of $14.0 million payable per year for the first two years, and RMR LLC will be paid a 3% property management fee and a 5% construction supervision fee under the new property management agreement, consistent with the existing property management agreement. The current management agreements between OPI and RMR LLC will remain in effect during the pendency of the OPI chapter 11 cases, and RMR LLC will continue to manage OPI’s business in the ordinary course. For further information regarding the fees we earn, see Note 4, Revenue Recognition, to our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.
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Table of Contents
The following table presents for each Managed Equity REIT a summary of its primary strategy and the lesser of the historical cost of its assets under management and its market capitalization as of March 31, 2026 and 2025, as applicable:
| Lesser of Historical Cost of Assets | ||||||||||||||||||||
| Under Management or | ||||||||||||||||||||
| Total Market Capitalization as of | ||||||||||||||||||||
| March 31, | ||||||||||||||||||||
| REIT | Primary Strategy | 2026 | 2025 | |||||||||||||||||
| DHC | Senior living communities, medical office and life science properties and other healthcare related properties | $ | 4,050,533 | $ | 3,469,383 | |||||||||||||||
| ILPT | Industrial and logistics properties | 4,587,892 | 4,530,731 | |||||||||||||||||
| OPI | Office properties primarily leased to single tenants and those with high credit quality characteristics | 2,508,302 | 2,468,647 | |||||||||||||||||
| SVC | Service-focused retail net lease properties and hotels | 5,477,874 | 6,211,123 | |||||||||||||||||
| $ | 16,624,601 | $ | 16,679,884 | |||||||||||||||||
A Managed Equity REIT’s historical cost of assets under management includes the real estate it owns and its consolidated assets invested directly or indirectly in equity interests in real estate (including acquisition related costs which may be allocated to intangibles or are unallocated), all before reserves for depreciation, amortization, impairment charges or other similar non-cash reserves. A Managed Equity REIT’s average market capitalization includes the average value of the Managed Equity REIT’s outstanding common equity value during the period, plus the daily weighted average of each of the aggregate liquidation preference of preferred shares, if any, and the principal amount of consolidated indebtedness during the period. The table above presents for each Managed Equity REIT, the lesser of the historical cost of its assets under management and its market capitalization as of the end of each period.
The basis on which our base business management fees is calculated for the three and six months ended March 31, 2026 and 2025 may differ from the basis at the end of the periods presented in the table above. As of March 31, 2026, the market capitalization was lower than the historical cost of assets under management for each of the Managed Equity REITs; the historical cost of assets under management for DHC, ILPT, OPI and SVC as of March 31, 2026, were $6,736,597, $5,709,492, $5,351,019 and $9,914,548, respectively.
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The fee revenues we earned from the Managed Equity REITs for the three and six months ended March 31, 2026 and 2025 are set forth below:
| Three Months Ended March 31, 2026 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Base | Property | Incentive | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Business | Management | Construction | Business | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Management | and Other | Supervision | Management | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| REIT | Revenues | Revenues | Revenues | Revenues | Total | |||||||||||||||||||||||||||||||||||||||||||||||||||
| DHC | $ | 4,400 | $ | 1,054 | $ | 326 | $ | — | $ | 5,780 | ||||||||||||||||||||||||||||||||||||||||||||||
| ILPT | 5,837 | 3,349 | 81 | — | 9,267 | |||||||||||||||||||||||||||||||||||||||||||||||||||
OPI | 2,771 | 2,683 | 240 | — | 5,694 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| SVC | 6,333 | 2,770 | 128 | — | 9,231 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| $ | 19,341 | $ | 9,856 | $ | 775 | $ | — | $ | 29,972 | |||||||||||||||||||||||||||||||||||||||||||||||
| Three Months Ended March 31, 2025 | ||||||||||||||||||||||||||||||||
| Base | Property | Incentive | ||||||||||||||||||||||||||||||
| Business | Management | Construction | Business | |||||||||||||||||||||||||||||
| Management | and Other | Supervision | Management | |||||||||||||||||||||||||||||
| REIT | Revenues | Revenues | Revenues | Revenues | Total | |||||||||||||||||||||||||||
| DHC | $ | 3,913 | $ | 1,286 | $ | 233 | $ | — | $ | 5,432 | ||||||||||||||||||||||
| ILPT | 5,760 | 3,257 | 41 | — | 9,058 | |||||||||||||||||||||||||||
OPI | 2,843 | 2,668 | 350 | — | 5,861 | |||||||||||||||||||||||||||
| SVC | 7,062 | 2,086 | 657 | — | 9,805 | |||||||||||||||||||||||||||
| $ | 19,578 | $ | 9,297 | $ | 1,281 | $ | — | $ | 30,156 | |||||||||||||||||||||||
| Six Months Ended March 31, 2026 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Base | Property | Incentive | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Business | Management | Construction | Business | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Management | and Other | Supervision | Management | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| REIT | Revenues | Revenues | Revenues | Revenues | Total | |||||||||||||||||||||||||||||||||||||||||||||||||||
| DHC | $ | 8,770 | $ | 2,271 | $ | 601 | $ | 17,905 | $ | 29,547 | ||||||||||||||||||||||||||||||||||||||||||||||
| ILPT | 11,788 | 6,676 | 207 | 5,679 | 24,350 | |||||||||||||||||||||||||||||||||||||||||||||||||||
OPI | 5,561 | 5,162 | 547 | — | 11,270 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| SVC | 13,204 | 4,927 | 1,012 | — | 19,143 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| $ | 39,323 | $ | 19,036 | $ | 2,367 | $ | 23,584 | $ | 84,310 | |||||||||||||||||||||||||||||||||||||||||||||||
| Six Months Ended March 31, 2025 | ||||||||||||||||||||||||||||||||
| Base | Property | Incentive | ||||||||||||||||||||||||||||||
| Business | Management | Construction | Business | |||||||||||||||||||||||||||||
| Management | and Other | Supervision | Management | |||||||||||||||||||||||||||||
| REIT | Revenues | Revenues | Revenues | Revenues | Total | |||||||||||||||||||||||||||
| DHC | $ | 8,198 | $ | 2,631 | $ | 1,197 | $ | — | $ | 12,026 | ||||||||||||||||||||||
| ILPT | 11,678 | 6,479 | 211 | — | 18,368 | |||||||||||||||||||||||||||
OPI | 5,830 | 5,575 | 1,002 | — | 12,407 | |||||||||||||||||||||||||||
| SVC | 14,271 | 3,594 | 2,046 | — | 19,911 | |||||||||||||||||||||||||||
| $ | 39,977 | $ | 18,279 | $ | 4,456 | $ | — | $ | 62,712 | |||||||||||||||||||||||
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Other Clients
We provide business management services to Sonesta and AlerisLife. Sonesta manages and franchises hotels, resorts and cruise ships in the United States, Latin America, the Caribbean and the Middle East; many of the U.S. hotels that Sonesta operates are owned by SVC. AlerisLife operated senior living communities throughout the U.S., many of which were owned by DHC. In September 2025, AlerisLife announced that it had entered into agreements to transition the management of its senior living communities to third party operators and in January 2026 completed the sale of all of its assets. AlerisLife will continue to wind down its business and operations. RMR LLC will continue to provide management services through the wind down period. Generally, our fees earned from business management services to Sonesta and AlerisLife are based on a percentage of certain revenues.
