Office Properties Income Trust is nearing a restructuring deal that would hand ownership to creditors, including Redwood Capital, in exchange for slashing its debt by $700 million. The bankrupt REIT, which owns over 120 office buildings, would reduce its total debt to approximately $1.7 billion under the proposed terms.

The months-long bankruptcy case has been a significant challenge for the commercial real estate sector, which has struggled with rising vacancies and higher borrowing costs. The deal would allow the company to emerge from bankruptcy with a more sustainable capital structure while providing creditors with equity in the reorganized entity.

This restructuring represents a major shift in control for the Office Properties Income Trust, moving from public shareholders to institutional creditors. The agreement would resolve the company's financial distress while preserving its portfolio of office properties, though the new ownership structure signals a complete reset for the once-public REIT.