v3.26.1
Indebtedness
 6 Months Ended
Jun. 30, 2026
Debt Disclosure [Abstract]  
Indebtedness Indebtedness
As of June 30, 2026 and December 31, 2025, our outstanding debt principal consisted of the following:
SuccessorPredecessor
June 30,
2026		December 31,
2025
Secured revolving credit facility, due in 2027$325,000 $325,000 
Secured term loan, due in 2027100,000 100,000 
Debtor-in-possession term loan, 12.000% interest rate, due in 2026
— 10,225 
Senior unsecured notes, 2.650% interest rate, due in 2026 (1)
— 133,929 
Senior unsecured notes, 2.400% interest rate, due in 2027 (1)
— 78,306 
Senior secured notes, 3.250% interest rate, due in 2027 (1)
— 417,994 
Mortgage note payable, 8.272% interest rate, due in 2028
42,700 42,700 
Mortgage note payable, 8.139% interest rate, due in 2028
26,340 26,340 
Mortgage note payable, 7.671% interest rate, due in 2028
54,300 54,300 
Senior secured notes, 9.000% interest rate, due in March 2029
300,000 300,000 
Senior secured notes, 9.000% interest rate, due in September 2029 (1)
— 609,999 
Senior secured notes, 8.375% interest rate, due in December 2029
385,000 — 
Senior unsecured notes, 8.000% interest rate, due in 2030 (1)
— 14,439 
Senior secured notes, 10.000% interest rate, due in 2031
420,000 — 
Senior unsecured notes, 3.450% interest rate, due in 2031 (1)
— 102,402 
Mortgage note payable, 7.210% interest rate, due in 2033
30,680 30,680 
Mortgage note payable, 7.305% interest rate, due in 2033
8,400 8,400 
Mortgage note payable, 7.717% interest rate, due in 2033
14,900 14,900 
Senior unsecured notes, 6.375% interest rate, due in 2050 (1)
— 162,000 
1,707,320 2,431,614 
Unamortized debt premiums, discounts and issuance costs(23,764)(22,988)
$1,683,556 $2,408,626 
(1)In connection with the commencement of the Chapter 11 Cases, the principal amount of these instruments was reclassified to LSTC in our consolidated balance sheet as of December 31, 2025 and the applicable debt issuance costs and discounts were written off to reorganization items, net in our consolidated statement of comprehensive net income (loss). See Note 2 for further information on our LSTC and their treatment under fresh start accounting.
Credit Agreement
Our $325,000 secured revolving credit facility and $100,000 secured term loan are governed by our credit agreement, as amended, 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 $502,072 as of June 30, 2026. 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 was previously at a rate of SOFR plus a margin of 350 basis points through the Petition Date. 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. In accordance with the Plan, upon emergence, we were required to pay interest under the default rate retroactive to the Petition Date. Pursuant to the credit agreement amendment and beginning on the Effective Date, interest payable on borrowings under our credit agreement is at a rate of SOFR plus a margin of 550 basis points, which margin increases to 750 basis points effective January 1, 2027. We are also required to pay an unused facility fee on the amount of total lending commitments of 25 basis points per annum based on amounts outstanding.
As of June 30, 2026 and August 4, 2026, our $325,000 revolving credit facility was fully drawn and $100,000 was outstanding under our term loan. As of June 30, 2026, the annual interest rate payable on borrowings under our credit agreement was 9.2%. The weighted average annual interest rate for borrowings under our credit agreement for the three and six months ended June 30, 2026 was 10.9% and 11.3%, respectively, and 7.9% and 8.9% for the three and six months ended June 30, 2025, respectively.
Secured Senior Notes
Our $420,000 of 2031 Secured Exit Notes bear interest at a rate of 10.000%, require semi-annual interest payments, may be prepaid at any time and are secured by first liens on 48 of our properties, 19 of which previously secured the Old September 2029 Notes, that had an aggregate gross book value of real estate assets of $641,422 as of June 30, 2026, and second liens on the 19 properties securing our credit agreement.
