Office Properties Income Trust (OPI), a Maryland real estate investment trust owning 124 office properties comprising 17.2 million rentable square feet across 30 states, filed for chapter 11 bankruptcy on October 30, 2025 in the Northern District of Texas. The filing represents the first office REIT to file for Chapter 11 bankruptcy. With approximately $2.42 billion in funded debt and over $1.1 billion maturing within 24 months, OPI faced refinancing pressure in an environment where lenders have been reluctant to extend office exposure.
The restructuring proceeds under a pre-negotiated framework supported by approximately 80% of the company's September 2029 secured noteholders. This Restructuring Support Agreement targets roughly $1 billion in deleveraging through a combination of debt-for-equity conversion and secured debt takebacks. OPI has no employees and is externally managed by The RMR Group LLC, which has operated the REIT since 2009. The First Day Declaration describes the management structure and the terms of RMR's continued involvement post-emergence that are part of the restructuring negotiations.
OPI's financial performance reflects these market dynamics. The company reported a net loss of $136.1 million in 2024, and by Q2 2025, OPI reported a net loss of $41.2 million compared to net income of $76.2 million in the same quarter of 2024, while normalized FFO declined from $33.2 million to $9.4 million. The company's stock, which traded above $40 per share in 2022, had fallen over 95% by the time of the bankruptcy filing. With assets substantially encumbered to prepetition secured lenders and lender reluctance to extend any additional office exposure, refinancing options were limited.
OPI's debt maturity schedule was a factor in the filing timing. With over $1.1 billion in debt maturing within 24 months of the filing date, the company faced refinancing pressure as credit markets tightened for office-focused REITs, property valuations declined, higher interest rates raised debt service costs, and lender appetite for office exposure weakened. The company explored various alternatives before filing, but could not construct a capital structure that would satisfy all stakeholders. Interest expense had risen 37% year-over-year to approximately $53 million per quarter, further straining liquidity.
The 9.000% coupon on the September 2029 Notes and March 2029 Notes reflects the rate OPI paid to extend maturities and secure additional time.
The collateral allocation across 90 properties (with some overlap between facilities) meant that virtually every asset in OPI's portfolio was pledged to one or more secured lenders. This encumbrance left the company with limited flexibility to raise incremental financing or selectively dispose of assets outside of a comprehensive restructuring.
Unsecured and Other Obligations.
Category
Amount
Notes
Unsecured Notes
~$491.1 million
Various maturities 2026-2050
Non-Debtor CMBS Debt
$177.3 million
7 properties; ~7.79% interest rate
Priority Guaranteed Notes
$14.4 million
8.000%; January 2030
The unsecured notes, totaling nearly $500 million, are slated for equity treatment rather than cash under the restructuring framework.
The non-debtor CMBS debt relates to seven properties financed through securitized lending structures. These property-level financings remain outside the bankruptcy estate, though the company must continue servicing these obligations to avoid foreclosure on the underlying assets.
The RSA contemplates a roughly six-month bankruptcy process. The restructuring targets approximately $1 billion in deleveraging—reducing OPI's funded debt from roughly $2.42 billion to approximately $1.4 billion through debt-for-equity conversion.
Creditor Treatment Under the RSA
The RSA establishes a detailed framework for treating each creditor class:
Secured Creditor Treatment.
Class
Treatment
September 2029 Notes
$420 million Secured Exit Notes (10% cash pay, 5-year) + $98 million reorganized equity; deficiency claim receives pro rata equity and ERO rights
March 2027 Notes
Indubitable equivalent of secured claim (collateral properties, cash, or takeback debt); deficiency claim receives equity and ERO rights
March 2029 Notes
Reinstated, refinanced, or otherwise unimpaired; deficiency claim receives equity and ERO rights
Credit Facility
Reinstated, refinanced, or otherwise unimpaired
The September 2029 Noteholders—who are also providing the DIP financing—receive $420 million in new secured notes plus $98 million in equity plus additional equity for any deficiency claim.
