SecProbe.io

United States securities and exchange commission logo
June 29, 2023
Christopher J. Bilotto
President and Chief Operating Officer
Office Properties Income Trust
Two Newton Place
255 Washington Street, Suite 300
Newton, MA 02458
Re:Office Properties Income Trust
Amendment No. 2 to Registration Statement on Form S-4
Filed June 20, 2023
File No. 333-272105
Dear Christopher J. Bilotto:
            We have limited our review of your registration statement to those issues we have
addressed in our comments.  In some of our comments, we may ask you to provide us with
information so we may better understand your disclosure.
            Please respond to this letter by amending your registration statement and providing the
requested information.  If you do not believe our comments apply to your facts and
circumstances or do not believe an amendment is appropriate, please tell us why in your
response.
            After reviewing any amendment to your registration statement and the information you
provide in response to these comments, we may have additional comments.
Amendment No. 2 to Form S-4 filed June 20, 2023
Interests of OPI and DHC Trustees, Executive Officers and Manager in the Merger and the Other
Transactions, page 18
1.With respect to the independent and disinterested trustees of both OPI and DHC, please
disclose whether any of the trustees maintain relationships or positions with any entities
affiliated with RMR Group.  We note, for example, that William Lamkin currently serves
as an independent trustee of two RMR-affiliated entities, Service Properties Trust and
Seven Hills Realty Trust, and that Lisa Harris Jones currently serves on the board of
Industrial Logistics Properties Trust.  Please disclose the consideration given to these
interests in your recommendations that shareholders approve the merger in the proxy
statement/prospectus and include risk factor disclosure, if appropriate.

 FirstName LastNameChristopher J. Bilotto
 Comapany NameOffice Properties Income Trust
 June 29, 2023 Page 2
 FirstName LastNameChristopher J. Bilotto
Office Properties Income Trust
June 29, 2023
Page 2
Background of the Merger, page 81
2.We note that at its meeting on December 7, 2022, the OPI board discussed its financial
and operating performance, long-term strategy, and the potential for future deterioration in
the operating performance of office buildings in connection with the possibility of a
transaction with DHC.  Please describe any material aspects of OPI’s financial and
operating performance that led or related to OPI's consideration of a transaction with DHC
and discuss how such factors were considered.
3.We note that obtaining an amendment or modification to the OPI Credit Agreement is a
condition to closing the merger.  With a view towards disclosure, please provide a
discussion of any financing concerns considered with respect to OPI's ability to meet this
condition.
4.We note that each of the special committees was advised by its financial advisors about
their relationships with OPI, DHC, RMR, and RMR Inc., and that information about these
relationships was updated from time to time.  Please disclose the nature and significance
of these relationships and explain how the special committees evaluated this information
and concluded that these relationships would not interfere with the advisors’ ability to
provide independent advice.  Please also provide risk factor disclosure addressing material
conflicts of interest arising from these relationships.
5.We note that OPI’s change in distribution policy and the timing of its announcement in
conjunction with the announcement of the merger was discussed at several meetings of the
OPI special committee throughout February, March, and April, and by the DHC special
committee at several meetings in March.  Please provide enhanced disclosure regarding
the views of the DHC and OPI special committees and their advisors as expressed during
these meetings and in the negotiations between the parties on each of the following:
•the reason for the change in OPI’s distribution policy, which resulted in a reduction
of OPI’s dividend in connection with the transaction and the amount of the reduction;
•the timing of the announcement of OPI’s dividend reduction concurrently with the
announcement of the merger, particularly in light of the anticipated impact on OPI’s
share price and the consequent diminished value of the merger consideration to DHC
shareholders; and
•DHC’s willingness on March 27 to proceed without the price collar it had proposed
to OPI despite the downward fluctuations in OPI’s share price between March 2 and
March 24 and after taking into account, for example, “the encouraging financial
performance of DHC during the first month of 2023, and the potential implications of
improved performance on DHC’s financing situation,” and the fact that as of March
24, the DHC special committee thought that DHC’s financial performance indicated
that DHC would outperform projections for the first quarter of 2023.
6.We note that RMR provided three-year projections to the DHC and OPI boards of trustees
in December 2022.  DHC and OPI management then provided five-year projections to
BofA and J.P. Morgan, respectively, in January 2023, which they updated several times

