Diversified Healthcare Trust(DHC) - 2020 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - In Q1 2020, the normalized FFO attributable to common shareholders was $0.29 per share, a decrease of $0.01 from the previous quarter and down $0.08 from the same quarter last year, primarily due to the restructuring transaction with Five Star and the effects of COVID-19 [12] - As of March 31, the debt to adjusted EBITDA ratio was 7.4x, consistent with the previous quarter [33] Business Line Data and Key Metrics Changes - The Office portfolio segment, which includes medical office and life science properties, represented approximately 53% of DHC's NOI for Q1 2020, with strong leasing results reported despite COVID-19 [13] - Over 302,000 square feet of new and renewal leases were executed in Q1 2020, with a 16% roll-up in rents and a weighted average lease term of 7.7 years [14] - The same-property shop segment revenues were down 140 basis points, with EBITDA for the same-property shop portfolio down 14.4% from the prior year quarter [27] Market Data and Key Metrics Changes - Approximately 86% of the office portfolio's May rents due were collected by the first three business days of May, consistent with April's collection rate of approximately 99% [17] - The average occupancy for the same-property shop segment was reported at 83.3%, with a decrease in in-person tours due to COVID-19 restrictions [28] Company Strategy and Development Direction - The company is committed to its asset disposition program, targeting $900 million in property sales, with $64.6 million already completed in 2020 [30] - DHC is deferring $150 million of previously budgeted capital expenditures while still planning to invest approximately $160 million in properties for the remainder of the year [35] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by the COVID-19 pandemic, emphasizing the importance of health and safety protocols in their communities [10][11] - The company expects occupancy to drop by 40 to 50 basis points per week, depending on the duration of the pandemic [41] Other Important Information - As of April 30, there were 350 confirmed resident cases of COVID-19 across 46 communities, representing less than 1.5% of the total resident population [26] - Rent deferrals granted in the office portfolio segment amounted to $1.7 million, representing 1.4% of the recurring monthly cash revenue expected to be collected [22] Q&A Session Summary Question: Future of senior housing and regulatory changes - Management indicated that social distancing measures will likely remain in place for senior living, with increased regulations anticipated [40] Question: Occupancy trends and projections - Management projected occupancy could drop by 40 to 50 basis points per week, depending on the pandemic's progression [41][42] Question: Need for additional capital - Management expressed confidence in current liquidity but acknowledged uncertainty due to the pandemic, indicating readiness to access additional capital if necessary [44]