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What changed in RMR GROUP INC.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of RMR GROUP INC.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+313 added−300 removedSource: 10-K (2025-11-12) vs 10-K (2024-11-12)

Top changes in RMR GROUP INC.'s 2025 10-K

313 paragraphs added · 300 removed · 227 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

65 edited+19 added−10 removed67 unchanged
Biggest changeThe annual base management fee generally is calculated as 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 $250.0 million, plus (c) 0.5% of the average invested capital exceeding $250.0 million; and • the sum of (a) 0.7% of the average market capitalization, as defined in the applicable business management agreement, up to $250.0 million, plus (b) 0.5% of the average market capitalization exceeding $250.0 million. 4 Table of Contents The annual incentive business management fee payable by each Managed Equity REIT, if any, is calculated as follows: • The incentive business management fee is calculated as an amount equal to 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 measurement period, and (b) the amount, expressed as a percentage, by which the Managed Equity REIT’s total return per share realized by its common shareholders (i.e. share price appreciation plus dividends) or the “total return per share,” exceeds the total shareholder return of a specified REIT index, the “benchmark return per share,” for the relevant measurement period, with each of (a) and (b) subject to adjustments for net common shares issued by the Managed Equity REIT during the measurement period. • The measurement period for an annual incentive business management fee is defined as the three year period ending on December 31 of the year for which such fee is being calculated. • The specified REIT index utilized to calculate the benchmark return per share for each of our Managed Equity REITs when calculating the incentive business management fees is as follows: DHC MSCI U.S.
Biggest changeThe annual incentive business management fee payable by each Managed Equity REIT, if any, is calculated as follows: • The incentive business management fee is calculated as an amount equal to 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 measurement period, and (b) the amount, expressed as a percentage, by which the Managed Equity REIT’s total return per share realized by its common shareholders (i.e. share price appreciation plus dividends) or the “total return per share,” exceeds the total shareholder return of a specified REIT index, the “benchmark return per share,” for the relevant measurement period, with each of (a) and (b) subject to adjustments for net common shares issued by the Managed Equity REIT during the measurement period. • The measurement period for an annual incentive business management fee is defined as the three year period ending on December 31 of the year for which such fee is being calculated. 5 Table of Contents • The specified REIT index utilized to calculate the benchmark return per share for each of our Managed Equity REITs when calculating the incentive business management fees is as follows: DHC MSCI U.S.
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. 1 Table of Contents 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.
SEVN is a publicly traded mortgage REIT that 1 Table of Contents focuses on originating and investing in first mortgage loans secured by middle market and transitional commercial real estate. 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.
Subject to the overall management, direction and oversight of the Board of Trustees of each Managed Equity REIT, RMR LLC has the responsibility to: • provide research and economic and statistical data in connection with the Managed Equity REIT’s real estate investments and recommend changes in the Managed Equity REIT’s real estate investment policies when appropriate; • investigate, evaluate and negotiate contracts for the investment in, or the acquisition or disposition of, real estate and related interests, financing and refinancing opportunities and make recommendations concerning specific real estate investments to the Board of Trustees of the Managed Equity REIT; • investigate, evaluate, prosecute and negotiate any of the Managed Equity REIT’s claims in connection with its real estate investments or otherwise in connection with the conduct of the Managed Equity REIT’s business; • administer bookkeeping and accounting functions as required for the Managed Equity REIT’s business and operation, contract for audits and prepare or cause to be prepared reports and filings required by a governmental authority in connection with the conduct of the Managed Equity REIT’s business, and otherwise advise and assist the Managed Equity REIT with its compliance with applicable legal and regulatory requirements; • advise and assist in the preparation of all equity and debt offering documents and all registration statements, prospectuses or other documents filed by the Managed Equity REIT with the SEC or any state; • retain counsel, consultants and other third party professionals on behalf of the Managed Equity REIT; 3 Table of Contents • provide internal audit services; • advise and assist with the Managed Equity REIT’s risk management and business oversight function; • advise and assist the Managed Equity REIT with respect to the Managed Equity REIT’s public relations, preparation of marketing materials, internet website and investor relations services; • provide communication facilities for the Managed Equity REIT and its officers and trustees and provide meeting space as required; • provide office space, equipment and experienced and qualified personnel necessary for the performance of the foregoing services; and • to the extent not covered above, advise and assist the Managed Equity REIT in the review and negotiation of the Managed Equity REIT’s contracts and agreements, coordination and supervision of all third party legal services and oversight for processing of claims by or against the Managed Equity REIT.
Subject to the overall management, direction and oversight of the Board of Trustees of each Managed Equity REIT, RMR LLC has the responsibility to: • provide research and economic and statistical data in connection with the Managed Equity REIT’s real estate investments and recommend changes in the Managed Equity REIT’s real estate investment policies when appropriate; • investigate, evaluate and negotiate contracts for the investment in, or the acquisition or disposition of, real estate and related interests, financing and refinancing opportunities and make recommendations concerning specific real estate investments to the Board of Trustees of the Managed Equity REIT; • investigate, evaluate, prosecute and negotiate any of the Managed Equity REIT’s claims in connection with its real estate investments or otherwise in connection with the conduct of the Managed Equity REIT’s business; • administer bookkeeping and accounting functions as required for the Managed Equity REIT’s business and operation, contract for audits and prepare or cause to be prepared reports and filings required by a governmental authority in connection with the conduct of the Managed Equity REIT’s business, and otherwise advise and assist the Managed Equity REIT with its compliance with applicable legal and regulatory requirements; 3 Table of Contents • advise and assist in the preparation of all equity and debt offering documents and all registration statements, prospectuses or other documents filed by the Managed Equity REIT with the SEC or any state; • retain counsel, consultants and other third party professionals on behalf of the Managed Equity REIT; • provide internal audit services; • advise and assist with the Managed Equity REIT’s risk management and business oversight function; • advise and assist the Managed Equity REIT with respect to the Managed Equity REIT’s public relations, preparation of marketing materials, internet website and investor relations services; • provide communication facilities for the Managed Equity REIT and its officers and trustees and provide meeting space as required; • provide office space, equipment and experienced and qualified personnel necessary for the performance of the foregoing services; and • to the extent not covered above, advise and assist the Managed Equity REIT in the review and negotiation of the Managed Equity REIT’s contracts and agreements, coordination and supervision of all third party legal services and oversight for processing of claims by or against the Managed Equity REIT.
We believe we have several strengths that distinguish our business from other alternative asset managers: • Strong Revenue Base, Operating Margins and Resulting Cash Flows . Our revenues are primarily earned from long term agreements with credit quality companies, many of which are permanent capital vehicles.
We believe we have several strengths that distinguish our business from other alternative asset managers: • Strong Revenue Base, Operating Margins and Resulting Cash Flows . Our revenues are primarily earned from long term agreements with predominantly credit quality companies, many of which are permanent capital vehicles.
Given the magnitude of our platform, we believe corporate sustainability must be a strategic focus alongside our focus on economic performance. Our sustainability practices — minimizing our impact on the environment, embracing the communities where we operate and attracting top professionals — are critical elements supporting our long-term success.
Given the magnitude of our platform, we believe corporate sustainability must be a strategic priority alongside our focus on economic performance. Our sustainability practices — minimizing our impact on the environment, embracing the communities where we operate and attracting top professionals — are critical elements supporting our long-term success.
Our continued growth will depend upon our ability to manage or assist our clients in an effective manner and identify and execute on opportunities to expand our services to new clients and new sources of capital. Our existing clients face significant competition in their respective sectors or industries.
Our continued growth will depend upon our ability to manage or assist our clients in an effective manner and identify and execute on opportunities to expand our services to new clients and to access new sources of capital. Our existing clients face significant competition in their respective sectors or industries.
The property management agreements may be terminated upon written notice and generally provide for property management fees ranging from 2.5% to 3.5% of gross collected rents, construction management fees of 5.0% of construction costs and reimbursement costs incurred to manage the properties.
The property management agreements may be terminated upon written notice and generally provide for property management fees ranging from 2.5% to 3.5% of gross collected rents, construction supervision fees of 5.0% of construction costs and reimbursement costs incurred to manage the properties.
We believe our efforts toward these goals will add value to our clients’ properties, benefit tenants by lowering their operating costs, drive sustainable economic returns and address investor demands that our clients have viable strategies to mitigate climate risk. We have made significant progress to date, achieving an overall reduction in emissions of 33%.
We believe our efforts toward these goals will add value to our clients’ properties, benefit tenants by lowering their operating costs, drive sustainable economic returns and address investor demands that our clients have viable strategies to mitigate climate risk. We have made significant progress to date, achieving an overall reduction in emissions of 31%.
RTM facilitates advanced data analytics and access to detect faults and inefficiencies in equipment operations faster, meanwhile enhancing building system control in a cost-effective and scalable way. In 2024, we expanded this program to include fault detection and diagnostics, with the aim of accelerating our identification of energy and emissions reduction opportunities.
RTM facilitates advanced data analytics and access to detect faults and inefficiencies in equipment operations faster, meanwhile enhancing building system control in a cost-effective and scalable way. We recently expanded this program to include fault detection and diagnostics, with the aim of accelerating our identification of energy and emissions reduction opportunities.
Under each business management agreement: the Managed Equity REIT pays or reimburses RMR LLC for all of the expenses relating to the Managed Equity REIT’s activities, including the costs and expenses of investigating, acquiring, owning and disposing of its real estate (third party property diligence costs, appraisal, reporting, audit and legal fees), its costs of borrowing money, its costs of securities listing, transfer, registration and compliance with reporting requirements and its costs of third party professional services, including legal and accounting fees, and as otherwise agreed; and RMR LLC bears its general and administrative expenses relating to its performance of its obligations under the agreement, 5 Table of Contents including expenses of its personnel, rent and other office expenses.
Under each business management agreement: the Managed Equity REIT pays or reimburses RMR LLC for all of the expenses relating to the Managed Equity REIT’s activities, including the costs and expenses of investigating, acquiring, owning and disposing of its real estate (third party property diligence costs, appraisal, reporting, audit and legal fees), its costs of borrowing money, its costs of securities listing, transfer, registration and compliance with reporting requirements and its costs of third party professional services, including legal and accounting fees, and as otherwise agreed; and RMR LLC bears its general and administrative expenses relating to its performance of its obligations under the agreement, including expenses of its personnel, rent and other office expenses.
We can provide no assurance that we will be able to implement our business strategy or achieve our desired growth. Our business and the businesses of our clients are subject to a number of risks and uncertainties. See “Risk Factors” beginning on page 12 .
We can provide no assurance that we will be able to implement our business strategy or achieve our desired growth. Our business and the businesses of our clients are subject to a number of risks and uncertainties. See “Risk Factors” beginning on page 13 .
Item 1. Business Our Company The RMR Group Inc., or RMR Inc., is a holding company incorporated as a Maryland corporation and substantially all of its business is conducted by its majority owned subsidiary, The RMR Group LLC, or RMR LLC. RMR LLC is a Maryland limited liability company.
Item 1. Business Our Company 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.
Generally Accepted Accounting Principles, or 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 estimated revenues from all sources reportable under GAAP, less any estimated revenues reportable by Sonesta with respect to hotels for which it provides management services, plus the estimated 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, determined as TA’s fuel sales revenues less its cost of fuel sales, plus TA’s total nonfuel revenues.
Generally Accepted Accounting Principles, or 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 estimated revenues from all sources reportable under GAAP, less any estimated revenues reportable by Sonesta with respect to hotels for which it provides management services, plus the estimated gross revenues at those hotels determined in accordance with GAAP; and (iii) in the case of TA until May 15, 2023, the sum of TA’s gross fuel margin, determined as TA’s fuel sales revenues less its cost of fuel sales, plus TA’s total nonfuel revenues.
Even if a Managed REIT qualifies for taxation as a REIT, it may be subject to state and local income taxes and to federal income tax and excise tax on its undistributed income. Certain of our clients own or operate healthcare and senior living properties.
Even if a Managed REIT qualifies for taxation as a REIT, it may be subject to state and local income taxes and to federal income tax and excise tax on its undistributed income. 8 Table of Contents Certain of our clients own or operate healthcare and senior living properties.
Accordingly, investors should monitor such portions of our website, in addition to following our press releases, SEC filings and public conference calls and webcasts. 11 Table of Contents
Accordingly, investors should monitor such portions of our website, in addition to following our press releases, SEC filings and public conference calls and webcasts. 12 Table of Contents
Lower energy use and emissions reduce our managed properties' potential exposure to policies that call for a carbon tax or other emissions-based penalties. 9 Table of Contents Our existing business practices align with the Task Force on Climate-related Financial Disclosures, or TCFD, framework across both physical and transition risks and opportunities.
Lower energy use and emissions reduce our managed properties' potential exposure to policies that call for a carbon tax or other emissions-based penalties. Our existing business practices align with the Task Force on Climate-related Financial Disclosures, or TCFD, framework across both physical and transition risks and opportunities.
We assist our clients in realizing investment opportunities by working together to make acquisitions, obtain financing, identifying possible joint venture partners, completing redevelopment activities, facilitating capital recycling from strategic property dispositions and assisting in portfolio repositioning and other business arrangements and strategic restructurings.
We assist our clients in realizing investment opportunities by working together to 2 Table of Contents make acquisitions, obtain financing, identifying possible joint venture partners, completing redevelopment activities, facilitating capital recycling from strategic property dispositions and assisting in portfolio repositioning and other business arrangements and strategic restructurings.
Our strength lies in the collective experience of a diverse and inclusive workplace. We ensure employees receive competitive salaries and benefits and we aim to attract professionals who will uphold our values of social and environmental stewardship.
Our strength lies in the collective experience of an inclusive workplace. We ensure employees receive competitive salaries and benefits and we aim to attract professionals who will uphold our values of social and environmental stewardship.
We anticipate emissions reductions will occur through a combination of strategic capital investments in energy efficiency by the Managed Equity REITs, stakeholder engagement to promote sustainable behavior, the deployment of on site solar and the purchase of energy from renewable sources.
We anticipate emissions reductions will occur through a combination of strategic capital investments in energy efficiency by the Managed Equity REITs and certain of our Private Capital Clients, stakeholder engagement to promote sustainable behavior, the deployment of on-site solar and the purchase of energy from renewable sources.
We believe our structure fosters strong alignment of interests between our principal executive officer and our shareholders because our principal executive officer, Adam D. Portnoy, has a 50.9% economic interest in RMR LLC.
We believe our structure fosters strong alignment of interests between our principal executive officer and our shareholders because our principal executive officer, Adam Portnoy, has a 50.7% economic interest in RMR LLC.
Other Management Agreements RMR LLC provides services and earns fees pursuant to management agreements with ABP Trust regarding AlerisLife; with Sonesta; and until May 15, 2023, with TA.
Other Management Agreements RMR LLC earns management fees pursuant to the management agreements with ABP Trust regarding AlerisLife, with Sonesta, and until May 15, 2023, with TA.
Portnoy, the Chair of our Board, one of our Managing Directors and our President and Chief Executive Officer, is the sole trustee, an officer and the controlling shareholder of our controlling shareholder, ABP Trust, and owns all of ABP Trust’s voting securities and a majority of the economic interest of ABP Trust. As of September 30, 2024, Adam D.
Adam Portnoy, the Chair of our Board, one of our Managing Directors and our President and Chief Executive Officer, is the sole trustee, an officer and the controlling shareholder of our controlling shareholder, ABP Trust, and owns all of ABP Trust’s voting securities and a majority of the economic interest of ABP Trust.
Examples of credentials and association memberships include: BOMA membership, Certified Property Manager, Certified Public Accountant, Certified Apartment Manager, Certified Apartment Portfolio Supervisor and National Association of Industrial and Office Properties. Internet Website Our internet website address is www.rmrgroup.com.
Examples of credentials and association memberships include: BOMA membership, Certified Property Manager, Certified Public Accountant, Certified Apartment Manager, Certified Apartment Portfolio Supervisor and National Association of Industrial and Office Properties. 11 Table of Contents Available Information Our internet website address is www.rmrgroup.com.
We provide management services to four publicly traded equity real estate investment trusts, or REITs, whose securities are listed on The Nasdaq Stock Market LLC, or Nasdaq: Diversified Healthcare Trust, a Maryland REIT, including its subsidiaries, or DHC; Industrial Logistics Properties Trust, a Maryland REIT, including its subsidiaries, or ILPT; Office Properties Income Trust, a Maryland REIT, including its subsidiaries, or OPI; and Service Properties Trust, a Maryland REIT, including its subsidiaries, or SVC.
We provide management services to four publicly traded equity real estate investment trusts, or REITs, three of whose securities are listed on The Nasdaq Stock Market LLC, or Nasdaq, and one of whose securities are listed on the OTC Markets Group Inc., or OTCPK: Diversified Healthcare Trust, a Maryland REIT, including its subsidiaries, or DHC; Industrial Logistics Properties Trust, a Maryland REIT, including its subsidiaries, or ILPT; Service Properties Trust, a Maryland REIT, including its subsidiaries, or SVC; and Office Properties Income Trust, a Maryland REIT, including its subsidiaries, or OPI.
The properties and businesses we managed as of September 30, 2024, are located throughout the United States in 48 states and Washington D.C., and in Puerto Rico and Canada. The diversity of our managed portfolio helps provide balance throughout economic cycles, as the impacts to each respective real estate sector can vary. • Growth .
The properties and businesses we managed as of September 30, 2025, are located throughout the United States in 48 states, the District of Columbia, Puerto Rico and Canada. The diversity of our managed portfolio helps provide balance throughout economic cycles, as the impacts to each respective real estate sector can vary. • Growth .
