Diversified Healthcare Trust
NASDAQ:DHC
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Diversified Healthcare Trust
Diversified Healthcare Trust is a real estate investment trust, which engages in the ownership of senior living communities, medical office buildings, and wellness centers. The company is headquartered in Newton, Massachusetts and currently employs 600 full-time employees. The firm owns medical office and life science properties, senior living communities, and other healthcare related properties throughout the United States. The firm's segments include Office Portfolio and SHOP. Its Office Portfolio segment consists of medical office properties leased to medical providers and other medical related businesses, as well as life science properties leased to biotech laboratories and other similar tenants. Its SHOP segment consists of managed senior living communities that provide short-term and long-term residential living and, in some instances, care and other services for residents where it pays fees to the operator to manage the communities for its account. Its portfolio consists of constructed commercial properties to operate as medical office space for physicians and other healthcare personnel, medical related fields, including clinics and life science or laboratory.
Diversified Healthcare Trust is a real estate investment trust, which engages in the ownership of senior living communities, medical office buildings, and wellness centers. The company is headquartered in Newton, Massachusetts and currently employs 600 full-time employees. The firm owns medical office and life science properties, senior living communities, and other healthcare related properties throughout the United States. The firm's segments include Office Portfolio and SHOP. Its Office Portfolio segment consists of medical office properties leased to medical providers and other medical related businesses, as well as life science properties leased to biotech laboratories and other similar tenants. Its SHOP segment consists of managed senior living communities that provide short-term and long-term residential living and, in some instances, care and other services for residents where it pays fees to the operator to manage the communities for its account. Its portfolio consists of constructed commercial properties to operate as medical office space for physicians and other healthcare personnel, medical related fields, including clinics and life science or laboratory.
Revenue Growth: DHC reported Q3 revenue of $388.7 million, up 4% year-over-year, reflecting continued momentum in its operating segments.
SHOP Performance: Senior housing (SHOP) occupancy rose 210 basis points YoY to 81.5%, with RevPAR up 5.3%, but temporary labor costs tied to operator transitions weighed on NOI.
Operator Transitions: Transition of 116 AlerisLife-managed communities to new operators caused $5.1 million in elevated Q3 labor costs, expected to decrease to $1.5–$2 million in Q4.
Guidance Reaffirmed: Full-year 2025 SHOP NOI guidance of $132–$142 million and CapEx guidance of $140–$160 million were both reaffirmed.
Asset Sales Progress: Year-to-date, 44 properties sold for $396 million; further $237 million in sales under agreement, mostly expected to close by year-end.
Improved Liquidity: No significant debt maturities until 2028 after repaying 2026 bonds, with $351 million in liquidity at quarter-end.
Margin Headwinds: Temporary expense increases (labor, utilities) impacted quarterly margins, but management expects these pressures to ease after transitions complete.
Positive Outlook: Management highlighted a strong liquidity profile and expects margin expansion and cash flow growth as transitions finish and operational improvements take hold.
