Diversified Healthcare Trust · NASDAQ:DHC
Diversified Healthcare Trust — Q1 2022 Earnings Presentation
43 slides from Diversified Healthcare Trust's earnings presentation, May 3, 2022
Slide 1: First Quarter 2022 Supplemental Operating and Financial Data
FIRST QUARTER 2022 Supplemental Operating and Financial Data ALL AMOUNTS IN THIS REPORT ARE UNAUDITED. Muse at Torrey Pines San Diego, CA Exhibit 99.2
Slide 2: Table of Contents
Supplemental Q1 2022 2 CORPORATE INFORMATION Company Profile ...............................................................................................................................................................................................................................................
Slide 3: Company Profile
Supplemental Q1 2022 3 The Company: Diversified Healthcare Trust, or DHC, we, our or us, is a real estate investment trust, or REIT, which owns healthcare related properties, including medical office and life science buildings, senior living communities and wellness centers located throughout the U.
Slide 4: Investor Information
Supplemental Q1 2022 4 Board of Trustees: John L. Harrington Lisa Harris Jones Daniel F. LePage Independent Trustee Lead Independent Trustee Independent Trustee David A. Pierce Jeffrey P. Somers Independent Trustee Independent Trustee Jennifer F. Francis Adam D. Portnoy Managing Trustee Chair of the
Slide 5: Research Coverage
Supplemental Q1 2022 5 Equity Research Coverage: B. Riley Securities, Inc. BofA Securities Colliers Securities LLC Bryan Maher Joshua Dennerlein David Toti (646) 885-5423 (646) 855-1681 (401) 488-4797 bmaher@brileyfin.com joshua.dennerlein@bofa.com david.toti@colliers.com JMP Securities RBC Capital
Slide 6: Key Financial Data
Supplemental Q1 2022 6 Key Financial Data RETURN TO TABLE OF CONTENTS As of and For the Three Months Ended 3/31/2022 12/31/2021 9/30/2021 6/30/2021 3/31/2021 Selected Balance Sheet Data: Total gross assets $ 8,465,059 $ 8,361,321 $ 8,907,220 $ 8,972,324 $ 9,285,312 Total assets $ 6,775,379 $ 6,623,5
Slide 7: Condensed Consolidated Balance Sheets
Supplemental Q1 2022 7 March 31, 2022 December 31, 2021 Assets Real estate properties: Land $ 652,302 $ 741,501 Buildings and improvements 5,760,881 6,072,055 Total real estate properties, gross 6,413,183 6,813,556 Accumulated depreciation (1,689,680) (1,737,807) Total real estate properties, net 4,
Slide 8: Condensed Consolidated Statements of Income (Loss)
Supplemental Q1 2022 8 For the Three Months Ended March 31, 2022 2021 Revenues: Rental income $ 65,285 $ 102,758 Residents fees and services 245,448 259,966 Total revenues 310,733 362,724 Expenses: Property operating expenses 268,742 287,391 Depreciation and amortization 57,259 66,153 General and ad
Slide 9: Condensed Consolidated Statements of Income (Loss) (Additional Data)
Supplemental Q1 2022 9 For the Three Months Ended March 31, 2022 2021 Additional Data: General and administrative expenses / total assets (at end of period) 0.1 % 0.1 % Non-cash straight line rent adjustments included in rental income $ 1,745 $ 804 Lease value amortization included in rental income
Slide 10: Debt Summary
Supplemental Q1 2022 10 Coupon Interest Principal Maturity Due at Years to Rate Rate Balance Date Maturity Maturity Floating Rate Debt: Revolving credit facility (1) 3.000% 3.000% $ 700,000 1/15/2024 $ 700,000 1.8 Weighted average rate / total floating rate debt 3.000% 3.000% $ 700,000 $ 700,000 1.8
Slide 11: Debt Maturity Schedule
Supplemental Q1 2022 11 $700,000 $250,000 $1,000,000 $500,000 $1,100,000 $38,229 $16,413 $1,834 $2,001 $904 $302 $315 $330 $346 $7,623 Floating Rate Debt Unsecured Fixed Rate Debt Secured Fixed Rate Debt 2022 2023 2024 2025 2026 2027 2028 2029 2030 Thereafter $0 $200,000 $400,000 $600,000 $800,000 $
