Here are a couple of analogies for Service Properties Trust (SVC):

• Imagine SVC as the McDonald's of commercial real estate, where they own a vast portfolio of hotel and essential retail buildings and lease them out to different operating brands, much like McDonald's owns and leases its restaurant locations.

• Think of them as Simon Property Group (SPG) for hotels and a diverse array of essential retail properties, owning the buildings and leasing them to various brands rather than just operating malls.

• Hotel Property Leasing and Management: Service Properties Trust provides hotel properties that are operated under long-term management or lease agreements, generating revenue from these arrangements.
• Net Lease Retail and Service Property Leasing: Service Properties Trust provides commercial real estate properties for retail and service businesses under net lease agreements, generating rental income from these properties.

Service Properties Trust (SVC) is a real estate investment trust (REIT) that owns a diverse portfolio of hotels and net lease retail properties. SVC's business model involves leasing these properties or entering into long-term management agreements with operators. Therefore, its major customers are other companies that operate the properties, rather than individual consumers.

SVC's major customers include:

• Sonesta International Hotels Corporation: Sonesta operates a significant portion of SVC's hotel portfolio under management agreements. SVC also holds a substantial equity stake in Sonesta. Sonesta International Hotels Corporation is not a publicly traded company.
• TravelCenters of America Inc.: TravelCenters of America Inc. (TA) is a major tenant, leasing a large number of travel centers from SVC. While TravelCenters of America Inc. was previously a publicly traded company (symbol: TA), it was acquired by BP p.l.c. in 2023 and now operates as a subsidiary of BP. BP p.l.c. is a publicly traded company (NYSE: BP, LSE: BP).

The RMR Group Inc. (Nasdaq: RMR)

Sonesta International Hotels Corporation

Christopher J. Bilotto, President and Chief Executive Officer

Christopher J. Bilotto was appointed President and Chief Executive Officer of Service Properties Trust (SVC) effective March 10, 2025. He also serves as a Managing Trustee of SVC. Since October 2023, Mr. Bilotto has been an Executive Vice President at The RMR Group, which manages SVC. In this role, he oversees the acquisition platform, asset management for hotel and senior living properties, and property development and redevelopment across the United States. Since January 2024, Mr. Bilotto has also served as President and Chief Executive Officer of Diversified Healthcare Trust (DHC). Before joining RMR in 2011, he held various management positions at General Growth Properties.

Brian Donley, Chief Financial Officer and Treasurer

Brian Donley has served as Chief Financial Officer and Treasurer of Service Properties Trust (SVC) since 2019. He is also a Senior Vice President of The RMR Group. Mr. Donley brings over 25 years of experience in REIT finance and accounting and is a Certified Public Accountant. He has held various finance and accounting leadership roles at RMR since 1997. Additionally, Mr. Donley has served as Chief Financial Officer and Treasurer of Office Properties Income Trust (OPI) since October 2023, and previously held the same roles for Industrial Logistics Properties Trust (ILPT) from October 2022 to September 2023 and Seven Hills Realty Trust (SEVN) from 2019 to 2021.

Jesse Abair, Vice President

Jesse Abair serves as Vice President of Service Properties Trust.

Lindsey Getz, Secretary

Lindsey Getz serves as Secretary of Service Properties Trust.

The public company Service Properties Trust (SVC) faces several key risks to its business operations and financial stability:

1. High Leverage and Debt Maturities: Service Properties Trust is exposed to significant financial risk due to its extreme leverage and substantial upcoming debt maturities. As of December 31, 2025, the company's debt-to-equity ratio was approximately 8x, with roughly 40% of its total debt, or about $2 billion, maturing by 2028. This situation led S&P Global to downgrade SVC's credit rating to 'B-' in February 2026, citing material near-term maturity risk and concerns about the potential for an unsustainable capital structure. Although SVC is actively selling hotels to reduce debt, the sheer volume of these maturities presents a considerable refinancing risk and potential liquidity concerns.
2. Hotel Operational Headwinds and Execution Risk of Portfolio Transformation: SVC is in the process of a strategic shift to reduce its hotel exposure and pivot towards a predominantly net lease REIT. This transformation involves aggressive hotel dispositions, which carry execution risk. The remaining hotel portfolio continues to face operational challenges, including inflationary pressures and elevated labor costs, which have impacted hotel-level profitability and led to a decline in adjusted hotel EBITDA. The success of this strategic repositioning hinges on effectively managing these headwinds and successfully executing asset sales.
3. External Management Structure: Service Properties Trust is externally managed by The RMR Group Inc. (RMR). This external management structure is identified as a risk by some analysts, who point to a perceived poor management track record, high fees, and potentially misaligned incentives that may have contributed to SVC's historical underperformance and financial deterioration. The structure exposes SVC to hotel operating risks, which is why the company is selling assets.