The March 2027 Notes treatment contemplates delivery of their collateral (35 properties) or equivalent value. Any deficiency claim (the amount by which the debt exceeds collateral value) converts to equity.
Unsecured and Other Treatment.
Class
Treatment
Unsecured Noteholders
Reorganized common equity + Equity Rights Offering (ERO) rights
Priority Guaranteed Notes
Reorganized common equity + ERO rights
Existing Equity
Cancelled with no distribution
Unsecured noteholders receive no cash—only equity in the reorganized company. The Equity Rights Offering provides an opportunity to acquire additional shares at a discount.
Existing equity holders—OPI's common shareholders—receive nothing. Major institutional investors like Vanguard saw their holdings decline by over 88% in value during the year preceding the filing.
DIP Financing
DIP Facility Terms.
Term
Detail
DIP Lenders
September 2029 Ad Hoc Group
Total Commitment
Up to $125 million
Interim Draw
$10 million
Final Draw
$115 million
Interest Rate
12.00% per annum (cash pay)
Default Rate
14.00%
Maturity
185 days post-petition (extendable)
The September 2029 Noteholders are both DIP lenders and plan sponsors. The court entered an Interim DIP Order on November 5, 2025 authorizing the initial $10 million draw. By providing the DIP facility, these creditors gain additional rights tied to the financing and plan process.
DIP Fee Structure.
Fee Type
Amount
Payment Form
Upfront Fee
2.25% of commitments
PIK or equity
Anchor Capital Commitment Fee
10.00% of commitments
Cash or equity (to SteerCo)
Exit Fee
5.75% of loans
Cash or equity
The fee structure has generated objections from other creditor constituencies. The 10% Anchor Capital Commitment Fee paid to the SteerCo (the steering committee of September 2029 Noteholders) compensates these creditors for organizing and committing to the DIP—a fee that other noteholders do not share. This differential treatment within the noteholder class has been challenged.
The equity payment option for fees provides flexibility. Fees paid in equity at a 37% discount to plan equity value increase the DIP lenders' equity allocation.
Collateral Structure.
The DIP facility is secured by:
First-priority liens on unencumbered assets
Junior liens on certain encumbered assets
Notably, the DIP liens exclude Credit Facility collateral, preserving the Credit Facility lenders' priority position on their 19 pledged properties.
The prepetition fee structure generated approximately $2.2 million monthly in management fees—over $26 million annually—and the management agreement runs through 2035. The business management fee is $14 million annually for two years, and the property management fee is 3% of gross rents. The 2% equity stake provides RMR with an equity allocation under the plan.
Inter-Creditor Disputes and Litigation
OPI v. UMB Bank Adversary Proceeding.
OPI filed an adversary proceeding against UMB Bank, National Association (trustee for the March 2027 Notes) on November 2, 2025. The dispute centers on original issue discount (OID) treatment for the March 2027 Notes.
The OID issue relates to whether the notes were issued at a discount from face value in a manner that requires the discount to be treated as interest (deductible for tax purposes) rather than principal. The resolution affects both the secured claim amount and the unsecured deficiency claim.
The court ordered mediation to attempt resolution of this dispute. However, mediation terminated on December 22, 2025 without resolution, leaving the matter for judicial determination.
DIP Financing Terms: Challenging the fee structure and the preferential treatment of September 2029 Noteholders
Adequate Protection: Disputing whether their collateral is adequately protected during the bankruptcy
Valuation: Contesting the property valuations that determine their secured claim recovery
Individual noteholders have also filed objections citing concerns about value transfer to the September 2029 group at their expense.
Key Creditor Constituencies
The September 2029 Ad Hoc Group represents the largest creditor constituency and serves as both DIP lender and plan sponsor. The March 2027 Ad Hoc Group, representing holders of the $418 million March 2027 Notes, has objected to the proposed restructuring framework, with objections focusing on the allocation of value between secured creditor classes, the fees and other benefits flowing to September 2029 Noteholders as DIP lenders, and property valuations affecting their secured claim recovery.
