Cover Page
Cover Page - shares | 9 Months Ended | |
Jun. 30, 2023 | Aug. 08, 2023 | |
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-37616 | |
Entity Registrant Name | RMR GROUP INC. | |
Entity Incorporation, State or Country Code | MD | |
Entity Tax Identification Number | 47-4122583 | |
Entity Address, Address Line One | Two Newton Place | |
Entity Address, Address Line Two | 255 Washington Street | |
Entity Address, Address Line Three | Suite 300 | |
Entity Address, City or Town | Newton | |
Entity Address, State or Province | MA | |
Entity Address, Postal Zip Code | 02458-1634 | |
City Area Code | 617 | |
Local Phone Number | 796-8230 | |
Title of 12(b) Security | Class A common stock, $0.001 par value per share | |
Trading Symbol | RMR | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Central Index Key | 0001644378 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --09-30 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q3 | |
Class A Common Stock | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 15,612,179 | |
Class B-1 Common Stock | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 1,000,000 | |
Class B-2 Common Stock | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 15,000,000 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2023 | Sep. 30, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 295,423 | $ 189,088 |
Prepaid and other current assets | 6,486 | 5,372 |
Total current assets | 404,010 | 303,281 |
Property and equipment, net | 5,501 | 2,495 |
Equity method investments accounted for under the fair value option | 17,525 | 49,114 |
Goodwill and intangible assets, net of amortization | 2,034 | 2,057 |
Operating lease right of use assets | 29,272 | 28,894 |
Deferred tax asset | 18,578 | 17,112 |
Other assets, net of amortization | 117,833 | 124,895 |
Total assets | 601,385 | 542,405 |
Current liabilities: | ||
Reimbursable accounts payable and accrued expenses | 74,263 | 80,221 |
Accounts payable and accrued expenses | 40,316 | 16,745 |
Operating lease liabilities | 5,056 | 4,693 |
Employer compensation liability | 1,039 | 7,516 |
Total current liabilities | 120,674 | 109,175 |
Operating lease liabilities, net of current portion | 25,406 | 25,626 |
Amounts due pursuant to tax receivable agreement, net of current portion | 23,308 | 23,308 |
Employer compensation liability, net of current portion | 6,632 | 14,557 |
Total liabilities | 176,020 | 172,666 |
Commitments and contingencies | ||
Equity: | ||
Additional paid in capital | 115,479 | 113,136 |
Retained earnings | 405,400 | 355,949 |
Cumulative common distributions | (282,427) | (262,496) |
Total shareholders’ equity | 238,484 | 206,621 |
Noncontrolling interest | 186,881 | 163,118 |
Total equity | 425,365 | 369,739 |
Total liabilities and equity | 601,385 | 542,405 |
Related Party | ||
Current assets: | ||
Due from related parties | 102,101 | 108,821 |
Due from related parties, net of current portion | 6,632 | 14,557 |
Class A Common Stock | ||
Equity: | ||
Common stock | 16 | 16 |
Class B-1 Common Stock | ||
Equity: | ||
Common stock | 1 | 1 |
Class B-2 Common Stock | ||
Equity: | ||
Common stock | $ 15 | $ 15 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2023 | Sep. 30, 2022 |
Class A Common Stock | ||
Common stock, par value (in usd per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 31,950,000 | 31,600,000 |
Common stock, shares issued (in shares) | 15,614,152 | 15,606,115 |
Common stock shares outstanding (in shares) | 15,614,152 | 15,606,115 |
Class B-1 Common Stock | ||
Common stock, par value (in usd per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 1,000,000 | 1,000,000 |
Common stock, shares issued (in shares) | 1,000,000 | 1,000,000 |
Common stock shares outstanding (in shares) | 1,000,000 | 1,000,000 |
Class B-2 Common Stock | ||
Common stock, par value (in usd per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 15,000,000 | 15,000,000 |
Common stock, shares issued (in shares) | 15,000,000 | 15,000,000 |
Common stock shares outstanding (in shares) | 15,000,000 | 15,000,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Revenues: | ||||
Total revenues | $ 280,225 | $ 211,088 | $ 739,384 | $ 590,310 |
Expenses: | ||||
Compensation and benefits | 34,239 | 32,170 | 102,039 | 95,671 |
Equity based compensation | 2,100 | 512 | 8,719 | 4,719 |
Separation costs | 1,064 | 400 | 2,002 | 617 |
Total compensation and benefits expense | 37,403 | 33,082 | 112,760 | 101,007 |
General and administrative | 9,575 | 8,323 | 28,198 | 24,464 |
Other reimbursable expenses | 170,881 | 144,012 | 497,465 | 397,063 |
Transaction and acquisition related costs | 1,196 | 0 | 1,196 | 0 |
Depreciation and amortization | 281 | 253 | 821 | 731 |
Total expenses | 219,336 | 185,670 | 640,440 | 523,265 |
Operating income | 60,889 | 25,418 | 98,944 | 67,045 |
Interest income | 2,833 | 279 | 6,837 | 402 |
Gain (loss) on equity method investments accounted for under the fair value option | 663 | (5,489) | 23,513 | (8,853) |
Income before income tax expense | 64,385 | 20,208 | 129,294 | 58,594 |
Income tax expense | (9,214) | (2,943) | (18,581) | (8,448) |
Net income | 55,171 | 17,265 | 110,713 | 50,146 |
Net income attributable to noncontrolling interest | (30,530) | (9,695) | (61,262) | (28,142) |
Net income attributable to The RMR Group Inc. | $ 24,641 | $ 7,570 | $ 49,451 | $ 22,004 |
Weighted average common shares outstanding - basic (in shares) | 16,435 | 16,343 | 16,416 | 16,332 |
Weighted average common shares outstanding - diluted (in shares) | 16,435 | 31,353 | 31,431 | 31,342 |
Net income attributable to The RMR Group Inc. per common share - basic (in dollars per share) | $ 1.48 | $ 0.46 | $ 2.98 | $ 1.33 |
Net income attributable to The RMR Group Inc. per common share - diluted (in dollars per share) | $ 1.48 | $ 0.46 | $ 2.97 | $ 1.33 |
Total management and advisory services revenues | ||||
Revenues: | ||||
Total revenues | $ 92,487 | $ 52,956 | $ 190,335 | $ 148,259 |
Management services | ||||
Revenues: | ||||
Total revenues | 45,872 | 51,819 | 141,490 | 144,867 |
Termination and incentive business management fees | ||||
Revenues: | ||||
Total revenues | 45,474 | 0 | 45,474 | 0 |
Advisory services | ||||
Revenues: | ||||
Total revenues | 1,141 | 1,137 | 3,371 | 3,392 |
Total reimbursable costs | ||||
Revenues: | ||||
Total revenues | 187,738 | 158,132 | 549,049 | 442,051 |
Reimbursable compensation and benefits | ||||
Revenues: | ||||
Total revenues | 15,235 | 14,189 | 44,441 | 42,092 |
Reimbursable equity based compensation | ||||
Revenues: | ||||
Total revenues | 1,622 | (69) | 7,143 | 2,896 |
Other reimbursable expenses | ||||
Revenues: | ||||
Total revenues | $ 170,881 | $ 144,012 | $ 497,465 | $ 397,063 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Shareholders' Equity - USD ($) $ in Thousands | Total | Total Shareholders' Equity | Common Stock Class A Common Stock | Common Stock Class B-1 Common Stock | Common Stock Class B-2 Common Stock | Additional Paid In Capital | Retained Earnings | Cumulative Common Distributions | Noncontrolling Interest |
Beginning balance at Sep. 30, 2021 | $ 347,715 | $ 195,120 | $ 15 | $ 1 | $ 15 | $ 109,910 | $ 321,945 | $ (236,766) | $ 152,595 |
Increase (Decrease) in Shareholders' Equity | |||||||||
Share awards, net | 613 | 613 | 613 | ||||||
Net income | 18,292 | 8,042 | 8,042 | 10,250 | |||||
Tax distributions to member | (1,979) | (1,979) | |||||||
Common share distributions | (10,764) | (6,264) | (6,264) | (4,500) | |||||
Ending balance at Dec. 31, 2021 | 353,877 | 197,511 | 15 | 1 | 15 | 110,523 | 329,987 | (243,030) | 156,366 |
Beginning balance at Sep. 30, 2021 | 347,715 | 195,120 | 15 | 1 | 15 | 109,910 | 321,945 | (236,766) | 152,595 |
Increase (Decrease) in Shareholders' Equity | |||||||||
Net income | 50,146 | ||||||||
Ending balance at Jun. 30, 2022 | 357,008 | 200,481 | 16 | 1 | 15 | 112,396 | 343,949 | (255,896) | 156,527 |
Beginning balance at Dec. 31, 2021 | 353,877 | 197,511 | 15 | 1 | 15 | 110,523 | 329,987 | (243,030) | 156,366 |
Increase (Decrease) in Shareholders' Equity | |||||||||
Share awards, net | 1,145 | 1,145 | 1 | 1,144 | |||||
Net income | 14,589 | 6,392 | 6,392 | 8,197 | |||||
Tax distributions to member | (4,277) | (4,277) | |||||||
Common share distributions | (10,765) | (6,265) | (6,265) | (4,500) | |||||
Ending balance at Mar. 31, 2022 | 354,569 | 198,783 | 16 | 1 | 15 | 111,667 | 336,379 | (249,295) | 155,786 |
Increase (Decrease) in Shareholders' Equity | |||||||||
Share awards, net | 729 | 729 | 729 | ||||||
Net income | 17,265 | 7,570 | 7,570 | 9,695 | |||||
Tax distributions to member | (4,154) | (4,154) | |||||||
Common share distributions | (11,401) | (6,601) | (6,601) | (4,800) | |||||
Ending balance at Jun. 30, 2022 | 357,008 | 200,481 | 16 | 1 | 15 | 112,396 | 343,949 | (255,896) | 156,527 |
Beginning balance at Sep. 30, 2022 | 369,739 | 206,621 | 16 | 1 | 15 | 113,136 | 355,949 | (262,496) | 163,118 |
Increase (Decrease) in Shareholders' Equity | |||||||||
Share awards, net | 594 | 594 | 594 | ||||||
Net income | 14,240 | 6,337 | 6,337 | 7,903 | |||||
Tax distributions to member | (3,839) | (3,839) | |||||||
Common share distributions | (11,442) | (6,642) | (6,642) | (4,800) | |||||
Ending balance at Dec. 31, 2022 | 369,292 | 206,910 | 16 | 1 | 15 | 113,730 | 362,286 | (269,138) | 162,382 |
Beginning balance at Sep. 30, 2022 | 369,739 | 206,621 | 16 | 1 | 15 | 113,136 | 355,949 | (262,496) | 163,118 |
Increase (Decrease) in Shareholders' Equity | |||||||||
Net income | 110,713 | ||||||||
Ending balance at Jun. 30, 2023 | 425,365 | 238,484 | 16 | 1 | 15 | 115,479 | 405,400 | (282,427) | 186,881 |
Beginning balance at Dec. 31, 2022 | 369,292 | 206,910 | 16 | 1 | 15 | 113,730 | 362,286 | (269,138) | 162,382 |
Increase (Decrease) in Shareholders' Equity | |||||||||
Share awards, net | 1,015 | 1,015 | 1,015 | ||||||
Net income | 41,302 | 18,473 | 18,473 | 22,829 | |||||
Tax distributions to member | (4,545) | (4,545) | |||||||
Common share distributions | (11,441) | (6,641) | (6,641) | (4,800) | |||||
Ending balance at Mar. 31, 2023 | 395,623 | 219,757 | 16 | 1 | 15 | 114,745 | 380,759 | (275,779) | 175,866 |
Increase (Decrease) in Shareholders' Equity | |||||||||
Share awards, net | 734 | 734 | 734 | ||||||
Net income | 55,171 | 24,641 | 24,641 | 30,530 | |||||
Tax distributions to member | (14,715) | (14,715) | |||||||
Common share distributions | (11,448) | (6,648) | (6,648) | (4,800) | |||||
Ending balance at Jun. 30, 2023 | $ 425,365 | $ 238,484 | $ 16 | $ 1 | $ 15 | $ 115,479 | $ 405,400 | $ (282,427) | $ 186,881 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Cash Flows from Operating Activities: | ||
Net income | $ 110,713 | $ 50,146 |
Adjustments to reconcile net income to net cash from operating activities: | ||
Depreciation and amortization | 821 | 731 |
Straight line office rent | (235) | (247) |
Amortization expense related to other assets | 7,062 | 7,062 |
Deferred income taxes | (1,466) | (132) |
Operating expenses paid in The RMR Group Inc. common shares | 2,522 | 2,518 |
Distributions from equity method investments | 1,623 | 415 |
(Gain) loss on equity method investments accounted for under the fair value option | (23,513) | 8,853 |
Changes in assets and liabilities: | ||
Due from related parties | 243 | (8,550) |
Prepaid and other current assets | (1,114) | 18 |
Reimbursable accounts payable and accrued expenses | (5,958) | 12,205 |
Accounts payable and accrued expenses | 22,994 | 16,837 |
Net cash from operating activities | 113,692 | 89,856 |
Cash Flows from Investing Activities: | ||
Purchase of property and equipment | (3,227) | (915) |
Equity method investment in Seven Hills Realty Trust | 0 | (9,469) |
Proceeds from sale of TravelCenters of America Inc. common shares | 53,479 | 0 |
Net cash provided by (used in) investing activities | 50,252 | (10,384) |
Cash Flows from Financing Activities: | ||
Distributions to noncontrolling interest | (37,499) | (24,210) |
Distributions to common shareholders | (19,931) | (19,130) |
Repurchase of common shares | (179) | (31) |
Net cash used in financing activities | (57,609) | (43,371) |
Increase in cash and cash equivalents | 106,335 | 36,101 |
Cash and cash equivalents at beginning of period | 189,088 | 159,835 |
Cash and cash equivalents at end of period | 295,423 | 195,936 |
Supplemental Cash Flow Information and Non-Cash Activities: | ||
Income taxes paid | 16,978 | 7,392 |
