What changed in this filing

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Item 1. Financial Statements

2025-10-27 compared with 2025-07-28 · 81 added, 64 removed, 418 unchanged (26% of the section changed)

3 unchanged sentences

(dollars in thousands, except per share data)

June 30, December 31,

September 30, December 31,

Cash and cash equivalents $ 77,495 $ 70,750

26 unchanged sentences

(amounts in thousands, except per share data)

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

35 unchanged sentences

Balance at June 30, 2025 14,944 15 241,390 96,690 ( 71,075 ) 267,020

Share grants 150 — 486 — — 486

Share repurchases ( 25 ) — ( 271 ) — — ( 271 )

Net income — — — 3,430 — 3,430

Distributions — — — — ( 4,184 ) ( 4,184 )

Balance at September 30, 2025 15,069 $ 15 $ 241,605 $ 100,120 $ ( 75,259 ) $ 266,481

Balance at December 31, 2023 14,811 $ 15 $ 239,443 $ 71,660 $ ( 39,870 ) $ 271,248

9 unchanged sentences

Balance at June 30, 2024 14,833 15 240,188 81,122 ( 50,236 ) 271,089

Share grants 91 — 367 — — 367

Share repurchases ( 18 ) — ( 239 ) — — ( 239 )

Net income — — — 3,479 — 3,479

Distributions — — — — ( 5,190 ) ( 5,190 )

Balance at September 30, 2024 14,906 $ 15 $ 240,316 $ 84,601 $ ( 55,426 ) $ 269,506

See accompanying notes.

2 unchanged sentences

(dollars in thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

CASH FLOWS FROM OPERATING ACTIVITIES:

27 unchanged sentences

Net cash used in financing activities ( 4,762 ) ( 95,467 )

Decrease in cash and cash equivalents ( 24,799 ) ( 18,252 )

Increase (decrease) in cash and cash equivalents 6,745 ( 5,658 )

Cash and cash equivalents at beginning of period 70,750 87,855

30 unchanged sentences

See Note 5 for further information regarding our secured financing agreements.

The table below provides overall statistics for our loan portfolio as of June 30, 2025 and December 31, 2024:

As of June 30, 2025 As of December 31, 2024

The table below provides overall statistics for our loan portfolio as of September 30, 2025 and December 31, 2024:

As of September 30, 2025 As of December 31, 2024

Number of loans 22 21

16 unchanged sentences

(dollars in thousands, except per share data)

The tables below represent our loan activities during the three months ended June 30, 2025 and 2024:

The tables below represent our loan activities during the three months ended September 30, 2025 and 2024:

Principal Balance Deferred Fees and Other Items Amortized Cost

Balance at March 31, 2025 $ 661,389 $ ( 1,152 ) $ 660,237

Balance at June 30, 2025 $ 632,826 $ ( 1,508 ) $ 631,318

Additional funding 822 — 822

2 unchanged sentences

Net amortization of deferred fees — 445 445

Balance at June 30, 2025 $ 632,826 $ ( 1,508 ) $ 631,318

Balance at September 30, 2025 $ 614,347 $ ( 1,923 ) $ 612,424

Principal Balance Deferred Fees and Other Items Amortized Cost

Balance at March 31, 2024 $ 590,632 $ ( 1,997 ) $ 588,635

Balance at June 30, 2024 $ 610,210 $ ( 960 ) $ 609,250

Additional funding 1,922 — 1,922

3 unchanged sentences

Purchase discount accretion — 420 420

Balance at June 30, 2024 $ 610,210 $ ( 960 ) $ 609,250

The tables below represent our loan activities during the six months ended June 30, 2025 and 2024:

Balance at September 30, 2024 $ 557,545 $ ( 319 ) $ 557,226

The tables below represent our loan activities during the nine months ended September 30, 2025 and 2024:

Principal Balance Deferred Fees and Other Items Amortized Cost

4 unchanged sentences

Net amortization of deferred fees — 1,542 1,542

Balance at June 30, 2025 $ 632,826 $ ( 1,508 ) $ 631,318

Balance at September 30, 2025 $ 614,347 $ ( 1,923 ) $ 612,424

Principal Balance Deferred Fees and Other Items Amortized Cost

5 unchanged sentences

Purchase discount accretion — 2,347 2,347

Balance at June 30, 2024 $ 610,210 $ ( 960 ) $ 609,250

Balance at September 30, 2024 $ 557,545 $ ( 319 ) $ 557,226

SEVEN HILLS REALTY TRUST

1 unchanged sentence

(dollars in thousands, except per share data)