RMR LLC provides management services to other Private Capital clients for which we receive, depending upon the services provided, a management fee based on a percentage of average invested capital, as defined in the applicable management agreements, a property management fee in an amount equal to 3.0% of rents collected from managed properties and a construction supervision fee in an amount up to 5.0% of the cost of any construction, renovation or repair activities at the managed properties, other than ordinary maintenance and repairs.
RMR LLC provides management services to other Private Capital clients for which we receive, depending upon the services provided, a management fee based on a percentage of average invested capital, as defined in the applicable management agreements, a property management fee in an amount equal to 3.0% of rents collected from managed properties and a construction supervision fee in an amount up to 5.0% of the cost of any construction, renovation or repair activities at the managed properties, other than ordinary maintenance and repairs. 7 Table of Contents Our Management Agreements with Advisory Clients Tremont is party to a management agreement with SEVN.
We continue to expand our RTM program and remain committed to a goal of monitoring 90% of our managed energy spend through RTM by the end of 2025, resulting in operational savings and reduced equipment wear and tear, while maintaining high tenant comfort. Our energy performance programs drive down energy consumption and reduce carbon emissions of our managed properties.
We continue to expand our RTM program and remain committed to increasing the monitoring coverage of our managed energy spend through RTM, resulting in operational savings and reduced equipment wear and tear, while maintaining high tenant comfort. Our energy performance programs drive down energy consumption and reduce carbon emissions of our managed properties.
We continued to generate strong operating margins resulting in net cash from operating activities of $61.4 million and net income of $53.1 million and our regular dividend of $0.45 per share per quarter ($1.80 per share per year) remains well covered by our cash flows. • Diverse Portfolio of Managed Real Estate .
We continued to generate strong operating margins resulting in net cash from operating activities of $75.7 million and net income of $38.7 million and our regular dividend of $0.45 per share per quarter ($1.80 per share per year) remains well covered by our cash flows and existing liquidity. • Diverse Portfolio of Managed Real Estate .
Since its founding in 1986, RMR LLC has substantially grown assets under management and the number of real estate businesses it manages. As of September 30, 2024, we had $40.9 billion of assets under management.
Since its founding in 1986, RMR LLC has substantially grown assets under management and the number of real estate businesses it manages. As of September 30, 2025, we had $39.0 billion of assets under management.
Our agreements with the Managed Equity REITs are 20 year term evergreen contracts with significant termination fees payable in certain circumstances. For the fiscal year ended September 30, 2024, revenues earned from the Managed Equity REITs represented 69.6% of our total management and advisory services revenue, excluding termination fee revenue.
Our agreements with the Managed Equity REITs are 20 year term evergreen contracts with significant termination fees payable in certain circumstances. For the fiscal year ended September 30, 2025, revenues earned from the Managed Equity REITs represented 68.0% of our total management and advisory services revenue.
Our ability and the ability of our clients to continue to compete effectively will depend in large part upon the ability to attract, retain and motivate employees. Corporate Sustainability Over our more than three decades in business, we and our clients have been guided by Environmental, Social and Governance, or ESG, principles.
Our ability and the ability of our clients to continue to compete effectively will depend in large part upon the ability to attract, retain and motivate employees. 9 Table of Contents Corporate Sustainability Over our nearly four decades in business, we and our clients have been guided by Environmental, Social and Governance, or ESG, principles.
RMR LLC provides management services to AlerisLife Inc., or AlerisLife, an operator of senior living communities, many of which are owned by DHC, and Sonesta International Hotels Corporation, or Sonesta, 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.
RMR LLC provides management services to Sonesta International Hotels Corporation, or Sonesta, a privately owned franchisor and operator of hotels, resorts and cruise ships in the United States, Canada, Latin America, the Caribbean and the Middle East, and many of the U.S. hotels that Sonesta operates are owned by SVC.
Property Management Agreement Fees and Expense Reimbursement Each property management agreement between RMR LLC and a Managed Equity REIT provides for the following: (i) a management fee equal to 3.0% of the gross rents collected from tenants, which is not applicable to any hotels, senior living communities or travel centers which are leased to, or managed by, AlerisLife, Sonesta or another operating business such as a hotel management company or a senior living or healthcare services provider; and (ii) a construction supervision fee equal to 5.0% of the cost of any construction, renovation or repair activities at the Managed Equity REIT’s properties, other than ordinary maintenance and repairs, and 3% of the cost of any major capital project or repositionings at DHC’s senior living communities and SVC’s hotels.
Property Management Agreement Fees and Expense Reimbursement Each property management agreement between RMR LLC and a Managed Equity REIT provides for the following: (i) a management fee equal to 3.0% of the gross rents collected from tenants, which is not applicable to any hotels, senior living communities or travel centers which are leased to, or managed by, AlerisLife, Sonesta or another operating business such as a hotel management company or a senior living or healthcare services provider; and (ii) a construction supervision fee equal to 5.0% of the cost of any construction, renovation or repair activities at the Managed Equity REIT’s properties, other than ordinary maintenance and repairs, and 3% of the cost of any major capital project or repositionings at DHC’s senior living communities and SVC’s hotels. 6 Table of Contents Also, under each property management agreement, the Managed Equity REIT pays certain allocable expenses of RMR LLC in the performance of its duties, including wages for onsite property management personnel and allocated costs of centralized property and construction supervision services.
We launched this program in 2017 and it is now deployed in 82 managed properties, totaling approximately 63% of our managed annual electricity spend as of the end of 2023.
We launched this program in 2017 and it is now deployed in 59 managed properties, totaling approximately 58% of our managed annual electricity spend as of the end of 2024.
However, it is not possible to forecast the nature of future legislation, regulations, judicial decisions, orders or interpretations, nor their impact upon our future business, financial condition, results of operations or prospects. Competition The asset management industry is intensely competitive, and we expect it to remain so.
However, it is not possible to forecast the nature of future legislation, regulations, judicial decisions, orders or interpretations, nor their impact upon our future business, financial condition, results of operations or prospects. Competition The asset management industry is intensely competitive and we have no expectation that this will change.
On December 19, 2023, or the Acquisition Date, RMR LLC acquired MPC Partnership Holdings LLC, or MPC, or the Acquisition. In connection with the Acquisition, RMR LLC started providing management services through MPC and its subsidiaries to multiple private funds and the underlying residential real estate assets of the funds, as well as property management services to third party owners.
In connection with the MPC Acquisition, RMR LLC started providing management services through MPC and its subsidiaries to multiple private funds and the underlying residential real estate assets of the funds, as well as property management services to third party owners.
We compete with other businesses in the real estate management and asset management businesses. Many of these competitors may have greater financial, technical, marketing and other resources than we or our clients have. Such competitors may also enjoy significant competitive advantages that result from, among other things, a lower cost of capital, greater business scale and enhanced operating efficiencies.
Many of these competitors may have greater financial, technical, marketing and other resources than us or our clients. Such competitors may also enjoy significant competitive advantages that result from, among other things, a lower cost of capital, greater business scale and enhanced operating efficiencies.
As of September 30, 2024, DHC owned 368 properties located in 36 states and the District of Columbia. • ILPT (Nasdaq: ILPT) owns and leases industrial and logistics properties.
As of September 30, 2025, DHC owned 335 properties located in 34 states and the District of Columbia. • ILPT (Nasdaq: ILPT) owns and leases industrial and logistics properties.
Since the founding of RMR LLC in 1986, we have substantially grown our assets under management and the number and variety of real estate businesses we manage. As of September 30, 2024, we had $40.9 billion of assets under management, including over 2,000 properties. The synergies among our clients may also facilitate their and our growth.
Since the founding of RMR LLC in 1986, we have substantially grown our assets under management and the number and variety of real estate businesses we manage. As of September 30, 2025, we had $39.0 billion of assets under management, including approximately 1,900 properties. The synergies among our clients may also facilitate their and our growth.
Portnoy beneficially owned (including through ABP Trust), in aggregate, (i) 211,561 shares of Class A common stock of RMR Inc., or Class A Common Shares; (ii) all the outstanding shares of Class B-1 common stock of RMR Inc., or Class B-1 Common Shares; and (iii) all the outstanding shares of Class B-2 common stock of RMR Inc., or Class B-2 Common Shares.
As of September 30, 2025, Adam Portnoy beneficially owned (including through ABP Trust), in aggregate, (i) 245,361 shares of Class A common stock of RMR Inc., or Class A Common Shares; (ii) all the outstanding shares of Class B-1 common stock of RMR Inc., or Class B-1 Common Shares; and (iii) all the outstanding shares of Class B-2 common stock of RMR Inc., or Class B-2 Common Shares.
Employees and Equal Opportunity As of September 30, 2024, RMR LLC employed over 1,000 real estate professionals, including 31% in our corporate offices and 69% across more than 35 offices throughout the United States. The average tenure of our employees was 5 years. Our employees are the foundation of our success and in many ways our most critical asset.
Employees and Equal Opportunity As of September 30, 2025, RMR LLC employed nearly 900 real estate professionals, including 36% in our corporate offices and 64% across more than 30 offices throughout the United States. The average tenure of our employees was 6 years. Our employees are the foundation of our success and in many ways our most critical asset.
In 2 Table of Contents recent years, we sought to expand the sources of capital underlying our assets under management, with our Private Capital clients representing $12.8 billion of our assets under management as of September 30, 2024, an increase of $11.1 billion from September 30, 2021.
In recent years, we sought to expand the sources of capital underlying our assets under management, with our Private Capital clients representing $12.3 billion of our assets under management as of September 30, 2025, an increase of $11.0 billion from September 30, 2021. • Quality and Depth of Management .
In addition, each of ABP Trust’s and Sonesta’s agreement provides that any disputes, as defined in those agreements, arising out of or relating to the agreement or the provision of services pursuant thereto, upon the demand of a party to the dispute, shall be subject to mandatory arbitration in accordance with procedures provided in the agreement. 6 Table of Contents RMR Residential provides management services to properties owned by third parties and to four funds through its property management and investment management agreements.
In addition, each of ABP Trust’s and Sonesta’s agreement provides that any disputes, as defined in those agreements, arising out of or relating to the agreement or the provision of services pursuant thereto, upon the demand of a party to the dispute, shall be subject to mandatory arbitration in accordance with procedures provided in the agreement.
A subsidiary of ABP Trust owns 15,000,000 redeemable Class A Units, representing approximately 47.1% of the economic interest of RMR LLC. Adam D.
A wholly owned subsidiary of ABP Trust owns 15,000,000 redeemable Class A Units, representing approximately 46.8% of the economic interest of RMR LLC.
As of September 30, 2024, SVC owned 959 properties (214 hotels and 745 net lease properties) located in 46 states, the District of Columbia, Puerto Rico and Canada. RMR LLC’s wholly owned subsidiary, Tremont Realty Capital LLC, or Tremont, an investment adviser registered with the SEC, provides advisory services for Seven Hills Realty Trust, or SEVN.
As of September 30, 2025, OPI owned 124 properties located in 29 states and the District of Columbia. RMR LLC’s wholly owned subsidiary, Tremont Realty Capital LLC, or Tremont, an investment adviser registered with the SEC, provides advisory services for Seven Hills Realty Trust, or SEVN.
We believe our compensation and benefits are best in class and are consistent with companies in the alternative asset management industry. We periodically review the effectiveness and competitiveness of our compensation program.
Our compensation is designed to motivate and retain employees and align their interests with those of our clients. We believe our compensation and benefits are best in class and are consistent with companies in the alternative asset management industry. We periodically review the effectiveness and competitiveness of our compensation program.
We are an equal opportunity employer, with all qualified applicants receiving consideration for employment without regard to race, color, religion, sex, sexual orientation, gender identity, national origin, disability or protected veteran status. Throughout our organization, including our Board, we are committed to racial equality and fostering a culture of diversity and inclusion.
We are an equal opportunity employer, with all qualified applicants receiving consideration for employment without regard to race, color, religion, sex, sexual orientation, gender identity, national origin, disability or protected veteran status.
Our organization is focused on the assets of our clients and we blend long-term strategic vision with careful execution of day-to-day operations to optimize efficiency and foster the sustainable growth of our clients.
Moreover, significant insider ownership and the structure of the contracts with our clients provide a strong alignment of interests with our clients and with public shareholders. Our organization is focused on the assets of our clients and we blend long-term strategic vision with careful execution of day-to-day operations to optimize efficiency and foster the sustainable growth of our clients.
As of September 30, 2024, RMR Inc. owned 15,846,025 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 represent approximately 52.9% of the economic interest of RMR LLC.
As of September 30, 2025, RMR Inc. owned 16,063,495 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 represent approximately 53.2% of the economic interest of RMR LLC.
SEVN competes on a national and regional 8 Table of Contents basis with a variety of institutional investors, including other REITs, specialty finance companies, public and private funds (including funds or investors that we or our affiliates may sponsor, advise or manage), banks, credit unions, insurance companies and other financial institutions.
SEVN competes on a national and regional basis with various entities, including other REITs, specialty finance companies, public and private funds (including funds or investors that we or our affiliates may sponsor, advise or manage), banks, credit unions, insurance companies, partnerships, developers and other financial institutions. We compete with other businesses in the real estate management and asset management businesses.
Our Management Agreements with Advisory Clients Tremont is party to a management agreement with SEVN. Pursuant to this agreement, Tremont provides SEVN with a continuous investment program, makes day to day investment decisions and generally manages the business affairs of SEVN in accordance with SEVN’s investment objectives and policies.
Pursuant to this agreement, Tremont provides SEVN with a continuous investment program, makes day to day investment decisions and generally manages the business affairs of SEVN in accordance with SEVN’s investment objectives and policies. Tremont is compensated pursuant to its management agreement with SEVN at an annual rate of 1.5% of equity, as defined in the agreement.
The investment management agreements generally provide for fees that are based on the lesser of a percentage of invested capital and a fixed fee ranging from $100 to $200 annually.
The investment management agreements generally provide for fees that are based on the lesser of a percentage of invested capital and a fixed fee ranging from $100 to $200 annually. RMR LLC (through certain of its subsidiaries) may also earn acquisition fees and a carried interest if certain investment returns are met.
A Managed Equity REIT is not required to pay any termination fee if it terminates its business or property management agreements for cause, or as a result of a manager change of control, in each case as defined in such agreements.
If a Managed Equity REIT terminates a management agreement for a performance reason, as defined in the agreement, the Managed Equity REIT is obligated to pay RMR LLC the termination fee calculated as described above, but assuming a remaining term of ten years. 4 Table of Contents A Managed Equity REIT is not required to pay any termination fee if it terminates its business or property management agreements for cause, or as a result of a manager change of control, in each case as defined in such agreements.
DHC, ILPT, OPI and SVC are collectively referred to as the Managed Equity REITs. As manager of the Managed Equity REITs, we are responsible for implementing investment strategies and managing day-to-day operations, subject to supervision and oversight by each Managed Equity REIT’s board of trustees.
As manager of the Managed Equity REITs, we are responsible for implementing investment strategies and managing day-to-day operations, subject to supervision and oversight by each Managed Equity REIT’s board of trustees. The Managed Equity REITs have no employees, and we provide the personnel and services necessary for each Managed Equity REIT to conduct its business.
For a discussion of our organizational structure, see Part I, Item 1 “Business – Our Organizational Structure” in our Annual Report on Form 10-K for the fiscal year ended September 30, 2019 . 7 Table of Contents Regulation We and our clients are subject to supervision and regulation by state, federal and non-U.S. governmental authorities and are subject to various laws and judicial and administrative decisions imposing various requirements and restrictions upon the ways in which we and our clients do business including various requirements for public disclosure of our and their activities.
Regulation We and our clients are subject to supervision and regulation by state, federal and non-U.S. governmental authorities and are subject to various laws and judicial and administrative decisions imposing various requirements and restrictions upon the ways in which we and our clients do business including various requirements for public disclosure of our and their activities.
Within their first year, managers complete the workshop and learn how to effectively delegate, solve problems and give meaningful performance feedback. 10 Table of Contents • Tuition Reimbursement Program: We offer tuition assistance up to $20,000 annually for work-related education from accredited colleges and universities in order to deepen employees’ skill sets and support personal enrichment. • Analyst Accelerator Internship Program: We established an Analyst Accelerator Internship Program which is designed to attract early career talent to our industry from backgrounds underrepresented in real estate.
Within their first year, managers complete the workshop and learn how to effectively delegate, solve problems and give meaningful performance feedback. • Tuition Reimbursement Program: We offer tuition assistance up to $20,000 annually for work-related education from accredited colleges and universities in order to deepen employees’ skill sets and support personal enrichment. • RMR Internship Programs: We offer hands-on experience across a wide array of disciplines that are critical to the success of our organization.
We have also assisted our clients to grow by successfully accessing the capital markets; since our founding in 1986, our clients have successfully completed over $46.0 billion of financing in approximately 190 capital raising transactions. • Alignment of Interests .
Since our founding in 1986, our clients have successfully completed nearly $47.0 billion of equity and debt financing in over 190 capital raising transactions. • Alignment of Interests .
As of September 30, 2024, OPI owned 145 properties located in 30 states and the District of Columbia. • SVC (Nasdaq: SVC) owns a diverse portfolio of hotels and service-focused retail net lease properties.
As of September 30, 2025, ILPT owned 411 properties, including 226 buildings, leasable land parcels and easements in Oahu, Hawaii and 185 properties located in 38 other states. • SVC (Nasdaq: SVC) owns a diverse portfolio of hotels and service-focused retail net lease properties.
We have an active pipeline of commercial real estate development projects and maintain a green and energy-efficient equipment purchasing guideline which mandates the use of high energy efficiency equipment and environmentally friendly materials for new developments and major asset refurbishments.
We have also exceeded our goal of achieving a 50% waste diversion rate from landfills by the end of 2025, with a 51% diversion rate to date. We maintain a green and energy-efficient equipment purchasing guideline which mandates the use of high energy efficiency equipment and environmentally friendly materials for new developments and major asset refurbishments.
