Service Properties Trust Q2 Loss Widens to $224M; Cash Dwindles to $5.5M Amid Hotel Write-Downs
SVC sits 37% above its 52-week low of $5.65.
Summary
Service Properties Trust reported a $223.8M Q2 net loss, driven by $189.1M in hotel impairment charges, while cash plunged to $5.5M. A new tax risk could further pressure liquidity.
Key Events · Earnings and Guidance · SVC
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Q2 Net Loss Widens to $223.8M
Net loss of $223.8M ($1.75/share) vs $38.2M loss in Q2 2025, driven by $189.1M in asset impairment charges on hotels and net lease properties.
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Cash Collapses to $5.5M
Cash and cash equivalents fell from $346.8M at year-end 2025 to $5.5M at June 30, 2026, despite raising $541.8M in equity and $745M in mortgage notes earlier in the year.
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Hotel Revenue Down 20.9% on Property Sales
Hotel operating revenues dropped to $320.1M from $404.4M, primarily due to the sale of 107 hotels over the past year. Comparable hotel RevPAR increased 6.5%.
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New Section 382 Tax Risk Emerges
The company warns that an ownership change could severely limit use of net operating losses and tax depreciation, potentially forcing higher taxable income and straining REIT distribution requirements.
Analysis · SVC · Real Estate & Construction
Service Properties Trust's Q2 results reveal a sharp deterioration. The net loss ballooned to $223.8 million from $38.2 million a year ago, driven by $189.1 million in asset impairment charges — mostly from hotels being sold at a loss. Cash on hand collapsed to just $5.5 million from $346.8 million at year-end, despite raising $541.8 million in an April equity offering and $745 million in mortgage notes. The company used those proceeds to redeem $1.55 billion of high-cost debt, but the cash burn from operations and capital spending left it with razor-thin liquidity. A new risk factor warns that an ownership change under Section 382 could severely limit its ability to use net operating losses and tax depreciation, potentially forcing higher taxable income and straining its ability to meet REIT distribution requirements. The company is racing to sell hotels — 12 are under agreement for $77.4 million — but the pace of asset sales may not be fast enough to offset ongoing losses and capital needs.
At the time of this filing, SVC was trading at $7.76 on NASDAQ in the Real Estate & Construction sector, with a market capitalization of approximately $1B. The 52-week trading range was $5.65 to $15.05. This filing was assessed with negative market sentiment and an importance score of 8 out of 10.