Service Properties Trust Stock Earnings Reports

Service Properties Trust (SVC) executed a significant capital-markets-driven deleveraging in Q1 2026, raising roughly $1.5 billion (including a $745M ABS and $575M equity offering) and retiring ~$1.6 billion of debt to lower annual cash interest by about $59M and improve credit metrics. Post-transactions the company has $4.7B of debt at a 5.65% weighted average rate, no unsecured maturities until 2028, and a Moody’s upgrade. Hotel RevPAR across 93 hotels rose 6.7% YoY (retained 78 hotels +7.5% RevPAR) with retained-hotel EBITDA up 2.1% to $26.2M; however consolidated hotel EBITDA declined due to the 15 Sonesta hotels currently marketed for sale (these 15 produced a $7.8M loss in Q1). SVC is actively marketing 15 Sonesta-managed hotels (8 focused-service and 7 full-service), has signed LOIs/awarded buyers on most, and expects proceeds (awarded/LOI amounts ~ $116M so far) to repay debt and eliminate ongoing cash drag despite softer-than-expected pricing. The net-lease portfolio (701 properties, 97% leased, WALT 7.3 yrs, $392M annual base rent) remains a stable foundation; NOI declined ~$2.2M in Q1 due to credit loss reserves tied to two franchisee bankruptcies (expected to be largely timing-related). Management reaffirmed full-year hotel EBITDA, net-lease NOI and consolidated adjusted EBITDAre guidance, and raised full-year normalized FFO to $124M–$144M ($0.24–$0.27/sh — assumes 526M weighted average shares), reflecting interest savings from the debt paydowns. CapEx expectations (including major renovations like the Nautilus) continue, and the company plans measured net-lease acquisitions (~$25M annual target) funded by capital recycling. Overall, SVC is shifting toward a more net-lease-oriented portfolio, reducing underperforming hotel exposure, and prioritizing margin recovery and cash-flow durability.