Human Capital Resources and Governance We are led by an experienced management team with proven ability to manage and grow a resilient business. Moreover, significant insider ownership and the structure of the contracts with our clients provide a strong alignment of interests with our clients and with public shareholders.
We also achieved our 2028 goal of certifying 50% of our managed square feet through LEED building certifications by certifying 53% of our managed square feet to date. Human Capital Resources and Governance We are led by an experienced management team with proven ability to manage and grow a resilient business.
In 2023, the honors achieved by our clients included 70 BOMA 360 Certified Properties, 88 ENERGY STAR Certified Properties, 87 LEED Certified Properties and 22 National Wildlife Sanctuary Sites Certified Properties.
In 2024, the honors achieved by our clients included 92 BOMA 360 Certified Properties, 88 ENERGY STAR Certified Properties, 90 LEED Certified Properties and 25 National Wildlife Sanctuary Sites Certified Properties. Finally, for the fourth and fifth year in a row, we and OPI, respectively, earned Partner of the Year 10 Table of Contents Sustained Excellence honors from Energy Star.
Board Diversity As of September 30, 2024, our Board of Directors composition included 50% of members from underrepresented communities, including 33% female and 17% African American. Employee Engagement, Education and Training Our employee engagement initiatives align with our goal of being an employer of choice with a thriving workforce that encourages career enrichment and positions us for growth.
Employee Engagement, Education and Training Our employee engagement initiatives align with our goal of being an employer of choice with a thriving workforce that encourages career enrichment and positions us for growth. Our programs are carefully designed for hiring, developing and retaining the best talent in the real estate industry.
Our senior management has worked together through several business cycles in which they acquired, financed, managed and disposed of real estate assets and started real estate businesses. We are a vertically integrated manager and as of September 30, 2024, we employed over 1,000 real estate professionals in more than 35 offices throughout the United States.
Our highly qualified and experienced management team provides a broad base of deep expertise to our clients. Our senior management has worked together through several business cycles in which they acquired, financed, managed and disposed of real estate assets and started real estate businesses.
As of September 30, 2024, ILPT owned 411 properties, including 226 buildings, leasable land parcels and easements in Oahu, Hawaii and 185 properties located in 38 other states. • OPI (Nasdaq: OPI) owns office properties primarily leased to single tenants and those with high credit quality characteristics.
As of September 30, 2025, SVC owned 912 properties (160 hotels and 752 net lease properties) located in 46 states, the District of Columbia, Puerto Rico and Canada. • OPI (OTCPK: OPITS) owns office properties primarily leased to single tenants and those with high credit quality characteristics.
Relationships with programs like the University of Massachusetts Amherst Real Estate Program, involvement with Historically Black Colleges and Universities, and engagement with women’s career forums all amplify our outreach efforts to develop a robust and diverse talent pipeline. • Engineering Apprenticeship Program: Given the increasing challenges within the real estate industry of attracting qualified engineers throughout the country, we made it a strategic focus to develop the next generation of qualified building engineers.
Interns have the opportunity to contribute to and learn from teams operating within our accounting, asset management, real estate development, energy and sustainability, information technology, investor relations and human resources departments. • Engineering Apprenticeship Program: Given the increasing challenges within the real estate industry of attracting qualified engineers throughout the country, we made it a strategic focus to develop the next generation of qualified building engineers.
Removed
The Managed Equity REITs have no employees, and we provide the personnel and services necessary for each Managed Equity REIT to conduct its business.
Added
DHC, ILPT, SVC and OPI are collectively referred to as the Managed Equity REITs. OPI’s securities were previously listed on Nasdaq. Effective as of the opening of business on October 6, 2025, OPI’s securities were delisted from Nasdaq and listed on OTCPK.
Removed
During the fiscal year ended September 30, 2024, we executed on this growth strategy through the acquisition of MPC, which added approximately $5.5 billion in assets under management as of the Acquisition Date. • Quality and Depth of Management . Our highly qualified and experienced management team provides a broad base of deep expertise to our clients.
Added
RMR LLC also provides management services to AlerisLife Inc., or AlerisLife, an owner and operator of senior living communities, many of which are owned by DHC.
Removed
If a Managed Equity REIT terminates a management agreement for a performance reason, as defined in the agreement, the Managed Equity REIT is obligated to pay RMR LLC the termination fee calculated as described above, but assuming a remaining term of ten years.
Added
On September 3, 2025, AlerisLife announced that it had entered into agreements to transition the management of its senior living communities to third party operators and expects to sell all of its assets and wind down its business and operations by June 30, 2026. RMR LLC will continue to provide management services through the wind down period.
Removed
Also, under each property management agreement, the Managed Equity REIT pays certain allocable expenses of RMR LLC in the performance of its duties, including wages for onsite property management personnel and allocated costs of centralized property and construction management services.
Added
On December 19, 2023, or the MPC Acquisition Date, RMR LLC acquired MPC Partnership Holdings LLC, or MPC, or the MPC Acquisition.
Removed
Tremont is compensated pursuant to its management agreement with SEVN at an annual rate of 1.5% of equity, as defined in the agreement.
Added
We are a vertically integrated manager and as of September 30, 2025, we employed nearly 900 real estate professionals in more than 30 offices throughout the United States. We have also assisted our clients to grow by successfully accessing the capital markets.
Removed
Finally, for the sixth year in a row, we received the 2024 ENERGY STAR Partner of the Year Award, and for the seventh year in a row, OPI received the 2024 ENERGY STAR Partner of the Year Award.
Added
On October 30, 2025, OPI, and certain of OPI’s subsidiaries, commenced voluntary cases under chapter 11 of title 11 of the United States Code in the United States Bankruptcy Court for the Southern District of Texas.
Removed
We have made diversity and inclusion an important part of our hiring, retention and development programs. As of September 30, 2024, 39% of our employees were women and 44% were members of minority communities underrepresented in commercial real estate.
Added
In connection with the OPI chapter 11 cases, on October 30, 2025, RMR LLC, in its capacity as manager of OPI, entered into a restructuring support agreement with OPI, certain of OPI’s lenders and certain of OPI’s subsidiaries.
Removed
Our programs are carefully designed for hiring, developing and retaining the best talent in the real estate industry. In connection with the acquisition of MPC, we added approximately 500 employees and integrated these employees into our organization. Our compensation is designed to motivate and retain employees and align their interests with those of our clients.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

101 edited+35 added−21 removed113 unchanged
Biggest changeFor more information see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Overview.” Risks to our clients, in addition to the risks noted elsewhere in this Annual Report on Form 10-K, include, but are not limited to, the following: • adverse economic and market conditions; • the inability of our clients’ tenants, managers and borrowers to weather the ongoing adverse economic conditions, including uncertainty surrounding interest rates and sustained high interest rates, prolonged inflation, economic downturn and possible recession and thereby impair their ability to pay rent and returns and make loan payments; 19 Table of Contents • the inability of our clients to access debt and equity capital on attractive terms, or at all which could reduce our clients’ ability to pursue acquisition and development opportunities and refinance existing debt, and reduce our clients’ returns from acquisition and development activities and increase their future interest expense; • some of our clients have a substantial amount of debt and are subject to additional risks, including the inability to refinance maturing debt and the cost of any such refinanced debt, the inability to reduce debt leverage which may remain at or above current levels for an indefinite period, covenants and conditions contained in debt agreements which may restrict such clients’ operations by increasing interest expense and limiting such clients’ ability to make investments in their properties, sell properties securing the debt and pay distributions to their shareholders, potential downgrades to credit ratings and other limitations on their ability to access capital at reasonable costs or at all, including the limited availability of debt capital to office and healthcare REITs in general ; • our clients face competition for tenants and customers at substantially all of their properties and competing properties may be more attractive to tenants and customers; • changing market, consumer and workplace practices and trends that have and could continue to result in decreased demand for office space, business travel, hotel stays and conference facilities; • our clients face significant competition for investment opportunities from other investors, some of which have greater financial resources, including publicly traded REITs, non-traded REITs, insurance companies, banking firms, private institutional funds, private equity funds and other investors; • a sustained period of high interest rates and inflation may increase operating costs, reduce the value of properties, increase cost of capital and make raising capital difficult for our clients whereas low interest rates may increase the amount of debt capital available, which may result in declining capitalization rates for property acquisitions and impede the growth of our clients’ businesses; • RMR Residential’s inability to grow its business and realize expected returns within the anticipated timeframe; • Tremont Realty Capital’s ability to identify and close suitable investments for our Real Estate Lending Venture and SEVN and to monitor, service and administer existing investments; • our Real Estate Lending Venture’s ability to obtain third party investors in order to attain its target leverage levels, to make additional investments and to increase potential returns; • changing general economic and financial market conditions could significantly reduce the value of the real estate, loans and other investments of our clients and reduce the amounts earned on those investments; • the real estate and real estate related investments of our clients may be less liquid than other investments and the ability of our clients to adjust their portfolios in response to changes in economic or other conditions may be limited; • our operating company clients’ ability to attract, retain and motivate sufficient qualified personnel in a challenging labor market and to effectively manage their labor costs; • changes in investor preferences or market conditions could limit our clients’ ability to raise capital to competitively maintain their properties and operations or make new investments; • geopolitical instability and tensions (such as the ongoing wars in Ukraine and the Middle East); • shareholder activism, complaints about management strategies and structures, corporate governance and other matters may divert management attention and be disruptive to our clients’ operations; • ESG initiatives, requirements and market expectations may impose additional costs and expose our clients to new risks; • changes in tax laws, regulation or accounting rules may make certain types of investments in or by our clients less valuable; • our clients are exposed to environmental, building and other laws, natural disasters, adverse impacts from global climate change and other factors beyond their control as a result of their investment in real estate; 20 Table of Contents • public health safety events, such as pandemics, may adversely impact our clients’ business, operating results, financial condition and value; • our clients have significant investments in certain types of assets, such as hotels, senior living communities and office, industrial and healthcare properties, and market changes which impact these specific types of assets (e.g., a reduction in levels of business travel and occupancy at hotels and senior living communities as a result of adverse economic and market conditions, tenant and customer trends, new competition for short term accommodations, changes in Medicare and Medicaid rates and other regulatory matters, an insufficient recovery or a further reduction in the demand for office space as a result of remote, hybrid and other flexible working arrangements, and declining economic activity, oversupply of industrial buildings or technological or market practice changes, such as offshoring, reducing the demand for industrial properties) may adversely impact certain of the clients’ ability to maintain or grow their businesses; • our clients with significant investments in office space have and may continue to experience declines in demand for office space consistent with declines in the office space industry generally, as a result of remote, hybrid and other flexible working arrangements which have adversely impacted such clients operating results and financial condition; • the failure of a Managed REIT to continue to qualify as a REIT would subject it to U.S. federal income tax and reduce cash available for distributions to its shareholders, adversely impacting its ability to raise capital and operate its business; • the failure of our clients to comply with applicable laws and regulations could result in legal liability, regulatory fines and the loss of, or an inability to obtain, licenses required to operate their businesses; and • complying with REIT requirements may cause a Managed REIT to forgo otherwise attractive opportunities or liquidate otherwise attractive investments.
Biggest changeFor more information see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Overview.” Risks to our clients, in addition to the risks noted elsewhere in this Annual Report on Form 10-K, include, but are not limited to, the following: • adverse economic and market conditions; • the inability of our clients’ tenants, managers and borrowers to weather adverse economic conditions, including uncertainty surrounding interest rates and sustained high interest rates, inflation, changes in tariffs and trade policies, economic downturn and possible recession and thereby impair their ability to pay rent and returns and make loan payments; • the inability of our clients to access debt and equity capital on attractive terms, or at all which could reduce our clients’ ability to pursue acquisition and development opportunities and refinance existing debt, and reduce our clients’ returns from acquisition and development activities and increase their future interest expense; • some of our clients have a substantial amount of debt and are subject to additional risks, including the inability to refinance maturing debt and the cost of any such refinanced debt, the inability to reduce debt leverage which may remain at or above current levels for an indefinite period, covenants and conditions contained in debt agreements which may restrict such clients’ operations by increasing interest expense and limiting such clients’ ability to make investments in their properties, sell properties securing the debt and pay distributions to their shareholders, potential downgrades to credit ratings and other limitations on their ability to access capital at reasonable costs or at all, including the limited availability of debt capital to office and healthcare REITs in general; • OPI’s ability to emerge from bankruptcy, continue as a going concern and improve its financial results; • our clients face competition for tenants and customers at substantially all of their properties and competing properties may be more attractive to tenants and customers; • changing market, consumer and workplace practices and trends that have and could continue to result in decreased demand for office space and hotel stays; • our clients face significant competition for investment opportunities from other investors, some of which have greater financial resources, including publicly traded REITs, non-traded REITs, insurance companies, banking firms, private institutional funds, private equity funds and other investors; 21 Table of Contents • a sustained period of high interest rates and inflation may increase operating costs, reduce the value of properties, increase cost of capital and make raising capital difficult for our clients whereas low interest rates may increase the amount of debt capital available, which may result in declining capitalization rates for property acquisitions and impede the growth of our clients’ businesses; • the ability of RMR Residential to grow its business and acquire new properties while successfully operating its managed properties and finding quality tenants for its buildings; • the ability of our value-add retail investments to successfully execute their business plans; • the previously authorized sale of our two floating rate mortgage loans to SEVN might not occur, or might not occur on the expected terms; • SEVN’s ability to raise additional funds for investment through its proposed rights offering; • changing general economic and financial market conditions could significantly reduce the value of the real estate, loans and other investments of our clients and reduce the amounts earned on those investments; • the real estate and real estate related investments of our clients may be less liquid than other investments and the ability of our clients to adjust their portfolios in response to changes in economic or other conditions may be limited and certain of our clients may not be able to sell properties previously announced for sale at targeted prices; • our operating company clients’ ability to attract, retain and motivate sufficient qualified personnel in a challenging labor market and to effectively manage their labor costs; • changes in investor preferences or market conditions could limit our clients’ ability to raise capital to competitively maintain their properties and operations or make new investments; • geopolitical instability and tensions (such as the ongoing wars in Ukraine and the Middle East); • shareholder activism, complaints about management strategies and structures, corporate governance and other matters may divert management attention and be disruptive to our clients’ operations; • ESG and anti-ESG initiatives, requirements and market expectations may impose additional costs and expose our clients to new risks; • changes in tax laws, regulation or accounting rules may make certain types of investments in or by our clients less valuable; • our clients are exposed to environmental, building and other laws, natural disasters, adverse impacts from global climate change and other factors beyond their control as a result of their investment in real estate; • public health safety events, such as pandemics, may adversely impact our clients’ business, operating results, financial condition and value; • our clients have significant investments in certain types of assets, such as hotels, senior living communities and office, industrial and healthcare properties, and market changes which impact these specific types of assets (e.g., a reduction in levels of business travel and occupancy at hotels and senior living communities as a result of adverse economic and market conditions, tenant and customer trends, new competition for short term accommodations, changes in Medicare and Medicaid rates and other regulatory matters, a further reduction in the demand for office space and an oversupply of office space as a result of remote, hybrid and other flexible working arrangements, and declining economic activity, oversupply of industrial buildings or technological or market practice changes, such as offshoring, reducing the demand for industrial properties) may adversely impact certain of the clients’ ability to maintain or grow their businesses; • our clients with significant investments in office space have and may continue to experience declines in demand for office space consistent with declines in the office space industry generally, as a result of remote, hybrid and other flexible working arrangements which have adversely impacted such clients operating results and financial condition; 22 Table of Contents • the failure of a Managed REIT to continue to qualify as a REIT would subject it to U.S. federal income tax and reduce cash available for distributions to its shareholders, adversely impacting its ability to raise capital and operate its business; • the failure of our clients to comply with applicable laws and regulations could result in legal liability, regulatory fines and the loss of, or an inability to obtain, licenses required to operate their businesses; and • complying with REIT requirements may cause a Managed REIT to forgo otherwise attractive opportunities or liquidate otherwise attractive investments.
Uncertainty surrounding interest rates and sustained high interest rates may significantly reduce our revenues or impede our growth. Uncertainty surrounding interest rates and sustained high interest rates or interest rate reductions may significantly reduce our revenues or impede our growth.
Uncertainty surrounding interest rates and sustained high interest rates or interest rate reductions may significantly reduce our revenues or impede our growth.
There is uncertainty in the legal and regulatory landscape for AI, which is not fully developed, and any laws, regulations or industry standards adopted in response to the emergence of AI may be burdensome, could entail significant costs, and may restrict or impede our ability to successfully develop, adopt and deploy AI technologies efficiently and effectively.
There is uncertainty in the legal and regulatory landscape for AI Technologies, which is not fully developed, and any laws, regulations or industry standards adopted in response to the emergence of AI Technologies may be burdensome, could entail significant costs, and may restrict or impede our ability to successfully develop, adopt and deploy AI Technologies efficiently and effectively.
Unless we otherwise consent in writing, the sole and exclusive forum for claims that arise under the Securities Act, is the federal district courts of the United States of America, to the fullest extent of the law.
Unless we otherwise consent in writing, to the fullest extent of the law, the sole and exclusive forum for claims that arise under the Securities Act, is the federal district courts of the United States of America.
If we and our clients fail to comply with ESG related regulations and to satisfy the expectations of investors and our clients’ tenants, managers, borrowers, customers, employees and other stakeholders or our or our clients’ announced goals and other initiatives are not executed as planned, our and our clients’ reputation and financial results could be adversely affected, the management fees we may earn from our clients may decline, and our revenues, results of operations and ability to grow our business may be negatively impacted.
