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Service Properties Trust (SVC)

Service Properties Trust is a real estate investment trust which owns a diverse portfolio of hotels and net lease service and necessity-based retail properties across the United States and in Puerto Rico and Canada. SVC's properties are operated by third parties pursuant to management or lease agreements. SVC is managed by the operating subsidiary of The RMR Group Inc., an alternative asset management company that is headquartered in Newton, Massachusetts.

Company profile

Ticker
SVC
Exchange
Website
CEO
John Murray
Employees
Incorporated
Location
Fiscal year end
Former names
HOSPITALITY PROPERTIES TRUST
SEC CIK
Subsidiaries
Banner NewCo LLC • Cambridge TRS, Inc. • Candlewood Jersey City-Urban Renewal, L.L.C. • Harbor Court Associates, LLC • Highway Ventures LLC • Highway Ventures Borrower LLC • Highway Ventures Properties LLC • HPT Cambridge LLC • HPT Clift TRS LLC • HPT CW MA Realty LLC ...
IRS number
43262075

SVC stock data

Analyst ratings and price targets

Last 3 months

Calendar

4 Aug 22
12 Aug 22
31 Dec 22
Quarter (USD) Jun 22 Mar 22 Dec 21 Sep 21
Revenue
Cost of revenue
Operating income
Operating margin
Net income
Net profit margin
Cash on hand
Change in cash
Diluted EPS
Annual (USD) Dec 21 Dec 20 Dec 19 Dec 18
Revenue
Cost of revenue
Operating income
Operating margin
Net income
Net profit margin
Cash on hand
Change in cash
Diluted EPS
Cash burn rate (est.) Burn method: Change in cash Burn method: Operating income Burn method: FCF (opex + capex)
Last Q Avg 4Q Last Q Avg 4Q Last Q Avg 4Q
Cash on hand (at last report) 700.11M 700.11M 700.11M 700.11M 700.11M 700.11M
Cash burn (monthly) 90.82M 18.04M (no burn) 30.65M (no burn) (no burn)
Cash used (since last report) 130.14M 25.85M n/a 43.92M n/a n/a
Cash remaining 569.97M 674.25M n/a 656.19M n/a n/a
Runway (months of cash) 6.3 37.4 n/a 21.4 n/a n/a

Beta Read what these cash burn values mean

Date Owner Security Transaction Code Indirect 10b5-1 $Price #Shares $Value #Remaining
15 Jun 22 Portnoy Adam Common Shares of Beneficial Interest Grant Acquire A No No 0 7,000 0 168,499
15 Jun 22 Fraiche Donna D. Common Shares of Beneficial Interest Grant Acquire A No No 0 7,000 0 33,000
15 Jun 22 Harrington John L. Common Shares of Beneficial Interest Gift Acquire G Yes No 0 7,000 0 14,000
15 Jun 22 Harrington John L. Common Shares of Beneficial Interest Gift Dispose G No No 0 7,000 0 0
15 Jun 22 Harrington John L. Common Shares of Beneficial Interest Grant Acquire A No No 0 7,000 0 7,000
15 Jun 22 Murray John G. Common Shares of Beneficial Interest Grant Acquire A No No 0 7,000 0 181,261
15 Jun 22 Laurie B. Burns Common Shares of Beneficial Interest Grant Acquire A No No 0 7,000 0 22,000
79.9% owned by funds/institutions
13F holders Current Prev Q Change
Total holders 251 249 +0.8%
Opened positions 33 33
Closed positions 31 34 -8.8%
Increased positions 83 94 -11.7%
Reduced positions 84 78 +7.7%
13F shares Current Prev Q Change
Total value 1.16B 1.15B +0.9%
Total shares 131.88M 131.29M +0.4%
Total puts 357.7K 326.8K +9.5%
Total calls 457.3K 706.9K -35.3%
Total put/call ratio 0.8 0.5 +69.2%
Largest owners Shares Value Change
BLK Blackrock 32.36M $285.72M +0.4%
Vanguard 25.82M $227.99M +0.4%
STT State Street 10.85M $95.83M +12.2%
LSV Asset Management 4.06M $35.86M -1.6%
Geode Capital Management 3.44M $30.4M +0.1%
140 Summer Partners 3.01M $26.58M +94.9%
Flat Footed 2.86M $25.24M +10.8%
Balyasny Asset Management 2.6M $22.97M +18.8%
Charles Schwab Investment Management 2.57M $22.66M +6.1%
Capital Management 2.44M $21.57M +28.8%
Largest transactions Shares Bought/sold Change
Davidson Kempner Capital Management 0 -1.88M EXIT
Norges Bank 0 -1.62M EXIT
140 Summer Partners 3.01M +1.47M +94.9%
Columbus Hill Capital Management 244.11K -1.45M -85.6%
STT State Street 10.85M +1.18M +12.2%
Millennium Management 426.52K -895.04K -67.7%
MS Morgan Stanley 993.29K -727.6K -42.3%
GS Goldman Sachs 1.33M +626.83K +88.7%
Capital Management 2.44M +546.41K +28.8%
Thrivent Financial For Lutherans 1.27M +506.52K +66.4%

