Seven Hills Realty (SEVN) - Hoya Hotseat
Hoya Capital
Seven Hills Realty (Nasdaq: SEVN) is a small-cap commercial mortgage REIT ($190M market cap) that invests in floating-rate first mortgage loans secured by middle-market and transitional commercial real estate. Among the best-performing commercial mREITs over the past three years, SEVN’s book is comprised of 22 loans totaling $610M in principal with a weighted average coupon rate of 9.1%.
Roughly 37% of SEVN’s loan book is secured by apartments, 27% in office, 22% in industrial, and the balance in hotels and retail properties. SEVN is externally managed by Tremont Realty Capital - an affiliate of The RMR Group.
President Thomas Lorenzini joins the Hoya Hotseat to discuss the founding of SEVN through its merger with Tremont Realty in 2021, its strategy of focusing on the “underserved” middle-market, the lingering headwinds on CRE office loans, and its belief that the worst is over for overall CRE loan performance.