If we and our clients fail to comply with ESG and anti-ESG related regulations and to satisfy the expectations of investors and our and our clients’ tenants, managers, borrowers, customers, employees and other stakeholders or our or our clients’ announced goals and other initiatives are not executed as planned, our and our clients’ reputation and financial results could be adversely affected, the management fees we may earn from our clients may decline, and our revenues, results of operations and ability to grow our business may be negatively impacted.
If the content, analyses or recommendations that AI applications assist in producing are, or are alleged to be, deficient, inaccurate or biased, such as due to limitations in AI algorithms, insufficient or biased base data or flawed training methodologies, our business, financial condition, results of operations and reputation may be adversely affected.
If the content, analyses or recommendations that AI Technologies applications assist in producing are, or are alleged to be, deficient, inaccurate or biased, such as due to limitations in AI Technologies algorithms, insufficient or biased base data or flawed training methodologies, our business, financial condition, results of operations and reputation may be adversely affected.
Substantially all of the voting power in RMR Inc. and a majority of the economic interest in RMR LLC is held by ABP Trust, an entity controlled by its sole trustee, Adam D. Portnoy. Mr. Portnoy is Chair of our Board of Directors and one of our Managing Directors and is our President and Chief Executive Officer.
Substantially all of the voting power in RMR Inc. and a majority of the economic interest in RMR LLC is held by ABP Trust, an entity controlled by its sole trustee, Adam Portnoy. Mr. Portnoy is Chair of our Board of Directors and one of our Managing Directors and is our President and Chief Executive Officer.
In addition, we or our clients may incur significant costs in attempting to comply with regulatory requirements, ESG policies or third party expectations or demands. We and our clients are subject to risks from adverse weather, natural disasters and adverse impact from global climate change.
In addition, we or our clients may incur significant costs in attempting to comply with regulatory requirements, ESG and anti-ESG policies or third party expectations or demands. We and our clients are subject to risks from adverse weather, natural disasters and adverse impact from global climate change.
Also, our competitors or other third parties may incorporate AI into their products and services more quickly or more successfully than us, which could impair our ability to compete effectively and adversely affect our results of operations.
Also, our competitors or other third parties may incorporate AI Technologies into their products and services more quickly or more successfully than us, which could impair our ability to compete effectively and adversely affect our results of operations.
We and our clients are party to transactions with related parties, including with entities controlled by Adam D. Portnoy and entities that we manage. For example, because of the relationships among us, Adam D. Portnoy, and our clients, the agreements we are party to with them, including our management agreements, are among related parties.
We and our clients are party to transactions with related parties, including with entities controlled by Adam Portnoy and entities that we manage. For example, because of the relationships among us, Adam Portnoy, and our clients, the agreements we are party to with them, including our management agreements, are among related parties.
Portnoy, as sole trustee of ABP Trust, holds more than 50.0% of the voting power of our shares eligible to vote. As a result, we are a “controlled company” under the Nasdaq listing rules.
Adam Portnoy, as sole trustee of ABP Trust, holds more than 50.0% of the voting power of our shares eligible to vote. As a result, we are a “controlled company” under the Nasdaq listing rules.
A discussion of the businesses and the risks associated with the businesses of our clients that are SEC registrants is contained in the reports filed by our clients, including in the section captioned “Risk Factors” in each Managed REIT’s Annual Report on Form 10-K for the year ended December 31, 2023, as those Risk Factors may have been updated or supplemented in those companies’ Quarterly Reports on Form 10-Q filed subsequently.
A discussion of the businesses and the risks associated with the businesses of our clients that are SEC registrants is contained in the reports filed by our clients, including in the section captioned “Risk Factors” in each Managed REIT’s Annual Report on Form 10-K for the year ended December 31, 2024, as those Risk Factors may have been updated or supplemented in those companies’ Quarterly Reports on Form 10-Q filed subsequently.
Our ability to generate revenue from RMR Residential depends on our execution of acquisition opportunities on behalf of the investment funds it manages in the multifamily real estate sector.
Our ability to generate revenue from RMR Residential depends on our execution of acquisition opportunities on our behalf and on behalf of the investment funds it manages in the multifamily real estate sector.
Copies of these reports are available at the SEC’s website, www.sec.gov. Risks Related to Our Securities A trading market that provides adequate liquidity may not be sustained for our Class A Common Shares and the market price of our Class A Common Shares may fluctuate widely. Our public float represents about 48.3% of the economic interest in RMR LLC.
Copies of these reports are available at the SEC’s website, www.sec.gov. Risks Related to Our Securities A trading market that provides adequate liquidity may not be sustained for our Class A Common Shares and the market price of our Class A Common Shares may fluctuate widely. Our public float represents about 48.5% of the economic interest in RMR LLC.
Risks Related to Our Organization and Structure We are a “controlled company” within the meaning of the Nasdaq listing rules and, as a result, qualify for, and may rely on, exemptions from certain corporate governance requirements. Our shareholders will not have the same protections afforded to shareholders of companies that are subject to such requirements. Adam D.
Risks Related to Our Organization and Structure We are a “controlled company” within the meaning of the Nasdaq listing rules and, as a result, qualify for, and may rely on, exemptions from certain corporate governance requirements. Our shareholders will not have the same protections afforded to shareholders of companies that are subject to such requirements.
We have entered into a tax receivable agreement, dated June 5, 2015, by and among RMR Inc., RMR LLC and ABP Trust that provides for the payment by RMR Inc. to ABP Trust of 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. actually realizes as a result of (a) the increases in tax basis attributable to its 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 25 Table of Contents agreement.
We have entered into a tax receivable agreement, dated June 5, 2015, by and among RMR Inc., RMR LLC and ABP Trust that provides for the payment by RMR Inc. to ABP Trust of 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. actually realizes as a result of (a) the increases in tax basis attributable to its 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.
These conditions may also give rise to an increase in defaults under our clients’ leases and loans, negatively impact market capitalizations, shareholder returns, rent income and construction projects for the Managed Equity REITs and acquisition and disposition activity of, financial performance of and returns for our Private Capital clients.
These conditions may also give rise to an increase in defaults under our clients’ leases and loans, negatively impact market capitalizations, shareholder returns, rental income and construction projects for the Managed Equity REITs and acquisition and disposition activity of, financial performance of and returns for our Private Capital clients.
The market price of our Class A Common Shares may fluctuate widely, depending upon many factors, some of which are beyond our control, including, but not limited to, the following: • market and economic volatility due to adverse economic, geopolitical and public health conditions and the resulting market disruption on us and our clients; • declines in the market prices of our clients’ common shares; • a relatively thin trading market for our Class A Common Shares could cause trades of small blocks of shares to have a significant impact on the price of our Class A Common Shares; • our quarterly or annual earnings, or those of other comparable companies; • actual or anticipated fluctuations in our operating results; • changes in accounting standards, policies, guidance, interpretations or principles; • announcements by us, our clients or our competitors of significant investments, acquisitions or dispositions; 21 Table of Contents • the inclusion, exclusion, or deletion of our Class A Common Shares from any trading indices; • the failure of securities analysts to cover our Class A Common Shares; • changes in earnings estimates by securities analysts or in our ability to meet those estimates; • the operating and stock price performance of other comparable companies; • overall market fluctuations; and • general economic conditions.
The market price of our Class A Common Shares may fluctuate widely, depending upon many factors, some of which are beyond our control, including, but not limited to, the following: • market and economic volatility due to adverse economic and geopolitical conditions and the resulting market disruption on us and our clients; • declines in the market prices of our clients’ common shares; • a relatively thin trading market for our Class A Common Shares could cause trades of small blocks of shares to have a significant impact on the price of our Class A Common Shares; • our quarterly or annual earnings, or those of other comparable companies; • actual or anticipated fluctuations in our operating results; • changes in accounting standards, policies, guidance, interpretations or principles; • announcements by us, our clients or our competitors of significant investments, acquisitions or dispositions; • the inclusion, exclusion, or deletion of our Class A Common Shares from any trading indices; • the failure of securities analysts to cover our Class A Common Shares; • changes in earnings estimates by securities analysts or in our ability to meet those estimates; • the operating and stock price performance of other comparable companies; • overall market fluctuations; and • general economic conditions.
The cybersecurity risks to us, our clients and third party vendors are heightened by, among other things, the evolving nature of the threats faced, advances in computer capabilities, new discoveries in the field of cryptography and new and 17 Table of Contents increasingly sophisticated methods used to perpetrate illegal or fraudulent activities against us, including cyberattacks, email or wire fraud and other attacks exploiting security vulnerabilities in our or other third parties’ information technology networks and systems or operations.
The cybersecurity risks to us, our clients and third party vendors are heightened by, among other things, the evolving nature of the threats faced, advances in computer capabilities, new discoveries in the field of cryptography and new and increasingly sophisticated methods used to perpetrate illegal or fraudulent activities against us, including cyberattacks, email or wire fraud and other attacks exploiting security vulnerabilities in our or other third parties’ information technology networks and systems or operations.
Under current Maryland law, our directors and officers will not have any liability to us and our shareholders for money damages other than liability resulting from: 24 Table of Contents • actual receipt of an improper benefit or profit in money, property or services; or • active and deliberate dishonesty by the director or officer that was established by a final judgment as being material to the cause of action adjudicated.
Under current Maryland law, our directors and officers will not have any liability to us and our shareholders for money damages other than liability resulting from: • actual receipt of an improper benefit or profit in money, property or services; or • active and deliberate dishonesty by the director or officer that was established by a final judgment as being material to the cause of action adjudicated.
For example, in the fiscal year ended September 30, 2019, our incentive business management fees earned from the Managed Equity REITs was 39.9% of our total management and advisory services revenues, and we have not subsequently earned any incentive business management fees from the Managed Equity REITs.
For example, in the fiscal year ended September 30, 2019, our incentive business management fees earned from the Managed Equity REITs was 39.9% of our total management and advisory services revenues, and through fiscal 2025 we have not subsequently earned any incentive business management fees from the Managed Equity REITs.
If our use of AI becomes controversial, we may experience brand or reputational harm, competitive harm, or legal liability.
If our use of AI Technologies becomes controversial, we may experience brand or reputational harm, competitive harm, or legal liability.
RMR LLC’s business management agreement with each Managed Equity REIT provides for a base business management fee that is based on the lower of the average historical costs of the Managed Equity REIT’s assets under management and its average market capitalization, as calculated in accordance with the applicable business management agreement, and an incentive business management fee that is based on the Managed Equity REIT’s relative outperformance of a specified REIT total shareholder return index.
RMR LLC’s business management agreement with each Managed Equity REIT provides for a base business management fee that is based on the lower of the average historical costs of the Managed Equity REIT’s assets under management and its 14 Table of Contents average market capitalization, as calculated in accordance with the applicable business management agreement, and an incentive business management fee that is based on the Managed Equity REIT’s relative outperformance of a specified REIT total shareholder return index.
If we fail or appear to fail to deal appropriately with one or more potential or actual conflict of interest our reputation could be damaged and could have a materially adverse effect on our business, financial condition or results of operations in a number of ways, including an inability to raise additional funds and a reluctance of counterparties to do business with us.
If we fail or appear to fail to deal appropriately with one or more potential or actual conflict of interest our reputation could be damaged and could have a materially adverse effect on our business, financial condition or 25 Table of Contents results of operations in a number of ways, including an inability to raise additional funds and a reluctance of counterparties to do business with us.
These current conditions, or similar conditions existing in the future, have adversely affected, and may continue to adversely affect, our and our clients’ and their tenants and managers’ results of operations, financial condition and ability to pay dividends.
These current conditions, or similar conditions existing in the future, have adversely affected, and may continue to adversely affect, our and our clients’ and our and their tenants and managers’, as applicable, results of operations, financial condition and ability to pay dividends.
Additionally, to the extent that RMR Inc. requires funds and RMR LLC is restricted from making such distributions under applicable law or regulation or under the terms of financing or other arrangements, or is otherwise unable to provide such funds, our liquidity and financial condition could be materially adversely affected. Item 1B. Unresolved Staff Comments None.
Additionally, to the extent that RMR Inc. requires funds and RMR LLC is restricted from making such distributions under applicable law or regulation or under the terms of financing or other arrangements, or is otherwise unable to provide such funds, our liquidity and financial condition could be materially adversely affected. Item 1B. Unresolved Staff Comments None. 28 Table of Contents
In addition, because RMR Residential involves certain joint venture arrangements, investment funds and limited partnerships, we have limited flexibility and discretionary authority with respect to certain assets acquired, or management of assets assumed.
In addition, because the RMR Residential business involves certain joint venture arrangements, investment funds and limited partnerships, we have limited flexibility and discretionary authority with respect to certain assets acquired, or management of assets assumed.
The use of AI applications to support business processes carries inherent risks related to data privacy and security, such as unintended or inadvertent transmission of proprietary or sensitive information, including personal data. AI presents emerging ethical issues, and we may be unsuccessful in identifying and resolving these issues before they arise.
The use of AI Technologies applications to support business processes carries inherent risks related to data privacy and security, such as unintended or inadvertent transmission of proprietary or sensitive information, including personal data. AI Technologies present emerging ethical issues, and we may be unsuccessful in identifying and resolving these issues before they arise.
Additionally, alleged misconduct by employees providing services to properties managed by the RMR Residential business has and may in the future contribute to the termination of property management agreements with respect to affected properties. RMR LLC’s required quarterly tax distributions may limit our ability to implement our business or pursue growth opportunities.
Additionally, alleged misconduct by employees providing services to properties managed by the RMR 20 Table of Contents Residential business has and may in the future contribute to the termination of property management agreements with respect to affected properties. RMR LLC’s required quarterly tax distributions may limit our ability to implement our business or pursue growth opportunities.
Additional risks and uncertainties that we do not yet know of, or that we currently think are immaterial, may also impair our business operations or financial results. If any of the events or circumstances described in this section occur, our business, financial condition or results of operations and the trading price of our securities could decline.
Additional risks and uncertainties that we do not yet know of, or that we currently think are immaterial, may also impair our business operations or financial results. If any of the events or circumstances described in this section occur, our 13 Table of Contents business, financial condition or results of operations and the trading price of our securities could decline.
Risks Related to Our Business Unfavorable market and industry conditions may have a material adverse effect on our and our clients’ results of operations, financial condition and ability to pay dividends.
Risks Related to Our Business Unfavorable market and industry conditions have had and may continue to have a material adverse effect on our and our clients’ results of operations, financial condition and ability to pay dividends.
Portnoy is effectively able to determine the outcome of all matters requiring shareholder approval, including, but not limited to, election of our directors. Adam D. Portnoy is able to cause or prevent a change of control of RMR Inc., and this voting control could preclude any unsolicited acquisition of RMR Inc. The voting control of Adam D.
As a result of this voting control, Adam Portnoy is effectively able to determine the outcome of all matters requiring shareholder approval, including, but not limited to, election of our directors. Adam Portnoy is able to cause or prevent a change of control of RMR Inc., and this voting control could preclude any unsolicited acquisition of RMR Inc.
Sales of common shares of the Managed Equity REITs may cause a decline in the market prices of such shares, which reduces the market capitalizations and total shareholder returns of the Managed Equity REITs, which, in turn, may materially reduce the fees we earn under our business management agreements with them.
Sales of common shares of the 16 Table of Contents Managed Equity REITs may cause a decline in the market prices of such shares, which reduces the market capitalizations and total shareholder returns of the Managed Equity REITs, which, in turn, may materially reduce the fees we earn under our business management agreements with them.
Insurance may not sufficiently cover all losses sustained by us or our clients and our or their tenants, managers or borrowers. If we or our clients fail to adequately prepare for such events, our and our clients’ revenues, results of operations and financial condition may be impacted.
Insurance may not sufficiently cover all losses sustained by us or our 18 Table of Contents clients and our or their tenants, managers or borrowers. If we or our clients fail to adequately prepare for such events, our and our clients’ revenues, results of operations and financial condition may be impacted.
Some investors may use ESG factors to guide their investment strategies and, in some cases, may choose not to invest in us or our clients, or otherwise do business with us or our clients, if they believe our or their policies relating to corporate responsibility are inadequate.
Some investors may use ESG factors to guide their investment strategies and, in some cases, may choose not to invest in us or our clients, or otherwise do business with us or our clients, if they believe our policies relating to corporate responsibility are not aligned with their own policies.
Additionally, AI technology is continuously evolving, and we may incur costs to adopt and deploy AI technologies that could become obsolete earlier than expected, and there can be no assurance that we will realize the desired or anticipated benefits from AI.
Additionally, AI Technologies are continuously evolving, and we may incur costs to adopt and deploy AI Technologies that could become obsolete earlier than expected, and there can be no assurance that we will realize the desired or anticipated benefits from AI Technologies.
Further, in order to grow 14 Table of Contents the RMR Residential business we may need to raise additional capital from third party investors and our ability to raise additional capital depends on many factors, some of which are outside of our control.
Further, in order to grow the RMR Residential business we may need to raise additional capital from third party investors and our ability to raise additional capital depends on many factors, some of which are outside of our control.
In addition, the tax receivable agreement provides that, upon certain changes of control and certain breaches of the agreement that we fail to cure in accordance with the terms of the agreement, our obligations with respect to Class A Units will be accelerated.
In addition, the tax receivable agreement provides that, upon certain changes of control and certain breaches of the agreement that we fail to cure in accordance with the terms of the agreement, our obligations with respect to Class A Units will 27 Table of Contents be accelerated.
In response to significant and prolonged increases in inflation, the Federal Reserve raised interest rates eleven times during 2022 and 2023 and then paused rate increases in the fourth quarter of 2023 following the deceleration of inflationary growth.
In response to significant and prolonged increases in inflation, the Federal Reserve raised interest rates eleven times during 2022 and 2023, paused rate increases in the fourth quarter of 2023 following the deceleration of inflationary growth and then cut interest rates in September 2024.
