Diversified Healthcare Trust(US:DHC)2025-05-05 20:56Property Portfolio - As of March 31, 2025, the company owned 343 properties across 34 states and Washington, D.C., with a total gross book value of real estate assets amounting to $6.84 billion[106][112]. - The total annualized rental income from the Medical Office and Life Science Portfolio as of March 31, 2025, was $194.69 million, with lease expirations scheduled for 2025 to 2034 and beyond[116]. - Total properties in the SHOP segment remained stable at 207, with occupancy increasing to 81.1% from 80.0%[128]. Financial Performance - The company reported a net loss of $8.99 million for Q1 2025, a significant improvement compared to a net loss of $86.26 million in Q1 2024[121]. - Total Net Operating Income (NOI) increased by 14.8% to $72,538,000 in Q1 2025 from $63,172,000 in Q1 2024[123]. - NOI for the Medical Office and Life Science Portfolio decreased by 11.2% to $26,856,000, while SHOP segment NOI increased by 49.0% to $36,828,000[123]. - The company reported a gain on the sale of properties amounting to $110,140,000, a significant improvement from a loss of $5,874,000 in the previous year[123]. - The company recognized a gain on insurance recoveries amounting to $7,522,000 during the three months ended March 31, 2025[154]. - Revenues for the three months ended March 31, 2025, were reported at $311,706, while expenses were $369,792, resulting in a net loss of $130,761[187]. Occupancy and Leasing - The overall occupancy rates as of March 31, 2025, were 80.6% for the Medical Office and Life Science Portfolio and 80.2% for the SHOP segment, compared to 82.9% and 78.9% respectively in the previous year[113]. - The company entered into new leases totaling 120,000 square feet and renewals for 25,000 square feet in the Medical Office and Life Science Portfolio during Q1 2025, with a weighted average rental rate change of 18.4%[115]. - Average monthly rate for SHOP properties increased to $5,303, up from $5,074, reflecting a rise in occupancy and service fees[128]. Expenses and Costs - Property operating expenses for comparable properties increased by 2.9% to $19,952,000, primarily due to higher snow removal and utility costs[126]. - The company’s general and administrative expenses increased to $9,000,000 for the three months ended March 31, 2025, compared to $7,568,000 in 2024, largely due to higher estimated incentive management fees[140]. - The company experienced a decrease in property operating expenses due to real estate taxes and other expenses being paid directly by tenants[137]. Debt and Financing - Interest expense increased to $57,831,000 for the three months ended March 31, 2025, compared to $57,576,000 in 2024, primarily due to a $120,000,000 mortgage loan executed at a fixed interest rate of 6.864%[146]. - The company executed a $140,000 million floating rate mortgage loan secured by 14 SHOP communities, maturing in March 2028[175]. - Outstanding principal amount of senior secured notes due 2026 was $641,376 million, with a potential extension option to January 15, 2027[174]. - The company has a floating rate mortgage loan of $140,000 with an interest rate of 6.82%, resulting in an annual interest expense of $9,681[194]. - An increase of one percentage point in interest rates would raise the floating rate debt interest expense to $9,936, impacting annual earnings per share by $0.04[196]. Asset Management - The company is actively reviewing non-performing communities for potential disposition or transition to different operators to optimize performance[109]. - The company plans to continue investing in redevelopment projects to enhance property positioning and returns in future years[165]. - The company is closely monitoring economic uncertainties, including interest rates and inflation, which could impact financial conditions and operational performance[110]. Capital Expenditures - Total capital expenditures for the three months ended March 31, 2025, were $32,054 million, an increase of 24.5% compared to $25,864 million in the same period of 2024[163]. - Recurring capital expenditures for the Medical Office and Life Science Portfolio were $5,371 million, down from $6,948 million in the prior year[163]. - SHOP fixed assets and capital improvements increased significantly to $21,115 million from $10,091 million year-over-year[163]. - Estimated unspent leasing related obligations at medical office and life science properties were approximately $28,429 million, with expected spending of $23,627 million in the next 12 months[166]. Cash Flow and Equity - The company reported cash and cash equivalents of $306,655,000 at the end of the period, up from $208,163,000 at the end of March 2024[159]. - The company’s cash provided by investing activities was $291,093,000 for the three months ended March 31, 2025, compared to a cash used of $58,839,000 in 2024, indicating a significant increase in cash flow from property sales[159]. - A quarterly cash distribution of approximately $2,413 million was paid to shareholders during the three months ended March 31, 2025[172]. Market Risks - The company is exposed to market risks associated with interest rate fluctuations, managing this risk through fixed rate debt and interest rate caps[193]. - The company has purchased an interest rate cap with a strike rate of 4.50% to hedge against increases in SOFR related to its floating rate mortgage loan[195].