SVC's Manager, The RMR Group

SVC is managed by The RMR Group (Nasdaq: RMR). RMR primarily provides management services to publicly traded real estate companies, privately held real estate funds and real estate related operating businesses. As of June 30, 2023, RMR had approximately $36 billion of real estate assets under management and the combined RMR managed companies had over $5 billion of annual revenues, more than 2,000 properties and over 20,000 employees. We believe that being managed by RMR is a competitive advantage for SVC because of RMR’s depth of management and experience in the real estate industry. We also believe RMR provides management services to us at costs that are lower than we would have to pay for similar quality services if we were selfmanaged.

Strategic Investors

The initial public offering of SVC occurred in May of 1995 as the company began investing in select service and extended stay hotels with the acquisition of 21 Courtyard by Marriott properties, a time when institutional investment in select service assets wasn’t as common as it is today.

SVC believed owning lodging properties that have lower fixed costs compared to full service hotels would provide a stable base of cash flows for SVC to increase its cash available for distribution from a dependable and diverse group of operators allowing it to periodically raise dividends over time, an objective that exists today.

In 2007, SVC began investing in full service travel centers, or truck stops, located principally along the United States Interstate Highway System. SVC’s travel centers are leased to TA, one of only three travel center brand owner operators in the country with interstate highway located truck stops of national scale. The travel center industry has experienced consolidation in recent years and this has allowed certain fuel fundamentals to improve, an important factor in the profitability of SVC’s travel centers.

Since 2007, federal regulations have decreased the number of hours a professional trucker can drive in a 24 hour period and we believe this has resulted in increased sales of non-fuel products and services at our travel centers.

In September 2019, Service Properties Trust completed its $2.4 billion acquisition of a net lease portfolio from Spirit MTA REIT. In conjunction with that transaction, the combined REIT changed its name to Service Properties Trust.

Experienced Managers

We believe that being managed by RMR is a competitive advantage for SVC because of RMR’s depth of management and broad-based experience in the real estate industry. As one example:

The RMR Group lodging asset management team partners with five hotel operators, several of whom are the largest and most experienced in the world, to maximize revenues, net operating income and guest service at our leased and managed hotels. This unique perspective enables RMR Asset Management, within appropriate legal bounds, to collaborate with operators in an informed way to compile business and service plans.

Efficient Operators

Leveraging the scale and expertise of RMR managed entities and employees respectively, SVC is able to realize benefits associated with:

We believe RMR provides management services to SVC at costs that are lower than we would have to pay for similar quality services.