Seven Hills Realty Trust (NASDAQ: SEVN) posts new June 2026 investor presentation
Rhea-AI Filing Summary
Seven Hills Realty Trust furnished an investor presentation as part of a current report. On June 1, 2026, the company posted this presentation on its website and attached it as Exhibit 99.1 to the filing. The trust’s common shares of beneficial interest trade on The Nasdaq Stock Market LLC under the symbol SEVN.
The report is a communication update rather than a transaction or earnings announcement, intended to provide investors with additional presentation materials in June 2026.
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8-K Event Classification
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investor presentation financial
Emerging growth company regulatory
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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CURRENT REPORT
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| Item 7.01. | Regulation FD Disclosure. |
On June 1, 2026, Seven Hills Realty Trust posted to its website an investor presentation, a copy of which is furnished hereto as Exhibit 99.1.
| Item 9.01. | Financial Statements and Exhibits. |
(d) Exhibits.
| 99.1 Investor Presentation dated June 2026. (Furnished herewith.) | |
| 104 Cover Page Interactive Data File. (Embedded within the Inline XBRL document.) |
SIGNATURE
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 hereunto duly authorized.
| SEVEN HILLS REALTY TRUST | ||
| By: | /s/ Matthew C. Brown | |
| Name: | Matthew C. Brown | |
| Title: | Chief Financial Officer and Treasurer | |
Date: June 1, 2026
Exhibit 99.1
| June 2026 INVESTOR PRESENTATION |
| 2 S E V E N H I L L S R E A L T Y T R U S T This presentation contains statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other securities laws. Whenever Seven Hills Realty Trust, or SEVN, uses words such as “believe”, “could”, “expect”, “anticipate”, “intend”, “plan”, “estimate”, “will”, “would”, “should”, “may” and negatives or derivatives of these or similar expressions, SEVN is making forward-looking statements. These forward-looking statements include, among others, statements about: economic, market and industry conditions; demand for commercial real estate, debt and opportunities that may exist for alternative lenders like SEVN; the diversity of SEVN's loan investment portfolio; SEVN's future lending activity and opportunities; the ability of SEVN's borrowers to achieve their business plans; SEVN's leverage levels and possible future financings; SEVN's liquidity needs and sources; and the amount and timing of future distributions. Forward-looking statements reflect SEVN's current expectations, are based on judgments and assumptions, are inherently uncertain and are subject to risks, uncertainties and other factors, which could cause SEVN's actual results, performance or achievements to differ materially from expected future results, performance or achievements expressed or implied in any forward-looking statements. The information contained in SEVN's filings with the Securities and Exchange Commission, or the SEC, including under the heading “Risk Factors” in SEVN’s Annual Report on Form 10-K for the year ended December 31, 2025, and its other periodic reports, or incorporated therein, identifies other important factors that could cause SEVN’s actual results to differ materially from those stated in or implied by SEVN’s forward-looking statements. SEVN’s filings with the SEC are available on the SEC’s website at www.sec.gov. These risks, uncertainties and other factors are not exhaustive and should be read in conjunction with other cautionary statements that are included in this presentation and in SEVN's periodic filings. SEVN assumes no obligation to update or supplement forward‐looking statements that become untrue because of subsequent events or