Financial report summary

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Risks
  • If the changes in business and consumer practices as a result of the COVID-19 pandemic continue and become long-term practices, our business would likely be materially and adversely impacted.
  • Adverse general economic conditions in the United States would likely negatively impact our business.
  • Sonesta manages a majority of our hotels, and we may need to fund operating losses for these hotels or make capital contributions to Sonesta.
  • We have a high concentration of properties that are operated by Sonesta or TA.
  • We may not be able to sell properties, or our plan to sell may be delayed and could be changed or abandoned.
  • Our earnings will be more volatile than in previous years due to most of the returns and rents no longer being guaranteed by our operators’ parent companies.
  • We have a substantial amount of debt and we may incur additional debt, and our debt leverage may remain at or above current levels for an indefinite period.
  • We may need additional waivers from our lenders or waivers from our note holders in order to avoid defaulting under our credit agreement or our public debt agreements, and the terms of our current waivers under our credit agreement impose restrictions on our ability to pay distributions and make capital investments, and any future waiver or amendment may impose similar or additional restrictions.
  • We may fail to comply with the terms of our credit agreement and our senior unsecured notes indentures and their supplements, which could adversely affect our business, would limit our ability to incur additional indebtedness and may prevent our making distributions to our shareholders.
  • Secured indebtedness exposes us to the possibility of foreclosure, which could result in the loss of our investment in certain of our subsidiaries or in a property or group of properties or other assets that secure that indebtedness.
  • Inherent risks in the hotel industry could impact Sonesta and our other managers and affect our business.
  • TA’s business is subject to substantial risks, which could adversely affect us.
  • We may be unable to fund capital improvements at our properties and our investments may cost more and take longer to complete than expected.
  • We may be unable to grow our business by acquiring additional properties, and we might encounter unanticipated difficulties and expenditures relating to our acquired properties.
  • We are limited in our ability to operate our properties and are thus dependent on our operators.
  • Changes in market interest rates, including changes resulting from the phase out of LIBOR, may adversely affect us.
  • REIT distribution requirements and limitations on our ability to access reasonably priced capital may adversely impact our ability to carry out our business plan.
  • We face significant competition.
  • Substantially all of our net lease properties are leased to single tenants, which may subject us to greater risks of loss than if each of those properties had multiple tenants.
  • Our tenants may fail to successfully operate their businesses, which could adversely affect us.
  • Many of our tenants do not have credit ratings.
  • We may be unable to renew leases, lease vacant space or re-lease space as leases expire on favorable terms or at all.
  • Vacancies in a property could result in significant capital expenditures and illiquidity and reduce the value of the property.
  • Ownership of real estate is subject to environmental risks and liabilities.
  • We are subject to risks associated with our hotel operators’ employment of personnel.
  • Bankruptcy law may adversely impact us.
  • Insurance may not adequately cover our losses, and insurance costs may continue to increase.
  • We are subject to risks from adverse weather, natural disasters and climate change and climate related events, and we incur significant costs and invest significant amounts with respect to these matters.
  • RMR LLC and our hotel managers rely on information technology and systems in providing services to us, and any material failure, inadequacy, interruption or security breach of that technology or those systems could materially harm us.
  • Third party expectations relating to ESG may impose additional costs and expose us to new risks.
  • Market and government actions in response to concerns about global climate change and supply chain challenges may negatively impact our business.
  • We are dependent upon RMR LLC to manage our business and implement our growth strategy.
  • RMR LLC has broad discretion in operating our day to day business.
  • Our management structure and agreements and relationships with RMR LLC and RMR LLC’s and its controlling shareholder’s relationships with others may create conflicts of interest, or the perception of such conflicts, and may restrict our investment activities.
  • Our management agreements with RMR LLC were not negotiated on an arm’s length basis and their fee and expense structure may not create proper incentives for RMR LLC, which may increase the risk of an investment in our common shares.