In addition, we also provide management services to certain other Private Capital clients, including high-quality institutional investor relationships we maintain through RMR Residential, and earn fees based on a percentage of average invested capital, as defined in the applicable agreements, property management fees based on a percentage of rents collected from managed properties and construction supervision fees based on a percentage of the cost of construction activities. RMR Residential also provides us the potential to generate a carried interest on any new co-investments in the future.
Our management fee revenues from services to these clients for the three and six months ended March 31, 2026 and 2025, are set forth in the following tables:
| Three Months Ended March 31, 2026 | Three Months Ended March 31, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Base | Property | Base | Property | |||||||||||||||||||||||||||||||||||||||||||||||
| Business | Management | Construction | Business | Management | Construction | |||||||||||||||||||||||||||||||||||||||||||||
| Management | and Other | Supervision | Management | and Other | Supervision | |||||||||||||||||||||||||||||||||||||||||||||
| Revenues | Revenues | Revenues | Total | Revenues | Revenues | Revenues | Total | |||||||||||||||||||||||||||||||||||||||||||
| Sonesta | $ | 1,485 | $ | — | $ | — | $ | 1,485 | $ | 2,021 | $ | — | $ | — | $ | 2,021 | ||||||||||||||||||||||||||||||||||
| RMR Residential | 118 | 3,273 | 188 | 3,579 | 120 | 4,873 | 266 | 5,259 | ||||||||||||||||||||||||||||||||||||||||||
| Other private entities | 2,961 | 2,260 | 408 | 5,629 | 4,438 | 2,239 | 248 | 6,925 | ||||||||||||||||||||||||||||||||||||||||||
| SEVN | — | 18 | — | 18 | — | 21 | — | 21 | ||||||||||||||||||||||||||||||||||||||||||
| $ | 4,564 | $ | 5,551 | $ | 596 | $ | 10,711 | $ | 6,579 | $ | 7,133 | $ | 514 | $ | 14,226 | |||||||||||||||||||||||||||||||||||
| Six Months Ended March 31, 2026 | Six Months Ended March 31, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Base | Property | Base | Property | |||||||||||||||||||||||||||||||||||||||||||||||
| Business | Management | Construction | Business | Management | Construction | |||||||||||||||||||||||||||||||||||||||||||||
| Management | and Other | Supervision | Management | and Other | Supervision | |||||||||||||||||||||||||||||||||||||||||||||
| Revenues | Revenues | Revenues | Total | Revenues | Revenues | Revenues | Total | |||||||||||||||||||||||||||||||||||||||||||
| Sonesta | $ | 3,588 | $ | — | $ | — | $ | 3,588 | $ | 4,245 | $ | — | $ | — | $ | 4,245 | ||||||||||||||||||||||||||||||||||
| RMR Residential | 236 | 6,007 | 687 | 6,930 | 274 | 9,398 | 752 | 10,424 | ||||||||||||||||||||||||||||||||||||||||||
| Other private entities | 6,279 | 4,486 | 539 | 11,304 | 8,867 | 3,864 | 411 | 13,142 | ||||||||||||||||||||||||||||||||||||||||||
| SEVN | — | 36 | 8 | 44 | — | 37 | 5 | 42 | ||||||||||||||||||||||||||||||||||||||||||
| $ | 10,103 | $ | 10,529 | $ | 1,234 | $ | 21,866 | $ | 13,386 | $ | 13,299 | $ | 1,168 | $ | 27,853 | |||||||||||||||||||||||||||||||||||
Advisory Business
Tremont provides advisory services to SEVN, a publicly traded mortgage REIT that focuses on originating and investing in first mortgage loans secured by middle market and transitional commercial real estate. Tremont is primarily compensated pursuant to its management agreement with SEVN based on a percentage of equity, as defined in the applicable agreement.
Tremont earned advisory services revenue of $1,349 and $1,104 for the three months ended March 31, 2026 and 2025, respectively, and $2,526 and $2,245 for the six months ended March 31, 2026 and 2025, respectively. Tremont also earned incentive fees from SEVN of $0 and $19 for the three months ended March 31, 2026 and 2025, respectively, and $41 and $87 for the six months ended March 31, 2026 and 2025, respectively.
