Diversified Healthcare Trust (Nasdaq: DHC) today provided an
update regarding the recent performance of its Senior Housing
Operating Portfolio, or SHOP, segment.
Monthly Unaudited Results in DHC’s
Total SHOP Comparable Properties:
- December 2023 occupancy was 80.0%, 580 basis points below
December 2019, and 10 basis points below November 2023.
- December 2023 Resident Fees and Services revenue was $96.0
million, $6.4 million, or 6.2%, below December 2019, and $1.4
million, or 1.4%, above November 2023.
- December 2023 net operating income, or NOI, was $2.8 million,
$9.8 million, or 77.9%, below December 2019, and $3.3 million, or
54.4%, below November 2023.
- December 2023 NOI margin was 2.9%, 930 basis points below
December 2019, and 350 basis points below November 2023.
Year to Date Unaudited Results in DHC’s
Total SHOP Comparable Properties:
- Year to date occupancy through December 31, 2023 was 78.7%, 760
basis points below the same period in 2019.
- Year to date Resident Fees and Services revenue through
December 31, 2023 was $1.1 billion, $106.7 million, or 8.7%, below
the same period in 2019.
- Year to date NOI through December 31, 2023 was $74.8 million,
$127.7 million, or 63.1%, below the same period in 2019.
- Year to date NOI margin through December 31, 2023 was 6.7%, 980
basis points below the same period in 2019.
Diversified Healthcare Trust
(1)
SHOP - ALR/Five Star Managed and Other
Operator Managed Results of Operations
(dollars in thousands, except average
monthly rate)
2019 Pro Forma (4)
COMPARABLE (2)
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
YTD
ALR/Five Star Managed
Communities
Number of Properties
117
117
117
117
117
117
117
117
117
117
117
117
117
Number of Units
16,995
16,995
16,995
16,995
16,995
16,995
16,995
16,995
16,951
16,951
16,951
16,951
16,951
Occupancy
88.0
%
88.0
%
88.0
%
88.0
%
87.9
%
88.0
%
87.9
%
87.9
%
87.3
%
87.1
%
86.9
%
87.0
%
87.6
%
Average Monthly Rate
$
4,709
$
5,099
$
4,723
$
4,833
$
4,703
$
4,834
$
4,695
$
4,695
$
4,756
$
4,755
$
4,824
$
4,729
$
4,777
Residents Fees and Services
$
72,761
$
71,079
$
72,954
$
72,277
$
72,562
$
72,250
$
72,451
$
72,447
$
70,879
$
73,102
$
71,586
$
72,593
$
866,941
Property Operating Expenses
(57,168
)
(53,411
)
(59,496
)
(56,989
)
(58,708
)
(56,515
)
(60,161
)
(59,247
)
(58,304
)
(59,880
)
(57,938
)
(61,220
)
(699,037
)
NOI (3)
$
15,593
$
17,668
$
13,458
$
15,288
$
13,854
$
15,735
$
12,290
$
13,200
$
12,575
$
13,222
$
13,648
$
11,373
$
167,904
NOI Margin
21.4
%
24.9
%
18.4
%
21.2
%
19.1
%
21.8
%
17.0
%
18.2
%
17.7
%
18.1
%
19.1
%
15.7
%
19.4
%
Other Operator Managed
Communities
Number of Properties
106
106
106
106
106
106
106
106
106
106
106
106
106
Number of Units
7,130
7,130
7,130
7,130
7,130
7,130
7,130
7,130
7,154
7,154
7,154
7,061
7,061
Occupancy
82.5
%
82.6
%
82.6
%
82.6
%
82.5
%
82.6
%
82.7
%
82.6
%
82.6
%
82.6
%
82.5
%
82.3
%
82.6
%
Average Monthly Rate
$
5,889
$
6,344
$
5,929
$
6,041
$
5,896
$
6,011
$
5,889
$
5,855
$
5,872
$
5,799
$
5,926
$
5,813
$
5,935
Residents Fees and Services
$
30,304
$
29,501
$
30,539
$
30,100
$
30,336
$
29,956
$
30,355
$
30,158
$
29,256
$
29,865
$
29,512
$
29,815
$
359,697
Property Operating Expenses
(26,798
)
(24,627
)
(27,785
)
(26,329
)
(27,284
)
(26,260
