UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, ~~2020~~2021

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 1-34364

OFFICE PROPERTIES INCOME TRUST

(Exact Name of Registrant as Specified in Its Charter)



Maryland						26-4273474
(State or Other Jurisdiction of Incorporation or Organization)						(IRS Employer Identification No.)

Two Newton Place,, 255 Washington Street,, Suite 300,, Newton,, Massachusetts02458-1634

(Address of Principal Executive Offices) (Zip Code)

~~617~~-~~219-1440~~617-219-1440

(Registrant’s Telephone Number, Including Area Code)

Securities Registered Pursuant to Section 12(b) of the Act:

Title of Each Class

Trading Symbol(s)

Name Of Each Exchange On Which Registered

Common Shares of Beneficial Interest

OPI

The Nasdaq Stock Market LLC

5.875% Senior Notes due 2046

OPINI

The Nasdaq Stock Market LLC

6.375% Senior Notes due 2050

OPINL

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Number of registrant’s common shares of beneficial interest, $.01 par value per share, outstanding as of April ~~30, 2020: 48,200,929~~28, 2021: 48,318,366

Table of Contents

OFFICE PROPERTIES INCOME TRUST

FORM 10-Q

March 31, ~~2020~~2021

INDEX


				Page
PART I.			Financial Information
				~~Page~~
~~PART I~~Item 1..			Financial ~~Information~~Statements (unaudited)

~~Item 1.~~			~~Financial Statements (unaudited)~~

	Condensed Consolidated Balance Sheets — March 31, ~~2020~~2021 and December 31, ~~2019~~2020	3

			Condensed Consolidated Statements of Comprehensive Income — Three Months Ended March 31, ~~2020~~2021 and ~~2019~~2020	4

			Condensed Consolidated Statements of ~~Shareholders'~~Shareholders’ Equity — Three Months Ended March 31, ~~2020~~2021 and ~~2019~~2020	5

			Condensed Consolidated Statements of Cash Flows — Three Months Ended March 31, ~~2020~~2021 and ~~2019~~2020	6

			Notes to Condensed Consolidated Financial Statements	8

Item 2.			Management’s Discussion and Analysis of Financial Condition and Results of Operations	15

Item 3.			Quantitative and Qualitative Disclosures About Market Risk	3128

Item 4.			Controls and Procedures	3330

			Warning Concerning Forward-Looking Statements	3330

			Statement Concerning Limited Liability	3834

PART IIII..			Other Information

Item 1A.			Risk Factors	3834



Item 6.			Exhibits	34

			~~Item 2.~~Signatures	~~Unregistered Sales of Equity Securities and Use of Proceeds~~36	40

~~Item 6.~~	~~Exhibits~~	41

	~~Signatures~~	43

References in this Quarterly Report on Form 10-Q to “the Company”, “OPI”, “we”, “us” or “our” include Office Properties Income Trust and its consolidated subsidiaries unless otherwise expressly stated or the context indicates otherwise.

Table of Contents

PART I. Financial Information

Item 1. Financial Statements

OFFICE PROPERTIES INCOME TRUST

CONDENSED CONSOLIDATED BALANCE SHEETS

(dollars in thousands, except per share data)

(unaudited)


	March 31,		December 31,
	2021		2020
ASSETS
Real estate properties:
Land	$	824,622	$	830,884
Buildings and improvements	2,650,159		2,691,259
Total real estate properties, gross	3,474,781		3,522,143
Accumulated depreciation	(467,085)		(451,914)
Total real estate properties, net	3,007,696		3,070,229
Assets of properties held for sale	47,918		75,177
Investments in unconsolidated joint ventures	37,402		37,951
Acquired real estate leases, net	505,582		548,943
Cash and cash equivalents	184,462		42,045
Restricted cash	17,013		14,810
Rents receivable	94,879		101,766
Deferred leasing costs, net	44,680		42,626
Other assets, net	12,947		12,889
Total assets	$	3,952,579	$	3,946,436

LIABILITIES AND SHAREHOLDERS’ EQUITY
Unsecured revolving credit facility	$	0	$	0
Senior unsecured notes, net	2,035,304		2,033,242
Mortgage notes payable, net	169,204		169,729
Liabilities of properties held for sale	84		891
Accounts payable and other liabilities	103,617		116,480
Due to related persons	13,370		6,114
Assumed real estate lease obligations, net	10,002		10,588
Total liabilities	2,331,581		2,337,044

Commitments and contingencies	0		0

Shareholders’ equity:
Common shares of beneficial interest, $0.01 par value: 200,000,000 shares authorized, 48,318,366 shares issued and outstanding	483		483
Additional paid in capital	2,615,626		2,615,305
Cumulative net income	221,755		183,895

Cumulative common distributions	(1,216,866)		(1,190,291)
Total shareholders’ equity	1,620,998		1,609,392
Total liabilities and shareholders’ equity	$	3,952,579	$	3,946,436

March 31, December 31,
2020 2019
ASSETS

Real estate properties:

Land $ 843,418
$ 840,550
Buildings and improvements 2,672,467
2,652,681
Total real estate properties, gross 3,515,885
3,493,231
Accumulated depreciation (403,229 ) (387,656 )
Total real estate properties, net 3,112,656
3,105,575
Assets of properties held for sale —
70,877
Investments in unconsolidated joint ventures 39,429
39,756
Acquired real estate leases, net 689,512
732,382
Cash and cash equivalents 29,657
93,744
Restricted cash 4,349
6,952
Rents receivable 90,462
83,556
Deferred leasing costs, net 42,612
40,107
Other assets, net 20,028
20,187
Total assets $ 4,028,705
$ 4,193,136

LIABILITIES AND SHAREHOLDERS’ EQUITY

Unsecured revolving credit facility $ 348,000
$ —
Senior unsecured notes, net 1,619,528
2,017,379
Mortgage notes payable, net 244,252
309,946
Liabilities of properties held for sale —
14,693
Accounts payable and other liabilities 106,066
125,048
Due to related persons 7,973
7,141
Assumed real estate lease obligations, net 12,512
13,175
Total liabilities 2,338,331
2,487,382

Commitments and contingencies

Shareholders’ equity:

Common shares of beneficial interest, $.01 par value: 200,000,000 shares authorized, 48,200,929 and 48,201,941 shares issued and outstanding, respectively 482
482
Additional paid in capital 2,612,777
2,612,425
Cumulative net income 188,057
177,217
Cumulative other comprehensive loss (261 ) (200 )
Cumulative common distributions (1,110,681 ) (1,084,170 )
Total shareholders’ equity 1,690,374
1,705,754
Total liabilities and shareholders’ equity $ 4,028,705
$ 4,193,136

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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OFFICE PROPERTIES INCOME TRUST

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(amounts in thousands, except per share data)

(unaudited)


	Three Months Ended March 31,
	2021		2020

Rental income	$	144,524	$	149,885

Expenses:
Real estate taxes	16,154		16,807
Utility expenses	6,432		7,012
Other operating expenses	25,439		25,880
Depreciation and amortization	64,087		62,943
Loss on impairment of real estate	7,660		0

General and administrative	11,272		7,109
Total expenses	131,044		119,751

Gain on sale of real estate	54,004		10,756


Interest and other income	5		706
Interest expense (including net amortization of debt premiums, discounts and issuance costs of $2,432 and $2,283, respectively)	(28,798)		(27,159)
Loss on early extinguishment of debt	0		(3,282)
Income before income tax expense and equity in net losses of investees	38,691		11,155
Income tax expense	(435)		(39)
Equity in net losses of investees	(396)		(276)



Net income	37,860		10,840



Other comprehensive loss:
Unrealized loss on financial instrument	0		(61)


Other comprehensive loss	0		(61)
Comprehensive income	$	37,860	$	10,779





Weighted average common shares outstanding (basic)	48,161		48,095
Weighted average common shares outstanding (diluted)	48,196		48,095

Per common share amounts (basic and diluted):



Net income	$	0.78	$	0.23

Three Months Ended March 31,
2020 2019

Rental income $ 149,885
$ 174,777

Expenses:
Real estate taxes 16,807
18,392
Utility expenses 7,012
9,381
Other operating expenses 25,880
30,136
Depreciation and amortization 62,943
77,521
Loss on impairment of real estate —
3,204
Acquisition and transaction related costs —
584
General and administrative 7,109
8,723
Total expenses 119,751
147,941

Gain on sale of real estate 10,756
22,092
Dividend income —
980
Gain on equity securities —
22,128
Interest and other income 706
248
Interest expense (including net amortization of debt premiums, discounts and issuance costs of $2,283 and $2,841, respectively) (27,159 ) (37,133 )
Loss on early extinguishment of debt (3,282 ) (414 )
Income before income tax expense and equity in net losses of investees 11,155
34,737
Income tax expense (39 ) (483 )
Equity in net losses of investees (276 ) (235 )
Net income 10,840
34,019
Other comprehensive income (loss):
Unrealized loss on financial instrument (61 ) (98 )
Equity in unrealized gain of investees —
66
Other comprehensive loss (61 ) (32 )
Comprehensive income $ 10,779
$ 33,987

Weighted average common shares outstanding (basic) 48,095
48,031
Weighted average common shares outstanding (diluted) 48,095
48,046

Per common share amounts (basic and diluted):
Net income $ 0.23
$ 0.71

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Table of Contents

OFFICE PROPERTIES INCOME TRUST

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(dollars in thousands)

(unaudited)


	Number of Shares	Common Shares		Additional Paid In Capital		Cumulative Net Income		Cumulative Other Comprehensive Loss		Cumulative Common Distributions		Total Shareholders’ Equity
Balance at December 31, 2020	48,318,366	$	483	$	2,615,305	$	183,895	$	0	$	(1,190,291)	$	1,609,392
Share grants	—	—		321		—		—		—		321

Net income	—	—		—		37,860		—		—		37,860
Distributions to common shareholders	—	—		—		—		—		(26,575)		(26,575)
Balance at March 31, 2021	48,318,366	$	483	$	2,615,626	$	221,755	$	0	$	(1,216,866)	$	1,620,998


	Number of Shares		Common Shares		Additional Paid In Capital			Cumulative Net Income		Cumulative Other Comprehensive Income (Loss)			Cumulative Common Distributions			Total Shareholders’ Equity
Balance at December 31, 2019	48,201,941		$	482	$	2,612,425		$	177,217	$	(200	)	$	(1,084,170	)	$	1,705,754		Balance at December 31, 2019	48,201,941	$	482	$	2,612,425	$	177,217	$	(200)	$	(1,084,170)	$	1,705,754
Share grants	—		—		379			—		—			—			379			Share grants	—	—		379		—		—		—		379
Share repurchases	(1,012	)	—		(27		)	—		—			—			(27		)	Share repurchases	(1,012)	—		(27)		—		—		—		(27)
Net current period other comprehensive loss	—		—		—			—		(61		)	—			(61		)	Net current period other comprehensive loss	—	—		—		—		(61)		—		(61)
Net income	—		—		—			10,840		—			—			10,840			Net income	—	—		—		10,840		—		—		10,840
Distributions to common shareholders	—		—		—			—		—			(26,511		)	(26,511		)	Distributions to common shareholders	—	—		—		—		—		(26,511)		(26,511)
Balance at March 31, 2020	48,200,929		$	482	$	2,612,777		$	188,057	$	(261	)	$	(1,110,681	)	$	1,690,374		Balance at March 31, 2020	48,200,929	$	482	$	2,612,777	$	188,057	$	(261)	$	(1,110,681)	$	1,690,374

Balance at December 31, 2018	48,082,903		$	481	$	2,609,801		$	146,882	$	106		$	(978,302	)	$	1,778,968
Share grants	9,000		—		865			—		—			—			865
Amount reclassified from cumulative other comprehensive income to net income	—		—		—			—		(371		)	—			(371		)
Net current period other comprehensive loss	—		—		—			—		(32		)	—			(32		)
Net income	—		—		—			34,019		—			—			34,019
Distributions to common shareholders	—		—		—			—		—			(26,445		)	(26,445		)
Balance at March 31, 2019	48,091,903		$	481	$	2,610,666		$	180,901	$	(297	)	$	(1,004,747	)	$	1,787,004

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Table of Contents

OFFICE PROPERTIES INCOME TRUST

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(dollars in thousands)

(unaudited)


	Three Months Ended March 31,
	2021		2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	37,860	$	10,840
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	21,629		20,499
Net amortization of debt premiums, discounts and issuance costs	2,432		2,283
Amortization of acquired real estate leases	41,575		42,457
Amortization of deferred leasing costs	1,820		1,665
Gain on sale of real estate	(54,004)		(10,756)
Loss on impairment of real estate	7,660		0
Loss on early extinguishment of debt	0		2,144

Straight line rental income	(5,357)		(5,583)
Other non-cash expenses, net	49		107


Equity in net losses of investees	396		276





Change in assets and liabilities:


Rents receivable	11,320		(1,087)
Deferred leasing costs	(4,826)		(4,466)
Other assets	(259)		180
Accounts payable and other liabilities	(9,609)		(21,790)
Due to related persons	7,256		832
Net cash provided by operating activities	57,942		37,601

CASH FLOWS FROM INVESTING ACTIVITIES:
Real estate acquisitions	0		(11,864)
Real estate improvements	(15,329)		(14,525)

Distributions in excess of earnings from unconsolidated joint ventures	153		51

Proceeds from sale of properties, net	129,072		68,433



Net cash provided by investing activities	113,896		42,095

CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of mortgage notes payable	(643)		(67,848)

Repayment of senior unsecured notes	0		(400,000)



Borrowings on unsecured revolving credit facility	0		418,467
Repayments on unsecured revolving credit facility	0		(70,467)

Repurchase of common shares	0		(27)


Distributions to common shareholders	(26,575)		(26,511)
Net cash used in financing activities	(27,218)		(146,386)

Increase (decrease) in cash, cash equivalents and restricted cash	144,620		(66,690)
Cash, cash equivalents and restricted cash at beginning of period	56,855		100,696
Cash, cash equivalents and restricted cash at end of period	$	201,475	$	34,006

Three Months Ended March 31,
2020 2019
CASH FLOWS FROM OPERATING ACTIVITIES:

Net income $ 10,840
$ 34,019
Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation 20,499
23,629
Net amortization of debt premiums, discounts and issuance costs 2,283
2,841
Amortization of acquired real estate leases 42,457
53,837
Amortization of deferred leasing costs 1,665
1,350
Gain on sale of real estate (10,756 ) (22,092 )
Loss on impairment of real estate —
3,204
Loss on early extinguishment of debt 2,144
414
Straight line rental income (5,583 ) (6,794 )
Other non-cash expenses, net 107
593
Gain on equity securities —
(22,128 )
Equity in net losses of investees 276
235
Change in assets and liabilities:
Rents receivable (1,087 ) 14,390
Deferred leasing costs (4,466 ) (7,985 )
Other assets 180
2,873
Accounts payable and other liabilities (21,790 ) (30,387 )
Due to related persons 832
(29,257 )
Net cash provided by operating activities 37,601
18,742

CASH FLOWS FROM INVESTING ACTIVITIES:

Real estate acquisitions (11,864 ) —
Real estate improvements (14,525 ) (12,969 )
Distributions in excess of earnings from unconsolidated joint ventures 51
521
Proceeds from sale of properties, net 68,433
262,779
Net cash provided by investing activities 42,095
250,331

CASH FLOWS FROM FINANCING ACTIVITIES:

Repayment of mortgage notes payable (67,848 ) (8,954 )
Repayment of unsecured term loans —
(153,000 )
Repayment of senior unsecured notes (400,000 ) —
Borrowings on unsecured revolving credit facility 418,467
85,000
Repayments on unsecured revolving credit facility (70,467 ) (180,000 )
Repurchase of common shares (27 ) —
Distributions to common shareholders (26,511 ) (26,445 )
Net cash used in financing activities (146,386 ) (283,399 )

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Table of Contents

OFFICE PROPERTIES INCOME TRUST

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

(dollars in thousands)

(unaudited)

Three Months Ended March 31,
2020 2019
Decrease in cash, cash equivalents and restricted cash $ (66,690 ) $ (14,326 )
Cash, cash equivalents and restricted cash at beginning of period 100,696
38,943
Cash, cash equivalents and restricted cash at end of period $ 34,006
$ 24,617


	Three Months Ended March 31,
	2021		2020
SUPPLEMENTAL CASH FLOW INFORMATION:
Interest paid	$	36,136	$	37,715


NON-CASH INVESTING ACTIVITIES:
Real estate improvements accrued, not paid	$	9,164	$	12,294
Sale of properties	$	0	$	13,095
Capitalized interest	$	50	$	28

NON-CASH FINANCING ACTIVITIES:
Repayment of mortgage notes payable related to properties sold	$	0	$	(13,095)

Three Months Ended March 31,
2020 2019
SUPPLEMENTAL CASH FLOW INFORMATION:
Interest paid $ 37,715
$ 49,545
Income taxes paid $ —
$ 7

NON-CASH INVESTING ACTIVITIES:
Sale of properties $ 13,095
$ —

NON-CASH FINANCING ACTIVITIES:
Repayment of mortgage notes payable related to properties sold $ (13,095 ) $ —

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 condensed consolidated balance sheets to the amounts shown in the condensed consolidated statements of cash flows:


	As of March 31,
	2021		2020
Cash and cash equivalents	$	184,462	$	29,657
Restricted cash (1)	17,013		4,349
Total cash, cash equivalents and restricted cash shown in the condensed consolidated statements of cash flows	$	201,475	$	34,006

As of March 31,
2020 2019
Cash and cash equivalents $ 29,657
$ 20,153
Restricted cash 4,349
4,464
Total cash, cash equivalents and restricted cash shown in the statements of cash flows $ 34,006
$ 24,617

(1)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.

Table of Contents

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following information should be read in conjunction with our condensed consolidated financial statements and accompanying notes included in Part I, Item 1 of this Quarterly Report on Form 10-Q and with our ~~2019~~2020 Annual Report.

