- Service Properties Trust has been hit extremely hard by COVID-19 due to a drastic decline in hotel and travel center revenue.
- The REIT is a client of RMR Group and owns many properties leased to companies that are also managed by RMR, creating potential conflicts of interest.
- After estimating SVC's net asset value, it appears the stock is generally undervalued. However, high leverage creates tremendous valuation uncertainty.
- SVC could bounce from here, but it does not appear to be undervalued enough to justify its high financial and operational risks.
For further details see:
Assessing Survival Potential: Service Properties Trust