Form 10-Q - Quarterly report [Sections 13 or 15(d)]

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2023

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 1-34364

OFFICE PROPERTIES INCOME TRUST

(Exact Name of Registrant as Specified in Its Charter)


Maryland						26-4273474
(State or Other Jurisdiction of Incorporation or Organization)						(IRS Employer Identification No.)

Two Newton Place, 255 Washington Street, Suite 300, Newton, Massachusetts 02458-1634

(Address of Principal Executive Offices) (Zip Code)

617-219-1440

(Registrant’s Telephone Number, Including Area Code)

Securities Registered Pursuant to Section 12(b) of the Act:

Title of Each Class

Trading Symbol(s)

Name Of Each Exchange On Which Registered

Common Shares of Beneficial Interest

OPI

The Nasdaq Stock Market LLC

6.375% Senior Notes due 2050

OPINL

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Number of registrant’s common shares of beneficial interest, $.01 par value per share, outstanding as of October 27, 2023: 48,755,886

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OFFICE PROPERTIES INCOME TRUST

FORM 10-Q

September 30, 2023

INDEX


		Page
PART I.	Financial Information

Item 1.	Financial Statements (unaudited)

	Condensed Consolidated Balance Sheets — September 30, 2023 and December 31, 2022	3

	Condensed Consolidated Statements of Comprehensive Income (Loss) — Three and Nine Months Ended September 30, 2023 and 2022	4

	Condensed Consolidated Statements of Shareholders’ Equity — Three and Nine Months Ended September 30, 2023 and 2022	5

	Condensed Consolidated Statements of Cash Flows — Nine Months Ended September 30, 2023 and 2022	7

	Notes to Condensed Consolidated Financial Statements	9

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	33

Item 4.	Controls and Procedures	36

	Warning Concerning Forward-Looking Statements	36

	Statement Concerning Limited Liability	37

PART II.	Other Information



Item 1A.	Risk Factors	38

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	38

Item 6.	Exhibits	38

	Signatures	40

References in this Quarterly Report on Form 10-Q to “the Company”, “OPI”, “we”, “us” or “our” include Office Properties Income Trust and its consolidated subsidiaries unless otherwise expressly stated or the context indicates otherwise.

Table of Contents

PART I. Financial Information

Item 1. Financial Statements

OFFICE PROPERTIES INCOME TRUST

CONDENSED CONSOLIDATED BALANCE SHEETS

(dollars in thousands, except per share data)

(unaudited)



	September 30, 2023		December 31, 2022
ASSETS
Real estate properties:
Land	$	802,904	$	821,238
Buildings and improvements	3,260,732		3,114,836
Total real estate properties, gross	4,063,636		3,936,074
Accumulated depreciation	(627,656)		(561,458)
Total real estate properties, net	3,435,980		3,374,616
Assets of properties held for sale	16,942		2,516
Investments in unconsolidated joint ventures	36,602		35,129
Acquired real estate leases, net	295,195		369,333
Cash and cash equivalents	24,358		12,249
Restricted cash	15,270		—
Rents receivable	124,043		105,639

Deferred leasing costs, net	85,087		73,098
Other assets, net	11,513		7,397
Total assets	$	4,044,990	$	3,979,977

LIABILITIES AND SHAREHOLDERS’ EQUITY
Unsecured revolving credit facility	$	200,000	$	195,000
Senior unsecured notes, net	2,193,577		2,187,875
Mortgage notes payable, net	172,331		49,917
Liabilities of properties held for sale	346		73
Accounts payable and other liabilities	154,061		140,151
Due to related persons	7,766		6,469
Assumed real estate lease obligations, net	12,276		14,157
Total liabilities	2,740,357		2,593,642

Commitments and contingencies

Shareholders’ equity:
Common shares of beneficial interest, $.01 par value: 200,000,000 shares authorized, 48,757,246 and 48,565,644 shares issued and outstanding, respectively	488		486
Additional paid in capital	2,621,107		2,619,532
Cumulative net income	137,325		169,606

Cumulative common distributions	(1,454,287)		(1,403,289)
Total shareholders’ equity	1,304,633		1,386,335
Total liabilities and shareholders’ equity	$	4,044,990	$	3,979,977

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Table of Contents

OFFICE PROPERTIES INCOME TRUST

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(amounts in thousands, except per share data)

(unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022

Rental income	$	133,361	$	137,683	$	399,780	$	426,353

Expenses:
Real estate taxes	14,257		16,414		45,491		49,642
Utility expenses	7,460		7,986		20,462		20,671
Other operating expenses	27,946		27,737		80,637		81,597
Depreciation and amortization	52,266		52,988		155,559		170,993
Loss on impairment of real estate	—		—		—		21,820
Acquisition and transaction related costs	16,135		—		30,534		224
General and administrative	5,720		6,564		17,430		19,353
Total expenses	123,784		111,689		350,113		364,300

Gain on sale of real estate	244		16,925		487		7,437


Interest and other income	281		56		782		73
Interest expense (including net amortization of debt premiums, discounts and issuance costs of $2,276, $2,176, $6,808 and $6,946, respectively)	(28,835)		(24,969)		(80,591)		(78,923)
Loss on early extinguishment of debt	—		—		—		(77)
(Loss) income before income tax expense and equity in net losses of investees	(18,733)		18,006		(29,655)		(9,437)
Income tax expense	(95)		(90)		(336)		(431)
Equity in net losses of investees	(765)		(952)		(2,290)		(2,631)



Net (loss) income	$	(19,593)	$	16,964	$	(32,281)	$	(12,499)














Weighted average common shares outstanding (basic and diluted)	48,403		48,286		48,365		48,260


Per common share amounts (basic and diluted):



Net (loss) income	$	(0.41)	$	0.35	$	(0.67)	$	(0.27)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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OFFICE PROPERTIES INCOME TRUST

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(dollars in thousands)

(unaudited)


	Number of Shares	Common Shares		Additional Paid In Capital		Cumulative Net Income		Cumulative Common Distributions		Total Shareholders’ Equity
Balance at December 31, 2022	48,565,644	$	486	$	2,619,532	$	169,606	$	(1,403,289)	$	1,386,335
Common share grants	—	—		477		—		—		477
Common share forfeitures and repurchases	(1,935)	—		(15)		—		—		(15)
Net loss	—	—		—		(446)		—		(446)
Distributions to common shareholders	—	—		—		—		(26,710)		(26,710)
Balance at March 31, 2023	48,563,709	486		2,619,994		169,160		(1,429,999)		1,359,641
Common share grants	31,500	—		744		—		—		744
Common share forfeitures and repurchases	(7,559)	—		(47)		—		—		(47)
Net loss	—	—		—		(12,242)		—		(12,242)
Distributions to common shareholders	—	—		—		—		(12,141)		(12,141)
Balance at June 30, 2023	48,587,650	486		2,620,691		156,918		(1,442,140)		1,335,955
Common share grants	210,300	2		656		—		—		658
Common share forfeitures and repurchases	(40,704)	—		(240)		—		—		(240)
Net loss	—	—		—		(19,593)		—		(19,593)
Distributions to common shareholders	—	—		—		—		(12,147)		(12,147)
Balance at September 30, 2023	48,757,246	$	488	$	2,621,107	$	137,325	$	(1,454,287)	$	1,304,633

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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OFFICE PROPERTIES INCOME TRUST

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(dollars in thousands)

(unaudited)


	Number of Shares	Common Shares		Additional Paid In Capital		Cumulative Net Income		Cumulative Common Distributions		Total Shareholders’ Equity
Balance at December 31, 2021	48,425,665	$	484	$	2,617,169	$	175,715	$	(1,296,659)	$	1,496,709
Common share grants	—	—		415		—		—		415
Common share forfeitures	(400)	—		(1)		—		—		(1)
Net loss	—	—		—		(13,407)		—		(13,407)
Distributions to common shareholders	—	—		—		—		(26,634)		(26,634)
Balance at March 31, 2022	48,425,265	484		2,617,583		162,308		(1,323,293)		1,457,082
Common share grants	31,500	1		1,078		—		—		1,079
Common share forfeitures and repurchases	(1,690)	—		(21)		—		—		(21)
Net loss	—	—		—		(16,056)		—		(16,056)
Distributions to common shareholders	—	—		—		—		(26,634)		(26,634)
Balance at June 30, 2022	48,455,075	485		2,618,640		146,252		(1,349,927)		1,415,450
Common share grants	141,200	1		922		—		—		923
Common share forfeitures and repurchases	(30,069)	—		(521)		—		—		(521)
Net income	—	—		—		16,964		—		16,964
Distributions to common shareholders	—	—		—		—		(26,651)		(26,651)
Balance at September 30, 2022	48,566,206	$	486	$	2,619,041	$	163,216	$	(1,376,578)	$	1,406,165

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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OFFICE PROPERTIES INCOME TRUST

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(dollars in thousands)

(unaudited)


	Nine Months Ended September 30,
	2023		2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(32,281)	$	(12,499)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation	77,635		73,174
Net amortization of debt premiums, discounts and issuance costs	6,808		6,946
Amortization of acquired real estate leases and assumed real estate lease obligations, net	71,332		93,458
Amortization of deferred leasing costs	7,359		6,115
Gain on sale of real estate	(487)		(7,437)
Loss on impairment of real estate	—		21,820
Loss on early extinguishment of debt	—		77

Straight line rental income	(17,120)		(7,226)
Other non-cash expenses, net	1,053		1,591


Equity in net losses of investees	2,290		2,631





Change in assets and liabilities:


Rents receivable	(1,375)		7,625
Deferred leasing costs	(17,904)		(20,724)
Other assets	(4,426)		(2,358)
Accounts payable and other liabilities	14,952		(3,255)
Due to/from related persons	1,297		(7,251)
Net cash provided by operating activities	109,133		152,687

CASH FLOWS FROM INVESTING ACTIVITIES:

Real estate improvements	(175,628)		(137,031)

Distributions in excess of earnings from unconsolidated joint ventures	—		51
Contributions to unconsolidated joint ventures	(3,763)		(2,914)
Proceeds from sale of properties, net	22,449		189,069



Net cash (used in) provided by investing activities	(156,942)		49,175

CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of mortgage notes payable	(50,000)		(25,400)
Proceeds from issuance of mortgage notes payable	177,320		—
Repayment of senior unsecured notes	—		(300,000)



Borrowings on unsecured revolving credit facility	225,000		295,000
Repayments on unsecured revolving credit facility	(220,000)		(160,000)
Payment of debt issuance costs	(5,843)		—
Repurchase of common shares	(291)		(533)


Distributions to common shareholders	(50,998)		(79,919)
Net cash provided by (used in) financing activities	75,188		(270,852)

Increase (decrease) in cash, cash equivalents and restricted cash	27,379		(68,990)
Cash, cash equivalents and restricted cash at beginning of period	12,249		84,515
Cash, cash equivalents and restricted cash at end of period	$	39,628	$	15,525

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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OFFICE PROPERTIES INCOME TRUST

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

(dollars in thousands)

(unaudited)


	Nine Months Ended September 30,
	2023		2022
SUPPLEMENTAL CASH FLOW INFORMATION:
Interest paid	$	79,324	$	80,504
Income taxes paid	$	374	$	283

NON-CASH INVESTING ACTIVITIES:
Real estate improvements accrued, not paid	$	41,445	$	34,340


Capitalized interest	$	6,423	$	2,887

SUPPLEMENTAL DISCLOSURE OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH:

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets to the amounts shown in the condensed consolidated statements of cash flows:


	As of September 30,
	2023		2022
Cash and cash equivalents	$	24,358	$	14,005
Restricted cash (1)	15,270		1,520
Total cash, cash equivalents and restricted cash shown in the condensed consolidated statements of cash flows	$	39,628	$	15,525

(1)Restricted cash consists of amounts escrowed for future real estate taxes, insurance, leasing costs, capital expenditures and debt service, as required by certain of our mortgage debts.

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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OFFICE PROPERTIES INCOME TRUST

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except per share data)

(unaudited)

Note 1. Basis of Presentation

The accompanying condensed consolidated financial statements of Office Properties Income Trust and its subsidiaries, or OPI, we, us or our, are unaudited. Certain information and disclosures required by U.S. generally accepted accounting principles, or GAAP, for complete financial statements have been condensed or omitted. We believe the disclosures made are adequate to make the information presented not misleading. However, the accompanying condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes contained in our Annual Report on Form 10-K for the year ended December 31, 2022, or our 2022 Annual Report. In the opinion of management, all adjustments, consisting of normal recurring accruals considered necessary for a fair statement of results for the interim period have been included. All intercompany transactions and balances with or among our consolidated subsidiaries have been eliminated. Our operating results for interim periods are not necessarily indicative of the results that may be expected for the full year.

The preparation of these financial statements in conformity with GAAP requires us to make estimates and assumptions that affect reported amounts. Actual results could differ from those estimates. Significant estimates in the condensed consolidated financial statements include purchase price allocations, useful lives of fixed assets and assessment of impairment of real estate and the related intangibles.

Termination of Merger with Diversified Healthcare Trust

As previously disclosed, on April 11, 2023, we and Diversified Healthcare Trust, or DHC, entered into an Agreement and Plan of Merger, or the Merger Agreement, pursuant to which we and DHC had agreed that DHC would merge with and into us, with us as the surviving entity in the merger, subject to the terms and conditions of the Merger Agreement. On September 1, 2023, we and DHC mutually agreed to terminate the Merger Agreement and entered into a termination agreement, or the Termination Agreement. The mutual termination of the Merger Agreement was separately recommended by our and DHC’s respective Special Committees of each Board of Trustees, and approved by our and DHC’s respective Board of Trustees. Neither we nor DHC will be required to pay any termination fee as a result of the mutual decision to terminate the Merger Agreement. We and DHC will bear our and its respective costs and expenses related to the Merger Agreement and the transactions contemplated thereby in accordance with the terms of the Merger Agreement. We recorded $30,534 of expenses during the nine months ended September 30, 2023 related to the potential merger with DHC, which is included in acquisition and transaction related costs in our condensed consolidated statement of comprehensive income (loss).

Contemporaneously with the execution of the Merger Agreement, on April 11, 2023, we and our manager, The RMR Group LLC, or RMR, entered into a Third Amended and Restated Property Management Agreement, or the Amended Property Management Agreement. The effectiveness of the Amended Property Management Agreement was conditioned upon the consummation of the merger. Since the merger will not be consummated, the Amended Property Management Agreement will not become effective and the Second Amended and Restated Property Management Agreement between us and RMR will remain in effect.

In connection with the execution of the Merger Agreement, on April 11, 2023, we entered into a commitment letter with an institutional lender, pursuant to which it committed to provide, subject to the terms and conditions of the commitment letter, a senior secured bridge facility to us in an aggregate principal amount of $368,000. On September 1, 2023, we terminated the commitment letter.

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OFFICE PROPERTIES INCOME TRUST

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(dollars in thousands, except per share data)

(unaudited)

Note 2. Per Common Share Amounts

We calculate basic earnings per common share using the two class method. We calculate diluted earnings per common share using the more dilutive of the two class method or the treasury stock method. Unvested share awards and other potentially dilutive common shares, together with the related impact on earnings, are considered when calculating diluted earnings per common share. The calculation of basic and diluted earnings per common share is as follows (amounts in thousands, except per share data):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Numerators:
Net (loss) income	$	(19,593)	$	16,964	$	(32,281)	$	(12,499)
Income/loss attributable to unvested participating securities	(50)		(99)		(232)		(299)
Net (loss) income used in calculating earnings per common share	$	(19,643)	$	16,865	$	(32,513)	$	(12,798)

Denominators:
Weighted average common shares outstanding - basic and diluted	48,403		48,286		48,365		48,260



Net (loss) income per common share - basic and diluted	$	(0.41)	$	0.35	$	(0.67)	$	(0.27)

Note 3. Real Estate Properties

As of September 30, 2023, our wholly owned properties were comprised of 154 properties containing approximately 20,705,000 rentable square feet, with an undepreciated carrying value of $4,081,026, including $17,390 classified as held for sale. We also had noncontrolling ownership interests of 51% and 50% in two unconsolidated joint ventures that own three properties containing approximately 451,000 rentable square feet. We generally lease space at our properties on a gross lease, modified gross lease or net lease basis pursuant to fixed term contracts expiring between 2023 and 2053. Some of our leases generally require us to pay all or some property operating expenses and to provide all or most property management services. During the three months ended September 30, 2023, we entered into 29 leases for approximately 586,000 rentable square feet for a weighted (by rentable square feet) average lease term of 7.4 years, and we made commitments of $25,359 for leasing related costs. During the nine months ended September 30, 2023, we entered into 68 leases for approximately 1,502,000 rentable square feet for a weighted (by rentable square feet) average lease term of 8.7 years, and we made commitments for approximately $74,744 of leasing related costs. As of September 30, 2023, we had estimated unspent leasing related obligations of $137,223.

We regularly evaluate whether events or changes in circumstances have occurred that could indicate an impairment in the value of long lived assets. Impairment indicators may include declining tenant occupancy, lack of progress leasing vacant space, tenant bankruptcies, low long term prospects for improvement in property performance, weak or declining tenant profitability, cash flow or liquidity, our decision to dispose of an asset before the end of its estimated useful life and legislative, market or industry changes that could permanently reduce the value of a property. If there is an indication that the carrying value of an asset is not recoverable, we estimate the projected undiscounted cash flows to determine if an impairment loss should be recognized. The future net undiscounted cash flows are subjective and are based in part on assumptions regarding hold periods, market rents and terminal capitalization rates. We determine the amount of any impairment loss by comparing the carrying value to estimated fair value. We estimate fair value through an evaluation of recent financial performance and projected discounted cash flows using standard industry valuation techniques. In addition to consideration of impairment upon the events or changes in circumstances described above, we regularly evaluate the remaining useful lives of our long lived assets. If we change our estimate of the remaining useful lives, we allocate the carrying value of the affected assets over their revised remaining useful lives.

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OFFICE PROPERTIES INCOME TRUST

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(dollars in thousands, except per share data)

(unaudited)

Acquisition Activities

As of October 27, 2023, we have entered into an agreement to acquire a land parcel adjacent to a property we own in Irving, TX containing approximately 4.7 acres for $2,750, excluding acquisition related costs. This acquisition is expected to close before the end of the fourth quarter. This pending acquisition is subject to conditions, and accordingly, we cannot be sure that we will complete this acquisition or that this acquisition will not be delayed or the terms will not change.

Disposition Activities

During the nine months ended September 30, 2023, we sold six properties containing approximately 376,000 rentable square feet for an aggregate sales price of $23,575, excluding closing costs. The sales of these properties, as presented in the table below, do not represent significant dispositions individually or in the aggregate, nor do they represent a strategic shift in our business. As a result, the results of operations of these properties are included in continuing operations through the date of sale in our condensed consolidated statements of comprehensive income (loss).


Date of Sale	Number of Properties	Location	Rentable Square Feet	Gross Sales Price(1)		Gain (Loss) on Sale of Real Estate
January 2023	3	Richmond, VA	89,000	$	5,350	$	2,548
April 2023	1	Phoenix, AZ	107,000	4,900		511
June 2023	1	Vernon Hills, IL	100,000	2,825		(2,816)
September 2023	1	Windsor Mill, MD	80,000	10,500		244
	6		376,000	$	23,575	$	487

(1)Gross sales price is the gross contract price, excluding closing costs.

As of September 30, 2023, we had two properties classified as held for sale in our condensed consolidated balance sheet. As of October 27, 2023, we have entered into agreements to sell the two properties classified as held for sale containing approximately 177,000 rentable square feet for an aggregate sales price of $21,299, excluding closing costs. These pending sales are subject to conditions, and accordingly, we cannot be sure that we will complete these sales or that these sales will not be delayed or the terms will not change.

Unconsolidated Joint Ventures

We own interests in two joint ventures that own three properties. We account for these investments under the equity method of accounting. As of September 30, 2023 and December 31, 2022, our investments in unconsolidated joint ventures consisted of the following:


		OPI Carrying Value of Investments at
Joint Venture	OPI Ownership	September 30, 2023		December 31, 2022		Number of Properties	Location	Rentable Square Feet
Prosperity Metro Plaza	51%	$	18,455	$	19,237	2	Fairfax, VA	329,000
1750 H Street, NW	50%	18,147		15,892		1	Washington, D.C.	122,000
Total		$	36,602	$	35,129	3		451,000

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OFFICE PROPERTIES INCOME TRUST

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(dollars in thousands, except per share data)

(unaudited)

The following table provides a summary of the mortgage debt of our two unconsolidated joint ventures:


Joint Venture	Interest Rate (1)	Maturity Date	Principal Balance at September 30, 2023 and December 31, 2022 (2)
Prosperity Metro Plaza	4.09%	12/1/2029	$	50,000
1750 H Street, NW (3)	3.69%	8/1/2027	32,000
Weighted Average / Total	3.93%		$	82,000

(1)Includes the effect of mark to market purchase accounting.

(2)Reflects the entire balance of the debt secured by the properties and is not adjusted to reflect the interests in the joint ventures we do not own. None of the debt is recourse to us.

(3)In July 2023, the maturity date of this mortgage loan was extended by three years at the same interest rate.

As of September 30, 2023, the aggregate unamortized basis difference of our two unconsolidated joint ventures of $6,123 was primarily attributable to the difference between the amount we paid to purchase our interest in these joint ventures, including transaction costs, and the historical carrying value of the net assets of these joint ventures. This difference is being amortized over the remaining useful life of the related properties and the resulting amortization expense is included in equity in net losses of investees in our condensed consolidated statements of comprehensive income (loss).

In October 2023, our joint venture partner that has a 50% equity interest in the 1750 H Street, NW joint venture failed to fund a $600 capital call. We are currently evaluating our options regarding this funding and there can be no assurance that we will be successful pursuing any remedies available to us under the joint venture agreement.

Note 4. Leases

Our leases provide for base rent payments and, in addition, may include variable payments. Rental income from operating leases, including any payments derived by index or market-based indices, is recognized on a straight line basis over the lease term when we have determined that the collectability of substantially all of the lease payments is probable. Some of our leases have options to extend or terminate the lease exercisable at the option of our tenants, which are considered when determining the lease term. Allowances for bad debts are recognized as a direct reduction of rental income. In certain circumstances, some leases provide the tenant with the right to terminate if the legislature or other funding authority does not appropriate the funding necessary for the tenant to meet its lease obligations; we have determined the fixed non-cancelable lease term of these leases to be the full term of the lease because we believe the occurrence of early terminations to be a remote contingency based on both our historical experience and our assessments of the likelihood of lease cancellation on a separate lease basis.

We increased rental income to record revenue on a straight line basis by $8,691 and $1,765 for the three months ended September 30, 2023 and 2022, respectively, and $17,120 and $7,226 for the nine months ended September 30, 2023 and 2022, respectively. Rents receivable, excluding properties classified as held for sale, included $103,366 and $86,305 of straight line rent receivables at September 30, 2023 and December 31, 2022, respectively.

We do not include in our measurement of our lease receivables certain variable payments, including payments determined by changes in the index or market-based indices after the inception of the lease, certain tenant reimbursements and other income until the specific events that trigger the variable payments have occurred. Such payments totaled $21,067 and $64,627 for the three and nine months ended September 30, 2023, respectively, of which tenant reimbursements totaled $19,722 and $60,641, respectively. For the three and nine months ended September 30, 2022, such payments totaled $23,183 and $67,820, respectively, of which tenant reimbursements totaled $21,953 and $64,437, respectively.

Note 5. Concentration

Tenant and Credit Concentration

As of September 30, 2023 and 2022, the U.S. government and certain state and other government tenants combined were responsible for approximately 28.1% and 27.8%, respectively, of our annualized rental income. The U.S. government is our largest tenant by annualized rental income and represented approximately 20.0% and 19.1% of our annualized rental income as of September 30, 2023 and 2022, respectively. We define annualized rental income as the annualized contractual base rents from our tenants pursuant to our lease agreements as of the measurement date, plus straight line rent adjustments and estimated recurring expense reimbursements to be paid to us, and excluding lease value amortization.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(dollars in thousands, except per share data)

(unaudited)

Geographic Concentration

As of September 30, 2023, our 154 wholly owned properties were located in 30 states and the District of Columbia. Properties located in California, Virginia, Illinois, Georgia and the District of Columbia were responsible for approximately 12.2%, 11.3%, 10.6%, 9.4% and 9.2% of our annualized rental income as of September 30, 2023, respectively.

Note 6. Indebtedness

Our principal debt obligations as of September 30, 2023 were: (1) $200,000 of outstanding borrowings under our $750,000 unsecured revolving credit facility; (2) $2,212,000 aggregate outstanding principal amount of senior unsecured notes; and (3) $177,320 aggregate outstanding principal amount of mortgage notes.

Our $750,000 revolving credit facility is governed by a credit agreement, or our credit agreement, with a syndicate of institutional lenders that includes a feature under which the maximum aggregate borrowing availability may be increased to up to $1,950,000 in certain circumstances. Our revolving credit facility is available for general business purposes, including acquisitions. The maturity date of our revolving credit facility is January 31, 2024. We can borrow, repay and reborrow funds available under our revolving credit facility until maturity and no principal repayment is due until maturity.

In March 2023, we amended our credit agreement to, among other things, replace LIBOR with the secured overnight financing rate, or SOFR, as the benchmark interest rate for calculating interest payable on the amounts outstanding under our revolving credit facility. We are required to pay interest at a rate of SOFR plus a premium, which was 145 basis points per annum at September 30, 2023, on the amount outstanding under our revolving credit facility. We also pay a facility fee on the total amount of lending commitments under our revolving credit facility, which was 30 basis points per annum at September 30, 2023. Both the interest rate premium and facility fee are subject to adjustment based upon changes to our credit ratings. As of September 30, 2023 and December 31, 2022, the annual interest rate payable on borrowings under our revolving credit facility was 6.9% and 5.4%, respectively. The weighted average annual interest rate for borrowings under our revolving credit facility was 6.8% and 6.4% for the three and nine months ended September 30, 2023, respectively, and 3.3% and 3.2% for the three and nine months ended September 30, 2022. As of September 30, 2023 and October 27, 2023, we had $200,000 and $205,000, respectively, outstanding under our revolving credit facility, and $550,000 and $545,000, respectively, available for borrowing, subject to meeting required financial covenants.

Our credit agreement and senior unsecured notes indentures and their supplements provide for acceleration of payment of all amounts due thereunder upon the occurrence and continuation of certain events of default, such as, in the case of our credit agreement, a change of control of us, which includes RMR ceasing to act as our business and property manager. Our credit agreement and senior unsecured notes indentures and their supplements also contain covenants, including covenants that restrict our ability to incur debts, require us to comply with certain financial covenants and, in the case of our credit agreement, restrict our ability to make distributions under certain circumstances. We believe we were in compliance with the terms and conditions of the respective covenants under our credit agreement and senior unsecured notes indentures and their supplements at September 30, 2023.

We are currently in discussion with our lenders regarding a new revolving credit facility. We are also evaluating different options to repay our maturing senior notes, including new financings and potential property sales. While our plans could be impacted by factors outside of our control, including unfavorable market, economic and commercial real estate conditions, we believe based on our current discussions and history of working with our lenders that it is probable that these plans will allow us to repay our maturing debt.

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OFFICE PROPERTIES INCOME TRUST

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(dollars in thousands, except per share data)

(unaudited)

Mortgage Note Issuances

During the nine months ended September 30, 2023, we issued six fixed rate, interest-only mortgage notes as summarized in the following table:


Issuance Date	Secured By	Principal Balance (1)		Interest Rate	Maturity	Net Book Value of Collateral as of September 30, 2023
May 2023 (2)	One property	$	30,680	7.210%	7/1/2033	$	36,752
June 2023	One property	26,340		8.139%	7/1/2028	52,878
June 2023	One property	42,700		8.272%	7/1/2028	43,445
June 2023	One property	8,400		7.305%	7/1/2033	19,085
August 2023	One property	14,900		7.717%	9/1/2033	24,113
September 2023	Two properties	54,300		7.671%	10/6/2028	64,192
Total / Weighted Average		$	177,320	7.792%		$	240,465

(1)Our mortgage notes are non-recourse, subject to certain limited exceptions and do not contain any material financial covenants.

