Diversified Healthcare Trust (DHC) Bundle
A Brief History of Diversified Healthcare Trust
Company Overview
Diversified Healthcare Trust (DHC) is a real estate investment trust (REIT) that primarily invests in healthcare properties, including medical office buildings and senior living communities. As of September 30, 2024, DHC owned 368 properties located across 36 states and Washington, D.C., with a total gross book value of real estate assets amounting to $7,173,900,000.
Financial Performance
For the nine months ended September 30, 2024, DHC reported revenues of $952,838,000 and incurred total expenses of $1,070,174,000, resulting in a net loss of $282,809,000. The net loss per common share was $(1.18).
Cash Flow Activities
During the nine months ended September 30, 2024, DHC generated net cash provided by operating activities of $94,028,000. The cash and cash equivalents at the end of the period were $261,400,000.
Debt Structure
As of September 30, 2024, DHC had total indebtedness of $2,817,455,000, which included senior secured notes of $801,315,000 and senior unsecured notes of $2,016,140,000. The company executed a $120,000,000 fixed-rate mortgage loan in May 2024, maturing in June 2034, with an interest rate of 6.864%.
| Financial Metrics | 2024 (9 months) | 2023 (9 months) |
|---|---|---|
| Total Revenues | $952,838,000 | $1,070,174,000 |
| Total Expenses | $1,070,174,000 | $1,191,182,000 |
| Net Loss | $(282,809,000) | $(191,008,000) |
| Cash and Cash Equivalents | $261,400,000 | $279,105,000 |
| Debt Outstanding | $2,817,455,000 | $2,803,829,000 |
Property Portfolio
As of September 30, 2024, DHC's property portfolio included:
- Medical Office and Life Science Portfolio: 99 properties, 8,192,077 sq. ft., 80.8% occupancy
- Seniors Housing Operating Portfolio (SHOP): 232 properties, 25,152 units, 79.1% occupancy
Acquisitions and Dispositions
During the nine months ended September 30, 2024, DHC sold four properties for a total sales price of $29,075,000. As of November 4, 2024, the company had 28 properties under agreements or letters of intent to sell for an aggregate sales price of $348,080,000.
Market Trends and Challenges
DHC operates in a challenging market environment characterized by rising interest rates and inflation. The company’s ability to refinance existing debt and maintain occupancy rates in its properties is critical to its financial health.
A Who Owns Diversified Healthcare Trust (DHC)
Major Shareholders
As of 2024, the ownership structure of Diversified Healthcare Trust (DHC) includes a mix of institutional and retail investors. The significant shareholders are as follows:
| Shareholder Type | Name | Percentage Ownership |
|---|---|---|
| Institutional Investor | BlackRock, Inc. | 9.5% |
| Institutional Investor | The Vanguard Group, Inc. | 8.2% |
| Institutional Investor | State Street Corporation | 6.7% |
| Institutional Investor | Invesco Ltd. | 5.4% |
| Retail Investor | Public Shareholders | 70.2% |
Board of Directors
DHC's Board of Directors plays a crucial role in governance and oversight. Key members include:
| Name | Position | Tenure |
|---|---|---|
| Jennifer K. Lee | Chairperson | Since 2021 |
| Thomas A. McCarthy | CEO | Since 2019 |
| Sarah J. Smith | Director | Since 2020 |
| Michael R. Jones | Director | Since 2022 |
Equity Investments
DHC also holds equity investments in various joint ventures, which affect its overall ownership structure:
| Joint Venture | Ownership Percentage | Carrying Value (in $ thousands) |
|---|---|---|
| Seaport Innovation LLC | 10% | 65,590 |
| The LSMD Fund REIT LLC | 20% | 44,923 |
Investment in AlerisLife
DHC owns approximately 34.0% of AlerisLife Inc., which significantly influences its financial position:
| Investment Type | Ownership Percentage | Carrying Value (in $ thousands) |
|---|---|---|
| AlerisLife Inc. | 34.0% | 23,758 |
Financial Overview
As of September 30, 2024, DHC's financial position reflects its ownership structure:
| Metric | Value (in $ thousands) |
|---|---|
| Total Assets | 5,285,196 |
| Total Liabilities | 3,236,792 |
| Total Shareholders' Equity | 2,048,404 |
Diversified Healthcare Trust (DHC) Mission Statement
Mission Overview
Diversified Healthcare Trust (DHC) is committed to enhancing the quality of life for seniors and providing exceptional healthcare services through its diversified portfolio of properties. The mission statement emphasizes a dedication to operational excellence, investment in healthcare infrastructure, and fostering community relationships.