circumstances, except as required by law. SEVN's manager, Tremont Realty Capital, or Tremont, is registered with the SEC as an investment adviser. Tremont is owned by The RMR Group (Nasdaq: RMR). Notes Regarding Certain Information in this Presentation This presentation contains industry and statistical data that SEVN obtained from various second party sources. Nothing in the data used or derived from second party sources should be construed as investment advice. Some data and other information presented are also based on SEVN’s good faith estimates and beliefs derived from its review of internal surveys and independent sources and its experience. SEVN believes that these external sources, estimates and beliefs are reliable and reasonable, but it has not independently verified them. Although SEVN is not aware of any misstatements regarding the data presented herein, these estimates and beliefs involve inherent risks and uncertainties and are based on assumptions that are subject to change. Unless otherwise noted, all data presented are as of or for the three months ended March 31, 2026. Non-GAAP Financial Measures This presentation contains non-GAAP financial measures including Distributable Earnings and Distributable Earnings per common share. Please refer to Non-GAAP Financial Measures and Certain Definitions in the Appendix for terms used throughout this presentation. WARNING REGARDING FORWARD-LOOKING STATEMENTS |
| 33 Table of Contents Page COMPANY OVERVIEW 4 RECENT HIGHLIGHTS 8 MARKET OPPORTUNITY 15 EXECUTION & PORTFOLIO GROWTH 18 APPENDIX 22 |
| 4 Company Overview |
| 5 S E V E N H I L L S R E A L T Y T R U S T BUSINESS AT A GLANCE1 Seven Hills Realty Trust is a real estate investment trust that originates and invests in floating rate first mortgage loans secured by middle market transitional commercial real estate, or CRE. 5 1.4x Debt to Equity Ratio ~20% Manager Ownership in SEVN $865M Total Debt Capacity 67% Weighted Average LTV 7.8% Weighted Average All In Yield $747M Total Loan Commitments 26 Floating-Rate First Mortgage Loans SEVN Nasdaq Listed 1. All information presented as of June 1, 2026, pro forma for two loan originations and two repayments which occurred in Q2 2026. |
| 6 S E V E N H I L L S R E A L T Y T R U S T • 100% invested in floating rate first mortgage loans • Diversified across geographies, sponsors and property types • Portfolio construction emphasizes visible cash flow and moderate LTV High Quality Portfolio • Fully performing loan portfolio with no losses or 5-rated loans • Conservative average risk rating of 2.8 • Disciplined credit selection focused on resilient sectors Performance Grounded in Credit Discipline • $3T of maturing CRE debt over the next five years • Secured debt investments provide compelling risk-adjusted returns • Interest rate environment driving renewed transaction activity and financing demand Attractive Market Opportunity • Deeply experienced team with 20+ years average tenure in CRE lending • Established relationships and repeat borrower base • ~20% ownership of SEVN aligns management and shareholder interests Managed by Tremont Realty Capital • ~$37B in AUM, ~800 professionals across more than 30 U.S. offices, and 40 years of experience • RMR’s operating scale, property management capabilities and market insight enhance all facets of our business Integrated with RMR Real Estate Platform COMPELLING INVESTMENT OPPORTUNITY Senior secured, diversified loan portfolio managed by an established CRE lender with an impressive track record and supported by a nationwide real estate platform. 6 |