Even if we receive a termination fee upon the termination of a management agreement with a client, we may be unable to invest the after tax proceeds from the termination fee we receive in opportunities that earn returns equal to or greater than the revenues lost as a result of the terminated management agreement.
Even if we receive a termination fee upon the termination of a management agreement with a client (to the extent applicable), we may be unable to invest the after tax proceeds from any such termination fee we receive in opportunities that earn returns equal to or greater than the revenues lost as a result of the terminated management agreement.
ABP Trust controls 100.0% of our Class B-1 Common Shares (which are exchangeable for Class A Common Shares) and Class B-2 Common Shares, some of our currently outstanding Class A Common Shares and approximately 48.6% of our Class A Units of RMR LLC (which ABP Trust may cause RMR LLC to redeem for, at our election, Class A Common Shares on a one for one basis or cash).
ABP Trust controls 100.0% of our Class B-1 Common Shares (which are exchangeable for Class A Common Shares) and Class B-2 Common Shares, some of our currently outstanding Class A Common Shares and approximately 46.8% of our Class A Units of RMR LLC (which ABP Trust may cause RMR LLC to redeem for, at our election, Class A Common Shares on a one for one basis or cash).
We have established internal policies designed to ensure that we manage our business in accordance with applicable law and regulation and in accordance with our contractual obligations. These internal policies may not be effective in all regards; and, if we fail to comply with our internal policies, we could be subjected to additional risk and liability.
We have established internal policies designed to ensure that we manage our business in accordance with applicable law and regulation and in accordance with our contractual obligations. These internal policies may not be effective in all regards; and, if we fail to 17 Table of Contents comply with our internal policies, we could be subjected to additional risk and liability.
In addition, the growth of the RMR Residential business and the time and resources necessary to resume the pace of its acquisition activity may divert our management’s attention from our other business opportunities.
In addition, the growth of the RMR Residential business and the time and resources necessary to increase its acquisition activity may divert our management’s attention from our other business opportunities.
Portnoy could deprive our shareholders of an opportunity to receive a premium for their Class A Common Shares as part of a sale of us and may affect the market price of our Class A Common Shares. 22 Table of Contents Our management agreements with the Managed Equity REITs may discourage our change of control.
The voting control of Adam Portnoy could deprive our shareholders of an opportunity to receive a premium for their Class A Common Shares as part of a sale of us and may affect the market price of our Class A Common Shares. Our management agreements with the Managed Equity REITs may discourage our change of control.
Many jurisdictions in which we operate have laws and regulations relating to data privacy, cybersecurity and protection of personal information, including, the California Consumer Privacy Act and the New York SHIELD Act.
Many jurisdictions in which we operate have laws and regulations relating to data privacy, cybersecurity and protection of personal information, including, the Maryland Online Data Privacy Act (“ MODPA ”), the California Consumer Privacy Act and the New York SHIELD Act.
We may not be able to successfully grow the RMR Residential business or the growth may be more costly or more time-consuming and complex than anticipated, and cost savings, synergies and anticipated future financial performance may not be realized or may take longer to realize than expected.
We may not be able to successfully grow the RMR Residential business or our value-add retail investments or the growth may be more costly or more time-consuming and complex than anticipated, and cost savings, synergies and anticipated future financial performance may not be realized or may take longer to realize than expected.
As an asset manager, our business, and our ability to retain and attract new clients, is dependent upon our maintaining a positive reputation in the marketplace. There is a risk that our employees could engage in misconduct that adversely affects our reputation and, hence, our business.
As an asset manager, our business, and our ability to retain and attract new clients, is dependent upon our maintaining a positive reputation in the marketplace. There is a risk that our employees or employees of businesses that we manage could engage in misconduct that adversely affects our reputation and, hence, our business.
The following is a summary of the principal risk factors described in this section: • unfavorable market and industry conditions may have a material adverse effect on our and our clients’ results of operations, financial condition and ability to pay dividends; • most of our revenues are derived from services to a limited number of clients; • our management fees from our clients are based, in general, on cost of assets, enterprise values, shareholder returns, rent income, construction projects or certain revenues, as applicable, and, accordingly our future revenues, income and cash flows will decline if the business activities, assets, enterprise values, shareholder returns, rent income, construction projects or certain revenues of our clients decline; • our revenues may be highly variable; • potential terminations of our management agreements with our clients; • our ability to successfully grow the RMR Residential business and realize our expected returns on our investment within the anticipated timeframe; • the ability of Tremont Realty Capital to identify and close suitable investments for our Real Estate Lending Venture and to monitor, service and administer existing investments; • our ability to obtain capital from third party investors in our Real Estate Lending Venture to make additional investments and to increase potential returns; • uncertainty surrounding interest rates and sustained high interest rates may significantly impact our clients and in turn adversely impact our revenues or impede our growth; • our ability to expand our business depends upon the growth and performance of our clients and our ability to obtain or create new clients for our business, including through our acquisition of new businesses, and is often dependent upon circumstances beyond our control; • our ability to continue to pay a regular quarterly dividend is dependent on many factors, including current and expected earnings and alternative uses for available cash and our Board of Directors may decide to lower our dividends; • our and our operating company clients’ ability to attract, retain and motivate sufficient qualified personnel in a challenging labor market and to effectively manage our and our operating company clients’ labor costs; • our ability to retain the services of our controlling shareholder and other key and talented personnel; • our and our clients’ risks associated with our and their costs of compliance with laws and regulations, including securities regulations, exchange listing standards and other laws and regulations affecting public companies; • our ESG initiatives, federal and state regulations, other requirements and investor expectations may impose additional costs and expose us and our clients to new risks; • risks related to the security of our network and information technology; • risks related to inflation, including inflation impacting wages and employee benefits; 12 Table of Contents • risks related to acquisitions, dispositions and other activities by or among our clients; • allegations, even if untrue, of any conflicts of interest arising from our management activities; and • risks to holders of our Class A Common Shares as a result of our dual class capital structure.
The following is a summary of the principal risk factors described in this section: • unfavorable market and industry conditions have had and may continue to have a material adverse effect on our and our clients’ results of operations, financial condition and ability to pay dividends; • most of our revenues are derived from services to a limited number of clients; • our management fees from our clients are based, in general, on cost of assets, enterprise values, shareholder returns, rental income, construction projects or certain revenues, as applicable, and, accordingly our future revenues, income and cash flows will decline if the business activities, assets, enterprise values, shareholder returns, rental income, construction projects or certain revenues of our clients decline; • our revenues may be highly variable; • potential terminations of our management agreements with our clients; • our ability to successfully grow the RMR Residential business and our value-add retail investments and realize our expected returns on our investment within the anticipated timeframe; • our ability to successfully integrate acquired businesses and realize the expected returns on our investments; • uncertainty surrounding interest rates and sustained high interest rates may significantly impact our clients and in turn adversely impact our revenues or impede our growth; • our ability to expand our business depends upon the growth and performance of our clients and our ability to obtain or create new clients for our business, including through our acquisition of new businesses, and is often dependent upon circumstances beyond our control; • our ability to continue to pay a regular quarterly dividend is dependent on many factors, including current and expected earnings and alternative uses for available cash and our Board of Directors may decide to lower our dividends; • our and our operating company clients’ ability to attract, retain and motivate sufficient qualified personnel in a challenging labor market and to effectively manage our and our operating company clients’ labor costs; • our ability to retain the services of our controlling shareholder and other key and talented personnel; • our and our clients’ risks associated with our and their costs of compliance with laws and regulations, including securities regulations, exchange listing standards and other laws and regulations affecting public companies; • our sustainability initiatives, federal and state regulations, other requirements and investor expectations may impose additional costs and expose us and our clients to new risks; • risks related to the security of our network and information technology; • risks related to inflation, including inflation impacting wages and employee benefits; • risks related to acquisitions, dispositions and other activities by us and our clients; • allegations, even if untrue, of any conflicts of interest arising from our management and investment activities; and • risks to holders of our Class A Common Shares as a result of our dual class capital structure.
Portnoy serves as the chair of the board and as a managing trustee of each Managed REIT, as a director of Sonesta (and its parent) and as the sole director of AlerisLife; certain of our other officers serve as managing trustees or directors of our clients; and all of the executive officers of the Managed REITs, one of the executive officers of AlerisLife and one of the executive officers of Sonesta is an officer and employee of ours.
In addition to serving as the Chair and a member of our Board of Directors and on our executive team, Adam Portnoy serves as the chair of the board and as a managing trustee of each Managed REIT, as a director of Sonesta (and its parent) and as the sole director of AlerisLife; certain of our other officers serve as managing trustees or directors of our clients; and all of the executive officers of the Managed REITs, one of the executive officers of AlerisLife and one of the executive officers of Sonesta is an officer and employee of ours.
Likewise, if competition for employees increases, in order to recruit and retain existing and future personnel, we may need to increase the level of compensation that we pay. We depend on our controlling shareholder and other key and talented personnel. We depend on the efforts, skills, reputations and business contacts of our controlling shareholder, Adam D.
Likewise, if competition for employees increases, in order to recruit and retain existing and future personnel, we may need to increase the level of compensation that we pay. We depend on our controlling shareholder and other key and talented personnel.
We are also responsible for managing or assisting with the regulatory aspects of certain of our clients, including the Managed REITs’ compliance with applicable REIT rules and SEVN’s maintenance of its exemption from registration under the 1940 Act.
We are also responsible for managing or assisting with the regulatory aspects of certain of our clients, including the Managed REITs’ compliance with applicable REIT rules, SEVN’s maintenance of its exemption from registration under the 1940 Act and the RMR Residential business’s compliance with regulations affecting its owned and managed residential properties.
We are subject to substantial regulation and numerous contractual obligations and internal policies, and failure to comply with these provisions could have a material adverse effect on our business, financial condition and results of operations. We are subject to substantial regulation and numerous contractual obligations and internal policies.
We are subject to substantial regulation and numerous contractual obligations and internal policies, and failure to comply with these provisions could have a material adverse effect on our business, financial condition and results of operations. We are subject to substantial regulation and numerous contractual obligations and internal policies as well as evolving interpretations of existing regulatory requirements.
If such persons engage in competitive business activities, we may have no remedy under our governing documents in these circumstances. Our governing documents do not limit our ability to enter into new lines of businesses and doing so may result in additional risks and uncertainties in our businesses.
If such persons engage in competitive business activities, we may have no remedy under our governing documents in those circumstances. We may enter into new lines of businesses and doing so may result in additional risks and uncertainties in our businesses.
Our business and operations may be adversely affected by market and economic volatility experienced by the U.S. and global economies, the commercial real estate industry and/or the local economies in the markets in which our clients’ properties are located.
Our business and operations have been and may continue to be adversely affected by market and economic volatility experienced by the U.S. and global economies, the commercial and residential real estate industries and/or the local economies in the markets in which our and our clients’ properties are located.
During the past three years, we expanded our Private Capital through the execution of new business ventures; our Private Capital assets under management increased from approximately $1.7 billion as of September 30, 2021 to approximately $12.8 billion as of September 30, 2024.
During the past four years, we expanded our Private Capital through the execution of new business ventures; our Private Capital assets under management increased from approximately $1.3 billion as of September 30, 2021 to approximately $12.3 billion as of September 30, 2025.
Alternatively, if we or our clients elect not to or are unable to satisfy such new criteria or do not meet the criteria of a specific third party provider, some investors may conclude that our or their policies with respect to corporate responsibility are inadequate.
If we or our clients elect not to or are unable to satisfy the criteria by which companies’ corporate responsibility practices are assessed or do not meet the criteria of a specific third party provider, some investors may conclude that our or their policies with respect to corporate responsibility are inadequate.
The number and timing of new co-investments may vary depending on market opportunities, changes in interest rates, demand for multifamily and commercial real estate in general and other factors that may be out of our control. Our management agreements with our clients are subject to termination.
The number and timing of new co-investments may vary depending on market opportunities, changes in interest rates, demand for multifamily and commercial real estate in general and other factors that may be out of our control.
Unfavorable economic and industry conditions may be due to, among other things, uncertainty surrounding interest rates, prolonged inflation, labor market challenges, supply chain disruptions, volatility in the public equity and debt markets, pandemics, geopolitical instability and tensions (such as the ongoing wars in Ukraine and the Middle East), possible economic recession, changes in real estate utilization and other conditions beyond our control.
Unfavorable economic and industry conditions may be due to, among other things, uncertainty surrounding interest rates, inflation, changing tariffs and trade policies and related uncertainty, labor market challenges, supply chain disruptions, volatility in the public equity and debt markets, pandemics, geopolitical instability and tensions (such as the ongoing wars in Ukraine and the Middle East), possible economic recession, changes in real estate utilization, catastrophic events such as natural disasters, adverse weather and climate conditions, and other conditions beyond our control.
RMR Inc. is the managing member of RMR LLC. As of September 30, 2024, Adam D. Portnoy beneficially owned in aggregate, directly and indirectly through ABP Trust, a combined direct and indirect 50.9% economic interest in RMR LLC and controlled 91.1% of the aggregate voting power of our outstanding capital stock. As a result of this voting control, Adam D.
RMR Inc. is the managing member of RMR LLC. As of September 30, 2025, Adam Portnoy beneficially owned in aggregate, directly and indirectly through ABP Trust, a combined direct and indirect 50.7% economic interest in RMR LLC and controlled 91.0% of the aggregate voting power of our outstanding capital stock.
Although S&P Dow Jones, a provider of widely followed stock indices, reversed its prior decision to exclude companies with multiple share classes, such as ours, in certain of their indices, there is no guarantee that our Class A Common Shares will be included in an S&P index, despite their eligibility.
Although S&P Dow Jones, a provider of widely followed stock indices, no longer excludes companies with multiple share classes, such as ours, in certain of its indices, our Class A Common Shares have not been included in an S&P index and there is no guarantee that our Class A Common Shares will be included in an S&P index, despite their eligibility.
Portnoy, and other key and talented personnel. The extent and nature of the experience of our executive officers and of the relationships they have with real estate professionals and financial institutions, although not a guarantee of positive results, are critical to the success of our business.
The extent and nature of the experience of our executive officers and key professionals in the RMR Residential business and of the relationships they have with real estate professionals, financial institutions and capital sources, although not a guarantee of positive results, are critical to the success of our business.
The level of regulation and supervision to which we and our clients are subject varies from jurisdiction to jurisdiction and is based on the type of business activity involved. For example, our Real Estate Lending Venture and SEVN may also be subject to state licensing requirements to conduct lending activities.
The level of regulation and supervision to which we and our clients are subject varies from jurisdiction to jurisdiction and is based on the type of business activity involved. For example, our private capital debt vehicle, or the TRMT Private Credit Fund, and SEVN may also be subject to state licensing requirements to conduct lending activities.
We do not have significant experience in this commercial real estate sector, and there can be no assurance that we will be successful in this business, that we will achieve our expected objectives, execute acquisition opportunities, operate successfully or that we will earn fees from RMR Residential that provide returns on our investment that meet our underwriting expectations.
There can be no assurance that we will be successful in this business, that we will achieve our expected objectives, execute acquisition opportunities, operate successfully or that we will earn fees from the RMR Residential business that provide returns on our investment that meet our underwriting expectations.
If these inflationary pressures continue, we and our clients may reduce or delay construction projects that we oversee, and may realize decreased earnings, negative impacts on their ability to increase or maintain dividends that they pay to their shareholders and reduced market capitalizations.
During periods of sustained inflation, we and our clients may reduce or delay construction projects that we oversee, and may realize decreased earnings, negative impacts on their ability to increase or maintain dividends that they pay to their shareholders and reduced market capitalizations.
The failure to raise capital in sufficient amounts and on satisfactory terms could result in a decrease in our assets under management and our management fees or could result in our being unable to grow the RMR Residential business.
The failure to raise capital in sufficient amounts and on satisfactory terms could result in a decrease in our assets under management and our management fees or could result in our being unable to grow the RMR Residential business. Any of the foregoing risks could have a material adverse effect on our ability to successfully grow the RMR Residential business.
Stock markets in general often experience volatility that is unrelated to the operating performance of a particular company. These broad market fluctuations may adversely affect the trading price of our Class A Common Shares. Our shareholders may not be able to resell their Class A Common Shares following periods of volatility because of the market’s adverse reaction to volatility.
Stock markets in general often experience volatility that is unrelated to the operating performance of a particular company. These broad market fluctuations may adversely affect the trading price of our Class A Common Shares.
Such increases in tax basis are likely to increase (for tax purposes) depreciation and amortization deductions and therefore reduce the amount of income tax we otherwise would be required to pay in the future.
Any future redemptions that ABP Trust may effect may similarly result in increases in our tax basis of our assets. Such increases in tax basis are likely to increase (for tax purposes) depreciation and amortization deductions and therefore reduce the amount of income tax we otherwise would be required to pay in the future.
Any failure to maintain the security, proper function and availability of our information technology and systems, or certain third party vendors’ failure to similarly protect their information technology and systems that are relevant to our or our clients’ operations, or to safeguard our or our clients’ business processes, assets and information, or any failure to provide the appropriate regulatory and other notifications in a timely manner could result in financial losses, interrupt our operations, damage our reputation, cause us to be in default of material contracts and subject us to liability claims or regulatory penalties, any of which could materially and adversely affect us.
Any failure to maintain the security, proper function and availability of our information technology and systems, or certain third party vendors’ failure to similarly protect their information technology and systems that are relevant to our or our clients’ operations, or to adequately protect personal data, or to safeguard our or our clients’ business processes, assets and information, or any failure to provide the appropriate regulatory and other notifications in a timely manner could result in financial losses, interrupt our operations, damage our reputation, cause us to be in default of material contracts and subject us to liability claims or regulatory penalties, any of which could materially and adversely affect us. 19 Table of Contents We incorporate artificial intelligence into some of our business workflows and processes, and challenges with properly managing its use could result in reputational harm, competitive harm, legal liability, and increased regulatory costs and adversely affect our results of operations.
