Service Properties Trust - Shares Of Beneficial Interest · NASDAQ:SVC
Service Properties Trust - Shares Of Beneficial Interest — Service Properties Trust — Q2 2025 Earnings Presentation
51 slides from Service Properties Trust - Shares Of Beneficial Interest's earnings presentation, Aug 6, 2025
Slide 1: Investor Presentation
Investor Presentation August 2025 | Nasdaq: SVC
Slide 2: Warning Concerning Forward-Looking Statements, Disclaimers and Non-GAAP Financial Measures
Warning Concerning Forward-Looking Statements, Disclaimers and Non-GAAP Financial Measures This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other securities laws that are subject to risks and uncertainties. These sta
Slide 3: SVC: Investment Highlights
SVC: Investment Highlights 1 Net lease retail and hotel portfolio with national scale Transforming to become a majority net lease REIT through the 2 sale of a significant portion of hotel assets Executing on previously announced hotel sales with 3 anticipated proceeds of $966 million in 2025 to stre
Slide 4: SVC: At a Glance Today
SVC: At a Glance Today SVC is a publicly traded REIT primarily invested in two asset categories, service-focused retail net lease properties and hotels, significantly diversifying its cash flows. Service-Focused Retail Net Lease Portfolio Hotel Portfolio 742 13.2M $386.5M 200 35,101 $1.5B Properties
Slide 5: Strategic Transformation
Strategic Transformation 5
Slide 6: SVC: Strategic Transformation
SVC: Strategic Transformation SVC is executing on a strategic transformation to become a majority net lease REIT through the sale of a significant portion of its hotel portfolio Hotel Asset Sales • 114 hotels (14,925 keys) earmarked for sale in 2H25, with $900 million under binding agreement (1) • F
Slide 7: The New SVC: Majority Net Lease REIT
The New SVC: Majority Net Lease REIT FY 2019 LTM 2Q25 Pro Forma for Planned Asset Sales $851 Million $520 Million Adj. EBITDAre Adj. EBITDAre Lodging Lodging Number of Hotels 329 Number of Hotels 84 Rooms 51,349 Rooms 19,942 Average Hotel Size (Rooms) 156 Average Hotel Size (Rooms) 237 Net Lease Net
Slide 8: TEV / EBITDA Multiple Comparison: Net Lease vs. Hotel REITs
TEV / EBITDA Multiple Comparison: Net Lease vs. Hotel REITs SVC will transform into a majority net lease REIT, with 71% of its pro forma portfolio being represented by retail net lease assets (1) TEV / EBITDA (2)(3) 20.0x 18.0x 15.7x Average (Net Lease REITs) 16.0x 14.0x 10.8x 12.0x Average (Hotel R
Slide 9: Improved Hotel Portfolio Quality
Improved Hotel Portfolio Quality The planned sale of hotel assets will significantly improve the quality of SVC’s hotel portfolio, resulting in a hotel portfolio primarily focused on full service hotels in urban markets targeting leisure-oriented travel 6/30/25(1) Sold Expected Hotel Pro Forma Hotel
Slide 10: Hotel Portfolio: Status Update
Hotel Portfolio: Status Update Expected Proceeds Generated from Hotel Asset Sales in 2025(1) (3) (2) Under Binding Sold Agreement (2) Terms Agreed To (3) Total Hotels 8 111 3 122 Rooms / Suites 1,006 14,449 476 15,931 Sales Price $46M $900M $20M $966M Avg. Sales Price per Room / Suite $45.3K $62.3K
Slide 11: Financial Update
Financial Update 11
Slide 12: Current Financial Position (2Q25)
Current Financial Position (2Q25) Book Capitalization Balance Sheet Profile Shareholders' Equity • $7.7 billion of unencumbered assets (gross book value) 11% • Unsecured fixed rate senior notes: $4.1 billion with a weighted average interest rate of 5.93% Secured Fixed • Secured fixed rate senior not
Slide 13: Financing Strategy
Financing Strategy Key Priorities New Orleans, LA • SVC does not currently meet an incurrence covenant that requires a minimum debt service coverage ratio of 1.50x – To ensure ample liquidity, SVC preemptively fully drew the remainder of its $650 million revolving credit facility, holding the cash o
Slide 14: Net Lease Portfolio
Net Lease Portfolio 14
Slide 15: Triple Net Leased Portfolio: Strategic Priorities & Benefits
