97.1 | | | | | | | 99.1 | | | 99.2 | | 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.) |
(+) Management contract or compensatory plan or arrangement. Item 16. Form 10-K Summary None.
Report of Independent Registered Public Accounting Firm To the Board of Trustees and Shareholders of Office Properties Income Trust Opinion on the Financial Statements We have audited the accompanying consolidated balance sheetsheets of Office Properties Income Trust (the "Company") as of December 31, 2020,2023 and 2022, the related consolidated statements of comprehensive income (loss), shareholders' equity, and cash flows, for each of the year thenthree years in the period ended December 31, 2023, and the related notes and the schedule listed in the Index at Item 15(a) (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020,2023 and 2022, and the results of its operations and its cash flows for each of the yearthree years in the period ended December 31, 2020,2023, in conformity with accounting principles generally accepted in the United States of America.America. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2020,2023, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 19, 2021,15, 2024, expressed an unqualified opinion on the Company's internal control over financial reporting. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audit.audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our auditaudits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our auditaudits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our auditaudits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit providesaudits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Impairment of Real Estate Properties - Refer to Notes 2 and 34 to the financial statements Critical Audit Matter Description The Company’s investments in real estate assetsproperties were $3.4 billion, net of accumulated depreciation of $650 million as of December 31, 2023. These real estate properties are evaluated for impairment periodically or when events or changes in circumstances indicate that the carrying amount of a real estate assetproperty may not be recoverable. TheImpairment indicators may include declining tenant or resident occupancy, weak or declining profitability from the property, decreasing tenant cash flows or liquidity, the Company’s evaluationdecision to dispose of a property before the end of its estimated useful life, and legislative, market or industry changes that could permanently reduce the value of a property. If indicators of impairment are identified for any real estate property, the Company evaluates the recoverability of that real estate assets involves the comparison ofproperty by comparing undiscounted future cash flows expected to be generated by eachthe real estate assetproperty over the Company’s estimated holdingexpected remaining hold period to the respective carrying amount. The Company’s undiscounted future cash flows analysis and the assessment of expected remaining holding period requires management to make significant estimates and assumptions related to future occupancy levels, rental rates, estimated sale proceeds,expected remaining hold periods, market rents, and terminal capitalization rates. In the event that a real estate asset is not recoverable, the Company will adjust the real estate asset to its fair value based on third-party appraisals, broker selling estimates, sale agreements under negotiation, and/or final selling prices, when available, and recognize an impairment loss for the carrying amount in excess of fair value.
We identified the impairment of real estate assetsproperties as a critical audit matter because of the significant estimates and assumptions management makes to evaluate the recoverability of real estate assets.properties. This required a high degree of auditor judgment and an
judgment and an increased extent of effort when performing audit procedures to evaluate the reasonableness of the significant estimates and assumptions related to expected remaining hold periods, market rents, and terminal capitalization rates within management’s undiscounted future cash flows analysis and assessment of expected remaining holding period.which are sensitive to future market or industry considerations. How the Critical Audit Matter Was Addressed in the Audit Our audit procedures related to the undiscounted cash flows analysis and the assessmentfor each real estate property or group of the expected remaining hold periodproperties with impairment indicators included the following among others: •We tested the effectiveness of controls over management’s evaluation of the recoverability of real estate property assets,properties, including the key inputsassumptions utilized in estimating the undiscounted future cash flows. •We evaluated the undiscounted cash flow analysis including estimates of future occupancy levels, rental rates, estimated sale proceeds,expected remaining hold period, market rents, and terminal capitalization rates for each real estate assetproperty or group of assetsproperties with possible impairment indicators by (1) evaluating the source information and assumptions used by management and (2) testing the mathematical accuracy of the undiscounted future cash flows analysis. •We evaluated the reasonableness of management’s undiscounted future cash flows analysis by comparing management’s projections to external market sources and evidence obtained in other areas of our audit.
•We held discussionsevaluated the reasonableness of management’s undiscounted future cash flows analysis by developing an independent expectation of future undiscounted cash flows based on third party market data and compared that independent estimate to the carrying amount of the real estate property or group of properties with indicators of impairment. We compared our analysis of the recoverability of the real estate property or group of properties to the Company's analysis. •We made inquiries of management about the current status of potential transactions and about management’s judgments to understand the probability of future events that could affect the expected remaining hold period and other cash flow assumptions for the properties. | | | | | | /s/ Deloitte & Touche LLP | | | | Boston, Massachusetts | | February 19, 202115, 2024 | | | | We have served as the Company’s auditor since 2020. | |
Report of Independent Registered Public Accounting Firm To the Board of Trustees and Shareholders of Office Properties Income Trust Opinion on Internal Control over Financial Reporting We have audited the internal control over financial reporting of Office Properties Income Trust (the “Company”) as of December 31, 2020,2023, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2020,2023, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2020,2023, of the Company and our report dated February 19, 2021,15, 2024, expressed an unqualified opinion on those financial statements. Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management Report on Assessment of Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directorstrustees of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. | | | | | | /s/ Deloitte & Touche LLP | | | | Boston, Massachusetts | | February 19, 202115, 2024 | | | | | |
Report of Independent Registered Public Accounting Firm
To the Trustees and Shareholders of Office Properties Income Trust
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheet of Office Properties Income Trust (the Company) as of December 31, 2019, the related consolidated statements of comprehensive income (loss), shareholders' equity and cash flows for each of the two years in the period ended December 31, 2019, and the related notes and the financial statement schedule listed in the Index at item 15(a)(collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2019, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2019, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2019, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 20, 2020 expressedan unqualified opinion thereon.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
| | | | | | /s/ Ernst & Young LLP | | | | We served as the Company’s auditor from 2008 to 2020. | | | | Boston, Massachusetts | | February 20, 2020 | |
OFFICE PROPERTIES INCOME TRUST
CONSOLIDATED BALANCE SHEETS (dollars in thousands, except per share data) | | December 31, | | | 2020 | | 2019 | | | December 31, | | | December 31, | | | December 31, | | | 2023 | | | 2023 | | | 2023 | | ASSETS | | ASSETS | | ASSETS | ASSETS | | | | | Real estate properties: | Real estate properties: | | | Real estate properties: | | Real estate properties: | | Land | | Land | | Land | Land | $ | 830,884 | | | $ | 840,550 | | | Buildings and improvements | Buildings and improvements | 2,691,259 | | | 2,652,681 | | | Buildings and improvements | | Buildings and improvements | | Total real estate properties, gross | | Total real estate properties, gross | | Total real estate properties, gross | Total real estate properties, gross | 3,522,143 | | | 3,493,231 | | | Accumulated depreciation | Accumulated depreciation | (451,914) | | | (387,656) | | | Accumulated depreciation | | Accumulated depreciation | | Total real estate properties, net | | Total real estate properties, net | | Total real estate properties, net | Total real estate properties, net | 3,070,229 | | | 3,105,575 | | | Assets of properties held for sale | Assets of properties held for sale | 75,177 | | | 70,877 | | | Assets of properties held for sale | | Assets of properties held for sale | | Investments in unconsolidated joint ventures | | Investments in unconsolidated joint ventures | | Investments in unconsolidated joint ventures | Investments in unconsolidated joint ventures | 37,951 | | | 39,756 | | | Acquired real estate leases, net | Acquired real estate leases, net | 548,943 | | | 732,382 | | | Acquired real estate leases, net | | Acquired real estate leases, net | | Cash and cash equivalents | | Cash and cash equivalents | | Cash and cash equivalents | Cash and cash equivalents | 42,045 | | | 93,744 | | | Restricted cash | Restricted cash | 14,810 | | | 6,952 | | | Restricted cash | | Restricted cash | | Rents receivable | Rents receivable | 101,766 | | | 83,556 | | | Rents receivable | | Rents receivable | | | Deferred leasing costs, net | | | Deferred leasing costs, net | | | Deferred leasing costs, net | Deferred leasing costs, net | 42,626 | | | 40,107 | | | Other assets, net | Other assets, net | 12,889 | | | 20,187 | | | Other assets, net | | Other assets, net | | Total assets | | Total assets | | Total assets | Total assets | $ | 3,946,436 | | | $ | 4,193,136 | | | | LIABILITIES AND SHAREHOLDERS’ EQUITY | LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | LIABILITIES AND SHAREHOLDERS’ EQUITY | | | LIABILITIES AND SHAREHOLDERS’ EQUITY | | Unsecured revolving credit facility | | Unsecured revolving credit facility | | Unsecured revolving credit facility | Unsecured revolving credit facility | $ | 0 | | | $ | 0 | | | Senior unsecured notes, net | Senior unsecured notes, net | 2,033,242 | | | 2,017,379 | | | Senior unsecured notes, net | | Senior unsecured notes, net | | Mortgage notes payable, net | | Mortgage notes payable, net | | Mortgage notes payable, net | Mortgage notes payable, net | 169,729 | | | 309,946 | | | Liabilities of properties held for sale | Liabilities of properties held for sale | 891 | | | 14,693 | | | Liabilities of properties held for sale | | Liabilities of properties held for sale | | Accounts payable and other liabilities | | Accounts payable and other liabilities | | Accounts payable and other liabilities | Accounts payable and other liabilities | 116,480 | | | 125,048 | | | Due to related persons | Due to related persons | 6,114 | | | 7,141 | | | Due to related persons | | Due to related persons | | Assumed real estate lease obligations, net | Assumed real estate lease obligations, net | 10,588 | | | 13,175 | | | Assumed real estate lease obligations, net | | Assumed real estate lease obligations, net | | Total liabilities | | Total liabilities | | Total liabilities | Total liabilities | 2,337,044 | | | 2,487,382 | | | | Commitments and contingencies | Commitments and contingencies | 0 | | 0 | | | Commitments and contingencies | | | Commitments and contingencies | | | Shareholders’ equity: | Shareholders’ equity: | | | Common shares of beneficial interest, $.01 par value: 200,000,000 shares authorized, 48,318,366 and 48,201,941 shares issued and outstanding, respectively | 483 | | | 482 | | | | Shareholders’ equity: | | | Shareholders’ equity: | | Common shares of beneficial interest, $.01 par value: 200,000,000 shares authorized, 48,755,415 and 48,565,644 shares issued and outstanding, respectively | | Common shares of beneficial interest, $.01 par value: 200,000,000 shares authorized, 48,755,415 and 48,565,644 shares issued and outstanding, respectively | | Common shares of beneficial interest, $.01 par value: 200,000,000 shares authorized, 48,755,415 and 48,565,644 shares issued and outstanding, respectively | | Additional paid in capital | | Additional paid in capital | | Additional paid in capital | Additional paid in capital | 2,615,305 | | | 2,612,425 | | | Cumulative net income | Cumulative net income | 183,895 | | | 177,217 | | | Cumulative other comprehensive loss | 0 | | | (200) | | | Cumulative net income | | Cumulative net income | | | Cumulative common distributions | | | Cumulative common distributions | | | Cumulative common distributions | Cumulative common distributions | (1,190,291) | | | (1,084,170) | | | Total shareholders’ equity | Total shareholders’ equity | 1,609,392 | | | 1,705,754 | | | Total shareholders’ equity | | Total shareholders’ equity | | Total liabilities and shareholders’ equity | Total liabilities and shareholders’ equity | $ | 3,946,436 | | | $ | 4,193,136 | | | Total liabilities and shareholders’ equity | | Total liabilities and shareholders’ equity | |
The accompanying notes are an integral part of these consolidated financial statements.
OFFICE PROPERTIES INCOME TRUST CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (amounts in thousands, except per share data) | | | | | | | | | | | | | | | | | | | Year Ended December 31, | | 2023 | | 2022 | | 2021 | | | | | | | Rental income | $ | 533,553 | | | $ | 554,275 | | | $ | 576,482 | | | | | | | | Expenses: | | | | | | Real estate taxes | 62,831 | | | 57,844 | | | 71,970 | | Utility expenses | 26,778 | | | 27,005 | | | 25,251 | | Other operating expenses | 109,883 | | | 110,366 | | | 105,825 | | Depreciation and amortization | 209,254 | | | 222,564 | | | 241,494 | | Loss on impairment of real estate | 11,299 | | | 21,820 | | | 62,420 | | Acquisition and transaction related costs | 31,816 | | | 292 | | | — | | General and administrative | 22,731 | | | 25,134 | | | 26,858 | | Total expenses | 474,592 | | | 465,025 | | | 533,818 | | | | | | | | | | | | | | Gain on sale of real estate | 3,780 | | | 11,001 | | | 78,354 | | | | | | | | | | | | | | Interest and other income | 1,039 | | | 217 | | | 7 | | Interest expense (including net amortization of debt premiums, discounts and issuance costs of $9,209, $9,134 and $9,771, respectively) | (110,647) | | | (103,480) | | | (112,385) | | Gain (loss) on early extinguishment of debt | — | | | 682 | | | (14,068) | | | | | | | | | | | | | | Loss before income tax expense and equity in net losses of investees | (46,867) | | | (2,330) | | | (5,428) | | Income tax expense | (351) | | | (270) | | | (251) | | Equity in net losses of investees | (3,031) | | | (3,509) | | | (2,501) | | Loss on impairment of equity method investment | (19,183) | | | — | | | — | | | | | | | | | | | | | | | | | | | | Net loss | (69,432) | | | (6,109) | | | (8,180) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Weighted average common shares outstanding (basic and diluted) | 48,389 | | | 48,278 | | | 48,195 | | | | | | | | Per common share amounts (basic and diluted): | | | | | | Net loss | $ | (1.44) | | | $ | (0.14) | | | $ | (0.17) | | | | | | | | | | | | | | | | | | | | | | | | | |
The accompanying notes are an integral part of these consolidated financial statements.
OFFICE PROPERTIES INCOME TRUST CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (amounts in thousands, except per share data)
| | | | | | | | | | | | | | | | | | | Year Ended December 31, | | 2020 | | 2019 | | 2018 | | | | | | | Rental income | $ | 587,919 | | | $ | 678,404 | | | $ | 426,560 | | | | | | | | Expenses: | | | | | | Real estate taxes | 65,119 | | | 73,717 | | | 49,708 | | Utility expenses | 25,384 | | | 34,302 | | | 26,425 | | Other operating expenses | 105,465 | | | 120,943 | | | 89,610 | | Depreciation and amortization | 251,566 | | | 289,885 | | | 162,488 | | Loss on impairment of real estate | 2,954 | | | 22,255 | | | 8,630 | | Acquisition and transaction related costs | 232 | | | 682 | | | 14,508 | | General and administrative | 28,443 | | | 32,728 | | | 24,922 | | Total expenses | 479,163 | | | 574,512 | | | 376,291 | | | | | | | | | | | | | | Gain on sale of real estate | 10,855 | | | 105,131 | | | 20,661 | | Dividend income | 0 | | | 1,960 | | | 1,337 | | Loss on equity securities, net | 0 | | | (44,007) | | | (7,552) | | Interest and other income | 779 | | | 1,045 | | | 639 | | Interest expense (including net amortization of debt premiums, discounts and issuance costs of $9,593, $10,740 and $3,626, respectively) | (108,303) | | | (134,880) | | | (89,865) | | Loss on early extinguishment of debt | (3,839) | | | (769) | | | (709) | | | | | | | | | | | | | | Income (loss) before income tax expense and equity in net losses of investees | 8,248 | | | 32,372 | | | (25,220) | | Income tax expense | (377) | | | (778) | | | (117) | | Equity in net losses of investees | (1,193) | | | (1,259) | | | (2,269) | | Income (loss) from continuing operations | 6,678 | | | 30,335 | | | (27,606) | | Income from discontinued operations | 0 | | | 0 | | | 5,722 | | Net income (loss) | 6,678 | | | 30,335 | | | (21,884) | | Other comprehensive income (loss): | | | | | | Unrealized gain (loss) on financial instrument | 200 | | | (200) | | | 0 | | | | | | | | Equity in unrealized loss of investees | 0 | | | (106) | | | (40) | | Other comprehensive income (loss) | 200 | | | (306) | | | (40) | | Comprehensive income (loss) | $ | 6,878 | | | $ | 30,029 | | | $ | (21,924) | | | | | | | | Net income (loss) | $ | 6,678 | | | $ | 30,335 | | | $ | (21,884) | | Preferred units of limited partnership distributions | 0 | | | 0 | | | (371) | | Net income (loss) available for common shareholders | $ | 6,678 | | | $ | 30,335 | | | $ | (22,255) | | | | | | | | | | | | | | | | | | | | Weighted average common shares outstanding (basic and diluted) | 48,124 | | | 48,062 | | | 24,830 | | | | | | | | Per common share amounts (basic and diluted): | | | | | | Income (loss) from continuing operations | $ | 0.14 | | | $ | 0.63 | | | $ | (1.13) | | | | | | | | Income from discontinued operations | $ | 0 | | | $ | 0 | | | $ | 0.23 | | Net income (loss) available for common shareholders | $ | 0.14 | | | $ | 0.63 | | | $ | (0.90) | | | | | | | |
The accompanying notes are an integral part of these consolidated financial statements.
OFFICE PROPERTIES INCOME TRUST
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(dollars in thousands) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Number of Shares | | Common Shares | | Additional Paid In Capital | | Cumulative Net Income | | Cumulative Other Comprehensive Income (Loss) | | Cumulative Common Distributions | | Total | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Balance at December 31, 2017 | 24,786,479 | | | $ | 248 | | | $ | 1,968,960 | | | $ | 108,144 | | | $ | 60,427 | | | $ | (807,736) | | | $ | 1,330,043 | | Cumulative adjustment upon adoption of ASU No. 2016-01 | — | | | — | | | — | | | 60,281 | | | (60,281) | | | — | | | 0 | | Adjustment upon adoption of ASU No. 2014-09 | — | | | — | | | — | | | 712 | | | — | | | — | | | 712 | | Balance at January 1, 2018 | 24,786,479 | | | 248 | | | 1,968,960 | | | 169,137 | | | 146 | | | (807,736) | | | 1,330,755 | | Issuance of shares, net | 23,281,738 | | | 233 | | | 639,550 | | | — | | | — | | | — | | | 639,783 | | Share grants | 19,925 | | | — | | | 1,523 | | | — | | | — | | | — | | | 1,523 | | Share forfeitures and repurchases | (5,239) | | | — | | | (232) | | | — | | | — | | | — | | | (232) | | Equity in unrealized loss of investees | — | | | — | | | — | | | — | | | (40) | | | — | | | (40) | | Net loss available for common shareholders | — | | | — | | | — | | | (22,255) | | | — | | | — | | | (22,255) | | Distributions to common shareholders | — | | | — | | | — | | | — | | | — | | | (170,566) | | | (170,566) | | Balance at December 31, 2018 | 48,082,903 | | | 481 | | | 2,609,801 | | | 146,882 | | | 106 | | | (978,302) | | | 1,778,968 | | Share grants | 136,100 | | | 1 | | | 3,097 | | | — | | | — | | | — | | | 3,098 | | Share forfeitures and repurchases | (17,062) | | | — | | | (473) | | | — | | | — | | | — | | | (473) | | Amounts reclassified from cumulative other comprehensive income to net income | — | | | — | | | — | | | — | | | (196) | | | — | | | (196) | | Equity in unrealized gain of investees | — | | | — | | | — | | | — | | | 90 | | | — | | | 90 | | Unrealized loss on financial instrument | — | | | — | | | — | | | — | | | (200) | | | — | | | (200) | | Net income available for common shareholders | — | | | — | | | — | | | 30,335 | | | — | | | — | | | 30,335 | | Distributions to common shareholders | — | | | — | | | — | | | — | | | — | | | (105,868) | | | (105,868) | | Balance at December 31, 2019 | 48,201,941 | | | 482 | | | 2,612,425 | | | 177,217 | | | (200) | | | (1,084,170) | | | 1,705,754 | | Share grants | 136,600 | | | 1 | | | 3,323 | | | — | | | — | | | — | | | 3,324 | | Share forfeitures and repurchases | (20,175) | | | — | | | (443) | | | — | | | — | | | — | | | (443) | | Amounts reclassified from cumulative other comprehensive loss to net income | — | | | — | | | — | | | — | | | 85 | | | — | | | 85 | | Unrealized gain on financial instruments | — | | | — | | | — | | | — | | | 115 | | | — | | | 115 | | Net income available for common shareholders | — | | | — | | | — | | | 6,678 | | | — | | | — | | | 6,678 | | Distributions to common shareholders | — | | | — | | | — | | | — | | | — | | | (106,121) | | | (106,121) | | Balance at December 31, 2020 | 48,318,366 | | | $ | 483 | | | $ | 2,615,305 | | | $ | 183,895 | | | $ | 0 | | | $ | (1,190,291) | | | $ | 1,609,392 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Number of Shares | | Common Shares | | Additional Paid In Capital | | Cumulative Net Income | | | | Cumulative Common Distributions | | Total | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Balance at December 31, 2020 | 48,318,366 | | | $ | 483 | | | $ | 2,615,305 | | | $ | 183,895 | | | | | $ | (1,190,291) | | | $ | 1,609,392 | | Common share grants | 145,800 | | | 1 | | | 2,872 | | | — | | | | | — | | | 2,873 | | Common share forfeitures and repurchases | (38,501) | | | — | | | (1,008) | | | — | | | | | — | | | (1,008) | | Net loss | — | | | — | | | — | | | (8,180) | | | | | — | | | (8,180) | | Distributions to common shareholders | — | | | — | | | — | | | — | | | | | (106,368) | | | (106,368) | | Balance at December 31, 2021 | 48,425,665 | | | 484 | | | 2,617,169 | | | 175,715 | | | | | (1,296,659) | | | 1,496,709 | | Common share grants | 172,700 | | | 2 | | | 2,914 | | | — | | | | | — | | | 2,916 | | Common share forfeitures and repurchases | (32,721) | | | — | | | (551) | | | — | | | | | — | | | (551) | | Net loss | — | | | — | | | — | | | (6,109) | | | | | — | | | (6,109) | | Distributions to common shareholders | — | | | — | | | — | | | — | | | | | (106,630) | | | (106,630) | | Balance at December 31, 2022 | 48,565,644 | | | 486 | | | 2,619,532 | | | 169,606 | | | | | (1,403,289) | | | 1,386,335 | | Common share grants | 241,800 | | | 2 | | | 2,266 | | | — | | | | | — | | | 2,268 | | Common share forfeitures and repurchases | (52,029) | | | — | | | (305) | | | — | | | | | — | | | (305) | | Net loss | — | | | — | | | — | | | (69,432) | | | | | — | | | (69,432) | | Distributions to common shareholders | — | | | — | | | — | | | — | | | | | (63,187) | | | (63,187) | | Balance at December 31, 2023 | 48,755,415 | | | $ | 488 | | | $ | 2,621,493 | | | $ | 100,174 | | | | | $ | (1,466,476) | | | $ | 1,255,679 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
The accompanying notes are an integral part of these consolidated financial statements.
OFFICE PROPERTIES INCOME TRUST CONSOLIDATED STATEMENTS OF CASH FLOWS (dollars in thousands) | | Year Ended December 31, | | | Year Ended December 31, | | 2023 | | | 2023 | | 2022 | | 2021 | CASH FLOWS FROM OPERATING ACTIVITIES: | | Net loss | | Net loss | | Net loss | | Adjustments to reconcile net loss to net cash provided by operating activities: | | Depreciation | | Depreciation | | Depreciation | | Net amortization of debt premiums, discounts and issuance costs | | Amortization of acquired real estate leases and assumed real estate lease obligations, net | | Amortization of deferred leasing costs | | Gain on sale of real estate | | Loss on impairment of real estate | | (Gain) loss on early extinguishment of debt | | Straight line rental income | | Other non-cash expenses, net | | | Equity in net losses of investees | | | Equity in net losses of investees | | | Equity in net losses of investees | | Loss on impairment of equity method investment | | | | | Year Ended December 31, | | | 2020 | | 2019 | | 2018 | CASH FLOWS FROM OPERATING ACTIVITIES: | | | | | | Net income (loss) | $ | 6,678 | | | $ | 30,335 | | | $ | (21,884) | | Adjustments to reconcile net income (loss) to net cash provided by operating activities: | | Depreciation | 83,828 | | | 89,400 | | | 66,685 | | Net amortization of debt premiums, discounts and issuance costs | 9,593 | | | 10,740 | | | 3,626 | | Amortization of acquired real estate leases | 167,192 | | | 197,978 | | | 94,375 | | Amortization of deferred leasing costs | 6,887 | | | 5,973 | | | 4,833 | | Gain on sale of real estate | (10,855) | | | (105,131) | | | (20,661) | | Loss on impairment of real estate | 2,954 | | | 22,255 | | | 8,630 | | Loss on early extinguishment of debt | 2,701 | | | 769 | | | 709 | | Straight line rental income | (16,079) | | | (27,507) | | | (10,164) | | Other non-cash expenses, net | 2,229 | | | 2,011 | | | 250 | | Loss on equity securities, net | 0 | | | 44,007 | | | 7,552 | | | Equity in net losses of investees | 1,193 | | | 1,259 | | | 2,269 | | Distribution of earnings from Affiliates Insurance Company | 0 | | | 2,438 | | | 0 | | Equity in earnings of Select Income REIT included in discontinued operations | 0 | | | 0 | | | (20,873) | | Net gain on issuance of shares by Select Income REIT included in discontinued operations | 0 | | | 0 | | | (29) | | Loss on sale of Select Income REIT shares included in discontinued operations | 0 | | | 0 | | | 15,180 | | Distributions of earnings from Select Income REIT | 0 | | | 0 | | | 20,873 | | Change in assets and liabilities: | Change in assets and liabilities: | | | Change in assets and liabilities: | | | Change in assets and liabilities: | | | Rents receivable | | | Rents receivable | | | Rents receivable | Rents receivable | (3,962) | | | 12,586 | | | 5,021 | | Deferred leasing costs | Deferred leasing costs | (12,128) | | | (27,971) | | | (9,203) | | Other assets | Other assets | 2,505 | | | 3,266 | | | 1,127 | | Accounts payable and other liabilities | Accounts payable and other liabilities | (8,081) | | | (19,333) | | | (3,303) | | Due to related persons | Due to related persons | (1,027) | | | (27,746) | | | (97) | | Net cash provided by operating activities | Net cash provided by operating activities | 233,628 | | | 215,329 | | | 144,916 | | | CASH FLOWS FROM INVESTING ACTIVITIES: | CASH FLOWS FROM INVESTING ACTIVITIES: | | | | | | CASH FLOWS FROM INVESTING ACTIVITIES: | | CASH FLOWS FROM INVESTING ACTIVITIES: | | | | | | | Real estate acquisitions | Real estate acquisitions | (47,215) | | | (2,905) | | | 25,221 | | Real estate improvements | Real estate improvements | (81,762) | | | (62,676) | | | (47,500) | | Distributions in excess of earnings from Select Income REIT | 0 | | | 0 | | | 17,251 | | | Distributions in excess of earnings from unconsolidated joint ventures | | Distributions in excess of earnings from unconsolidated joint ventures | | Distributions in excess of earnings from unconsolidated joint ventures | Distributions in excess of earnings from unconsolidated joint ventures | 612 | | | 2,370 | | | 3,751 | | Distributions in excess of earnings from Affiliates Insurance Company | Distributions in excess of earnings from Affiliates Insurance Company | 287 | | | 6,562 | | | 0 | | Proceeds from sale of properties, net | Proceeds from sale of properties, net | 102,211 | | | 829,794 | | | 304,808 | | Proceeds from sale of Select Income REIT shares | 0 | | | 0 | | | 435,125 | | Proceeds from sale of The RMR Group Inc. common shares, net | 0 | | | 104,674 | | | 0 | | Proceeds from repayment of mortgage note receivable | 2,880 | | | 0 | | | 0 | | Net cash (used in) provided by investing activities | (22,987) | | | 877,819 | | | 738,656 | | Contributions to unconsolidated joint ventures | | | Net cash used in investing activities | | | Net cash used in investing activities | | | Net cash used in investing activities | | | CASH FLOWS FROM FINANCING ACTIVITIES: | | CASH FLOWS FROM FINANCING ACTIVITIES: | | CASH FLOWS FROM FINANCING ACTIVITIES: | | Repayment of mortgage notes payable | | Repayment of mortgage notes payable | | Repayment of mortgage notes payable | | Proceeds from issuance of mortgage notes payable | | Repayment of senior unsecured notes | | | Proceeds from issuance of senior unsecured notes, net | | Proceeds from issuance of senior unsecured notes, net | | Proceeds from issuance of senior unsecured notes, net | | Borrowings on unsecured revolving credit facility | | Repayments on unsecured revolving credit facility | | Payment of debt issuance costs | | Repurchase of common shares | | | Distributions to common shareholders | | | Distributions to common shareholders | | | Distributions to common shareholders | | Net cash provided by (used in) financing activities | | | Increase (decrease) in cash, cash equivalents and restricted cash | | Increase (decrease) in cash, cash equivalents and restricted cash | | Increase (decrease) in cash, cash equivalents and restricted cash | | Cash, cash equivalents and restricted cash at beginning of period | | Cash, cash equivalents and restricted cash at end of period | |
The accompanying notes are an integral part of these consolidated financial statements.
