What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-05-22 compared with 2025-07-30 · 194 added, 318 removed, 245 unchanged (68% of the section changed)

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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.

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.

As of March 31, 2026, our wholly owned properties were comprised of 122 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 March 31, 2026, our properties are located in 29 states and the District of Columbia and contain approximately 17,113,000 rentable square feet.

As of March 31, 2026, our properties were leased to 209 different tenants with a weighted average remaining lease term (based on annualized rental income) of approximately 6.4 years.

government is our largest tenant, representing approximately 17.5% of our annualized rental income as of March 31, 2026.

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, 2026, plus straight line rent adjustments and estimated recurring expense reimbursements to be paid to us, and excluding lease value amortization.

Leases representing approximately $22,248, or 5.7%, of our annualized rental income, are scheduled to expire on or before March 31, 2027 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.

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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.

Higher interest rates, inflationary pressures, changes in government policies including the potential reduction of U.S.

federal office leases and potential impacts from tariffs, geopolitical events or an economic recession, continue to cause disruptions in financial markets 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.

In addition, prospective tenants 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.

Chapter 11 Bankruptcy Proceedings

On the Petition Date, the Debtors voluntarily commenced the Chapter 11 Cases.

In connection with the filing of the Chapter 11 Cases, we entered into the RSA with certain holders of the September 2029 Notes to implement a court-supervised financial restructuring pursuant to the transactions contemplated in the RSA.

We continue to operate our businesses as debtors-in-possession under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court.

As debtors-in-possession, we are authorized to pay all debts and honor all obligations arising in the ordinary course of our business after the Petition Date.

However, generally, we may not pay third-party claims or creditors on account of obligations arising before the Petition Date or engage in transactions outside the ordinary course of business without prior approval of the Bankruptcy Court.

While the commencement of these proceedings constituted an event of default under certain of our debt agreements, enforcement of any remedies in respect of which is automatically stayed during the pendency of the Chapter 11 Cases.

There are a number of risks and uncertainties associated with our bankruptcy proceedings, including, among others, that the Plan may not become effective.

The Plan has not yet become effective as of the date of filing of this Quarterly Report on Form 10-Q.

Effectiveness of the Plan is subject to a number of conditions precedent.

There can be no assurance that all conditions to the effectiveness of the Plan will be satisfied or waived, or that the Plan will become effective on the timeline currently contemplated, or at all.

For more information regarding the Chapter 11 Cases, the RSA and the Plan, including the material terms thereof, see Note 1 to our Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Going Concern

Substantial doubt about our ability to continue as a going concern exists due to (1) insufficient liquidity to satisfy our obligations as they come due, (2) limited alternatives available to us to obtain debt or equity financing, (3) inability to refinance our maturing debt, and (4) the resulting Chapter 11 Cases.

Our ability to continue as a going concern is contingent upon, among other things, our ability to, subject to the approval by the Bankruptcy Court, implement a plan of reorganization, emerge from

the Chapter 11 proceedings and generate sufficient liquidity following the reorganization to meet our obligations, restructured debt obligations and operating needs.

The transactions contemplated by the Plan are subject to approval by the Bankruptcy Court, among other conditions.

Accordingly, no assurance can be given that the transactions described therein will be consummated.

As a result, we have concluded that management’s plans at this stage do not alleviate 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 2025 Annual Report.

Nasdaq Delisting

On September 25, 2025, Nasdaq notified us that our common shares were subject to delisting.

We did not appeal Nasdaq’s determination, and our common shares were delisted from Nasdaq effective October 6, 2025.

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.

Occupancy data for our properties as of June 30, 2025 and 2024 was as follows (square feet in thousands):

Unless otherwise noted, the data presented in this section 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 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.

Occupancy data for our properties as of March 31, 2026 and 2025 was as follows (square feet in thousands):

All Properties (1)

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78.2 % 81.3 % 81.3 % 85.4 %

(1) Based on properties we owned on June 30, 2025 and 2024, respectively.

(1) Based on properties we owned on March 31, 2026 and 2025, respectively.

(2) Based on properties we owned continuously since January 1, 2025;

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.

excludes 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

The average effective rental rate per square foot for our properties for the three months ended March 31, 2026 and 2025 were as follows:

Three Months Ended March 31,

Average effective rental rate per square foot (1) :

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(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;

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

(2) Based on properties we owned on March 31, 2026 and 2025, respectively.

