Service Properties Trust SEC 10-Q Report

Service Properties Trust, a real estate investment trust (REIT) specializing in hospitality and service-focused retail net lease properties, has released its Form 10-Q report for the second quarter of 2025. The report provides a comprehensive overview of the company's financial performance and operational highlights, reflecting the impact of strategic property sales and ongoing efforts to optimize its portfolio.

Financial Highlights

• Total Revenues: $503.4 million, reflecting a decrease of 1.9% compared to the same period in 2024, primarily due to the sale of certain hotels and net lease properties.
• Net Loss: $38.2 million, a significant improvement from the $73.9 million loss in the same period in 2024, driven by reduced depreciation and amortization expenses and lower loss on asset impairment.
• Net Loss Per Common Share (basic and diluted): $0.23, compared to $0.45 in the same period in 2024, indicating a 48.9% improvement.
• Total Revenues (Six Months Ended): $938.6 million, a decrease of 1.1% from the same period in 2024, attributed to the sale of properties and lower rental income.
• Net Loss (Six Months Ended): $154.6 million, slightly higher than the $152.2 million loss in the same period in 2024, due to increased interest expenses and loss on asset impairment.
• Net Loss Per Common Share (basic and diluted, Six Months Ended): $0.93, compared to $0.92 in the same period in 2024, reflecting a marginal increase.

Business Highlights

• Hotel Portfolio Performance: As of June 30, 2025, the company owned 200 hotels. The U.S. hotel industry saw increases in average daily rate (ADR) and decreases in revenue per available room (RevPAR) compared to the previous year. The company's hotels experienced increases in ADR and RevPAR, attributed partly to renovation disruptions in the prior year.
• Net Lease Portfolio: The company owned 742 service-focused retail net lease properties with an aggregate of 13,162,020 square feet leased to 174 tenants. These properties were 97.3% occupied with a weighted average lease term of 7.6 years. TravelCenters of America (TA) is the largest tenant, leasing 175 travel centers under five master leases.
• Hotel Segment Revenue: For the three months ended June 30, 2025, hotel operating revenues were $404,405,000, a decrease from the previous year, primarily due to the sale of certain hotels.
• Net Lease Segment Revenue: Rental income for the net lease segment was $99,031,000 for the three months ended June 30, 2025, slightly down from the previous year, due to lower rental income and the sale of certain properties.
• Operational Strategy: The company is focused on reducing debt, growing its net lease portfolio, and improving the performance of hotels it plans to retain after completing the sale of previously announced dispositions.
• Future Outlook: The company plans to sell 114 hotels with a total of 14,925 keys for a combined sales price of $919,952,000. The management agreements for the 59 retained hotels managed by Sonesta will be amended to provide better alignment with market terms.
• Geographical Performance: The company operates properties in 46 states, the District of Columbia, Canada, and Puerto Rico, with a focus on service-focused retail net lease properties and hotels.
• Sales Units: The company sold eight hotels with a total of 1,006 keys for a combined sales price of $45,600,000 as of August 1, 2025, and entered into agreements to sell the remaining 114 hotels.
• Management Agreements: As of June 30, 2025, the company had management agreements with Sonesta, Hyatt, Radisson, and IHG for its hotel operations, with Sonesta managing the majority of the hotels.

SEC Filing: Service Properties Trust [ SVC ] - 10-Q - Aug. 05, 2025