OFFICE PROPERTIES INCOME TRUST Management’s Discussion and Analysis of Financial Condition and Results of Operations (form 10-Q)

The following information should be read in conjunction with our consolidated financial statements and accompanying notes included in Part I, Item 1 of this Quarterly Report on Form 10-Q and our 2021 Annual Report.

OVERVIEW (dollars in thousands, except per share and per square foot data)

We are a real estate investment trust, or REIT, organized under Maryland law. As
of September 30, 2022, our wholly owned properties were comprised of 162
properties and we had noncontrolling ownership interests of 51% and 50% in two
unconsolidated joint ventures that own three properties containing approximately
444,000 rentable square feet. As of September 30, 2022, our properties are
located in 31 states and the District of Columbia and contain approximately
21,211,000 rentable square feet. As of September 30, 2022, our properties were
leased to 276 different tenants with a weighted average remaining lease term
(based on annualized rental income) of approximately 6.3 years. The U.S.
government is our largest tenant, representing approximately 19.1% of our
annualized rental income as of September 30, 2022. The term annualized rental
income as used herein is defined as the annualized contractual base rents from
our tenants pursuant to our lease agreements as of September 30, 2022, plus
straight line rent adjustments and estimated recurring expense reimbursements to
be paid to us, and excluding lease value amortization.

Certain changes in office space utilization following the COVID-19 pandemic,
including increased remote work arrangements, continue to impact the market. The
utilization and demand for office space continues to evolve and the ultimate
impact of current trends on the demands for office space at our properties
remains uncertain and subject to change. Accordingly, we do not yet know the
full extent of the impacts on our or our tenants' businesses and operations.

In response to inflationary pressures, the U.S. Federal Reserve increased the
federal funds rate by 300 basis points over five consecutive meetings from March
2022 to September 2022 and has signaled that further increases are likely to
occur. These inflationary pressures and rising interest rates in the United
States and globally have given rise to increasing concerns that the U.S. economy
is now in, or may soon enter, an economic recession and they have caused
disruptions in the financial markets. Sustained inflationary pressures,
increased interest rates, an economic recession or continued or intensified
disruptions in the financial markets could adversely affect our financial
condition and that of our tenants, could adversely impact the ability of our
tenants to renew our leases or pay rent to us, would impair our ability to
effectively deploy our capital or realize upon investments on favorable terms,
may restrict our access to, and would likely increase our cost of capital, and
may cause the values of our properties and of our securities to decline.

For more information and risks relating to the COVID-19 pandemic, inflation and
changes in market interest rates and their impacts on us and our business, see
Part I, Item IA, "Risk Factors", of our 2021 Annual Report.

Property Operations

Unless otherwise noted, the data presented in this section includes properties
classified as held for sale as of September 30, 2022 and excludes three
properties owned by two unconsolidated joint ventures in which we own 51% and
50% interests. For more information regarding our properties classified as held
for sale and our two unconsolidated joint ventures, see Note 3 to our Condensed
Consolidated Financial Statements included in Part I, Item 1 of this Quarterly
Report on Form 10-Q.

Occupancy data for our properties since September 30, 2022 and 2021 are as follows (square feet in thousands):

                                                            All Properties (1)(2)                            Comparable Properties (3)
                                                                September 30,                                      September 30,
                                                        2022                      2021                     2022                      2021
Total properties                                                 162                      178                    150                      150
Total rentable square feet (4)                             21,211                   23,274                    19,139                   19,144
Percent leased (5)                                           90.7  %                  89.0  %                   93.6  %                  93.1  %



(1)Based on properties we owned on September 30, 2022 and 2021, respectively.
(2)Includes one leasable land parcel.
(3)Based on properties we owned continuously since January 1, 2021; excludes
properties classified as held for sale and properties undergoing significant
redevelopment, if any, and three properties owned by two unconsolidated joint
ventures in which we own 51% and 50% interests.
(4)Subject to changes when space is remeasured or reconfigured for tenants.
(5)Percent leased includes (i) space being fitted out for tenant occupancy
pursuant to our lease agreements, if any, and (ii) space which is leased, but is
not occupied or is being offered for sublease by tenants, if any, as of the
measurement date.