OVERVIEW (dollars in thousands, except per share and per square foot data)

We are a real estate investment trust, or REIT, organized under Maryland law. As of March 31, ~~2020,~~2021, our wholly owned properties were comprised of ~~184~~180 properties and we had noncontrolling ownership interests of 51% and 50% in ~~three properties totaling 0.4 million rentable square feet through~~ two unconsolidated joint ventures ~~in which we~~that own ~~51% and 50% interests.~~three properties containing a combined approximately 444,000 rentable square feet. As of March 31, ~~2020,~~2021, our properties are located in 34 states and the District of Columbia and contain approximately ~~24.9 million~~24,568,000 rentable square feet. As of March 31, ~~2020,~~2021, our properties were leased to ~~359~~340 different tenants with a weighted average remaining lease term (based on annualized rental income) of approximately ~~5.6~~4.9 years. The U.S. ~~Government~~government is our largest tenant, representing approximately ~~25.0%~~25.9% of our annualized rental income as of March 31, ~~2020.~~2021. The term annualized rental income as used herein is defined as the annualized contractual base rents from our tenants pursuant to our lease agreements as of March 31, ~~2020,~~2021, plus straight line rent adjustments and estimated recurring expense reimbursements to be paid to us, and excluding lease value amortization.

COVID-19 Pandemic

~~In March 2020, the World Health Organization declared the outbreak of~~The COVID-19 ~~as a~~ pandemic and ~~in response to~~ the ~~outbreak, the U.S. Health~~various governmental and Human Services Secretary declared a public health emergency in the United States and many states and municipalities declared public health emergencies. The COVID-19 virus has continued to spread throughout the United States and the world. Various governmentalmarket responses ~~in an attempt~~intended to contain and mitigate the spread of the ~~COVID-19~~ virus ~~have negatively impacted,~~ and its detrimental public health impact, as well as the general uncertainty surrounding the dangers and impact of the pandemic, continue to ~~negatively~~have a significant impact on the global economy, including the U.S. economy. As a result, most market observers believe the global economy will be in a recession. Our business is focused on leasing office space to primarily single tenants and those with high credit quality characteristics such as government entities. AlthoughTo date, the COVID-19 pandemic ~~did~~has not ~~have~~had a significant impact on our business ~~during the three months ended March 31, 2020,~~and we have received requests from some of our tenants for rent assistance. As of April 28, 2020, we have granted temporary rent assistance totaling $1,403 to 18 tenants who represent 2.4% of our annualized rental income as of March 31, 2020. This assistance generally entails a deferral of, in most cases, one month of rent until September 2020 when the deferred rent amounts will begin to be payable over a 12-month period.

~~We are closely monitoring the impact of the COVID-19 pandemic on all aspects of our business, including:~~

~~our tenants and their ability to withstand the current economic conditions and continue to pay us rent;~~

~~our operations, liquidity and capital needs and resources;~~

~~conducting financial modeling and sensitivity analyses;~~

actively communicating with our tenants and other key constituents and stakeholders in order to help assess market conditions, opportunities, best practices and mitigate risks and potential adverse impacts;

~~monitoring applicable states and municipalities to which we lease property and their responses to the COVID-19 pandemic and economic slowdown, including budgetary impacts; and~~

monitoring, with the assistance of counsel and other specialists, possible government relief funding sources and other programs that may be available to us or our tenants to enable us and them to operate through the current economic conditions and enhance our tenants’ ability to pay us rent.

We believe that our current financial resources, the characteristics of our portfolio, including the diversity of our tenant base, both geographically and by industry, and the financial strength and resources of our tenants, will enable us to withstand the COVID-19 ~~pandemic and perhaps present opportunities~~pandemic. However, we have received requests from some of our tenants for ~~us to strategically deploy our capital.~~rent assistance. As of April ~~30, 2020,~~26, 2021, we ~~had:~~

~~$395,000 of availability under our revolving credit facility;~~

~~only~~have granted temporary rent assistance totaling $2,483 to 18 tenants who represent approximately ~~$40,000 of debt maturities until 2022; and~~

~~62.2%~~3.2% of our annualized rental income as of March 31, ~~2020, derived from investment grade tenants (as described below).~~

~~Table~~2021. This assistance generally entails a deferral of, ~~Contents~~

~~We do not have any employees and the personnel and various services we require to operate our business are provided to us by RMR LLC~~in most cases, one month of rent pursuant to deferred payment plans which require the deferred rent amounts be payable over a 12-month period, all of which have commenced. As of April 26, 2021, we have collected $2,118, or 85.3%, of our ~~business and property management agreements with RMR LLC.~~granted rent deferrals.

Our manager, RMR LLC, has ~~implemented enhanced cleaning protocols~~taken various actions in response to the COVID-19 pandemic to address its operating and ~~social distancing guidelines at its corporate headquarters and its regional offices, as well as business continuity plans to ensure RMR LLC employees remain safe and able to support~~financial impact on us and to protect the health and safety of our tenants and other companies managed by RMR LLC, including providing appropriate information technology such as notebook computers, smart phones, computer applications, information technology security applications and technology support.

~~With respect to our properties, RMR LLC has implemented enhanced cleaning protocols and has taken measures to reduce the possibility of~~ persons gathering in groups and in close proximity to each other, for the purpose of mitigating the potential for spreading of COVID-19 infections. Included among these protocols and measures are the following:

~~focusing on sanitizing high touch points in common areas and restrooms;~~

~~shutting down certain building amenities; and~~

~~prudently managing the execution or deferment of tenant work orders to limit RMR LLC staff and tenant interactions at~~who visit our properties. In addition, we are continuing to closely monitor the impact of the COVID-19 pandemic on all aspects of our business. For more information regarding these actions and monitoring activities, see our 2020 Annual Report.

~~All RMR LLC property management~~The U.S economy has been growing as COVID-19 vaccinations are increasingly administered, commercial activities increasingly return to pre-pandemic practices and ~~engineering personnel have been trained~~operations, and as a result of recent and expected future government spending on COVID-19 ~~precaution procedures. As states~~pandemic relief, infrastructure and ~~local communities across~~other matters. However, there remains uncertainty as to the ~~country have moved to shelter in place orders, RMR LLC has worked to reduce and optimize our operating costs at our properties by:~~

~~deferring non-emergency work;~~

~~implementing energy reduction protocols for lighting and HVAC systems;~~

~~reducing non-essential building services and staff; and~~

~~reducing the frequency of trash removal.~~

RMR LLC’s property management teams have also established business continuity plans to ensure operational stability at our properties. RMR LLC has suspended all non-essential work travel, its regional leadership personnel have not been allowed to work in the same locations at the same time, and RMR LLC requires its employees who work at our properties to use personal protective equipment and business continuity bonus pay is provided to those individuals.

~~There are extensive uncertainties surrounding the COVID-19 pandemic. These uncertainties include among others:~~

~~the~~ultimate duration and severity of the ~~economic impact;~~

~~the strength and sustainability of any economic recovery;~~

~~the timing and process for how the government and other market participants may oversee and conduct the return of economic activity when the~~ COVID-19 pandemic ~~abates, such as what continuing restrictions and protective measures~~on commercial activities, including risks that may ~~remain in place~~arise from mutations or ~~be added and what restrictions and protective measures may be lifted~~related strains of the virus, the ability to successfully administer vaccinations to a sufficient number of persons or ~~reduced in order~~attain immunity to ~~foster a return of increased economic activity in~~ the ~~United States; and~~

~~whether, following a recommencing of more normal level of economic activities, the United States~~virus by natural or other ~~countries experience “second waves” of COVID-19 infection outbreaks and, if so, the responses of governments, businesses~~means to achieve herd immunity, and the ~~general public~~impact on the U.S. economy that may result from the inability of other countries to ~~those events.~~

administer vaccinations to their citizens or their citizens’ ability to otherwise achieve immunity to the virus. As a result, ~~of these uncertainties,~~ we are unable to determine what the ultimate impact will be on ~~us and~~our, our tenants’ and other stakeholders’ businesses, operations, financial results and financial position. For ~~further~~more information and risks relating to the COVID-19 pandemic on us and our business, see Part ~~II,~~I, Item 1, “Business—COVID-19 Pandemic” and Part I, Item 1A, “Risk ~~Factors,” in this Quarterly Report on Form 10-Q.~~

~~Table~~Factors”, of ~~Contents~~

our 2020 Annual Report.

Property Operations

Unless otherwise noted, the data presented in this section includes properties classified as held for sale as of March 31, 2021 and excludes three properties owned by two unconsolidated joint ventures in which we own 51% and 50% interests. For

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more information regarding our properties classified as held for sale and our two unconsolidated joint ventures, see Note 43 to the Notes to Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

~~As of March 31, 2020, 91.5% of our rentable square feet was leased, compared to 89.6% of our rentable square feet as of March 31, 2019.~~ Occupancy data for our properties as of March 31, ~~2020~~2021 and ~~2019~~2020 was as follows (square feet in thousands):


	All Properties (1)				Comparable Properties (2)
	March 31,				March 31,
	2021		2020		2021		2020
Total properties (3)	180		184		175		175
Total rentable square feet (4)	24,568		24,906		22,662		22,658
Percent leased (5)	90.8	%	91.5	%	91.3	%	92.1	%

All Properties ⁽¹⁾

Comparable Properties ⁽²⁾
March 31, March 31,
2020 2019 2020 2019
Total properties ⁽³⁾
184
212
182
182
Total rentable square feet ⁽⁴⁾
24,906
30,134
24,619
24,711
Percent leased ⁽⁵⁾
91.5 % 89.6 % 92.6 % 93.2 %

(1)Based on properties we owned on March 31, 2021 and 2020, respectively.


~~(1)~~	~~Based on properties we owned on March 31, 2020 and 2019, respectively.~~


~~(2)~~	Based on properties we owned continuously since January 1, 2019; excludes properties classified as held for sale and properties undergoing significant redevelopment, if any, and three properties owned by two unconsolidated joint ventures in which we own 51% and 50% interests.


~~(3)~~	~~Includes one leasable land parcel as of March 31, 2020 and two leasable land parcels as of March 31, 2019.~~


~~(4)~~	~~Subject to changes when space is remeasured or reconfigured for tenants.~~


~~(5)~~	Percent leased includes (i) space being fitted out for tenant occupancy pursuant to our lease agreements, if any, and (ii) space which is leased, but is not occupied or is being offered for sublease by tenants, if any, as of the measurement date.

(2)Based on properties we owned continuously since January 1, 2020; excludes properties classified as held for sale and properties undergoing significant redevelopment, if any, and three properties owned by two unconsolidated joint ventures in which we own 51% and 50% interests.

(3)Includes one leasable land parcel.

(4)Subject to changes when space is remeasured or reconfigured for tenants.

(5)Percent leased includes (i) space being fitted out for tenant occupancy pursuant to our lease agreements, if any, and (ii) space which is leased, but is not occupied or is being offered for sublease by tenants, if any, as of the measurement date.

The average effective rental rate per square foot for our properties for the three months ended March 31, ~~2020~~2021 and ~~2019~~2020 are as follows:


	Three Months Ended March 31,
		2021		2020
Average effective rental rate per square foot (1):
All properties (2)		$	25.95	$	26.03
Comparable properties (3)		$	27.39	$	27.28

Three Months Ended March 31,
2020 2019
Average effective rental rate per square foot ⁽¹⁾:

All properties ⁽²⁾
$ 26.03
$ 25.96
Comparable properties ⁽³⁾
$ 26.09
$ 26.09

(1)Average effective rental rate per square foot represents annualized total rental income during the period specified divided by the average rentable square feet leased during the period specified.


~~(1)~~	~~Average effective rental rate per square foot represents annualized total rental income during the period specified divided by the average rentable square feet leased during the period specified.~~


~~(2)~~	~~Based on properties we owned on March 31, 2020 and 2019, respectively.~~


~~(3)~~	Based on properties we owned continuously since January 1, 2019; excludes properties classified as held for sale and properties undergoing significant redevelopment, if any, and three properties owned by two unconsolidated joint ventures in which we own 51% and 50% interests.

(2)Based on properties we owned on March 31, 2021 and 2020, respectively.

(3)Based on properties we owned continuously since January 1, 2020; excludes properties classified as held for sale and properties undergoing significant redevelopment, if any, and three properties owned by two unconsolidated joint ventures in which we own 51% and 50% interests.

During the three months ended March 31, ~~2020,~~2021, changes in rentable square feet leased and available for lease at our properties were as follows (square feet in thousands):


	Three Months Ended March 31, 2021
		Leased	Available for Lease	Total
Beginning of period		22,705	2,184	24,889
Changes resulting from:

Disposition of properties		(321)	—	(321)
Lease expirations		(658)	658	—
Lease renewals (1)		542	(542)	—
New leases (1)		33	(33)	—
Remeasurements (2)		1	(1)	—
End of period		22,302	2,266	24,568

Three Months Ended March 31, 2020
Leased Available for Lease Total
Beginning of period 23,761
1,965
25,726
Changes resulting from:

Acquisition of properties —
13
13
Disposition of properties (693 ) (42 ) (735 )
Lease expirations (868 ) 868
—
Lease renewals ⁽¹⁾
508
(508 ) —
New leases ⁽¹⁾
81
(81 ) —
Remeasurements ⁽²⁾
—
(98 ) (98 )
End of period 22,789
2,117
24,906


~~(1)~~	~~Based on leases entered during the three months ended March 31, 2020.~~


~~(2)~~	~~Rentable square feet are subject to changes when space is remeasured or reconfigured for tenants.~~

(1)Based on leases entered during the three months ended March 31, 2021.

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Rentable square feet are subject to changes when space is remeasured or reconfigured for tenants.

Leases at our properties totaling approximately ~~0.9 million~~658,000 rentable square feet expired during the three months ended March 31, ~~2020.~~2021. During the three months ended March 31, ~~2020,~~2021, we entered leases totaling approximately ~~0.6 million~~575,000 rentable square feet, including lease renewals of approximately ~~0.5 million~~542,000 rentable square feet and new leases of approximately ~~0.1 million~~33,000 rentable square feet. The weighted (by rentable square feet) average rents were ~~4.1%~~3.2% above prior rents for the same space and the weighted (by rentable square feet) average lease term for new and renewal leases entered during the three months ended March 31, ~~2020~~2021 was ~~4.8~~5.4 years.

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During the three months ended March 31, ~~2020,~~2021, commitments made for expenditures, such as tenant improvements and leasing costs, in connection with leasing space at our properties were as follows (square feet in thousands):


	Three Months Ended March 31, 2021
	New Leases		Renewals		Total
Rentable square feet leased	33		542		575
Tenant leasing costs and concession commitments (1)	$	1,207	$	5,938	$	7,145
Tenant leasing costs and concession commitments per rentable square foot (1)	$	35.97	$	10.96	$	12.42
Weighted (by square feet) average lease term (years)	7.0		5.3		5.4
Total leasing costs and concession commitments per rentable square foot per year (1)	$	5.12	$	2.05	$	2.28

Three Months Ended March 31, 2020
New Leases Renewals Total
Rentable square feet leased 81
508
589
Tenant leasing costs and concession commitments ⁽¹⁾
$ 6,160
$ 6,770
$ 12,930
Tenant leasing costs and concession commitments per rentable square foot ⁽¹⁾
$ 75.98
$ 13.32
$ 21.94
Weighted (by square feet) average lease term (years) 10.8
3.8
4.8
Total leasing costs and concession commitments per rentable square foot per year ⁽¹⁾
$ 7.04
$ 3.49
$ 4.60
(1)Includes commitments made for leasing expenditures and concessions, such as tenant improvements, leasing commissions, tenant reimbursements and free rent.


~~(1)~~	~~Includes commitments made for leasing expenditures and concessions, such as tenant improvements, leasing commissions, tenant reimbursements and free rent.~~

During the three months ended March 31, ~~2020,~~2021, changes in effective rental rates per square foot achieved for new leases and lease renewals at our properties that commenced during the three months ended March 31, ~~2020,~~2021, when compared to prior effective rental rates per square foot in effect for the same space (and excluding space acquired vacant), were as follows (square feet in thousands):


	Three Months Ended March 31, 2021
		Old Effective Rent Per Square Foot (1)		New Effective Rent Per Square Foot (1)		Rentable Square Feet
New leases		$	17.46	$	21.29	79
Lease renewals		$	24.31	$	25.66	529
Total leasing activity		$	23.42	$	25.10	608

Three Months Ended March 31, 2020

Old Effective Rent Per Square Foot ⁽¹⁾

New Effective Rent Per Square Foot ⁽¹⁾
Rentable Square Feet
New leases $ 28.13
$ 26.95
100
Lease renewals $ 39.71
$ 40.92
568
Total leasing activity $ 37.98
$ 38.83
668
(1)Effective rental rate includes contractual base rents from our tenants pursuant to our lease agreements, plus straight line rent adjustments and estimated expense reimbursements to be paid to us, and excludes lease value amortization.


~~(1)~~	Effective rental rate includes contractual base rents from our tenants pursuant to our lease agreements, plus straight line rent adjustments and estimated expense reimbursements to be paid to us, and excluding lease value amortization.

During the three months ended March 31, ~~2020~~2021 and ~~2019,~~2020, amounts capitalized at our properties for ~~tenant improvements, leasing~~lease related costs, building improvements and development, redevelopment and ~~redevelopment~~other activities were as follows:


	Three Months Ended March 31,
		2021		2020


Lease related costs (1)		$	6,970	$	7,113
Building improvements (2)		4,526		9,230
Recurring capital expenditures		11,496		16,343
Development, redevelopment and other activities (3)		4,906		3,161
Total capital expenditures		$	16,402	$	19,504

Three Months Ended March 31,
2020 2019
Tenant improvements ⁽¹⁾
$ 2,967
$ 4,912
Leasing costs ⁽²⁾
4,146
7,325
Building improvements ⁽³⁾
9,230
4,308
Recurring capital expenditures 16,343
16,545
Development, redevelopment and other activities ⁽⁴⁾
3,161
226
Total capital expenditures $ 19,504
$ 16,771
(1)Lease related costs generally include capital expenditures used to improve tenants’ space or amounts paid directly to tenants to improve their space and leasing related costs, such as brokerage commissions and other tenant inducements.