Recognition of right of use assets and related lease liabilities | $ 4,119 | $ 783 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Jun. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The RMR Group Inc., or RMR Inc., is a holding company and substantially all of its business is conducted by its majority owned subsidiary, The RMR Group LLC, or RMR LLC. RMR Inc. is a Maryland corporation and RMR LLC is a Maryland limited liability company. RMR Inc. serves as the sole managing member of RMR LLC and, in that capacity, operates and controls the business and affairs of RMR LLC. In these financial statements, unless otherwise indicated, “we”, “us” and “our” refer to RMR Inc. and its direct and indirect subsidiaries, including RMR LLC. As of June 30, 2023, RMR Inc. owned 15,614,152 class A membership units of RMR LLC, or Class A Units, and 1,000,000 class B membership units of RMR LLC, or Class B Units. The aggregate RMR LLC membership units RMR Inc. owns represented 52.6% of the economic interest of RMR LLC as of June 30, 2023. We refer to economic interest as the right of a holder of a Class A Unit or Class B Unit to share in distributions made by RMR LLC and, upon liquidation, dissolution or winding up of RMR LLC, to share in the assets of RMR LLC after payments to creditors. A wholly owned subsidiary of ABP Trust, a Maryland statutory trust, owns 15,000,000 redeemable Class A Units, representing 47.4% of the economic interest of RMR LLC as of June 30, 2023, which is presented as a noncontrolling interest within the condensed consolidated financial statements. Adam D. Portnoy, the Chair of our Board, one of our Managing Directors and our President and Chief Executive Officer, is the sole trustee of ABP Trust, and owns all of ABP Trust’s voting securities. RMR LLC was founded in 1986 to manage public investments in real estate and, as of June 30, 2023, managed a diverse portfolio of real estate and real estate related businesses. RMR LLC provides management services to four publicly traded equity real estate investment trusts, or REITs: Diversified Healthcare Trust, or DHC, which owns medical office and life science properties, senior living communities and wellness centers; Industrial Logistics Properties Trust, or ILPT, which owns and leases industrial and logistics properties; Office Properties Income Trust, or OPI, which owns office properties primarily leased to single tenants and those with high quality credit characteristics, including the government; and Service Properties Trust, or SVC, which owns a diverse portfolio of hotels and net lease service and necessity-based retail properties. DHC, ILPT, OPI and SVC are collectively referred to as the Managed Equity REITs. On April 11, 2023, OPI and DHC entered into an agreement to merge, pursuant to which DHC will be merged with and into OPI, with OPI continuing as the surviving entity in the merger. RMR LLC will continue to manage the surviving entity following the merger. For additional information, see Note 6, Related Person Transactions. RMR LLC’s wholly owned subsidiary, Tremont Realty Capital LLC, or Tremont, an investment adviser registered with the Securities and Exchange Commission, or SEC, provides advisory services for Seven Hills Realty Trust, or SEVN. SEVN is a publicly traded mortgage REIT that focuses on originating and investing in first mortgage loans secured by middle market and transitional commercial real estate. Tremont has in the past and may in the future manage additional accounts that invest in commercial real estate debt. Tremont may also act as a transaction broker for non-investment advisory clients for negotiated fees, which we refer to as the Tremont business. RMR LLC also provided management services to TravelCenters of America Inc., or TA, until it was acquired by BP Products North America Inc., or BP, on May 15, 2023. TA is a real estate operating company that operates and franchises travel centers primarily along the U.S. interstate highway system, many of which are owned by SVC, and standalone truck service facilities. The Managed Equity REITs, SEVN, and until May 15, 2023, TA, are collectively referred to as the Perpetual Capital clients. In addition, RMR LLC provides management services to private capital vehicles, including ABP Trust, AlerisLife Inc., or AlerisLife, Sonesta International Hotels Corporation, or Sonesta, and other private entities that own commercial real estate, of which certain of our Managed Equity REITs own minority equity interests. These clients are collectively referred to as the Private Capital clients. AlerisLife is an operator of senior living communities, many of which are owned by DHC, and as discussed in Note 6, Related Person Transactions , was a publicly traded company until March 20, 2023 when it was acquired by a subsidiary of ABP Trust. As a result of this transaction, amounts relating to AlerisLife are characterized as Private Capital for all periods presented. Sonesta is a privately owned franchisor and operator of hotels, resorts and cruise ships in the United States, Latin America, the Caribbean and the Middle East, and many of the U.S. hotels that Sonesta operates are owned by SVC. The accompanying condensed consolidated financial statements are unaudited. Certain information and disclosures required by U.S. Generally Accepted Accounting Principles, or GAAP, for complete financial statements have been condensed or omitted. We believe the disclosures made are adequate to make the information presented not misleading. However, the accompanying condensed consolidated financial statements should be read in conjunction with the financial statements and notes contained in our Annual Report on Form 10-K for the fiscal year ended September 30, 2022, or our 2022 Annual Report. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair statement of results for the interim period have been included. All intercompany transactions and balances with or among our consolidated subsidiaries have been eliminated. Our operating results for interim periods are not necessarily indicative of the results that may be expected for the full year. We report our results in a single reportable segment, which reflects how our chief operating decision maker allocates resources and evaluates our financial results. Preparation of these financial statements in conformity with GAAP requires our management to make certain estimates and assumptions that may affect the amounts reported in these condensed consolidated financial statements and related notes. The actual results could differ from these estimates. |
Revenue Recognition
Revenue Recognition | 9 Months Ended |
Jun. 30, 2023 | |
Revenue Recognition [Abstract] | |
Revenue Recognition | Revenue Recognition Revenues from services that we provide are recognized as earned over time as the services provided represent performance obligations that are satisfied over time. Management Agreements with the Managed Equity REITs We are party to a business management and a property management agreement with each Managed Equity REIT. The following is a summary of the fees we earn pursuant to our business management agreements with the Managed Equity REITs. For a summary of the fees we earn pursuant to our property management agreements with the Managed Equity REITs, please see Property Management Agreements , below. Base Business Management Fees — We earn annual base business management fees from the Managed Equity REITs by providing continuous services pursuant to business management agreements equal to the lesser of: • the sum of (a) 0.5% of the historical cost of transferred real estate assets, if any, as defined in the applicable business management agreement, plus (b) 0.7% of the average invested capital (exclusive of the transferred real estate assets), as defined in the applicable business management agreement, up to $250,000, plus (c) 0.5% of the average invested capital exceeding $250,000; and • the sum of (a) 0.7% of the average market capitalization, as defined in the applicable business management agreement, up to $250,000, plus (b) 0.5% of the average market capitalization exceeding $250,000. The foregoing base business management fees are paid in cash monthly in arrears. We earned aggregate base business management fees from the Managed Equity REITs of $21,037 and $25,446 for the three months ended June 30, 2023 and 2022, respectively, and $63,894 and $73,085 for the nine months ended June 30, 2023 and 2022, respectively. Incentive Business Management Fees — We also may earn annual incentive business management fees from the Managed Equity REITs under the business management agreements. The incentive business management fees, which are payable in cash, are contingent performance based fees recognized only when earned at the end of each respective measurement period. Incentive business management fees are excluded from the transaction price until it becomes probable that there will not be a significant reversal of cumulative revenue recognized. The incentive business management fees are calculated for each Managed Equity REIT as 12.0% of the product of (a) the equity market capitalization of the Managed Equity REIT, as defined in the applicable business management agreement, on the last trading day of the year immediately prior to the relevant measurement period and (b) the amount, expressed as a percentage, by which the Managed Equity REIT’s total return per share, as defined in the applicable business management agreement, exceeded the applicable benchmark total return per share, as defined in the applicable business management agreement, of a specified REIT index identified in the applicable business management agreement for the measurement period, as adjusted for net share issuances during the period and subject to caps on the values of the incentive fees. The measurement period for the annual incentive business management fees is defined as the three year period ending on December 31 of the year for which such fee is being calculated. We did not earn incentive business management fees from the Managed Equity REITs for calendar years 2022 or 2021. Other Management Agreements We earn management fees by providing continuous services pursuant to the management agreements with AlerisLife, Sonesta and until May 15, 2023, TA, equal to 0.6% of: (i) in the case of AlerisLife, AlerisLife’s revenues from all sources reportable under GAAP, less any revenues reportable by AlerisLife with respect to properties for which it provides management services, plus the gross revenues at those properties determined in accordance with GAAP; (ii) in the case of Sonesta, Sonesta’s revenues from all sources reportable under GAAP, less any revenues reportable by Sonesta with respect to hotels for which it provides management services, plus the gross revenues at those hotels determined in accordance with GAAP; and (iii) in the case of TA, the sum of TA’s gross fuel margin, as defined in the applicable agreement, plus TA’s total nonfuel revenues. These management fees are estimated and payable in cash monthly in advance. We also earn management fees from certain Private Capital clients based on a percentage of average invested capital, as defined in the applicable management agreements. These management fees are payable in cash monthly in arrears. We earned aggregate base business management fees from TA and the Private Capital clients of $9,134 and $11,107 for the three months ended June 30, 2023 and 2022, respectively, and $29,874 and $28,296 for the nine months ended June 30, 2023 and 2022, respectively. In addition, in connection with BP’s acquisition of TA on May 15, 2023, TA terminated its business management agreement with us and paid us the applicable termination fee of $45,282. Property Management Agreements We earn property management fees by providing continuous services pursuant to property management agreements with the Managed Equity REITs and certain Private Capital clients. We generally earn fees under these agreements equal to 3.0% of gross collected rents. Also, under the terms of the property management agreements, we receive additional fees for construction supervision services up to 5.0% of the cost of such construction. For the three months ended June 30, 2023 and 2022, we earned aggregate property management fees of $15,649 and $15,220, respectively, including construction supervision fees of $4,418 and $4,596, respectively. For the nine months ended June 30, 2023 and 2022, we earned aggregate property management fees of $47,670 and $43,387, respectively, including construction supervision fees of $14,120 and $11,623, respectively. Management Agreements with Advisory Clients Tremont is primarily compensated pursuant to its management agreement with SEVN at an annual rate of 1.5% of equity, as defined in the applicable agreement. We earned advisory services revenue of $1,141 and $1,137 for the three months ended June 30, 2023 and 2022, respectively, and $3,371 and $3,392 for the nine months ended June 30, 2023 and 2022, respectively. Tremont may also earn an incentive fee under its management agreement with SEVN equal to the difference between: (a) the product of (i) 20% and (ii) the difference between (A) core earnings, as defined in the agreement, for the most recent 12 month period (or such lesser number of completed calendar quarters, if applicable), including the calendar quarter (or part thereof) for which the calculation of the incentive fee is being made, and (B) the product of (1) equity in the most recent 12 month period (or such lesser number of completed calendar quarters, if applicable), including the calendar quarter (or part thereof) for which the calculation of the incentive fee is being made, and (2) 7% per year and (b) the sum of any incentive fees paid to Tremont with respect to the first three calendar quarters of the most recent 12 month period (or such lesser number of completed calendar quarters preceding the applicable period, if applicable). No incentive fee shall be payable with respect to any calendar quarter unless core earnings for the 12 most recently completed calendar quarters in the aggregate is greater than zero. The incentive fee may not be less than zero. Tremont earned incentive fees from SEVN of $192 for the three and nine months ended June 30, 2023. Tremont did not earn incentive fees from SEVN for the three or nine months ended June 30, 2022. The Tremont business earns between 0.5% and 1.0% of the aggregate principal amounts of any loans it brokers. The Tremont business earned fees for such brokerage services of $52 and $46 for the three months ended June 30, 2023 and 2022, respectively, and $52 and $99 for the nine months ended June 30, 2023 and 2022, respectively, which amounts are included in management services revenue in our condensed consolidated statements of income. Reimbursable Costs Reimbursable Compensation and Benefits — Reimbursable compensation and benefits include reimbursements, at cost, that arise primarily from services our employees provide pursuant to our property management agreements at the properties of our clients. A significant portion of these compensation and benefits are charged or passed through to and paid by tenants of our clients. We recognize the revenue for reimbursements when we incur the related reimbursable compensation and benefits expense on behalf of our clients. Reimbursable Equity Based Compensation — Reimbursable equity based compensation includes awards of common shares by our clients directly to certain of our officers and employees in connection with the provision of management services to those clients. The revenue in respect of each award is based on the fair value as of the award date for those shares that have vested, with subsequent changes in the fair value of the unvested awards being recognized in our condensed consolidated statements of income over the requisite service periods. We record an equal, offsetting amount as equity based compensation expense for the value of these awards. Other Reimbursable Expenses — |
