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 Properties:
- January 2024 occupancy was 79.0%, 30 basis points below
December 2023, and 250 basis points above January 2023.
- January 2024 Resident Fees and Services revenue was $102.7
million, $3.9 million, or 4.0%, above December 2023, and $10.7
million, or 11.6%, above January 2023.
- January 2024 net operating income, or NOI, was $7.3 million,
$4.6 million, or 175.6%, above December 2023, and $3.3 million, or
83.4%, above January 2023.
- January 2024 NOI margin was 7.1%, 440 basis points above
December 2023, and 280 basis points above January 2023.
Revenues increased primarily due to increases in average monthly
rate and care level increases at DHC’s communities, partially
offset by increased use of discounts and decreased community
fees.
Operating expenses decreased due to lower repair and maintenance
expenses and decreases in contract labor, partially offset by
annual wage adjustments and hiring expenses. Year over year,
increases were primarily attributable to inflationary effects of
higher wages and food expenses, as well as higher property
insurance premiums in select markets.
Diversified Healthcare
Trust
SHOP Segment - Monthly Results
of Operations
(dollars in thousands, except
average monthly rate)
2024 (1)
2023
$
%
2023
$
%
Jan
Dec
Change
Change
Jan
Change
Change
ALR/Five Star Managed
Communities
Number of Properties
119
119
119
Number of Units
17,542
17,655
17,716
Occupancy
78.8%
79.1%
77.2%
Average Monthly Rate
$
4,638
$
4,401
$
237
5.4%
$
4,267
$
371
8.7%
Residents Fees and Services
$
66,669
$
63,558
$
3,111
4.9%
$
59,539
$
7,130
12.0%
Property Operating Expenses
(59,093)
(59,851)
758
(1.3)%
(53,744)
(5,349)
10.0%
NOI (2)
$
7,576
$
3,707
$
3,869
104.4%
$
5,795
$
1,781
30.7%
NOI Margin
11.4%
5.8%
9.7%
Other Operator Managed
Communities
Number of Properties
113
113
118
Number of Units
7,557
7,554
7,623
Occupancy
79.5%
79.6%
74.8%
Average Monthly Rate
$
5,841
$
5,706
$
135
2.4%
$
5,547
$
(8)
(0.1)%
Residents Fees and Services
$
36,059
$
35,262
$
797
2.3%
$
32,486
$
3,573
11.0%
Property Operating Expenses
(36,356)
(36,328)
(28)
0.1%
(34,312)
(2,044)
6.0%
NOI (2)
$
(297)
$
(1,066)
$
769
72.1%
$
(1,826)
$
1,529
83.7%
NOI Margin
(0.8)%
(3.0)%
(5.6)%
Total SHOP
Number of Properties
232
232
237
Number of Units
25,099
25,209
25,339
Occupancy
79.0%
79.3%
76.5%
Average Monthly Rate
$
4,999
$
4,792
$
207
4.3%
$
4,645
$
354
7.6%
Residents Fees and Services
$
102,728
$
98,820
$
3,908
4.0%
$
92,025
$
10,703
11.6%
Property Operating Expenses
(95,449)
(96,179)
730
(0.8)%
(88,056)
(7,393)
8.4%
NOI (2)
$
7,279
$
2,641
$
4,638
175.6%
$
3,969
$
3,310
83.4%
NOI Margin
7.1%
2.7%
4.3%
2023
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
YTD
ALR/Five Star Managed
Communities
Number of Properties
119
119
119
119
119
119
119
119
119
119
119
119
119
Number of Units
17,716
17,706
17,704
17,704
17,703
17,699
17,699
17,677
17,655
17,655
17,655
17,655
17,655
Occupancy
77.2%
77.2%
77.7%
78.0%
78.1%
77.6%
78.0%
78.5%
78.7%
79.2%
79.3%
79.1%
78.2%
Average Monthly Rate
$
4,267
$
4,892
$
4,369
$
4,527
$
4,404
$
4,532
$
4,384
$
4,388
$
4,556
$
4,396
$
4,510
$
4,401
$
4,464
Residents Fees and Services
$
59,539
$
61,616
$
61,307
$
61,673
$
62,076
$
62,268
$
62,570
$
62,923
$
63,276
$
63,482
$
63,154
$
63,558
$
747,442
Property Operating Expenses
(53,744)
(52,753)
(56,145)
(51,873)
(55,579)
(55,416)
(56,808)
(56,774)
(56,355)
(56,793)
(56,604)
(59,851)
(668,695)
NOI (2)
$
5,795
$
8,863
$
5,162
$
9,800
$
6,497
$
6,852
$
5,762
$
6,149
$
6,921
$
6,689
$
6,550
$
3,707
$
78,747
NOI Margin
9.7%
14.4%
8.4%
15.9%
10.5%
11.0%
9.2%
9.8%
10.9%
10.5%
10.4%
5.8%
10.5%
Other Operator Managed
Communities
Number of Properties
118
115
115
115
115
115
115
115
115
114
113
113
113
