Office Properties Income Trust, which owns a nearly 20M SF portfolio, says it might be forced to file for bankruptcy next year if it can't find a way to extend or refinance $457M in maturing debt.

OPI warned investors Thursday that it there is “substantial doubt about our ability to continue as a going concern” because of its unsecured senior notes that are slated to come due on Feb. 1, according to its third-quarter earnings report.

The Newton, Massachusetts-based REIT said it is in negotiations with its lenders on a note exchange but “is not able to conclude that it is probable that the negotiations will result in an exchange that refinances such notes prior to their maturity.”

Its stock price had fallen more than 16% to $1.64 per share as of Thursday afternoon. So far this year, the REIT has lost more than 76% of its market value.

OPI said in an investor presentation it has reached a deal to sell 1.6M SF of its office properties for $119.2M, following its sale of six buildings spanning 750K SF for $46.3M during the third quarter.

Part of the debt negotiations involve determining what the actual value of OPI's unencumbered assets are in today's office market, and whether selling those buildings would net enough to cover 2025 maturities, Debtwire reported in March.

OPI reported a net loss of $58.4M in the quarter ending Sept. 30, up from a $19.5M loss in the same period of 2023. OPI has also faced a significant lease rollover in its portfolio: 66 leases encompassing nearly 3M SF were set to expire this year, according to its annual report. The firm also has 43 leases encompassing 1.8M SF expiring next year.

Its cash has dwindled to $146.4M as of Oct. 30, according to the report, down from $263.5M at the end of 2023.

OPI slashed its quarterly dividend to 1 cent per share in January. Its manager, RMR Group, last year tried to merge it with another of its managed REITs, Diversified Healthcare Trust, in an effort to shore up its liquidity. It called off the merger following a shareholder revolt.

The REIT has been hammered by the malaise affecting the U.S. office sector and was the worst-performing REIT this year as of Oct. 20, according to Insider Monkey.

OPI’s largest tenant is the U.S. government, which occupies 2.9M SF, or 18%, of its portfolio and is responsible for $75M in rental income. But the government has been pulling back on leasing space, with the General Services Administration looking to cut its leased office space by 5M SF next year.

“Throughout the country, we face pressure in our releasing efforts with minimal tenants in the market to absorb large blocks of vacant space,” OPI President Yael Duffy said during a second-quarter earnings call in August. “The upcoming election creates additional volatility as government tenants are hesitant to engage in long-term space planning discussions, given the uncertainty surrounding return-to-work mandates.”