| 7 S E V E N H I L L S R E A L T Y T R U S T TARGET INVESTMENTS Selective origination strategy providing flexible capital solutions for middle market CRE, underpinned by disciplined underwriting and downside protection Loan Size Principal balances typically $20 million to $75 million. Collateral First lien mortgages on middle market transitional assets, with focus on cash-flowing properties in liquid markets and strong locations. Property Type Multifamily, Industrial, Hospitality, Student Housing, and other commercial property types. Geography Primary and secondary markets nationwide. Loan to Value Stabilized LTV ≤75%, supported by third-party appraisals and downside protection analysis. Interest Rates Competitive rates over SOFR. Term 2 - 5 years including extension options, aligned with business plan execution. Amortization Interest only. Recourse Non-recourse to borrowers. Sponsorship Experienced, well-capitalized sponsors with meaningful alignment and executable business plans. 7 |
| 8 Recent Highlights |
| 9 S E V E N H I L L S R E A L T Y T R U S T • Generated Distributable Earnings of $0.24 per diluted share and declared a quarterly distribution of $0.28 per common share. • Continued deploying Rights Offering proceeds, originating three loans with aggregate total commitments of $67.5 million. • Loans originated at the highest net interest margins achieved over the past four years. • Portfolio’s weighted average risk rating remained strong at 2.8, with no realized losses. • Maintained strong liquidity, with $56.6 million of cash on hand and $397.5 million of available capacity to support new investments. While distributable earnings have been temporarily impacted by declining base rates and dilution from the December rights offering, SEVN’s increased shareholders’ equity positions the Company to invest capital and grow earnings in upcoming quarters. Distributable Earnings Per Share and Shareholders’ Equity 1Q26 Highlights Dividend Payout Ratio 90% 97% S E V E N H I L L S R E A L T Y T R U S T 100% 117% PORTFOLIO PERFORMANCE $0.31 $0.29 $0.28 $0.24 $267.0 $266.5 $328.7 $327.0 Q2 2025 Q3 2025 Q4 2025 Q1 2026 Distributable Earnings Per Share Shareholders' Equity (Millions) |
| 10 S E V E N H I L L S R E A L T Y T R U S T 1Q26 originations achieved the highest net interest margins over the past four years, with additional upside to total returns from exit fees. This reflects improved transaction conditions and the strength of SEVN’s platform. Average Advance Rate 73.9% 72.4% 68.7% 71.0% 70.8% INCOME FROM LOAN INVESTMENTS, NET - INTEREST RATE TRENDS 1. Represents the weighted average coupon rate for SEVN's Secured Financing Facilities during the respective period. 2. Represents the weighted average coupon rate for SEVN's portfolio of investment loans during the respective period. 3. Represents the weighted average net interest margin for originations during the respective period. |
| 11 S E V E N H I L L S R E A L T Y T R U S T Loan Roswell, GA Philadelphia, PA Type First Mortgage Loan First Mortgage Loan Size $36.3 million $16.0 million Collateral Multifamily Self Storage LTV 79% 70% Term Three-year initial term; Two 12-month extension options Three-year initial term; Two 12-month extension options Loan Purpose Refinance Refinance Investment Date May 2026 May 2026 NOTABLE 2Q26 TRANSACTIONS Recent Loan Originations Office Loan Repayment Loan Downers Grove, IL Type First Mortgage Loan Size $26.5 million Collateral Office Origination Date September 2020 Scheduled Maturity May 2026 Outcome Repaid in full via borrower refinancing in May 2026 Portfolio Impact Reduces SEVN’s office exposure to ~20% of current portfolio with no exposure to urban or CBD office assets.1 1. Pro forma for two loan originations and two repayments which occurred in Q2 2026. |
| 12 S E V E N H I L L S R E A L T Y T R U S T LOAN PORTFOLIO OVERVIEW Number of Loans 5 26 Average Loan Commitment $23,962 $28,719 Total Loan Commitments $119,810 $746,693 Unfunded Loan Commitments $11,180 $45,324 Principal Balance $108,630 $701,369 Weighted Average Coupon Rate 7.37% 7.34% Weighted Average All In Yield 7.96% 7.79% Weighted Average LTV 71% 67% Weighted Average Floor 3.10% 2.95% Weighted Average Maximum Maturity 4.9 3.0 Weighted Average Risk Rating 3.0 3.0 12 Well diversified portfolio of 100% floating rate loans with strong credit metrics. 2026 YTD Originations As of June 1, 2026 |
