RMR

• Core Strategic Priorities

  • Drive sustained share price outperformance for managed public REITs through strong operational execution, deleveraging, and balance sheet improvement
  • Scale the private capital business to drive long-term growth and fee diversification
  • Expand RMR's brand awareness and investor base via a newly built in-house global sales and marketing team

• Managed REIT Operational Progress

  • DHC: Transitioned 116 senior housing communities to new operators, completed over $600 million in non-core asset sales since early 2025, reduced net debt to adjusted EBITDA to 7.1x, and has outperformed peer REITs over the past three years
  • ILPT: Refinanced $1.6 billion of floating rate Mountain Joint Venture debt into fixed rate 5.7% interest-only debt, doubled its quarterly dividend to 10 cents per share while maintaining strong coverage, and marked its seventh consecutive quarter of double-digit rent growth
  • SVC: Completed over $900 million in non-core asset sales since early 2025, used $575 million in net equity offering proceeds to redeem $550 million of 2027 unsecured notes, reduced near-term refinancing risk, and is progressing on its transformation to a net lease-focused REIT
  • OPI: Successfully emerged from bankruptcy, with newly listed shares trading on NASDAQ

• Private Capital Operational Progress

  • Closed the Greenwich, CT multifamily JV acquisition with new institutional partners that provided 95% of the venture equity
  • Wholly owned on-balance sheet multifamily assets are 92% occupied, seeing improving rental rates and easing tenant concessions as multifamily supply growth slows
  • The residential platform targets a return to $1 billion in annual transaction volume once market headwinds abate

• Valuation Note

  • Management highlighted that RMR shares trade at a material discount to peers: after backing out investment and real estate carrying values, RMR shares trade at just over 5x EBITDA for its evergreen management contracts, compared to a 16.5x peer average

• Next quarter (fiscal Q4 2026): Recurring service revenues are expected to be ~$45 million, consistent with the current quarter as improving managed REIT enterprise values offset current quarter acquisition fees. Recurring cash compensation is expected to decrease to ~$38.5 million, with ~$600,000 in incremental equity-based compensation from planned September annual employee share grants. Recurring G&A is expected to decrease slightly. Adjusted EBITDA is projected to be $19–21 million, and distributable earnings are projected to be 48–50 cents per share.
• Full fiscal year 2026: Adjusted EBITDA is expected to be $76.5–78.5 million, which excludes 2025 calendar year incentive fees of $23.6 million. RMR is on pace to generate over $40 million in calendar year 2026 incentive fees, primarily from DHC (75% of the total) and ILPT.
• Medium term: RMR's medium-term target is to return EBITDA margins to the historical 50% level, up from the current low 40% range, via revenue growth and operating leverage.
• The full year estimated effective tax rate is maintained at 17–18%.

The RMR Group's overall fiscal Q3 2026 adjusted EBITDA was $19.7 million and distributable earnings were 48 cents per share. Recurring service revenues totaled $45.5 million, a sequential increase of $3.5 million. Recurring cash compensation was $39.6 million, recurring G&A was $10.7 million, and the quarter included a net non-cash impairment charge of $19 million tied to OPI's bankruptcy emergence. The firm has two core business segments: 1) Managed Public REITs: This is the core recurring revenue segment, contributing the majority of RMR's stable base cash flows. It includes DHC, ILPT, SVC, and OPI. DHC reported Q2 2026 normalized FFO of $0.16 per share and adjusted EBITDA of $82 million, with same property NOI growth of 37% year-over-year; ILPT achieved a record 5.4 million square feet of leasing in the quarter with a 35%+ weighted average rent roll-up; SVC reported normalized FFO per share of 43 cents and adjusted EBITDA of $146 million, with 6.6% REVPAR growth and 4.2% hotel EBITDA growth for retained properties; OPI recently emerged from bankruptcy with RMR retaining a 2% equity stake and a fixed $14 million annual management fee for the first two years of the new 5-year management contract. 2) Private Capital Business: This is RMR's growth segment, which has grown from ~$0 AUM in 2020 to over $12 billion AUM as of Q3 2026. The segment recently closed a $350 million multifamily joint venture acquisition in Greenwich, CT, where RMR holds a 5% general partner stake and earns ~$750,000 annual asset/property management fees plus a closing acquisition fee. RMR also wholly owns 3 multifamily communities (781 total units, 92% occupied) that are performing in line with value-add business plans.

• Broad economic and geopolitical uncertainty, particularly the ongoing conflict in the Middle East, has created market volatility and created a headwind for global real estate fundraising, which hit a nine-year low in the first half of 2026. Many institutional investors that deployed capital at near-zero interest rates have not yet realized returns on peak-cycle investments, limiting capacity for new capital deployment.
• Commercial real estate transaction volumes are running at ~50% of normal levels, with a broad slowdown in capital flows across most sectors, which slows private capital growth and transaction-related fee generation.
• Incentive fees, which are a large expected contributor to 2026 results, are volatile and tied to managed REIT equity market performance.
• DHC and ILPT's incentive fees are capped at 1.5% of each REIT's equity market cap, so future upside is limited to further increases in market valuation.

Q: What factors are impacting private capital fundraising for the enhanced growth venture, and how do you expect progress to unfold over coming quarters? / A: The overall fundraising cycle has extended to 18–24 months, and the firm is only 9 months into the current process, with sustained interest from global institutional investors. The Middle East conflict has compounded slowdowns by causing market volatility and reducing deployable capital from regional investors. Additionally, many peak-cycle real estate investors have not yet returned capital to their limited partners, leaving no new capital to deploy. The firm is playing the long game, with current branding and outreach efforts expected to pay off once markets stabilize. (317 characters)

Q: What is RMR's medium-term EBITDA margin target, and how will it get there? / A: Current EBITDA margins are in the low 40% range, down from a historical trend of 50% or higher. Management's explicit medium-term goal is to return to ~50% margin, driven by revenue growth that will flow through to the bottom line as operating leverage improves. (183 characters)

Q: What is RMR's plan for its SVC investment holding period, and could it monetize the stake for a gain in the near term? / A: Management views the SVC investment as a long-term holding. RMR is bullish on SVC's prospects as the portfolio benefits from completed renovations and ongoing operational improvements, which will play out over years, not quarters. There is no near-term plan to monetize the stake. (209 characters)

Q: How is RMR approaching new on-balance sheet real estate investments prior to a pickup in private capital fundraising? / A: RMR does not plan to add new wholly owned multifamily assets to the balance sheet until EGV fundraising progresses, as the firm already holds three on-balance sheet multifamily properties. The only sector where RMR may deploy balance sheet capital for new wholly owned investments is value-add retail, to build a track record that will support future private capital raising and fee generation. (296 characters)

Q: How are wholly owned legacy on-balance sheet real estate investments performing relative to underwriting? / A: The three multifamily assets and one retail asset are still in the early innings of their 4–5 year value-add business plans, and are all tracking on target. Multifamily assets are 92% occupied, with 3–4% renewal rent growth and high teen returns on completed unit renovations, which is well ahead of where performance was a year ago. The end goal is to generate promote income upon exit in 4–5 years. (312 characters)