Diversified Healthcare Trust · NASDAQ:DHC
Diversified Healthcare Trust — Investor Presentation (May 2024)
28 slides from Diversified Healthcare Trust's investor presentation, May 21, 2024
Slide 1: Investor Presentation May 2024
Investor Presentation Five Star Senior Living Tiffany Court Walnut Creek 1866 San Miguel Drive Walnut Creek, CA Five Star Senior Living The Horizon Club 1208 South Military Trail Deerfield Beach, FL MAY 2024
Slide 2: Forward-looking statements
2 2 This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other securities laws that are subject to risks and uncertainties. These statements may include words such as “believe”, “expect”, “anticipate”, “intend”, “plan”,
Slide 3: Table of Contents
3 3 Table of Contents Page COMPANY OVERVIEW 4 FINANCIAL AND OPERATING HIGHLIGHTS 5 2024 OUTLOOK 7 STRATEGY DRIVING FOR SHAREHOLDER VALUE 8 CAPITAL AND LIQUIDITY OUTLOOK 9 SHOP OVERVIEW 10 MEDICAL OFFICE & LIFE SCIENCE PORTFOLIO OVERVIEW 14 APPENDIX 19
Slide 4: DHC Today - National Healthcare REIT Well Positioned For Growth
4 4 DHC Today - National Healthcare REIT Well Positioned For Growth 371 Healthcare Related Properties 8.5M sf Medical Office & Life Science Space Approximately 27,000 Senior Living Units $7.2B Investment Portfolio 27 Triple Net Senior Living Communities and 10 Wellness Centers DHC is well positioned
Slide 5: Delivered Strong Results In 2023 - Portfolio Highlights
5 5 Industry tailwinds driving continued demand Delivered Strong Results In 2023 - Portfolio Highlights 2023 Full Year Performance Highlights SHOP 28% Triple net leased senior living communities 15% Wellness centers 5% Medical Office 34% Life Science 18% +43% Cash Basis NOI Growth +207% Normalized F
Slide 6: Financial and Operating Results Delivered Continued Momentum
6 6 Financial and Operating Results Delivered Continued Momentum • Net loss of $86.3 million, or $0.36 per share • Normalized FFO $3.5 million, or $0.01 per share. • Same property cash basis NOI of $63.6 million, an increase of $5.5 million, or 9.5%. • Medical Office and Life Science portfolio execu
Slide 7: 2024 Full Year Financial Outlook Shows Continued Positive Momentum
7 7 2024 Full Year Financial Outlook Shows Continued Positive Momentum Category Guidance Assumptions Low point Mid point High point SHOP NOI1 $120 million $130 million $140 million • Annual growth weighted towards the second half of 2024. SHOP RevPOR Growth 10% 11% 12% • Increases in rate and occupa
Slide 8: 2024 Strategic Priorities Designed to Capture Near and Long Term Value
8 8 2024 Strategic Priorities Designed to Capture Near and Long Term Value Financing Strategies • Targeting real estate secured fixed rate debt financing to enhance liquidity and repay the 2025 debt maturity at accretive rates. o CMBS financing secured by certain medical office and life science prop
Slide 9: Opportunities to Further Strengthen Capital and Liquidity
9 9 Opportunities to Further Strengthen Capital and Liquidity $1.4 $502.0 $941.4 $0.3 $500.3 $1,107.4 $0 $200 $400 $600 $800 $1,000 $1,200 2024 2025 2026 2027 2028 2029 & After Unsecured Fixed Rate Debt Secured Fixed Rate Debt Debt Maturity Schedule (As of March 31, 2024) (dollars in millions) • As
Slide 10: SHOP Segment
1010 SHOP Segment Five Star Senior Living Heritage Place at Boerne 120 Crosspoint Drive Boerne, TX
Slide 11: SHOP Overview
1111 SHOP Overview 232 SHOP communities span across 31 states. Portfolio largely located in areas where the growth rate of 75+ population is higher than NIC designated metro population growth rate. Good mix of properties strategically located in areas where home values are outpacing the national med
Slide 12: SHOP Margin Expansion is Expected to Continue
1212 (4.2%) 3.8% 7.0% 11.0% 4.0% 3.3% 0.7% 6.5% 71.1% 74.4% 78.1% 81.6% 50% 55% 60% 65% 70% 75% 80% 85% -5% 0% 5% 10% 15% 2021 2022 2023 2024 Midpoint Guidance Occupancy RevPOR / ExpPOR Growth RevPOR Y/Y ∆% ExpPOR Y/Y ∆% Occupancy % SHOP Margin Expansion is Expected to Continue RevPOR growth continu
Slide 13: Expect Favorable Industry Trends to Support Operational Momentum
1313 Expect Favorable Industry Trends to Support Operational Momentum • Senior living demographic of 80+ population is projected to grow at a 4.2% CAGR over the next 10 years while inventory growth is expected to remain depressed at 1.2%.1,2 • Rent growth remains elevated with top primary / secondar
Slide 14: Medical Office & Life Science Segment
1414 Medical Office & Life Science Segment Torrey Pines 3030 Science Park San Diego, CA
