What changed in this filing

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Item 1. Financial Statements

2026-07-28 compared with 2026-04-28 · 117 added, 72 removed, 376 unchanged (33% of the section changed)

3 unchanged sentences

(dollars in thousands, except per share data)

March 31, December 31,

June 30, December 31,

Cash and cash equivalents $ 69,975 $ 123,471

26 unchanged sentences

(amounts in thousands, except per share data)

Three Months Ended March 31,

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

2026 2025 2026 2025

INCOME FROM INVESTMENTS:

9 unchanged sentences

Reimbursement of shared services expenses 574 551 1,148 1,101

Provision for (reversal of) credit losses 603 ( 153 )

Provision for credit losses 4,923 912 5,526 759

Expenses from real estate owned 554 569 1,134 1,163

1 unchanged sentence

Income before income taxes ( 878 ) 2,675 3,513 7,218

Income tax expense ( 6 ) ( 11 )

Net income $ 4,385 $ 4,532

Income tax benefit (expense) 11 3 5 ( 8 )

Net (loss) income $ ( 867 ) $ 2,678 $ 3,518 $ 7,210

Weighted average common shares outstanding - basic and diluted 22,419 14,785 22,408 14,771

Net income per common share - basic and diluted $ 0.19 $ 0.30

Net (loss) income per common share - basic and diluted $ ( 0.04 ) $ 0.18 $ 0.15 $ 0.48

See accompanying notes.

10 unchanged sentences

Balance at March 31, 2026 22,596 23 303,464 109,299 ( 85,804 ) 326,982

Share grants 70 — 891 — — 891

Share repurchases ( 1 ) — ( 6 ) — — ( 6 )

Net loss — — — ( 867 ) — ( 867 )

Distributions — — — — ( 6,327 ) ( 6,327 )

Balance at June 30, 2026 22,665 $ 23 $ 304,349 $ 108,432 $ ( 92,131 ) $ 320,673

Balance at December 31, 2024 14,903 $ 15 $ 240,425 $ 89,480 $ ( 60,642 ) $ 269,278

4 unchanged sentences

Balance at March 31, 2025 14,907 15 240,776 94,012 ( 65,858 ) 268,945

Share grants 42 — 677 — — 677

Share repurchases ( 5 ) — ( 63 ) — — ( 63 )

Net income — — — 2,678 — 2,678

Distributions — — — — ( 5,217 ) ( 5,217 )

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

See accompanying notes.

2 unchanged sentences

(dollars in thousands)

Three Months Ended March 31,

Six Months Ended June 30,

CASH FLOWS FROM OPERATING ACTIVITIES:

2 unchanged sentences

Accretion of purchase discount ( 333 ) —

Provision for (reversal of) credit losses 603 ( 153 )

Provision for credit losses 5,526 759

Amortization of loan origination and exit fees ( 1,050 ) ( 1,097 )

22 unchanged sentences

Distributions ( 12,654 ) ( 10,433 )

Net cash (used in) provided by financing activities ( 28,254 ) 17,102

Net cash used in financing activities ( 30,690 ) ( 13,041 )

Decrease in cash and cash equivalents ( 53,496 ) ( 24,799 )

3 unchanged sentences

Interest paid $ 13,864 $ 14,244

Income taxes refunded $ 11 $ —

Income taxes paid (refunded) $ 9 $ ( 5 )

SEVEN HILLS REALTY TRUST

25 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 March 31, 2026 and December 31, 2025:

As of March 31, 2026 As of December 31, 2025

The table below provides overall statistics for our loan portfolio as of June 30, 2026 and December 31, 2025:

As of June 30, 2026 As of December 31, 2025

Number of loans 27 24

16 unchanged sentences

(dollars in thousands, except per share data)

The tables below represent our loan activities during the three months ended March 31, 2026 and 2025:

The tables below represent our loan activities during the three months ended June 30, 2026 and 2025:

Principal Balance Deferred Fees and Other Items Amortized Cost

Balance at December 31, 2025 $ 687,585 $ ( 1,878 ) $ 685,707

Balance at March 31, 2026 $ 732,003 $ ( 1,907 ) $ 730,096

Additional funding 3,244 — 3,244

4 unchanged sentences

Purchase discount accretion — 188 188

Balance at June 30, 2026 $ 722,325 $ ( 2,691 ) $ 719,634

Principal Balance Deferred Fees and Other Items Amortized Cost

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

Additional funding 1,285 — 1,285

Originations 40,800 ( 544 ) 40,256

Repayments ( 70,648 ) ( 396 ) ( 71,044 )

Net amortization of deferred fees — 584 584

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

The tables below represent our loan activities during the six months ended June 30, 2026 and 2025.

Principal Balance Deferred Fees and Other Items Amortized Cost

1 unchanged sentence

Additional funding 5,425 — 5,425

Deferred interest capitalized to loans held for investment 350 — 350

Originations 130,040 ( 1,597 ) 128,443

Repayments ( 101,075 ) ( 599 ) ( 101,674 )

Net amortization of deferred fees — 1,050 1,050

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

The tables below detail the property type and geographic location of the properties securing the loans in our portfolio as of March 31, 2026 and December 31, 2025:

March 31, 2026 December 31, 2025

Purchase discount accretion — 333 333

Balance at June 30, 2026 $ 722,325 $ ( 2,691 ) $ 719,634

Principal Balance Deferred Fees and Other Items Amortized Cost

Balance at December 31, 2024 $ 610,811 $ ( 895 ) $ 609,916

Additional funding 5,358 — 5,358

Originations 87,305 ( 1,314 ) 85,991

Repayments ( 70,648 ) ( 396 ) ( 71,044 )

Net amortization of deferred fees — 1,097 1,097

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

SEVEN HILLS REALTY TRUST

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(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, 2026 and December 31, 2025:

June 30, 2026 December 31, 2025

Property Type Number of Loans

4 unchanged sentences

Office 5 $ 139,755 19 % 6 $ 165,745 24 %

Hotel 4 122,996 17 % 4 121,393 18 %

Student Housing 4 119,596 17 % 4 115,575 17 %

Hotel 4 119,125 17 % 4 121,393 18 %

Industrial 4 113,500 16 % 4 112,792 16 %

Multifamily 3 67,115 9 % 3 87,920 13 %

Other 3 74,524 10 % 1 34,292 5 %

Self Storage 3 64,264 9 % 2 47,990 7 %

Other 2 49,418 7 % 1 34,292 5 %

Medical Office 2 46,861 6 % — — — %

27 $ 719,634 100 % 24 $ 685,707 100 %

March 31, 2026 December 31, 2025

June 30, 2026 December 31, 2025

Geographic Location Number of Loans

6 unchanged sentences

27 $ 719,634 100 % 24 $ 685,707 100 %

SEVEN HILLS REALTY TRUST

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except per share data)

Credit Quality Information and Allowance for Credit Losses

2 unchanged sentences

See our 2025 Annual Report for more information regarding our loan risk ratings.

As of March 31, 2026 and December 31, 2025, the amortized cost of our loan portfolio within each internal risk rating by year of origination was as follows:

March 31, 2026

As of June 30, 2026 and December 31, 2025, the amortized cost of our loan portfolio within each internal risk rating by year of origination was as follows:

June 30, 2026

Risk Rating Number of Loans Percentage of Portfolio 2026 2025 2024 2023 2022 Prior Total

5 unchanged sentences

27 100 % $ 129,090 $ 152,749 $ 178,175 $ 54,213 $ 65,652 $ 139,755 $ 719,634

SEVEN HILLS REALTY TRUST

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except per share data)

December 31, 2025

7 unchanged sentences

Allowance for credit losses

We measure our allowance for credit losses using the current expected credit loss, or CECL, model, which is based upon historical experience, current conditions and reasonable and supportable forecasts incorporating forward-looking information that affect the collectability of the reported amount.

The allowance for credit losses is a valuation account that is deducted from the related loans’ amortized cost basis in our condensed consolidated balance sheets.

2 unchanged sentences

The allowance for credit losses related to unfunded loan commitments is included in accounts payable, accrued liabilities and other liabilities in our condensed consolidated balance sheets.

SEVEN HILLS REALTY TRUST

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except per share data)

Given the lack of historical loss data related to our loan portfolio, we estimate our expected losses using an analytical model that considers the likelihood of default and loss given default for each individual loan.

11 unchanged sentences

See Note 2 to our Consolidated Financial Statements included in Part IV, Item 15 of our 2025 Annual Report for further information regarding our measurement of our allowance for credit losses.

The tables below represent the changes to the allowance for credit losses during the three months ended March 31, 2026 and 2025.

SEVEN HILLS REALTY TRUST

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(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, 2026 and 2025.

Loans Held for Investment, net Unfunded Loan Commitments Total

Balance at March 31, 2026 $ 9,495 $ 219 $ 9,714

Provision for credit losses 4,909 14 4,923

Balance at June 30, 2026 $ 14,404 $ 233 $ 14,637

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

The tables below represent the changes to the allowance for credit losses during the six months ended June 30, 2026 and 2025.

Loans Held for Investment, net Unfunded Loan Commitments Total

Balance at December 31, 2025 $ 8,799 $ 312 $ 9,111

Provision for (reversal of) credit losses 5,605 ( 79 ) 5,526

Balance at March 31, 2026 $ 9,495 $ 219 $ 9,714

Balance at June 30, 2026 $ 14,404 $ 233 $ 14,637

Loans Held for Investment, net Unfunded Loan Commitments Total

Balance at December 31, 2024 $ 8,074 $ 834 $ 8,908

(Reversal of) provision for credit losses ( 426 ) 273 ( 153 )

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

The increase in the allowance for credit losses during the three months ended March 31, 2026 reflects an increased loan investment balance as of March 31, 2026 and increased allowances for certain of our office loans, partially offset by loans nearing maturity.

Provision for (reversal of) credit losses 1,301 ( 542 ) 759

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

The increase in the allowance for credit losses during the three months ended June 30, 2026 is primarily due to increased allowances for certain of our “4” rated office loans with near-term maturities, and primarily reflects lower estimated collateral values for these loans within the office sector.

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.

Loan modifications are evaluated to determine whether a modification results in a new loan or a continuation of an existing loan under ASC 310.

In April 2025, we amended the agreement governing our loan secured by an office property in Bellevue, WA.

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

As of March 31, 2026, this loan had an amortized cost of $ 20,817 and a risk rating of 4.

In July 2026, we amended the agreement governing our loan secured by an office property in Plano, TX.

As part of this amendment, the maturity date was extended by two years to July 1, 2028.

As of June 30, 2026, this loan had an amortized cost of $ 26,637 and a risk rating of 4.

We did not have any outstanding past due loans or nonaccrual loans as of June 30, 2026 or December 31, 2025.

As of June 30, 2026 and July 24, 2026, all of our borrowers had paid their debt service obligations owed and due to us.

See our 2025 Annual Report for more information regarding our nonaccrual policy.

As of June 30, 2026, we had unfunded loan commitments of $ 43,018 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, 2026.

SEVEN HILLS REALTY TRUST

1 unchanged sentence

(dollars in thousands, except per share data)

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 March 31, 2026, this loan had an amortized cost of $ 26,650 and a risk rating of 3.

We did not have any outstanding past due loans or nonaccrual loans as of March 31, 2026 or December 31, 2025.

As of March 31, 2026 and April 24, 2026, all of our borrowers had paid their debt service obligations owed and due to us.

See our 2025 Annual Report for more information regarding our nonaccrual policy.

As of March 31, 2026, we had unfunded loan commitments of $ 43,955 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 1.2 years as of March 31, 2026.

Real Estate Owned

2 unchanged sentences

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

March 31, 2026 December 31, 2025

June 30, 2026 December 31, 2025

Land, building and improvements $ 11,989 $ 11,955

6 unchanged sentences

Total liabilities $ 482 $ 515

(1) Includes $ 1,225 and $ 1,211 of straight line rent receivables as of March 31, 2026 and December 31, 2025, respectively.

(1) Includes $ 1,224 and $ 1,211 of straight line rent receivables as of June 30, 2026 and December 31, 2025, 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 $ 14 and $ 16 for the three months ended March 31, 2026 and 2025, respectively.

Revenue from real estate owned includes adjustments to record revenue on a straight line basis of $( 1 ) and $ 13 for the three and six months ended June 30, 2026, respectively, and $ 15 and $ 31 for the three and six months ended June 30, 2025, respectively.

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

6 unchanged sentences

Secured Financing Agreements

As of March 31, 2026, 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 June 30, 2026, 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.

5 unchanged sentences

(dollars in thousands, except per share data)

The table below summarizes our Secured Financing Facilities as of March 31, 2026 and December 31, 2025:

The table below summarizes our Secured Financing Facilities as of June 30, 2026 and December 31, 2025:

Debt Obligation

4 unchanged sentences

Principal Balance

March 31, 2026:

June 30, 2026:

UBS Master Repurchase Facility $ 250,000 $ 134,692 $ 134,174 6.22 % 0.9 2/18/2028 $ 195,585

14 unchanged sentences

In February 2026, we amended our master repurchase agreement with Wells Fargo and made certain changes to the agreement, including extending the stated maturity date to March 13, 2028 and increasing the maximum facility size by $ 125,000 to $ 250,000 .

As of March 31, 2026, we were in compliance with the covenants and other terms of the agreements that govern our Secured Financing Facilities.

As of March 31, 2026, our outstanding borrowings under our Secured Financing Facilities had the following remaining maturities:

As of June 30, 2026, we were in compliance with the covenants and other terms of the agreements that govern our Secured Financing Facilities.

As of June 30, 2026, our outstanding borrowings under our Secured Financing Facilities had the following remaining maturities:

Year Principal Payments on

8 unchanged sentences

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

As of March 31, 2026, 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.

As of June 30, 2026, 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:

March 31, 2026 December 31, 2025

June 30, 2026 December 31, 2025

Carrying Value Fair Value Carrying Value Fair Value

3 unchanged sentences

Secured Financing Facilities $ 470,334 $ 472,150 $ 487,657 $ 487,637

There were no transfers of financial assets or liabilities within the fair value hierarchy during the three months ended March 31, 2026.

There were no transfers of financial assets or liabilities within the fair value hierarchy during the six months ended June 30, 2026.

Shareholders' Equity

2 unchanged sentences

The record date shareholders received one transferable right for each outstanding common share they owned on the record date, which entitled them to purchase one new common share for every two rights held.

The Rights Offering was fully backstopped by Tremont.

The Rights Offering was fully backstopped by Tremont Realty Capital, or Tremont.

In December 2025, we completed the Rights Offering, in which 7,532,861 common shares were issued at $ 8.65 per share, generating net proceeds of $ 61,494 , after offering costs.

See Note 9 for further information regarding the Rights Offering.

Common Share Awards

On June 9, 2026, in accordance with our Trustee compensation arrangements, we awarded each of our seven Trustees 9,976 of our common shares valued at the closing price of our common shares on The Nasdaq Stock Market LLC, or Nasdaq, on that day.

The aggregate value of common shares awarded was $ 595 .

Common Share Purchases

During the three months ended March 31, 2026, we purchased 814 of our common shares from certain former officers and employees of Tremont Realty Capital, or Tremont, and 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 The Nasdaq Stock Market LLC, or Nasdaq, on the applicable purchase date.

During the six months ended June 30, 2026, we purchased 1,472 of our common shares from certain former officers and employees of Tremont, and 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.