OFFICE PROPERTIES INCOME TRUST CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued) (dollars in thousands)
| | | | | | | | | | | | | | | | | | | Year Ended December 31, | | 2020 | | 2019 | | 2018 | CASH FLOWS FROM FINANCING ACTIVITIES: | | | | | | Repayment of mortgage notes payable | (155,367) | | | (12,054) | | | (3,708) | | Repayment of unsecured term loans | 0 | | | (388,000) | | | (162,000) | | Repayment of senior unsecured notes | (400,000) | | | (350,000) | | | 0 | | | | | | | | Proceeds from issuance of senior unsecured notes, net | 408,932 | | | 0 | | | 0 | | Borrowings on unsecured revolving credit facility | 561,467 | | | 430,000 | | | 238,000 | | Repayments on unsecured revolving credit facility | (561,467) | | | (605,000) | | | (741,000) | | Payment of debt issuance costs | (1,492) | | | 0 | | | (3,936) | | Repurchase of common shares | (434) | | | (473) | | | (232) | | Redemption of preferred units of limited partnership | 0 | | | 0 | | | (20,221) | | Preferred units of limited partnership distributions | 0 | | | 0 | | | (646) | | Distributions to common shareholders | (106,121) | | | (105,868) | | | (170,566) | | Net cash used in financing activities | (254,482) | | | (1,031,395) | | | (864,309) | | (Decrease) increase in cash, cash equivalents and restricted cash | (43,841) | | | 61,753 | | | 19,263 | | Cash, cash equivalents and restricted cash at beginning of period | 100,696 | | | 38,943 | | | 19,680 | | Cash, cash equivalents and restricted cash at end of period | $ | 56,855 | | | $ | 100,696 | | | $ | 38,943 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | SUPPLEMENTAL CASH FLOW INFORMATION: | | | | | | Interest paid | $ | 100,083 | | | $ | 131,735 | | | $ | 65,188 | | Income taxes paid | $ | 1,377 | | | $ | 491 | | | $ | 68 | | | | | | | | NON-CASH INVESTING ACTIVITIES: | | | | | | Real estate improvements accrued, not paid | $ | 11,981 | | | $ | 11,457 | | | $ | 9,281 | | | | | | | | | | | | | | | | | | | | | | | | | | Working capital assumed | $ | 0 | | | $ | 0 | | | $ | 25,170 | | Real estate and investment acquired by issuance of common shares | $ | 0 | | | $ | 0 | | | $ | (639,809) | | Real estate and investment acquired by assumption of debt | $ | 0 | | | $ | 0 | | | $ | (1,719,772) | | | | | | | | NON-CASH FINANCING ACTIVITIES: | | | | | | Select Income REIT unsecured revolving credit facility | $ | 0 | | | $ | 0 | | | $ | 108,000 | | Assumption of mortgage notes payable | $ | 0 | | | $ | 0 | | | $ | 161,772 | | Assumption of senior unsecured notes | $ | 0 | | | $ | 0 | | | $ | 1,450,000 | | | | | | | | Issuance of common shares | $ | 0 | | | $ | 0 | | | $ | 639,809 | |
| | | | | | | | | | | | | | | | | | | Year Ended December 31, | | 2023 | | 2022 | | 2021 | SUPPLEMENTAL CASH FLOW INFORMATION: | | | | | | Interest paid | $ | 107,645 | | | $ | 104,174 | | | $ | 103,200 | | Income taxes paid | $ | 478 | | | $ | 352 | | | $ | 299 | | | | | | | | NON-CASH INVESTING ACTIVITIES: | | | | | | Real estate improvements accrued, not paid | $ | 32,231 | | | $ | 42,772 | | | $ | 18,492 | | | | | | | | Real estate acquisition | $ | — | | | $ | — | | | $ | (13,031) | | Capitalized interest | $ | 7,634 | | | $ | 4,578 | | | $ | 795 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| SUPPLEMENTAL DISCLOSURE OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH: | SUPPLEMENTAL DISCLOSURE OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH: | SUPPLEMENTAL DISCLOSURE OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH: | | The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets to the amounts shown in the consolidated statements of cash flows: | The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets to the amounts shown in the consolidated statements of cash flows: | | The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets to the amounts shown in the consolidated statements of cash flows: | | | | As of December 31, | | 2020 | | 2019 | | 2018 | | | As of December 31, | | | | As of December 31, | | | | As of December 31, | | | | 2023 | | | | 2023 | | 2022 | | 2021 | Cash and cash equivalents | Cash and cash equivalents | | $ | 42,045 | | | $ | 93,744 | | | $ | 35,349 | | Restricted cash | Restricted cash | | 14,810 | | | 6,952 | | | 3,594 | | Total cash, cash equivalents and restricted cash shown in the consolidated statements of cash flows | Total cash, cash equivalents and restricted cash shown in the consolidated statements of cash flows | | $ | 56,855 | | | $ | 100,696 | | | $ | 38,943 | |
The accompanying notes are an integral part of these consolidated financial statements.
OFFICE PROPERTIES INCOME TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share amounts)
Note 1. Organization Office Properties Income Trust, or OPI, we, us or our, is a real estate investment trust, or REIT, formed in 2009 under Maryland law. As of December 31, 2020,2023, our wholly owned properties were comprised of 181152 properties containing approximately 24,889,00020,541,000 rentable square feet and we had a noncontrolling ownership interestinterests of 51% and 50% in 3two unconsolidated joint ventures that owned three properties totaling approximately 444,000 rentable square feet through 2 unconsolidated joint ventures in which we own 51% and 50% interests. Merger with Select Income REIT
On December 31, 2018, we completed our acquisition of Select Income REIT, or SIR, a REIT that owned properties primarily net leased to single tenants, pursuant to a merger transaction, or the SIR Merger. As a result of the SIR Merger, we acquired SIR’s property portfolio of 99 properties with approximately 16,500,000468,000 rentable square feet.
The aggregate transaction value, based on the closing price of our common shares on December 31, 2018 of $6.87 per share (prior to the Reverse Share Split, as defined below), was $2,409,740, excluding closing costs of $27,497 ($14,508 of which was paid by us and $12,989 of which was paid by SIR) and including the repayment or assumption of $1,719,772 of SIR debt. In connection with the SIR Merger, SIR shareholders received 1.04, or 23,282,704 in the aggregate, of our newly issued common shares for each common share of SIR, with cash paid in lieu of fractional shares.
As a condition of the SIR Merger, on October 9, 2018, we sold all of the 24,918,421 common shares of SIR we then owned, or the Secondary Sale, in an underwritten public offering at a price of $18.25 per share, raising net proceeds of $435,125 after deducting underwriting discounts and offering expenses. We used the net proceeds from the Secondary Sale to repay amounts then outstanding under our revolving credit facility.
In addition, as a condition of the SIR Merger, on December 27, 2018, SIR paid a pro rata distribution to SIR’s shareholders of record as of the close of business on December 20, 2018 of all 45,000,000 common shares of beneficial interest of Industrial Logistics Properties Trust, or ILPT, that SIR owned, or the ILPT Distribution.
The SIR Merger and the other transactions in connection with the SIR Merger, including the Secondary Sale and the ILPT Distribution, are collectively referred to herein as the SIR Transactions.
Following completion of the SIR Merger and the other SIR Transactions, on December 31, 2018, we effected a reverse share split of our common shares, or the Reverse Share Split, pursuant to which every four of our common shares issued and outstanding as of the effective time of the Reverse Share Split were converted and reclassified into one of our common shares. All impacted amounts and share information included in the consolidated financial statements and notes hereto for the periods presented prior to January 1, 2019 have been retroactively adjusted for the Reverse Share Split as if the Reverse Share Split occurred on the first day of the first period presented.
Note 2. Summary of Significant Accounting Policies Basis of Presentation. These consolidated financial statements include the accounts of us and our subsidiaries, all of which are wholly owned directly or indirectly by us. All intercompany transactions and balances with or among our consolidated subsidiaries have been eliminated. Real Estate Properties. We record our properties at cost and provide depreciation on real estate investments on a straight line basis over estimated useful lives generally ranging from 7 to 40 years. In some circumstances, we engage independent real estate appraisal firms to provide market information and evaluations which are relevant to our purchase price allocations and determinations of useful lives; however, we are ultimately responsible for the purchase price allocations and determinations of useful lives.
OFFICE PROPERTIES INCOME TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(dollars in thousands, except per share amounts)
We allocate the purchase prices of our properties to land, buildingbuildings and improvements based on determinations of the relative fair values of these assets assuming the properties are vacant. We determine the fair value of each property using methods similar to those used by independent appraisers, which may involve estimated cash flows that are based on a number of factors, including capitalization rates and discount rates, among others. We allocate a portion of the purchase price of our properties to above market and below market leases based on the present value (using an interest rate which reflects the risks associated with acquired in place leases at the time each property was acquired by us) of the difference, if any, between (i) the contractual amounts to be paid pursuant to the acquired in place leases and (ii) our estimates of fair market lease rates for the corresponding leases, measured over a period equal to the terms of the respective leases. We allocate a portion of the purchase price to acquired in place leases and tenant relationships based upon market estimates to lease up the property based on the leases in place at the time of purchase. We allocate this aggregate value between acquired in place lease values and tenant relationships based on our evaluation of the specific characteristics of each tenant’s lease. However, we have not separated the value of tenant relationships from the value of acquired in place leases because such value and related amortization expense is immaterial to the accompanying consolidated financial statements. In making these allocations, we consider factors such as estimated carrying costs during the expected lease up periods, including real estate taxes, insurance and other operating income and expenses and costs, such as leasing commissions, legal and other related expenses, to execute similar leases in current market conditions at the time a property was acquired by us. If the value of tenant relationships becomes material in the future, we may separately allocate those amounts and amortize the allocated amounts over the estimated life of the relationships. For transactions that qualify as business combinations, we allocate the excess, if any, of the consideration over the fair value of the assets acquired to goodwill. We amortize capitalized above market lease values (included in acquired real estate leases, net in our consolidated balance sheets) and below market lease values (presented as assumed real estate lease obligations, net in our consolidated balance sheets) as a reduction or increase, respectively, to rental income over the terms of the associated leases. Such amortization resulted in a net increase to rental income of $252 during the year ended December 31, 2023 and net decreases to rental income of $5,440, $2,710$975 and $2,903$2,288 during the years ended December 31, 2020, 20192022 and 2018,2021, respectively. We amortize the value of acquired in place leases (included in acquired real estate leases, net in our consolidated balance sheets), exclusive of the value of above market and below market acquired in place leases, over the terms of the associated leases. Such amortization, which is included in depreciation and amortization expense, amounted to $161,752, $195,268$93,057, $118,728 and $91,472$142,538 during the years ended December 31, 2020, 20192023, 2022 and 2018,2021, respectively. If a lease is terminated prior to its stated expiration, we write off the unamortized amounts relating to that lease. As of December 31, 2020 and 2019, our acquired real estate leases and assumed real estate lease obligations, excluding properties classified as held for sale, were as follows:
| | | | | | | | | | | | | December 31, | | 2020 | | 2019 | Acquired real estate leases: | | | | Capitalized above market lease values | $ | 34,972 | | | $ | 61,971 | | Less: accumulated amortization | (19,291) | | | (29,927) | | Capitalized above market lease values, net | 15,681 | | | 32,044 | | | | | | Lease origination value | 868,459 | | | 1,032,769 | | Less: accumulated amortization | (335,197) | | | (332,431) | | Lease origination value, net | 533,262 | | | 700,338 | | Acquired real estate leases, net | $ | 548,943 | | | $ | 732,382 | | | | | | Assumed real estate lease obligations: | | | | Capitalized below market lease values | $ | 21,092 | | | $ | 28,118 | | Less: accumulated amortization | (10,504) | | | (14,943) | | Assumed real estate lease obligations, net | $ | 10,588 | | | $ | 13,175 | |
As of December 31, 2020, the weighted average amortization periods for capitalized above market leases, lease origination value and capitalized below market lease values were 4.0 years, 5.8 years and 5.0 years, respectively. Future amortization of net intangible lease assets and liabilities, to be recognized over the current terms of the associated leases as of December 31, 2020
OFFICE PROPERTIES INCOME TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (dollars in thousands, except per share amounts) As of December 31, 2023 and 2022, our acquired real estate leases and assumed real estate lease obligations, excluding properties classified as held for sale, were as follows: | | | | | | | | | | | | | December 31, | | 2023 | | 2022 | Acquired real estate leases: | | | | Capitalized above market lease values | $ | 14,758 | | | $ | 15,792 | | Less: accumulated amortization | (10,876) | | | (9,672) | | Capitalized above market lease values, net | 3,882 | | | 6,120 | | | | | | Lease origination value | 572,766 | | | 728,773 | | Less: accumulated amortization | (313,150) | | | (365,560) | | Lease origination value, net | 259,616 | | | 363,213 | | Acquired real estate leases, net | $ | 263,498 | | | $ | 369,333 | | | | | | Assumed real estate lease obligations: | | | | Capitalized below market lease values | $ | 25,678 | | | $ | 27,033 | | Less: accumulated amortization | (14,013) | | | (12,876) | | Assumed real estate lease obligations, net | $ | 11,665 | | | $ | 14,157 | |
As of December 31, 2023, the weighted average amortization periods for capitalized above market leases, lease origination value and capitalized below market lease values were 3.4 years, 6.5 years and 11.0 years, respectively. Future amortization of net intangible lease assets and liabilities, to be recognized over the current terms of the associated leases as of December 31, 2023 are estimated to be $131,357 in 2021, $112,709 in 2022, $91,420in 2023, $69,178$67,692 in 2024, $45,150$48,838 in 2025, $35,068 in 2026, $26,833 in 2027, $14,123 in 2028 and $88,541$59,279 thereafter. We regularly evaluate whether events or changes in circumstances have occurred that could indicate an impairment in the value of long lived assets. Impairment indicators may include declining tenant occupancy, lack of progress releasing vacant space, tenant bankruptcies, low long term prospects for improvement in property performance, weak or declining tenant profitability, cash flow or liquidity, our decision to dispose of an asset before the end of its estimated useful life and legislative, market or industry changes that could permanently reduce the value of a property. If there is an indication that the carrying value of an asset is not recoverable, we estimate the projected undiscounted cash flows to determine if an impairment loss should be recognized. The future net undiscounted cash flows are subjective and are based in part on assumptions regarding hold periods, market rents and terminal capitalization rates. We determine the amount of any impairment loss by comparing the historical carrying value to estimated fair value. We estimate fair value through an evaluation of recent financial performance and projected discounted cash flows using standard industry valuation techniques. In addition to consideration of impairment upon the events or changes in circumstances described above, we regularly evaluate the remaining useful lives of our long lived assets. If we change our estimate of the remaining useful lives, we allocate the carrying value of the affected assets over their revised remaining useful lives. Cash and Cash Equivalents. We consider highly liquid investments with original maturities of three months or less at the date of purchase to be cash equivalents. Restricted Cash. Restricted cash consists of amounts escrowed for future real estate taxes, insurance, leasing costs, capital expenditures and debt service, as required by certain of our mortgage debts. Deferred Leasing Costs. Deferred leasing costs include brokerage costs inducements and until January 1, 2019, legal feesinducements associated with our entering leases. We amortize deferred leasing costs, which are included in depreciation and amortization expense, and inducements, which are included as a reduction to rental income, on a straight line basis over the terms of the respective leases. We recorded amortization of deferred leasing costs of $5,985, $5,216 and $4,330, and reductions to rental income related to the amortization of inducements of $902, $757 and $512 for the years ended December 31, 2020, 2019 and 2018, respectively. Effective January 1, 2019, in accordance with Financial Accounting Standards Board, or FASB, Accounting Standards Update, or ASU, No. 2016-02, Leases, legalLegal costs associated with the execution of our leases, which were previously capitalized and amortized over the life of their respective leases are expensed as incurred and included in general and administrative expenses in our consolidated statements of comprehensive income (loss). We recorded amortization of deferred leasing costs of $8,737, $6,869 and $6,691, and reductions to rental income related to the amortization of inducements of $1,326, $1,124 and $1,187 for the years ended December 31, 2023, 2022 and 2021, respectively. Deferred leasing costs, excluding properties classified as held for sale, totaled $59,691$113,433 and $55,716$94,680 at December 31, 20202023 and 2019,2022, respectively, and accumulated amortization of deferred
OFFICE PROPERTIES INCOME TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (dollars in thousands, except per share amounts) leasing costs totaled $17,065$26,462 and $15,609$21,582 at December 31, 20202023 and 2019,2022, respectively. Future amortization of deferred leasing costs to be recognized during the current terms of our existing leases as of December 31, 20202023 are estimated to be $6,672 in 2021, $5,754 in 2022, $5,060 in 2023, $4,335$11,807 in 2024, $3,699$10,549 in 2025, $9,912 in 2026, $8,919 in 2027, $8,116 in 2028 and $17,106$37,668 thereafter. Debt Issuance Costs. Debt issuance costs include capitalizedCosts related to the issuance or assumption costs related to borrowings, whichof debt are capitalized and amortized to interest expense over the terms of the respective loans. Debt issuance costs, net of accumulated amortization, for our prior $750,000 unsecured revolving credit facility, or our prior revolving credit facility, are included in other assets in our consolidated balance sheets. As of December 31, 20202023 and 2019,2022, debt issuance costs for our prior revolving credit facility were $4,125$5,328 and $4,593, respectively, and accumulated amortization of debt issuance costs for our prior revolving credit facility were $2,069$5,240 and $1,059,$4,072, respectively. Debt issuance costs, net of accumulated amortization, for our senior unsecured notes and mortgage notes payable are presented as a direct deduction from the associated debt liability in our consolidated balance sheets. As of December 31, 20202023 and 2019,2022, debt issuance costs, net of accumulated amortization, for our senior unsecured notes and mortgage notes payable totaled $17,545$16,623 and $10,631,$13,589, respectively. Future amortization of debt issuance costs to be recognized with respect to our prior revolving credit facility, senior unsecured notes and mortgage notes payable as of December 31, 20202023 are estimated to be $2,659 in 2021, $2,428 in 2022, $1,132 in 2023, $1,069$3,147 in 2024, $584$2,573 in 2025, $2,239 in 2026, $1,499 in 2027, $1,231 in 2028 and $11,729$6,022 thereafter. Mortgage Notes Receivable. In connection with a property we sold in July 2016, we provided $3,600 of mortgage financing to the buyer. The mortgage note required interest to be paid at an annual rate of LIBOR plus 4.0%, subject to a minimum annual interest rate of 5.0%, and required monthly payments of interest only until it was repaid in full in March 2020. The mortgage note receivable was included in other assets in our consolidated balance sheet at December 31, 2019.
Equity Securities. We previously owned 2,801,060 common shares of class A common stock of The RMR Group Inc., or RMR Inc., including 1,586,836 common shares acquired from SIR on December 31, 2018 in connection with the SIR Merger, that we sold on July 1, 2019 for net proceeds of $104,674, after deducting underwriting discounts and commissions and other offering expenses. Prior to the sale of our shares of RMR Inc. class A common stock on July 1, 2019, our equity securities were recorded at fair value based on their quoted market price at the end of each reporting period. See Note 6 for more information regarding the sale of our RMR Inc. class A common stock.
OFFICE PROPERTIES INCOME TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(dollars in thousands, except per share amounts)
Equity Method Investments. We previously accounted for our investments in Affiliates Insurance Company, or AIC, until AIC was dissolved on February 13, 2020, and SIR, until we sold the SIR common shares we owned on October 9, 2018, using the equity method of accounting. Significant influence was present through common representation on the boards of trustees or directors of us, AIC and SIR. As of December 31, 2020 and 2019, our investment in AIC2023, we had a carrying valuenoncontrolling ownership interests of $11 and $298, respectively. These amounts are included in other assets in our consolidated balance sheets. We recognized income of $281 and $516 related to our investment in AIC for the years ended December 31, 2019 and 2018, respectively. These amounts are included in equity in net losses of investees in our consolidated statements of comprehensive income (loss). Our other comprehensive income (loss) includes our proportionate share of unrealized losses on securities which were owned and held for sale by AIC of $90 and $(69) related to our investment in AIC for the years ended December 31, 2019 and 2018, respectively. See Notes 1, 3, 6, 11 and 12 for more information regarding our investments in AIC and SIR. We also own 51% and 50% interests in 2two unconsolidated joint ventures which own 3that owned three properties. The properties owned by these joint ventures are encumbered by an aggregate of $82,000 of mortgage indebtedness. We dodid not control the activities that are most significant to these joint ventures and, as a result, we accountaccounted for our investmentinvestments in these joint ventures under the equity method of accounting. See Note 34 for more information regarding our unconsolidated joint ventures.
We periodically evaluate our equity method investments for possible indicators of other than temporary impairment whenever events or changes in circumstances indicate the carrying amount of the investment might not be recoverable. These indicators may include the length of time and the extent to which the market value of our investment is below our carrying value, the financial condition of our investees, our intent and ability to be a long term holder of the investment and other considerations. If the decline in fair value is judged to be other than temporary, we record an impairment charge to adjust the basis of the investment to its estimated fair value. Other Liabilities. We initially acquired 1,541,201 shares of class A common stock of RMR Inc. on June 5, 2015 for cash and share consideration of $17,462. We concluded, for accounting purposes, that the cash and share consideration we paid for our investment in these shares represented a discount to the fair value of these shares. We initially accounted for this investment under the cost method of accounting and recorded this investment at its estimated fair value of $39,833 as of June 5, 2015 using Level 3 inputs, as defined in the fair value hierarchy under U.S. generally accepted accounting principles, or GAAP. As a result, we recorded a liability for the amount by which the estimated fair value of these shares exceeded the price we paid for these shares. This liability is included in accounts payable and other liabilities in our consolidated balance sheets. This liability is being amortized on a straight line basis through December 31, 2035 as an allocated reduction to our business management and property management fee expense. We amortized $1,087 of this liability during each of the years ended December 31, 2020, 2019 and 2018. These amounts are included in the net business management and property management fee amounts for such periods disclosed in Note 5. As of December 31, 2020, the remaining unamortized amount of this liability was $16,319. Future amortization of this liability as of December 31, 2020 is estimated to be $1,087 in 2021 through 2025 and $10,884 thereafter.
Revenue Recognition. We are a lessor of commercial office properties. Our leases provide our tenants with the contractual right to use and economically benefit from all of the physical space specified in the leases; therefore, we have determined to evaluate our leases as lease arrangements. In February 2016, the FASB issued ASU No. 2016-02, Leases. In July 2018, the FASB issued ASU No. 2018-10, Codification Improvements to Topic 842, Leases and ASU No. 2018-11, Leases (Topic 842): Targeted Improvements. In December 2018, the FASB issued ASU No. 2018-20 Leases (Topic 842), Narrow-Scope Improvements for Lessors. Collectively, these standards set out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e., lessees and lessors). ASU No. 2016-02 requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase of the leased asset by the lessee. This classification will determine whether the lease expense is recognized based on an effective interest method or on a straight line basis over the term of the lease. ASU No. 2016-02 requires lessors to account for leases using an approach that is substantially equivalent to existing guidance for sales type leases, direct financing leases and operating leases. These standards were effective as of January 1, 2019. Upon adoption, we applied the package of practical expedients that allowed us to not reassess (i) whether any expired or existing contracts are or contain leases, (ii) lease classification for any expired or existing leases and (iii) initial direct costs for any expired or existing leases. Furthermore, we applied the optional transition method in ASU No. 2018-11, which allowed us to initially apply the new leases standard at the adoption date and recognize a cumulative effect adjustment to the opening balance of retained earnings in the adoption period, although we did not have an adjustment. Additionally, our leases met the criteria in ASU No. 2018-11 to not separate non-lease components from the related lease component; therefore, the accounting for these leases remained largely unchanged from the previous standard. The adoption of ASU No. 2016-02 and the related improvements did not have a material impact in our
OFFICE PROPERTIES INCOME TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(dollars in thousands, except per share amounts)
consolidated financial statements. Upon adoption, (i) allowances for bad debts are recognized as a direct reduction of rental income, and (ii) legal costs associated with the execution of our leases, which were previously capitalized and amortized over the life of their respective leases, are expensed as incurred.
Our leases provide for base rent payments and in addition may include variable payments. Rental income from operating leases, including any payments derived by index or market-based indices, is recognized on a straight line basis over the lease term when we have determined that the collectability of substantially all of the lease payments is probable. Some of our leases have options to extend or terminate the lease exercisable at the option of our tenants, which are considered when determining the lease term. Allowances for bad debts are recognized as a direct reduction of rental income. Certain of our leases contain non-lease components, such as property level operating expenses and capital expenditures reimbursed by our tenants as well as other required lease payments. We have determined that all of our leases qualify formade the practical expedientpolicy election to not separate the lease and non-lease components because (i) the lease components are operating leases and (ii) the timing and pattern of recognition of the non-lease components are the same as those of the lease components. We apply Accounting Standards Codification 842, Leases, to the combined component. Income derived by our leases is recorded in rental income in our consolidated statements of comprehensive income (loss). Certain tenants are obligated to pay directly their obligations under their leases for insurance, real estate taxes and certain other expenses. These obligations, which have been assumed by the tenants under the terms of their respective leases, are not reflected in our consolidated financial statements. To the extent any tenant responsible for any such obligations under the applicable lease defaults on such lease or if it is deemed probable that the tenant will fail to pay for such obligations, we would record a liability for such obligations. See Note 45 for more information regarding our leases.
OFFICE PROPERTIES INCOME TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (dollars in thousands, except per share amounts) Income Taxes. We have elected to be taxed as a REIT under the United States Internal Revenue Code of 1986, as amended, and, accordingly, we generally will not be subject to federal income taxes provided we distribute our taxable income and meet certain other requirements to qualify for taxation as a REIT. We are, however, subject to certain state and local taxes. Cumulative Other Comprehensive Income (Loss). Cumulative other comprehensive income (loss) represents our share of the cumulative comprehensive income and losses of our equity method investees and, prior to January 1, 2018, unrealized gains and losses related to our former investment in RMR Inc.
