Download PDF

1. Company Snapshot

1.a. Company Description

Seven Hills Realty Trust, a real estate investment trust, focuses on originating and investing in first mortgage loans secured by middle market and transitional commercial real estate in the United States.The company has elected to be taxed as a real estate investment trust.As a result, it would not be subject to corporate income tax on that portion of its net income that is distributed to shareholders.


The company was formerly known as RMR Mortgage Trust.Seven Hills Realty Trust was incorporated in 2008 and is headquartered in Newton, Massachusetts.

Show Full description

1.b. Last Insights on SEVN

Seven Hills Realty Trust's recent performance was negatively driven by a challenging macroeconomic environment, with Treasury yields posting a decline due to soft PMI employment metrics and mortgage demand. Additionally, the company's recent acquisition of a hotel in Boston and student housing property near the University of Mississippi may have increased leverage and debt levels, potentially weighing on its financial performance. Furthermore, the Trump administration's perceived inflationary policies may have contributed to higher interest rates, negatively impacting the company's operations.

1.c. Company Highlights

2. Seven Hills Realty Trust Delivers Solid Q3 Results

Seven Hills Realty Trust reported distributable earnings of $4.2 million or $0.29 per share for the third quarter of 2025, which was at the high end of the guidance range. The actual EPS came out slightly higher than estimates of $0.285. The company's financial performance was supported by a fully performing loan portfolio and disciplined capital deployment. The Board declared a regular quarterly dividend of $0.28 per share, which equates to an annualized yield of 11% on the previous day's closing price.

Publication Date: Nov -19

📋 Highlights
  • Distributable Earnings:: $4.2 million or $0.29/share, aligning with the high end of guidance and a $0.28/share dividend at 11% yield.
  • Loan Portfolio:: $642 million in floating-rate loans with 8.2% all-in yield, 67% LTV, and $53.8 million in repayments during Q3.
  • Capital Position:: $77 million in cash and $310 million in secured financing capacity, with a 172 bps net interest margin (397 bps yield vs. 215 bps borrowing cost).
  • Market Trends:: Increased acquisition financing activity post-Fed rate cut, signaling renewed confidence with 2021-2022 loan maturity volumes driving demand.
  • Future Guidance:: Q4 distributable earnings expected at $0.29–$0.31/share, with $15.3 million in additional loan repayments and $0.01–$0.02 in Q4 origination fees.

Loan Portfolio Performance

The company's portfolio consisted of $642 million of floating-rate first mortgage commitments across 22 loans with a weighted average all-in yield of 8.2% and a weighted average loan-to-value of 67% at close. The weighted average risk rating at the quarter end was 2.9, with all loans current on debt service, no 5-rated loans, and no nonaccrual balances. The company received a full repayment of two loans totaling $53.8 million during the quarter and expects one additional loan repayment of $15.3 million before year-end, as stated by Tom Lorenzini during the Q&A session.

Market Trends and Outlook

Jared Lewis updated that the third quarter saw a notable improvement in market sentiment following the Fed's rate cut in September, driving new financing activity. The company is seeing a higher proportion of acquisition financing compared to refinancing activity, a trend viewed as a key indicator of renewed market confidence and a constructive environment for new lending. The company expects to deploy capital in Q4, with a typical quarter looking like $0.01 to $0.02 in origination fees.

Valuation and Dividend Yield

With a dividend yield of 14.49%, Seven Hills Realty Trust offers an attractive return to its investors. The company's P/E Ratio stands at 8.38, and the P/B Ratio is 0.48. Analysts estimate next year's revenue growth at -2.2%. The company's ability to maintain its dividend yield and navigate the current market trends will be crucial in determining its stock performance.

Financial Position and Liquidity

The company has $77 million of cash on hand and $310 million of capacity on its secured financing facilities. The portfolio has an all-in yield of SOFR plus 397 basis points and a weighted average borrowing rate of SOFR plus 215 basis points. The CECL reserve remains modest at 150 basis points of total loan commitments, unchanged from last quarter. The company's financial position and liquidity provide a solid foundation for its future operations.

