Business
DHC Announces the Sale by AlerisLife of 116 Management Agreements for DHC SHOP Communities to Seven Different Operators
Strategic Transaction is Expected to Diversify DHC’s Operator Base AlerisLife is Selling All its Assets and Will Wind-Down its Business DHC Expected to
About this update from Diversified Healthcare Trust
[{"type":"text","content":"\nStrategic Transaction is Expected to Diversify DHC’s Operator Base\n\n\nAlerisLife is Selling All its Assets and Will Wind-Down its Business\n\n\nDHC Expected to Monetize its 34% Ownership Stake in AlerisLife\n\n\n NEWTON, Mass.--(BUSINESS WIRE)--\nDiversified Healthcare Trust (Nasdaq: DHC) today announced that it has entered agreements with AlerisLife Inc. (“AlerisLife”) and seven different operators to transition the management of 116 of DHC’s senior living communities managed by Five Star Senior Living (“Five Star”), the operating division of AlerisLife. The transition of these management agreements will occur in tranches beginning in September and is expected to be completed by year end. AlerisLife is also selling all its assets, including its 17 owned communities, and expects to complete a full wind-down of its business and operations in the first half of 2026. In connection with the sale of AlerisLife’s assets and after repayment of debt and payment of estimated wind-down costs, DHC expects to receive estimated net proceeds of between $25 million to $40 million for its 34% interest in AlerisLife. DHC plans to use these net proceeds to reduce leverage and for other general business purposes, including reinvestment in its SHOP segment.\n\n\nTransaction Highlights\n\n\nAlerisLife engaged a third party investment banking firm to explore opportunities to monetize its owned communities and its DHC management agreements. A marketing process commenced in April 2025, and, after outreach to more than 300 potential counterparties and a competitive bidding process, AlerisLife and DHC selected seven operators to purchase the management agreements for the 116 DHC communities.\n\n\nThe closing of these transactions is expected to improve the operating performance of DHC’s SHOP communities, strengthen DHC’s balance sheet and deliver other meaningful benefits, including the following:\n\n\n\nThe sale of the DHC management agreements to a diversified pool of operators, which provides for the concentration of operations in certain key geographic markets, is expected to unlock operational efficiencies, drive cost savings and position DHC’s SHOP segment for accelerated revenue and NOI growth opportunities;\n\n\n\nThe investment being made by the operators to purchase the management agreements, as well as resulting changes to the terms of the...