The tables below detail the property type and geographic location of the properties securing the loans in our portfolio as of June 30, 2025 and December 31, 2024:

June 30, 2025 December 31, 2024

The tables below detail the property type and geographic location of the properties securing the loans in our portfolio as of September 30, 2025 and December 31, 2024:

September 30, 2025 December 31, 2024

Property Type Number of Loans

7 unchanged sentences

Hotel 3 84,290 14 % 3 84,028 14 %

Mixed Use 1 34,230 6 % — — — %

Retail 1 15,244 2 % 2 57,506 9 %

22 $ 612,424 100 % 21 $ 609,916 100 %

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

Geographic Location Number of Loans

3 unchanged sentences

West 6 136,538 22 % 6 142,560 23 %

Midwest 4 134,951 21 % 4 135,349 22 %

East 4 133,762 22 % 4 139,899 23 %

Midwest 3 105,209 17 % 4 135,349 22 %

22 $ 612,424 100 % 21 $ 609,916 100 %

3 unchanged sentences

See our 2024 Annual Report for more information regarding our loan risk ratings.

As of June 30, 2025 and December 31, 2024, the amortized cost of our loan portfolio within each internal risk rating by year of origination was as follows:

June 30, 2025

As of September 30, 2025 and December 31, 2024, the amortized cost of our loan portfolio within each internal risk rating by year of origination was as follows:

September 30, 2025

Risk Rating Number of Loans Percentage of Portfolio 2025 2024 2023 2022 2021 Prior Total

38 unchanged sentences

(dollars in thousands, except per share data)

The tables below represent the changes to the allowance for credit losses during the three months ended June 30, 2025 and 2024.

The tables below represent the changes to the allowance for credit losses during the three months ended September 30, 2025 and 2024.

Loans Held for Investment, net Unfunded Loan Commitments Total

Balance at March 31, 2025 $ 7,648 $ 1,107 $ 8,755

Provision for (reversal of) credit losses 1,727 ( 815 ) 912

Balance at June 30, 2025 $ 9,375 $ 292 $ 9,667

Loans Held for Investment, net Unfunded Loan Commitments Total

Balance at March 31, 2024 $ 5,149 $ 1,376 $ 6,525

Provision for credit losses 36 1 37

Balance at September 30, 2025 $ 9,411 $ 293 $ 9,704

Loans Held for Investment, net Unfunded Loan Commitments Total

Balance at June 30, 2024 $ 5,723 $ 2,117 $ 7,840

The tables below represent the changes to the allowance for credit losses during the six months ended June 30, 2025 and 2024.

Provision for (reversal of) credit losses 1,559 ( 41 ) 1,518

Balance at September 30, 2024 $ 7,282 $ 2,076 $ 9,358

The tables below represent the changes to the allowance for credit losses during the nine months ended September 30, 2025 and 2024.

Loans Held for Investment, net Unfunded Loan Commitments Total

1 unchanged sentence

Provision for (reversal of) credit losses 1,337 ( 541 ) 796

Balance at June 30, 2025 $ 9,375 $ 292 $ 9,667

Balance at September 30, 2025 $ 9,411 $ 293 $ 9,704

Loans Held for Investment, net Unfunded Loan Commitments Total

1 unchanged sentence

Provision for credit losses 2,906 624 3,530

Balance at June 30, 2024 $ 5,723 $ 2,117 $ 7,840

The increase in the allowance for credit losses during the three and six months ended June 30, 2025 was primarily attributable to unfavorable CRE pricing forecasts used in our CECL model and extensions for certain of our loans, partially offset by loan repayments.

Balance at September 30, 2024 $ 7,282 $ 2,076 $ 9,358

The increase in the allowance for credit losses during the three months ended September 30, 2025 was primarily attributable to decreased net operating income for the collateral securing certain of our loans, partially offset by loans nearing maturity and loan repayments.

The increase in the allowance for credit losses during the nine months ended September 30, 2025 was primarily attributable to increased provisions for our office loans, partially offset by loans nearing maturity and loan repayments.