Per Common Share Amounts. We calculate basic earnings per common share by dividing net income (loss) available for common shareholders byusing the weighted average number of our common shares of beneficial ownership, $.01 par value, or our common shares, outstanding during the period.two class method. We calculate diluted earnings per share using the more dilutive of the two class method or the treasury stock method. Unvested share awards and other potentially dilutive common shares, together with the related impact on earnings, are considered when calculating diluted earnings per share. For the years ended December 31, 2020, 2019 and 2018, there were no dilutive common shares. In addition, for the years ended December 31, 2020, 2019 and 2018, 14, 12 and 4 unvested common shares, respectively, were not included in the calculation of diluted earnings per share because to do so would have been antidilutive. Use of Estimates. Preparation of these financial statements in conformity with GAAP requires us to make estimates and assumptions that may affect the amounts reported in these consolidated financial statements and related notes. The actual results could differ from these estimates. Significant estimates in the consolidated financial statements include purchase price allocations, useful lives of fixed assets and assessment of impairment of real estate and the related intangibles. Segment Reporting. We operate in 1one business segment: direct ownership of real estate properties. New Accounting Pronouncements. In June 2016,On November 27, 2023, the FASBFinancial Accounting Standards Board issued ASUAccounting Standards Update No. 2016-13, Financial Instruments - Credit Losses2023-07, Segment Reporting (Topic 326)280): Measurement of Credit Losses on Financial Instruments, Improvements to Reportable Segment Disclosures, or ASU No. 2016-13,2023-07, which requires thatpublic entities useto: (i) provide disclosures of significant segment expenses and other segment items if they are regularly provided to the Chief Operating Decision Maker, or the CODM, and included in each reported measure of segment profit or loss; (ii) provide all annual disclosures about a new forward looking “expected loss” model that generally will resultreportable segment’s profit or loss and assets currently required by Accounting Standards Codification 280, Segment Reporting, or ASC 280, in interim periods; and (iii) disclose the CODM’s title and position, as well as an explanation of how the CODM uses the reported measures and other disclosures. Public entities with a single reportable segment must apply all the disclosure requirements of ASU No. 2023-07, as well as all the existing segment disclosures under ASC 280. The amendments in ASU No. 2023-07 are incremental to the requirements in ASC 280 and do not change how a public entity identifies its operating segments, aggregates those operating segments, or applies the quantitative thresholds to determine its reportable segments. ASU No. 2023-07 should be applied retrospectively to all prior periods presented in the earlier recognition of allowancefinancial statements and is effective for credit losses. The measurement of expected credit losses is based upon historical experience, current conditions,fiscal years beginning after December 15, 2023, and reasonable and supportable forecasts that affectinterim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. We are currently evaluating the collectability of the reported amount. We adoptedimpact ASU No. 2016-132023-07 will have on January 1, 2020 using the modified retrospective approach. The implementation of this standard did not have a material impact in our consolidated financial statements.statements and disclosures. Note 3. Per Common Share Amounts The calculation of basic and diluted earnings per share is as follows (amounts in thousands, except per share amounts): | | | | | | | | | | | | | | | | | | | Year Ended December 31, | | 2023 | | 2022 | | 2021 | Numerators: | | | | | | Net loss | $ | (69,432) | | | $ | (6,109) | | | $ | (8,180) | | Income attributable to unvested participating securities | (305) | | | (427) | | | — | | Net loss used in calculating earnings per share | $ | (69,737) | | | $ | (6,536) | | | $ | (8,180) | | | | | | | | Denominators: | | | | | | Weighted average common shares outstanding - basic and diluted (1) | 48,389 | | | 48,278 | | | 48,195 | | | | | | | | | | | | | | | | | | | | Net loss per common share - basic and diluted | $ | (1.44) | | | $ | (0.14) | | | $ | (0.17) | | | | | | | |
(1)For the years ended December 31, 2023, 2022 and 2021, there were no dilutive common shares. For the year ended December 31, 2021, 34 unvested common shares were not included in the calculation of diluted earnings per share because to do so would have been antidilutive. Note 3.4. Real Estate Properties As of December 31, 2020,2023, our wholly owned properties were comprised of 181152 properties containing approximately 24,889,00020,541,000 rentable square feet, with an aggregate undepreciated carrying value of $3,577,232,$4,095,010, including $55,089$29,331 classified as held for sale. We also had noncontrolling ownership interests of 51% and 50% in two unconsolidated joint ventures that owned three properties containing approximately 468,000 rentable square feet. We generally lease space at our properties on a gross lease,
OFFICE PROPERTIES INCOME TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (dollars in thousands, except per share amounts) held for sale, and we had noncontrolling ownership interests in 3 properties totaling approximately 444,000 rentable square feet through 2 unconsolidated joint ventures in which we own 51% and 50% interests. We generally lease space at our properties on a gross lease, modified gross lease or net lease basis pursuant to fixed term contracts expiring between 20212024 and 2040.2053. Some of our leases generally require us to pay all or some property operating expenses and to provide all or most property management services. During the year ended December 31, 2020,2023, we entered into 7775 leases for approximately 1,965,0001,698,000 rentable square feet for a weighted (by rentable square feet) average lease term of 7.38.5 years and we made commitments of $82,202 for approximately $43,404 of leasing related costs. As of December 31, 2020,2023, we havehad estimated unspent leasing related obligations of $51,913.$109,309.
2020Acquisition Activities
2023 Acquisition Activities In December 2023, we acquired a vacant land parcel adjacent to a property we own in Irving, TX for $2,750, excluding acquisition related costs. 2022 Acquisition Activities We did not acquire any properties during the year ended December 31, 2022. 2021 Acquisition Activities During the year ended December 31, 2020,2021, we acquired 2three properties containing a combined approximately 163,000926,000 rentable square feet for an aggregate purchase price of $47,215,$576,478, including capitalizednet purchase price adjustments of $1,761 and acquisition related costs of $590.$1,264. These acquisitions were accounted for as asset acquisitions. We allocated the purchase prices of these acquisitions based on the relative estimated fair values of the acquired assets and assumed liabilities as follows: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Acquisition Date | | Location | | Number of Properties | | Rentable Square Feet | | Purchase Price | | Land | | Buildings and Improvements | | Acquired Real Estate Leases | February 2020 | | Boston, MA | | 1 | | 13,000 | | | $ | 11,864 | | | $ | 2,618 | | | $ | 9,246 | | | $ | 0 | | December 2020 | | Fort Mill, SC | | 1 | | 150,000 | | | 35,351 | | | 5,031 | | | 22,526 | | | 7,794 | | | | | | | | | | | | | | | | | | | | | 2 | | 163,000 | | | $ | 47,215 | | | $ | 7,649 | | | $ | 31,772 | | | $ | 7,794 | |
In November 2020, we entered into an agreement to acquire a property adjacent to a property we own in Boston, MA for a purchase price of $26,975, excluding acquisition related costs. This acquisition is expected to occur before the end of the first quarter. However, this acquisition is subject to conditions; accordingly, we cannot be sure that we will complete this acquisition or that this acquisition will not be delayed or the terms will not change.
2019 Acquisition Activities
In November 2019, we acquired a land parcel adjacent to a property we own in Boston, MA for $2,900, excluding acquisition related costs.
OFFICE PROPERTIES INCOME TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(dollars in thousands, except per share amounts)
2018 Acquisition Activities
As described in Note 1, on December 31, 2018, we completed the SIR Merger, pursuant to which we acquired SIR’s property portfolio of 99 properties with approximately 16,500,000 rentable square feet. The total consideration transferred and assumed debt for the SIR Merger was $2,409,740, including the assumption of $1,719,772 of debt and excluding acquisition related costs.
The following table summarizes the consideration transferred and liabilities assumed:
| | | | | | | | | | | | | | | | | | | | | Total Purchase Price (excluding acquisition related costs): | | | OPI common shares issued (1)
| 23,282,704 | | | Closing price of OPI common shares on December 31, 2018 (1)
| $ | 27.48 | | | Value of consideration transferred | $ | 639,809 | | | Cash consideration for fractional shares | 8 | | | Equity issuance costs | (239) | | | Value of consideration transferred | 639,578 | | | | | | Assumed working capital | 50,390 | | | Assumed senior unsecured notes, principal balance | 1,450,000 | | | Assumed mortgage notes payable, principal balance | 161,772 | | | Select Income REIT unsecured revolving credit facility repaid at closing | 108,000 | | | Non-cash portion of purchase price | 1,770,162 | | | Total consideration transferred and liabilities assumed | $ | 2,409,740 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Acquisition Date | | | | Location | | Number of Properties | | Rentable Square Feet | | Purchase Price | | Land | | Buildings and Improvements | | Acquired Real Estate Leases | | Assumed Real Estate Lease Obligations | | | | | June 2021 | | | | Chicago, IL (1) | | 1 | | 531,000 | | | $ | 368,331 | | | $ | 42,935 | | | $ | 258,348 | | | $ | 76,136 | | | $ | (9,088) | | | | | | June 2021 | | | | Atlanta, GA | | 1 | | 346,000 | | | 180,602 | | | 13,040 | | | 135,459 | | | 32,103 | | | — | | | | | | August 2021 | | | | Boston, MA | | 1 | | 49,000 | | | 27,545 | | | 16,103 | | | 10,217 | | | 1,225 | | | — | | | | | | | | | | | | 3 | | 926,000 | | $ | 576,478 | | | $ | 72,078 | | | $ | 404,024 | | | $ | 109,464 | | | $ | (9,088) | | | | | |
(1)OPI common shares issued and the closingPurchase price includes an adjustment of OPI common shares on December 31, 2018 is after giving effect to the Reverse Share Split.$13,031 t
OFFICE PROPERTIES INCOME TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(dollars in thousands, except per share amounts)
As of December 31, 2019, we finalized the purchase price allocation for the SIR Merger from the preliminary amounts reported as of December 31, 2018. The adjustments made during the year ended December 31, 2019 to the fair value of acquired assets and liabilities assumed did not have a significant impact on our consolidated balance sheets or our consolidated statements of comprehensive income (loss). The following table summarizes the final purchase price allocation for SIR based ono record an estimated fair valuesreal estate tax liability as of the December 31, 2018:
| | | | | | | | | | | | Purchase Price Allocation: | | | Land | $ | 477,977 | | | Buildings and improvements | 956,801 | | | Assets of properties held for sale | 6,846 | | | Acquired real estate leases | 854,431 | | | Cash | 24,744 | | | Restricted cash | 476 | | | Rents receivable | 11,370 | | | Other assets (1)
| 88,658 | | | Total assets | 2,421,303 | | | Unsecured revolving credit facility (2)
| (108,000) | | | Senior unsecured notes (3)
| (1,410,947) | | | Mortgage notes payable (4)
| (159,490) | | | Accounts payable and other liabilities | (61,289) | | | Assumed real estate lease obligations | (11,879) | | | | | | | | | Due to related persons | (30,120) | | | Net assets acquired | 639,578 | | | Assumed working capital | 50,390 | | | Select Income REIT unsecured revolving credit facility repaid at closing (2)
| 108,000 | | | Assumed senior unsecured notes, principal balance | 1,450,000 | | | Assumed mortgage notes payable, principal balance | 161,772 | | | Consideration transferred and liabilities assumed (5)
| $ | 2,409,740 | |
(1)Other assets include $84,229 for SIR’s investment in shares of class A common stock of RMR Inc. which was recorded at fair value as of December 31, 2018.
(2)We repaid the outstanding balance under SIR’s revolving credit facility at the closing of the SIR Merger with borrowings under our revolving credit facility.
(3)The aggregate principal balance of the senior unsecured notes was $1,450,000 as of December 31, 2018.
(4)The aggregate principal balance of the mortgage notes payable was $161,772 as of December 31, 2018.
(5)Purchase price excludes acquisition related costs.date.
We were the accounting acquirer of SIR and accounted for the SIR Merger as a business combination because substantially all of the fair value of the gross assets acquired was not concentrated in a single identifiable asset or a group of similar identifiable assets and we acquired inputs and a substantive process that together significantly contributed to the ability to create outputs. As we have and SIR had no employees, the personnel and various services required to operate our and SIR’s businesses are and were provided pursuant to business and property management agreements with The RMR Group LLC, or RMR LLC. These agreements were in effect before, and, in our case, remain in effect after, the SIR Merger. As a result, our acquisition of SIR included a substantive process for accounting purposes.
The assets acquired and liabilities assumed were recorded at their respective fair values and added to our consolidated balance sheet as of December 31, 2018. We allocated the purchase price based on the estimated fair values of the acquired assets and liabilities assumed in a manner consistent with our purchase price allocation accounting policy described in Note 2. We engaged an independent real estate consulting firm to assist us with determining the purchase price allocations and to provide market information and evaluations which are relevant to purchase price allocations and determinations of useful lives. As of the date acquired, the weighted average amortization periods for capitalized above market lease values, lease origination value and capitalized below market lease values were 5.8 years, 7.2 years and 5.7 years, respectively.
OFFICE PROPERTIES INCOME TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(dollars in thousands, except per share amounts)
Disposition Activities The sales completed during the years ended December 31, 2020, 20192023, 2022 and 2018,2021, as presented in the tables below, do not represent significant dispositions individually (unless otherwise noted) or in the aggregate, nor do they represent a strategic shift in our business. As a result, the results of operations of these properties are included in continuing operations through the date of sale in our consolidated statements of comprehensive income (loss). 2020 Disposition Activities
During the year ended December 31, 2020, we sold 10 properties containing a combined approximately 906,000 rentable square feet for an aggregate sales price of $110,463, excluding closing costs and including the repayment of one mortgage note with an outstanding principal balance of $13,095, an annual interest rate of 5.9% and a maturity date in August 2021.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Date of Sale | | | | Number of Properties | | Location | | Rentable Square Feet | | Gross Sales Price (1) | | Gain (Loss) on Sale of Real Estate | | Loss on Impairment of Real Estate | | | January 2020 (2) | | | | 2 | | Stafford, VA | | 65,000 | | | $ | 14,063 | | | $ | 4,771 | | | $ | 0 | | | | January 2020 (2) | | | | 1 | | Windsor, CT | | 97,000 | | | 7,000 | | | 314 | | | 0 | | | | February 2020 (2) | | | | 1 | | Lincolnshire, IL | | 223,000 | | | 12,000 | | | 1,179 | | | 0 | | | | March 2020 (2)(3) | | | | 1 | | Trenton, NJ | | 267,000 | | | 30,100 | | | (179) | | | 0 | | | | March 2020 (2) | | | | 1 | | Fairfax, VA | | 83,000 | | | 22,200 | | | 4,754 | | | 0 | | | | October 2020 | | | | 4 | | Fairfax, VA | | 171,000 | | | 25,100 | | | 16 | | | 2,954 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 10 | | | | 906,000 | | | $ | 110,463 | | | $ | 10,855 | | | $ | 2,954 | | | |
(1)Gross sales price is the gross contract price, includes purchase price adjustments, if any, and excludes closing costs.
(2)Held for sale as of December 31, 2019.
(3)We recorded a $9,454 loss on impairment of real estate during the year ended December 31, 2019 to adjust the carrying value of this property to its fair value less costs to sell.
As of December 31, 2020, we had 2 properties with an aggregate undepreciated carrying value of $55,089 under agreements to sell, as presented in the following table. We have classified these properties as held for sale in our consolidated balance sheet at December 31, 2020. The sales of these properties were completed in January 2021.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | Date of Sale Agreement | | | | Number of Properties | | Location | | Rentable Square Feet | | Gross Sales Price (1) | December 2020 | | | | 0 | | Kansas City, MO (2) | | 10,000 | | | $ | 845 | | December 2020 | | | | 1 | | Richmond, VA | | 311,000 | | | 130,000 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 1 | | | | 321,000 | | | $ | 130,845 | |
(1)Gross sales price is the gross contract price, includes purchase price adjustments, if any, and excludes closing costs.
(2)Consists of a warehouse facility adjacent to a property we own in Kansas City, MO.
In February 2021, we entered into an agreement to sell a property located in Huntsville, AL containing approximately 1,371,000 rentable square feet for a sales price of $39,000, excluding closing costs. This sale is expected to occur before the end of the second quarter. However, this sale is subject to conditions; accordingly, we cannot be sure that we will complete this sale or that this sale will not be delayed or the terms will not change.
OFFICE PROPERTIES INCOME TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (dollars in thousands, except per share amounts) 20192023 Disposition Activities
During the year ended December 31, 2019,2023, we sold 58eight properties containing a combined approximately 6,179,000553,000 rentable square feet for an aggregate sales price of $848,853,$44,874, excluding closing costs. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Date of Sale | | | | Number of Properties | | Location | | Rentable Square Feet | | Gross Sales Price (1) | | Gain (Loss) on Sale of Real Estate | | Loss on Impairment of Real Estate | February 2019 | | | | 34 | | Northern Virginia and Maryland | | 1,636,000 | | | $ | 198,500 | | | $ | 0 | | | $ | 732 | | March 2019 | | | | 1 | | Washington, D.C. (2) | | 129,000 | | | 70,000 | | | 22,075 | | | 0 | | May 2019 | | | | 1 | | Buffalo, NY | | 122,000 | | | 16,900 | | | 0 | | | 5,137 | | May 2019 | | | | 1 | | Maynard, MA | | 287,000 | | | 5,000 | | | (227) | | | 0 | | June 2019 | | | | 1 | | Kapolei, HI | | 417,000 | | | 7,100 | | | 0 | | | 0 | | July 2019 | | | | 1 | | San Jose, CA | | 72,000 | | | 14,000 | | | (270) | | | 0 | | July 2019 | | | | 1 | | Nashua, NH | | 322,000 | | | 25,000 | | | 8,401 | | | 0 | | August 2019 | | | | 1 | | Arlington, TX | | 182,000 | | | 14,900 | | | 187 | | | 0 | | August 2019 | | | | 1 | | Rochester, NY | | 95,000 | | | 4,765 | | | (104) | | | 0 | | August 2019 | | | | 1 | | Hanover, PA | | 502,000 | | | 5,500 | | | (417) | | | 0 | | August 2019 | | | | 1 | | San Antonio, TX | | 618,000 | | | 198,000 | | | 3,869 | | | 0 | | September 2019 | | | | 1 | | Topeka, KS | | 144,000 | | | 15,600 | | | 36 | | | 0 | | September 2019 | | | | 1 | | Falling Waters, WV | | 40,000 | | | 650 | | | 0 | | | 2,179 | | September 2019 | | | | 1 | | San Diego, CA | | 44,000 | | | 8,950 | | | 3,062 | | | 0 | | October 2019 | | | | 3 | | Columbia, SC | | 181,000 | | | 10,750 | | | 0 | | | 3,581 | | November 2019 | | | | 3 | | Metro DC - MD | | 373,000 | | | 61,938 | | | 1,177 | | | 0 | | | | | | | | | | | | | | | | | December 2019 | | | | 1 | | San Diego, CA | | 148,000 | | | 23,750 | | | 6,823 | | | 0 | | December 2019 | | | | 1 | | Phoenix, AZ | | 123,000 | | | 12,850 | | | 860 | | | 0 | | December 2019 | | | | 1 | | Houston, TX | | 497,000 | | | 130,000 | | | 59,992 | | | 0 | | December 2019 | | | | 1 | | Kansas City, KS | | 171,000 | | | 11,700 | | | 0 | | | 1,172 | | December 2019 | | | | 1 | | San Jose, CA | | 76,000 | | | 13,000 | | | (333) | | | 0 | | | | | | 58 | | | | 6,179,000 | | | $ | 848,853 | | | $ | 105,131 | | | $ | 12,801 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Date of Sale | | Number of Properties | | Location | | Rentable Square Feet | | Gross Sales Price (1) | | Gain (Loss) on Sale of Real Estate | | | January 2023 | | 3 | | Richmond, VA (2) | | 89,000 | | | $ | 5,350 | | | $ | 2,548 | | | | April 2023 | | 1 | | Phoenix, AZ | | 107,000 | | | 4,900 | | | 511 | | | | June 2023 | | 1 | | Vernon Hills, IL | | 100,000 | | | 2,825 | | | (2,816) | | | | September 2023 | | 1 | | Windsor Mill, MD | | 80,000 | | | 10,500 | | | 244 | | | | October 2023 | | 1 | | Santa Clara, CA | | 66,000 | | | 16,049 | | | 705 | | | | November 2023 | | 1 | | Chelmsford, MA | | 111,000 | | | 5,250 | | | 2,588 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 8 | | | | 553,000 | | | $ | 44,874 | | | $ | 3,780 | | | |
(1)Gross sales price is the gross contract price, includes purchase price adjustments, if any, and excludesexcluding closing costs. (2)Represents an individually significant disposition. 2018 Disposition Activities
During the year endedProperties were classified as held for sale as of December 31, 2018,2022.
As of December 31, 2023, we sold 19 propertieshad one property located in Chicago, IL containing a combined approximately 2,175,000248,000 rentable square feet classified as held for an aggregate sales price of $320,255, excluding closing costs. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Date of Sale | | | | Number of Properties | | Location | | Rentable Square Feet | | Gross Sales Price (1) | | Gain on Sale of Real Estate | | Loss on Impairment of Real Estate | March 2018 | | | | 1 | | Minneapolis, MN | | 194,000 | | | $ | 20,000 | | | $ | 0 | | | $ | 640 | | May 2018 | | | | 1 | | New York, NY | | 187,000 | | | 118,500 | | | 17,249 | | | 0 | | May 2018 | | | | 1 | | Sacramento, CA | | 111,000 | | | 10,755 | | | 0 | | | 3,029 | | November 2018 | | | | 1 | | Golden, CO | | 43,000 | | | 4,000 | | | 54 | | | 0 | | December 2018 | | | | 15 | | Southern Virginia | | 1,640,000 | | | 167,000 | | | 3,358 | | | 0 | | | | | | 19 | | | | 2,175,000 | | | $ | 320,255 | | | $ | 20,661 | | | $ | 3,669 | |
(1)Gross sales price is the gross contract price, includes purchase price adjustments, if any, and excludes closing costs.
In February 2018, we entered an agreement to sell an office property locatedsale in Safford, AZ with approximately 36,000 rentable square feet for $8,250.our consolidated balance sheets. We recorded a $2,453an $11,299 loss on impairment of real estate to reduce the carrying value of thethis property to its estimated fair value less costs to sell duringas of December 31, 2023. As of February 14, 2024, we have entered into an agreement to sell this property for a sales price of $39,000, excluding closing costs. This pending sale is subject to conditions; accordingly, we cannot be sure that we will complete this sale or that this sale will not be delayed or the three monthsterms will not change.
2022 Disposition Activities During the year ended MarchDecember 31, 2018. In April 2018,2022, we sold 18 properties containing approximately 2,326,000 rentable square feet for an aggregate sales price of $211,020, excluding closing costs. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Date of Sale | | Number of Properties | | Location | | Rentable Square Feet | | Gross Sales Price (1) | | Gain (Loss) on Sale of Real Estate | | Loss on Impairment of Real Estate | January 2022 | | 1 | | Rockville, MD (2) | | 129,000 | | | $ | 6,750 | | | $ | (72) | | | $ | — | | February 2022 | | 2 | | Chesapeake, VA (2) | | 172,000 | | | 18,945 | | | 2,296 | | | — | | March 2022 | | 1 | | Milwaukee, WI (2) | | 29,000 | | | 3,775 | | | (75) | | | — | | May 2022 | | 1 | | Holtsville, NY | | 264,000 | | | 28,500 | | | 1,900 | | | — | | June 2022 | | 1 | | Fairfax, VA | | 184,000 | | | 19,750 | | | (13,537) | | | — | | July 2022 | | 1 | | Houston, TX | | 206,000 | | | 9,800 | | | (135) | | | 15,278 | | August 2022 | | 3 | | Birmingham, AL | | 448,000 | | | 16,050 | | | (265) | | | 3,709 | | August 2022 | | 1 | | Erlanger, KY | | 86,000 | | | 2,600 | | | 135 | | | 2,184 | | September 2022 | | 2 | | Chesapeake, VA | | 214,000 | | | 24,000 | | | 62 | | 649 | September 2022 | | 2 | | Everett, WA | | 112,000 | | | 31,500 | | | 11,959 | | — | September 2022 | | 1 | | Salem, OR | | 233,000 | | | 34,250 | | | 5,369 | | — | November 2022 | | 1 | | Kapolei, HI (3) | | 109,000 | | | 4,000 | | | 2,504 | | — | November 2022 | | 1 | | Englewood, CO | | 140,000 | | | 11,100 | | | 860 | | — | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 18 | | | | 2,326,000 | | $ | 211,020 | | | $ | 11,001 | | | $ | 21,820 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
(1)Gross sales price is the buyergross contract price, excluding closing costs. (2)Properties were classified as held for sale as of December 31, 2021. (3)Property is a leasable land parcel.
OFFICE PROPERTIES INCOME TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (dollars in thousands, except per share amounts) terminated the sale agreement and we removed this property from held for sale status. We recorded a $322 adjustment to impairment of real estate to increase the carrying value of the property to its estimated fair value during the year ended December 31, 2018. 2021 Disposition Activities
During the year ended December 31, 2018,2021, we sold six properties, a warehouse facility and two vacant land parcels containing approximately 2,565,000 rentable square feet for an aggregate sales price of $226,915, excluding closing costs. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Date of Sale | | | | Number of Properties | | Location | | Rentable Square Feet | | Gross Sales Price (1) | | Gain (Loss) on Sale of Real Estate | | Loss on Impairment of Real Estate | | | January 2021 | | | | — | | Kansas City, MO (2)(3) | | 10,000 | | | $ | 845 | | | $ | (63) | | | $ | — | | | | January 2021 | | | | 1 | | Richmond, VA (2) | | 311,000 | | | 130,000 | | | 54,181 | | | — | | | | April 2021 | | | | 1 | | Huntsville, AL | | 1,371,000 | | | 39,000 | | | — | | | 5,383 | | | | July 2021 | | | | 1 | | Fresno, CA | | 532,000 | | | 6,000 | | | — | | | 33,902 | | | | July 2021 | | | | 1 | | Liverpool, NY | | 38,000 | | | 650 | | | 31 | | | — | | | | August 2021 | | | | 1 | | Memphis, TN | | 205,000 | | | 15,270 | | | 287 | | | — | | | | September 2021 | | | | 1 | | Stoneham, MA | | 98,000 | | | 6,650 | | | (282) | | | 5,911 | | | | October 2021 | | | | — | | Sterling, VA (4) | | — | | | 28,500 | | | 24,200 | | | — | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 6 | | | | 2,565,000 | | | $ | 226,915 | | | $ | 78,354 | | | $ | 45,196 | | | |
(1)Gross sales price is the gross contract price, excluding closing costs. (2)Properties were classified as held for sale as of December 31, 2020. (3)Consists of a warehouse facility. (4)Consists of two vacant land parcels. We also recorded a $2,830$10,658 loss on impairment of real estate to reduce the carrying value of three properties that were classified as held for sale to their estimated fair values less costs to sell as of September 30, 2021. Subsequently, we removed these properties from held for sale status due to a portfoliochange of 34plan for sale and recorded an impairment adjustment of $425 to increase the carrying value of these properties which wasto their estimated fair value as of December 31, 2021. In addition, we recorded a $6,991 loss on impairment of real estate to reduce the carrying value of two properties that were classified as held for sale as of December 31, 2018, to its estimated fair value less costs to sell.2021 and subsequently sold in 2022. Unconsolidated Joint Ventures We ownAs of December 31, 2023, we owned interests in 2two joint ventures that own 3owned three properties. We accountaccounted for these investments under the equity method of accounting. As of December 31, 20202023 and 2019,2022, our investments in unconsolidated joint ventures consisted of the following:
| | OPI Ownership | | OPI Carrying Value of Investments at December 31, | | Number of Properties | | Location | | Rentable Square Feet | | | | OPI Ownership | | | | OPI Ownership | | | | OPI Ownership | | Joint Venture | | Joint Venture | | Joint Venture | Joint Venture | | OPI Ownership | | 2020 | | 2019 | | Number of Properties | | Location | | Rentable Square Feet | | Prosperity Metro Plaza | Prosperity Metro Plaza | | $ | 21,888 | | | $ | 22,483 | | | | Prosperity Metro Plaza | | Prosperity Metro Plaza | | 1750 H Street, NW | | 1750 H Street, NW | | 1750 H Street, NW | 1750 H Street, NW | | 50% | | 16,063 | | | 17,273 | | | 1 | | Washington, D.C. | | 115,000 | | Total | Total | | $ | 37,951 | | | $ | 39,756 | | | 3 | | 444,000 | | Total | | Total | |
In October 2023, our joint venture partner in our 1750 H Street, NW joint venture failed to fund a $600 capital call and was in default of the joint venture agreement as of December 31, 2023. During our periodic evaluation of our equity method investments for impairment, we determined that the estimated fair value of our investment in our 1750 H Street, NW joint venture was lower than our carrying value and the decline was other than temporary based on current market conditions and the default of our joint venture partner. As a result, we recorded a loss on impairment of equity method investment of $19,183 during the year ended December 31, 2023 to fully write off its carrying value.