3. NewsRoom

Card image cap

REIT Market Perspectives - December 2025

Nov -26

Source: seekingalpha.com

Card image cap

Seven Hills Realty Trust Deploys $101.3 Million Across Three New Loan Investments

Nov -21

Source: businesswire.com

Card image cap

Dividend Power Dogs: 12 Ideal Safer November Stars

Nov -16

Source: seekingalpha.com

Card image cap

Seven Hills Realty Trust Announces Rights Offering

Oct -30

Source: businesswire.com

Card image cap

Seven Hills Realty Trust (SEVN) Q3 2025 Earnings Call Transcript

Oct -28

Source: seekingalpha.com

Card image cap

Seven Hills Realty Trust Announces Third Quarter 2025 Results

Oct -27

Source: businesswire.com

Card image cap

Seven Hills Realty Trust Announces Quarterly Dividend on Common Shares

Oct -09

Source: businesswire.com

Card image cap

Why U.S. REITs May Shine In A Rate-Cutting Environment

Oct -01

Source: seekingalpha.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.50%)

6. Segments

Investment and Related Activities

Expected Growth: 4.5%

Growing demand for income-generating properties, increasing need for financing and leasing services, and expansion into new markets drive growth for Seven Hills Realty Trust's investment and related activities.

7. Detailed Products

Office Buildings

Seven Hills Realty Trust offers a diverse portfolio of office buildings, providing tenants with high-quality spaces that cater to their business needs.

Industrial Properties

The company's industrial properties comprise warehouses, distribution centers, and manufacturing facilities, serving a range of industries.

Retail Centers

Seven Hills Realty Trust's retail portfolio features shopping centers, strip malls, and freestanding stores, offering prime retail spaces for various businesses.

Multifamily Communities

The company's multifamily properties provide residents with comfortable living spaces, amenities, and convenient locations.

Land Development

Seven Hills Realty Trust offers land development opportunities, enabling the creation of new projects, including residential, commercial, and mixed-use developments.

8. Seven Hills Realty Trust's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Seven Hills Realty Trust is moderate, as there are alternative options for customers to invest in real estate, but the company's diversified portfolio and strong brand presence mitigate this threat.

Bargaining Power Of Customers

The bargaining power of customers is low, as Seven Hills Realty Trust has a strong brand presence and a diversified portfolio, making it difficult for customers to negotiate prices.

Bargaining Power Of Suppliers

The bargaining power of suppliers is moderate, as Seven Hills Realty Trust relies on a few key suppliers for its operations, but the company's scale and diversification mitigate this risk.

Threat Of New Entrants

The threat of new entrants is low, as Seven Hills Realty Trust has a strong brand presence and a diversified portfolio, making it difficult for new entrants to compete.

Intensity Of Rivalry

The intensity of rivalry is high, as Seven Hills Realty Trust operates in a competitive industry with many established players, and the company must continually innovate and improve its offerings to stay ahead.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 70.09%
Debt Cost 6.56%
Equity Weight 29.91%
Equity Cost 6.56%
WACC 6.56%
Leverage 234.32%

11. Quality Control: Seven Hills Realty Trust passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Angel Oak Mortgage

A-Score: 7.1/10

Value: 7.8

Growth: 6.9

Quality: 7.3

Yield: 10.0

Momentum: 4.0

Volatility: 6.7

1-Year Total Return ->

View Full Report
Stock-Card
Chicago Atlantic

A-Score: 6.7/10

Value: 6.1

Growth: 9.1

Quality: 4.3

Yield: 10.0

Momentum: 1.0

Volatility: 9.7

1-Year Total Return ->

View Full Report
Stock-Card
AG Mortgage Investment Trust

A-Score: 6.5/10

Value: 7.6

Growth: 3.3

Quality: 5.8

Yield: 10.0

Momentum: 5.0

Volatility: 7.3

1-Year Total Return ->

View Full Report
Stock-Card
PennyMac Mortgage Trust

A-Score: 6.2/10

Value: 7.6

Growth: 2.4

Quality: 5.4

Yield: 10.0

Momentum: 3.5

Volatility: 8.3

1-Year Total Return ->

View Full Report
Stock-Card
Seven Hills Realty

A-Score: 6.0/10

Value: 7.3

Growth: 2.7

Quality: 7.9

Yield: 10.0

Momentum: 1.0

Volatility: 7.3

1-Year Total Return ->

View Full Report
Stock-Card
Lument Finance Trust

A-Score: 5.9/10

Value: 8.0

Growth: 3.3

Quality: 5.6

Yield: 10.0

Momentum: 2.0

Volatility: 6.3

1-Year Total Return ->

View Full Report

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

8.52$

Current Price

8.52$

Potential

-0.00%

Expected Cash-Flows