Equity Method Investments
Equity Method Investments | 9 Months Ended |
Jun. 30, 2023 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity Method Investments | Equity Method Investments Seven Hills Realty Trust As of June 30, 2023, Tremont owned 1,708,058, or approximately 11.6%, of SEVN’s outstanding common shares. We account for our investment in SEVN using the equity method of accounting because we are deemed to exert significant influence, but not control, over SEVN’s most significant activities. We elected the fair value option to account for our equity method investment in SEVN and determine fair value using the closing price of SEVN’s common shares as of the end of the period, which is a Level 1 fair value input. The aggregate market value of our investment in SEVN at June 30, 2023 and September 30, 2022, based on quoted market prices, was $17,525 and $15,577, respectively. The unrealized gain (loss) in our condensed consolidated statements of income related to our investment in SEVN was $974 and $(209) for the three months ended June 30, 2023 and 2022, respectively, and $3,571 and $675 for the nine months ended June 30, 2023 and 2022, respectively. We received distributions from SEVN of $598 and $207 for the three months ended June 30, 2023 and 2022, respectively, and $1,623 and $415 for the nine months ended June 30, 2023 and 2022, respectively. TravelCenters of America Inc. We previously owned 621,853, or approximately 4.1%, of TA’s outstanding common shares, that had a cost of $13,701 and were accounted for using the equity method of accounting under the fair value option. As discussed in Note 6, Related Person Transactions , BP acquired TA on May 15, 2023 for $86.00 per share in cash. In connection with that acquisition, we received $53,479 for the TA common shares we owned and realized a gain of $39,778. We previously accounted for our investment in TA using the equity method of accounting because we were deemed to exert significant influence, but not control, over TA’s most significant activities. Under the fair value option, we determined fair value using the closing price of TA’s common shares as of the end of the period, which was a Level 1 fair value input, and recorded changes in fair value in earnings in our condensed consolidated statements of income. Net gains and losses recorded in our condensed consolidated statements of income related to our investment in TA was $(311) and $5,280 for the three months ended June 30, 2023 and 2022, respectively, and $19,942 and $(9,528) for the nine months ended June 30, 2023 and 2022, respectively. |
Income Taxes
Income Taxes | 9 Months Ended |
Jun. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes We are the sole managing member of RMR LLC. We are a corporation subject to U.S. federal and state income tax with respect to our allocable share of any taxable income of RMR LLC and its tax consolidated subsidiaries. RMR LLC is treated as a partnership for U.S. federal and most applicable state and local income tax purposes. As a partnership, RMR LLC is generally not subject to U.S. federal and most state income taxes. Any taxable income or loss generated by RMR LLC is passed through to and included in the taxable income or loss of its members, including RMR Inc. and ABP Trust, based on each member’s respective ownership percentage. For the three months ended June 30, 2023 and 2022, we recognized estimated income tax expense of $9,214 and $2,943, respectively, which includes $6,751 and $2,162, respectively, of U.S. federal income tax and $2,463 and $781, respectively, of state income taxes. For the nine months ended June 30, 2023 and 2022, we recognized estimated income tax expense of $18,581 and $8,448, respectively, which includes $13,614 and $6,205, respectively, of U.S. federal income tax and $4,967 and $2,243, respectively, of state income taxes. A reconciliation of the statutory income tax rate to the effective tax rate is as follows: Three Months Ended June 30, Nine Months Ended June 30, 2023 2022 2023 2022 Income taxes computed at the federal statutory rate 21.0 % 21.0 % 21.0 % 21.0 % State taxes, net of federal benefit 3.1 % 3.1 % 3.0 % 3.1 % Permanent items 0.2 % 0.6 % 0.3 % 0.4 % Net income attributable to noncontrolling interest (10.0) % (10.1) % (9.9) % (10.1) % Total 14.3 % 14.6 % 14.4 % 14.4 % ASC 740, Income Taxes , provides a model for how a company should recognize, measure and present in its financial statements uncertain tax positions that have been taken or are expected to be taken with respect to all open years and in all significant jurisdictions. Pursuant to this topic, we recognize a tax benefit only if it is “more likely than not” that a particular tax position will be sustained upon examination or audit. To the extent the “more likely than not” standard has been satisfied, the benefit associated with a tax position is measured as the largest amount that is greater than 50.0% likely to be realized upon settlement. As of June 30, 2023 and 2022, we had no uncertain tax positions. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 9 Months Ended |
Jun. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments As of June 30, 2023 and September 30, 2022, the fair values of our financial instruments, which include cash and cash equivalents, amounts due from related parties, accounts payable and accrued expenses and reimbursable accounts payable and accrued expenses, were not materially different from their carrying values due to the short term nature of these financial instruments. On a recurring basis, we measure certain financial assets and financial liabilities at fair value based upon quoted market prices. ASC 820, Fair Value Measurements , establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets and liabilities (Level 1), and the lowest priority to unobservable inputs (Level 3). A financial asset’s or financial liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. The following table presents our assets and liabilities that have been measured at fair value using Level 1 inputs in the fair value hierarchy as of June 30, 2023 and September 30, 2022: June 30, September 30, 2023 2022 Current portion of due from related parties related to share based payment awards $ 1,039 $ 7,516 Long term portion of due from related parties related to share based payment awards 6,632 14,557 Equity method investment in SEVN 17,525 15,577 Equity method investment in TA — 33,537 Current portion of employer compensation liability related to share based payment awards 1,039 7,516 Long term portion of employer compensation liability related to share based payment awards 6,632 14,557 |
Related Person Transactions
Related Person Transactions | 9 Months Ended |
Jun. 30, 2023 | |
Related Party Transactions [Abstract] | |
Related Person Transactions | Related Person Transactions Adam D. Portnoy, Chair of our Board, one of our Managing Directors and our President and Chief Executive Officer, is the sole trustee of our controlling shareholder, ABP Trust, and owns all of ABP Trust’s voting securities and a majority of the economic interests of ABP Trust. RMR Inc.’s other executive officers are officers and employees of RMR LLC, and Jennifer B. Clark, our other Managing Director, and Matthew P. Jordan, our Executive Vice President, Chief Financial Officer and Treasurer, are also officers of ABP Trust. Mr. Portnoy is the chair of the board and a managing trustee of each of the Perpetual Capital clients, the controlling shareholder and a director of Sonesta (and its parent) and was the chair of the board and a managing director of AlerisLife until March 20, 2023 when AlerisLife was acquired by ABP Trust. Since March 20, 2023, Mr. Portnoy is the sole director of AlerisLife. Mr. Portnoy was the chair of the board and a managing director of TA until May 15, 2023 when TA was acquired by BP. Ms. Clark is a managing trustee of OPI and a director of Sonesta (and its parent), and she previously served as a managing director of AlerisLife until March 20, 2023. Ms. Clark also serves as the secretary of all the Perpetual Capital clients, Sonesta and AlerisLife. As of June 30, 2023, Adam D. Portnoy beneficially owned 13.5% of SEVN’s outstanding common shares (including through Tremont and ABP Trust) and 9.8% of DHC’s outstanding common shares (including through ABP Trust). In addition, Mr. Portnoy beneficially owns shares of ILPT, OPI, SVC, and prior to May 15, 2023, TA, comprising less than 5.0% of the outstanding shares of each of those respective companies. The Managed Equity REITs and SEVN have no employees. RMR LLC provides or arranges for all the personnel, overhead and services required for the operation of the Managed Equity REITs pursuant to management agreements with them. The officers of the Managed Equity REITs and ABP Trust are officers or employees of RMR LLC. All the officers, overhead and required office space of SEVN are provided or arranged by Tremont. SEVN’s officers are officers or employees of Tremont or RMR LLC. Some of the executive officers of TA (prior to May 15, 2023), AlerisLife and Sonesta are officers or employees of RMR LLC. Our executive officers are also managing trustees of certain of the Perpetual Capital clients. Additional information about our related person transactions appears in Note 7, Shareholders’ Equity , below and in our 2022 Annual Report. Revenues from Related Parties For the three months ended June 30, 2023 and 2022, we recognized revenues from related parties as set forth in the following table: Three Months Ended June 30, 2023 Three Months Ended June 30, 2022 Total Total Management Management and Advisory Total and Advisory Total Services Reimbursable Total Services Reimbursable Total Revenues Costs Revenues Revenues Costs Revenues Perpetual Capital: DHC $ 5,655 $ 37,352 $ 43,007 $ 7,208 $ 41,318 $ 48,526 ILPT 9,113 10,664 19,777 9,803 8,126 17,929 OPI 9,363 89,220 98,583 10,640 80,083 90,723 SVC 10,308 34,643 44,951 10,721 10,412 21,133 Total Managed Equity REITs 34,439 171,879 206,318 38,372 139,939 178,311 SEVN 1,333 1,193 2,526 1,137 1,006 2,143 TA (1) 47,238 — 47,238 4,441 527 4,968 83,010 173,072 256,082 43,950 141,472 185,422 Private Capital: AlerisLife (2) 1,381 — 1,381 1,239 99 1,338 Sonesta 2,796 — 2,796 2,491 46 2,537 Other private entities 5,248 14,666 19,914 5,230 16,515 21,745 9,425 14,666 24,091 8,960 16,660 25,620 Total revenues from related parties 92,435 187,738 280,173 52,910 158,132 211,042 Revenues from unrelated parties 52 — 52 46 — 46 Total revenues $ 92,487 $ 187,738 $ 280,225 $ 52,956 $ 158,132 $ 211,088 (1) On May 15, 2023, BP acquired TA and TA terminated its management agreement with us. In connection with the termination of TA’s management agreement, we received the applicable termination fee of $45,282. For further information, please see “TA Merger” below. (2) On March 20, 2023, AlerisLife merged with and into a subsidiary of ABP Trust and ceased to be a public company. As a result, the revenues earned with respect to AlerisLife are characterized as Private Capital for all periods presented. For further information about this transaction, please see “ ABP Trust’s Acquisition of AlerisLife ” below. For the nine months ended June 30, 2023 and 2022, we recognized revenues from related parties as set forth in the following table: Nine Months Ended June 30, 2023 Nine Months Ended June 30, 2022 Total Total Management Management and Advisory Total and Advisory Total Services Reimbursable Total Services Reimbursable Total Revenues Costs Revenues Revenues Costs Revenues Perpetual Capital: (1) DHC $ 17,593 $ 117,821 $ 135,414 $ 23,737 $ 109,241 $ 132,978 ILPT 27,377 30,615 57,992 21,545 20,387 41,932 OPI 29,448 268,204 297,652 31,722 221,249 252,971 SVC 30,046 75,468 105,514 34,113 43,641 77,754 Total Managed Equity REITs 104,464 492,108 596,572 111,117 394,518 505,635 SEVN 3,563 3,516 7,079 3,392 