Earnings

Service Properties Trust Turns Rolling Cash Available Positive

The Tip Desk · November 11, 2026 · 4 min read

Normalized FFO was $0.34 a share and Adjusted EBITDAre $133.5 million as rolling four-quarter cash available for distribution flipped to a $12.6 million surplus.

Service Properties Trust (SVC), a real estate investment trust with $9.6 billion invested in service-focused retail net lease properties and hotels, reported a net loss of $87.9 million, or $0.68 a share, for the quarter ended September 30, 2026.

The loss narrowed from $223.8 million, or $1.75 a share, in the three months ended June 30, 2026. A year earlier the company posted a $46.9 million, or $1.41 a share, loss.

Normalized FFO was $43.8 million, or $0.34 a share, and Adjusted EBITDAre was $133.5 million. The company said both figures exceeded consensus estimates. Cash available for distribution was $32.1 million, or $0.25 a share, versus a $13.0 million, or $0.39 a share, deficit a year earlier. Rolling four-quarter cash available for distribution turned positive at $12.6 million, or $0.16 a share, after a $32.6 million, or $0.57 a share, deficit as of June 30, 2026.

Total revenues were $399.5 million, down from $421.0 million in the prior quarter. Hotel operating revenues were $298.4 million, versus $377.6 million a year earlier. Rental income was $101.1 million, essentially unchanged from $101.2 million a year earlier.

Adjusted Hotel EBITDA for 77 Retained Hotels was $41.1 million, up 16.2% year over year, which the company attributed to an 8.3% year-over-year increase in RevPAR. President and Chief Executive Officer Christopher Bilotto said RevPAR at those hotels outperformed the U.S. hotel industry for the eighth consecutive quarter and that Adjusted Hotel EBITDA growth reflected recently completed renovations and operational initiatives.

The company completed 14 of 15 planned exit hotel sales for $116.7 million. In the third quarter it sold six hotels with 1,213 keys for $66.1 million. Since October 1 it has sold eight hotels with 1,509 keys for $50.6 million. Hotels sold this year generated Hotel EBITDA losses of about $10.3 million through September. Two hotels with 795 keys remain for marketing, including the Crowne Plaza Atlanta Perimeter at Ravinia by IHG.

Net lease NOI was $94.8 million, described as flat sequentially, with occupancy of 97.6% and rent coverage of 2.17x. Occupancy reflected reclassification of land assets held for potential future uses. The company sold six net lease properties totaling 18,804 square feet for $1.5 million and acquired one net lease property of 7,627 square feet for $5.9 million. Since October 1 it acquired four net lease properties totaling 41,020 square feet for $8.3 million.

As of September 30, SVC owned 740 service-focused retail net lease properties with over 13.5 million square feet and 87 hotels with approximately 20,000 guest rooms, versus 745 net lease properties and 93 hotels with over 21,000 rooms as of June 30, 2026.

The company cut full-year 2026 guidance at the midpoint. Normalized FFO is now $113.0 million to $128.0 million, from $124.0 million to $144.0 million. Adjusted EBITDAre is $489.0 million to $498.0 million, from $500.0 million to $520.0 million. Net Lease NOI is $373.0 million to $379.0 million, from $380.0 million to $386.0 million. Normalized FFO per common share is $1.07 to $1.22, from $1.20 to $1.35. Total capital expenditures are $115.0 million to $125.0 million, from $120.0 million to $140.0 million.

RevPAR guidance was raised at the midpoint. Retained Hotels are $117.00 to $122.00, from $116.00 to $121.00. Exit Hotels are $74.00 to $79.00, from $70.00 to $75.00. Total or average RevPAR is $111.00 to $116.00, from $108.00 to $113.00. Hotel EBITDA for Retained Hotels is $135.0 million to $142.5 million, from $135.0 million to $150.0 million. Total or average Hotel EBITDA is $124.0 million to $134.0 million, from $124.0 million to $144.0 million.

In October 2026, SVC received an unsolicited, non-binding proposal from TKO LLC to acquire its hotel portfolio for $2.0 billion. The Board of Trustees, including all Independent Trustees, unanimously rejected the proposal because it believes the proposal significantly undervalues the hotel portfolio. The company said it intends to continue executing its strategy, including working with hotel operators to improve performance.

SVC repaid and terminated a $45.0 million variable funding note. As of November 2, 2026, it had $762.8 million of liquidity, including $112.8 million of cash and $650.0 million available under its revolving credit facility. The company effected a 1-for-5 reverse share split after the close of trading on July 6, 2026, and said it is engaged in discussion with lender groups to extend or refinance its secured revolving credit facility. It declared a quarterly distribution of $0.05 a share, payable on or about November 12, 2026.

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