)
(27,853
)
(27,539
)
(27,145
)
(28,053
)
(26,802
)
(28,664
)
(325,139
)
NOI (3)
$
3,506
$
4,874
$
2,754
$
3,771
$
3,052
$
3,696
$
2,502
$
2,619
$
2,111
$
1,812
$
2,710
$
1,151
$
34,558
NOI Margin
11.6
%
16.5
%
9.0
%
12.5
%
10.1
%
12.3
%
8.2
%
8.7
%
7.2
%
6.1
%
9.2
%
3.9
%
9.6
%
Total SHOP Comparable
Number of Properties
223
223
223
223
223
223
223
223
223
223
223
223
223
Number of Units
24,125
24,125
24,125
24,125
24,125
24,125
24,125
24,125
24,105
24,105
24,105
24,012
24,012
Occupancy
86.6
%
86.6
%
86.6
%
86.6
%
86.5
%
86.5
%
86.5
%
86.5
%
86.0
%
85.9
%
85.7
%
85.8
%
86.3
%
Average Monthly Rate
$
5,004
$
5,410
$
5,024
$
5,135
$
5,001
$
5,128
$
4,994
$
4,985
$
5,035
$
5,017
$
5,101
$
5,000
$
5,067
Residents Fees and Services
$
103,065
$
100,580
$
103,493
$
102,377
$
102,898
$
102,206
$
102,806
$
102,605
$
100,135
$
102,967
$
101,098
$
102,408
$
1,226,638
Property Operating Expenses
(83,966
)
(78,038
)
(87,281
)
(83,318
)
(85,992
)
(82,775
)
(88,014
)
(86,786
)
(85,449
)
(87,933
)
(84,740
)
(89,884
)
(1,024,176
)
NOI (3)
$
19,099
$
22,542
$
16,212
$
19,059
$
16,906
$
19,431
$
14,792
$
15,819
$
14,686
$
15,034
$
16,358
$
12,524
$
202,462
NOI Margin
18.5
%
22.4
%
15.7
%
18.6
%
16.4
%
19.0
%
14.4
%
15.4
%
14.7
%
14.6
%
16.2
%
12.2
%
16.5
%
2023
COMPARABLE (2)
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
YTD
ALR/Five Star Managed
Communities
Number of Properties
117
117
117
117
117
117
117
117
117
117
117
117
117
Number of Units
16,995
16,995
16,995
16,995
16,995
16,995
16,995
16,995
16,951
16,951
16,951
16,951
16,951
Occupancy
78.0
%
77.9
%
78.5
%
78.7
%
78.8
%
79.3
%
79.5
%
79.9
%
80.0
%
80.5
%
80.6
%
80.4
%
79.4
%
Average Monthly Rate
$
4,278
$
4,907
$
4,384
$
4,541
$
4,417
$
4,549
$
4,405
$
4,411
$
4,582
$
4,423
$
4,538
$
4,429
$
4,484
Residents Fees and Services
$
58,695
$
60,666
$
60,434
$
60,769
$
61,178
$
61,309
$
61,524
$
61,831
$
62,160
$
62,375
$
62,026
$
62,397
$
735,364
Property Operating Expenses
(52,606
)
(51,786
)
(54,777
)
(50,892
)
(54,500
)
(54,324
)
(55,532
)
(55,526
)
(55,153
)
(55,470
)
(55,602
)
(58,398
)
(654,566
)
NOI (3)
$
6,089
$
8,880
$
5,657
$
9,877
$
6,678
$
6,985
$
5,992
$
6,305
$
7,007
$
6,905
$
6,424
$
3,999
$
80,798
NOI Margin
10.4
%
14.6
%
9.4
%
16.3
%
10.9
%
11.4
%
9.7
%
10.2
%
11.3
%
11.1
%
10.4
%
6.4
%
11.0
%
Other Operator Managed
Communities
Number of Properties
106
106
106
106
106
106
106
106
106
106
106
106
106
Number of Units
7,130
7,130
7,130
7,130
7,130
7,130
7,130
7,130
7,154
7,154
7,154
7,061
7,061
Occupancy
74.2
%
75.9
%
76.2
%
76.6
%
76.3
%
77.2
%
77.6
%
77.8
%
77.9
%
78.5
%
78.8
%
79.1
%
77.2
%
Average Monthly Rate
$
5,665
$
5,944
$
5,662
$
5,668
$
5,566
$
5,749
$
5,675
$
5,723
$
6,095
$
5,740
$
5,853
$
5,816
$
5,762
Residents Fees and Services
$
30,788
$
29,808
$
31,504
$
30,938
$
31,303
$
31,664
$
32,461
$
32,933
$
33,981
$
32,953
$
32,638
$
33,631
$
384,602
Property Operating Expenses
(33,025
)
(30,118
)
(32,590
)
(31,725
)
(32,096
)
(31,472
)
(32,549
)
(33,946
)
(32,181
)
(33,042
)
(33,003
)
(34,868
)
(390,615
)
NOI (3)
$
(2,237
)
$
(310
)
$
(1,086
)
$
(787
)
$
(793
)
$
192
$
(88
)
$
(1,013
)
$
1,800
$
(89
)
$
(365
)
$
(1,237
)
$
(6,013
)
NOI Margin
(7.3
)%
(1.0
)%
(3.4
)%
(2.5
)%
(2.5
)%
0.6
%
(0.3
)%
(3.1
)%
5.3