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RESULTS OF OPERATIONS (dollars in thousands)
Three Months Ended March 31, 2026, Compared to the Three Months Ended March 31, 2025
The following table presents the changes in our operating results for the three months ended March 31, 2026 compared to the three months ended March 31, 2025:
| Three Months Ended March 31, | ||||||||||||||||||||||||||
| 2026 | 2025 | $ Change | % Change | |||||||||||||||||||||||
| Revenues: | ||||||||||||||||||||||||||
| Management services | $ | 40,683 | $ | 44,382 | $ | (3,699) | (8.3)% | |||||||||||||||||||
| Incentive fees | — | 19 | (19) | (100.0)% | ||||||||||||||||||||||
| Advisory services | 1,349 | 1,104 | 245 | 22.2% | ||||||||||||||||||||||
| Total management, incentive and advisory services revenues | 42,032 | 45,505 | (3,473) | (7.6)% | ||||||||||||||||||||||
| Income from loan investments, net | — | 646 | (646) | (100.0)% | ||||||||||||||||||||||
| Rental property revenues | 5,100 | 1,425 | 3,675 | n/m | ||||||||||||||||||||||
| Reimbursable compensation and benefits | 16,814 | 20,611 | (3,797) | (18.4)% | ||||||||||||||||||||||
| Reimbursable equity based compensation | 2,402 | 1,132 | 1,270 | 112.2% | ||||||||||||||||||||||
| Other reimbursable expenses | 79,281 | 97,349 | (18,068) | (18.6)% | ||||||||||||||||||||||
| Total reimbursable costs | 98,497 | 119,092 | (20,595) | (17.3)% | ||||||||||||||||||||||
| Total revenues | 145,629 | 166,668 | (21,039) | (12.6)% | ||||||||||||||||||||||
| Expenses: | ||||||||||||||||||||||||||
| Compensation and benefits | 37,690 | 42,051 | (4,361) | (10.4)% | ||||||||||||||||||||||
| Equity based compensation | 3,025 | 1,606 | 1,419 | 88.4% | ||||||||||||||||||||||
| Separation costs | 1,293 | 3,455 | (2,162) | (62.6)% | ||||||||||||||||||||||
| Total compensation and benefits expense | 42,008 | 47,112 | (5,104) | (10.8)% | ||||||||||||||||||||||
| General and administrative | 10,748 | 11,246 | (498) | (4.4)% | ||||||||||||||||||||||
| Other reimbursable expenses | 79,281 | 97,349 | (18,068) | (18.6)% | ||||||||||||||||||||||
| Rental property expenses | 1,876 | 395 | 1,481 | n/m | ||||||||||||||||||||||
| Transaction and acquisition related costs | 227 | 549 | (322) | (58.7)% | ||||||||||||||||||||||
| Depreciation and amortization | 4,448 | 2,457 | 1,991 | 81.0% | ||||||||||||||||||||||
| Total expenses | 138,588 | 159,108 | (20,520) | (12.9)% | ||||||||||||||||||||||
| Operating income | 7,041 | 7,560 | (519) | (6.9)% | ||||||||||||||||||||||
| Interest income | 516 | 1,377 | (861) | (62.5)% | ||||||||||||||||||||||
| Interest expense | (2,611) | (871) | (1,740) | 199.8% | ||||||||||||||||||||||
| Change in fair value of Earnout liability | — | 1,270 | (1,270) | (100.0)% | ||||||||||||||||||||||
| Loss on investments | (2,298) | (709) | (1,589) | n/m | ||||||||||||||||||||||
| Gain on sale of real estate | — | 445 | (445) | (100.0)% | ||||||||||||||||||||||
| Income before income tax expense | 2,648 | 9,072 | (6,424) | (70.8)% | ||||||||||||||||||||||
| Income tax expense | (589) | (1,378) | 789 | 57.3% | ||||||||||||||||||||||
| Net income | 2,059 | 7,694 | (5,635) | (73.2)% | ||||||||||||||||||||||
| Net income attributable to noncontrolling interest in The RMR Group LLC | (1,454) | (4,337) | 2,883 | 66.5% | ||||||||||||||||||||||
| Net loss attributable to other noncontrolling interests | 402 | 259 | 143 | (55.2)% | ||||||||||||||||||||||
| Net income attributable to The RMR Group Inc. | $ | 1,007 | $ | 3,616 | $ | (2,609) | (72.2)% | |||||||||||||||||||
n/m - not meaningful
Management services revenue. Management services revenue decreased $3,699 due to a decrease in base business management revenues of $2,252 primarily due to the wind down of AlerisLife’s business and deleveraging activities at certain of the Managed Equity REITs, lower property management revenues of $1,023 primarily due to third party management transitions within RMR Residential and disposition activities during 2025 and lower construction supervision revenues of $424 due to declines in capital spend at our Managed Equity REITs.
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Income from loan investments, net. Income from loan investments, net decreased $646 due to the sale of our two mortgage loans to SEVN in November 2025.
Rental property revenues. Rental property revenues includes base rental income and non-cash straight line rent adjustments for our rental properties. Rental property revenues increased $3,675 primarily due to our acquisition of properties in Chicago, IL, Raleigh, NC and Orlando, FL after the second fiscal quarter of 2025.
Reimbursable compensation and benefits. Reimbursable compensation and benefits includes reimbursements, at cost, that arise primarily from services our employees provide pursuant to our property management agreements at the properties of our clients. A significant portion of these compensation and benefits are charged or passed through to and paid by tenants of our clients. Reimbursable compensation and benefits decreased $3,797 primarily due to cost containment measures that included headcount reductions over the last twelve months and disposition activities during 2025.
Reimbursable equity based compensation. Reimbursable equity based compensation includes awards of common shares by our clients directly to certain of our officers and employees in connection with the provision of management services to those clients. We record an equal, offsetting amount as equity based compensation expense for the value of these awards. Reimbursable equity based compensation revenue increased $1,270 primarily as a result of increases in total unvested shares and increases in certain of our clients’ respective share prices as of the current fiscal period.
Other reimbursable expenses. For further information about these reimbursements, see Note 4, Revenue Recognition, to our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10‑Q.
Compensation and benefits. Compensation and benefits consists of employee salaries and other employment related costs, including health insurance expenses and contributions related to our employee retirement plan. Compensation and benefits expense decreased $4,361 due to cost containment measures that included headcount reductions over the last twelve months and disposition activity during 2025.
Equity based compensation. Equity based compensation consists of the value of vested shares awarded to certain of our employees under our and our clients’ equity compensation plans. We record an equal offsetting amount as reimbursable equity based compensation revenue for the value of awards under our clients’ equity compensation plans to certain of our employees. Equity based compensation increased $1,419 primarily as a result of increases in total unvested shares and increases in certain of our clients’ respective share prices as of the current fiscal period.
Separation costs. Separation costs consists of employment termination costs. For further information about these costs, see Note 3, Related Person Transactions, to our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10‑Q.
General and administrative. General and administrative expenses consists of office related expenses, information technology related expenses, employee training, travel, professional services expenses, director compensation and other administrative expenses. General and administrative costs decreased $498 primarily due to declines in recurring professional and legal fees.
Rental property expenses. Rental property expenses includes property operating expenses, such as real estate taxes, repairs and maintenance and utility costs incurred at our owned properties. Rental property expenses increased $1,481 primarily due to our acquisition of properties in Chicago, IL, Raleigh, NC and Orlando, FL after the second fiscal quarter of 2025.
Transaction and acquisition related costs. Transaction and acquisition related costs in the prior fiscal period primarily represent costs associated with our acquisition of MPC Partnership Holdings LLC, or MPC, and related integration expenses. Costs incurred in the current fiscal period relate to other transactions and agreements with our Managed Equity REITs or private capital vehicles.