We may enter into loan modifications that include, among other changes, extensions of maturity dates, repurposing or required replenishment of reserves, increases or decreases in loan commitments and required pay downs of principal amounts outstanding.

2 unchanged sentences

As part of this amendment, the loan commitment was reduced by $ 3,189 , the borrower was required to contribute $ 2,900 to cash reserves and the maturity date was extended by two years to August 25, 2026.

As of June 30, 2025, this loan had an amortized cost of $ 43,511 and a risk rating of 4.

As of September 30, 2025, this loan had an amortized cost of $ 43,511 and a risk rating of 4.

In August 2024, we amended the agreement governing our loan secured by an office property in Plano, TX.

As part of this amendment, the coupon rate was reduced from the Secured Overnight Financing Rate, or SOFR, + 4.75 % to SOFR + 3.75 % and the maturity date was extended by two years to July 1, 2026.

As of June 30, 2025, this loan had an amortized cost of $ 26,636 and a risk rating of 4.

As of September 30, 2025, this loan had an amortized cost of $ 26,636 and a risk rating of 4.

In November 2024, we amended the agreement governing our loan secured by an office property in Carlsbad, CA.

As part of this amendment, the borrower was required to contribute $ 1,100 to cash reserves and the maturity date was extended by two years to October 27, 2026.

As of June 30, 2025, this loan had an amortized cost of $ 24,414 and a risk rating of 4.

As of September 30, 2025, this loan had an amortized cost of $ 24,414 and a risk rating of 4.

SEVEN HILLS REALTY TRUST

3 unchanged sentences

As part of this amendment, the borrower was required to contribute $ 1,625 to cash reserves, the coupon rate was reduced from SOFR + 3.85 % to SOFR + 2.85 % and the maturity date was extended by three years to April 7, 2028.

As of June 30, 2025, this loan had an amortized cost of $ 19,999 and a risk rating of 4.

As of September 30, 2025, this loan had an amortized cost of $ 19,999 and a risk rating of 4.

In May 2025, we amended the agreement governing our loan secured by an office property in Downers Grove, IL.

As part of this amendment, the borrower repaid $ 3,000 of the outstanding principal balance and the maturity date was extended by one year to May 22, 2026.

As of June 30, 2025, this loan had an amortized cost of $ 26,620 and a risk rating of 4.

We did not have any outstanding past due loans or nonaccrual loans as of June 30, 2025 or December 31, 2024.

As of June 30, 2025 and July 24, 2025, all of our borrowers had paid their debt service obligations owed and due to us.

As of September 30, 2025, this loan had an amortized cost of $ 26,630 and a risk rating of 4.

We did not have any outstanding past due loans or nonaccrual loans as of September 30, 2025 or December 31, 2024.

As of September 30, 2025 and October 23, 2025, all of our borrowers had paid their debt service obligations owed and due to us.

See our 2024 Annual Report for more information regarding our nonaccrual policy.

As of June 30, 2025, we had unfunded loan commitments of $ 32,595 related to our loans held for investment that are not reflected in our condensed consolidated balance sheets.

These unfunded loan commitments had a weighted average initial maturity of 1.3 years as of June 30, 2025.

As of September 30, 2025, we had unfunded loan commitments of $ 27,554 related to our loans held for investment that are not reflected in our condensed consolidated balance sheets.

These unfunded loan commitments had a weighted average initial maturity of 1.3 years as of September 30, 2025.

Real Estate Owned

4 unchanged sentences

The table below presents the assets and liabilities of real estate owned in our condensed consolidated balance sheets:

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

Land, building and improvements $ 11,782 $ 11,735

6 unchanged sentences

Total liabilities

(1) Includes $ 1,125 and $ 1,094 of straight line rent receivables as of June 30, 2025 and December 31, 2024, respectively.

(1) Includes $ 1,133 and $ 1,094 of straight line rent receivables as of September 30, 2025 and December 31, 2024, respectively.

Revenue from real estate owned represents rental income from operating leases with tenants and is recognized on a straight line basis over the lease term.

We increased revenue from real estate owned to record revenue on a straight line basis by $ 15 and $ 31 for the three and six months ended June 30, 2025, respectively, and $ 107 and $ 385 for the three and six months ended June 30, 2024, respectively.

