Office REIT Emerges From Bankruptcy After Shaving $700M In Debt
A publicly traded landlord managed by Massachusetts-based The RMR Group has come out on the other side of bankruptcy after cutting hundreds of million of dollars in debt.
Office Properties Income Trust announced its emergence from Chapter 11 bankruptcy on Wednesday. The company's post-restructuring balance sheet has $1.7B in debt after shaving off $714M.
OPI, which has a portfolio of 122 properties and about 17M rentable SF across the U.S., filed for Chapter 11 in October. That was a year after notifying investors there was concern over staying above water amid maturing debt.
In its restructuring, the REIT amended and restated the $425M revolving credit facility at 9.1% interest. Its $300M of 9% senior secured notes due March 2029 and $177M of mortgage debt have also been reinstated, according to the release.
All previous outstanding common shares in the company were effectively canceled once OPI emerged from bankruptcy. OPI issued about 22 million new common shares, a "significant portion" of which are owned by its note-holders, including Helix Partners Management and Redwood Capital Management, according to the release.
The REIT's new shares started trading on the Nasdaq on Thursday and, as of Thursday afternoon, were down 33%.
The RMR Group will continue managing OPI under new five-year business management and property management agreements.
OPI’s senior leadership remained in place, but the company formed a new board of directors.
The lineup includes Jonathan Heller, founder and CEO of Helix Partners Management LP; Jonathan Kolatch, founder and principal at Jasper Lake LLC; Irvin Schlussel, chief investment officer of Diamond Family Office; William Lamkin, former partner of Ackrell Capital; and Adam Portnoy, president and CEO of RMR.
“We are pleased to have successfully guided OPI through its complex financial restructuring,” Heller said in a statement. “Working closely with management and the Company’s creditors, we strengthened OPI’s capital structure and significantly reduced its debt burden.”
While the company was able to bring itself back from bankruptcy, it wasn't a smooth ride.
In January, OPI was denied access to a $125M bankruptcy loan after a Houston bankruptcy judge ruled it would restrict business decisions and the court's handling of the case, The Wall Street Journal reported.
OPI said in its first-quarter report for 2026 it expects to sell properties or interest in properties to manage leverage levels or improve liquidity. As of May, OPI was under contract to sell a 275K SF office in Virginia for $18M by 2027.
The REIT is also marketing 31 properties with a total of about 3M SF for sale, planning to use those proceeds to repay debt.