Depreciation and amortization. Depreciation and amortization increased $1,991 primarily due to depreciation in the current fiscal quarter of our owned properties in Chicago, IL, Raleigh, NC and Orlando, FL, which were acquired after the second fiscal quarter of 2025.
Interest income. Interest income decreased $861 due to a lower amount of investable cash and lower average interest rates during the current fiscal period compared to the prior fiscal period.
Interest expense. Interest expense increased $1,740 primarily due to mortgage notes encumbering our owned properties in Raleigh, NC and Orlando, FL which were acquired after the second fiscal quarter of 2025.
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Change in fair value of Earnout liability. For further information about the Earnout liability, see Note 10, Fair Value of Financial Instruments to our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.
Loss on investments. Loss on investments represents the unrealized and realized gains or losses on our investment in SEVN common shares, investment in Fund VII and investment in joint ventures. For further information, see Note 8, Investments, to our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.
Gain on sale of real estate. We recognized a $445 gain on sale of real estate resulting from the sale of a property in Woodstock, GA during the prior fiscal period.
Income tax expense. The decrease in income tax expense of $789 is primarily attributable to lower taxable income.
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Six Months Ended March 31, 2026, Compared to the Six Months Ended March 31, 2025
The following table presents the changes in our operating results for the six months ended March 31, 2026 compared to the six months ended March 31, 2025:
| Six Months Ended March 31, | ||||||||||||||||||||||||||
| 2026 | 2025 | $ Change | % Change | |||||||||||||||||||||||
| Revenues: | ||||||||||||||||||||||||||
| Management services | $ | 82,592 | $ | 90,565 | $ | (7,973) | (8.8)% | |||||||||||||||||||
| Incentive fees | 23,625 | 87 | 23,538 | n/m | ||||||||||||||||||||||
| Advisory services | 2,526 | 2,245 | 281 | 12.5% | ||||||||||||||||||||||
| Total management, incentive and advisory services revenues | 108,743 | 92,897 | 15,846 | 17.1% | ||||||||||||||||||||||
| Income from loan investments, net | 411 | 1,192 | (781) | (65.5)% | ||||||||||||||||||||||
| Rental property revenues | 10,240 | 3,047 | 7,193 | n/m | ||||||||||||||||||||||
| Reimbursable compensation and benefits | 34,011 | 42,401 | (8,390) | (19.8)% | ||||||||||||||||||||||
| Reimbursable equity based compensation | 3,737 | 702 | 3,035 | n/m | ||||||||||||||||||||||
| Other reimbursable expenses | 168,911 | 245,905 | (76,994) | (31.3)% | ||||||||||||||||||||||
| Total reimbursable costs | 206,659 | 289,008 | (82,349) | (28.5)% | ||||||||||||||||||||||
| Total revenues | 326,053 | 386,144 | (60,091) | (15.6)% | ||||||||||||||||||||||
| Expenses: | ||||||||||||||||||||||||||
| Compensation and benefits | 75,138 | 84,613 | (9,475) | (11.2)% | ||||||||||||||||||||||
| Equity based compensation | 4,980 | 1,732 | 3,248 | 187.5% | ||||||||||||||||||||||
| Separation costs | 2,672 | 3,455 | (783) | (22.7)% | ||||||||||||||||||||||
| Total compensation and benefits expense | 82,790 | 89,800 | (7,010) | (7.8)% | ||||||||||||||||||||||
| General and administrative | 20,696 | 22,530 | (1,834) | (8.1)% | ||||||||||||||||||||||
| Other reimbursable expenses | 168,911 | 245,905 | (76,994) | (31.3)% | ||||||||||||||||||||||
| Rental property expenses | 3,710 | 821 | 2,889 | n/m | ||||||||||||||||||||||
| Transaction and acquisition related costs | 1,685 | 1,336 | 349 | 26.1% | ||||||||||||||||||||||
| Depreciation and amortization | 9,135 | 4,804 | 4,331 | 90.2% | ||||||||||||||||||||||
| Total expenses | 286,927 | 365,196 | (78,269) | (21.4)% | ||||||||||||||||||||||
| Operating income | 39,126 | 20,948 | 18,178 | 86.8% | ||||||||||||||||||||||
| Interest income | 1,051 | 2,933 | (1,882) | (64.2)% | ||||||||||||||||||||||
| Interest expense | (5,258) | (1,570) | (3,688) | n/m | ||||||||||||||||||||||
| Change in fair value of Earnout liability | 3,639 | 4,680 | (1,041) | (22.2)% | ||||||||||||||||||||||
| Loss on investments | (3,959) | (1,780) | (2,179) | 122.4% | ||||||||||||||||||||||
| Loss on extinguishment of debt | (452) | — | (452) | n/m | ||||||||||||||||||||||
| Gain on sale of real estate | — | 445 | (445) | (100.0)% | ||||||||||||||||||||||
| Income before income tax expense | 34,147 | 25,656 | 8,491 | 33.1% | ||||||||||||||||||||||
| Income tax expense | (5,250) | (3,854) | (1,396) | (36.2)% | ||||||||||||||||||||||
| Net income | 28,897 | 21,802 | 7,095 | 32.5% | ||||||||||||||||||||||
| Net income attributable to noncontrolling interest in The RMR Group LLC | (16,488) | (12,059) | (4,429) | (36.7)% | ||||||||||||||||||||||
Net loss attributable to other noncontrolling interests | 788 | 253 | 535 | n/m | ||||||||||||||||||||||
| Net income attributable to The RMR Group Inc. | $ | 13,197 | $ | 9,996 | $ | 3,201 | 32.0% | |||||||||||||||||||
n/m - not meaningful
Management services revenue. Management services revenue decreased $7,973 due to a decrease in base business management revenues of $3,937 primarily due to the wind down of AlerisLife’s business and deleveraging activities at certain of the Managed Equity REITs, lower property management revenues of $2,013 primarily due to third party management transitions within RMR Residential and disposition activities during 2025 and lower construction supervision revenues of $2,023 due to declines in capital spend at our Managed Equity REITs.
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Incentive fees. Incentive fees increased $23,538 due to fees earned from DHC and ILPT for calendar year 2025. Each of DHC’s and ILPT’s respective total return per share exceeded the applicable benchmark total return per share for the measurement period, as defined in the respective management agreements for calendar year 2025.
Income from loan investments, net. Income from loan investments, net decreased $781 due to the sale of our two mortgage loans to SEVN in November 2025.
Rental property revenues. Rental property revenues increased $7,193 primarily due to our acquisition of properties in Chicago, IL, Raleigh, NC and Orlando, FL after the second fiscal quarter of 2025.
