We recently published an article titled 11 High Growth Micro-cap Stocks to Buy.
On January 7, Ladenburg initiated coverage of Seven Hills Realty Trust (NASDAQ:SEVN) with a Buy rating and a $10 price target, highlighting improving forward visibility following recent balance sheet actions and portfolio growth initiatives. The initiation comes after a volatile period for the stock, during which shares declined sharply despite management executing on previously outlined strategic objectives.
A key catalyst underpinning the investment thesis is Seven Hills’ fully backstopped transferable rights offering completed on December 11, 2025, which raised $65.2 million in gross proceeds at $8.65 per share. The capital raise was designed to fund portfolio expansion and was quickly deployed into income-generating assets, including three floating-rate first mortgage loans totaling $101.3 million, reflecting disciplined underwriting across diversified commercial real estate asset types. The timely deployment of capital mitigates dilution concerns and positions the REIT to rebuild earnings momentum in the new loan season.
Operationally, Seven Hills Realty Trust (NASDAQ:SEVN) reported softer third-quarter 2025 results, with distributable income of $0.29 per share on $7.1 million in revenue, reflecting pressure from lower net interest margins ahead of the capital raise. However, management reaffirmed confidence in near-term stabilization by closing on the anticipated new investments and guiding to fourth-quarter distributable income of approximately $0.30 per share, sufficient to cover the $0.28 quarterly distribution. Despite the stock’s pullback to multi-year lows in early December, the combination of refreshed capital, portfolio expansion, and improving income coverage supports a more constructive outlook.
Based in Newton, Massachusetts, Seven Hills Realty Trust (NASDAQ:SEVN) focuses on floating-rate first mortgage loans secured by middle-market transitional commercial real estate, a niche that can benefit meaningfully as deployment scales and rate dynamics stabilize, making the recent weakness an opportunity for long-term, income-focused investors.
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