Equity Method Investments

6 Months Ended

Mar. 31, 2022

Equity Method Investments and Joint Ventures [Abstract]

Equity Method Investments

Equity Method Investments

As of March 31, 2022, we had equity method investments in SEVN and TA that were accounted for under the fair value option.

Seven Hills Realty Trust

As of March 31, 2022, Tremont Realty Capital owned 825,651, or approximately 5.7%, of SEVN’s outstanding common shares. We account for our investment in SEVN using the equity method of accounting because we are deemed to exert significant influence, but not control, over SEVN’s most significant activities. As a result of the Merger, we elected the fair value option to account for our equity method investment in SEVN and determine fair value using the closing price of SEVN’s common shares as of the end of the period, which is a Level 1 fair value input. The aggregate market value of our investment in SEVN at March 31, 2022 and September 30, 2021, based on quoted market prices, was $9,189 and $8,513, respectively, and is included in equity method investments accounted for under the fair value option in our condensed consolidated balance sheets. The unrealized gain in our condensed consolidated statements of income related to our investment in SEVN was $826 and $884 for the three and six months ended March 31, 2022, respectively. During the three and six months ended March 31, 2022, we received distributions from SEVN of $208.

Immediately prior to the consummation of the Merger, Tremont Realty Capital owned 1,600,100, or approximately 19.3%, of TRMT’s then outstanding common shares that were accounted for under the equity method of accounting. Pursuant to the equity method, we recorded our share of earnings from our investment in TRMT in equity in earnings of investees in our condensed consolidated statements of income which totaled $303 and $727 for the three and six months ended March 31, 2021, respectively. We received aggregate distributions from TRMT of $847 and $864 during the three and six months ended March 31, 2021, respectively. Pursuant to the Merger, each common share of TRMT converted to 0.516 common shares of SEVN.

TravelCenters of America Inc.

As of March 31, 2022, we owned 621,853, or approximately 4.2%, of TA’s outstanding common shares. We account for our investment in TA using the equity method of accounting because we are deemed to exert significant influence, but not control, over TA’s most significant activities. We elected the fair value option to account for our equity method investment in TA and determine fair value using the closing price of TA’s common shares as of the end of the period, which is a Level 1 fair value input. The aggregate market value of our investment in TA at March 31, 2022 and September 30, 2021, based on quoted market prices, was $26,715 and $30,963, respectively, and is included in equity method investments accounted for under the

fair value option in our condensed consolidated balance sheets. The unrealized (loss) gain in our condensed consolidated statements of income related to our investment in TA was $(5,386) and $(3,402) for the three months ended March 31, 2022 and 2021, respectively, and $(4,248) and $4,720 for the six months ended March 31, 2022 and 2021, respectively.