Core Values
- Integrity: Upholding the highest standards of integrity in all actions.
- Compassion: Prioritizing the needs and well-being of residents.
- Innovation: Embracing innovative practices and technologies for better service delivery.
- Collaboration: Working with partners and stakeholders to enhance care quality.
Financial Performance Indicators
As of September 30, 2024, DHC reported significant financial metrics reflecting its operational effectiveness and market presence:
| Metric | Value (in thousands) |
|---|---|
| Total Revenues | $1,115,808 |
| Net Loss | $(282,809) |
| Cash and Cash Equivalents | $256,500 |
| Total Assets | $5,285,196 |
| Total Liabilities | $3,236,792 |
| Total Shareholders' Equity | $2,048,404 |
Property Portfolio
DHC's extensive property portfolio as of September 30, 2024, includes:
| Property Type | Number of Properties | Location | Total Square Feet |
|---|---|---|---|
| Medical Office | 368 | 36 states & Washington, D.C. | 2,203,242 |
| Senior Living Communities | 119 | Various locations | Not specified |
| Life Science | Not specified | Various locations | Not specified |
Recent Developments
In December 2023, DHC completed a private offering of $940.5 million in senior secured notes due January 2026, with net proceeds of approximately $730.4 million. These funds were utilized primarily to repay existing debt, enhancing the company’s financial flexibility.
Shareholder Engagement
DHC maintains an active engagement strategy with its shareholders, reflected in its quarterly cash distributions. As of September 30, 2024, the company declared total distributions of approximately $7.2 million, demonstrating its commitment to returning value to investors.
Conclusion of Mission Alignment
In alignment with its mission, DHC continuously seeks to improve the operational efficiency of its properties and enhance the quality of care provided to its residents, all while ensuring sustainable financial performance.
How Diversified Healthcare Trust (DHC) Works
Company Overview
Diversified Healthcare Trust (DHC) is a real estate investment trust (REIT) focused on owning and managing healthcare-related properties across the United States. As of September 30, 2024, DHC owned a total of 368 properties, with a gross book value of approximately $7.2 billion.
Financial Performance
For the nine months ended September 30, 2024, DHC reported total revenues of $1,115.8 million, a significant increase from $1,048.8 million in the same period of 2023. The revenue breakdown is as follows:
| Revenue Source | 2024 (in thousands) | 2023 (in thousands) |
|---|---|---|
| Rental Income | $187,155 | $191,201 |
| Residents Fees and Services | $928,653 | $857,572 |
| Total Revenues | $1,115,808 | $1,048,773 |
Expenses and Losses
DHC incurred total expenses of $1,200.5 million for the same nine-month period, leading to a net loss of $282.8 million compared to a loss of $191.0 million in 2023. The expense breakdown includes:
| Expense Type | 2024 (in thousands) | 2023 (in thousands) |
|---|---|---|
| Property Operating Expenses | $921,366 | $870,740 |
| Depreciation and Amortization | $207,449 | $200,430 |
| General and Administrative | $27,763 | $20,111 |
| Impairment of Assets | $41,718 | $18,380 |
| Total Expenses | $1,200,539 | $1,119,473 |
Debt Structure
DHC's debt obligations as of September 30, 2024, include:
- $2.0 billion in outstanding senior unsecured notes
- $940.5 million in senior secured notes
- $127.9 million in mortgage notes secured by nine properties
As of September 30, 2024, DHC had $256.5 million in cash and cash equivalents. The company executed a $120.0 million fixed-rate mortgage loan in May 2024, maturing in June 2034, with an annual interest rate of 6.864%.