~~(1)~~	~~Tenant improvements include capital expenditures used to improve tenants’ space or amounts paid directly to tenants to improve their space.~~


~~(2)~~	~~Leasing costs include leasing related costs, such as brokerage commissions and other tenant inducements.~~


~~(3)~~	~~Building improvements generally include expenditures to replace obsolete building components and expenditures that extend the useful life of existing assets.~~


~~(4)~~	~~Development, redevelopment and other activities generally include capital expenditure projects that reposition a property or result in new sources of revenue.~~

(2)Building improvements generally include expenditures to replace obsolete building components and expenditures that extend the useful life of existing assets.

(3)Development, redevelopment and other activities generally include capital expenditure projects that reposition a property or result in new sources of revenue.

As of March 31, ~~2020,~~2021, we have estimated unspent leasing related obligations of ~~$57,348.~~$50,405, of which we expect to spend $25,939 over the next 12 months.

As of March 31, ~~2020,~~2021, we had leases at our properties totaling approximately ~~1.1 million~~3,517,000 rentable square feet that were scheduled to expire through ~~December~~March 31, ~~2020.~~2022. As of April ~~30, 2020,~~28, 2021, we expect tenants with leases totaling approximately ~~0.2 million~~

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2,701,000 rentable square feet that are scheduled to expire through ~~December~~March 31, ~~2020, have notified us that they do~~2022, to not ~~plan to~~ renew their leases upon expiration and we cannot be sure as to whether other tenants ~~may or may not~~will renew their leases upon expiration. Of the approximately 2,701,000 rentable square feet that are expiring and expected to not renew, 1,371,000 rentable square feet have been sold and 263,000 rentable square feet are within a property that is in the planning stage for a potential redevelopment. As a result of the COVID-19 pandemic and ~~the current~~its economic impact, overall new leasing ~~activity~~volume has ~~slowed in~~remained at a reduced level during the ~~2020 second quarter to date~~three months ended March 31, 2021 and ~~we expect~~ that ~~slowing~~trend may continue until market conditions ~~improve.~~meaningfully improve for a sustained period. However, we ~~also believe that these conditions may result in~~remain focused on proactive dialogues with our existing tenants and overall tenant ~~retention levels increasing.~~retention. Prevailing market conditions and government and other tenants’ needs at the time we negotiate and enter leases or lease renewals will

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generally determine rental rates and demand for leased space at our properties, and market conditions and our tenants’ needs are beyond our control. Whenever we ~~extend,~~ renew or enter into new leases for our properties, we intend to seek rents which are equal to or higher than our historical rents for the same properties; however, our ability to maintain or increase the rents for our current properties will depend in large part upon market conditions, which are beyond our control. We cannot be sure of the rental rates which will result from our ongoing negotiations regarding lease renewals or any new or renewed leases we may enter; also, we may experience material declines in our rental income due to vacancies upon lease expirations or early terminations.

As of March 31, ~~2020,~~2021, our lease expirations by year are as follows (square feet in thousands):


Year (1)	Number of Leases Expiring	Leased Square Feet Expiring (2)	Percent of Total		Cumulative Percent of Total		Annualized Rental Income Expiring		Percent of Total		Cumulative Percent of Total
2021	57	3,219	14.4	%	14.4	%	$	56,305	10.0	%	10.0	%
2022	82	2,120	9.5	%	23.9	%	60,395		10.8	%	20.8	%
2023	63	2,402	10.8	%	34.7	%	77,080		13.7	%	34.5	%
2024	56	3,534	15.8	%	50.5	%	88,579		15.8	%	50.3	%
2025	55	2,146	9.6	%	60.1	%	46,562		8.3	%	58.6	%
2026	32	1,734	7.8	%	67.9	%	46,244		8.2	%	66.8	%
2027	32	1,923	8.6	%	76.5	%	48,638		8.7	%	75.5	%
2028	15	875	3.9	%	80.4	%	25,723		4.6	%	80.1	%
2029	15	934	4.2	%	84.6	%	24,831		4.4	%	84.5	%
2030 and thereafter	43	3,415	15.4	%	100.0	%	86,667		15.5	%	100.0	%
Total	450	22,302	100.0	%			$	561,024	100.0	%

Weighted average remaining lease term (in years)		4.9					4.9

Year ⁽¹⁾
Number of Leases Expiring
Leased
Square Feet Expiring ⁽²⁾
Percent of Total Cumulative Percent of Total Annualized Rental Income Expiring Percent of Total Cumulative Percent of Total
2020 56
1,083
4.8 % 4.8 % $ 27,541
4.7 % 4.7 %
2021 58
2,050
9.0 % 13.8 % 58,503
10.1 % 14.8 %
2022 79
2,147
9.4 % 23.2 % 60,941
10.5 % 25.3 %
2023 63
2,528
11.1 % 34.3 % 68,662
11.8 % 37.1 %
2024 54
3,674
16.1 % 50.4 % 97,273
16.7 % 53.8 %
2025 49
2,018
8.9 % 59.3 % 43,531
7.5 % 61.3 %
2026 29
1,710
7.5 % 66.8 % 45,728
7.9 % 69.2 %
2027 28
1,855
8.1 % 74.9 % 46,984
8.1 % 77.3 %
2028 12
872
3.8 % 78.7 % 25,568
4.4 % 81.7 %
2029 and thereafter 46
4,851
21.3 % 100.0 % 106,992
18.3 % 100.0 %
Total 474
22,788
100.0 % $ 581,723
100.0 %

Weighted average remaining lease term (in years) 5.9 5.6

(1)The year of lease expiration is pursuant to current contract terms. Some of our leases allow the tenants to vacate the leased premises before the stated expirations of their leases with little or no liability. As of March 31, 2021, tenants occupying approximately 6.5% of our rentable square feet and responsible for approximately 7.5% of our annualized rental income as of March 31, 2021 currently have exercisable rights to terminate their leases before the stated terms of their leases expire. Also, in 2021, 2022, 2023, 2024, 2025, 2026, 2027, 2028, 2029, and 2035, early termination rights become exercisable by other tenants who currently occupy an additional approximately 1.3%, 2.9%, 1.5%, 1.1%, 2.1%, 1.1%, 0.6%, 1.1%, 0.1%, and 0.3% of our rentable square feet, respectively, and contribute an additional approximately 1.6%, 3.1%, 1.7%, 1.8%, 3.7%, 1.4%, 1.1%, 1.4%, 0.2%, and 0.4% of our annualized rental income, respectively, as of March 31, 2021. In addition, as of March 31, 2021, pursuant to leases with 13 of our tenants, these tenants have rights to terminate their leases if their respective legislature or other funding authority does not appropriate rent amounts in their respective annual budgets. These 13 tenants occupy approximately 5.1% of our rentable square feet and contribute approximately 6.1% of our annualized rental income as of March 31, 2021.

~~(1)~~

The year of lease expiration is pursuant to current contract terms. Some of our leases allow the tenants to vacate the leased premises before the stated expirations of their leases with little or no liability. As of March 31, 2020, tenants occupying approximately 11.0% of our rentable square feet and responsible for approximately 7.9% of our annualized rental income as of March 31, 2020 currently have exercisable rights to terminate their leases before the stated terms of their leases expire. Also, in 2020, 2021, 2022, 2023, 2024, 2025, 2026, 2027, 2028, 2030 and 2035, early termination rights become exercisable by other tenants who currently occupy an additional approximately 3.2%, 1.3%, 2.3%, 0.7%, 1.0%, 2.2%, 1.0%, 0.5%, 1.1%, 0.1% and 0.1% of our rentable square feet, respectively, and contribute an additional approximately 4.0%, 1.4%, 2.4%, 0.9%, 1.6%, 3.8%, 1.3%, 0.7%, 1.2%, 0.2% and 0.1% of our annualized rental income, respectively, as of March 31, 2020. In addition, as of March 31, 2020, pursuant to leases with 13 of our tenants, these tenants have rights to terminate their leases if their respective legislature or other funding authority does not appropriate rent amounts in their respective annual budgets. These 13 tenants occupy approximately 5.2% of our rentable square feet and contribute approximately 5.5% of our annualized rental income as of March 31, 2020.


~~(2)~~	Leased square feet is pursuant to leases existing as of March 31, 2020, and includes (i) space being fitted out for tenant occupancy pursuant to our lease agreements, if any, and (ii) space which is leased, but is not occupied or is being offered for sublease by tenants, if any. Square feet measurements are subject to changes when space is remeasured or reconfigured for new tenants.

(2)Leased square feet is pursuant to leases existing as of March 31, 2021, and includes (i) space being fitted out for tenant occupancy pursuant to our lease agreements, if any, and (ii) space which is leased, but is not occupied or is being offered for sublease by tenants, if any. Square feet measurements are subject to changes when space is remeasured or reconfigured for new tenants.

We generally will seek to renew or extend the terms of leases in our single tenant properties when they expire. Because of the capital many of the tenants in these properties have invested in the properties and because many of these properties appear to be of strategic importance to the tenants’ businesses, we believe that it is likely that these tenants will renew or extend their leases prior to when they expire. If we are unable to extend or renew our leases, it may be time consuming and expensive to relet some of these properties.

We believe that ~~current~~recent government budgetary ~~methodology,~~and spending priorities and ~~the current U.S. presidential administration’s views on the size and scope of government employment~~enhancements in technology have resulted in a decrease in government ~~employment.~~office use for employees. Furthermore, ~~for~~over the past ~~six~~several years, government tenants have reduced their space utilization per employee and consolidated government tenants into existing government owned properties. This activity has reduced the demand for government leased space. Our historical experience with respect to properties of the type we own that are majority leased to government tenants has been that government tenants frequently renew leases to avoid the costs and disruptions that may result

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from relocating their operations. However, efforts to ~~reduce~~manage space utilization rates may result in our tenants exercising early termination rights under our leases, vacating our properties upon expiration of our leases in order to relocate, or renewing their leases for less space than they currently occupy. Also, our government tenants’ ~~desires~~desire to reconfigure leased office space to ~~reduce~~manage utilization per employee may require us to spend significant amounts for tenant improvements, and tenant relocations ~~have become~~are often more prevalent ~~than our past experiences~~ in ~~instances where efforts by government tenants to reduce their space utilization require a significant reconfiguration of currently leased space.~~those circumstances. Increasing uncertainty with respect to government agency budgets and funding to implement relocations, consolidations and reconfigurations has resulted in delayed decisions by some of our government tenants and their reliance on short term lease renewals; however, ~~recent~~ activity prior to the outbreak of the COVID-19 pandemic suggested that the U.S. government had begun to shift its leasing strategy to include

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longer term leases and was actively exploring 10 to 20 year lease terms at renewal, in some instances. We believe the reduction in government tenant space utilization and the consolidation of government tenants into government owned real estate is substantially complete; however, these activities may impact us for some time into the future. It is also possible that as a result of the COVID-19 pandemic, government tenants may seek to ~~increase~~manage space utilization rates in order to provide greater physical distancing for ~~employees.~~employees, mostly through lease renewals, which may require us to spend significant amounts for tenant improvements. However, the COVID-19 pandemic and its aftermath have had negative impacts on government budgets and resources, although there are indications that to date, certain of those impacts may not have been as negative as originally expected, and it is unclear what the effect of these impacts will be on government demand for leasing office space. In addition, the new presidential administration may result in a change in the federal government’s policy priorities, which may impact leasing at our government leased properties. Given the significant uncertainties, including as to the COVID-19 pandemic, its economic impact and its aftermath and the new presidential administration, we are unable to reasonably project what the financial impact of market conditions or changing government circumstances ~~including as a result of the COVID-19 pandemic,~~ will be on our financial results for future periods.

As of March 31, ~~2020,~~2021, we derive ~~24.3%~~24.0% of our annualized rental income from our properties located in the metropolitan Washington, D.C. market area, which includes Washington, D.C., Northern Virginia and suburban Maryland. A downturn in economic conditions in this area, including as a result of the COVID-19 pandemic, could result in reduced demand from tenants for our properties or reduce the rents that our tenants in this area are willing to pay when our leases expire or terminate and when renewal or new terms are negotiated. Additionally, in recent years there has been a decrease in demand for new leased office space by the U.S. ~~Government~~government in the metropolitan Washington, D.C. market area, and that could increase competition for government tenants and adversely affect our ability to retain government tenants when our leases expire.

Our manager, RMR LLC, employs a tenant review process for us. RMR LLC assesses tenants on an individual basis based on various applicable credit criteria. In general, depending on facts and circumstances, RMR LLC evaluates the creditworthiness of a tenant based on information concerning the tenant that is provided by the tenant and, in some cases, information that is publicly available or obtained from third party sources. RMR LLC also often uses a third party service to monitor the credit ratings, both actual and implied, of our existing tenants. We consider investment grade tenants to include: (a) investment grade rated tenants; (b) tenants with investment grade rated parent entities that guarantee the tenant’s lease obligations; and/or (c) tenants with investment grade rated parent entities that do not guarantee the tenant’s lease obligations. As of March 31, ~~2020,~~2021, tenants contributing ~~52.6%~~56.1% of annualized rental income were investment grade rated (or their payment obligations were guaranteed by an investment grade rated parent) and tenants contributing an additional ~~9.6%~~8.6% of annualized rental income were subsidiaries of an investment grade rated parent (although these parent entities were not liable for the payment of rents).

2019

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RESULTS OF OPERATIONS (amounts in thousands, except per share amounts)

Three Months Ended March 31, ~~2020,~~2021, Compared to Three Months Ended March 31, ~~2019~~2020


	Comparable Properties (1) Results Three Months Ended March 31,								Non-Comparable Properties Results Three Months Ended March 31,				Consolidated Results Three Months Ended March 31,

	2021		2020		$ Change		% Change		2021		2020		2021		2020		$ Change		% Change
Rental income	$	140,975	$	140,931	$	44	—	%	$	3,549	$	8,954	$	144,524	$	149,885	$	(5,361)	(3.6	%)
Operating expenses:
Real estate taxes	15,907		15,688		219		1.4	%	247		1,119		16,154		16,807		(653)		(3.9	%)
Utility expenses	6,274		6,767		(493)		(7.3	%)	158		245		6,432		7,012		(580)		(8.3	%)
Other operating expenses	24,935		24,376		559		2.3	%	504		1,504		25,439		25,880		(441)		(1.7	%)
Total operating expenses	47,116		46,831		285		0.6	%	909		2,868		48,025		49,699		(1,674)		(3.4	%)
Net operating income (2)	$	93,859	$	94,100	$	(241)	(0.3	%)	$	2,640	$	6,086	96,499		100,186		(3,687)		(3.7	%)

Other expenses:
Depreciation and amortization													64,087		62,943		1,144		1.8	%
Loss on impairment of real estate													7,660		—		7,660		n/m

General and administrative													11,272		7,109		4,163		58.6	%
Total other expenses													83,019		70,052		12,967		18.5	%

Gain on sale of real restate													54,004		10,756		43,248		n/m


Interest and other income													5		706		(701)		(99.3	%)
Interest expense													(28,798)		(27,159)		(1,639)		6.0	%
Loss on early extinguishment of debt													—		(3,282)		3,282		n/m

Income before income tax expense and equity in net losses of investees													38,691		11,155		27,536		n/m
Income tax expense													(435)		(39)		(396)		n/m
Equity in net losses of investees													(396)		(276)		(120)		43.5	%






Net income													$	37,860	$	10,840	$	27,020	n/m



Weighted average common shares outstanding (basic)													48,161		48,095		66		0.1	%
Weighted average common shares outstanding (diluted)													48,196		48,095		101		0.2	%

Per common share amounts (basic and diluted):
Net income													$	0.78	$	0.23	$	0.55	n/m

Non-Comparable
Properties Results

Comparable Properties Results ⁽¹⁾
Three Months Ended Consolidated Results
Three Months Ended March 31, March 31, Three Months Ended March 31,
$ % $ %
2020 2019 Change Change 2020 2019 2020 2019 Change Change
Rental income $ 147,512
$ 148,595
$ (1,083 ) (0.7 %) $ 2,373
$ 26,182
$ 149,885
$ 174,777
$ (24,892 ) (14.2 %)
Operating expenses:

Real estate taxes 16,166
16,027
139
0.9 % 641
2,365
16,807
18,392
(1,585 ) (8.6 %)
Utility expenses 6,875
7,715
(840 ) (10.9 %) 137
1,666
7,012
9,381
(2,369 ) (25.3 %)
Other operating expenses 25,106
25,386
(280 ) (1.1 %) 774
4,750
25,880
30,136
(4,256 ) (14.1 %)
Total operating expenses 48,147
49,128
(981 ) (2.0 %) 1,552
8,781
49,699
57,909
(8,210 ) (14.2 %)
Property net operating income ⁽²⁾
$ 99,365
$ 99,467
$ (102 ) (0.1 %) $ 821
$ 17,401
100,186
116,868
(16,682 ) (14.3 %)

Other expenses:

Depreciation and amortization 62,943
77,521
(14,578 ) (18.8 %)
Loss on impairment of real estate —
3,204
(3,204 ) n/m
Acquisition and transaction related costs —
584
(584 ) n/m
General and administrative 7,109
8,723
(1,614 ) (18.5 %)
Total other expenses 70,052
90,032
(19,980 ) (22.2 %)
Gain on sale of real restate 10,756
22,092
(11,336 ) (51.3 %)
Dividend income —
980
(980 ) n/m
Gain on equity securities —
22,128
(22,128 ) n/m
Interest and other income 706
248
458
184.7 %
Interest expense (27,159 ) (37,133 ) 9,974
(26.9 %)
Loss on early extinguishment of debt (3,282 ) (414 ) (2,868 ) n/m
Income before income tax expense and equity in net losses of investees 11,155
34,737
(23,582 ) (67.9 %)
Income tax expense (39 ) (483 ) 444
(91.9 %)
Equity in net losses of investees (276 ) (235 ) (41 ) 17.4 %
Net income $ 10,840
$ 34,019
$ (23,179 ) (68.1 %)

Weighted average common shares outstanding (basic) 48,095
48,031
64
0.1 %
Weighted average common shares outstanding (diluted) 48,095
48,046
49
0.1 %

Per common share amounts (basic and diluted):

Net income $ 0.23
$ 0.71
$ (0.48 ) (67.6 %)

n/m - not meaningful


~~(1)~~	Comparable properties consists of 182 properties we owned on March 31, 2020 and which we owned continuously since January 1, 2019 and excludes properties classified as held for sale and properties undergoing significant redevelopment, if any, and three properties owned by two unconsolidated joint ventures in which we own 51% and 50% interests.