OFFICE PROPERTIES INCOME TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (dollars in thousands, except per share amounts) The following table provides a summary of the mortgage debt of our 2two unconsolidated joint ventures: | | | | | | | | | | | | | | | | | | | | | Joint Venture | | Interest Rate (1) | | Maturity Date | | Principal Balance at December 31, 2020 and 2019 (2) | Prosperity Metro Plaza | | 4.09% | | 12/1/2029 | | $ | 50,000 | | 1750 H Street, NW | | 3.69% | | 8/1/2024 | | 32,000 | | Weighted Average/Total | | 3.93% | | | | $ | 82,000 | |
| | | | | | | | | | | | | | | | | | | | | Joint Venture | | Interest Rate (1) | | Maturity Date | | Principal Balance at December 31, 2023 and 2022 (2) | Prosperity Metro Plaza | | 4.09% | | 12/1/2029 | | $ | 50,000 | | 1750 H Street, NW (3) | | 3.69% | | 8/1/2027 | | 32,000 | | Weighted Average/Total | | 3.93% | | | | $ | 82,000 | |
(1)Includes the effect of mark to market purchase accounting. (2)Reflects the entire balance of the debt secured by the properties and is not adjusted to reflect the interests in the joint ventures we dodid not own. None of the debt is recourse to us. At(3)In July 2023, the maturity date of this mortgage loan was extended by three years at the same interest rate.
As of December 31, 2020,2023, the aggregate unamortized basis difference of our 2 unconsolidatedProsperity Metro Plaza joint venturesventure of $7,463 is$701 was primarily attributable to the difference between the amount for which we purchasedpaid to purchase our interest in thethis joint ventures,venture, including transaction costs, and the historical carrying value of the net assets of thethis joint ventures.venture. This difference is being amortized over the remaining useful life of the related propertiesproperty and the resulting amortization expense is included in the reported amount of equity in net earnings (losses)losses of investees.investees in our consolidated statements of comprehensive income (loss). As of December 31, 2023, there was no unamortized basis difference for our 1750 H Street, NW joint venture. Note 4.5. Leases Rental income from operating leases, including payments derived by index or market-based indices, is recognized on a straight line basis over the lease term when we have determined that the collectability of substantially all of the lease payments is probable. We increased rental income by $16,079, $27,507$26,194, $10,830 and $10,164$15,368 to record revenue on a straight line basis during the years ended December 31, 2020, 20192023, 2022 and 2018,2021, respectively. Rents receivable, excluding properties classified as held for sale, include $68,824$112,440 and $54,837$86,305 of straight line rent receivables at December 31, 20202023 and 2019,2022, respectively. We do not include in our measurement of our lease receivables certain variable payments, including payments determined by changes in the index or market-based indices after the inception of the lease, certain tenant reimbursements and other income until the specific events that trigger the variable payments have occurred. Such payments totaled $75,851, $91,076$88,173, $83,103 and $45,261$85,107 for the years ended December 31, 2020, 20192023, 2022 and 2018,2021, respectively, of which tenant reimbursements totaled $71,385, $86,353$82,885, $78,388 and $40,764,$81,295, respectively.
OFFICE PROPERTIES INCOME TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(dollars in thousands, except per share amounts)
The following operating lease maturity analysis presents the future contractual lease payments to be received by us through 20402053 as of December 31, 2020:2023: | Year | Year | | Amount | Year | | Amount | 2021 | | $ | 474,170 | | 2022 | | 435,572 | | 2023 | | 389,272 | | 2024 | 2024 | | 316,483 | | 2025 | 2025 | | 234,064 | | 2026 | | 2027 | | 2028 | | Thereafter | Thereafter | | 842,615 | | Total | Total | | $ | 2,692,176 | |
As of December 31, 2023, tenants representing approximately 1.8% of our total operating lease maturities had exercisable rights to terminate their leases before the stated terms of their leases expire. In 2024, 2025, 2026, 2027, 2028, 2029, 2030, 2031, 2032, 2034, 2035, 2036, 2037 and 2040, early termination rights become exercisable by other tenants who represented an additional approximately 1.4%, 2.5%, 2.4%, 2.0%, 6.1%, 2.0%, 2.6%, 1.0%, 0.8%, 1.4%, 4.4%, 0.6%, 0.6% and 2.3% of our total operating lease maturities, respectively. In certain circumstances, some leases provide the tenant with the right to terminate if the legislature or other funding authority does not appropriate the funding necessary for the tenant to meet its lease obligations; we have determined the fixed non-cancelable lease term of these leases to be the full term of the lease because we believe the occurrence of early terminations to be a remote contingency based on both our historical experience and our assessments of the likelihood of lease cancellation on a separate lease basis. As of December 31, 2020, tenants who currently represent approximately 6.3% of our total operating lease maturities have currently exercisable rights to terminate their leases before the stated terms of their leases expire. In 2021, 2022, 2023, 2024, 2025, 2026, 2027, 2028, 2029 and 2035, early termination rights become exercisable by other tenants who currently represent an additional approximately 1.4%, 3.4%, 1.3%, 2.2%, 5.0%, 2.9%, 1.9%, 3.1%, 0.5% and 1.6% of our total operating lease maturities, respectively. In addition, as of December 31, 2020, 13eight of our tenants have had
OFFICE PROPERTIES INCOME TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (dollars in thousands, except per share amounts) the right to terminate their leases if the respective legislature or other funding authority does not appropriate the funding necessary for the tenant to meet its obligation. These 13eight tenants representrepresented approximately 7.1%3.9% of our total operating lease maturities as of December 31, 2020. As a result of the COVID-19 pandemic, some of our tenants have requested rent assistance. As of February 16, 2021, we have granted temporary rent assistance totaling $2,546 to 19 of our tenants who represent approximately 3.3% of our annualized rental income, as defined below in Note 7, as of December 31, 2020, pursuant to deferred payment plans. These tenants are obligated to pay, in most cases, the deferred rent over a 12-month period, certain of which commenced in 2020. We have elected to use the FASB relief package regarding the application of lease accounting guidance to lease concessions provided as a result of the COVID-19 pandemic. The FASB relief package provides entities with the option to account for lease concessions resulting from the COVID-19 pandemic outside of the existing lease modification guidance if the resulting cash flows from the modified lease are substantially the same as or less than the original lease. Because the deferred rent amounts referenced above will be repaid, the cash flows from the respective leases are substantially the same as before the rent deferrals. The deferred amounts did not impact our operating results for the year ended December 31, 2020. As of December 31, 2020, deferred payments totaling $772 are included in rents receivable in our consolidated balance sheet.2023.
Right of use asset and lease liability. For leasesLeases where we are the lessee, we are required to record a right of use asset and lease liability for all leases with an initial term greater than 12 months. As of December 31, 2020, welessee. We had one lease that met these criteria where we arewere the lessee which expired on January 31, 2021. We subleased a portion of the space, which sublease also expired on January 31, 2021. The value of the right of use asset and related liability representing our future obligation under the lease arrangement for which we are the lessee were $168 and $174, respectively, as of December 31, 2020 and $2,149 and $2,179, respectively, as of December 31, 2019. The right of use asset and related lease liability are included in other assets, net and accounts payable and other liabilities, respectively, in our consolidated balance sheets. Rent expense incurred under the lease, net of sublease revenue, was $1,749, $1,670 and $1,707$79 for the yearsyear ended December 31, 2020, 2019 and 2018, respectively.2021.
Note 5.6. Business and Property Management Agreements with RMR LLC We have 0no employees. The personnel and various services we require to operate our business are provided to us by The RMR LLC.Group LLC, or RMR. We have 2two agreements with RMR LLC to provide management services to us: (1) a business management agreement, which relates to our business generally; and (2) a property management agreement, which relates to our property level operations. Prior to the consummation of the SIR Merger, SIR had similar business and property management agreements with RMR LLC on substantially similar terms, which agreements were terminated in connection with the SIR Merger. See Notes 1 and 6 for more information regarding our relationship, agreements and transactions with SIR and RMR LLC.
OFFICE PROPERTIES INCOME TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(dollars in thousands, except per share amounts)
Management Agreements with RMR LLC. Our management agreements with RMR LLC provide for an annual base management fee, an annual incentive management fee and property management and construction supervision fees, payable in cash, among other terms: •Base Management Fee. The annual base management fee payable to RMR LLC by us for each applicable period is equal to the lesser of: •the sum of (a) 0.5% of the average aggregate historical cost of the real estate assets acquired from a REIT to which RMR LLC provided business management or property management services, or the Transferred Assets, plus (b) 0.7% of the average aggregate historical cost of our real estate investments excluding the Transferred Assets up to $250,000, plus (c) 0.5% of the average aggregate historical cost of our real estate investments excluding the Transferred Assets exceeding $250,000; and •the sum of (a) 0.7% of the average closing price per share of our common shares on the stock exchange on which such shares are principally traded during such period, multiplied by the average number of our common shares outstanding during such period, plus the daily weighted average of the aggregate liquidation preference of each class of our preferred shares outstanding during such period, plus the daily weighted average of the aggregate principal amount of our consolidated indebtedness during such period, or, together, our Average Market Capitalization, up to $250,000, plus (b) 0.5% of our Average Market Capitalization exceeding $250,000. The average aggregate historical cost of our real estate investments includes our consolidated assets invested, directly or indirectly, in equity interests in or loans secured by real estate and personal property owned in connection with such real estate (including acquisition related costs and costs which may be allocated to intangibles or are unallocated), all before reserves for depreciation, amortization, impairment charges or bad debts or other similar non-cash reserves; provided, however, our prior ownership of SIR common shares was not included as part of our real estate investments for purposes of calculating our base management fees due to RMR LLC since SIR paid separate business management fees to RMR LLC.reserves. •Incentive Management Fee. The incentive management fee which may be earned by RMR LLC for an annual period is calculated as follows: •An amount, subject to a cap based on the value of our common shares outstanding, equal to 12% of the product of: •our equity market capitalization on the last trading day of the year immediately prior to the relevant three year measurement period, and •the amount (expressed as a percentage) by which the total return per share, as defined in the business management agreement and further described below, of our common shareholders (i.e., share price appreciation plus dividends) exceeds the total shareholder return of the applicable index, or the benchmark return per share, for the relevant measurement period. Effective as of January 1, 2019, we amended our business management agreement with RMR LLC so that the SNLThe MSCI U.S. REIT/Office REIT Index will be usedis the benchmark index for periods beginning on and after JanuaryAugust 1, 2019, with2021, and the SNL U.S. REIT EquityOffice Index is the benchmark index for periods ending on or prior to December 31, 2018.August 1, 2021. •
OFFICE PROPERTIES INCOME TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (dollars in thousands, except per share amounts) For purposes of the total return per share of our common shareholders, share price appreciation for a measurement period is determined by subtracting (1) the closing price of our common shares on The Nasdaq Stock Market LLC, or Nasdaq, on the last trading day of the year immediately before the first year of the applicable measurement period, or the initial share price, from (2) the average closing price of our common shares on the 10 consecutive trading days having the highest average closing prices during the final 30 trading days in the last year of the measurement period. •The calculation of the incentive management fee (including the determinations of our equity market capitalization, initial share price and the total return per share of our common shareholders) is subject to adjustments if we issue or repurchase our common shares, or if our common shares are forfeited, during the measurement period. •No incentive management fee is payable by us unless our total return per share during the measurement period is positive.
OFFICE PROPERTIES INCOME TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(dollars in thousands, except per share amounts)
•The measurement periods are three year year periods ending with the year for which the incentive management fee is being calculated. •If our total return per share exceeds 12% per year in any measurement period, the benchmark return per share is adjusted to be the lesser of the total shareholder return of the applicable index for such measurement period and 12% per year, or the adjusted benchmark return per share. In instances where the adjusted benchmark return per share applies, the incentive management fee will be reduced if our total return per share is between 200 basis points and 500 basis points below the applicable index in any year by a low return factor, as defined in the business management agreement, and there will be no incentive management fee paid if, in these instances, our total return per share is more than 500 basis points below the applicable index.index in any year, determined on a cumulative basis (i.e., between 200 basis points and 500 basis points per year multiplied by the number of years in the measurement period and below the applicable market index). •The incentive management fee is subject to a cap. The cap is equal to the value of the number of our common shares which would, after issuance, represent 1.5% of the number of our common shares then outstanding multiplied by the average closing price of our common shares during the 10 consecutive trading days having the highest average closing prices during the final 30 trading days of the relevant measurement period. •Incentive management fees we paid to RMR LLC for any period may be subject to “clawback” if our financial statements for that period are restated due to material non-compliance with any financial reporting requirements under the securities laws as a result of the bad faith, fraud, willful misconduct or gross negligence of RMR LLC and the amount of the incentive management fee we paid was greater than the amount we would have paid based on the restated financial statements. Pursuant to our business management agreement with RMR, LLC, we recognized net business management fees of $17,358, $21,320$14,751, $17,376 and $16,381$18,637 for the years ended December 31, 2020, 20192023, 2022 and 2018,2021, respectively. The net business management fees we recognized are included in general and administrative expenses in our consolidated statements of comprehensive income (loss) for these periods. The net business management fees we recognized for each of the years ended December 31, 2020, 20192023, 2022 and 20182021 reflect a reduction of $603, for the amortization of the liability we recorded in connection with our former investment in RMR Inc., as further described in Note 2. NaN We did not incur any incentive management fee was payablepursuant to RMR LLC under our business management agreement for the years ended December 31, 2020, 20192023, 2022 or 2018.2021. •Property Management and Construction Supervision Fees. The property management fees payable to RMR LLC by us for each applicable period are equal to 3.0% of gross collected rents and the construction supervision fees payable to RMR LLC by us for each applicable period are equal to 5.0% of construction costs. Pursuant to our property management agreement with RMR, LLC, we recognized aggregate net property management and construction supervision fees of $20,774, $21,911$23,280, $25,756 and $13,989$21,103 for each of the years ended December 31, 2020, 20192023, 2022 and 2018,2021, respectively. The net property management and construction supervision fees we recognized for the years ended December 31, 2020, 20192023, 2022 and 20182021 reflect a reduction of $484 for each of those years for the amortization of the liability we recorded in connection with our former investment in RMR Inc., as further described in Note 2. For the years ended December 31, 2020, 20192023, 2022 and 2018, $17,328, $19,320,2021, $14,890, $15,839 and $12,317,$16,507, respectively, of the total net property management and construction supervision fees were expensed to other operating expenses in our consolidated statements of income (loss) and $3,446, $2,591,$8,390, $9,917 and $1,672, respectively, were capitalized as building improvements in our consolidated balance sheets. In January 2019, we paid RMR LLC $2,185 for SIR’s 2018 business management, property management and construction supervision fees that it had accrued, but not paid, as of December 31, 2018. We also paid RMR LLC a business management incentive fee of $25,817, which represented the incentive fee incurred, but not paid, by SIR for the year ended December 31, 2018. We had assumed the obligation to pay these amounts as a result of the SIR Merger.
•Expense Reimbursement. We are generally responsible for all of our operating expenses, including certain expenses incurred or arranged by RMR LLC on our behalf. We are generally not responsible for payment of RMR LLC’s employment, office or administrative expenses incurred to provide management services to us, except for the employment and related expenses of RMR LLC’s employees assigned to work exclusively or partly at our properties, our share of the wages, benefits and other related costs of RMR LLC’s centralized accounting personnel, our share of RMR LLC’s costs for providing our internal audit function and as otherwise agreed. Our Audit Committee appoints our Director of Internal Audit and our Compensation Committee approves the costs of our internal audit function. Our$4,596,
OFFICE PROPERTIES INCOME TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (dollars in thousands, except per share amounts) respectively, were capitalized as building improvements in our consolidated balance sheets. The amounts capitalized are being depreciated over the estimated useful lives of the related capital assets. •Expense Reimbursement. We are generally responsible for all of our operating expenses, including certain expenses incurred or arranged by RMR on our behalf. We are generally not responsible for payment of RMR’s employment, office or administrative expenses incurred to provide management services to us, except for the employment and related expenses of RMR’s employees assigned to work exclusively or partly at our properties, our share of the wages, benefits and other related costs of RMR’s centralized accounting personnel, our share of RMR’s costs for providing our internal audit function and as otherwise agreed. Our property level operating expenses are generally incorporated into rents charged to our tenants, including certain payroll and related costs incurred by RMR LLC.RMR. We reimbursed RMR LLC $24,919, $26,442$25,872, $24,371 and $21,279$24,766 for these expenses and costs for each of the years ended December 31, 2020, 20192023, 2022 and 2018,2021, respectively. We included these amounts in other operating expenses and general and administrative expense, as applicable, for these periods. We assumed the obligation to reimburse RMR LLC for similar expenses and costs that RMR LLC had incurred on behalf of SIR in the ordinary course but which SIR had not paid as of December 31, 2018. We reimbursed RMR LLC $462 in January 2019 for these SIR expenses and costs. •Term. Our management agreements with RMR LLC have terms that end on December 31, 2040,2043, and automatically extend on December 31st of each year for an additional year, so that the terms of our management agreements thereafter end on the 20th anniversary of the date of the extension. •Termination Rights. We have the right to terminate one or both of our management agreements with RMR LLC:RMR: (i) at any time on 60 days’ written notice for convenience, (ii) immediately on written notice for cause, as defined therein, (iii) on written notice given within 60 days after the end of an applicable calendar year for a performance reason, as defined therein, and (iv) by written notice during the 12 months following a change of control of RMR, LLC, as defined therein. RMR LLC has the right to terminate the management agreements for good reason, as defined therein. •Termination Fee. If we terminate one or both of our management agreements with RMR LLC for convenience, or if RMR LLC terminates one or both of our management agreements for good reason, we have agreed to pay RMR LLC a termination fee in an amount equal to the sum of the present values of the monthly future fees, as defined therein, for the terminated management agreement(s) for the term that was remaining prior to such termination, which, depending on the time of termination, would be between 19 and 20 years. If we terminate one or both of our management agreements with RMR LLC for a performance reason, we have agreed to pay RMR LLC the termination fee calculated as described above, but assuming a 10 year10-year term was remaining prior to the termination. We are not required to pay any termination fee if we terminate our management agreements with RMR LLC for cause or as a result of a change of control of RMR LLC.RMR. •Transition Services. RMR LLC has agreed to provide certain transition services to us for 120 days following an applicable termination by us or notice of termination by RMR, LLC, including cooperating with us and using commercially reasonable efforts to facilitate the orderly transfer of the management and real estate investment services provided under our business management agreement and to facilitate the orderly transfer of the management of the managed properties under our property management agreement, as applicable. •Vendors. Pursuant to our management agreements with RMR, LLC, RMR LLC may from time to time negotiate on our behalf with certain third party vendors and suppliers for the procurement of goods and services to us. As part of this arrangement, we may enter agreements with RMR LLC and other companies to which RMR LLC or its subsidiaries provide management services for the purpose of obtaining more favorable terms from such vendors and suppliers. •Investment Opportunities. Under our business management agreement with RMR, LLC, we acknowledge that RMR LLC may engage in other activities or businesses and act as the manager to any other person or entity (including other REITs) even though such person or entity has investment policies and objectives similar to ours and we are not entitled to preferential treatment in receiving information, recommendations and other services from RMR. Management Agreements between our Joint Ventures and RMR. RMR LLC.provides management services to our two unconsolidated joint ventures. We are not obligated to pay management fees to RMR under our management agreements with RMR for the services it provides regarding the joint ventures. The joint ventures pay management fees directly to RMR. Note 6.7. Related Person Transactions We have relationships and historical and continuing transactions with SIR (prior to the SIR Merger), RMR, LLC, RMR Inc., and others related to them, including other companies to which RMR LLC or its subsidiaries provide management services and some of which have trustees, directors or officers who are also our Trustees or officers. RMR LLC is a majority owned subsidiary of RMR Inc. The Chair of our Board of Trustees and one of our Managing Trustees, Adam Portnoy, is the sole trustee, an officer and the controlling shareholder of ABP Trust, which is the controlling shareholder of RMR Inc., a managing director, the president and chief executive officer of RMR Inc. and an officer and employee of RMR LLC. David Blackman resigned as our President and Chief Executive Officer, effective December 31, 2020. Mr. Blackman will remain in his position as our Managing Trustee, until June 30, 2021 or such earlier date as his successor Managing Trustee is elected to our Board. In replacement of Mr. Blackman, Christopher J. Bilotto was appointed as our President and Chief Operating Officer, effective January 1, 2021. Mr. Bilotto previously served as our Vice President and Chief Operating Officer, and he is an officer and employee of RMR LLC. In addition, each of our other officers is also an officer and employee of RMR LLC. Some of our
OFFICE PROPERTIES INCOME TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (dollars in thousands, except per share amounts) Board of Trustees and one of our Managing Trustees, Adam D. Portnoy, is the sole trustee, an officer and the controlling shareholder of ABP Trust, which is the controlling shareholder of RMR Inc., the chair of the board of directors, a managing director, the president and chief executive officer of RMR Inc. and an officer and employee of RMR. Jennifer Clark, our other Managing Trustee, is a managing director and the executive vice president, general counsel and secretary of RMR Inc., an officer and employee of RMR and an officer of ABP Trust. Each of our officers is also an officer and employee of RMR. Some of our Independent Trustees also serve as independent trustees or independent directors of other public companies to which RMR LLC or its subsidiaries provide management services. AdamMr. Portnoy serves as chair of the boards of trustees or boards of directors of several of these public companies and as a managing director or managing trustee of these public companies. Other officers of RMR, LLC, including certain of our officers,Ms. Clark, serve as managing trustees managing directors or officers of certain of these companies. Our Manager, RMR LLC. We have 2two agreements with RMR LLC to provide management services to us. RMR also provides management services to our unconsolidated joint ventures. See Note 56 for more information regarding our and our unconsolidated joint ventures’ management agreements with RMR LLC.RMR. Leases with RMR LLC. We lease office space to RMR LLC in certain of our properties for RMR LLC’sRMR’s property management offices. Pursuant to our lease agreements with RMR, LLC, we recognized rental income from RMR LLC for leased office space of $1,120, $1,142$851, $1,126 and $1,026$1,138 for the years ended December 31, 2020, 20192023, 2022 and 2018,2021, respectively. Our office space leases with RMR LLC are terminable by RMR LLC if our management agreements with RMR LLC are terminated. Share Awards to RMR LLC Employees. As described further in Note 10,11, we award shares to our officers and other employees of RMR LLC annually. Generally, one fifth of these awards vest on the grant date and one fifth vests on each of the next four anniversaries of the grant dates. In certain instances, we may accelerate the vesting of an award, such as in connection with the award holder’s retirement as an officer of us or an officer or employee of RMR LLC.RMR. These awards to RMR LLC employees are in addition to the share awards to our Managing Trustees, as Trustee compensation, and the fees we paid to RMR LLC.RMR. See Note 1011 for more information regarding our share awards and activity as well as certain share purchases we made in connection with share award recipients satisfying tax withholding obligations on vesting share awards. RMR Inc. On July 1, 2019, we sold all of the 2,801,060 shares of class A common stock of RMR Inc. that we owned in an underwritten public offering at a price to the public of $40.00 per share pursuant to an underwriting agreement among us, RMR Inc., certain other REITs managed by RMR LLC that also sold their class A common stock of RMR Inc. in the offering and the underwriters named therein. We received net proceeds of $104,674 from this sale, after deducting underwriting discounts and commissions and other offering expenses.
SIRSonesta. As described further in Note 1,In June 2021, we completed the SIR Merger effective December 31, 2018. See Notes 3, 11 and 12 for more information regarding the SIR Merger and our former equity method investment in SIR.
AIC. Until its dissolution on February 13, 2020, we, ABP Trust and five other companies to which RMR LLC provides management services owned AIC in equal portions. We and the other AIC shareholders historically participated inentered into a combined property insurance program arranged and insured30-year lease agreement with a subsidiary of Sonesta International Hotels Corporation, or reinsured in part by AIC until June 30, 2019.
We paid aggregate annual premiums, including taxes and fees, of $1,211 and $757Sonesta, in connection with this insurance programthe redevelopment of an office property we own in Washington, D.C. as a mixed-use property. Sonesta’s lease commenced in August 2023 and is for the policyfull-service hotel component of the property that includes approximately 230,000 rentable square feet, which represents approximately 55% of the total square feet upon completion of the redevelopment. Sonesta has two options to extend the term for 10 years ended June 30, 2019each. Pursuant to the lease agreement, Sonesta will pay us annual base rent of approximately $6,436 beginning 18 months after the lease commenced. The annual base rent will increase by 10% every five years throughout the term. Sonesta is also obligated to pay its pro rata share of the operating costs for the property. As of December 31, 2023, we have paid approximately $66,000 of tenant improvement costs for the build out of the hotel space pursuant to the lease agreement. Mr. Portnoy is a director and 2018, respectively. Propertiescontrolling shareholder of Sonesta and Ms. Clark is a director of Sonesta. Another officer and employee of RMR is a director and president and chief executive officer of Sonesta.
Terminated Merger Agreement with DHC. On April 11, 2023, we acquiredand Diversified Healthcare Trust, or DHC, entered into an Agreement and Plan of Merger, or the Merger Agreement, pursuant to which we and DHC had agreed that DHC would merge with and into us, with us as the surviving entity in the merger, subject to the terms and conditions of the Merger Agreement. On September 1, 2023, we and DHC mutually agreed to terminate the Merger Agreement and entered into a termination agreement, or the Termination Agreement. The mutual termination of the Merger Agreement was separately recommended by our and DHC’s respective Special Committees of each Board of Trustees, and approved by our and DHC’s respective Board of Trustees. Neither we nor DHC were required to pay any termination fee as a result of the SIRmutual decision to terminate the Merger were already previouslyAgreement. We and DHC bore our and its respective costs and expenses related to the Merger Agreement and the transactions contemplated thereby in accordance with the terms of the Merger Agreement. We recorded $31,491 of expenses during the year ended December 31, 2023 related to the potential merger with DHC, which is included in this insurance program because SIR was a participantacquisition and transaction related costs in our consolidated statement of comprehensive income (loss). Contemporaneously with the program. SIR paid an annual premium, including taxes and fees,execution of $1,666 in connection with this insurance program for the policy year ended June 30, 2019. In connection with AIC’s dissolution,Merger Agreement, on April 11, 2023, we and each other AIC shareholder received an initial liquidating distributionour manager, RMR, entered into a Third Amended and Restated Property Management Agreement, or the Amended Property Management Agreement. The effectiveness of $9,000 from AICthe Amended Property Management Agreement was conditioned upon the consummation of the merger. Since the merger was not consummated, the Amended Property Management Agreement did not become effective and the Second Amended and Restated Property Management Agreement between us and RMR remains in December 2019 and an additional liquidating distributioneffect.