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The average effective rental rate per square foot for our properties for three and nine months ended September 30, 2022 and 2021 are as follows:

                                                   Three Months Ended September 30,               Nine Months Ended September 30,
                                                       2022                   2021                    2022                   2021
Average effective rental rate per
square foot (1):
 All properties (2)                            $           29.19          $    28.86          $           29.44          $    27.12
 Comparable properties (3)                     $           29.09          $    28.84          $           27.64          $    27.11



(1)Average effective rental rate per square foot represents annualized total
rental income during the period specified divided by the average rentable square
feet leased during the period specified.
(2)Based on properties we owned on September 30, 2022 and 2021, respectively.
(3)Based on properties we owned continuously since July 1, 2021 and January 1,
2021, respectively; excludes properties classified as held for sale and
properties undergoing significant redevelopment, if any, and three properties
owned by two unconsolidated joint ventures in which we own 51% and 50%
interests.

During the three and nine months ended September 30, 2022, changes in rentable
square feet leased and available for lease at our properties were as follows
(square feet in thousands):
                                                             Three Months Ended September 30, 2022                                                  

Nine Months ended September 30, 2022

                                           Leased                    Available for Lease                     Total                 Leased                    Available for Lease                   Total
Beginning of period                        20,100                           2,391                             22,491               20,817                           2,454                          23,271
Changes resulting from:

Disposition of properties                    (827)                           (472)                            (1,299)              (1,349)                           (728)                         (2,077)
Lease expirations                            (643)                            643                                  -               (2,088)                          2,088                               -
Lease renewals (1)                            383                            (383)                                 -                1,272                          (1,272)                              -
New leases (1)                                223                            (223)                                 -                  585                            (585)                              -

Remeasurements (2)                              -                              19                                 19                   (1)                             18                              17
End of period                              19,236                           1,975                             21,211               19,236                           1,975                          21,211



(1)Based on leases entered during the three and nine months ended September 30,
2022.
(2)Rentable square feet are subject to changes when space is remeasured or
reconfigured for tenants.

Leases at our properties totaling approximately 643,000 and 2,088,000 rentable
square feet expired during the three and nine months ended September 30, 2022,
respectively. During the three and nine months ended September 30, 2022, we
entered into new and renewal leases as summarized in the following tables
(square feet in thousands):
                                                                   Three 

The months are over September 30, 2022

                                                               New Leases           Renewals            Total
Rentable square feet leased                                          223                383               606
Weighted average rental rate change (by rentable                    59.1  %             0.2  %           21.6  %
square feet)
Tenant leasing costs and concession commitments (1)         $     33,957    

$9,056 $43,013
Tenant leasing expenses and concession commitments per rentable square foot (1)

                                    $     152.13           $  23.66          $  70.98
Weighted (by square feet) average lease term (years)                 9.9                5.5               7.2

Total leasing expenses and concession commitments per rental square foot per year (1)

                           $      15.33    

$4.27 $9.92


                                                                    Nine 

The months are over September 30, 2022

                                                              New Leases           Renewals            Total
Rentable square feet leased                                         585              1,272              1,857
Weighted average rental rate change (by rentable                   27.8  %             2.7  %            11.0  %
square feet)
Tenant leasing costs and concession commitments (1)         $    72,011     

$41,119 $113,130
Tenant leasing expenses and concession commitments per rentable square foot (1)

                                    $    123.03           $  32.35          $   60.94
Weighted (by square feet) average lease term (years)                9.8                8.6                9.0

Total leasing expenses and concession commitments per rental square foot per year (1)

                           $     12.62     

$3.75 $6.79

(1)Includes commitments made for lease expenditures and concessions, such as tenant improvements, lease commissions, tenant payments and free rent.