~~(2)~~	~~Our definition of property net operating income, or Property NOI, and our reconciliation of net income to Property NOI are included below under the heading “Non-GAAP Financial Measures.”~~

(1)Comparable properties consists of 175 properties we owned on March 31, 2021 and which we owned continuously since January 1, 2020 and excludes properties classified as held for sale and properties undergoing significant redevelopment, if any, and three properties owned by two unconsolidated joint ventures in which we own 51% and 50% interests.

(2)Our definition of net operating income, or NOI, and our reconciliation of net income to NOI are included below under the heading “Non-GAAP Financial Measures.”

References to changes in the income and expense categories below relate to the comparison of consolidated results for the three ~~month period~~months ended March 31, ~~2020,~~2021, compared to the three ~~month period~~months ended March 31, ~~2019.~~2020.

Rental income. The decrease in rental income reflects decreases in rental income of ~~$21,776~~$6,168 as a result of property ~~dispositions, $2,048 related to~~disposition activities and $49 for a property undergoing significant redevelopment, offset by increases in rental income of $812 related to acquired properties and ~~$1,083~~$44 related to comparable properties. ~~The decrease in rental income for comparable properties is primarily due to reductions in occupied space at certain of our~~

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~~properties in the 2020 period.~~ Rental income includes non-cash straight line rent adjustments totaling $5,357 in the 2021 period and $5,583 in the 2020 period, and ~~$6,794 in the 2019 period, and~~ amortization of acquired real estate leases and assumed real estate lease obligations totaling ~~$1,432~~($722) in the 2021 period and ($1,432) in the 2020 ~~period and $1,147 in the 2019~~ period.

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Real estate taxes. The decrease in real estate taxes primarily reflects ~~a decrease~~decreases in real estate taxes ~~associated with~~of $690 as a result of property ~~dispositions of $1,739, partially~~disposition activities and $182 for a property undergoing significant redevelopment, offset by an increase ~~in real estate taxes~~of $219 for comparable ~~properties of $139.~~properties. Real estate taxes for comparable properties increased primarily due to a refund received in the 2020 period at one of our properties as a result of a successful real estate tax appeal, as well as the effect of higher real estate tax rates and valuation assessments ~~across~~at certain of our ~~portfolio~~comparable properties in the ~~2020~~2021 period.

Utility expenses. The decrease in utility expenses reflects ~~a decrease in utility expenses associated with property dispositions of $1,529, as well as a decrease~~decreases in utility expenses for comparable properties of ~~$840.~~$493 and $196 as a result of property disposition activities, offset by an increase in utility expenses of $109 for a property undergoing significant redevelopment. Utility expenses for comparable properties declined primarily due to a decrease in electricity and water usage resulting from cost savings initiatives implemented by our manager, RMR LLC, in response to decreased space utilization at our properties as a result of ~~mild weather and~~the COVID-19 pandemic, as well as the implementation of real time energy ~~savings initiatives~~management programs at certain of our ~~properties in the 2020 period.~~properties.

Other operating expenses. Other operating expenses consist of salaries and benefit costs of property level personnel, repairs and maintenance expense, cleaning expense, other direct costs of operating our properties and property management fees. The decrease in other operating expenses primarily reflects a decrease of $1,062 as a result of property disposition activities, offset by an increase in other operating expenses ~~related to property dispositions~~ of ~~$3,853, a decrease of $280~~$559 for comparable properties and ~~a decrease of $169 related to a property undergoing significant redevelopment.~~$62 for acquired properties. Other operating expenses for comparable properties ~~decreased~~increased primarily due to ~~lower~~higher snow removal costs in the ~~2020~~2021 period, partially offset by ~~higher insurance~~lower cleaning costs as a result of cost savings initiatives implemented by our manager, RMR LLC, in response to decreased space utilization at our properties as a result of the COVID-19 pandemic and ~~cleaning costs.~~lower parking garage maintenance costs at certain of our properties due to lower parking activity resulting from the COVID-19 pandemic.

Depreciation and amortization. The ~~decrease~~increase in depreciation and amortization is primarily ~~reflects~~the result of increases of $1,697 related to the accelerated amortization of an intangible lease asset as a result of an early lease termination, $591 related to depreciation and amortization of improvements made to certain of our properties after January 1, 2020 and $354 for acquired properties, offset by a decrease of $1,498 related to property dispositions of $8,035, a decrease for comparable properties of $5,681 and a decrease related to a property undergoing significant redevelopment of $888. Depreciation and amortization for comparable properties and the property undergoing significant redevelopment declined due to certain leasing related assets becoming fully depreciated in the 2020 period.disposition activities.

Loss on impairment of real estate. ~~In the 2019 period, we~~We recorded a ~~$2,757~~$7,660 loss on impairment of real estate in the 2021 period to reduce the carrying value of ~~one property~~two properties to ~~its~~their estimated fair ~~value~~values less costs to ~~sell and a $447 loss on impairment of real estate related to the sale of a portfolio of 34 properties.~~

~~Acquisition and transaction related costs.~~ Acquisition and transaction related costs in the 2019 period consists of post-merger activity costs incurred in 2019 in connection with our acquisition of Select Income REIT and other related transactions completed on December 31, 2018.sell.

General and administrative. General and administrative expenses consist of fees pursuant to our business management agreement, equity compensation expense, legal and accounting fees, Trustees’ fees and expenses, securities listing and transfer agency fees and other costs relating to our status as a publicly traded company. The ~~decrease~~increase in general and administrative expenses is primarily ~~reflects~~the result of $5,200 of estimated business management incentive fees recorded in the 2021 period, partially offset by a decrease in base business management fees ~~primarily as a result~~resulting from declines in our share price in the 2021 period compared to the 2020 period, the expiration of ~~property sales during 2019 and 2020~~an office lease in January 2021 where we were the lessee and lower ~~equity based compensation expenses.~~legal costs.

Gain on sale of real estate. We recorded a $54,004 net gain on sale of real estate resulting from the sale of two properties in the 2021 period. We recorded a $10,756 net gain on sale of real estate resulting from the sale of six properties ~~during~~in the 2020 period. ~~We recorded a $22,092 gain on sale of real estate resulting from the sale of one property during the 2019 period.~~

~~Dividend income.~~ ~~Dividend income in the 2019 period consists of distributions received in connection with our former investment in RMR Inc. that we sold on July 1, 2019.~~

~~Gain on equity securities.~~ ~~Gain on equity securities represents an unrealized gain in the 2019 period to adjust our former investment in RMR Inc. to its fair value.~~

Interest and other income. The ~~increase~~decrease in interest and other income is primarily due to a settlement we received in the 2020 period resulting from a dispute with a vendor, ~~partially offset by~~ the effect of lower returns on cash ~~balances~~invested in the ~~2020~~2021 period compared to the ~~2019~~2020 period and ~~lower returns on cash invested.~~the June 2020 payoff of a mortgage note receivable in connection with a property we sold in 2016.

Interest expense. The ~~decrease~~increase in interest expense is primarily due to ~~lower average outstanding debt balances in~~ the ~~2020 period resulting from debt repayment activity in 2019 and 2020, including the repayment~~issuance of ~~our term loans during 2019, the redemption~~$162,000 of ~~our $350,000 3.75%~~6.375% senior unsecured notes in June and July ~~2019~~2020 and ~~the redemption~~$250,000 of our ~~$400,000 3.60%~~4.50% senior unsecured notes in ~~January 2020. Also contributing to the decrease were~~September 2020, partially offset by lower ~~weighted average~~ interest ~~rates on borrowings~~expense incurred as a result of having no amounts outstanding under our revolving credit facility during the ~~2020~~2021 period ~~compared to~~and the ~~2019 period.~~

~~Table~~repayment of ~~Contents~~four mortgage notes with an aggregate principal balance of $152,187 in 2020.

Loss on early extinguishment of debt. We recorded a loss on early extinguishment of debt of $3,282 in the 2020 period from prepayment fees incurred and the write off of unamortized discounts and debt issuance costs associated with the prepayment of two mortgage notes and the redemption of our 3.60% senior unsecured notes due 2020. ~~We recorded a loss on early extinguishment of debt of $414 in the 2019 period from the write off of debt issuance costs associated with the repayment of certain of our term loans.~~

Income tax expense. The ~~decrease~~increase in income tax expense ~~reflects lower operating income in certain jurisdictions~~is primarily the result of the net gain on sale of real estate recorded in the ~~2020 period that is subject to state income taxes.~~2021 period.

Equity in net losses of investees. Equity in net losses of investees represents our proportionate share of ~~earnings and~~ losses from our investments in two unconsolidated joint ~~ventures and, in the 2019 period, our investment in AIC.~~ventures.

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Net income. ~~Our net~~Net income and net income per basic and diluted common share ~~decreased~~increased in the ~~2020~~2021 period compared to the ~~2019~~2020 period primarily as a result of the changes noted above.

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Non-GAAP Financial Measures

We present certain “non-GAAP financial measures” within the meaning of the applicable rules of the Securities and Exchange Commission, or SEC, including ~~Property~~the calculations below of NOI, funds from operations, or FFO, and normalized funds from operations, or Normalized FFO. These measures do not represent cash generated by operating activities in accordance with GAAP and should not be considered alternatives to net income as indicators of our operating performance or as measures of our liquidity. These measures should be considered in conjunction with net income as presented in our condensed consolidated statements of comprehensive income. We consider these non-GAAP measures to be appropriate supplemental measures of operating performance for a REIT, along with net income. We believe these measures provide useful information to investors because by excluding the effects of certain historical amounts, such as depreciation and amortization expense, they may facilitate a comparison of our operating performance between periods and with other REITs and, in the case of ~~Property~~ NOI, reflecting only those income and expense items that are generated and incurred at the property level may help both investors and management to understand the operations of our properties.

~~Property~~ Net Operating Income

The calculation of ~~Property~~ NOI excludes certain components of net income in order to provide results that are more closely related to our property level results of operations. We calculate ~~Property~~ NOI as shown below. We define ~~Property~~ NOI as income from our rental of real estate less our property operating expenses. ~~Property~~ NOI excludes amortization of capitalized tenant improvement costs and leasing commissions that we record as depreciation and amortization expense. We use ~~Property~~ NOI to evaluate individual and company-wide property level performance. Other real estate companies and REITs may calculate ~~Property~~ NOI differently than we do.

The following table presents the reconciliation of net income to ~~Property~~ NOI for the three months ended March 31, ~~2020~~2021 and ~~2019.~~2020.


	Three Months Ended March 31,
		2021		2020

Net income		$	37,860	$	10,840




Equity in net losses of investees		396		276
Income tax expense		435		39
Income before income tax expense and equity in net losses of investees		38,691		11,155
Loss on early extinguishment of debt		—		3,282
Interest expense		28,798		27,159
Interest and other income		(5)		(706)


Gain on sale of real estate		(54,004)		(10,756)

General and administrative		11,272		7,109

Loss on impairment of real estate		7,660		—
Depreciation and amortization		64,087		62,943
NOI		$	96,499	$	100,186

Three Months Ended March 31,
2020 2019
Net income $ 10,840
$ 34,019
Equity in net losses of investees 276
235
Income tax expense 39
483
Income before income tax expense and equity in net losses of investees 11,155
34,737
Loss on early extinguishment of debt 3,282
414
Interest expense 27,159
37,133
Interest and other income (706 ) (248 )
Gain on equity securities —
(22,128 )
Dividend income —
(980 )
Gain on sale of real estate (10,756 ) (22,092 )
General and administrative 7,109
8,723
Acquisition and transaction related costs —
584
Loss on impairment of real estate —
3,204
Depreciation and amortization 62,943
77,521
Property NOI $ 100,186
$ 116,868

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Funds From Operations and Normalized Funds From Operations

We calculate FFO and Normalized FFO as shown below. FFO is calculated on the basis defined by The National Association of Real Estate Investment Trusts, which is net income, calculated in accordance with GAAP, plus real estate depreciation and amortization of consolidated properties and our proportionate share of the real estate depreciation and amortization of unconsolidated joint venture properties, but excluding impairment charges on real estate assets and any gain or loss on sale of real estate, ~~and equity securities,~~ as well as certain other adjustments currently not applicable to us. In calculating Normalized FFO, we adjust for the other items shown below and include business management incentive fees, if any, only in the fourth quarter versus the quarter when they are recognized as an expense in accordance with GAAP due to their quarterly volatility not necessarily being indicative of our core operating performance and the uncertainty as to whether any such business management incentive fees will be payable when all contingencies for determining such fees are known at the end of the calendar year. FFO and Normalized FFO are among the factors considered by our Board of Trustees when determining the amount of distributions to our shareholders. Other factors include, but are not limited to, requirements to maintain our qualification for taxation as a REIT, limitations in our credit agreement and public debt covenants, the availability to us of debt and equity capital, our expectation of our future capital requirements and operating performance and our expected needs for and availability of cash to pay our obligations. Other real estate companies and REITs may calculate FFO and Normalized FFO differently than we do.

The following table presents the reconciliation of net income to FFO and Normalized FFO for the three months ended March 31, ~~2020~~2021 and ~~2019.~~2020.


	Three Months Ended March 31,
	2021		2020
Net income	$	37,860	$	10,840
Add (less): Depreciation and amortization:
Consolidated properties	64,087		62,943
Unconsolidated joint venture properties	1,006		1,241

Loss on impairment of real estate	7,660		—


Gain on sale of real estate	(54,004)		(10,756)

FFO	56,609		64,268


Add (less): Loss on early extinguishment of debt	—		3,282



Estimated business management incentive fees	5,200		—

Normalized FFO	$	61,809	$	67,550

Weighted average common shares outstanding (basic)	48,161		48,095
Weighted average common shares outstanding (diluted)	48,196		48,095

FFO per common share (basic)	$	1.18	$	1.34
FFO per common share (diluted)	$	1.17	$	1.34
Normalized FFO per common share (basic and diluted)	$	1.28	$	1.40

Three Months Ended March 31,
2020 2019
Net income $ 10,840
$ 34,019
Add (less): Depreciation and amortization:
Consolidated properties 62,943
77,521
Unconsolidated joint venture properties 1,241
1,751
Loss on impairment of real estate —
3,204
Gain on sale of real estate (10,756 ) (22,092 )
Gain on equity securities —
(22,128 )
FFO 64,268
72,275
Add (less): Acquisition and transaction related costs —
584
Loss on early extinguishment of debt 3,282
414
Normalized FFO $ 67,550
$ 73,273

FFO per common share (basic and diluted) $ 1.34
$ 1.50
Normalized FFO per common share (basic and diluted) $ 1.40
$ 1.53

LIQUIDITY AND CAPITAL RESOURCES

Our Operating Liquidity and Resources (dollar amounts in thousands)

Our principal sources of funds to meet operating and capital expenses, pay debt service obligations and make distributions to our shareholders are the operating cash flows we generate from our properties, net proceeds from property sales and borrowings under our revolving credit facility. We believe that these sources of funds will be sufficient to meet our operating and capital expenses, pay debt service obligations and make distributions to our shareholders for the next 12 months and for the foreseeable future thereafter. Our future cash flows from operating activities will depend primarily upon:

•our ability to collect rent from our tenants;

•our ability to maintain or increase the occupancy of, and the rental rates at, our properties;

•our ability to control operating and capital expenses at our properties;

•our ability to successfully sell properties that we market for sale;

•our ability to develop or redevelop properties to produce cash flows in excess of our cost of capital; and

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•our ability to purchase additional properties which produce cash flows from operations in excess of our cost of acquisition capital and property operating ~~expenses~~ and capital expenses.

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With ~~$395,000~~$750,000 available under our revolving credit facility as of April ~~30, 2020~~28, 2021 and ~~only approximately $40,000 of~~no debt maturities until 2022, we believe that we are well positioned to weather the present disruptions facing the real estate industry and the economy generally. As a result of the COVID-19 pandemic, we have received requests from some of our tenants for rent assistance. As of April ~~28, 2020,~~26, 2021, we have granted temporary rent assistance totaling ~~$1,403~~$2,483 to 18 tenants who represent ~~2.4%~~approximately 3.2% of our annualized rental income as of March 31, ~~2020.~~2021. This assistance generally entails a deferral of, in most cases, one month of rent ~~until September 2020 when~~pursuant to deferred payment plans which require the deferred rent amounts ~~will begin to~~ be payable over a 12-month ~~period. Our liquidity will be temporarily impacted by these~~period, all of which have commenced. As of April 26, 2021, we have collected $2,118, or 85.3%, of our granted rent deferrals as follows: $452, $809, $71, and $71 of granted deferrals in April, May, June and July 2020, respectively, until September 2020 when these deferrals begin to become obligated to be repaid. Seventeen tenants have requested assistance with respect to additional rent amounts and we are evaluating these requests on a tenant-by-tenant basis and assessing whether to grant any additional relief. In addition, we also anticipate that our general and administrative expenses will be reduced because of the lower fees we will pay to our manager as a result of the decline in our share price since the COVID-19 pandemic began.deferrals. Although some of our tenants have sought temporary rent assistance, we ~~also believe that~~remain focused on proactive dialogues with our existing tenants and overall tenant ~~retention levels may increase.~~retention. Also, we believe we will benefit from the approximately ~~62.2%~~64.7% of our annualized rental income as of March 31, ~~2020~~2021 paid by investment grade tenants, the majority of which is made up of government tenants, and the diversity of our tenant base, both geographically and by industry, which may help mitigate the economic impact of the COVID-19 ~~pandemic.~~pandemic.