  • The termination of our management agreements with RMR LLC may require us to pay a substantial termination fee, including in the case of a termination for unsatisfactory performance, which may limit our ability to end our relationship with RMR LLC.
  • Our management arrangements with RMR LLC may discourage a change of control of us.
  • Our business dealings with Sonesta and TA comprise a significant part of our business and operations and they may create conflicts of interest or the perception of such conflicts of interest.
  • We may not realize the benefits we expect from our investment in Sonesta.
  • We are party to transactions with related parties that may increase the risk of allegations of conflicts of interest.
  • We may be at an increased risk for dissident shareholder activities due to perceived conflicts of interest arising from our management structure and relationships.
  • We may change our operational, financing and investment policies without shareholder approval and we may become more highly leveraged, which may increase our risk of default under our debt obligations.
  • Ownership limitations and certain provisions in our declaration of trust, bylaws and agreements, as well as certain provisions of Maryland law, may deter, delay or prevent a change in our control or unsolicited acquisition proposals.
  • Certain aspects of our business may prevent shareholders from accumulating a large stake in us, from nominating or serving as our Trustees, or from taking actions to otherwise control our business.
  • Our rights and the rights of our shareholders to take action against our Trustees and officers are limited.
  • Shareholder litigation against us or our Trustees, officers, managers or other agents may be referred to mandatory arbitration proceedings, which follow different procedures than in-court litigation and may be more restrictive to shareholders asserting claims than in-court litigation.
  • Our bylaws designate the Circuit Court for Baltimore City, Maryland as the sole and exclusive forum for certain actions and proceedings that may be initiated by our shareholders, which could limit our shareholders’ ability to obtain a judicial forum they deem favorable for disputes with us or our Trustees, officers, managers or other agents.
  • Our failure to remain qualified for taxation as a REIT under the IRC or the loss of our other special tax statuses could have significant adverse consequences.
  • Maintaining our qualification for taxation as a REIT under the IRC will require us to continue to satisfy tests concerning, among other things, the nature of our assets, the sources of our income and the amounts we distribute to our shareholders. In order to meet these requirements, it may be necessary for us to sell or forgo attractive investments.
  • Distributions to shareholders generally will not qualify for reduced tax rates applicable to “qualified dividends.”
  • REIT distribution requirements could adversely affect us and our shareholders.
  • Even if we remain qualified for taxation as a REIT under the IRC, we may face other tax liabilities that reduce our cash flow.
  • If arrangements involving our TRSs fail to comply as intended with the REIT qualification and taxation rules, we may fail to qualify for taxation as a REIT under the IRC or be subject to significant penalty taxes.
  • Legislative or other actions affecting REITs could materially and adversely affect us and our shareholders.
  • Our quarterly cash distribution rate on our common shares is currently $0.01 per share and future distributions may remain at this level for an indefinite period or be eliminated and the form of payment could change.
  • The Notes and the Guarantees are structurally subordinated to the payment of all indebtedness and other liabilities of our subsidiaries that do not guarantee the 2025 Notes and the 2027 Notes.
  • The Notes and the Guarantees are unsecured and effectively subordinated to all of our and the subsidiary guarantors’ existing and future secured indebtedness to the extent of the value of the assets securing such indebtedness.
  • Federal and state statutes allow courts, under specific circumstances, to void guarantees and require holders of notes to return payments received from guarantors.
  • There is no public market for the Notes, and one may not develop, be maintained or be liquid.
  • A downgrade in credit ratings could materially adversely affect the market price of the Notes and may increase our cost of capital.
  • Some or all of the Guarantees may be released automatically.

Content analysis

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Positive
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Uncertain
Constraining
Legalese
Litigous
Readability
H.S. junior V good
New words: accrued, classification, combat, critical, deploy, deteriorate, effort, high, margin, par, pronounced, recession, redeemed, redemption, small, Subsequent, unpaid, weakening, write
Removed: borrowing, demonstrate, disruptive, expensive, forced, impacted, ongoing, position, representing, transitioning, ultimate