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Related Person Transactions | 12 Months Ended
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Sep. 30, 2024
Related Party Transactions [Abstract] |
Related Person Transactions | Related Person Transactions Adam D. Portnoy, Chair of our Board, one of our Managing Directors and our President and Chief Executive Officer, is the sole trustee, an officer and the controlling shareholder of our controlling shareholder, ABP Trust. RMR Inc.’s executive officers serve as trustees or directors of certain companies to which we provide management services. For more information regarding these relationships, please see our proxy statement for our 2024 annual meeting of shareholders. The Managed Equity REITs and SEVN have no employees. RMR LLC provides or arranges for all the personnel, overhead and services required for the operation of the Managed Equity REITs pursuant to management agreements with them. The officers of the Managed Equity REITs are officers or employees of RMR LLC. All the officers, overhead and required office space of SEVN are provided or arranged by Tremont. All of SEVN’s officers are officers or employees of Tremont or RMR LLC. One of the executive officers of AlerisLife and one of the executive officers of Sonesta are officers or employees of RMR LLC. Our executive officers are also managing trustees of certain of the Perpetual Capital clients. Additional information about our related person transactions appears in Note 9, Shareholders’ Equity. Revenues from Related Parties For the fiscal years ended September 30, 2024, 2023 and 2022, we recognized revenues from related parties as set forth in the following tables:
|  | Fiscal Year Ended September 30, 2024
|  | Total |  |  |  |  |  |  |  |  |  |
|  | Management and |  | % of |  | Total |  | % of |  |  |  | % of
|  | Advisory Services |  | Total |  | Reimbursable |  | Total |  | Total |  | Total
|  | Revenues |  | Revenues |  | Costs |  | Revenues |  | Revenues |  | Revenues
Perpetual Capital: |  |
DHC |  | $ | 24,516 |  |  | 12.6% |  | $ | 127,119 |  |  | 18.1% |  | $ | 151,635 |  |  | 16.9%
ILPT |  | 36,704 |  |  | 18.9% |  | 35,768 |  |  | 5.1% |  | 72,472 |  |  | 8.1%
OPI |  | 29,903 |  |  | 15.5% |  | 212,054 |  |  | 30.3% |  | 241,957 |  |  | 27.0%
SVC |  | 43,759 |  |  | 22.6% |  | 236,760 |  |  | 33.8% |  | 280,519 |  |  | 31.3%
Total Managed Equity REITs |  | 134,882 |  |  | 69.6% |  | 611,701 |  |  | 87.3% |  | 746,583 |  |  | 83.3%
SEVN |  | 5,766 |  |  | 3.0% |  | 6,064 |  |  | 0.9% |  | 11,830 |  |  | 1.3%
|  | 140,648 |  |  | 72.6% |  | 617,765 |  |  | 88.2% |  | 758,413 |  |  | 84.6%
Private Capital: |  |
AlerisLife |  | 5,632 |  |  | 2.9% |  | — |  |  | —% |  | 5,632 |  |  | 0.6%
Sonesta |  | 9,362 |  |  | 4.8% |  | — |  |  | —% |  | 9,362 |  |  | 1.0%
RMR Residential |  | 16,936 |  |  | 8.7% |  | 23,369 |  |  | 3.3% |  | 40,305 |  |  | 4.5%
Other private entities |  | 21,342 |  |  | 11.0% |  | 59,642 |  |  | 8.5% |  | 80,984 |  |  | 9.0%
|  | 53,272 |  |  | 27.4% |  | 83,011 |  |  | 11.8% |  | 136,283 |  |  | 15.1%
Total revenues from related parties |  | 193,920 |  |  | 100.0% |  | 700,776 |  |  | 100.0% |  | 894,696 |  |  | 99.7%
Income from loan investments, net |  | — |  |  | —% |  | — |  |  | —% |  | 1,313 |  |  | 0.1%
Rental property revenues |  | — |  |  | —% |  | — |  |  | —% |  | 1,604 |  |  | 0.2%
Total revenues from unrelated parties |  | — |  |  | —% |  | — |  |  | —% |  | 2,917 |  |  | 0.3%
Total revenues |  | $ | 193,920 |  |  | 100.0% |  | $ | 700,776 |  |  | 100.0% |  | $ | 897,613 |  |  | 100.0%
|  | Fiscal Year Ended September 30, 2023
|  | Total |  |  |  |  |  |  |  |  |  |
|  | Management and |  | % of |  | Total |  | % of |  |  |  | % of
|  | Advisory |  | Total |  | Reimbursable |  | Total |  | Total |  | Total
|  | Services Revenues |  | Revenues |  | Costs |  | Revenues |  | Revenues |  | Revenues
Perpetual Capital: |  |  |  |  |  |  |  |  |  |  |  |
DHC |  | $ | 23,675 |  |  | 10.0% |  | $ | 156,224 |  |  | 21.4% |  | $ | 179,899 |  |  | 18.7%
ILPT |  | 36,834 |  |  | 15.5% |  | 40,438 |  |  | 5.6% |  | 77,272 |  |  | 8.0%
OPI |  | 38,163 |  |  | 16.2% |  | 334,208 |  |  | 46.0% |  | 372,371 |  |  | 38.7%