OFFICE PROPERTIES INCOME TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (dollars in June 2020. See Note 2 for more information regarding our investment in AIC.thousands, except per share amounts) Note 7.8. Concentration Tenant and Credit Concentration As of December 31, 2023, 2022 and 2021, the U.S. government and certain state and other government tenants combined were responsible for approximately 27.5%, 28.5% and 28.9%, respectively, of our annualized rental income. The U.S. government is our largest tenant by annualized rental income and represented approximately 19.5%, 19.7%, and 19.5% of our annualized rental income as of December 31, 2023, 2022 and 2021, respectively. We define annualized rental income as the annualized contractual base rents from our tenants pursuant to our lease agreements as of the measurement date, plus straight line rent adjustments and estimated recurring expense reimbursements to be paid to us, and excluding lease value amortization. Geographic Concentration As of December 31, 20202023, our 152 wholly owned properties were located in 30 states and 2019, the U.S. government, 11 state governments,District of Columbia. Properties located in California, Virginia, Illinois, District of Columbia and 2 other government tenants combinedTexas were responsible for approximately 35.3%11.8%, 11.6%, 10.6%, 9.3%, and 35.5% of our annualized rental income, respectively. As of December 31, 2018, the U.S. government, 13 state governments and 3 other government tenants combined were responsible for approximately 35.4% of our annualized rental income. The U.S. government is our largest tenant by annualized rental income and represented approximately 25.2%, 25.0% and 25.6%8.8% of our annualized rental income as of December 31, 2020, 20192023, respectively. Note 9. Indebtedness As of December 31, 2023 and 2018, respectively.2022, our outstanding indebtedness consisted of the following: | | | | | | | | | | | | | | | | | December 31, | | | 2023 | | 2022 | Revolving credit facility, due in 2024 | | $ | 205,000 | | | $ | 195,000 | | | | | | | | | | | | Mortgage note payable, 3.700% interest rate, due in 2023 (1) | | — | | | 50,000 | | Senior unsecured notes, 4.250% interest rate, due in 2024 | | 350,000 | | | 350,000 | | Senior unsecured notes, 4.500% interest rate, due in 2025 | | 650,000 | | | 650,000 | | Senior unsecured notes, 2.650% interest rate, due in 2026 | | 300,000 | | | 300,000 | | Senior unsecured notes, 2.400% interest rate, due in 2027 | | 350,000 | | | 350,000 | | Mortgage note payable, 8.272% interest rate, due in 2028 | | 42,700 | | | — | | Mortgage note payable, 8.139% interest rate, due in 2028 | | 26,340 | | | — | | Mortgage note payable, 7.671% interest rate, due in 2028 | | 54,300 | | | — | | Senior unsecured notes, 3.450% interest rate, due in 2031 | | 400,000 | | | 400,000 | | Mortgage note payable, 7.210% interest rate, due in 2033 | | 30,680 | | | — | | Mortgage note payable, 7.305% interest rate, due in 2033 | | 8,400 | | | — | | Mortgage note payable, 7.717% interest rate, due in 2033 | | 14,900 | | | — | | Senior unsecured notes, 6.375% interest rate, due in 2050 | | 162,000 | | | 162,000 | | | | | | | | | | | | | | | | | | | | | | | | 2,594,320 | | | 2,457,000 | | Unamortized debt premiums, discounts and issuance costs | | (21,711) | | | (24,208) | | | | $ | 2,572,609 | | | $ | 2,432,792 | |
(1)This mortgage note was repaid at maturity in June 2023. In January 2024, we entered into an amended and restated credit agreement, or our credit agreement, governing a new $325,000 secured revolving credit facility and a $100,000 secured term loan. Our credit agreement replaced our prior revolving credit facility, which had a maturity date of January 31, 2024. As collateral for all loans and other obligations under our credit agreement, certain of our subsidiaries pledged all of their respective equity interests in certain of our direct and indirect property owning subsidiaries, and our pledged subsidiaries provided first mortgage liens on 19 properties that had an undepreciated carrying value, including lease intangibles, other assets and other liabilities, of $941,937 as of December 31, 2023. 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 29, 2027 and, subject to the payment of an extension fee and meeting certain other requirements, we can extend the stated maturity date of our revolving credit facility by one year. Our credit agreement contains a number of covenants, including covenants that require us to maintain certain financial ratios, restrict our ability to incur additional debt in excess of calculated amounts and,
OFFICE PROPERTIES INCOME TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (dollars in thousands, except per share amounts) Geographic Concentration
At December 31, 2020,subject to limited exceptions, restrict our 181 wholly owned properties were located in 34 statesability to increase our distribution rate above the current level of $0.01 per common share per quarter and the Districtenter into share repurchases. Availability of Columbia. Properties located in Virginia, California, the District of Columbia, Texas and Maryland were responsible for approximately 14.5%, 12.3%, 10.9%, 8.3%, and 6.6% of our annualized rental income as of December 31, 2020, respectively.
Note 8. Indebtedness
At December 31, 2020 and 2019, our outstanding indebtedness consisted of the following:
| | | | | | | | | | | | | | | | | December 31, | | | 2020 | | 2019 | Revolving credit facility, due in 2023 | | $ | 0 | | | $ | 0 | | | | | | | | | | | | Senior unsecured notes, 3.600% interest rate, due in 2020 (1) | | 0 | | | 400,000 | | Senior unsecured notes, 4.150% interest rate, due in 2022 (1) | | 300,000 | | | 300,000 | | Senior unsecured notes, 4.000% interest rate, due in 2022 | | 300,000 | | | 300,000 | | Senior unsecured notes, 4.250% interest rate, due in 2024 (1) | | 350,000 | | | 350,000 | | Senior unsecured notes, 4.500% interest rate, due in 2025 (1) (2) | | 650,000 | | | 400,000 | | Senior unsecured notes, 5.875% interest rate, due in 2046 | | 310,000 | | | 310,000 | | Senior unsecured notes, 6.375% interest rate, due in 2050 | | 162,000 | | | 0 | | Mortgage note payable, 5.720% interest rate, due in 2020 | | 0 | | | 32,888 | | | | | | | Mortgage note payable, 4.160% interest rate, due in 2020 (1) | | 0 | | | 40,062 | | Mortgage note payable, 8.150% interest rate, due in 2021 | | 350 | | | 1,683 | | Mortgage note payable, 5.877% interest rate, due in 2021 (3) | | 0 | | | 13,166 | | Mortgage note payable, 4.220% interest rate, due in 2022 | | 25,804 | | | 26,522 | | Mortgage note payable, 3.550% interest rate, due in 2023 (1) | | 71,000 | | | 71,000 | | Mortgage note payable, 3.700% interest rate, due in 2023 (1) | | 50,000 | | | 50,000 | | Mortgage note payable, 4.800% interest rate, due in 2023 | | 23,688 | | | 24,108 | | Mortgage note payable, 4.050% interest rate, due in 2030 | | 0 | | | 66,780 | | | | 2,242,842 | | | 2,386,209 | | Unamortized debt premiums, discounts and issuance costs | | (39,871) | | | (45,756) | | | | $ | 2,202,971 | | | $ | 2,340,453 | |
(1)We assumed these senior unsecured notes and mortgage notes in connection with the SIR Merger.
(2)An additional $250,000 of these senior unsecured notes were issued in September 2020.
(3)The carrying value of this mortgage note of $13,128 as of December 31, 2019 is net of unamortized issuance costs of $38 and is included in liabilities of properties held for sale in our consolidated balance sheet as of December 31, 2019. This mortgage note was secured by a property in Fairfax, VA that was sold in March 2020. The mortgage note was repaid at the closing of that property sale.
Our $750,000 revolving credit facility is governed by a credit agreement, orborrowings under our credit agreement with a syndicateis subject to ongoing minimum performance and market values of institutional lenders that includes a feature under which the maximum aggregate borrowing availability may be increased to up to $1,950,000 in19 collateral properties, our satisfying certain circumstances.
OFFICE PROPERTIES INCOME TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(dollars in thousands, except per share amounts)
Our $750,000 revolvingfinancial covenants and other credit facility conditions.
Interest payable on borrowings under our credit agreement is available for general business purposes, including acquisitions. The maturity dateat a rate of our revolving creditthe secured overnight financing rate, or SOFR, plus a margin of 350 basis points. We are also required to pay an unused facility is January 31, 2023 and, subject to our paymentfee on the amount of an extension fee and meeting certain other conditions,total lending commitments, which was 35 basis points per annum at February 14, 2024. As of February 14, 2024, we have the option to extend the stated maturity date of our revolving credit facility by 2 additional six month periods. We can borrow, repay and reborrow funds availablehad $132,000 outstanding under our revolving credit facility, until maturity$100,000 outstanding under our term loan and no principal repayment is due until maturity. We are$193,000 available for borrowing under our revolving credit facility. Prior Revolving Credit Facility Under our prior revolving credit facility, we were required to pay interest at a rate of LIBORSOFR plus a premium, which was 110145 basis points per annum at December 31, 2020,2023, on the amount outstanding under our prior revolving credit facility. We also payfacility, as well as a facility fee on the total amount of lending commitments, under our revolving credit facility, which was 2530 basis points per annum at December 31, 2020. Both the interest rate premium and facility fee are subject to adjustment based upon changes to our credit ratings.2023. As of December 31, 20202023 and 2019,2022, the annual interest rate payable on borrowings under our prior revolving credit facility was 1.2%6.9% and 2.7%5.4%, respectively. The weighted average annual interest rate for borrowings under our prior revolving credit facility was 2.0%6.5%, 3.3%4.0% and 3.0%,1.2% for the years ended December 31, 2020, 20192023, 2022 and 2018,2021, respectively. As of December 31, 2020 and February 18, 2021,2023, we had 0 amounts$205,000 outstanding under our prior revolving credit facility. Our revolving credit facility and $750,000 available for borrowing. is governed by a credit agreement with a syndicate of institutional lenders. Our credit agreement and senior unsecured notes indentures and their supplements provide for acceleration of payment of all amounts due thereunder upon the occurrence and continuation of certain events of default, such as, in the case of our credit agreement, a change of control of us, which includes RMR LLC ceasing to act as our business and property manager. Our credit agreement and our senior unsecured notes indentures and their supplements also contain, and our prior revolving credit facility contained, covenants, including covenants that restrict our ability to incur debts, require us to comply with certain financial covenants and, in the case of our credit agreement, restrict our ability to make distributions under certain circumstances.increase our distribution rate above the current level of $0.01 per common share per quarter. We believe we were in compliance with the terms and conditions of the respective covenants under our credit agreement and our senior unsecured notes indentures and their supplements at December 31, 2020.2023. Senior UnsecuredMortgage Note Issuances
In June and July 2020, we issued an aggregate of $162,000 of 6.375% senior unsecured notes due 2050 in an underwritten public offering. Our aggregate net proceeds from this offering were $156,226, after underwriters’ discounts and offering expenses. These notes require quarterly payments of interest only through maturity and may be repaid at par (plus accrued and unpaid interest) on or after June 23, 2025.
In September 2020, we issued $250,000 of our 4.50% senior unsecured notes due 2025 in an underwritten public offering. These notes are a further issuance of our existing $400,000 of senior unsecured notes due 2025 that were initially issued by SIR in February 2015, which we assumed in connection with the SIR Merger. The public offering price of these notes was 101.414% of the principal amount, raising net proceeds of $251,214, after underwriters’ discounts and estimated offering expenses. These notes require semi-annual payments of interest only through maturity.
Senior Unsecured Note Redemption
In January 2020, we redeemed, at par plus accrued interest, all $400,000 of our 3.60% senior unsecured notes due 2020. As a result of the redemption of our 3.60% senior unsecured notes due 2020, we recognized a loss on early extinguishment of debt of $61 duringDuring the year ended December 31, 2020,2023, we issued six fixed rate, interest-only mortgage notes as summarized in the following table:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Issuance Date | | Secured By | | Principal Balance (1) | | Interest Rate | | Maturity | | Net Book Value of Collateral as of December 31, 2023 | May 2023 (2) | | One property | | $ | 30,680 | | | 7.210% | | 7/1/2033 | | $ | 36,807 | | June 2023 | | One property | | 26,340 | | | 8.139% | | 7/1/2028 | | 52,342 | | June 2023 | | One property | | 42,700 | | | 8.272% | | 7/1/2028 | | 42,834 | | June 2023 | | One property | | 8,400 | | | 7.305% | | 7/1/2033 | | 19,035 | | August 2023 | | One property | | 14,900 | | | 7.717% | | 9/1/2033 | | 23,908 | | September 2023 | | Two properties | | 54,300 | | | 7.671% | | 10/6/2028 | | 64,828 | | Total / Weighted Average | | | | $ | 177,320 | | | 7.792% | | | | $ | 239,754 | | | | | | | | | | | | |
(1)Our mortgage notes are non-recourse, subject to write off unamortized debt discounts.certain limited exceptions and do not contain any material financial covenants. (2)Requires interest-only payments through May 2028, at which time principal and interest payments are due monthly through the maturity date. Mortgage Note RepaymentsRepayment In March 2020, in connection with the sale of 1 property,June 2023, we prepaid,repaid at a premium plus accrued interest, a mortgage note secured by that property with an outstanding principal balance of $13,095, an annual interest rate of 5.9% and a maturity, date in August 2021, which was classified in liabilities of properties held for sale in our consolidated balance sheet as of December 31, 2019. As a result of the prepayment of this mortgage note, we recognized a loss on early extinguishment of debt of $508 during the year ended December 31, 2020, from a prepayment penalty and the write off of unamortized debt issuance costs. Also in March 2020, we prepaid, at a premium plus accrued interest, a mortgage note secured by one property with an outstanding principal balance of $66,780,$50,000, an annual interest rate of 4.0% and a maturity date in September 2030. As a result of the prepayment of this mortgage note, we recognized a loss on early extinguishment of debt of $2,713 during the year ended December 31, 2020, from a prepayment penalty and the write off of unamortized debt discounts.
In April 2020, we prepaid, at par plus accrued interest, a mortgage note secured by one property with an outstanding principal balance of $32,677, an annual interest rate of 5.7% and a maturity date in July 2020. As a result of the prepayment of3.70%.
OFFICE PROPERTIES INCOME TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (dollars in thousands, except per share amounts) thisSenior Secured Notes Issuance
In February 2024, we issued $300,000 of 9.000% senior secured notes due 2029, or the 2029 Notes. The aggregate net proceeds from the offering of the 2029 Notes were $271,500, after initial purchaser discounts and other estimated offering expenses. The 2029 Notes are fully and unconditionally guaranteed on a joint, several and senior secured basis by certain of our subsidiaries and secured by a pledge of all of the respective equity interests of the subsidiary guarantors and first mortgage note, we recognized a gainliens on early extinguishment17 properties with an undepreciated carrying value, including lease intangibles, other assets and other liabilities, of debt$574,291 as of $163 during the year ended December 31, 2020, from the write off2023. The 2029 Notes require semi-annual payments of unamortized debt premiums. In August 2020, we repaid at maturity,interest only and are prepayable, at par plus accrued interest, after March 31, 2028.
Senior Unsecured Notes Redemption In February 2024, we issued a mortgage note secured by 1 property with an outstanding principal balancenotice of $39,635 and an annualearly redemption, at par plus accrued interest, rate of 2.2%. At December 31, 2020, 7all of our properties$350,000 of 4.25% senior unsecured notes due 2024. The redemption is expected to take place in March 2024 and is conditioned upon our borrowing an amount under our revolving credit facility sufficient, together with an aggregatethe net book valueproceeds from the offering of $304,227 were encumbered by mortgage notes with an aggregate principal amount of $170,842. Our mortgage notes are non-recourse, subjectthe 2029 Notes, to certain limited exceptions and do not contain any material financial covenants.
None of our unsecured debt obligations require sinking fund paymentspay the redemption price on or prior to their maturity dates.the redemption date.
The required principal payments due during the next five years and thereafter under all our outstanding consolidated debt as of December 31, 2020 are2023 were as follows: | Year | Year | | Principal Payment | | | 2021 | | $ | 1,540 | | | 2022 | | 625,518 | | | 2023 | | 143,784 | | | 2024 | | | 2024 | | | 2024 | 2024 | | 350,000 | | | 2025 | 2025 | | 650,000 | | | 2025 | | 2025 | | 2026 | | 2026 | | 2026 | | 2027 | | 2027 | | 2027 | | 2028 | | 2028 | | 2028 | | Thereafter | | Thereafter | | Thereafter | Thereafter | | 472,000 | | | Total | Total | | $ | 2,242,842 | | (1) | Total | | Total | | | $ | 2,594,320 | | (1) | |
(1)Total consolidated debt outstanding as of December 31, 2020,2023, net of unamortized premiums, discounts and issuance costs totaling $39,871,$21,711, was $2,202,971.$2,572,609. None of our unsecured debt obligations require principal or sinking fund payments prior to their maturity dates. We currently do not have sufficient sources of liquidity to repay our $650,000 senior unsecured notes due 2025 and are evaluating market-based alternatives to obtain debt financing. Based on the significant number of unencumbered properties in our portfolio, our successful history of obtaining debt financings and our current financing metrics, we believe it is probable that we can obtain new debt financing that will allow us satisfy the 2025 unsecured notes as they become due. We have also engaged Moelis & Company LLC as our financial advisor to assist in evaluating our options to address our upcoming debt maturities.
OFFICE PROPERTIES INCOME TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (dollars in thousands, except per share amounts) Note 9.10. Fair Value of Assets and Liabilities OurThe following table presents certain of our assets measured at fair value at December 31, 2023, categorized by level of inputs as defined in the fair value hierarchy under GAAP, used in the valuation of each asset:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Fair Value at Reporting Date Using | Description | | Total | | Quoted Prices in Active Markets for Identical Assets (Level 1) | | Significant Other Observable Inputs (Level 2) | | Significant Unobservable Inputs (Level 3) | Non-recurring Fair Value Measurements Assets | | | | | | | | | Assets of properties held for sale (1) | | $ | 39,000 | | | $ | — | | | $ | 39,000 | | | $ | — | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
(1)We recorded an impairment charge of $11,299 to reduce the carrying value of one property in our consolidated balance sheet to its estimated fair value less estimated costs to sell of $1,777, based on a negotiated sales price with a third party buyer (Level 2 input as defined in the fair value hierarchy under GAAP). See Note 4 for more information. We recorded an impairment charge of $19,183 to fully write off our equity method investment in our 1750 H NW joint venture, based on our estimates of fair value of the investment which reflects implied pricing based on ongoing negotiations with the lender to this joint venture regarding the property (a Level 3 input as defined in the fair value hierarchy under GAAP). See Note 4 for more information. In addition to the assets described above, our financial instruments include our cash and cash equivalents, restricted cash, rents receivable, accounts payable, a revolving credit facility, senior unsecured notes, mortgage notes payable, amounts due to related persons, other accrued expenses and security deposits. At December 31, 20202023 and 2019,2022, the fair values of our financial instruments approximated their carrying values in our consolidated financial statements, due to their short term nature or floating interest rates, except as follows: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | As of December 31, 2020 | | As of December 31, 2019 | Financial Instrument | | Carrying Value (1) | | Fair Value | | Carrying Value (1) | | Fair Value | Senior unsecured notes, 3.60% interest rate, due in 2020 (2) | | $ | 0 | | | $ | 0 | | | $ | 399,934 | | | $ | 400,048 | | Senior unsecured notes, 4.15% interest rate, due in 2022 | | 298,853 | | | 306,192 | | | 297,795 | | | 307,221 | | Senior unsecured notes, 4.00% interest rate, due in 2022 | | 298,579 | | | 306,756 | | | 297,657 | | | 306,096 | | Senior unsecured notes, 4.25% interest rate, due in 2024 | | 342,299 | | | 365,435 | | | 340,018 | | | 364,602 | | Senior unsecured notes, 4.50% interest rate, due in 2025 (3) | | 635,921 | | | 688,399 | | | 381,055 | | | 419,578 | | Senior unsecured notes, 5.875% interest rate, due in 2046 | | 301,264 | | | 322,028 | | | 300,920 | | | 322,028 | | Senior unsecured notes, 6.375% interest rate, due in 2050 (4) | | 156,326 | | | 171,590 | | | 0 | | | 0 | | Mortgage notes payable (5) | | 169,729 | | | 174,952 | | | 323,074 | | | 331,675 | | Total | | $ | 2,202,971 | | | $ | 2,335,352 | | | $ | 2,340,453 | | | $ | 2,451,248 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | As of December 31, 2023 | | As of December 31, 2022 | Financial Instrument | | Carrying Value(1) | | Fair Value | | Carrying Value(1) | | Fair Value | | | | | | | | | | Senior unsecured notes, 4.25% interest rate, due in 2024 | | $ | 349,144 | | | $ | 331,510 | | | $ | 346,863 | | | $ | 331,601 | | Senior unsecured notes, 4.50% interest rate, due in 2025 | | 646,266 | | | 510,445 | | | 642,818 | | | 589,388 | | Senior unsecured notes, 2.650% interest rate, due in 2026 | | 298,464 | | | 185,934 | | | 297,839 | | | 232,770 | | Senior unsecured notes, 2.400% interest rate, due in 2027 | | 348,086 | | | 196,147 | | | 347,466 | | | 256,606 | | Senior unsecured notes, 3.450% interest rate, due in 2031 | | 396,614 | | | 199,060 | | | 396,178 | | | 268,004 | | Senior unsecured notes, 6.375% interest rate, due in 2050 | | 156,904 | | | 83,916 | | | 156,711 | | | 113,075 | | Mortgage notes payable (2)(3) | | 172,131 | | | 179,813 | | | 49,917 | | | 49,099 | | Total | | $ | 2,367,609 | | | $ | 1,686,825 | | | $ | 2,237,792 | | | $ | 1,840,543 | |
(1)Includes unamortized debt premiums, discounts and issuance costs totaling $39,871$21,711 and $45,756$24,208 as of December 31, 20202023 and 2019,2022, respectively. (2)These senior unsecured notes were redeemed in January 2020. (3)An additional $250,000 of these senior unsecured notes were issued in September 2020.
(4)$150,000 of these senior unsecured notes were issued in June 2020. In July 2020, we issued an additional $12,000 of these senior unsecured notes in connection with the underwriters’ partial exercise of their option to purchase additional notes.
(5)BalanceBalances as of December 31, 2019 includes one2022 include a mortgage note with a carrying value of $13,128 net of unamortized issuance costs totaling $38 which is classified in liabilities of properties held for sale in our consolidated balance sheet. This mortgage note was secured by aone property in Fairfax, VAwith an outstanding principal balance of $50,000 that was soldrepaid in March 2020. The mortgage note was repaid at closing.June 2023.
(3)Balances as of December 31, 2023 include six mortgage notes issued during the year ended December 31, 2023 with an aggregate principal balance of $177,320.
We estimated the fair values of our senior unsecured notes (except for our senior unsecured notes due 2046 and 2050) using an average of the bid and ask price of the notes (Level 2 inputs as defined in the fair value hierarchy under GAAP) as of the measurement date. We estimated the fair values of our senior unsecured notes due 2046 and 2050 based on the closing price on Nasdaq (Level 1 inputs as defined in the fair value hierarchy under GAAP) as of the measurement date. We estimated the fair values of our mortgage notes payable using discounted cash flow analyses and currently prevailing market rates (Level 3 inputs as defined in the fair value hierarchy under GAAP) as of the measurement date. Because Level 3 inputs are unobservable, our estimated fair values may differ materially from the actual fair values.
OFFICE PROPERTIES INCOME TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (dollars in thousands, except per share amounts) Note 10.11. Shareholders’ Equity Share Awards We have common shares available for issuance under the terms of our Amended and Restated 2009 Incentive Share Award Plan, or the 2009 Plan. During the years ended December 31, 2020, 20192023, 2022 and 2018,2021, we awarded to our officers and other employees of RMR LLC annual share awards of 108,600, 103,100210,300, 141,200 and 14,675117,800 of our common shares, respectively, valued at $2,502, $3,080$1,211, $2,470 and $995,$2,994, in aggregate, respectively. We also awarded each of our 8 Trusteesthen Trustees 3,500 and 3,000 of our common shares in 2020 and 2019, respectively, with aggregate values of $745 ($93 per Trustee) and $575 ($72 per Trustee), respectively, and each of our then 6 Trustees 750 of our common shares in 2018 with an aggregate value of $254 ($42 per Trustee),2023, 2022 and 2021 as part of their annual compensation. In addition, we awarded 3,000These awards had aggregate values of our common shares, with a value of $270$249 ($28 per Trustee), $593 ($9066 per Trustee) and $837 ($105 per Trustee) in connection with the election of 3 of our Trustees in 20192023, 2022 and 750 of our common shares, with a value of $41 in connection with the election of one of our Trustees in 2018.2021, respectively. The values of the share awards were based upon the closing price of our common shares trading on Nasdaq on the date of grant. The common shares awarded to our Trustees vested immediately.award. The common shares awarded to our officers and certain other employees of RMR LLC vest in 5five equal annual installments beginning on the date of award. The common shares awarded to our Trustees vest immediately. We recognize share forfeitures as they occur. Weoccur and include the value of awarded shares in general and administrative expenses ratably over the vesting period.
OFFICE PROPERTIES INCOME TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(dollars in thousands, except per share amounts)
A summary of shares awarded, forfeited, vested and unvested under the terms of the 2009 Plan for the years ended December 31, 2020, 20192023, 2022 and 2018,2021, is as follows: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2020 | | 2019 | | 2018 | | | Number of Shares | | Weighted Average Grant Date Fair Value | | Number of Shares | | Weighted Average Grant Date Fair Value | | Number of Shares | | Weighted Average Grant Date Fair Value | Unvested at beginning of year | | 106,680 | | | $ | 40.16 | | | 55,321 | | | $ | 73.25 | | | 26,062 | | | $ | 78.24 | | Awarded | | 136,600 | | | $ | 23.77 | | | 136,100 | | | $ | 28.84 | | | 19,925 | | | $ | 64.73 | | Forfeited | | (586) | | | $ | 43.75 | | | (1,474) | | | $ | 49.10 | | | (255) | | | $ | 52.96 | | Vested | | (85,173) | | | $ | 34.02 | | | (83,267) | | | $ | 27.78 | | | (18,634) | | | $ | 63.80 | | Unvested acquired in the SIR Merger (1) | | 0 | | | $ | 0 | | | 0 | | | $ | 0 | | | 28,223 | | | $ | 27.48 | | Unvested at end of year | | 157,521 | | | $ | 29.26 | | | 106,680 | | | $ | 40.16 | | | 55,321 | | | $ | 73.25 | |
(1)Represents unvested shares awarded under SIR’s equity compensation plan that were converted into shares under the 2009 Plan, and which have similar vesting requirements as shares granted under the 2009 Plan. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2023 | | 2022 | | 2021 | | | Number of Shares | | Weighted Average Grant Date Fair Value | | Number of Shares | | Weighted Average Grant Date Fair Value | | Number of Shares | | Weighted Average Grant Date Fair Value | Unvested at beginning of year | | 231,301 | | | $ | 21.47 | | | 182,224 | | | $ | 26.23 | | | 157,521 | | | $ | 29.26 | | Awarded | | 241,800 | | | $ | 6.04 | | | 172,700 | | | $ | 17.74 | | | 145,800 | | | $ | 26.28 | | Forfeited | | (3,700) | | | $ | 17.31 | | | (1,900) | | | $ | 25.97 | | | (700) | | | $ | 25.97 | | Vested | | (180,720) | | | $ | 16.00 | | | (121,723) | | | $ | 23.24 | | | (120,397) | | | $ | 30.24 | | Unvested at end of year | | 288,681 | | | $ | 12.01 | | | 231,301 | | | $ | 21.47 | | | 182,224 | | | $ | 26.23 | |
The 157,521288,681 unvested shares as of December 31, 20202023 are scheduled to vest as follows: 67,99498,241 shares in 2021, 37,2672024, 83,620 shares in 2022, 33,9402025, 65,160 shares in 20232026 and 18,32041,660 shares in 2024.2027. As of December 31, 2020,2023, the estimated future compensation expense for the unvested shares was $3,338.$3,042. The weighted average period over which the compensation expense will be recorded is approximately 2123 months. During the years ended December 31, 2020, 20192023, 2022 and 2018,2021, we recorded $3,315, $3,088$2,257, $2,905 and $1,337,$2,868, respectively, of compensation expense related to the 2009 Plan. At December 31, 2020, 1,094,9092023, 657,860 of our common shares remained available for issuance under the 2009 Plan. Share Purchases During the years ended December 31, 2020, 20192023, 2022 and 2018, we2021, we purchased 19,589, 15,58848,329, 30,821 and 4,98437,801 of ourour common shares, respectively, valued at weighted average share prices of $22.15, $29.76$6.08, $17.54 and $46.54$26.55 per commoncommon share, respectively, from certain of our current and former Trustees and officers and certain current and former officers and employees of RMR LLC in satisfaction of tax withholding and payment obligations in connection with the vesting of awards of our common shares. Distributions During the years ended December 31, 2020, 20192023, 2022 and 2018,2021, we paid distributions on our common shares as follows: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Annual Per Share Distribution | | Total Distributions | | Characterization of Distributions | Year | | | | Return of Capital | | Ordinary Income | | Qualified Dividend | 2020 | | $ | 2.20 | | | $ | 106,121 | | | 0% | | 100.00% | | 0% | 2019 | | $ | 2.20 | | | $ | 105,868 | | | 0% | | 100.00% | | 0% | 2018 | | $ | 6.88 | | | $ | 170,566 | | | 68.60% | | 31.40% | | 0% |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Annual Per Share Distribution | | Total Distributions | | Characterization of Distributions | Year | | | | Return of Capital | | Ordinary Income | | Qualified Dividend | 2023 | | $ | 1.30 | | | $ | 63,187 | | | 100.00% | | —% | | —% | 2022 | | $ | 2.20 | | | $ | 106,630 | | | 62.68% | | 37.32% | | —% | 2021 | | $ | 2.20 | | | $ | 106,368 | | | —% | | 100.00% | | —% |
On January 14, 2021,11, 2024, we declared a dividendquarterly cash distribution payable to common shareholders of record on January 25, 202122, 2024 in the amount of $0.55$0.01 per share, or $26,575.approximately $490. We paidexpect to pay this distribution on or about February 18, 2021. Preferred Units of Limited Partnership
On May 1, 2018, one of our subsidiaries redeemed all 1,813,504 of its outstanding 5.5% Series A Cumulative Preferred Units for $11.15 per unit plus accrued and unpaid distributions (an aggregate of $20,310).15, 2024.