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During the three and nine months ended September 30, 2022, changes in effective
rental rates per square foot achieved for new leases and lease renewals at our
properties that commenced during the three and nine months ended September 30,
2022, when compared to prior effective rental rates per square foot in effect
for the same space (and excluding space acquired vacant), were as follows
(square feet in thousands):

                                             Three Months Ended September 30, 2022                                           Nine Months Ended September 30, 2022
                             Old Effective                                                                  Old Effective
                                Rent Per           New Effective Rent                                          Rent Per           New Effective Rent
                            Square Foot (1)        Per Square Foot (1)        Rentable Square Feet         Square Foot (1)        Per Square Foot (1)        Rentable Square Feet
New leases                  $       30.67          $          32.73                     108                $       15.07          $          15.43                     368
Lease renewals              $       29.38          $          29.97                     328                $       28.08          $          29.28                   1,356
Total leasing
activity                    $       29.70          $          30.65                     436                $       25.30          $          26.32                   1,724

(1) Effective rental rates include base contractual rents from our tenants pursuant to our lease agreements, including straight-line rent adjustments and estimated expense payments payable in us, and does not include amortization in the lease amount.

In three and nine months completed September 30, 2022 and 2021, the amounts capitalized on our properties for costs related to leasing, building improvements and development, redevelopment and other activities are as follows:

                                                     Three Months Ended September 30,            Nine Months Ended September 30,
                                                         2022                   2021                 2022                2021

Lease related costs (1)                           $         17,297         

$17,074 $42,092 $35,259
Building improvements (2)

                                    8,585               9,267               16,070              21,558
Recurring capital expenditures                              25,882              26,341               58,162              56,817
Development, redevelopment and other
activities (3)                                              36,811              13,272              114,637              30,916
Total capital expenditures                        $         62,693          

$39,613 $172,799 $87,733


(1)Lease related costs generally include capital expenditures used to improve
tenants' space or amounts paid directly to tenants to improve their space and
leasing related costs, such as brokerage commissions and other tenant
inducements.
(2)Building improvements generally include expenditures to replace obsolete
building components and expenditures that extend the useful life of existing
assets.
(3)Development, redevelopment and other activities generally include capital
expenditure projects that reposition a property or result in new sources of
revenue.

In addition to the capital expenditures described above, we contributed $712 and
$2,914 to one of our unconsolidated joint ventures during the three and nine
months ended September 30, 2022, respectively. Also, as of September 30, 2022,
we had estimated unspent leasing related obligations of $137,420, of which we
expect to spend $77,251 over the next 12 months.

As of September 30, 2022, we had leases at our properties totaling approximately
1,596,000 rentable square feet that were scheduled to expire through September
30, 2023. As of October 26, 2022, we expect tenants with leases totaling
approximately 696,000 rentable square feet that are scheduled to expire through
September 30, 2023, not to renew their leases upon expiration and we cannot be
sure as to whether other tenants will renew their leases upon expiration.
However, we continue to proactively engage with our existing tenants and are
focused on our overall tenant retention. Prevailing market conditions and
government and other tenants' needs at the time we negotiate and enter leases or
lease renewals will generally determine rental rates and demand for leased space
at our properties, all of which factors are beyond our control. Whenever we
renew or enter into new leases for our properties, we intend to seek rents which
are equal to or higher than our historical rents for the same properties;
however, our ability to maintain or increase the rents for our current
properties will depend in large part upon market conditions, which are beyond
our control. We cannot be sure of the rental rates which will result from our
ongoing negotiations regarding lease renewals or any new or renewed leases we
may enter. Also, we may experience material declines in our rental income due to
vacancies upon lease expirations or early terminations or lower rents upon lease
renewal or reletting. Additionally, we may incur significant costs and make
significant concessions to renew our leases with current tenants or lease our
properties to new tenants.