| 13 S E V E N H I L L S R E A L T Y T R U S T LOAN PORTFOLIO OVERVIEW (Continued) Property Type1 Geographic Diversity1 Loan to Value1 Risk Rating Distribution1 South 38% East 35% West 24% Midwest 3% 13 21% 13% 20% 31% 15% 30%-60% 61%-65% 66%-70% 71%-75% 76%-80% 6% 13% 58% 23% -- % Lower Risk (1) Average Risk (2) Acceptable Risk (3) Higher Risk (4) Impaired/ Loss Likely (5) Office 20% Hotel 17% Student Housing 17% Industrial 16% Multifamily 10% Self Storage 9% Mixed Use 5% Medical Office 4% Retail 2% 1. All information presented as of June 1, 2026, pro forma for two loan originations and two repayments which occurred in Q2 2026. |
| 14 S E V E N H I L L S R E A L T Y T R U S T FIRST QUARTER CAPITALIZATION $136 $138 $85 $104 $79 $112 $65 $146 $215 $150 Citibank UBS BMO Wells Fargo Advanced Unused Capacity Secured Financing Facilities1 (Dollars in millions) Strong relationships with Secured Financing Providers continue to support SEVN’s growth strategy to invest in accretive loan opportunities. Highlights • Secured Financing Facilities provide total borrowing capacity of $865 million. • Extended the maturity dates of our UBS and Wells Fargo Facilities to 2028 and increased the Wells Fargo facility size by $125 million to $250 million. • Available borrowing capacity of $398 million and $57 million of cash on hand. • Conservative leverage with debt-to-equity ratio of ~1.4x. 14 S E V E N H I L L S R E A L T Y T R U S T $250 $250 1. All information presented as of June 1, 2026, pro forma for two loan originations and two repayments which occurred in Q2 2026. |
| Market Opportunity |
| 16 S E V E N H I L L S R E A L T Y T R U S T $15 million - $100 million 85% >$100 million 15% STRUCTURAL TAILWINDS IN MIDDLE MARKET CRE LENDING Demand for CRE debt capital in the underserved middle market is expected to remain strong as regional banks reduce CRE exposure, creating an opportunity for alternative lenders like SEVN to benefit from favorable market conditions. • ~85% of CRE asset sales transactions occur in the $15 million to $100 million range, commonly defined as the middle market. • Demand for alternative and flexible sources of CRE debt capital remains strong and competitive conditions remain favorable due to interest rate volatility and curtailed lending in the banking sector. • Focus on underserved middle market presents opportunity to generate attractive risk adjusted returns. Alternative Lender Market Share2 CRE Asset Sales Transactions > $15 Million1 Q1 2017 – Q1 2026 1. Source: Real Capital Analytics; Data obtained April 2026. Includes all properties sold in transactions greater than $15 million from 2017 to 2025 in the following property types: Office, Industrial, Retail, Hotel, Apartment and Senior Housing & Care. 2. Source: Real Capital Analytics as of April 2026. 7% 10% 10% 8% 12% 12% 10% 11% 14% 2017 2018 2019 2020 2021 2022 2023 2024 2025 Middle Market Upper Market |
| 17 S E V E N H I L L S R E A L T Y T R U S T LARGE AND NEAR-TERM CRE DEBT MATURITY OPPORTUNITY ~$3.0T of CRE debt, including ~$1.2T in multifamily, matures over the next five years, creating a substantial financing opportunity for flexible lenders. 1. Source: Mortgage Bankers Association, as of 12/31/2025. All figures in billions USD. Middle Market CRE Debt Maturities, 2026-2030 ($B)1 Office, $167 Office, $123 Office, $76 Office, $70 Office, $55 Multifamily, $297 Multifamily, $223 Multifamily, $237 Multifamily, $237 Multifamily, $235 Commercial/Other, $400 Commercial/Other, $298 Commercial/Other, $268 Commercial/Other, $204 Commercial/Other, $153 $0 $100 $200 $300 $400 $500 $600 $700 $800 $900 $1,000 2026 2027 2028 2029 2030 Total: $864 Total: $644 Total: $581 Total: $511 Total: $443 |