 FirstName LastNameChristopher J. Bilotto
 Comapany NameOffice Properties Income Trust
 June 29, 2023 Page 3
 FirstName LastNameChristopher J. Bilotto
Office Properties Income Trust
June 29, 2023
Page 3
prior to entering into the merger agreement.  Please provide clear disclosure regarding the
individuals from OPI and DHC management that were ultimately responsible for
preparing the prospective financial information for each respective entity.  In particular,
please disclose the involvement of the external manager, RMR Group Inc., in the
preparation of this prospective financial information.  Also clarify why the parties
determined to increase the projections from three to five years, and disclose any material
assumptions made and associated risks about growth rates after the third year.
7.Please elaborate on why the DHC special committee, at its meetings on January 25 and
27, requested DHC management to revise the DHC January 2023 projections to make
them “less conservative.”  We note that at a meeting on January 25, DHC management
discussed recent negative changes in DHC's operating environment and that on January
27, DHC noted that the RMR termination fee made it impractical to obtain a change of
control proposal from a third party other than OPI.  Please clarify how these
considerations related to the request for less conservative projections.
8.Please provide additional context around the need for the sensitivity cases for the DHC
projections that were prepared between January 27 and February 3.  Explain the
significance of the difference between net operating income of SHOP communities
managed by AlerisLife versus all SHOP communities of DHC.  Also, please explain the
significance of the AlerisLife acquisition and related transactions to DHC as discussed at
the DHC special committee meeting on February 3.  Finally, please revise your disclosure
to clarify who prepared the ultimate projections that were considered using those
sensitivity analyses, and if such analyses resulted in multiple sets of projections being
given to or used by the DHC special committee and/or the OPI special committee or their
advisors, please explain the rationale for this and include these in the applicable
subsections for the unaudited prospective financial information, or advise.
9.Please clarify why DHC’s compensation committee considered and then determined not to
terminate its agreements with RMR for performance reasons in February 2023, as reported
to the DHC board of trustees at a meeting on March 1, 2023.
10.We note disclosure on page 102 that in connection with RMR’s rejection of DHC’s
proposal to waive business management incentive fees, RMR provided incentive fee
calculations that demonstrated that as of March 31, 2023, RMR did not expect to earn a
business management incentive fee for DHC or OPI in 2023.  However, disclosure on
pages 101 and 146 indicates that RMR will earn an incentive fee by virtue of closing the
transaction that it would not have earned with respect to DHC or OPI on a stand-alone
basis.  Revise to clarify whether the DHC or OPI special committees considered the
amount of the increased or additional incentive fees or any estimate thereof in connection
with their requests for incentive fee waivers and their negotiations of the fees and other
terms of the RMR Letter Agreement or OPI’s amended property and management
agreements with RMR to become effective after the merger.  Please also disclose such
amounts here and on page 146 in the section entitled “Interests of the . . . Manager in the
Merger and the Other Transactions,” and identify who negotiated on behalf of RMR and