Triple Net Leased Portfolio: Strategic Priorities & Benefits • Build on existing platform focusing on properties in e-commerce resistant, necessity-based industries • Current portfolio anchored by travel center properties backed by corporate IG credit Strategic Priorities • Diversified tenant base a
Slide 16: Net Lease Portfolio: Built with Properties in E-Commerce Resistant, Necessity Based Industries
Net Lease Portfolio: Built with Properties in E-Commerce Resistant, Necessity Based Industries Net Lease Portfolio Statistics Tenants by Industry (1) Other, 7.4% 742 $387M Automotive Dealers, 1.3% Home Goods and Leisure, 2.0% Properties Annualized Minimum Rent Automotive Equipment and Services, 2.1%
Slide 17: Net Lease Portfolio: Top Tenant Brands
Net Lease Portfolio: Top Tenant Brands Top Ten Tenants by Brand TravelCenters of America Portfolio % of • Rents are guaranteed by investment-grade rated Annualized BP Corporation North America Inc. Brand Minimum Rent Rent Coverage TravelCenters of America / 68.4% 1.31x • 175 travel centers operate u
Slide 18: Net Lease Portfolio: Long-term Leases with Embedded Rent Growth
Net Lease Portfolio: Long-term Leases with Embedded Rent Growth Lease Structures Saint Augustine, FL 3% 2% ~97% of Leases Have 12% Contractual Increases or Percentage Rent $387M Fixed / Scheduled CPI 83% Flat Percentage Rent Well-Laddered Lease Expirations (1) 83.1% Only 16.9% of the net lease portf
Slide 19: Net Lease Portfolio: Disciplined Acquisition Strategy
Net Lease Portfolio: Disciplined Acquisition Strategy Objective: Acquire assets that enhance the tenant and geographic diversity of the portfolio, increase weighted average lease term and capitalize on accretive opportunities in pipeline. Acquisition Criteria: Focused on single-tenant freestanding p
Slide 20: Net Lease Portfolio: Underwriting Criteria & Deal Closings
Net Lease Portfolio: Underwriting Criteria & Deal Closings Acquisition Criteria Acquisitions 2025 To Date • Net leases / ground leases with minimal landlord 14 $44.4M responsibilities for operating or capital expenses Properties Closed Total Purchase Price • Long remaining lease term (>7 years) 15.0
Slide 21: Hotel Portfolio
Hotel Portfolio 21
Slide 22: Hotel Portfolio: Strategic Priorities & Benefits
Hotel Portfolio: Strategic Priorities & Benefits • SVC has invested significant amounts of capital into hotel renovations over the last several years Strategic • Exiting non-core focused service hotels that require significant capex Priorities with limited earnings upside potential • Focused on driv
Slide 23: Hotel Portfolio: Current vs. Pro Forma as of 2Q25
Hotel Portfolio: Current vs. Pro Forma as of 2Q25 Current Pro Forma for Hotel Sales 200 35,101 176 84 19,942 237 Properties Keys Average Keys Per Hotel Properties Keys Average Keys Per Hotel CA, FL, IL $6.3B $181K CA, FL, IL $4.5B $227K Top States by LTM Investment Investment Per Key Top States by L
Slide 24: Recent Performance of Retained & Exit Hotels
Recent Performance of Retained & Exit Hotels(1) Occupancy ADR RevPAR LTM as of June 30, 2025 No. of No. of Rooms LTM LTM LTM Operating EBITDA Brand Service Level Hotels or Suites June 30, 2025 June 30, 2025 June 30, 2025 Revenues ($M) EBITDA ($M) Margin Retained Hotels: Sonesta Hotels & Resorts® Ful
Slide 25: Retained Hotel Portfolio: Overview
Retained Hotel Portfolio: Overview Elevating our hotel portfolio with a focus on high-growth urban and resort destinations 84 19,942 Retained Properties Rooms 88% 57% Upscale and Upper Top 50 U.S. Lodging Upscale Markets(1) Royal Sonesta San Juan Royal Sonesta Boston Quarterly Hotel EBITDA(2) $60.6M
Slide 26: Retained Hotel Portfolio: Select Locations
Retained Hotel Portfolio: Select Locations Nautilus Sonesta South Beach Miami Royal Sonesta Chicago River North Royal Sonesta Minneapolis Royal Sonesta New Orleans Hyatt Radisson Place Salt LakeSan CityAntonio Riverwalk Downtown 26
Slide 27: Hotel Portfolio: Comparable Property Operating Metrics
Hotel Portfolio: Comparable Property Operating Metrics(1) Quarterly Operating Metrics 80% $250 69.1% 67.7% 69.2% 70% 61.2% $200 57.9% 60% 50% $150 40% $146 $143 $139 $145 $146 30% $100 $101 $97 $101 20% $85 $84 $50 10% 0% $0 2Q24 3Q24 4Q24 1Q25 2Q25 Occupancy ADR RevPAR Quarterly Hotel EBITDA $83.2M