OFFICE PROPERTIES INCOME TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(dollars in thousands, except per share amounts)
Note 11. Equity Investment in Select Income REIT
Until October 9, 2018, we owned 24,918,421, or approximately 27.8%, of the then outstanding SIR common shares. As described in Note 1, we completed the Secondary Sale on that date. As a result of the Secondary Sale, we recorded a loss of $18,665 during the year ended December 31, 2018.
We accounted for our investment in SIR under the equity method and had previously reported our investment in SIR as a reportable segment. As a result of the Secondary Sale and the elimination of a reportable segment, our former equity method investment in SIR is classified as discontinued operations in our consolidated statements of comprehensive income (loss). See Note 12 for more information regarding discontinued operations.
Under the equity method, we recorded our proportionate share of SIR’s net income as equity in earnings of SIR in our consolidated statements of comprehensive income (loss). During the period from January 1, 2018 to October 9, 2018, we recorded $24,358 of equity in earnings of SIR. Our other comprehensive income (loss) includes our proportionate share of SIR’s unrealized gains of $28 for the period from January 1, 2018 to October 9, 2018.
The adjusted GAAP cost basis of our investment in SIR was less than our proportionate share of SIR’s total shareholders’ equity book value on the dates we acquired the shares. Prior to the Secondary Sale, we were accreting a basis difference to earnings over the estimated remaining useful lives of certain real estate assets and intangible assets and liabilities owned by SIR. This accretion increased our equity in the earnings of SIR by $3,233 for the period from January 1, 2018 to October 9, 2018.
During the period from January 1, 2018 to October 9, 2018, we received cash distributions from SIR totaling $38,124.
During the period from January 1, 2018 to October 9, 2018, SIR issued 63,157 common shares. We recognized a gain on issuance of shares by SIR of $29 during the period from January 1, 2018 to October 9, 2018, as a result of the per share issuance price of these SIR common shares being above the then average per share carrying value of our SIR common shares.
OFFICE PROPERTIES INCOME TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(dollars in thousands, except per share amounts)
The following table presents summarized income statement data of SIR:
| | | | | | | | | | | | | | Nine Months Ended September 30, 2018 | | | | Revenues: | | | | | | Rental income | | $ | 298,003 | | | | | Tenant reimbursements and other income | | 60,514 | | | | | Total revenues | | 358,517 | | | | | | | | | | | Expenses: | | | | | | Real estate taxes | | 36,748 | | | | | Other operating expenses | | 43,714 | | | | | Depreciation and amortization | | 105,326 | | | | | Acquisition and transaction related costs | | 3,796 | | | | | General and administrative | | 47,353 | | | | | Write-off of straight line rent receivable, net | | 10,626 | | | | | | | | | | | Loss on impairment of real estate assets | | 9,706 | | | | | Total expenses | | 257,269 | | | | | | | | | | | | | | | | | | | | | | | Gain on sale of real estate | | 4,075 | | | | | Dividend income | | 1,190 | | | | | Unrealized gain on equity securities | | 53,159 | | | | | Interest income | | 753 | | | | | Interest expense | | (69,446) | | | | | Loss on early extinguishment of debt | | (1,192) | | | | | | | | | | | Income before income tax expense and equity in earnings of an investee | | 89,787 | | | | | Income tax expense | | (446) | | | | | Equity in earnings of an investee | | 882 | | | | | Net income | | 90,223 | | | | | Net income allocated to noncontrolling interest | | (15,841) | | | | | Net income attributed to SIR | | $ | 74,382 | | | | | | | | | | | Weighted average common shares outstanding (basic) | | 89,395 | | | | | Weighted average common shares outstanding (diluted) | | 89,411 | | | | | Net income attributed to SIR per common share (basic and diluted) | | $ | 0.83 | | | | |
OFFICE PROPERTIES INCOME TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(dollars in thousands, except per share amounts)
Note 12. Discontinued Operations
As described in Note 1, on October 9, 2018, we sold all 24,918,421 SIR common shares that we then owned in the Secondary Sale. We recorded a loss of $18,665 during the year ended December 31, 2018 related to this sale. The sale of our SIR common shares qualifies as discontinued operations; accordingly, our former equity method investment in SIR is classified as discontinued operations in our consolidated statements of comprehensive income (loss).
The following table presents the components of income from discontinued operations for the year ended December 31, 2018:
| | | | | | | | | | | | | | | | | | | Year Ended December 31, 2018 | Equity in earnings of Select Income REIT | | | | | | $ | 24,358 | | Net gain on issuance of shares by Select Income REIT | | | | | | 29 | | Loss on sale of Select Income REIT shares | | | | | | (18,665) | | | | | | | | | Income from discontinued operations | | | | | | $ | 5,722 | |
OFFICE PROPERTIES INCOME TRUST SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION December 31, 20202023 (dollars in thousands)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Initial Cost to Company | | Costs Capitalized Subsequent to Acquisition | | | | Cost amount carried at Close of Period | | | | | | | | Property | | Location | | Number of Properties | | Encumbrances (1) | | Land | | Buildings and Equipment | | | Impairments/ Writedowns | | Land | | Buildings and Equipment | | Total (2) | | Accumulated Depreciation (3) | | Date(s) Acquired | | Original Construction Date(s) | | Inverness Center | | Birmingham, AL | | 3 | | $ | — | | | $ | 5,907 | | | $ | 12,098 | | | $ | 1,570 | | | $ | — | | | $ | 5,907 | | | $ | 13,668 | | | $ | 19,575 | | | $ | (946) | | | 12/31/2018 | | 1984 | | 445 Jan Davis Drive | | Huntsville, AL | | 1 | | — | | | 1,501 | | | 1,492 | | | 0 | | | — | | | 1,501 | | | 1,492 | | | 2,993 | | | (80) | | | 12/31/2018 | | 2007 | | 4905 Moores Mill Road | | Huntsville, AL | | 1 | | — | | | 4,592 | | | 36,324 | | | 2,486 | | | — | | | 4,592 | | | 38,810 | | | 43,402 | | | (2,268) | | | 12/31/2018 | | 1979 | | 131 Clayton Street | | Montgomery, AL | | 1 | | — | | | 920 | | | 9,084 | | | 230 | | | — | | | 920 | | | 9,314 | | | 10,234 | | | (2,189) | | | 6/22/2011 | | 2007 | | 4344 Carmichael Road | | Montgomery, AL | | 1 | | — | | | 1,374 | | | 11,658 | | | 562 | | | — | | | 1,374 | | | 12,220 | | | 13,594 | | | (2,081) | | | 12/17/2013 | | 2009 | | 15451 North 28th Avenue | | Phoenix, AZ | | 1 | | — | | | 1,917 | | | 7,416 | | | 722 | | | — | | | 1,917 | | | 8,138 | | | 10,055 | | | (1,282) | | | 9/10/2014 | | 1996 | | 16001 North 28th Avenue | | Phoenix, AZ | | 1 | | — | | | 3,355 | | | 412 | | | 674 | | | — | | | 3,355 | | | 1,086 | | | 4,441 | | | (62) | | | 12/31/2018 | | 1998 | | 711 S 14th Avenue | | Safford, AZ | | 1 | | — | | | 460 | | | 11,708 | | | 793 | | | (4,440) | | | 364 | | | 8,157 | | | 8,521 | | | (753) | | | 6/16/2010 | | 1992 | | Regents Center | | Tempe, AZ | | 2 | | — | | | 4,121 | | | 3,042 | | | 170 | | | — | | | 4,121 | | | 3,212 | | | 7,333 | | | (306) | | | 12/31/2018 | | 1988 | | Campbell Place | | Carlsbad, CA | | 2 | | — | | | 5,769 | | | 3,871 | | | 7,484 | | | — | | | 5,769 | | | 11,355 | | | 17,124 | | | (517) | | | 12/31/2018 | | 2007 | | Folsom Corporate Center | | Folsom, CA | | 1 | | — | | | 2,904 | | | 5,583 | | | 568 | | | — | | | 2,904 | | | 6,151 | | | 9,055 | | | (354) | | | 12/31/2018 | | 2008 | | Bayside Technology Park | | Fremont, CA | | 1 | | — | | | 10,784 | | | 648 | | | 87 | | | — | | | 10,784 | | | 735 | | | 11,519 | | | (45) | | | 12/31/2018 | | 1990 | | 5045 East Butler Street | | Fresno, CA | | 1 | | — | | | 7,276 | | | 61,118 | | | 175 | | | — | | | 7,276 | | | 61,293 | | | 68,569 | | | (28,101) | | | 8/29/2002 | | 1971 | | 10949 N. Mather Boulevard | | Rancho Cordova, CA | | 1 | | — | | | 562 | | | 16,923 | | | 992 | | | — | | | 562 | | | 17,915 | | | 18,477 | | | (3,152) | | | 10/30/2013 | | 2012 | | 11020 Sun Center Drive | | Rancho Cordova, CA | | 1 | | — | | | 1,466 | | | 8,797 | | | 1,405 | | | — | | | 1,466 | | | 10,202 | | | 11,668 | | | (1,145) | | | 12/20/2016 | | 1983 | | 100 Redwood Shores Parkway | | Redwood City, CA | | 1 | | — | | | 14,454 | | | 7,721 | | | 0 | | | — | | | 14,454 | | | 7,721 | | | 22,175 | | | (429) | | | 12/31/2018 | | 1993 | | 3875 Atherton Road | | Rocklin, CA | | 1 | | — | | | 177 | | | 853 | | | 0 | | | — | | | 177 | | | 853 | | | 1,030 | | | (47) | | | 12/31/2018 | | 1991 | | 801 K Street | | Sacramento, CA | | 1 | | — | | | 4,688 | | | 61,994 | | | 5,816 | | | — | | | 4,688 | | | 67,810 | | | 72,498 | | | (8,674) | | | 1/29/2016 | | 1989 | | 9815 Goethe Road | | Sacramento, CA | | 1 | | — | | | 1,450 | | | 9,465 | | | 1,494 | | | — | | | 1,450 | | | 10,959 | | | 12,409 | | | (2,538) | | | 9/14/2011 | | 1992 | | Capitol Place | | Sacramento, CA | | 1 | | — | | | 2,290 | | | 35,891 | | | 7,882 | | | — | | | 2,290 | | | 43,773 | | | 46,063 | | | (11,442) | | | 12/17/2009 | | 1988 | | 4560 Viewridge Road | | San Diego, CA | | 1 | | — | | | 4,269 | | | 18,316 | | | 4,478 | | | — | | | 4,347 | | | 22,716 | | | 27,063 | | | (12,270) | | | 3/31/1997 | | 1996 | | 2115 O’Nel Drive | | San Jose, CA | | 1 | | — | | | 12,305 | | | 5,062 | | | 0 | | | — | | | 12,305 | | | 5,062 | | | 17,367 | | | (281) | | | 12/31/2018 | | 1984 | | North First Street | | San Jose, CA | | 1 | | — | | | 8,311 | | | 4,003 | | | 411 | | | — | | | 8,311 | | | 4,414 | | | 12,725 | | | (261) | | | 12/31/2018 | | 1984 | | Rio Robles Drive | | San Jose, CA | | 3 | | — | | | 23,687 | | | 13,698 | | | 3,126 | | | — | | | 23,687 | | | 16,824 | | | 40,511 | | | (906) | | | 12/31/2018 | | 1984 | | 2450 and 2500 Walsh Avenue | | Santa Clara, CA | | 2 | | — | | | 13,374 | | | 16,651 | | | 150 | | | — | | | 13,374 | | | 16,801 | | | 30,175 | | | (923) | | | 12/31/2018 | | 1982 | | 3250 and 3260 Jay Street | | Santa Clara, CA | | 2 | | — | | | 19,899 | | | 14,051 | | | 0 | | | — | | | 19,899 | | | 14,051 | | | 33,950 | | | (779) | | | 12/31/2018 | | 1982 | | 603 San Juan Avenue | | Stockton, CA | | 1 | | — | | | 563 | | | 5,470 | | | 0 | | | — | | | 563 | | | 5,470 | | | 6,033 | | | (1,151) | | | 7/20/2012 | | 2012 | | 350 West Java Drive | | Sunnyvale, CA | | 1 | | — | | | 24,609 | | | 462 | | | 21 | | | — | | | 24,609 | | | 483 | | | 25,092 | | | (29) | | | 12/31/2018 | | 1984 | | 7958 South Chester Street | | Centennial, CO | | 1 | | — | | | 6,682 | | | 7,153 | | | 261 | | | — | | | 6,682 | | | 7,414 | | | 14,096 | | | (411) | | | 12/31/2018 | | 2000 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Initial Cost to Company | | Costs Capitalized Subsequent to Acquisition | | | | Cost amount carried at Close of Period | | | | | | | | Property | | Location | | Number of Properties | | Encumbrances (1) | | Land | | Buildings and Equipment | | | Impairments/ Writedowns | | Land | | Buildings and Equipment | | Total (2) | | Accumulated Depreciation (3) | | Date(s) Acquired | | Original Construction Date(s) | | 445 Jan Davis Drive | | Huntsville, AL | | 1 | | $ | — | | | $ | 1,501 | | | $ | 1,492 | | | $ | — | | | $ | — | | | $ | 1,501 | | | $ | 1,492 | | | $ | 2,993 | | | $ | (199) | | | 12/31/2018 | | 2007 | | 131 Clayton Street | | Montgomery, AL | | 1 | | — | | | 920 | | | 9,084 | | | 417 | | | — | | | 920 | | | 9,501 | | | 10,421 | | | (2,957) | | | 6/22/2011 | | 2007 | | 4344 Carmichael Road | | Montgomery, AL | | 1 | | — | | | 1,374 | | | 11,658 | | | 571 | | | — | | | 1,374 | | | 12,229 | | | 13,603 | | | (3,109) | | | 12/17/2013 | | 2009 | | 15451 North 28th Avenue | | Phoenix, AZ | | 1 | | — | | | 1,917 | | | 7,416 | | | 1,239 | | | — | | | 1,917 | | | 8,655 | | | 10,572 | | | (2,016) | | | 9/10/2014 | | 1996 | | 711 S 14th Avenue | | Safford, AZ | | 1 | | — | | | 460 | | | 11,708 | | | 903 | | | (4,440) | | | 364 | | | 8,267 | | | 8,631 | | | (1,703) | | | 6/16/2010 | | 1992 | | Regents Center | | Tempe, AZ | | 2 | | — | | | 4,121 | | | 3,042 | | | 354 | | | — | | | 4,121 | | | 3,396 | | | 7,517 | | | (841) | | | 12/31/2018 | | 1988 | | Campbell Place | | Carlsbad, CA | | 2 | | — | | | 5,769 | | | 3,871 | | | 7,595 | | | — | | | 5,769 | | | 11,466 | | | 17,235 | | | (3,407) | | | 12/31/2018 | | 2007 | | Folsom Corporate Center (5) | | Folsom, CA | | 1 | | — | | | 2,904 | | | 5,583 | | | 1,587 | | | — | | | 2,904 | | | 7,170 | | | 10,074 | | | (1,238) | | | 12/31/2018 | | 2008 | | Bayside Technology Park | | Fremont, CA | | 1 | | — | | | 10,784 | | | 648 | | | 255 | | | — | | | 10,784 | | | 903 | | | 11,687 | | | (154) | | | 12/31/2018 | | 1990 | | 10949 N. Mather Boulevard | | Rancho Cordova, CA | | 1 | | — | | | 562 | | | 16,923 | | | 1,052 | | | — | | | 562 | | | 17,975 | | | 18,537 | | | (4,675) | | | 10/30/2013 | | 2012 | | 11020 Sun Center Drive | | Rancho Cordova, CA | | 1 | | — | | | 1,466 | | | 8,797 | | | 1,543 | | | — | | | 1,466 | | | 10,340 | | | 11,806 | | | (2,174) | | | 12/20/2016 | | 1983 | | 100 Redwood Shores Parkway | | Redwood City, CA | | 1 | | — | | | 14,454 | | | 7,721 | | | — | | | — | | | 14,454 | | | 7,721 | | | 22,175 | | | (1,071) | | | 12/31/2018 | | 1993 | | 3875 Atherton Road | | Rocklin, CA | | 1 | | — | | | 177 | | | 853 | | | 479 | | | — | | | 177 | | | 1,332 | | | 1,509 | | | (140) | | | 12/31/2018 | | 1991 | | 801 K Street | | Sacramento, CA | | 1 | | — | | | 4,688 | | | 61,994 | | | 10,472 | | | — | | | 4,688 | | | 72,466 | | | 77,154 | | | (15,524) | | | 1/29/2016 | | 1989 | | 9815 Goethe Road | | Sacramento, CA | | 1 | | — | | | 1,450 | | | 9,465 | | | 2,181 | | | — | | | 1,450 | | | 11,646 | | | 13,096 | | | (3,400) | | | 9/14/2011 | | 1992 | | Capitol Place | | Sacramento, CA | | 1 | | — | | | 2,290 | | | 35,891 | | | 8,674 | | | — | | | 2,290 | | | 44,565 | | | 46,855 | | | (15,686) | | | 12/17/2009 | | 1988 | | 4560 Viewridge Road (5) | | San Diego, CA | | 1 | | — | | | 4,269 | | | 18,316 | | | 5,294 | | | — | | | 4,347 | | | 23,532 | | | 27,879 | | | (14,798) | | | 3/31/1997 | | 1996 | | 2115 O’Nel Drive | | San Jose, CA | | 1 | | — | | | 12,305 | | | 5,062 | | | 385 | | | — | | | 12,305 | | | 5,447 | | | 17,752 | | | (765) | | | 12/31/2018 | | 1984 | | North First Street | | San Jose, CA | | 1 | | — | | | 8,311 | | | 4,003 | | | 443 | | | — | | | 8,311 | | | 4,446 | | | 12,757 | | | (729) | | | 12/31/2018 | | 1984 | | Rio Robles Drive | | San Jose, CA | | 3 | | 8,064 | | | 23,687 | | | 13,698 | | | 17,061 | | | — | | | 23,687 | | | 30,759 | | | 54,446 | | | (3,779) | | | 12/31/2018 | | 1984 | | 2500 Walsh Avenue | | Santa Clara, CA | | 1 | | — | | | 6,687 | | | 8,326 | | | 280 | | | — | | | 6,687 | | | 8,606 | | | 15,293 | | | (1,181) | | | 12/31/2018 | | 1982 | | 3250 and 3260 Jay Street | | Santa Clara, CA | | 2 | | — | | | 19,899 | | | 14,051 | | | 114 | | | — | | | 19,899 | | | 14,165 | | | 34,064 | | | (1,949) | | | 12/31/2018 | | 1982 | | 603 San Juan Avenue | | Stockton, CA | | 1 | | — | | | 563 | | | 5,470 | | | 206 | | | — | | | 563 | | | 5,676 | | | 6,239 | | | (1,586) | | | 7/20/2012 | | 2012 | | 350 West Java Drive | | Sunnyvale, CA | | 1 | | — | | | 24,609 | | | 462 | | | 978 | | | — | | | 24,609 | | | 1,440 | | | 26,049 | | | (148) | | | 12/31/2018 | | 1984 | | 7958 South Chester Street | | Centennial, CO | | 1 | | — | | | 6,682 | | | 7,153 | | | 1,801 | | | — | | | 6,682 | | | 8,954 | | | 15,636 | | | (1,265) | | | 12/31/2018 | | 2000 | | 350 Spectrum Loop | | Colorado Springs, CO | | 1 | | — | | | 3,650 | | | 7,732 | | | 594 | | | — | | | 3,650 | | | 8,326 | | | 11,976 | | | (1,205) | | | 12/31/2018 | | 2000 | | 12795 West Alameda Parkway | | Lakewood, CO | | 1 | | — | | | 2,640 | | | 23,777 | | | 1,508 | | | — | | | 2,640 | | | 25,285 | | | 27,925 | | | (8,849) | | | 1/15/2010 | | 1988 | | Corporate Center | | Lakewood, CO | | 3 | | — | | | 2,887 | | | 27,537 | | | 2,613 | | | — | | | 2,887 | | | 30,150 | | | 33,037 | | | (15,398) | | | 10/11/2002 | | 1980 | | 11 Dupont Circle, NW | | Washington, DC | | 1 | | — | | | 28,255 | | | 44,743 | | | 19,249 | | | — | | | 28,255 | | | 63,992 | | | 92,247 | | | (12,479) | | | 10/2/2017 | | 1974 |
OFFICE PROPERTIES INCOME TRUST SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION (Continued) December 31, 20202023 (dollars in thousands)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Initial Cost to Company | | Costs Capitalized Subsequent to Acquisition | | | | Cost amount carried at Close of Period | | | | | | | | Property | | Location | | Number of Properties | | Encumbrances (1) | | Land | | Buildings and Equipment | | | Impairments/ Writedowns | | Land | | Buildings and Equipment | | Total (2) | | Accumulated Depreciation (3) | | Date(s) Acquired | | Original Construction Date(s) | | 350 Spectrum Loop | | Colorado Springs, CO | | 1 | | — | | | 3,650 | | | 7,732 | | | 86 | | | — | | | 3,650 | | | 7,818 | | | 11,468 | | | (442) | | | 12/31/2018 | | 2000 | | 333 Inverness Drive South | | Englewood, CO | | 1 | | — | | | 5,711 | | | 4,543 | | | 0 | | | — | | | 5,711 | | | 4,543 | | | 10,254 | | | (272) | | | 12/31/2018 | | 1998 | | 12795 West Alameda Parkway | | Lakewood, CO | | 1 | | 350 | | | 2,640 | | | 23,777 | | | 1,357 | | | — | | | 2,640 | | | 25,134 | | | 27,774 | | | (6,851) | | | 1/15/2010 | | 1988 | | Corporate Center | | Lakewood, CO | | 3 | | — | | | 2,887 | | | 27,537 | | | 4,041 | | | — | | | 2,887 | | | 31,578 | | | 34,465 | | | (14,329) | | | 10/11/2002 | | 1980 | | 11 Dupont Circle, NW | | Washington, DC | | 1 | | 0 | | | 28,255 | | | 44,743 | | | 10,534 | | | — | | | 28,255 | | | 55,277 | | | 83,532 | | | (5,020) | | | 10/2/2017 | | 1974 | | 1211 Connecticut Avenue, NW | | Washington, DC | | 1 | | 25,816 | | | 30,388 | | | 24,667 | | | 2,880 | | | — | | | 30,388 | | | 27,547 | | | 57,935 | | | (2,707) | | | 10/2/2017 | | 1967 | | 1401 K Street, NW | | Washington, DC | | 1 | | 23,966 | | | 29,215 | | | 34,656 | | | 5,542 | | | — | | | 29,215 | | | 40,198 | | | 69,413 | | | (4,432) | | | 10/2/2017 | | 1929 | | 20 Massachusetts Avenue | | Washington, DC | | 1 | | — | | | 12,009 | | | 51,527 | | | 25,957 | | | — | | | 12,229 | | | 77,264 | | | 89,493 | | | (38,812) | | | 3/31/1997 | | 1996 | | 440 First Street, NW | | Washington, DC | | 1 | | — | | | 27,903 | | | 38,624 | | | 1,459 | | | — | | | 27,903 | | | 40,083 | | | 67,986 | | | (3,418) | | | 10/2/2017 | | 1982 | | 625 Indiana Avenue | | Washington, DC | | 1 | | — | | | 26,000 | | | 25,955 | | | 8,596 | | | — | | | 26,000 | | | 34,551 | | | 60,551 | | | (8,440) | | | 8/17/2010 | | 1989 | | 840 First Street, NE | | Washington, DC | | 1 | | 0 | | | 42,727 | | | 73,278 | | | 3,470 | | | — | | | 42,727 | | | 76,748 | | | 119,475 | | | (6,462) | | | 10/2/2017 | | 2003 | | 10350 NW 112th Avenue | | Miami, FL | | 1 | | — | | | 4,798 | | | 2,757 | | | 178 | | | — | | | 4,798 | | | 2,935 | | | 7,733 | | | (153) | | | 12/31/2018 | | 2002 | | 7850 Southwest 6th Court | | Plantation, FL | | 1 | | — | | | 4,800 | | | 30,592 | | | 352 | | | — | | | 4,800 | | | 30,944 | | | 35,744 | | | (7,451) | | | 5/12/2011 | | 1999 | | 8900 Grand Oak Circle | | Tampa, FL | | 1 | | — | | | 1,100 | | | 11,773 | | | 536 | | | — | | | 1,100 | | | 12,309 | | | 13,409 | | | (3,097) | | | 10/15/2010 | | 1994 | | 180 Ted Turner Drive SW | | Atlanta, GA | | 1 | | — | | | 5,717 | | | 20,017 | | | 310 | | | — | | | 5,717 | | | 20,327 | | | 26,044 | | | (4,279) | | | 7/25/2012 | | 2007 | | Corporate Square | | Atlanta, GA | | 5 | | — | | | 3,996 | | | 29,762 | | | 27,503 | | | — | | | 3,996 | | | 57,265 | | | 61,261 | | | (16,602) | | | 7/16/2004 | | 1967 | | Executive Park | | Atlanta, GA | | 1 | | — | | | 1,521 | | | 11,826 | | | 4,071 | | | — | | | 1,521 | | | 15,897 | | | 17,418 | | | (7,096) | | | 7/16/2004 | | 1972 | | One Georgia Center | | Atlanta, GA | | 1 | | — | | | 10,250 | | | 27,933 | | | 12,687 | | | — | | | 10,250 | | | 40,620 | | | 50,870 | | | (8,194) | | | 9/30/2011 | | 1968 | | One Primerica Parkway | | Duluth, GA | | 1 | | — | | | 6,927 | | | 22,951 | | | 0 | | | — | | | 6,927 | | | 22,951 | | | 29,878 | | | (1,272) | | | 12/31/2018 | | 2013 | | 4712 Southpark Boulevard | | Ellenwood, GA | | 1 | | — | | | 1,390 | | | 19,635 | | | 118 | | | — | | | 1,390 | | | 19,753 | | | 21,143 | | | (4,152) | | | 7/25/2012 | | 2005 | | 91-209 Kuhela Street | | Kapolei, HI | | 