4,563 7,955 TA (2) 55,214 3,476 58,690 11,499 1,235 12,734 163,241 499,100 662,341 126,008 400,316 526,324 Private Capital: (1) AlerisLife (3) 4,014 97 4,111 3,610 245 3,855 Sonesta 6,954 544 7,498 6,092 84 6,176 Other private entities 16,074 49,308 65,382 12,450 41,406 53,856 27,042 49,949 76,991 22,152 41,735 63,887 Total revenues from related parties 190,283 549,049 739,332 148,160 442,051 590,211 Revenues from unrelated parties 52 — 52 99 — 99 Total revenues $ 190,335 $ 549,049 $ 739,384 $ 148,259 $ 442,051 $ 590,310 (1) On December 23, 2021, DHC sold a 35% equity interest in its existing joint venture with an institutional investor. Following this sale, DHC owned a 20% equity interest in this joint venture. As a result, the revenues earned with respect to this joint venture are characterized as Private Capital for periods on and after December 23, 2021 and as Perpetual Capital for periods prior to December 23, 2021. On June 29, 2022, DHC sold an additional 10% equity interest in this joint venture. Following this additional sale, DHC owns a 10% equity interest in this joint venture. (2) On May 15, 2023, BP acquired TA and TA terminated its management agreement with us. In connection with the termination of TA’s management agreement, we received the applicable termination fee of $45,282. For further information, please see “TA Merger” below. (3) On March 20, 2023, AlerisLife merged with and into a subsidiary of ABP Trust and ceased to be a public company. As a result, the revenues earned with respect to AlerisLife are characterized as Private Capital for all periods presented. For further information about this transaction, please see “ ABP Trust’s Acquisition of AlerisLife ” below. Amounts Due From Related Parties The following table presents amounts due from related parties as of the dates indicated: June 30, 2023 September 30, 2022 Accounts Reimbursable Accounts Reimbursable Receivable Costs Total Receivable Costs Total Perpetual Capital: DHC $ 4,692 $ 15,525 $ 20,217 $ 8,098 $ 14,148 $ 22,246 ILPT 3,928 7,739 11,667 3,235 13,717 16,952 OPI 6,125 45,206 51,331 335 47,943 48,278 SVC 4,640 6,096 10,736 5,627 5,357 10,984 Total Managed Equity REITs 19,385 74,566 93,951 17,295 81,165 98,460 SEVN 3,115 1,433 4,548 1,768 1,262 3,030 TA (1) — — — 124 11,635 11,759 22,500 75,999 98,499 19,187 94,062 113,249 Private Capital: AlerisLife (2) 68 — 68 112 492 604 Sonesta 65 — 65 127 290 417 Other private entities 4,166 5,935 10,101 1,658 7,450 9,108 4,299 5,935 10,234 1,897 8,232 10,129 $ 26,799 $ 81,934 $ 108,733 $ 21,084 $ 102,294 $ 123,378 (1) On May 15, 2023, BP acquired TA and TA terminated its management agreement with us. For further information about this transaction, please see “TA Merger” below. (2) On March 20, 2023, AlerisLife merged with and into a subsidiary of ABP Trust and ceased to be a public company. As a result, the amounts due from related parties with respect to AlerisLife are characterized as Private Capital for all periods presented. For further information about this transaction, please see “ ABP Trust’s Acquisition of AlerisLife ” below. Leases As of June 30, 2023, RMR LLC leased from ABP Trust and certain Managed Equity REITs office space for use as our headquarters and local offices. We incurred rental expense under related party leases aggregating $1,221 and $1,470 for the three months ended June 30, 2023 and 2022, respectively, and $4,052 and $4,444 for the nine months ended June 30, 2023 and 2022, respectively. Tax-Related Payments Pursuant to our tax receivable agreement with ABP Trust, RMR Inc. pays to ABP Trust 85.0% of the amount of cash savings, if any, in U.S. federal, state and local income tax or franchise tax that RMR Inc. realizes as a result of (a) the increases in tax basis attributable to our dealings with ABP Trust and (b) tax benefits related to imputed interest deemed to be paid by us as a result of the tax receivable agreement. As of June 30, 2023, our condensed consolidated balance sheet reflects a liability related to the tax receivable agreement of $25,583, including $2,275 classified as a current liability in accounts payable and accrued expenses that we expect to pay to ABP Trust during the fourth quarter of fiscal year 2023. Under the RMR LLC operating agreement, RMR LLC is also required to make certain pro rata distributions to each member of RMR LLC quarterly on the basis of the estimated tax liabilities of its members, subject to future adjustment based on actual results. For the nine months ended June 30, 2023 and 2022, pursuant to the RMR LLC operating agreement, RMR LLC made required quarterly tax distributions to holders of its membership units totaling $48,857 and $21,969, respectively, of which $25,758 and $11,559, respectively, was distributed to us and $23,099 and $10,410, respectively, was distributed to ABP Trust, based on each membership unit holder’s respective ownership percentage. The amounts distributed to us were eliminated in our condensed consolidated financial statements, and the amounts distributed to ABP Trust were recorded as a reduction of its noncontrolling interest. We use funds from these distributions to pay certain of our U.S. federal and state income tax liabilities and to pay part of our obligations under the tax receivable agreement. Purchase of SEVN Shares On May 11, 2022, Tremont Realty Capital purchased 882,407 SEVN common shares of beneficial interest from Diane Portnoy, the mother of Adam D. Portnoy, for an aggregate purchase price of $9,469. As of June 30, 2023, Tremont owned 1,708,058 SEVN common shares, and Mr. Portnoy beneficially owned 13.5% of SEVN’s outstanding common shares of beneficial interest (including through Tremont and ABP Trust). ABP Trust’s Acquisition of AlerisLife On March 20, 2023, ABP Trust acquired AlerisLife. In connection with that acquisition, AlerisLife terminated its management agreement with RMR LLC and RMR LLC waived its right to receive payment of the termination fee that would have otherwise resulted due to the acquisition. In consideration of this waiver, RMR LLC and ABP Trust amended and restated their management agreement to provide that (i) RMR LLC will also provide services to AlerisLife at ABP Trust’s request, (ii) ABP Trust will pay to RMR LLC management fees with respect to AlerisLife, which fees are calculated based upon AlerisLife’s revenues in the same manner as such fees would have been calculated under AlerisLife’s terminated management agreement with RMR LLC, and (iii) AlerisLife’s properties will not be subject to ABP Trust’s property management agreement with RMR LLC. TA Merger On May 15, 2023, BP acquired TA in a merger transaction for $86.00 per TA common share in cash, or the TA Merger. RMR LLC received $53,479 for its TA common shares pursuant to that acquisition. In connection with that acquisition, RMR LLC, which owned an aggregate amount of 4.1% of TA’s outstanding common shares, entered into a voting agreement with BP pursuant to which RMR LLC agreed to vote all of its TA common shares to approve the transaction. Upon consummation of the acquisition, TA terminated its business management agreement with us and in accordance with its terms paid us the applicable termination fee of $45,282. OPI’s Merger Agreement with DHC On April 11, 2023, DHC and OPI entered into an Agreement and Plan of Merger, or the DHC-OPI Merger Agreement, pursuant to which, on the terms and subject to the satisfaction or waiver of the conditions thereof, DHC will be merged with and into OPI, with OPI continuing as the surviving entity in the merger, or the DHC-OPI Merger. The DHC-OPI Merger is expected to close during the third quarter of calendar 2023. Contemporaneously with the execution of the DHC-OPI Merger Agreement, we, DHC and OPI entered into a letter agreement, or the RMR Letter Agreement, pursuant to which, on the terms and subject to conditions contained therein, we and DHC have acknowledged and agreed that, effective upon consummation of the DHC-OPI Merger, DHC shall have terminated its business and property management agreements with us for convenience, and we shall have waived our right to receive payment of the termination fee pursuant to each such agreement upon such termination. We will continue to manage the surviving entity following the DHC-OPI Merger. Contemporaneously with the execution of the DHC-OPI Merger Agreement, RMR LLC and OPI entered into a Third Amended and Restated Property Management Agreement, or the Amended Property Management Agreement. The effectiveness of the Amended Property Management Agreement is conditioned upon and will be concurrent with the consummation of the DHC-OPI Merger. Pursuant to the Amended Property Management Agreement, at the effective time of the DHC-OPI Merger, properties then owned by DHC that are subject to its existing property management agreement with RMR LLC, including its medical office and life science properties, will become subject to the terms and conditions of the Amended Property Management Agreement. Also pursuant to the Amended Property Management Agreement, we will be entitled to a renovation and repositioning fee equal to 3% of the cost of any major capital projects and repositionings at senior living communities owned by DHC that the surviving entity may request us to oversee from time to time, consistent with DHC’s existing property management agreement. The terms of the Amended Property Management Agreement are otherwise consistent with the terms of RMR LLC’s existing property management agreement with OPI. Separation Arrangements We entered into retirement agreements with certain of our former executive officers. Pursuant to these agreements, we made various cash payments and accelerated the vesting of unvested shares of RMR Inc. previously awarded to these retiring officers. We also enter into separation arrangements from time to time with executive and nonexecutive officers and employees of ours. All costs associated with separation arrangements, for which there remain no substantive performance obligations, are recorded in our condensed consolidated statements of income as separation costs. RMR LLC entered into a letter agreement, or the Separation Agreement, dated March 27, 2023, with Jonathan M. Pertchik, a former Executive Vice President of RMR LLC. Mr. Pertchik also served as chief executive officer and was a managing director of TA. Mr. Pertchik resigned as our Executive Vice President, effective 11:59 p.m. on May 14, 2023, the date prior to the closing of the TA Merger, or the Separation Date. Pursuant to the Separation Agreement, RMR LLC paid Mr. Pertchik $211 following the TA Merger and our Compensation Committee approved the acceleration of vesting of Mr. Pertchik’s unvested shares of RMR Inc., effective as of the Separation Date. The Separation Agreement contains other customary terms and conditions, including confidentiality, non-solicitation, and other covenants and a waiver and release. For the three months ended June 30, 2023 and 2022, we recognized separation costs of $1,064 and $400, respectively, including cash separation costs of $708 and $252, respectively, and equity based separation costs of $356 and $148, respectively. For the nine months ended June 30, 2023 and 2022, we recognized separation costs of $2,002 and $617, respectively, including cash separation costs of $1,520 and $469, respectively, and equity based separation costs of $482 and $148, respectively. SEVN Property Management Agreement We entered into a new property management agreement with SEVN in July 2023 with respect to an office property SEVN owns. Pursuant to this agreement, we will provide property management services and SEVN will pay us fees equal to 3.0% of gross collected rents. Also under the terms of this property management agreement, SEVN will pay us additional fees for construction supervision services equal to 5.0% of the cost of such construction. Either we or SEVN may terminate this agreement upon 30 days’ prior notice. No termination fee would be payable as a result of terminating the agreement. |
Shareholders_ Equity
Shareholders’ Equity | 9 Months Ended |
Jun. 30, 2023 | |
Stockholders' Equity Note [Abstract] | |