(2)Requires interest-only payments through May 2028, at which time principal and interest payments are due monthly through the maturity date.

Mortgage Note Repayment

In June 2023, we repaid at maturity, a mortgage note secured by one property with an outstanding principal balance of $50,000 and an annual interest rate of 3.70%.

Note 7. Fair Value of Assets and Liabilities

Our financial instruments include our cash and cash equivalents, restricted cash, rents receivable, accounts payable, a revolving credit facility, senior unsecured notes, mortgage notes payable, amounts due to related persons, other accrued expenses and security deposits. At September 30, 2023 and December 31, 2022, the fair values of our financial instruments approximated their carrying values in our condensed consolidated financial statements, due to their short term nature or floating interest rates, except as follows:


	As of September 30, 2023				As of December 31, 2022
Financial Instrument	Carrying Value (1)		Fair Value		Carrying Value (1)		Fair Value


Senior unsecured notes, 4.25% interest rate, due in 2024	$	348,574	$	331,881	$	346,863	$	331,601
Senior unsecured notes, 4.50% interest rate, due in 2025	645,404		531,284		642,818		589,388
Senior unsecured notes, 2.650% interest rate, due in 2026	298,308		204,081		297,839		232,770
Senior unsecured notes, 2.400% interest rate, due in 2027	347,931		209,255		347,466		256,606
Senior unsecured notes, 3.450% interest rate, due in 2031	396,504		202,504		396,178		268,004

Senior unsecured notes, 6.375% interest rate, due in 2050	156,856		89,748		156,711		113,075
Mortgage notes payable (2) (3)	172,331		175,868		49,917		49,099
Total	$	2,365,908	$	1,744,621	$	2,237,792	$	1,840,543

(1)Includes unamortized debt premiums, discounts and issuance costs totaling $23,412 and $24,208 as of September 30, 2023 and December 31, 2022, respectively.

(2)Balances as of December 31, 2022 include a mortgage note secured by one property with an outstanding principal balance of $50,000 that was repaid in June 2023.

(3)Balances as of September 30, 2023 include six mortgage notes issued during the nine months ended September 30, 2023 with an aggregate outstanding principal balance of $177,320.

We estimated the fair values of our senior unsecured notes (except for our senior unsecured notes due 2050) using an average of the bid and ask price of the notes (Level 2 inputs as defined in the fair value hierarchy under GAAP) as of the measurement date. We estimated the fair value of our senior unsecured notes due 2050 based on the closing price on The Nasdaq Stock Market LLC, or Nasdaq, (Level 1 inputs as defined in the fair value hierarchy under GAAP) as of the measurement date. We estimated the fair values of our mortgage notes payable using discounted cash flow analyses and

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(dollars in thousands, except per share data)

(unaudited)

currently prevailing market rates (Level 3 inputs as defined in the fair value hierarchy under GAAP) as of the measurement date. Because Level 3 inputs are unobservable, our estimated fair values may differ materially from the actual fair values.

Note 8. Shareholders’ Equity

Share Awards

On June 13, 2023, in accordance with our Trustee compensation agreements, we awarded to each of our nine Trustees 3,500 of our common shares, valued at $7.90 per share, the closing price of our common shares on Nasdaq on that day.

On September 13, 2023, we awarded under our equity compensation plan an aggregate of 210,300 of our common shares, valued at $5.76 per share, the closing price of our common shares on Nasdaq on that day, to our current and former officers and certain other employees of RMR.

Share Purchases

During the three and nine months ended September 30, 2023, we purchased an aggregate of 40,104 and 47,858 of our common shares, valued at a weighted average share price of $5.84 and $6.09 from one of our Trustees, our current and former officers and certain current and former officers and employees of RMR in satisfaction of tax withholding and payment obligations in connection with the vesting of awards of our common shares.

Distributions

During the nine months ended September 30, 2023, we declared and paid regular quarterly distributions to common shareholders as follows:


Declaration Date	Record Date	Paid Date	Distributions Per Common Share		Total Distributions
January 12, 2023	January 23, 2023	February 16, 2023	$	0.55	$	26,710
April 13, 2023	April 24, 2023	May 18, 2023	0.25		12,141
July 13, 2023	July 24, 2023	August 17, 2023	0.25		12,147

			$	1.05	$	50,998

On October 12, 2023, we declared a regular quarterly distribution payable to common shareholders of record on October 23, 2023 in the amount of $0.25 per share, or approximately $12,200. We expect to pay this distribution on or about November 16, 2023.

Note 9. Business and Property Management Agreements with RMR

We have no employees. The personnel and various services we require to operate our business are provided to us by RMR. We have two agreements with RMR to provide management services to us: (1) a business management agreement, which relates to our business generally; and (2) a property management agreement, which relates to our property level operations.

Pursuant to our business management agreement with RMR, we recognized net business management fees of $3,637 and $11,180 for the three and nine months ended September 30, 2023, respectively, and $4,260 and $13,462 for the three and nine months ended September 30, 2022, respectively. Based on our common share total return, as defined in our business management agreement, as of September 30, 2023, no estimated incentive fees are included in the net business management fees we recognized for the three and nine months ended September 30, 2023. The actual amount of annual incentive fees for 2023, if any, will be based on our common share total return for the three year period ending December 31, 2023, and will be payable in January 2024. We did not incur an incentive fee payable to RMR for the year ended December 31, 2022. We include business management fees in general and administrative expenses in our condensed consolidated statements of comprehensive income (loss).

Pursuant to our property management agreement with RMR, we recognized aggregate net property management and construction supervision fees of $5,465 and $17,947 for the three and nine months ended September 30, 2023, respectively, and $6,502 and $19,024 for the three and nine months ended September 30, 2022, respectively. Of these amounts, for the three and nine months ended September 30, 2023, $3,718 and $11,252, respectively, were expensed to other operating expenses in our

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(dollars in thousands, except per share data)

(unaudited)

condensed consolidated statements of comprehensive income (loss) and $1,747 and $6,695, respectively, were capitalized as building improvements in our condensed consolidated balance sheet. For the three and nine months ended September 30, 2022, $3,996 and $12,237, respectively, were expensed to other operating expenses in our condensed consolidated statements of comprehensive income (loss) and $2,506 and $6,787, respectively, were capitalized as building improvements in our condensed consolidated balance sheet. The amounts capitalized are being depreciated over the estimated useful lives of the related capital assets.

We are generally responsible for all of our operating expenses, including certain expenses incurred or arranged by RMR on our behalf. We are generally not responsible for payment of RMR’s employment, office or administrative expenses incurred to provide management services to us, except for the employment and related expenses of RMR’s employees assigned to work exclusively or partly at our properties, our share of the wages, benefits and other related costs of RMR’s centralized accounting personnel, our share of RMR’s costs for providing our internal audit function and as otherwise agreed. Our property level operating expenses are generally incorporated into the rents charged to our tenants, including certain payroll and related costs incurred by RMR. We reimbursed RMR $6,331 and $19,295 for these expenses and costs for the three and nine months ended September 30, 2023, respectively, and $6,268 and $18,281 for the three and nine months ended September 30, 2022, respectively. We included these amounts in other operating expenses and general and administrative expenses, as applicable, in our condensed consolidated statements of comprehensive income (loss).

Management Agreements Between Our Joint Ventures and RMR. RMR provides management services to our two unconsolidated joint ventures. We are not obligated to pay management fees to RMR under our management agreements with RMR for the services it provides regarding the joint ventures. The joint ventures pay management fees directly to RMR.

Note 10. Related Person Transactions

We have relationships and historical and continuing transactions with RMR, The RMR Group Inc., or RMR Inc., and others related to them, including other companies to which RMR or its subsidiaries provide management services and some of which have trustees, directors or officers who are also our Trustees or officers. RMR is a majority owned subsidiary of RMR Inc. The Chair of our Board of Trustees and one of our Managing Trustees, Adam D. Portnoy, is the sole trustee, an officer and the controlling shareholder of ABP Trust, which is the controlling shareholder of RMR Inc., the chair of the board of directors, a managing director, the president and chief executive officer of RMR Inc. and an officer and employee of RMR. Jennifer B. Clark, our other Managing Trustee and our Secretary, also serves as a managing director and the executive vice president, general counsel and secretary of RMR Inc., an officer and employee of RMR and an officer of ABP Trust. Each of our officers is an officer and employee of RMR. Some of our Independent Trustees also serve as independent trustees of other public companies to which RMR or its subsidiaries provide management services. Mr. Portnoy serves as chair of the boards and as a managing trustee of these public companies. Other officers of RMR serve as managing trustees or officers of certain of these companies.

Share Awards to RMR Employees. See Note 8 for further information relating to our awards of common shares to our officers and certain other employees of RMR in September 2023 and our repurchases of common shares from certain of our Trustees and officers and certain other current and former officers and employees of RMR in satisfaction of tax withholding and payment obligations in connection with the vesting of awards of our common shares to them. We include amounts recognized as expense for awards of our common shares to our officers and other RMR employees in general and administrative expenses in our condensed consolidated statements of comprehensive income (loss).

Our Manager, RMR. We have two agreements with RMR to provide management services to us. RMR also provides management services to our two unconsolidated joint ventures. See Note 9 for more information regarding our and our unconsolidated joint ventures’ management agreements with RMR.

Leases with RMR. We lease office space to RMR in certain of our properties for RMR’s property management offices. Pursuant to our lease agreements with RMR, we recognized rental income from RMR for leased office space of $205 and $671 for the three and nine months ended September 30, 2023, respectively, and $282 and $851 for the three and nine months ended September 30, 2022, respectively.

Sonesta. In June 2021, we entered into a 30-year lease agreement with a subsidiary of Sonesta International Hotels Corporation, or Sonesta, in connection with the redevelopment of an office property we own in Washington, D.C. as a mixed-use property. Sonesta’s lease is for the full-service hotel component of the property that includes approximately 230,000 rentable square feet, which represents approximately 55% of the total square feet of the property. We substantially completed

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(dollars in thousands, except per share data)

(unaudited)

the redevelopment in June 2023 and the term of the lease commenced in August 2023. Sonesta has two options to extend the term for 10 years each. Pursuant to the lease agreement, Sonesta will pay us annual base rent of approximately $6,436 beginning 18 months after the lease commencement. The annual base rent will increase by 10% every five years throughout the term. Sonesta is also obligated to pay its pro rata share of the operating costs for the building. As of September 30, 2023, we have paid approximately $77,000 of tenant improvement costs for the build out of the hotel space pursuant to the lease agreement. Mr. Portnoy is a director and controlling shareholder of Sonesta and Ms. Clark is also a director and officer of Sonesta.

Terminated Merger Agreement with DHC. See Note 1 for more information relating to our terminated merger agreement with DHC.

For more information about these and other such relationships and certain other related person transactions, refer to our 2022 Annual Report.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following information should be read in conjunction with our condensed consolidated financial statements and accompanying notes included in Part I, Item 1 of this Quarterly Report on Form 10-Q and with our 2022 Annual Report.

OVERVIEW (dollars in thousands, except per share and per square foot data)

We are a real estate investment trust, or REIT, organized under Maryland law. As of September 30, 2023, our wholly owned properties were comprised of 154 properties and we had noncontrolling ownership interests of 51% and 50% in two unconsolidated joint ventures that own three properties containing approximately 451,000 rentable square feet. As of September 30, 2023, our properties are located in 30 states and the District of Columbia and contain approximately 20,705,000 rentable square feet. As of September 30, 2023, our properties were leased to 263 different tenants with a weighted average remaining lease term (based on annualized rental income) of approximately 6.4 years. The U.S. government is our largest tenant, representing approximately 20.0% of our annualized rental income as of September 30, 2023. The term annualized rental income as used herein is defined as the annualized contractual base rents from our tenants pursuant to our lease agreements as of September 30, 2023, plus straight line rent adjustments and estimated recurring expense reimbursements to be paid to us, and excluding lease value amortization.

Certain changes in office space utilization that accelerated during the COVID-19 pandemic, including increased remote work arrangements and tenants consolidating their real estate footprint, continue to impact the market. The utilization and demand for office space continues to face headwinds and the duration and ultimate impact of current trends on the demands for office space at our properties remains uncertain and subject to change. Accordingly, we do not yet know what the full extent of the impacts will be on our or our tenants’ businesses and operations nor the long-term outlook for leasing our properties.

In response to inflationary pressures, the U.S. Federal Reserve has increased the federal funds rate by 525 basis points since March 2022 and has indicated that there may be additional increases. The inflationary pressures and rising interest rates in the United States and globally, and global geopolitical hostilities and tensions, have given rise to concerns that the U.S. economy may soon enter an economic recession and they have caused disruptions in the financial markets. Sustained inflationary pressures, increased interest rates, an economic recession or continued or intensified disruptions in the financial markets could adversely affect our and our tenants’ financial condition, could adversely impact the ability or willingness of our tenants to renew our leases or pay rent to us, would impair our ability to effectively deploy our capital or realize desirable returns on our investments, may restrict our access to, and would likely increase our cost of, capital and may cause the values of our properties and our securities to decline.

On September 1, 2023, we and DHC mutually agreed to terminate the previously disclosed Merger Agreement and entered into the Termination Agreement. For more information on our terminated merger with DHC, see Note 1 to our Condensed Consolidated Financial Statements.

For more information about the risks relating to these dynamics and conditions and their impacts on us and our business, see Part I, Item IA, “Risk Factors”, of our 2022 Annual Report.

Property Operations

Unless otherwise noted, the data presented in this section includes properties classified as held for sale as of September 30, 2023 and excludes three properties owned by two unconsolidated joint ventures in which we own 51% and 50% interests. For more information regarding our properties classified as held for sale and our two unconsolidated joint ventures, see Note 3 to our Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

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Occupancy data for our properties as of September 30, 2023 and 2022 was as follows (square feet in thousands):


	All Properties (1)				Comparable Properties (2)
	September 30,				September 30,
	2023		2022		2023		2022
Total properties	154		162		147		147
Total rentable square feet (3)	20,705		21,211		19,526		19,551
Percent leased (4)	89.9	%	90.7	%	93.3	%	94.7	%

(1)Based on properties we owned on September 30, 2023 and 2022, respectively.

(2)Based on properties we owned continuously since January 1, 2022; excludes two properties classified as held for sale, five properties undergoing significant redevelopment and three properties owned by two unconsolidated joint ventures in which we own 51% and 50% interests.

(3)Subject to changes when space is remeasured or reconfigured for tenants.

(4)Percent leased includes (i) space being fitted out for tenant occupancy pursuant to our lease agreements, if any, and (ii) space which is leased, but is not occupied or is being offered for sublease by tenants, if any, as of the measurement date.

The average effective rental rate per square foot for our properties for the three and nine months ended September 30, 2023 and 2022 were as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Average effective rental rate per square foot (1):
All properties (2)	$	29.37	$	29.19	$	29.25	$	29.44
Comparable properties (3)	$	29.61	$	29.33	$	29.42	$	29.25

(1)Average effective rental rate per square foot represents annualized total rental income during the period specified divided by the average rentable square feet leased during the period specified.

(2)Based on properties we owned on September 30, 2023 and 2022, respectively.

(3)Based on properties we owned continuously since July 1, 2022 and January 1, 2022, respectively; excludes two properties classified as held for sale, five properties undergoing significant redevelopment and three properties owned by two unconsolidated joint ventures in which we own 51% and 50% interests.

During the three and nine months ended September 30, 2023, changes in rentable square feet leased and available for lease at our properties were as follows (square feet in thousands):


	Three Months Ended September 30, 2023			Nine Months Ended September 30, 2023
	Leased	Available for Lease	Total	Leased	Available for Lease	Total
Beginning of period	18,834	1,950	20,784	19,004	1,965	20,969
Changes resulting from:

Disposition of properties	(2)	(78)	(80)	(102)	(274)	(376)
Lease expirations	(797)	797	—	(1,783)	1,783	—
Redevelopment expansion (1)	—	—	—	—	87	87
Lease renewals (2)	482	(482)	—	1,111	(1,111)	—
New leases (2)	104	(104)	—	391	(391)	—
Remeasurements (3)	—	1	1	—	25	25
End of period	18,621	2,084	20,705	18,621	2,084	20,705

(1)Represents additional rentable square feet resulting from the redevelopment of a property in Washington, D.C., which was completed in June 2023.

(2)Based on leases entered during the three and nine months ended September 30, 2023.

(3)Rentable square feet are subject to changes when space is remeasured or reconfigured for tenants.

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During the three and nine months ended September 30, 2023, we entered into new and renewal leases as summarized in the following table (square feet in thousands):


	Three Months Ended September 30, 2023
	New Leases			Renewals			Total
Rentable square feet leased	104			482			586
Weighted average rental rate change (by rentable square feet)	1.9		%	(3.7		%)	(2.7		%)
Tenant leasing costs and concession commitments (1)	$	13,623		$	11,736		$	25,359
Tenant leasing costs and concession commitments per rentable square foot (1)	$	131.54		$	24.36		$	43.33
Weighted (by square feet) average lease term (years)	9.5			6.9			7.4
Total leasing costs and concession commitments per rentable square foot per year (1)	$	13.84		$	3.53		$	5.89


	Nine Months Ended September 30, 2023
	New Leases			Renewals			Total
Rentable square feet leased	391			1,111			1,502
Weighted average rental rate change (by rentable square feet)	(1.3		%)	(3.7		%)	(3.1		%)
Tenant leasing costs and concession commitments (1)	$	34,512		$	40,232		$	74,744
Tenant leasing costs and concession commitments per rentable square foot (1)	$	88.47		$	36.23		$	49.81
Weighted (by square feet) average lease term (years)	8.7			8.7			8.7
Total leasing costs and concession commitments per rentable square foot per year (1)	$	10.19		$	4.17		$	5.74

(1)Includes commitments made for leasing expenditures and concessions, such as tenant improvements, leasing commissions, tenant reimbursements and free rent.

During the three and nine months ended September 30, 2023, changes in effective rental rates per square foot achieved for new leases and lease renewals at our properties that commenced during the three and nine months ended September 30, 2023, when compared to prior effective rental rates per square foot in effect for the same space (and excluding space acquired vacant), were as follows (square feet in thousands):


	Three Months Ended September 30, 2023					Nine Months Ended September 30, 2023
	Old Effective Rent Per Square Foot (1)		New Effective Rent Per Square Foot (1)		Rentable Square Feet	Old Effective Rent Per Square Foot (1)		New Effective Rent Per Square Foot (1)		Rentable Square Feet
New leases	$	23.27	$	28.03	101	$	27.26	$	28.95	415
Lease renewals	$	37.09	$	36.26	568	$	31.13	$	30.10	1,324
Total leasing activity	$	35.01	$	35.02	669	$	30.21	$	29.83	1,739

(1)Effective rental rates include contractual base rents from our tenants pursuant to our lease agreements, plus straight line rent adjustments and estimated expense reimbursements to be paid to us, and exclude lease value amortization.

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During the three and nine months ended September 30, 2023 and 2022, amounts capitalized at our properties for lease related costs, building improvements and development, redevelopment and other activities were as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022


Lease related costs (1)	$	15,677	$	17,297	$	56,970	$	42,092
Building improvements (2)	8,516		8,585		18,453		16,070
Recurring capital expenditures	24,193		25,882		75,423		58,162
Development, redevelopment and other activities (3)	28,326		36,811		118,232		114,637
Total capital expenditures	$	52,519	$	62,693	$	193,655	$	172,799

(1)Lease related costs generally include capital expenditures used to improve tenants’ space or amounts paid directly to tenants to improve their space and leasing related costs, such as brokerage commissions and other tenant inducements.

(2)Building improvements generally include expenditures to replace obsolete building components and expenditures that extend the useful life of existing assets.

(3)Development, redevelopment and other activities generally include capital expenditure projects that reposition a property or result in new sources of revenue. Includes capitalized interest and other operating costs of $1,978 and $8,691 for the three and nine months ended September 30, 2023, respectively, and $2,089 and $5,029 for the three and nine months ended September 30, 2022, respectively.

In addition to the capital expenditures described above, we contributed $3,763 to one of our unconsolidated joint ventures during the nine months ended September 30, 2023. Also, as of September 30, 2023, we had estimated unspent leasing related obligations of $137,223, of which we expect to spend $73,666 over the next 12 months.

As of September 30, 2023, we had leases at our properties totaling approximately 2,614,820 rentable square feet that were scheduled to expire through September 30, 2024. As of October 27, 2023, we expect tenants with leases totaling approximately 1,832,201 rentable square feet that are scheduled to expire through September 30, 2024, excluding space that has been re-leased and space for which we are in advanced negotiations to re-lease, not to renew or to downsize their leased space upon expiration, and we cannot be sure as to whether other tenants will renew their leases upon expiration. However, we continue to proactively engage with our existing tenants and are focused on overall tenant retention. Prevailing market conditions and our tenants’ needs at the time we negotiate and enter leases or lease renewals will generally determine rental rates and demand for leased space at our properties, all of which factors are beyond our control. Whenever we renew or enter into new leases for our properties, we intend to seek rents which are equal to or higher than our historical rents for the same properties; however, our ability to maintain or increase the rents for our current properties will depend in large part upon market conditions, which are beyond our control. We cannot be sure of the rental rates that will result from our ongoing negotiations regarding lease renewals or any new or renewed leases we may enter. Also, we may experience material declines in our rental income due to vacancies upon lease expirations or early terminations or lower rents upon lease renewal or reletting. Additionally, we may incur significant costs and make significant concessions to renew our leases with current tenants or lease our properties to new tenants.

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As of September 30, 2023, our lease expirations by year were as follows (square feet in thousands):


Year (1)	Number of Leases Expiring	Leased Square Feet Expiring (2)	Percent of Total		Cumulative Percent of Total		Annualized Rental Income Expiring		Percent of Total		Cumulative Percent of Total
2023	26	1,098	5.9	%	5.9	%	$	29,827	5.6	%	5.6	%
2024	55	2,521	13.5	%	19.4	%	65,112		12.3	%	17.9	%
2025	40	2,342	12.6	%	32.0	%	59,960		11.3	%	29.2	%
2026	38	1,469	7.9	%	39.9	%	41,597		7.8	%	37.0	%
2027	36	2,059	11.1	%	51.0	%	52,427		9.9	%	46.9	%
2028	20	762	4.1	%	55.1	%	33,386		6.3	%	53.2	%
2029	28	1,035	5.6	%	60.7	%	28,722		5.4	%	58.6	%
2030	29	936	5.0	%	65.7	%	26,957		5.1	%	63.7	%
2031	19	1,035	5.6	%	71.3	%	29,726		5.6	%	69.3	%
2032 and thereafter	59	5,364	28.7	%	100.0	%	163,019		30.7	%	100.0	%
Total	350	18,621	100.0	%			$	530,733	100.0	%

Weighted average remaining lease term (in years)		6.0					6.4

(1)The year of lease expiration is pursuant to current contract terms. Some of our leases allow the tenants to vacate the leased premises before the stated expirations of their leases with little or no liability. As of September 30, 2023, tenants occupying approximately 3.6% of our rentable square feet and responsible for approximately 3.6% of our annualized rental income as of September 30, 2023 had exercisable rights to terminate their leases before the stated terms of their leases expire. Also, in 2023, 2024, 2025, 2026, 2027, 2028, 2029, 2030, 2031, 2032, 2034, 2035, 2036, 2037 and 2040, early termination rights become exercisable by other tenants who occupied an additional approximately 1.0%, 2.6%, 2.6%, 1.6%, 1.3%, 3.9%, 0.8%, 0.9%, 0.6%, 0.3%, 0.2%, 0.9%, 0.1%, 0.1% and 0.3% of our rentable square feet, respectively, and contributed an additional approximately 1.1%, 2.9%, 5.0%, 2.2%, 1.6%, 4.4%, 1.4%, 1.0%, 0.5%, 0.6%, 0.6%, 1.2%, 0.3%, 0.2% and 0.4% of our annualized rental income, respectively, as of September 30, 2023. In addition, as of September 30, 2023, pursuant to leases with nine of our tenants, these tenants had rights to terminate their leases if their respective legislature or other funding authority does not appropriate rent amounts in their respective annual budgets. These nine tenants occupied approximately 4.8% of our rentable square feet and contributed approximately 5.2% of our annualized rental income as of September 30, 2023.

(2)Leased square feet is pursuant to leases existing as of September 30, 2023, and includes (i) space being fitted out for tenant occupancy pursuant to our lease agreements, if any, and (ii) space which is leased, but is not occupied or is being offered for sublease by tenants, if any. Square feet measurements are subject to changes when space is remeasured or reconfigured for new tenants.

We generally will seek to renew or extend the terms of leases at properties with tenants when they expire. However, market and economic factors, along with increases in remote work, changes in space utilization and government spending and budget priorities, may cause our tenants not to renew or extend their leases when they expire, or to seek to renew their leases for less space than they currently occupy. If we are unable to extend or renew our leases, or we renew leases for reduced space, it may be time consuming and expensive to relet some of these properties.

As of September 30, 2023, we derived 21.6% of our annualized rental income from our properties located in the metropolitan Washington, D.C. market area, which includes Washington, D.C., Northern Virginia and suburban Maryland. Current economic conditions in this area or a possible recession, including as a result of current inflationary conditions or otherwise, could reduce demand from tenants for our properties, reduce rents that our tenants in this area are willing to pay when our leases expire and increase lease concessions for new leases and renewals. Additionally, there has been a decrease in demand for new leased office space by the U.S. government, including in the metropolitan Washington, D.C. market area, and that could increase competition for government tenants and adversely affect our ability to retain government tenants or maintain or increase our rents when our leases expire.

Our manager, RMR, employs a tenant review process for us. RMR assesses tenants on an individual basis based on various applicable credit criteria. In general, depending on facts and circumstances, RMR evaluates the creditworthiness of a tenant based on information concerning the tenant that is provided by the tenant and, in some cases, information that is publicly available or obtained from third party sources. We consider investment grade tenants to include: (a) investment grade rated tenants; (b) tenants with investment grade rated parent entities that guarantee the tenant’s lease obligations; and/or (c) tenants with investment grade rated parent entities that do not guarantee the tenant’s lease obligations. As of September 30, 2023, tenants contributing 53.6% of annualized rental income were investment grade rated (or their payment obligations were guaranteed by an investment grade rated parent) and tenants contributing an additional 10.4% of annualized rental income were subsidiaries of an investment grade rated parent (although these parent entities were not liable for the payment of rents).