See “Business-Our Organizational Structure-The RMR LLC Operating Agreement-Redemption rights of holders of Class A Units” in our Annual Report on Form 10-K for the fiscal year ended September 30, 2019.
In the future, additional Class A Units may be redeemed by ABP Trust for Class A Common Shares or cash. See “Business-Our Organizational Structure-The RMR LLC Operating Agreement-Redemption rights of holders of Class A Units” in our Annual Report on Form 10-K for the fiscal year ended September 30, 2019.
If any of our management agreements with a client is terminated, we may be unable to replace the lost revenue.
Additionally, if any of our management agreements with a client is, in the case of OPI, rejected, or in all other cases terminated, we may be unable to replace the lost revenue.
The termination of our management agreement with any of our clients could have a material adverse impact on our business, results of operations and financial condition. We may be unable to successfully grow the RMR Residential business and achieve the anticipated benefits of the transaction .
The termination (or rejection, as applicable) of our management agreement with any of our clients could have a material adverse impact on our business, results of operations and financial condition. 15 Table of Contents We may be unable to successfully grow the RMR Residential business and our value-add retail investments.
Additionally, our operating results and ability to maintain or grow revenue also increasingly depend on the ability of our Private Capital clients to raise or contribute capital to invest in real estate assets.
Additionally, our operating results and ability to maintain or grow revenue also increasingly depend on the ability of our Private Capital clients to raise or contribute capital to invest in real estate assets. Reduced business activities of the Managed Equity REITs or our Private Capital clients may materially reduce our revenues and our profitability. Our revenues may be highly variable.
The ability of ABP Trust to sell its ownership stake in us and speculation about any such sale may adversely affect the market price of our Class A Common Shares.
The need for such approval may discourage a change of control of us, including a change of control which might result in payment of a premium for our Class A Common Shares. 24 Table of Contents The ability of ABP Trust to sell its ownership stake in us and speculation about any such sale may adversely affect the market price of our Class A Common Shares.
For example: Sonesta manages most of SVC’s hotels, and SVC owns approximately 34% of Sonesta’s outstanding common stock; and AlerisLife manages many of the senior living communities owned by DHC, and DHC owns approximately 34% of AlerisLife’s outstanding common stock.
For example: Sonesta manages many of SVC’s hotels, and SVC owns approximately 34% of Sonesta’s outstanding common stock; and until AlerisLife’s sale of its senior living communities and management agreements with DHC during the fourth quarter of calendar year 2025, AlerisLife managed many of the senior living communities owned by DHC, and DHC owned approximately 34% of AlerisLife’s outstanding common stock.
If interest rates go up, investors may expect a higher distribution rate before investing in a Managed REIT or they may sell the Managed REITs’ common shares and seek alternate investments with a higher distribution rate. Several of the Managed Equity REITs have reduced their quarterly dividend to $0.01 per share in recent years.
If interest rates go up, investors may expect a higher distribution rate before investing in a Managed REIT or they may sell the Managed REITs’ common shares and seek alternate investments with a higher distribution rate.
In addition, some of the independent trustees of the Managed REITs also serve as independent trustees of other Managed REITs. Mr. Portnoy is also the controlling shareholder of AlerisLife and Sonesta. These multiple responsibilities and varying interests could create competition for the time and efforts of Adam D.
In addition, some of the independent trustees of the Managed REITs also serve as independent trustees of other Managed REITs. Mr. Portnoy is also the controlling shareholder of AlerisLife and Sonesta.
Our bylaws designate the Circuit Court for Baltimore City, Maryland or, if that court does not have jurisdiction, the United States District Court for the District of Maryland, Baltimore Division, as the sole and exclusive forum for certain actions and proceedings that may be initiated by our shareholders, which could limit our shareholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, manager, agents or employees.
As a result of these limitations on liability and indemnification obligations, we and our shareholders may have more limited rights against our present and former directors and officers than might exist with other companies, which could limit shareholder recourse in the event of actions which some shareholders may believe are not in our best interest. 26 Table of Contents Our bylaws designate the Circuit Court for Baltimore City, Maryland or, if that court does not have jurisdiction, the United States District Court for the District of Maryland, Baltimore Division, as the sole and exclusive forum for certain actions and proceedings that may be initiated by our shareholders, which could limit our shareholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, managers, agents or employees.
Further, during periods of increased borrowing costs, real estate transaction volumes often slow along with real estate valuation growth which may impact the results of operation of our clients and the fees we earn from those clients. 15 Table of Contents If we cannot retain and motivate our key and talented personnel and recruit, retain and motivate new talented personnel, our business, operating results and financial condition could be adversely affected.
Further, during periods of increased borrowing costs, real estate transaction volumes often slow along with real estate valuation growth which may impact the results of operation of our clients and the fees we earn from those clients.
ESG initiatives, requirements and market expectations may impose additional costs and expose us and our clients to new risks . There remains a continued focus from regulators, investors, certain of our clients’ tenants, managers, borrowers, customers, employees, and other stakeholders concerning corporate sustainability.
There remains a continued focus from regulators, investors, certain of our clients’ tenants, managers, borrowers, customers, employees, and other stakeholders concerning corporate sustainability.
There can be no assurance that our increased focus on private real estate capital or any other business initiative we decide to pursue will be successful in the future or that we will achieve our performance objectives. 26 Table of Contents Our only material asset is our interest in RMR LLC, and we are accordingly dependent upon distributions from RMR LLC to pay our taxes and expenses.
There can be no assurance that our increased focus on private real estate capital or any other business initiative we decide to pursue will be successful in the future or that we will achieve our performance objectives.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeOur Director of Information Security assembles our incident response and investigative teams and informs our CIO if an incident occurs. Investigative findings are reported to our executive leadership and to the relevant 27 Table of Contents authorities if warranted.
Biggest changeOur Director of Information Security assembles our incident response and investigative teams and informs our CIO if an incident occurs. Investigative findings are reported to our executive leadership and to the relevant authorities if warranted.

Item 2. Properties

Properties — owned and leased real estate

1 edited+2 added−4 removed2 unchanged
Biggest changeFor more information about our leased facilities, see Note 13 , Leases , to our consolidated financial statements included in Part IV, Item 15 of this Annual Report on Form 10-K.
Biggest changeFor more information about our leased facilities, see Note 15 , Leases , to our consolidated financial statements included in Part IV, Item 15 of this Annual Report on Form 10-K.
Removed
In December 2023, as part of the MPC Acquisition, we acquired a 90.0% economic ownership interest in 260 Woodstock Investor, LLC, a mixed-use apartment complex located in Woodstock, GA, or the Woodstock Property.
Added
As of September 30, 2025, our wholly owned properties were comprised of one retail property near Chicago, IL containing approximately 204,000 rentable square feet and three residential properties located in three states containing approximately 781 29 Table of Contents units.
Removed
A mortgage loan with an acquisition date fair value of $4,726 and an aggregate principal amount outstanding of $5,429 is secured by the Woodstock Property and bears interest at a fixed rate of 3.71%.
Added
For more information about our wholly owned properties, see Note 4 , Acquisitions to our consolidated financial statements included in Part IV, Item 15 of this Annual Report on Form 10-K.
Removed
The mortgage loan requires monthly payments of interest only until September 2025, at which time payments of principal and interest are due monthly until the loan matures in August 2029. In July 2024, we acquired a 240 unit, garden style apartment community located in Denver, CO, or the Denver Property, for a purchase price of $70,000, excluding acquisition costs.
Removed
We financed this purchase with cash on hand and proceeds from a $46,500 mortgage loan with a 5.34% fixed interest rate. This mortgage loan requires monthly payments of interest only until maturity in July 2029.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeMine Safety Disclosures Not applicable. 28 Table of Contents PART II
Biggest changeMine Safety Disclosures Not applicable. 30 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

3 edited+0 added−0 removed1 unchanged
Biggest changeThe following table provides information about our purchases of our equity securities during the fiscal year ended September 30, 2024: Maximum Total Number of Approximate Dollar Shares Purchased Value of Shares that Number of Average as Part of Publicly May Yet Be Purchased Shares Price Paid Announced Plans Under the Plans or Calendar Month Purchased (1) per Share or Programs Programs November 1, 2023 - November 30, 2023 492 $ 23.82 N/A N/A January 1, 2024 - January 31, 2024 1,832 27.53 N/A N/A March 1, 2024 - March 31, 2024 2,568 24.21 N/A N/A May 1, 2024 - May 31, 2024 1,156 23.99 N/A N/A July 1, 2024 - July 31, 2024 4,250 22.48 N/A N/A August 1, 2024 - August 31, 2024 1,720 25.30 N/A N/A September 1, 2024 - September 30, 2024 33,471 25.25 N/A N/A Total 45,489 $ 24.98 N/A N/A (1) These Class A Common Share withholdings and purchases were made to satisfy tax withholding and payment obligations of certain of our Directors, officers and employees in connection with the vesting of awards of our Class A Common Shares.
Biggest changeThe following table provides information about our purchases of our equity securities during the fiscal year ended September 30, 2025: Maximum Total Number of Approximate Dollar Shares Purchased Value of Shares that Number of Average as Part of Publicly May Yet Be Purchased Shares Price Paid Announced Plans Under the Plans or Calendar Month Purchased (1) per Share or Programs Programs December 1 - December 31, 2024 294 $ 20.43 N/A N/A March 1 - March 31, 2025 1,377 $ 16.70 N/A N/A April 1 - April 30, 2025 1,993 $ 16.44 N/A N/A May 1 - May 31, 2025 4,396 $ 14.57 N/A N/A June 1 - June 30, 2025 2,321 $ 16.17 N/A N/A July 1 - July 31, 2025 171 $ 16.98 N/A N/A September 1 - September 30, 2025 42,649 $ 17.28 N/A N/A Total 53,201 $ 16.98 N/A N/A (1) These Class A Common Share withholdings and purchases were made to satisfy tax withholding and payment obligations of certain of our Directors, officers and employees in connection with the vesting of awards of our Class A Common Shares.
We withheld and purchased these shares at their fair market values based upon the trading prices of our Class A Common Shares at the close of trading on Nasdaq on the purchase dates. Item 6. [Reserved] 29 Table of Contents
We withheld and purchased these shares at their fair market values based upon the trading prices of our Class A Common Shares at the close of trading on Nasdaq on the purchase dates. Item 6. [Reserved] 31 Table of Contents
As of November 5, 2024, there were 2,087 shareholders of record of our Class A Common Shares. Issuer purchases of equity securities.
As of November 7, 2025, there were 1,991 shareholders of record of our Class A Common Shares. Issuer purchases of equity securities.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeWe plan either to syndicate this acquisition or use it to seed a small portfolio of multifamily assets we would subsequently syndicate to third party investors. 33 Table of Contents RESULTS OF OPERATIONS (dollars in thousands) The following table presents the changes in our operating results for the fiscal year ended September 30, 2024 compared to the fiscal year ended September 30, 2023: Fiscal Year Ended September 30, 2024 2023 $ Change % Change Revenues: Management services $ 188,201 $ 185,702 $ 2,499 1.3% Termination and incentive fees 1,213 45,942 (44,729) (97.4)% Advisory services 4,506 4,520 (14) (0.3)% Total management, termination, incentive and advisory services revenues 193,920 236,164 (42,244) (17.9)% Loan investment interest income 1,400 — 1,400 n/m Loan investment interest expense (87) — (87) n/m Income from loan investments, net 1,313 — 1,313 n/m Rental property revenues 1,604 — 1,604 n/m Reimbursable compensation and benefits 84,169 59,925 24,244 40.5% Reimbursable equity based compensation 7,919 9,826 (1,907) (19.4)% Other reimbursable expenses 608,688 656,401 (47,713) (7.3)% Total reimbursable costs 700,776 726,152 (25,376) (3.5)% Total revenues 897,613 962,316 (64,703) (6.7)% Expenses: Compensation and benefits 170,357 136,355 34,002 24.9% Equity based compensation 10,624 12,488 (1,864) (14.9)% Separation costs 6,297 2,002 4,295 n/m Total compensation and benefits expense 187,278 150,845 36,433 24.2% General and administrative 43,743 36,019 7,724 21.4% Other reimbursable expenses 608,688 656,401 (47,713) (7.3)% Rental property expenses 462 — 462 n/m Transaction and acquisition related costs 7,750 4,221 3,529 83.6% Depreciation and amortization 4,713 1,102 3,611 n/m Total expenses 852,634 848,588 4,046 0.5% Operating income 44,979 113,728 (68,749) (60.5)% Change in fair value of Earnout liability 2,589 — 2,589 n/m Interest income 10,403 10,574 (171) (1.6)% Interest expense (783) — (783) n/m Gain on equity method investments 7,260 25,237 (17,977) (71.2)% Income before income tax expense 64,448 149,539 (85,091) (56.9)% Income tax expense (11,319) (21,768) 10,449 48.0% Net income 53,129 127,771 (74,642) (58.4)% Net income attributable to noncontrolling interest in The RMR Group LLC (30,039) (70,624) 40,585 57.5% Net loss attributable to noncontrolling interest in consolidated entity 40 — 40 n/m Net income attributable to The RMR Group Inc. $ 23,130 $ 57,147 $ (34,017) (59.5)% n/m - not meaningful References to changes in the income and expense categories below relate to the comparison of consolidated results for the fiscal year ended September 30, 2024, compared to the fiscal year ended September 30, 2023.
Biggest changeWe expect to close on the sale of these loans by year-end and terminate our secured financing facility. 35 Table of Contents RESULTS OF OPERATIONS (dollars in thousands) The following table presents the changes in our operating results for the fiscal year ended September 30, 2025 compared to the fiscal year ended September 30, 2024: Fiscal Year Ended September 30, 2025 2024 $ Change % Change Revenues: Management services $ 177,575 $ 188,201 $ (10,626) (5.6)% Incentive fees 653 1,213 (560) (46.2)% Advisory services 4,475 4,506 (31) (0.7)% Total management, incentive and advisory services revenues 182,703 193,920 (11,217) (5.8)% Loan investment interest income 5,848 1,400 4,448 n/m Loan investment interest expense (3,401) (87) (3,314) n/m Income from loan investments, net 2,447 1,313 1,134 86.4% Rental property revenues 8,273 1,604 6,669 n/m Reimbursable compensation and benefits 77,970 84,169 (6,199) (7.4)% Reimbursable equity based compensation 6,882 7,919 (1,037) (13.1)% Other reimbursable expenses 422,009 608,688 (186,679) (30.7)% Total reimbursable costs 506,861 700,776 (193,915) (27.7)% Total revenues 700,284 897,613 (197,329) (22.0)% Expenses: Compensation and benefits 161,728 170,357 (8,629) (5.1)% Equity based compensation 9,664 10,624 (960) (9.0)% Separation costs 7,078 6,297 781 12.4% Total compensation and benefits expense 178,470 187,278 (8,808) (4.7)% General and administrative 42,497 43,743 (1,246) (2.8)% Other reimbursable expenses 422,009 608,688 (186,679) (30.7)% Rental property expenses 2,833 462 2,371 n/m Transaction and acquisition related costs 1,142 7,750 (6,608) (85.3)% Depreciation and amortization 11,551 4,713 6,838 145.1% Total expenses 658,502 852,634 (194,132) (22.8)% Operating income 41,782 44,979 (3,197) (7.1)% Interest income 5,197 10,403 (5,206) (50.0)% Interest expense (4,308) (783) (3,525) n/m Change in fair value of Earnout liability 8,319 2,589 5,730 n/m (Loss) gain on investments (5,085) 7,260 (12,345) (170.0)% Gain on sale of real estate 445 — 445 n/m Income before income tax expense 46,350 64,448 (18,098) (28.1)% Income tax expense (7,671) (11,319) 3,648 32.2% Net income 38,679 53,129 (14,450) (27.2)% Net income attributable to noncontrolling interest in The RMR Group LLC (21,910) (30,039) 8,129 27.1% Net loss attributable to other noncontrolling interests 827 40 787 n/m Net income attributable to The RMR Group Inc. $ 17,596 $ 23,130 $ (5,534) (23.9)% n/m - not meaningful References to changes in the income and expense categories below relate to the comparison of consolidated results for the fiscal year ended September 30, 2025, compared to the fiscal year ended September 30, 2024.
Equity based compensation. Equity based compensation consists of the value of vested shares awarded to certain of our employees under our and our clients’ equity compensation plans. We record an equal offsetting amount as reimbursable equity based compensation revenue for the value of awards under our clients’ equity compensation plans to certain of our employees.
Equity based compensation consists of the value of vested shares awarded to certain of our employees under our and our clients’ equity compensation plans. We record an equal offsetting amount as reimbursable equity based compensation revenue for the value of awards under our clients’ equity compensation plans to certain of our employees.
Consolidation . Our consolidated financial statements included in Part IV, Item 15 of this Annual Report on Form 10-K include only the accounts of the entities we control. We continually assess whether our existing contractual rights give us the ability to direct the activities of the entities we manage that most significantly affect the results of that entity.
Our consolidated financial statements included in Part IV, Item 15 of this Annual Report on Form 10-K include only the accounts of the entities we control. We continually assess whether our existing contractual rights give us the ability to direct the activities of the entities we manage that most significantly affect the results of that entity.
The property management fees we earn from the Managed Equity REITs are principally based on a percentage of the gross rents collected at certain managed properties owned by the Managed Equity REITs, excluding rents or other revenues from hotels, travel centers, senior living properties and wellness centers, which are separately managed by AlerisLife, Sonesta or a third party.