Our $385,000 of 2029 Secured Exit Notes bear interest at a rate of 8.375%, require quarterly interest payments, may be prepaid at any time, subject to certain early redemption fees, and are secured by first liens on 31 of our properties that had an aggregate gross book value of real estate assets of $483,743 as of June 30, 2026. As required under these notes, we made a required principal payment of $5,000 on August 1, 2026. These notes also require additional mandatory principal payments as follows: $15,000 on or before November 1, 2026, $30,000 on or before February 1, 2027 and $45,000 on or before each of February 1, 2028 and 2029.
Our $300,000 of 9.000% senior secured notes due March 2029 were reinstated upon emergence from the Chapter 11 Cases, require semi-annual interest payments, are prepayable at any time, subject to certain early redemption fees, and are secured by first liens on 17 of our properties that had an aggregate gross book value of real estate assets of $350,033 as of June 30, 2026.
Our credit agreement and senior notes indentures 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 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. The filing of the Chapter 11 Cases constituted an event of default under our credit agreement and our prior senior notes indentures and their supplements which accelerated amounts due under the applicable agreements. Efforts to enforce financial obligations under the applicable agreements were stayed as a result of the filing of the Chapter 11 Cases and the creditors’ rights of enforcement were subject to the applicable provisions of the Bankruptcy Code.
Mortgage Notes
As of June 30, 2026, seven of our properties with an aggregate gross book value of real estate assets of $220,559 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 were 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 continued to own, operate and lease the applicable collateral properties and remain current on their debt service obligations. As of August 4, 2026, two of the Mortgage Note Borrowers have entered into waiver agreements with their respective lenders regarding the default. We remain in negotiation with the special servicers and lenders of our other Mortgage Notes regarding potential waiver agreements.
DIP Term Loan Credit Agreement
On November 5, 2025, the Bankruptcy Court entered an interim order allowing us to enter into a debtor-in-possession term loan credit agreement, or the Initial DIP Credit Agreement. The Initial DIP Credit Agreement provided for a multiple draw secured debtor-in-possession term loan facility in an aggregate principal amount of up to $125,000. An initial borrowing of $10,000 was made following the entry of the interim order and our entry into the Initial DIP Credit Agreement on November 6, 2025.
On February 5, 2026, we entered into an amended and restated DIP term loan credit agreement, or the A&R DIP Credit Agreement, pursuant to a final order entered by the Bankruptcy Court on February 4, 2026. The A&R DIP Credit Agreement provided for the DIP Facility, a multiple draw secured debtor-in-possession term loan facility in an aggregate principal amount of up to $125,000, of which: (a) we borrowed $10,000 on November 6, 2025 pursuant to an interim order entered by the Bankruptcy Court; (b) $75,000 was made available to us and drawn as follows: (i) we borrowed $64,300 on February 5, 2026 and (ii) we borrowed $10,700 on March 13, 2026; and (c) we borrowed $40,000, or the Tranche B Term Loan, on April 7, 2026. We had the option to repay borrowings under the DIP Facility in Reorganized Common Equity.
Borrowings under the DIP Facility bore interest, payable in cash, at a rate of 12.00% per annum. Fees and expenses under the DIP Facility included: (a) an upfront fee equal to (i) cash at 2.25% of the lenders’ commitments or (ii) Reorganized Common Equity equal to 3.60% of the commitments, which fee was earned upon the initial funding of each loan under the DIP Facility and was payable in kind; (b) an anchor capital commitment fee of 10.00% of the lenders’ commitments under the DIP Facility payable to certain backstop parties, which was earned upon the initial funding of the DIP Facility, and could be paid, at our election, in cash or Reorganized Common Equity; and (c) an exit fee of 4.50% of the aggregate borrowings under the DIP Facility, which was due and payable upon the repayment of any loans under the DIP Facility, at our election, in cash or Reorganized Common Equity. A commitment fee was also due for the ratable account of each Tranche B Term Loan lender, in an aggregate amount equal to 0.75% per annum times the actual daily amount of the aggregate undrawn Tranche B Term Loan commitments.
As discussed in Note 1, the DIP Facility was terminated in connection with our emergence from the Chapter 11 Cases and all allowed claims related to the DIP Facility were satisfied through the issuance of shares of the Reorganized Common Equity.