%
(0.3
)%
(1.1
)%
(3.7
)%
(1.6
)%
Total SHOP Comparable
Number of Properties
223
223
223
223
223
223
223
223
223
223
223
223
223
Number of Units
24,125
24,125
24,125
24,125
24,125
24,125
24,125
24,125
24,105
24,105
24,105
24,012
24,012
Occupancy
76.9
%
77.3
%
77.8
%
78.1
%
78.1
%
78.7
%
79.0
%
79.3
%
79.4
%
79.9
%
80.1
%
80.0
%
78.7
%
Average Monthly Rate
$
4,671
$
5,206
$
4,751
$
4,868
$
4,749
$
4,897
$
4,774
$
4,793
$
5,023
$
4,804
$
4,919
$
4,832
$
4,854
Residents Fees and Services
$
89,483
$
90,474
$
91,938
$
91,707
$
92,481
$
92,973
$
93,985
$
94,764
$
96,141
$
95,328
$
94,664
$
96,028
$
1,119,966
Property Operating Expenses
(85,631
)
(81,904
)
(87,367
)
(82,617
)
(86,596
)
(85,796
)
(88,081
)
(89,472
)
(87,334
)
(88,512
)
(88,605
)
(93,266
)
(1,045,181
)
NOI (3)
$
3,852
$
8,570
$
4,571
$
9,090
$
5,885
$
7,177
$
5,904
$
5,292
$
8,807
$
6,816
$
6,059
$
2,762
$
74,785
NOI Margin
4.3
%
9.5
%
5.0
%
9.9
%
6.4
%
7.7
%
6.3
%
5.6
%
9.2
%
7.2
%
6.4
%
2.9
%
6.7
%
(1)
The information regarding DHC’s
SHOP segment results for October, November and December 2023 and
year to date 2023, and on a pro forma basis for the 2019 periods
indicated, reflects preliminary estimates with respect to certain
results of DHC for such periods, based on currently available
information. Because the quarterly financial close process and
review for those periods is not yet complete, DHC’s final results
upon completion of its quarterly close process and review may vary
from these preliminary estimates.
(2)
Comparable properties consist of
properties owned and in service continuously since January 1, 2019;
excludes properties classified as held for sale, closed or out of
service and communities previously leased to operators that did not
provide monthly financial results.
(3)
The calculation of NOI shown
excludes certain components of net income (loss) in order to
provide results that are more closely related to DHC's property
level results of operations. DHC defines NOI as income from its
real estate less its property operating expenses. NOI excludes
amortization of capitalized tenant improvement costs and leasing
commissions that DHC records as depreciation and amortization. DHC
calculates comparable property NOI in the same manner that it
calculates the corresponding NOI amount, except that it only
includes comparable properties in calculating comparable property
NOI. DHC uses NOI and comparable property NOI to evaluate
individual and company wide property level performance. Other real
estate companies and real estate investment trusts, or REITs, may
calculate NOI and comparable property NOI differently than DHC
does.
(4)
Many of the senior living
communities currently operated on DHC’s behalf in its SHOP segment
were leased in 2019. DHC believes pro forma operating results are a
meaningful supplemental performance measure as they present
historical community level operating results regardless of the form
of contractual arrangements. The table presents pro forma residents
fees and services revenue, pro forma property operating expenses
and pro forma NOI as if the communities had been managed for DHC’s
account throughout all periods presented to assist in understanding
community level operating results.