(3) Based on properties we owned continuously since January 1, 2025;

excludes five properties affected by significant redevelopment activities and two properties owned by an unconsolidated joint venture in which we owned a 51% interest as of March 31, 2026.

During the three months ended March 31, 2026, 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, 2026

Leased Available for Lease Total

Beginning of period 13,390 3,723 17,113

Changes resulting from:

Disposition of properties — — — (100) (149) (249)

Lease expirations (227) 227 —

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 13,375 3,738 17,113

(1) Based on leases entered during the three and six months ended June 30, 2025.

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

(1) Based on leases entered during the three months ended March 31, 2026.

During the three months ended March 31, 2026, we entered into new and renewal leases as summarized in the following table (square feet in thousands):

Three Months Ended March 31, 2026

New Leases Renewals Total

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(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

During the three months ended March 31, 2026, 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, 2026, 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, 2026

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

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(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.

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

During the three months ended March 31, 2026 and 2025, amounts capitalized at our properties for lease related costs, building improvements and development, redevelopment and other activities were as follows:

Three Months Ended March 31,

Lease related costs (1)

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Building improvements (2)

4,327 4,085 7,338 8,559

Recurring capital expenditures 10,808 13,738

Development, redevelopment and other activities (3)

565 3,862 648 10,773

Total capital expenditures $ 10,917 $ 13,821

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(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.

As of March 31, 2026, we had estimated unspent leasing related obligations of $54,390, of which we expect to spend $35,186 over the next 12 months.

As of March 31, 2026, we had leases at our properties totaling approximately 801,000 rentable square feet that were scheduled to expire on or before March 31, 2027.

As of May 18, 2026, we expect tenants with leases totaling approximately 196,000 rentable square feet that are scheduled to expire on or before March 31, 2027, 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.

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Additionally, we may incur significant costs and make significant concessions to renew leases with current tenants or attract new tenants to our properties.

As of June 30, 2025, our lease expirations by year were as follows (square feet in thousands):

As of March 31, 2026, our lease expirations by year were as follows (square feet in thousands):

Number of Leases Expiring Leased

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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.

As of March 31, 2026, tenants occupying approximately 2.2% of our rentable square feet and responsible for approximately 2.8% of our annualized rental income as of March 31, 2026 had exercisable rights to terminate their leases before the stated terms of their leases expire.

Also, in 2026, 2027, 2028, 2029, 2030, 2031, 2032, 2034, 2035, 2036 and 2037, early termination rights become exercisable by other tenants who occupied an additional approximately 0.5%, 1.5%, 5.3%, 3.2%, 2.4%, 0.7%, 4.3%, 0.3%, 1.1%, 0.2% and 0.2%, of our rentable square feet, respectively, and contributed an additional approximately 0.9%, 2.2%, 6.4%, 3.1%, 3.0%, 0.8%, 5.6%, 0.9%, 1.6%, 0.4% and 0.3% of our annualized rental income, respectively, as of March 31, 2026.

In addition, as of March 31, 2026, 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 4.5% of our rentable square feet and contributed approximately 4.9% of our annualized rental income as of March 31, 2026.

(2) Leased square feet is pursuant to leases existing as of March 31, 2026, 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.

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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.

As of March 31, 2026, we derived 23.2% 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.

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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).

As of June 30, 2025, tenants representing 1% or more of our total annualized rental income were as follows (square feet in thousands):

As of March 31, 2026, tenants contributing 59.6% 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 0.5% of annualized rental income were subsidiaries of an investment grade rated parent (although these parent entities were not liable for the payment of rents).

As of March 31, 2026, tenants representing 1% or more of our total annualized rental income were as follows (square feet in thousands):

Tenant Credit Rating Sq.