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As of September 30, 2022, our lease expirations by year were as follows (square
feet in thousands):

                                                                                                                                         Annualized
                                 Number of Leases                  Leased                   Percent of            Cumulative            Rental Income         Percent of            Cumulative
         Year (1)                    Expiring             Square Feet Expiring (2)            Total            Percent of Total           Expiring               Total           Percent of Total
2022                                       17                         160                         0.8  %                  0.8  %       $      4,443                 0.8  %                  0.8  %
2023                                       64                       2,374                        12.3  %                 13.1  %             77,045                14.0  %                 14.8  %
2024                                       50                       3,028                        15.7  %                 28.8  %             79,495                14.4  %                 29.2  %
2025                                       43                       2,036                        10.6  %                 39.4  %             43,564                 7.9  %                 37.1  %
2026                                       36                       1,565                         8.1  %                 47.5  %             41,418                 7.5  %                 44.6  %
2027                                       35                       2,055                        10.7  %                 58.2  %             52,053                 9.5  %                 54.1  %
2028                                       17                       1,282                         6.7  %                 64.9  %             49,042                 8.9  %                 63.0  %
2029                                       18                         732                         3.8  %                 68.7  %             22,550                 4.1  %                 67.1  %
2030                                       22                         839                         4.4  %                 73.1  %             24,585                 4.5  %                 71.6  %
2031 and thereafter                        57                       5,165                        26.9  %                100.0  %            156,408                28.4  %                100.0  %
Total                                     359                      19,236                       100.0  %                               $    550,603               100.0  %

Weighted average remaining lease term (in years)                    6.0                                                                      6.3



(1)The year of lease expiration is pursuant to current contract terms. Some of
our leases allow the tenants to vacate the leased premises before the stated
expirations of their leases with little or no liability. As of September 30,
2022, tenants occupying approximately 3.6% of our rentable square feet and
responsible for approximately 3.5% of our annualized rental income as of
September 30, 2022 had exercisable rights to terminate their leases before the
stated terms of their leases expire. Also, in 2023, 2024, 2025, 2026, 2027,
2028, 2029, 2030, 2031, 2035, 2037 and 2040, early termination rights become
exercisable by other tenants who occupied an additional approximately 5.4%,
2.8%, 4.5%, 0.9%, 0.9%, 1.6%, 0.8%, 0.7%, 0.1%, 0.4%, 0.1% and 0.3% of our
rentable square feet, respectively, and contributed an additional approximately
6.4%, 3.0%, 8.3%, 1.2%, 1.3%, 1.7%, 1.3%, 0.9%, 0.1%, 0.5%, 0.2% and 0.4% of our
annualized rental income, respectively, as of September 30, 2022. In addition,
as of September 30, 2022, pursuant to leases with 10 of our tenants, these
tenants had rights to terminate their leases if their respective legislature or
other funding authority does not appropriate rent amounts in their respective
annual budgets. These 10 tenants occupied approximately 5.4% of our rentable
square feet and contributed approximately 6.1% of our annualized rental income
as of September 30, 2022.
(2)Leased square feet is pursuant to leases existing as of September 30, 2022,
and includes (i) space being fitted out for tenant occupancy pursuant to our
lease agreements, if any, and (ii) space which is leased, but is not occupied or
is being offered for sublease by tenants, if any. Square feet measurements are
subject to changes when space is remeasured or reconfigured for new tenants.

We generally will seek to renew or extend the terms of leases at properties with
tenants when they expire. Because of the capital many of our single tenants have
invested in the properties they lease from us and because many of these
properties appear to be of strategic importance to such tenants' businesses, we
believe that it is likely that most of these tenants will renew or extend their
leases prior to when they expire. However, increases in remote work and changes
in space utilization may cause our tenants not to renew or extend their leases
when they expire, or to seek to renew their leases for less space than they
currently occupy. If we are unable to extend or renew our leases, or we renew
leases for reduced space, it may be time consuming and expensive to relet some
of these properties.

