Service Properties Trust - Shares Of Beneficial Interest · NASDAQ:SVC
Service Properties Trust - Shares Of Beneficial Interest — Service Properties Trust — Investor Presentation (November 2024)
31 slides from Service Properties Trust - Shares Of Beneficial Interest's investor presentation, Nov 18, 2024
Slide 1: Investor Presentation November 2024
Investor Presentation November 2024 | Nasdaq: SVC Exhibit 99.1
Slide 2: Warning Concerning Forward-Looking Statements, Disclaimers and Non-GAAP Financial Measures
Warning Concerning Forward-Looking Statements, Disclaimers and Non-GAAP Financial Measures The contents of this presentation are not to be construed as legal, regulatory, business, accounting or tax advice. You should consult your own attorney, business advisor, accountant and tax advisor as to lega
Slide 3: Investment Highlights
Investment Highlights Diversified net lease necessity-based retail and hotel portfolio with national scale creates resilience through market cycles. Capex investment in hotel portfolio to improve asset quality and operating performance. Strong financial position with no near-term debt maturities and
Slide 4: SVC: A Diversified Portfolio
SVC: A Diversified Portfolio SVC is a publicly traded REIT with over $11 billion invested in two asset categories, hotels and service- focused retail net lease properties, significantly diversifying its cash flows. 959 Properties 46 States, Washington, D.C., Puerto Rico & Canada 22 Industries 146 Br
Slide 5: Complementary Portfolios Create Stability Through Market Cycles with Significant Upside
Complementary Portfolios Create Stability Through Market Cycles with Significant Upside • 56% of portfolio based on investment. • Geographically diverse across 36 states, Washington, D.C., Puerto Rico and Canada. • Focused on destination, urban and near-urban locations with solid demand drivers. • L
Slide 6: Hotel Portfolio
Hotel Portfolio 66
Slide 7: Hotel Portfolio: At a Glance
Hotel Portfolio: At a Glance 1. Based on hotel percentage of investments. 2. Based on number of keys. 3. Based on room revenue. 57% 27% 16% Full Service Extended Stay Select Service Service Level(1) 47% 38% 15% Upscale Upper Midscale/Midscale Upper Upscale Chain Scale(2) 48% 25% 18% 8% 1% Suburban U
Slide 8: Hotel Portfolio: 213 Comparable Property Operating Trends
69.9% 65.3% 66.9% 66.4% 57.6% 49.8% 50.5% 56.5% 63.0% 66.0% 68.5% 71.2% 69.3% 66.8% 65.8% $144 $136 $143 $147 $134 $131 $137 $139 $144 $141 $143 $147 $143 $138 $141 $100 $89 $96 $97 $77 $65 $69 $79 $91 $93 $98 $104 $99 $92 $93 $0 $50 $100 $150 $200 $250 0% 10% 20% 30% 40% 50% 60% 70% 80% Jul '23 Aug
Slide 9: Hotel Portfolio: Sonesta at a Glance
Hotel Portfolio: Sonesta at a Glance • 8th largest hotel company according to Smith Travel Research. • More than 1,100 hotels totaling more than 95,000 rooms across 15 brands. • Franchises close to 1,000 hotels. • SVC owns 34% of Sonesta. • Equity investment has a carrying value of $111 million. • U
Slide 10: Announced Plan in October 2024 to Sell Sonesta Hotels and Use Proceeds to Reduce Leverage
Hotel Portfolio: Announced Plan in October 2024 to Sell 114 Sonesta Hotels and Use Proceeds to Reduce Leverage • Selling 114 focused service hotels managed by Sonesta in 2025, in addition to the ongoing sale of 22 hotels announced in February 2024. • Targeting ~$1 billion in gross proceeds to be use
Slide 11: Historical Quarterly Performance of Retained & Exit Hotels
Historical Quarterly Performance of Retained & Exit Hotels(1) 111. For SVC’s 213 comparable hotels. Three Months Ended LTM as of December 31, 2023 March 30,2024 June 30, 2024 September 30, 2024 September 30, 2024 Total Retained Hotels Occupancy 56.9% 55.3% 68.2% 66.4% 61.7% ADR $165.57 $171.59 $175.
