Seven Hills Realty Trust (SEVN) Q3 2026 earnings summary

Executive summary

• Q3 net income was $8.052M, or $0.36/share; Distributable Earnings were $3.791M, or $0.17/share, and $5.291M, or $0.24/share excluding the $1.5M Dallas realized loss.

• Three originations totaled $122.3M, the highest quarterly volume since Q4 2021; office exposure fell from 19% to 13% at quarter-end.

• Repayments reduced legacy office exposure and unlocked lending capacity; after the October Carlsbad resolution, office exposure stood at 10%.

Financial highlights

• Q3 revenue was $8.271M versus $7.092M YoY; net income was $8.052M versus $3.430M, and diluted EPS was $0.36 versus $0.23.

• A $3.6M net reversal of credit loss provisions primarily reflected the Dallas reserve release, partly offset by new-loan and office-loan allowances.

• 9M revenue rose 12.0% YoY to $24.735M; net income increased 8.7% to $11.570M, while diluted EPS fell 28.2% to $0.51 after the higher share count following the December 2025 rights offering.

• 9M operating cash flow was $15.163M; quarter-end cash was $51.468M, down from $123.471M at year-end 2025.

Outlook and guidance

• Q4 Distributable Earnings, excluding realized losses, are expected at $0.25–$0.27/share; reported results are also expected to include a $0.11/share Carlsbad realized loss.

• Sustainable dividend coverage is expected in H1 2027, primarily due to loan closings later than anticipated rather than a change in origination assumptions.

• Three loans totaling $121.7M were in diligence and expected to close in Q4, with near-term closings anticipated within 30 days; portfolio size targets are ~$900M by year-end and $1.0B–$1.1B in 2027.

• The $0.28/share quarterly dividend was maintained; each $100M of net portfolio growth at current spreads and advance rates is expected to add ~$0.04/share to quarterly Distributable Earnings.