Shareholders’ Equity | Shareholders’ Equity We award our Class A common stock, or Class A Common Shares, to our Directors, officers and employees under the Amended and Restated 2016 Omnibus Equity Plan, or the 2016 Plan. Director share awards vest immediately. Officer and employee share awards vest in five equal, consecutive, annual installments, with the first installment vesting on the date of award. We recognize forfeitures as they occur. Compensation expense related to share awards is determined based on the market value of our shares on the date of award, with the aggregate value of the awarded shares amortized to expense over the related vesting period. Expense recognized for Director share awards are included in general and administrative expenses and expense recognized for officer and employee share awards are included in equity based compensation in our condensed consolidated statements of income. On March 29, 2023, we awarded 3,000 of our Class A Common Shares, valued at $25.80 per share, the closing price of our Class A Common Shares on The Nasdaq Stock Market LLC, or Nasdaq, on that day, to each of our Directors as part of his or her annual compensation for serving as a Director. For the nine months ended June 30, 2023, we recorded general and administrative expense of $464 for these awards. Equity based compensation expense related to shares awarded to certain officers and employees was $478 and $581 for the three months ended June 30, 2023 and 2022, respectively, and $1,576 and $1,823 for the nine months ended June 30, 2023 and 2022, respectively. As of June 30, 2023, we had 170,420 unvested shares outstanding which are scheduled to vest as follows: 62,160 shares in 2023, 49,920 shares in 2024, 36,740 shares in 2025 and 21,600 in 2026. In connection with the vesting and issuance of awards of our Class A Common Shares to our Directors, officers and employees, we provide for the ability to repurchase our Class A Common Shares to satisfy tax withholding and payment obligations for those eligible to do so. The repurchase price is based on the closing price of our Class A Common Shares on Nasdaq on the date of repurchase. The aggregate value of 7,383 Class A Common Shares repurchased during the nine months ended June 30, 2023 was $179, which is recorded as a decrease to additional paid in capital within shareholders’ equity in our condensed consolidated balance sheets. In connection with the issuances and repurchases of our Class A Common Shares, and as required by the RMR LLC operating agreement, RMR LLC concurrently issues or acquires an identical number of Class A Units from RMR Inc. Distributions During the nine months ended June 30, 2023 and 2022, we declared and paid dividends on our Class A Common Shares and Class B-1 common stock, or Class B-1 Common Shares, as follows: Declaration Record Paid Distributions Total Date Date Date Per Common Share Distributions Nine Months Ended June 30, 2023 10/13/2022 10/24/2022 11/17/2022 $ 0.40 $ 6,642 1/12/2023 1/23/2023 2/16/2023 0.40 6,641 4/13/2023 4/24/2023 5/18/2023 0.40 6,648 $ 1.20 $ 19,931 Nine Months Ended June 30, 2022 10/14/2021 10/25/2021 11/18/2021 $ 0.38 $ 6,264 1/13/2022 1/24/2022 2/17/2022 0.38 6,265 4/14/2022 4/25/2022 5/19/2022 0.40 6,601 $ 1.16 $ 19,130 These dividends were funded in part by distributions from RMR LLC to holders of its membership units as follows: Distributions Per Total RMR LLC RMR LLC Declaration Record Paid RMR LLC RMR LLC Distributions Distributions Date Date Date Membership Unit Distributions to RMR Inc. to ABP Trust Nine Months Ended June 30, 2023 10/13/2022 10/24/2022 11/17/2022 $ 0.32 $ 10,114 $ 5,314 $ 4,800 1/12/2023 1/23/2023 2/16/2023 0.32 10,113 5,313 4,800 4/13/2023 4/24/2023 5/18/2023 0.32 10,118 5,318 4,800 $ 0.96 $ 30,345 $ 15,945 $ 14,400 Nine Months Ended June 30, 2022 10/14/2021 10/25/2021 11/18/2021 $ 0.30 $ 9,446 $ 4,946 $ 4,500 1/13/2022 1/24/2022 2/17/2022 0.30 9,446 4,946 4,500 4/14/2022 4/25/2022 5/19/2022 0.32 10,080 5,280 4,800 $ 0.92 $ 28,972 $ 15,172 $ 13,800 The remainder of the dividends noted above were funded with cash accumulated at RMR Inc. On July 13, 2023, we declared a quarterly dividend on our Class A Common Shares and Class B-1 Common Shares to our shareholders of record as of July 24, 2023, in the amount of $0.40 per Class A Common Share and Class B-1 Common Share, or $6,645. This dividend will be partially funded by a distribution from RMR LLC to holders of its membership units in the amount of $0.32 per unit, or $10,116, of which $5,316 will be distributed to us based on our aggregate ownership of 16,613,279 membership units of RMR LLC and $4,800 will be distributed to ABP Trust based on its ownership of 15,000,000 membership units of RMR LLC. The remainder of this dividend will be funded with cash accumulated at RMR Inc. We expect to pay this dividend on or about August 17, 2023. |
Per Common Share Amounts
Per Common Share Amounts | 9 Months Ended |
Jun. 30, 2023 | |
Earnings Per Share [Abstract] | |
Per Common Share Amounts | Per Common Share AmountsWe calculate basic earnings per share using the two-class method. Unvested Class A Common Shares awarded to our employees are deemed participating securities for purposes of calculating basic earnings per common share because they have dividend rights. Under the two-class method, we allocate earnings proportionately to vested Class A Common Shares and Class B-1 Common Shares outstanding and unvested Class A Common Shares outstanding for the period. Accordingly, earnings attributable to unvested Class A Common Shares are excluded from basic earnings per share under the two-class method. Our Class B-2 common stock of RMR Inc., or Class B-2 Common Shares, which are paired with ABP Trust’s Class A Units, have no independent economic interest in RMR Inc. and thus are not included as common shares outstanding for purposes of calculating basic earnings per common share. Diluted earnings per share is calculated using the treasury stock method for unvested Class A Common Shares and the if-converted method for Class B-2 Common Shares. The 15,000,000 Class A Units that we do not own may be redeemed for our Class A Common Shares on a one-for-one basis, or upon such redemption, we may elect to pay cash instead of issuing Class A Common Shares. Upon redemption of a Class A Unit, the Class B-2 Common Share “paired” with such unit is canceled for no additional consideration. In computing the dilutive effect, if any, that the assumed redemption would have on earnings per share, we considered that net income available to holders of our Class A Common Shares would increase due to elimination of the noncontrolling interest offset by any tax effect, which may be dilutive. For the three months ended June 30, 2022 and the nine months ended June 30, 2023 and 2022, the assumed redemption is dilutive to earnings per share. For the three months ended June 30, 2023, such redemption is not reflected in diluted earnings per share as the assumed redemption would be anti-dilutive. The calculation of basic and diluted earnings per share for the three and nine months ended June 30, 2023 and 2022, is as follows: Three Months Ended June 30, Nine Months Ended June 30, 2023 2022 2023 2022 Numerators: Net income attributable to The RMR Group Inc. $ 24,641 $ 7,570 $ 49,451 $ 22,004 Less: income attributable to unvested participating securities (273) (72) (580) (213) Net income attributable to The RMR Group Inc. used in calculating basic EPS 24,368 7,498 48,871 21,791 Effect of dilutive securities: Add back: income attributable to unvested participating securities — 72 580 213 Add back: net income attributable to noncontrolling interest — 9,695 61,262 28,142 Add back: income tax expense — 2,943 18,581 8,448 Less: income tax expense assuming redemption of noncontrolling interest’s Class A Units for Class A Common Shares (1) — (5,851) (35,932) (16,833) Net income used in calculating diluted EPS $ 24,368 $ 14,357 $ 93,362 $ 41,761 Denominators: Common shares outstanding 16,614 16,501 16,614 16,501 Less: unvested participating securities and incremental impact of weighted average (179) (158) (198) (169) Weighted average common shares outstanding - basic 16,435 16,343 16,416 16,332 Effect of dilutive securities: Add: assumed redemption of noncontrolling interest’s Class A Units for Class A Common Shares — 15,000 15,000 15,000 Add: incremental unvested shares — 10 15 10 Weighted average common shares outstanding - diluted 16,435 31,353 31,431 31,342 Net income attributable to The RMR Group Inc. per common share - basic $ 1.48 $ 0.46 $ 2.98 $ 1.33 Net income attributable to The RMR Group Inc. per common share - diluted $ 1.48 $ 0.46 $ 2.97 $ 1.33 (1) Income tax expense assumes the hypothetical conversion of the noncontrolling interest, which results in estimated tax rates of 29.0% for the three months ended June 30, 2022, and 27.8% and 28.7% for the nine months ended June 30, 2023 and 2022, respectively. |
Net Income Attributable to RMR
Net Income Attributable to RMR Inc. | 9 Months Ended |
Jun. 30, 2023 | |
Net Income Attributable to RMR Inc. | |
Net Income Attributable to RMR Inc. | Net Income Attributable to RMR Inc. Net income attributable to RMR Inc. for the three and nine months ended June 30, 2023 and 2022, is calculated as follows: Three Months Ended June 30, Nine Months Ended June 30, 2023 2022 2023 2022 Income before income tax expense $ 64,385 $ 20,208 $ 129,294 $ 58,594 RMR Inc. franchise tax expense and interest income (110) 149 (255) 485 Net income before noncontrolling interest 64,275 20,357 129,039 59,079 Net income attributable to noncontrolling interest (30,530) (9,695) (61,262) (28,142) Net income attributable to RMR Inc. before income tax expense 33,745 10,662 67,777 30,937 Income tax expense attributable to RMR Inc. (9,214) (2,943) (18,581) (8,448) RMR Inc. franchise tax expense and interest income 110 (149) 255 (485) Net income attributable to RMR Inc. $ 24,641 $ 7,570 $ 49,451 $ 22,004 |
Subsequent Events
Subsequent Events | 9 Months Ended |
Jun. 30, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On July 29, 2023, RMR LLC entered into an equity purchase agreement, or the Purchase Agreement, with MPC Partnership Holdings LLC, a Georgia limited liability company, or MPC. MPC, which does business as CARROLL, is a vertically-integrated platform focused on investing in multifamily properties in the Sun Belt region of the United States. Pursuant to the Purchase Agreement, and upon the terms and subject to the conditions thereof, RMR LLC will acquire all of the issued and outstanding equity interests of MPC for $80,000 in cash, subject to customary adjustments for cash, debt, transaction expenses, working capital, and property management revenue at closing, plus up to an additional $20,000 of contingent consideration subject to the deployment of capital remaining in investment funds managed by MPC prior to the end of such fund’s investment period. Consummation of the acquisition is subject to customary conditions, including, among others, (i) MPC obtaining all required consents with respect to managed funds, joint-venture investors and applicable lenders with respect to its managed properties, (ii) MPC’s revenues from its property management agreements at the time the acquisition is consummated being not less than 85% of an agreed upon baseline property management revenue and (iii) the absence of any Material Adverse Effect (as defined in the Purchase Agreement). |
Income Taxes (Tables)
Income Taxes (Tables) | 9 Months Ended |
Jun. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Schedule of Reconciliation of the Statutory Income Tax Rate to the Effective Tax Rate | A reconciliation of the statutory income tax rate to the effective tax rate is as follows: Three Months Ended June 30, Nine Months Ended June 30, 2023 2022 2023 2022 Income taxes computed at the federal statutory rate 21.0 % 21.0 % 21.0 % 21.0 % State taxes, net of federal benefit 3.1 % 3.1 % 3.0 % 3.1 % Permanent items 0.2 % 0.6 % 0.3 % 0.4 % Net income attributable to noncontrolling interest (10.0) % (10.1) % (9.9) % (10.1) % Total 14.3 % 14.6 % 14.4 % 14.4 % |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 9 Months Ended |
Jun. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of Assets and Liabilities Measured at Fair Value | The following table presents our assets and liabilities that have been measured at fair value using Level 1 inputs in the fair value hierarchy as of June 30, 2023 and September 30, 2022: June 30, September 30, 2023 2022 Current portion of due from related parties related to share based payment awards $ 1,039 $ 7,516 Long term portion of due from related parties related to share based payment awards 6,632 14,557 Equity method investment in SEVN 17,525 15,577 Equity method investment in TA — 33,537 Current portion of employer compensation liability related to share based payment awards 1,039 7,516 Long term portion of employer compensation liability related to share based payment awards 6,632 14,557 |
Related Person Transactions (Ta
Related Person Transactions (Tables) | 9 Months Ended |
Jun. 30, 2023 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions | For the three months ended June 30, 2023 and 2022, we recognized revenues from related parties as set forth in the following table: Three Months Ended June 30, 2023 Three Months Ended June 30, 2022 Total Total Management Management and Advisory Total and Advisory Total Services Reimbursable Total Services Reimbursable Total Revenues Costs Revenues Revenues Costs Revenues Perpetual Capital: DHC $ 5,655 $ 37,352 $ 43,007 $ 7,208 $ 41,318 $ 48,526 ILPT 9,113 10,664 19,777 9,803 8,126 17,929 OPI 9,363 89,220 98,583 10,640 80,083 90,723 SVC 10,308 34,643 44,951 10,721 10,412 21,133 Total Managed Equity REITs 34,439 171,879 206,318 38,372 139,939 178,311 SEVN 1,333 1,193 2,526 1,137 1,006 2,143 TA (1) 47,238 — 47,238 4,441 527 4,968 83,010 173,072 256,082 43,950 141,472 185,422 Private Capital: AlerisLife (2) 1,381 — 1,381 1,239 99 1,338 Sonesta 2,796 — 2,796 2,491 46 2,537 Other private entities 5,248 14,666 19,914 5,230 16,515 21,745 9,425 14,666 24,091 8,960 16,660 25,620 Total revenues from related parties 92,435 187,738 280,173 52,910 158,132 211,042 Revenues from unrelated parties 52 — 52 46 — 46 Total revenues $ 92,487 $ 187,738 $ 280,225 $ 52,956 $ 158,132 $ 211,088 (1) On May 15, 2023, BP acquired TA and TA terminated its management agreement with us. In connection with the termination of TA’s management agreement, we received the applicable termination fee of $45,282. For further information, please see “TA Merger” below. (2) On March 20, 2023, AlerisLife merged with and into a subsidiary of ABP Trust and ceased to be a public company. As a result, the revenues earned with respect to AlerisLife are characterized as Private Capital for all periods presented. For further information about this transaction, please see “ ABP Trust’s Acquisition of AlerisLife ” below. For the nine months ended June 30, 2023 and 2022, we recognized revenues from related parties as set forth in the following table: Nine Months Ended June 30, 2023 Nine Months Ended June 30, 2022 Total Total Management Management and Advisory Total and Advisory Total Services Reimbursable Total Services Reimbursable Total Revenues Costs Revenues Revenues Costs Revenues Perpetual Capital: (1) DHC $ 17,593 $ 117,821 $ 135,414 $ 23,737 $ 109,241 $ 132,978 ILPT 27,377 30,615 57,992 21,545 20,387 41,932 OPI 29,448 268,204 297,652 31,722 221,249 252,971 SVC 30,046 75,468 105,514 34,113 43,641 77,754 Total Managed Equity REITs 104,464 492,108 596,572 111,117 394,518 505,635 SEVN 3,563 3,516 7,079 3,392 4,563 7,955 TA (2) 55,214 3,476 58,690 11,499 1,235 12,734 163,241 499,100 662,341 126,008 400,316 526,324 Private Capital: (1) AlerisLife (3) 4,014 97 4,111 3,610 245 3,855 Sonesta 6,954 544 7,498 6,092 84 6,176 Other private entities 16,074 49,308 65,382 12,450 41,406 53,856 27,042 49,949 76,991 22,152 41,735 63,887 Total revenues from related parties 190,283 549,049 739,332 148,160 442,051 590,211 Revenues from unrelated parties 52 — 52 99 — 99 Total revenues $ 190,335 $ 549,049 $ 739,384 $ 148,259 $ 442,051 $ 590,310 (1) On December 23, 2021, DHC sold a 35% equity interest in its existing joint venture with an institutional investor. Following this sale, DHC owned a 20% equity interest in this joint venture. As a result, the revenues earned with respect to this joint venture are characterized as Private Capital for periods on and after December 23, 2021 and as Perpetual Capital for periods prior to December 23, 2021. On June 29, 2022, DHC sold an additional 10% equity interest in this joint venture. Following this additional sale, DHC owns a 10% equity interest in this joint venture. (2) On May 15, 2023, BP acquired TA and TA terminated its management agreement with us. In connection with the termination of TA’s management agreement, we received the applicable termination fee of $45,282. For further information, please see “TA Merger” below. (3) On March 20, 2023, AlerisLife merged with and into a subsidiary of ABP Trust and ceased to be a public company. As a result, the revenues earned with respect to AlerisLife are characterized as Private Capital for all periods presented. For further information about this transaction, please see “ ABP Trust’s Acquisition of AlerisLife ” below. Amounts Due From Related Parties The following table presents amounts due from related parties as of the dates indicated: June 30, 2023 September 30, 2022 Accounts Reimbursable Accounts Reimbursable Receivable Costs Total Receivable Costs Total Perpetual Capital: DHC $ 4,692 $ 15,525 $ 20,217 $ 8,098 $ 14,148 $ 22,246 ILPT 3,928 7,739 11,667 3,235 13,717 16,952 OPI 6,125 45,206 51,331 335 47,943 48,278 SVC 4,640 6,096 10,736 5,627 5,357 10,984 Total Managed Equity REITs 19,385 74,566 93,951 17,295 81,165 98,460 SEVN 3,115 1,433 4,548 1,768 1,262 3,030 TA (1) — — — 124 11,635 11,759 22,500 75,999 98,499 19,187 94,062 113,249 Private Capital: AlerisLife (2) 68 — 68 112 492 604 Sonesta 65 — 65 127 290 417 Other private entities 4,166 5,935 10,101 1,658 7,450 9,108 4,299 5,935 10,234 1,897 8,232 10,129 $ 26,799 $ 81,934 $ 108,733 $ 21,084 $ 102,294 $ 123,378 (1) On May 15, 2023, BP acquired TA and TA terminated its management agreement with us. For further information about this transaction, please see “TA Merger” below. (2) On March 20, 2023, AlerisLife merged with and into a subsidiary of ABP Trust and ceased to be a public company. As a result, the amounts due from related parties with respect to AlerisLife are characterized as Private Capital for all periods presented. For further information about this transaction, please see “ ABP Trust’s Acquisition of AlerisLife ” below. |
Shareholders_ Equity (Tables)
Shareholders’ Equity (Tables) | 9 Months Ended |
Jun. 30, 2023 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Dividends Declared | During the nine months ended June 30, 2023 and 2022, we declared and paid dividends on our Class A Common Shares and Class B-1 common stock, or Class B-1 Common Shares, as follows: Declaration Record Paid Distributions Total Date Date Date Per Common Share Distributions Nine Months Ended June 30, 2023 10/13/2022 10/24/2022 11/17/2022 $ 0.40 $ 6,642 1/12/2023 1/23/2023 2/16/2023 0.40 6,641 4/13/2023 4/24/2023 5/18/2023 0.40 6,648 $ 1.20 $ 19,931 Nine Months Ended June 30, 2022 10/14/2021 10/25/2021 11/18/2021 $ 0.38 $ 6,264 1/13/2022 1/24/2022 2/17/2022 0.38 6,265 4/14/2022 4/25/2022 5/19/2022 0.40 6,601 $ 1.16 $ 19,130 These dividends were funded in part by distributions from RMR LLC to holders of its membership units as follows: Distributions Per Total RMR LLC RMR LLC Declaration Record Paid RMR LLC RMR LLC Distributions Distributions Date Date Date Membership Unit Distributions to RMR Inc. to ABP Trust Nine Months Ended June 30, 2023 10/13/2022 10/24/2022 11/17/2022 $ 0.32 $ 10,114 $ 5,314 $ 4,800 1/12/2023 1/23/2023 2/16/2023 0.32 10,113 5,313 4,800 4/13/2023 4/24/2023 5/18/2023 0.32 10,118 5,318 4,800 $ 0.96 $ 30,345 $ 15,945 $ 14,400 Nine Months Ended June 30, 2022 10/14/2021 10/25/2021 11/18/2021 $ 0.30 $ 9,446 $ 4,946 $ 4,500 1/13/2022 1/24/2022 2/17/2022 0.30 9,446 4,946 4,500 4/14/2022 4/25/2022 5/19/2022 0.32 10,080 5,280 4,800 $ 0.92 $ 28,972 $ 15,172 $ 13,800 |
Per Common Share Amounts (Table
Per Common Share Amounts (Tables) | 9 Months Ended |
Jun. 30, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share | The calculation of basic and diluted earnings per share for the three and nine months ended June 30, 2023 and 2022, is as follows: Three Months Ended June 30, Nine Months Ended June 30, 2023 2022 2023 2022 Numerators: Net income attributable to The RMR Group Inc. $ 24,641 $ 7,570 $ 49,451 $ 22,004 Less: income attributable to unvested participating securities (273) (72) (580) (213) Net income attributable to The RMR Group Inc. used in calculating basic EPS 24,368 7,498 48,871 21,791 Effect of dilutive securities: Add back: income attributable to unvested participating securities — 72 580 213 Add back: net income attributable to noncontrolling interest — 9,695 61,262 28,142 Add back: income tax expense — 2,943 18,581 8,448 Less: income tax expense assuming redemption of noncontrolling interest’s Class A Units for Class A Common Shares (1) — (5,851) (35,932) (16,833) Net income used in calculating diluted EPS $ 24,368 $ 14,357 $ 93,362 $ 41,761 Denominators: Common shares outstanding 16,614 16,501 16,614 16,501 Less: unvested participating securities and incremental impact of weighted average (179) (158) (198) (169) Weighted average common shares outstanding - basic 16,435 16,343 16,416 16,332 Effect of dilutive securities: Add: assumed redemption of noncontrolling interest’s Class A Units for Class A Common Shares — 15,000 15,000 15,000 Add: incremental unvested shares — 10 15 10 Weighted average common shares outstanding - diluted 16,435 31,353 31,431 31,342 Net income attributable to The RMR Group Inc. per common share - basic $ 1.48 $ 0.46 $ 2.98 $ 1.33 Net income attributable to The RMR Group Inc. per common share - diluted $ 1.48 $ 0.46 $ 2.97 $ 1.33 (1) Income tax expense assumes the hypothetical conversion of the noncontrolling interest, which results in estimated tax rates of 29.0% for the three months ended June 30, 2022, and 27.8% and 28.7% for the nine months ended June 30, 2023 and 2022, respectively. |
Net Income Attributable to RM_2
Net Income Attributable to RMR Inc. (Tables) | 9 Months Ended |
Jun. 30, 2023 | |
Net Income Attributable to RMR Inc. | |
Schedule of Net Income Attributable to Parent | Net income attributable to RMR Inc. for the three and nine months ended June 30, 2023 and 2022, is calculated as follows: Three Months Ended June 30, Nine Months Ended June 30, 2023 2022 2023 2022 Income before income tax expense $ 64,385 $ 20,208 $ 129,294 $ 58,594 RMR Inc. franchise tax expense and interest income (110) 149 (255) 485 Net income before noncontrolling interest 64,275 20,357 129,039 59,079 Net income attributable to noncontrolling interest (30,530) (9,695) (61,262) (28,142) Net income attributable to RMR Inc. before income tax expense 33,745 10,662 67,777 30,937 Income tax expense attributable to RMR Inc. (9,214) (2,943) (18,581) (8,448) RMR Inc. franchise tax expense and interest income 110 (149) 255 (485) Net income attributable to RMR Inc. $ 24,641 $ 7,570 $ 49,451 $ 22,004 |
Basis of Presentation (Details)
Basis of Presentation (Details) | 9 Months Ended |
Jun. 30, 2023 real_estate_investment_trust shares | |
Related Party Transaction [Line Items] | |
Number of managed trusts | real_estate_investment_trust | 4 |
RMR LLC | |
Related Party Transaction [Line Items] | |
Ownership percentage | 52.60% |
Class B Membership Units | |
Related Party Transaction [Line Items] | |
Membership units (in shares) | 1,000,000 |
Class A Common Stock | Class A Membership Units | |
Related Party Transaction [Line Items] | |
Membership units (in shares) | 15,614,152 |
Capital Unit Redeemable Class A Units | ABP Trust | |
Related Party Transaction [Line Items] | |
Membership units (in shares) | 15,000,000 |
Capital Unit Redeemable Class A Units | ABP Trust | RMR LLC | |
Related Party Transaction [Line Items] | |
Ownership percentage | 47.40% |
Revenue Recognition - Managemen
Revenue Recognition - Management Agreements with the Managed Equity REITs (Details) - Managed Equity REITs - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | |
Business Management and Incentive Fees | ||||||
Business management fees as a percentage of transferred real estate assets | 0.50% | |||||
Business management fees as a percentage of average invested capital below the threshold limit | 0.70% | |||||
Maximum threshold amount for calculating the business management fees | $ 250,000,000 | $ 250,000,000 | ||||
Business management fees as a percentage of average invested capital above the threshold limit | 0.50% | |||||
Minimum threshold amount for calculating the business management fees | 250,000,000 | $ 250,000,000 | ||||
Business management fees as a percent of average market capitalization below the threshold limit | 0.70% | |||||
Business management fees as a percent of average market capitalization above the threshold limit | 0.50% | |||||
Aggregate base business management fees | $ 21,037,000 | $ 25,446,000 | $ 63,894,000 | $ 73,085,000 | ||
Contingent incentive business management fee percentage | 12% | |||||
Aggregate incentive business management fees | $ 0 | $ 0 |
Revenue Recognition - Other Man
Revenue Recognition - Other Management Agreements (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
May 15, 2023 | Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Related Party Transaction [Line Items] | |||||
received termination fees from TA | $ 280,225 | $ 211,088 | $ 739,384 | $ 590,310 | |
Termination and incentive business management fees | |||||
Related Party Transaction [Line Items] | |||||
received termination fees from TA | $ 45,282 | ||||
Managed Operating Companies | |||||
Related Party Transaction [Line Items] | |||||
Business management fee percent based on management agreements | 0.60% | ||||
Perpetual Capital | |||||
Related Party Transaction [Line Items] | |||||
Aggregate business management fees | 9,134 | 11,107 | $ 29,874 | 28,296 | |
received termination fees from TA | $ 256,082 | $ 185,422 | $ 662,341 | $ 526,324 |
Revenue Recognition - Property
Revenue Recognition - Property Management Fees (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Revenue Recognition [Abstract] | ||||
Property management fee percent based on gross collected rents | 3% | |||
Property management fee percent based on the cost of construction | 5% | |||
Aggregate property management fees | $ 15,649 | $ 15,220 | $ 47,670 | $ 43,387 |
Construction supervision fees | $ 4,418 | $ 4,596 | $ 14,120 | $ 11,623 |
Revenue Recognition - Managem_2
Revenue Recognition - Management Agreements with Advisory Clients (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Related Party Transaction [Line Items] | ||||
Total revenues | $ 280,225,000 | $ 211,088,000 | $ 739,384,000 | $ 590,310,000 |
Tremont Advisors | ||||
Related Party Transaction [Line Items] | ||||
Incentive fee percentage condition 1 | 20% | |||
Incentive fee percentage condition 2 | 7% | |||
Tremont Advisors | Minimum | ||||
Related Party Transaction [Line Items] | ||||
Advisory fee percentage based on aggregate principal amounts of loan originate | 0.50% | |||
Tremont Advisors | Maximum | ||||
Related Party Transaction [Line Items] | ||||
Advisory fee percentage based on aggregate principal amounts of loan originate | 1% | |||
Advisory services | ||||
Related Party Transaction [Line Items] | ||||
Total revenues | 1,141,000 | 1,137,000 | $ 3,371,000 | 3,392,000 |
Advisory services | Tremont Advisors | ||||
Related Party Transaction [Line Items] | ||||
Business management fee percent based on management agreements | 1.50% | |||
Total revenues | 1,141,000 | 1,137,000 | $ 3,371,000 | 3,392,000 |
Management services | ||||
Related Party Transaction [Line Items] | ||||
Total revenues | 45,872,000 | 51,819,000 | 141,490,000 | 144,867,000 |