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As of September 30, 2023, tenants representing 1% or more of our total annualized rental income were as follows (square feet in thousands):


	Tenant	Credit Rating	Sq. Ft.	% of Leased Sq. Ft.		Annualized Rental Income		% of Total Annualized Rental Income
1	U.S. Government	Investment Grade	3,822	20.5	%	$	105,955	20.0	%
2	Alphabet Inc. (Google)	Investment Grade	386	2.1	%	22,119		4.2	%
3	Shook, Hardy & Bacon L.L.P.	Not Rated	596	3.2	%	19,216		3.6	%
4	Bank of America Corporation	Investment Grade	577	3.1	%	18,159		3.4	%
5	IG Investments Holdings LLC	Not Rated	339	1.8	%	17,303		3.3	%
6	State of California	Investment Grade	519	2.8	%	15,893		3.0	%
7	Tyson Foods, Inc. (1)	Investment Grade	248	1.3	%	11,954		2.3	%
8	Northrop Grumman Corporation	Investment Grade	337	1.8	%	10,795		2.0	%
9	Sonesta International Hotels Corporation	Not Rated	234	1.3	%	10,745		2.0	%
10	CommScope Holding Company Inc.	Non Investment Grade	228	1.2	%	9,582		1.8	%
11	Sonoma Biotherapeutics, Inc. (2)	Not Rated	107	0.6	%	7,634		1.4	%
12	State of Georgia	Investment Grade	308	1.7	%	7,345		1.4	%
13	Commonwealth of Massachusetts	Investment Grade	212	1.1	%	7,269		1.4	%
14	PNC Bank	Investment Grade	441	2.4	%	6,960		1.3	%
15	Micro Focus International plc	Non Investment Grade	215	1.2	%	6,836		1.3	%
16	Compass Group plc	Investment Grade	267	1.4	%	6,697		1.3	%
17	ServiceNow, Inc.	Investment Grade	149	0.8	%	6,675		1.3	%
18	Allstate Insurance Co.	Investment Grade	468	2.5	%	6,484		1.2	%
19	Automatic Data Processing, Inc.	Investment Grade	289	1.6	%	6,079		1.1	%
20	Church & Dwight Co., Inc.	Investment Grade	250	1.3	%	6,043		1.1	%
21	Leidos Holdings Inc.	Investment Grade	159	0.9	%	5,950		1.1	%
22	Primerica, Inc.	Investment Grade	344	1.8	%	5,737		1.1	%

	Total		10,495	56.4	%	$	321,430	60.6	%

(1)In July 2023, we received notice from Tyson Foods, Inc. exercising its option to terminate its lease at a property we own in Chicago, IL effective January 2025, prior to the stated lease expiration date of January 31, 2028. We are amortizing termination fees of approximately $1,400 per quarter through January 2025 as a result of this early termination.

(2)In August 2022, we entered into an approximately 10-year lease with Sonoma Biotherapeutics, Inc. at a property we own in Seattle, WA that is currently undergoing redevelopment. The term of the lease is estimated to commence in the first quarter of 2024.

Disposition Activities

We continue to evaluate our portfolio and are currently in various stages of marketing certain of our properties for sale, and we may decide to seek to sell additional properties in the future. As of October 27, 2023, we have entered into agreements to sell two properties containing approximately 177,000 rentable square feet for an aggregate sales price of $21,299, excluding closing costs. We cannot be sure we will sell any properties we are marketing for sale for prices in excess of their carrying values or otherwise. In addition, our pending sales are subject to conditions; accordingly, we cannot be sure that we will complete these sales or that these sales will not be delayed or the terms will not change.

For more information about our disposition activities, see Note 3 to our Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Segment Information

We operate in one business segment: ownership of real estate properties.

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RESULTS OF OPERATIONS (amounts in thousands, except per share amounts)

Three Months Ended September 30, 2023, Compared to Three Months Ended September 30, 2022


	Comparable Properties (1) Results Three Months Ended September 30,								Non-Comparable Properties Results Three Months Ended September 30,				Consolidated Results Three Months Ended September 30,

	2023		2022		$ Change		% Change		2023		2022		2023		2022		$ Change		% Change
Rental income	$	132,355	$	131,769	$	586	0.4	%	$	1,006	$	5,914	$	133,361	$	137,683	$	(4,322)	(3.1	%)
Operating expenses:
Real estate taxes	15,182		15,399		(217)		(1.4	%)	(925)		1,015		14,257		16,414		(2,157)		(13.1	%)
Utility expenses	7,169		7,409		(240)		(3.2	%)	291		577		7,460		7,986		(526)		(6.6	%)
Other operating expenses	27,207		25,971		1,236		4.8	%	739		1,766		27,946		27,737		209		0.8	%
Total operating expenses	49,558		48,779		779		1.6	%	105		3,358		49,663		52,137		(2,474)		(4.7	%)
Net operating income (2)	$	82,797	$	82,990	$	(193)	(0.2	%)	$	901	$	2,556	83,698		85,546		(1,848)		(2.2	%)

Other expenses:
Depreciation and amortization													52,266		52,988		(722)		(1.4	%)

Acquisition and transaction related costs													16,135		—		16,135		n/m
General and administrative													5,720		6,564		(844)		(12.9	%)
Total other expenses													74,121		59,552		14,569		24.5	%

Gain on sale of real estate													244		16,925		(16,681)		(98.6	%)


Interest and other income													281		56		225		n/m
Interest expense													(28,835)		(24,969)		(3,866)		15.5	%


(Loss) income before income tax expense and equity in net losses of investees													(18,733)		18,006		(36,739)		n/m
Income tax expense													(95)		(90)		(5)		5.6	%
Equity in net losses of investees													(765)		(952)		187		(19.6	%)






Net (loss) income													$	(19,593)	$	16,964	$	(36,557)	n/m



Weighted average common shares outstanding (basic and diluted)													48,403		48,286		117		0.2	%


Per common share amounts (basic and diluted):
Net (loss) income													$	(0.41)	$	0.35	$	(0.76)	n/m

n/m - not meaningful

(1)Comparable properties consists of 147 properties we owned on September 30, 2023 and which we owned continuously since July 1, 2022 and excludes two properties classified as held for sale, five properties undergoing significant redevelopment and three properties owned by two unconsolidated joint ventures in which we own 51% and 50% interests.

(2)Our definition of net operating income, or NOI, and our reconciliation of net (loss) income to NOI are included below under the heading “Non-GAAP Financial Measures.”

References to changes in the income and expense categories below relate to the comparison of consolidated results for the three months ended September 30, 2023, compared to the three months ended September 30, 2022.

Rental income. Rental income declined $5,440 as a result of our property disposition activities, partially offset by increases of $532 from new leases at properties undergoing significant redevelopment and $586 for comparable properties as a result of increased termination fee revenue and recovery of allowances for bad debts in the 2023 period, partially offset by increased vacancies and lower rents from lease renewals at certain of our properties in the 2023 period. Rental income includes non-cash straight line rent adjustments totaling $8,691 in the 2023 period and $1,765 in the 2022 period, and amortization of acquired real estate leases and assumed real estate lease obligations totaling $56 in the 2023 period and $(204) in the 2022 period.

Real estate taxes. Real estate taxes for non-comparable properties declined $1,001 as a result of successful tax appeals at certain properties undergoing significant redevelopment and $939 related to property disposition activities, and declined $217 for comparable properties primarily due to successful tax appeals at certain of our properties in the 2023 period.

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Utility expenses. Utility expenses declined $465 related to our property disposition activities and $240 for comparable properties as a result of higher utility expenses in the 2022 period for expenses previously paid directly by a certain tenant that were paid by us pursuant to a lease amendment executed in 2022 with that tenant, partially offset by an increase of $179 for properties undergoing significant redevelopment due to the related lease-up of the properties.

Other operating expenses. Other operating expenses increased $1,236 for comparable properties and $259 for properties undergoing significant redevelopment due to the related lease-up of the properties, partially offset by a decrease of $1,286 related to property disposition activities. The increase in other operating expenses for comparable properties is primarily due to the impact of inflation in the 2023 period, higher repairs and maintenance costs and higher insurance costs.

Depreciation and amortization. Depreciation and amortization for comparable properties declined $2,694 due to certain leasing related assets becoming fully depreciated since July 1, 2022, partially offset by depreciation and amortization of improvements made to certain of our properties since July 1, 2022. Depreciation and amortization for properties undergoing significant redevelopment increased $1,175 due to the substantial completion of our 20 Mass Ave. redevelopment in Washington, D.C. in June 2023 and $797 related to our property disposition activities.

Acquisition and transaction related costs. Acquisition and transaction related costs in the 2023 period consist of costs incurred in connection with our terminated merger with DHC and related transactions. For more information regarding our terminated merger with DHC, see Note 1 to our Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

General and administrative. The decrease in general and administrative expenses is primarily the result of a decrease in base business management fees resulting from a decrease in average total market capitalization and a decrease in share based compensation in the 2023 period compared to the 2022 period.

Gain on sale of real estate. We recorded a $244 gain on sale of real estate resulting from the sale of one property in the 2023 period. We recorded a $16,925 net gain on sale of real estate resulting from the sale of 10 properties in the 2022 period.

Interest and other income. The increase in interest and other income is primarily due to the effect of higher interest rates earned on cash balances invested in the 2023 period compared to the 2022 period.

Interest expense. The increase in interest expense reflects higher average interest rates on borrowings under our revolving credit facility and higher average amounts outstanding, as well as the issuance of six mortgage notes with an aggregate principal balance of $177,320 and a weighted average interest rate of 7.8% during 2023, partially offset by the repayment of two mortgage notes since July 1, 2022 with an aggregate principal balance of approximately $73,000 and a weighted average interest rate of 4.0%.

Income tax expense. Income tax expense is primarily the result of operating income earned in jurisdictions where we are subject to state income taxes and can fluctuate based on the timing of our income, including as a result of gains or losses on the sale of real estate.

Equity in net losses of investees. Equity in net losses of investees represents our proportionate share of losses from our investments in two unconsolidated joint ventures.

Net (loss) income. Net (loss) income and net (loss) income per basic and diluted common share decreased in the 2023 period compared to the 2022 period primarily as a result of the changes noted above.

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Nine Months Ended September 30, 2023, Compared to Nine Months Ended September 30, 2022


	Comparable Properties (1) Results Nine Months Ended September 30,								Non-Comparable Properties Results Nine Months Ended September 30,				Consolidated Results Nine Months Ended September 30,
	2023		2022		$ Change		% Change		2023		2022		2023		2022		$ Change		% Change
Rental income	$	396,434	$	394,807	$	1,627	0.4	%	$	3,346	$	31,546	$	399,780	$	426,353	$	(26,573)	(6.2	%)
Operating expenses:
Real estate taxes	45,664		45,244		420		0.9	%	(173)		4,398		45,491		49,642		(4,151)		(8.4	%)
Utility expenses	19,862		18,573		1,289		6.9	%	600		2,098		20,462		20,671		(209)		(1.0	%)
Other operating expenses	78,519		73,929		4,590		6.2	%	2,118		7,668		80,637		81,597		(960)		(1.2	%)
Total operating expenses	144,045		137,746		6,299		4.6	%	2,545		14,164		146,590		151,910		(5,320)		(3.5	%)
Net operating income (loss) (2)	$	252,389	$	257,061	$	(4,672)	(1.8	%)	$	801	$	17,382	253,190		274,443		(21,253)		(7.7	%)

Other expenses:
Depreciation and amortization													155,559		170,993		(15,434)		(9.0	%)
Loss on impairment of real estate													—		21,820		(21,820)		n/m
Acquisition and transaction related costs													30,534		224		30,310		n/m
General and administrative													17,430		19,353		(1,923)		(9.9	%)
Total other expenses													203,523		212,390		(8,867)		(4.2	%)


Gain on sale of real estate													487		7,437		(6,950)		(93.5	%)


Interest and other income													782		73		709		n/m
Interest expense													(80,591)		(78,923)		(1,668)		2.1	%
Loss on early extinguishment of debt													—		(77)		77		n/m
Loss before income tax expense and equity in net losses of investees													(29,655)		(9,437)		(20,218)		n/m
Income tax expense													(336)		(431)		95		(22.0	%)
Equity in net losses of investees													(2,290)		(2,631)		341		(13.0	%)




Net loss													$	(32,281)	$	(12,499)	$	(19,782)	158.3	%

Weighted average common shares outstanding (basic and diluted)													48,365		48,260		105		0.2	%


Per common share amounts (basic and diluted):


Net loss													$	(0.67)	$	(0.27)	$	(0.40)	148.1	%

n/m - not meaningful

(1)Comparable properties consists of 147 properties we owned on September 30, 2023 and which we owned continuously since January 1, 2022 and excludes two properties classified as held for sale, five properties undergoing significant redevelopment and three properties owned by two unconsolidated joint ventures in which we own 51% and 50% interests.

(2)Our definition of NOI and our reconciliation of net loss to NOI are included below under the heading “Non-GAAP Financial Measures.”

References to changes in the income and expense categories below relate to the comparison of consolidated results for the nine months ended September 30, 2023, compared to the nine months ended September 30, 2022.

Rental income. Rental income for non-comparable properties declined $22,443 as a result of our property disposition activities and $5,757 for properties undergoing significant redevelopment due to termination fee revenue in the 2022 period and increased vacancy at a property that began a redevelopment project in February 2022, partially offset by an increase of $1,627 for comparable properties as a result of decreased amortization of acquired real estate leases in the 2023 period and an increase in reimbursement revenue resulting from higher operating expenses, partially offset by lower termination fee revenue and increased vacancies at certain of our properties in the 2023 period. Rental income includes non-cash straight line rent adjustments totaling $17,120 in the 2023 period and $7,226 in the 2022 period, and amortization of acquired real estate leases and assumed real estate lease obligations totaling $196 in the 2023 period and $(780) in the 2022 period.

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Real estate taxes. Real estate taxes for non-comparable properties declined $3,384 related to our property disposition activities and $1,187 for properties undergoing significant redevelopment as a result of successful tax appeals at certain properties undergoing significant redevelopment, partially offset by an increase of $420 for comparable properties primarily due to successful tax appeals in the 2022 period.

Utility expenses. Utility expenses declined $1,655 related to our property disposition activities, partially offset by increases of $1,289 for comparable properties and $157 for properties undergoing significant redevelopment due to the related lease-up of those properties. The increase in utility expenses for comparable properties is primarily due to the impact of inflation in the 2023 period, as well as utility expenses that were previously paid directly by certain of our tenants that are now being paid by us pursuant to lease amendments executed in 2022 with those tenants.

Other operating expenses. Other operating expenses for non-comparable properties declined $5,450 related to our property disposition activities and $100 for properties undergoing significant redevelopment, partially offset by an increase of $4,590 for comparable properties due to the impact of inflation in the 2023 period, higher repairs and maintenance costs and higher insurance costs, as well as other operating expenses that were previously paid directly by certain of our tenants that are now being paid by us pursuant to lease amendments executed in 2022 with those tenants, partially offset by lower snow removal costs in the 2023 period.

Depreciation and amortization. The decrease in depreciation and amortization primarily reflects decreases of $9,401 for comparable properties, $4,142 related to our property disposition activities and $1,891 for properties undergoing significant redevelopment. Depreciation and amortization for comparable properties decreased due to certain leasing related assets becoming fully depreciated since January 1, 2022, partially offset by depreciation and amortization of improvements made to certain of our properties since January 1, 2022.

Loss on impairment of real estate. We recorded a $21,820 loss on impairment of real estate in the 2022 period to reduce the carrying value of seven properties to their estimated fair values less costs to sell.

Acquisition and transaction related costs. Acquisition and transaction related costs consist of costs in the 2023 period incurred in connection with our terminated merger with DHC and related transactions. For more information regarding our terminated merger with DHC, see Note 1 to our Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Gain on sale of real estate. We recorded a $487 net gain on sale of real estate resulting from the sale of six properties in the 2023 period. We recorded a $7,437 net gain on sale of real estate resulting from the sale of 16 properties in the 2022 period.

Interest expense. The increase in interest expense reflects higher average amounts outstanding and higher average interest rates on borrowings under our revolving credit facility, as well as the issuance of six mortgage notes with an aggregate principal balance of $177,320 and a weighted average interest rate of 7.8% during the 2023 period, partially offset by the redemption of our $300,000 senior unsecured notes with an interest rate of 4.0% in June 2022, higher capitalized interest in the 2023 period and the repayment of three mortgage notes since January 1, 2022 with an aggregate principal balance of approximately $98,000 and a weighted average interest rate of 4.1%.

Loss on early extinguishment of debt. We recorded a loss on early extinguishment of debt of $77 in the 2022 period from the write off of unamortized discounts and debt issuance costs associated with the redemption of our senior unsecured notes due July 2022.

Equity in net losses of investees. Equity in net losses of investees represents our proportionate share of losses from our investments in two unconsolidated joint ventures.

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Net loss. Net loss and net loss per basic and diluted common share increased in the 2023 period compared to the 2022 period primarily as a result of the changes noted above.

Non-GAAP Financial Measures

We present certain “non-GAAP financial measures” within the meaning of the applicable rules of the SEC, including the calculations below of NOI, funds from operations, or FFO, and normalized funds from operations, or Normalized FFO. These measures do not represent cash generated by operating activities in accordance with GAAP and should not be considered alternatives to net (loss) income as indicators of our operating performance or as measures of our liquidity. These measures should be considered in conjunction with net (loss) income as presented in our condensed consolidated statements of comprehensive income (loss). We consider these non-GAAP measures to be appropriate supplemental measures of operating performance for a REIT, along with net (loss) income. We believe these measures provide useful information to investors because by excluding the effects of certain historical amounts, such as depreciation and amortization expense, they may facilitate a comparison of our operating performance between periods and with other REITs and, in the case of NOI, reflecting only those income and expense items that are generated and incurred at the property level may help both investors and management to understand the operations of our properties.

Net Operating Income

The calculation of NOI excludes certain components of net (loss) income in order to provide results that are more closely related to our property level results of operations. We calculate NOI as shown below. We define NOI as income from our rental of real estate less our property operating expenses. NOI excludes amortization of capitalized tenant improvement costs and leasing commissions that we record as depreciation and amortization expense. We use NOI to evaluate individual and company-wide property level performance. Other real estate companies and REITs may calculate NOI differently than we do.

The following table presents the reconciliation of net (loss) income to NOI for the three and nine months ended September 30, 2023 and 2022:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022

Net (loss) income	$	(19,593)	$	16,964	$	(32,281)	$	(12,499)




Equity in net losses of investees	765		952		2,290		2,631
Income tax expense	95		90		336		431
(Loss) income before income tax expense and equity in net losses of investees	(18,733)		18,006		(29,655)		(9,437)
Loss on early extinguishment of debt	—		—		—		77
Interest expense	28,835		24,969		80,591		78,923
Interest and other income	(281)		(56)		(782)		(73)


Gain on sale of real estate	(244)		(16,925)		(487)		(7,437)

General and administrative	5,720		6,564		17,430		19,353
Acquisition and transaction related costs	16,135		—		30,534		224
Loss on impairment of real estate	—		—		—		21,820
Depreciation and amortization	52,266		52,988		155,559		170,993
NOI	$	83,698	$	85,546	$	253,190	$	274,443

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Funds From Operations and Normalized Funds From Operations

We calculate FFO and Normalized FFO as shown below. FFO is calculated on the basis defined by The National Association of Real Estate Investment Trusts, which is net (loss) income, calculated in accordance with GAAP, plus real estate depreciation and amortization of consolidated properties and our proportionate share of the real estate depreciation and amortization of unconsolidated joint venture properties, but excluding impairment charges on real estate assets and any gain or loss on sale of real estate, as well as certain other adjustments currently not applicable to us. In calculating Normalized FFO, we adjust for the other items shown below and include business management incentive fees, if any, only in the fourth quarter versus the quarter when they are recognized as an expense in accordance with GAAP due to their quarterly volatility not necessarily being indicative of our core operating performance and the uncertainty as to whether any such business management incentive fees will be payable when all contingencies for determining such fees are known at the end of the calendar year. FFO and Normalized FFO are among the factors considered by our Board of Trustees when determining the amount of distributions to our shareholders. Other factors include, but are not limited to, requirements to maintain our qualification for taxation as a REIT, limitations in our credit agreement and public debt covenants, the availability to us of debt and equity capital, our expectation of our future capital requirements and operating performance and our expected needs for and availability of cash to pay our obligations. Other real estate companies and REITs may calculate FFO and Normalized FFO differently than we do.

The following table presents the reconciliation of net (loss) income to FFO and Normalized FFO for the three and nine months ended September 30, 2023 and 2022:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Net (loss) income	$	(19,593)	$	16,964	$	(32,281)	$	(12,499)
Add (less): Depreciation and amortization:
Consolidated properties	52,266		52,988		155,559		170,993
Unconsolidated joint venture properties	840		775		2,538		2,269

Loss on impairment of real estate	—		—		—		21,820


Gain on sale of real estate	(244)		(16,925)		(487)		(7,437)

FFO	33,269		53,802		125,329		175,146
Add (less): Acquisition and transaction related costs	16,135		—		30,534		224

Loss on early extinguishment of debt	—		—		—		77





Normalized FFO	$	49,404	$	53,802	$	155,863	$	175,447

Weighted average common shares outstanding (basic and diluted)	48,403		48,286		48,365		48,260


FFO per common share (basic and diluted)	$	0.69	$	1.11	$	2.59	$	3.63

Normalized FFO per common share (basic and diluted)	$	1.02	$	1.11	$	3.22	$	3.64

LIQUIDITY AND CAPITAL RESOURCES

Our Operating Liquidity and Resources (dollar amounts in thousands, except per share amounts)

Our principal sources of funds to meet operating and capital expenses, pay debt service obligations and make distributions to our shareholders are the operating cash flows we generate from our properties, net proceeds from property sales and borrowings under our revolving credit facility. We believe that these sources of funds will be sufficient to meet our operating and capital expenses, pay debt service obligations and make distributions to our shareholders for the next 12 months and for the foreseeable future thereafter. Our future cash flows from operating activities will depend primarily upon:

•our ability to collect rent from our tenants;

•our ability to maintain or increase the occupancy of, and the rental rates at, our properties;

•our ability to control operating and capital expenses at our properties;

•our ability to successfully sell properties that we market for sale;

•our ability to develop, redevelop or reposition properties to produce cash flows in excess of our cost of capital and property operating and capital expenses; and

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•our ability to purchase additional properties which produce cash flows from operations in excess of our cost of acquisition capital and property operating and capital expenses.

On October 12, 2023, we announced a regular quarterly cash distribution of $0.25 per common share ($1.00 per common share per year). We determine our distribution payout ratio with consideration for our expected capital expenditures as well as cash flows from operations and payment of debt obligations.

Pursuant to our capital recycling program, we selectively sell certain properties from time to time to manage leverage levels and to acquire new properties or portfolios with a goal of improving our asset diversification, our geographical footprint and the average age of our properties, lengthening the weighted average term of our leases and increasing tenant retention. During the nine months ended September 30, 2023, we sold six properties for an aggregate sales price of $23,575, excluding closing costs. We continue to evaluate our portfolio to strategically recycle capital and are currently in various stages of marketing certain of our properties for sale. As of October 27, 2023, we have entered into agreements to sell two properties for an aggregate sales price of $21,299, excluding closing costs. We cannot be sure we will sell any properties we are marketing for sale for prices in excess of their carrying values or otherwise. In addition, our pending sales are subject to conditions; accordingly, we cannot be sure that we will complete these sales or that these sales will not be delayed or the terms will not change. We continue to carefully consider our capital allocation strategy to position us to opportunistically recycle and deploy capital.

Our future purchases of properties cannot be accurately projected because such purchases depend upon purchase opportunities which come to our attention and our ability to successfully complete the acquisitions. We generally do not intend to purchase “turn around” properties, or properties which do not generate positive cash flows.

The following is a summary of our sources and uses of cash flows for the periods presented, as reflected in our condensed consolidated statements of cash flows:


	Nine Months Ended September 30,
	2023		2022
Cash, cash equivalents and restricted cash at beginning of period	$	12,249	$	84,515
Net cash provided by (used in):
Operating activities	109,133		152,687
Investing activities	(156,942)		49,175
Financing activities	75,188		(270,852)
Cash, cash equivalents and restricted cash at end of period	$	39,628	$	15,525

The decrease in cash provided by operating activities for the 2023 period compared to the 2022 period was primarily due to decreases in NOI in the 2023 period due to property dispositions, reductions in occupied space at certain of our properties and an increase in costs incurred in connection with the terminated merger with DHC and related transactions. The change from cash flow provided by investing activities in the 2022 period to cash flows used in investing activities in the 2023 period was primarily due to lower proceeds received from property sales in the 2023 period and increased capital expenditures in the 2023 period related to our redevelopment activities. The change from cash flow used in financing activities in the 2022 period to cash flows provided by financing activities in the 2023 period was primarily due to the redemption of $300,000 of our senior unsecured notes in the 2022 period and the issuance of $177,320 of mortgage notes and decreased distributions to our common shareholders in the 2023 period.

Our Investment and Financing Liquidity and Resources (dollar amounts in thousands, except per share amounts)

In order to fund acquisitions and to meet cash needs that may result from our desire or need to make distributions or pay operating or capital expenses, we maintain a $750,000 revolving credit facility. In June 2023, we exercised our option to extend the maturity date of our revolving credit facility by six months to January 31, 2024. We can borrow, repay and reborrow funds available under our revolving credit facility until maturity, and no principal repayment is due until maturity. In March 2023, we amended our credit agreement to, among other things, replace LIBOR with SOFR as the benchmark interest rate for calculating interest payable on amounts outstanding under our revolving credit facility. We are required to pay interest at a rate of SOFR plus a premium, which was 145 basis points per annum at September 30, 2023, on the amount outstanding under our revolving credit facility. We also pay a facility fee on the total amount of lending commitments under our revolving credit facility, which was 30 basis points per annum at September 30, 2023. Both the interest rate premium and facility fee are subject to adjustment based upon changes to our credit ratings. As of September 30, 2023, the annual interest rate payable on

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borrowings under our revolving credit facility was 6.9%. As of September 30, 2023 and October 27, 2023, we had $200,000 and $205,000, respectively, outstanding under our revolving credit facility, and $550,000 and $545,000, respectively, available for borrowing, subject to meeting required financial covenants.

Our credit agreement includes a feature under which the maximum borrowing availability may be increased to up to $1,950,000 in certain circumstances.

Our credit agreement provides that, with certain exceptions, a subsidiary of ours is required to guaranty our obligations under our $750,000 revolving credit facility only if that subsidiary has separately incurred debt (other than nonrecourse debt), within the meaning specified in our credit agreement, or provided a guarantee of debt incurred by us or any of our other subsidiaries.

Mortgage Notes Issuances

During the nine months ended September 30, 2023, we issued six mortgage notes with an aggregate principal balance of $177,320 and a weighted average interest rate of 7.8%. The net proceeds from these mortgage loans were used to repay amounts outstanding under our revolving credit facility. See Note 6 to our Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for more information regarding our mortgage note issuances.

Mortgage Note Repayment

In June 2023, we repaid at maturity, a mortgage note secured by one property with an outstanding principal balance of $50,000 and an annual interest rate of 3.7% using cash on hand and borrowings under our revolving credit facility.

As of September 30, 2023, our debt maturities (other than our revolving credit facility), consisting of senior unsecured notes and mortgage notes, were as follows:


Year	Debt Maturities
2023	$	—
2024	350,000
2025	650,000
2026	300,000
2027	350,000
2028 and thereafter	739,320
Total	$	2,389,320

None of our unsecured debt obligations require sinking fund payments prior to their maturity dates. Our mortgage debts currently require monthly payments of interest only; however, certain of our mortgages will require payments of principal and interest after a specified date through maturity.

In addition to our debt obligations, as of September 30, 2023, we had estimated unspent leasing related obligations of $137,223, of which we expect to spend $73,666 over the next 12 months.

We substantially completed the redevelopment of a property located in Washington, D.C. containing approximately 427,000 rentable square feet in June 2023. We currently estimate the total project costs associated with this redevelopment, including lease related costs that will continue to be incurred subsequent to the substantial completion date, to be approximately $227,000. As of September 30, 2023, we had incurred $182,839 related to this project. In August 2023, a 30-year lease for approximately 230,000 rentable square feet commenced at this property that is approximately 25.1% higher than the prior rental rate for the same space, making the redevelopment project 55% leased. See Note 10 to our Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for more information regarding this lease and related redevelopment costs.

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We are also in the process of redeveloping a three-property campus located in Seattle, WA containing approximately 300,000 rentable square feet. This project includes the repositioning of two properties from office to life science and maintaining the third property for office use. We currently estimate the total project costs associated with this redevelopment to be approximately $162,000 and completion of the redevelopment in the first quarter of 2024. As of September 30, 2023, we had incurred $117,873 related to this project. In August 2022, we entered into an approximately 10-year lease for approximately 84,000 rentable square feet at one of the life science properties that is approximately 109.0% higher than the prior rental rate for the same space, making the redevelopment project 28% pre-leased.