SVC |  | 40,543 |  |  | 17.2% |  | 117,421 |  |  | 16.2% |  | 157,964 |  |  | 16.5%
Total Managed Equity REITs |  | 139,215 |  |  | 58.9% |  | 648,291 |  |  | 89.2% |  | 787,506 |  |  | 81.9%
SEVN |  | 5,188 |  |  | 2.2% |  | 4,865 |  |  | 0.7% |  | 10,053 |  |  | 1.0%
TA(1) |  | 55,214 |  |  | 23.4% |  | 3,476 |  |  | 0.5% |  | 58,690 |  |  | 6.1%
|  | 199,617 |  |  | 84.5% |  | 656,632 |  |  | 90.4% |  | 856,249 |  |  | 89.0%
Private Capital: |  |  |  |  |  |  |  |  |  |  |  |
AlerisLife (2) |  | 5,414 |  |  | 2.3% |  | 97 |  |  | —% |  | 5,511 |  |  | 0.6%
Sonesta |  | 9,471 |  |  | 4.0% |  | 544 |  |  | 0.1% |  | 10,015 |  |  | 1.0%
Other private entities |  | 21,531 |  |  | 9.1% |  | 68,879 |  |  | 9.5% |  | 90,410 |  |  | 9.4%
|  | 36,416 |  |  | 15.4% |  | 69,520 |  |  | 9.6% |  | 105,936 |  |  | 11.0%
Total revenues from related parties |  | 236,033 |  |  | 99.9% |  | 726,152 |  |  | 100.0% |  | 962,185 |  |  | 100.0%
Revenues from unrelated parties |  | 131 |  |  | 0.1% |  | — |  |  | —% |  | 131 |  |  | —%
Total revenues |  | $ | 236,164 |  |  | 100.0% |  | $ | 726,152 |  |  | 100.0% |  | $ | 962,316 |  |  | 100.0%
(1)On May 15, 2023, BP acquired TA and TA terminated its management agreement with us. In connection with the termination of TA’s management agreement, we received the applicable termination fee of $45,282 during the fiscal year ended September 30, 2023. (2)On March 30, 2023, AlerisLife merged with and into a subsidiary of ABP Trust and ceased to be a public company. As a result, the amounts due with respect to AlerisLife are characterized as Private Capital for the period presented.
|  | Fiscal Year Ended September 30, 2022
|  | Total |  |  |  |  |  |  |  |  |  |
|  | Management and |  | % of |  | Total |  | % of |  |  |  | % of
|  | Advisory |  | Total |  | Reimbursable |  | Total |  | Total |  | Total
|  | Services Revenues |  | Revenues |  | Costs |  | Revenues |  | Revenues |  | Revenues
Perpetual Capital: (1) |  |  |  |  |  |  |  |  |  |  |  |
DHC |  | $ | 30,343 |  |  | 15.2% |  | $ | 157,770 |  |  | 24.9% |  | $ | 188,113 |  |  | 22.6%
ILPT |  | 31,354 |  |  | 15.6% |  | 33,593 |  |  | 5.4% |  | 64,947 |  |  | 7.8%
OPI |  | 42,204 |  |  | 21.1% |  | 308,139 |  |  | 48.7% |  | 350,343 |  |  | 42.1%
SVC |  | 44,193 |  |  | 22.1% |  | 67,844 |  |  | 10.7% |  | 112,037 |  |  | 13.5%
Total Managed Equity REITs |  | 148,094 |  |  | 74.0% |  | 567,346 |  |  | 89.7% |  | 715,440 |  |  | 86.0%
SEVN |  | 4,530 |  |  | 2.3% |  | 5,692 |  |  | 0.9% |  | 10,222 |  |  | 1.2%
TA |  | 15,926 |  |  | 8.0% |  | 2,060 |  |  | 0.3% |  | 17,986 |  |  | 2.2%
|  | 168,550 |  |  | 84.3% |  | 575,098 |  |  | 90.9% |  | 743,648 |  |  | 89.4%
Private Capital: (1) |  |  |  |  |  |  |  |  |  |  |  |
AlerisLife |  | 4,908 |  |  | 2.5% |  | 309 |  |  | —% |  | 5,217 |  |  | 0.6%
Sonesta |  | 8,726 |  |  | 4.4% |  | 396 |  |  | 0.1% |  | 9,122 |  |  | 1.1%
Other private entities |  | 17,697 |  |  | 8.8% |  | 56,720 |  |  | 9.0% |  | 74,417 |  |  | 8.9%
|  | 31,331 |  |  | 15.7% |  | 57,425 |  |  | 9.1% |  | 88,756 |  |  | 10.6%
Total revenues from related parties |  | 199,881 |  |  | 100.0% |  | 632,523 |  |  | 100.0% |  | 832,404 |  |  | 100.0%
Revenues from unrelated parties |  | 99 |  |  | —% |  | — |  |  | —% |  | 99 |  |  | —%
Total revenues |  | $ | 199,980 |  |  | 100.0% |  | $ | 632,523 |  |  | 100.0% |  | $ | 832,503 |  |  | 100.0%
(1)On December 23, 2021, DHC sold a 35% equity interest in its existing joint venture with an institutional investor. Following this sale, DHC owned a 20% equity interest in this joint venture. As a result, the revenues earned with respect to this joint venture are characterized as Private Capital for periods on and after December 23, 2021 and as Perpetual Capital for periods prior to December 23, 2021. On June 29, 2022, DHC sold an additional 10% equity interest in this joint venture. Following this additional sale, DHC owns a 10% equity interest in this joint venture. For additional information regarding our management or advisory agreements with these related parties, see Note 2, Summary of Significant Accounting Policies. Amounts Due From Related Parties The following table presents amounts due from related parties as of the dates indicated:
|  | September 30,
|  | 2024 |  | 2023
|  | Accounts |  | Reimbursable |  |  |  | Accounts |  | Reimbursable |  |
|  | Receivable |  | Costs |  | Total |  | Receivable |  | Costs |  | Total
Perpetual Capital: |  |  |  |  |  |
DHC |  | $ | 6,307 |  |  | $ | 11,358 |  |  | $ | 17,665 |  |  | $ | 5,953 |  |  | $ | 13,434 |  |  | $ | 19,387 |
ILPT |  | 4,244 |  |  | 7,968 |  |  | 12,212 |  |  | 4,597 |  |  | 5,869 |  |  | 10,466 |
OPI |  | 5,877 |  |  | 20,132 |  |  | 26,009 |  |  | 7,427 |  |  | 51,912 |  |  | 59,339 |
SVC |  | 5,470 |  |  | 8,591 |  |  | 14,061 |  |  | 5,528 |  |  | 8,423 |  |  | 13,951 |
Total Managed Equity REITs |  | 21,898 |  |  | 48,049 |  |  | 69,947 |  |  | 23,505 |  |  | 79,638 |  |  | 103,143 |
SEVN |  | 2,551 |  |  | 2,601 |  |  | 5,152 |  |  | 1,663 |  |  | 1,921 |  |  | 3,584 |
|  | 24,449 |  |  | 50,650 |  |  | 75,099 |  |  | 25,168 |  |  | 81,559 |  |  | 106,727 |
Private Capital: |  |  |  |  |  |
AlerisLife |  | 570 |  |  | — |  |  | 570 |  |  | 74 |  |  | — |  |  | 74 |
Sonesta |  | 82 |  |  | — |  |  | 82 |  |  | 89 |  |  | — |  |  | 89 |
RMR Residential |  | 9,587 |  |  | — |  |  | 9,587 |  |  | — |  |  | — |  |  | — |
Other private entities |  | 3,909 |  |  | 54,133 |  |  | 58,042 |  |  | 4,634 |  |  | 7,060 |  |  | 11,694 |
|  | 14,148 |  |  | 54,133 |  |  | 68,281 |  |  | 4,797 |  |  | 7,060 |  |  | 11,857 |
|  | $ | 38,597 |  |  | $ | 104,783 |  |  | $ | 143,380 |  |  | $ | 29,965 |  |  | $ | 88,619 |  |  | $ | 118,584 |
Leases As of September 30, 2024, RMR LLC leased from ABP Trust and certain Managed Equity REITs office space for use as our headquarters and local offices. During the fiscal years ended September 30, 2024, 2023 and 2022, we incurred rental expense under related party leases aggregating $5,552, $5,329 and $5,859, respectively. Our related party leases have various termination dates and many have renewal options. Some of our related party leases are terminable on 30 days’ notice and many allow us to terminate early if our management agreements for the buildings in which we lease space are terminated. For additional information regarding these leases, see Note 13, Leases. Tax-Related Payments Pursuant to our tax receivable agreement with ABP Trust, RMR Inc. pays to ABP Trust 85.0% of the amount of cash savings, if any, in U.S. federal, state and local income tax or franchise tax that RMR Inc. realizes as a result of (a) the increases in tax basis attributable to RMR Inc.’s dealings with ABP Trust and (b) tax benefits related to imputed interest deemed to be paid by RMR Inc. as a result of the tax receivable agreement. Accordingly, we made payments of $2,366, $2,355 and $2,209 to ABP Trust during the fiscal years ended September 30, 2024, 2023 and 2022, respectively. As of September 30, 2024, our consolidated balance sheet reflects a liability related to the tax receivable agreement of $20,863, including $2,421 classified as a current liability in accounts payable and accrued expenses that we expect to pay to ABP Trust during the fourth quarter of fiscal year 2025. Pursuant to the RMR LLC operating agreement, for the fiscal years ended September 30, 2024, 2023 and 2022, RMR LLC made required quarterly tax distributions to holders of its membership units totaling $27,796, $65,486 and $30,281, respectively, of which $14,799, $34,541 and $15,940, respectively, was distributed to us and $12,997, $30,945 and $14,341, respectively, was distributed to ABP Trust, based on each membership unit holder’s respective ownership percentage at the time of distribution. The amounts distributed to us were eliminated in our consolidated financial statements, and the amounts distributed to ABP Trust were recorded as a reduction of its noncontrolling interest. We use funds from these distributions to pay certain of our U.S. federal and state income tax liabilities and to pay part of our obligations under the tax receivable agreement. Registration and Lock-up Agreements The following registration rights and lock-up agreements are in effect: •ABP Trust Registration Rights Agreement. RMR Inc. is party to a registration rights agreement with ABP Trust pursuant to which RMR Inc. has granted ABP Trust demand and piggyback registration