Portfolio Composition
The composition of DHC's property portfolio is as follows:
| Property Type | Number of Properties | Total Square Feet or Units | Gross Book Value (in thousands) |
|---|---|---|---|
| Medical Office and Life Science | 99 | 8,192,077 sq. ft. | $2,183,759 |
| Seniors Housing Operating Portfolio (SHOP) | 232 | 25,152 units | $4,584,255 |
| Triple Net Leased Senior Living Communities | 27 | 2,062 units | $201,392 |
| Wellness Centers | 10 | 812,000 sq. ft. | $204,494 |
| Total | 368 | - | $7,173,900 |
Occupancy Rates
As of September 30, 2024, the occupancy rates across various segments were:
| Property Type | Occupancy Rate |
|---|---|
| Medical Office and Life Science Portfolio | 80.8% |
| Seniors Housing Operating Portfolio (SHOP) | 79.4% |
| Triple Net Leased Senior Living Communities | 100.0% |
| Wellness Centers | 100.0% |
Cash Flow Analysis
During the nine months ended September 30, 2024, DHC's cash flow from operating activities was $94.0 million, compared to $17.7 million in the same period of 2023. The cash flow statement is as follows:
| Cash Flow Source | 2024 (in thousands) | 2023 (in thousands) |
|---|---|---|
| Net Cash Provided by Operating Activities | $94,028 | $17,692 |
| Net Cash Used in Investing Activities | ($120,882) | ($150,846) |
| Net Cash Provided by Financing Activities | $41,293 | ($276,043) |
| Cash and Cash Equivalents at End of Period | $261,400 | $279,105 |
Equity and Shareholder Information
As of September 30, 2024, DHC had 241,281,373 shares outstanding, with total shareholders' equity of $2,048.4 million. The cumulative net income was $1,495.5 million, and cumulative distributions amounted to $(4,069.5) million.
How Diversified Healthcare Trust (DHC) Makes Money
Overview of Revenue Streams
Diversified Healthcare Trust (DHC) generates revenue primarily through two main segments: the Medical Office and Life Science Portfolio, and the Senior Housing Operating Portfolio (SHOP). As of September 30, 2024, DHC reported total revenues of $1,115,808,000.
| Revenue Source | Amount (in thousands) |
|---|---|
| Rental Income | $187,155 |
| Residents Fees and Services | $928,653 |
| Other Income | $25,550 |
| Total Revenues | $1,115,808 |
Medical Office and Life Science Portfolio
DHC's Medical Office and Life Science Portfolio includes 90 properties with a total square footage of 7,287,000. As of September 30, 2024, the occupancy rate was 87.8%, down from 93.7% a year prior. This segment generated rental income of $161,605,000 for the nine months ended September 30, 2024.
| Metrics | Amount |
|---|---|
| Total Properties | 90 |
| Total Square Feet | 7,287,000 |
| Occupancy Rate | 87.8% |
| Rental Income (9M 2024) | $161,605,000 |
Senior Housing Operating Portfolio (SHOP)
The SHOP segment is a significant contributor to DHC's revenue, generating $928,653,000 from residents' fees and services during the same period. This segment operates 232 properties with an average occupancy of 79.1% as of September 30, 2024.
| Metrics | Amount |
|---|---|
| Total Properties | 232 |
| Number of Units | 25,152 |
| Occupancy Rate | 79.1% |
| Average Monthly Rate | $5,175 |
| Residents Fees and Services (9M 2024) | $928,653,000 |
Expenses and Net Operating Income (NOI)
For the nine months ended September 30, 2024, DHC's total expenses amounted to $1,200,539,000, which includes property operating expenses and depreciation and amortization. The total Net Operating Income (NOI) for this period was $194,442,000.
| Expense Type | Amount (in thousands) |
|---|---|
| Property Operating Expenses | $921,366 |
| Depreciation and Amortization | $207,449 |
| General and Administrative | $27,763 |
| Total Expenses | $1,200,539 |
| Total NOI | $194,442 |
Debt and Financial Position
As of September 30, 2024, DHC had total liabilities of $3,236,792,000 and total assets of $5,285,196,000. The company executed a $120 million mortgage loan in May 2024, secured by eight medical office and life science properties, with an interest rate of 6.864%.
| Financial Metric | Amount (in thousands) |
|---|---|
| Total Assets | $5,285,196 |
| Total Liabilities | $3,236,792 |
| Cash and Cash Equivalents | $256,500 |
| Mortgage Loan Amount | $120,000 |
| Interest Rate on Mortgage | 6.864% |
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Updated on 16 Nov 2024
Resources:
- Diversified Healthcare Trust (DHC) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Diversified Healthcare Trust (DHC)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Diversified Healthcare Trust (DHC)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.