 FirstName LastNameChristopher J. Bilotto
 Comapany NameOffice Properties Income Trust
 June 29, 2023 Page 4
 FirstName LastName
Christopher J. Bilotto
Office Properties Income Trust
June 29, 2023
Page 4
disclose whether any of these individuals also serve as managing trustees or are otherwise
affiliates of DHC and OPI.  Finally, please revise the paragraph captioned "RMR
Management Agreements" on page 117 to clarify the nature of the changes RMR was
unwilling to make that were viewed as negative factors by the DHC special committee
and board of trustees.
Recommendation of the DHC Special Committee and the DHC Board of Trustees . . ., page 114
11.We note that the DHC special committee and board of trustees considered as a material
factor in support of the merger that the implied value of $1.70 per DHC Common Share,
representing a 34.09% premium to the closing price of DHC Common Shares on April 10,
2023, was an “attractive valuation” for DHC Common Shares.  We also note that the DHC
special committee and board of trustees considered as a negative factor that the
simultaneous announcements of the reduction in OPI’s regular distribution and the merger
were “expected to have a negative impact on the market price of OPI Common Shares”
and that OPI was not willing to provide price protection around the fixed exchange ratio.
Please elaborate on the negative impact on the market price of OPI Common Shares that
the DHC special committee and board of trustees “expected,” including whether it was
estimated or quantified, whether the special committee and board of trustees considered
how it would affect the 34.09% premium, and why, in view of this expectation, the DHC
special committee and board of trustees nevertheless believed the valuation was
attractive.  In light of the fixed exchange ratio and the more recent implied value as of
June 16, 2023 of $1.21 per share, please address whether the special committee and board
continue to believe this is an attractive value.
Opinion of Financial Advisor to the OPI Special Committee, page 114; Opinion of Financial
Advisor to the DHC Special Committee, page 127
12.We note that the financial advisors used the closing price of OPI common shares of
$11.80 as of April 6, 2023 in their analyses of the implied per share consideration to DHC
shareholders in the merger.  In addition, we note that the parties announced the merger
and the OPI dividend reduction from $2.20 to $1.00 per share on April 11, 2023.  With a
view towards disclosure, please discuss whether this dividend reduction and its potential
impact on the trading price of OPI common shares was considered within the material
assumptions underlying the financial advisors’ analyses.  If not, please revise the
“Recommendations . . .” sections beginning on pages 107 (for OPI) and 114 (for DHC) to
explain why the special committees and boards of trustees relied on the fairness opinions
and cited them as material factors weighing in favor of the merger in approving and
recommending the merger to shareholders.  Also address whether the special committees
and boards of trustees continue to rely on the opinions to support their recommendations,
given the dividend reduction and the $8.22 closing price of OPI Common Shares on June
16.

 FirstName LastNameChristopher J. Bilotto
 Comapany NameOffice Properties Income Trust
 June 29, 2023 Page 5
 FirstName LastName
Christopher J. Bilotto
Office Properties Income Trust
June 29, 2023
Page 5
13.Please provide us supplementally with copies of any board books or other written
materials provided by the financial advisors to OPI and DHC in connection with their
analyses and opinions.
Unaudited Prospective Financial Information of OPI, page 138
14.Please disclose whether the projections in this section are the OPI Financial Projections
that updated the OPI January 2023 Projections.  Clarify whether other projections, such as
the OPI January 2023 Projections and the three-year projections prepared by RMR were
also provided to J.P. Morgan, BofA or DHC.  Tell us what consideration you have given
to including all of these projections in the filing.
Unaudited Prospective Financial Information of DHC, page 142
15.Please disclose whether the projections in this section are the DHC Financial Projections
that updated the DHC February 2023 Projections.  Clarify whether other projections, such
as the DHC February 2023 Projections, DHC January 2023 Projections and three-year
projections prepared by RMR and the DHC May 2022 Projections were also provided to
BofA, J.P. Morgan or OPI.  Tell us what consideration you have given to including all of
these projections in the filing.
            We remind you that the company and its management are responsible for the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action or absence of
action by the staff.
            Refer to Rules 460 and 461 regarding requests for acceleration.  Please allow adequate
time for us to review any amendment prior to the requested effective date of the registration
statement.
            You may contact Isabel Rivera at 202-551-3518 or Pam Long at 202-551-3765 if you
have any questions.
Sincerely,
Division of Corporation Finance
Office of Real Estate & Construction
cc:       Mark A. Stagliano