We currently expect to use cash balances, borrowings under any revolving credit facility we may then have, net proceeds from property sales, incurrences or assumptions of mortgage debt and net proceeds from offerings of debt or equity securities to fund our future operations, capital expenditures, distributions to our shareholders and property acquisitions. When significant amounts are outstanding under our revolving credit facility or the maturities of our indebtedness approach, we expect to explore refinancing alternatives. Such alternatives may include incurring term debt, issuing debt or equity securities, extending the maturity date of our revolving credit facility and entering into a new revolving credit facility. We may assume additional mortgage debt in connection with our acquisitions or elect to place new mortgages on properties we own as a source of financing. We may also seek to participate in additional joint ventures or other arrangements that may provide us with additional sources of financing. Although we cannot be sure that we will be successful in consummating any particular type of financing, we believe that we will have access to financing, such as debt and equity offerings, to fund future acquisitions and capital expenditures and to pay our obligations. We currently have an effective shelf registration statement that allows us to issue public securities on an expedited basis, but it does not assure that there will be buyers for such securities.

Our ability to obtain, and the costs of, our future debt financings will depend primarily on credit market conditions and our creditworthiness. We have no control over market conditions. Potential investors and lenders likely will evaluate our ability to pay distributions to shareholders, fund required debt service and repay debts when they become due by reviewing our business practices and plans to balance our use of debt and equity capital so that our financial profile and leverage ratios afford us flexibility to withstand any reasonably anticipated adverse changes. Similarly, our ability to raise equity capital in the future will depend primarily upon equity capital market conditions and our ability to conduct our business to maintain and grow our operating cash flows. We intend to conduct our business in a manner that will afford us reasonable access to capital for investment and financing activities, but we cannot be sure that we will be able to successfully carry out this intention. For instance, it is uncertain what the ultimate impacts of inflationary pressures, rising or sustained high interest rates or any economic recession will be. A protracted and extensive economic recession or continued or intensified disruptions in capital markets could limit our access to financing from public sources and would likely increase our cost of capital.

During the nine months ended September 30, 2023, we paid quarterly distributions to our shareholders totaling $50,998 using cash on hand and borrowings under our revolving credit facility. On October 12, 2023, we declared a regular quarterly distribution payable to shareholders of record on October 23, 2023 of $0.25 per share, or approximately $12,200. We expect to pay this distribution on or about November 16, 2023 using cash on hand and borrowings under our revolving credit facility. For more information regarding the distributions we paid and declared during 2023, see Note 8 to our Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

We own 51% and 50% interests in two unconsolidated joint ventures which own three properties. The properties owned by these joint ventures are encumbered by an aggregate $82,000 principal amount of mortgage indebtedness, none of which is recourse to us. In July 2023, the maturity date of the mortgage loan secured by the property owned by our unconsolidated joint venture, in which we have a 50% interest, was extended by three years at the same interest rate. In October 2023, our joint venture partner that has a 50% equity interest in the 1750 H Street, NW joint venture failed to fund a $600 capital call. We are currently evaluating our options regarding this funding and there can be no assurance that we will be successful pursuing any remedies available to us under the joint venture agreement. We do not control the activities that are most significant to these joint ventures and, as a result, we account for our investments in these joint ventures under the equity method of accounting. For more information on the financial condition and results of operations of these joint ventures, see Note 3 to our Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q. Other than these joint ventures, as of September 30, 2023, 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.

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Debt Covenants (dollars in thousands)

Our principal debt obligations as of September 30, 2023 consisted of $200,000 of borrowings outstanding under our revolving credit facility, an outstanding principal balance of $2,212,000 of public issuances of senior unsecured notes and mortgage notes with an outstanding principal balance $177,320. Also, the three properties owned by two joint ventures in which we own 51% and 50% interests secure two additional mortgage notes. Our publicly issued senior unsecured notes are governed by indentures and their supplements. Our credit agreement and our senior unsecured notes indentures and their supplements provide for acceleration of payment of all amounts outstanding upon the occurrence and continuation of certain events of default, such as, in the case of our credit agreement, a change of control of us, which includes RMR ceasing to act as our business and property manager. Our credit agreement and our senior unsecured notes indentures and their supplements also contain a number of covenants, including those that restrict our ability to incur debts, including debts secured by mortgages on our properties, in excess of calculated amounts, require us to comply with certain financial covenants and, in the case of our credit agreement, restrict our ability to make distributions to our shareholders under certain circumstances. As of September 30, 2023, we believe we were in compliance with the terms and conditions of our respective covenants under our credit agreement and senior unsecured notes indentures and their supplements. Our mortgage notes are non-recourse, subject to certain limited exceptions, and do not contain any material financial covenants.

Neither our credit agreement nor our senior unsecured notes indentures and their supplements contain provisions for acceleration which could be triggered by our credit ratings. However, under our credit agreement, our highest senior credit rating is used to determine the fees and interest rates we pay. Accordingly, if that credit rating is downgraded, our interest expense and related costs under our credit agreement would increase. In March 2023, Moody’s Investors Service, or Moody’s, downgraded our senior unsecured debt rating from Ba1 to Ba2 and S&P Global Ratings, or S&P, downgraded our senior unsecured debt rating from BBB- to BB+. As a result, the interest rate premium under our revolving credit facility increased 35 basis points effective April 1, 2023. In April 2023, following the announcement of the merger with DHC, Moody’s downgraded our senior unsecured debt rating from Ba2 to Ba3. In September 2023, following the termination of the merger with DHC, Moody’s downgraded our senior unsecured debt rating from Ba3 to B2 and S&P downgraded our senior unsecured debt rating from BB+ to BB.

Our credit agreement has cross default provisions to other indebtedness that is recourse of $25,000 or more and indebtedness that is non-recourse of $50,000 or more. Similarly, our senior unsecured notes indentures and their supplements contain cross default provisions to any other debts of more than $25,000 (or up to $50,000 in certain circumstances).

Related Person Transactions

We have relationships and historical and continuing transactions with RMR, RMR Inc. and others related to them. For more information about these and other such relationships and related person transactions, see Notes 9 and 10 to our Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q, our 2022 Annual Report, our definitive Proxy Statement for our 2023 Annual Meeting of Shareholders and our other filings with the SEC. In addition, see the section captioned “Risk Factors” in Part I, Item 1A of our 2022 Annual Report for a description of risks that may arise as a result of these and other related person transactions and relationships. We may engage in additional transactions with related persons, including businesses to which RMR or its subsidiaries provide management services.

Critical Accounting Estimates

The preparation of our Condensed Consolidated Financial Statements in conformity with GAAP requires us to make estimates and assumptions that affect reported amounts. Actual results could differ from those estimates. Significant estimates in the Condensed Consolidated Financial Statements include purchase price allocations, useful lives of fixed assets and assessment of impairment of real estate and the related intangibles.

A discussion of our critical accounting estimates is included in our 2022 Annual Report. There have been no significant changes in our critical accounting estimates since the year ended December 31, 2022.

Item 3. Quantitative and Qualitative Disclosures About Market Risk (dollar amounts in thousands, except per share data)

We are exposed to risks associated with market changes in interest rates. We manage our exposure to this market risk by monitoring available financing alternatives. Our strategy to manage exposure to changes in interest rates has not materially changed since December 31, 2022. Other than as described below, we do not currently foresee any significant changes in our exposure to fluctuations in interest rates or in how we manage this exposure in the near future.

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Fixed Rate Debt

As of September 30, 2023, our outstanding fixed rate debt consisted of the following:


Debt	Principal Balance (1)		Annual Interest Rate (1)	Annual Interest Expense		Maturity	Interest Payments Due




Senior unsecured notes	$	350,000	4.250%	$	14,875	2024	Semi-annually
Senior unsecured notes	650,000		4.500%	29,250		2025	Semi-annually
Senior unsecured notes	300,000		2.650%	7,950		2026	Semi-annually
Senior unsecured notes	350,000		2.400%	8,400		2027	Semi-annually
Mortgage note (one property)	26,340		8.139%	2,144		2028	Monthly
Mortgage note (one property)	42,700		8.272%	3,532		2028	Monthly
Mortgage note (two properties)	54,300		7.671%	4,165		2028	Monthly
Senior unsecured notes	400,000		3.450%	13,800		2031	Semi-annually
Mortgage note (one property)	30,680		7.210%	2,212		2033	Monthly
Mortgage note (one property)	8,400		7.305%	614		2033	Monthly
Mortgage note (one property)	14,900		7.717%	1,150		2033	Monthly
Senior unsecured notes	162,000		6.375%	10,328		2050	Quarterly
Total	$	2,389,320		$	98,420

(1)The principal balances and annual interest rates are the amounts stated in the applicable contracts. In accordance with GAAP, our carrying values and recorded interest expense may differ from these amounts because of market conditions at the time we issued or assumed these debts. For more information, see Notes 6 and 7 to our Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Our senior unsecured notes require semi-annual or quarterly interest payments through maturity. Our mortgage notes require monthly payments of interest only or payments of principal and interest through maturity. Because these debts require interest to be paid at a fixed rate, changes in market interest rates during the term of these debts will not affect our interest obligations. If these debts were refinanced at interest rates which are one percentage point higher or lower than shown above, our annual interest cost would increase or decrease by approximately $23,893.

Changes in market interest rates also would affect the fair value of our fixed rate debt obligations; increases in market interest rates decrease the fair value of our fixed rate debt, while decreases in market interest rates increase the fair value of our fixed rate debt. Since the beginning of 2022, the U.S. Federal Reserve has been raising interest rates in an effort to combat inflation and may continue to do so. Based on the balances outstanding at September 30, 2023, and discounted cash flow analyses through the respective maturity dates, and assuming no other changes in factors that may affect the fair value of our fixed rate debt obligations, a hypothetical immediate one percentage point increase in interest rates would change the fair value of those obligations by approximately $68,555.

Our fixed rate debt arrangements may allow us to make repayments earlier than the stated maturity date. In some cases, we are not allowed to make early repayment prior to a cutoff date and we are generally allowed to make prepayments only at a premium equal to a make whole amount, as defined, which is generally designed to preserve a stated yield to the note holder. These prepayment rights may afford us opportunities to mitigate the risk of refinancing our debts at maturity at a higher rate by refinancing prior to maturity.

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In addition to the fixed rate debt presented in the table above, at September 30, 2023, we had noncontrolling ownership interests of 51% and 50% in two unconsolidated joint ventures that own three properties that are secured by fixed rate debt consisting of the following mortgage notes:


Debt	Our JV Ownership Interest	Principal Balance (1)(2)		Annual Interest Rate (1)	Annual Interest Expense		Maturity	Interest Payments Due
Mortgage note (two properties)	51%	$	50,000	4.090%	$	2,045	2029	Monthly
Mortgage note (one property) (3)	50%	32,000		3.690%	1,181		2027	Monthly
Total		$	82,000		$	3,226

(1)The principal balances and annual interest rates are the amounts stated in the applicable contracts. In accordance with GAAP, the joint ventures’ recorded interest expense may differ from these amounts because of market conditions at the time they incurred the debt.

(2)Reflects the entire balance of the debt secured by the properties and is not adjusted to reflect the interests in the joint ventures we do not own. None of the debt is recourse to us.

(3)In July 2023, the maturity date of this mortgage loan was extended by three years at the same interest rate.

Floating Rate Debt

As of September 30, 2023, our floating rate debt consisted of $200,000 outstanding under our $750,000 revolving credit facility. Our revolving credit facility matures on January 31, 2024. No principal repayments are required under our revolving credit facility prior to maturity, and we can borrow, repay and reborrow funds available under our revolving credit facility, subject to conditions, at any time without penalty.

Borrowings under our revolving credit facility are in U.S. dollars and require interest to be paid at a rate of SOFR plus premiums that are subject to adjustment based upon changes to our credit ratings. Accordingly, we are vulnerable to changes in U.S. dollar based short term rates, specifically SOFR, and to changes in our credit ratings. In addition, upon any renewal or refinancing of our revolving credit facility, we are vulnerable to increases in interest rate premiums due to market conditions or our perceived credit characteristics. Generally, a change in interest rates would not affect the value of our floating rate debt but would affect our operating results.

The following table presents the impact a one percentage point increase in interest rates would have on our annual floating rate interest expense as of September 30, 2023:


	Impact of an Increase in Interest Rates
	Annual Interest Rate (1)		Outstanding Debt		Total Interest Expense Per Year		Annual Earnings Per Share Impact (2)
At September 30, 2023	6.9	%	$	200,000	$	13,800	$	0.29
One percentage point increase	7.9	%	$	200,000	$	15,800	$	0.33

(1)Based on SOFR plus a premium, which was 145 basis points per annum, as of September 30, 2023.

(2)Based on the weighted average common shares outstanding (diluted) for the nine months ended September 30, 2023.

The following table presents the impact a one percentage point increase in interest rates would have on our annual floating rate interest expense as of September 30, 2023 if we were fully drawn on our revolving credit facility:


	Impact of an Increase in Interest Rates
	Annual Interest Rate (1)		Outstanding Debt		Total Interest Expense Per Year		Annual Earnings Per Share Impact (2)
At September 30, 2023	6.9	%	$	750,000	$	51,750	$	1.07
One percentage point increase	7.9	%	$	750,000	$	59,250	$	1.23

(1)Based on SOFR plus a premium, which was 145 basis points per annum, as of September 30, 2023.

(2)Based on the weighted average common shares outstanding (diluted) for the nine months ended September 30, 2023.

The foregoing tables show the impact of an immediate increase in floating interest rates as of September 30, 2023. If interest rates were to increase gradually over time, the impact would be spread over time. Our exposure to fluctuations in floating interest rates will increase or decrease in the future with increases or decreases in the outstanding amount under our revolving credit facility or our other floating rate debt, if any. Although we have no present plans to do so, we may in the future enter into hedge arrangements from time to time to mitigate our exposure to changes in interest rates.

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Item 4. Controls and Procedures

As of the end of the period covered by this Quarterly Report on Form 10-Q, our management carried out an evaluation, under the supervision and with the participation of our President and Chief Executive Officer and our Chief Financial Officer and Treasurer, of the effectiveness of our disclosure controls and procedures pursuant to Rules 13a-15 and 15d-15 under the Securities Exchange Act of 1934, as amended. Based upon that evaluation, our President and Chief Executive Officer and our Chief Financial Officer and Treasurer concluded that our disclosure controls and procedures are effective.

There have been no changes in our internal control over financial reporting during the quarter ended September 30, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Warning Concerning Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other securities laws that are subject to risks and uncertainties. These statements may include words such as “believe”, “expect”, “anticipate”, “intend”, “plan”, “estimate”, “will”, “may” and negatives or derivatives of these or similar expressions. These forward-looking statements include, among others, statements about: economic and market conditions; demand for office lease space; our future leasing activity; our leverage levels and possible future financings; our liquidity needs and sources; our capital expenditure plans and commitments; our capital recycling program; acquisitions and dispositions; our redevelopment and construction activities and plans; and the amount and timing of future distributions.

Forward-looking statements reflect our current expectations, are based on judgments and assumptions, are inherently uncertain and are subject to risks, uncertainties and other factors, which could cause our actual results, performance or achievements to differ materially from expected future results, performance or achievements expressed or implied in those forward-looking statements. Some of the risks, uncertainties and other factors that may cause our actual results, performance or achievements to differ materially from those expressed or implied by forward-looking statements include, but are not limited to, the following:

•The impact of increasing or sustained high interest rates, inflation, labor market challenges, disruption and volatility in the public equity and debt markets, conditions in the commercial real estate industry generally and in the sectors we operate, geopolitical instability and economic downturns or recessions on us and our tenants,

•The extent to which changes and trends in office space utilization and needs, including due to remote work arrangements, may impact demand for office space at our properties,

•The financial strength of our tenants,

•Risks and uncertainties regarding the costs and timing of development, redevelopment and repositioning activities, including as a result of inflation, cost overruns, supply chain challenges, labor shortages, construction delays or inability to obtain necessary permits,

•Whether our tenants will renew or extend their leases and not exercise early termination options pursuant to their leases or that we will obtain replacement tenants on terms as favorable to us as our prior leases,

•Our ability to successfully recycle and deploy capital,

•The likelihood that our tenants will pay rent or be negatively affected by cyclical economic conditions or government budget constraints,

•Our ability to pay distributions to our shareholders and to maintain or increase the amount of such distributions,

•Our ability to increase or maintain occupancy at our properties on terms desirable to us,

•Our ability to increase rents when our leases expire or renew,

•Our tenant and geographic concentration,

•Our ability to manage our capital expenditures and other operating costs effectively and to maintain and enhance our properties and their appeal to tenants,

•Our ability to acquire properties that realize our targeted returns,

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•Our ability to sell properties at prices we target,

•Our ability to cost effectively raise and balance our use of debt and equity capital,

•Our ability to make required payments on our debt,

•Our ability to maintain sufficient liquidity, including the availability of borrowings under our revolving credit facility, and otherwise manage leverage,

•Our credit ratings,

•The ability of our manager, RMR, to successfully manage us,

•Competition within the commercial real estate industry, particularly in those markets in which our properties are located,

•Compliance with, and changes to, federal, state and local laws and regulations, accounting rules, tax laws and similar matters,

•The impact of any U.S. government shutdown or failure to increase the government debt ceiling on our ability to collect rents and pay our operating expenses, debt obligations and distributions to shareholders on a timely basis,

•Actual and potential conflicts of interest with our related parties, including our Managing Trustees, RMR, Sonesta and others affiliated with them,

•Limitations imposed by and our ability to satisfy complex rules to maintain our qualification for taxation as a REIT for U.S. federal income tax purposes,

•Acts of terrorism, outbreaks or continuation of pandemics or other public health safety events or conditions, war or other hostilities, material or prolonged disruption to supply chains, climate change, or other manmade or natural disasters beyond our control, and

•Other matters.

These risks, uncertainties, and other factors are not exhaustive and should be read in conjunction with other cautionary statements that are included in our periodic filings. The information contained in our filings with the SEC, including under the caption “Risk Factors” in this Quarterly Report on Form 10-Q and our other periodic reports, or incorporated herein or therein, identifies important factors that could cause differences from the forward-looking statements in this Quarterly Report on Form 10-Q. Our filings with the SEC are available on the SEC’s website at www.sec.gov.

You should not place undue reliance upon our forward-looking statements.

Except as required by law, we do not intend to update or change any forward-looking statements as a result of new information, future events or otherwise.

Statement Concerning Limited Liability

The amended and restated declaration of trust establishing Office Properties Income Trust, dated June 8, 2009, as amended, as filed with the State Department of Assessments and Taxation of Maryland, provides that no trustee, officer, shareholder, employee or agent of Office Properties Income Trust shall be held to any personal liability, jointly or severally, for any obligation of, or claim against, Office Properties Income Trust. All persons dealing with Office Properties Income Trust in any way shall look only to the assets of Office Properties Income Trust for the payment of any sum or the performance of any obligation.

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Part II. Other Information

Item 1A. Risk Factors

There have been no material changes to the risk factors from those previously disclosed in our 2022 Annual Report.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Issuer purchases of equity securities. The following table provides information about our purchases of our equity securities during the quarter ended September 30, 2023:


Calendar Month	Number of Shares Purchased (1)	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
July 1, 2023 - July 31, 2023	915	$	7.87	—	$	—
September 1, 2023 - September 30, 2023	39,189	5.79		—	—



Total	40,104	$	5.84	—	$	—

(1)These common share withholdings and purchases were made to satisfy tax withholding and payment obligations of one of our Managing Trustees and certain other current and former officers and employees of RMR in connection with the vesting of awards of our common shares to them. We withheld and purchased these shares at their fair market values based upon the trading prices of our common shares at the close of trading on Nasdaq on the purchase dates.

Item 6. Exhibits


Exhibit Number			Description
3.1			Composite Copy of Amended and Restated Declaration of Trust, dated June 8, 2009, as amended to date. (Incorporated by reference to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2020.)

3.2			Second Amended and Restated Bylaws of the Company, adopted June 13, 2023. (Incorporated by reference to the Company’s Current Report on Form 8-K filed on June 13, 2023.)

4.1			Form of Common Share Certificate. (Incorporated by reference to the Company's Annual Report on Form 10-K for the year ended December 31, 2018.)

4.2			Indenture, dated as of July 20, 2017, between the Company and U.S. Bank Trust Company, National Association (as successor in interest to U.S. Bank National Association). (Incorporated by reference to the Company’s Current Report on Form 8-K filed on July 21, 2017.)

4.3			Second Supplemental Indenture, dated as of June 23, 2020, between the Company and U.S. Bank Trust Company, National Association (as successor in interest to U.S. Bank National Association), relating to the Company’s 6.375% Senior Notes due 2050, including form thereof. (Incorporated by reference to the Company’s Registration Statement on Form 8-A filed on June 23, 2020.)

4.4			Third Supplemental Indenture, dated as of May 18, 2021, between the Company and U.S. Bank Trust Company, National Association (as successor in interest to U.S. Bank National Association), relating to the Company’s 2.650% Senior Notes due 2026, including form thereof. (Incorporated by reference to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2021.)

4.5			Fourth Supplemental Indenture, dated as of August 13, 2021, between the Company and U.S. Bank Trust Company, National Association (as successor in interest to U.S. Bank National Association), relating to the Company’s 2.400% Senior Notes due 2027, including form thereof. (Incorporated by reference to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2021.)

4.6			Fifth Supplemental Indenture, dated as of September 28, 2021, between the Company and U.S. Bank Trust Company, National Association (as successor in interest to U.S. Bank National Association), relating to the Company’s 3.450% Senior Notes due 2031, including form thereof. (Incorporated by reference to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2021.)

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4.7			Indenture, dated as of February 3, 2015, between the Company (as successor to Select Income REIT) and U.S. Bank Trust Company, National Association (as successor in interest to U.S. Bank National Association). (Incorporated by reference to Select Income REIT’s Current Report on Form 8-K filed on February 3, 2015.)

4.8			First Supplemental Indenture, dated as of February 3, 2015, between the Company (as successor to Select Income REIT) and U.S. Bank Trust Company, National Association (as successor in interest to U.S. Bank National Association), including the form of 4.50% Senior Notes due 2025. (Incorporated by reference to Select Income REIT’s Current Report on Form 8-K filed on February 3, 2015.)

4.9			Second Supplemental Indenture, dated as of May 15, 2017, between the Company (as successor to Select Income REIT) and U.S. Bank Trust Company, National Association (as successor in interest to U.S. Bank National Association), including the form of 4.250% Senior Notes due 2024. (Incorporated by reference to Select Income REIT’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2017, filed by Select Income REIT on July 25, 2017.)

4.10			Third Supplemental Indenture, dated as of December 31, 2018, among Select Income REIT, the Company and U.S. Bank Trust Company, National Association (as successor in interest to U.S. Bank National Association). (Incorporated by reference to the Company’s Current Report on Form 8-K filed on December 31, 2018.)

4.11			Authentication Order, dated as of September 24, 2020, from the Company to U.S. Bank Trust Company, National Association (as successor in interest to U.S. Bank National Association), relating to the Company’s 4.50% Senior Notes due 2025. (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2020.)

4.12			Registration Rights and Lock-Up Agreement, dated as of June 5, 2015, among the Company, ABP Trust (f/k/a Reit Management & Research Trust) and Adam D. Portnoy. (Incorporated by reference to the Company’s Current Report on Form 8‑K filed on June 8, 2015.)

10.1			Termination Agreement, dated as of September 1, 2023, by and between Office Properties Income Trust and Diversified Healthcare Trust. (Incorporated by reference to the Company's Current Report on Form 8-K filed on September 1, 2023.)

10.2			Form of Share Award Agreement. (Filed herewith.)

10.3			Form of Indemnification Agreement. (Filed herewith.)

31.1			Rule 13a-14(a) Certification. (Filed herewith.)

31.2			Rule 13a-14(a) Certification. (Filed herewith.)

32.1			Section 1350 Certification. (Furnished herewith.)

101.INS			XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH			XBRL Taxonomy Extension Schema Document. (Filed herewith.)
101.CAL			XBRL Taxonomy Extension Calculation Linkbase Document. (Filed herewith.)
101.DEF			XBRL Taxonomy Extension Definition Linkbase Document. (Filed herewith.)
101.LAB			XBRL Taxonomy Extension Label Linkbase Document. (Filed herewith.)
101.PRE			XBRL Taxonomy Extension Presentation Linkbase Document. (Filed herewith.)
104			Cover Page Interactive Data File. (Formatted as Inline XBRL and contained in Exhibit 101.)

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


			OFFICE PROPERTIES INCOME TRUST


			By:			/s/ Christopher J. Bilotto
						Christopher J. Bilotto
						President and Chief Executive Officer
						Dated: October 30, 2023

			By:			/s/ Brian E. Donley
						Brian E. Donley
						Chief Financial Officer and Treasurer
						(principal financial officer and principal accounting officer)
						Dated: October 30, 2023

Exhibit 10.2

FORM OF

OFFICE PROPERTIES INCOME TRUST

Share Award Agreement

This Share Award Agreement (this “Agreement”) is made as of «DATE», 2023, between «NAME» (the “Recipient”) and Office Properties Income Trust (the “Company”).

In consideration of the mutual promises and covenants contained in this Agreement, and for other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1. Award of Shares. Subject to the terms and conditions hereinafter set forth and the terms and conditions of the Amended and Restated Office Properties Income Trust 2009 Incentive Share Award Plan, as it may be amended from time to time (the “Plan”), the Company hereby awards to the Recipient, effective as of the date of this Agreement, «NUMBER» of its common shares of beneficial interest, par value $.01 per share (the “Common Shares”). The shares so awarded are hereinafter referred to as the “Shares,” which term shall also include any shares of the Company issued to the Recipient by virtue of his or her ownership of the Shares, by share dividend, share split or combination, recapitalization or otherwise.

2. Vesting; Forfeiture of Shares.

(a) Subject to Sections 2(b) and 2(c) hereof, the Shares shall vest one-fifth of the total number of Shares as of the date hereof and as to a further one-fifth of such total number of Shares on each anniversary of the date hereof for the next four calendar years. Any Shares not vested as of any date are herein referred to as “Unvested Shares.”

(b) Subject to Section 2(c) hereof, at the option of the Company, in the event the Recipient ceases to render significant services, whether as an employee or otherwise, to (i) the Company, (ii) the entity which is the manager or shared services provider to the Company or an entity controlled by, under common control with or controlling such entity (collectively, the “Manager”), or (iii) an affiliate of the Company (which shall be deemed for such purpose to include any other entity to which the Manager is the manager or shared services provider), all or any portion of the Unvested Shares shall be forfeited by the Recipient on or after the date the Recipient ceases to render all such services, as determined by the Company. The Company may exercise such option by delivering or mailing to the Recipient (or his or her estate), at any time after the Recipient has ceased to render such services, a written notice of exercise of such option. Such notice shall specify the number of Unvested Shares to be forfeited.

(c) Notwithstanding anything in this Agreement to the contrary, immediately upon the occurrence of an Acceleration Event (as defined below), all of the Unvested Shares shall vest and any forfeiture or other rights of the Company described in Section 2(b) shall lapse in their entirety, and such vesting and lapse of forfeiture or other Company rights shall also immediately apply to each other Common Share previously awarded to the Recipient which then remains subject to comparable restrictions and rights. For purposes of this Section 2(c), an Acceleration Event shall be deemed to occur immediately upon the occurrence of any of the following events: a Change in Control, a Termination Event (as each such term is defined in Exhibit A hereto) or the death of the Recipient. By executing this Agreement, the Recipient hereby agrees and

acknowledges that the provisions of Exhibit A hereto shall apply to each award of Common Shares of the Company previously awarded to the Recipient which remains subject to comparable vesting restrictions (“Prior Awards”) and shall supersede the corresponding provisions of such Prior Awards.

3. Legends. Vested and Unvested Shares awarded under this Agreement may bear or contain, as applicable, such legends and notations as may be required by the Plan or the Company’s declaration of trust, any applicable supplement thereto or bylaws, each as in effect from time to time, or as the Company may otherwise determine appropriate.

