SEVN · Seven Hills Realty Trust

Seven Hills Realty Trust delivered solid first quarter 2026 results driven by active deployment of capital raised in its December 2025 rights offering, with $67.5 million in new loan originations across three transitional commercial real estate assets — a medical office in Atlanta, retail in Palm Desert, and a hotel in Scottsdale — all carrying floating-rate coupons with floors. The portfolio grew to $776 million in total commitments, supported by strong credit discipline: no realized losses, a weighted average risk rating of 2.8, and an allowance for credit losses representing just 1.3% of total loan commitments. Distributable Earnings of $0.24 per share — at the high end of management’s guidance — reflect the benefit of a fully floating-rate loan book (weighted average All In Yield of 7.84%) partially offset by rising funding costs (weighted average secured financing coupon of 5.84%). Management highlighted robust pipeline activity and meaningful remaining capital to deploy, citing recent extensions of its UBS and Wells Fargo repurchase facilities — including a $125 million increase in the Wells Fargo facility — as critical enablers of continued growth. The declared $0.28 per share distribution implies a 117% payout ratio against Distributable Earnings, underscoring reliance on both current earnings and ample liquidity ($56.6 million cash on hand and $397.5 million unused financing capacity) to sustain shareholder returns while maintaining conservative leverage (1.4x debt-to-equity). These developments affirm SEVN’s execution capability within its middle-market transitional CRE niche and reinforce confidence in its ability to capitalize on attractive risk-adjusted opportunities amid evolving rate environments.