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Not Rated 84 0.6 % 7,492 1.9 %

10 Genesys Cloud Services Holdings I, LLC Non Investment Grade 275 2.1 % 6,297 1.6 %

11 Automatic Data Processing, Inc.

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Investment Grade 250 1.9 % 6,055 1.6 %

13 Genesys Cloud Services Holdings I, LLC Non Investment Grade 275 2.0 % 5,950 1.5 %

14 Leidos Holdings Inc.

Investment Grade 159 1.2 % 5,823 1.5 %

Investment Grade 425 3.2 % 5,751 1.5 %

16 Primerica, Inc.

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17 Science Applications International Corp Non Investment Grade 159 1.2 % 5,118 1.3 %

17 Berkshire Hathaway Inc.

Investment Grade 134 1.0 % 4,716 1.2 %

18 Rocky Mountain University of Health Professions, Inc.

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20 Hartford Financial Services Group Inc Investment Grade 143 1.1 % 4,424 1.1 %

21 Berkshire Hathaway Inc.

Investment Grade 134 1.0 % 4,255 1.1 %

22 BAE Systems plc Investment Grade 139 1.0 % 3,920 1.0 %

Total 8,073 60.5 % $ 244,439 63.1 %

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

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

Three Months Ended June 30, 2025, Compared to Three Months Ended June 30, 2024

Three Months Ended March 31, 2026, Compared to Three Months Ended March 31, 2025

Comparable Properties (1) Results

Three Months Ended June 30,

Three Months Ended March 31,

Non-Comparable

Properties Results

Three Months Ended June 30,

Three Months Ended March 31,

Consolidated Results

Three Months Ended June 30,

Three Months Ended March 31,

2026 2025 $ Change % Change 2026 2025 2026 2025 $ Change % Change

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Total operating expenses 44,344 43,417 927 2.1 % 8,111 8,813 52,455 52,230 225 0.4 %

Net operating income (2)

Net operating income (loss) (2)

$ 55,398 $ 60,482 $ (5,084) (8.4 %) $ 1,015 $ 903 56,413 61,385 (4,972) (8.1 %)

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Depreciation and amortization 44,083 43,733 350 0.8 %

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.

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 — 876 (876) (100.0 %)

Transaction related costs in the 2025 period consist of costs related to our evaluation of potential financing transactions.

General and administrative 4,299 5,058 (759) (15.0 %)

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.

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 48,382 49,667 (1,285) (2.6 %)

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Interest expense (42,207) (53,378) 11,171 (20.9 %)

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

Net loss on early extinguishment of debt — (243) 243 (100.0 %)

Reorganization items, net (59,532) — (59,532) n/m

Loss before income tax benefit (expense) and equity in net earnings (losses) of investees (93,277) (45,478) (47,799) 105.1 %

Income tax benefit (expense) 146 (137) 283 n/m

Equity in net earnings (losses) of investees 110 (252) 362 (143.7 %)

Net loss $ (93,021) $ (45,867) $ (47,154) 102.8 %

Weighted average common shares outstanding (basic and diluted) 73,577 69,257 4,320 6.2 %

Per common share amounts (basic and diluted):

Net (loss) income $ (1.24) $ 1.45 $ (2.69) (185.5 %)

Net loss $ (1.26) $ (0.66) $ (0.60) 90.9 %

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.

(1) Comparable properties consists of 117 properties we owned on March 31, 2026 and which we owned continuously since January 1, 2025 and excludes 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 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 March 31, 2026, compared to the three months ended March 31, 2025.

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 decreased $4,157 for comparable properties as a result of increased vacancies and lower rents from lease renewals at certain of our properties in the 2026 period and $590 related to our property disposition activities.

Rental income includes non-cash straight line rent adjustments totaling $1,936 in the 2026 period and $6,856 in the 2025 period, and amortization of acquired real estate leases and assumed real estate lease obligations totaling $140 in the 2026 period and $123 in the 2025 period.

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.

Real estate taxes decreased $249 related to our property disposition activities, $74 for comparable properties and $41 for properties affected by significant redevelopment activities.

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.

Utility expenses increased $1,731 for comparable properties due to higher electricity usage and rates in the 2026 period, partially offset by decreases of $144 for properties affected by significant redevelopment activities and $75 related to our property disposition activities.

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.

Other operating expenses decreased $730 for comparable properties due to lower repairs and maintenance costs in the 2026 period and $298 related to our property disposition activities, partially offset by an increase of $105 related to properties affected by significant redevelopment activities.

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.

Depreciation and amortization increased $424 for comparable properties and $110 for properties affected by significant redevelopment activities related to improvements made at certain of our properties since January 1, 2025, partially offset by a decrease of $184 related to our property disposition activities.

Transaction related costs.

Transaction related costs in the 2025 and 2024 period consist of costs related to our evaluation of potential financing transactions.

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, lower public company costs during the pendency of the Chapter 11 Cases and a decrease in share-based compensation in the 2026 period compared to the 2025 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 $4,737 loss on sale of real estate resulting from the sale of one property in the 2025 period.