Reimbursable compensation and benefits. Reimbursable compensation and benefits decreased $8,390 primarily due to cost containment measures that included headcount reductions over the last twelve months and disposition activities during 2025.
Reimbursable equity based compensation. Reimbursable equity based compensation revenue increased $3,035 primarily as a result of increases in total unvested shares and increases in certain of our clients’ respective share prices as of the current fiscal period.
Other reimbursable expenses. For further information about these reimbursements, see Note 4, Revenue Recognition, to our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10‑Q.
Compensation and benefits. Compensation and benefits expense decreased $9,475 due to cost containment measures that included headcount reductions over the last twelve months and disposition activities during 2025.
Equity based compensation. Equity based compensation increased $3,248 primarily as a result of increases in total unvested shares and increases in certain of our clients’ respective share prices as of the current fiscal period.
Separation costs. For further information about these costs, see Note 3, Related Person Transactions, to our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10‑Q.
General and administrative. General and administrative costs decreased $1,834 primarily due to declines in third party construction supervision fees and recurring professional and legal fees.
Rental property expenses. Rental property expenses increased $2,889 primarily due to our acquisition of properties in Chicago, IL, Raleigh, NC and Orlando, FL after the second fiscal quarter of 2025.
Transaction and acquisition related costs. Transaction and acquisition related costs in the prior fiscal period primarily represent costs associated with our acquisition of MPC and related integration expenses. Costs incurred in the current fiscal period relate to other transactions and agreements with our Managed Equity REITs or private capital vehicles.
Depreciation and amortization. Depreciation and amortization increased $4,331 primarily due to depreciation in the current fiscal quarter of our owned properties in Chicago, IL, Raleigh, NC and Orlando, FL, which were acquired after the second fiscal quarter of 2025.
Interest income. Interest income decreased $1,882 due to a lower amount of investable cash and lower average interest rates during the current fiscal period compared to the prior fiscal period.
Interest expense. Interest expense increased $3,688 primarily due to mortgage notes encumbering our owned properties in Raleigh, NC and Orlando, FL which were acquired after the second fiscal quarter of 2025.
Change in fair value of Earnout liability. For further information about the Earnout liability, see Note 10, Fair Value of Financial Instruments to our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.
Loss on investments. For further information, see Note 8, Investments, to our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.
Loss on extinguishment of debt. Loss on extinguishment of debt represents the loss recognized on unamortized deferred fees related to our secured financing facility which was terminated in the current fiscal period.
Gain on sale of real estate. We recognized a $445 gain on sale of real estate resulting from the sale of a property in Woodstock, GA during the prior fiscal period.
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Income tax expense. The increase in income tax expense of $1,396 is primarily attributable to higher taxable income.
LIQUIDITY AND CAPITAL RESOURCES (dollars in thousands, except per share amounts)
Our current assets have historically been comprised predominantly of cash, cash equivalents and receivables for business management, property management and advisory services fees. As of March 31, 2026 and September 30, 2025, we had cash and cash equivalents of $80,104 and $62,297, respectively, of which $17,380 and $19,478, respectively, was held by RMR Inc., with the remainder being held at RMR LLC and its subsidiaries. Cash and cash equivalents include all short term, highly liquid investments that are readily convertible to known amounts of cash and have original maturities of three months or less from the date of purchase. As of March 31, 2026 and September 30, 2025, $70,615 and $50,662, respectively, of our cash and cash equivalents were invested in money market accounts.
We believe that our cash and cash equivalents leave us well positioned to pursue a range of capital allocation strategies, with a focus on the growth of our private capital business, to fund our operations and cash distributions and enhance our technology infrastructure, in the next twelve months. Our experienced platform and existing relationships with institutional investors have provided us with significant opportunities to continue expanding our private capital business. We intend to diversify and further grow our private capital revenues by sponsoring and managing new real estate related investment funds that may invest in the equity of real estate or provide commercial mortgage loans secured by middle market and transitional real estate in the U.S. We anticipate that using our capital for possible formation costs and co-investment in these funds will diversify our revenues and generate management fees, incentive fees and potential carried interest.
Our liquidity is highly dependent upon our receipt of fees from the businesses we manage. Historically, we have funded our working capital needs with cash generated from our operating activities. We expect that our future working capital needs will relate largely to our operating expenses, primarily consisting of employee compensation and benefits costs, our obligation to make quarterly tax distributions to the members of RMR LLC, our plan to make quarterly distributions on our Class A Common Shares and Class B-1 Common Shares and our plan to pay quarterly distributions to the members of RMR LLC in connection with the quarterly dividends to RMR Inc. shareholders.
Our revolving credit facility is secured by substantially all of our assets and provides us with enhanced financial flexibility as we continue to invest in our private capital business and position ourselves to capitalize on long term growth opportunities. We can borrow, repay and reborrow funds available under our revolving credit facility until maturity, and no principal repayments on borrowings under our credit agreement are due until maturity. The maturity date of our credit agreement is January 22, 2028 and, subject to the payment of an extension fee and meeting certain other requirements, we can extend the maturity date of our revolving credit facility by one year. Interest is payable on borrowings under our credit agreement at a rate of SOFR plus a margin of 225 basis points. We are also required to pay a fee of 50 basis points per annum on the amount of unused lending commitments. Our credit agreement contains a number of covenants, including covenants that require us to maintain certain financial ratios and restrict our ability to incur additional debt in excess of calculated amounts. Availability of borrowings under our credit agreement is subject to ongoing minimum performance, our satisfying certain financial covenants and other credit facility conditions. As of March 31, 2026 and May 1, 2026, we had $0 and $25,000 outstanding, respectively.
Cash Flows
The $21,575 increase in net cash flows provided by operating activities for the six months ended March 31, 2026 compared to the prior period reflects the impact of incentive fees paid by DHC and ILPT in the current period, which amounted to $23,584 in the aggregate. The $43,277 increase in net cash flows provided by investing activities for the six months ended March 31, 2026 compared to the prior period was due to proceeds from the sale of our loan investments in the current period, partially offset by our additional investment in SEVN shares. The $42,632 increase in net cash flows used in financing activities for the six months ended March 31, 2026 compared to the prior period was due to repayment of our secured financing facility in connection with the sale of our loan investments noted above.
