OFFICE PROPERTIES INCOME TRUST 10-Q

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 2024 Annual Report. OVERVIEW (dollars in thousands, except per share and per square foot data) We are a REIT organized under Maryland law. As of June 30, 2025, our wholly owned properties were comprised of 125 properties and we had a noncontrolling ownership interest of 51% in an unconsolidated joint venture that owned two properties containing approximately 346,000 rentable square feet. As of June 30, 2025, our properties are located in 29 states and the District of Columbia and contain approximately 17,270,000 rentable square feet. As of June 30, 2025, our properties were leased to 220 different tenants with a weighted average remaining lease term (based on annualized rental income) of approximately 6.8 years. The U.S. government is our largest tenant, representing approximately 17.1% of our annualized rental income as of June 30, 2025. 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 June 30, 2025, plus straight line rent adjustments and estimated recurring expense reimbursements to be paid to us, and excluding lease value amortization. Leases representing approximately $14,426 and $15,851, or 3.6% and 4.0%, of our annualized rental income are scheduled to expire during the remainder of 2025 and 2026, respectively, and we may be unable to renew leases or find replacement tenants. Certain shifts in office space utilization, including increased remote work arrangements and tenants consolidating their real estate footprint, as well as ongoing market and economic conditions, including government spending and budget priorities, continue to impact the office sector and our portfolio. The demand for office space continues to face headwinds, including in markets where we have a concentration of properties, such as Washington, D.C., and declining rents and increasing costs to relet space when tenants can be identified continue to impact the market. The duration and ultimate impact of current trends on the demand for office space at our properties remains uncertain and subject to change. Higher interest rates, inflationary pressures, recent announcements regarding tariffs on a wide variety of imports, other government policies (including the potential reduction of U.S. federal office leases), geopolitical hostilities and tensions, and concerns that the U.S. economy may enter an economic recession have caused disruptions in the financial markets and these factors could adversely affect our and our tenants’ financial condition and the ability or willingness of our tenants to renew our leases or pay rent to us. Entities in the market for office space may delay their decision to lease space due to current economic conditions. Accordingly, we do not yet know what the full extent of the impacts will be on our or our tenants’ businesses and operations nor the long-term outlook for leasing at our properties. We also have a significant amount of debt maturing in the next 12 months and we have limited debt and equity financing alternatives available to us to refinance our debt, and recent financing sources we have utilized to refinance debt have increased our cost of capital. The duration and ultimate impact of these factors on our properties and our business remains uncertain and subject to change; however, these conditions continue to have a significant negative impact on our results of operations, financial position and cash flows. As of July 30, 2025, our total available liquidity was comprised of $90,102 of cash and, in addition to long-term debt, our near-term obligations include outstanding lease obligations of $72,394, and principal debt repayments of $13,000 in 2025 and $277,431 in 2026. Given the limited alternatives available to us to obtain debt or equity financing to refinance our maturing debt, the illiquid nature of our real estate assets and our limited ability to incur additional debt while maintaining compliance with the financial covenants in our existing debt agreements, we continue to work with our financial advisor, Moelis & Company LLC, to evaluate strategies to address our upcoming debt obligations, which could include potential asset sales, debt exchanges or equity sales. However, we are not able to conclude that it is probable that these strategies will allow us to satisfy our upcoming debt obligations and maturities. If we are unable to consummate transactions that allow us to refinance certain of our existing debt, our Board of Trustees may consider a reorganization in a bankruptcy court. As a result of the foregoing, we have concluded that there is substantial doubt about our ability to continue as a going concern. For more information about the risks relating to these dynamics and conditions and their impacts on us and our business, see Part I, Item IA, “Risk Factors”, of our 2024 Annual Report. Property Operations Unless otherwise noted, the data presented in this section includes properties classified as held for sale as of June 30, 2025 and excludes two properties owned by an unconsolidated joint venture in which we owned a 51% interest and the hotel component of a mixed-use property in Washington, D.C. For more information regarding our properties classified as held for sale, our unconsolidated joint venture and our mixed-use property in Washington, D.C., see Notes 4 and 11 to our Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q. 19 Table of Contents Occupancy data for our properties as of June 30, 2025 and 2024 was as follows (square feet in thousands): All Properties (1) Comparable Properties (2) June 30, June 30, 2025 2024 2025 2024 Total properties 125 151 117 117 Total rentable square feet (3) 17,270 20,293 16,351 16,344 Percent leased (4) 81.2 % 83.5 % 85.2 % 91.4 % (1) Based on properties we owned on June 30, 2025 and 2024, respectively. (2) Based on properties we owned continuously since January 1, 2024; excludes three properties classified as held for sale, five properties affected by significant redevelopment activities and two properties owned by an unconsolidated joint venture in which we owned a 51% interest. (3) Subject to changes when space is remeasured or reconfigured for tenants. (4) 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 and six months ended June 30, 2025 and 2024 were as follows: Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Average effective rental rate per square foot (1) : All properties (2) $ 31.98 $ 29.14 $ 32.13 $ 30.62 Comparable properties (3) $ 29.81 $ 28.75 $ 29.82 $ 28.89 (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 June 30, 2025 and 2024, respectively. (3) Based on properties we owned continuously since April 1, 2024 and January 1, 2024, respectively; excludes three properties classified as held for sale, five properties affected by significant redevelopment activities and two properties owned by an unconsolidated joint venture in which we owned a 51% interest. During the three and six months ended June 30, 2025, changes in rentable square feet leased and available for lease at our properties were as follows (square feet in thousands): Three Months Ended June 30, 2025 Six Months Ended June 30, 2025 Leased Available for Lease Total Leased Available for Lease Total Beginning of period 14,048 3,226 17,274 15,092 2,671 17,763 Changes resulting from: Disposition of properties — — — (100) (149) (249) Lease expirations (441) 441 — (1,368) 1,368 — Lease renewals (1) 278 (278) — 451 (451) — New leases (1) 138 (138) — 188 (188) — Lease conversion to managed hotel — — — (240) — (240) Remeasurements (4) — (4) (4) — (4) End of period 14,019 3,251 17,270 14,019 3,251 17,270 (1) Based on leases entered during the three and six months ended June 30, 2025. 