Party
Role
Official Committee of Unsecured Creditors
Appointed November 17, 2025
UMB Bank
March 2027 Notes Trustee; defendant in OID litigation
U.S. Government
Largest tenant (17.1% of annualized rental income)
Tenants generally
Drivers of rental income
The unsecured creditors' committee represents the interests of general unsecured creditors — primarily the holders of approximately $491 million in unsecured notes. Their recovery depends entirely on the equity value available after satisfying secured claims.
Early in the bankruptcy, OPI filed a Sale Motion to sell a vacant office building in Tempe, Arizona:
Element
Detail
Property
Tempe, Arizona office building
Sale Price
$11,037,975
Status
Vacant since November 2023
Annual Carrying Costs
~$720,000
Rationale
Unable to secure better offers; parking contingencies limited bidder interest
The Tempe property had been vacant for over two years and generated ongoing carrying costs without offsetting revenue. The court entered a Sale Order approving the transaction on December 3, 2025.
Property valuations have declined across the office sector. Cap rates have expanded, vacancy assumptions have increased, tenant improvement and leasing costs have risen, and lender financing availability has contracted.
April 2026: Third Amended Plan, Plan Supplements, and Confirmation Posture
OPI filed its Third Amended Joint Chapter 11 Plan of Reorganization on April 8, 2026, accompanied by a redline showing changes from the prior version. The amended plan was followed by three plan supplements: the First Plan Supplement on April 8 (covering Secured Exit Notes documents, New Warrants, directors and officers of Reorganized Debtors, schedules of assumed/rejected contracts and leases, retained causes of action, amended RMR Management Agreement term sheet, and Mortgage Debt Guarantee Settlement Agreements), the Second Plan Supplement on April 10 (Waiver and Amendment to the Second Amended & Restated Credit Agreement plus a Preliminary Steps Plan), and the Third Plan Supplement on April 11 (the New 2027 Senior Secured Notes Indenture).
The plan implements the Restructuring Support Agreement framework with revised treatment of the noteholder classes and a debt-for-equity equitization of the DIP — the debtors filed a Notice of Intent to Equitize the DIP at docket 1152 and the court entered a Sell-Down Procedures Order on April 8 establishing a record date and trading restrictions for transferring claims against the debtors during the equitization process.
The Disclosure Statement Approval and Combined Confirmation Hearing was originally noticed for April 20, 2026 but has been adjourned. A separate Equity Rights Offering Motion Hearing is scheduled for April 22, 2026 at 9:00 AM CT.
Confirmation objections. Multiple objections were filed in the run-up to confirmation. The TN Department of Revenue objected on April 13. X-Energy LLC filed a limited objection on April 15 with respect to assumption notices and the proposed treatment. Equity holder Harrison Hines filed an objection and renewed motion for appointment of an Official Committee of Equity Security Holders on April 16. Equity holder Gerald L. Eggleston filed exhibits supporting his objection on April 13. Generic equity-holder objections to confirmation were also filed on April 15 (docket 1195) and April 16 (docket 1200). Separately, equity holder Jesse Manthei filed an emergency motion for appointment of an examiner and to adjourn or stay confirmation, which the debtors opposed on April 8.
Statement in support.U.S. Bank Trust Company, National Association, as trustee for the Original September 2029 Senior Secured Notes, filed a statement in support of plan confirmation on April 15 and reservation of rights, signaling that the principal supporting noteholder constituency remains aligned behind the plan structure.
Operating performance. Monthly operating reports filed in mid-April 2026 reflect ongoing operating losses across the OPI debtor group, with the largest individual debtor entity reporting a monthly loss of approximately $7.8 million and aggregate cross-entity monthly losses across the property-level debtors running into eight figures. The reports underscore the urgency the debtors place on emergence on the prepackaged-style timeline rather than letting administrative costs and operating losses extend the case.