Slide 12: Leverage Ratios, Coverage Ratios and Public Debt Covenants
Supplemental Q1 2022 12 Leverage Ratios, Coverage Ratios and Public Debt Covenants RETURN TO TABLE OF CONTENTS As of and For the Three Months Ended 3/31/2022 12/31/2021 9/30/2021 6/30/2021 3/31/2021 Leverage Ratios: Net debt / total gross assets 25.2% 32.3% 39.8% 38.9% 40.9% Net debt / gross book va
Slide 13: Summary of Capital Expenditures
Supplemental Q1 2022 13 (dollars and sq. ft. in thousands, except per sq. ft. and unit data) Summary of Capital Expenditures RETURN TO TABLE OF CONTENTS For the Three Months Ended 3/31/2022 12/31/2021 9/30/2021 6/30/2021 3/31/2021 Office Portfolio lease related costs $ 6,759 $ 15,941 $ 5,910 $ 10,04
Slide 14: Office Portfolio Redevelopment Information
Supplemental Q1 2022 14 Project Location Type of Property Square Feet (1) Estimated Project Costs Total Costs Incurred as of March 31, 2022 Estimated Completion Date 4 Maguire Road Lexington, MA Life Science 54,633 $ 29.2 $ 27.9 Q3 2022 101 West Ponce De Leon Avenue Decatur, GA Medical Office 112,44
Slide 15: Property Acquisitions / Dispositions Information
Supplemental Q1 2022 15 Property Acquisitions / Dispositions Information Since January 1, 2022 Acquisitions: We have not acquired any properties since January 1, 2022. Dispositions: We have not disposed of any properties since January 1, 2022. Joint Venture Activity: Date Sold Location Type of Prope
Slide 16: Investments in Unconsolidated Joint Ventures
Supplemental Q1 2022 16 Investments in Unconsolidated Joint Ventures (1) (dollars in thousands) RETURN TO TABLE OF CONTENTS As of March 31, 2022 Three Months Ended March 31, 2022 Joint Venture Location Type of Property Number of Properties Square Feet Occupancy at March 31, 2022 Weighted Average Lea
Slide 17: Investments in Unconsolidated Joint Ventures (continued)
Supplemental Q1 2022 17 Investments in Unconsolidated Joint Ventures (continued) (1) (dollars in thousands) RETURN TO TABLE OF CONTENTS As of March 31, 2022 (1) Our property list, including properties owned by these unconsolidated joint ventures, is available on our website. (2) Based on the aggrega
Slide 18: Calculation and Reconciliation of NOI and Cash Basis NOI
Supplemental Q1 2022 18 Calculation and Reconciliation of NOI and Cash Basis NOI (dollars in thousands) RETURN TO TABLE OF CONTENTS For the Three Months Ended 3/31/2022 12/31/2021 9/30/2021 6/30/2021 3/31/2021 Calculation of NOI and Cash Basis NOI: Revenues: Rental income $ 65,285 $ 102,034 $ 101,40
Slide 19: NOI and Cash Basis NOI
Supplemental Q1 2022 19 For the Three Months Ended 3/31/2022 3/31/2021 % Change NOI: Life Science $ 7,291 $ 32,088 (77.3) % Medical Office 24,259 29,942 (19.0) % Total Office Portfolio 31,550 62,030 (49.1) % SHOP 153 3,868 (96.0) % Non-Segment 10,288 9,435 9.0 % Total $ 41,991 $ 75,333 (44.3) % Cash
Slide 20: Same Property NOI and Cash Basis NOI
Supplemental Q1 2022 20 Same Property NOI and Cash Basis NOI (dollars in thousands) RETURN TO TABLE OF CONTENTS For the Three Months Ended 3/31/2022 3/31/2021 % Change NOI: Life Science $ 6,367 $ 7,091 (10.2) % Medical Office 22,193 21,858 1.5 % Total Office Portfolio 28,560 28,949 (1.3) % SHOP 9,48
Slide 21: NOI Reconciliation by Segment: Office Portfolio
Supplemental Q1 2022 21 Calculation and Reconciliation of NOI, Cash Basis NOI, Same Property NOI and Same Property Cash Basis NOI by Segment RETURN TO TABLE OF CONTENTS (dollars in thousands) Office Portfolio For the Three Months Ended Calculation of NOI and Cash Basis NOI: 3/31/2022 12/31/2021 9/30
Slide 22: NOI Reconciliation by Segment: SHOP