20 Table of Contents During the three and six months ended June 30, 2025, we entered into new and renewal leases as summarized in the following table (square feet in thousands): Three Months Ended June 30, 2025 New Leases Renewals Total Rentable square feet leased 138 278 416 Weighted average rental rate change (by rentable square feet) 8.5 % 5.2 % 6.4 % Tenant leasing costs and concession commitments (1) $ 6,050 $ 1,924 $ 7,974 Tenant leasing costs and concession commitments per rentable square foot (1) $ 44.00 $ 6.93 $ 19.21 Weighted (by square feet) average lease term (years) 4.7 5.8 5.4 Total leasing costs and concession commitments per rentable square foot per year (1) $ 9.34 $ 1.20 $ 3.53 Six Months Ended June 30, 2025 New Leases Renewals Total Rentable square feet leased 188 451 639 Weighted average rental rate change (by rentable square feet) 5.5 % 10.4 % 8.8 % Tenant leasing costs and concession commitments (1) $ 9,838 $ 8,759 $ 18,597 Tenant leasing costs and concession commitments per rentable square foot (1) $ 52.42 $ 19.43 $ 29.13 Weighted (by square feet) average lease term (years) 6.2 7.5 7.1 Total leasing costs and concession commitments per rentable square foot per year (1) $ 8.45 $ 2.58 $ 4.08 (1) Includes commitments made for leasing expenditures and concessions, such as tenant improvements, leasing commissions, tenant reimbursements and free rent. During the three and six months ended June 30, 2025, changes in effective rental rates per square foot achieved for new leases and lease renewals at our properties that commenced during the three and six months ended June 30, 2025, 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 June 30, 2025 Six Months Ended June 30, 2025 Old Effective Rent Per Square Foot (1) New Effective Rent Per Square Foot (1) Rentable Square Feet Old Effective Rent Per Square Foot (1) New Effective Rent Per Square Foot (1) Rentable Square Feet New leases $ 28.58 $ 25.36 5 $ 33.04 $ 25.63 39 Lease renewals $ 22.77 $ 25.29 107 $ 20.41 $ 24.39 517 Total leasing activity $ 23.02 $ 25.29 112 $ 21.30 $ 24.48 556 (1) Effective rental rates include 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 exclude lease value amortization. 21 Table of Contents During the three and six months ended June 30, 2025 and 2024, amounts capitalized at our properties for lease related costs, building improvements and development, redevelopment and other activities were as follows: Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Lease related costs (1) $ 8,830 $ 25,965 $ 19,557 $ 42,733 Building improvements (2) 4,327 4,085 7,338 8,559 Recurring capital expenditures 13,157 30,050 26,895 51,292 Development, redevelopment and other activities (3) 565 3,862 648 10,773 Total capital expenditures $ 13,722 $ 33,912 $ 27,543 $ 62,065 (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. (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. Includes capitalized interest and other operating costs of $1,172 for the six months ended June 30, 2024. We did not capitalize any interest or other operating costs during the three months ended June 30, 2024 or the three and six months ended June 30, 2025. As of June 30, 2025, we had estimated unspent leasing related obligations of $72,394, of which we expect to spend $42,748 over the next 12 months. As of June 30, 2025, we had leases at our properties totaling approximately 911,000 and 427,000 rentable square feet that were scheduled to expire during 2025 and 2026, respectively. As of July 29, 2025, we expect tenants with leases totaling approximately 682,000 and 60,000 rentable square feet that are scheduled to expire during 2025 and 2026, respectively, excluding space that has been re-leased and space for which we are in advanced negotiations to re-lease, not to renew or to downsize their leased space upon expiration, and we cannot be sure as to whether other tenants will renew their leases upon expiration. We continue to proactively engage with our existing tenants and are focused on overall tenant retention. Prevailing market conditions and our tenants’ needs at the time we ne gotiate and enter leases or lease renewals will generally determine rental rates and demand for leased space at our properties, all of which are beyond our control. Whenever we 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 properties will depend in large part upon market conditions, which are beyond our control. We cannot be sure of the rental rates that 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, early terminations or lower rents upon lease renewal or reletting. Additionally, we may incur significant costs and make significant concessions to renew leases with current tenants or attract new tenants to our properties. 22 Table of Contents As of June 30, 2025, our lease expirations by year were 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 2025 25 911 6.5 % 6.5 % $ 14,426 3.6 % 3.6 % 2026 41 427 3.0 % 9.5 % 15,851 4.0 % 7.6 % 2027 32 1,861 13.3 % 22.8 % 50,354 12.6 % 20.2 % 2028 17 520 3.7 % 26.5 % 28,516 7.2 % 27.4 % 2029 34 1,064 7.6 % 34.1 % 33,058 8.3 % 35.7 % 2030 31 1,026 7.3 % 41.4 % 29,302 7.4 % 43.1 % 2031 23 1,517 10.8 % 52.2 % 35,608 8.9 % 52.0 % 2032 13 577 4.1 % 56.3 % 17,673 4.4 % 56.4 % 2033 14 1,159 8.3 % 64.6 % 22,050 5.5 % 61.9 % 2034 and thereafter 44 4,957 35.4 % 100.0 % 151,632 38.1 % 100.0 % Total 274 14,019 100.0 % $ 398,470 100.0 % Weighted average remaining lease term (in years) 6.6 6.8 (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 June 30, 2025, tenants occupying approximately 1.4% of our rentable square feet and responsible for approximately 1.8% of our annualized rental income as of June 30, 2025 had exercisable rights to terminate their leases before the stated terms of their leases expire. Also, in 2025, 2026, 2027, 2028, 2029, 2030, 2031, 2032, 2034, 2035, 2036, 2037 and 2040, early termination rights become exercisable by other tenants who occupied an additional approximately 1.1%, 1.2%, 1.8%, 5.2%, 3.2%, 2.4%, 0.7%, 4.2%, 0.3%, 1.0%, 0.2%, 0.2% and 0.4% of our rentable square feet, respectively, and contributed an additional approximately 