the hotel has been open less than a year, so it's still in its ramp up period. Additionally, the office component that that provides 45% vacancy on the whole site, and I think it's impairing the value of the property in whole because I think any potential buyer has a hard time underwriting what it would take to release that property or to lease that property as office given the challenges in DC for the office market.
— Yael Duffy
03Detailed Report
OPI
Company OPI
Period
Q2 2024
CurrencyUSD
Report TypeQuarterly Earnings
GeneratedMay 24, 2026
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Executive Summary
OPI reported a Q2 2024 normalized FFO of $33.2 million ($0.68 per share), topping the high end of guidance by $0.04 despite a sequential and year-over-year blend of headwinds. Management highlighted ongoing deleveraging actions, including a mid-June debt exchange that reduced total debt and extended near-term maturities, and a clear focus on liquidity and portfolio dispositions. In the quarter, NOI metrics softened as vacancies and held-for-sale assets weighed on operating performance, while leverage remained elevated with a debt burden that requires near-term strategic actions. Looking ahead, management guided Q3 2024 normalized FFO to $0.45–$0.47 per share and same-property cash basis NOI down 5% to 7% versus Q3 2023, reflecting expected tenant vacancies and higher operating costs tied to the debt-exchange-related expense run rate and summer seasonality. A central theme is OPI’s active disposition program of unencumbered assets (12 properties under agreement for $93.5 million) to reduce leverage and stabilize liquidity, albeit within the challenging funding environment for commercial real estate dispositions. The company's near-term trajectory hinges on (i) successful monetization of unencumbered assets, (ii) stabilizing occupancy and rent collection amid ongoing work-from-home headwinds, and (iii) effectively addressing the February 2025 debt maturity while maintaining liquidity buffers.
Key Performance Indicators
Revenue
Decreasing
123.69M
QoQ: -11.29% | YoY: -7.69%
Gross Profit
Decreasing
49.50M
40.02% margin
QoQ: -19.75% | YoY: -58.09%
Operating Income
Decreasing
20.37M
QoQ: -36.88% | YoY: -33.86%
Net Income
Increasing
76.17M
QoQ: 1 568.50% | YoY: 722.21%
EPS
Increasing
1.56
QoQ: 1 518.18% | YoY: 724.00%
Revenue Trend
Margin Analysis
Financial Highlights
Revenue in the quarter was $123.686 million, down 7.69% year-over-year and down 11.29% quarter-over-quarter. Gross profit was $49.497 million (gross margin ~40.0%), down 58.09% YoY and 19.75% QoQ. Operating income came in at $20.365 million (operating margin ~16.47%), down 33.86% YoY and 36.88% QoQ. Net income was $76.171 million, up 722.21% YoY and up 1,568.50% QoQ, reflecting notable non-operating/non-cash items and impairment dynamics in prior periods. EPS was $1.56 (diluted same), up 724% YoY and 1,518.18% QoQ. Normalized FFO for Q2 2024 was $33.2 million or $0.68 per share, versus $38.3 million or $0.79 per share in Q1 2024. Same-property cash basis NOI declined 7.7% YoY. Operating cash flow was $31.867 million; free cash flow was $14.897 million. Cash and cash equivalents at period end were $34.387 million; total liquidity stood at $160 million with $147 million available under the revolver. Total debt was $2.3 billion with a weighted average interest rate of 7.1% and a weighted average maturity of 5.2 years; the next debt maturity is $499 million of senior unsecured notes due February 2025.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
123.69M
-7.69%
-11.29%
Gross Profit
49.50M
-58.09%
-19.75%
Operating Income
20.37M
-33.86%
-36.88%
Net Income
76.17M
722.21%
1 568.50%
EPS
1.56
724.00%
1 518.18%
Key Financial Ratios
Gross Profit Margin
Good
40.00%
Gross profit margin is healthy and competitive within industry standards
Operating Profit Margin
Good
16.50%
Operating margin is healthy and competitive within industry standards
Net Profit Margin
Excellent
61.60%
Net profit margin is exceptional, indicating strong pricing power and operational efficiency
Return on Assets
Weak
2.00%
Return on assets suggests inefficient capital allocation
Return on Equity
Fair
5.73%
Return on equity is acceptable but below top-tier companies
Current Ratio
Healthy
1.93
Current ratio shows adequate liquidity to meet short-term obligations
Debt to Equity
High Risk
1.74
Debt-to-equity indicates high leverage and elevated financial risk
P/E Ratio
Value
0.30x
P/E ratio suggests potential undervaluation or stable earnings
Price to Book
Undervalued
0.07x
Trading below book value, potential value opportunity or distressed
Management Insights Available for Members
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