Supplemental Q1 2022 22 Calculation and Reconciliation of NOI, Cash Basis NOI, Same Property NOI and Same Property Cash Basis NOI by Segment (continued) RETURN TO TABLE OF CONTENTS (dollars in thousands) SHOP For the Three Months Ended Calculation of NOI and Cash Basis NOI: 3/31/2022 12/31/2021 9/30
Slide 23: NOI Reconciliation by Segment: Non-Segment
Supplemental Q1 2022 23 Calculation and Reconciliation of NOI, Cash Basis NOI, Same Property NOI and Same Property Cash Basis NOI by Segment (continued) RETURN TO TABLE OF CONTENTS (dollars in thousands) Non-Segment For the Three Months Ended Calculation of NOI and Cash Basis NOI: 3/31/2022 12/31/20
Slide 24: NOI Reconciliation by Segment: Consolidated
Supplemental Q1 2022 24 Calculation and Reconciliation of NOI, Cash Basis NOI, Same Property NOI and Same Property Cash Basis NOI by Segment (continued) RETURN TO TABLE OF CONTENTS (dollars in thousands) Consolidated For the Three Months Ended Calculation of NOI and Cash Basis NOI: 3/31/2022 12/31/2
Slide 25: Reconciliation of EBITDA, EBITDAre and Adjusted EBITDAre
Supplemental Q1 2022 25 Calculation and Reconciliation of EBITDA, EBITDAre and Adjusted EBITDAre (dollars in thousands) For the Three Months Ended 3/31/2022 12/31/2021 9/30/2021 6/30/2021 3/31/2021 Net income (loss) $ 240,423 $ 366,758 $ (88,004) $ (32,645) $ (66,183) Interest expense 57,131 63,518
Slide 26: Reconciliation of FFO and Normalized FFO
Supplemental Q1 2022 26 Calculation and Reconciliation of FFO and Normalized FFO Attributable to Common Shareholders (amounts in thousands, except per share data) RETURN TO TABLE OF CONTENTS For the Three Months Ended 3/31/2022 12/31/2021 9/30/2021 6/30/2021 3/31/2021 Net income (loss) attributable
Slide 27: Portfolio Summary by Geographic Diversification and Property Type
Supplemental Q1 2022 27 (based on Gross Book Value of Real Estate Assets as of March 31, 2022) (1) Senior living communities are categorized by the type of living units which constitute a majority of the living units at the community. (2) Memory care communities are classified as assisted living com
Slide 28: Portfolio Summary
Supplemental Q1 2022 28 Portfolio Summary RETURN TO TABLE OF CONTENTS (dollars in thousands, except investment per square foot or unit) As of March 31, 2022 Number of Properties Square Feet or Number of Units Gross Book Value of Real Estate Assets % of Total Gross Book Value of Real Estate Assets In
Slide 29: SHOP Unit Count
Supplemental Q1 2022 29 SHOP Unit Count Assisted Living units: 10,444: 42% Independent Living and Active Adult units: 10,417: 42% SNF units: 1,394: 5% Memory Care units: 2,833: 11% RETURN TO TABLE OF CONTENTS SHOP Unit Count as of March 31, 2022 Assisted Living units: 6,451: 36% Independent Living a
Slide 30: Rent Coverage and Occupancy
Supplemental Q1 2022 30 Rent Coverage and Occupancy Rent Coverage (1): For the Twelve Months Ended 12/31/2021 9/30/2021 6/30/2021 3/31/2021 12/31/2020 Triple net leased senior living communities 1.21 x 1.21 x 1.27 x 1.38 x 1.48 x Wellness centers 1.12 x 1.23 x 1.17 x 0.94 x 0.91 x Total 1.18 x 1.21
Slide 31: Office Portfolio - Results of Operations
Supplemental Q1 2022 31RETURN TO TABLE OF CONTENTS OFFICE PORTFOLIO - RESULTS OF OPERATIONS (dollars and sq. ft. in thousands) As of and For the Three Months Ended March 31, 2022 As of and For the Three Months Ended March 31, 2021 Life Science Medical Office Total Office Portfolio Life Science Medic
Slide 32: Office Portfolio - Results of Operations (continued)
Supplemental Q1 2022 32 (1) Same property includes those properties classified as same property for the three months ended March 31, 2022 for all periods presented. RETURN TO TABLE OF CONTENTS OFFICE PORTFOLIO - RESULTS OF OPERATIONS (dollars and sq. ft. in thousands) As of and For the Three Months
Slide 33: SHOP Segment and Same Property - Results of Operations