We believe that recent government budgetary and spending priorities and
enhancements in technology have resulted in a decrease in government office use
for employees. Furthermore, over the past several years, government tenants have
reduced their space utilization per employee and consolidated government tenants
into existing government owned properties. This activity has reduced the demand
for government leased space. Our historical experience with respect to
properties of the type we own that are majority leased to government tenants has
been that government tenants frequently renew leases to avoid the costs and
disruptions that may result from relocating their operations. However, efforts
to manage space utilization rates may result in our tenants exercising early
termination rights under our leases, vacating our properties upon expiration of
our leases in order to relocate, or renewing their leases for less space than
they currently occupy. Also, our government tenants' desire to reconfigure
leased office space to manage utilization per employee may require us to spend
significant amounts for tenant improvements, and tenant relocations are often
more prevalent in those circumstances. Increasing uncertainty with respect to
government agency budgets and funding to implement relocations, consolidations
and reconfigurations has resulted in delayed decisions by some of our government
tenants and their reliance on short term lease renewals; however, activity prior
to the outbreak of the COVID-19 pandemic suggested that the U.S. government had
begun to shift its leasing strategy to include longer term leases and was
actively exploring 10 to 20 year lease terms at renewal, in some instances.
Given the significant uncertainties, including the extent to which remote or
alternative work arrangements may continue or increase, we are unable to
reasonably project what the financial impact of market conditions or changing
government circumstances will be on the demand for leased space at our
properties and our financial results for future periods.

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As of September 30, 2022, we derived 22.4% of our annualized rental income from
our properties located in the metropolitan Washington, D.C. market area, which
includes Washington, D.C., Northern Virginia and suburban Maryland. A downturn
in economic conditions in this area could result in reduced demand from tenants
for our properties or reduce the rents that our tenants in this area are willing
to pay when our leases expire or terminate and when renewal or new terms are
negotiated. Additionally, in recent years there has been a decrease in demand
for new leased office space by the U.S. government in the metropolitan
Washington, D.C. market area, and that could increase competition for government
tenants and adversely affect our ability to retain government tenants when our
leases expire.

Our manager, RMR, employs a tenant review process for us. RMR assesses tenants
on an individual basis based on various applicable credit criteria. In general,
depending on facts and circumstances, RMR evaluates the creditworthiness of a
tenant based on information concerning the tenant that is provided by the tenant
and, in some cases, information that is publicly available or obtained from
third party sources. We consider investment grade tenants to include: (a)
investment grade rated tenants; (b) tenants with investment grade rated parent
entities that guarantee the tenant's lease obligations; and/or (c) tenants with
investment grade rated parent entities that do not guarantee the tenant's lease
obligations. As of September 30, 2022, tenants contributing 52.4% of annualized
rental income were investment grade rated (or their payment obligations were
guaranteed by an investment grade rated parent) and tenants contributing an
additional 10.6% of annualized rental income were subsidiaries of an investment
grade rated parent (although these parent entities were not liable for the
payment of rents).

Number of September 30, 2022tenants representing 1% or more of our gross annual rental income are as follows (square feet in thousands):

                                                                                                                                                 % of Total
                                                                                                    % of Leased           Annualized          Annualized Rental
                    Tenant                          Credit Rating                 Sq. Ft.             Sq. Ft.           Rental Income              Income
  1    U.S. Government                             Investment Grade               3,894                   20.2  %       $   105,440                    

19.1 %

  2    Alphabet Inc. (Google)                      Investment Grade                 386                    2.0  %            23,713                     

4.3%

  3    Shook, Hardy & Bacon L.L.P.                    Not Rated                     596                    3.1  %            19,336                     

3.5%

  4    IG Investments Holdings LLC                    Not Rated                     338                    1.8  %            16,788                     

3.0%

  5    Bank of America Corporation                 Investment Grade                 577                    3.0  %            15,766                       2.9  %
  6    State of California                         Investment Grade                 523                    2.7  %            15,762                       2.9  %
  7    Commonwealth of Massachusetts               Investment Grade                 311                    1.6  %            12,260                       2.2  %
  8    CareFirst Inc.                                 Not Rated                     207                    1.1  %            11,498                       2.1  %
  9    Northrop Grumman Corporation                Investment Grade                 337                    1.8  %            11,465                       2.1  %
 10    Tyson Foods, Inc.                           Investment Grade                 248                    1.3  %            11,042                       2.0  %

