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On January 7, Ladenburg initiated coverage of Seven Hills Realty Trust (NASDAQ:SEVEN) with a buy rating and a $10 price target, highlighting improved forward visibility following recent balance sheet actions and portfolio growth initiatives. The launch comes after a volatile period for the stock, during which the stock fell sharply despite management executing on previously outlined strategic goals.

A key catalyst underpinning the investment thesis is Seven Hills’ transferable rights offering completed on December 11, 2025, which raised $65.2 million in gross proceeds at $8.65 per share. The capital increase was designed to fund portfolio expansion and was rapidly deployed in income-generating assets, including three variable-rate prime mortgage loans totaling $101.3 million, reflecting disciplined underwriting across various types of commercial real estate assets. The timely deployment of capital mitigates dilution concerns and positions the REIT to regain earnings momentum in the new lending season.

Operationally, Seven Hills Realty Trust ( NASDAQ:SEVN ) reported softer Q3 2025 results, with distributable earnings of $0.29 per share on revenue of $7.1 million, reflecting pressure from lower net interest margins before the capital increase. However, management reaffirmed confidence in near-term stabilization by closing planned new investments and targeting fourth-quarter distributable earnings of approximately $0.30 per share, sufficient to cover the quarterly distribution of $0.28. Despite the stock’s retreat to multi-year lows in early December, the combination of renewed capital, portfolio expansion and improved revenue coverage supports a more constructive outlook.

Based in Newton, Mass., Seven Hills Realty Trust (NASDAQ:SEVN) focuses on variable-rate mortgage loans secured by middle-market transitional commercial real estate, a niche that stands to benefit significantly as rollout scales and rate dynamics stabilize, making recent weakness an opportunity for long-term income-focused investors.

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