Diversified Healthcare Trust(DHC) - 2020 Q3 - Quarterly Report

Real Estate Assets - As of September 30, 2020, the gross book value of the company's real estate assets was $8.2 billion, including $172.1 million classified as held for sale[169] - The company owns 407 properties across 37 states and Washington, D.C., with a focus on healthcare-related properties[169] Financial Performance - Total revenues for Q3 2020 were $394,339, a significant increase from $255,827 in Q3 2019, representing a year-over-year growth of 54.3%[191] - The Office Portfolio segment generated revenues of $94,235 in Q3 2020, down from $100,010 in Q3 2019, reflecting a decrease of 5.8%[191] - SHOP segment revenues surged to $290,101 in Q3 2020, compared to $140,554 in Q3 2019, marking an increase of 106.5%[191] - The total net income (loss) attributable to common shareholders was $(106,888) in Q3 2020, compared to $(29,390) in Q3 2019[191] - The company reported a net loss of $124.5 million for the nine months ended September 30, 2020, compared to a net loss of $84.2 million for the year ended December 31, 2019[317] Rent Collection and Deferrals - For the three months ended September 30, 2020, the company collected approximately 99% of contractual rents due from tenants in its Office Portfolio segment[157] - The company granted rent deferral requests totaling $2.2 million to 74 tenants, representing approximately 5.3% of its annualized rental income[157] - As of September 30, 2020, the company collected approximately 99% of contractual rents due from tenants in its Office Portfolio segment[273] - The company granted rent deferrals totaling $2.2 million, representing about 5.3% of its annualized rental income as of September 30, 2020[267] Operating Expenses and Income - Total NOI decreased to $78,689, a decline of $52,055 or 39.8% compared to $130,744 in the same period last year[1] - Rental income decreased by $1,852 or 2.0% to $90,736, primarily due to the disposition of 19 properties and increased bad debt related to the COVID-19 pandemic[1][2] - Property operating expenses for the SHOP segment rose to $252,931, an increase of $168,749 or 200.5% compared to $84,182 in the prior year[1][2] - Interest expense increased by $13,274 or 29.6% to $58,091, compared to $44,817 in the same period last year[1] COVID-19 Impact - The company expects senior living community operators to operate at lower average occupancy with higher operating expenses due to the pandemic[153] - The company anticipates continued slow leasing activity in the Office Portfolio due to COVID-19, which may lead to further decreases in occupancy and increased operating costs[183] - The company expects continued downward pressure on occupancy and average monthly rates due to the COVID-19 pandemic[1][2] - The company expects to continue experiencing higher operating expenses due to increased labor costs and supply consumption related to COVID-19[206] Debt and Liquidity - The company issued $1.0 billion in senior notes due 2025 to strengthen its financial position during the COVID-19 pandemic[156] - The company had $82.2 million in cash and cash equivalents and $1.0 billion available to borrow under its revolving credit facility as of September 30, 2020[286] - The company is required to maintain unrestricted liquidity of not less than $200.0 million during the Amendment Period[290] - The company’s credit ratings were downgraded, resulting in increased interest expenses under its credit and term loan agreements[299][310] Occupancy Rates - The occupancy rate for the Office Portfolio segment decreased to 91.3% as of September 30, 2020, down from 92.3% in 2019[189] - The SHOP segment's occupancy rate also declined to 80.0% as of September 30, 2020, compared to 84.6% in 2019[189] - Occupancy in the SHOP segment dropped to 76.3%, down from 85.4% in the same quarter last year[1][2] - The occupancy rate for comparable properties as of September 30, 2020 was 93.3%, slightly down from 93.7% in 2019[225] Asset Impairment - Impairment of assets increased to $64,202, a rise of $31,103 or 94.0% from $33,099 in the previous year[1] - Impairment of assets increased significantly by $65,093 (156.8%) to $106,611 for the nine months ended September 30, 2020[224] Shareholder Distributions - The company reduced its quarterly cash distribution rate to $0.01 per share, conserving approximately $33.3 million of cash per calendar quarter[156] - The company paid approximately $40.4 million in quarterly cash distributions to shareholders during the nine months ended September 30, 2020, with a declared distribution of $0.01 per share for the quarter ending November 19, 2020[293] Future Plans - The company plans to continue investing in its senior living communities, although certain projects may be delayed due to COVID-19 restrictions[280] - The company has estimated unspent leasing-related obligations of approximately $18.4 million as of September 30, 2020[281]