Interest and other income.

The decrease in interest and other income is primarily due to lower cash balances invested and the effect of lower interest rates earned on cash balances invested in the 2026 period compared to the 2025 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.

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.

The decrease in interest expense is primarily due to our adoption of Financial Accounting Standards Board Accounting Standards Codification, or ASC, Topic 852, Reorganizations, or ASC 852, as a result of the Chapter 11 Cases, pursuant to which we ceased recognition of interest expense on our senior unsecured notes and wrote-off unamortized discounts and issuance costs related to liabilities subject to compromise, or LSTC, as of the Petition Date, resulting in lower amortization expense in the 2026 period.

For more information regarding our adoption of ASC 852 and the Chapter 11 Cases, see Notes 1 and 2 to our Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Net loss on early extinguishment of debt .

We recorded a net loss on early extinguishment of debt of $243 in the 2025 period related to a 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.

Reorganization Items, net.

Reorganization items, net represent amounts incurred after the Petition Date as a direct result of the Chapter 11 Cases and are comprised of bankruptcy-related professional fees and adjustments to reflect the carrying value of LSTC at their estimated allowed claim amounts.

For more information regarding reorganization items, net and the Chapter 11 Cases, see Notes 1 and 2 to our Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Income tax benefit (expense).

Income tax benefit (expense) 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 earnings (losses) of investees.

Equity in net earnings (losses) of investees represents our proportionate share of earnings (losses) from our investment in our unconsolidated joint venture.

Net loss and net loss per basic and diluted common share changed in the 2026 period compared to the 2025 period primarily as a result of the changes noted above.

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.

These measures do not represent cash generated by operating activities in accordance with GAAP and should not be considered alternatives to net income (loss) as indicators of our operating performance or as measures of our liquidity.

These measures should be considered in conjunction with net income (loss) 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 income (loss).

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.

The calculation of NOI excludes certain components of net income (loss) in order to provide results that are more closely related to our property level results of operations.

We calculate NOI as shown below.

3 unchanged sentences

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)

The following table presents the reconciliation of net loss to NOI for the three months ended March 31, 2026 and 2025:

Three Months Ended March 31,

Net loss $ (93,021) $ (45,867)

Equity in net earnings (losses) of investees (110) 252

Income tax (benefit) expense (146) 137

Loss before income tax (benefit) expense and equity in net earnings (losses) of investees (93,277) (45,478)

Reorganization items, net 59,532 —

Net loss on early extinguishment of debt — 243

Interest expense 42,207 53,378

Interest and other income (431) (1,162)

(Gain) loss on sale of real estate (159) 64 4,578 2,448

Loss on sale of real estate — 4,737

General and administrative 4,299 5,058

Transaction related costs — 876

Loss on impairment of real estate 2,426 131,732 2,426 131,732

Depreciation and amortization 44,083 43,733

2 unchanged sentences

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.

FFO is calculated on the basis defined by The National Association of Real Estate Investment Trusts, which is net income (loss), 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.

2 unchanged sentences

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

The following table presents the reconciliation of net income (loss) to FFO and Normalized FFO for the three months ended March 31, 2026 and 2025:

Three Months Ended March 31,

Net loss $ (93,021) $ (45,867)

Depreciation and amortization:

1 unchanged sentence

Unconsolidated joint venture properties 582 628

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

Loss on sale of real estate — 4,737

FFO (48,356) 3,231

Reorganization items, net

Default interest incurred related to Chapter 11 Cases 3,292 —

Transaction related costs — 876

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)

Net loss on early extinguishment of debt — 243

Normalized FFO $ 14,468 $ 4,350

1 unchanged sentence

Per common share amounts (basic and diluted):

Net (loss) income $ (0.58) $ 1.56 $ (1.24) $ 1.45

Net loss $ (1.26) $ (0.66)

FFO $ (0.66) $ 0.05

2 unchanged sentences

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 historical 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 ability to issue additional indebtedness, dispose of assets or access capital markets is substantially limited as a result of the Chapter 11 Cases and, until the effectiveness of the Plan, will require Bankruptcy Court approval in most instances.

Accordingly, our liquidity primarily depends on cash generated from operating activities and borrowings under our DIP Facility.