| Execution & Portfolio Growth |
| 19 S E V E N H I L L S R E A L T Y T R U S T DISCIPLINED INVESTMENT SCREENING PROCESS Term Sheets Issued 48 Loans $1.5 billion 10 Loans $264 million Seven Hills employs a rigorous, multi-disciplinary screening process to identify loan opportunities with the most attractive risk-adjusted returns. • Screened loans with an average size of ~$41 million. • Converted 14% of term sheets issued into closed loans. • Closed approximately 1.6% of loans screened. • Closed three loans for an aggregate total commitment of $67.5 million during the first quarter of 2026. 425 Loans $17.3 billion Loans Screened Applications Closed 19 Production Statistics 1Q26 Trailing Twelve Months 9 Loans $249 million All information presented as of the three months ended March 31, 2026. |
| 20 S E V E N H I L L S R E A L T Y T R U S T Tremont’s reputation in CRE lending and RMR’s scope and scale across the U.S. provides a deep network of relationships for sourcing opportunities. Repeat Business Approximately one-third of Tremont’s loan volume is attributable to repeat sponsors. Relationships Tremont reviewed opportunities from over 400 different sponsors in 2025. Lenders Tremont and RMR have 30+ active lending relationships. Brokers Tremont and RMR have utilized more than 50 broker relationships for debt placement and property sales. Representative Relationships Note: This is a sampling of the firms with which Tremont has worked with and do not reflect all relevant relationships. Logos are protected trademarks of their respective owners, and RMR disclaims any association with them and any rights associated with such trademarks. DIFFERENTIATED SOURCING THROUGH DEEP RELATIONSHIPS |
| 21 S E V E N H I L L S R E A L T Y T R U S T CONSISTENT PORTFOLIO GROWTH THROUGH CAPITAL DEPLOYMENT SEVN is growing the portfolio through selective deployment, prioritizing high-quality loans in capital-constrained segments where fundamentals remain strong. $661.4 $632.8 $614.3 $687.6 $732.0 $701.4 $29.5 $32.6 $27.6 $36.9 $44.0 $690.9 $45.3 $665.4 $641.9 $724.5 $776.0 $746.7 Q1 2025 Q2 2025 Q3 2025 Q4 2025 Q1 2026 Pro Forma as of June 1, 2026 Total Loan Commitments by Quarter (Dollars in millions) Total Commitments Unfunded Commitments Principal Balance Loan Count 23 23 22 24 26 26 * * Rights offering completed during the quarter ended December 31, 2025. |
| Appendix |
| 23 S E V E N H I L L S R E A L T Y T R U S T MANAGED BY TREMONT REALTY CAPITAL Impressive track record with deep experience originating and actively managing middle market and transitional CRE loans. • ~$9.5 billion of loan originations completed since inception in 2000. • Seasoned origination, underwriting, and asset management teams support continued growth. • Team of professionals with an average of over 20 years experience in the CRE finance sector. • As a wholly owned subsidiary of RMR, Tremont benefits from a fully integrated platform with ownership experience across all major property types, in-house property management, and operational experience to help protect shareholder value in the event of a borrower default and foreclosure situation. • Strong shareholder alignment with ~20% equity ownership of SEVN. Fully Integrated Platform Origination Underwriting Diligence Asset Management Reporting Investor Relations Compliance Marketing Established Manager |
| 24 S E V E N H I L L S R E A L T Y T R U S T Industrial Residential Senior Living Medical Office Life Science Hotels Retail Office Over $37 Billion in AUM RMR Platform Over 800 Real Estate Professionals More than 30 Offices Nationwide Approximately 1,800 Properties National Multi-Sector Investment Platform RMR Clients Private Real Estate Vehicles 32% $11.8 Billion Private Capital 68% $25.4 Billion Perpetual Capital Information on this page is as of March 31, 2026. VERTICALLY INTEGRATED NATIONAL REAL ESTATE INVESTING PLATFORM |
