Diversified Healthcare Trust Provides Monthly SHOP Performance Update

Published

NEWTON, Mass.--(BUSINESS WIRE)-- 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:

  • February 2024 occupancy was 78.9%, a decrease of 10 basis points from January 2024, and 190 basis points higher than February 2023.
  • February 2024 Resident Fees and Services revenue was $102.3 million, a decrease of $0.4 million, or 0.4%, from January 2024, and higher by $9.2 million, or 9.9%, compared to February 2023.
  • February 2024 net operating income, or NOI, was $10.1 million, an increase of $2.8 million, or 38.7%, from January 2024, and higher by $1.2 million, or 12.9%, compared to February 2023.
  • February 2024 NOI margin was 9.9%, 280 basis points above January 2024, and 30 basis points above February 2023.

February 2024 total SHOP revenues decreased slightly from the prior month due to a decrease in skilled nursing revenue as a result of two fewer days in February. Year over year, total SHOP revenues increased 9.9% primarily due to increases in rental and care rates, partially offset by higher discounts and lower community fees.

February 2024 total SHOP operating expenses decreased 3.4% from the prior month, which was driven by a decrease in labor expenses as a result of two fewer days in February. Year over year, total SHOP operating expenses increased primarily due to the inflationary effects related to higher wages and utilities 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)

2024 (1)

$

%

 

2023

 

$

%

 

 

Feb

Jan

Change

Change

Feb

Change

Change

ALR/Five Star Managed Communities

Number of Properties

 

 

119

 

 

 

119

 

 

 

 

 

 

 

119

 

 

 

 

 

Number of Units

 

17,655

 

 

17,542

 

 

17,706

 

Occupancy

 

 

78.8

%

 

 

78.8

%

 

 

 

 

 

 

77.2

%

 

 

 

 

Average Monthly Rate (2)

$

4,796

 

$

4,792

 

$

4

 

0.1

%

$

4,566

 

$

230

 

5.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residents Fees and Services

$

66,684

 

$

66,669

 

$

15

 

0.0

%

$

61,616

 

$

5,068

 

8.2

%

Property Operating Expenses

 

 

(57,849

)

 

 

(59,093

)

 

 

(1,244

)

 

(2.1

)%

 

 

(52,753

)

 

 

5,096

 

 

9.7

%

NOI (3)

$

8,835

 

$

7,576

 

$

1,259

 

16.6

%

$

8,863

 

$

(28

)

(0.3

)%

NOI Margin

 

 

13.2

%

 

 

11.4

%

 

 

 

 

 

 

14.4

%

 

 

 

 

 

Other Operator Managed Communities

Number of Properties

 

 

113

 

 

 

113

 

 

 

 

 

 

 

115

 

 

 

 

 

Number of Units

 

7,574

 

 

7,557

 

 

7,623

 

Occupancy

 

 

79.1

%

 

 

79.5

%

 

 

 

 

 

 

76.3

%

 

 

 

 

Average Monthly Rate (2)

$

5,945

 

$

6,036

 

$

(91

)

(1.5

)%

$

5,450

 

$

495

 

9.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residents Fees and Services

$

35,618

 

$

36,059

 

$

(441

)

(1.2

)%

$

31,502

 

$

4,116

 

13.1

%

Property Operating Expenses

 

 

(34,358

)

 

 

(36,356

)

 

 

(1,998

)

 

(5.5

)%

 

 

(31,423

)

 

 

2,935

 

 

9.3

%

NOI (3)

$

1,260

 

$

(297

)

$

1,557

 

524.2

%

$

79

 

$

1,181

 

1494.9

%

NOI Margin

 

 

3.5

%

 

 

(0.8

)%

 

 

 

 

 

 

0.3

%

 

 

 

 

 

Total SHOP

Number of Properties

 

 

232

 

 

 

232

 

 

 

 

 

 

 

234

 

 

 

 

 

Number of Units

 

25,229

 

 

25,099

 

 

25,329

 

Occupancy

 

 

78.9

%

 

 

79.0

%

 

 

 

 

 

 

77.0

%

 

 

 

 

Average Monthly Rate (2)

$

5,142

 

$

5,166

 

$

(24

)

(0.5

)%

$

4,831

 

$

311

 

6.4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residents Fees and Services

$

102,302

 

$

102,728

 

$

(426

)

(0.4

)%

$

93,118

 

$

9,184

 

9.9

%

Property Operating Expenses

 

 

(92,207

)

 

 

(95,449

)

 

 

(3,242

)

 

(3.4

)%

 

 

(84,176

)

 

 

8,031

 

 

9.5

%

NOI (3)

$

10,095

 

$

7,279

 

$

2,816

 

38.7

%

$

8,942

 

$

1,153

 

12.9

%

NOI Margin

 

 

9.9

%

 

 

7.1

%

 

 

 

 

 

 

9.6

%

 

 

 

 

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 (2)

$

4,409

 

$

4,566

 

$

4,514

 

$

4,527

 

$

4,551

 

$

4,532

 

$

4,530

 

$

4,534

 

$

4,556

 

$

4,542

 

$

4,510

 

$

4,548

 

$

4,526

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 (3)

$

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 (2)

$

5,732

 

$

5,450

 

$

5,738

 

$

5,569

 

$

5,652

 

$

5,644

 

$

5,762

 

$

5,797

 

$

5,987

 

$

5,815

 

$

5,745

 

$

5,896

 

$

5,733

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 (3)

$

(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 (2)

$

4,800

 

$

4,831

 

$

4,879

 

$

4,840

 

$

4,880

 

$

4,866

 

$

4,900

 

$

4,914

 

$

4,986

 

$

4,922

 

$

4,879

 

$

4,952

 

$

4,888

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 (3)

$

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 and February 2024 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 these 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)

Previously, average monthly rate was calculated as average daily rate (revenue divided by occupied days) multiplied by 30 days. Retroactively to January 2023, we are now calculating the average monthly rate as the average daily rate multiplied by the exact number of days in the month. This change in methodology is now largely consistent with changes in revenue and occupancy as they are based on the same time period.

(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 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

February 28, 2023

February 29, 2024

Calculation of NOI:

SHOP

SHOP

Residents fees and services

$

93,118

 

 

$

102,302

 

Property operating expenses

 

(84,176

)

 

(92,207

)

NOI

$

8,942

 

 

$

10,095

 

For the Month Ended

February 28, 2023

January 31, 2024

February 29, 2024

SHOP

SHOP

SHOP

 

Residents fees and services

$

93,118

 

 

$

102,728

 

 

$

102,302

 

 

Expenses:

 

 

 

 

 

Property operating expenses

 

84,176

 

 

95,449

 

 

92,207

 

Depreciation and amortization

 

13,998

 

 

 

15,595

 

 

 

15,644

 

Total expenses

 

98,174

 

 

111,044

 

 

107,851

 

 

 

 

 

 

 

Gain on sale of properties

 

(2,430

)

 

-

 

 

-

 

Interest expense

 

(93

)

 

 

(23

)

 

 

(23

)

Net loss

 

(7,579

)

 

(8,339

)

 

(5,572

)

 

 

 

 

 

 

Add (less): Interest expense

 

93

 

 

23

 

 

23

 

Depreciation and amortization

 

13,998

 

 

 

15,595

 

 

 

15,644

 

Gain on sale of properties

 

2,430

 

 

-

 

 

-

 

NOI

$

8,942

 

 

$

7,279

 

 

$

10,095

 

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.

Kevin Brady, Director, Investor Relations (617) 796-8234

Source: Diversified Healthcare Trust

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