v3.26.1
Indebtedness
 9 Months Ended
Sep. 30, 2025
Debt Disclosure [Abstract]  
Indebtedness Indebtedness
Credit Agreement, Senior Notes and Mortgage Notes
Our principal debt obligations as of September 30, 2025 were: (1) $325,000 of outstanding borrowings under our $325,000 secured revolving credit facility; (2) $100,000 outstanding principal amount under our secured term loan; (3) $1,819,069 aggregate outstanding principal amount of senior notes and (4) $177,320 aggregate outstanding principal amount of mortgage notes.
Our $325,000 secured revolving credit facility and $100,000 secured term loan are governed by a credit agreement, or our credit agreement, with a syndicate of institutional lenders. As collateral for all loans and other obligations under our credit agreement, 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 19 properties that had a gross book value of real estate assets of $1,034,776 as of September 30, 2025. The maturity date of our credit agreement is January 29, 2027. Our credit agreement contains a number of covenants, including covenants that require us to maintain certain financial ratios, restrict our ability to incur additional debt in excess of calculated amounts and, subject to limited exceptions, restrict our ability to increase our distribution rate above $0.01 per common share per quarter and enter into share repurchases. Availability of borrowings under our credit agreement is subject to ongoing minimum performance and market values of the 19 collateral properties, our satisfying certain financial covenants and other credit facility conditions.
Interest payable on borrowings under our credit agreement through the Petition Date was at a rate of the secured overnight financing rate plus a margin of 350 basis points. Effective on the Petition Date, interest payable on borrowings under our credit agreement changed to a rate of the U.S. federal prime rate plus a margin of 250 basis points. Effective February 4, 2026, in accordance with an order entered by the Bankruptcy Court, the margin increased to 450 basis points pursuant to the default rate stipulated in our credit agreement. We are also required to pay an unused facility fee on the amount of total lending commitments of 25 to 35 basis points per annum based on amounts outstanding. As of September 30, 2025 and May 18, 2026, our $325,000 revolving credit facility was fully drawn and $100,000 was outstanding under our term loan. As of September 30, 2025, the annual interest rate payable on borrowings under our credit agreement was 7.7%. The weighted average annual interest rate for borrowings under our credit agreement for both the three and nine months ended September 30, 2025 was 7.9% and for the three and nine months ended September 30, 2024 was 8.9%.
Senior Notes Redemptions and Repayments
In January 2025, we redeemed, at par plus accrued interest, all of the remaining $171,586 of our 4.50% senior unsecured notes due 2025.
In February 2025, in connection with the sale of a collateral property, we redeemed, at par plus accrued interest, $5,469 of our senior secured notes due 2027. As a result, we recorded a loss on early extinguishment of debt of $928 during the nine months ended September 30, 2025, which represented the unamortized discounts and issuance costs related to these notes.
In July 2025, in connection with the sale of a collateral property, we redeemed, at par plus accrued interest, $2,029 of our senior secured notes due 2027. As a result, we recorded a loss on early extinguishment of debt of $285 during the nine months ended September 30, 2025 which represented the unamortized discounts and issuance costs related to these notes.
Our senior secured notes due 2027 require quarterly principal repayments of $6,500 and an additional $117,502 principal repayment in March 2026. During the nine months ended September 30, 2025, we made $19,500 of scheduled quarterly principal repayments on these notes. We did not make any required principal payments following the Petition Date.

Senior Notes Exchange
In March 2025, we exchanged $14,439 of new 8.00% senior priority guaranteed unsecured notes, or the 2030 Notes, for an aggregate $20,990 of our outstanding unsecured senior notes, or the Existing Notes, and such transaction, the Senior Note Exchange, as follows:
Existing Notes ExchangedAggregate Principal Amount of Existing Notes Accepted for ExchangeAggregate Principal Amount of New Notes Delivered
Existing 2.650% 2026 Notes
$6,559 $5,836 
Existing 2.400% 2027 Notes
2,478 1,882 
Existing 3.450% 2031 Notes
11,953 6,721 
Total$20,990 $14,439 
The 2030 Notes are fully and unconditionally guaranteed on a joint, several and unsecured basis by certain of our subsidiaries which also guarantee our senior secured notes due 2027. The 2030 Notes require semi-annual payments of interest only and are prepayable, at par plus accrued interest, after March 12, 2029. During the nine months ended September 30, 2025, we recorded an aggregate gain related to the Senior Note Exchange of $764, or $0.01 per common share, which is included in net (loss) gain on early extinguishment of debt in our condensed consolidated statements of comprehensive income (loss).
Our credit agreement and senior notes indentures and their supplements provide for acceleration of payment of all amounts due thereunder upon the occurrence and continuation of certain events of default, such as, in the case of our credit agreement, a change of control of us, which includes RMR ceasing to act as our business and property manager. Our credit agreement and senior notes indentures and their supplements also contain covenants, including covenants that restrict our ability to incur debts, require us to comply with certain financial covenants and, in the case of our credit agreement, restrict our ability to increase our distribution rate above the level of $0.01 per common share per quarter. As of September 30, 2025, we believe we were in compliance with the terms and conditions of our respective covenants under our credit agreement and our senior notes indentures and their supplements.
The filing of the Chapter 11 Cases constituted an event of default under our credit agreement and senior notes indentures and their supplements which accelerated amounts due under the applicable agreements. Efforts to enforce financial obligations under the applicable agreements are stayed as a result of the filing of the Chapter 11 Cases and the creditors’ rights of enforcement are subject to the applicable provisions of the Bankruptcy Code. Our credit agreement is being amended and restated pursuant to the Plan to resolve any defaults thereunder and address certain terms to facilitate the Debtors’ restructuring. The amended and restated credit agreement will become effective on the effective date of the Plan.
As of September 30, 2025, seven of our properties with an aggregate gross book value of real estate assets of $305,809 were encumbered by mortgage notes, or our Mortgage Notes, with an aggregate principal amount of $177,320. Our Mortgage Notes are non-recourse, subject to certain limited exceptions and do not contain any material financial covenants. The borrowers under our Mortgage Notes, or the Mortgage Note Borrowers, are certain of our subsidiaries that are not included in the Chapter 11 Cases. However, we provide certain guarantees under our Mortgage Notes, and as a result, the filing of the Chapter 11 Cases constituted an event of default under our Mortgage Notes and each Mortgage Note was transferred to special servicing. The Mortgage Note Borrowers continue to own, operate and lease the applicable collateral properties and remain current on their debt service obligations. As of May 18, 2026, two of the Mortgage Note Borrowers have entered into waiver
agreements with their respective lenders. We remain in negotiation with the special servicers and lenders of our other Mortgage Notes regarding potential waiver agreements.