1 | | — | | | 1,998 | | | 0 | | | 3 | | | — | | | 1,992 | | | 9 | | | 2,001 | | | 0 | | | 12/31/2018 | | Land | | 8305 NW 62nd Avenue | | Johnston, IA | | 1 | | — | | | 2,649 | | | 7,997 | | | 0 | | | — | | | 2,649 | | | 7,997 | | | 10,646 | | | (443) | | | 12/31/2018 | | 2011 | | 1185, 1249 & 1387 S. Vinnell Way | | Boise, ID | | 3 | | — | | | 3,390 | | | 29,026 | | | 1,025 | | | — | | | 3,390 | | | 30,051 | | | 33,441 | | | (6,242) | | | 9/11/2012 | | 1996; 1997; 2002 | | 2020 S. Arlington Heights | | Arlington Heights, IL | | 1 | | — | | | 1,450 | | | 13,588 | | | 451 | | | — | | | 1,450 | | | 14,039 | | | 15,489 | | | (3,833) | | | 12/29/2009 | | 1988 | | 400 South Jefferson Street | | Chicago, IL | | 1 | | 49,505 | | | 19,379 | | | 20,115 | | | 384 | | | — | | | 19,379 | | | 20,499 | | | 39,878 | | | (1,126) | | | 12/31/2018 | | 1947 | | 1415 West Diehl Road | | Naperville, IL | | 1 | | — | | | 12,333 | | | 20,586 | | | 5,787 | | | — | | | 12,333 | | | 26,373 | | | 38,706 | | | (1,339) | | | 12/31/2018 | | 2001 | | 440 North Fairway Drive | | Vernon Hills, IL | | 1 | | — | | | 4,465 | | | 441 | | | 0 | | | — | | | 4,465 | | | 441 | | | 4,906 | | | (25) | | | 12/31/2018 | | 1,992 | | 7601 and 7635 Interactive Way | | Indianapolis, IN | | 2 | | — | | | 3,337 | | | 14,522 | | | 26 | | | — | | | 3,337 | | | 14,548 | | | 17,885 | | | (756) | | | 12/31/2018 | | 2003 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Initial Cost to Company | | Costs Capitalized Subsequent to Acquisition | | | | Cost amount carried at Close of Period | | | | | | | | Property | | Location | | Number of Properties | | Encumbrances (1) | | Land | | Buildings and Equipment | | | Impairments/ Writedowns | | Land | | Buildings and Equipment | | Total (2) | | Accumulated Depreciation (3) | | Date(s) Acquired | | Original Construction Date(s) | | 1211 Connecticut Avenue, NW | | Washington, DC | | 1 | | — | | | 30,388 | | | 24,667 | | | 4,855 | | | — | | | 30,388 | | | 29,522 | | | 59,910 | | | (5,821) | | | 10/2/2017 | | 1967 | | 1401 K Street, NW | | Washington, DC | | 1 | | — | | | 29,215 | | | 34,656 | | | 8,485 | | | — | | | 29,215 | | | 43,141 | | | 72,356 | | | (9,458) | | | 10/2/2017 | | 1929 | | 20 Massachusetts Avenue | | Washington, DC | | 1 | | — | | | 12,009 | | | 51,527 | | | 221,203 | | | — | | | 12,231 | | | 272,508 | | | 284,739 | | | (48,475) | | | 3/31/1997 | | 1996 | | 440 First Street, NW (5) | | Washington, DC | | 1 | | — | | | 27,903 | | | 38,624 | | | 2,169 | | | — | | | 27,903 | | | 40,793 | | | 68,696 | | | (6,341) | | | 10/2/2017 | | 1982 | | 625 Indiana Avenue | | Washington, DC | | 1 | | — | | | 26,000 | | | 25,955 | | | 12,158 | | | — | | | 26,000 | | | 38,113 | | | 64,113 | | | (12,464) | | | 8/17/2010 | | 1989 | | 840 First Street, NE | | Washington, DC | | 1 | | — | | | 42,727 | | | 73,278 | | | 2,912 | | | — | | | 42,727 | | | 76,190 | | | 118,917 | | | (12,414) | | | 10/2/2017 | | 2003 | | 10350 NW 112th Avenue | | Miami, FL | | 1 | | — | | | 4,798 | | | 2,757 | | | 2,354 | | | — | | | 4,798 | | | 5,111 | | | 9,909 | | | (684) | | | 12/31/2018 | | 2002 | | 7850 Southwest 6th Court | | Plantation, FL | | 1 | | — | | | 4,800 | | | 30,592 | | | 14,993 | | | — | | | 4,800 | | | 45,585 | | | 50,385 | | | (9,839) | | | 5/12/2011 | | 1999 | | 8900 Grand Oak Circle | | Tampa, FL | | 1 | | — | | | 1,100 | | | 11,773 | | | 1,661 | | | — | | | 1,100 | | | 13,434 | | | 14,534 | | | (4,219) | | | 10/15/2010 | | 1994 | | 180 Ted Turner Drive SW (5) | | Atlanta, GA | | 1 | | — | | | 5,717 | | | 20,017 | | | 1,390 | | | — | | | 5,717 | | | 21,407 | | | 27,124 | | | (5,989) | | | 7/25/2012 | | 2007 | | 1224 Hammond Drive | | Atlanta, GA | | 1 | | — | | | 13,040 | | | 135,459 | | | 11,583 | | | — | | | 13,040 | | | 147,042 | | | 160,082 | | | (10,789) | | | 6/25/2021 | | 2020 | | Corporate Square | | Atlanta, GA | | 5 | | — | | | 3,996 | | | 29,763 | | | 26,570 | | | — | | | 3,996 | | | 56,333 | | | 60,329 | | | (21,009) | | | 7/16/2004 | | 1967 | | Executive Park | | Atlanta, GA | | 1 | | — | | | 1,521 | | | 11,826 | | | 4,123 | | | — | | | 1,521 | | | 15,949 | | | 17,470 | | | (9,089) | | | 7/16/2004 | | 1972 | | One Georgia Center (5) | | Atlanta, GA | | 1 | | — | | | 10,250 | | | 27,933 | | | 20,903 | | | — | | | 10,250 | | | 48,836 | | | 59,086 | | | (13,865) | | | 9/30/2011 | | 1968 | | One Primerica Parkway (4) | | Duluth, GA | | 1 | | 25,904 | | | 6,927 | | | 22,951 | | | 40 | | | — | | | 6,927 | | | 22,991 | | | 29,918 | | | (3,181) | | | 12/31/2018 | | 2013 | | 4712 Southpark Boulevard | | Ellenwood, GA | | 1 | | — | | | 1,390 | | | 19,635 | | | 911 | | | — | | | 1,390 | | | 20,546 | | | 21,936 | | | (5,707) | | | 7/25/2012 | | 2005 | | 8305 NW 62nd Avenue | | Johnston, IA | | 1 | | — | | | 2,649 | | | 7,997 | | | — | | | — | | | 2,649 | | | 7,997 | | | 10,646 | | | (1,108) | | | 12/31/2018 | | 2011 | | 1185, 1249 & 1387 S. Vinnell Way | | Boise, ID | | 3 | | — | | | 3,390 | | | 29,026 | | | 1,246 | | | — | | | 3,390 | | | 30,272 | | | 33,662 | | | (8,663) | | | 9/11/2012 | | 1996; 1997; 2002 | | 2020 S. Arlington Heights (5) | | Arlington Heights, IL | | 1 | | — | | | 1,450 | | | 13,588 | | | 2,129 | | | — | | | 1,450 | | | 15,717 | | | 17,167 | | | (5,138) | | | 12/29/2009 | | 1988 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 1000 W. Fulton (5) | | Chicago, IL | | 1 | | — | | | 42,935 | | | 252,914 | | | 528 | | | — | | | 42,935 | | | 253,442 | | | 296,377 | | | (21,274) | | | 6/24/2021 | | 2015 | | HUB 1415 | | Naperville, IL | | 1 | | — | | | 12,333 | | | 20,586 | | | 23,564 | | | — | | | 12,333 | | | 44,150 | | | 56,483 | | | (7,248) | | | 12/31/2018 | | 2001 | | 7601 and 7635 Interactive Way | | Indianapolis, IN | | 2 | | — | | | 3,337 | | | 14,522 | | | 34 | | | — | | | 3,337 | | | 14,556 | | | 17,893 | | | (1,900) | | | 12/31/2018 | | 2003 | | Intech Park | | Indianapolis, IN | | 3 | | — | | | 4,170 | | | 69,759 | | | 12,052 | | | — | | | 4,170 | | | 81,811 | | | 85,981 | | | (26,133) | | | 10/14/2011 | | 2000; 2001; 2008 | | 7125 Industrial Road | | Florence, KY | | 1 | | — | | | 1,698 | | | 11,722 | | | 293 | | | — | | | 1,698 | | | 12,015 | | | 13,713 | | | (3,349) | | | 12/31/2012 | | 1980 | | 251 Causeway Street | | Boston, MA | | 3 | | — | | | 26,851 | | | 36,756 | | | 5,296 | | | — | | | 26,851 | | | 42,052 | | | 68,903 | | | (9,174) | | | 8/17/2010 | | 1987 | | 330 Billerica Road | | Chelmsford, MA | | 1 | | — | | | 2,477 | | | — | | | 10,246 | | | — | | | 2,477 | | | 10,246 | | | 12,723 | | | (1,924) | | | 12/31/2018 | | 1984 | | 75 Pleasant Street | | Malden, MA | | 1 | | — | | | 1,050 | | | 31,086 | | | 275 | | | — | | | 1,050 | | | 31,361 | | | 32,411 | | | (10,636) | | | 5/24/2010 | | 2008 | | 25 Newport Avenue | | Quincy, MA | | 1 | | — | | | 2,700 | | | 9,199 | | | 3,106 | | | — | | | 2,700 | | | 12,305 | | | 15,005 | | | (3,572) | | | 2/16/2011 | | 1985 |
OFFICE PROPERTIES INCOME TRUST SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION (Continued) December 31, 20202023 (dollars in thousands)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Initial Cost to Company | | Costs Capitalized Subsequent to Acquisition | | | | Cost amount carried at Close of Period | | | | | | | | Property | | Location | | Number of Properties | | Encumbrances (1) | | Land | | Buildings and Equipment | | | Impairments/ Writedowns | | Land | | Buildings and Equipment | | Total (2) | | Accumulated Depreciation (3) | | Date(s) Acquired | | Original Construction Date(s) | | Intech Park | | Indianapolis, IN | | 3 | | — | | | 4,170 | | | 69,759 | | | 7,742 | | | — | | | 4,170 | | | 77,501 | | | 81,671 | | | (18,042) | | | 10/14/2011 | | 2000; 2001; 2008 | | The Atrium at Circleport II | | Erlanger, KY | | 1 | | — | | | 1,796 | | | 1,933 | | | 578 | | | — | | | 1,796 | | | 2,511 | | | 4,307 | | | (167) | | | 12/31/2018 | | 1999 | | 7125 Industrial Road | | Florence, KY | | 1 | | — | | | 1,698 | | | 11,722 | | | 293 | | | — | | | 1,698 | | | 12,015 | | | 13,713 | | | (2,393) | | | 12/31/2012 | | 1980 | | 251 Causeway Street | | Boston, MA | | 2 | | — | | | 10,748 | | | 26,539 | | | 3,008 | | | — | | | 10,748 | | | 29,547 | | | 40,295 | | | (5,130) | | | 8/17/2010 | | 1987 | | 300 and 330 Billerica Road | | Chelmsford, MA | | 2 | | — | | | 4,700 | | | 0 | | | 6,959 | | | — | | | 4,700 | | | 6,959 | | | 11,659 | | | (20) | | | 12/31/2018 | | 1984 | | 75 Pleasant Street | | Malden, MA | | 1 | | — | | | 1,050 | | | 31,086 | | | 857 | | | — | | | 1,050 | | | 31,943 | | | 32,993 | | | (8,439) | | | 5/24/2010 | | 2008 | | 25 Newport Avenue | | Quincy, MA | | 1 | | — | | | 2,700 | | | 9,199 | | | 1,879 | | | — | | | 2,700 | | | 11,078 | | | 13,778 | | | (2,915) | | | 2/16/2011 | | 1985 | | One Montvale Avenue | | Stoneham, MA | | 1 | | — | | | 1,670 | | | 11,035 | | | 3,415 | | | — | | | 1,670 | | | 14,450 | | | 16,120 | | | (3,404) | | | 6/16/2010 | | 1945 | | 314 Littleton Road | | Westford, MA | | 1 | | — | | | 5,691 | | | 8,487 | | | 47 | | | — | | | 5,691 | | | 8,534 | | | 14,225 | | | (477) | | | 12/31/2018 | | 2007 | | Annapolis Commerce Center | | Annapolis, MD | | 2 | | — | | | 4,057 | | | 7,665 | | | 989 | | | — | | | 4,057 | | | 8,654 | | | 12,711 | | | (777) | | | 10/2/2017 | | 1989 | | 4201 Patterson Avenue | | Baltimore, MD | | 1 | | — | | | 901 | | | 8,097 | | | 4,104 | | | (85) | | | 893 | | | 12,124 | | | 13,017 | | | (5,844) | | | 10/15/1998 | | 1989 | | 7001 Columbia Gateway Drive | | Columbia, MD | | 1 | | — | | | 5,642 | | | 10,352 | | | 226 | | | — | | | 5,642 | | | 10,578 | | | 16,220 | | | (613) | | | 12/31/2018 | | 2008 | | Hillside Center | | Columbia, MD | | 2 | | — | | | 3,437 | | | 4,228 | | | 701 | | | — | | | 3,437 | | | 4,929 | | | 8,366 | | | (451) | | | 10/2/2017 | | 2001 | | TenThreeTwenty | | Columbia, MD | | 1 | | — | | | 3,126 | | | 16,361 | | | 1,978 | | | — | | | 3,126 | | | 18,339 | | | 21,465 | | | (1,852) | | | 10/2/2017 | | 1982 | | 3300 75th Avenue | | Landover, MD | | 1 | | — | | | 4,110 | | | 36,371 | | | 2,721 | | | — | | | 4,110 | | | 39,092 | | | 43,202 | | | (10,330) | | | 2/26/2010 | | 1985 | | 2115 East Jefferson Street | | Rockville, MD | | 1 | | — | | | 3,349 | | | 11,152 | | | 592 | | | — | | | 3,349 | | | 11,744 | | | 15,093 | | | (2,112) | | | 8/27/2013 | | 1981 | | Redland 520/530 | | Rockville, MD | | 3 | | — | | | 12,714 | | | 61,377 | | | 4,003 | | | — | | | 12,714 | | | 65,380 | | | 78,094 | | | (5,261) | | | 10/2/2017 | | 2008 | | Redland 540 | | Rockville, MD | | 1 | | — | | | 10,740 | | | 17,714 | | | 6,082 | | | — | | | 10,740 | | | 23,796 | | | 34,536 | | | (3,147) | | | 10/2/2017 | | 2003 | | Rutherford Business Park | | Windsor Mill, MD | | 1 | | — | | | 1,598 | | | 10,219 | | | 490 | | | — | | | 1,598 | | | 10,709 | | | 12,307 | | | (2,139) | | | 11/16/2012 | | 1972 | | 3550 Green Court | | Ann Arbor, MI | | 1 | | — | | | 3,630 | | | 4,857 | | | 0 | | | — | | | 3,630 | | | 4,857 | | | 8,487 | | | (286) | | | 12/31/2018 | | 1998 | | 11411 E. Jefferson Avenue | | Detroit, MI | | 1 | | — | | | 630 | | | 18,002 | | | 544 | | | — | | | 630 | | | 18,546 | | | 19,176 | | | (4,878) | | | 4/23/2010 | | 2009 | | Rosedale Corporate Plaza | | Roseville, MN | | 1 | | — | | | 672 | | | 6,045 | | | 1,526 | | | — | | | 672 | | | 7,571 | | | 8,243 | | | (4,046) | | | 12/1/1999 | | 1987 | | 1300 Summit Street | | Kansas City, MO | | 1 | | — | | | 2,776 | | | 12,070 | | | 1,145 | | | — | | | 2,776 | | | 13,215 | | | 15,991 | | | (2,869) | | | 9/27/2012 | | 1998 | | 2555 Grand Boulevard | | Kansas City, MO | | 1 | | — | | | 4,209 | | | 51,522 | | | 2,706 | | | — | | | 4,209 | | | 54,228 | | | 58,437 | | | (2,871) | | | 12/31/2018 | | 2003 | | 4241 NE 34th Street | | Kansas City, MO | | 1 | | — | | | 1,133 | | | 5,649 | | | 4,201 | | | — | | | 1,470 | | | 9,513 | | | 10,983 | | | (4,670) | | | 3/31/1997 | | 1995 | | 1220 Echelon Parkway | | Jackson, MS | | 1 | | — | | | 440 | | | 25,458 | | | 345 | | | — | | | 440 | | | 25,803 | | | 26,243 | | | (5,423) | | | 7/25/2012 | | 2009 | | 2300 and 2400 Yorkmont Road | | Charlotte, NC | | 2 | | — | | | 1,334 | | | 19,075 | | | 1,988 | | | — | | | 1,334 | | | 21,063 | | | 22,397 | | | (1,241) | | | 12/31/2018 | | 1995 | | 18010 and 18020 Burt Street | | Omaha, NE | | 2 | | — | | | 6,977 | | | 12,500 | | | 0 | | | — | | | 6,977 | | | 12,500 | | | 19,477 | | | (693) | | | 12/31/2018 | | 2012 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Initial Cost to Company | | Costs Capitalized Subsequent to Acquisition | | | | Cost amount carried at Close of Period | | | | | | | | Property | | Location | | Number of Properties | | Encumbrances (1) | | Land | | Buildings and Equipment | | | Impairments/ Writedowns | | Land | | Buildings and Equipment | | Total (2) | | Accumulated Depreciation (3) | | Date(s) Acquired | | Original Construction Date(s) | | 314 Littleton Road | | Westford, MA | | 1 | | — | | | 5,691 | | | 8,487 | | | 100 | | | — | | | 5,691 | | | 8,587 | | | 14,278 | | | (1,201) | | | 12/31/2018 | | 2007 | | Annapolis Commerce Center | | Annapolis, MD | | 2 | | — | | | 4,057 | | | 7,665 | | | 4,806 | | | — | | | 4,057 | | | 12,471 | | | 16,528 | | | (2,241) | | | 10/2/2017 | | 1989 | | 4201 Patterson Avenue | | Baltimore, MD | | 1 | | — | | | 901 | | | 8,097 | | | 4,134 | | | (85) | | | 893 | | | 12,154 | | | 13,047 | | | (7,198) | | | 10/15/1998 | | 1989 | | 7001 Columbia Gateway Drive | | Columbia, MD | | 1 | | — | | | 5,642 | | | 10,352 | | | 3,444 | | | — | | | 5,642 | | | 13,796 | | | 19,438 | | | (1,605) | | | 12/31/2018 | | 2008 | | Hillside Center | | Columbia, MD | | 2 | | — | | | 3,437 | | | 4,228 | | | 1,015 | | | — | | | 3,437 | | | 5,243 | | | 8,680 | | | (1,098) | | | 10/2/2017 | | 2001 | | TenThreeTwenty | | Columbia, MD | | 1 | | — | | | 3,126 | | | 16,361 | | | 4,011 | | | — | | | 3,126 | | | 20,372 | | | 23,498 | | | (3,418) | | | 10/2/2017 | | 1982 | | 3300 75th Avenue | | Landover, MD | | 1 | | 29,537 | | | 4,110 | | | 36,371 | | | 3,730 | | | — | | | 4,110 | | | 40,101 | | | 44,211 | | | (13,789) | | | 2/26/2010 | | 1985 | | Redland 520/530 | | Rockville, MD | | 3 | | — | | | 12,714 | | | 61,377 | | | 8,002 | | | — | | | 12,714 | | | 69,379 | | | 82,093 | | | (11,313) | | | 10/2/2017 | | 2008 | | Redland 540 | | Rockville, MD | | 1 | | — | | | 10,740 | | | 17,714 | | | 6,108 | | | — | | | 10,740 | | | 23,822 | | | 34,562 | | | (5,344) | | | 10/2/2017 | | 2003 | | 3550 Green Court | | Ann Arbor, MI | | 1 | | — | | | 3,630 | | | 4,857 | | | — | | | — | | | 3,630 | | | 4,857 | | | 8,487 | | | (714) | | | 12/31/2018 | | 1998 | | 11411 E. Jefferson Avenue | | Detroit, MI | | 1 | | — | | | 630 | | | 18,002 | | | 586 | | | — | | | 630 | | | 18,588 | | | 19,218 | | | (6,322) | | | 4/23/2010 | | 2009 | | Rosedale Corporate Plaza | | Roseville, MN | | 1 | | — | | | 672 | | | 6,045 | | | 819 | | | — | | | 672 | | | 6,864 | | | 7,536 | | | (3,917) | | | 12/1/1999 | | 1987 | | 1300 Summit Street | | Kansas City, MO | | 1 | | — | | | 2,776 | | | 12,070 | | | 925 | | | — | | | 2,776 | | | 12,995 | | | 15,771 | | | (3,690) | | | 9/27/2012 | | 1998 | | 2555 Grand Boulevard (5) | | Kansas City, MO | | 1 | | — | | | 4,209 | | | 51,522 | | | 5,414 | | | — | | | 4,209 | | | 56,936 | | | 61,145 | | | (8,213) | | | 12/31/2018 | | 2003 | | 4241 NE 34th Street | | Kansas City, MO | | 1 | | — | | | 1,133 | | | 5,649 | | | 5,056 | | | — | | | 1,470 | | | 10,368 | | | 11,838 | | | (5,455) | | | 3/31/1997 | | 1995 | | 1220 Echelon Parkway | | Jackson, MS | | 1 | | 14,510 | | | 440 | | | 25,458 | | | 1,571 | | | — | | | 440 | | | 27,029 | | | 27,469 | | | (7,500) | | | 7/25/2012 | | 2009 | | 2300 and 2400 Yorkmont Road (5) | | Charlotte, NC | | 2 | | — | | | 1,334 | | | 19,075 | | | 4,222 | | | — | | | 1,334 | | | 23,297 | | | 24,631 | | | (3,549) | | | 12/31/2018 | | 1995 | | 18010 and 18020 Burt Street | | Omaha, NE | | 2 | | — | | | 6,977 | | | 12,500 | | | 2,369 | | | — | | | 6,977 | | | 14,869 | | | 21,846 | | | (1,733) | | | 12/31/2018 | | 2012 | | 500 Charles Ewing Boulevard | | Ewing, NJ | | 1 | | 42,279 | | | 4,808 | | | 26,002 | | | 1,554 | | | — | | | 4,808 | | | 27,556 | | | 32,364 | | | (3,737) | | | 12/31/2018 | | 2012 | | 299 Jefferson Road | | Parsippany, NJ | | 1 | | — | | | 4,543 | | | 2,914 | | | 1,282 | | | — | | | 4,543 | | | 4,196 | | | 8,739 | | | (723) | | | 12/31/2018 | | 2011 | | One Jefferson Road | | Parsippany, NJ | | 1 | | — | | | 4,415 | | | 5,249 | | | 103 | | | — | | | 4,415 | | | 5,352 | | | 9,767 | | | (741) | | | 12/31/2018 | | 2009 | | Airline Corporate Center | | Colonie, NY | | 1 | | — | | | 790 | | | 6,400 | | | 1,876 | | | — | | | 790 | | | 8,276 | | | 9,066 | | | (2,239) | | | 6/22/2012 | | 2004 | | 1212 Pittsford - Victor Road | | Pittsford, NY | | 1 | | — | | | 608 | | | 78 | | | 1,627 | | | — | | | 608 | | | 1,705 | | | 2,313 | | | (174) | | | 12/31/2018 | | 1965 | | 2231 Schrock Road | | Columbus, OH | | 1 | | — | | | 716 | | | 217 | | | 578 | | | — | | | 716 | | | 795 | | | 1,511 | | | (163) | | | 12/31/2018 | | 1999 | | 8800 Tinicum Boulevard | | Philadelphia, PA | | 1 | | — | | | 5,573 | | | 22,686 | | | 6,022 | | | — | | | 5,573 | | | 28,708 | | | 34,281 | | | (3,658) | | | 12/31/2018 | | 2000 | | 446 Wrenplace Road | | Fort Mill, SC | | 1 | | — | | | 5,031 | | | 22,524 | | | 43 | | | — | | | 5,031 | | | 22,567 | | | 27,598 | | | (1,704) | | | 12/22/2020 | | 2019 | | 9680 Old Bailes Road | | Fort Mill, SC | | 1 | | — | | | 834 | | | 2,944 | | | 91 | | | — | | | 834 | | | 3,035 | | | 3,869 | | | (423) | | | 12/31/2018 | | 2007 | | 16001 North Dallas Parkway | | Addison, TX | | 2 | | — | | | 10,282 | | | 63,071 | | | 2,558 | | | — | | | 10,282 | | | 65,629 | | | 75,911 | | | (9,485) | | | 12/31/2018 | | 1987 |
