Seven Hills Realty Trust announced its financial results for the second quarter ended June 30, 2025, with distributable earnings of $0.31 per share, hitting the high end of management's guidance range. Income from loan investments, net, decreased by 22.0% to $13.72 million compared to $17.59 million in the prior year period.
The company's weighted average coupon rate on its loan portfolio was 8.03% at June 30, 2025, down from 9.11% a year prior, while interest and related expenses decreased by 12.3% to $14.96 million. The allowance for credit losses increased to $9.38 million (150 basis points) from $8.07 million (130 basis points) at December 31, 2024, primarily due to unfavorable CRE pricing forecasts and loan extensions.
Despite these pressures, all loans remained current on debt service with no nonaccrual loans, and the provision for credit losses decreased by 62.3% to $759 thousand for the six months ended June 30, 2025. SEVN maintained $46 million in cash and $323 million in excess borrowing capacity, with a conservative total debt-to-equity ratio of 1.6x. The company also secured extensions for its UBS, Wells Fargo, and Citibank Secured Financing Facilities, with the UBS facility increasing by $45 million to $250 million.
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