The filing of the Chapter 11 Cases constituted an event of default under our credit agreement, senior notes indentures and their supplements and mortgage notes which accelerated amounts due under the applicable agreements.

Efforts to enforce financial obligations under the applicable agreements are stayed as a result of the filing of the Chapter 11 Cases and the creditors’ rights of enforcement are subject to the applicable provisions of the Bankruptcy Code.

Our credit agreement is being amended and restated pursuant to the Plan to resolve any defaults thereunder and address certain terms to facilitate the Debtors’ restructuring.

The amended and restated credit agreement will become effective on the effective date of the Plan.

Our future cash flows from operating activities will depend primarily upon:

6 unchanged sentences

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.

As of May 18, 2026, we have entered into an agreement to sell one property containing approximately 275,000 rentable square feet for a sales price of $18,125, excluding closing costs.

We expect to sell this property in 2027.

This pending sale is subject to conditions;

accordingly, we cannot be sure that we will complete this sale or that this sale will not be delayed or the pricing will not change.

We are also at various stages of marketing for sale 31 properties with a total of approximately 3,416,000 square feet.

We expect to use the net sales proceeds from property sales to repay debt.

There can be no assurance we will be successful selling any of these properties or what the amount of proceeds we may realize will be.

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,

Three Months Ended March 31,

Cash, cash equivalents and restricted cash at beginning of period $ 80,661 $ 275,165

4 unchanged sentences

Cash, cash equivalents and restricted cash at end of period $ 87,690 $ 76,654

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.

The increase in cash used in operating activities in the 2026 period was primarily due to professional fees paid in connection with the Chapter 11 Cases and decreased NOI related to reductions in occupied space at certain of our properties in the 2026 period.

The change from cash provided by investing activities in the 2025 period to cash used in investing activities in the 2026 period was primarily due to lower proceeds from property sales and increased capital expenditures in the 2026 period.

The change from cash used in financing activities in the 2025 period to cash provided by financing activities in the 2026 period was primarily due to the repayment of our senior unsecured notes due 2025 in the 2025 period and borrowings under our DIP Facility in the 2026 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.

In order to meet cash needs to pay operating or capital expenses during the pendency of the Chapter 11 Cases, we have relied on borrowings under our secured $125,000 DIP Facility.

We have made the following borrowings under the DIP Facility:

(a) we borrowed $10,000 on November 6, 2025 pursuant to an interim order entered by the Bankruptcy Court;

(b) $75,000 was made available to us and drawn as follows:

(i) we borrowed $64,300 on February 5, 2026, and (ii) we borrowed $10,700 on March 13, 2026;

and (c) we borrowed $40,000, or the Tranche B Term Loan, on April 7, 2026.

Borrowings under the DIP Facility bear interest, payable in cash, at a rate of 12.00% per annum.

The DIP Facility had an original maturity date of May 4, 2026, with the option to extend under certain circumstances.

In May 2026, the maturity date was extended to May 31, 2026.

Borrowings under the DIP Facility may be repaid in reorganized common equity or cash, at the Debtors’ election.

On April 5, 2026, the Debtors filed a notice of their intent to equitize the DIP Facility with the Bankruptcy Court.

Fees and expenses under the DIP Facility include:

(a) an upfront fee equal to (i) cash at 2.25% of the lenders’ commitments or (ii) common equity of the

reorganized OPI in an aggregate amount equal to 3.60% of the commitments, which fee was earned upon the initial funding of each loan under the DIP Facility and is payable in kind;

(b) an anchor capital commitment fee of 10.00% of the lenders’ commitments under the DIP Facility payable to certain backstop parties, which was earned upon the initial funding of the DIP Facility, and may be paid, at our election, in cash or common equity of the reorganized company;

and (c) an exit fee of 4.50% of the aggregate borrowings under the DIP Facility, which is due and payable upon the repayment of any loan under the DIP Facility, at our election, in cash or common equity of the reorganized company.

In the event of a voluntary prepayment, we are required to pay, for the ratable account of each lender, in cash a prepayment premium equal to 1.0% multiplied by the sum of the principal amount of the borrowings that are being repaid at such time.

A commitment fee is also due for the ratable account of each Tranche B Term Loan lender, in an aggregate amount equal to 0.75% per annum times the actual daily amount of the aggregate undrawn Tranche B Term Loan commitments.

As of March 31, 2026 and May 18, 2026, the outstanding principal balance under our DIP Facility was $86,913 and $127,813, respectively, including fees payable in kind.