Promptly following the request of the Recipient with respect to any Shares (or any other Common Shares previously awarded to the Recipient), the Company shall take, at its sole cost and expense, all such actions as may be required to permit the Recipient to sell such shares including, as applicable and without limitation, providing to the Company’s transfer agent certificates of officers of the Company, and opinions of counsel and/or filing an appropriate registration statement, and taking all such other actions as may be required to remove the legends set forth above with respect to transfer and vesting restrictions from the certificates evidencing such shares and, if applicable, from the share books and records of the Company. The Company shall reimburse the Recipient, promptly upon the receipt of a request for payment, for all expenses (including legal expenses) reasonably incurred by the Recipient in connection with the enforcement of the Recipient’s rights under this paragraph.

4. Tax Withholding. To the extent required by law, the Company or the Manager shall withhold or cause to be withheld income and other taxes incurred by the Recipient by reason of an award of Common Shares, and the Recipient agrees that he or she shall, upon the request of the Company or the Manager, pay to the Company or to the Manager an amount sufficient to satisfy his or her tax withholding obligations from time to time (including as Shares become vested).

5. Miscellaneous.

(a) Amendments. Neither this Agreement nor any provision hereof may be changed or modified except by an agreement in writing executed by the Recipient and the Company; provided, however, that any change or modification that does not adversely affect the rights hereunder of the Recipient, as they may exist immediately prior to the effective date of such change or modification, may be adopted by the Company without an agreement in writing executed by the Recipient, and the Company shall give the Recipient written notice of such change or modification reasonably promptly following the adoption of such change or modification.

(b) Binding Effect of the Agreement. This Agreement shall inure to the benefit of, and be binding upon , the Company, the Recipient and their respective estates, heirs, executors, transferees, successors, assigns and legal representatives.

(c) Provisions Separable. In the event that any of the terms of this Agreement shall be or become or is declared to be illegal or unenforceable by any court or other authority of competent jurisdiction, such terms shall be null and void and shall be deemed deleted from this Agreement, and all the remaining terms of this Agreement shall remain in full force and effect.

(d) Notices. Any notice in connection with this Agreement shall be deemed to have been properly delivered if it is in writing and is delivered by hand or by facsimile or sent by

registered certified mail, postage prepaid, to the party addressed as follows, unless another address has been substituted by notice so given:

To the Recipient: To the Recipient’s address as set forth on the signature page hereof.

To the Company: Office Properties Income Trust

Two Newton Place

255 Washington Street, Suite 300

Newton, MA 02458

Attn: Secretary

(e) Construction. The headings and subheadings of this Agreement have been inserted for convenience only, and shall not affect the construction of the provisions hereof. All references to sections of this Agreement shall be deemed to refer as well to all subsections which form a part of such section.

(f) Employment Agreement. This Agreement shall not be construed as an agreement by the Company, the Manager or any affiliate of the Company or the Manager to employ the Recipient, nor is the Company, the Manager or any affiliate of the Company or the Manager obligated to continue employing the Recipient by reason of this Agreement or the award of the Shares to the Recipient hereunder.

(g) Applicable Law. This Agreement shall be construed and enforced in accordance with the laws of the State of Maryland, without giving effect to the principles of conflicts of law of such state.

(h) Binding Arbitration. Any disputes regarding this Agreement, any award or vesting of Common Shares and/or any related matters shall be settled by binding arbitration in accordance with any Mutual Agreement to Resolve Disputes and Arbitrate Claims between the Recipient and the Manager. In the absence of such an agreement, any such claims or disputes shall be resolved through binding arbitration before one arbitrator conducted under the rules of JAMS in Boston, Massachusetts.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement, or caused this Agreement to be executed under seal, as of the date first above written.


OFFICE PROPERTIES INCOME TRUST


By:
Name:
Title:

RECIPIENT:



«NAME»
«ADDRESS»
«CITY», «ST» «ZIP»

Exhibit A

A “Change in Control” shall be deemed to have occurred if any of the events set forth in any one of the following paragraphs shall have occurred:

(a) any Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company representing 50% or more of either the then outstanding common shares of beneficial interest of the Company or the combined voting power of the Company’s then outstanding securities, excluding any Person who becomes such a Beneficial Owner in connection with a transaction described in paragraph (c)(i) below;

(b) the following individuals cease for any reason to constitute a majority of the number of Trustees then serving: individuals who, on the date of the Agreement, constitute the Board and any new Trustee (other than a Trustee whose initial assumption of office is in connection with an actual or threatened election contest, including but not limited to a consent solicitation, relating to the election of Trustees) whose appointment or election by the Board or nomination for election by the Company’s shareholders was approved or recommended by a vote of at least two-thirds (2/3) of the Trustees then in office who either were Trustees on the date of the Agreement or whose appointment, election or nomination for election was previously so approved or recommended;

(c) there is consummated a merger or consolidation of the Company or any direct or indirect subsidiary of the Company with any other entity, other than (i) a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior to such merger or consolidation continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or any parent thereof) at least 50% of the combined voting power of the securities of the Company or such surviving entity or any parent thereof outstanding immediately after such merger or consolidation, or (ii) a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company (not including in the securities Beneficially Owned by such Person any securities acquired directly from the Company or its Affiliates) representing 50% or more of the combined voting power of the Company’s then outstanding securities; or

(d) the shareholders of the Company approve a plan of complete liquidation or dissolution of the Company or there is consummated an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets, other than a sale or disposition by the Company of all or substantially all of the Company’s assets to an entity, at least 50% of the combined voting power of the voting securities of which are owned by shareholders of the Company in substantially the same proportions as their ownership of the Company immediately prior to such sale.

Notwithstanding anything to the contrary set forth herein, a transaction involving the Company and an Excluded Entity (or Affiliate) in which the award of Shares is to be assumed by the successor (or replaced by a substantially equivalent award) shall not constitute a Change in Control.

A “Termination Event” shall occur if The RMR Group LLC (or any entity controlled by, under common control with or controlling The RMR Group LLC) ceases to be the manager or shared services provider to the Company.

For purposes of the definitions set forth on this Exhibit A, the following definitions shall apply, with capitalized terms used but not defined in this Exhibit A having the meaning set forth in the Plan:

“Affiliate” shall have the meaning set forth in Rule 12b-2 promulgated under Section 12 of the Exchange Act.

“Agreement” shall mean the Share Award Agreement to which this Exhibit A is attached.

“Beneficial Owner” shall have the meaning set forth in Rule 13d-3 under the Exchange Act.

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

“Excluded Entity” shall mean any entity to which The RMR Group LLC (or any entity controlled by, under common control with or controlling The RMR Group LLC) provides management, advisory or shared services.

“Person” shall have the meaning given in Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof, except that such term shall not include (i) the Company or any of its subsidiaries, (ii) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any of its Affiliates, (iii) an underwriter temporarily holding securities pursuant to an offering of such securities and (iv) a corporation owned, directly or indirectly, by the shareholders of the Company in substantially the same proportions as their ownership of shares of the Company.

“Trustee” is a member of the Board of Trustees of the Company.

Exhibit 10.3

OFFICE PROPERTIES INCOME TRUST
FORM OF [AMENDED AND RESTATED]1 INDEMNIFICATION AGREEMENT

THIS [AMENDED AND RESTATED] INDEMNIFICATION AGREEMENT (this “Agreement”), effective as of [DATE] (the “Effective Date”), by and between Office Properties Income Trust, a Maryland real estate investment trust (the “Company”), and [TRUSTEE/OFFICER] (“Indemnitee”).

WHEREAS, Indemnitee currently serves as a trustee and/or officer of the Company and may, in connection therewith, be subjected to claims, suits or proceedings arising from such service; and

WHEREAS, as an inducement to Indemnitee to continue to serve as such, the Company has agreed to indemnify and to advance expenses and costs incurred by Indemnitee in connection with any such claims, suits or proceedings, to the maximum extent permitted by law as hereinafter provided; and

WHEREAS, the parties [are currently parties to an Indemnification Agreement dated as of [DATE] (the “Prior Indemnification Agreement”) and] desire to [amend and restate the Prior Indemnification Agreement and] set forth their agreement regarding indemnification and advancement of expenses [as reflected herein];

NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows:

Section 1.Definitions. For purposes of this Agreement:

(a)“Board” means the board of trustees of the Company.

(b)“Bylaws” means the bylaws of the Company, as they may be amended from time to time.

(c)“Change in Control” means a change in control of the Company occurring after the Effective Date of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or in response to any similar item on any similar schedule or form) promulgated under the Securities Exchange Act of 1934, as amended (the “Act”), whether or not the Company is then subject to such reporting requirement; provided, however, that, without limitation, such a Change in Control shall be deemed to have occurred if after the Effective Date:

(i)any “person” (as such term is used in Sections 13(d) and 14(d) of the Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Act), directly or indirectly, of securities of the Company representing 10% or more of the combined voting power of all the Company’s then outstanding securities entitled to vote generally in the election of trustees without the prior approval of at least two-thirds of the members of the Board in office immediately prior to such person attaining such percentage interest;

(ii)there occurs a proxy contest, or the Company is a party to a merger, consolidation, sale of assets, plan of liquidation or other reorganization not approved by at least two-thirds of the members of the Board then in office, as a consequence of which members of the Board in office immediately prior to such transaction or event constitute less than a majority of the Board thereafter; or

(iii)during any period of two consecutive years, other than as a result of an event described in clause (a)(ii) of this Section 1, individuals who at the beginning of such period constituted the Board (including for this purpose any new trustee whose election or nomination for election by the Company’s shareholders was approved by a vote of at least two-thirds of the trustees then still in office

1 Bracketed text to be included for trustees and officers with existing agreements. Bracketed text would not be included for persons who are first elected as a trustee or appointed as an officer after this form is adopted.

who were trustees at the beginning of such period) cease for any reason to constitute at least a majority of the Board.

(d)“Company Status” means the status of a Person who is or was a trustee, director, manager, officer, partner, employee, agent or fiduciary of the Company or any predecessor of the Company or any of their majority owned subsidiaries and the status of a Person who, while a trustee, director, manager, officer, partner, employee, agent or fiduciary of the Company or any predecessor of the Company or any of their majority owned subsidiaries, is or was serving at the request of the Company or any predecessor of the Company or any of their majority owned subsidiaries as a trustee, director, manager, officer, partner, employee, agent or fiduciary of another real estate investment trust, corporation, partnership, limited liability company, joint venture, trust, employee benefit plan or any other Enterprise.

(e)“control” of an entity, shall mean the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of such entity, whether through ownership of voting securities, by contract or otherwise.

(f)“Declaration of Trust” means the declaration of trust (as defined in the Maryland REIT Law) of the Company, as it may be in effect from time to time.

(g)“Disinterested Trustee” means a trustee of the Company who is not and was not a party to the Proceeding in respect of which indemnification or advance of Expenses is sought by Indemnitee.

(h)“Enterprise” shall mean the Company and any other real estate investment trust, corporation, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise that Indemnitee is or was serving at the express written request of the Company as a trustee, director, manager, officer, partner, employee, agent or fiduciary.

(i)“Expenses” means all expenses, including, but not limited to, all attorneys’ fees and costs, retainers, court or arbitration costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, and all other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, participating, or being or preparing to be a witness in a Proceeding, or responding to, or objecting to, a request to provide discovery in any Proceeding. Expenses also shall include Expenses incurred in connection with any appeal resulting from any Proceeding, including without limitation the premium, security for, and other costs relating to any cost bond or other appeal bond or its equivalent.

(j)“Independent Counsel” means a law firm, or a member of a law firm, selected by the Company and acceptable to Indemnitee, that is experienced in matters of business law. If, within twenty (20) days after submission by Indemnitee of a written demand for indemnification pursuant to Section 7(a) hereof, no Independent Counsel shall have been selected and agreed to by Indemnitee, either the Company or Indemnitee may petition a Chosen Court (as defined in Section 18) for the appointment as Independent Counsel of a person selected by the court or by such other person as the court shall designate, and the person so appointed shall act as Independent Counsel hereunder.

(k)“MGCL” means the Maryland General Corporation Law.

(l)“Maryland REIT Law” means Title 8 of the Corporations and Associations Article of the Annotated Code of Maryland.

(m)“Person” means an individual, a corporation, a general or limited partnership, an association, a limited liability company, a governmental entity, a trust, a joint venture, a joint stock company or another entity or organization.

(n)“Proceeding” means any threatened, pending or completed claim, demand, action, suit, arbitration, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other proceeding, whether civil, criminal, administrative or investigative (including on appeal), whether or not by or in the right of the Company, except one initiated by an Indemnitee pursuant to Section 9.

Section 2.Indemnification - General. The Company shall indemnify, and advance Expenses to, Indemnitee (a) as provided in this Agreement and (b) otherwise to the maximum extent permitted by Maryland law in effect on the Effective Date and as amended from time to time; provided, however, that no change in Maryland law shall have the effect of reducing the benefits available to Indemnitee hereunder based on Maryland law as in effect on the Effective Date. The rights of Indemnitee provided in this Section 2 shall include, without limitation, the rights set forth in the other sections of this Agreement, including any additional indemnification permitted by Section 2-418(g) of the MGCL, as applicable to a Maryland real estate investment trust by virtue of Section 8-301(15) of the Maryland REIT Law, the Declaration of Trust or the Bylaws.

Section 3.Proceedings Other Than Derivative Proceedings by or in the Right of the Company. Indemnitee shall be entitled to the rights of indemnification provided in this Section 3 if, by reason of Indemnitee’s Company Status, Indemnitee is, or is threatened to be, made a party to any Proceeding, other than a derivative Proceeding by or in the right of the Company (or, if applicable, such other Enterprise at which Indemnitee is or was serving at the request of the Company or a predecessor of the Company or any of their majority owned subsidiaries). Pursuant to this Section 3, Indemnitee shall be indemnified against all judgments, penalties, fines and amounts paid in settlement and all Expenses incurred by Indemnitee or on Indemnitee’s behalf in connection with a Proceeding by reason of Indemnitee’s Company Status unless it is finally determined that such indemnification is not permitted by the MGCL, the Declaration of Trust or the Bylaws.

Section 4.Derivative Proceedings by or in the Right of the Company. Indemnitee shall be entitled to the rights of indemnification provided in this Section 4 if, by reason of Indemnitee’s Company Status, Indemnitee is, or is threatened to be, made a party to any derivative Proceeding brought by or in the right of the Company (or, if applicable, such other Enterprise at which Indemnitee is or was serving at the request of the Company or a predecessor of the Company or any of their majority owned subsidiaries). Pursuant to this Section 4, Indemnitee shall be indemnified against all judgments, penalties, fines and amounts paid in settlement and all Expenses incurred by Indemnitee or on Indemnitee’s behalf in connection with such Proceeding unless it is finally determined that such indemnification is not permitted by the MGCL, the Declaration of Trust or the Bylaws.

Section 5.Indemnification for Expenses of a Party Who is Partly Successful. Without limitation on Section 3 or Section 4, if Indemnitee is not wholly successful in any Proceeding covered by this Agreement, but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the Company shall indemnify Indemnitee under this Section 5 for all Expenses incurred by Indemnitee or on Indemnitee’s behalf in connection with each successfully resolved claim, issue or matter, allocated on a reasonable and proportionate basis. For purposes of this Section 5 and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.

Section 6.Advancement of Expenses. The Company, without requiring a preliminary determination of Indemnitee’s ultimate entitlement to indemnification hereunder, shall advance all Expenses incurred by or on behalf of Indemnitee in connection with any Proceeding in which Indemnitee may be involved, or is threatened to be involved, including as a party, a witness or otherwise, by reason of Indemnitee’s Company Status, within ten (10) days after the receipt by the Company of a statement or statements from Indemnitee requesting such advance or advances from time to time, whether prior to or after final disposition of such Proceeding. Such statement or statements shall reasonably evidence the Expenses incurred by Indemnitee and shall be preceded or accompanied by a written affirmation by Indemnitee of Indemnitee’s good faith belief that the standard of conduct necessary for indemnification by the Company as authorized by the MGCL, the Declaration of Trust and the Bylaws has been met and a written undertaking by or on behalf of Indemnitee, in substantially the form of Exhibit A hereto or in such other form as may be required under applicable law as in effect at the time of the execution thereof, to reimburse the portion of any Expenses advanced to Indemnitee relating to any claims, issues or matters in the Proceeding as to

which it shall be finally determined that the standard of conduct has not been met and which have not been successfully resolved as described in Section 5. For the avoidance of doubt, the Company shall advance Expenses incurred by Indemnitee or on Indemnitee’s behalf in connection with such a Proceeding pursuant to this Section 6 until it is finally determined that Indemnitee is not entitled to indemnification under the MGCL, the Declaration of Trust or the Bylaws in respect of such Proceeding. To the extent that Expenses advanced to Indemnitee do not relate to a specific claim, issue or matter in the Proceeding, such Expenses shall be allocated on a reasonable and proportionate basis. The undertaking required by this Section 6 shall be an unlimited general obligation by or on behalf of Indemnitee and shall be accepted without reference to Indemnitee’s financial ability to repay such advanced Expenses and without any requirement to post security therefor. At Indemnitee’s request, advancement of any such Expense shall be made by the Company’s direct payment of such Expense instead of reimbursement of Indemnitee’s payment of such Expense.

Section 7.Procedure for Determination of Entitlement to Indemnification.

(a)To obtain indemnification under this Agreement, Indemnitee shall submit to the Company a written demand therefor. The Secretary of the Company shall, promptly upon receipt of such a demand for indemnification, provide copies of the demand to the Board.

(b)Upon written request by Indemnitee for indemnification pursuant to the first sentence of Section 7(a), a determination, if required by applicable law, with respect to Indemnitee’s entitlement thereto shall promptly be made in the specific case: (i) if a Change in Control shall have occurred, by Independent Counsel in a written opinion to the Board, a copy of which shall be delivered to Indemnitee; or (ii) if a Change in Control shall not have occurred or if, after a Change in Control, Indemnitee shall so request, (A) by the Board (or a duly authorized committee thereof) by a majority vote of a quorum consisting of Disinterested Trustees, or (B) if a quorum of the Board consisting of Disinterested Trustees is not obtainable or, even if obtainable, such quorum of Disinterested Trustees so directs, by Independent Counsel in a written opinion to the Board, a copy of which shall be delivered to Indemnitee, or (C) if so directed by a majority of the members of the Board, by the shareholders of the Company; and, if it is so determined that Indemnitee is entitled to indemnification, payment to Indemnitee shall be made within ten (10) days after such determination. Any Independent Counsel, member of the Board or shareholder of the Company shall act reasonably and in good faith in making a determination regarding Indemnitee’s entitlement to indemnification under this Agreement.

(c)The Company shall pay the fees and expenses of Independent Counsel, if one is appointed, and shall agree to fully indemnify such Independent Counsel against any and all expenses, claims, liabilities and damages arising out of or relating to this Agreement or the Independent Counsel’s engagement as such pursuant hereto.

Section 8.Presumptions and Effect of Certain Proceedings.

(a)In making a determination with respect to entitlement to indemnification hereunder, the Person or Persons making such determination shall presume that Indemnitee is entitled to indemnification under this Agreement. Anyone seeking to overcome this presumption shall have the burden of proof and the burden of persuasion by clear and convincing evidence.

(b)It shall be presumed that Indemnitee has at all times acted in good faith and in a manner Indemnitee reasonably believed to be in or not opposed to the best interests of the Company. Anyone seeking to overcome this presumption shall have the burden of proof and the burden of persuasion by clear and convincing evidence. Without limitation of the foregoing, Indemnitee shall be deemed to have acted in good faith if Indemnitee’s action is based on the records or books of account of the Enterprise, including financial statements, or on information supplied to Indemnitee by officers of the Enterprise in the course of their duties, or on the advice of legal counsel for the Enterprise or on information or records given or reports made to the Enterprise by an independent certified public accountant or by an appraiser or other expert selected with reasonable care by the Enterprise. In addition, the knowledge or actions, or failure to act, of any trustee, director, manager, officer, partner,

employee, agent or fiduciary of the Enterprise shall not be imputed to Indemnitee for purposes of determining the right to indemnification under this Agreement.

(c)Neither the failure to make a determination pursuant to Section 7(b) as to whether indemnification is proper in the circumstances because Indemnitee has met any particular standard of conduct, nor an actual determination by the Company (including by the Board or Independent Counsel) pursuant to Section 7(b) that Indemnitee has not met such standard of conduct, shall be a defense to Indemnitee’s claim that indemnification is proper in the circumstances or create a presumption that Indemnitee has not met any particular standard of conduct.

(d)The termination of any Proceeding by judgment, order, settlement, conviction, a plea of nolo contendere or its equivalent, or an entry of an order of probation prior to judgment, shall not in and of itself adversely affect the right of Indemnitee to indemnification or create a presumption that Indemnitee did not meet the standard of conduct required for indemnification. The Company acknowledges that a settlement or other disposition short of final judgment may be successful if it permits a party to avoid expense, delay, distraction, disruption and uncertainty. In the event that any Proceeding to which Indemnitee is a party is resolved in any manner other than by adverse judgment against Indemnitee (including, without limitation, settlement of such action, claim or proceeding with or without payment of money or other consideration), it shall be presumed that Indemnitee has been successful on the merits or otherwise in such Proceeding. Anyone seeking to overcome this presumption shall have the burden of proof and the burden of persuasion by clear and convincing evidence.

Section 9.Remedies of Indemnitee.

(a)If (i) a determination is made pursuant to Section 7(b) that Indemnitee is not entitled to indemnification under this Agreement, (ii) advance of Expenses is not timely made pursuant to Section 6, (iii) no determination of entitlement to indemnification shall have been made pursuant to Section 7(b) within thirty (30) days after receipt by the Company of the request for indemnification, (iv) payment of indemnification is not made pursuant to Section 5 within ten (10) days after receipt by the Company of a written request therefor, or (v) payment of indemnification is not made within ten (10) days after a determination has been made that Indemnitee is entitled to indemnification, Indemnitee shall (A) unless the Company demands arbitration as provided by Section 17, be entitled to an adjudication in a Chosen Court or (B) be entitled to seek an award in arbitration as provided by Section 17, in each case of Indemnitee’s entitlement to such indemnification or advance of Expenses.

(b)In any judicial proceeding or arbitration commenced pursuant to this Section 9, the Company shall have the burden of proving that Indemnitee is not entitled to indemnification or advance of Expenses, as the case may be. In the event that a determination shall have been made pursuant to Section 7(b) that Indemnitee is not entitled to indemnification, any judicial proceeding or arbitration commenced pursuant to this Section 9 shall be conducted in all respects as a de novo trial on the merits, and Indemnitee shall not be prejudiced by reason of the adverse determination under Section 7(b).

(c)If a determination shall have been made pursuant to Section 7(b) that Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any judicial proceeding or arbitration commenced pursuant to this Section 9, absent a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s statement not materially misleading, in connection with the demand for indemnification.

(d)In the event that Indemnitee, pursuant to this Section 9, seeks a judicial adjudication of or an award in arbitration as provided by Section 17 to enforce Indemnitee’s rights under, or to recover damages for breach of, this Agreement by the Company, or to recover under any directors’ and officers’ liability insurance policies maintained by the Company, the Company shall indemnify Indemnitee against any and all Expenses incurred by Indemnitee in such judicial adjudication or arbitration and, if requested by Indemnitee, the Company shall (within ten (10) days after receipt by the Company of a written demand therefor) advance, to the extent not prohibited by law, the Declaration of Trust or the Bylaws, any and all such Expenses.

(e)The Company shall be precluded from asserting in any judicial proceeding or arbitration commenced pursuant to this Section 9 that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such judicial proceeding or arbitration that the Company is bound by all the provisions of this Agreement.

(f)To the extent requested by Indemnitee and approved by the Board, the Company may at any time and from time to time provide security to Indemnitee for the Company’s obligations hereunder through an irrevocable bank line of credit, funded trust or other collateral. Any such security, once provided to Indemnitee, may not be revoked or released without the prior written consent of Indemnitee.

(g)Interest shall be paid by the Company to Indemnitee at the maximum rate allowed to be charged for judgments under the Courts and Judicial Proceedings Article of the Annotated Code of Maryland for amounts which the Company pays or is obligated to pay for the period (i) commencing with either the tenth (10th) day after the date on which the Company was requested to advance Expenses in accordance with Section 6 of this Agreement or the thirtieth (30th) day after the date on which the Company was requested to make the determination of entitlement to indemnification under Section 7(b) of this Agreement, as applicable, and (ii) ending on the date such payment is made to Indemnitee by the Company.

Section 10.Defense of the Underlying Proceeding.

(a)Indemnitee shall notify the Company promptly upon being served with or receiving any summons, citation, subpoena, complaint, indictment, information, notice, request or other document relating to any Proceeding which may result in the right to indemnification or the advance of Expenses hereunder; provided, however, that the failure to give any such notice shall not disqualify Indemnitee from the right, or otherwise affect in any manner any right of Indemnitee, to indemnification or the advance of Expenses under this Agreement unless the Company’s ability to defend in such Proceeding or to obtain proceeds under any insurance policy is materially and adversely prejudiced thereby, and then only to the extent the Company is thereby actually so prejudiced.

(b)Subject to the provisions of the last sentence of this Section 10(b) and of Section 10(c) below, the Company shall have the right to defend Indemnitee in any Proceeding which may give rise to indemnification hereunder; provided, however, that the Company shall notify Indemnitee of any such decision to defend within fifteen (15) days following receipt of notice of any such Proceeding under Section 10(a) above, and the counsel selected by the Company shall be reasonably satisfactory to Indemnitee. The Company shall not, without the prior written consent of Indemnitee, consent to the entry of any judgment against Indemnitee or enter into any settlement or compromise which (i) includes an admission of fault of Indemnitee, (ii) does not include, as an unconditional term thereof, the full release of Indemnitee from all liability in respect of such Proceeding, which release shall be in form and substance reasonably satisfactory to Indemnitee or (iii) has the actual or purported effect of extinguishing, limiting or impairing Indemnitee’s rights hereunder. This Section 10(b) shall not apply to a Proceeding brought by Indemnitee under Section 9 above or Section 15.

(c)Notwithstanding the provisions of Section 10(b), if in a Proceeding to which Indemnitee is a party by reason of Indemnitee’s Company Status, (i) Indemnitee reasonably concludes, based upon an opinion of counsel approved by the Company, which approval shall not be unreasonably withheld, that Indemnitee may have separate defenses or counterclaims to assert with respect to any issue which may not be consistent with other defendants in such Proceeding, (ii) Indemnitee reasonably concludes, based upon an opinion of counsel approved by the Company, which approval shall not be unreasonably withheld, that an actual or apparent conflict of interest or potential conflict of interest exists between Indemnitee and the Company, or (iii) the Company fails to assume the defense of such Proceeding in a timely manner, Indemnitee shall be entitled to be represented by separate legal counsel of Indemnitee’s choice, subject to the prior approval of the Company, which shall not be unreasonably withheld, at the expense of the Company. In addition, if the Company fails to comply with any of its obligations under this Agreement or in the event that the Company or any other Person takes any action to declare this Agreement void or unenforceable, or institutes any Proceeding to deny or to recover from Indemnitee the benefits intended to be provided to Indemnitee hereunder, Indemnitee shall have the right to retain counsel of Indemnitee’s

choice, at the expense of the Company (subject to Section 9(d)), to represent Indemnitee in connection with any such matter.

Section 11.Liability Insurance.

(a)To the extent the Company maintains an insurance policy or policies providing liability insurance for any of its trustees or officers, Indemnitee shall be covered by such policy or policies, in accordance with its or their terms, to the maximum extent of the coverage available for any Company trustee or officer during Indemnitee’s tenure as a trustee or officer and, following a termination of Indemnitee’s service in connection with a Change in Control, for a period of six (6) years thereafter.

