Seven Hills Realty Trust · NASDAQ:SEVN
Seven Hills Realty Trust — Q3 2024 Earnings Presentation
22 slides from Seven Hills Realty Trust's earnings presentation, Oct 28, 2024
Slide 1: Seven Hills Realty Trust Third Quarter 2024 Financial Results
Seven Hills Realty Trust Third Quarter 2024 Financial Results
Slide 2: Seven Hills Realty Trust Announces Third Quarter 2024 Results
Seven Hills Realty Trust Announces Third Quarter 2024 Results “We delivered solid third quarter Newton, MA (October 28, 2024). Seven Hills Realty Trust (Nasdaq: SEVN) today announced financial results for the quarter and nine months ended September 30, 2024. results with distributable earnings Distr
Slide 3: Company Snapshot
Company Snapshot (As of September 30, 2024, unless otherwise noted) Strong Loan Portfolio Conservative Leverage Integrated with RMR Real Estate Platform $594 million 1.4x 11% Floating rate Debt to equity ratio Ownership of SEVN first mortgage loan commitments $30 million $695 million ~$41 billion Av
Slide 4: Third Quarter 2024 Highlights
Third Quarter 2024 Highlights (As of and for the three months ended September 30, 2024, unless otherwise noted) • Generated net income of $3.5 million, or $0.23 per diluted share and Distributable Earnings of $5.3 million, or $0.36 per Financial diluted share. Results • Quarterly distribution of $0.
Slide 5: Third Quarter 2024 Financial Summary
Third Quarter 2024 Financial Summary (amounts in thousands, except per share data) Income Statement Balance Sheet Three Months Ended September 30, 2024 September 30, 2024 Income from loan investments, net $ 8,286 Loans held for investment, net $ 549,944 Revenue from real estate owned 571 Real estate
Slide 6: Loan Portfolio Summary
Loan Portfolio Summary As of Third Quarter September 30, (dollars in thousands) Originations 2024 Number of loans 1 20 Third Quarter 2024 Loan Portfolio Activity Average loan commitment $16,000 $29,721 (dollars in millions) Total loan commitments $16,000 $594,421 $652.2 $42.0 $594.4 (1) Total Loan C
Slide 7: Loan Portfolio Originations and Diversity
Loan Portfolio Originations and Diversity Geographic Region (1) Loan Originations by Quarter East (dollars in millions) 18% $54.3 South $- 34% $47.0 $44.8 Midwest $3.2 $41.6 23% $8.6 $37.5 $- $5.6 West 25% (1) Property Type Retail $24.4 $54.3 Hotel $2.4 8% $41.6 Retail $38.4 $37.5 $16.0 Total Loan C
Slide 8: Loan Portfolio Credit Quality
Loan Portfolio Credit Quality Loan to Value (1) % of Portfolio Weighted Average LTV: 68% 26% 27% 18% 16% 13% 30% - 60% 61% - 65% 66% - 70% 71% - 75% 76% - 80% Loan Count 4 2 5 6 3 Risk Rating Distribution (1) % of Portfolio Weighted Average Risk Rating: 3.1 59% 26% 15% —% —% Lower Risk (1) Average R
Slide 9: Reducing Office Loan Exposure
Reducing Office Loan Exposure Since the beginning of 2023, SEVN's office loan exposure has declined to 30% through diversified loan originations and repayments. The modest increase this quarter is due to three multifamily loan payoffs, not new office loan originations. Portfolio Composition (1) 2% 7
Slide 10: Office Loans
Office Loans (1) • No office loans in urban or CBD markets in our portfolio. • As of September 30, 2024, all of our borrowers had paid their debt service obligations owed and due to us. Total Loan Portfolio Office Risk Rating Distribution Office Risk Rating $23.5 million principal balance / Class B
Slide 11: Secured Financing Facilities
Secured Financing Facilities (As of September 30, 2024) Total/Weighted Citibank (1) UBS BMO Wells Fargo (2) Average (dollars in thousands) Maximum facility size $ 215,000 $ 205,000 $ 150,000 $ 125,000 $ 695,000 Principal balance $ 59,714 $ 146,339 $ 103,855 $ 67,426 $ 377,334 Unused capacity $ 155,2
Slide 12: Appendix
SEVEN HILLS REALTY TRUST Appendix a eo Ph ... ) = 2
Slide 13: 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 Janney Montgomery Scott investment adviser and is owned by RMR. As of September 30, 2024, RMR had nearly
Slide 14: Loan Investment Details
Loan Investment Details (dollars in thousands) First mortgage loans as of September 30, 2024: 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 15: Loan Investment Details (Continued)
Loan Investment Details (Continued) (dollars in thousands) First mortgage loans as of September 30, 2024: Committed Maximum Origination Principal Principal Coupon All in Maturity Maturity Risk # Location Property Type Date Amount Balance Rate Yield Date Date LTV Rating 14 Fontana, CA Industrial 11/1
Slide 16: Interest Rate Sensitivity
Interest Rate Sensitivity (As of September 30, 2024) 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 $(0.02) $-0.05 $(0.05) $-0.10 $(0.08) $(0.10) $(0.12) $-0.15 $-0.20 -125 bps -100 bps -75 bps -50 bps -25 bps 0 bps +25 bps +50 bps +
Slide 17: Financial Summary: Condensed Consolidated Balance Sheets
Condensed Consolidated Balance Sheets (dollars in thousands, except per share data) September 30, December 31, 2024 2023 ASSETS Cash and cash equivalents $ 82,197 $ 87,855 Loans held for investment 557,226 626,462 Allowance for credit losses (7,282) (4,376) Loans held for investment, net 549,944 622
Slide 18: Condensed Consolidated Statements of Operations
Condensed Consolidated Statements of Operations (amounts in thousands, except per share data) Three Months Ended September 30, Nine Months Ended September 30, 2024 2023 2024 2023 INCOME FROM INVESTMENTS: Interest and related income $ 15,741 $ 17,137 $ 48,467 $ 48,814 Purchase discount accretion 420
Slide 19: Non-GAAP Financial Measures
Non-GAAP Financial Measures (amounts in thousands, except per share data) Three Months Ended September 30, June 30, March 31, December 31, September 30, 2024 2024 2024 2023 2023 Net income $ 3,479 $ 4,229 $ 5,233 $ 6,045 $ 7,473 Non-cash equity compensation expense 367 497 336 151 271 Non-cash accre
Slide 20: 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 21: 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 22: 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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