Incentive fees | Tremont Advisors | ||||
Related Party Transaction [Line Items] | ||||
Total revenues | 192,000 | 0 | 192,000 | 0 |
Tremont Advisors | Management services | ||||
Related Party Transaction [Line Items] | ||||
Total revenues | $ 52,000 | $ 46,000 | $ 52,000 | $ 99,000 |
Equity Method Investments (Deta
Equity Method Investments (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | |||||
May 15, 2023 | Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Mar. 31, 2023 | Sep. 30, 2022 | |
Schedule of Equity Method Investments [Line Items] | |||||||
Equity method investments accounted for under the fair value option | $ 17,525 | $ 17,525 | $ 49,114 | ||||
Gain (loss) on equity method investments accounted for under the fair value option | 663 | $ (5,489) | 23,513 | $ (8,853) | |||
Distributions from equity method investments | 1,623 | 415 | |||||
Proceeds from sale of TravelCenters of America Inc. common shares | 53,479 | 0 | |||||
SEVN | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
Gain (loss) on equity method investments accounted for under the fair value option | 974 | (209) | 3,571 | 675 | |||
Distributions from equity method investments | 598 | 207 | 1,623 | 415 | |||
SEVN | Level 1 | Recurring basis | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
Equity method investments accounted for under the fair value option | 17,525 | 17,525 | 15,577 | ||||
TA | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
Gain (loss) on equity method investments accounted for under the fair value option | (311) | $ 5,280 | 19,942 | $ (9,528) | |||
Proceeds from sale of TravelCenters of America Inc. common shares | $ 53,479 | ||||||
Equity method investment, realized gain (loss) on disposal | $ 39,778 | ||||||
TA | Level 1 | Recurring basis | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
Equity method investments accounted for under the fair value option | $ 0 | $ 0 | $ 33,537 | ||||
Tremont Reality Capital | SEVN | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
Ownership percentage | 11.60% | 11.60% | |||||
RMR LLC | TA | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
Number of shares owned (in shares) | 621,853 | ||||||
Ownership percentage | 4.10% | ||||||
Purchase price | $ 13,701 | ||||||
BP Products North America Inc | TA | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
Business acquisition share price (in dollars per share) | $ 86 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Income Tax Disclosure [Abstract] | ||||
Income tax expense | $ 9,214 | $ 2,943 | $ 18,581 | $ 8,448 |
Federal income tax expense | 6,751 | 2,162 | 13,614 | 6,205 |
State income tax expense | $ 2,463 | $ 781 | $ 4,967 | $ 2,243 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Income Tax Rate (Details) | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Income Tax Disclosure [Abstract] | ||||
Income taxes computed at the federal statutory rate | 21% | 21% | 21% | 21% |
State taxes, net of federal benefit | 3.10% | 3.10% | 3% | 3.10% |
Permanent items | 0.20% | 0.60% | 0.30% | 0.40% |
Net income attributable to noncontrolling interest | (10.00%) | (10.10%) | (9.90%) | (10.10%) |
Total | 14.30% | 14.60% | 14.40% | 14.40% |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Sep. 30, 2022 |
Schedule of assets and liabilities measured at fair value | ||
Equity method investment | $ 17,525 | $ 49,114 |
Recurring basis | Level 1 | ||
Schedule of assets and liabilities measured at fair value | ||
Current portion of due from related parties related to share based payment awards | 1,039 | 7,516 |
Long term portion of due from related parties related to share based payment awards | 6,632 | 14,557 |
Current portion of employer compensation liability related to share based payment awards | 1,039 | 7,516 |
Long term portion of employer compensation liability related to share based payment awards | 6,632 | 14,557 |
Recurring basis | Level 1 | SEVN | ||
Schedule of assets and liabilities measured at fair value | ||
Equity method investment | 17,525 | 15,577 |
Recurring basis | Level 1 | TA | ||
Schedule of assets and liabilities measured at fair value | ||
Equity method investment | $ 0 | $ 33,537 |
Related Person Transactions - N
Related Person Transactions - Narrative (Details) - Related Party - Adam D. Portnoy | Jun. 30, 2023 |
SEVN | |
Related Party Transaction [Line Items] | |
Ownership percentage (less than) | 13.50% |
DHC | |
Related Party Transaction [Line Items] | |
Ownership percentage (less than) | 9.80% |
ILPT | |
Related Party Transaction [Line Items] | |
Ownership percentage (less than) | 5% |
OPI | |
Related Party Transaction [Line Items] | |
Ownership percentage (less than) | 5% |
SVC | |
Related Party Transaction [Line Items] | |
Ownership percentage (less than) | 5% |
TA | |
Related Party Transaction [Line Items] | |
Ownership percentage (less than) | 5% |
Related Person Transactions - R
Related Person Transactions - Revenues from Related Parties (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Jun. 29, 2022 | Dec. 23, 2021 | Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Related Party Transaction [Line Items] | ||||||
Total revenues | $ 280,225 | $ 211,088 | $ 739,384 | $ 590,310 | ||
DHC | Joint Venture With Institutional Investor | ||||||
Related Party Transaction [Line Items] | ||||||
Percentage of ownership sold | 10% | 35% | ||||
Ownership percentage | 10% | 20% | ||||
Total management and advisory services revenues | ||||||
Related Party Transaction [Line Items] | ||||||
Total revenues | 92,487 | 52,956 | 190,335 | 148,259 | ||
Total reimbursable costs | ||||||
Related Party Transaction [Line Items] | ||||||
Total revenues | 187,738 | 158,132 | 549,049 | 442,051 | ||
Related Party | ||||||
Related Party Transaction [Line Items] | ||||||
Total revenues | 280,173 | 211,042 | 739,332 | 590,211 | ||
Related Party | Total management and advisory services revenues | ||||||
Related Party Transaction [Line Items] | ||||||
Total revenues | 92,435 | 52,910 | 190,283 | 148,160 | ||
Related Party | Total reimbursable costs | ||||||
Related Party Transaction [Line Items] | ||||||
Total revenues | 187,738 | 158,132 | 549,049 | 442,051 | ||
Perpetual Capital | ||||||
Related Party Transaction [Line Items] | ||||||
Total revenues | 256,082 | 185,422 | 662,341 | 526,324 | ||
Perpetual Capital | Total management and advisory services revenues | ||||||
Related Party Transaction [Line Items] | ||||||
Total revenues | 83,010 | 43,950 | 163,241 | 126,008 | ||
Perpetual Capital | Total reimbursable costs | ||||||
Related Party Transaction [Line Items] | ||||||
Total revenues | 173,072 | 141,472 | 499,100 | 400,316 | ||
Managed Equity REITs | ||||||
Related Party Transaction [Line Items] | ||||||
Total revenues | 206,318 | 178,311 | 596,572 | 505,635 | ||
Managed Equity REITs | Total management and advisory services revenues | ||||||
Related Party Transaction [Line Items] | ||||||
Total revenues | 34,439 | 38,372 | 104,464 | 111,117 | ||
Managed Equity REITs | Total reimbursable costs | ||||||
Related Party Transaction [Line Items] | ||||||
Total revenues | 171,879 | 139,939 | 492,108 | 394,518 | ||
DHC | ||||||
Related Party Transaction [Line Items] | ||||||
Total revenues | 43,007 | 48,526 | 135,414 | 132,978 | ||
DHC | Total management and advisory services revenues | ||||||
Related Party Transaction [Line Items] | ||||||
Total revenues | 5,655 | 7,208 | 17,593 | 23,737 | ||
DHC | Total reimbursable costs | ||||||
Related Party Transaction [Line Items] | ||||||
Total revenues | 37,352 | 41,318 | 117,821 | 109,241 | ||
ILPT | ||||||
Related Party Transaction [Line Items] | ||||||
Total revenues | 19,777 | 17,929 | 57,992 | 41,932 | ||
ILPT | Total management and advisory services revenues | ||||||
Related Party Transaction [Line Items] | ||||||
Total revenues | 9,113 | 9,803 | 27,377 | 21,545 | ||
ILPT | Total reimbursable costs | ||||||
Related Party Transaction [Line Items] | ||||||
Total revenues | 10,664 | 8,126 | 30,615 | 20,387 | ||
OPI | ||||||
Related Party Transaction [Line Items] | ||||||
Total revenues | 98,583 | 90,723 | 297,652 | 252,971 | ||
OPI | Total management and advisory services revenues | ||||||
Related Party Transaction [Line Items] | ||||||
Total revenues | 9,363 | 10,640 | 29,448 | 31,722 | ||
OPI | Total reimbursable costs | ||||||
Related Party Transaction [Line Items] | ||||||
Total revenues | 89,220 | 80,083 | 268,204 | 221,249 | ||
SVC | ||||||
Related Party Transaction [Line Items] | ||||||
Total revenues | 44,951 | 21,133 | 105,514 | 77,754 | ||
SVC | Total management and advisory services revenues | ||||||
Related Party Transaction [Line Items] | ||||||
Total revenues | 10,308 | 10,721 | 30,046 | 34,113 | ||
SVC | Total reimbursable costs | ||||||
Related Party Transaction [Line Items] | ||||||
Total revenues | 34,643 | 10,412 | 75,468 | 43,641 | ||
SEVN | ||||||
Related Party Transaction [Line Items] | ||||||
Total revenues | 2,526 | 2,143 | 7,079 | 7,955 | ||
SEVN | Total management and advisory services revenues | ||||||
Related Party Transaction [Line Items] | ||||||
Total revenues | 1,333 | 1,137 | 3,563 | 3,392 | ||
SEVN | Total reimbursable costs | ||||||
Related Party Transaction [Line Items] | ||||||
Total revenues | 1,193 | 1,006 | 3,516 | 4,563 | ||
TA | ||||||
Related Party Transaction [Line Items] | ||||||
Total revenues | 47,238 | 4,968 | 58,690 | 12,734 | ||
TA | Total management and advisory services revenues | ||||||
Related Party Transaction [Line Items] | ||||||
Total revenues | 47,238 | 4,441 | 55,214 | 11,499 | ||
TA | Total reimbursable costs | ||||||
Related Party Transaction [Line Items] | ||||||
Total revenues | 0 | 527 | 3,476 | 1,235 | ||
Private Capital | ||||||
Related Party Transaction [Line Items] | ||||||
Total revenues | 24,091 | 25,620 | 76,991 | 63,887 | ||
Private Capital | Total management and advisory services revenues | ||||||
Related Party Transaction [Line Items] | ||||||
Total revenues | 9,425 | 8,960 | 27,042 | 22,152 | ||
Private Capital | Total reimbursable costs | ||||||
Related Party Transaction [Line Items] | ||||||
Total revenues | 14,666 | 16,660 | 49,949 | 41,735 | ||
AlerisLife | ||||||
Related Party Transaction [Line Items] | ||||||
Total revenues | 1,381 | 1,338 | 4,111 | 3,855 | ||
AlerisLife | Total management and advisory services revenues | ||||||
Related Party Transaction [Line Items] | ||||||
Total revenues | 1,381 | 1,239 | 4,014 | 3,610 | ||
AlerisLife | Total reimbursable costs | ||||||
Related Party Transaction [Line Items] | ||||||
Total revenues | 0 | 99 | 97 | 245 | ||
Sonesta | ||||||
Related Party Transaction [Line Items] | ||||||
Total revenues | 2,796 | 2,537 | 7,498 | 6,176 | ||
Sonesta | Total management and advisory services revenues | ||||||
Related Party Transaction [Line Items] | ||||||
Total revenues | 2,796 | 2,491 | 6,954 | 6,092 | ||
Sonesta | Total reimbursable costs | ||||||
Related Party Transaction [Line Items] | ||||||
Total revenues | 0 | 46 | 544 | 84 | ||
Other private entities | ||||||
Related Party Transaction [Line Items] | ||||||
Total revenues | 19,914 | 21,745 | 65,382 | 53,856 | ||
Other private entities | Total management and advisory services revenues | ||||||
Related Party Transaction [Line Items] | ||||||
Total revenues | 5,248 | 5,230 | 16,074 | 12,450 | ||
Other private entities | Total reimbursable costs | ||||||
Related Party Transaction [Line Items] | ||||||
Total revenues | 14,666 | 16,515 | 49,308 | 41,406 | ||
Nonrelated Party | ||||||
Related Party Transaction [Line Items] | ||||||
Total revenues | 52 | 46 | 52 | 99 | ||
Nonrelated Party | Total management and advisory services revenues | ||||||
Related Party Transaction [Line Items] | ||||||
Total revenues | 52 | 46 | 52 | 99 | ||
Nonrelated Party | Total reimbursable costs | ||||||
Related Party Transaction [Line Items] | ||||||
Total revenues | $ 0 | $ 0 | $ 0 | $ 0 |
Related Person Transactions - A
Related Person Transactions - Amount Due from Related Parties (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Sep. 30, 2022 |
Related Party Transaction [Line Items] | ||
Accounts receivable | $ 26,799 | $ 21,084 |
Reimbursable costs | 81,934 | 102,294 |
Total | 108,733 | 123,378 |
Perpetual Capital | ||
Related Party Transaction [Line Items] | ||
Accounts receivable | 22,500 | 19,187 |
Reimbursable costs | 75,999 | 94,062 |
Total | 98,499 | 113,249 |
Managed Equity REITs | ||
Related Party Transaction [Line Items] | ||
Accounts receivable | 19,385 | 17,295 |
Reimbursable costs | 74,566 | 81,165 |
Total | 93,951 | 98,460 |
DHC | ||
Related Party Transaction [Line Items] | ||
Accounts receivable | 4,692 | 8,098 |
Reimbursable costs | 15,525 | 14,148 |
Total | 20,217 | 22,246 |
ILPT | ||
Related Party Transaction [Line Items] | ||
Accounts receivable | 3,928 | 3,235 |
Reimbursable costs | 7,739 | 13,717 |
Total | 11,667 | 16,952 |
OPI | ||
Related Party Transaction [Line Items] | ||
Accounts receivable | 6,125 | 335 |
Reimbursable costs | 45,206 | 47,943 |
Total | 51,331 | 48,278 |
SVC | ||
Related Party Transaction [Line Items] | ||
Accounts receivable | 4,640 | 5,627 |
Reimbursable costs | 6,096 | 5,357 |
Total | 10,736 | 10,984 |
SEVN | ||
Related Party Transaction [Line Items] | ||
Accounts receivable | 3,115 | 1,768 |
Reimbursable costs | 1,433 | 1,262 |
Total | 4,548 | 3,030 |
TA | ||
Related Party Transaction [Line Items] | ||
Accounts receivable | 0 | 124 |
Reimbursable costs | 0 | 11,635 |
Total | 0 | 11,759 |
Private Capital | ||
Related Party Transaction [Line Items] | ||
