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Investor releaseQuarter not tagged2026-04-30Seven Hills (SEVN) Q1 2026 Earnings Transcript
Motley Fool
Seven Hills (SEVN) Q1 2026 Earnings Transcript
Image source: The Motley Fool. Wednesday, April 29, 2026 at 11 a.m. ET President and Chief Investment Officer — Thomas Lorenzini Chief Financial Officer and Treasurer — Matthew C. Brown Vice President — Jared Lewis Thomas Lorenzini, President and Chief Investment Officer; Matthew C. Brown, Chief Financial Officer and Treasurer; and Jared Lewis, Vice President. Today's call includes a presentation by management followed by a question and answer session with analysts. Please note that the recording, rebroadcast, transmission, and transcription of today's conference call is prohibited without the prior written consent of the company. Also note that today's conference call contains forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other securities laws. These forward looking statements are based on Seven Hills Realty Trust's beliefs and expectations as of today, 04/29/2026, and actual results may differ materially from those that we project. The company undertakes no obligation to revise or publicly release the results of any revision to the forward looking statements made in today's conference call. Additional information concerning factors that could cause those differences is contained in our filings with the Securities and Exchange Commission, which can be accessed from the SEC's website. Investors are cautioned not to place undue reliance on any forward looking statements. In addition, we will be discussing non-GAAP financial numbers during this call, including distributable earnings and distributable earnings per share. A reconciliation of GAAP to non-GAAP financial measures can be found in our earnings release, and the presentation can be found on our website at 7reit.com. With that, I will now turn the call over to Thomas Lorenzini. Thomas Lorenzini: Thank you, Matt, and good morning, everyone. On our call today, I will start by providing an update on our first quarter performance and recent investment activity, followed by an overview of our loan portfolio, then Jared Lewis will discuss current market conditions and our pipeline, before Matthew C. Brown reviews our financial results and guidance. Yesterday, we reported solid first quarter results reflecting the continued strength of our fully performing loan portfolio and our disciplined underwriting approach. Distributable earnings for the quarter...
Investor releaseQuarter not tagged2026-04-30Seven Hills Realty Trust (SEVN) Q1 2026 Earnings Call Highlights: Strong Loan Portfolio and ...
GuruFocus.com
Seven Hills Realty Trust (SEVN) Q1 2026 Earnings Call Highlights: Strong Loan Portfolio and ...
This article first appeared on GuruFocus. Release Date: April 29, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Seven Hills Realty Trust (NASDAQ:SEVN) reported solid first quarter results with distributable earnings of $5.3 million or $0.24 per share, at the high end of guidance. The company achieved a new high watermark with approximately $776 million in total outstanding loan commitments after originating three new loans totaling $67.5 million. The loan portfolio demonstrated strong credit performance with a weighted average risk rating of 2.8 and no realized losses, with all loans current on debt service. Seven Hills Realty Trust (NASDAQ:SEVN) extended the maturities of its UBS and Wells Fargo financing facilities to 2028 and doubled the capacity of the Wells Fargo facility to $250 million. The company maintains strong liquidity with approximately $110 million of cash on hand and nearly $400 million of available capacity under secured financing facilities. Recent market volatility, driven by geopolitical tensions and interest rate fluctuations, has impacted transaction activity and owner decision-making. The rights offering in December has caused near-term dilution, impacting earnings, although deployment of proceeds is progressing. Distributable earnings have not covered the dividend over the past quarter, although the company remains committed to maintaining the dividend level through 2026. The company faces challenges in underwriting refinancing transactions due to the difficulty in assessing reset basis compared to acquisitions. The multifamily sector, while desirable, presents competitive challenges with compressed yields, impacting the company's ability to achieve desired returns. Warning! GuruFocus has detected 3 Warning Sign with SEVN. Is SEVN fairly valued? Test your thesis with our free DCF calculator. Q: I noticed your origination net interest margin (NIM) of 195 basis points this quarter is wider than last year's average. Is this due to market access or product mix? Where do you see the NIM for the rest of the year? A: (Tom Lorenzini, President and Chief Investment Officer) The wider NIM is primarily due to the product mix, including medical office, retail, and hospitality loans, which tend to have wider spreads. We avoid competitive bidding situations to maintain higher margins. For...
Investor releaseQuarter not tagged2026-04-29Seven Hills Realty Trust Q1 2026 Earnings Call Summary
Moby
Seven Hills Realty Trust Q1 2026 Earnings Call Summary
Achieved a four-year high net interest margin of 195 basis points on new originations by avoiding commodity-style auctions and focusing on high-yield sectors like medical office and hospitality. Maintained a fully performing loan portfolio with a 2.8 weighted average risk rating and zero realized losses, supported by RMR's deep asset-level operational expertise. Successfully deployed capital from the December rights offering into three new loans totaling $67.5 million, reaching a record high watermark of $776 million in total outstanding commitments. Strategically reduced office exposure to approximately 21% of the portfolio through disciplined repayment activity, including an expected $26.5 million payoff in suburban Chicago. Utilized interest rate floors on nearly all loans to provide a baseline of downside protection, contributing $0.01 per share in earnings protection during the quarter. Enhanced capital deployment capacity by extending UBS and Wells Fargo financing facilities to 2028 and doubling the Wells Fargo facility capacity to $250 million. Projecting second quarter distributable earnings between $0.23 and $0.25 per share, with a goal to return to dividend coverage levels by the end of 2026. Targeting a total portfolio size of approximately $950 million by year-end 2026, implying roughly $200 million in incremental growth. Anticipating near-term net portfolio growth of $50 million to $75 million in the current quarter, supported by a $105 million pipeline of outstanding term sheets. Committing to a $0.28 per share quarterly dividend through at least 2026, despite current temporary dilution from the recent rights offering. Expects to evaluate a potential disposition of the Yardley REO property in late 2026 following incremental leasing activity and tenant renewals. Acknowledged a moderation in acquisition activity due to market volatility and uncertainty surrounding interest rates, inflation, and geopolitical tensions in Iran. Noted that while the CMBS market slowed recently, capital availability remains stable across banks, debt funds, and government-sponsored enterprises. Maintains a modest CECL reserve of 130 basis points, reflecting a portfolio with no five-rated loans, no collateral-dependent loans, and no specific reserves. Mitigated construction risk by limiting future funding exposure to 6% of total commitments and requiring sponsor equity...
Investor releaseQuarter not tagged2026-04-29Seven Hills Realty Trust Announces First Quarter 2026 Results
Business Wire
Seven Hills Realty Trust Announces First Quarter 2026 Results
NEWTON, Mass., April 28, 2026--(BUSINESS WIRE)--Seven Hills Realty Trust (Nasdaq: SEVN) today announced its financial results for the quarter ended March 31, 2026, which can be found at the Quarterly Results section of SEVN's website at https://sevnreit.com/investors/financial-information/default.aspx. A conference call to discuss SEVN's first quarter 2026 results will be held on Wednesday, April 29, 2026 at 11:00 a.m. Eastern Time. The conference call telephone number is (866) 739-7850. Participants calling from outside the United States and Canada should dial (412) 317-6592. No pass code is necessary to access the call from either number. Participants should dial in about 15 minutes prior to the scheduled start of the call. A replay of the conference call will be available through 11:59 p.m. Eastern Time on Wednesday, May 6, 2026. To access the replay, dial (855) 669-9658. The replay pass code is 8218848. A live audio webcast of the conference call will also be available in listen only mode on SEVN's website, at www.sevnreit.com. The archived webcast will be available for replay on SEVN's website after the call. The transcription, recording and retransmission of SEVN's first quarter conference call in any way are strictly prohibited without the prior written consent of SEVN. About Seven Hills Realty Trust Seven Hills Realty Trust (Nasdaq: SEVN) is a real estate investment trust, or REIT, that originates and invests in first mortgage loans secured by middle market transitional commercial real estate. SEVN is managed by Tremont Realty Capital, an affiliate of The RMR Group (Nasdaq: RMR), a leading U.S. alternative asset management company with over $37 billion in assets under management and 40 years of institutional experience in buying, selling, financing and operating commercial real estate. For more information about SEVN, please visit www.sevnreit.com. A Maryland Real Estate Investment Trust with transferable shares of beneficial interest listed on the Nasdaq. No shareholder, Trustee or officer is personally liable for any act or obligation of the Trust. View source version on businesswire.com: https://www.businesswire.com/news/home/20260428864033/en/ Contacts Matt Murphy, Manager, Investor Relations (617) 796-8253
TranscriptFY2026 Q12026-04-29FY2026 Q1 earnings call transcript
Earnings source - 52 paragraphs
FY2026 Q1 earnings call transcript
Please note this event is being recorded. I would now like to turn the call over to Matt Murphy, Manager of Investor Relations. Please go ahead.
Good morning. Joining me on today's call are Tom Lorenzini, President and Chief Investment Officer, Matt Brown, Chief Financial Officer and Treasurer, and Jared Lewis, Vice President. Today's call includes a presentation by management, followed by a question and answer session with analysts. Please note that the recording, retransmission, and transcription of today's conference call is prohibited without the prior written consent of the company. Note that today's conference call contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other securities laws. These forward-looking statements are based on Seven Hills' beliefs and expectations as of today, April 29, 2026, and actual results may differ materially from those that we project. The company undertakes no obligation to revise or publicly release the results of any revision to the forward-looking statements made in today's conference call.
Additional information concerning factors that could cause those differences is contained in our filings with the Securities and Exchange Commission, or SEC, which can be accessed from the SEC's website. Investors are cautioned not to place undue reliance on any forward-looking statements. In addition, we will be discussing non-GAAP financial numbers during this call, including distributable earnings and distributable earnings per share. A reconciliation of GAAP to non-GAAP financial measures can be found in our earnings release presentation, which can be found on our website at sevnreit.com. With that, I will now turn the call over to Tom.
Thank you, Matt. Good morning, everyone. On our call today, I will start by providing an update on our first quarter performance and recent investment activity, followed by an overview of our loan portfolio. Jared will discuss current market conditions in our pipeline before Matt reviews our financial results and guidance. Yesterday, we reported solid first quarter results, reflecting the continued strength of our fully performing loan portfolio and our disciplined underwriting approach. Distributable earnings for the quarter came in as $5.3 million or $0.24 per share, which was at the high end of our guidance. We reached a new high water mark with approximately $776 million in total outstanding loan commitments after originating three new loans totaling $67.5 million during the quarter, reflecting our continued progress in deploying the capital raised from our December rights offering.
First quarter closings included a $30.5 million loan secured by a medical office property in Atlanta, a $19.5 million loan secured by a grocery anchored retail property in Palmdale, California, and a $17.5 million loan secured by a select service hotel in Scottsdale, Arizona. We also have three additional loans in process that we expect to close in the near term, totaling approximately $78 million, which Jared will speak to in more detail. These originations reflect our ability to source opportunities across property types and geographies while maintaining disciplined underwriting. Importantly, we remain selective in deploying capital and continue to focus on opportunities that meet our return thresholds.
Originations so far in 2026 have been executed at a net interest margin of approximately 195 basis points, representing the highest level we have achieved over the past four years. When including the impact of exit fees, total returns are incrementally higher. We believe this reflects both the strength of our platform and an improved first quarter transaction environment. Turning to our loan portfolio, as of March 31st, we had total loan commitments of approximately $776 million across 26 floating rate first mortgage loans. Our portfolio continues to demonstrate strong credit performance with a weighted average risk rating of 2.8, no realized losses, and all loans current on debt service. Our weighted average all-in yield at quarter end was 7.8%, and our weighted average loan-to-value at origination remained conservative at 66%.
During the quarter, we received the full repayment of a $16 million loan secured by a hotel in Lake Mary, Florida, and subsequent to quarter end, we received an additional $54.6 million from the repayment of a multifamily loan in Ohio. We are also expecting the repayment of a $26.5 million loan secured by an office building in suburban Chicago as early as this week. Upon payoff, this will reduce our overall office exposure to approximately 21% of the current portfolio. This repayment activity meaningfully increases our available capital and supports continued deployment into new investments. With recent loan repayments, we currently have approximately $110 million of cash on hand and nearly $400 million of available capacity under our secured financing facilities.
As previously announced, we extended the maturities of our UBS and Wells Fargo financing facilities to 2028 and doubled the capacity of the Wells Fargo facility to $250 million, further enhancing our ability to deploy capital and continue growing the portfolio. In summary, we believe Seven Hills is well-positioned to capitalize on an active pipeline of middle-market lending opportunities. While recent headlines have raised concerns around private credit, it is important to note that Seven Hills remains narrowly focused on senior secured commercial real estate lending. This approach is reinforced by RMR's multi-decade track record managing and operating commercial real estate, providing deep asset-level insight, disciplined underwriting, and proven experience across market cycles. With strong liquidity, expectations of improving transaction activity and attractive lending spreads, we remain focused on disciplined execution and generating compelling risk-adjusted returns for our shareholders.
With that, I'll turn the call over to Jared.
Thanks, Tom. Since our last call, we have seen increased volatility across the capital markets, driven in part by the ongoing conflict in Iran and its impact on investor sentiment. Interest rates have also moved higher, with the ten-year treasury rate increasing from approximately 3.95% at the end of February to 4.39% today. The expectation is that the FOMC will maintain its target range for the federal funds rate at 3.5%-3.75% later this afternoon. While the year began with strong transaction activity, continuing the momentum we saw at the end of 2025, recent market volatility has started to have an impact on owners' decision making.
Over the past month, we have seen some moderation in acquisition and sales activity as market participants take a slightly more cautious approach due to the uncertainty around interest rates, inflation, monetary policy, and broader geopolitical developments. With respect to debt capital markets, CMBS market appeared to slow a bit earlier this month given the macroeconomic uncertainty and interest rate volatility. Overall, we have not seen a meaningful pullback in capital availability. Banks, debt funds, life companies and government-sponsored enterprises all remain active. Importantly, our bank partners continue to support transactions through our secured financing facilities. From an activity standpoint, we are seeing a divergence across asset classes. Multifamily refinancing continues to dominate as borrowers work through maturing bridge and construction loans originated in 2021 and 2022.
In contrast, for new acquisitions and in many other asset classes, owners that are not under pressure to transact are generally waiting for greater clarity on macroeconomic conditions before moving forward with buy, sell, or refinance decisions. However, despite this period of slow acquisition transaction volume, assets still need to be financed, and we continue to see consistent demand for flexible lending solutions. As a result, our pipeline remains strong and we have over $125 million of term sheets outstanding for new loan opportunities and three loans totaling $78 million currently in diligence that we expect to close imminently. These include a $39.2 million loan secured by a multifamily property in Georgia, a $22.7 million loan secured by a medical office property in Texas, and a $16 million loan secured by a self-storage property in Pennsylvania.
In addition, we continue to evaluate a range of opportunities across the industrial, storage, retail, and hospitality sectors, where we believe we can achieve more attractive risk-adjusted returns relative to more competitive segments of the market. Importantly, we remain disciplined in our approach. While competition remains elevated in certain sectors, particularly multifamily, we are focused on transactions that offer attractive yields. We believe our ability to provide certainty of execution and flexibility to borrowers is a key differentiator in the current environment. Overall, while near-term transaction activity may remain somewhat uneven given ongoing macro uncertainty, we believe the current backdrop represents an attractive opportunity for lenders with available capital and a disciplined underwriting approach. As conditions stabilize, we expect to continue to selectively deploy capital into opportunities that meet both our credit standards and return thresholds.
With that, I'll turn the call over to Matt to discuss our financial results.
Thank you, Jared, and good morning, everyone. Yesterday, we reported first quarter distributable earnings of $5.3 million or $0.24 per share, which includes $0.08 of dilution related to our rights offering in December. As expected, the rights offering has impacted earnings in the near term. However, deployment of the proceeds is progressing well. New loan investments over the last 2 quarters have contributed $0.03 per share to distributable earnings in the first quarter. As Tom mentioned, originations so far in 2026 have been executed at net interest margins of 1.95%, the highest level over the past 4 years. During the first quarter, interest rate floors remained active for seven of our loans, a structural feature of our portfolio that actively protects earnings in a declining rate environment.
These floors contributed $0.01 per share of earnings protection for the quarter based on SOFR as of March 31st. All but one of our loans contain floors ranging from 25 basis points to 4.34%, providing a meaningful baseline of downside protection as the rate environment evolves. Earlier this month, our board declared a regular quarterly dividend of $0.28 per share, which equates to an annualized yield of approximately 14% based on yesterday's closing price. Although distributable earnings have not covered our dividend over the past quarter, we remain committed to this dividend level through 2026 at a minimum and expect distributable earnings to trend back to our quarterly dividend level by the end of this year. Overall, we expect second quarter distributable earnings to be in the range of $0.23-$0.25 per share.
As the proceeds from the rights offering are invested and capital from loan repayments is redeployed, we expect the incremental earnings contribution by the end of the year to offset the impact of the higher share count. Credit quality remains strong at Seven Hills. Our CECL reserve stands at a modest 130 basis points of total loan commitments, flat from last quarter, and is supported by a conservative portfolio risk rating of 2.8, also unchanged. The portfolio is well diversified by property type and geography, and all loans are current on debt service. Importantly, we have no 5-rated loans, no collateral-dependent loans, and no loans with specific reserves.
This reflects a disciplined underwriting and asset management process that we believe creates durable long-term value for shareholders. That concludes our prepared remarks. Operator, please open the line for questions.
We will now begin the question-and-answer session. To ask a question, you may press star then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. The first question today comes from Jason Weaver with Jones Trading. Please go ahead.
Hi. Good morning, guys. Thanks for taking my question. I thought it was notable about your origination NIM of 195 in this quarter being about 35 basis points wider than last year's average. Is that a function of just mix? You know, pocket to the market that you're able to access that others aren't? We're just seeing, you know, opposite sort of trends at some of your peers. Where do you see the rest of the year's NIM settling? How much of that is step of the base rate?
Yeah. Thanks for the question. The loans that we did in Q1, the properties were medical office, retail, and hospitality. There was no multifamily in there, which is where we see the tightest pricing and the narrowest margin. We were able to, you know, attract some outsized returns, especially when we look at select service hospitality, which, you know, technically, tend to price at a little bit wider spreads. And then medical office as well, and then retail. Those are just, it's really product mix, I think, on those. I would also say that it's. You know, we take a rifle shot approach to the originations, right? You know, while we have a lot of transactions come through the shop, robust pipeline, we really pick our spots.
We're looking to take deals off the street where we're going to achieve that outsized return rather than get into a commodity situation where we're simply bidding against, you know, several other lenders and we're just, you know, everybody's cutting their spreads by 1 or 2 basis points to win the business. We try to avoid those auction-type situations. For the going forward, I would tell you that the 3 loans that we're anticipating closing here in short order, net interest margin on those is probably a little bit inside of that 195, probably closer to about 180. That is just again, as a function of the product types there. We do have a multifamily loan in there that's fairly sizable, relative to the three, which drives down that net interest margin a little bit.
Then the other properties, another medical office and a self-storage, as Jared had mentioned, help round that out. We're able to maintain a healthy margin. It's really the multifamily loans where we're seeing the most compression.
Got it. Understood. That's helpful. I wanted to ask, after the Olmsted Falls repayment in April, I think you're sitting on a, you know, a pretty large chunk of liquidity, almost $0.5 billion. What does the qualifying pipeline look like by sector and size as well as probability of closing, in the near term? What's the realistic deployment timeline?
Thanks, Jason. This is Jared. Right now, the pipeline averages about $1 billion, and it continues to turn over pretty frequently. We're seeing a lot of transactions. As we, you know, mine through them and meet up the ones we wanna look at, they get replenished. We're still seeing quite a bit of activity. The majority of the activity we are seeing today is really for refinancing of assets as opposed to acquisition. Those are a little bit more challenging to underwrite. We do have three loans right now that we're negotiating term sheets on for about $125 million. The average deal size there is, you know, it's a little bit barbell, but we're kind of targeting deals that are in the $25 million-$40 million range as a sweet spot.
When you have the pipeline with the majority of it being refinance, they're a little bit harder to quantify because we're trying to determine whether or not the borrowers, you know, we wanna do deals where borrowers are bringing new cash to the table. We wanna do deals that we understand a reset basis in the transaction, a refinance is much harder to do that than in an acquisition. In terms of our ability to deploy the capital that we have now, like I said, we're negotiating three term sheets at $125 million. We're far along in a couple of those right now. I can't handicap whether or not we'll win all of them, feel pretty good about it.
Then going forward, we'll continue to evaluate quite a bit of multifamily. The majority of our pipeline is in multifamily, but we're not going to. Again, as Tom mentioned, we're not gonna chase deals down to win business by 5, 10, 15 basis points. I think the point is that over the next two quarters, we should have the ability to kind of meet our targets of origination activity in that 100 to 300 over the next two quarters.
Got it. Thank you. I appreciate the color.
Again, if you have a question, please press star one. Your next question comes from Chris Muller with Citizens Capital Markets. Please go ahead.
Hey, everyone. Thanks for taking the questions. Q originations were pretty diverse, and you guys touched on this a little bit. Is there a particular asset type that you guys do wanna increase exposure to? Or are you more just looking at the best opportunities across the board that aren't in super competitive, asset classes?
We would certainly like to increase exposure further to multifamily. I think that's beneficial, given it's an extremely liquid market, right? With, you know, Fannie and Freddie playing there, et cetera, and from an investor standpoint as well. The transactions that we are going to pursue there are gonna be ones where we feel that we're making a decent return. That said, other product types certainly make sense in today's world. You know, we've seen the self-storage, like that product. Student housing has been attractive to us. Medical office has been attractive to us. Industrial still remains an attractive asset class. The only thing we're not actively pursuing right now really is new office loans and healthcare related assets.
We don't target per se and say, "Hey, we need to have X% per property type." It's a little bit more of a holistic, making sure we have a diverse portfolio, which we do, and we wanna continue to maintain that. We're really looking for just making the proper returns, you know, risk-adjusted returns, right? If we can pick off a few multifamilies, we'll do that. We're more than capable with the other products as well. Grocery anchored retail is somewhere that we are focused as well.
I know that's a broad-based answer for your question, but, you know, it's, it's a little less formulaic and more about taking that rifle shot approach and making sure that we're lending against quality real estate and making an outsized return to do so.
That's helpful. Then I guess were 1Q origination volumes impacted at all by the geopolitical disruptions? Just how are you thinking about net portfolio growth over the coming quarters?
Yeah, I think, we touched on a little bit. Certainly the first quarter we saw quite a bit of activity. We were very happy with what we saw coming through the pipeline. With the war in Iran, things have slowed a little bit from a transaction standpoint. I think borrowers and investors, if they don't need to make a decision right now, they might pause just to see what's gonna happen with interest rates, given all the volatility that there's been. That said, there's still adequate flow. We anticipate this quarter, with the loans that we've closed, the loans that we're closing, and add a couple spec loans in there, probably $200 million.
We are really from a repayment standpoint, you know, we mentioned we do have an office loan that we believe is repaying possibly this week. Beyond that, we're not expecting any other payoffs in the quarter. We should have pretty good net portfolio growth, maybe $50 million, $75 million, something along those lines, compared to where we are today. You know, Q4, or Q3 and Q4, another $200 million of net portfolio growth.
Got it. Very helpful. If I could just squeeze one last one in. Are there any updates you guys could share on the plans for the Yardley REO property?
That property, it continues to perform just remarkably well. Occupancy right now remains at about 81%-82%. We did renew a large tenant in there. The WALT is almost six years now on that asset, and there's been quite a bit of activity over the last quarter of new tenants coming in and looking at. We've done some test fit outs for a few tenants that are looking for space. Our goal there really would be if we're able to lease a little bit incrementally some additional space, then we can consider chatting with the board and, you know, looking to dispose of the asset late this year.
Got it. Very helpful. Thanks again for taking the questions.
Yep.
Your next question comes from Christopher Nolan with Ladenburg Thalmann. Please go ahead.
Hi. Just to follow up on the last question in terms of the portfolio growth. Did you say that you're expecting roughly $200 million in incremental portfolio growth for 2026?
Yeah. Ideally, Chris, we end up, you know, close to $950 or so at the end of the year for total portfolio size.
Great. On the allowance reserve, does the steeper yield curve sort of impact the reserving? What I'm thinking about is if someone has a property and, you know, interest rates are higher and they have to refinance, they're going to have to toss in more equity to do that. Does CECL sort of require you to increase your allowances, loan rates go up?
Yeah. It's an interesting question. You know, there's a lot of factors that go into the CECL reserve. Some of them are related to our specific portfolio, you know, maturities, et cetera, as well as a lot of, you know, economic factors. You know, what I would say is, we would expect our reserve at 1.3% of total commitments to be probably, you know, hanging around there for a while. It could tick down a little bit. You know, Tom mentioned an office loan we're expected to repay in the near term. We have some other office loan maturities coming up this year.
Overall, you know, we have a pretty modest overall reserve at 1.3%, which I think is on the low end for some of our mortgage REIT peers.
Great. Final question. Given the jump in fuel prices, for projects which are being repositioned, you know, with the developer, is there any sort of requirement for the developer? I mean, obviously the construction costs are gonna go up, the input's gonna go up. How does that impact your underwriting? Do you require the developer to put in more equity or no real impact at all?
A couple things. One, our portfolio as far as future fundings is really somewhat limited. I think it's 6% of the total commitment, so it's not that sizable. If we're in a situation where it's a value add transaction and there are cost increases beyond what we have budgeted for, when we close the transaction, there's typically going to be an equity rebalance that's required from sponsorship. Meaning if a project is started and they commence rehab or construction, what have you, and there's X dollars available inside the loan to fund those costs, but the costs actually come in higher, they would be required to rebalance and come to the table with equity to do so.
Great. Thanks, Tom.
This concludes our question and answer session. I would like to turn the conference back over to Tom Lorenzini, President and Chief Investment Officer, for any closing remarks.
Thanks, everyone, for joining today's call. We look forward to seeing many of you at the upcoming Nareit Conference in New York City this June. Please reach out to investor relations if you're interested in scheduling a meeting with Seven Hills. Operator, that concludes our call.
The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.
Investor releaseQuarter not tagged2026-04-28What To Expect From Seven Hills Realty Trust (SEVN) Q1 2026 Earnings
GuruFocus.com
What To Expect From Seven Hills Realty Trust (SEVN) Q1 2026 Earnings
This article first appeared on GuruFocus. Seven Hills Realty Trust (NASDAQ:SEVN) is set to release its Q1 2026 earnings on Apr 29, 2026. The consensus estimate for Q1 2026 revenue is $8.65 million, and the earnings are expected to come in at $0.21 per share. The full year 2026's revenue is expected to be $36.55 million and the earnings are expected to be $0.91 per share. More detailed estimate data can be found on the Forecast page. Warning! GuruFocus has detected 3 Warning Sign with SEVN. Is SEVN fairly valued? Test your thesis with our free DCF calculator. Revenue estimates for Seven Hills Realty Trust (NASDAQ:SEVN) have increased from $33.77 million to $36.55 million for the full year 2026. For 2027, revenue estimates have declined from $41.20 million to $38.03 million over the past 90 days. Earnings estimates have decreased from $0.93 per share to $0.91 per share for the full year 2026, while for 2027, they have increased from $1.01 per share to $1.03 per share over the same period. In the previous quarter of 2025-12-31, Seven Hills Realty Trust's (NASDAQ:SEVN) actual revenue was $7.30 million, which missed analysts' revenue expectations of $7.34 million by -0.54%. Seven Hills Realty Trust's (NASDAQ:SEVN) actual earnings were $0.29 per share, which beat analysts' earnings expectations of $0.22 per share by 33.18%. After releasing the results, Seven Hills Realty Trust (NASDAQ:SEVN) was up by 0.81% in one day. Based on the one-year price targets offered by 3 analysts, the average target price for Seven Hills Realty Trust (NASDAQ:SEVN) is $10.50, with a high estimate of $11.50 and a low estimate of $10.00. The average target implies an upside of 28.99% from the current price of $8.14. Based on GuruFocus estimates, the estimated GF Value for Seven Hills Realty Trust (NASDAQ:SEVN) in one year is $12.61, suggesting an upside of 54.91% from the current price of $8.14. Based on the consensus recommendation from 3 brokerage firms, Seven Hills Realty Trust's (NASDAQ:SEVN) average brokerage recommendation is currently 1.7, indicating an "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Investor releaseQuarter not tagged2026-04-27Earnings To Watch: Seven Hills Realty Trust (SEVN) Reports Q1 2026 Result
GuruFocus.com
Earnings To Watch: Seven Hills Realty Trust (SEVN) Reports Q1 2026 Result
This article first appeared on GuruFocus. Seven Hills Realty Trust (NASDAQ:SEVN) is set to release its Q1 2026 earnings on Apr 28, 2026. The consensus estimate for Q1 2026 revenue is $8.65 million, and the earnings are expected to come in at $0.21 per share. The full year 2026's revenue is expected to be $36.55 million, and the earnings are expected to be $0.91 per share. More detailed estimate data can be found on the Forecast page. Warning! GuruFocus has detected 3 Warning Sign with SEVN. Is SEVN fairly valued? Test your thesis with our free DCF calculator. Over the past 90 days, revenue estimates for Seven Hills Realty Trust (NASDAQ:SEVN) have increased from $33.77 million to $36.55 million for the full year 2026, while they have declined from $41.20 million to $38.03 million for 2027. Earnings estimates have declined from $0.93 per share to $0.91 per share for the full year 2026 but have increased from $1.01 per share to $1.03 per share for 2027. In the previous quarter ending 2025-12-31, Seven Hills Realty Trust's (NASDAQ:SEVN) actual revenue was $7.30 million, which missed analysts' revenue expectations of $7.34 million by -0.54%. Seven Hills Realty Trust's (NASDAQ:SEVN) actual earnings were $0.29 per share, which beat analysts' earnings expectations of $0.22 per share by 33.18%. After releasing the results, Seven Hills Realty Trust (NASDAQ:SEVN) was up by 0.81% in one day. Based on the one-year price targets offered by 3 analysts, the average target price for Seven Hills Realty Trust (NASDAQ:SEVN) is $10.50, with a high estimate of $11.50 and a low estimate of $10.00. The average target implies an upside of 29.15% from the current price of $8.13. Based on GuruFocus estimates, the estimated GF Value for Seven Hills Realty Trust (NASDAQ:SEVN) in one year is $12.61, suggesting an upside of 55.10% from the current price of $8.13. Based on the consensus recommendation from 3 brokerage firms, Seven Hills Realty Trust's (NASDAQ:SEVN) average brokerage recommendation is currently 1.7, indicating an "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Investor releaseQuarter not tagged2026-04-09Seven Hills Realty Trust Announces Quarterly Dividend on Common Shares
Business Wire
Seven Hills Realty Trust Announces Quarterly Dividend on Common Shares
NEWTON, Mass., April 09, 2026--(BUSINESS WIRE)--Seven Hills Realty Trust (Nasdaq: SEVN) today announced a regular cash distribution on its common shares of $0.28 per share ($1.12 per share per year). The distribution declared today will be paid to SEVN’s common shareholders of record as of the close of business on April 21, 2026 and distributed on or about May 14, 2026. About Seven Hills Realty Trust Seven Hills Realty Trust (Nasdaq: SEVN) is a real estate investment trust, or REIT, that originates and invests in first mortgage loans secured by middle market transitional commercial real estate. SEVN is managed by Tremont Realty Capital, an affiliate of The RMR Group (Nasdaq: RMR), a leading U.S. alternative asset management company with over $37 billion in assets under management and 40 years of institutional experience in buying, selling, financing and operating commercial real estate. For more information about SEVN, please visit www.sevnreit.com. WARNING CONCERNING FORWARD-LOOKING STATEMENTS This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other securities laws. These forward-looking statements are based upon SEVN’s present intent, beliefs and expectations, but these statements and the implications of these statements are not guaranteed to occur and may not occur for various reasons, some of which are beyond SEVN’s control. For example, this press release states that SEVN’s quarterly cash distribution rate is $0.28 per share per quarter or $1.12 per share per year. A possible implication of this statement is that SEVN will continue to pay quarterly distributions of $0.28 per share or $1.12 per share per year in the future. SEVN’s Board of Trustees considers many factors when setting or resetting SEVN’s distribution rate, including SEVN’s Distributable Earnings, Distributable Earnings per share, the then current and expected needs and availability of cash to pay SEVN's obligations and fund its investments, distributions which may be required to be paid by SEVN to maintain SEVN’s qualification for taxation as a real estate investment trust and other factors deemed relevant by SEVN's Board of Trustees in its discretion. Accordingly, any future distributions to SEVN’s shareholders may be increased, decreased, suspended or discontinued, and SEVN cannot be sure as to the rate a...
Investor releaseQuarter not tagged2026-04-01Seven Hills Realty Trust First Quarter 2026 Conference Call Scheduled for Wednesday, April 29th
Business Wire
Seven Hills Realty Trust First Quarter 2026 Conference Call Scheduled for Wednesday, April 29th
NEWTON, Mass., March 31, 2026--(BUSINESS WIRE)--Seven Hills Realty Trust (Nasdaq: SEVN) today announced that it will issue a press release containing its first quarter 2026 financial results after the Nasdaq closes on Tuesday, April 28, 2026. On Wednesday, April 29, 2026 at 11:00 a.m. Eastern Time, President and Chief Investment Officer Tom Lorenzini, Chief Financial Officer and Treasurer Matthew Brown and Vice President Jared Lewis will host a conference call to discuss these results. The conference call telephone number is (866) 739-7850. Participants calling from outside the United States and Canada should dial (412) 317-6592. No pass code is necessary to access the call from either number. Participants should dial in about 15 minutes prior to the scheduled start of the call. A replay of the conference call will be available through 11:59 p.m. on Wednesday, May 6, 2026. To access the replay, dial (855) 669-9658. The replay pass code is 8218848. A live audio webcast of the conference call will also be available in a listen-only mode on the company’s website, which is located at www.sevnreit.com. Participants wanting to access the webcast should visit the company’s website about five minutes before the call. The archived webcast will be available for replay on the company’s website after the call. About Seven Hills Realty Trust Seven Hills Realty Trust (Nasdaq: SEVN) is a real estate investment trust, or REIT, that originates and invests in first mortgage loans secured by middle market transitional commercial real estate. SEVN is managed by Tremont Realty Capital, an affiliate of The RMR Group (Nasdaq: RMR), a leading U.S. alternative asset management company with over $37 billion in assets under management and 40 years of institutional experience in buying, selling, financing and operating commercial real estate. For more information about SEVN, please visit www.sevnreit.com. A Maryland Real Estate Investment Trust with transferable shares of beneficial interest listed on the Nasdaq. No shareholder, Trustee or officer is personally liable for any act or obligation of the Trust. View source version on businesswire.com: https://www.businesswire.com/news/home/20260331342103/en/ Contacts Matt Murphy, Manager, Investor Relations (617) 796-8253 www.sevnreit.com
Investor releaseQuarter not tagged2026-02-20Seven Hills Realty Trust (SEVN) Q4 2025 Earnings Call Highlights: Strong Loan Growth and ...
GuruFocus.com
Seven Hills Realty Trust (SEVN) Q4 2025 Earnings Call Highlights: Strong Loan Growth and ...
This article first appeared on GuruFocus. Distributable Earnings: $4.6 million or $0.28 per share for Q4 2025. Rights Offering Proceeds: $61.5 million raised in December. New Loan Investments: $101.3 million in three new loans during Q4 2025. Total Loan Commitments: $724.5 million as of December 31, 2025. Weighted Average All-In Yield: 7.92%. Weighted Average Loan-to-Value: 66% at origination. Dividend: $0.28 per share, annualized yield of approximately 14%. Cash on Hand: $123 million at the end of Q4 2025. Secured Financing Facilities Capacity: $377 million pro forma. First-Quarter 2026 Distributable Earnings Guidance: $0.22 to $0.24 per share. Warning! GuruFocus has detected 3 Warning Signs with SEVN. Is SEVN fairly valued? Test your thesis with our free DCF calculator. Release Date: February 19, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Seven Hills Realty Trust (NASDAQ:SEVN) reported strong fourth-quarter results with distributable earnings of $4.6 million or $0.28 per share. The company successfully completed a rights offering in December, raising $61.5 million in net proceeds, increasing investment capacity by over $200 million. SEVN's loan portfolio grew by $83 million year-over-year, with a weighted average all-in yield of 7.92% and improved risk rating. The company has significant available capacity for new investments, with several loans scheduled to close in the first quarter of 2026. SEVN's portfolio is well-diversified by property type and geography, with all loans current on debt service and no past due or nonaccrual loans at year-end. The rights offering resulted in a temporary dilution, impacting fourth-quarter distributable earnings by $0.03 per share. First-quarter distributable earnings are expected to be lower, in the range of $0.22 to $0.24 per share, due to the increased share count from the rights offering. The company faces competition for quality lending opportunities, putting downward pressure on credit spreads, particularly in the industrial and multifamily sectors. SEVN's focus remains on senior secured positions, limiting exploration into potentially higher-yielding junior tranches. The company expects limited loan repayments in the near term, which may affect the pace of portfolio growth and capital redeployment. Q: How is Seven Hills Realty Trust finding opportuniti...
Investor releaseQuarter not tagged2026-02-19Seven Hills Realty Trust Q4 2025 Earnings Call Summary
Moby
Seven Hills Realty Trust Q4 2025 Earnings Call Summary
Successfully completed a $61.5 million net rights offering in December, expanding investment capacity by over $200 million to capitalize on a recovering transaction environment. Achieved a fully performing loan portfolio with zero nonaccruals, supported by a weighted average risk rating improvement to 2.8 and conservative 66% LTV at origination. Accelerated capital deployment with $101.3 million in new commitments during Q4, targeting diverse sectors including student housing, hospitality, and industrial properties. Benefited from interest rate floors on all but one loan, which provided $0.01 of earnings protection in Q4 and serves as a hedge against a declining SOFR environment. Maintained a disciplined underwriting approach by avoiding the 'race to the bottom' in multifamily yields, instead finding outsized risk-adjusted returns in medical office and self-storage. Strengthened alignment with shareholders as the manager increased its ownership stake to over 20% following the rights offering participation. Observed a 25% year-over-year increase in office transaction volume, indicating stabilizing pricing and improved debt capital availability for the asset class. Projecting Q1 2026 distributable earnings between $0.22 and $0.24 per share, reflecting temporary dilution from the rights offering before full capital deployment. Targeting a total loan portfolio size of approximately $1 billion by year-end 2026, supported by a pipeline of over $1 billion in loan opportunities being evaluated in the first quarter of 2026. Anticipating approximately $300 million in loan maturities starting in the second half of 2026, which will provide significant recycling capacity for new investments. Maintaining the $0.28 quarterly dividend despite near-term earnings drag, with expectations for distributable earnings to recover to Q4 levels by year-end as leverage increases. Evaluating a robust pipeline of over $1 billion in loan opportunities as market liquidity and visibility around interest rates continue to improve. Completed the acquisition of two loans totaling $64 million from the manager's balance sheet to efficiently deploy rights offering proceeds into known, pre-vetted assets. Extended maturities on two secured financing facilities and increased one facility's maximum size by $125 million, resulting in $377 million of total pro forma capacity. Reduced CECL reserves by...
Investor releaseQuarter not tagged2026-02-19Seven Hills Realty Trust Announces Fourth Quarter 2025 Results
Business Wire
Seven Hills Realty Trust Announces Fourth Quarter 2025 Results
NEWTON, Mass., February 18, 2026--(BUSINESS WIRE)--Seven Hills Realty Trust (Nasdaq: SEVN) today announced its financial results for the quarter and year ended December 31, 2025, which can be found at the Quarterly Results section of SEVN's website at https://sevnreit.com/investors/financial-information/default.aspx. A conference call to discuss SEVN's fourth quarter 2025 results will be held on Thursday, February 19, 2026 at 11:00 a.m. Eastern Time. The conference call telephone number is (866) 739-7850. Participants calling from outside the United States and Canada should dial (412) 317-6592. No pass code is necessary to access the call from either number. Participants should dial in about 15 minutes prior to the scheduled start of the call. A replay of the conference call will be available through 11:59 p.m. Eastern Time on Thursday, February 26, 2026. To access the replay, dial (855) 669-9658. The replay pass code is 9498636. A live audio webcast of the conference call will also be available in listen only mode on SEVN's website, at www.sevnreit.com. The archived webcast will be available for replay on SEVN's website after the call. The transcription, recording and retransmission of SEVN's fourth quarter conference call in any way are strictly prohibited without the prior written consent of SEVN. About Seven Hills Realty Trust Seven Hills Realty Trust (Nasdaq: SEVN) is a real estate investment trust, or REIT, that originates and invests in first mortgage loans secured by middle market transitional commercial real estate. SEVN is managed by Tremont Realty Capital, an affiliate of The RMR Group (Nasdaq: RMR), a leading U.S. alternative asset management company with over $37 billion in assets under management and 40 years of institutional experience in buying, selling, financing and operating commercial real estate. For more information about SEVN, please visit www.sevnreit.com. A Maryland Real Estate Investment Trust with transferable shares of beneficial interest listed on the Nasdaq. No shareholder, Trustee or officer is personally liable for any act or obligation of the Trust. View source version on businesswire.com: https://www.businesswire.com/news/home/20260218907718/en/ Contacts Matt Murphy, Manager, Investor Relations (617) 796-8253