(b)If, at the time of the receipt of a notice of a claim pursuant to the terms hereof, the Company has directors’ and officers’ liability insurance in effect, the Company shall give prompt notice of the commencement of such proceeding to the insurers in accordance with the procedures set forth in the respective policies. The Company shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of Indemnitee, all amounts payable as a result of such proceeding in accordance with the terms of such policies.

(c)In the event of any payment by the Company under this Agreement the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee with respect to any insurance policy. Indemnitee shall take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Company to bring suit to enforce such rights in accordance with the terms of such insurance policy. The Company shall pay or reimburse all expenses actually and reasonably incurred by Indemnitee in connection with such subrogation.

Section 12.Non-Exclusivity; Survival of Rights.

(a)The rights of indemnification and advance of Expenses as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the Declaration of Trust or the Bylaws, any agreement or a resolution of the shareholders entitled to vote generally in the election of trustees or of the Board, or otherwise. No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by Indemnitee in Indemnitee’s Company Status prior to such amendment, alteration or repeal. To the extent that a change in the Maryland REIT Law or the MGCL permits greater indemnification to Indemnitee than would be afforded currently under the Maryland REIT Law or the MGCL, it is the intent of the parties hereto that Indemnitee shall enjoy by this Agreement the greater benefits so afforded by such change if permitted by the Maryland REIT Law or the MGCL. No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every other right and remedy shall be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other right or remedy.

(b)The Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable or payable or reimbursable as Expenses hereunder if and to the extent that Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise.

Section 13.Binding Effect.

(a)The indemnification and advance of Expenses provided by, or granted pursuant to, this Agreement shall be binding upon and be enforceable by the parties hereto and their respective successors and assigns (including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business or assets of the Company), shall continue as to an Indemnitee who has ceased to be a trustee, director, manager, officer, partner, employee, agent or fiduciary of the Company or a trustee, director, manager, officer, partner, employee, agent or fiduciary of another Enterprise which such Person is or was serving at the request of the Company or a predecessor of the Company or any of their majority owned subsidiaries, and shall

inure to the benefit of Indemnitee and Indemnitee’s spouse, assigns, heirs, devisees, executors and administrators and other legal representatives.

(b)Any successor of the Company (whether direct or indirect by purchase, merger, consolidation or otherwise) to all, substantially all, or a substantial part of, the business or assets of the Company shall be automatically deemed to have assumed and agreed to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place, provided that no such assumption shall relieve the Company of its obligations hereunder. To the extent required by applicable law to give effect to the foregoing sentence and to the extent requested by Indemnitee, the Company shall require and cause any such successor to expressly assume and agree to perform this Agreement by written agreement in form and substance satisfactory to Indemnitee.

Section 14.Severability. If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including, without limitation, each portion of any section of this Agreement containing any such provision held to be invalid, illegal or unenforceable that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby; and (b) to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested thereby.

Section 15.Limitation and Exception to Right of Indemnification or Advance of Expenses. Notwithstanding any other provision of this Agreement, (a) any indemnification or advance of Expenses to which Indemnitee is otherwise entitled under the terms of this Agreement shall be made only to the extent such indemnification or advance of Expenses does not conflict with applicable Maryland law and (b) Indemnitee shall not be entitled to indemnification or advance of Expenses under this Agreement with respect to any Proceeding brought by Indemnitee, unless (i) the Proceeding is brought to enforce rights under this Agreement, the Declaration of Trust, the Bylaws, liability insurance policy or policies, if any, or otherwise or (ii) the Declaration of Trust, the Bylaws, a resolution of the shareholders entitled to vote generally in the election of trustees or of the Board or an agreement approved by the Board to which the Company is a party expressly provides otherwise. Notwithstanding any other provision of this Agreement, a court of appropriate jurisdiction, upon application of Indemnitee and such notice as the court shall require, may order indemnification of Indemnitee by the Company in the following circumstances: (a) if such court determines that Indemnitee is entitled to reimbursement under Section 2-418(d)(1) of the MGCL, the court shall order indemnification, in which case Indemnitee shall be entitled to recover the Expenses of securing such reimbursement; or (b) if such court determines that Indemnitee is fairly and reasonably entitled to indemnification in view of all the relevant circumstances, whether or not Indemnitee (i) has met the standard of conduct set forth in Section 2-418(b) of the MGCL or (ii) has been adjudged liable for receipt of an improper personal benefit under Section 2-418(c) of the MGCL, the court may order such indemnification as the court shall deem proper without regard to any limitation on such court-ordered indemnification contemplated by Section 2-418(d)(2)(ii) of the MGCL.

Section 16.Specific Performance, Etc. The parties hereto recognize that if any provision of this Agreement is violated by the Company, Indemnitee may be without an adequate remedy at law. Accordingly, in the event of any such violation, Indemnitee shall be entitled, if Indemnitee so elects, to institute proceedings, either in law or at equity, to obtain damages, to enforce specific performance, to enjoin such violation, or to obtain any relief or any combination of the foregoing as Indemnitee may elect to pursue.

Section 17.Arbitration.

(a)Any disputes, claims or controversies regarding Indemnitee’s entitlement to indemnification or advancement of Expenses hereunder or otherwise arising out of or relating to this Agreement, including any disputes, claims or controversies brought by or on behalf of a party hereto or any holder of equity interests (which, for purposes of this Section 17, shall mean any holder of record or any beneficial owner of equity interests or any former holder of record or beneficial owner of equity interests) of a party, either on his, her or its

own behalf, on behalf of a party or on behalf of any series or class of equity interests of a party or holders of equity interests of a party against a party or any of their respective trustees, directors, members, officers, managers, agents or employees, including any disputes, claims or controversies relating to the meaning, interpretation, effect, validity, performance or enforcement of this Agreement, including this Section 17 or the governing documents of a party (all of which are referred to as “Disputes”), or relating in any way to such a Dispute or Disputes, shall, on the demand of any party to such Dispute or Disputes, be resolved through binding and final arbitration in accordance with the Commercial Arbitration Rules (the “Rules”) of the American Arbitration Association (“AAA”) then in effect, except as those Rules may be modified in this Section 17. For the avoidance of doubt, and not as a limitation, Disputes are intended to include derivative actions against the trustees, directors, officers or managers of a party and class actions by a holder of equity interests against those individuals or entities and a party. For the avoidance of doubt, a Dispute shall include a Dispute made derivatively on behalf of one party against another party. For purposes of this Section 17, the term “equity interest” shall mean (i) in respect of the Company, shares of beneficial interest of the Company, (ii) shares of “membership interests” in an entity that is a limited liability company, (iii) general partnership interests in an entity that is a partnership, (iv) shares of capital stock of an entity that is a corporation and (v) similar equity ownership interests in other entities.

(b)There shall be three (3) arbitrators. If there are only two (2) parties to the Dispute, each party shall select one (1) arbitrator within fifteen (15) days after receipt by respondent of a copy of the demand for arbitration. The arbitrators may be affiliated or interested persons of the parties. If there are more than two (2) parties to the Dispute, all claimants, on the one hand, and all respondents, on the other hand, shall select, by the vote of a majority of the claimants or the respondents, as the case may be, one (1) arbitrator within fifteen (15) days after receipt of the demand for arbitration. The arbitrators may be affiliated or interested persons of the claimants or the respondents, as the case may be. If either a claimant (or all claimants) or a respondent (or all respondents) fail(s) to timely select an arbitrator then the party (or parties) who has selected an arbitrator may request AAA to provide a list of three (3) proposed arbitrators in accordance with the Rules (each of whom shall be neutral, impartial and unaffiliated with any party) and the party (or parties) that failed to timely appoint an arbitrator shall have ten (10) days from the date AAA provides the list to select one (1) of the three (3) arbitrators proposed by AAA. If the party (or parties) fail(s) to select the second (2nd) arbitrator by that time, the party (or parties) who have appointed the first (1st) arbitrator shall then have ten (10) days to select one (1) of the three (3) arbitrators proposed by AAA to be the second (2nd) arbitrator; and, if he/they should fail to select the second (2nd) arbitrator by such time, AAA shall select, within fifteen (15) days thereafter, one (1) of the three (3) arbitrators it had proposed as the second (2nd) arbitrator. The two (2) arbitrators so appointed shall jointly appoint the third (3rd) and presiding arbitrator (who shall be neutral, impartial and unaffiliated with any party) within fifteen (15) days of the appointment of the second (2nd) arbitrator. If the third (3rd) arbitrator has not been appointed within the time limit specified herein, then AAA shall provide a list of proposed arbitrators in accordance with the Rules, and the arbitrator shall be appointed by AAA in accordance with a listing, striking and ranking procedure, with each party having a limited number of strikes, excluding strikes for cause.

(c)The place of arbitration shall be Boston, Massachusetts unless otherwise agreed by the parties.

(d)There shall be only limited documentary discovery of documents directly related to the issues in dispute, as may be ordered by the arbitrators. For the avoidance of doubt, it is intended that there shall be no depositions and no other discovery other than limited documentary discovery as described in the preceding sentence.

(e)In rendering an award or decision (an “Award”), the arbitrators shall be required to follow the laws of the State of Maryland without regard to principles of conflicts of law. Any arbitration proceedings or award rendered hereunder and the validity, effect and interpretation of this arbitration agreement shall be governed by the Federal Arbitration Act, 9 U.S.C. §1 et seq. An Award shall be in writing and shall state the findings of fact and conclusions of law on which it is based. Any monetary Award shall be made and payable in U.S. dollars free of any tax, deduction or offset. Subject to Section 17(g), each party against which an Award assesses a monetary obligation shall pay that obligation on or before the thirtieth (30th) day following the date of such Award or such other date as the Award may provide.

(f)Except to the extent expressly provided by this Agreement or as otherwise agreed by the parties hereto, each party and each Person acting or seeking to act in a representative capacity (such Person, a “Named Representative”) involved in a Dispute shall bear its own costs and expenses (including attorneys’ fees), and the arbitrators shall not render an Award that would include shifting of any such costs or expenses (including attorneys’ fees) or, in a derivative case or class action, award any portion of a party’s award to its attorneys, a Named Representative or any attorney of a Named Representative. Each party (or, if there are more than two (2) parties to the Dispute, all claimants, on the one hand, and all respondents, on the other hand, respectively) shall bear the costs and expenses of its (or their) selected arbitrator and the parties (or, if there are more than two (2) parties to the Dispute, all claimants, on the one hand, and all respondents, on the other hand) shall equally bear the costs and expenses of the third (3rd) appointed arbitrator.

(g)Notwithstanding any language to the contrary in this Agreement, an Award, including but not limited to any interim Award, may be appealed pursuant to the AAA’s Optional Appellate Arbitration Rules (the “Appellate Rules”). An Award shall not be considered final until after the time for filing the notice of appeal pursuant to the Appellate Rules has expired. Appeals must be initiated within thirty (30) days of receipt of an Award by filing a notice of appeal with any AAA office. Following the appeal process, the decision rendered by the appeal tribunal may be entered in any court having jurisdiction thereof. For the avoidance of doubt, and despite any contrary provision of the Appellate Rules, Section 17(f) shall apply to any appeal pursuant to this Section 17 and the appeal tribunal shall not render an Award that would include shifting of any costs or expenses (including attorneys’ fees) of any party or Named Representative or the payment of such costs and expenses, and all costs and expenses of a party or Named Representative shall be its sole responsibility.

(h)Following the expiration of the time for filing the notice of appeal, or the conclusion of the appeal process set forth in Section 17(g), an Award shall be final and binding upon the parties thereto and shall be the sole and exclusive remedy between those parties relating to the Dispute, including any claims, counterclaims, issues or accounting presented to the arbitrators. Judgment upon an Award may be entered in any court having jurisdiction. To the fullest extent permitted by law, no application or appeal to any court of competent jurisdiction may be made in connection with any question of law arising in the course of arbitration or with respect to any award made except for actions relating to enforcement of this agreement to arbitrate or any arbitral award issued hereunder and except for actions seeking interim or other provisional relief in aid of arbitration proceedings in any court of competent jurisdiction.

(i)This Section 17 is intended to benefit and be enforceable by the parties hereto and their respective holders of equity interests, trustees, directors, officers, managers, agents or employees, and their respective successors and assigns, and shall be binding upon all such parties and their respective holders of equity interests, and be in addition to, and not in substitution for, any other rights to indemnification or contribution that such individuals or entities may have by contract or otherwise.

Section 18.Venue. Each party hereto agrees that it shall bring any Proceeding in respect of any claim arising out of or related to this Agreement exclusively in the courts of the State of Maryland and the Federal courts of the United States, in each case, located in the City of Baltimore (the “Chosen Courts”). Solely in connection with claims arising under this Agreement, each party irrevocably and unconditionally (i) submits to the exclusive jurisdiction of the Chosen Courts, (ii) agrees not to commence any such Proceeding except in such courts, (iii) waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any such Proceeding in the Chosen Courts, (iv) waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such Proceeding, (v) agrees that service of process upon such party in any such Proceeding shall be effective if notice is given in accordance with Section 24 and (vi) agrees to request and/or consent to the assignment of any dispute arising out of this Agreement or the transactions contemplated by this Agreement to the Chosen Courts’ Business and Technology Case Management Program, or similar program. Nothing in this Agreement will affect the right of any party hereto to serve process in any other manner permitted by law. A final judgment in any such Proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. EACH PARTY HERETO IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS.

Notwithstanding anything herein to the contrary, if a demand for arbitration of a Dispute is made pursuant to Section 17, this Section 18 shall not preempt resolution of the Dispute pursuant to Section 17.

Section 19.Adverse Settlement. The Company shall not seek, nor shall it agree to or support, or agree not to contest any settlement or other resolution of any matter that has the actual or purported effect of extinguishing, limiting or impairing Indemnitee’s rights hereunder, including without limitation the entry of any bar order or other order, decree or stipulation, pursuant to 15 U.S.C. § 78u-4 (the Private Securities Litigation Reform Act), or any similar foreign, federal or state statute, regulation, rule or law.

Section 20.Period of Limitations. To the fullest extent permitted by law, no legal action shall be brought, and no cause of action shall be asserted, by or on behalf of the Company or any controlled affiliate of the Company against Indemnitee, Indemnitee’s spouse, heirs, executors or personal or legal representatives after the expiration of two years from the date of accrual of such cause of action, and any claim or cause of action of the Company or its controlled affiliate shall be extinguished and deemed released unless asserted by the timely filing of a legal action within such two-year period; provided, however, if any shorter period of limitations is otherwise applicable to any such cause of action, such shorter period shall govern.

Section 21.Counterparts. This Agreement may be executed in any number of counterparts, all of which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each of the parties hereto and delivered to the other party (including via facsimile or other electronic transmission), it being understood that each party hereto need not sign the same counterpart.

Section 22.Delivery by Electronic Transmission. This Agreement and any signed agreement or instrument entered into in connection with this Agreement or contemplated hereby, and any amendments hereto or thereto, to the extent signed and delivered by means of an electronic transmission, including by a facsimile machine or via email, shall be treated in all manner and respects as an original agreement or instrument and shall be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person. At the request of any party hereto or to any such agreement or instrument, each other party hereto or thereto shall re-execute original forms thereof and deliver them to the other parties. No party hereto or to any such agreement or instrument shall raise the use of electronic transmission by a facsimile machine or via email to deliver a signature or the fact that any signature or agreement or instrument was transmitted or communicated through electronic transmission as a defense to the formation of a contract and each such party forever waives any such defense.

Section 23.Modification and Waiver. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed to, or shall, constitute a waiver of any other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.

Section 24.Notices. Any notice, report or other communication required or permitted to be given hereunder shall be in writing unless some other method of giving such notice, report or other communication is accepted by the party to whom it is given, and shall be given by being delivered at the following addresses to the parties hereto:

(a)If to Indemnitee, to: The address set forth on the signature page hereto.

(b)If to the Company to:

Office Properties Income Trust
Two Newton Place
255 Washington Street, Suite 300
Newton, Massachusetts 02458-1634
Attn: Secretary

or to such other address as may have been furnished to Indemnitee by the Company or to the Company by Indemnitee, as the case may be.

Section 25.Governing Law. The provisions of this Agreement and any Dispute, whether in contract, tort or otherwise, shall be governed by and construed in accordance with the laws of the State of Maryland without regard to its conflicts of laws rules.

Section 26.Interpretation.

(a)Generally. Unless the context otherwise requires, as used in this Agreement: (a) words defined in the singular have the parallel meaning in the plural and vice versa; (b) “Articles,” “Sections,” and “Exhibits” refer to Articles, Sections and Exhibits of this Agreement unless otherwise specified; and (c) “hereto” and “hereunder” and words of like import used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement.

(b)Additional Interpretive Provisions. The headings in this Agreement are for reference purposes only and shall not in any way affect the meaning or interpretation of this Agreement. Any capitalized term used in any Exhibit to this Agreement, but not otherwise defined therein, shall have the meaning as defined in this Agreement. References to any statute shall be deemed to refer to such statute as amended from time to time and to any rules or regulations promulgated thereunder and any successor statute or statutory provision. References to any agreement are to that agreement as amended, modified or supplemented from time to time in accordance with the terms hereof and thereof. References to any Person include the successors and permitted assigns of that Person. Reference to any agreement, document or instrument means the agreement, document or instrument as amended or otherwise modified from time to time in accordance with the terms thereof, and if applicable hereof.

(c)[Expansion of Indemnification. This amendment and restatement of the Prior Indemnification Agreement is intended to expand, and not to limit, the scope of indemnification provided to Indemnitee under the Prior Indemnification Agreement, and this Agreement shall be interpreted consistent with such intent.]

[Signature Page Follows]

IN WITNESS WHEREOF, the undersigned have executed or caused to be executed on their behalf this Agreement as of the date first written above.


OFFICE PROPERTIES INCOME TRUST


By:
Name:
Title:

[INDEMNITEE]



Indemnitee’s Address:

[Signature Page to [Amended and Restated] Indemnification Agreement]

EXHIBIT A

FORM OF AFFIRMATION AND
UNDERTAKING TO REPAY EXPENSES ADVANCED

To the Board of Trustees of Office Properties Income Trust:

This affirmation and undertaking is being provided pursuant to that certain [Amended and Restated] Indemnification Agreement dated __________________, 20__ (the “Indemnification Agreement”), by and between Office Properties Income Trust, a Maryland real estate investment trust (the “Company”), and the undersigned Indemnitee, pursuant to which Indemnitee is entitled to advancement of expenses in connection with [Description of Claims/Proceeding] (together, the “Claims”). Terms used, and not otherwise defined, herein shall have the meanings specified in the Indemnification Agreement.

Indemnitee is subject to the Claims by reason of Indemnitee’s Company Status or by reason of alleged actions or omissions by Indemnitee in such capacity.

Indemnitee hereby affirms Indemnitee’s good faith belief that the standard of conduct necessary for Indemnitee’s indemnification has been met.

In consideration of the advancement of Expenses by the Company for attorneys’ fees and related expenses incurred by Indemnitee in connection with the Claims (the “Advanced Expenses”), Indemnitee hereby agrees that if, in connection with a proceeding regarding the Claim, it is ultimately determined that Indemnitee is not entitled to indemnification under law, the Declaration of Trust, the Bylaws or the Indemnification Agreement with respect to an act or omission by Indemnitee, then Indemnitee shall promptly reimburse the portion of the Advanced Expenses relating to the Claim(s) as to which the foregoing findings have been established and which have not been successfully resolved as described in Section 5 of the Indemnification Agreement. To the extent that Advanced Expenses do not relate to specific Claims, Indemnitee agrees that such Advanced Expenses may be allocated on a reasonable and proportionate basis.

IN WITNESS WHEREOF, the undersigned Indemnitee has executed this Affirmation and Undertaking to Repay Expenses Advanced on ______________________, 20__.

WITNESS:






Print name of witness						Print name of witness

Schedule to Exhibit 10.3

The following trustees and executive officers of Office Properties Income Trust, or OPI, are parties to Indemnification Agreements with OPI which are substantially identical in all material respects to the representative Indemnification Agreement filed herewith and are dated as of the respective dates listed below. The other Indemnification Agreements are omitted pursuant to Instruction 2 to Item 601 of Regulation S-K.


Name of Signatory			Date
Brian E. Donley			October 1, 2023
Mark A. Talley			April 12, 2022
Christopher J. Bilotto			March 2, 2020
Donna D. Fraiche			January 15, 2019
William A. Lamkin			January 15, 2019
Jennifer B. Clark			May 24, 2018
Barbara D. Gilmore			May 24, 2018
John L. Harrington			May 24, 2018
Elena Poptodorova			May 24, 2018
Adam D. Portnoy			May 24, 2018
Jeffrey P. Somers			May 24, 2018

Exhibit 31.1

CERTIFICATION PURSUANT TO EXCHANGE ACT RULES 13a-14(a) AND 15d-14(a)

I, Christopher J. Bilotto, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Office Properties Income Trust;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.



Date: October 30, 2023			/s/ Christopher J. Bilotto
			Christopher J. Bilotto President and Chief Executive Officer

Exhibit 31.2

CERTIFICATION PURSUANT TO EXCHANGE ACT RULES 13a-14(a) AND 15d-14(a)

I, Brian Donley, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Office Properties Income Trust;

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.



Date: October 30, 2023			/s/ Brian E. Donley
			Brian E. Donley Chief Financial Officer and Treasurer

Exhibit 32.1

Certification Pursuant to 18 U.S.C. Sec. 1350

In connection with the filing by Office Properties Income Trust (the “Company”) of the Quarterly Report on Form 10-Q for the period ended September 30, 2023 (the “Report”), each of the undersigned hereby certifies, to the best of his knowledge:

1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.



						/s/ Christopher J. Bilotto
						Christopher J. Bilotto President and Chief Executive Officer


						/s/ Brian E. Donley
						Brian E. Donley Chief Financial Officer and Treasurer

Date: October 30, 2023

Cover Page - shares	9 Months Ended
Cover Page - shares	Sep. 30, 2023	Oct. 27, 2023
Document Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2023
Document Transition Report	false
Entity File Number	1-34364
Entity Registrant Name	OFFICE PROPERTIES INCOME TRUST
Entity Incorporation, State or Country Code	MD
Entity Tax Identification Number	26-4273474
Entity Address, Address Line One	Two Newton Place
Entity Address, Address Line Two	255 Washington Street
Entity Address, Address Line Three	Suite 300
Entity Address, City or Town	Newton
Entity Address, State or Province	MA
Entity Address, Postal Zip Code	02458-1634
City Area Code	617
Local Phone Number	219-1440
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		48,755,886
Entity Central Index Key	0001456772
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q3
Common shares
Document Information [Line Items]
Title of 12(b) Security	Common Shares of Beneficial Interest
Trading Symbol	OPI
Security Exchange Name	NASDAQ
6.375% Senior Unsecured Notes Due 2050
Document Information [Line Items]
Title of 12(b) Security	6.375% Senior Notes due 2050
Trading Symbol	OPINL
Security Exchange Name	NASDAQ

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Real estate properties:
Land	$ 802,904	$ 821,238
Buildings and improvements	3,260,732	3,114,836
Total real estate properties, gross	4,063,636	3,936,074
Accumulated depreciation	(627,656)	(561,458)
Total real estate properties, net	3,435,980	3,374,616
Assets of properties held for sale	16,942	2,516
Investments in unconsolidated joint ventures	36,602	35,129
Acquired real estate leases, net	295,195	369,333
Cash and cash equivalents	24,358	12,249
Restricted cash	15,270	0
Rents receivable	124,043	105,639
Deferred leasing costs, net	85,087	73,098
Other assets, net	11,513	7,397
Total assets	4,044,990	3,979,977
LIABILITIES AND SHAREHOLDERS’ EQUITY
Unsecured revolving credit facility	200,000	195,000
Senior unsecured notes, net	2,193,577	2,187,875
Mortgage notes payable, net	172,331	49,917
Liabilities of properties held for sale	346	73
Accounts payable and other liabilities	154,061	140,151
Due to related persons	7,766	6,469
Assumed real estate lease obligations, net	12,276	14,157
Total liabilities	2,740,357	2,593,642
Commitments and contingencies
Shareholders’ equity:
Common shares of beneficial interest, $.01 par value: 200,000,000 shares authorized, 48,757,246 and 48,565,644 shares issued and outstanding, respectively	488	486
Additional paid in capital	2,621,107	2,619,532
Cumulative net income	137,325	169,606
Cumulative common distributions	(1,454,287)	(1,403,289)
Total shareholders’ equity	1,304,633	1,386,335
Total liabilities and shareholders’ equity	$ 4,044,990	$ 3,979,977

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Sep. 30, 2023	Dec. 31, 2022
Shareholders’ equity:
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common shares of beneficial interest, shares authorized (in shares)	200,000,000	200,000,000
Common shares of beneficial interest, shares issued (in shares)	48,757,246	48,565,644
Common shares of beneficial interest, shares outstanding (in shares)	48,757,246	48,565,644

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Income Statement [Abstract]
Rental income	$ 133,361	$ 137,683	$ 399,780	$ 426,353
Expenses:
Real estate taxes	14,257	16,414	45,491	49,642
Utility expenses	7,460	7,986	20,462	20,671
Other operating expenses	27,946	27,737	80,637	81,597
Depreciation and amortization	52,266	52,988	155,559	170,993
Loss on impairment of real estate	0	0	0	21,820
Acquisition and transaction related costs	16,135	0	30,534	224
General and administrative	5,720	6,564	17,430	19,353
Total expenses	123,784	111,689	350,113	364,300
Gain on sale of real estate	244	16,925	487	7,437
Interest and other income	281	56	782	73
Interest expense (including net amortization of debt premiums, discounts and issuance costs of $2,276, $2,176, $6,808 and $6,946, respectively)	(28,835)	(24,969)	(80,591)	(78,923)
Loss on early extinguishment of debt	0	0	0	(77)
(Loss) income before income tax expense and equity in net losses of investees	(18,733)	18,006	(29,655)	(9,437)
Income tax expense	(95)	(90)	(336)	(431)
Equity in net losses of investees	(765)	(952)	(2,290)	(2,631)
Net (loss) income	$ (19,593)	$ 16,964	$ (32,281)	$ (12,499)
Weighted average common shares outstanding (basic) (in shares)	48,403	48,286	48,365	48,260
Weighted average common shares outstanding (diluted) (in shares)	48,403	48,286	48,365	48,260
Per common share amounts (basic and diluted):
Net (loss) income (basic) (in dollars per share)	$ (0.41)	$ 0.35	$ (0.67)	$ (0.27)
Net (loss) income (diluted) (in dollars per share)	$ (0.41)	$ 0.35	$ (0.67)	$ (0.27)

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Income Statement [Abstract]
Net amortization of debt premiums, discounts and issuance costs	$ 2,276	$ 2,176	$ 6,808	$ 6,946