1.4%, 1.9%, 2.6%, 5.8%, 3.0%, 2.9%, 0.8%, 5.6%, 0.9%, 1.6%, 0.4%, 0.3% and 0.5% of our annualized rental income, respectively, as of June 30, 2025. In addition, as of June 30, 2025, pursuant to leases with six of our tenants, these tenants had rights to terminate their leases if their respective legislature or other funding authority does not appropriate rent amounts in their respective annual budgets. These six tenants occupied approximately 4.4% of our rentable square feet and contributed approximately 4.8% of our annualized rental income as of June 30, 2025. (2) Leased square feet is pursuant to leases existing as of June 30, 2025, 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 at properties with tenants when they expire. However, market and economic factors, along with increases in remote work, changes in space utilization and government policies, spending and budget priorities, may cause our tenants not to renew or extend their leases when they expire, or to seek to renew their leases for less space than they currently occupy. If we are unable to extend or renew our leases, or we renew leases for reduced space, it may be time consuming and expensive to relet our properties. As of June 30, 2025, we derived 24.2% 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. Current economic conditions in this area or a possible recession could reduce demand from tenants at our properties, reduce rents that our tenants are willing to pay when our leases expire or increase lease concessions for new leases and renewals. Additionally, although the current administration has issued so called return to work mandates, there has been a decrease in demand for leased office space by the U.S. government, including in the metropolitan Washington, D.C. market area, which could increase competition for government tenants and adversely affect our ability to retain government tenants or maintain or increase our rents when leases expire. Our manager, RMR, employs a tenant review process for us. RMR assesses tenants on an individual basis based on various applicable credit criteria. In general, depending on facts and circumstances, RMR 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. 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 June 30, 2025, tenants contributing 51.0% 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 7.7% of annualized rental income were subsidiaries of an investment grade rated parent (although these parent entities were not liable for the payment of rents). 23 Table of Contents As of June 30, 2025, tenants representing 1% or more of our total annualized rental income were as follows (square feet in thousands): Tenant Credit Rating Sq. Ft. % of Leased Sq. Ft. Annualized Rental Income % of Total Annualized Rental Income 1 U.S. Government Investment Grade 2,415 17.2 % $ 68,172 17.1 % 2 Alphabet Inc. (Google) Investment Grade 386 2.8 % 22,977 5.8 % 3 IG Investments Holdings LLC Not Rated 339 2.4 % 18,669 4.7 % 4 Bank of America Corporation Investment Grade 577 4.1 % 17,419 4.4 % 5 Shook, Hardy & Bacon L.L.P. Not Rated 412 2.9 % 13,609 3.4 % 6 Northrop Grumman Corporation Investment Grade 337 2.4 % 10,746 2.7 % 7 State of California Investment Grade 363 2.6 % 10,500 2.6 % 8 State of Georgia Investment Grade 308 2.2 % 7,924 2.0 % 9 Sonoma Biotherapeutics, Inc. Not Rated 84 0.6 % 7,497 1.9 % 10 Automatic Data Processing, Inc. Investment Grade 289 2.1 % 6,253 1.6 % 11 Compass Group plc Investment Grade 267 1.9 % 6,186 1.6 % 12 Church & Dwight Co., Inc. Investment Grade 250 1.8 % 6,043 1.5 % 13 Genesys Cloud Services Holdings I, LLC Non Investment Grade 275 2.0 % 5,950 1.5 % 14 Leidos Holdings Inc. Investment Grade 159 1.1 % 5,939 1.5 % 15 Primerica, Inc. Investment Grade 344 2.5 % 5,743 1.4 % 16 Science Applications International Corp Non Investment Grade 159 1.1 % 5,151 1.3 % 17 Berkshire Hathaway Inc. Investment Grade 134 1.0 % 4,716 1.2 % 18 Rocky Mountain University of Health Professions, Inc. Not Rated 170 1.2 % 4,563 1.1 % 19 CommScope Holding Company Inc. Non Investment Grade 96 0.7 % 4,513 1.1 % 20 Hartford Financial Services Group Inc Investment Grade 143 1.0 % 4,469 1.1 % 21 AT&T Inc. Investment Grade 425 3.0 % 4,068 1.0 % Total 7,932 56.6 % $ 241,107 60.5 % Disposition Activities During the six months ended June 30, 2025, we sold three properties containing approximately 249,000 rentable square feet for an aggregate sales price of $26,900, excluding closing costs. The net proceeds from these sales were used to repay debt and to increase our liquidity. In July 2025, we sold one property containing approximately 56,000 rentable square feet for a sales price of $2,150, excluding closing costs. We continue to evaluate our portfolio and are currently in various stages of marketing certain of our properties for sale, and we may seek to sell additional properties in the future. As of July 29, 2025, we have entered into agreements to sell three properties containing approximately 376,000 rentable square feet for an aggregate sales price of $28,863, excluding closing costs. We expect to sell two of the three properties under agreement for $10,738 in the third quarter of 2025 and expect to use the proceeds from these sales for general business purposes. We expect the third property under agreement for $18,125 to sell in 2027. We cannot be sure we will sell any properties we are marketing for sale for prices in excess of their carrying values or otherwise. In addition, our pending sales are subject to conditions; accordingly, we cannot be sure that we will complete these sales or that these sales will not be delayed or the pricing will not change. For more information about our disposition activities, see Note 4 to our Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q. Segment Information We operate in one business segment: ownership and leasing of real estate properties. 24 Table of Contents RESULTS OF OPERATIONS (amounts in thousands, except per share amounts) Three Months Ended June 30, 2025, Compared to Three Months Ended June 30, 2024 Comparable Properties (1) Results Three Months Ended June 30, Non-Comparable Properties Results Three Months Ended June 30, Consolidated Results Three Months Ended June 30, 2025 2024 $ Change % Change 2025 2024 2025 2024 $ Change % Change Rental income $ 103,171 $ 105,580 $ (2,409) (2.3 %) $ 11,328 $ 18,106 $ 114,499 $ 123,686 $ (9,187) (7.4 %) Operating expenses: Real estate taxes 12,070 11,412 658 5.8 % 41 3,315 12,111 14,727 (2,616) (17.8 %) Utility expenses 5,524 4,906 618 12.6 % 159 856 5,683 5,762 (79) (1.4 %) Other operating expenses 23,175 22,822 353 1.5 % 8,062 4,329 31,237 27,151 4,086 15.0 % Total operating expenses 40,769 39,140 1,629 4.2 % 8,262 8,500 49,031 47,640 1,391 2.9 % Net operating income (2) $ 62,402 $ 66,440 $ (4,038) (6.1 %) $ 3,066 $ 9,606 65,468 76,046 (10,578) (13.9 %) Other expenses: Depreciation and amortization 43,838 50,391 (6,553) (13.0 %) Loss on impairment of real estate 2,426 131,732 (129,306) (98.2 %) Transaction related costs 3,940 — 3,940 n/m General and administrative 4,816 5,290 (474) (9.0 %) Total other expenses 55,020 187,413 (132,393) (70.6 %) Gain (loss) on sale of real estate 159 (64) 223 n/m Interest and other income 788 226 562 n/m Interest expense (52,507) (38,349) (14,158) 36.9 % Net gain on early extinguishment of debt 148 225,798 (225,650) (99.9 %) (Loss) income before income tax (expense) benefit and equity in net losses of investees (40,964) 76,244 (117,208) (153.7 %) Income tax (expense) benefit (94) 107 (201) (187.9 %) Equity in net losses of investees (128) (180) 52 (28.9 %) Net (loss) income $ (41,186) $ 76,171 $ (117,357) (154.1 %) Weighted average common shares outstanding (basic and diluted) 71,282 48,648 22,634 46.5 % Per common share amounts (basic and diluted): Net (loss) income $ (0.58) $ 1.56 $ (2.14) (137.2 %) n/m - not meaningful (1) Comparable properties consists of 117 properties we owned on June 30, 2025 and which we owned continuously since April 1, 2024 and excludes three properties classified as held for sale, five properties affected by significant redevelopment activities and two properties owned by an unconsolidated joint venture in which we own a 51% interest. (2) Our definition of net operating income, or NOI, and our reconciliation of Net (loss) 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 months ended June 30, 2025, compared to the three months ended June 30, 2024. Rental income. Rental income for non-comparable properties decreased $13,098 related to our property disposition activities, partially offset by an increase in rental income at properties affected by significant redevelopment activities of $6,320 related to the conversion of a lease at a mixed-use property to a hotel management agreement and our recognition of the operating revenues of the hotel. Rental income for comparable properties decreased $2,409 as a result of increased vacancies and lower rents from lease renewals at certain of our properties in the 2025 period. Rental income includes non-cash straight line rent adjustments totaling $6,636 in the 2025 period and $7,563 in the 2024 period, and amortization of acquired real estate leases and assumed real estate lease obligations totaling $159 in the 2025 period and $56 in the 2024 period. 25 Table of Contents Real estate taxes. Real estate taxes decreased $2,580 related to our property disposition activities, $694 for properties affected by significant redevelopment activities, partially offset by an increase of $658 related to real estate taxes that were previously paid directly by one of our tenants that are now being paid by us pursuant to a lease renewal with that tenant. Utility expenses. Utility expenses decreased $674 related to our property disposition activities and $23 for properties affected by significant redevelopment activities, partially offset by an increase in comparable properties of $618 primarily due to higher electricity costs. Other operating expenses. Other operating expenses for non-comparable properties increased $6,929 related to the conversion of a lease at a mixed-use property to a hotel management agreement and our recognition of operating expenses of the hotel, partially offset by a decrease of $3,196 related to our property disposition activities. Other operating expenses for comparable properties increased $353 due to higher repairs and maintenance costs, partially offset by lower insurance costs and property management fee expenses in the 2025 period. Depreciation and amortization. Depreciation and amortization for non-comparable properties decreased $5,212 related to our property disposition activities, partially offset by an increase of $824 due to the substantial completion of redevelopment activities at certain properties in the 2024 period. Depreciation and amortization for comparable properties declined $2,165 due to certain leasing related assets becoming fully depreciated since April 1, 2024, partially offset by depreciation and amortization of improvements made to certain of our properties since April 1, 2024. Loss on impairment of real estate. We recorded a $2,426 loss on impairment of real estate in the 2025 period to reduce the carrying value of one property to its estimated fair value less costs to sell. We recorded a $131,732 loss on impairment of real estate in the 2024 period to reduce the carrying value of 13 properties to their estimated fair values less costs to sell. Transaction related costs. Transaction related costs in the 2025 period consist of costs related to our evaluation of potential financing transactions. General and administrative. The decrease in general and administrative expenses is primarily the result of a decrease in base business management fees resulting from a decrease in average total market capitalization and a decrease in share-based compensation in the 2025 period compared to the 2024 period. Gain (loss) on sale of real estate. We recorded a $159 net gain on sale of real estate related to disposition activities in the 2025 period. We recorded a $64 loss on sale of real estate resulting from the sale of one property in the 2024 period. Interest and other income. The increase in interest and other income is primarily due to higher cash balances invested, partially offset by the effect of lower interest rates earned on cash balances invested in the 2025 period compared to the 2024 period. Interest expense. The increase in interest expense is due to higher weighted average interest rates in the 2025 period as a result of our financing activities in 2024. Net gain on early extinguishment of debt . We recorded a net gain on early extinguishment of debt of $148 in the 2025 period related to the reduction of debt principal related to our Senior Note Exchange, partially offset by the write off of unamortized discounts and issuance costs related to the partial redemption of our senior secured notes due 2027. We recorded a gain on early extinguishment of debt of $225,798 in the 2024 period resulting from our exchange of $865,219 of existing unsecured notes for $567,429 of our 9.000% senior secured notes due 2029 in June 2024. For more information regarding the Senior Note Exchange, see Note 7 to our Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q. Income tax (expense) benefit. Income tax (expense) benefit is primarily the result of operating income earned in jurisdictions where we are subject to state income taxes and can fluctuate based on the timing of our income, including as a result of gains or losses on the sale of real estate or the repayment of debt. Equity in net losses of investees. Equity in net losses of investees represents our proportionate share of losses from our investment in our unconsolidated joint venture. Net (loss) income. Net (loss) income and net (loss) income per basic and diluted common share changed in the 2025 period compared to the 2024 period primarily as a result of the changes noted above. 