As of March 31, 2026, we had no off-balance sheet arrangements that have had or that we expect would be reasonably likely to have a material effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
In April 2026, SVC completed a public offering of its common shares of beneficial interest at a price of $1.20 per share and raised gross proceeds of approximately $575,000, excluding underwriting discounts and expenses. We participated in the public offering by purchasing 41,666,666 common shares for $50,000 using cash on hand and borrowings under our revolving credit facility. For further information regarding this transaction, see Note 3, Related Person Transactions, to our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.
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Tax Receivable Agreement
We are party to a tax receivable agreement which provides for the payment by RMR Inc. to ABP Trust of 85.0% of the amount of savings, if any, in U.S. federal, state and local income tax or franchise tax that RMR Inc. realizes as a result of (a) the increases in tax basis attributable to RMR Inc.’s dealings with ABP Trust and (b) tax benefits related to imputed interest deemed to be paid by it as a result of the tax receivable agreement. See Note 3, Related Person Transactions, to our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q and “Business—Our Organizational Structure—tax receivable agreement” in our Annual Report on Form 10-K for the fiscal year ended September 30, 2019. As of March 31, 2026, our condensed consolidated balance sheet reflects a liability related to the tax receivable agreement of $18,478, of which we expect to pay $2,552 to ABP Trust during the fourth quarter of fiscal year 2026.
Related Person Transactions
We have relationships and historical and continuing transactions with Adam Portnoy, the Chair of our Board and one of our Managing Directors, as well as our clients and certain employees. For further information about these and other such relationships and related person transactions, please see Note 3, Related Person Transactions, to our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q, our 2025 Annual Report, our definitive Proxy Statement for our 2026 Annual Meeting of Shareholders and our other filings with the SEC. In addition, see the section captioned “Risk Factors” in our 2025 Annual Report for a description of risks that may arise as a result of these and other related person transactions and relationships. We may engage in additional transactions with related persons, including businesses to which RMR LLC or its subsidiaries provide management services.
Critical Accounting Estimates
The preparation of our condensed consolidated financial statements in conformity with GAAP requires us to make estimates and assumptions that affect reported amounts. Actual results could differ from those estimates. Significant estimates that impact the condensed consolidated financial statements include the revenue recognized during the reporting periods, the estimation of fair values of certain assets and liabilities and purchase price allocations..
A discussion of our critical accounting estimates is included in our 2025 Annual Report. There have been no significant changes in our critical accounting estimates since the fiscal year ended September 30, 2025.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
We are exposed to risks associated with market changes in interest rates. We manage our exposure to this market risk by monitoring available financing alternatives, including fixed rate debt, and employing derivative instruments, including interest rate caps, to limit our exposure to increasing interest rates. Other than as described below, we do not currently expect any significant changes in our exposure to fluctuations in interest rates or in how we manage this exposure in the near future.
Floating Rate Debt
As of March 31, 2026, our outstanding floating rate debt consisted of the following:
| Principal Balance | Annual Interest Rate (1) | Annual Interest Expense | Maturity | Interest Payments Due | |||||||||||||||||||||||||||||||
| Raleigh, NC mortgage loan | $ | 40,550 | 5.50% | $ | 2,230 | 2028 | Monthly | ||||||||||||||||||||||||||||
| Orlando, FL mortgage loan | 52,707 | 5.55% | 2,925 | 2028 | Monthly | ||||||||||||||||||||||||||||||
| $ | 93,257 | $ | 5,155 | ||||||||||||||||||||||||||||||||
(1) The annual interest rate is the rate stated in the applicable contract, as adjusted by the related interest rate cap.
The Raleigh, NC loan has two remaining one year extension options and requires interest to be paid at an annual rate of SOFR plus a premium of 2.50%. The Orlando, FL loan has two remaining one year extension options and requires interest to be paid at an annual rate of SOFR plus a premium of 2.55%. We are vulnerable to changes in the U.S. dollar based on short term interest rates, specifically SOFR. In conjunction with these borrowings, to hedge our exposure to risk related to changes in SOFR and as required under the applicable loan agreements, we obtained interest rate caps with current SOFR strike rates equal to 3.00% for the Raleigh, NC loan and Orlando, FL loan.
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In addition, upon renewal or refinancing of these obligations, we are vulnerable to increases in interest rate premiums, including increases in the cost of replacement interest rate caps, due to market conditions and our perceived credit risk. Generally, a change in interest rates would not affect the value of our floating rate debt but would affect our operating results. The following table presents the approximate impact a one percentage point increase in interest rates would have on the annual interest expense of our floating rate mortgage notes as of March 31, 2026:
| Impact of an Increase in Interest Rates | ||||||||||||||||||||||||||
| Weighted Average Interest Rate | Outstanding Debt | Total Interest Expense Per Year | Annual Earnings Per Share Impact (1) | |||||||||||||||||||||||
At March 31, 2026 | 5.53% | $ | 93,257 | $ | 5,155 | $ | 0.09 | |||||||||||||||||||
One percentage point increase (2) | 5.53% | $ | 93,257 | $ | 5,155 | $ | 0.09 | |||||||||||||||||||
(1) Based on the diluted weighted average common shares outstanding and income tax rate for the three months ended March 31, 2026 and includes the impact of noncontrolling interests.
(2) A one percentage point increase in interest rates would not have an impact on annual interest expense for our floating rate mortgage loans because current interest rates exceed the strike rates of our interest rate caps. However, a one percentage point increase in the weighted average interest rate of our floating rate debt at March 31, 2026 would result in a weighted average interest rate of 6.53%, total floating rate interest expense per year of $6,088 and a decrease in annual earnings per share of $0.11.
The foregoing table shows the impact of an immediate one percentage point change in floating interest rates, including the impact of our interest rate caps. Our exposure to fluctuations in floating interest rates will increase or decrease in the future with increases or decreases in the outstanding amounts of any floating rate debt we may incur and the impact, if any, of interest rate caps we may purchase. Generally, if interest rates were to change gradually over time, the impact would be spread over time. As of March 31, 2026, neither of our floating rate mortgage notes had an active interest rate floor.
We also maintain our revolving credit facility which has a total borrowing capacity of $100,000. Interest is payable on borrowings under our credit agreement at a rate of SOFR plus a margin of 225 basis points. As of March 31, 2026 and May 1, 2026, we had $0 and $25,000 outstanding, respectively.
Fixed Rate Debt
As of March 31, 2026, our outstanding fixed rate debt consisted of one mortgage note with a principal balance of $46,500 with a 5.34% fixed interest rate. This mortgage note requires monthly payments of interest only until maturity in July 2029. Because interest is to be paid at a fixed rate, changes in market interest rates during the term of this mortgage note will not affect our interest obligation. If this mortgage note is refinanced at an interest rate which is one percentage point higher or lower than shown above, our annual interest cost would increase or decrease by approximately $465.