On April ~~2, 2020,~~15, 2021, we announced a continuation of our regular quarterly cash distribution of $0.55 per common share ($2.20 per common share per year), maintaining our previous distribution rate. At this time, we expect our 2020 cash available for distribution coverage to remain reasonably consistent with our target of 75% and expect that the quarterly distribution rate will remain unchanged for 2020.. We determine our distribution payout ratio with consideration for our expected capital expenditures as well as cash flows from operations and debt obligations.

~~In early 2020, we completed our previously announced disposition program and transitioned to a capital recycling program through which we~~We expect to accretively grow our property ~~portfolio. Pursuant to~~portfolio through our capital recycling program, pursuant to which we plan to sell certain properties from time to time to fund future acquisitions and to maintain leverage consistent with our current investment grade ratings with a goal of (1) improving the asset quality of our portfolio by reducing the average age of our properties, lengthening the weighted average term of our leases and increasing the likelihood of retaining our tenants and (2) increasing our ~~distributions to shareholders.~~cash available for distribution. During the three months ended March 31, ~~2020,~~2021, we sold ~~six~~two properties for ~~$85,363,~~an aggregate sales price of $130,845, excluding closing costs ~~as part~~and sold another property in April 2021 for a sales price of ~~this program.~~$39,000, excluding closing costs. In addition, as of April 28, 2021, we ~~are also marketing~~have entered into an agreement to sell one property for ~~sale~~a sales price of $650, excluding closing costs and have entered into an ~~additional four properties.~~agreement to acquire a property adjacent to a property we own in Boston, MA for $26,975, excluding acquisition related costs. Given the current economic conditions, we ~~are~~continue to carefully ~~considering~~consider our capital allocation strategy and believe we are well positioned to opportunistically recycle and deploy ~~capital during 2020.~~capital.

Our future purchases of properties cannot be accurately projected because such purchases depend upon purchase opportunities which come to our attention and our ability to successfully complete the acquisitions. We generally do not intend to purchase “turn around” properties, or properties which do not generate positive cash flows.

~~Our changes in~~The following is a summary of our sources and uses of cash flows for the ~~three months ended March 31, 2020 compared to the same period~~periods presented, as reflected in ~~2019 were as follows: (i)~~our condensed consolidated statements of cash flows provided by operating activities increased from $18,742 in the 2019 period to $37,601 in the 2020 period; (ii) cash flows provided by investing activities decreased from $250,331 in the 2019 period to $42,095 in the 2020 period; and (iii) cash flows used in financing activities decreased from $283,399 in the 2019 period to $146,386 in the 2020 period.flows:


	Three Months Ended March 31,
	2021		2020
Cash, cash equivalents and restricted cash at beginning of period	$	56,855	$	100,696
Net cash provided by (used in):
Operating activities	57,942		37,601
Investing activities	113,896		42,095
Financing activities	(27,218)		(146,386)
Cash, cash equivalents and restricted cash at end of period	$	201,475	$	34,006

The increase in cash provided by operating activities for the ~~2020~~2021 period as compared to the ~~2019~~2020 period was a result of favorable changes in working capital in the ~~2020~~2021 period compared to the ~~2019 period.~~2020 period, partially offset by a decline in NOI as a result of property sales. The ~~decrease~~increase in cash provided by investing activities in the ~~2020~~2021 period as compared to the ~~2019~~2020 period is primarily due to ~~lower~~higher cash proceeds received from our sales of properties and lower acquisition activity in the ~~2020~~2021 period compared to the ~~2019~~2020 period. The decrease in cash used in financing activities in the ~~2020~~2021 period as compared to the ~~2019~~2020 period is primarily due to a decrease in net debt repayment activity ~~due to repayments of our unsecured term loans and net repayment activity on our revolving credit facility using cash on hand and proceeds from sales of properties~~ in the ~~2019~~2021 period compared to ~~increased~~the 2020 period, which included the redemption of $400,000 of our 3.60% senior unsecured notes and the repayment of approximately $67,000 in mortgage debt using borrowings under our revolving credit facility ~~in the 2020 period in order to facilitate the repayment~~and proceeds received from our sales of ~~other debts.~~properties.

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Our Investment and Financing Liquidity and Resources (dollar amounts in thousands, except per share ~~and per square foot~~ amounts)

In order to fund acquisitions and to meet cash needs that may result from our desire or need to make distributions or pay operating or capital expenses, we maintain a $750,000 revolving credit facility. The maturity date of our revolving credit facility is January 31, 2023 and, subject to our payment of an extension fee and meeting certain other conditions, we have the option to extend the stated maturity date of our revolving credit facility by two additional six month periods. We can borrow, repay and reborrow funds available under our revolving credit facility until maturity, and no principal repayment is due until

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maturity. We are required to pay interest at a rate of LIBOR plus a premium, which was 110 basis points per annum at March 31, ~~2020,~~2021, on the amount outstanding under our revolving credit ~~facility.~~facility, if any. We also pay a facility fee on the total amount of lending commitments under our revolving credit facility, which was 25 basis points per annum at March 31, ~~2020.~~2021. Both the interest rate premium and facility fee are subject to adjustment based upon changes to our credit ratings. As of March 31, ~~2020,~~2021, the annual interest rate payable on borrowings under our revolving credit facility was ~~1.8%~~1.2%. As of March 31, ~~2020~~2021 and April ~~30, 2020,~~28, 2021, we had ~~$348,000 and $355,000, respectively,~~no amounts outstanding under our revolving credit facility and ~~$402,000 and $395,000, respectively,~~$750,000 available for ~~borrowing under our revolving credit facility.~~borrowing.

Our credit agreement includes a feature under which the maximum borrowing availability may be increased to up to $1,950,000 in certain circumstances.

Our credit agreement provides that, with certain exceptions, a subsidiary of ours is required to guaranty our obligations under our $750,000 revolving credit facility only if that subsidiary has separately incurred debt (other than nonrecourse debt), within the meaning specified in our credit agreement, or provided a guarantee of debt incurred by us or any of our other subsidiaries.

In January 2020, we redeemed, at par plus accrued interest, all $400,000 of our 3.60% senior unsecured notes that had a maturity date in February 2020 using cash on hand, proceeds from property sales and borrowings under our revolving credit facility.

In March 2020, in connection with the sale of one property in Fairfax, VA, we prepaid, 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.

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, an annual interest rate of 4.0% and a maturity date in September 2030 using cash on hand and borrowings under our revolving credit facility.

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 using cash on hand and borrowings under our revolving credit facility.

As of March 31, ~~2020,~~2021, our debt maturities (other than our revolving credit facility), consisting of senior unsecured notes and mortgage notes, are as follows:


Year	Debt Maturities		Year	Debt Maturities
2020	$	74,423
2021	1,541		2021	$	896
2022	625,518		2022	625,518
2023	143,784		2023	143,784
2024	350,000		2024	350,000
2025 and thereafter	710,000
2025			2025	650,000
Thereafter			Thereafter	472,000
Total	$	1,905,266	Total	$	2,242,198

None of our unsecured debt obligations require sinking fund payments prior to their maturity dates. Our ~~$245,266~~$170,198 in mortgage debts generally require monthly payments of principal and interest through maturity.

In addition to our debt obligations, as of March 31, ~~2020,~~2021, we have estimated unspent leasing related obligations of ~~$57,348.~~$50,405, of which we expect to spend $25,939 over the next 12 months.

We are currently in the planning stage for a potential redevelopment project at a property located in Washington, D.C. containing approximately 340,000 rentable square feet. This redevelopment project may require significant capital expenditures and time to complete. We cannot be sure that we will complete this redevelopment project, that our plans for this project will not change or that this project will ultimately be successful.

We currently expect to use cash balances, borrowings under our revolving credit facility, net proceeds from property sales, incurrences or assumptions of mortgage debt and net proceeds from offerings of debt or equity securities to fund our future operations, capital expenditures, distributions to our shareholders and property acquisitions. When significant amounts are outstanding under our revolving credit facility or the maturities of our indebtedness approach, we expect to explore refinancing alternatives. Such alternatives may include incurring term debt, issuing debt or equity securities, extending the maturity date of our revolving credit facility and entering into a new revolving credit facility. We may assume additional mortgage debt in connection with our acquisitions or elect to place new mortgages on properties we own as a source of financing. We may also seek to participate in additional joint venture or other arrangements that may provide us with additional sources of financing. Although we cannot be sure that we will be successful in consummating any particular type of financing, we believe that we will have access to financing, such as debt and equity offerings, to fund future acquisitions and capital expenditures and to pay

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our obligations. We currently have an effective shelf registration statement that allows us to issue public securities on an expedited basis, but it does not assure that there will be buyers for such securities.

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Our ability to obtain, and the costs of, our future debt financings will depend primarily on credit market conditions and our creditworthiness. We have no control over market conditions. Potential investors and lenders likely will evaluate our ability to pay distributions to shareholders, fund required debt service and repay debts when they become due by reviewing our business practices and plans to balance our use of debt and equity capital so that our financial profile and leverage ratios afford us flexibility to withstand any reasonably anticipated adverse changes. Similarly, our ability to raise equity capital in the future will depend primarily upon equity capital market conditions and our ability to conduct our business to maintain and grow our operating cash flows. We intend to conduct our business in a manner that will afford us reasonable access to capital for investment and financing activities, but we cannot be sure that we will be able to successfully carry out this intention. ~~However,~~For instance, it is uncertain what the duration and severity of the current economic impact resulting from the COVID-19 pandemic will be. A protracted and extensive economic recession may cause a decline in financing availability and increased costs for financings. Further, such conditions could also disrupt capital markets and limit our access to financing from public sources.

~~On February 20, 2020,~~During the three months ended March 31, 2021, we paid a ~~regular~~ quarterly ~~cash~~ distribution to our ~~common~~ shareholders ~~of record on January 27, 2020, of $0.55 per share, or $26,511,~~totaling $26,575 using cash on ~~hand and borrowings under our revolving credit facility.~~hand. On April ~~2, 2020,~~15, 2021, we declared a regular quarterly distribution payable to ~~common~~ shareholders of record on April ~~13, 2020~~26, 2021 of $0.55 per share, or approximately ~~$26,500.~~$26,600. We expect to pay this distribution on or about May ~~21, 2020~~20, 2021 using cash on ~~hand and borrowings under our revolving credit facility.~~hand. For more information regarding the distributions we paid and declared during ~~2020,~~2021, see Note 98 to the Notes to Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

~~Off Balance Sheet Arrangements (dollars in thousands)~~

We own 51% and 50% interests in two unconsolidated joint ventures which own three properties. The properties owned by these joint ventures are encumbered by an aggregate $82,000 principal amount of mortgage ~~indebtedness.~~indebtedness, none of which is recourse to us. We do not control the activities that are most significant to these joint ventures and, as a result, we account for our investments in these joint ventures under the equity method of accounting. For more information on the financial condition and results of operations of these joint ventures, see Note 43 to the Notes to Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q. Other than these joint ventures, as of March 31, ~~2020,~~2021, we had no off balance sheet arrangements that have had or that we expect would be reasonably likely to have a material effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

Debt Covenants (dollars in thousands)

Our principal debt obligations at March 31, ~~2020~~2021 consisted of ~~borrowings under our $750,000 revolving credit facility,~~ an aggregate outstanding principal balance of ~~$1,660,000~~$2,072,000 of public issuances of senior unsecured notes and mortgage notes with an aggregate outstanding principal balance of ~~$245,266,~~$170,198, that were assumed in connection with certain of our acquisitions. Also, the three properties owned by two joint ventures in which we own 51% and 50% interests secure two additional mortgage notes. Our publicly issued senior unsecured notes are governed by indentures and their supplements. Our credit agreement and our senior unsecured notes indentures and their supplements provide for acceleration of payment of all amounts outstanding 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 a number of covenants, including those that restrict our ability to incur debts, including debts secured by mortgages on our properties, in excess of calculated amounts, require us to comply with certain financial covenants and, in the case of our credit agreement, restrict our ability to make distributions to our shareholders under certain circumstances. As of March 31, ~~2020,~~2021, we believe we were in compliance with the terms and conditions of our respective covenants under our credit agreement and senior unsecured notes indentures and their supplements. Our mortgage notes are non-recourse, subject to certain limited exceptions, and do not contain any material financial covenants.

Neither our credit agreement nor our senior unsecured notes indentures and their supplements contain provisions for acceleration which could be triggered by our credit ratings. However, under our credit agreement our highest senior credit rating is used to determine the fees and interest rates we pay. Accordingly, if that credit rating is downgraded, our interest expense and related costs under our credit agreement would increase.

Our credit agreement has cross default provisions to other indebtedness that is recourse of $25,000 or more and indebtedness that is non-recourse of $50,000 or more. Similarly, our senior unsecured notes indentures and their supplements contain cross default provisions to any other debts of more than $25,000 (or up to $50,000 in certain circumstances).

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Related Person Transactions

We have relationships and historical and continuing transactions with RMR LLC, RMR Inc. and others related to them. For example: we have no employees and the personnel and various services we require to operate our business are provided to us by RMR LLC pursuant to our business and property management agreements with RMR LLC; RMR Inc. is the managing member of RMR LLC; Adam Portnoy, the Chair of our Board of Trustees and one of our Managing Trustees, 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, our other Managing Trustee and our President and Chief Executive Officer, also serves as an officer and employee of RMR LLC; and each of our other officers is also an officer and employee of RMR LLC. We have relationships and historical and continuing transactions with other companies to which RMR LLC or its subsidiaries provide management services and some of which have trustees, directors or officers who are also trustees, directors or officers of us, RMR LLC or RMR Inc. and some of our Trustees and officers serve as trustees, directors or officers of these companies.

~~For~~ more information about these and other such relationships and related person transactions, see Notes 109 and 1110 to the Notes to Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q, our ~~2019~~2020 Annual Report, our definitive Proxy Statement for our ~~2020~~2021 Annual Meeting of Shareholders and our other filings with the

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SEC. In addition, see the section captioned “Risk Factors” of our ~~2019~~2020 Annual Report for a description of risks that may arise as a result of these and other related person transactions and relationships. Our filings with the SEC and copies of certain of our agreements with these related persons, including our business and property management agreements with RMR LLC, are available as exhibits to our public filings with the SEC and accessible at the SEC’s website, www.sec.gov. We may engage in additional transactions with related persons, including businesses to which RMR LLC or its subsidiaries provide management services.

Item 3. Quantitative and Qualitative Disclosures About Market Risk (dollar amounts in thousands, except per share data)

We are exposed to risks associated with market changes in interest rates. We manage our exposure to this market risk by monitoring available financing alternatives. Our strategy to manage exposure to changes in interest rates has not materially changed since December 31, ~~2019.~~2020. Other than as described below, we do not currently foresee any significant changes in our exposure to fluctuations in interest rates or in how we manage this exposure in the near future.

Fixed Rate Debt

At March 31, ~~2020,~~2021, our outstanding fixed rate debt consisted of the following:


Debt	Principal Balance (1)		Annual Interest Rate (1)	Annual Interest Expense (1)		Maturity	Interest Payments Due


Senior unsecured notes	$	300,000	4.150%	$	12,450	2022	Semi-annually
Senior unsecured notes	300,000		4.000%	12,000		2022	Semi-annually
Senior unsecured notes	350,000		4.250%	14,875		2024	Semi-annually
Senior unsecured notes	650,000		4.500%	29,250		2025	Semi-annually
Senior unsecured notes	310,000		5.875%	18,213		2046	Quarterly
Senior unsecured notes	162,000		6.375%	10,328		2050	Quarterly



Mortgage note (one property in Washington, D.C.)	25,619		4.220%	1,081		2022	Monthly
Mortgage note (three properties in Seattle, WA)	71,000		3.550%	2,521		2023	Monthly
Mortgage note (one property in Chicago, IL)	50,000		3.700%	1,850		2023	Monthly
Mortgage note (one property in Washington, D.C.)	23,579		4.800%	1,132		2023	Monthly

Total	$	2,242,198		$	103,700

Debt
Principal Balance ⁽¹⁾

Annual Interest Rate ⁽¹⁾

Annual Interest Expense ⁽¹⁾
Maturity Interest Payments Due
Senior unsecured notes $ 300,000
4.150% $ 12,450
2022 Semi-annually
Senior unsecured notes 300,000
4.000% 12,000
2022 Semi-annually
Senior unsecured notes 350,000
4.250% 14,875
2024 Semi-annually
Senior unsecured notes 400,000
4.500% 18,000
2025 Semi-annually
Senior unsecured notes 310,000
5.875% 18,213
2046 Quarterly
Mortgage note (one property in Washington, D.C.) ⁽²⁾
32,677
5.720% 1,869
2020 Monthly
Mortgage note (one property in Philadelphia, PA) 39,879
3.580% 1,428
2020 Monthly
Mortgage note (one property in Lakewood, CO) 1,360
8.150% 111
2021 Monthly
Mortgage note (one property in Washington, D.C.) 26,345
4.220% 1,112
2022 Monthly
Mortgage note (three properties in Seattle, WA) 71,000
3.550% 2,521
2023 Monthly
Mortgage note (one property in Chicago, IL) 50,000
3.700% 1,850
2023 Monthly
Mortgage note (one property in Washington, D.C.) 24,005
4.800% 1,152
2023 Monthly
Total $ 1,905,266
$ 85,581

(1)The principal balances and annual interest rates are the amounts stated in the applicable contracts. In accordance with GAAP, our carrying values and recorded interest expense may differ from these amounts because of market conditions at the time we issued or assumed these debts. For more information, see Notes 6 and 7 to the Notes to Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

~~(1)~~

The principal balances and interest rates are the amounts stated in the applicable contracts. In accordance with GAAP, our carrying values and recorded interest expense may differ from these amounts because of market conditions at the time we issued or assumed these debts. For more information, see Notes 7 and 8 to the Notes to Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.


~~(2)~~	~~In April 2020, this mortgage note was prepaid at par plus accrued interest.~~

Our senior unsecured notes require semi-annual or quarterly interest payments through maturity. Our mortgages generally require principal and interest payments through maturity pursuant to amortization schedules. Because these debts require

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interest to be paid at a fixed rate, changes in market interest rates during the term of these debts will not affect our interest obligations. If these debts were refinanced at interest rates which are one percentage point higher or lower than shown above, our annual interest cost would increase or decrease by approximately ~~$19,053.~~$22,422.