Slide 15: Medical Office & Life Science Portfolio Overview
1515 High quality Medical Office and Life Science portfolio. • Nearly 500 individual tenants including industry-leading institutions. • Diverse tenant industry mix including healthcare systems, medical and dental offices, pharmaceutical and biotech research, health insurance and other related indust
Slide 16: Positive Pharmaceutical and Medical Research Industry Fundamentals
1616 $461.6B $715.5B 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Conventional Drugs Biologics & Biosmilars Positive Pharmaceutical and Medical Research Industry Fundamentals • Industry tailwinds driving continued demand. • Increasing demand for healthcare services, driven by an aging popu
Slide 17: Triple Net Leased Senior Living & Wellness Centers Segment
1717 Triple Net Leased Senior Living & Wellness Centers Segment The Stratford 2460 Glebe Street Carmel, IN
Slide 18: Triple Net Leased Senior Living & Wellness Centers Portfolio Overview
1818 Stable performance outlook with embedded growth through a mix of contracted rental increases and percent rent. Triple Net Leased Senior Living & Wellness Centers Portfolio Overview 2,062 Units 100% Occupancy 7.4 year WALT1 1.49x Rent Coverage 812,000 SF 100% Occupancy 15.9 year WALT1 1.67x Rent
Slide 19: Appendix
The picture can't be displayed. 19 Appendix
Slide 20: Impact Through Action
2020 1. Certifications as of December 31, 2023. Our business strategy for our Medical Office and Life Science portfolio incorporates a focus on sustainable approaches to operating these properties in a manner that benefits our shareholders, tenants and the communities in which we are located. We see
Slide 21: RMR Platform: Private Clients
2121 Private Clients DHC is managed by The RMR Group LLC, an alternative asset manager More than $41 Billion in AUM RMR Platform More than $5 Billion in Annual Revenues Over 20,000 Employees Approximately 2,100 Properties National Multi-Sector Investment Platform Industrial Residential Senior Living
Slide 22: National Vertically Integrated Real Estate Operating Platform
National Vertically Integrated Real Estate Operating Platform is a Differentiator and Competitive Advantage RMR Shared Services Accounting Marketing Human Resources Investor Relations Property Management Development Finance Legal Information Technology Project Management Tax Portfolio Management Tra
Slide 23: Management aligned with shareholder interests
2323 Management aligned with shareholder interests RMR base management fee tied to DHC share price performance • Consists of an annual fee based on 50 bps of the lower of: (1) DHC’s historical cost of real estate, or (2) DHC’s total market capitalization. • There is no incentive for RMR to complete
Slide 24: RMR's Demonstrated Commitment to Sustainability
RMR’s Demonstrated Commitment to Sustainability with Measurable Progress 1. Certifications as of December 31, 2023. • Zero Emissions Promise by 2050 for all RMR managed properties. – Reduce GHG emissions 50% by 2029 from 2019 baseline. – Achieve net zero emissions from operations by 2050. • Water an
Slide 25: Calculation of NOI and Cash Basis NOI
2525 (dollars in thousands) For the Three Months Ended 3/31/2024 12/31/2023 9/30/2023 6/30/2023 3/31/2023 Calculation of NOI and Cash Basis NOI: Revenues: Rental income $ 62,650 $ 67,199 $ 63,390 $ 61,373 $ 66,438 Residents fees and services 308,126 294,336 293,134 284,846 279,592 Total revenues 370
Slide 26: NOI by Segment Reconciliation
2626 For the Three Months Ended March 31, 2024 For the Three Months Ended December 31, 2023 For the Three Months Ended March 31, 2023 Calculation of NOI and Cash Basis NOI: MOB and LS Portfolio SHOP Non-Segment Total MOB and LS Portfolio SHOP Non-Segment Total MOB and LS Portfolio SHOP Non-Segment T
Slide 27: FFO and Normalized FFO Reconciliation
2727 (amounts in thousands, except per share data) For the Three Months Ended 3/31/2024 12/31/2023 9/30/2023 6/30/2023 3/31/2023 Net loss $ (86,259) $ (102,564) $ (65,779) $ (72,571) $ (52,658) Depreciation and amortization 70,133 83,653 67,236 68,394 64,800 Loss (gain) on sale of properties 5,874 2
Slide 28: NOI Definitions
2828 NOI, Cash Basis NOI, Same Property NOI and Same Property Cash Basis NOI The calculations of NOI, Cash Basis NOI, same property NOI and same property cash basis NOI exclude certain components of net income (loss) in order to provide results that are more closely related to our property level res
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