Seven Hills Realty Trust · NASDAQ:SEVN
Seven Hills Realty Trust — Q4 2023 Earnings Presentation
21 slides from Seven Hills Realty Trust's earnings presentation, Feb 20, 2024
Slide 1: Seven Hills Realty Trust Fourth Quarter 2023 Financial Results
Seven Hills Realty Trust Fourth Quarter 2023 Financial Results
Slide 2: Seven Hills Realty Trust Announces Fourth Quarter 2023 Results
Seven Hills Realty Trust Announces Fourth Quarter 2023 Results "We continue to deliver attractive returns for Newton, MA (February 20, 2024). Seven Hills Realty Trust (Nasdaq: SEVN) today announced financial results for the quarter and year ended December 31, 2023. our shareholders as demonstrated b
Slide 3: Company Snapshot
Company Snapshot (As of December 31, 2023, unless otherwise noted) Strong Loan Portfolio Conservative Leverage Integrated with RMR Real Estate Platform $670 million 1.7x 12% Floating rate Debt to equity ratio Ownership of SEVN first mortgage loan commitments $28 million $695 million ~$41 billion Ave
Slide 4: Fourth Quarter 2023 Highlights
Fourth Quarter 2023 Highlights (As of and for the three months ended December 31, 2023, unless otherwise noted) • Generated net income of $6.0 million, or $0.41 per diluted share and Distributable Earnings of $6.3 million, or $0.43 per diluted Financial share. Results • Quarterly distribution of $0.
Slide 5: Loan Portfolio Summary
Loan Portfolio Summary As of Fourth Quarter December 31, (dollars in thousands) Originations 2023 Number of loans 2 24 Fourth Quarter 2023 Loan Portfolio Activity Average loan commitment $27,125 $27,929 (dollars in millions) Total loan commitments $54,250 $670,293 $720.4 $100.3 $54.3 $670.3 Total Lo
Slide 6: Loan Portfolio Originations and Diversity
Loan Portfolio Originations and Diversity Geographic Region (1) Loan Originations by Quarter East (dollars in millions) 14% South 35% $164.7 $7.4 Midwest 21% West 30% $95.8 $4.6 (1) Property Type Retail $157.3 Hotel $54.3 Total Loan Commitments 7% $60.5 Retail $- Unfunded Commitments 12% $8.9 $47.0
Slide 7: Loan Portfolio Credit Quality
Loan Portfolio Credit Quality Loan to Value (1) % of Portfolio Weighted Average LTV: 68% 30% 26% 18% 14% 12% 30% - 60% 61% - 65% 66% - 70% 71% - 75% 76% - 80% Loan Count 5 2 7 7 3 Risk Rating Distribution (1) % of Portfolio Weighted Average 71% Risk Rating: 3.0 15% 14% —% —% Lower Risk (1) Average R
Slide 8: Reducing Office Loan Exposure
Reducing Office Loan Exposure Throughout 2023, SEVN's office loan exposure has declined to 29% through diversified loan originations and repayments of office loans. Portfolio Composition (1) 2% 7% 11% 11% 14% 19% 18% 18% 17% 12% Hotel 31% Industrial 35% 33% 33% Retail Multifamily Office 40% 36% 34%
Slide 9: Office Loans
Office Loans (1) • No office loans in urban or CBD markets in our portfolio. • In October 2023, we received repayments on two office loans totaling $44.4 million. • Seven office loans with a weighted average risk rating of 3.4 make up 29% of our portfolio as of December 31, 2023 compared to 40% as o
Slide 10: Secured Financing Facilities
Secured Financing Facilities (As of December 31, 2023) Total/Weighted Citibank UBS BMO Wells Fargo Average (dollars in thousands) Maximum facility size $ 215,000 $ 205,000 $ 150,000 $ 125,000 $ 695,000 Principal balance $ 91,115 $ 181,381 $ 87,767 $ 95,551 $ 455,814 Unused capacity $ 123,885 $ 23,61
Slide 11: Appendix
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Slide 12: Company Profile, Governance and Research Coverage
Company Profile, Governance and Research Coverage Management Equity Research Coverage Our manager, Tremont, is registered with the Securities and Exchange Commission, or SEC, as an JMP Securities investment adviser and is owned by RMR. As of December 31, 2023, RMR had over $41 billion of real Chris
Slide 13: Loan Investment Details
Loan Investment Details (dollars in thousands) First mortgage loans as of December 31, 2023: Committed Maximum Origination Principal Principal Coupon All in Maturity Maturity Risk # Location Property Type Date Amount Balance Rate Yield Date Date LTV Rating 1 Olmsted Falls, OH Multifamily 01/28/2021
Slide 14: Loan Investment Details (Continued)
Loan Investment Details (Continued) (dollars in thousands) First mortgage loans as of December 31, 2023: Committed Maximum Origination Principal Principal Coupon All in Maturity Maturity Risk # Location Property Type Date Amount Balance Rate Yield Date Date LTV Rating 14 Carlsbad, CA Office 10/27/20
Slide 15: Interest Rate Sensitivity
Interest Rate Sensitivity (As of December 31, 2023) Annualized Impact to Net Interest Income per Share $0.20 $0.15 $0.15 $0.12 $0.10 $0.09 $0.06 $0.05 $0.03 $— $0.00 $-0.05 $(0.03) $(0.05) $(0.07) $-0.10 $(0.09) $(0.11) $-0.15 $-0.20 -125 bps -100 bps -75 bps -50 bps -25 bps 0 bps +25 bps +50 bps +7
Slide 16: Financial Summary: Consolidated Balance Sheets
Consolidated Balance Sheets (dollars in thousands, except per share data) December 31, 2023 December 31, 2022 ASSETS Cash and cash equivalents $ 87,855 $ 71,067 Loans held for investment 626,462 669,929 Allowance for credit losses (1) (4,376) — Loans held for investment, net 622,086 669,929 Real est
Slide 17: Consolidated Statements of Operations
Consolidated Statements of Operations (amounts in thousands, except per share data) Three Months Ended December 31, Year Ended December 31, 2023 2022 2023 2022 INCOME FROM INVESTMENTS: Interest and related income $ 17,523 $ 15,205 $ 66,337 $ 45,303 Purchase discount accretion 821 1,522 4,128 10,689
Slide 18: Non-GAAP Financial Measures
Non-GAAP Financial Measures (amounts in thousands, except per share data) Three Months Ended December 31, September 30, June 30, March 31, December 31, 2023 2023 2023 2023 2022 Net income $ 6,045 $ 7,473 $ 4,644 $ 7,803 $ 6,760 Non-cash equity compensation expense 151 271 579 120 129 Non-cash accret
Slide 19: Non-GAAP Financial Measures (Continued)
Non-GAAP Financial Measures (Continued) We present Distributable Earnings, Distributable Earnings per common share and Adjusted Book Value per common share, which are considered “non-GAAP financial measures” within the meaning of the applicable SEC rules. These non-GAAP financial measures do not rep
Slide 20: Other Measures and Definitions
Other Measures and Definitions All In Yield: All In Yield represents the yield on a loan, including amortization of deferred fees over the initial term of the loan and excluding any purchase discount accretion. BMO Facility: Amounts advanced under the facility loan agreement and security agreement w
Slide 21: Warning Concerning Forward-Looking Statements
Warning Concerning Forward-Looking Statements This presentation contains statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other securities laws. These statements include words such as “believe”, "could", “expect”, “a
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