Business and Property Management Agreements with RMR

6 Months Ended

Jun. 30, 2025

Business and Property Management Agreements with RMR

We have no employees. The personnel and various services we require to operate our business are provided to us by RMR. We have two agreements with RMR to provide management services to us: (1) a business management agreement, which relates to our business generally; and (2) a property management agreement, which relates to the property level operations of many of our properties, including our medical office and life science properties, and major renovation or repositioning activities at our senior living communities that we may request RMR to manage from time to time. See Note 11 for further information regarding our relationship, agreements and transactions with RMR.

Business Management Agreements with RMR. Pursuant to our business management agreement and in accordance with GAAP, we accrued estimated incentive management fees during the three and six months ended June 30, 2025 and 2024, if any. The actual amount of incentive management fees incurred for 2025, if any, will be based on our common share total return, as defined in our business management agreement, for the three year period ending December 31, 2025, and will be payable to RMR in January 2026. We did not incur any incentive management fees for the year ended December 31, 2024.

Expense Reimbursement. We are generally responsible for all our operating expenses, including certain expenses incurred or arranged by RMR on our behalf. We are generally not responsible for payment of RMR's employment, office or administrative expenses incurred to provide management services to us, except for the employment and related expenses of RMR's employees assigned to work exclusively or partly at our properties, our share of the wages, benefits and other related costs of RMR's centralized accounting personnel, our share of RMR's costs for providing our internal audit function or as otherwise agreed. Our property level operating expenses are generally incorporated into the rents charged to our tenants, including certain payroll and related costs incurred by RMR.

For the three and six months ended June 30, 2025 and 2024, the business management fees, incentive management fees, property management fees and construction supervision fees and expense reimbursements recognized in our condensed consolidated financial statements were as follows:


		Three Months Ended June 30,				Six Months Ended June 30,
	Financial Statement Line Item	2025		2024		2025		2024
Pursuant to business management agreement:
Business management fees	General and administrative expenses (1)	$	3,741	$	3,977	$	7,550	$	8,006
Incentive management fees	General and administrative expenses	4,148		(849)		6,555		—
Total		$	7,889	$	3,128	$	14,105	$	8,006

Pursuant to property management agreement (2):
Property management fees	Property operating expenses	$	1,192	$	1,446	$	2,456	$	2,984
Construction supervision fees	Building and improvements (3)	208		274		434		640
Total		$	1,400	$	1,720	$	2,890	$	3,624

Expense Reimbursement:
Property level expenses	Property operating expenses	$	3,318	$	3,631	$	7,059	$	7,277
Other reimbursed expenses	General and administrative expenses	50		82		100		164
Total		$	3,368	$	3,713	$	7,159	$	7,441

(1)The net business management fees we recognized reflect a reduction of $743 for each of the three months ended June 30, 2025 and 2024 and $1,487 for each of the six months ended June 30, 2025 and 2024, for the amortization of the liability we recorded in connection with our former investment in The RMR Group Inc., or RMR Inc.

(2)The net property management and construction supervision fees we recognized reflect a reduction of $199 for each of the three months ended June 30, 2025 and 2024 and $398 for each of the six months ended June 30, 2025 and 2024, for the amortization of the liability we recorded in connection with our former investment in RMR Inc.

(3)Amounts capitalized as building improvements are depreciated over the estimated useful lives of the related capital assets.

In January 2025, in connection with a $100,000 credit agreement and related security agreement entered into by RMR and certain of its subsidiaries with Citibank, N.A., or Citibank, and the other lenders party thereto, we consented to the pledge and assignment of RMR’s interest in our management agreements under the security agreement. Pursuant to the consent, we agreed, among other things, that upon notice that an event of default under the RMR credit agreement has occurred and is continuing, we will continue to make all payments under our management agreements in accordance with the instructions of Citibank, and that if there is an event of default by RMR under our management agreements that would allow us to terminate or suspend our obligations, we will not terminate or suspend without notice to Citibank and provide Citibank 30 days to cure the default on RMR’s behalf. The consent was approved by our Independent Trustees.

Management Agreements between our Joint Ventures and RMR. We have two separate joint venture arrangements with third party institutional investors, the Seaport JV and the LSMD JV. RMR provides management services to both of these joint ventures. Our joint ventures are not our consolidated subsidiaries and, as a result, we are not obligated to pay management fees to RMR under our management agreements with RMR for the services it provides regarding the joint ventures.