NEWTON, Mass.--(BUSINESS WIRE)--Office Properties Income Trust (Nasdaq:OPI) today announced a regular quarterly cash dividend on its common shares of $0.55 per share ($2.20 per share per year), maintaining its previous dividend level. This dividend will be paid to OPI’s common shareholders of record as of the close of business on April 13, 2020 and distributed on or about May 21, 2020.
David Blackman, President and Chief Executive Officer provided the following business update:
“OPI is carefully monitoring the developments of the COVID-19 outbreak. We have been keenly focused on the health and safety of our manager The RMR Group LLC’s employees, our tenants and their businesses throughout this evolving situation. We anticipate that leasing activity may slow and that some tenants may seek temporary rent relief, but we also believe that overall tenant retention levels may increase. We believe our company will benefit from the 63% of our annual rental income paid by investment grade tenants, the majority of which is made up of government tenants, and the diversity of our tenant base, both geographically and by industry.
“Today’s dividend declaration underscores the Board of Trustees’ confidence in OPI’s liquidity and capital position. With approximately $400 million of availability under our $750 million credit facility, we believe that we are well positioned to weather the present disruptions facing the real estate industry. In addition, we anticipate that our G&A expenses will be reduced because of the lower fees we will pay to our manager as a result of the decline in our stock price since this crisis began. We have no significant debt maturities until 2022, we expect our 2020 cash available for distribution coverage to remain reasonably consistent with our target of 75% and expect that the dividend will remain unchanged. Given the current market conditions, we are carefully considering our capital allocation strategy and we hope to be in a position to opportunistically deploy capital in the future.”
Office Properties Income Trust is a real estate investment trust, or REIT, focused on owning, operating and leasing properties primarily leased to single tenants and those with high credit quality characteristics like government entities. OPI is managed by the operating subsidiary of The RMR Group Inc. (Nasdaq:RMR), an alternative asset management company that is headquartered in Newton, MA.
Warning Concerning Forward-Looking Statements
This press release contains statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other securities laws. Also, whenever OPI uses words such as “believe”, “expect”, “anticipate”, “intend”, “plan”, “estimate”, “will”, “may” and negatives or derivatives of these or similar expressions, OPI is making forward-looking statements. These forward-looking statements are based upon OPI’s present intent, beliefs or expectations, but forward-looking statements are not guaranteed to occur and may not occur. Actual results may differ materially from those contained in or implied by OPI’s forward-looking statements as a result of various factors. Forward-looking statements involve known and unknown risks, uncertainties and other factors, some of which are beyond OPI's control. For example:
- This press release states that OPI’s dividend rate will be $0.55 per share ($2.20 per share per year). A possible implication of this statement is that OPI will continuously pay quarterly dividends of $0.55 per share ($2.20 per share per year) in the future. OPI’s dividend rates are set and reset from time to time by OPI’s Board of Trustees. The OPI Board considers many factors when setting dividend rates including OPI’s historical and projected income, normalized funds from operations, cash available for distribution, the then current and expected needs and availability of cash to pay OPI’s obligations and fund OPI’s investments, distributions which may be required to be paid to maintain OPI’s tax status as a real estate investment trust and other factors deemed relevant by OPI’s Board of Trustees in their discretion. Accordingly, future dividend rates may be increased or decreased and there is no assurance as to the rate at which future dividends will be paid.
- Mr. Blackman states that OPI believes its overall tenant retention levels may increase and that OPI will benefit from the 63% of its annual rental income paid by investment grade rated tenants and the diversity of its tenant base. However, OPI’s ability to increase its tenant retention levels is subject to various factors, including competition for tenants and market demands for office space in the markets where OPI owns properties. As a result of these and other factors, OPI may not realize the benefits it expects. In addition, OPI’s leasing activity may slow more than it currently expects due to the current market conditions, competition, market demand or for other reasons.
- Mr. Blackman states that OPI believes it is well positioned to weather the present disruptions facing the real estate industry and references OPI’s $400 million of availability under its credit facility as a reason supporting this belief. However, if the current challenging economic conditions continue or worsen for a prolonged period, OPI’s ability to weather those disruptions may be challenged. Further, OPI’s ability to borrow under its credit facility is subject to it satisfying covenants and conditions. If OPI’s operating results and financial position are significantly negatively impacted by the current economic conditions or otherwise, it may fail to satisfy those covenants and conditions.
- Mr. Blackman states that OPI expects that its 2020 cash available for distribution coverage will remain reasonably consistent with its target of 75%. However, OPI’s ability to maintain that coverage level will depend on various factors, including realizing cash flows consistent with its expectations, and, as a result, its 2020 cash available for distribution coverage may be higher or lower than its expectations.
- Mr. Blackman states that OPI is carefully considering its capital allocation strategy and that it hopes to be in a position to opportunistically deploy capital in the future. This may imply that OPI will be able to deploy capital in the future and that its use of capital will produce returns it may expect and that OPI will benefit from this deployment. However, OPI may fail to identify and execute on opportunities to deploy capital and any deployment of capital it may make may not realize the returns it expects.
The information contained in OPI’s filings with the SEC, including under “Risk Factors” in OPI’s periodic reports, or incorporated therein, identifies other important factors that could cause OPI’s actual results to differ materially from those stated in or implied by OPI’s forward-looking statements. OPI’s filings with the SEC are available on the SEC's website at www.sec.gov.
You should not place undue reliance upon forward-looking statements.
Except as required by law, OPI does not intend to update or change any forward-looking statements as a result of new information, future events or otherwise.
A Maryland Real Estate Investment Trust with transferable shares of beneficial interest listed on the Nasdaq.
No shareholder, Trustee or officer is personally liable for any act or obligation of the Trust.
