The RMR Group Inc.

Good morning and welcome to the RMR Group Fiscal First Quarter 2025 Earnings Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one in your telephone keypad. To withdraw your question, please press star then two. Please note this event is being recorded. I'd now like to turn the call over to Kevin Barry, Senior Director of Investor Relations.

Please go ahead. Good morning and thank you for joining RMR's first quarter fiscal 2025 conference call. With me on today's call are President and CEO Adam Portnoy and Chief Financial Officer Matt Jordan. In just a moment, they will provide details about our business and quarterly results, followed by a question and answer session. I would also like to note that the recording and retransmission of today's conference call is prohibited without the prior written consent of the company. Today's conference call contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other securities laws. These forward-looking statements are based on RMR's beliefs and expectations as of today, February 6, 2025, and actual results may differ materially from those that we project. The company undertakes no obligation to revise or publicly release the results of any revision to the forward-looking statements made in today's conference call. Additional information concerning factors that could cause those differences is contained in our filings with the Securities and Exchange Commission, which can be found on our website at rmrgroup.com. Investors are cautioned not to place undue reliance upon any forward-looking statements. In addition, we may discuss non-GAAP numbers during this call, including adjusted net income, adjusted earnings per share, distributable earnings, and adjusted EBITDA. a reconciliation of net income determined in accordance with U.S. generally accepted accounting principles to these non-GAAP figures can be found in our financial results. I will now turn the call over to Adam.

Thanks, Kevin, and thank you all for joining us this morning. Yesterday, we reported first quarter results that were in line with our expectations, highlighted by adjusted net income of $0.35 per share and distributable earnings of $0.46 per share. With nearly $150 million of cash on hand and adjusted EBITDA this quarter of approximately $21 million, our dividend remains secure. Two weeks ago, we further strengthened our liquidity by establishing a $100 million line of credit. Although we have no immediate plans to draw on this facility, it further enhances our financial profile and puts us in a strong position to continue investing in growth initiatives. We are optimistic that the cyclical bottom for commercial real estate is likely behind us and the market is positioned to improve in 2025. Despite some lingering uncertainty, fundamentals across most real estate sectors are getting better. Our recent interactions with our institutional private capital partners indicate that they are also ready to make significant investments in sectors where they have conviction around in 2025. Three private capital growth areas that we are focused on in 2025 are the residential sector, credit strategies, and development initiatives. In each of these areas, RMR is well positioned to take advantage of strong investor interest in these sectors, and we continue to advance our fundraising efforts through a combination of internal resources and strategic partners. A recent example of the growing momentum is at our residential platform, where we recently raised over $60 million from three institutional partners to acquire two South Florida residential communities with an aggregate purchase price of almost $200 million. As general partner, RMR will invest approximately $10 million in aggregate into these deals. Over the next three to five years, RMR will execute a value-add business strategy at each property with expected returns in the high teens. In addition to acquisition fees and ongoing property management fees, upon completion of each property's respective business plan, we stand to earn promote income if certain investment hurdles are met. We believe this early momentum is the beginning of our institutional partners coming off the sidelines and supporting our belief that now is a good time to make investments as we transition from a period of oversupply in residential to a period of steady demand-driven growth, especially in the Sunbelt markets where RMR has a successful track record. While we expect to continue to execute one-off strategic joint ventures with RMR as the general partner, our goal is to raise a committed fund focused on residential investments in the future. As it relates to our private real estate credit vehicle fundraising, we remain confident in the demand for private real estate credit and believe we have a differentiated product focused on middle market lending with a proven track record. We are continuing fundraising in what is a crowded space, but remain confident that in 2025, we will have success. As a reminder, our on-balance sheet loan portfolio currently consists of $67 million in aggregate commitments, all of which are performing at or ahead of their stated business plans, with a goal of seeding our credit vehicle with approximately $100 million of bridge loans. Turning to our public capital clients, we are limited in what we can discuss today as we are reporting results in advance of their earnings reports in the coming weeks. Although I do want to highlight some recent public announcements that underscore the actions we are taking to reduce leverage and improve cash flow at these clients. OPI finished an active year, highlighted by a focus on addressing its debt maturities in a challenging financing environment for the office sector. We executed on $1.8 billion of financings, including a debt exchange transaction related to OPI's 2025 debt maturity that closed in December 2024. OPI also executed well on its asset disposition plans, selling 17 properties for over $114 million during the past quarter and using the proceeds to repay its remaining 2025 debt maturity in January. SVC is advancing its plans to improve the composition of its hotel portfolio and strengthen its balance sheet. The company has begun marketing efforts to sell 114 Sinestro hotels this year, targeting $1 billion in proceeds to improve liquidity and reduce leverage. We remain confident that the rationalization of SVC's hotel portfolio, stable cash flows from its triple net lease assets, and continued prudent capital allocation well position SVC for long-term value creation. DHC continues to execute on initiatives to improve its portfolio while pursuing deleveraging strategies. To that end, earlier this week, the company completed the sale of a 186,000 square foot life science campus in San Diego for $159 million, reflecting an attractive valuation of approximately $855 per square foot. DHC also expects to close its previously announced sale of 18 senior living communities to Brookdale Senior Living for $135 million later this month. Lastly, our commercial mortgage REIT, Seven Hills Realty Trust, achieved exceptional results for shareholders in 2024. Seven Hills delivered a total shareholder return of over 12%. compared to its industry benchmark, which had a total return of negative 8% during the same period. This outperformance is a testament to the strength of our lending platform and management's disciplined underwriting and asset management capabilities. To conclude, we are pleased with the progress we have made assisting our clients with their financial and strategic objectives, while also driving new growth initiatives We look forward to updating you on our progress in the coming quarters. With that, I'll now turn the call over to Matt Jordan, Executive Vice President and our Chief Financial Officer.