Calculation and Reconciliation of NOI
and Comparable Property NOI for SHOP Segment
(dollars in thousands)
For the Twelve Months
Ended
12/31/2019
12/31/2023
Calculation of NOI:
SHOP
Restructuring
Transaction
Pro Forma
SHOP
Rental income
$
137,898
$
(137,898
)
$
-
$
-
Residents fees and services
433,597
840,045
1,273,642
1,151,908
Property operating expenses
(356,722
)
(706,779
)
(1,063,501
)
(1,075,091
)
NOI
214,773
(4,632
)
210,141
76,817
Reconciliation of NOI to Comparable
Property NOI:
NOI
$
214,773
$
(4,632
)
$
210,141
$
76,817
NOI of properties not included in
comparable results
(1,247
)
(6,432
)
(7,679
)
(2,032
)
Comparable property NOI
$
213,526
$
(11,064
)
$
202,462
$
74,785
For the Twelve Months
Ended
12/31/2019
12/31/2023
SHOP
Restructuring
Transaction
Pro Forma
SHOP
Revenues:
Rental income
$
137,898
$
(137,898
)
$
-
$
-
Residents fees and services
433,597
840,045
1,273,642
1,151,908
Total revenues
571,495
702,147
1,273,642
1,151,908
Expenses:
Property operating expenses
356,722
706,779
1,063,501
1,075,091
Depreciation and amortization
132,637
-
132,637
175,926
Impairment of assets
65,822
-
65,822
4,346
Total expenses
555,181
706,779
1,261,960
1,255,363
Gain on sale of properties
15,207
-
15,207
2,802
Interest and other income
-
-
-
1,581
Interest expense
(3,058
)
-
(3,058
)
(551
)
Loss on early extinguishment of debt
(17
)
-
(17
)
-
Net income (loss)
28,446
(4,632
)
23,814
(99,623
)
Add (less): Interest expense
3,058
551
Interest and other income
-
(1,581
)
Depreciation and amortization
132,637
175,926
Impairment of assets
65,822
4,346
Gain on sale of properties
(15,207
)
(2,802
)
Loss on early extinguishment of debt
17
-
NOI
210,141
76,817
NOI of properties not included in
comparable results
(7,679
)
(2,032
)
Comparable property NOI
$
202,462
$
74,785
About Diversified Healthcare Trust:
DHC is a real estate investment trust focused on owning
high-quality healthcare properties located throughout the United
States. DHC seeks diversification across the health services
spectrum by care delivery and practice type, by scientific research
disciplines and by property type and location. As of September 30,
2023, DHC’s approximately $7.2 billion portfolio included 376
properties in 36 states and Washington, D.C., occupied by
approximately 500 tenants, and totaling approximately 9 million
square feet of life science and medical office properties and more
than 27,000 senior living units. DHC is managed by The RMR Group
(Nasdaq: RMR), a leading U.S. alternative asset management company
with approximately $36 billion in assets under management as of
September 30, 2023 and more than 35 years of institutional
experience in buying, selling, financing and operating commercial
real estate. To learn more about DHC, visit www.dhcreit.com.
Warning Concerning
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995
and other securities laws. Also, whenever DHC uses words such as
“believe”, “expect”, “anticipate”, “intend”, “plan”, “estimate”,
“will”, “may” and negatives or derivatives of these or similar
expressions, it is making forward-looking statements. These
forward-looking statements are based upon DHC’s present intent,
beliefs or expectations, but forward-looking statements are not
guaranteed to occur and may not occur. Actual results may differ
materially from those contained in or implied by DHC’s
forward-looking statements as a result of various factors. For
example, the information regarding DHC’s SHOP segment results
provided in this press release reflects certain preliminary
estimates based on currently available information, and DHC’s final
results upon completion of its quarterly financial close process
and review may vary from these preliminary estimates, and as a
result, the information provided herein may not provide a
meaningful measure of DHC’s SHOP segment results as expected.
The information contained in DHC's periodic reports filed with
the Securities and Exchange Commission, or the SEC, including under
“Risk Factors” and “Management’s Discussion and Analysis of
Financial Condition and Results of Operations,” or incorporated
therein, also identifies important factors that could cause DHC's
actual results to differ materially from those stated in or implied
by DHC's forward-looking statements. DHC's filings with the SEC are
available on the SEC's website at www.sec.gov.
You should not place undue reliance upon any forward-looking
statements. Except as required by law, DHC does not intend to
update or change any forward-looking statements as a result of new
information, future events or otherwise.
A Maryland Real Estate Investment Trust with
transferable shares of beneficial interest listed on the Nasdaq. No
shareholder, Trustee or officer is personally liable for any act or
obligation of the Trust.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240130289780/en/
Melissa McCarthy, Manager, Investor Relations (617) 796-8234
Diversified Healthcare (NASDAQ:DHC)
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