26 Table of Contents Six Months Ended June 30, 2025, Compared to Six Months Ended June 30, 2024 Comparable Properties (1) Results Six Months Ended June 30, Non-Comparable Properties Results Six Months Ended June 30, Consolidated Results Six Months Ended June 30, 2025 2024 $ Change % Change 2025 2024 2025 2024 $ Change % Change Rental income $ 207,071 $ 212,202 $ (5,131) (2.4 %) $ 21,043 $ 50,919 $ 228,114 $ 263,121 $ (35,007) (13.3 %) Operating expenses: Real estate taxes 24,476 23,855 621 2.6 % 1,093 6,581 25,569 30,436 (4,867) (16.0 %) Utility expenses 12,615 11,586 1,029 8.9 % 635 2,327 13,250 13,913 (663) (4.8 %) Other operating expenses 47,095 45,052 2,043 4.5 % 15,347 9,426 62,442 54,478 7,964 14.6 % Total operating expenses 84,186 80,493 3,693 4.6 % 17,075 18,334 101,261 98,827 2,434 2.5 % Net operating income (2) $ 122,885 $ 131,709 $ (8,824) (6.7 %) $ 3,968 $ 32,585 126,853 164,294 (37,441) (22.8 %) Other expenses: Depreciation and amortization 87,571 100,732 (13,161) (13.1 %) Loss on impairment of real estate 2,426 131,732 (129,306) (98.2 %) Transaction related costs 4,816 233 4,583 n/m General and administrative 9,874 10,934 (1,060) (9.7 %) Total other expenses 104,687 243,631 (138,944) (57.0 %) Loss on sale of real estate (4,578) (2,448) (2,130) 87.0 % Interest and other income 1,950 1,583 367 23.2 % Interest expense (105,885) (73,825) (32,060) 43.4 % Net (loss) gain on early extinguishment of debt (95) 225,373 (225,468) (100.0 %) (Loss) income before income tax (expense) benefit and equity in net losses of investees (86,442) 71,346 (157,788) n/m Income tax (expense) benefit (231) 51 (282) n/m Equity in net losses of investees (380) (410) 30 (7.3 %) Net (loss) income $ (87,053) $ 70,987 $ (158,040) n/m Weighted average common shares outstanding (basic and diluted) 70,275 48,557 21,718 44.7 % Per common share amounts (basic and diluted): Net (loss) income $ (1.24) $ 1.45 $ (2.69) (185.5 %) n/m - not meaningful (1) Comparable properties consists of 117 properties we owned on June 30, 2025 and which we owned continuously since January 1, 2024 and excludes three properties classified as held for sale, five properties affected by significant redevelopment activities and two properties owned by an unconsolidated joint venture in which we own a 51% interest. (2) Our definition of NOI and our reconciliation of net income (loss) 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 six months ended June 30, 2025, compared to the six months ended June 30, 2024. Rental income. Rental income for non-comparable properties decreased $41,952 related to our property disposition activities, partially offset by an increase in rental income at properties affected by significant redevelopment activities of $12,076 related to the conversion of a lease at a mixed-use property to a hotel management agreement and our recognition of the operating revenues of the hotel. Rental income for comparable properties decreased $5,131 as a result of increased vacancies and lower rents from lease renewals at certain of our properties in the 2025 period. Rental income includes non-cash straight line rent adjustments totaling $13,492 in the 2025 period and $14,942 in the 2024 period, and amortization of acquired real estate leases and assumed real estate lease obligations totaling $282 in the 2025 period and $89 in the 2024 period. 27 Table of Contents Real estate taxes. Real estate taxes decreased $4,611 related to our property disposition activities and $877 for properties affected by significant redevelopment activities, partially offset by an increase of $621 related to real estate taxes that were previously paid directly by one of our tenants that are now being paid by us pursuant to a lease renewal with that tenant. Utility expenses. Utility expenses decreased $1,602 related to our property disposition activities and $90 for properties affected by significant redevelopment activities, partially offset by an increase in comparable properties of $1,029 primarily due to higher electricity costs. Other operating expenses. Other operating expenses for non-comparable properties increased $13,039 related to the conversion of a lease at a mixed-use property to a hotel management agreement and our recognition of operating expenses of the hotel, partially offset by a decrease of $7,118 related to our property disposition activities. Other operating expenses for comparable properties increased $2,043 due to higher snow removal and repairs and maintenance costs, partially offset by lower insurance costs and property management fee expenses in the 2025 period. Depreciation and amortization. Depreciation and amortization for non-comparable properties decreased $10,983 related to our property disposition activities, partially offset by an increase of $2,621 due to the substantial completion of redevelopment activities at certain properties in the 2024 period. Depreciation and amortization for comparable properties declined $4,799 due to certain leasing related assets becoming fully depreciated since January 1, 2024, partially offset by depreciation and amortization of improvements made to certain of our properties since January 1, 2024. Loss on impairment of real estate. We recorded a $2,426 loss on impairment of real estate in the 2025 period to reduce the carrying value of one property to its estimated fair values less costs to sell. We recorded a $131,732 loss on impairment of real estate in the 2024 period to reduce the carrying value of 13 properties to their estimated fair values less costs to sell. Transaction related costs. Transaction related costs in the 2025 and 2024 period consist of costs related to our evaluation of potential financing transactions. General and administrative. The decrease in general and administrative expenses is primarily the result of a decrease in base business management fees resulting from a decrease in average total market capitalization and a decrease in share-based compensation in the 2025 period compared to the 2024 period. Loss on sale of real estate. We recorded a $4,578 net loss on sale of real estate resulting from the sale of three properties in the 2025 period. We recorded a $2,448 loss on sale of real estate resulting from the sale of one property in the 2024 period. Interest and other income. The increase in interest and other income is primarily due to higher cash balances invested, partially offset by the effect of lower interest rates earned on cash balances invested in the 2025 period compared to the 2024 period. Interest expense. The increase in interest expense is due to higher weighted average interest rates in the 2025 period as a result of our financing activities in 2024. Net (loss) gain on early extinguishment of debt. We recorded a net loss on early extinguishment of debt of $95 in the 2025 period