Slide 28: Recent Performance of Retained & Exit Hotels
Recent Performance of Retained & Exit Hotels Number of Three Months Ended LTM as of Hotels Keys September 30, 2024 December 31, 2024 March 31, 2025 June 30, 2025 June 30, 2025 Total Retained Hotels 84 19,942 Occupancy 66.4% 60.2% 56.8% 69.0% 63.1% ADR $170.80 $166.26 $173.96 $175.89 $171.80 RevPar $
Slide 29: SVC Hotel Capital Expenditures
SVC Hotel Capital Expenditures SVC Hotel Capital Expenditures $350M 25% $295M $300M 20% CAPEX Spend as a % of Revenue $243M $250M Total Hotel CAPEX Spend $250M $232M 15% $200M $136M $150M $150M 10% $102M $105M $100M 5% $50M $0M 0% 2019 2020 2021 2022 2023 2024 2025 2026 Projected Projected Total Hot
Slide 30: Retained Hotel Renovation and Redevelopment Initiatives
Retained Hotel Renovation and Redevelopment Initiatives 2024 2025 2026 Completions (27) Targeted Completions (2) Targeted Completions (6) Hyatt Place Sonesta Hotels & Resorts Royal Sonesta • Hendersonville, TN • Atlanta Airport, GA (Phase 1) • New Orleans, LA • Dallas Galleria, TX • Cambridge, MA •
Slide 31: Hotel Renovations: Recent Completions
Hotel Renovations: Recent Completions Hyatt Place Portfolio Sonesta Hotels & Resorts Sonesta Hotels & Resorts Sonesta ES Suites (17 Hotels) White Plains, NY Miami Airport Torrance, CA • Completion: Jan. 2025 • Completion: Oct. 2024 • Completion: Nov. 2024 • Completion: Dec. 2024 • Total Project Cost
Slide 32: Hotel Renovation Recent Completion: Sonesta Hotels & Resorts Los Angeles Airport
Hotel Renovation Recent Completion: Sonesta Hotels & Resorts Los Angeles Airport $40.6 million full renovation with redesigned guestrooms and upgraded F&B options completed in March 2025 32
Slide 33: Hotel Renovation Case Study: Radisson Hotel, Salt Lake City, UT
Hotel Renovation Case Study: Radisson Hotel, Salt Lake City, UT $12 million renovation completed in August 2024 Renovation Scope • Completed upgrades to 381 guestrooms • Revitalized lobby, enhanced outlets and upgraded meeting space with modern technology • New Executive Club lounge and coffee shop
Slide 34: Appendix
Appendix 34
Slide 35: Sonesta at a Glance
Sonesta at a Glance Sonesta Portfolio Highlights New Hotel Management Agreement • 8th largest hotel company in the U.S. according to Smith Rationale for new HMA: Travel Research • SVC is working through a multi-year disposition plan • More than 1,100 hotels totaling over 95,000 rooms across • Under
Slide 36: Sonesta: Transitioning to a Leaner Hotel Operating Model
Sonesta: Transitioning to a Leaner Hotel Operating Model Using the scale and flexibility of the Sonesta platform to drive portfolio optimization, reduce capital intensity, and enhance long-term value Company Overview Lihue, HI • One of the largest hotel companies in the world with over 1,100 propert
Slide 37: The RMR Group (Nasdaq: RMR)
The RMR Group (Nasdaq: RMR) National Multi-Sector Institutional Infrastructure & RMR Platform Investment Platform Vertically Integrated Platform Approximately Asset Industrial Accounting Management $40 Billion in AUM Residential Development Finance Approximately Senior Living Human Information 1,900
Slide 38: 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 Alignment of Interests • Consists of an annual fee equal to generally 50 bps If SVC’s share price goes up and its total market cap multipli
Slide 39: Condensed Consolidated Statements of Income (Loss)
Condensed Consolidated Statements of Income (Loss) (amounts in thousands, except per share data) LTM For the Three Months Ended 2Q 2025 6/30/2025 3/31/2025 12/31/2024 9/30/2024 Revenues: (1) Hotel operating revenues $ 1,487,351 $ 404,405 $ 334,963 $ 357,048 $ 390,935 Rental income 398,994 99,031 100
Slide 40: Calculation of FFO, Normalized FFO and CAD
Calculation of FFO, Normalized FFO and CAD (amounts in thousands, except per share data) LTM For the Three Months Ended 2Q 2025 6/30/2025 3/31/2025 12/31/2024 9/30/2024 Net loss $ (277,887) $ (38,159) $ (116,435) $ (76,392) $ (46,901) Add (Less): Depreciation and amortization 347,135 75,030 89,100 9
Slide 41: Calculation of EBITDA, EBITDAre and Adjusted EBITDAre