Supplemental Q1 2022 33 SHOP Segment and Same Property - Results of Operations RETURN TO TABLE OF CONTENTS SHOP SEGMENT - RESULTS OF OPERATIONS (dollars in thousands, except average monthly rate) As of and For the Three Months Ended 3/31/2022 12/31/2021 9/30/2021 6/30/2021 3/31/2021 Number of Proper
Slide 34: SHOP Segment - Results of Operations
Supplemental Q1 2022 34RETURN TO TABLE OF CONTENTS SHOP SEGMENT - RESULTS OF OPERATIONS (dollars in thousands, except average monthly rate) As of and For the Three Months Ended March 31, 2022 As of and For the Three Months Ended March 31, 2021 Five Star Managed Communities Other Operator Managed Com
Slide 35: Office Portfolio Leasing Summary
Supplemental Q1 2022 35 Office Portfolio Leasing Summary (1) (2) (1) The leasing summary on this page is based on leases entered into during the periods indicated. (2) Effective as of the date of deconsolidation, excludes properties owned by the unconsolidated joint ventures in which we own an equit
Slide 36: Tenants Representing 1% Or More of Total Annualized Rental Income
Supplemental Q1 2022 36 As of March 31, 2022 (1) In July 2021, we entered into a 10-year lease with KSQ Therapeutics, Inc. The lease relates to an ongoing redevelopment of a property we own in Lexington, MA. The term of the lease commences upon our delivery of the completed space, which is estimated
Slide 37: Office Portfolio Lease Expiration Schedule
Supplemental Q1 2022 37 Office Portfolio Lease Expiration Schedule RETURN TO TABLE OF CONTENTS (dollars in thousands) As of March 31, 2022 Office Portfolio Annualized Rental Income Expiring Year Annualized Rental Income Expiring % of Total Annualized Rental Income Expiring Cumulative % of Total Annu
Slide 38: Non-Segment Lease Expiration Schedule
Supplemental Q1 2022 38 Non-Segment Annualized Rental Income Expiring Year Number of Properties Number of Units or Square Feet Annualized Rental Income Expiring % of Total Annualized Rental Income Expiring Cumulative % of Total Annualized Rental Income Expiring 2022 — — $ — —% —% 2023 — — — —% —% 20
Slide 39: Non-GAAP Financial Measures
Supplemental Q1 2022 39 Non-GAAP Financial Measures We present certain "non-GAAP financial measures" within the meaning of applicable rules of the SEC, including net operating income, or NOI, Cash Basis NOI, same property NOI, same property Cash Basis NOI, earnings before interest, income tax, depre
Slide 40: Definitions of Terms
Supplemental Q1 2022 40 Adjusted total assets Adjusted total assets is the original cost of real estate assets calculated in accordance with GAAP before depreciation and after impairment write downs, if any, and excludes accounts receivable and intangible assets. AlerisLife AlerisLife means AlerisLi
Slide 41: Definitions of Terms (continued)
Supplemental Q1 2022 41 GAAP GAAP is U.S. generally accepted accounting principles. Gross book value of real estate assets Gross book value of real estate assets is real estate assets at cost plus certain acquisition costs, before depreciation and purchase price allocations, less impairment writedow
Slide 42: Definitions of Terms (continued)
Supplemental Q1 2022 42 Office Portfolio Office Portfolio consists of medical office properties leased to medical providers and other medical related businesses, as well as life science properties leased to biotech laboratories and other similar tenants. Our medical office and life science property
Slide 43: Forward-Looking Statements
Supplemental Q1 2022 43 This presentation of supplemental operating and financial data may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other securities laws. Whenever we use words such as “believe”, “expect”, “anticipate”, “intend
Diversified Healthcare Trust — Q1 2022 Earnings Presentation on 6ix