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) $ in Thousands	Total	Common Shares	Additional Paid In Capital	Cumulative Net Income	Cumulative Common Distributions
Beginning balance (in shares) at Dec. 31, 2021		48,425,665
Beginning balance at Dec. 31, 2021	$ 1,496,709	$ 484	$ 2,617,169	$ 175,715	$ (1,296,659)
Increase (Decrease) in Shareholders' Equity
Common share grants	415		415
Common share forfeitures (in shares)		(400)
Common share forfeitures	(1)		(1)
Net loss	(13,407)			(13,407)
Distributions to common shareholders	(26,634)				(26,634)
Ending balance (in shares) at Mar. 31, 2022		48,425,265
Ending balance at Mar. 31, 2022	1,457,082	$ 484	2,617,583	162,308	(1,323,293)
Beginning balance (in shares) at Dec. 31, 2021		48,425,665
Beginning balance at Dec. 31, 2021	1,496,709	$ 484	2,617,169	175,715	(1,296,659)
Increase (Decrease) in Shareholders' Equity
Net loss	(12,499)
Ending balance (in shares) at Sep. 30, 2022		48,566,206
Ending balance at Sep. 30, 2022	1,406,165	$ 486	2,619,041	163,216	(1,376,578)
Beginning balance (in shares) at Mar. 31, 2022		48,425,265
Beginning balance at Mar. 31, 2022	1,457,082	$ 484	2,617,583	162,308	(1,323,293)
Increase (Decrease) in Shareholders' Equity
Common share grants (in shares)		31,500
Common share grants	1,079	$ 1	1,078
Common share forfeitures and repurchases (in shares)		(1,690)
Common share forfeitures and repurchases	(21)		(21)
Net loss	(16,056)			(16,056)
Distributions to common shareholders	(26,634)				(26,634)
Ending balance (in shares) at Jun. 30, 2022		48,455,075
Ending balance at Jun. 30, 2022	1,415,450	$ 485	2,618,640	146,252	(1,349,927)
Increase (Decrease) in Shareholders' Equity
Common share grants (in shares)		141,200
Common share grants	923	$ 1	922
Common share forfeitures and repurchases (in shares)		(30,069)
Common share forfeitures and repurchases	(521)		(521)
Net loss	16,964			16,964
Distributions to common shareholders	(26,651)				(26,651)
Ending balance (in shares) at Sep. 30, 2022		48,566,206
Ending balance at Sep. 30, 2022	1,406,165	$ 486	2,619,041	163,216	(1,376,578)
Beginning balance (in shares) at Dec. 31, 2022		48,565,644
Beginning balance at Dec. 31, 2022	1,386,335	$ 486	2,619,532	169,606	(1,403,289)
Increase (Decrease) in Shareholders' Equity
Common share grants	477		477
Common share forfeitures and repurchases (in shares)		(1,935)
Common share forfeitures and repurchases	(15)		(15)
Net loss	(446)			(446)
Distributions to common shareholders	(26,710)				(26,710)
Ending balance (in shares) at Mar. 31, 2023		48,563,709
Ending balance at Mar. 31, 2023	1,359,641	$ 486	2,619,994	169,160	(1,429,999)
Beginning balance (in shares) at Dec. 31, 2022		48,565,644
Beginning balance at Dec. 31, 2022	1,386,335	$ 486	2,619,532	169,606	(1,403,289)
Increase (Decrease) in Shareholders' Equity
Net loss	(32,281)
Ending balance (in shares) at Sep. 30, 2023		48,757,246
Ending balance at Sep. 30, 2023	1,304,633	$ 488	2,621,107	137,325	(1,454,287)
Beginning balance (in shares) at Mar. 31, 2023		48,563,709
Beginning balance at Mar. 31, 2023	1,359,641	$ 486	2,619,994	169,160	(1,429,999)
Increase (Decrease) in Shareholders' Equity
Common share grants (in shares)		31,500
Common share grants	744		744
Common share forfeitures and repurchases (in shares)		(7,559)
Common share forfeitures and repurchases	(47)		(47)
Net loss	(12,242)			(12,242)
Distributions to common shareholders	(12,141)				(12,141)
Ending balance (in shares) at Jun. 30, 2023		48,587,650
Ending balance at Jun. 30, 2023	1,335,955	$ 486	2,620,691	156,918	(1,442,140)
Increase (Decrease) in Shareholders' Equity
Common share grants (in shares)		210,300
Common share grants	658	$ 2	656
Common share forfeitures and repurchases (in shares)		(40,704)
Common share forfeitures and repurchases	(240)		(240)
Net loss	(19,593)			(19,593)
Distributions to common shareholders	(12,147)				(12,147)
Ending balance (in shares) at Sep. 30, 2023		48,757,246
Ending balance at Sep. 30, 2023	$ 1,304,633	$ 488	$ 2,621,107	$ 137,325	$ (1,454,287)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)
$ in Thousands

9 Months Ended

Sep. 30, 2023

Sep. 30, 2022

CASH FLOWS FROM OPERATING ACTIVITIES:

Net loss

$ (32,281)

$ (12,499)

Adjustments to reconcile net loss to net cash provided by operating activities:

Depreciation

77,635

73,174

Net amortization of debt premiums, discounts and issuance costs

6,808

6,946

Amortization of acquired real estate leases and assumed real estate lease obligations, net

71,332

93,458

Amortization of deferred leasing costs

7,359

6,115

Gain on sale of real estate

(487)

(7,437)

Loss on impairment of real estate

21,820

Loss on early extinguishment of debt

Straight line rental income

(17,120)

(7,226)

Other non-cash expenses, net

1,053

1,591

Equity in net losses of investees

2,290

2,631

Change in assets and liabilities:

Rents receivable

(1,375)

7,625

Deferred leasing costs

(17,904)

(20,724)

Other assets

(4,426)

(2,358)

Accounts payable and other liabilities

14,952

(3,255)

Due to/from related persons

1,297

(7,251)

Net cash provided by operating activities

109,133

152,687

CASH FLOWS FROM INVESTING ACTIVITIES:

Real estate improvements

(175,628)

(137,031)

Distributions in excess of earnings from unconsolidated joint ventures

Contributions to unconsolidated joint ventures

(3,763)

(2,914)

Proceeds from sale of properties, net

22,449

189,069

Net cash (used in) provided by investing activities

(156,942)

49,175

CASH FLOWS FROM FINANCING ACTIVITIES:

Repayment of mortgage notes payable

(50,000)

(25,400)

Proceeds from issuance of mortgage notes payable

177,320

Repayment of senior unsecured notes

(300,000)

Borrowings on unsecured revolving credit facility

225,000

295,000

Repayments on unsecured revolving credit facility

(220,000)

(160,000)

Payment of debt issuance costs

(5,843)

Repurchase of common shares

(291)

(533)

Distributions to common shareholders

(50,998)

(79,919)

Net cash provided by (used in) financing activities

75,188

(270,852)

Increase (decrease) in cash, cash equivalents and restricted cash

27,379

(68,990)

Cash, cash equivalents and restricted cash at beginning of period

12,249

84,515

Cash, cash equivalents and restricted cash at end of period

39,628

15,525

SUPPLEMENTAL CASH FLOW INFORMATION:

Interest paid

79,324

80,504

Income taxes paid

374

283

NON-CASH INVESTING ACTIVITIES:

Real estate improvements accrued, not paid

41,445

34,340

Capitalized interest

6,423

2,887

SUPPLEMENTAL DISCLOSURE OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH:

Cash and cash equivalents

24,358

14,005

Restricted cash

^[1]

15,270

1,520

Total cash, cash equivalents and restricted cash shown in the condensed consolidated statements of cash flows

$ 39,628

$ 15,525

[1]	Restricted cash consists of amounts escrowed for future real estate taxes, insurance, leasing costs, capital expenditures and debt service, as required by certain of our mortgage debts.

Basis of Presentation	9 Months Ended
Basis of Presentation	Sep. 30, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Basis of Presentation	Basis of Presentation The accompanying condensed consolidated financial statements of Office Properties Income Trust and its subsidiaries, or OPI, we, us or our, are unaudited. Certain information and disclosures required by U.S. generally accepted accounting principles, or GAAP, for complete financial statements have been condensed or omitted. We believe the disclosures made are adequate to make the information presented not misleading. However, the accompanying condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes contained in our Annual Report on Form 10-K for the year ended December 31, 2022, or our 2022 Annual Report. In the opinion of management, all adjustments, consisting of normal recurring accruals considered necessary for a fair statement of results for the interim period have been included. All intercompany transactions and balances with or among our consolidated subsidiaries have been eliminated. Our operating results for interim periods are not necessarily indicative of the results that may be expected for the full year. The preparation of these financial statements in conformity with GAAP requires us to make estimates and assumptions that affect reported amounts. Actual results could differ from those estimates. Significant estimates in the condensed consolidated financial statements include purchase price allocations, useful lives of fixed assets and assessment of impairment of real estate and the related intangibles. Termination of Merger with Diversified Healthcare Trust As previously disclosed, on April 11, 2023, we and Diversified Healthcare Trust, or DHC, entered into an Agreement and Plan of Merger, or the Merger Agreement, pursuant to which we and DHC had agreed that DHC would merge with and into us, with us as the surviving entity in the merger, subject to the terms and conditions of the Merger Agreement. On September 1, 2023, we and DHC mutually agreed to terminate the Merger Agreement and entered into a termination agreement, or the Termination Agreement. The mutual termination of the Merger Agreement was separately recommended by our and DHC’s respective Special Committees of each Board of Trustees, and approved by our and DHC’s respective Board of Trustees. Neither we nor DHC will be required to pay any termination fee as a result of the mutual decision to terminate the Merger Agreement. We and DHC will bear our and its respective costs and expenses related to the Merger Agreement and the transactions contemplated thereby in accordance with the terms of the Merger Agreement. We recorded $30,534 of expenses during the nine months ended September 30, 2023 related to the potential merger with DHC, which is included in acquisition and transaction related costs in our condensed consolidated statement of comprehensive income (loss). Contemporaneously with the execution of the Merger Agreement, on April 11, 2023, we and our manager, The RMR Group LLC, or RMR, entered into a Third Amended and Restated Property Management Agreement, or the Amended Property Management Agreement. The effectiveness of the Amended Property Management Agreement was conditioned upon the consummation of the merger. Since the merger will not be consummated, the Amended Property Management Agreement will not become effective and the Second Amended and Restated Property Management Agreement between us and RMR will remain in effect. In connection with the execution of the Merger Agreement, on April 11, 2023, we entered into a commitment letter with an institutional lender, pursuant to which it committed to provide, subject to the terms and conditions of the commitment letter, a senior secured bridge facility to us in an aggregate principal amount of $368,000. On September 1, 2023, we terminated the commitment letter.

Per Common Share Amounts

9 Months Ended

Sep. 30, 2023

Earnings Per Share [Abstract]

Per Common Share Amounts


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Numerators:
Net (loss) income	$	(19,593)	$	16,964	$	(32,281)	$	(12,499)
Income/loss attributable to unvested participating securities	(50)		(99)		(232)		(299)
Net (loss) income used in calculating earnings per common share	$	(19,643)	$	16,865	$	(32,513)	$	(12,798)

Denominators:
Weighted average common shares outstanding - basic and diluted	48,403		48,286		48,365		48,260



Net (loss) income per common share - basic and diluted	$	(0.41)	$	0.35	$	(0.67)	$	(0.27)

Real Estate Properties

9 Months Ended

Sep. 30, 2023

Real Estate [Abstract]

Real Estate Properties

Acquisition Activities

Disposition Activities


Date of Sale	Number of Properties	Location	Rentable Square Feet	Gross Sales Price(1)		Gain (Loss) on Sale of Real Estate
January 2023	3	Richmond, VA	89,000	$	5,350	$	2,548
April 2023	1	Phoenix, AZ	107,000	4,900		511
June 2023	1	Vernon Hills, IL	100,000	2,825		(2,816)
September 2023	1	Windsor Mill, MD	80,000	10,500		244
	6		376,000	$	23,575	$	487

(1)Gross sales price is the gross contract price, excluding closing costs.

Unconsolidated Joint Ventures


		OPI Carrying Value of Investments at
Joint Venture	OPI Ownership	September 30, 2023		December 31, 2022		Number of Properties	Location	Rentable Square Feet
Prosperity Metro Plaza	51%	$	18,455	$	19,237	2	Fairfax, VA	329,000
1750 H Street, NW	50%	18,147		15,892		1	Washington, D.C.	122,000
Total		$	36,602	$	35,129	3		451,000

The following table provides a summary of the mortgage debt of our two unconsolidated joint ventures:


Joint Venture	Interest Rate (1)	Maturity Date	Principal Balance at September 30, 2023 and December 31, 2022 (2)
Prosperity Metro Plaza	4.09%	12/1/2029	$	50,000
1750 H Street, NW (3)	3.69%	8/1/2027	32,000
Weighted Average / Total	3.93%		$	82,000

(1)Includes the effect of mark to market purchase accounting.

(2)Reflects the entire balance of the debt secured by the properties and is not adjusted to reflect the interests in the joint ventures we do not own. None of the debt is recourse to us.

(3)In July 2023, the maturity date of this mortgage loan was extended by three years at the same interest rate.

Leases	9 Months Ended
Leases	Sep. 30, 2023
Leases [Abstract]
Leases	Leases Our leases provide for base rent payments and, in addition, may include variable payments. Rental income from operating leases, including any payments derived by index or market-based indices, is recognized on a straight line basis over the lease term when we have determined that the collectability of substantially all of the lease payments is probable. Some of our leases have options to extend or terminate the lease exercisable at the option of our tenants, which are considered when determining the lease term. Allowances for bad debts are recognized as a direct reduction of rental income. In certain circumstances, some leases provide the tenant with the right to terminate if the legislature or other funding authority does not appropriate the funding necessary for the tenant to meet its lease obligations; we have determined the fixed non-cancelable lease term of these leases to be the full term of the lease because we believe the occurrence of early terminations to be a remote contingency based on both our historical experience and our assessments of the likelihood of lease cancellation on a separate lease basis. We increased rental income to record revenue on a straight line basis by $8,691 and $1,765 for the three months ended September 30, 2023 and 2022, respectively, and $17,120 and $7,226 for the nine months ended September 30, 2023 and 2022, respectively. Rents receivable, excluding properties classified as held for sale, included $103,366 and $86,305 of straight line rent receivables at September 30, 2023 and December 31, 2022, respectively. We do not include in our measurement of our lease receivables certain variable payments, including payments determined by changes in the index or market-based indices after the inception of the lease, certain tenant reimbursements and other income until the specific events that trigger the variable payments have occurred. Such payments totaled $21,067 and $64,627 for the three and nine months ended September 30, 2023, respectively, of which tenant reimbursements totaled $19,722 and $60,641, respectively. For the three and nine months ended September 30, 2022, such payments totaled $23,183 and $67,820, respectively, of which tenant reimbursements totaled $21,953 and $64,437, respectively.
Leases	Leases Our leases provide for base rent payments and, in addition, may include variable payments. Rental income from operating leases, including any payments derived by index or market-based indices, is recognized on a straight line basis over the lease term when we have determined that the collectability of substantially all of the lease payments is probable. Some of our leases have options to extend or terminate the lease exercisable at the option of our tenants, which are considered when determining the lease term. Allowances for bad debts are recognized as a direct reduction of rental income. In certain circumstances, some leases provide the tenant with the right to terminate if the legislature or other funding authority does not appropriate the funding necessary for the tenant to meet its lease obligations; we have determined the fixed non-cancelable lease term of these leases to be the full term of the lease because we believe the occurrence of early terminations to be a remote contingency based on both our historical experience and our assessments of the likelihood of lease cancellation on a separate lease basis. We increased rental income to record revenue on a straight line basis by $8,691 and $1,765 for the three months ended September 30, 2023 and 2022, respectively, and $17,120 and $7,226 for the nine months ended September 30, 2023 and 2022, respectively. Rents receivable, excluding properties classified as held for sale, included $103,366 and $86,305 of straight line rent receivables at September 30, 2023 and December 31, 2022, respectively. We do not include in our measurement of our lease receivables certain variable payments, including payments determined by changes in the index or market-based indices after the inception of the lease, certain tenant reimbursements and other income until the specific events that trigger the variable payments have occurred. Such payments totaled $21,067 and $64,627 for the three and nine months ended September 30, 2023, respectively, of which tenant reimbursements totaled $19,722 and $60,641, respectively. For the three and nine months ended September 30, 2022, such payments totaled $23,183 and $67,820, respectively, of which tenant reimbursements totaled $21,953 and $64,437, respectively.

Concentration	9 Months Ended
Concentration	Sep. 30, 2023
Risks and Uncertainties [Abstract]
Concentration	Concentration Tenant and Credit Concentration As of September 30, 2023 and 2022, the U.S. government and certain state and other government tenants combined were responsible for approximately 28.1% and 27.8%, respectively, of our annualized rental income. The U.S. government is our largest tenant by annualized rental income and represented approximately 20.0% and 19.1% of our annualized rental income as of September 30, 2023 and 2022, respectively. We define annualized rental income as the annualized contractual base rents from our tenants pursuant to our lease agreements as of the measurement date, plus straight line rent adjustments and estimated recurring expense reimbursements to be paid to us, and excluding lease value amortization. Geographic Concentration As of September 30, 2023, our 154 wholly owned properties were located in 30 states and the District of Columbia. Properties located in California, Virginia, Illinois, Georgia and the District of Columbia were responsible for approximately 12.2%, 11.3%, 10.6%, 9.4% and 9.2% of our annualized rental income as of September 30, 2023, respectively.

Indebtedness

9 Months Ended

Sep. 30, 2023

Debt Disclosure [Abstract]

Indebtedness

Mortgage Note Issuances

During the nine months ended September 30, 2023, we issued six fixed rate, interest-only mortgage notes as summarized in the following table:


Issuance Date	Secured By	Principal Balance (1)		Interest Rate	Maturity	Net Book Value of Collateral as of September 30, 2023
May 2023 (2)	One property	$	30,680	7.210%	7/1/2033	$	36,752
June 2023	One property	26,340		8.139%	7/1/2028	52,878
June 2023	One property	42,700		8.272%	7/1/2028	43,445
June 2023	One property	8,400		7.305%	7/1/2033	19,085
August 2023	One property	14,900		7.717%	9/1/2033	24,113
September 2023	Two properties	54,300		7.671%	10/6/2028	64,192
Total / Weighted Average		$	177,320	7.792%		$	240,465

(1)Our mortgage notes are non-recourse, subject to certain limited exceptions and do not contain any material financial covenants.

(2)Requires interest-only payments through May 2028, at which time principal and interest payments are due monthly through the maturity date.

Mortgage Note Repayment

In June 2023, we repaid at maturity, a mortgage note secured by one property with an outstanding principal balance of $50,000 and an annual interest rate of 3.70%.

Fair Value of Assets and Liabilities

9 Months Ended

Sep. 30, 2023

Fair Value Disclosures [Abstract]

Fair Value of Assets and Liabilities


	As of September 30, 2023				As of December 31, 2022
Financial Instrument	Carrying Value (1)		Fair Value		Carrying Value (1)		Fair Value


Senior unsecured notes, 4.25% interest rate, due in 2024	$	348,574	$	331,881	$	346,863	$	331,601
Senior unsecured notes, 4.50% interest rate, due in 2025	645,404		531,284		642,818		589,388
Senior unsecured notes, 2.650% interest rate, due in 2026	298,308		204,081		297,839		232,770
Senior unsecured notes, 2.400% interest rate, due in 2027	347,931		209,255		347,466		256,606
Senior unsecured notes, 3.450% interest rate, due in 2031	396,504		202,504		396,178		268,004

Senior unsecured notes, 6.375% interest rate, due in 2050	156,856		89,748		156,711		113,075
Mortgage notes payable (2) (3)	172,331		175,868		49,917		49,099
Total	$	2,365,908	$	1,744,621	$	2,237,792	$	1,840,543

(1)Includes unamortized debt premiums, discounts and issuance costs totaling $23,412 and $24,208 as of September 30, 2023 and December 31, 2022, respectively.

(2)Balances as of December 31, 2022 include a mortgage note secured by one property with an outstanding principal balance of $50,000 that was repaid in June 2023.

(3)Balances as of September 30, 2023 include six mortgage notes issued during the nine months ended September 30, 2023 with an aggregate outstanding principal balance of $177,320.

Shareholders' Equity

9 Months Ended

Sep. 30, 2023

Equity [Abstract]

Shareholders' Equity

Shareholders’ Equity

Share Awards

Share Purchases

Distributions

During the nine months ended September 30, 2023, we declared and paid regular quarterly distributions to common shareholders as follows:


Declaration Date	Record Date	Paid Date	Distributions Per Common Share		Total Distributions
January 12, 2023	January 23, 2023	February 16, 2023	$	0.55	$	26,710
April 13, 2023	April 24, 2023	May 18, 2023	0.25		12,141
July 13, 2023	July 24, 2023	August 17, 2023	0.25		12,147

			$	1.05	$	50,998

Business and Property Management Agreements with RMR	9 Months Ended
Business and Property Management Agreements with RMR	Sep. 30, 2023
Property Management Fee [Abstract]
Business and Property Management Agreements with RMR	Business and Property Management Agreements with RMR We have no employees. The personnel and various services we require to operate our business are provided to us by RMR. We have two agreements with RMR to provide management services to us: (1) a business management agreement, which relates to our business generally; and (2) a property management agreement, which relates to our property level operations. Pursuant to our business management agreement with RMR, we recognized net business management fees of $3,637 and $11,180 for the three and nine months ended September 30, 2023, respectively, and $4,260 and $13,462 for the three and nine months ended September 30, 2022, respectively. Based on our common share total return, as defined in our business management agreement, as of September 30, 2023, no estimated incentive fees are included in the net business management fees we recognized for the three and nine months ended September 30, 2023. The actual amount of annual incentive fees for 2023, if any, will be based on our common share total return for the three year period ending December 31, 2023, and will be payable in January 2024. We did not incur an incentive fee payable to RMR for the year ended December 31, 2022. We include business management fees in general and administrative expenses in our condensed consolidated statements of comprehensive income (loss). Pursuant to our property management agreement with RMR, we recognized aggregate net property management and construction supervision fees of $5,465 and $17,947 for the three and nine months ended September 30, 2023, respectively, and $6,502 and $19,024 for the three and nine months ended September 30, 2022, respectively. Of these amounts, for the three and nine months ended September 30, 2023, $3,718 and $11,252, respectively, were expensed to other operating expenses in our condensed consolidated statements of comprehensive income (loss) and $1,747 and $6,695, respectively, were capitalized as building improvements in our condensed consolidated balance sheet. For the three and nine months ended September 30, 2022, $3,996 and $12,237, respectively, were expensed to other operating expenses in our condensed consolidated statements of comprehensive income (loss) and $2,506 and $6,787, respectively, were capitalized as building improvements in our condensed consolidated balance sheet. The amounts capitalized are being depreciated over the estimated useful lives of the related capital assets. We are generally responsible for all of our operating expenses, including certain expenses incurred or arranged by RMR on our behalf. We are generally not responsible for payment of RMR’s employment, office or administrative expenses incurred to provide management services to us, except for the employment and related expenses of RMR’s employees assigned to work exclusively or partly at our properties, our share of the wages, benefits and other related costs of RMR’s centralized accounting personnel, our share of RMR’s costs for providing our internal audit function and as otherwise agreed. Our property level operating expenses are generally incorporated into the rents charged to our tenants, including certain payroll and related costs incurred by RMR. We reimbursed RMR $6,331 and $19,295 for these expenses and costs for the three and nine months ended September 30, 2023, respectively, and $6,268 and $18,281 for the three and nine months ended September 30, 2022, respectively. We included these amounts in other operating expenses and general and administrative expenses, as applicable, in our condensed consolidated statements of comprehensive income (loss). Management Agreements Between Our Joint Ventures and RMR. RMR provides management services to our two unconsolidated joint ventures. We are not obligated to pay management fees to RMR under our management agreements with RMR for the services it provides regarding the joint ventures. The joint ventures pay management fees directly to RMR.

Related Person Transactions	9 Months Ended
Related Person Transactions	Sep. 30, 2023
Related Party Transactions [Abstract]
Related Person Transactions	Related Person Transactions We have relationships and historical and continuing transactions with RMR, The RMR Group Inc., or RMR Inc., and others related to them, including other companies to which RMR or its subsidiaries provide management services and some of which have trustees, directors or officers who are also our Trustees or officers. RMR is a majority owned subsidiary of RMR Inc. The Chair of our Board of Trustees and one of our Managing Trustees, Adam D. Portnoy, is the sole trustee, an officer and the controlling shareholder of ABP Trust, which is the controlling shareholder of RMR Inc., the chair of the board of directors, a managing director, the president and chief executive officer of RMR Inc. and an officer and employee of RMR. Jennifer B. Clark, our other Managing Trustee and our Secretary, also serves as a managing director and the executive vice president, general counsel and secretary of RMR Inc., an officer and employee of RMR and an officer of ABP Trust. Each of our officers is an officer and employee of RMR. Some of our Independent Trustees also serve as independent trustees of other public companies to which RMR or its subsidiaries provide management services. Mr. Portnoy serves as chair of the boards and as a managing trustee of these public companies. Other officers of RMR serve as managing trustees or officers of certain of these companies. Share Awards to RMR Employees. See Note 8 for further information relating to our awards of common shares to our officers and certain other employees of RMR in September 2023 and our repurchases of common shares from certain of our Trustees and officers and certain other current and former officers and employees of RMR in satisfaction of tax withholding and payment obligations in connection with the vesting of awards of our common shares to them. We include amounts recognized as expense for awards of our common shares to our officers and other RMR employees in general and administrative expenses in our condensed consolidated statements of comprehensive income (loss). Our Manager, RMR. We have two agreements with RMR to provide management services to us. RMR also provides management services to our two unconsolidated joint ventures. See Note 9 for more information regarding our and our unconsolidated joint ventures’ management agreements with RMR. Leases with RMR. We lease office space to RMR in certain of our properties for RMR’s property management offices. Pursuant to our lease agreements with RMR, we recognized rental income from RMR for leased office space of $205 and $671 for the three and nine months ended September 30, 2023, respectively, and $282 and $851 for the three and nine months ended September 30, 2022, respectively. Sonesta. In June 2021, we entered into a 30-year lease agreement with a subsidiary of Sonesta International Hotels Corporation, or Sonesta, in connection with the redevelopment of an office property we own in Washington, D.C. as a mixed-use property. Sonesta’s lease is for the full-service hotel component of the property that includes approximately 230,000 rentable square feet, which represents approximately 55% of the total square feet of the property. We substantially completed the redevelopment in June 2023 and the term of the lease commenced in August 2023. Sonesta has two options to extend the term for 10 years each. Pursuant to the lease agreement, Sonesta will pay us annual base rent of approximately $6,436 beginning 18 months after the lease commencement. The annual base rent will increase by 10% every five years throughout the term. Sonesta is also obligated to pay its pro rata share of the operating costs for the building. As of September 30, 2023, we have paid approximately $77,000 of tenant improvement costs for the build out of the hotel space pursuant to the lease agreement. Mr. Portnoy is a director and controlling shareholder of Sonesta and Ms. Clark is also a director and officer of Sonesta. Terminated Merger Agreement with DHC. See Note 1 for more information relating to our terminated merger agreement with DHC. For more information about these and other such relationships and certain other related person transactions, refer to our 2022 Annual Report.

Basis of Presentation (Policies)	9 Months Ended
Basis of Presentation (Policies)	Sep. 30, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Consolidation	The accompanying condensed consolidated financial statements of Office Properties Income Trust and its subsidiaries, or OPI, we, us or our, are unaudited. Certain information and disclosures required by U.S. generally accepted accounting principles, or GAAP, for complete financial statements have been condensed or omitted. We believe the disclosures made are adequate to make the information presented not misleading. However, the accompanying condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes contained in our Annual Report on Form 10-K for the year ended December 31, 2022, or our 2022 Annual Report. In the opinion of management, all adjustments, consisting of normal recurring accruals considered necessary for a fair statement of results for the interim period have been included. All intercompany transactions and balances with or among our consolidated subsidiaries have been eliminated. Our operating results for interim periods are not necessarily indicative of the results that may be expected for the full year.
Basis of Presentation	The preparation of these financial statements in conformity with GAAP requires us to make estimates and assumptions that affect reported amounts. Actual results could differ from those estimates. Significant estimates in the condensed consolidated financial statements include purchase price allocations, useful lives of fixed assets and assessment of impairment of real estate and the related intangibles.
Revenue Recognition	Our leases provide for base rent payments and, in addition, may include variable payments. Rental income from operating leases, including any payments derived by index or market-based indices, is recognized on a straight line basis over the lease term when we have determined that the collectability of substantially all of the lease payments is probable. Some of our leases have options to extend or terminate the lease exercisable at the option of our tenants, which are considered when determining the lease term. Allowances for bad debts are recognized as a direct reduction of rental income. In certain circumstances, some leases provide the tenant with the right to terminate if the legislature or other funding authority does not appropriate the funding necessary for the tenant to meet its lease obligations; we have determined the fixed non-cancelable lease term of these leases to be the full term of the lease because we believe the occurrence of early terminations to be a remote contingency based on both our historical experience and our assessments of the likelihood of lease cancellation on a separate lease basis.