The widespread and sustained adoption of remote and hybrid work models represents a clear emerging threat to SVC's hotel portfolio. This fundamental shift in corporate operations and employee travel patterns is reducing demand for business travel and corporate events, impacting hotel occupancy rates, average daily rates, and overall profitability. While hotels also cater to leisure travelers, business travel is a significant revenue driver, and a permanent reduction in this segment threatens the long-term value and operational stability of these assets.

Service Properties Trust (SVC) operates in the hotel and net lease service and necessity-based retail property sectors. The addressable markets for its main products and services are as follows:

Hotel Market

• U.S. Hotel Market: The U.S. hotels market size was estimated at USD 263.21 billion in 2024 and is projected to grow to USD 280.63 billion in 2025.
• Canada Hotel Market: The Canada hotels market size was estimated at USD 42.34 billion in 2024.
• Puerto Rico Hotel Market: Puerto Rico's lodging revenues reached a record of approximately $1.95 billion in 2024.

Net Lease Retail Properties Market

• U.S. Net Lease Retail Market: The U.S. single-tenant net-lease retail sector recorded $5.7 billion in sales volume during the first six months of 2025.
• Canada Net Lease Retail Market: Null
• Puerto Rico Net Lease Retail Market: Null

• Growth in Net Lease Portfolio through Acquisitions and Rent Escalations: Service Properties Trust is strategically expanding its net lease segment through new acquisitions, aiming to enhance tenant and geographic diversity and extend weighted average lease terms. This is expected to increase annual minimum rents. For example, the net lease portfolio recently experienced a 2.4% increase in annualized base rent. The company projects net operating income (NOI) from its net lease portfolio to be between $380 million and $386 million for the full year 2026.
• Improved Performance of Retained Hotel Portfolio: The company is focused on optimizing the performance of its remaining hotel assets. SVC is projecting an increase in Revenue Per Available Room (RevPAR) for its retained hotels, with an expected range of $108 to $113 for the full year 2026. Capital improvement projects are also being advanced across the hotel portfolio to enhance their market position and attract more business.
• Strategic Redeployment of Capital from Hotel Dispositions: SVC is actively reshaping its portfolio by disposing of hotels and intends to reinvest the proceeds into higher-yielding net lease assets. This strategic pivot aims to shift the company towards a predominantly net lease REIT, providing more stable and predictable cash flows and fostering long-term revenue growth from the new asset base.
• Leveraging Brand Relationships for New Net Lease Opportunities: Service Properties Trust plans to leverage its augmented tenant roster and established brand relationships to identify additional growth opportunities within its net lease segment. This includes pursuing sale-leasebacks and off-market deals, indicating a proactive approach to expanding its net lease property base through strategic partnerships.

Capital Allocation Decisions (Last 3-5 Years)

Outbound Investments

• Service Properties Trust made acquisitions totaling $101 million for its net lease portfolio in 2025.
• In 2025, SVC acquired 14 net lease properties for $44 million year-to-date and was under agreement to acquire six additional properties in Q3 for $10.3 million.
• The company is actively curating its net lease portfolio as it transitions to a predominantly net lease REIT.

Capital Expenditures

• Capital expenditures for 2024 and 2025 were over $300 million for each year.
• Projected capital expenditures for 2026 are between $120 million and $140 million, marking a decline from previous years.
• The capital expenditures were primarily focused on advancing capital improvement projects on its hotel portfolio, with a future emphasis on the minimal CapEx needs of net lease properties as property investments wind down.