Accounts receivable | 4,299 | 1,897 |
Reimbursable costs | 5,935 | 8,232 |
Total | 10,234 | 10,129 |
AlerisLife | ||
Related Party Transaction [Line Items] | ||
Accounts receivable | 68 | 112 |
Reimbursable costs | 0 | 492 |
Total | 68 | 604 |
Sonesta | ||
Related Party Transaction [Line Items] | ||
Accounts receivable | 65 | 127 |
Reimbursable costs | 0 | 290 |
Total | 65 | 417 |
Other private entities | ||
Related Party Transaction [Line Items] | ||
Accounts receivable | 4,166 | 1,658 |
Reimbursable costs | 5,935 | 7,450 |
Total | $ 10,101 | $ 9,108 |
Related Person Transactions - L
Related Person Transactions - Leases (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
ABP Trust and Managed REIT | ||||
Related Party Transaction [Line Items] | ||||
Lease expense, rental expense | $ 1,221 | $ 1,470 | $ 4,052 | $ 4,444 |
Related Person Transactions - T
Related Person Transactions - Tax Related Payments (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
RMR LLC | ||
Related Party Transaction [Line Items] | ||
Tax distributions | $ 25,758 | $ 11,559 |
ABP Trust | RMR LLC | ||
Related Party Transaction [Line Items] | ||
Tax distributions | $ 23,099 | 10,410 |
ABP Trust | Up C Transaction | ||
Related Party Transaction [Line Items] | ||
Tax receivable agreement, percent of payment | 85% | |
Liability related to tax receivable agreement | $ 25,583 | |
Current portion of liability related to tax receivable agreement | 2,275 | |
ABP Trust and Managed REIT | RMR LLC | ||
Related Party Transaction [Line Items] | ||
Tax distributions | $ 48,857 | $ 21,969 |
Related Person Transactions - P
Related Person Transactions - Purchase of SEVN shares (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
May 11, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Related Party Transaction [Line Items] | |||
Purchase price | $ 0 | $ 9,469 | |
SEVN | Tremont Reality Capital | |||
Related Party Transaction [Line Items] | |||
Ownership percentage | 11.60% | ||
SEVN | Tremont Reality Capital | Related Party | |||
Related Party Transaction [Line Items] | |||
Number of shares purchased (in shares) | 882,407 | ||
Purchase price | $ 9,469 | ||
Number of shares owned (in shares) | 1,708,058 | ||
SEVN | Adam D. Portnoy | Related Party | |||
Related Party Transaction [Line Items] | |||
Ownership percentage | 13.50% |
Related Person Transactions -_2
Related Person Transactions - TA Merger (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
May 15, 2023 | Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Mar. 31, 2023 | |
Related Party Transaction [Line Items] | ||||||
Proceeds from sale of TravelCenters of America Inc. common shares | $ 53,479 | $ 0 | ||||
Total revenues | $ 280,225 | $ 211,088 | 739,384 | 590,310 | ||
Related Party | ||||||
Related Party Transaction [Line Items] | ||||||
Total revenues | $ 280,173 | $ 211,042 | $ 739,332 | $ 590,211 | ||
Termination and incentive business management fees | ||||||
Related Party Transaction [Line Items] | ||||||
Total revenues | $ 45,282 | |||||
Termination and incentive business management fees | Related Party | ||||||
Related Party Transaction [Line Items] | ||||||
Total revenues | 45,282 | |||||
TA | ||||||
Related Party Transaction [Line Items] | ||||||
Proceeds from sale of TravelCenters of America Inc. common shares | 53,479 | |||||
TA | Related Party | ||||||
Related Party Transaction [Line Items] | ||||||
Proceeds from sale of TravelCenters of America Inc. common shares | $ 53,479 | |||||
RMR LLC | TA | ||||||
Related Party Transaction [Line Items] | ||||||
Ownership percentage | 4.10% | |||||
RMR LLC | TA | Related Party | ||||||
Related Party Transaction [Line Items] | ||||||
Ownership percentage | 4.10% | 4.10% | ||||
TA | BP Products North America Inc | ||||||
Related Party Transaction [Line Items] | ||||||
Business acquisition share price (in dollars per share) | $ 86 | |||||
TA | BP Products North America Inc | Related Party | ||||||
Related Party Transaction [Line Items] | ||||||
Business acquisition share price (in dollars per share) | $ 86 |
Related Person Transactions - O
Related Person Transactions - OPI’s Merger Agreement with DHC (Details) | 9 Months Ended |
Jun. 30, 2023 | |
DHC | |
Related Party Transaction [Line Items] | |
Renovation and repositioning fee percentage | 3% |
Related Person Transactions - S
Related Person Transactions - Separation Arrangements (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Mar. 27, 2023 | Jul. 31, 2023 | Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Related Party Transaction [Line Items] | ||||||
Separation costs | $ 1,064 | $ 400 | $ 2,002 | $ 617 | ||
Related Party | ||||||
Related Party Transaction [Line Items] | ||||||
Separation costs | 400 | 617 | ||||
SEVN | Subsequent Event | ||||||
Related Party Transaction [Line Items] | ||||||
Management fee percentage | 3% | |||||
Retirement Agreement | Mr. Pertchik | ||||||
Related Party Transaction [Line Items] | ||||||
Related party transaction | $ 211 | |||||
Construction Supervision Fees | SEVN | Subsequent Event | ||||||
Related Party Transaction [Line Items] | ||||||
Management fee percentage | 5% | |||||
Former Nonexecutive Officer | Related Party | ||||||
Related Party Transaction [Line Items] | ||||||
Cash severance costs | 708 | 252 | 1,520 | 469 | ||
Equity severance costs | $ 356 | $ 148 | $ 482 | $ 148 |
Shareholders_ Equity - Narrativ
Shareholders’ Equity - Narrative (Details) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | |||||||||||
Jul. 13, 2023 USD ($) $ / shares shares | May 18, 2023 USD ($) | Mar. 29, 2023 $ / shares shares | Feb. 16, 2023 USD ($) | Nov. 17, 2022 USD ($) | May 19, 2022 USD ($) | May 18, 2022 USD ($) | Feb. 17, 2022 USD ($) | Nov. 18, 2021 USD ($) | Jun. 30, 2023 USD ($) vesting_installment shares | Jun. 30, 2022 USD ($) | Jun. 30, 2023 USD ($) vesting_installment shares | Jun. 30, 2022 USD ($) | |
Class of Stock [Line Items] | |||||||||||||
General and administrative | $ 9,575 | $ 8,323 | $ 28,198 | $ 24,464 | |||||||||
Equity based compensation expense | $ 478 | $ 581 | $ 1,576 | 1,823 | |||||||||
Unvested shares outstanding (in shares) | shares | 170,420 | 170,420 | |||||||||||
Vesting 2023 | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Shares vesting (in shares) | shares | 62,160 | ||||||||||||
Vesting 2024 | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Shares vesting (in shares) | shares | 49,920 | ||||||||||||
Vesting 2025 | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Shares vesting (in shares) | shares | 36,740 | ||||||||||||
Vesting 2026 | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Shares vesting (in shares) | shares | 21,600 | ||||||||||||
Class A Common Stock | 2016 Omnibus Equity Plan | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Number of annual installments | vesting_installment | 5 | 5 | |||||||||||
Shares granted (in shares) | shares | 3,000 | ||||||||||||
Share price (in dollars per share) | $ / shares | $ 25.80 | ||||||||||||
General and administrative | $ 464 | ||||||||||||
Shares repurchased (in shares) | shares | 7,383 | ||||||||||||
Shares repurchased during period | $ 179 | ||||||||||||
Class A and B-1 common shares | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Value of dividends | $ 6,648 | $ 6,641 | $ 6,642 | $ 6,601 | $ 6,265 | $ 6,264 | 19,931 | 19,130 | |||||
Class A and B-1 common shares | Subsequent Event | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Dividends declared (in usd per share) | $ / shares | $ 0.40 | ||||||||||||
Value of dividends | $ 6,645 | ||||||||||||
Membership Units | RMR LLC | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Value of dividends | 10,113 | 10,114 | 10,080 | $ 10,118 | 9,446 | 9,446 | 30,345 | 28,972 | |||||
Membership Units | RMR LLC | RMR, Inc | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Value of dividends | 5,313 | 5,314 | 5,280 | 5,318 | 4,946 | 4,946 | 15,945 | 15,172 | |||||
Membership Units | RMR LLC | ABP Trust | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Value of dividends | $ 4,800 | $ 4,800 | $ 4,800 | $ 4,800 | $ 4,500 | $ 4,500 | $ 14,400 | $ 13,800 | |||||
Membership Units | Subsequent Event | RMR LLC | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Shares owned (in shares) | shares | 16,613,279 | ||||||||||||
Membership Units | Subsequent Event | RMR LLC | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Dividends declared (in usd per share) | $ / shares | $ 0.32 | ||||||||||||
Value of dividends | $ 10,116 | ||||||||||||
Membership Units | Subsequent Event | RMR LLC | RMR, Inc | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Value of dividends | 5,316 | ||||||||||||
Membership Units | Subsequent Event | RMR LLC | ABP Trust | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Value of dividends | $ 4,800 | ||||||||||||
Membership Units | Subsequent Event | ABP Trust | RMR LLC | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Shares owned (in shares) | shares | 15,000,000 |
Shareholders_ Equity - Distribu
Shareholders’ Equity - Distributions (Details) - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | ||||||||
May 18, 2023 | Feb. 16, 2023 | Nov. 17, 2022 | May 19, 2022 | May 18, 2022 | Feb. 17, 2022 | Nov. 18, 2021 | Jun. 30, 2023 | Jun. 30, 2022 | |
Class A and B-1 common shares | |||||||||
Class of Stock [Line Items] | |||||||||
Dividends paid (in usd per share) | $ 0.40 | $ 0.40 | $ 0.40 | $ 0.40 | $ 0.38 | $ 0.38 | $ 1.20 | $ 1.16 | |
Value of dividends | $ 6,648 | $ 6,641 | $ 6,642 | $ 6,601 | $ 6,265 | $ 6,264 | $ 19,931 | $ 19,130 | |
RMR LLC | Membership Units | |||||||||
Class of Stock [Line Items] | |||||||||
Dividends paid (in usd per share) | $ 0.32 | $ 0.32 | $ 0.32 | $ 0.32 | $ 0.30 | $ 0.30 | $ 0.96 | $ 0.92 | |
Value of dividends | $ 10,113 | $ 10,114 | $ 10,080 | $ 10,118 | $ 9,446 | $ 9,446 | $ 30,345 | $ 28,972 | |
RMR LLC | RMR, Inc | Membership Units | |||||||||
Class of Stock [Line Items] | |||||||||
Value of dividends | 5,313 | 5,314 | 5,280 | 5,318 | 4,946 | 4,946 | 15,945 | 15,172 | |
RMR LLC | ABP Trust | Membership Units | |||||||||
Class of Stock [Line Items] | |||||||||
Value of dividends | $ 4,800 | $ 4,800 | $ 4,800 | $ 4,800 | $ 4,500 | $ 4,500 | $ 14,400 | $ 13,800 |
Per Common Share Amounts - Narr
Per Common Share Amounts - Narrative (Details) - Class A Membership Units | 9 Months Ended |
Jun. 30, 2023 shares | |
Class of Stock [Line Items] | |
Antidilutive securities (in shares) | 15,000,000 |
Conversion ratio | 1 |
Per Common Share Amounts - Earn
Per Common Share Amounts - Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Numerators: | ||||
Net income attributable to The RMR Group Inc. | $ 24,641 | $ 7,570 | $ 49,451 | $ 22,004 |
Less: income attributable to unvested participating securities | (273) | (72) | (580) | (213) |
Net income attributable to The RMR Group Inc. used in calculating basic EPS | 24,368 | 7,498 | 48,871 | 21,791 |
Add back: income attributable to unvested participating securities | 0 | 72 | 580 | 213 |
Add back: net income attributable to noncontrolling interest | 0 | 9,695 | 61,262 | 28,142 |
Add back: income tax expense | 0 | 2,943 | 18,581 | 8,448 |
Less: income tax expense assuming redemption of noncontrolling interest’s Class A units for Class A common shares | 0 | (5,851) | (35,932) | (16,833) |
Net income used in calculating diluted EPS | $ 24,368 | $ 14,357 | $ 93,362 | $ 41,761 |
Denominators: | ||||
Common shares outstanding (in shares) | 16,614 | 16,501 | 16,614 | 16,501 |
Less: unvested participating securities and incremental impact of weighted average (in shares) | (179) | (158) | (198) | (169) |
Weighted average common shares outstanding - basic (in shares) | 16,435 | 16,343 | 16,416 | 16,332 |
Add: assumed redemption of noncontrolling interest’s Class A Units for Class A common shares (in shares) | 0 | 15,000 | 15,000 | 15,000 |
Add: Incremental unvested shares (in shares) | 0 | 10 | 15 | 10 |
Weighted average common shares outstanding - diluted (in shares) | 16,435 | 31,353 | 31,431 | 31,342 |
Net income attributable to The RMR Group Inc. per common share - basic (in dollars per share) | $ 1.48 | $ 0.46 | $ 2.98 | $ 1.33 |
Net income attributable to The RMR Group Inc. per common share - diluted (in dollars per share) | $ 1.48 | $ 0.46 | $ 2.97 | $ 1.33 |
Effective tax rate | 29% | 27.80% | 28.70% |
Net Income Attributable to RM_3
Net Income Attributable to RMR Inc. (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Net Income Attributable to RMR Inc. | ||||
Income before income tax expense | $ 64,385 | $ 20,208 | $ 129,294 | $ 58,594 |
RMR Inc. franchise tax expense and interest income | (110) | 149 | (255) | 485 |
Net income before noncontrolling interest | 64,275 | 20,357 | 129,039 | 59,079 |
Net income attributable to noncontrolling interest | (30,530) | (9,695) | (61,262) | (28,142) |
Net income attributable to RMR Inc. before income tax expense | 33,745 | 10,662 | 67,777 | 30,937 |
Income tax expense attributable to RMR Inc. | (9,214) | (2,943) | (18,581) | (8,448) |
RMR Inc. franchise tax expense and interest income | 110 | (149) | 255 | (485) |
Net income attributable to The RMR Group Inc. | $ 24,641 | $ 7,570 | $ 49,451 | $ 22,004 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event - MPC Partnership Holdings LLC $ in Thousands | Jul. 29, 2023 USD ($) |
Subsequent Event [Line Items] | |
Payments to acquire businesses, gross | $ 80,000 |
Contingent consideration | $ 20,000 |
Baseline percentage of revenue | 85% |