We increased revenue from real estate owned to record revenue on a straight line basis by $ 8 and $ 39 for the three and nine months ended September 30, 2025, respectively, and $ 45 and $ 430 for the three and nine months ended September 30, 2024, respectively.

Expenses from real estate owned represents costs to operate the property and depreciation and amortization expense.

9 unchanged sentences

Secured Financing Agreements

As of June 30, 2025, we had secured financing facilities governed by master repurchase agreements with Wells Fargo, National Association, or Wells Fargo, Citibank, N.A., or Citibank, and UBS AG, or UBS;

As of September 30, 2025, we had secured financing facilities governed by master repurchase agreements with Wells Fargo, National Association, or Wells Fargo, Citibank, N.A., or Citibank, and UBS AG, or UBS;

and a facility loan program with BMO Harris Bank N.A., or BMO.

2 unchanged sentences

See our 2024 Annual Report for more information regarding our Secured Financing Facilities.

The table below summarizes our Secured Financing Facilities as of June 30, 2025 and December 31, 2024:

The table below summarizes our Secured Financing Facilities as of September 30, 2025 and December 31, 2024:

Debt Obligation

4 unchanged sentences

Principal Balance

June 30, 2025:

September 30, 2025:

UBS Master Repurchase Facility $ 250,000 $ 146,799 $ 146,638 6.54 % 0.3 2/18/2026 $ 216,861

12 unchanged sentences

The weighted average remaining maturity of the BMO Facility is determined using the underlying loan investment maturity date.

As of June 30, 2025, we were in compliance with the covenants and other terms of the agreements that govern our Secured Financing Facilities.

As of June 30, 2025, our outstanding borrowings under our Secured Financing Facilities had the following remaining maturities:

As of September 30, 2025, we were in compliance with the covenants and other terms of the agreements that govern our Secured Financing Facilities.

As of September 30, 2025, our outstanding borrowings under our Secured Financing Facilities had the following remaining maturities:

Year Principal Payments on

3 unchanged sentences

Based upon the performance and payment history of our commercial mortgage loans, along with our ability to obtain financing under repurchase agreements and success in extending certain of our existing Master Repurchase Agreements, we believe it is probable that we will extend our Master Repurchase Facilities prior to their maturities.

Fair Value Measurements

We determine the estimated fair value of financial assets and liabilities using the three-tier value hierarchy established by GAAP.

As of June 30, 2025, the carrying values of cash and cash equivalents, accrued interest receivable and accounts payable approximate their fair values due to the short term nature of these financial instruments.

SEVEN HILLS REALTY TRUST

1 unchanged sentence

(dollars in thousands, except per share data)

Fair Value Measurements

We determine the estimated fair value of financial assets and liabilities using the three-tier value hierarchy established by GAAP.

As of September 30, 2025, the carrying values of cash and cash equivalents, accrued interest receivable and accounts payable approximate their fair values due to the short term nature of these financial instruments.

We estimate the fair values of our loans held for investment and outstanding principal balances under our Secured Financing Facilities by using Level III inputs, including discounted cash flow analyses and currently prevailing market terms as of the measurement date.

1 unchanged sentence

The table below provides information regarding financial assets and liabilities not carried at fair value in our condensed consolidated balance sheets:

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

Carrying Value Fair Value Carrying Value Fair Value

3 unchanged sentences

Secured Financing Facilities $ 429,449 $ 430,738 $ 417,796 $ 418,492

There were no transfers of financial assets or liabilities within the fair value hierarchy during the six months ended June 30, 2025.

There were no transfers of financial assets or liabilities within the fair value hierarchy during the nine months ended September 30, 2025.

Shareholders' Equity

4 unchanged sentences

The aggregate value of common shares awarded was $ 490 .

On September 9, 2025, we awarded an aggregate of 150,158 of our common shares to our officers and certain other employees of Tremont Realty Capital LLC, or Tremont, and of The RMR Group LLC, or RMR, valued at the closing price of our common shares on Nasdaq that day.

The aggregate value of common shares awarded was $ 1,653 .

Common Share Purchases

During the six months ended June 30, 2025, we purchased 5,593 of our common shares from certain current and former officers of The RMR Group LLC, or RMR, in satisfaction of tax withholding and payment obligations in connection with the vesting of awards of our common shares, valued at the closing price of our common shares on Nasdaq on the applicable purchase date.