The property management fees we earn from the Managed Equity REITs are principally based on a percentage of the gross rents collected at certain managed properties owned by the Managed Equity REITs, excluding rents or other revenues from hotels, senior living communities, travel centers and wellness centers, which are separately managed by Sonesta, AlerisLife or a third party.
AlerisLife operates senior living communities throughout the United States, many of which are owned by and managed for DHC. Sonesta manages and franchises hotels, resorts and cruise ships in the United States, Latin America, the Caribbean and the Middle East; many of the U.S. hotels that Sonesta operates are owned by SVC.
AlerisLife operates senior living communities throughout the United States, many of which are owned by and managed for DHC. Sonesta manages and franchises hotels, resorts and cruise ships in the United States, Canada, Latin America, the Caribbean and the Middle East; many of the U.S. hotels that Sonesta operates are owned by SVC.
The estimation of fair value involves a significant level of judgment and estimation uncertainty, and actual results could be materially different and have a material impact on our financial condition and results of operations. We accounted for the Acquisition as a business combination.
The estimation of fair value involves a significant level of judgment and estimation uncertainty, and actual results could be materially different and have a material impact on our financial condition and results of operations. We accounted for the MPC Acquisition as a business combination.
See Note 8 , Related Person Transactions , to our consolidated financial statements included in Part IV, Item 15 of this Annual Report on Form 10-K.
See Note 10 , Related Person Transactions , to our consolidated financial statements included in Part IV, Item 15 of this Annual Report on Form 10-K.
Related Person Transactions We have relationships and historical and continuing transactions with Adam D. Portnoy, the Chair of our Board and one of our Managing Directors, as well as our clients.
Related Person Transactions We have relationships and historical and continuing transactions with Adam Portnoy, the Chair of our Board and one of our Managing Directors, as well as our clients.
The Earnout liability is remeasured on a quarterly basis and changes to our estimates and assumptions are likely to have a significant impact on the fair value estimate of the Earnout liability. In addition, actual payments required under the Earnout may differ significantly from our estimates and could have a material impact to our results of operations and financial condition.
The Earnout liability is remeasured on a quarterly basis and changes to our estimates and assumptions may have a significant impact on the fair value estimate of the Earnout liability. In addition, actual payments required under the Earnout may differ significantly from our estimates and could have a material impact to our results of operations and financial condition.
As of September 30, 2024, we had no off-balance sheet arrangements that have had or that we expect would be reasonably likely to have a material effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
As of September 30, 2025, we had no off-balance sheet arrangements that have had or that we expect would be reasonably likely to have a material effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
For further information about these and other such relationships and related person transactions, see Note 2 , Summary of Significant Accounting Policies and Note 8 , Related Person Transactions , to our consolidated financial statements included in Part IV, Item 15 of this Annual Report on Form 10-K, which is incorporated herein by reference, the section captioned “Business” above in Part I, Item 1 of this Annual Report on Form 10-K, our other filings with the SEC and our definitive Proxy Statement for our 2025 Annual Meeting of Shareholders, or the 2025 Proxy Statement, to be filed within 120 days after the close of the fiscal year ended September 30, 2024.
For further information about these and other such relationships and related person transactions, please see Note 2 , Summary of Significant Accounting Policies and Note 10 , Related Person Transactions , to our consolidated financial statements included in Part IV, Item 15 of this Annual Report on Form 10-K, which is incorporated herein by reference, the section captioned “Business” above in Part I, Item 1 of this Annual Report on Form 10-K, our other filings with the SEC and our definitive Proxy Statement for our 2026 Annual Meeting of Shareholders, or the 2026 Proxy Statement, to be filed within 120 days after the close of the fiscal year ended September 30, 2025.
The basis on which our base business management fees are calculated for the fiscal years ended September 30, 2024 and 2023 may differ from the basis at the end of the periods presented in the table above.
The basis on which our base business management fees are calculated for the fiscal years ended September 30, 2025 and 2024 may differ from the basis at the end of the periods presented in the table above.
Typically, as the general U.S. economy expands, commercial real estate occupancies increase and new real estate development occurs; new development frequently leads to increased real estate supply and reduced occupancies; and then the cycle repeats.
Typically, as the general U.S. economy expands, commercial real estate, or CRE, occupancies increase and new real estate development occurs; new development frequently leads to increased real estate supply and reduced occupancies; and then the cycle repeats.
For a comparison of consolidated results for the fiscal year ended September 30, 2023 compared to the fiscal year ended September 30, 2022, see Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended September 30, 2023. 34 Table of Contents Management services revenue.
For a comparison of consolidated results for the fiscal year ended September 30, 2024 compared to the fiscal year ended September 30, 2023, see Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended September 30, 2024. 36 Table of Contents Management services revenue.
We also recognize as revenue certain compensation and benefits reimbursements in our capacity as property manager, at cost, when we incur the related reimbursable compensation and benefits and other costs on behalf of our clients.
We 40 Table of Contents also recognize as revenue certain compensation and benefits reimbursements in our capacity as property manager, at cost, when we incur the related reimbursable compensation and benefits and other costs on behalf of our clients.
Cash and cash equivalents include all short term, highly liquid investments that are readily convertible to known amounts of cash and have original maturities of three months or less from the date of purchase. As of September 30, 2024 and 2023, $92,326 and $265,800, respectively, of our cash and cash equivalents were invested in money market bank accounts.
Cash and cash equivalents include all short term, highly liquid investments that are readily convertible to known amounts of cash and have original maturities of three months or less from the date of purchase. As of September 30, 2025 and 2024, $50,662 and $92,326, respectively, of our cash and cash equivalents were invested in money market bank accounts.
Tremont is primarily compensated pursuant to its management agreement with SEVN based on a percentage of equity, as defined in the applicable agreement. For the fiscal years ended September 30, 2024 and 2023, Tremont earned advisory services revenue of $4,506 and $4,520, respectively, and incentive fees of $1,213 and $660, respectively.
Tremont is primarily compensated pursuant to its management agreement with SEVN based on a percentage of equity, as defined in the applicable agreement. For the fiscal years ended September 30, 2025 and 2024, Tremont earned advisory services revenue of $4,475 and $4,506, respectively, and incentive fees of $653 and $1,213, respectively.
Business Environment and Outlook The continuation and growth of our business depends upon our ability to operate the Managed Equity REITs, our private capital clients and SEVN so as to maintain, grow and increase the value of their businesses, to assist AlerisLife and Sonesta to grow their businesses and operate profitably, and to successfully expand our business through the execution of new business ventures and additional investments.
Business Environment and Outlook The continuation and growth of our business depends upon our ability to manage the Managed Equity REITs, SEVN and our private capital clients so as to maintain, grow and increase the value of their businesses and to successfully expand our business through the execution of new business ventures and additional investments.
During the fiscal year ended September 30, 2024, we paid cash distributions to the holders of our Class A Common Shares, Class B-1 Common Shares and to the other owner of RMR LLC membership units in the aggregate amount of $47,623.
During the fiscal year ended September 30, 2025 , we paid cash distributions to the holders of our Class A Common Shares, Class B-1 Common Shares and to the other owner of RMR LLC membership units in the aggregate amount of $49,547 .
For further information about the Earnout liability, see Note 4 , Acquisitions and Note 7 , Fair Value of Financial Instruments to our consolidated financial statements included in Part IV, Item 15 of this Annual Report on Form 10-K. Interest income.
For further information about the Earnout liability, see Note 4 , Acquisitions and Note 9 , Fair Value of Financial Instruments to our consolidated financial statements included in Part IV, Item 15 of this Annual Report on Form 10-K. (Loss) gain on investments.
The preparation of our consolidated financial statements requires our management to make certain critical accounting estimates and judgments that impact (i) the revenue recognized during the reporting periods (ii) the estimation of 38 Table of Contents fair values and (iii) our principles of consolidation. These accounting estimates are based on our management’s judgment.
The preparation of our consolidated financial statements requires our management to make certain critical accounting estimates and judgments that impact (i) the revenue recognized during the reporting periods, (ii) the estimation of fair values, (iii) our principles of consolidation and (iv) assessment of goodwill for certain reporting units. These accounting estimates are based on our management’s judgment.
The remainder of this dividend will be funded with cash accumulated at RMR Inc. We expect the total dividend will amount to approximately $12,381 and we expect to pay this dividend on or about November 14, 2024.
The remainder of this dividend will be funded with cash accumulated at RMR Inc. We expect the total dividend will amount to approximately $12,479 and we expect to pay this dividend on or about November 13, 2025 .
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 $10,191, of which $5,391 will be distributed to us based on our aggregate ownership of 16,846,025 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.
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 $10,260 , of which $5,460 will be distributed to us based on our aggregate ownership of 17,063,495 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.
On October 16, 2024, we declared a quarterly dividend on our Class A Common Shares and Class B-1 Common Shares to our shareholders of record as of October 28, 2024 in the amount of $0.45 per Class A Common Share and Class B-1 Common Share, or $7,581.
On October 9, 2025 , we declared a quarterly dividend on our Class A Common Shares and Class B-1 Common Shares to our shareholders of record as of October 27, 2025 in the amount of $0.45 per Class A Common Share and Class B-1 Common Share, or $7,679 .
See Note 9 , Shareholders’ Equity , to our consolidated financial statements included in Part IV, Item 15 of this Annual Report on Form 10-K for more information regarding these distributions.
For more information on these financial instruments, see Note 9 , Fair Value of Financial Instruments to our consolidated financial statements included in Part IV, Item 15 of this Annual Report on Form 10-K. Consolidation .
For further information, see Note 2 , Summary of Significant Accounting Policies , to our consolidated financial statements included in Part IV, Item 15 of this Annual Report on Form 10-K. Income tax expense .
For further information about these reimbursements, see Note 2 , Summary of Significant Accounting Policies , to our consolidated financial statements included in Part IV, Item 15 of this Annual Report on Form 10-K. Compensation and benefits.
RMR Residential also provides us the potential to generate promote fees on any new co-investments in the future.
RMR Residential also provides us the potential to generate a carried interest on any new co-investments in the future.
In addition, we balance our pursuit of growth of our and our clients’ businesses by executing, on behalf of our clients, prudent capital recycling or business arrangement restructurings in an attempt to help our clients prudently manage leverage and increased operating costs.
Despite the macroeconomic uncertainty, both we and our clients will continue to balance our pursuit of growth of our and our clients’ businesses by executing, on behalf of our clients, sensible capital recycling or business arrangement restructurings in an attempt to help our clients prudently manage leverage and increased operating costs.
In addition, we also provide management services to certain other Private Capital clients, including high-quality institutional investors relationships we assumed as part of our MPC acquisition, and earn fees based on a percentage of average invested capital, as defined in the applicable agreements, property management fees based on a percentage of rents collected from managed properties and construction supervision fees based on a percentage of the cost of construction activities.
In addition, we also provide management services to certain other Private Capital clients, including high-quality institutional investor relationships we maintain through RMR Residential, and earn fees based on a percentage of average 33 Table of Contents invested capital, as defined in the applicable agreements, property management fees based on a percentage of rents collected from managed properties and construction supervision fees based on a percentage of the cost of construction activities.
The decrease in income tax expense of $10,449 is primarily attributable to lower taxable income during the 2024 period as compared to the 2023 period. 36 Table of Contents LIQUIDITY AND CAPITAL RESOURCES (dollars in thousands, except per share amounts) Our current assets have historically been comprised predominantly of cash, cash equivalents and receivables for business management, property management and advisory services fees.
The decrease in income tax expense of $3,648 is primarily attributable to lower taxable income. 38 Table of Contents LIQUIDITY AND CAPITAL RESOURCES (dollars in thousands, except per share amounts) Our current assets have historically been comprised predominantly of cash, cash equivalents and receivables for business management, property management, construction supervision and advisory services fees.
The $14,799 distributed to us was eliminated in our consolidated financial statements included in Part IV, Item 15 of this Annual Report on Form 10-K, and the $12,997 distributed to ABP Trust was recorded as a reduction of their noncontrolling interest.
The $13,288 distributed to RMR Inc. was eliminated in our consolidated financial statements included in Part IV, Item 15 of this Annual Report on Form 10-K, and the $11,841 distributed to ABP Trust was recorded as a reduction of their noncontrolling interest.
As of September 30, 2024 and 2023, we had cash and cash equivalents of $141,599 and $267,989, respectively, of which $23,189 and $26,802, respectively, was held by RMR Inc., with the remainder being held at RMR LLC and its subsidiaries.
As of September 30, 2025 and 2024, we had cash and cash equivalents of $62,297 and $141,599, respectively, of which $19,478 and $23,189, respectively, was held by RMR Inc., with the remainder being held at RMR LLC and its subsidiaries.
For the fiscal year ended September 30, 2024, pursuant to the RMR LLC operating agreement, RMR LLC made required quarterly tax distributions to its holders of its membership units totaling $27,796, of which $14,799 was distributed to us and $12,997 was distributed to ABP Trust, based on each membership unit holder’s then respective ownership percentage in RMR LLC.
For the fiscal year ended September 30, 2025 , pursuant to the RMR LLC operating agreement, RMR LLC made required quarterly tax distributions to its holders of its membership units totaling $25,129 , of which $13,288 was distributed to RMR Inc. and $11,841 was distributed to ABP Trust, based on each membership unit holder’s then respective ownership percentage in RMR LLC.
The following table presents for each Managed Equity REIT a summary of its primary strategy and the lesser of the historical cost of its assets under management and its market capitalization as of September 30, 2024 and 2023, as applicable: Lesser of Historical Cost of Assets Under Management or Total Market Capitalization as of September 30, REIT Primary Strategy 2024 2023 DHC Medical office and life science properties, senior living communities and other healthcare related properties $ 4,122,133 $ 3,280,149 ILPT Industrial and logistics properties 4,627,266 4,520,662 OPI Office properties primarily leased to single tenants and those with high credit quality characteristics 2,450,756 2,789,224 SVC Hotels and service-focused retail net lease properties 6,442,016 7,083,845 $ 17,642,171 $ 17,673,880 A Managed Equity REIT’s historical cost of assets under management includes the real estate it owns and its consolidated assets invested directly or indirectly in equity interests in or loans secured by real estate and personal property owned in connection with such real estate (including acquisition related costs which may be allocated to intangibles or are unallocated), all before reserves for depreciation, amortization, impairment charges or bad debts or other similar non-cash reserves.
For further information regarding the fees we earn, see Note 2 , Summary of Significant Accounting Policies , to our consolidated financial statements included in Part IV, Item 15 of this Annual Report on Form 10-K. 32 Table of Contents The following table presents for each Managed Equity REIT a summary of its primary strategy and the lesser of the historical cost of its assets under management and its market capitalization as of September 30, 2025 and 2024, as applicable: Lesser of Historical Cost of Assets Under Management or Total Market Capitalization as of September 30, REIT Primary Strategy 2025 2024 DHC Medical office and life science properties, senior living communities and other healthcare related properties $ 3,847,471 $ 4,122,133 ILPT Industrial and logistics properties 4,607,421 4,627,266 OPI Office properties primarily leased to single tenants and those with high credit quality characteristics 2,445,790 2,450,756 SVC Hotels and service-focused retail net lease properties 6,410,822 6,442,016 $ 17,311,504 $ 17,642,171 A Managed Equity REIT’s historical cost of assets under management includes the real estate it owns and its consolidated assets invested directly or indirectly in equity interests in or loans secured by real estate and personal property owned in connection with such real estate (including acquisition related costs which may be allocated to intangibles or are unallocated), all before reserves for depreciation, amortization, impairment charges or bad debts or other similar non-cash reserves.
Our management fee revenues from services to these clients for the fiscal years ended September 30, 2024 and 2023, are set forth in the following table and exclude termination fee revenue earned from TA of $45,282 for the fiscal year ended September 30, 2023: Fiscal Year Ended September 30, 2024 2023 Base Base Base Base Business Property Construction Business Property Construction Management Management Supervision Management Management Supervision Revenues Revenues Revenues Total Revenues Revenues Revenues Total AlerisLife $ 5,632 $ — $ — $ 5,632 $ 5,414 $ — $ — $ 5,414 Sonesta 9,362 — — 9,362 9,456 — 15 9,471 RMR Residential 482 15,014 1,440 16,936 — — — — Other private entities 12,099 8,664 579 21,342 12,013 8,388 1,130 21,531 SEVN — 47 — 47 — 8 — 8 TA — — — — 9,932 — — 9,932 $ 27,575 $ 23,725 $ 2,019 $ 53,319 $ 36,815 $ 8,396 $ 1,145 $ 46,356 32 Table of Contents Advisory Business Tremont provides advisory services to SEVN, a publicly traded mortgage REIT that focuses on originating and investing in first mortgage loans secured by middle market and transitional commercial real estate.
Our management fee revenues from services to these clients for the fiscal years ended September 30, 2025 and 2024, are set forth in the following table: Fiscal Year Ended September 30, 2025 2024 Base Base Base Base Business Property Construction Business Property Construction Management Management Supervision Management Management Supervision Revenues Revenues Revenues Total Revenues Revenues Revenues Total AlerisLife $ 5,720 $ — $ — $ 5,720 $ 5,632 $ — $ — $ 5,632 Sonesta 9,314 — — 9,314 9,362 — — 9,362 RMR Residential 510 15,422 1,592 17,524 482 15,014 1,440 16,936 Other private entities 12,126 8,318 726 21,170 12,099 8,664 579 21,342 SEVN — 73 5 78 — 47 — 47 $ 27,670 $ 23,813 $ 2,323 $ 53,806 $ 27,575 $ 23,725 $ 2,019 $ 53,319 Advisory Business Tremont provides advisory services to SEVN, a publicly traded mortgage REIT that focuses on originating and investing in first mortgage loans secured by middle market and transitional commercial real estate.
