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Jennifer Francis
Executive vice president, The RMR Group
Age: 56
Industry experience: 25 years
Jennifer Francis has a day-to-day window into how all commercial real estate sectors are performing throughout the pandemic. Francis is the second woman to be named executive vice president in the 34-year history of The RMR Group of Newton, which provides asset management, finance and investor relations services for four commercial property REITs – Diversified Healthcare Trust, Industrial Logistics Properties Trust, Office Properties Income Trust and Service Properties Trust – a mortgage REIT and three real estate operating companies. The RMR Group had $32.3 billion in assets under management including more than 2,100 properties nationwide as of Sept. 30, and more than 600 employees.
Q: How is The RMR Group organized and how did your role change following your promotion in October?
A: There are four managed equity REITs, and we’re also responsible for management of three operating companies. Because I’m also president of Diversified Health Care Trust, I’m responsible for the public-facing things that CEOs do. All of RMR’s over 600 employees are doing the day-to-day management of those equity REITs. The operating companies – Travel Centers of America, Five Star Senior Living and Sonesta – have their own employees.
Q: So, the bulk of RMR’s revenues comes from management fees?
A: They have long-term, 20-year contracts with the REITs, and they are paid a business management fee and then in some cases an incentive fee based upon the REITs performance.
Q: What effects has the pandemic had on the senior living portfolio you manage?
A: Occupancy has obviously dropped since the first quarter of 2020. Initially during the pandemic, residents moved into their apartments or rooms, food service was delivered to the rooms, dining rooms were closed and amenity spaces were closed. The impact to senior living has been for the most part in skilled nursing facilities, and we have a high percentage of independent living communities, along with some skilled nursing and memory care. As the pandemic has moved on and we entered the second wave, operators got a lot of pressure from residents to open so they could get back to their regular lives, so it’s a delicate balance when to reopen and what’s needed to do to make sure the residents are safe. The residential experience was really being compromised by not being able to get out and sit with their friends and socialize. They’ve opened back up, but I think the operators have become very good at infection control.
Q: What is RMR Group’s niche in the Boston-area commercial real estate industry?
A: The RMR Group has been a bit of a quiet giant in the Boston market, I would say. We have a lot of real estate and we’re often well-known in other markets where we have more of a concentration of properties. But we have over 3 million square feet of assets in Massachusetts. We own the Vertex [headquarters] buildings in the Seaport District, but we’ve been somewhat under the radar. We have more than 600 employees, a little under half of which are in Massachusetts. It’s a great company to work for, but it’s just been under the radar screen.
Q: How has The RMR Group dealt with requests for rent deferrals for tenants who have been struggling since spring?
A: We’re very interested in the success of our tenants, and partnering with them so they can withstand the impacts of COVID. There are some retailers who are looking for a month or two of rent deferrals, and so for tenants who were in good standing, we agreed to defer rent with the expectation they’d get back in the fourth quarter or early next year. For tenants who didn’t have a great deal of term, that often turned into an extension in exchange for some rent deferment. We had those discussions early on with the medical office tenants. Some of the smaller ones were a little panicked early on, but those [requests] have really dried up. Some tenants came back and said, “We don’t need it.”
Q: Where are The RMR Group’s opportunities for growth in 2021?
A: Our growth in the next year is probably going to be focused on industrial, which has obviously withstood COVID quite well, and we have an industrial REIT. I expect we’ll continue acquiring industrial properties and we’ll see growth in our office REIT. Both medical offices and life science have withstood the pandemic and we’ll look for opportunities to grow in those sectors.
Francis’ Top Five Favorite Bands
- Neil Young’s many bands
- Cowboy Junkies
- Cracker
- The Beatles
- Pearl Jam
