OFFICE PROPERTIES INCOME TRUST

Office Properties Income Trust (OPI) Chapter 11 Bankruptcy Update: Key Developments for Investors

Investors in Office Properties Income Trust (OPI) face continued uncertainty as the company navigates Chapter 11 bankruptcy. An SEC Form 8-K filed on March 13, 2026, provides a crucial update on these proceedings, which began on October 30, 2025.

1. Event Description: Ongoing Bankruptcy Negotiations

The March 13, 2026 8-K filing reveals ongoing, critical negotiations between OPI and its various creditor groups. These discussions aim to finalize a Plan of Reorganization for the company. A key point of contention involves an "Ad Hoc Group of Holders of March 2029 Notes," with OPI and the group disputing whether the company owes $321 million or $310 million. Resolving this disagreement is central to OPI's efforts to restructure its substantial debt.

2. Event Date/Timeline: Why OPI Filed for Chapter 11

OPI filed for Chapter 11 bankruptcy on October 30, 2025, after a prolonged period of financial distress. Several key factors drove this decision:

• Severe Office Market Downturn: The persistent shift to remote and hybrid work models significantly reduced demand for office space, leading to declining occupancy rates and reduced rental income across OPI's portfolio.
• Overwhelming Debt Load: As revenues shrank, OPI struggled to service its substantial debt. An earlier dividend cut in August 2023, an attempt to conserve cash, proved insufficient to avert bankruptcy.
• Seeking Court Protection: Chapter 11 allows OPI to continue operating under court supervision while it restructures its debts and attempts to formulate a viable business plan, protected from creditor lawsuits.

3. Financial Impact: Financial Health & Restructuring Strategy

This 8-K primarily focuses on negotiation details, not comprehensive financial statements, yet it clearly underscores OPI's severe financial distress. The debt dispute itself highlights the complexity of the company's balance sheet.

• Limited Financial Disclosure: Investors should note that this 8-K does not provide updated comprehensive financial metrics like current occupancy rates, overall debt figures beyond the specific dispute, cash reserves, or property valuations. While typically found in other bankruptcy filings or periodic reports, their absence here means investors must look elsewhere for a complete financial picture.
• Restructuring Strategy: OPI's Chapter 11 strategy involves negotiating a consensual Plan of Reorganization with its various creditor groups. This plan will likely include significant debt reduction, potentially through debt-for-equity swaps, asset sales, or new financing. The ultimate goal is to emerge from bankruptcy with a sustainable capital structure and a business model adapted to the challenging office real estate market.

4. Impact Assessment: Extreme Risks & Delisting for Investors

This bankruptcy process carries monumental implications, particularly for common shareholders:

• Extreme Risk for Common Shareholders: OPI explicitly warns that trading in its common shares is "highly speculative and poses substantial risks." The company states the stock price "may bear little or no relationship to the actual recovery, if any, by holders thereof." In Chapter 11, common shareholders are typically the last in line to receive any value, often losing most, if not all, of their investment, especially when a company is deeply indebted.
• Delisted from Nasdaq: OPI's common shares were delisted from Nasdaq, likely around its October 2025 bankruptcy filing. This means the shares now trade on the over-the-counter (OTC) market, which significantly reduces liquidity, transparency, and makes them much harder to buy or sell.
• Lenders/Debtholders: Although higher in priority than shareholders, lenders are actively negotiating to recover their investments. They may still face significant losses or be forced to convert debt into equity in the reorganized company.

5. Key Takeaways for Investors: What Happens Next & Investor Caution

The Chapter 11 process is complex and involves several critical steps:

• Continued Negotiations: OPI will continue intensive negotiations with its creditor groups to agree on debt treatment.
• Plan of Reorganization: The company must develop and submit a detailed Plan of Reorganization to the bankruptcy court. This plan outlines how OPI will pay its creditors and operate going forward.
• Court Approval: Both creditors and the bankruptcy court must approve the Plan of Reorganization.
• Shareholder Fate Decided: The approved plan will ultimately determine the fate of existing common shares, which often face cancellation or severe dilution in such cases.

Investor Takeaways: Exercise Extreme Caution

• High Risk of Total Loss: For common shareholders, a very high probability exists of losing your entire investment.
• Illiquid Trading: Delisting means OPI shares are difficult to trade, and their price may not reflect any fundamental value.
• Not a "Buy the Dip" Opportunity: This is a highly complex and risky bankruptcy situation. Unless you are an experienced investor with a deep understanding of bankruptcy proceedings and OPI's specific situation, this is likely an investment to avoid.
• Monitor Bankruptcy Filings: Current shareholders must closely follow public bankruptcy court filings for detailed updates on the Plan of Reorganization and its implications for their holdings.