Diversified Healthcare Trust(US:DHC)2024-11-04 21:31Real Estate Assets - As of September 30, 2024, the gross book value of the company's real estate assets was $7.2 billion, with 368 properties owned across 36 states and Washington, D.C.[99] - The company holds equity interests in joint ventures owning approximately 2.2 million rentable square feet, which are 99% leased with an average remaining lease term of 15.2 years[100] - The total number of properties in the Medical Office and Life Science Portfolio segment remained stable at 90 as of September 30, 2024, with total square feet increasing slightly to 7,287,000[125] Financial Performance - During Q3 2024, the company generated revenues of $373.6 million, with a net operating income (NOI) of $63.9 million, representing 100% of total revenues[107] - Total revenues for the three months ended September 30, 2024, increased to $373,640,000, compared to $356,524,000 for the same period in 2023, representing a growth of 4.0%[121] - The SHOP segment reported revenues of $312,005,000 for the three months ended September 30, 2024, up from $293,134,000 in 2023, reflecting an increase of 6.0%[121] - For the nine months ended September 30, 2024, the company reported revenues of $952.8 million and a net loss of $292.8 million[228] Occupancy Rates - The company's Medical Office and Life Science Portfolio had an occupancy rate of 80.8%, down from 85.8% in the previous year, while the SHOP segment's occupancy increased to 79.4% from 78.4%[108] - The SHOP segment's occupancy rate improved to 80.3% as of September 30, 2024, compared to 79.0% in the same period of 2023[129] - Occupancy rate for medical office and life science properties was 87.8%, down from 93.7% in 2023[152] Net Loss and Income - Net loss for the three months ended September 30, 2024, was $98,689,000, compared to a net loss of $65,779,000 for the same period in 2023, indicating a deterioration of 50.0%[121] - The net loss for the nine months ended September 30, 2024, was $(282,809), compared to $(191,008) in 2023, representing an increase in loss of $91,801 or 48.1%[151] - Funds From Operations (FFO) for the three months ended September 30, 2024, was $(3.4) million, a decrease from $4.7 million in the same period of 2023[183] Operating Expenses - Interest expense increased by 24.5% to $59,443,000 for the three months ended September 30, 2024, compared to $47,758,000 in 2023[123] - Property operating expenses rose to $(268,883) in 2024 from $(258,709) in 2023, resulting in a $10,174 increase or 3.9% change[130] - General and administrative expenses rose to $27,763 in 2024 from $20,111 in 2023, an increase of $7,652 or 38.0%[151] Leases and Rental Rates - The company entered into new and renewal leases totaling 83 leases in Q3 2024, with a weighted average rental rate change of 4.8%[111] - For the nine months ended September 30, 2024, the company completed 285 leases, achieving a weighted average rental rate change of 9.5%[113] - Annualized rental income from lease expirations in 2024 is projected to be $39,267,000, with 36 properties contributing to this total[117] Economic Conditions - The company is closely monitoring economic conditions, including high interest rates and inflation, which may impact financial performance and capital deployment[102] - The company anticipates continued variability in labor, insurance, and food costs, particularly in the SHOP segment, but expects these cost increases to moderate[101] Asset Impairment - The company reported an impairment of assets of $23.0 million for the three months ended September 30, 2024, compared to $1.2 million in 2023[189] - Impairment of assets increased significantly to $41,718 in 2024 from $18,380 in 2023, an increase of $23,338 or 127.0%[151] Financing and Debt - As of September 30, 2024, the company had total indebtedness of $2.82 billion, with $2.0 billion in senior unsecured notes, $940.5 million in senior secured notes, and $127.9 million in mortgage notes[219][220] - The company completed a private offering of $940.5 million in senior secured notes due January 2026, with net proceeds of approximately $730.4 million after costs[193] - The company has access to various financing options, including debt or equity offerings, to support operations and debt repayments[211] Future Plans - The company expects to close the sale of 18 senior living communities for $135,000,000 in the fourth quarter of 2024[117] - The company plans to continue investing capital in its SHOP segment to capitalize on positive trends in the senior living industry[192] - The company expects to spend approximately $20.3 million of estimated unspent leasing related obligations over the next 12 months, funded by operating cash flows and property dispositions[205]