Key Timeline
Date
Event
October 30, 2025
Chapter 11 petitions filed; RSA executed
October 31, 2025
Joint administration and complex case treatment orders
November 2, 2025
OID adversary proceeding filed against UMB Bank
November 3, 2025
First Day Hearing; interim DIP ($10 million) approved
November 5, 2025
Interim DIP Order entered
November 10, 2025
Sale Motion filed (Tempe property)
November 17, 2025
Official Committee of Unsecured Creditors appointed
November 24, 2025
Individual noteholder objections to DIP filed
December 3, 2025
Hearing on DIP, essential creditors, management agreements
December 9, 2025
Status conference; mediation progress discussed
December 15, 2025
Final orders on professional retentions; bar date order
December 17, 2025
Utility motion withdrawn (settlement reached)
December 22, 2025
Mediation terminated without resolution
December 23, 2025
Notice of final DIP hearing
January 19, 2026
Objection deadline for final DIP financing
January 27, 2026
Final DIP Financing Hearing scheduled
April 8, 2026
Third Amended Plan filed; First Plan Supplement; Sell-Down Procedures Order entered
April 10, 2026
Second Plan Supplement filed (RCF amendment + Preliminary Steps Plan)
April 11, 2026
Third Plan Supplement filed (New 2027 Senior Secured Notes Indenture)
Several issues remain contested in OPI's restructuring. OID litigation resolution will determine how original issue discount on the March 2027 Notes is treated, which affects the secured claim amount and any deficiency claim. Inter-creditor value allocation remains disputed between the September 2029 group (DIP lenders and plan sponsors) and the March 2027 group (objectors) over how enterprise value is divided, including the DIP fee structure, priority position, and valuation assumptions.
The U.S. government's status as OPI's largest tenant (17.1% of revenue) keeps government tenant lease renewals a focus in the case record. RMR relationship terms under the amended management agreement set RMR's ongoing role and compensation, including the 2% equity stake. Emergence valuation remains a point of dispute because the reorganized company's equity allocation depends on enterprise value assumptions.
Frequently Asked Questions
Why did Office Properties Income Trust file for bankruptcy?
Remote work and reduced office demand contributed to pressure on cash flows and refinancing options. With over $1.1 billion maturing within 24 months and lenders reluctant to extend office exposure, the company filed to restructure the $2.42 billion debt load.
How much debt does OPI have?
Approximately $2.42 billion in company-wide funded debt, including $1.75 billion in secured notes across multiple tranches, a $425 million credit facility, and $491 million in unsecured notes.
What happens to OPI's office properties?
The 124 properties remain operational during bankruptcy. The Tempe property sale is part of the case, and other dispositions could occur.
Who manages OPI?
The RMR Group LLC has externally managed OPI since 2009. OPI has no direct employees—all operations are conducted through RMR's personnel. RMR will continue managing the company post-emergence under amended terms.
What is the restructuring plan?
The RSA with approximately 80% noteholder support targets roughly $1 billion in deleveraging through debt-for-equity conversion. September 2029 Noteholders receive new secured notes plus equity; unsecured noteholders receive equity only; existing equity is cancelled.
Who is providing DIP financing?
The September 2029 Ad Hoc Group is providing up to $125 million in DIP financing, with $10 million drawn at interim approval and $115 million available at final approval.
What happens to existing stockholders?
Existing OPI common equity is cancelled with no distribution.
Who is OPI's largest tenant?
The U.S. government accounts for 17.1% of OPI's annualized rental income. Federal tenancy provides relatively stable cash flows, though government space needs have also declined post-pandemic.
What are the inter-creditor disputes about?
The March 2027 Noteholders dispute the DIP fee structure, valuation allocations, and adequate protection terms. They argue that the September 2029 group is receiving preferential treatment as DIP lenders and plan sponsors.