Changes in market interest rates also would affect the fair value of our fixed rate debt obligations; increases in market interest rates decrease the fair value of our fixed rate debt, while decreases in market interest rates increase the fair value of our fixed rate debt. Based on the balances outstanding at March 31, ~~2020,~~2021, and discounted cash flow analyses through the respective maturity dates, and assuming no other changes in factors that may affect the fair value of our fixed rate debt obligations, a hypothetical immediate one percentage point increase in interest rates would change the fair value of those obligations by approximately ~~$56,166.~~$103,648.

Some of our fixed rate secured debt arrangements allow us to make repayments earlier than the stated maturity date. In some cases, we are not allowed to make early repayment prior to a cutoff date and we are generally allowed to make prepayments only at a premium equal to a make whole amount, as defined, which is generally designed to preserve a stated yield to the note holder. These prepayment rights may afford us opportunities to mitigate the risk of refinancing our debts at maturity at higher rates by refinancing prior to maturity.

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At March 31, ~~2020,~~2021, we owned 51% and 50% interests in two joint venture arrangements which own three properties that are secured by fixed rate debt consisting of the following mortgage notes:


Debt	Our JV Ownership Interest	Principal Balance (1)(2)		Annual Interest Rate (1)	Annual Interest Expense (1)		Maturity	Interest Payments Due
Mortgage note (two properties in Fairfax, VA)	51%	$	50,000	4.090%	$	2,045	2029	Monthly
Mortgage note (one property in Washington, D.C.)	50%	32,000		3.690%	1,181		2024	Monthly
Total		$	82,000		$	3,226

Debt Our JV Ownership Interest
Principal Balance ⁽¹⁾⁽²⁾

Annual Interest Rate ⁽¹⁾

Annual Interest Expense ⁽¹⁾
Maturity Interest Payments Due
Mortgage note (two properties in Fairfax, VA) 51% $ 50,000
4.09% $ 2,045
2029 Monthly
Mortgage note (one property in Washington, D.C.) 50% 32,000
3.69% 1,181
2024 Monthly
Total $ 82,000
$ 3,226

(1)The principal balances and annual interest rates are the amounts stated in the applicable contracts. In accordance with GAAP, the joint ventures’ recorded interest expense may differ from these amounts because of market conditions at the time they incurred the debt.


~~(1)~~	The principal balances and interest rates are the amounts stated in the applicable contracts. In accordance with GAAP, the joint ventures’ recorded interest expense may differ from these amounts because of market conditions at the time they incurred the debt.


~~(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 do not own.~~

(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 do not own. None of the debt is recourse to us.

Floating Rate Debt

At March 31, ~~2020, our~~2021, we had no outstanding floating rate ~~debt consisted of $348,000 of borrowings under our~~debt. Our $750,000 ~~revolving credit facility. Our~~ revolving credit facility matures on January 31, 2023 and, subject to the payment of an extension fee and meeting certain other conditions, we have the option to extend the stated maturity by two six month periods. No principal repayments are required under our revolving credit facility prior to maturity, and we can borrow, repay and reborrow funds available under our revolving credit facility, subject to conditions, at any time without penalty.

Borrowings under our $750,000 revolving credit facility are in U.S. dollars and require interest to be paid at a rate of LIBOR plus premiums that are subject to adjustment based upon changes to our credit ratings. Accordingly, we are vulnerable to changes in U.S. dollar based short term rates, specifically LIBOR, and to changes in our credit ratings. In addition, upon renewal or refinancing of our revolving credit facility, we are vulnerable to increases in interest rate premiums due to market conditions or our perceived credit characteristics. Generally, a change in interest rates would not affect the value of our floating rate debt but would affect our operating results.

The following table presents the impact a one percentage point increase in interest rates would have on our annual floating rate interest expense as of March 31, ~~2020:~~

Impact of Changes in Interest Rates

Annual Interest Rate ⁽¹⁾
Outstanding Debt Total Interest Expense Per Year
Annual Earnings Per Share Impact ⁽²⁾
At March 31, 2020 1.8 % $ 348,000
$ 6,264
$ 0.13
One percentage point increase 2.8 % $ 348,000
$ 9,744
$ 0.20


~~(1)~~	~~Weighted based on the interest rate and outstanding borrowings under our revolving credit facility as of March 31, 2020.~~


~~(2)~~	~~Based on the weighted average shares outstanding (diluted) for the three months ended March 31, 2020.~~

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~~The following table presents the impact a one percentage point increase in interest rates would have on our annual floating rate interest expense as of March 31, 2020~~2021 if we were fully drawn on our revolving credit facility:


	Impact of an Increase in Interest Rates
	Annual Interest Rate (1)		Outstanding Debt		Total Interest Expense Per Year		Annual Earnings Per Share Impact (2)
At March 31, 2021	1.2	%	$	750,000	$	9,000	$	0.19
One percentage point increase	2.2	%	$	750,000	$	16,500	$	0.34

Impact of an Increase in Interest Rates

Annual Interest Rate ⁽¹⁾
Outstanding Debt Total Interest Expense Per Year
Annual Earnings Per Share Impact ⁽²⁾
At March 31, 2020 1.8 % $ 750,000
$ 13,500
$ 0.28
One percentage point increase 2.8 % $ 750,000
$ 21,000
$ 0.44

(1)Based on LIBOR plus a premium, which was 110 basis points per annum, at March 31, 2021.


~~(1)~~	~~Weighted based on the interest rate and outstanding borrowings under our revolving credit facility as of March 31, 2020.~~


~~(2)~~	~~Based on the weighted average shares outstanding (diluted) for the three months ended March 31, 2020.~~

(2)Based on the weighted average shares outstanding (diluted) for the three months ended March 31, 2021.

The foregoing ~~tables show~~table shows the impact of an immediate increase in floating interest rates as of March 31, ~~2020.~~2021. If interest rates were to increase gradually over time, the impact would be spread over time. Our exposure to fluctuations in floating interest rates will increase or decrease in the future with increases or decreases in the outstanding amount under our revolving credit facility or our other floating rate debt, if any. Although we have no present plans to do so, we may in the future enter into hedge arrangements from time to time to mitigate our exposure to changes in interest rates.

LIBOR Phase Out

LIBOR is currently expected to be phased out ~~in 2021.~~for new contracts by December 31, 2021 and for pre-existing contracts by June 30, 2023. We are required to pay interest on borrowings under our revolving credit facility at a floating rate based on LIBOR. ~~Future~~Interest we may pay on any future debt that we may incur may also require that we pay interest based upon LIBOR. We currently expect that the determination of interest under our revolving credit facility would be revised as provided under our credit agreement or amended as necessary to provide for an interest rate that approximates the existing interest rate as calculated in accordance with LIBOR. Despite our current expectations, we cannot be sure that, if LIBOR is phased out or transitioned, the changes to the determination of interest under our agreements would approximate the current calculation in accordance with LIBOR. We do not know what standard, if any, will replace LIBOR if it is phased out or transitioned.

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Item 4. Controls and Procedures

As of the end of the period covered by this Quarterly Report on Form 10-Q, our management carried out an evaluation, under the supervision and with the participation of our Managing Trustees, our President and Chief ~~Executive~~Operating Officer and our Chief Financial Officer and Treasurer, of the effectiveness of our disclosure controls and procedures pursuant to Rules 13a-15 and 15d-15 under the Securities Exchange Act of 1934, as amended. Based upon that evaluation, our Managing Trustees, our President and Chief ~~Executive~~Operating Officer and our Chief Financial Officer and Treasurer concluded that our disclosure controls and procedures are effective.

There have been no changes in our internal control over financial reporting during the quarter ended March 31, ~~2020~~2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Warning Concerning Forward-Looking Statements

This Quarterly Report on Form 10-Q contains statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other securities laws. Also, whenever we use words such as “believe”, “expect”, “anticipate”, “intend”, “plan”, “estimate”, “will”, “may” and negatives or derivatives of these or similar expressions, we are making forward-looking statements. These forward-looking statements are based upon our present intent, beliefs or expectations, but forward-looking statements are not guaranteed to occur and may not occur. Forward-looking statements in this Quarterly Report on Form 10-Q relate to various aspects of our business, including:

•The duration and severity of the economic impact resulting from the COVID-19 pandemic and its impact on us and our tenants

~~The likelihood~~ and ~~extent to which~~ our ~~tenants will be negatively impacted by the COVID-19 pandemic~~tenants’ ability and ~~its aftermath and be able and willing~~willingness to pay us rent,

•Our expectations about the financial strength of our tenants,

•The likelihood that our rents will increase when we renew or extend our leases or enter new leases,

•Our belief that we are in a position to opportunistically recycle and deploy capital,

•Our expectations that the diversity and other characteristics of our property portfolio and our financial resources will result in our ability to successfully withstand the current economic conditions,

~~Our sales and acquisitions of properties,~~

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~~Our ability to compete for acquisitions and tenancies effectively,~~

~~The likelihood that our tenants will pay rent or be negatively affected by cyclical economic conditions or government budget constraints,~~

The likelihood that our tenants will renew or extend their leases and not exercise early termination options pursuant to their leases or that we will obtain replacement tenants, on terms as favorable to us as our prior leases,

•The likelihood that our ~~rents~~tenants will ~~increase when we renew~~be negatively affected by cyclical economic conditions or ~~extend~~government budget constraints and, if so, the impact that may have on their ability and willingness to lease our ~~leases or enter new leases,~~properties and pay us rent,

•Our ability to successfully execute our capital recycling program,

•The expectation that, as a result of the COVID-19 pandemic, leasing activity may ~~continue to slow, but overall tenant retention~~remain at a reduced level and could further decline from pre-COVID-19 pandemic levels, ~~may increase,~~

~~Our belief that we are in a position to opportunistically deploy capital during 2020,~~

•Our ability to pay distributions to our shareholders and to maintain or increase the amount of such distributions,

•Our expectations regarding occupancy at our properties,

•Our expectations regarding our future financial performance including FFO, Normalized FFO ~~Property~~or NOI, ~~and cash basis NOI,~~

~~Our policies and plans regarding investments, financings and dispositions,~~

•Our expectations regarding ~~occupancy at our properties,~~demand for leased space,

~~The future availability of borrowings under our revolving credit facility,~~•Our expectations regarding capital expenditures,

•Our expectation that there will be opportunities for us to acquire, and that we will acquire, additional properties primarily leased to single tenants and tenants with high credit quality characteristics ~~like~~such as government entities,

~~Our expectations regarding demand for leased space,~~

~~Our expectations regarding capital expenditures,~~

•Our ability to ~~raise debt or equity capital,~~compete for acquisitions and tenancies effectively,

•Our ~~ability to pay interest on~~sales and ~~principal~~acquisitions of ~~our debt,~~properties,

•Our policies and plans regarding investments, financings and dispositions,

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•Our ability to appropriately balance our use of debt and equity capital,

•The future availability of borrowings under our revolving credit facility,

•Our ability to ~~successfully execute~~raise debt or equity capital,

•Our ability to pay interest on and principal of our ~~capital recycling program,~~debt,

•Our ability to maintain sufficient liquidity during the duration of the COVID-19 pandemic and resulting economic downturn,

•Our credit ratings,

•Our expectation that we benefit from our relationships with RMR ~~Inc.,~~LLC,

•The credit qualities of our tenants,

•Our qualification for taxation as a REIT,

•Changes in federal or state tax laws, and

•Other matters.

Our actual results may differ materially from those contained in or implied by our forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties and other factors, some of which are beyond our control. Risks, uncertainties and other factors that could have a material adverse effect on our forward-looking statements and upon our business, results of operations, financial condition, FFO, Normalized FFO, ~~Property~~ NOI, cash flows, liquidity and prospects include, but are not limited to:

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The impact of conditions in the economy, including the COVID-19 pandemic and its aftermath, and the capital markets on us and our tenants,

•Competition within the real estate industry, particularly in those markets in which our properties are located,

•The impact of changes in the real estate needs and financial conditions of our tenants,

•Compliance with, and changes to, federal, state and local laws and regulations, accounting rules, tax laws and similar matters,

•The impact of any U.S. government shutdown on our ability to collect rents or pay our operating expenses, debt obligations and distributions to shareholders on a timely basis,

•Actual and potential conflicts of interest with our related parties, including our Managing Trustees, RMR LLC ~~RMR Inc.,~~ and others affiliated with them,

•Limitations imposed on our business and our ability to satisfy complex rules in order for us to maintain our qualification for taxation as a REIT for U.S. federal income tax purposes, and

•Acts of terrorism, outbreaks of pandemics, including the COVID-19 pandemic, or other manmade or natural disasters beyond our control.

For example:

•Our ability to make future distributions to our shareholders and to make payments of principal and interest on our indebtedness depends upon a number of factors, including our receipt of rent from our tenants, our future earnings, the capital costs we incur to lease our properties and our working capital requirements. We may be unable to pay our debt obligations or to maintain our current rate of distributions on our common shares and future distributions may be reduced or eliminated,

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•Our ability to grow our business and increase our distributions depends in large part upon our ability to buy properties and lease them for rents, less their property operating costs, that exceed our capital costs. We may be unable to identify properties that we want to acquire, and we may fail to reach agreement with the sellers and complete the purchases of any properties we want to acquire. In addition, any properties we may acquire may not provide us with rents less property operating costs that exceed our capital costs or achieve our expected returns,

•We may fail to maintain, or we may elect to change our ~~target payout ratio for distributions to shareholders of 75% of cash available for distribution. Further, our~~distribution rate. Our Board of Trustees considers many factors when setting distribution rates, including our historical and projected income, Normalized FFO, ~~cash available for distribution,~~CAD, the then current and expected needs and availability of cash to pay our obligations and fund our investments, distributions which may be required to be paid to maintain our qualification for taxation as a REIT and other factors deemed relevant by our Board of Trustees. Accordingly, future distribution rates may be increased or decreased and there is no assurance as to the rate at which future distributions will be paid,

•We ~~plan~~expect to selectively sell ~~certain~~ properties from time to time ~~to fund future acquisitions and to strategically update, rebalance and reposition~~when we determine our ~~investment portfolio, which~~continued ownership or ongoing required capital expenditures will not achieve desired returns or when we ~~refer to as our capital recycling program.~~believe we can successfully pursue more desirable opportunities than retaining those properties. We cannot be sure we will sell any of these properties or what the terms of any sales may be ~~nor~~or that we will acquire replacement properties that improve our asset quality or our ability to increase our distributions to shareholders,

•We may not succeed in maintaining our leverage consistent with our current investment grade ratings or levels that the market or credit rating agencies believe are appropriate,

•Some of our tenants may not renew expiring leases or they may exercise their rights, if any, to vacate their space before the stated expirations of their leases, and we may be unable to obtain new tenants to maintain or increase the historical occupancy rates of, or rents from, our properties,

Some government tenants may exercise their rights to vacate their space before the stated expirations of their leases, and we may be unable to obtain new tenants to maintain the historical occupancy rates of, or rents from, our properties,

•Rents that we can charge at our properties may decline upon renewals or expirations because of changing market conditions or otherwise,

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Leasing for some of our properties depends on a private sector single tenant and we may be adversely affected by the bankruptcy, insolvency, a downturn of business or a lease termination of asuch single tenant,

•Our belief that there is a likelihood that tenants may renew or extend our leases prior to their expirations whenever they have made significant investments in the leased properties, or because those properties may be of strategic importance to them, may not be realized,

~~Our belief that our overall tenant retention levels~~•Overall new leasing volume may ~~increase as a result of the COVID-19 pandemic may not be realized. However,~~decrease more than we currently expect. In addition, if the COVID-19 pandemic and the current economic conditions continue for an extended period or worsen, our tenants may become unable to pay rent or they may elect to not renew their leases with us. Further, some of our government leases provide the tenant with certain rights to terminate their lease early. Budgetary and other fiscal pressures may result in some governmental tenants terminating their leases early or not renewing their leases. ~~Further,~~In addition, the COVID-19 pandemic has caused changes in workplace practices, including increased remote work arrangements. To the extent those practices become permanent or increased, leasing demand for office space may decline. As a result of these factors, our tenant retention levels ~~may not increase and they~~ could decline and we may experience reduced rent or incur increased costs under future new or renewal leases,

•Our belief that we are well positioned to opportunistically recycle and deploy capital ~~during 2020~~ may not be realized. We may fail to identify and execute on opportunities to deploy capital and any deployment of capital we may make may not result in the returns that we expect,

•Our ~~belief~~perception that, ~~the reduction in government tenant space utilization and the consolidation~~as a result of ~~government tenants into government owned real estate is substantially complete may prove misplaced if these prior trends continue or do not moderate to the extent we expect, including in response to~~ the COVID-19 pandemic, ~~and its aftermath,~~government tenants may seek to manage space utilization rates in order to provide greater physical distancing for employees, may prove incorrect,

•Our perception that ~~recent~~ activity ~~suggests~~prior to the outbreak of the COVID-19 pandemic suggested that the government ~~has~~had begun to shift its leasing strategy to include longer term leases and that the government iswas actively exploring 10 to 20 year lease terms at renewal, in some instances, may mistakenly imply that these activities are indicative of a trend or broader change in government leasing strategy or ~~practices.~~practices that will recommence after the COVID-19 pandemic ends. Further, even if ~~they may be indicative of~~ such a trend or change were to recommence, that trend or change may not be sustained by the government, ~~including in response to the COVID-19 pandemic and its aftermath,~~

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•Contingencies in our acquisition and sale agreements may not be satisfied and any expected acquisitions and sales and any related lease arrangements we expect to enter may not occur, may be delayed or the terms of such transactions or arrangements may change,

~~We are currently marketing four properties for sale. However, we may not succeed in selling any or all of these properties,~~

•We expect to pursue accretively growing our property portfolio. However, we may not succeed in making acquisitions that are accretive and future acquisitions could be dilutive,