Slide 12: Net Lease Portfolio
Net Lease Portfolio 12
Slide 13: Net Lease Portfolio: High-Quality Service & Necessity Based Assets
Net Lease Portfolio: High-Quality Service & Necessity Based Assets 745 $380M Properties Annualized Minimum Rent 13.3M 8.3 years Rentable Square Feet Weighted Average Lease Term 97.6% 2.16x Occupancy Rent Coverage % of Annual Minimum Rent<1% >9.0% Diverse Geographical Footprint(1) 13 Net Lease Portfo
Slide 14: TravelCenters of America (TA)
TravelCenters of America (TA) • Represents 68.2% of SVC’s net lease minimum rents. • 175 travel centers operate under two brands. • Difficult to replicate real estate located near exits along the U.S. Interstate Highway System. • Five master leases that run through 2033 and include 50 years of exten
Slide 15: Net Lease Portfolio: Reliable Income Stream and Low Capex Requirements
3% 81% 13% 3% Percentage Rent Fixed/Scheduled CPI Flat Net Lease Portfolio: Reliable Income Stream and Low Capex Requirements 1. By annualized minimum rent. Well-Laddered Lease Expirations (1) 97% of Leases Have Contractual Increases or Percentage Rent Lease Structures $380M 0.3% 2.3% 3.0% 3.3% 2.7%
Slide 16: Net Lease Portfolio: Diversified Tenants & Industries Mitigate Risk
Net Lease Portfolio: Diversified Tenants & Industries Mitigate Risk Top Ten Tenants by BrandTenants by Industry (1) Travel Centers, 69.0% Restaurants - Quick Service, 5.1% Restaurants - Casual Dining, 3.1% Health and Fitness, 3.0% Home Goods and Leisure, 2.8% Grocery Stores, 2.4% Medical, Dental Off
Slide 17: Financial Information
Financial Information 17
Slide 18: Balance Sheet Strategy
Secured Fixed Rate Debt 24% Unsecured Fixed Rate Debt 61% Shareholder's Equity 15% Balance Sheet Strategy $2 $800 $850 $400 $1,125 $400 $500 $0 $2 $2 $601 $1,000 $0 $200 $400 $600 $800 $1,000 $1,200 2024 2025 2026 2027 2028 2029 2030 2031 2032 $ (M ill io n s) Unsecured Fixed Rate Debt Secured Fixed
Slide 19: Appendix
Appendix 19
Slide 20: RMR Platform: Nearly $41 Billion in AUM
Nearly $41 Billion in AUM RMR Platform More than 2,000 Properties More than 35 Offices Nationwide National Multi-Sector Investment Platform Industrial Residential Senior Living Medical Office Life Science Hotels Retail Office Over 1,000 Real Estate Professionals Institutional Infrastructure & Vertic
Slide 21: A Winning Tradition
A Winning Tradition EPA’S 2024 ENERGY STAR® Partner of the Year. 86 properties with EPA ENERGY STAR certifications 73 properties with BOMA designations 87 properties with LEED designations RMR SUSTAINABILITY Ranked Boston Globe’s Top Places to Work 2020, 2021, 2022, 2023 Women on Boards; Winning Org
Slide 22: Fees that SVC Pays to RMR are Primarily Performance Based
Fees that SVC Pays to RMR are Primarily Performance Based which Aligns Interests with Shareholders RMR base management fee tied to SVC’s share price performance. • Consists of an annual fee equal to generally 50 bps multiplied by the lower of: (1) SVC’s historical cost of real estate, or (2) SVC’s t
Slide 23: Calculation of FFO, Normalized FFO and CAD
Calculation of FFO, Normalized FFO and CAD See accompanying notes on page 27. 23 (4) (5) (6) (3)
Slide 24: Calculation of EBITDA, EBITDAre and Adjusted EBITDAre
Calculation of EBITDA, EBITDAre and Adjusted EBITDAre See accompanying notes on page 27. 24 (4) (5) (6) (3)
Slide 25: Calculation and Reconciliation of Hotel EBITDA - Comparable Hotels
Calculation and Reconciliation of Hotel EBITDA - Comparable Hotels See accompanying notes on page 27. 25 (2) (7)
Slide 26: Calculation and Reconciliation of Hotel EBITDA - All Hotels
Calculation and Reconciliation of Hotel EBITDA - All Hotels* See accompanying notes on page 27. *Results of all hotels owned during the periods presented, including the results of hotels sold by SVC for the periods owned by SVC. 26 (2) (7)
Slide 27: Notes to Calculations of FFO, Normalized FFO, EBITDA, EBITDAre, Adjusted EBITDAre and Hotel EBITDA
Notes to Calculations of FFO, Normalized FFO, EBITDA, EBITDAre, Adjusted EBITDAre and Hotel EBITDA 1. As of September 30, 2024, SVC owned 214 hotels. SVC's condensed consolidated statements of income (loss) include hotel operating revenues and expenses of its managed hotels. 2. When managers of SVC'
Slide 28: Non-GAAP Financial Measures and Certain Definitions
Non-GAAP Financial Measures and Certain Definitions 28 Non-GAAP Financial Measures SVC presents certain “non-GAAP financial measures” within the meaning of the applicable Securities and Exchange Commission, or SEC, rules, including FFO, Normalized FFO, CAD, EBITDA, Hotel EBITDA, EBITDAre and Adjuste
Slide 29: Non-GAAP Financial Measures and Certain Definitions (Continued)
Non-GAAP Financial Measures and Certain Definitions (Continued) 29 Other Definitions Annualized Minimum Rent: Generally, SVC's lease agreements with its net lease tenants require payment of minimum rent to SVC. Certain of these minimum rent payment amounts are secured by full or limited guarantees.
Slide 30: Non-GAAP Financial Measures and Certain Definitions (Continued)
Non-GAAP Financial Measures and Certain Definitions (Continued) 30 Occupancy: Occupancy represents the total number of room nights sold divided by the total number of room nights available at a hotel or group of hotels and represents occupied properties as of the end of the period shown for net leas
Slide 31: | Two Newton Place Washington Street, Suite Newton, MA 02458 SVCREIT.COM 31
Investor Presentation November 2024 | Nasdaq: SVC Two Newton Place 255 Washington Street, Suite 300 Newton, MA 02458 SVCREIT.COM 31
Service Properties Trust — Investor Presentation (November 2024) on 6ix