What is the expected timeline for emergence?
The RSA targets plan confirmation within 175 days and emergence within 185 days of the October 30, 2025 petition date, implying an effective date in late April 2026.
Who is the claims agent for Office Properties Income Trust?
Kroll Restructuring Administration LLC serves as the claims and noticing agent. The court-authorized role in this case anchors creditor notices and claims-register administration to the filed retention and noticing record.
For more expert analysis of commercial real estate restructurings and chapter 11 developments, visit the ElevenFlo bankruptcy blog.
U.S. Bank Trust Company, National Association /documents/91d94f2b-6e6f-431e-8267-d62af29ab470/
monthly loss of approximately $7.8 million /documents/1b44b0d2-2dc5-49a3-b9a9-6211dde2921e/
filed for chapter 11 bankruptcy https://www.reuters.com/markets/us/office-reit-opi-files-chapter-11-bankruptcy-2025-10-30/
the first office REIT to file for Chapter 11 bankruptcy https://www.bisnow.com/national/news/office/after-collapse-warning-office-reit-files-for-bankruptcy-131663
researchers estimate approximately $500 billion in office property value destruction https://fortune.com/2023/05/25/office-space-crash-harder-than-expected-remote-work-economy-cre-crash/
Office attendance has stabilized at approximately 50% of pre-pandemic levels https://www.us.jll.com/en/trends-and-insights/research/office-market-outlook
National office vacancy rates remained at historic highs of 18.8% in Q3 2025 https://www.cbre.com/insights/figures/q3-2025-us-office-figures
net loss of $136.1 million in 2024 https://www.costar.com/article/27345381/office-properties-income-trust-files-for-chapter-11-bankruptcy
reported a net loss of $41.2 million https://www.investing.com/news/company-news/office-properties-income-trust-q2-2025-slides-reveal-going-concern-risks-93CH-4371012
fallen over 95% by the time of the bankruptcy filing https://www.wsj.com/real-estate/commercial/office-properties-income-trust-files-for-bankruptcy-citing-market-turmoil
could not construct a capital structure https://ionanalytics.com/insights/debtwire/cre-turbulence-clouds-office-properties-income-trusts-restructuring-options/
approximately $53 million per quarter https://www.investing.com/news/transcripts/earnings-call-transcript-office-properties-income-trust-faces-liquidity-challenges-in-q2-2025-93CH-4370931
Restructuring Support Agreement signed on the petition date https://octus.com/resources/articles/office-properties-income-trust-enters-chapter-11/
a roughly six-month bankruptcy process https://finance.yahoo.com/news/office-properties-income-trust-enters-004700882.html
Major institutional investors like Vanguard https://www.sec.gov/Archives/edgar/data/1456772/000110465925104631/tm2529875d1_8k.htm
these creditors gain additional rights https://www.tipranks.com/news/company-announcements/office-properties-income-trust-files-for-bankruptcy
The RMR Group LLC has externally managed OPI since 2009 https://www.rmrgroup.com/
filed objections to multiple aspects of the case https://www.theglobeandmail.com/investing/markets/stocks/OPI/pressreleases/35184191/office-properties-income-faces-payment-default-risk/
National office vacancy rates have remained elevated https://www.credaily.com/briefs/office-reit-debt-crisis-leads-to-nasdaq-delisting/
lenders have been reluctant to extend or refinance office loans https://www.bisnow.com/national/news/office/office-reit-misses-30m-in-interest-bills-and-will-be-delisted-from-nasdaq-131197
predicts office values are unlikely to recover to pre-pandemic peaks even by 2040 https://fortune.com/2023/06/23/commercial-real-estate-crash-office-values-unlikely-to-recover-by-2040-says-capital-economics/
This article was researched and written with AI assistance, using court filings, public records, and news sources. AI-generated content can contain errors. Verify all information against primary sources before relying on it. This is not legal or financial advice. See the disclaimer.