rights, subject to certain limitations, covering the Class A Common Shares ABP Trust owns, including the shares received on conversion of Class B-1 Common Shares or redemption of the paired Class B-2 Common Shares and Class A Units of RMR LLC. •Founders Registration Rights and Lock-Up Agreements. Adam D. Portnoy and ABP Trust are parties to a registration rights and lock-up agreement with each of DHC, OPI and SVC with respect to each such Managed Equity REITs’ common shares. Pursuant to that agreement, ABP Trust and Adam D. Portnoy agreed not to transfer the Managed Equity REITs’ common shares they acquired in connection with RMR LLC’s reorganization in June 2015 for a period of ten years, subject to certain exceptions, and each of those Managed Equity REITs has granted ABP Trust and Adam D. Portnoy demand and piggyback registration rights, subject to certain limitations. Separation Arrangements We enter into retirement agreements with certain of our former executive officers. Pursuant to these agreements, we make various cash payments and accelerate the vesting of unvested shares of RMR Inc. previously awarded to these retiring officers. We also enter into separation arrangements from time to time with executive and non-executive officers and employees of ours. All costs associated with separation arrangements, for which there remain no substantive performance obligations, are recorded in our consolidated statements of income as separation costs. For the fiscal year ended September 30, 2024, 2023 and 2022, we recognized separation costs of $6,297, $2,002, and $1,315 respectively, including equity based separation costs of $632, $482 and $163, respectively, and cash separation costs of $5,665, $1,520, and $1,152, respectively.

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- Definition The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 946 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Publisher FASB -URI https://asc.fasb.org/1943274/2147480990/946-20-50-2 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 946 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 5 -Publisher FASB -URI https://asc.fasb.org/1943274/2147480990/946-20-50-5 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 946 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 6 -Publisher FASB -URI https://asc.fasb.org/1943274/2147480990/946-20-50-6 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 946 -SubTopic 235 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (c) -Publisher FASB -URI https://asc.fasb.org/1943274/2147477968/946-235-50-2 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 946 -SubTopic 235 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (e) -Publisher FASB -URI https://asc.fasb.org/1943274/2147477968/946-235-50-2 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 850 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org/1943274/2147483326/850-10-50-1 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 946 -SubTopic 220 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SX 210.6-07(2)(g)(3)) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479134/946-220-S99-1 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 946 -SubTopic 220 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SX 210.6-07(2)(c)) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479134/946-220-S99-1 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 946 -SubTopic 220 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SX 210.6-07(2)(e)) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479134/946-220-S99-1 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 850 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/850/tableOfContent Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Topic 850 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6 -Publisher FASB -URI https://asc.fasb.org/1943274/2147483326/850-10-50-6 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Topic 850 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147483326/850-10-50-1 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Topic 850 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147483326/850-10-50-1 + Details
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