Changes in market interest rates would affect the fair value of our mortgage note. Increases in market interest rates decrease the fair value of our fixed rate debt, while decreases in market interest rates increase the fair value of our fixed rate debt. Based on the balances outstanding at March 31, 2026 and assuming no other changes in factors that may affect the fair value of our fixed rate debt obligation, a hypothetical immediate one percentage point change in the interest rates would change the fair value of this obligation by approximately $1,442.
Risks Related to Cash and Short Term Investments
Our cash and cash equivalents include short term, highly liquid investments readily convertible to known amounts of cash that have original maturities of three months or less from the date of purchase. We invest a substantial amount of our cash in money market bank accounts and all of our cash is maintained in U.S. bank accounts. Some U.S. bank account balances exceed the Federal Deposit Insurance Corporation insurance limit. We believe our cash and short term investments are not subject to any material interest rate risk, equity price risk, credit risk or other market risk.
Item 4. Controls and Procedures
As of the end of the period covered by this report, our management carried out an evaluation, under the supervision and with the participation of our President and Chief Executive Officer and our Executive Vice President, Chief Financial Officer and Treasurer, of the effectiveness of our disclosure controls and procedures pursuant to Rules 13a-15 and 15d-15 under the Securities Exchange Act of 1934, as amended. Based upon that evaluation, our President and Chief Executive Officer and our Executive Vice President, Chief Financial Officer and Treasurer concluded that our disclosure controls and procedures are effective.
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There have been no changes in our internal control over financial reporting during the quarter ended March 31, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
WARNING CONCERNING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other securities laws that are subject to risks and uncertainties. These statements may include words such as “believe”, “expect”, “anticipate”, “intend”, “plan”, “estimate”, “will”, “opportunity”, “may”, “positioned”, “potential” and negatives or derivatives of these or similar expressions. These forward-looking statements include, among others, statements about: our business strategy; economic and industry conditions, including as a result of changing tariffs or trade policies and the related uncertainty thereof; the impact and opportunities for our and our clients’ businesses from business cycles in the U.S. real estate industry as well as economic and industry conditions, including interest rates; our belief that it is possible to grow real estate based businesses in selected property types or geographic areas despite national trends; our liquidity, including its sufficiency to pursue a range of capital allocation strategies and fund our operations and enhance our technology infrastructure and limit risk exposure; our future profitability; anticipated financial results, future prospects and estimated valuations and share prices; and our sustainability practices.
Forward-looking statements reflect our current expectations, are based on judgments and assumptions, are inherently uncertain and are subject to risks, uncertainties and other factors, which could cause our actual results, performance or achievements to differ materially from expected future results, performance or achievements expressed or implied in those forward-looking statements. Some of the risks, uncertainties and other factors that may cause actual results, performance or achievements to differ materially from those expressed or implied by forward-looking statements include, but are not limited to, the following:
•The dependence of our revenues on a limited number of clients,
•The variability of our revenues,
•Risks related to supply chain constraints, commodity pricing and inflation, including inflation impacting wages and employee benefits,
•Changing market conditions, practices and trends, which may adversely impact our clients and the fees we receive from them,
•OPI’s voluntary chapter 11 process to restructure its debt obligations and capital structure, which may reduce our management fee revenue over time and may result in reputational harm to us,
•Potential terminations of the management agreements with our clients,
•Uncertainty surrounding interest rates and sustained high interest rates, which may impact our clients and significantly reduce our revenues or impede our growth,
•Our dependence on the growth and performance of our clients,
•Our ability to obtain or create new clients for our business which is often dependent on circumstances beyond our control,
•The ability of our clients to operate their businesses profitably, optimize their capital structures, comply with the terms of their debt agreements and financial covenants and to grow and increase their market capitalizations and total shareholder returns,
•Our ability to successfully provide management services to our clients,
•Our ability to maintain or increase the distributions we pay to our shareholders,
•Our ability to successfully pursue and execute capital allocation and new business strategies,
•Our ability to prudently invest in our business to enhance our operations, services and competitive positioning,
•Our ability to successfully grow the RMR Residential business and realize our expected returns on our investment within the anticipated timeframe,
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•Our ability to successfully integrate acquired businesses and realize our expected returns on our investments,
•The ability of Tremont to identify and close suitable investments for SEVN and to monitor, service and administer existing investments,
•Our ability to obtain additional capital from third party investors for our private capital initiatives in order to make additional investments and to increase potential returns,
•Changes to our operating leverage or client diversity,
•Risks related to the security of our network and information technology,
•Litigation risks,
•Risks related to acquisitions, dispositions and other activities by us or among our clients,
•Allegations, even if untrue, of any conflicts of interest arising from our management activities,
•Our ability to retain the services of our managing directors and other key personnel,
•Our and our clients’ risks associated with our and our clients’ costs of compliance with laws and regulations, including securities regulations, exchange listing standards and other laws and regulations affecting public companies, and
•Other matters, including other risks that are described in our filings with the SEC.
These risks, uncertainties and other factors are not exhaustive and should be read in conjunction with other cautionary statements that are included in our periodic filings. The information contained in our filings with the SEC, including under the caption “Risk Factors” in our periodic reports, or incorporated therein, identifies important factors that could cause differences from the forward-looking statements in this Quarterly Report on Form 10-Q. Our filings with the SEC are available on the SEC’s website at www.sec.gov.
You should not place undue reliance upon our forward-looking statements.
Except as required by law, we do not intend to update or change any forward-looking statements as a result of new information, future events or otherwise.
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Part II. Other Information
Item 1A. Risk Factors
There have been no material changes to the risk factors from those we previously provided in our 2025 Annual Report.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Issuer purchases of equity securities.