For further information about these fees, see Note 2 , Summary of Significant Accounting Policies , and Note 8 , Related Person Transactions , to our consolidated financial statements included in Part IV, Item 15 of this Annual Report on Form 10-K. Income from loan investments, net .
For further information about these costs, see Note 10 , Related Person Transactions, to our consolidated financial statements included in Part IV, Item 15 of this Annual Report on Form 10-K. General and administrative. General and administrative expenses consists of office related expenses, information technology related expenses, employee training, travel, professional services expenses, director compensation and other administrative expenses.
As of September 30, 2024, our consolidated balance sheet reflects a liability related to the tax receivable agreement of $20,863, of which we expect to pay $2,421 to ABP Trust during the fourth quarter of fiscal year 2025. Market Risk and Credit Risk We have not invested in derivative instruments, borrowed through issuing debt securities or transacted in foreign currencies.
As of September 30, 2025, our consolidated balance sheet reflects a liability related to the tax receivable agreement of $18,478, of which we expect to pay $2,552 to ABP Trust during the fourth quarter of fiscal year 2026.
Because of such multiple factors, we believe it is often possible to grow real estate based businesses in selected property types or geographic areas despite general national trends. Beyond general real estate industry trends, we also take into account general economic factors impacting our clients.
Because of such multiple factors, we believe it is often possible to grow real estate based businesses in selected property types or geographic areas despite general national trends. U.S. trade and fiscal policy, coupled with ongoing geopolitical tensions, has caused uncertainty in financial markets.
The $259,334 decrease in net cash flows from investing activities for the fiscal year ended September 30, 2024 compared to the prior fiscal year was due to our acquisition of MPC and the Denver Property, as well as the origination of loans held for investment in the current fiscal year compared to the proceeds received from the sale of TA’s common shares in the prior period.
The $25,978 decrease in net cash flows used in investing activities for the fiscal year ended September 30, 2025 compared to the 2024 period was due to our acquisition of MPC and a residential property and our funding of loans held for investment in the 2024 period, partially offset by our acquisition of three properties in the 2025 period.
As of September 30, 2024, the market capitalization was lower than the historical cost of assets under management for each of the Managed Equity REITs; the historical cost of assets under management for DHC, ILPT, OPI and SVC as of September 30, 2024, were $7,651,487, $5,699,132, $5,806,052 and $11,425,389, respectively. 31 Table of Contents The fee revenues we earned from the Managed Equity REITs for the fiscal years ended September 30, 2024 and 2023 are set forth in the following table: Fiscal Year Ended September 30, 2024 2023 Base Base Base Base Business Property Construction Business Property Construction Management Management Supervision Management Management Supervision REIT Revenues Revenues Revenues Total Revenues Revenues Revenues Total DHC $ 16,498 $ 5,659 $ 2,359 $ 24,516 $ 14,388 $ 5,921 $ 3,366 $ 23,675 ILPT 23,590 12,683 431 36,704 23,428 12,690 716 36,834 OPI 12,484 13,339 4,080 29,903 14,133 13,909 10,121 38,163 SVC 31,610 5,397 6,752 43,759 33,654 3,794 3,095 40,543 $ 84,182 $ 37,078 $ 13,622 $ 134,882 $ 85,603 $ 36,314 $ 17,298 $ 139,215 Other Clients We provide business management services to AlerisLife, Sonesta and until May 15, 2023, TA.
The fee revenues we earned from the Managed Equity REITs for the fiscal years ended September 30, 2025 and 2024 are set forth in the following table: Fiscal Year Ended September 30, 2025 2024 Base Base Base Base Business Property Construction Business Property Construction Management Management Supervision Management Management Supervision REIT Revenues Revenues Revenues Total Revenues Revenues Revenues Total DHC $ 16,142 $ 5,080 $ 1,752 $ 22,974 $ 16,498 $ 5,659 $ 2,359 $ 24,516 ILPT 23,437 12,965 533 36,935 23,590 12,683 431 36,704 OPI 11,412 10,838 1,794 24,044 12,484 13,339 4,080 29,903 SVC 29,039 7,865 2,912 39,816 31,610 5,397 6,752 43,759 $ 80,030 $ 36,748 $ 6,991 $ 123,769 $ 84,182 $ 37,078 $ 13,622 $ 134,882 Other Clients We provide business management services to AlerisLife and Sonesta.
We used a portion of these funds distributed to us to pay our tax liabilities and amounts due under the tax receivable agreement.
We used a portion of these funds distributed to RMR Inc. to pay our tax liabilities and amounts due under a tax receivable agreement. Excess cash distributed to us as part of the required quarterly tax distributions are accumulated at RMR Inc. to fund future dividends to holders of our Class A Common Shares and Class B-1 Common Shares.
Rental property expenses. Rental property expenses includes property operating expenses, such as real estate taxes, repairs and maintenance and utility costs incurred at our two owned properties. Transaction and acquisition related costs . Transaction and acquisition related costs in the 2024 period primarily represent costs associated with our acquisition of MPC and related integration expenses. Depreciation and amortization .
Transaction and acquisition related costs . Transaction and acquisition related costs primarily represent costs associated with our acquisition of MPC and related integration expenses, which were predominantly incurred during the 2024 period. Depreciation and amortization .
For further information regarding the fees we earn, see Note 2 , Summary of Significant Accounting Policies , to our consolidated financial statements included in Part IV, Item 15 of this Annual Report on Form 10-K.
For further information, see Note 8 , Investments , to our consolidated financial statements included in Part IV, Item 15 of this Annual Report on Form 10-K. Gain on sale of real estate. We recorded a $445 gain on sale of real estate resulting from the sale of one residential property during the 2025 period. Income tax expense .
A significant portion of these compensation and benefits are charged or passed through to and paid by tenants of our clients. Reimbursable compensation and benefits increased $24,244 primarily due to the impact of our acquisition of MPC and annual merit increases effective October 1, 2023. Reimbursable equity based compensation.
A significant portion of these compensation and benefits are charged or passed through to and paid by tenants of our clients. Reimbursable compensation and benefits decreased $6,199 primarily due to cost containment measures that included headcount reductions over the last twelve months. Reimbursable equity based compensation.
Compensation and benefits. Compensation and benefits consist of employee salaries and other employment related costs, including health insurance expenses and contributions related to our employee retirement plan. Compensation and benefits expense increased $34,002 primarily due to the impact of our acquisition of MPC and annual merit and benefit increases, which was partially offset by cost containment measures that reduced headcount.
Compensation and benefits consists of employee salaries and other employment related costs, including health insurance expenses and contributions related to our employee retirement plan. Compensation and benefits expense decreased $8,629 due to cost containment measures that included headcount reductions over the last twelve months. Equity based compensation.
Rental property revenues includes base rental income and non-cash straight line rent adjustments for our two owned properties, each of which was acquired in the current fiscal year. 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.
Rental property revenues increased $6,669 primarily due to our acquisition of one retail and three residential properties after the third fiscal quarter of 2024. Reimbursable compensation and benefits. Reimbursable compensation and benefits includes reimbursements, at cost, that arise primarily from services our employees provide pursuant to our property management agreements at the properties of our clients.
The $101,883 increase in net cash flows from financing activities for the fiscal year ended September 30, 2024 compared to the prior fiscal 37 Table of Contents year was primarily due to proceeds from our UBS Master Repurchase Facility and mortgage note payable in the current fiscal year, as well as higher tax distributions in the prior period.
The $6,739 increase in net cash flows provided by financing activities for the fiscal year ended September 30, 2025 compared to the 2024 period was due to proceeds from mortgage financings in the 2025 period, partially offset by borrowings on our secured financing facility in the 2024 period.
TA operates, leases and franchises travel centers along the U.S. interstate highway system, many of which are owned by SVC, and standalone truck service facilities. Generally, our fees earned from business management services to AlerisLife, Sonesta and until May 15, 2023, TA, are based on a percentage of certain revenues.
Generally, our fees earned from business management services to AlerisLife and Sonesta are based on a percentage of certain revenues.
We anticipate that using our capital for possible formation costs and co-investment in these funds will diversify our revenues and generate management fees, incentive fees and potential promote income. On December 19, 2023, we completed our acquisition of MPC for total cash consideration of $84,474.
We anticipate that using our capital for possible formation costs and co-investment in these funds will diversify our revenues and generate management fees, incentive fees and potential carried interest. Our liquidity is highly dependent upon our receipt of fees from the businesses we manage. Historically, we have funded our working capital needs with cash generated from our operating activities.
Depreciation and amortization increased $3,611 primarily due to the amortization of MPC acquisition related intangible assets and the acquisition of our two owned properties in the 2024 period. 35 Table of Contents Change in fair value of Earnout liability.
Interest expense increased $3,525 primarily due to three mortgage notes encumbering our owned properties, which were acquired after the third fiscal quarter of 2024. 37 Table of Contents Change in fair value of Earnout liability.
Equity based compensation decreased $1,864 primarily as a result of decreases in certain of our clients’ respective share prices. Separation costs. Separation costs consist of employment termination costs. For further information about these costs, see Note 8 , Related Person Transactions, to our consolidated financial statements included in Part IV, Item 15 of this Annual Report on Form 10-K.
Equity based compensation decreased $960 primarily as a result of decreases in certain of our clients’ respective share prices in the 2025 period. Separation costs. Separation costs consist of employment termination costs.
Reimbursable equity based compensation revenue decreased $1,907 primarily as a result of decreases in certain of our clients’ respective share prices. Other reimbursable expenses. For further information about these reimbursements, see Note 2 , Summary of Significant Accounting Policies , to our consolidated financial statements included in Part IV, Item 15 of this Annual Report on Form 10-K.
Reimbursable equity based compensation revenue decreased $1,037 primarily as a result of decreases in certain of our clients’ respective share prices in the 2025 period. Other reimbursable expenses.
In September 2024, we entered into a master repurchase agreement with UBS AG, or UBS, or our UBS Master Repurchase Agreement, for a facility with an aggregate maximum capacity of $200,000, or our UBS Master Repurchase Facility, pursuant to which we may sell to UBS, and later repurchase, commercial mortgage loans, which are referred to as purchased assets.
Our secured financing facility is governed by a master repurchase agreement with UBS AG, or UBS, or our UBS Master Repurchase Agreement, for a facility with an aggregate maximum capacity of $200,000, or our UBS Master Repurchase 34 Table of Contents Facility. We are required to pay interest at a rate of SOFR plus a premium.
We are required to pay interest on our floating rate debt at a rate of SOFR plus a premium and earn interest on our underlying loans held for investment at a rate of SOFR plus a premium that is in excess of the premium paid on our floating rate debt.
These loans require the borrower to pay interest at a rate of SOFR plus a premium that is in excess of the premium paid by us on the secured financing facility. As of September 30, 2025, our borrowers had paid their debt service obligations owed and due to us and partial repayments of these outstanding loans have been received.
Cash Flows The $47,840 decrease in net cash flows from operating activities for the fiscal year ended September 30, 2024 compared to the prior fiscal year reflects a decrease in net income due to termination fee revenue from TA in the prior period.
As of September 30, 2025 and November 7, 2025 , we had no amounts outstanding on our revolving credit facility. 39 Table of Contents Cash Flows The $14,371 increase in net cash flows provided by operating activities for the fiscal year ended September 30, 2025 compared to the 2024 period reflects favorable changes in working capital, partially offset by a decrease in net income in the 2025 period.
Removed
Acquisition of MPC Partnership Holdings LLC On December 19, 2023, we completed our acquisition, or the Acquisition, of MPC (now doing business as RMR Residential), a vertically integrated residential platform.
Added
As a result, we believe many CRE investors continue to remain on the sidelines, waiting until they have greater clarity on the outcomes of negotiations with U.S. trade partners, new tariff announcements, domestic fiscal policy initiatives and the path of interest rates to make buy and sell decisions.
Removed
This acquisition further advances our strategic focus on continuing to grow our private capital business, comprising approximately $5.1 billion in assets under management as of September 30, 2024 and a number of new institutional relationships.
Added
In connection with OPI’s voluntary chapter 11 petitions on October 30, 2025, we entered into a restructuring support agreement with OPI and certain of its lenders pursuant to which we have agreed to terms for new management agreements with OPI to take effect upon the effectiveness of OPI’s plan of reorganization.
Removed
This acquisition also allows us to further diversify our revenue sources, to enter the only major commercial real estate, or CRE, sector in which we did not have a significant presence, and brings infrastructure and digital marketing capabilities that may be leveraged across our platform.
Added
Pursuant to the management agreement term sheet, the initial term of the new management agreements will be five years, RMR LLC will be paid an annual fee under the new business management agreement of $14.0 million payable per year for the first two years, and RMR LLC will be paid a 3% property management fee and a 5% construction supervision fee under the new property management agreement, consistent with the existing property management agreement.
Removed
Heading in to 2024, certain CRE investors seemed cautiously optimistic that inflation had peaked, that the U.S. economy was likely headed for a “soft-landing” and that the Federal Open Market Committee of the U.S.
Added
The current management agreements between OPI and RMR LLC will remain in effect during the pendency of the OPI chapter 11 cases, and RMR LLC will continue to manage OPI’s business in the ordinary course.
Removed
Federal Reserve, or the FOMC, would be poised to reduce the federal funds rate by 125 to 150 basis points as a result of five or six rate cuts in 2024.
Added
As of September 30, 2025, the market capitalization was lower than the historical cost of assets under management for each of the Managed Equity REITs; the historical cost of assets under management for DHC, ILPT, OPI and SVC as of September 30, 2025, were $7,323,576, $5,714,174, $5,348,885 and $10,750,102, respectively.
Removed
With the anticipation of lower interest rates in the future, investors chose to delay sale or refinancing decisions and overall CRE investment and transaction volume remained tepid well into the third quarter of calendar 2024.
Added
Private Capital Business As part of our strategic initiative to expand our private capital business, we acquire value-add multifamily residential and retail properties and use them to develop a track record in these sectors for future fundraising. We have also invested in first mortgage loans using existing cash resources that we financed, in part, through a bank repurchase facility.
Removed
In September 2024, citing progress toward its 2% inflation target, the FOMC lowered the targeted federal funds rate by 50 basis points, to a range of 4.75% to 5.00%, the first reduction since March 2020. This rate cut provided CRE owners relief from the recent high borrowing costs and uncertainty regarding the timing and magnitude of future rate cuts.
Added
In February and March 2025, we closed two joint venture acquisitions: (i) a 225-unit residential community in Pompano Beach, FL, or the Pompano JV, and (ii) a 400-unit residential community in Sunrise, FL, or the Sunrise JV, for an aggregate purchase price of $190,100.
Removed
With this additional clarity on the intentions of the FOMC and the direction of future interest rates, CRE owners are now better positioned to make sale or refinance decisions and opt between floating or fixed rate financing options. Although certain CRE investors feel that the risk of a prolonged period of elevated interest rates is largely over, other challenges remain.
Added
As general partner of both joint ventures, we made an aggregate equity contribution of $11,031, with institutional investors funding the remaining equity. In conjunction with these acquisitions, we earned aggregate acquisition fees of $664 and are entitled to construction supervision and property management fees pursuant to management agreements with these private capital joint ventures.
Removed
Special servicing rates for commercial mortgage-backed securities, or CMBS, and CRE collateralized loan obligations continue to increase and lenders have become more willing to foreclose on borrowers unable to support underperforming properties.
Added
We are also entitled to a carried interest if we meet certain investment returns. In August and September 2025, we acquired two garden style apartment communities located near Raleigh, NC and Orlando, FL for an aggregate purchase price of $143,386, excluding acquisition costs. We financed these acquisitions with cash on hand and $93,200 in mortgage proceeds, excluding financing costs.
Removed
Furthermore, certain segments of the CRE industry continue to experience headwinds in trying to improve operating fundamentals, whether it be the pandemic shift in work habits and weak demand for office space impacting the office sector or oversupply in certain markets adversely impacting the industrial and residential sectors.
Added
These mortgages carry interest at the Secured Overnight Financing Rate, or SOFR, plus a premium. To mitigate our exposure to fluctuating interest rates, we purchased interest rate caps on both mortgages with a current SOFR strike rate equal to 3.00%. We plan to syndicate these multifamily residential acquisitions to third party investors through a managed fund or traditional joint venture.
Removed
Both we and our clients consider industry and general economic factors and attempt to take advantage of opportunities when they arise.
Added
In July 2025, we acquired a community shopping center near Chicago, IL in an all-cash transaction for a purchase price of $21,250, excluding acquisition costs. Our goal is to acquire a small portfolio of retail properties through which we can make value-add investments over a three- to five-year span and achieve a sizable return on those investments at exit.
Removed
For example: (i) since March 2020, ILPT and DHC have completed several joint venture transactions with institutional investors and subsequently grown some of those ventures by acquiring additional properties; (ii) SVC transitioned over 200 hotels from other hotel operators to Sonesta, which on March 17, 2021, completed its acquisition of RLH Corporation, establishing it as one of the largest hotel companies in the U.S. and expanding its franchising capabilities; and (iii) on February 25, 2022, ILPT completed its acquisition of 126 new, Class A, single tenant, net leased, e-commerce focused industrial properties as a result of its acquisition of Monmouth Real Estate Investment Corporation, or MNR, in an all-cash transaction 30 Table of Contents valued at approximately $4.0 billion.
Added
To date, we have originated two floating rate first mortgage loans secured by hotel and industrial properties in Revere, MA and Wayne, PA, respectively, for an aggregate remaining lending commitment of $64,000.
Removed
More recently, on December 19, 2023, we completed our previously announced agreement to acquire 100% of the equity interest in MPC for total consideration of $99,021, which added residential capabilities to RMR LLC.

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Other RMR 10-K year-over-year comparisons