Diversified Healthcare Trust(DHC) - 2025 Q3 - Quarterly Results

Financial Performance - Diversified Healthcare Trust reported a net loss of $164.0 million, or $0.68 per share, for Q3 2025, compared to a net loss of $91.6 million in Q2 2025[11]. - Normalized FFO for Q3 2025 was $9.7 million, or $0.04 per share, down 47.7% from $18.6 million in Q2 2025[12]. - Total revenues for Q3 2025 were $388,706,000, an increase of 4.0% compared to $373,640,000 in Q3 2024[21]. - Net loss for Q3 2025 was $(164,040,000), compared to a net loss of $(98,689,000) in Q3 2024, representing a 66.4% increase in losses year-over-year[21]. - Normalized FFO for Q3 2025 was $9,721,000, down from $18,572,000 in Q3 2024, indicating a decline of 47.7%[21]. - The company reported a net loss of $164,040 for Q3 2025, compared to a net loss of $98,689 for Q3 2024, reflecting a deterioration in financial performance[95]. - EBITDA for Q3 2025 was $(49,493), a significant decline from $29,861 in Q3 2024, highlighting operational challenges[95]. - DHC's total revenues for the nine months ended September 30, 2025, were $1.158 billion, compared to $1.115 billion for the same period in 2024, showing a growth of about 3.9%[93]. Occupancy and Revenue Metrics - The Senior Housing Operating Portfolio (SHOP) segment saw a year-over-year occupancy increase of 210 basis points to 81.5%, with average monthly rates growing by over 5%[5]. - The Medical Office and Life Science Portfolio achieved an occupancy rate of 86.6%, with weighted average rents 9% above prior rates[5]. - Average occupancy rate for Senior Living properties improved to 81.5% in Q3 2025, up from 79.4% in Q3 2024, representing a 210 basis point increase[68]. - Medical Office and Life Science portfolio occupancy increased to 86.6% in Q3 2025, up from 80.8% in Q3 2024[69]. - The total gross book value of the Medical Office and Life Science Portfolio is $1.718 billion, representing 25.8% of total real estate assets[55]. - The SHOP segment represents 69.1% of the gross book value of real estate assets, with total revenues of $333.39 million, accounting for 85.8% of total revenues[55]. Asset and Debt Management - DHC's cash and cash equivalents totaled approximately $209.6 million as of September 30, 2025[11]. - DHC entered into a $1.0 billion mortgage loan secured by Vertex Pharmaceuticals' headquarters, resulting in a $28.0 million distribution[11]. - The company plans to repay its 2026 debt maturity as early as year-end 2025, with no debt maturities until 2028[6]. - Total assets as of September 30, 2025, were $4,683,974,000, a decrease from $5,137,005,000 as of December 31, 2024[17]. - Total liabilities increased to $2,995,244,000 as of September 30, 2025, compared to $3,178,162,000 at the end of 2024[17]. - Total equity decreased to $1,688,730,000 as of September 30, 2025, down from $1,958,843,000 at the end of 2024, reflecting a decline of 13.8%[17]. - The leverage ratio of net debt to total gross assets is 38.1% as of September 30, 2025, an increase from 37.3% in the previous quarter[30]. - The company has a total debt to adjusted total assets ratio of 40.7%, remaining below the allowable maximum of 60.0%[31]. Capital Expenditures and Investments - For the three months ended September 30, 2025, total recurring capital expenditures amounted to $40,562, compared to $29,329 for the previous quarter[35]. - Capital expenditures for the Medical Office and Life Science Portfolio for the nine months ended September 30, 2025, totaled $17,848[35]. - The company has disposed of 44 properties since January 1, 2025, generating a total gross sales price of $395.805 million[40]. - The company has a total unsecured fixed rate debt of $1,600,000, with a weighted average interest rate of 5.059%[23]. Operational Efficiency and Management - The transition of 116 AlerisLife-managed communities to new operators is on track, with approximately 73% completed as of November 3, 2025[6]. - The company is focused on redevelopment and repositioning activities, which are expected to enhance property values and operational efficiency[134]. - DHC's management believes that being managed by RMR provides a competitive advantage due to RMR's extensive experience in the real estate industry[87]. - The company is actively managing its financial covenants to ensure compliance and maintain access to capital[119]. Leasing and Tenant Information - The total annualized rental income from tenants as of September 30, 2025, is $219.2 million, with Advocate Aurora Health contributing 7.7% of this income[79]. - The company executed a total of 89 leases in the third quarter of 2025, comprising 10 new leases and 76 renewals[1]. - The cumulative percentage of total annualized rental income expiring by 2028 is projected to be 40.9%[80]. - The company has a diverse tenant base, with 50.6% of annualized rental income coming from tenants not listed individually[79].