Even after selling 112 hotels last year for nearly $1B, Service Properties Trust could still struggle to dig out from $2B of debt maturing in the next two years, according to an S&P Global report.

S&P downgraded the credit rating of Newton, Massachusetts-based Service Properties Trust to B- from B on Wednesday, citing the looming maturities. Roughly 40% of the company's debt is set to mature in the next 24 months.

Its outlook for the company's credit is negative, which “reflects our view that the company’s capital structure could become unsustainable over the next 12 months, depending on how refinancings are addressed,” S&P analysts wrote in the report. “Moreover, it reflects liquidity and covenant concerns.”

Service Properties Trust, which trades on the Nasdaq under the ticker SVC, generated $859M in proceeds from hotel sales last year, according to the company's fourth-quarter earnings statement, which was released on Wednesday. It sold another hotel in January for $7M and is marketing more than 3,000 additional rooms for sale.

Overall, the REIT has a roughly $10B portfolio, split almost evenly between hotels and net-leased retail assets. The net-leased portfolio was 96.6% occupied at the end of 2025, down from 97.6% a year earlier. Its hotel portfolio averaged 61.6% occupancy during the fourth quarter and revenue per available room of $99.24, both slightly below the national average.

On the company's earnings call Thursday, SVC executives said they plan to sell more assets to help refinance the loans that are maturing next year and in 2028. SVC refinanced a $700M unsecured loan that was set to mature this year with a $745M CMBS loan secured by a $1.1B net-leased retail portfolio.

“Our focus is largely on the unsecured notes due in 2027, which between asset sales and potential other transactions, we will look to refinance those out,” SVC Chief Financial Officer Brian Donley said on the call, according to a Motley Fool transcript.

S&P analysts wrote that they expect there will be fewer asset sales available to SVC this year to cover the remaining debt. The “negative outlook” is also influenced by potential liquidity concerns — depending on how SVC plans to address its secured revolving credit facility, which has an initial start date in the summer of 2027.

SVC is managed by Massachusetts-based The RMR Group, which also manages public REITs Diversified Healthcare Trust, a senior housing and life sciences specialist, Industrial Logistics Properties Trust and Office Properties Income Trust.

SVC and The RMR Group did not respond to an immediate request for comment.