| 25 S E V E N H I L L S R E A L T Y T R U S T LOAN INVESTMENT DETAILS (Dollars in thousands) First mortgage loans, pro forma as of June 1, 2026: # Location Property Type Origination Date Committed Principal Amount Principal Balance Coupon Rate All in Yield Maturity Date Maximum Maturity Date LTV Risk Rating 1 Passaic, NJ Industrial 09/08/2022 $ 47,000 $ 45,260 S + 3.85% S + 4.42% 09/08/2026 09/08/2027 69% 3 2 Dallas, TX Office 08/25/2021 46,811 44,217 S + 3.25% S + 3.27% 08/25/2026 08/25/2026 72% 4 3 Boston, MA Hotel 12/16/2024 45,000 39,800 S + 3.95% S + 4.39% 12/16/2027 12/16/2029 49% 3 4 Oxford, MS Student Housing 11/26/2024 42,000 42,000 S + 2.95% S + 3.35% 11/26/2027 11/26/2029 75% 1 5 College Park, MD Student Housing 11/12/2025 37,320 28,327 S + 2.95% S + 3.45% 11/12/2028 11/12/2030 43% 3 6 Revere, MA Hotel 07/01/2024 37,000 37,000 S + 3.95% S + 5.14% 07/01/2026 07/01/2029 73% 3 7 Roswell, GA Multifamily 05/29/2026 36,310 34,440 S + 3.35% S + 4.16% 05/29/2029 05/29/2031 79% 3 8 New York, NY Mixed Use 09/05/2025 34,500 34,500 S + 3.20% S + 4.02% 09/05/2027 09/05/2030 70% 2 9 San Marcos, TX Student Housing 01/14/2025 31,200 28,811 S + 3.25% S + 3.67% 01/14/2028 01/14/2030 62% 2 10 Atlanta, GA Medical Office 02/05/2026 30,500 25,500 S + 3.95% S + 4.42% 02/05/2029 02/05/2031 66% 3 11 Anaheim, CA Hotel 11/29/2023 29,000 29,000 S + 4.00% S + 4.05% 11/29/2026 11/29/2028 55% 2 12 San Antonio, TX Industrial 06/13/2025 28,000 22,800 S + 3.40% S + 3.88% 06/13/2028 06/13/2030 62% 3 13 Plano, TX Office 07/01/2021 27,385 26,569 S + 3.75% S + 3.76% 07/01/2026 07/01/2026 78% 4 14 Wayne, PA Industrial 07/18/2024 27,000 25,252 S + 4.25% S + 4.72% 07/18/2027 07/18/2029 62% 3 15 Fayetteville, GA Self Storage 10/06/2023 25,250 25,250 S + 3.35% S + 3.73% 10/06/2026 10/06/2028 55% 3 |
| 26 S E V E N H I L L S R E A L T Y T R U S T LOAN INVESTMENT DETAILS (Continued) (Dollars in thousands) First mortgage loans, pro forma as of June 1, 2026: # Location Property Type Origination Date Committed Principal Amount Principal Balance Coupon Rate All in Yield Maturity Date Maximum Maturity Date LTV Risk Rating 16 Carlsbad, CA Office 10/27/2021 24,750 24,417 S + 3.25% S + 3.26% 10/27/2026 10/27/2026 78% 4 17 Los Angeles, CA Self Storage 06/28/2024 23,800 23,093 S + 3.40% S + 3.82% 06/28/2027 06/28/2029 58% 3 18 Downers Grove, IL Office 12/09/2021 23,530 23,530 S + 4.25% S + 4.51% 12/09/2026 12/09/2026 72% 3 19 Fontana, CA Industrial 11/18/2022 22,080 20,470 S + 3.75% S + 4.03% 11/18/2026 11/18/2026 72% 3 20 Bellevue, WA Office 11/05/2021 21,000 20,817 S + 2.85% S + 2.85% 04/07/2028 04/07/2029 68% 4 21 Palm Desert, CA Retail 02/25/2026 19,500 15,190 S + 3.60% S + 4.12% 02/25/2029 02/25/2031 72% 3 22 Waco, TX Student Housing 03/06/2025 18,500 18,500 S + 3.35% S + 3.75% 03/06/2028 03/06/2030 73% 3 23 Boise, ID Multifamily 06/26/2025 18,000 18,000 S + 3.50% S + 4.28% 06/26/2028 06/26/2030 79% 3 24 Newport News, VA Multifamily 04/25/2024 17,757 15,126 S + 3.15% S + 3.85% 04/25/2027 04/25/2029 71% 3 25 Scottsdale, AZ Hotel 03/06/2026 17,500 17,500 S + 3.85% S + 4.44% 03/06/2029 03/06/2031 63% 3 26 Philadelphia, PA Self Storage 5/7/2026 16,000 16,000 S + 4.00% S + 4.41% 05/07/2029 05/07/2031 70% 3 Total/weighted average $ 746,693 $ 701,369 S + 3.55% S + 3.99% 67% 3.0 |