Number of Units
7,623
7,623
7,623
7,623
7,623
7,623
7,623
7,647
7,647
7,572
7,571
7,554
7,554
Occupancy
74.8%
76.3%
76.5%
77.4%
77.1%
78.0%
78.3%
78.6%
78.6%
79.2%
79.4%
79.6%
77.8%
Average Monthly Rate
$
5,547
$
5,839
$
5,553
$
5,569
$
5,469
$
5,644
$
5,576
$
5,610
$
5,987
$
5,627
$
5,745
$
5,706
$
5,654
Residents Fees and Services
$
32,486
$
31,502
$
33,142
$
32,576
$
32,953
$
33,300
$
34,109
$
34,559
$
35,697
$
34,605
$
34,275
$
35,262
$
404,466
Property Operating Expenses
(34,312)
(31,423)
(33,952)
(32,932)
(33,428)
(32,731)
(33,688)
(35,301)
(33,519)
(34,361)
(34,421)
(36,328)
(406,396)
NOI (2)
$
(1,826)
$
79
$
(810)
$
(356)
$
(475)
$
569
$
421
$
(742)
$
2,178
$
244
$
(146)
$
(1,066)
$
(1,930)
NOI Margin
(5.6)%
0.3%
(2.4)%
(1.1)%
(1.4)%
1.7%
1.2%
(2.1)%
6.1%
0.7%
(0.4)%
(3.0)%
(0.5)%
Total SHOP
Number of Properties
237
234
234
234
234
234
234
234
234
233
232
232
232
Number of Units
25,339
25,329
25,327
25,327
25,326
25,322
25,322
25,324
25,302
25,227
25,226
25,209
25,209
Occupancy
76.5%
77.0%
77.3%
77.8%
77.8%
77.7%
78.1%
78.5%
78.6%
79.2%
79.3%
79.3%
78.1%
Average Monthly Rate
$
4,645
$
5,176
$
4,722
$
4,840
$
4,723
$
4,866
$
4,742
$
4,755
$
4,986
$
4,764
$
4,879
$
4,792
$
4,821
Residents Fees and Services
$
92,025
$
93,118
$
94,449
$
94,249
$
95,029
$
95,568
$
96,679
$
97,482
$
98,973
$
98,087
$
97,429
$
98,820
$
1,151,908
Property Operating Expenses
(88,056)
(84,176)
(90,097)
(84,805)
(89,007)
(88,147)
(90,496)
(92,075)
(89,874)
(91,154)
(91,025)
(96,179)
(1,075,091)
NOI (2)
$
3,969
$
8,942
$
4,352
$
9,444
$
6,022
$
7,421
$
6,183
$
5,407
$
9,099
$
6,933
$
6,404
$
2,641
$
76,817
NOI Margin
4.3%
9.6%
4.6%
10.0%
6.3%
7.8%
6.4%
5.5%
9.2%
7.1%
6.6%
2.7%
6.7%
(1)
The information regarding DHC’s
SHOP segment results for January 2024 reflects preliminary
estimates with respect to certain results of DHC for such period,
based on currently available information. Because the quarterly
financial close process and review for that period is not yet
complete, DHC’s final results upon completion of its quarterly
close process and review may vary from these preliminary
estimates.
(2)
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
uses NOI to evaluate individual and company wide property level
performance. Other real estate companies and real estate investment
trusts, or REITs, may calculate NOI differently than DHC does.
Calculation and Reconciliation of NOI for SHOP
Segment
(dollars in thousands)
For the Month Ended
January 31, 2023
January 31, 2024
Calculation of NOI:
SHOP
SHOP
Residents fees and services
$
92,025
$
102,728
Property operating expenses
(88,056)
(95,449)
NOI
$
3,969
$
7,279
For the Month Ended
January 31, 2023
December 31, 2023
January 31, 2024
SHOP
SHOP
SHOP
Residents fees and services
$
92,025
$
98,820
$
102,728
Expenses:
Property operating expenses
88,056
96,179
95,449
Depreciation and amortization
13,874
15,952
15,595
Total expenses
101,930
112,131
111,044
Gain on sale of properties
940
-
-
Interest expense
(178)
(24)
(23)
Net loss
(9,143)
(13,335)
(8,339)
Add (less):
Interest expense
178
24
23
Depreciation and amortization
13,874
15,952
15,595
Gain on sale of properties
(940)
-
-
NOI
$
3,969
$
2,641
$
7,279
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 December 31,
2023, DHC’s approximately $7.2 billion portfolio included 371
properties in 36 states and Washington, D.C., occupied by
approximately 500 tenants, and totaling approximately 8.6 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 over $41 billion in assets under management as of December 31,
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/20240226193173/en/
Melissa McCarthy, Manager, Investor Relations (617) 796-8234
Diversified Healthcare (NASDAQ:DHC)
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