Historically, in order to meet cash needs to pay operating or capital expenses and make distributions, we have maintained a revolving credit facility under our credit agreement.

The maturity date of our credit agreement is January 29, 2027.

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.

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:

Interest payable on borrowings under our credit agreement was at a rate of the secured overnight financing rate plus a margin of 350 basis points through the Petition Date.

Effective on the Petition Date, interest payable on borrowings under our credit agreement changed to a rate of the U.S.

federal prime rate plus a margin of 250 basis points.

Effective February 4, 2026, in accordance with an order entered by the Bankruptcy Court, the margin increased to 450 basis points pursuant to the default rate stipulated in our credit agreement.

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 March 31, 2026.

As of March 31, 2026, the annual interest rate payable on borrowings under our credit agreement was 11.3%.

As of March 31, 2026, and May 18, 2026, our $325,000 revolving credit facility was fully drawn and $100,000 was outstanding under our term loan.

Our senior secured notes due 2027 require quarterly principal repayments of $6,500 and an additional $117,502 principal repayment in March 2026.

As of March 31, 2026, we have made $19,500 of scheduled quarterly principal repayments on these notes in 2025.

We ceased scheduled quarterly principal payments and did not make the additional March 2026 principal repayment following the commencement of the Chapter 11 Cases.

As of March 31, 2026, our debt maturities (other than our revolving credit facility), consisting of senior notes, our DIP Facility, a term loan and mortgage notes, were as follows:

Year Debt Maturities

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Total $ 2,183,302

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.

None of our unsecured debt obligations require sinking fund payments prior to their respective maturity dates.

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

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.

In addition to our debt obligations, as of March 31, 2026, we had estimated unspent leasing related obligations of $54,390, of which we expect to spend $35,186 over the next 12 months.

As of May 18, 2026, our total available liquidity was comprised of $118,501, which included $56,253 of unrestricted cash and $62,248 of restricted cash.

Our ability to continue as a going concern is contingent upon, among other things, our ability to implement the Plan, emerge from the Chapter 11 proceedings and generate sufficient liquidity following the reorganization to meet our obligations, restructured debt obligations and operating needs.

We owned a 51% interest in an unconsolidated joint venture which owned two properties at March 31, 2026.

As of March 31, 2026, the properties owned by this joint venture were encumbered by $48,877 principal amount of mortgage indebtedness, none of which is recourse to us.

As of March 31, 2026, 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.

The filing of the Chapter 11 Cases constituted an event of default under the mortgage note secured by the properties owned by this joint venture.

This joint venture remains current on debt service under this mortgage note and continues to own, operate and lease the collateral properties.

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.

Other than this joint venture, as of March 31, 2026, 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

Our principal debt obligations as of March 31, 2026 consisted of (i) $325,000 of borrowings outstanding under our revolving credit facility, (ii) $100,000 outstanding principal amount under our secured term loan, (iii) an outstanding principal balance of $1,819,069 of senior notes, (iv) $86,913 outstanding under our DIP Facility and (v) mortgage notes with an outstanding principal balance of $177,320.

Also, the two properties owned by the joint venture in which we own a 51% interest secure 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.

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

accumulated depreciation 678,368

adjustments to reflect original cost of real estate assets 968,156

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).

Our credit agreement, senior notes indentures and their supplements and the amended and restated debtor-in-possession term loan credit agreement governing our DIP Facility, or the DIP Credit Agreement, provide for acceleration of payment of all amounts due thereunder upon the occurrence and continuation of certain events of default, such as, in the case of our credit agreement, a change of control of us, which includes RMR ceasing to act as our business and property manager.

Our credit agreement, senior notes indentures and their supplements and the DIP Credit Agreement also contain covenants, including covenants that restrict our ability to incur debts, require us to comply with certain financial covenants and, in the case of our credit agreement, restrict our ability to increase our distribution rate above the level of $0.01 per common share per quarter.

The filing of the Chapter 11 Cases constituted an event of default under our credit agreement and senior notes indentures which accelerated amounts due under the applicable agreements.

Related Person Transactions

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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.

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 2025 Annual Report and our other filings with the SEC.

In addition, see the section captioned “Risk Factors” in Part I, Item 1A of our 2025 Annual Report for a description of risks that may arise as a result of these and other related person transactions and relationships.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis