v3.26.1
Indebtedness
 3 Months Ended
Mar. 31, 2026
Debt Disclosure [Abstract]  
Indebtedness
Note 8. Indebtedness
Our principal debt obligations at March 31, 2026 were: (1) $2,275,000 aggregate outstanding principal amount of senior unsecured notes; (2) $1,580,155 aggregate outstanding principal amount of senior secured notes; (3) $1,349,164 aggregate outstanding principal amount of net lease mortgage notes; and (4) $45,000 of outstanding borrowings under our $45,000 variable funding note, or the VFN. We had no amounts outstanding under our revolving credit facility as of March 31, 2026.
Revolving Credit Facility
Our $650,000 secured revolving credit facility is available for general business purposes, including acquisitions. We can borrow, repay and reborrow funds available under our revolving credit facility until maturity and no principal repayments are due until maturity. Availability of borrowings under our credit agreement is subject to ongoing minimum performance and market values of the collateral properties, satisfying certain financial covenants and other credit facility conditions. The maturity date of our revolving credit facility is June 29, 2027, and, subject to the payment of an extension fee and meeting certain other conditions, we have an option to extend the stated maturity date of the facility by two additional six-month periods.
Interest payable on drawings under our revolving credit facility is based on the secured overnight financing rate, or SOFR, plus a margin ranging from 1.50% to 3.00% based on our leverage ratio, as defined in our credit agreement, which was 2.75% as of March 31, 2026. We also pay unused commitment fees of 20 to 30 basis points per annum on the total amount of lending commitments under our revolving credit facility based on amounts outstanding. As of March 31, 2026 and 2025, the annual interest rate payable on borrowings under our revolving credit facility was 6.43% and 6.91%, respectively. The weighted average annual interest rate for borrowings under our revolving credit facility was 6.94% for the three months ended March 31, 2025. As of both March 31, 2026 and May 4, 2026, we had no amounts outstanding under our revolving credit facility and $650,000 available for borrowing.
As collateral for all loans and other obligations under our revolving credit facility, certain of our subsidiaries pledged all of their respective equity interests in certain of our direct and indirect property owning subsidiaries, and our pledged subsidiaries provided first mortgage liens on certain properties. As of March 31, 2026, our revolving credit facility was secured by 55 properties, including 38 net lease properties and 17 hotels, with an aggregate undepreciated book value of $887,212.
Our debt agreements provide for acceleration of payment of all amounts outstanding upon the occurrence and continuation of certain events of default, such as, in the case of our credit agreement, a change of control of us, which includes The RMR Group LLC, or RMR, ceasing to act as our business manager. Our debt agreements also contain covenants, including those that restrict our ability to incur debts or to make distributions under certain circumstances and generally require us to maintain certain financial ratios. Borrowings under our revolving credit facility are subject to meeting ongoing minimum performance and market values of the collateral properties, satisfying certain financial covenants and other credit facility conditions. We believe we were in compliance with the terms and conditions of our debt agreements as of March 31, 2026.
Redemption of Senior Unsecured Notes
In January 2026, we redeemed $300,000 of our $400,000 of 4.95% senior unsecured notes due 2027 for a redemption price equal to the principal amount, plus accrued and unpaid interest to, but excluding, the date of redemption and a make whole premium of $1,569. As a result of the redemption, we recorded a loss on early extinguishment of debt of $2,174 during the three months ended March 31, 2026, which represented the write-off of unamortized discounts and issuance costs related to these notes.
In March 2026, we redeemed all $700,000 of our outstanding 8.375% senior guaranteed unsecured notes due 2029 for a redemption price equal to the principal amount, plus accrued and unpaid interest to, but excluding, the date of redemption and a make whole premium of $37,128. As a result of the redemption, we recorded a loss on early extinguishment of debt of $49,697 during the three months ended March 31, 2026, which represented the write-off of unamortized discounts and issuance costs related to these notes.
In April 2026, we redeemed all $450,000 of our outstanding 5.50% senior guaranteed unsecured notes due 2027 for a redemption price equal to the principal amount, plus accrued and unpaid interest to, but excluding, the date of redemption and a make whole premium of $7,191.
In May 2026, we redeemed the remaining $100,000 of our outstanding 4.95% senior unsecured notes due 2027 for a redemption price equal to the principal amount, plus accrued and unpaid interest to, but excluding, the date of redemption and a make whole premium of $216.
Net Lease Mortgage Notes
SVC ABS LLC, or the Initial Issuer, issued $610,200 in aggregate principal amount of net lease mortgage notes, or the Series 2023-1 Notes, on February 10, 2023. On March 6, 2026, the Initial Issuer, SVC 2026 ABS LLC and SVC 2026 TA ABS LLC, or collectively, the Issuers, issued $745,000 in aggregate principal amount of net lease mortgage notes in three classes, or the Series 2026-1 Notes. We contributed to the Issuers 158 properties with an undepreciated book value of $761,023 and required minimum rents of $84,179 as of March 31, 2026. The Issuers are wholly owned special purpose bankruptcy remote, indirect subsidiaries that are separate legal entities and are the sole owners of their respective assets and liabilities. The assets of the Issuers are not available to pay or otherwise satisfy obligations to the creditors of any owners or affiliates of the Issuers.
Our net lease mortgage notes are summarized below:
SeriesNote Class
Principal Outstanding as of March 31, 2026
Coupon RateInitial Term (in years)Maturity
2023-1Class A$300,298 5.15%5February 2028
2023-1Class B171,666 5.55%5February 2028
2023-1Class C132,200 6.70%5February 2028
2023-1 Total / weighted average604,164 5.60%
2026-1Class A220,000 5.16%5March 2031
2026-1Class B375,000 5.80%5March 2031
2026-1Class M150,000 7.55%5March 2031
2026-1 Total / weighted average745,000 5.96%
Total / weighted average$1,349,164 5.80%
The Series 2023-1 Class A notes and the Series 2023-1 Class B notes require monthly principal repayments at an annualized rate of 0.50% and 0.25% of the balance outstanding, respectively, and the Series 2023-1 Class C notes require interest payments only, with balloon payments due at maturity. The Series 2023-1 Notes mature in February 2028 and may be redeemed without penalty 24 months prior to the scheduled maturity date beginning in February 2026.
The Series 2026-1 Class A notes and the Series 2026-1 Class B notes require monthly principal repayments at an annualized rate of 0.50% and 0.25% of the balance outstanding, respectively, and the Series 2026-1 Class M notes require interest payments only, with balloon payments due at maturity. The Series 2026-1 Notes mature in March 2031 and may be redeemed without penalty 24 months prior to the scheduled maturity date beginning in March 2029.
Our Series 2023-1 Notes and Series 2026-1 Notes are non-recourse and, as of March 31, 2026, were secured by 472 retail net lease properties, including 158 properties that were contributed by us during the three months ended March 31, 2026. As of March 31, 2026, the current leases relating to the 472 properties required annual minimum rents of $150,754 and had an aggregate undepreciated book value of $1,511,474.
The VFN is also secured by the 472 net lease properties that secure our existing $1,349,164 of net lease mortgage notes. The VFN permits borrowings on a revolving basis up to $45,000 and the Issuer can borrow, repay and reborrow funds available until maturity. The maturity date of the VFN is January 27, 2027, and, subject to the payment of an extension fee and meeting certain other conditions, can be extended by one year at the Issuer’s option. The VFN requires interest payments only on drawings under the VFN based on SOFR plus a margin of 1.75%, and an unused commitment fee of 50 basis points per annum paid on undrawn amounts. As of March 31, 2026 and 2025, the annual interest rate payable on borrowings under the VFN was 5.43% and 6.16%, respectively. The weighted average annual interest rate for borrowings under the VFN was 5.42% and 6.19% for the three months ended March 31, 2026 and 2025, respectively. As of both March 31, 2026 and May 4, 2026, we had $45,000 outstanding under the VFN.