The aggregate value of common shares purchased was $ 13 .

Distributions

For the three months ended March 31, 2026, we declared and paid regular quarterly distributions to common shareholders, using cash on hand, as follows:

For the six months ended June 30, 2026, 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

January 26, 2026 February 19, 2026 $ 0.28 $ 6,327

On April 9, 2026, we declared a quarterly distribution of $ 0.28 per common share, or $ 6,327 , to shareholders of record on April 21, 2026.

We expect to pay this distribution on or about May 14, 2026, using cash on hand.

April 21, 2026 May 14, 2026 0.28 6,327

$ 0.56 $ 12,654

SEVEN HILLS REALTY TRUST

1 unchanged sentence

(dollars in thousands, except per share data)

On July 9, 2026, we declared a quarterly distribution of $ 0.28 per common share, or $ 6,346 , to shareholders of record on July 20, 2026.

We expect to pay this distribution on or about August 13, 2026, using cash on hand.

Management Agreement with Tremont

29 unchanged sentences

See Note 8 for further information regarding our management agreement.

As of March 31, 2026, Tremont owned 4,577,835 of our common shares, or 20.3 % of our outstanding common shares, and Mr.

As of June 30, 2026, Tremont owned 4,577,835 of our common shares, or 20.2 % of our outstanding common shares, and Mr.

Portnoy beneficially owned (including through Tremont and ABP Trust) 5,095,308 of our common shares, or 22.5 % of our outstanding common shares.

8 unchanged sentences

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

We recognized property management and construction supervision fees of $ 20 and $ 21 for the three months ended March 31, 2026 and 2025, respectively, related to real estate owned.

We recognized property management and construction supervision fees of $ 18 and $ 38 for the three and six months ended June 30, 2026, respectively, and $ 16 and $ 37 for the three and six months ended June 30, 2025, respectively, related to real estate owned.

Purchase of Mortgage Loans.

13 unchanged sentences

Weighted Average Common Shares

We calculate net income per common share - basic using the two class method.

We calculate net income per common share - diluted using the more dilutive of the two class or treasury stock method.

Unvested share awards are considered participating securities and the related impact on earnings are considered when calculating net income per common share - basic and net income per common share - diluted.

We calculate net (loss) income per common share - basic using the two class method.

We calculate net (loss) income per common share - diluted using the more dilutive of the two class or treasury stock method.

Unvested share awards are considered participating securities and the related impact on earnings is considered when calculating net (loss) income per common share - basic and net (loss) income per common share - diluted.

SEVEN HILLS REALTY TRUST

1 unchanged sentence

(dollars in thousands, except per share data)

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

Three Months Ended March 31,

Net income $ 4,385 $ 4,532

The calculation of net (loss) 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,

2026 2025 2026 2025

Net (loss) income $ ( 867 ) $ 2,678 $ 3,518 $ 7,210

Net income attributable to unvested share awards ( 55 ) ( 50 ) ( 110 ) ( 101 )

Net income used in calculating net income per common share - basic and diluted $ 4,330 $ 4,481

Net (loss) income used in calculating net income per common share - basic and diluted $ ( 922 ) $ 2,628 $ 3,408 $ 7,109

Denominators:

Weighted average common shares outstanding - basic and diluted 22,419 14,785 22,408 14,771

Net income per common share - basic and diluted $ 0.19 $ 0.30

Net (loss) income per common share - basic and diluted $ ( 0.04 ) $ 0.18 $ 0.15 $ 0.48

Segment Reporting

2 unchanged sentences

The Chief Operating Decision Maker, or CODM, is our President and Chief Investment Officer.

The CODM assesses performance, allocates resources and makes strategic decisions based on net income as shown in our condensed consolidated statements of operations.

The CODM assesses performance, allocates resources and makes strategic decisions based on net (loss) income as shown in our condensed consolidated statements of operations.

Our significant expense categories are included in our condensed consolidated statements of operations.

1 unchanged sentence

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