related to the Senior Note Exchange and the write off of unamortized discounts and issuance costs related to the partial redemption of our senior secured notes due 2027. We recorded a net gain on early extinguishment of debt of $225,373 in the 2024 period resulting from our exchange of $865,219 of existing unsecured notes for $567,429 of our 9.000% senior secured notes due 2029 in June 2024. For more information regarding the Senior Note Exchange, see Note 7 to our Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q. Income tax (expense) benefit. Income tax (expense) benefit is primarily the result of operating income earned in jurisdictions where we are subject to state income taxes and can fluctuate based on the timing of our income, including as a result of gains or losses on the sale of real estate or repayment of debt. Equity in net losses of investees. Equity in net losses of investees represents our proportionate share of losses from our investments in two unconsolidated joint ventures. Net (loss) income. Net (loss) income and net (loss) income per basic and diluted common share changed in the 2025 period compared to the 2024 period primarily as a result of the changes noted above. 28 Table of Contents Non-GAAP Financial Measures We present certain “non-GAAP financial measures” within the meaning of the applicable SEC rules, including 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 (loss) income as indicators of our operating performance or as measures of our liquidity. These measures should be considered in conjunction with net (loss) income as presented in our condensed consolidated statements of comprehensive income (loss). We consider these non-GAAP measures to be appropriate supplemental measures of operating performance for a REIT, along with net (loss) 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 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. Net Operating Income The calculation of NOI excludes certain components of net (loss) income in order to provide results that are more closely related to our property level results of operations. We calculate NOI as shown below. We define NOI as income from our rental of real estate less our property operating expenses. NOI excludes amortization of capitalized tenant improvement costs and leasing commissions that we record as depreciation and amortization expense. We use NOI to evaluate individual and company-wide property level performance. Other real estate companies and REITs may calculate NOI differently than we do. The following table presents the reconciliation of net loss to NOI for the three and six months ended June 30, 2025 and 2024: Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Net (loss) income $ (41,186) $ 76,171 $ (87,053) $ 70,987 Equity in net losses of investees 128 180 380 410 Income tax expense (benefit) 94 (107) 231 (51) (Loss) income before income tax expense (benefit) and equity in net losses of investees (40,964) 76,244 (86,442) 71,346 Net (gain) loss on early extinguishment of debt (148) (225,798) 95 (225,373) Interest expense 52,507 38,349 105,885 73,825 Interest and other income (788) (226) (1,950) (1,583) (Gain) loss on sale of real estate (159) 64 4,578 2,448 General and administrative 4,816 5,290 9,874 10,934 Transaction related costs 3,940 — 4,816 233 Loss on impairment of real estate 2,426 131,732 2,426 131,732 Depreciation and amortization 43,838 50,391 87,571 100,732 NOI $ 65,468 $ 76,046 $ 126,853 $ 164,294 29 Table of Contents 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 (loss) 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, 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 (loss) income to FFO and Normalized FFO for the three and six months ended June 30, 2025 and 2024: Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Net (loss) income $ (41,186) $ 76,171 $ (87,053) $ 70,987 Add (less): Depreciation and amortization: Consolidated properties 43,838 50,391 87,571 100,732 Unconsolidated joint venture properties 708 611 1,336 1,253 Loss on impairment of real estate 2,426 131,732 2,426 131,732 (Gain) loss on sale of real estate (159) 64 4,578 2,448 FFO 5,627 258,969 8,858 307,152 Add (less): Transaction related costs 3,940 — 4,816 233 Net (gain) loss on early extinguishment of debt (148) (225,798) 95 (225,373) Lease termination fees for sold property — — — (10,524) Normalized FFO $ 9,419 $ 33,171 $ 13,769 $ 71,488 Weighted average common shares outstanding (basic and diluted) 71,282 48,648 70,275 48,557 Per common share amounts (basic and diluted): Net (loss) income $ (0.58) $ 1.56 $ (1.24) $ 1.45 FFO $ 0.08 $ 5.32 $ 0.13 $ 6.33 Normalized FFO $ 0.13 $ 0.68 $ 0.20 $ 1.47 LIQUIDITY AND CAPITAL RESOURCES Our Operating Liquidity and Resources (dollar amounts in thousands, except per share amounts) 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. 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; and • our ability to successfully sell properties that we market for sale. 30 Table of Contents The office industry has been adversely affected by shifts in office space utilization, including increased remote work arrangements and tenants consolidating their real estate footprint, as well as ongoing market and economic conditions, including government spending and budget priorities. Demand for office space continues to face headwinds, including in markets where we have a concentration of properties, such as Washington, D.C., and the duration and ultimate impact of current trends on our properties remains uncertain and subject to change. These conditions continue to have a significant negative impact on our results of operations, financial position and cash flows. We are actively pursuing several strategic initiatives to improve liquidity, which could include asset sales, debt refinancing or equity issuance opportunities. We expect to sell properties, or sell an interest in properties through joint venture arrangements, from time to time in order to manage leverage levels or improve our liquidity. During the six months ended June 30, 2025 , we sold three properties for an aggregate sales price of $26,900 , excluding closing costs. In July 2025, we sold one property containing approximately 56,000 rentable square feet for a sales price of $2,150, excluding closing costs. W e continue to evaluate our portfolio and are currently in various stages of marketing certain of our properties for sale. As of July 29, 2025, we had three properties containing approximately 376,000 rentable square feet which are under agreement to sell for an aggregate sales price of $28,863. We cannot be sure we will sell any of the properties we are marketing for sale for prices in excess of their carrying values or otherwise. In addition, our pending sales are subject to conditions; accordingly, we cannot be sure that we will complete these sales or that these sales will not be delayed or the pricing will not change. The