The following table provides information about our purchases of our equity securities during the quarter ended March 31, 2026:
| Maximum | ||||||||||||||||||||||||||
| Total Number of | Approximate Dollar | |||||||||||||||||||||||||
| Shares Purchased | Value of Shares that | |||||||||||||||||||||||||
| Number of | Average | as Part of Publicly | May Yet Be Purchased | |||||||||||||||||||||||
| Shares | Price Paid | Announced Plans | Under the Plans or | |||||||||||||||||||||||
| Calendar Month | Purchased (1) | per Share | or Programs | Programs | ||||||||||||||||||||||
| January 1 - January 31, 2026 | — | $ | — | N/A | N/A | |||||||||||||||||||||
| February 1 - February 28, 2026 | — | $ | — | N/A | N/A | |||||||||||||||||||||
| March 1 - March 31, 2026 | 2,935 | $ | 15.56 | N/A | N/A | |||||||||||||||||||||
| Total | 2,935 | $ | 15.56 | N/A | N/A | |||||||||||||||||||||
(1)These Class A Common Share withholdings and purchases were made to satisfy tax withholding and payment obligations in connection with the vesting of awards of our Class A Common Shares. We withheld and purchased these shares at their fair market values based upon the trading prices of our Class A Common Shares at the close of trading on Nasdaq on the purchase dates.
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Item 6. Exhibits
| Exhibit Number | Description | |||||||
| 3.1 | Articles of Amendment and Restatement of the Registrant. (Incorporated by reference to the Registrant’s Registration Statement on Form S-1 (File No. 333-207423) filed with the SEC on October 14, 2015.) | |||||||
| 3.2 | Articles of Amendment, filed July 30, 2015. (Incorporated by reference to the Registrant’s Registration Statement on Form S-1 (File No. 333-207423) filed with the SEC on October 14, 2015.) | |||||||
| 3.3 | Articles of Amendment, filed September 11, 2015. (Incorporated by reference to the Registrant’s Registration Statement on Form S-1 (File No. 333-207423) filed with the SEC on October 14, 2015.) | |||||||
| 3.4 | Articles of Amendment, filed March 9, 2016. (Incorporated by reference to the Registrant’s Current Report on Form 8-K (File No. 001-37616) filed with the SEC on March 11, 2016.) | |||||||
| 3.5 | Articles of Amendment, filed November 14, 2022. (Incorporated by reference to the Registrant's Annual Report on Form 10-K (File No. 001-37616) filed with the SEC on November 14, 2022.) | |||||||
| 3.6 | Fifth Amended and Restated Bylaws of the Registrant adopted June 11, 2024. (Incorporated by reference to the Registrant's Current Report on Form 8-K (File No. 001-37616) filed with the SEC on June 11, 2024.) | |||||||
| 3.7 | Articles of Amendment, filed December 19, 2024. (Incorporated by reference to the Registrant’s Current Report on Form 8-K (File No. 001-37616) filed with the SEC on December 19, 2024.) | |||||||
| 4.1 | Form of The RMR Group Inc. Share Certificate for Class A Common Stock. (Incorporated by reference to the Registrant’s Amendment No. 1 to Registration Statement on Form S-1 (File No. 333-207423) filed with the SEC on November 2, 2015.) | |||||||
| 4.2 | Registration Rights Agreement, dated as of June 5, 2015, by and between the Registrant and ABP Trust (formerly known as Reit Management and Research Trust). (Incorporated by reference to the Registrant’s Registration Statement on Form S-1 (File No. 333-207423) filed with the SEC on October 14, 2015.) | |||||||
| 10.1 | Letter Agreement, dated as of January 7, 2026, by and among The RMR Group LLC, Sonesta International Hotels Corporation and John G. Murray (Incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q (File No. 001-37616) filed with the SEC on February 4, 2026.)(+) | |||||||
| 10.2 | Second Amendment to the Second Amended and Restated Business Management Agreement, effective as of January 1, 2026, by and between Service Properties Trust and The RMR Group LLC (Incorporated by reference to Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q (File No. 001-37616) filed with the SEC on February 4, 2026.) | |||||||
| 31.1 | Rule 13a-14(a) Certification. (Filed herewith.) | |||||||
| 31.2 | Rule 13a-14(a) Certification. (Filed herewith.) | |||||||
| 32.1 | Section 1350 Certification. (Furnished herewith.) | |||||||
| 101.INS | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | |||||||
| 101.SCH | XBRL Taxonomy Extension Schema Document. (Filed herewith.) | |||||||
| 101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document. (Filed herewith.) | |||||||
| 101.DEF | XBRL Taxonomy Extension Definition Linkbase Document. (Filed herewith.) | |||||||
| 101.LAB | XBRL Taxonomy Extension Label Linkbase Document. (Filed herewith.) | |||||||
| 101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document. (Filed herewith.) | |||||||
| 104 | Cover Page Interactive Data File. (formatted as Inline XBRL and contained in Exhibit 101.) | |||||||
(+) Contract with management or compensatory plan or arrangement.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| By: | /s/ Matthew C. Brown | |||||||
| Matthew C. Brown | ||||||||
| Executive Vice President, Chief Financial Officer and Treasurer (principal financial officer and principal accounting officer) | ||||||||
| Date: May 6, 2026 | ||||||||
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FAQ
How did The RMR Group Inc. (RMR) perform in Q2 2026?
RMR’s Q2 2026 performance was mixed. Revenue fell to $145.6 million from $166.7 million, and net income attributable to RMR Inc. declined to $1.0 million from $3.6 million, as lower management revenues and higher interest expense offset cost savings.
What were RMR’s results for the first six months of fiscal 2026?
Six-month results showed higher profit on lower revenue. Total revenues were $326.1 million versus $386.1 million a year earlier, but net income attributable to RMR Inc. rose to $13.2 million from $10.0 million, helped by $23.6 million of incentive fees and reduced reimbursable costs.
How important were incentive fees to RMR’s 2026 year-to-date earnings?
Incentive fees were a major earnings driver. For the six months ended March 31, 2026, incentive fees reached $23.6 million compared with $0.1 million in the prior-year period, significantly boosting operating income despite declines in base management and reimbursable revenues.
What trends affected RMR’s reimbursable and compensation costs in 2026?
RMR reduced reimbursable and compensation expenses. For the first half of 2026, reimbursable costs fell by $82.3 million and compensation and benefits decreased by $9.5 million, reflecting headcount reductions, cost containment measures, and lower activity tied to prior-year asset dispositions.
How did interest expense and debt activity change for RMR in 2026?
Interest expense increased due to new mortgage debt. Six‑month interest expense rose to $5.3 million from $1.6 million, largely from mortgages on newly acquired properties. RMR also fully repaid a $45.1 million secured financing facility, recognizing a $0.5 million loss on extinguishment of debt.
What is RMR’s current economic interest in The RMR Group LLC?
RMR holds a majority economic interest in its operating subsidiary. As of March 31, 2026, The RMR Group Inc. owned 17,093,798 membership units of The RMR Group LLC, representing approximately 53.3% of the economic interest, with the balance held by an ABP Trust subsidiary.