Calculation of EBITDA, EBITDAre and Adjusted EBITDAre (amounts in thousands) LTM For the Three Months Ended 2Q 2025 6/30/2025 3/31/2025 12/31/2024 9/30/2024 Net loss $ (277,887) $ (38,159) $ (116,435) $ (76,392) $ (46,901) Add (Less): Interest expense 402,724 102,679 101,517 99,402 99,126 Income tax
Slide 42: Calculation and Reconciliation of Hotel EBITDA and Adjusted Hotel EBITDA – All Hotels
Calculation and Reconciliation of Hotel EBITDA and Adjusted Hotel EBITDA – All Hotels* (dollars in thousands) LTM For the Three Months Ended 2Q 2025 6/30/2025 3/31/2025 12/31/2024 9/30/2024 Number of hotels 200 200 202 206 214 Room revenues $ 1,191,740 $ 323,884 $ 266,439 $ 278,614 $ 322,803 Food an
Slide 43: Notes to Condensed Consolidated Statements of Income (Loss) and Calculations of FFO, EBITDA
Notes to Condensed Consolidated Statements of Income (Loss) and Calculations of FFO, Normalized FFO, CAD, EBITDA, EBITDAre, Adjusted EBITDAre, Hotel EBITDA and Adjusted Hotel EBITDA 1. As of June 30 2025, SVC owned 200 hotels. SVC's condensed consolidated statements of income (loss) include hotel op
Slide 44: Pro Forma Condensed Consolidated Statement of Income (Loss)
Pro Forma Condensed Consolidated Statement of Income (Loss) (amounts in thousands, except per share data) LTM Transaction Accounting Adjustments Pro Forma LTM 2Q 2025 Asset Sales (1) Debt Repayment (2) 2Q 2025 Revenues: Hotel operating revenues (3) $ 1,487,351 $ (420,278) $ - $ 1,067,073 Rental inco
Slide 45: Pro Forma Calculation of FFO, Normalized FFO and CAD
Pro Forma Calculation of FFO, Normalized FFO and CAD (amounts in thousands, except per share data) LTM Transaction Accounting Adjustments Pro Forma LTM 2Q 2025 Asset Sales (1) Debt Repayment (2) 2Q 2025 Net loss $ (277,887) $ 89,082 $ 45,129 $ (143,676) Add (Less): Depreciation and amortization 347,
Slide 46: Pro Forma Calculation of EBITDA, EBITDAre and Adjusted EBITDAre
Pro Forma Calculation of EBITDA, EBITDAre and Adjusted EBITDAre (dollars in thousands) LTM Transaction Accounting Adjustments Pro Forma LTM (1) 2Q 2025 Asset Sales Debt Repayment (2) 2Q 2025 Net loss $ (277,887) $ 89,082 $ 45,129 $ (143,676) Add (Less): Interest expense 402,724 - (46,886) 355,838 In
Slide 47: Pro Forma Calculation and Reconciliation of Hotel EBITDA and Adjusted Hotel EBITDA
Pro Forma Calculation and Reconciliation of Hotel EBITDA and Adjusted Hotel EBITDA (dollars in thousands) LTM Transaction Accounting Adjustments Pro Forma LTM (1) 2Q 2025 * Asset Sales 2Q 2025* Number of hotels 200 (116) 84 Room revenues $ 1,191,740 $ (402,851) $ 788,889 Food and beverage revenues 2
Slide 48: Notes to Pro Forma Condensed Consolidated Statements of Income (Loss) and Pro Forma Calculations
Notes to Pro Forma Condensed Consolidated Statements of Income (Loss) and Pro Forma Calculations of FFO, Normalized FFO, CAD, EBITDA, EBITDAre, Hotel EBITDA and Adjusted EBITDAre 1. The adjustments represent the historical revenues and expenses of 116 hotels owned by SVC, that were sold in 2025 or a
Slide 49: Non-GAAP Financial Measures and Certain Definitions
Non-GAAP Financial Measures and Certain Definitions Non-GAAP Financial Measures SVC presents certain “non-GAAP financial measures” within the meaning of the applicable SEC rules, including FFO, Normalized FFO, CAD, EBITDA, Hotel EBITDA, Adjusted Hotel EBITDA, EBITDAre and Adjusted EBITDAre. These me
Slide 50: Non-GAAP Financial Measures and Certain Definitions (Continued)
Non-GAAP Financial Measures and Certain Definitions (Continued) Other Definitions Adjusted Hotel EBITDA Margin: Adjusted Hotel EBITDA as a percentage of hotel operating revenues. Annualized Minimum Rent: Generally, SVC's lease agreements with its net lease tenants require payment of minimum rent to
Slide 51: Non-GAAP Financial Measures and Certain Definitions (Continued)
Non-GAAP Financial Measures and Certain Definitions (Continued) Non-Cash Expenses: Non-cash expenses represent general and administrative expense paid in common shares and amortization of liabilities relating to SVC’s initial investment in Sonesta and its former investment in The RMR Group, Inc. Non
Service Properties Trust — Q2 2025 Earnings Presentation on 6ix