following is a summary of our sources and uses of cash flows for the periods presented, as reflected in our condensed consolidated statements of cash flows: Six Months Ended June 30, 2025 2024 Cash, cash equivalents and restricted cash at beginning of period $ 275,165 $ 26,714 Net cash provided by (used in): Operating activities 3,811 58,499 Investing activities 4,506 (21,282) Financing activities (191,528) (29,544) Cash, cash equivalents and restricted cash at end of period $ 91,954 $ 34,387 The decrease in cash provided by operating activities in the 2025 period was primarily due to higher interest expense and decreased NOI related to property dispositions and reductions in occupied space at certain of our properties in the 2025 period. The change from cash used in investing activities in the 2024 period to cash provided by investing activities in the 2025 period was primarily due to decreased capital expenditures, partially offset by lower proceeds from property sales in the 2025 period. The increase in cash used in financing activities in the 2025 period was primarily due to an increase in net debt repayments in the 2025 period. Our Investment and Financing Liquidity and Resources (dollar amounts in thousands, except per share amounts) In order to meet cash needs to pay operating or capital expenses and make distributions, we maintain a revolving credit facility. Our obligations under our credit agreement are secured by a pledge by certain of our subsidiaries of all of their respective equity interests in certain of our direct and indirect property owning subsidiaries and first mortgage liens on 19 properties owned by the pledged subsidiaries with a gross book value of real estate assets of $1,032,837 as of June 30, 2025. We can borrow, repay and reborrow funds available under our revolving credit facility until maturity, and no principal repayments are due until maturity. The maturity date of our credit agreement is January 29, 2027, and, subject to the payment of an extension fee and meeting certain other requirements, we can extend the stated maturity date of our revolving credit facility by one year. Our credit agreement contains a number of covenants, including covenants that require us to maintain certain financial ratios, restrict our ability to incur additional debt in excess of calculated amounts and, subject to limited exceptions, restrict our ability to increase our distribution rate above $0.01 per common share per quarter and enter into share repurchases. Availability of borrowings under our credit agreement is subject to ongoing minimum performance and market values of the 19 collateral properties, our satisfying certain financial covenants and other credit facility conditions. Interest payable on borrowings under our credit agreement is based on a rate of SOFR plus a margin of 350 basis points. We are also required to pay an unused facility fee on the amount of total lending commitments, which was 25 basis points per annum at June 30, 2025. As of June 30, 2025, the annual interest rate payable on borrowings under our credit agreement was 7.9%. As of June 30, 2025, and July 29, 2025, we had fully drawn our $325,000 revolving credit facility and $100,000 was outstanding under our term loan. 31 Table of Contents Senior Notes Redemptions and Repayments In January 2025, we redeemed, at par plus accrued interest, all $171,586 of our 4.50% senior unsecured notes due 2025 using the proceeds from the issuance of our senior secured notes due 2027 and cash on hand. In February 2025, in connection with the sale of a collateral property, we redeemed, at par plus accrued interest, $5,469 of our senior secured notes due 2027. Our senior secured notes due 2027 require quarterly principal repayments of $6,500. As of June 30, 2025, we have made $13,000 of scheduled quarterly principal repayments on these notes in 2025. In July 2025, in connection with the sale of a collateral property, we redeemed, at par plus accrued interest, $2,029 of our senior secured notes due 2027. Senior Note Exchange In March 2025, in connection with the Senior Note Exchange, we exchanged $14,439 of New 2030 Notes for an aggregate $20,990 of the Existing Notes. The New 2030 Notes are fully and unconditionally guaranteed on a joint, several and unsecured basis by certain of our subsidiaries which also guarantee our senior secured notes due 2027. The New 2030 Notes require semi-annual payments of interest only and are prepayable, at par plus accrued interest, after March 12, 2029. For more information regarding the Senior Note Exchange and the New 2030 Notes, see Note 7 to our Condensed Consolidated Financial Statements included in Part I, Item I of this Quarterly Report on Form 10-Q. As of June 30, 2025, our debt maturities (other than our revolving credit facility), consisting of senior notes, a term loan and mortgage notes, were as follows: Year Debt Maturities 2025 $ 13,000 2026 279,460 2027 346,298 2028 123,487 2029 910,278 2030 and thereafter 332,395 Total $ 2,004,918 None of our unsecured debt obligations require sinking fund payments prior to their maturity dates. Our senior secured notes due 2027 require quarterly principal amortization payments of $6,500 and an additional $119,531 principal repayment in March 2026. Our mortgage notes currently require monthly payments of interest only; however, certain of our mortgage notes will require payments of principal and interest after a specified date through maturity. In addition to our debt obligations, as of June 30, 2025, we had estimated unspent leasing related obligations of $72,394, of which we expect to spend $42,748 over the next 12 months. Share Issuances In March 2025, we entered into a sales agreement with the Agent pursuant to which we may issue and sell our common shares from time to time in transactions that are deemed to be an “at the market offering” as defined in Rule 415 under the Securities Act of 1933, as amended, for up to an aggregate sales price of $100,000. We are required to pay the Agent a cash commission of 3% of the gross sales prices of any common shares we sell under the ATM Program. During the three months ended June 30, 2025, we sold an aggregate 3,933,346 of our common shares under the ATM Program valued at a weighted average share price of $0.26 for net proceeds of $961 after deducting Agent commissions and other offering costs. During the six months ended June 30, 2025, we sold an aggregate 4,171,689 of our common shares under the ATM Program valued at a weighted average share price of $0.27 for net proceeds of $1,106 after deducting Agent commissions and other offering costs. As of July 30, 2025, our total available liquidity was comprised of $90,102 of cash and our near-term obligations include outstanding lease obligations of $72,394 and principal debt repayments of $13,000 in 2025 and $277,431 in 2026. We are evaluating strategies to address our upcoming debt obligations, which could include potential asset sales, future debt exchanges or equity issuances. We cannot be sure that we will be able to obtain any future financing, and any such financing we may 32 Table of Contents obtain may not be sufficient to repay our debt. If we are unable to obtain sufficient funds, our Board of Trustees may consider a reorganization in a bankruptcy court. As a result of the foregoing, we have concluded that there is substantial doubt about our ability to continue as a going concern. 