| 27 S E V E N H I L L S R E A L T Y T R U S T Three Months Ended March 31, 2026 December 31, 2025 September 30, 2025 June 30, 2025 March 31, 2025 Distributable Earnings Net income $ 4,385 $ 4,794 $ 3,430 $ 2,678 $ 4,532 Non-cash equity compensation expense 207 216 487 677 356 Non-cash accretion of purchase discount (145) (37) — — — Provision for (reversal of) credit losses 603 (593) 37 912 (153) Depreciation and amortization of real estate owned 253 247 278 269 269 Distributable Earnings $ 5,303 $ 4,627 $ 4,232 $ 4,536 $ 5,004 Weighted average common shares outstanding - basic and diluted 22,398 16,578 14,826 14,785 14,757 Distributable Earnings per common share - basic and diluted $ 0.24 $ 0.28 $ 0.29 $ 0.31 $ 0.34 As of March 31, 2026 December 31, 2025 September 30, 2025 June 30, 2025 March 31, 2025 Adjusted Book Value Shareholders' equity $ 326,982 $ 328,651 $ 266,481 $ 267,020 $ 268,945 Allowance for credit losses (1) 9,714 9,111 9,704 9,667 8,755 Adjusted Book Value $ 336,696 $ 337,762 $ 276,185 $ 276,687 $ 277,700 Total outstanding common shares 22,596 22,584 15,069 14,944 14,907 Book value per common share $ 14.47 $ 14.55 $ 17.68 $ 17.87 $ 18.04 Adjusted Book Value per common share $ 14.90 $ 14.96 $ 18.33 $ 18.51 $ 18.63 NON-GAAP FINANCIAL MEASURES (amounts in thousands, except per share data) (1) Amounts include our allowance for credit losses for our loan portfolio and our unfunded commitments. The allowance for credit losses for our unfunded commitments is included in accounts payable, accrued liabilities and other liabilities in our consolidated balance sheets. |
| 28 S E V E N H I L L S R E A L T Y T R U S T NON-GAAP FINANCIAL MEASURES (Continued) We present Distributable Earnings, Distributable Earnings per common share, Adjusted Book Value and Adjusted Book Value per common share, which are considered “non-GAAP financial measures” within the meaning of the applicable SEC rules. These non-GAAP financial measures do not represent book value, book value per common share, net income, net income per common share or cash generated from operating activities and should not be considered as alternatives to book value, book value per common share, net income or net income per common share determined in accordance with GAAP or as an indication of our cash flows from operations determined in accordance with GAAP, a measure of our capital adequacy, liquidity or operating performance or an indication of funds available for our cash needs. In addition, our methodologies for calculating these non-GAAP financial measures may differ from the methodologies employed by other companies to calculate the same or similar supplemental capital adequacy or performance measures; therefore, our reported Adjusted Book Value, Adjusted Book Value per common share, Distributable Earnings and Distributable Earnings per common share may not be comparable to adjusted book value, adjusted book value per common share, distributable earnings and distributable earnings per common share as reported by other companies. We believe that Adjusted Book Value and Adjusted Book Value per common share is a meaningful measure of our capital adequacy because it excludes the impact of certain non-cash estimates or adjustments, including our allowance for credit losses for our loan portfolio and unfunded loan commitments. Adjusted Book Value per common share does not represent book value per common share or alternative measures determined in accordance with GAAP. Our methodology for calculating Adjusted Book Value per common share may differ from the methodologies employed by other companies to calculate the same or similar supplemental capital adequacy measures; therefore, our Adjusted Book Value per common share may not be comparable to the adjusted book value per common share reported by other companies. In order to maintain our qualification for taxation as a REIT, we are generally required to distribute substantially all of our taxable income, subject to certain adjustments, to our shareholders. We believe that one of the factors that investors consider important in deciding whether to buy or sell securities of a REIT is its distribution rate. Over time, Distributable Earnings and Distributable Earnings per common share may be useful indicators of distributions to our shareholders and are measures that are considered by our Board of Trustees when