Service Properties Trust (SVC), a real estate investment trust, reported owning 760 service-focused retail net lease properties and 94 hotels as of December 31, 2025. The company's annual revenue totaled $1.81 billion, a decrease of 4.3% compared to $1.90 billion in the previous year. This decline was primarily attributed to a decrease in hotel operating revenues, which fell by 5.6% to $1.41 billion, while rental income saw a slight increase of 0.3% to $401.4 million. SVC's net loss for the year was $202.3 million, or $1.22 per common share, compared to a net loss of $275.5 million, or $1.67 per common share, in the prior year.

A significant strategic shift during 2025 involved the sale of 112 hotels, generating $858.7 million in proceeds, and the acquisition of 29 net lease properties for $93.7 million. These actions are part of SVC's initiative to rebalance its portfolio towards service-focused retail net lease properties and reduce debt. The company's net lease portfolio was 96.6% occupied with a weighted average lease term of 7.4 years. The company also announced plans to sell seven additional full-service Sonesta hotels with a total of 2,010 keys.

Key operational developments included a slight increase in overall hotel occupancy to 64.1%, with an average daily rate (ADR) of $166.56 and revenue per available room (RevPAR) of $106.77. The company's largest tenant, TravelCenters of America (TA), accounted for $264.3 million in annualized minimum rent. SVC's largest hotel manager, Sonesta, operated 69 hotels within the portfolio. The company's net lease properties generated rent coverage of 1.98x as of December 31, 2025.

SVC's outlook includes a continued focus on reducing debt and rebalancing its portfolio. The company declared a regular quarterly distribution of $0.01 per common share. SVC's ability to pay distributions to its shareholders or sustain the rate of distributions may continue to be adversely affected by economic and market conditions. The company's debt agreements contain various conditions, covenants and events of default. SVC may not be able to satisfy all of these conditions or may default on some of these covenants for various reasons, including for reasons beyond its control.

About Service Properties Trust

Service Properties Trust is a real estate investment trust (REIT) specializing in owning and managing a diversified portfolio of hotels and retail net lease properties across the United States and Canada. It generates income through leasing properties to tenants and managing hotel operations via third-party operators. The company focuses on asset management, strategic acquisitions, and long-term value creation in the hospitality and necessity retail sectors.

This description was generated via AI from an annual report. Updated 8 months ago.

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