•The competitive advantages we believe we have may not in fact exist or provide us with the advantages we expect. We may fail to maintain any of these advantages or our competition may obtain or increase their competitive advantages relative to us,

•We intend to conduct our business activities in a manner that will afford us reasonable access to capital for investment and financing activities. However, we may not succeed in this regard and we may not have reasonable access to capital,

•Continued availability of borrowings under our revolving credit facility is subject to our satisfying certain financial covenants and other credit facility conditions that we may be unable to satisfy,

•Actual costs under our revolving credit facility will be higher than LIBOR plus a premium because of fees and expenses associated with such debt,

•The interest rates payable under our floating rate debt obligations depend upon our credit ratings. If our credit ratings are downgraded, our borrowing costs will increase,

•Our ability to access debt capital and the cost of our debt capital will depend in part on our credit ratings. If our credit ratings are downgraded, we may not be able to access debt capital or the debt capital we can access may be expensive,

•We may be unable to repay our debt obligations when they become due,

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The maximum borrowing availability under our revolving credit facility may be increased to up to $1.95 billion in certain circumstances; however, increasing the maximum borrowing availability under our revolving credit facility is subject to our obtaining additional commitments from lenders, which may not occur,

•We have the option to extend the maturity date of our revolving credit facility upon payment of a fee and meeting other conditions; however, the applicable conditions may not be met,

•We may incur significant costs to prepare a property for ~~a tenant,~~tenancy, particularly for single tenant properties,

•We may spend more for capital expenditures than we currently expect,

•We may fail to obtain development rights or entitlements that we may seek for development and other projects we may wish to conduct at our properties,

•Our existing joint venture arrangements and any other joint venture arrangements that we may enter may not be successful,

•Any redevelopment projects we undertake may be unsuccessful, may require greater capital expenditures or other costs than we project or may take significant time to complete,

•We believe that we are well positioned to weather the present disruptions of the COVID-19 pandemic facing the real estate industry and the economy generally. However, the full extent of the future impact of the COVID-19 pandemic is unknown and we may not realize similar or better operating results in the future,

•We believe that the near term impact of the COVID-19 pandemic to us will not be material due to the strength of our tenant base. However, if the COVID-19 pandemic and the current economic conditions continue for an extended period of time or worsen, our tenants may be significantly adversely impacted, which may result in those tenants seeking relief from their rent obligations, their inability to pay rent, the termination of their leases or our tenants not renewing their leases or renewing their leases for less space. Therefore, the impact we experience in the near term may be worse than we currently expect and our results of operations and financial position may be negatively affected,

•We have granted requests ~~for assistance~~ to some of our ~~tenants. This assistance generally entails a deferral of,~~tenants to defer payments over, in most cases, ~~one month of rent until September 2020 when the deferred rent amounts will begin to be payable over~~ a 12-month ~~period.~~period, all of which have commenced. However, current market and economic conditions may deteriorate further and the rent

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assistance granted by us may not be sufficient to ensure that tenants will be able to meet their rent payment obligations under their leases with us, which may result in an increase in tenant defaults and terminations,

•The business and property management agreements between us and RMR LLC have continuing 20 year terms. However, those agreements permit early termination in certain circumstances. Accordingly, we cannot be sure that these agreements will remain in effect for continuing 20 year terms,

•We believe that our relationships with our related parties, including RMR LLC ~~RMR Inc.,~~ and others affiliated with them, may benefit us and provide us with competitive advantages in operating and growing our business. However, the advantages we believe we may realize from these relationships may not materialize, and

•It is difficult to accurately estimate leasing related obligations and costs of property repositioning, development, redevelopment and tenant improvement costs. Our unspent leasing related obligations and development or redevelopment costs may cost more and may take longer to complete than we currently expect, and we may incur increased amounts for these and similar purposes in the future.

Currently unexpected results could occur due to many different circumstances, some of which are beyond our control, such as the COVID-19 pandemic and its aftermath, changes in our tenants’ needs for leased space, the ability of the U.S. ~~government~~and state governments to approve spending bills to fund ~~the U.S. government’s~~their obligations, acts of terrorism, natural disasters or changes in capital markets or the economy generally.

The information contained elsewhere in this Quarterly Report on Form 10-Q and our ~~2019~~2020 Annual Report, or in our other filings with the SEC, including under the caption “Risk Factors”, or incorporated herein or therein, identifies other important factors that could cause differences from our forward-looking statements. Our filings with the SEC are available on the SEC’s website at www.sec.gov.

You should not place undue reliance upon our forward-looking statements.

Except as required by law, we do not intend to update or change any forward-looking statements as a result of new information, future events or otherwise.

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Statement Concerning Limited Liability

The amended and restated declaration of trust establishing Office Properties Income Trust, dated June 8, 2009, as amended, as filed with the State Department of Assessments and Taxation of Maryland, provides that no trustee, officer, shareholder, employee or agent of Office Properties Income Trust shall be held to any personal liability, jointly or severally, for any obligation of, or claim against, Office Properties Income Trust. All persons dealing with Office Properties Income Trust in any way shall look only to the assets of Office Properties Income Trust for the payment of any sum or the performance of any obligation.

Part II. Other Information

Item 1A. Risk Factors

~~Our business faces many risks, a number of which are described under the caption “Risk Factors” in our 2019 Annual Report. The COVID-19 pandemic may subject us~~There have been no material changes to additional risks that are described below. The risks described in our 2019 Annual Report and below may not be the only risks we face. Other risks of which we are not yet aware, or that we currently believe are not material, may also materially and adversely impact our business operations or financial results. If any of the events or circumstances described in the risk factors ~~contained~~from those previously disclosed in our ~~2019~~2020 Annual Report or described below occurs, our business, financial condition or results of operations could be adversely impacted and the value of an investment in our securities could decline. Investors and prospective investors should consider the risks described in our 2019 Annual Report and below, and the information contained under the caption “Warning Concerning Forward-Looking Statements” and elsewhere in this Quarterly Report on Form 10-Q before deciding whether to invest in our securities.Report.

~~The COVID-19 pandemic has resulted, or is expected to result, in a global economic recession that may materially adversely impact our business, operations, financial results and liquidity.~~

The viral disease outbreak known as COVID-19 has been declared a pandemic by the World Health Organization and in response to the outbreak, the U.S. Health and Human Services Secretary has declared a public health emergency in the United States and many states and municipalities have declared public health emergencies. The COVID-19 pandemic has had a devastating impact on the global economy, including the U.S. economy, and has resulted, or is expected to result, in a global economic recession.

Economic downturns and recessions in the United States have historically negatively impacted the commercial office real estate market, including by causing increased tenant defaults, decreased occupancies and reduced rental rates. We expect that the current economic conditions may have similar negative impacts on our business and that the extent of those negative consequences will depend to a large extent on the duration and depth of the economic downturn in the United States and the strength and sustainability of any economic recovery that may follow.

While we have not yet experienced a material adverse impact on our occupancy resulting from the COVID-19 pandemic as of the date of this Quarterly Report on Form 10-Q, if the outbreak continues to weaken national, regional and local economies, it could negatively impact our occupancy levels and result in significant tenant defaults in the payment of rent owed to us. Although, as of March 31, 2020, 34.6% of our total annualized rental income was from leases with governmental agencies, including 25.0% of our total annualized rental income from leases with the U.S. federal government, the balance of our rents comes from nongovernmental tenants. Further, as of March 31, 2020, tenants occupying approximately 11.0% of our rentable square feet and responsible for approximately 7.9% of our annualized rental income as of March 31, 2020 currently have exercisable rights to terminate their leases before the stated terms of their leases expire. Also, in 2020, 2021 and 2022, early termination rights become exercisable by other tenants who currently occupy an additional approximately 3.2%, 1.3% and 2.3% of our rentable square feet, respectively, and contribute an additional approximately 4.0%, 1.4% and 2.4% of our annualized rental income, respectively, as of March 31, 2020. In addition, as of March 31, 2020, pursuant to leases with 13 of our tenants, these tenants have rights to terminate their leases if their respective legislature or other funding authority does not appropriate rent amounts in their respective annual budgets. These 13 tenants occupy approximately 5.2% of our rentable square feet and contribute approximately 5.5% of our annualized rental income as of March 31, 2020. Additionally, we typically conduct aspects of our leasing activity at our properties. Reductions in the ability and willingness of prospective tenants to visit our properties due to the COVID-19 outbreak, or the extent to which federal, state and municipal orders limit the extent to which our manager’s employees can visit our properties, could have an impact on our leasing activity which could reduce rental income and tenant reimbursements and other income produced by our properties. We have experienced a slowdown in our leasing activity thus far in the second quarter of 2020 due to the COVID-19 pandemic and expect this slowdown may continue. Concerns relating to such an outbreak could also cause on-site personnel not to report for work at our properties, which could adversely affect the management of our properties.

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We cannot predict the extent and duration of the COVID-19 pandemic or the severity and duration of its economic impact. Potential consequences of the current unprecedented measures taken in response to the spread of COVID-19, and current market disruptions and volatility affecting us include, but are not limited to:

~~continued sudden and/or severe declines in the market price of our common shares;~~

~~possible significant declines in the value of our properties;~~

~~our inability to accurately or reliably value our portfolio;~~

~~our inability to comply with financial covenants contained in our debt agreements that could result in our defaulting under such agreements;~~

~~our need to reduce or eliminate the distributions we pay to our shareholders and our need to maintain such reduction or elimination for an extended period of time;~~

our failure to pay interest and principal when due under our outstanding debt, which may result in the acceleration of payment for our outstanding debt and our possible loss of our revolving credit facilities;

~~our inability to access debt and equity capital on attractive terms, or at all;~~

~~increased risk of default or bankruptcy of our tenants;~~

~~increased risk of our tenants being unable to weather an extended cessation of normal economic activity and thereby impairing their ability to continue functioning as a going concern;~~

~~downgrades of our credit ratings by nationally recognized credit rating agencies;~~

our inability to sell properties we may identify for sale due to a general decline in business activity and demand for real estate transactions and, as a result, our inability to redeploy our capital into investments we believe are more beneficial to us;

our inability to make improvements to our properties due to a construction moratorium or decrease in available construction workers or construction activity, including required inspectors and governmental personnel for permitting and other requirements, and due to our need to maintain our liquidity; and

reduced economic demand resulting from mass employee layoffs or furloughs in response to governmental action taken to slow the spread of COVID-19, which could impact the continued viability of our tenants and the demand for office space at our properties.

Further, the extent and strength of any economic recovery after the COVID-19 pandemic abates are uncertain and subject to various factors and conditions. Our business, operations and financial position may continue to be negatively impacted after the COVID-19 pandemic abates and may remain at depressed levels compared to prior to the outbreak of the COVID-19 pandemic and those conditions may continue for an extended period.

Future distributions to our shareholders may be reduced or eliminated as a result of the uncertainty and materially adverse impact of the COVID-19 pandemic and related economic downturn and the form of payment could change.

~~We currently intend to continue to make regular quarterly distributions to our shareholders. However:~~

our ability to make or sustain the rate of distributions may continue to be adversely affected by the negative impact of the COVID-19 pandemic and its aftermath on our business, results of operations and liquidity;

our making of distributions is subject to compliance with restrictions contained in our credit agreement and may be subject to restrictions in future debt obligations we may incur; during the continuance of any event of default under our credit agreement, we may be limited or in some cases prohibited from making distributions to our shareholders; and

our distribution rates are set and reset from time to by our Board of Trustees. Our Board of Trustees considers many factors when setting distribution rates including our historical and projected income, Normalized FFO, cash available for distribution, the then current and expected needs and availability of cash to pay our obligations and fund our investments, distributions which may be required to be paid to maintain our qualification for

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taxation as a REIT and other factors deemed relevant by our Board of Trustees. Accordingly, future distribution rates may be increased or decreased and there is no assurance as to the rate at which future distributions will be paid.

~~For these reasons, among others, our distribution rate may decline or we may cease making distributions to our shareholders.~~

In addition, in order to preserve liquidity, we may elect to pay distributions to our shareholders in part in a form other than cash, such as issuing additional common shares of ours to our shareholders, as permitted by the applicable tax rules.

Some of our tenants have requested assistance from their obligations to pay us rent in response to the current economic conditions resulting from the COVID-19 pandemic and we expect to receive additional similar requests in the future; we have provided certain limited assistance in response to these requests and may determine to grant additional assistance in the future if we determine it prudent or appropriate to do so.

The current economic conditions resulting from the COVID-19 pandemic significantly negatively impacted certain of our tenants’ businesses, operations and liquidity. As a result of the COVID-19 pandemic, we have received requests from some of our tenants for rent assistance. As of April 28, 2020, we have granted temporary rent assistance totaling $1,403 to 18 tenants who represent 2.4% of our annualized rental income as of March 31, 2020. This assistance generally entails a deferral of, in most cases, one month of rent until September 2020 when the deferred rent amounts will begin to be payable over a 12-month period. We expect to receive additional similar requests in the future, and we may determine to grant additional assistance in the future, which may vary from the type of assistance we have granted to date, and could include more substantial assistance, if we determine it prudent or appropriate to do so. In addition, if any of our tenants are unable to continue as going concerns as a result of the current economic conditions or otherwise, we will experience a reduction in rents received and we may be unable to find suitable replacement tenants for an extended period or at all and the terms of our leases with those replacement tenants may not be as favorable to us as the terms of our agreements with our existing tenants.

~~The COVID-19 pandemic may have significant impacts on workplace practices and those changes could be detrimental to our business.~~

Temporary closures of businesses and stay in place orders and the resulting remote working arrangements for nonessential personnel in response to the COVID-19 pandemic may result in long-term changed work practices that could negatively impact us and our business. For example, the increased adoption of and familiarity with remote work practices could result in decreased demand for office space. If so, our business, operating results, financial condition and prospects may be materially adversely impacted.

~~Item 2. Unregistered Sales of Equity Securities and Use of Proceeds~~

~~Issuer purchases of equity securities.~~ ~~The following table provides information about our purchases of our equity securities during the quarter ended March 31, 2020:~~

Maximum
Total Number of Approximate Dollar
Shares Purchased Value of Shares that
Number of as Part of Publicly May Yet Be Purchased
Shares Average Price Announced Plans Under the Plans or
Calendar Month
Purchased ⁽¹⁾
Paid per Share or Programs Programs
January 2020 410 $ 32.89 — $ —
March 2020 602 22.65 — —
Total 1,012 $ 26.80 — $ —

~~(1)~~

These common share withholdings and purchases were made to satisfy tax withholding and payment obligations of former officers and employees of RMR LLC in connection with awards of our common shares and the vesting of those and prior awards of common shares to them. We withheld and purchased these shares at their fair market values based upon the trading prices of our common shares at the close of trading on Nasdaq on the purchase dates.

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Item 6. Exhibits



Exhibit Number			Description
3.1			Composite Copy of Amended and Restated Declaration of Trust, dated June 8, 2009, as amended to date. (Incorporated by reference to the Company's ~~Current~~Quarterly Report on Form ~~8-K dated December 31, 2018.~~10-Q for the quarter ended June 30, 2020.)

3.2			Amended and Restated Bylaws of the Company, adopted March 27, 2019. (Incorporated by reference to the ~~Company's~~Company’s Current Report on Form 8-K ~~dated~~filed on March ~~27,~~28, 2019.)

4.1			Form of Common Share Certificate. (Incorporated by reference to the Company's Annual Report on Form 10-K for the year ended December 31, 2018.)

4.2			Indenture, dated as of August 18, 2014, between the Company and U.S. Bank National Association. (Incorporated by reference to the Company’s Current Report on Form 8-K ~~dated~~filed on August 18, 2014.)

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4.3		Supplemental Indenture No. 2, dated as of May 26, 2016, between the Company and U.S. Bank National Association, relating to the Company’s 5.875% Senior Notes due 2046, including form thereof. (Incorporated by reference to the Company’s Current Report on Form 8-K ~~dated~~filed on May 26, 2016.)

4.4		Authentication Order, dated as of June 22, 2016, from the Company to U.S. Bank National Association, relating to the Company’s 5.875% Senior Notes due 2046. (Incorporated by reference to the Company’s Registration Statement on Form 8-A ~~dated~~filed on June 30, 2016.)

4.5		Indenture, dated as of July 20, 2017, between the Company and U.S. Bank National Association. (Incorporated by reference to the Company’s Current Report on Form 8-K ~~dated~~filed on July ~~20,~~21, 2017.)

4.6		First Supplemental Indenture, dated as of July 20, 2017, between the Company and U.S. Bank National Association, relating to the Company’s 4.000% Senior Notes due 2022, including form thereof. (Incorporated by reference to the Company’s Current Report on Form 8-K ~~dated~~filed on July ~~20,~~21, 2017.)

4.7		Second Supplemental Indenture, dated as of June 23, 2020, between the Company and U.S. Bank National Association, relating to the Company’s 6.375% Senior Notes due 2050, including form thereof. (Incorporated by reference to the Company’s Registration Statement on Form 8-A filed on June 23, 2020.)

4.8		Indenture, dated as of February 3, 2015, between the Company (as successor to Select Income REIT) and U.S. Bank National Association. (Incorporated by reference to Select Income REIT’s Current Report on Form 8-K ~~dated January 29,~~filed on February 3, 2015.)

~~4.8~~4.9		First Supplemental Indenture, dated as of February 3, 2015, between the Company (as successor to Select Income REIT) and U.S. Bank National Association, including the forms of 4.15% Senior Notes due 2022 and 4.50% Senior Notes due 2025. (Incorporated by reference to Select Income REIT’s Current Report on Form 8-K ~~dated January 29,~~filed on February 3, 2015.)

~~4.9~~4.10		Second Supplemental Indenture, dated as of May 15, 2017, between the Company (as successor to Select Income REIT) and U.S. Bank National Association, including the form of 4.250% Senior Notes due 2024. (Incorporated by reference to Select Income REIT’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2017, filed by Select Income REIT on July 25, 2017.)

