RMR Group’s OPI Files for Chapter 11 Bankruptcy

The RMR Group’s Office Properties Income Trust has filed a voluntary Chapter 11 petition as it reorganizes corporate debt. Concurrently with this procedure, the company entered into a restructuring support agreement with certain holders of senior secured notes.

This accord provides OPI with an improved capital structure and reduced debt service obligations, including the equitization of $1 billion in loans. The firm had $279.5 million maturing next year and $771.3 million in 2027, according to its second-quarter report.

The RSA deal regards holders of September 2029 notes. Last month, OPI missed the required interest payment of roughly $27.4 million on these loans, according to SEC filings. It also missed $3.4 million on its 3.25 percent March 2027 notes and $1.8 million on its 2031 Notes.

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Additionally, OPI received a commitment of $125 million in debtor-in-possession financing from the same holders of September 2029 notes, allowing operations to continue as the company navigates the court proceedings. For reference, the firm’s liquidity consisted of $90.1 million at the end of July. That volume clocked in at $160.5 million in July 2024.

The average occupancy across OPI’s portfolio stood at 85.2 percent at the end of the second quarter, down from 89.9 percent last year. Amid the ongoing government shutdown, its tenant roster is dominated by the U.S. administration and its contractors, as well as state and municipal entities, which account for 34.1 percent of leases.

RMR’s effort to keep OPI going

The RMR Group manages OPI, which owned 17.2 million square feet of office space across 124 properties at the end of June. RMR’s attempts to restructure OPI included a failed merger attempt with its health care REIT—Diversified Healthcare Trust—in 2023.

Diversified Healthcare Trust is among the primary owners of a joint venture managed by The RMR Group, which owns the Vertex Pharmaceuticals headquarters in Boston. The venture landed a $1 billion refinancing deal earlier this year for this 1.1 million-square-foot property.