determining the amount of distributions. We believe that Distributable Earnings and Distributable Earnings per common share provide meaningful information to consider in addition to net income, net income per common share and cash flows from operating activities determined in accordance with GAAP. These measures help us to evaluate our performance excluding the effects of certain transactions and GAAP adjustments that we believe are not necessarily indicative of our current loan portfolio and operations. In addition, Distributable Earnings, excluding incentive fees, is used in determining the amount of base management and management incentive fees payable by us to Tremont under our management agreement. Distributable Earnings: We calculate Distributable Earnings and Distributable Earnings per common share as net income and net income per common share, respectively, computed in accordance with GAAP, including realized losses not otherwise included in net income determined in accordance with GAAP, and excluding: (a) depreciation and amortization of real estate owned and related intangible assets, if any; (b) non-cash equity compensation expense; (c) unrealized gains, losses and other similar non-cash items that are included in net income for the period of the calculation (regardless of whether such items are included in or deducted from net income or in other comprehensive income under GAAP), if any; and (d) one-time events pursuant to changes in GAAP and certain non-cash items, if any. Distributable Earnings are reduced for realized losses on loan investments when amounts are deemed uncollectable. This is generally at the time a loan is repaid, or in the case of foreclosure, when the underlying asset is sold, but may also be when, in our determination, it is nearly certain that all amounts due will not be collected. The realized loss amount reflected in Distributable Earnings will equal the difference between the cash received or expected to be received and the carrying value of the asset. |
| 29 S E V E N H I L L S R E A L T Y T R U S T NON-GAAP FINANCIAL MEASURES (Continued) All In Yield: All In Yield represents the yield on a loan, including amortization of deferred fees over the initial term of the loan and excluding any purchase discount accretion. BMO Facility: Amounts advanced under the facility loan agreement and security agreement with BMO Harris Bank N.A., or BMO, are pursuant to separate facility loan agreements that we refer to as the BMO Facility. CBD: The central business district, or CBD, is the center of business and economic activity in major markets of the United States. GAAP: GAAP refers to generally accepted accounting principles. Gross AUM: Gross AUM refers to gross assets under management. LTV: Loan to value ratio, or LTV, represents the initial loan amount divided by the underwritten in-place value of the underlying collateral at closing. Master Repurchase Facilities: Collectively, we refer to the master repurchase facilities with UBS AG, or UBS, Citibank, N.A., or Citibank, and Wells Fargo, National Association, or Wells Fargo, as our Master Repurchase Facilities. Maximum Maturity: Maximum Maturity assumes all borrower loan extension options have been exercised, which options are subject to the borrower meeting certain conditions. Net Interest Margin: Net interest margin refers to the difference between the interest rate margin of an investment loan and the interest rate margin under the respective Secured Financing Facility for that loan. Secured Financing Facilities: Collectively, we refer to the Master Repurchase Facilities and our BMO Facility as our Secured Financing Facilities. SOFR: SOFR refers to the Secured Overnight Financing Rate. WALT: WALT refers to weighted average lease term. |
| TWO NEWTON PLACE | 255 WASHINGTON STREET, SUITE 300 | NEWTON, MASSACHUSETTS 02458 S E V N R E I T . C O M |