~~4.10~~4.11		Third Supplemental Indenture, dated as of December 31, 2018, among Select Income REIT, the Company and U.S. Bank National Association. (Incorporated by reference to the Company’s Current Report on Form 8-K ~~dated~~filed on December 31, 2018.)

~~4.11~~4.12		Authentication Order, dated as of September 24, 2020, from the Company to U.S. Bank National Association, relating to the Company’s 4.50% Senior Notes due 2025. (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2020.)

4.13		Registration Rights and Lock-Up Agreement, dated as of June 5, 2015, among the Company, ABP Trust (f/k/a Reit Management & Research Trust) and Adam D. Portnoy. (Incorporated by reference to the Company’s Current Report on Form 8‑K ~~dated~~filed on June 5,8, 2015.)

~~10.1~~31.1		~~Form of Indemnification Agreement. (Filed herewith.)~~

~~31.1~~	Rule 13a-14(a) Certification. (Filed herewith.)

31.2		Rule 13a-14(a) Certification. (Filed herewith.)

~~32.1~~31.3		Rule 13a-14(a) Certification. (Filed herewith.)

31.4		Rule 13a-14(a) Certification. (Filed herewith.)

32.1		Section 1350 Certification. (Furnished herewith.)

101.INS		XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH		XBRL Taxonomy Extension Schema Document. (Filed herewith.)

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101.CAL
~~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.)

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



			OFFICE PROPERTIES INCOME TRUST


			By:			/s/ ~~David M. Blackman~~Christopher J. Bilotto
						~~David M. Blackman~~Christopher J. Bilotto
						President and Chief ~~Executive~~Operating Officer
						Dated: ~~May 1, 2020~~April 29, 2021

			By:			/s/ Matthew C. Brown
						Matthew C. Brown
						Chief Financial Officer and Treasurer
						(principal financial officer and principal accounting officer)
						Dated: ~~May 1, 2020~~April 29, 2021


Date of Sale	Number of Properties	Location	Rentable Square Feet	Gross Sales Price (1)		Gain (Loss) on Sale of Real Estate
January 2021	0	Kansas City, MO (2)	10,000	$	845	$	(63)
January 2021	1	Richmond, VA	311,000	130,000		54,067













	1		321,000	$	130,845	$	54,004


Date of Sale Agreement	Number of Properties	Location	Rentable Square Feet	Gross Sales Price (1)		Loss on Impairment of Real Estate
February 2021	1	Huntsville, AL (2)	1,371,000	$	39,000	$	2,289
March 2021	1	Stoneham, MA (3)	98,000	10,700		5,371
	2		1,469,000	$	49,700	$	7,660



Date of Sale	Number of Properties	Location	Rentable Square Feet	Gross Sales Price ⁽¹⁾		Gain (Loss) on Sale of Real Estate
January 2020	2	Stafford, VA	64,656	$	14,063	$	4,704
January 2020	1	Windsor, CT	97,256	7,000		314
February 2020	1	Lincolnshire, IL	222,717	12,000		1,176
March 2020	1	Trenton, NJ	267,025	30,100		(192		)
March 2020	1	Fairfax, VA	83,130	22,200		4,754
	6		734,784	$	85,363	$	10,756



		OPI Carrying Value of Investments at
Joint Venture	OPI Ownership	March 31, 2020		December 31, 2019		Number of Properties	Location	Rentable Square Feet
Prosperity Metro Plaza	51%	$	22,405	$	22,483	2	Fairfax, VA	328,456
1750 H Street, NW	50%	17,024		17,273		1	Washington, D.C.	115,411
Total		$	39,429	$	39,756	3		443,867


		OPI Carrying Value of Investments at
Joint Venture	OPI Ownership	March 31, 2021		December 31, 2020		Number of Properties	Location	Rentable Square Feet
Prosperity Metro Plaza	51%	$	21,715	$	21,888	2	Fairfax, VA	329,000
1750 H Street, NW	50%	15,687		16,063		1	Washington, D.C.	115,000
Total		$	37,402	$	37,951	3		444,000



	For the Three Months
	Ended March 31,
	2020	2019
Weighted average common shares for basic earnings per share	48,095	48,031
Effect of dilutive securities: unvested share awards	—	15
Weighted average common shares for diluted earnings per share ⁽¹⁾	48,095	48,046


~~(1)~~	~~For the three months ended March 31, 2020, certain unvested common shares were not included in the calculation of diluted earnings per share because to do so would have been antidilutive.~~


~~(1)~~	~~Gross sales price is equal to the gross contract price, includes purchase price adjustments, if any, and excludes closing costs.~~


Joint Venture	Interest Rate (1)	Maturity Date	Principal Balance at March 31, 2021 and December 31, 2020 (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 March 31, 2020 and December 31, 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


~~(1)~~	~~Includes the effect of mark to market purchase accounting.~~


			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)	$	49,700	$	0	$	49,700	$	0


	As of March 31, 2021				As of December 31, 2020
Financial Instrument	Carrying Value (1)		Fair Value		Carrying Value (1)		Fair Value

Senior unsecured notes, 4.15% interest rate, due in 2022	$	299,118	$	306,261	$	298,853	$	306,192
Senior unsecured notes, 4.00% interest rate, due in 2022	298,809		307,919		298,579		306,756
Senior unsecured notes, 4.25% interest rate, due in 2024	342,870		368,921		342,299		365,435
Senior unsecured notes, 4.50% interest rate, due in 2025	636,783		686,862		635,921		688,399
Senior unsecured notes, 5.875% interest rate, due in 2046	301,350		312,108		301,264		322,028
Senior unsecured notes, 6.375% interest rate, due in 2050	156,374		174,118		156,326		171,590
Mortgage notes payable	169,204		174,894		169,729		174,952

Total	$	2,204,508	$	2,331,083	$	2,202,971	$	2,335,352



	As of March 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	$	—	$	—	$	399,934	$	400,048
Senior unsecured notes, 4.00% interest rate, due in 2022	297,887		294,464		297,657		306,096
Senior unsecured notes, 4.15% interest rate, due in 2022	298,059		292,616		297,795		307,221
Senior unsecured notes, 4.25% interest rate, due in 2024	340,588		337,227		340,018		364,602
Senior unsecured notes, 4.50% interest rate, due in 2025	381,987		361,020		381,055		419,578
Senior unsecured notes, 5.875% interest rate, due in 2046	301,007		248,000		300,920		322,028
Mortgage notes payable ⁽²⁾	244,252		254,619		323,074		331,675
Total	$	1,863,780	$	1,787,946	$	2,340,453	$	2,451,248


~~(1)~~	~~Includes unamortized debt premiums, discounts and issuance costs totaling $41,486 and $45,756 as of March 31, 2020 and December 31, 2019, respectively.~~


~~(2)~~	Balance as of December 31, 2019 includes one 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 condensed consolidated balance sheet. This mortgage note was secured by a property in Fairfax, VA that was sold in March 2020. The mortgage note was repaid at closing.



	All Properties ⁽¹⁾				Comparable Properties ⁽²⁾
	March 31,				March 31,
	2020		2019		2020		2019
Total properties ⁽³⁾	184		212		182		182
Total rentable square feet ⁽⁴⁾	24,906		30,134		24,619		24,711
Percent leased ⁽⁵⁾	91.5	%	89.6	%	92.6	%	93.2	%



	Three Months Ended March 31, 2020
	Leased		Available for Lease		Total
Beginning of period	23,761		1,965		25,726
Changes resulting from:
Acquisition of properties	—		13		13
Disposition of properties	(693	)	(42	)	(735	)
Lease expirations	(868	)	868		—
Lease renewals ⁽¹⁾	508		(508	)	—
New leases ⁽¹⁾	81		(81	)	—
Remeasurements ⁽²⁾	—		(98	)	(98	)
End of period	22,789		2,117		24,906



	Three Months Ended March 31, 2020
	Old Effective Rent Per Square Foot ⁽¹⁾		New Effective Rent Per Square Foot ⁽¹⁾		Rentable Square Feet
New leases	$	28.13	$	26.95	100
Lease renewals	$	39.71	$	40.92	568
Total leasing activity	$	37.98	$	38.83	668



Year ⁽¹⁾	Number of Leases Expiring	Leased Square Feet Expiring ⁽²⁾	Percent of Total		Cumulative Percent of Total		Annualized Rental Income Expiring		Percent of Total		Cumulative Percent of Total
2020	56	1,083	4.8	%	4.8	%	$	27,541	4.7	%	4.7	%
2021	58	2,050	9.0	%	13.8	%	58,503		10.1	%	14.8	%
2022	79	2,147	9.4	%	23.2	%	60,941		10.5	%	25.3	%
2023	63	2,528	11.1	%	34.3	%	68,662		11.8	%	37.1	%
2024	54	3,674	16.1	%	50.4	%	97,273		16.7	%	53.8	%
2025	49	2,018	8.9	%	59.3	%	43,531		7.5	%	61.3	%
2026	29	1,710	7.5	%	66.8	%	45,728		7.9	%	69.2	%
2027	28	1,855	8.1	%	74.9	%	46,984		8.1	%	77.3	%
2028	12	872	3.8	%	78.7	%	25,568		4.4	%	81.7	%
2029 and thereafter	46	4,851	21.3	%	100.0	%	106,992		18.3	%	100.0	%
Total	474	22,788	100.0	%			$	581,723	100.0	%

Weighted average remaining lease term (in years)		5.9					5.6


	Tenant	Credit Rating	Annualized Rental Income		% of Total Annualized Rental Income			Tenant	Credit Rating	Sq. Ft.	% of Leased Sq. Ft.		Annualized Rental Income		% of Total Annualized Rental Income
1	U.S. Government	Investment Grade	$	145,675	25.0	%	1	U.S. Government	Investment Grade	5,310	23.8	%	$	145,196	25.9	%
2	Shook, Hardy & Bacon L.L.P.	Not Rated	19,199		3.3	%	2	Shook, Hardy & Bacon L.L.P.	Not Rated	596	2.7	%	19,377		3.5	%
3	State of California	Investment Grade	19,125		3.3	%	3	State of California	Investment Grade	648	2.9	%	19,243		3.4	%
4	Bank of America Corporation	Investment Grade	16,467		2.8	%	4	Bank of America Corporation	Investment Grade	577	2.6	%	15,803		2.8	%
5	WestRock Company	Investment Grade	12,864		2.2	%	5	F5 Networks, Inc.	Not Rated	299	1.3	%	13,027		2.3	%
6	F5 Networks, Inc.	Not Rated	12,777		2.2	%	6	Commonwealth of Massachusetts	Investment Grade	311	1.4	%	12,281		2.2	%
7	CareFirst Inc.	Non Investment Grade	11,684		2.0	%	7	CareFirst Inc.	Not Rated	207	0.9	%	11,870		2.1	%
8	Northrop Grumman Corporation	Investment Grade	11,320		1.9	%	8	Northrop Grumman Corporation	Investment Grade	337	1.5	%	11,447		2.0	%
9	Tyson Foods, Inc.	Investment Grade	11,011		1.9	%	9	Tyson Foods, Inc.	Investment Grade	248	1.1	%	11,198		2.0	%
10	Technicolor SA	Non Investment Grade	10,034		1.7	%	10	Micro Focus International plc	Non Investment Grade	406	1.8	%	8,710		1.6	%
11	Commonwealth of Massachusetts	Investment Grade	9,769		1.7	%	11	CommScope Holding Company Inc	Non Investment Grade	228	1.0	%	8,166		1.5	%
12	Micro Focus International plc	Non Investment Grade	8,710		1.5	%	12	State of Georgia	Investment Grade	308	1.4	%	7,248		1.3	%
13	CommScope Holding Company Inc	Non Investment Grade	8,097		1.4	%	13	PNC Bank	Investment Grade	441	2.0	%	6,915		1.2	%
14	State of Georgia	Investment Grade	7,173		1.2	%	14	Compass Group plc	Investment Grade	267	1.2	%	6,639		1.2	%
15	PNC Bank	Investment Grade	6,902		1.2	%	15	ServiceNow, Inc.	Investment Grade	149	0.7	%	6,623		1.2	%
16	ServiceNow, Inc.	Not Rated	6,481		1.1	%	16	Allstate Insurance Co.	Investment Grade	468	2.1	%	6,473		1.2	%
17	Allstate Insurance Co.	Investment Grade	6,472		1.1	%	17	Automatic Data Processing, Inc.	Investment Grade	289	1.3	%	6,037		1.1	%
18	Compass Group plc	Investment Grade	6,398		1.1	%	18	Church & Dwight Co., Inc.	Investment Grade	250	1.1	%	6,031		1.1	%
19	Automatic Data Processing, Inc.	Investment Grade	6,047		1.0	%
20	Church & Dwight Co., Inc.	Investment Grade	6,019		1.0	%
21	Tailored Brands, Inc.	Non Investment Grade	5,898		1.0	%
	Total		$	348,122	59.6	%

								Total		11,339	50.8	%	$	322,284	57.6	%



										Non-Comparable
										Properties Results
	Comparable Properties Results ⁽¹⁾									Three Months Ended				Consolidated Results
	Three Months Ended March 31,									March 31,				Three Months Ended March 31,
					$			%												$			%
	2020		2019		Change			Change		2020		2019		2020			2019			Change			Change
Rental income	$	147,512	$	148,595	$	(1,083	)	(0.7	%)	$	2,373	$	26,182	$	149,885		$	174,777		$	(24,892	)	(14.2	%)
Operating expenses:
Real estate taxes	16,166		16,027		139			0.9	%	641		2,365		16,807			18,392			(1,585		)	(8.6	%)
Utility expenses	6,875		7,715		(840		)	(10.9	%)	137		1,666		7,012			9,381			(2,369		)	(25.3	%)
Other operating expenses	25,106		25,386		(280		)	(1.1	%)	774		4,750		25,880			30,136			(4,256		)	(14.1	%)
Total operating expenses	48,147		49,128		(981		)	(2.0	%)	1,552		8,781		49,699			57,909			(8,210		)	(14.2	%)
Property net operating income ⁽²⁾	$	99,365	$	99,467	$	(102	)	(0.1	%)	$	821	$	17,401	100,186			116,868			(16,682		)	(14.3	%)

Other expenses:
Depreciation and amortization														62,943			77,521			(14,578		)	(18.8	%)
Loss on impairment of real estate														—			3,204			(3,204		)	n/m
Acquisition and transaction related costs														—			584			(584		)	n/m
General and administrative														7,109			8,723			(1,614		)	(18.5	%)
Total other expenses														70,052			90,032			(19,980		)	(22.2	%)
Gain on sale of real restate														10,756			22,092			(11,336		)	(51.3	%)
Dividend income														—			980			(980		)	n/m
Gain on equity securities														—			22,128			(22,128		)	n/m
Interest and other income														706			248			458			184.7	%
Interest expense														(27,159		)	(37,133		)	9,974			(26.9	%)
Loss on early extinguishment of debt														(3,282		)	(414		)	(2,868		)	n/m
Income before income tax expense and equity in net losses of investees														11,155			34,737			(23,582		)	(67.9	%)
Income tax expense														(39		)	(483		)	444			(91.9	%)
Equity in net losses of investees														(276		)	(235		)	(41		)	17.4	%
Net income														$	10,840		$	34,019		$	(23,179	)	(68.1	%)

Weighted average common shares outstanding (basic)														48,095			48,031			64			0.1	%
Weighted average common shares outstanding (diluted)														48,095			48,046			49			0.1	%

Per common share amounts (basic and diluted):
Net income														$	0.23		$	0.71		$	(0.48	)	(67.6	%)



Debt	Principal Balance ⁽¹⁾		Annual Interest Rate ⁽¹⁾	Annual Interest Expense ⁽¹⁾		Maturity	Interest Payments Due
Senior unsecured notes	$	300,000	4.150%	$	12,450	2022	Semi-annually
Senior unsecured notes	300,000		4.000%	12,000		2022	Semi-annually
Senior unsecured notes	350,000		4.250%	14,875		2024	Semi-annually
Senior unsecured notes	400,000		4.500%	18,000		2025	Semi-annually
Senior unsecured notes	310,000		5.875%	18,213		2046	Quarterly
Mortgage note (one property in Washington, D.C.) ⁽²⁾	32,677		5.720%	1,869		2020	Monthly
Mortgage note (one property in Philadelphia, PA)	39,879		3.580%	1,428		2020	Monthly
Mortgage note (one property in Lakewood, CO)	1,360		8.150%	111		2021	Monthly
Mortgage note (one property in Washington, D.C.)	26,345		4.220%	1,112		2022	Monthly
Mortgage note (three properties in Seattle, WA)	71,000		3.550%	2,521		2023	Monthly
Mortgage note (one property in Chicago, IL)	50,000		3.700%	1,850		2023	Monthly
Mortgage note (one property in Washington, D.C.)	24,005		4.800%	1,152		2023	Monthly
Total	$	1,905,266		$	85,581



Debt	Our JV Ownership Interest	Principal Balance ⁽¹⁾⁽²⁾		Annual Interest Rate ⁽¹⁾	Annual Interest Expense ⁽¹⁾		Maturity	Interest Payments Due
Mortgage note (two properties in Fairfax, VA)	51%	$	50,000	4.09%	$	2,045	2029	Monthly
Mortgage note (one property in Washington, D.C.)	50%	32,000		3.69%	1,181		2024	Monthly
Total		$	82,000		$	3,226



	Impact of Changes in Interest Rates
	Annual Interest Rate ⁽¹⁾		Outstanding Debt		Total Interest Expense Per Year		Annual Earnings Per Share Impact ⁽²⁾
At March 31, 2020	1.8	%	$	348,000	$	6,264	$	0.13
One percentage point increase	2.8	%	$	348,000	$	9,744	$	0.20




							Maximum
					Total Number of		Approximate Dollar
					Shares Purchased		Value of Shares that
	Number of				as Part of Publicly		May Yet Be Purchased
	Shares	Average Price			Announced Plans		Under the Plans or
Calendar Month	Purchased ⁽¹⁾	Paid per Share		or Programs		Programs
January 2020	410	$	32.89		—	$	—
March 2020	602		22.65		—		—
Total	1,012	$	26.80		—	$	—