Sonesta International Hotels

 11    Corporation (1)                                Not Rated                     230                    1.2  %            10,745                     

2.0%

 12    CommScope Holding Company Inc             Non Investment Grade               228                    1.2  %             9,370                     

1.7%

 13    Sonoma Biotherapeutics, Inc. (2)               Not Rated                      84                    0.4  %             7,468                       1.4  %
 14    State of Georgia                            Investment Grade                 308                    1.6  %             7,383                       1.3  %
 15    PNC Bank                                    Investment Grade                 441                    2.3  %             6,924                       1.3  %
 16    Micro Focus International plc             Non Investment Grade               215                    1.1  %             6,905                       1.3  %
 17    Compass Group plc                           Investment Grade                 267                    1.4  %             6,703                       1.2  %
 18    ServiceNow, Inc.                            Investment Grade                 149                    0.8  %             6,637                       1.2  %
 19    Allstate Insurance Co.                      Investment Grade                 468                    2.4  %             6,479                       1.2  %
 20    Leidos Holdings Inc.                        Investment Grade                 159                    0.8  %             6,117                       1.1  %
 21    Automatic Data Processing, Inc.             Investment Grade                 289                    1.5  %             6,087                     

1.1%

 22    Church & Dwight Co., Inc.                   Investment Grade                 250                    1.3  %             6,037                       1.1  %
       Total                                                                     10,505                   54.6  %       $   329,925                      60.0  %


(1)In June 2021, we entered into a 30-year lease with Sonesta. The lease relates
to the redevelopment of a property we own in Washington, D.C to a mixed use and
Sonesta's lease relates to the planned hotel component of the property. The term
of the lease commences upon our delivery of the completed hotel, which is
estimated to occur in the second quarter of 2023. For more information about our
lease with Sonesta, see Note 10 to our Condensed Consolidated Financial
Statements included in Part I, Item I of this Quarterly Report on Form 10-Q.
(2)In August 2022, we entered into an approximately 10-year lease with Sonoma
Biotherapeutics, Inc. at a property we own in Seattle, WA that is currently
undergoing redevelopment. The term of the lease is estimated to commence in the
fourth quarter of 2023.

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Disposition Activities

Within nine months completed September 30, 2022we sold 16 properties containing approximately 2,077,000 rentable square feet for an aggregate sales price of $195,920excluding closing costs.

Based on current real estate market conditions, including rising interest rates,
we expect the pace of our dispositions to moderate. However, we continue to
evaluate our portfolio to strategically recycle capital and are currently in
various stages of marketing certain of our properties for sale, and we may
decide to seek to sell additional properties in the future. As of October 26,
2022, we have entered into agreements to sell five properties, including one
leasable land parcel, containing approximately 338,000 rentable square feet for
an aggregate sales price of $20,450, excluding closing costs. These sales are
expected to occur before the end of the fourth quarter of 2022. However, these
sales are subject to conditions; accordingly, we cannot be sure that we will
complete these sales or that these sales will not be delayed or the terms will
not change.

For more information about our disposition activities, see Note 3 to our Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Funding Activities

In April 2022we prepaid, at par plus accrued interest, a mortgage note secured by a property with an outstanding principal balance of $24,863an annual interest rate of 4.22% and a maturity date of July 2022 with cash on hand.

In June 2022, we redeemed, at par plus accrued interest, all $300,000 of our
4.00% senior unsecured notes due July 2022 using cash on hand and borrowings
under our revolving credit facility.

In October 2022, we prepaid, at a discounted amount of $22,176 plus accrued
interest, a mortgage note secured by one property with an outstanding principal
balance of $22,901, an annual interest rate of 4.80% and a maturity date in June
2023 using cash on hand and borrowings under our revolving credit facility.

Segment Information

We operate in one business segment: ownership of real estate properties.

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