OFFICE PROPERTIES INCOME TRUST SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION (Continued) December 31, 20202023 (dollars in thousands)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Initial Cost to Company | | Costs Capitalized Subsequent to Acquisition | | | | Cost amount carried at Close of Period | | | | | | | | Property | | Location | | Number of Properties | | Encumbrances (1) | | Land | | Buildings and Equipment | | | Impairments/ Writedowns | | Land | | Buildings and Equipment | | Total (2) | | Accumulated Depreciation (3) | | Date(s) Acquired | | Original Construction Date(s) | | 500 Charles Ewing Boulevard | | Ewing, NJ | | 1 | | — | | | 4,808 | | | 26,002 | | | 0 | | | — | | | 4,808 | | | 26,002 | | | 30,810 | | | (1,441) | | | 12/31/2018 | | 2012 | | 299 Jefferson Road | | Parsippany, NJ | | 1 | | — | | | 4,543 | | | 2,914 | | | 823 | | | — | | | 4,543 | | | 3,737 | | | 8,280 | | | (221) | | | 12/31/2018 | | 2011 | | One Jefferson Road | | Parsippany, NJ | | 1 | | — | | | 4,415 | | | 5,249 | | | 63 | | | — | | | 4,415 | | | 5,312 | | | 9,727 | | | (289) | | | 12/31/2018 | | 2009 | | Airline Corporate Center | | Colonie, NY | | 1 | | — | | | 790 | | | 6,400 | | | 406 | | | — | | | 790 | | | 6,806 | | | 7,596 | | | (1,452) | | | 6/22/2012 | | 2004 | | 5000 Corporate Court | | Holtsville, NY | | 1 | | — | | | 6,530 | | | 17,711 | | | 4,103 | | | — | | | 6,530 | | | 21,814 | | | 28,344 | | | (5,206) | | | 8/31/2011 | | 2000 | | 8687 Carling Road | | Liverpool, NY | | 1 | | — | | | 566 | | | 0 | | | 8 | | | — | | | 566 | | | 8 | | | 574 | | | (1) | | | 12/31/2018 | | 1997 | | 1212 Pittsford - Victor Road | | Pittsford, NY | | 1 | | — | | | 608 | | | 78 | | | 538 | | | — | | | 608 | | | 616 | | | 1,224 | | | (36) | | | 12/31/2018 | | 1965 | | 2231 Schrock Road | | Columbus, OH | | 1 | | — | | | 716 | | | 217 | | | 201 | | | — | | | 716 | | | 418 | | | 1,134 | | | (31) | | | 12/31/2018 | | 1999 | | 4600 25th Avenue | | Salem, OR | | 1 | | — | | | 6,510 | | | 17,973 | | | 5,209 | | | — | | | 6,510 | | | 23,182 | | | 29,692 | | | (5,016) | | | 12/20/2011 | | 1957 | | 8800 Tinicum Boulevard | | Philadelphia, PA | | 1 | | — | | | 5,573 | | | 22,686 | | | 1,325 | | | — | | | 5,573 | | | 24,011 | | | 29,584 | | | (1,265) | | | 12/31/2018 | | 2000 | | 446 Wrenplace Road | | Fort Mill, SC | | 1 | | — | | | 5,031 | | | 22,526 | | | 0 | | | — | | | 5,031 | | | 22,526 | | | 27,557 | | | (14) | | | 12/22/2020 | | 2019 | | 9680 Old Bailes Road | | Fort Mill, SC | | 1 | | — | | | 834 | | | 2,944 | | | 0 | | | — | | | 834 | | | 2,944 | | | 3,778 | | | (163) | | | 12/31/2018 | | 2007 | | One Memphis Place | | Memphis, TN | | 1 | | — | | | 1,630 | | | 5,645 | | | 7,407 | | | — | | | 1,630 | | | 13,052 | | | 14,682 | | | (2,687) | | | 9/17/2010 | | 1985 | | 16001 North Dallas Parkway | | Addison, TX | | 2 | | — | | | 10,282 | | | 63,071 | | | 375 | | | — | | | 10,282 | | | 63,446 | | | 73,728 | | | (3,750) | | | 12/31/2018 | | 1987 | | Research Park | | Austin, TX | | 2 | | — | | | 4,258 | | | 13,747 | | | 360 | | | — | | | 4,258 | | | 14,107 | | | 18,365 | | | (1,461) | | | 12/31/2018 | | 1999 | | 10451 Clay Road | | Houston, TX | | 1 | | — | | | 5,495 | | | 10,253 | | | 0 | | | — | | | 5,495 | | | 10,253 | | | 15,748 | | | (569) | | | 12/31/2018 | | 2013 | | 202 North Castlegory Road | | Houston, TX | | 1 | | — | | | 863 | | | 5,024 | | | 0 | | | — | | | 863 | | | 5,024 | | | 5,887 | | | (262) | | | 12/31/2018 | | 2016 | | 6380 Rogerdale Road | | Houston, TX | | 1 | | — | | | 12,628 | | | 6,113 | | | 26 | | | — | | | 12,628 | | | 6,139 | | | 18,767 | | | (341) | | | 12/31/2018 | | 2006 | | 4221 W. John Carpenter Freeway | | Irving, TX | | 1 | | — | | | 1,413 | | | 2,365 | | | 1,843 | | | — | | | 1,413 | | | 4,208 | | | 5,621 | | | (382) | | | 12/31/2018 | | 1995 | | 8675,8701-8711 Freeport Pkwy and 8901 Esters Boulevard | | Irving, TX | | 3 | | — | | | 10,185 | | | 31,566 | | | 62 | | | — | | | 10,185 | | | 31,628 | | | 41,813 | | | (1,750) | | | 12/31/2018 | | 1990 | | 1511 East Common Street | | New Braunfels, TX | | 1 | | — | | | 4,965 | | | 1,266 | | | 73 | | | — | | | 4,965 | | | 1,339 | | | 6,304 | | | (75) | | | 12/31/2018 | | 2005 | | 2900 West Plano Parkway | | Plano, TX | | 1 | | — | | | 6,819 | | | 8,831 | | | 0 | | | — | | | 6,819 | | | 8,831 | | | 15,650 | | | (490) | | | 12/31/2018 | | 1998 | | 3400 West Plano Parkway | | Plano, TX | | 1 | | — | | | 4,543 | | | 15,964 | | | 321 | | | — | | | 4,543 | | | 16,285 | | | 20,828 | | | (910) | | | 12/31/2018 | | 1994 | | 3600 Wiseman Boulevard | | San Antonio, TX | | 1 | | — | | | 3,493 | | | 6,662 | | | 3,245 | | | — | | | 3,493 | | | 9,907 | | | 13,400 | | | (546) | | | 12/31/2018 | | 2004 | | 701 Clay Road | | Waco, TX | | 1 | | — | | | 2,030 | | | 8,708 | | | 13,392 | | | — | | | 2,060 | | | 22,070 | | | 24,130 | | | (5,934) | | | 12/23/1997 | | 1997 | | 1800 Novell Place | | Provo, UT | | 1 | | — | | | 7,487 | | | 43,487 | | | 0 | | | — | | | 7,487 | | | 43,487 | | | 50,974 | | | (2,602) | | | 12/31/2018 | | 2000 | | 4885-4931 North 300 West | | Provo, UT | | 2 | | — | | | 3,915 | | | 9,429 | | | 21 | | | — | | | 3,915 | | | 9,450 | | | 13,365 | | | (555) | | | 12/31/2018 | | 2009 | | 14660, 14672 & 14668 Lee Road | | Chantilly, VA | | 3 | | — | | | 6,966 | | | 74,214 | | | 4,590 | | | — | | | 6,966 | | | 78,804 | | | 85,770 | | | (8,024) | | | 12/22/2016 | | 1998; 2002; 2006 | | 1434 Crossways | | Chesapeake, VA | | 2 | | — | | | 3,617 | | | 19,527 | | | 2,795 | | | — | | | 3,617 | | | 22,322 | | | 25,939 | | | (2,686) | | | 10/2/2017 | | 1998 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Initial Cost to Company | | Costs Capitalized Subsequent to Acquisition | | | | Cost amount carried at Close of Period | | | | | | | | Property | | Location | | Number of Properties | | Encumbrances (1) | | Land | | Buildings and Equipment | | | Impairments/ Writedowns | | Land | | Buildings and Equipment | | Total (2) | | Accumulated Depreciation (3) | | Date(s) Acquired | | Original Construction Date(s) | | Research Park | | Austin, TX | | 2 | | — | | | 4,258 | | | 13,747 | | | 534 | | | — | | | 4,258 | | | 14,281 | | | 18,539 | | | (3,403) | | | 12/31/2018 | | 1999 | | 10451 Clay Road | | Houston, TX | | 1 | | — | | | 5,495 | | | 10,253 | | | 2,432 | | | — | | | 5,495 | | | 12,685 | | | 18,180 | | | (1,809) | | | 12/31/2018 | | 2013 | | 202 North Castlegory Road | | Houston, TX | | 1 | | — | | | 863 | | | 5,024 | | | 41 | | | — | | | 863 | | | 5,065 | | | 5,928 | | | (657) | | | 12/31/2018 | | 2016 | | 4221 W. John Carpenter Freeway | | Irving, TX | | 1 | | — | | | 1,413 | | | 2,365 | | | 1,843 | | | — | | | 1,413 | | | 4,208 | | | 5,621 | | | (1,445) | | | 12/31/2018 | | 1995 | | 8675,8701-8711 Freeport Pkwy and 8901 Esters Boulevard | | Irving, TX | | 3 | | — | | | 12,970 | | | 31,566 | | | 138 | | | — | | | 12,970 | | | 31,704 | | | 44,674 | | | (4,375) | | | 12/31/2018 | | 1990 | | 1511 East Common Street | | New Braunfels, TX | | 1 | | — | | | 4,965 | | | 1,266 | | | 251 | | | — | | | 4,965 | | | 1,517 | | | 6,482 | | | (323) | | | 12/31/2018 | | 2005 | | 2900 West Plano Parkway | | Plano, TX | | 1 | | — | | | 6,819 | | | 8,831 | | | — | | | — | | | 6,819 | | | 8,831 | | | 15,650 | | | (1,224) | | | 12/31/2018 | | 1998 | | 3400 West Plano Parkway | | Plano, TX | | 1 | | — | | | 4,543 | | | 15,964 | | | 321 | | | — | | | 4,543 | | | 16,285 | | | 20,828 | | | (2,286) | | | 12/31/2018 | | 1994 | | 3600 Wiseman Boulevard | | San Antonio, TX | | 1 | | — | | | 3,493 | | | 6,662 | | | 2,134 | | | — | | | 3,493 | | | 8,796 | | | 12,289 | | | (1,059) | | | 12/31/2018 | | 2004 | | 701 Clay Road (4) | | Waco, TX | | 1 | | 25,903 | | | 2,030 | | | 8,708 | | | 14,651 | | | — | | | 2,060 | | | 23,329 | | | 25,389 | | | (9,787) | | | 12/23/1997 | | 1997 | | 1800 Novell Place | | Provo, UT | | 1 | | — | | | 7,487 | | | 43,487 | | | 13,364 | | | — | | | 7,487 | | | 56,851 | | | 64,338 | | | (7,307) | | | 12/31/2018 | | 2000 | | 4885-4931 North 300 West | | Provo, UT | | 2 | | — | | | 3,915 | | | 9,429 | | | 21 | | | — | | | 3,915 | | | 9,450 | | | 13,365 | | | (1,392) | | | 12/31/2018 | | 2009 | | 14660, 14672 & 14668 Lee Road (5) | | Chantilly, VA | | 3 | | — | | | 6,966 | | | 74,214 | | | 17,518 | | | — | | | 6,966 | | | 91,732 | | | 98,698 | | | (15,123) | | | 12/22/2016 | | 1998; 2002; 2006 | | Enterchange at Meadowville | | Chester, VA | | 1 | | — | | | 1,478 | | | 9,594 | | | 1,369 | | | — | | | 1,478 | | | 10,963 | | | 12,441 | | | (2,720) | | | 8/28/2013 | | 1999 | | 7987 Ashton Avenue | | Manassas, VA | | 1 | | — | | | 1,562 | | | 8,253 | | | 1,069 | | | — | | | 1,562 | | | 9,322 | | | 10,884 | | | (1,946) | | | 1/3/2017 | | 1989 | | Two Commercial Place | | Norfolk, VA | | 1 | | — | | | 4,494 | | | 21,508 | | | 1,033 | | | — | | | 4,494 | | | 22,541 | | | 27,035 | | | (2,976) | | | 12/31/2018 | | 1974 | | 1759 Business Center Drive | | Reston, VA | | 1 | | — | | | 4,033 | | | 28,517 | | | 2,517 | | | — | | | 4,033 | | | 31,034 | | | 35,067 | | | (7,563) | | | 5/28/2014 | | 1987 | | 1760 Business Center Drive | | Reston, VA | | 1 | | — | | | 5,033 | | | 50,141 | | | 6,320 | | | — | | | 5,033 | | | 56,461 | | | 61,494 | | | (13,571) | | | 5/28/2014 | | 1987 | | 1775 Wiehle Avenue | | Reston, VA | | 1 | | — | | | 4,138 | | | 26,120 | | | 5,716 | | | — | | | 4,138 | | | 31,836 | | | 35,974 | | | (5,376) | | | 10/2/2017 | | 2001 | | 9201 Forest Hill Avenue | | Richmond, VA | | 1 | | — | | | 1,344 | | | 375 | | | 668 | | | — | | | 1,344 | | | 1,043 | | | 2,387 | | | (239) | | | 12/31/2018 | | 1985 | | 9960 Mayland Drive | | Richmond, VA | | 1 | | — | | | 2,614 | | | 15,930 | | | 4,690 | | | — | | | 2,614 | | | 20,620 | | | 23,234 | | | (5,109) | | | 5/20/2014 | | 1994 | | 1751 Blue Hills Drive (5) | | Roanoke, VA | | 1 | | — | | | 2,689 | | | 7,761 | | | — | | | — | | | 2,689 | | | 7,761 | | | 10,450 | | | (1,076) | | | 12/31/2018 | | 2003 | | Atlantic Corporate Park | | Sterling, VA | | 2 | | — | | | 5,752 | | | 29,316 | | | 3,616 | | | — | | | 5,752 | | | 32,932 | | | 38,684 | | | (5,532) | | | 10/2/2017 | | 2008 | | Orbital Sciences Campus (5) | | Sterling, VA | | 3 | | — | | | 12,275 | | | 19,320 | | | 7,400 | | | — | | | 12,269 | | | 26,726 | | | 38,995 | | | (3,205) | | | 12/31/2018 | | 2001 | | Sterling Park Business Center | | Sterling, VA | | 1 | | 25,934 | | | 5,871 | | | 44,324 | | | 127 | | | — | | | 5,871 | | | 44,451 | | | 50,322 | | | (6,951) | | | 10/2/2017 | | 2016 | | 65 Bowdoin Street | | S. Burlington, VT | | 1 | | — | | | 700 | | | 8,416 | | | 148 | | | — | | | 700 | | | 8,564 | | | 9,264 | | | (2,959) | | | 4/9/2010 | | 2009 | | Stevens Center (5) | | Richland, WA | | 2 | | — | | | 3,970 | | | 17,035 | | | 4,776 | | | — | | | 4,042 | | | 21,739 | | | 25,781 | | | (13,025) | | | 3/31/1997 | | 1995 | | Unison Elliott Bay-Lab Space | | Seattle, WA | | 2 | | — | | | 17,316 | | | 34,281 | | | 137,343 | | | — | | | 17,316 | | | 171,624 | | | 188,940 | | | (5,302) | | | 12/31/2018 | | 2000 | | Unison Elliott Bay-Office Space | | Seattle, WA | | 1 | | — | | | 9,324 | | | 18,459 | | | 5,101 | | | — | | | 9,324 | | | 23,560 | | | 32,884 | | | (2,953) | | | 12/31/2018 | | 2000 |
OFFICE PROPERTIES INCOME TRUST SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION (Continued) December 31, 20202023 (dollars in thousands)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Initial Cost to Company | | Costs Capitalized Subsequent to Acquisition | | | | Cost amount carried at Close of Period | | | | | | | | Property | | Location | | Number of Properties | | Encumbrances (1) | | Land | | Buildings and Equipment | | | Impairments/ Writedowns | | Land | | Buildings and Equipment | | Total (2) | | Accumulated Depreciation (3) | | Date(s) Acquired | | Original Construction Date(s) | | Greenbrier Towers | | Chesapeake, VA | | 2 | | — | | | 3,437 | | | 11,241 | | | 3,011 | | | — | | | 3,437 | | | 14,252 | | | 17,689 | | | (1,781) | | | 10/2/2017 | | 1985 | | Enterchange at Meadowville | | Chester, VA | | 1 | | — | | | 1,478 | | | 9,594 | | | 424 | | | — | | | 1,478 | | | 10,018 | | | 11,496 | | | (1,808) | | | 8/28/2013 | | 1999 | | Three Flint Hill | | Fairfax, VA | | 1 | | — | | | 5,991 | | | 25,536 | | | 3,021 | | | — | | | 5,991 | | | 28,557 | | | 34,548 | | | (3,164) | | | 10/2/2017 | | 1984 | | 7987 Ashton Avenue | | Manassas, VA | | 1 | | — | | | 1,562 | | | 8,253 | | | 912 | | | — | | | 1,562 | | | 9,165 | | | 10,727 | | | (1,006) | | | 1/3/2017 | | 1989 | | Two Commercial Place | | Norfolk, VA | | 1 | | — | | | 4,494 | | | 21,508 | | | 480 | | | — | | | 4,494 | | | 21,988 | | | 26,482 | | | (1,150) | | | 12/31/2018 | | 1974 | | 1759 & 1760 Business Center Drive | | Reston, VA | | 2 | | — | | | 9,066 | | | 78,658 | | | 6,969 | | | — | | | 9,066 | | | 85,627 | | | 94,693 | | | (13,592) | | | 5/28/2014 | | 1987 | | 1775 Wiehle Avenue | | Reston, VA | | 1 | | — | | | 4,138 | | | 26,120 | | | 1,749 | | | — | | | 4,138 | | | 27,869 | | | 32,007 | | | (2,431) | | | 10/2/2017 | | 2001 | | 9201 Forest Hill Avenue | | Richmond, VA | | 1 | | — | | | 1,344 | | | 375 | | | 451 | | | — | | | 1,344 | | | 826 | | | 2,170 | | | (39) | | | 12/31/2018 | | 1985 | | 9960 Mayland Drive | | Richmond, VA | | 1 | | — | | | 2,614 | | | 15,930 | | | 2,885 | | | — | | | 2,614 | | | 18,815 | | | 21,429 | | | (3,062) | | | 5/20/2014 | | 1994 | | Parham Place | | Richmond, VA | | 3 | | — | | | 913 | | | 1,099 | | | 206 | | | — | | | 913 | | | 1,305 | | | 2,218 | | | (73) | | | 12/31/2018 | | 1989; 2012 | | 1751 Blue Hills Drive | | Roanoke, VA | | 1 | | — | | | 2,689 | | | 7,761 | | | 0 | | | — | | | 2,689 | | | 7,761 | | | 10,450 | | | (430) | | | 12/31/2018 | | 2003 | | Atlantic Corporate Park | | Sterling, VA | | 2 | | — | | | 5,752 | | | 29,316 | | | 2,193 | | | — | | | 5,752 | | | 31,509 | | | 37,261 | | | (2,589) | | | 10/2/2017 | | 2008 | | Orbital Sciences Campus | | Sterling, VA | | 3 | | — | | | 12,275 | | | 19,320 | | | 276 | | | — | | | 12,275 | | | 19,596 | | | 31,871 | | | (1,148) | | | 12/31/2018 | | 2001 | | Sterling Business Park Lots 8 and 9 | | Sterling, VA | | 1 | | — | | | 9,177 | | | 44,324 | | | 57 | | | — | | | 9,177 | | | 44,381 | | | 53,558 | | | (3,602) | | | 10/2/2017 | | 2016 | | 65 Bowdoin Street | | S. Burlington, VT | | 1 | | — | | | 700 | | | 8,416 | | | 140 | | | — | | | 700 | | | 8,556 | | | 9,256 | | | (2,307) | | | 4/9/2010 | | 2009 | | 840 North Broadway | | Everett, WA | | 2 | | 0 | | | 3,360 | | | 15,376 | | | 2,897 | | | — | | | 3,360 | | | 18,273 | | | 21,633 | | | (3,604) | | | 6/28/2012 | | 1985 | | Stevens Center | | Richland, WA | | 2 | | — | | | 3,970 | | | 17,035 | | | 5,236 | | | — | | | 4,042 | | | 22,199 | | | 26,241 | | | (11,502) | | | 3/31/1997 | | 1995 | | 351, 401, 501 Elliott Ave West | | Seattle, WA | | 3 | | 70,092 | | | 26,640 | | | 52,740 | | | 2,518 | | | — | | | 26,640 | | | 55,258 | | | 81,898 | | | (2,985) | | | 12/31/2018 | | 2000 | | 11050 West Liberty Drive | | Milwaukee, WI | | 1 | | 0 | | | 945 | | | 4,539 | | | 103 | | | — | | | 945 | | | 4,642 | | | 5,587 | | | (1,116) | | | 6/9/2011 | | 2006 | | 5353 Yellowstone Road | | Cheyenne, WY | | 1 | | — | | | 1,915 | | | 8,217 | | | 1,775 | | | — | | | 1,950 | | | 9,957 | | | 11,907 | | | (5,209) | | | 3/31/1997 | | 1995 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 180 | | $ | 169,729 | | | $ | 830,222 | | | $ | 2,395,928 | | | $ | 300,518 | | | $ | (4,525) | | | $ | 830,884 | | | $ | 2,691,259 | | | $ | 3,522,143 | | | $ | (451,914) | | | | | | | Properties Held for Sale | | | | | | | | | | | | | | | | | | | | | | | | | | | | 4300 NE 34th Street (4) | | Kansas City, MO | | 0 | | — | | | 310 | | | 544 | | | 134 | | | — | | | 310 | | | 678 | | | 988 | | | (198) | | | 3/31/1997 | | 1995 | | 501 South 5th Street (5) | | Richmond, VA | | 1 | | — | | | 14,767 | | | 39,101 | | | 233 | | | — | | | 14,767 | | | 39,334 | | | 54,101 | | | (2,279) | | | 12/31/2018 | | 2009 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 1 | | 0 | | | 15,077 | | | 39,645 | | | 367 | | | 0 | | | 15,077 | | | 40,012 | | | 55,089 | | | (2,477) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 181 | | $ | 169,729 | | | $ | 845,299 | | | $ | 2,435,573 | | | $ | 300,885 | | | $ | (4,525) | | | $ | 845,961 | | | $ | 2,731,271 | | | $ | 3,577,232 | | | $ | (454,391) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Initial Cost to Company | | Costs Capitalized Subsequent to Acquisition | | | | Cost amount carried at Close of Period | | | | | | | | Property | | Location | | Number of Properties | | Encumbrances (1) | | Land | | Buildings and Equipment | | | Impairments/ Writedowns | | Land | | Buildings and Equipment | | Total (2) | | Accumulated Depreciation (3) | | Date(s) Acquired | | Original Construction Date(s) | | 5353 Yellowstone Road (5) | | Cheyenne, WY | | 1 | | — | | | 1,915 | | | 8,217 | | | 2,402 | | | — | | | 1,950 | | | 10,584 | | | 12,534 | | | (6,251) | | | 3/31/1997 | | 1995 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 151 | | $ | 172,131 | | | $ | 785,646 | | | $ | 2,492,042 | | | $ | 792,516 | | | $ | (4,525) | | | $ | 786,310 | | | $ | 3,279,369 | | | $ | 4,065,679 | | | $ | (650,179) | | | | | | | Properties Held for Sale | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 400 South Jefferson Street | | Chicago, IL | | 1 | | — | | | 19,379 | | | 20,115 | | | 1,136 | | | (11,299) | | | 13,555 | | | 15,776 | | | 29,331 | | | (3,030) | | | 12/31/2018 | | 1947 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 1 | | — | | | 19,379 | | | 20,115 | | | 1,136 | | | (11,299) | | | 13,555 | | | 15,776 | | | 29,331 | | | (3,030) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 152 | | $ | 172,131 | | | $ | 805,025 | | | $ | 2,512,157 | | | $ | 793,652 | | | $ | (15,824) | | | $ | 799,865 | | | $ | 3,295,145 | | | $ | 4,095,010 | | | $ | (653,209) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
(1) Represents mortgage debt, net of the unamortized balance of the fair value adjustments and debt issuance costs totaling $1,113.$5,189. (2) Excludes the value of real estate intangibles. Aggregate cost for federal income tax purposes is approximately $7,059,170.$7,540,917. (3) Depreciation on building and improvements is provided for periods ranging up to 40 years and on equipment up to 12seven years. (4) ConsistsThese two properties are collateral for our $54,300 mortgage note. (5) These 19 properties (with the exception of a warehouse14660 Lee Road) are collateral for our $325,000 secured revolving credit facility adjacent to a propertyand $100,000 term loan under our amended and restated credit facility, which we own in Kansas City, MO that was soldentered into in January 2021.2024. (5) This property was sold in January 2021.
OFFICE PROPERTIES INCOME TRUST SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION (Continued) December 31, 20202023 (dollars in thousands)
An analysis of the carrying amount of real estate properties and accumulated depreciation is as follows: | | | | | | | | | | | | | Real Estate Properties | | Accumulated Depreciation | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Balance at December 31, 2017 | $ | 2,975,721 | | | $ | 341,848 | | Additions | 1,486,342 | | | 65,215 | | Loss on asset impairment | (8,630) | | | 0 | | Disposals | (286,837) | | | (18,740) | | Cost basis adjustment (1) | (5,005) | | | (5,005) | | Reclassification of assets of properties held for sale | (216,955) | | | (8,171) | | Balance at December 31, 2018 | 3,944,636 | | | 375,147 | | Additions | 66,221 | | | 89,398 | | Loss on asset impairment | (22,255) | | | 0 | | Disposals | (424,302) | | | (64,167) | | Cost basis adjustment (1) | (9,169) | | | (9,169) | | Reclassification of assets of properties held for sale | (61,900) | | | (3,553) | | Balance at December 31, 2019 | 3,493,231 | | | 387,656 | | Additions | 122,116 | | | 83,828 | | Loss on asset impairment | (2,954) | | | 0 | | Disposals | (31,193) | | | (13,125) | | | | | | Cost basis adjustment (1) | (3,968) | | | (3,968) | | Reclassification of assets of properties held for sale | (55,089) | | | (2,477) | | Balance at December 31, 2020 | $ | 3,522,143 | | | $ | 451,914 | |
| | | | | | | | | | | | | Real Estate Properties | | Accumulated Depreciation | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Balance at December 31, 2020 | $ | 3,522,143 | | | $ | 451,914 | | Additions | 584,805 | | | 92,266 | | Loss on asset impairment | (58,696) | | | — | | Disposals | (72,137) | | | (8,675) | | Cost basis adjustment (1) | (37,239) | | | (37,239) | | Reclassification of assets of properties held for sale | (27,790) | | | (2,354) | | Balance at December 31, 2021 | 3,911,086 | | | 495,912 | | Additions | 222,951 | | | 96,966 | | Loss on asset impairment | (17,303) | | | — | | Disposals | (173,841) | | | (26,997) | | Cost basis adjustment (1) | (4,235) | | | (4,235) | | Reclassification of assets of properties held for sale | (2,584) | | | (188) | | Balance at December 31, 2022 | 3,936,074 | | | 561,458 | | Additions | 221,246 | | | 107,460 | | Loss on asset impairment | (11,299) | | | — | | Disposals | (51,011) | | | (15,709) | | | | | | Reclassification of assets of properties held for sale | (29,331) | | | (3,030) | | Balance at December 31, 2023 | $ | 4,065,679 | | | $ | 650,179 | |
(1) Represents the reclassification between accumulated depreciation and building made to certain properties reclassified as assets of properties held for sale at fair value less costs to sell in accordance with GAAP.
SIGNATURES Pursuant to the requirements of Section 13 and 15(d) 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. | | | | | | | | | | | | | OFFICE PROPERTIES INCOME TRUST | | | By: | /s/ Christopher J. BilottoYael Duffy | | | | Christopher J. BilottoYael Duffy
President and Chief Operating Officer | | | | | | | Dated: February 19, 202115, 2024 | |
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. | | | | | | | | | | | | Signature | Title | Date | | | | /s/ Christopher J. BilottoYael Duffy | President and Chief Operating Officer | February 19, 202115, 2024 | Christopher J. BilottoYael Duffy | | | | /s/ Matthew C. BrownBrian E. Donley | Chief Financial Officer and Treasurer (principal financial officer and principal accounting officer) | February 19, 202115, 2024 | Matthew C. BrownBrian E. Donley | | | | /s/ David M. BlackmanJennifer B. Clark | Managing Trustee | February 19, 202115, 2024 | David M. BlackmanJennifer B. Clark | | | | /s/ Adam D. Portnoy | Managing Trustee | February 19, 202115, 2024 | Adam D. Portnoy | | | | /s/ Donna D. Fraiche | Independent Trustee | February 19, 202115, 2024 | Donna D. Fraiche | | | | /s/ Barbara D. Gilmore | Independent Trustee | February 19, 202115, 2024 | Barbara D. Gilmore | | | | /s/ John L. Harrington | Independent Trustee | February 19, 202115, 2024 | John L. Harrington | | | | /s/ William A. Lamkin | Independent Trustee | February 19, 202115, 2024 | William A. Lamkin | | | | /s/ Elena Poptodorova | Independent Trustee | February 19, 202115, 2024 | Elena Poptodorova | | | | /s/ Jeffrey P. Somers | Independent Trustee | February 19, 202115, 2024 | Jeffrey P. Somers | | | | /s/ Mark A. Talley | Independent Trustee | February 15, 2024 | Mark A. Talley |
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