Per Common Share Amounts (Tables)

9 Months Ended

Sep. 30, 2023

Earnings Per Share [Abstract]

Schedule of earnings per share, basic and diluted

The calculation of basic and diluted earnings per common share is as follows (amounts in thousands, except per share data):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Numerators:
Net (loss) income	$	(19,593)	$	16,964	$	(32,281)	$	(12,499)
Income/loss attributable to unvested participating securities	(50)		(99)		(232)		(299)
Net (loss) income used in calculating earnings per common share	$	(19,643)	$	16,865	$	(32,513)	$	(12,798)

Denominators:
Weighted average common shares outstanding - basic and diluted	48,403		48,286		48,365		48,260



Net (loss) income per common share - basic and diluted	$	(0.41)	$	0.35	$	(0.67)	$	(0.27)

Real Estate Properties (Tables)

9 Months Ended

Sep. 30, 2023

Real Estate [Abstract]

Schedule of disposition activities


Date of Sale	Number of Properties	Location	Rentable Square Feet	Gross Sales Price(1)		Gain (Loss) on Sale of Real Estate
January 2023	3	Richmond, VA	89,000	$	5,350	$	2,548
April 2023	1	Phoenix, AZ	107,000	4,900		511
June 2023	1	Vernon Hills, IL	100,000	2,825		(2,816)
September 2023	1	Windsor Mill, MD	80,000	10,500		244
	6		376,000	$	23,575	$	487

(1)Gross sales price is the gross contract price, excluding closing costs.

Schedule of joint ventures

As of September 30, 2023 and December 31, 2022, our investments in unconsolidated joint ventures consisted of the following:


		OPI Carrying Value of Investments at
Joint Venture	OPI Ownership	September 30, 2023		December 31, 2022		Number of Properties	Location	Rentable Square Feet
Prosperity Metro Plaza	51%	$	18,455	$	19,237	2	Fairfax, VA	329,000
1750 H Street, NW	50%	18,147		15,892		1	Washington, D.C.	122,000
Total		$	36,602	$	35,129	3		451,000

The following table provides a summary of the mortgage debt of our two unconsolidated joint ventures:


Joint Venture	Interest Rate (1)	Maturity Date	Principal Balance at September 30, 2023 and December 31, 2022 (2)
Prosperity Metro Plaza	4.09%	12/1/2029	$	50,000
1750 H Street, NW (3)	3.69%	8/1/2027	32,000
Weighted Average / Total	3.93%		$	82,000

(1)Includes the effect of mark to market purchase accounting.

(2)Reflects the entire balance of the debt secured by the properties and is not adjusted to reflect the interests in the joint ventures we do not own. None of the debt is recourse to us.

(3)In July 2023, the maturity date of this mortgage loan was extended by three years at the same interest rate.

Indebtedness (Tables)

9 Months Ended

Sep. 30, 2023

Debt Disclosure [Abstract]

Schedule of mortgage note issuances

During the nine months ended September 30, 2023, we issued six fixed rate, interest-only mortgage notes as summarized in the following table:


Issuance Date	Secured By	Principal Balance (1)		Interest Rate	Maturity	Net Book Value of Collateral as of September 30, 2023
May 2023 (2)	One property	$	30,680	7.210%	7/1/2033	$	36,752
June 2023	One property	26,340		8.139%	7/1/2028	52,878
June 2023	One property	42,700		8.272%	7/1/2028	43,445
June 2023	One property	8,400		7.305%	7/1/2033	19,085
August 2023	One property	14,900		7.717%	9/1/2033	24,113
September 2023	Two properties	54,300		7.671%	10/6/2028	64,192
Total / Weighted Average		$	177,320	7.792%		$	240,465

(1)Our mortgage notes are non-recourse, subject to certain limited exceptions and do not contain any material financial covenants.

(2)Requires interest-only payments through May 2028, at which time principal and interest payments are due monthly through the maturity date.

Fair Value of Assets and Liabilities (Tables)

9 Months Ended

Sep. 30, 2023

Fair Value Disclosures [Abstract]

Schedule of fair value and carrying value of financial instruments

At September 30, 2023 and December 31, 2022, the fair values of our financial instruments approximated their carrying values in our condensed consolidated financial statements, due to their short term nature or floating interest rates, except as follows:


	As of September 30, 2023				As of December 31, 2022
Financial Instrument	Carrying Value (1)		Fair Value		Carrying Value (1)		Fair Value


Senior unsecured notes, 4.25% interest rate, due in 2024	$	348,574	$	331,881	$	346,863	$	331,601
Senior unsecured notes, 4.50% interest rate, due in 2025	645,404		531,284		642,818		589,388
Senior unsecured notes, 2.650% interest rate, due in 2026	298,308		204,081		297,839		232,770
Senior unsecured notes, 2.400% interest rate, due in 2027	347,931		209,255		347,466		256,606
Senior unsecured notes, 3.450% interest rate, due in 2031	396,504		202,504		396,178		268,004

Senior unsecured notes, 6.375% interest rate, due in 2050	156,856		89,748		156,711		113,075
Mortgage notes payable (2) (3)	172,331		175,868		49,917		49,099
Total	$	2,365,908	$	1,744,621	$	2,237,792	$	1,840,543

(1)Includes unamortized debt premiums, discounts and issuance costs totaling $23,412 and $24,208 as of September 30, 2023 and December 31, 2022, respectively.

(2)Balances as of December 31, 2022 include a mortgage note secured by one property with an outstanding principal balance of $50,000 that was repaid in June 2023.

(3)Balances as of September 30, 2023 include six mortgage notes issued during the nine months ended September 30, 2023 with an aggregate outstanding principal balance of $177,320.

Shareholders' Equity (Tables)

9 Months Ended

Sep. 30, 2023

Equity [Abstract]

Schedule of Dividends

During the nine months ended September 30, 2023, we declared and paid regular quarterly distributions to common shareholders as follows:


Declaration Date	Record Date	Paid Date	Distributions Per Common Share		Total Distributions
January 12, 2023	January 23, 2023	February 16, 2023	$	0.55	$	26,710
April 13, 2023	April 24, 2023	May 18, 2023	0.25		12,141
July 13, 2023	July 24, 2023	August 17, 2023	0.25		12,147

			$	1.05	$	50,998

Basis of Presentation (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
Basis of Presentation (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Apr. 11, 2023
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Acquisition and transaction related costs	$ 16,135	$ 0	$ 30,534	$ 224
Senior Secured Bridge Facility \| Bridge Loan
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Principal balance					$ 368,000

Per Common Share Amounts - Income (Loss) Per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended						9 Months Ended
	Sep. 30, 2023	Jun. 30, 2023	Mar. 31, 2023	Sep. 30, 2022	Jun. 30, 2022	Mar. 31, 2022	Sep. 30, 2023	Sep. 30, 2022
Numerators:
Net (loss) income	$ (19,593)	$ (12,242)	$ (446)	$ 16,964	$ (16,056)	$ (13,407)	$ (32,281)	$ (12,499)
Income/loss attributable to unvested participating securities	(50)			(99)			(232)	(299)
Net (loss) income used in calculating earnings per common share	$ (19,643)			$ 16,865			$ (32,513)	$ (12,798)
Denominators:
Weighted average common shares outstanding - basic (in shares)	48,403			48,286			48,365	48,260
Weighted average common shares outstanding - diluted (in shares)	48,403			48,286			48,365	48,260
Net (loss) income (basic) (in dollars per share)	$ (0.41)			$ 0.35			$ (0.67)	$ (0.27)
Net (loss) income (diluted) (in dollars per share)	$ (0.41)			$ 0.35			$ (0.67)	$ (0.27)

Real Estate Properties - Additional Information (Details) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2023 USD ($) ft² lease property	Sep. 30, 2023 USD ($) ft² joint_venture lease property	Dec. 31, 2022 USD ($)
Real Estate Properties [Line Items]
Real estate aggregate undepreciated carrying value	$ 4,063,636	$ 4,063,636	$ 3,936,074
Number of joint ventures \| joint_venture		2
Number of leases entered \| lease	29	68
Rentable square feet (in square feet) \| ft²	586,000	1,502,000
Weighted average lease term	7 years 4 months 24 days	8 years 8 months 12 days
Expenditures committed on leases	$ 25,359	$ 74,744
Committed but unspent tenant related obligations estimated	$ 137,223	$ 137,223
Unconsolidated Joint Ventures
Real Estate Properties [Line Items]
Number of properties (in properties) \| property	3	3
Rentable square feet (in square feet) \| ft²	451,000	451,000
Number of buildings, noncontrolling interest \| property		3
Joint Venture 1
Real Estate Properties [Line Items]
Ownership percentage	51.00%	51.00%
Joint Venture 2
Real Estate Properties [Line Items]
Ownership percentage	50.00%	50.00%
Disposal Group, Held-for-sale, Not Discontinued Operations
Real Estate Properties [Line Items]
Number of properties (in properties) \| property	2	2
Real estate held-for-sale	$ 17,390	$ 17,390
Continuing operations
Real Estate Properties [Line Items]
Number of properties (in properties) \| property	154	154
Rentable square feet (in square feet) \| ft²	20,705,000	20,705,000
Real estate aggregate undepreciated carrying value	$ 4,081,026	$ 4,081,026

Real Estate Properties - Acquisition Activities (Details) - Irving, TX Land Parcel - Forecast $ in Thousands	3 Months Ended
	Dec. 31, 2023 USD ($) a
Business Acquisition [Line Items]
Land parcel (in acres) \| a	4.7
Asset acquisition, consideration transferred \| $	$ 2,750

Real Estate Properties - Disposition Activities (Details) $ in Thousands		3 Months Ended		9 Months Ended
	Oct. 27, 2023 USD ($) ft² property	Sep. 30, 2023 USD ($) ft² property	Sep. 30, 2022 USD ($)	Sep. 30, 2023 USD ($) ft² property	Sep. 30, 2022 USD ($)
Real Estate Properties [Line Items]
Gain (loss) on sale of real estate		$ 244	$ 16,925	$ 487	$ 7,437
Disposal Group, Disposed of by Sale, Not Discontinued Operations
Real Estate Properties [Line Items]
Number of properties (in properties) \| property		6		6
Rentable square feet (in square feet) \| ft²		376,000		376,000
Gross sales price				$ 23,575
Gain (loss) on sale of real estate				$ 487
Disposal Group, Disposed of by Sale, Not Discontinued Operations \| Subsequent Event
Real Estate Properties [Line Items]
Rentable square feet (in square feet) \| ft²	177,000
Gross sales price	$ 21,299
Disposal Group, Disposed of by Sale, Not Discontinued Operations \| Richfield, VA
Real Estate Properties [Line Items]
Number of properties (in properties) \| property		3		3
Rentable square feet (in square feet) \| ft²		89,000		89,000
Gross sales price				$ 5,350
Gain (loss) on sale of real estate				$ 2,548
Disposal Group, Disposed of by Sale, Not Discontinued Operations \| Phoenix, AZ
Real Estate Properties [Line Items]
Number of properties (in properties) \| property		1		1
Rentable square feet (in square feet) \| ft²		107,000		107,000
Gross sales price				$ 4,900
Gain (loss) on sale of real estate				$ 511
Disposal Group, Disposed of by Sale, Not Discontinued Operations \| Vernon Hills, IL
Real Estate Properties [Line Items]
Number of properties (in properties) \| property		1		1
Rentable square feet (in square feet) \| ft²		100,000		100,000
Gross sales price				$ 2,825
Gain (loss) on sale of real estate				$ (2,816)
Disposal Group, Disposed of by Sale, Not Discontinued Operations \| Windsor Mill, MD
Real Estate Properties [Line Items]
Number of properties (in properties) \| property		1		1
Rentable square feet (in square feet) \| ft²		80,000		80,000
Gross sales price				$ 10,500
Gain (loss) on sale of real estate				$ 244
Disposal Group, Held-for-sale, Not Discontinued Operations
Real Estate Properties [Line Items]
Number of properties (in properties) \| property		2		2
Disposal Group, Held-for-sale, Not Discontinued Operations \| Subsequent Event
Real Estate Properties [Line Items]
Number of properties (in properties) \| property	2

Real Estate Properties - Unconsolidated Joint Ventures (Details) $ in Thousands	1 Months Ended	9 Months Ended
	Jul. 31, 2023	Sep. 30, 2023 USD ($) ft² property joint_venture	Oct. 30, 2023 USD ($)	Dec. 31, 2022 USD ($)
Real Estate [Line Items]
Number of joint ventures \| joint_venture		2
Mortgages
Real Estate [Line Items]
Interest rate (as a percent)		7.792%
Principal balance		$ 177,320
Unconsolidated Joint Ventures
Real Estate [Line Items]
Number of properties (in properties) \| property		3
Investment at carrying value		$ 36,602		$ 35,129
Rentable square feet (in square feet) \| ft²		451,000
Unamortized basis difference		$ 6,123
Unconsolidated Joint Ventures \| Mortgages
Real Estate [Line Items]
Interest rate (as a percent)		3.93%
Principal balance		$ 82,000		82,000
Unconsolidated Joint Ventures \| Prosperity Metro Plaza
Real Estate [Line Items]
Number of properties (in properties) \| property		2
Ownership percentage		51.00%
Investment at carrying value		$ 18,455		19,237
Rentable square feet (in square feet) \| ft²		329,000
Unconsolidated Joint Ventures \| Prosperity Metro Plaza \| Mortgages
Real Estate [Line Items]
Interest rate (as a percent)		4.09%
Principal balance		$ 50,000		50,000
Unconsolidated Joint Ventures \| 1750 H Street, NW
Real Estate [Line Items]
Number of properties (in properties) \| property		1
Ownership percentage		50.00%
Investment at carrying value		$ 18,147		15,892
Rentable square feet (in square feet) \| ft²		122,000
Unconsolidated Joint Ventures \| 1750 H Street, NW \| Subsequent Event \| Joint Venture Partner
Real Estate [Line Items]
Ownership percentage			50.00%
Capital call funding requirement			$ 600
Unconsolidated Joint Ventures \| 1750 H Street, NW \| Mortgages
Real Estate [Line Items]
Interest rate (as a percent)		3.69%
Principal balance		$ 32,000		$ 32,000
Extension term	3 years

Leases - Lease Receivables (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Leases [Abstract]
Straight line rent adjustments	$ 8,691	$ 1,765	$ 17,120	$ 7,226
Straight line rent receivables	103,366		103,366		$ 86,305
Variable lease, income	21,067	23,183	64,627	67,820
Tenant reimbursements and other income	$ 19,722	$ 21,953	$ 60,641	$ 64,437

Concentration (Details)	9 Months Ended
Concentration (Details)	Sep. 30, 2023 property state	Sep. 30, 2022
Continuing operations
Concentration
Number of wholly owned properties \| property	154
Number of states in which acquired properties located \| state	30
Annualized rental income, excluding properties classified as discontinued operations \| Tenant concentration \| U.S. Government, State Governments and Four Other Governments
Concentration
Concentration risk percentage	28.10%	27.80%
Annualized rental income, excluding properties classified as discontinued operations \| Tenant concentration \| U.S. Government
Concentration
Concentration risk percentage	20.00%	19.10%
Annualized rental income, excluding properties classified as discontinued operations \| Geographic concentration \| California
Concentration
Concentration risk percentage	12.20%
Annualized rental income, excluding properties classified as discontinued operations \| Geographic concentration \| Virginia
Concentration
Concentration risk percentage	11.30%
Annualized rental income, excluding properties classified as discontinued operations \| Geographic concentration \| Illinois
Concentration
Concentration risk percentage	10.60%
Annualized rental income, excluding properties classified as discontinued operations \| Geographic concentration \| Georgia
Concentration
Concentration risk percentage	9.40%
Annualized rental income, excluding properties classified as discontinued operations \| Geographic concentration \| District of Columbia
Concentration
Concentration risk percentage	9.20%

Indebtedness - Narrative (Details) $ in Thousands	1 Months Ended	3 Months Ended		9 Months Ended
Indebtedness - Narrative (Details) $ in Thousands	Jun. 30, 2023 USD ($) property	Sep. 30, 2023 USD ($)	Sep. 30, 2022	Sep. 30, 2023 USD ($)	Sep. 30, 2022 USD ($)	Oct. 27, 2023 USD ($)	Dec. 31, 2022 USD ($)
Debt Instrument [Line Items]
Borrowings outstanding		$ 200,000		$ 200,000			$ 195,000
Repayment of mortgage notes payable				50,000	$ 25,400
Mortgages
Debt Instrument [Line Items]
Outstanding principal amount		$ 177,320		$ 177,320
Interest rate (as a percent)		7.792%		7.792%
Mortgages \| 3.700% Mortgage Notes Payable
Debt Instrument [Line Items]
Interest rate (as a percent)	3.70%
Number of properties used to secured mortgage note \| property	1
Repayment of mortgage notes payable	$ 50,000
Unsecured revolving credit facility
Debt Instrument [Line Items]
Borrowings outstanding		$ 200,000		$ 200,000
Maximum borrowing capacity on revolving credit facility		750,000		750,000
Aggregate principal amount on secured properties		$ 1,950,000		$ 1,950,000
Facility fee (as a percent)				0.30%
Interest rate (as a percent)		6.90%		6.90%			5.40%
Weighted average annual interest rate		6.80%	3.30%	6.40%	3.20%
Line of credit facility, remaining borrowing capacity		$ 550,000		$ 550,000
Unsecured revolving credit facility \| Subsequent Event
Debt Instrument [Line Items]
Borrowings outstanding						$ 205,000
Line of credit facility, remaining borrowing capacity						$ 545,000
Unsecured revolving credit facility \| SOFR
Debt Instrument [Line Items]
Interest rate premium (as a percent)				1.45%
Senior unsecured notes
Debt Instrument [Line Items]
Borrowings outstanding		$ 2,212,000		$ 2,212,000

Indebtedness - Mortgage Note Issuances (Details) $ in Thousands	Sep. 30, 2023 USD ($) property mortgage_note
Debt Instrument [Line Items]
Number of mortgage notes \| mortgage_note	6
Mortgages
Debt Instrument [Line Items]
Principal balance	$ 177,320
Interest rate (as a percent)	7.792%
Aggregate net book value of secured properties	$ 240,465
Mortgages \| 7.210% Mortgage Notes Payable
Debt Instrument [Line Items]
Number of properties used to secured mortgage note \| property	1
Principal balance	$ 30,680
Interest rate (as a percent)	7.21%
Aggregate net book value of secured properties	$ 36,752
Mortgages \| 8.139% Mortgage Notes Payable
Debt Instrument [Line Items]
Number of properties used to secured mortgage note \| property	1
Principal balance	$ 26,340
Interest rate (as a percent)	8.139%
Aggregate net book value of secured properties	$ 52,878
Mortgages \| 8.272% Mortgage Notes Payable
Debt Instrument [Line Items]
Number of properties used to secured mortgage note \| property	1
Principal balance	$ 42,700
Interest rate (as a percent)	8.272%
Aggregate net book value of secured properties	$ 43,445
Mortgages \| 7.305% Mortgage Notes Payable
Debt Instrument [Line Items]
Number of properties used to secured mortgage note \| property	1
Principal balance	$ 8,400
Interest rate (as a percent)	7.305%
Aggregate net book value of secured properties	$ 19,085
Mortgages \| 7.717% Mortgage Notes Payable
Debt Instrument [Line Items]
Number of properties used to secured mortgage note \| property	1
Principal balance	$ 14,900
Interest rate (as a percent)	7.717%
Aggregate net book value of secured properties	$ 24,113
Mortgages \| 7.671% Mortgage Notes Payable
Debt Instrument [Line Items]
Number of properties used to secured mortgage note \| property	2
Principal balance	$ 54,300
Interest rate (as a percent)	7.671%
Aggregate net book value of secured properties	$ 64,192

Fair Value of Assets and Liabilities - Financial Instruments (Details) $ in Thousands	1 Months Ended	9 Months Ended
	Jun. 30, 2023 USD ($)	Sep. 30, 2023 USD ($) mortgage_note	Sep. 30, 2022 USD ($)	Dec. 31, 2022 USD ($) property
Fair Value of Financial Instruments
Senior notes		$ 2,193,577		$ 2,187,875
Mortgage notes payable		172,331		$ 49,917
Repayment of mortgage notes payable		$ 50,000	$ 25,400
Number of mortgage notes \| mortgage_note		6
4.25% Senior Unsecured Notes Due 2024
Fair Value of Financial Instruments
Interest rate (as a percent)		4.25%
4.50% Senior Unsecured Notes Due 2025
Fair Value of Financial Instruments
Interest rate (as a percent)		4.50%
2.650% Senior Unsecured Notes Due 2026
Fair Value of Financial Instruments
Interest rate (as a percent)		2.65%
2.400% Senior Unsecured Notes Due 2027
Fair Value of Financial Instruments
Interest rate (as a percent)		2.40%
3.450% Senior Unsecured Notes Due 2031
Fair Value of Financial Instruments
Interest rate (as a percent)		3.45%
6.375% Senior Unsecured Notes Due 2050
Fair Value of Financial Instruments
Interest rate (as a percent)		6.375%
3.700% Mortgage Notes Payable
Fair Value of Financial Instruments
Number of properties (in properties) \| property				1
Mortgages
Fair Value of Financial Instruments
Interest rate (as a percent)		7.792%
Outstanding principal amount		$ 177,320
Mortgages \| 3.700% Mortgage Notes Payable
Fair Value of Financial Instruments
Interest rate (as a percent)	3.70%
Repayment of mortgage notes payable	$ 50,000
Senior Notes And Mortgages
Fair Value of Financial Instruments
Unamortized debt premiums, discounts and issuance costs		23,412		$ 24,208
Carrying Value
Fair Value of Financial Instruments
Fair value of financial instruments		2,365,908		2,237,792
Carrying Value \| 4.25% Senior Unsecured Notes Due 2024
Fair Value of Financial Instruments
Senior notes		348,574		346,863
Carrying Value \| 4.50% Senior Unsecured Notes Due 2025
Fair Value of Financial Instruments
Senior notes		645,404		642,818
Carrying Value \| 2.650% Senior Unsecured Notes Due 2026
Fair Value of Financial Instruments
Senior notes		298,308		297,839
Carrying Value \| 2.400% Senior Unsecured Notes Due 2027
Fair Value of Financial Instruments
Senior notes		347,931		347,466
Carrying Value \| 3.450% Senior Unsecured Notes Due 2031
Fair Value of Financial Instruments
Senior notes		396,504		396,178
Carrying Value \| 6.375% Senior Unsecured Notes Due 2050
Fair Value of Financial Instruments
Senior notes		156,856		156,711
Carrying Value \| Mortgages
Fair Value of Financial Instruments
Mortgage notes payable		172,331		49,917
Fair Value
Fair Value of Financial Instruments
Fair value of financial instruments		1,744,621		1,840,543
Fair Value \| 4.25% Senior Unsecured Notes Due 2024
Fair Value of Financial Instruments
Senior notes		331,881		331,601
Fair Value \| 4.50% Senior Unsecured Notes Due 2025
Fair Value of Financial Instruments
Senior notes		531,284		589,388
Fair Value \| 2.650% Senior Unsecured Notes Due 2026
Fair Value of Financial Instruments
Senior notes		204,081		232,770
Fair Value \| 2.400% Senior Unsecured Notes Due 2027
Fair Value of Financial Instruments
Senior notes		209,255		256,606
Fair Value \| 3.450% Senior Unsecured Notes Due 2031
Fair Value of Financial Instruments
Senior notes		202,504		268,004
Fair Value \| 6.375% Senior Unsecured Notes Due 2050
Fair Value of Financial Instruments
Senior notes		89,748		113,075
Fair Value \| Mortgages
Fair Value of Financial Instruments
Mortgage notes payable		$ 175,868		$ 49,099

Shareholders' Equity (Details) $ / shares in Units, $ in Thousands							3 Months Ended	9 Months Ended
	Oct. 12, 2023 USD ($) $ / shares	Sep. 13, 2023 $ / shares shares	Aug. 17, 2023 USD ($) $ / shares	Jun. 13, 2023 trustee $ / shares shares	May 18, 2023 USD ($) $ / shares	Feb. 16, 2023 USD ($) $ / shares	Sep. 30, 2023 trustee $ / shares shares	Sep. 30, 2023 USD ($) trustee $ / shares shares	Sep. 30, 2022 USD ($)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of trustees \| trustee				9
Shares granted (in shares) \| shares				3,500
Share price (in dollars per share)		$ 5.76		$ 7.90
Equity compensation plan shares issue (in shares) \| shares		210,300
Share repurchases (in shares) \| shares							40,104	47,858
Stock repurchase price (in dollars per share)							$ 5.84	$ 6.09
Stock repurchased during period, number of trustees \| trustee							1	1
Cash distribution to common shareholders (in dollars per share)			$ 0.25		$ 0.25	$ 0.55		$ 1.05
Distributions to common shareholders \| $			$ 12,147		$ 12,141	$ 26,710		$ 50,998	$ 79,919
Subsequent Event
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Dividends declared (in dollars per share)	$ 0.25
Dividends declared \| $	$ 12,200

Business and Property Management Agreements with RMR (Details) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2023 USD ($)	Sep. 30, 2022 USD ($)	Sep. 30, 2023 USD ($) joint_venture agreement employee	Sep. 30, 2022 USD ($)	Dec. 31, 2022 USD ($)
Related Party Transaction [Line Items]
Number of joint ventures \| joint_venture			2
RMR LLC
Related Party Transaction [Line Items]
Number of employees \| employee			0
Number of agreements \| agreement			2
Incentive fee	$ 0		$ 0		$ 0
RMR LLC \| Net Business Management Fees
Related Party Transaction [Line Items]
Related party transaction amount	3,637	$ 4,260	11,180	$ 13,462
RMR LLC \| Net Property Management and Construction Supervision Fees
Related Party Transaction [Line Items]
Related party transaction amount	5,465	6,502	17,947	19,024
RMR LLC \| Net Property Management and Construction Supervision Fees \| Buildings and Improvements
Related Party Transaction [Line Items]
Related party transaction amount	1,747	2,506	6,695	6,787
RMR LLC \| Net Property Management and Construction Supervision Fees \| Other Operating Income (Expense)
Related Party Transaction [Line Items]
Related party transaction amount	3,718	3,996	11,252	12,237
RMR LLC \| Property Operating Expenses
Related Party Transaction [Line Items]
Related party transaction amount	$ 6,331	$ 6,268	$ 19,295	$ 18,281

Related Person Transactions (Details) $ in Thousands	1 Months Ended	3 Months Ended		9 Months Ended
Related Person Transactions (Details) $ in Thousands	Jun. 30, 2021 USD ($) ft² renewal_option	Sep. 30, 2023 USD ($)	Sep. 30, 2022 USD ($)	Sep. 30, 2023 USD ($) joint_venture agreement	Sep. 30, 2022 USD ($)
Related Party Transaction [Line Items]
Number of joint ventures \| joint_venture				2
Rental income		$ 133,361	$ 137,683	$ 399,780	$ 426,353
Related Party \| RMR LLC
Related Party Transaction [Line Items]
Number of agreements \| agreement				2
Rental income		205	$ 282	$ 671	$ 851
Related Party \| Sonesta
Related Party Transaction [Line Items]
Lessor, operating lease, lease not yet commenced, term of contract	30 years
Rentable square feet (in square feet) \| ft²	230,000
Area of real estate property percentage upon completion of re-development	55.00%
Number of renewal options \| renewal_option	2
Renewal term	10 years
Annual base rent	$ 6,436
Deferred payment plan period	18 months
Annual percentage increase	10.00%
Annual base rent increase period	5 years
Tenant improvements		$ 77,000		$ 77,000