During the nine months ended September 30, 2025, we purchased 30,363 of our common shares from certain current and former officers and certain other employees of RMR in satisfaction of tax withholding and payment obligations in connection with the vesting of awards of our common shares, valued at the closing price of our common shares on Nasdaq on the applicable purchase date.

The aggregate value of common shares purchased was $ 339 .

Distributions

For the six months ended June 30, 2025, we declared and paid regular quarterly distributions to common shareholders, using cash on hand, as follows:

For the nine months ended September 30, 2025, we declared and paid regular quarterly distributions to common shareholders, using cash on hand, as follows:

Record Date Payment Date Distribution per Share Total Distribution

1 unchanged sentence

April 22, 2025 May 15, 2025 0.35 5,217

July 21, 2025 August 14, 2025 0.28 4,184

$ 0.98 $ 14,617

On July 10, 2025, we declared a quarterly distribution of $ 0.28 per common share, or $ 4,184 , to shareholders of record on July 21, 2025.

We expect to pay this distribution on or about August 14, 2025 using cash on hand.

Management Agreement with Tremont

We have no employees.

The personnel and various services we require to operate our business are provided to us, pursuant to a management agreement with Tremont Realty Capital LLC, or Tremont, which provides for the day to day management of our operations, subject to the oversight and direction of our Board of Trustees.

SEVEN HILLS REALTY TRUST

1 unchanged sentence

(dollars in thousands, except per share data)

On October 9, 2025, we declared a quarterly distribution of $ 0.28 per common share, or $ 4,218 , to shareholders of record on October 27, 2025.

We expect to pay this distribution on or about November 13, 2025 using cash on hand.

Management Agreement with Tremont

We have no employees.

The personnel and various services we require to operate our business are provided to us, pursuant to a management agreement with Tremont which provides for the day to day management of our operations, subject to the oversight and direction of our Board of Trustees.

We pay Tremont an annual base management fee payable quarterly ( 0.375 % per quarter) in arrears equal to 1.5 % of our “Equity,” as defined under our management agreement.

19 unchanged sentences

and an officer and employee of RMR, and our other officers are officers and employees of Tremont and/or RMR.

See Note 7 for information relating to the awards of our common shares we made in September 2025 to our officers and certain other employees of Tremont and/or RMR and common shares we purchased from certain of our current and former officers and current and former officers and employees of Tremont and/or RMR in satisfaction of tax withholding and payment obligations in connection with the vesting of awards of our common shares.

We include amounts recognized as expense for awards of our common shares to our officers and certain other employees of Tremont and/or RMR in general and administrative expenses in our condensed consolidated statements of operations.

Certain of our Independent Trustees also serve as independent trustees of other public companies to which RMR or its subsidiaries provide management services.

4 unchanged sentences

See Note 8 for further information regarding our management agreement.

As of June 30, 2025, Tremont owned 1,708,058 of our common shares, and Mr.

As of September 30, 2025, Tremont owned 1,708,058 of our common shares, and Mr.

Portnoy beneficially owned (including through Tremont and ABP Trust) 13.6 % of our outstanding common shares.

SEVEN HILLS REALTY TRUST

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except per share data)

Property Management Agreement with RMR.

4 unchanged sentences

No termination fee would be payable as a result of terminating the agreement.

We recognized property management and construction supervision fees of $ 16 and $ 37 for the three and six months ended June 30, 2025, respectively, and $ 22 and $ 31 for the three and six months ended June 30, 2024, respectively, related to real estate owned.

We recognized property management and construction supervision fees of $ 22 and $ 59 for the three and nine months ended September 30, 2025, respectively, and $ 20 and $ 51 for the three and nine months ended September 30, 2024, respectively, related to real estate owned.

For further information about these and other such relationships and certain other related person transactions, refer to our 2024 Annual Report.

SEVEN HILLS REALTY TRUST

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except per share data)

We have elected to be taxed as a real estate investment trust, or REIT, under the Internal Revenue Code of 1986, as amended, or the IRC.

7 unchanged sentences

The calculation of net income per common share - basic and diluted is as follows (amounts in thousands, except per share data):

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

13 unchanged sentences

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 1. Financial Statements