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 will likely evaluate our ability to fund required debt service, repay debts when they become due and pay distributions to shareholders 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. It is uncertain what the ultimate impacts of inflationary pressures, sustained high interest rates, deteriorating office fundamentals and market sentiment toward the office sector or any economic recession will be. A protracted and extensive economic recession, further deterioration of office fundamentals or continued or intensified disruptions in capital markets could limit our access to financing, would likely increase our cost of capital and impact our ability to satisfy covenants and conditions under our credit agreement or senior notes. During the six months ended June 30, 2025, we paid quarterly distributions to our shareholders totaling $1,407 using cash on hand. On July 10, 2025, we suspended our regular quarterly distribution payable on our common shares to preserve our cash. For more information regarding the distributions we paid and declared during 2024, see Note 9 to our Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q. We owned a 51% interest in an unconsolidated joint venture which owned two properties at June 30, 2025. As of June 30, 2025, the properties owned by this joint venture were encumbered by $49,557 principal amount of mortgage indebtedness, none of which is recourse to us. As of June 30, 2025, we did not control the activities that are most significant to this joint venture and, as a result, we accounted for our investment in this joint venture under the equity method of accounting. For more information on the financial condition and results of operations of this joint venture, see Note 4 to our Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q. Other than this joint venture, as of June 30, 2025, 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 as of June 30, 2025 consisted of $325,000 of borrowings outstanding under our revolving credit facility, $100,000 outstanding principal amount under our secured term loan, an outstanding principal balance of $1,827,598 of senior notes and mortgage notes with an outstanding principal balance of $177,320. Also, the two properties owned by the joint venture in which we owned a 51% interest secured an additional mortgage note. Our senior notes are governed by indentures and their supplements. Our credit agreement and our senior 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 ceasing to act as our business and property manager. Our credit agreement and our senior 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 increase our distribution rate above $0.01 per common share per quarter. Our mortgage notes are non-recourse, subject to certain limited exceptions, and do not contain any material financial covenants. The following table presents our senior notes and credit agreement covenants as of June 30, 2025: Maintenance Covenant Total unencumbered assets / unsecured debt (minimum 150.0%) 161.6 % Incurrence Covenants Total debt / adjusted total assets (maximum 60.0%) 49.8 % Secured debt / adjusted total assets (maximum 40.0%) 39.8 % Consolidated income available for debt service / debt service (minimum 1.50x) 1.51x As of June 30, 2025, we were in compliance with all of the terms and conditions of our respective covenants under our credit agreement and our senior notes indentures and their supplements, which reinstates our ability to incur secured debt. 33 Table of Contents However, our ability to incur debt is limited due to the narrow margin by which these covenant ratios are below or above the minimum or maximum allowed levels. As of June 30, 2025, adjusted total assets for covenant purposes as defined in our senior notes indentures were $4,877,317. Assets serving as collateral under our credit agreement, our secured senior notes or mortgage notes represented $4,083,970 of adjusted total assets, as defined in our senior notes indentures. Our unencumbered assets represented $793,347 of adjusted total assets. The following table presents the calculation of adjusted total assets to total assets in accordance with GAAP as of June 30, 2025: Total assets $ 3,560,949 Plus: accumulated depreciation 678,368 Plus: adjustments to reflect original cost of real estate assets 968,156 Less: accounts receivable and intangibles (330,156) Adjusted total assets $ 4,877,317 Neither our credit agreement nor our senior notes indentures and their supplements contain provisions for acceleration which could be triggered by our credit ratings. Our credit agreement and our senior notes indentures and their supplements contain cross default provisions to any other debts of more than $25,000 (or more than $50,000 in certain circumstances). Related Person Transactions We have relationships and historical and continuing transactions with RMR, RMR Inc. and others related to them. For more information about these and other such relationships and related person transactions, see Notes 10 and 11 to our Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q, our 2024 Annual Report, our definitive Proxy Statement for our 2025 Annual Meeting of Shareholders and our other filings with the SEC. In addition, see the section captioned “Risk Factors” in Part I, Item 1A of our 2024 Annual Report for a description of risks that may arise as a result of these and other related person transactions and relationships. We may engage in additional transactions with related persons, including businesses to which RMR or its subsidiaries provide management services. Critical Accounting Estimates The preparation of our Condensed Consolidated Financial Statements in conformity with GAAP requires us to make estimates and assumptions that affect reported amounts. Actual results could differ from those estimates. Significant estimates in the Condensed Consolidated Financial Statements include purchase price allocations, useful lives of fixed assets and assessment of impairment of real estate and the related intangibles. A discussion of our critical accounting estimates is included in our 2024 Annual Report. There have been no significant changes in our critical accounting estimates since the year ended December 31, 2024. 34 Table of Contents Item 3. Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, we are not required to make disclosures under this Item.