Diversified Healthcare Trust · NASDAQ:DHC
Diversified Healthcare Trust — Q4 2023 Earnings Presentation
39 slides from Diversified Healthcare Trust's earnings presentation, Feb 26, 2024
Slide 1: Fourth Quarter 2023 Financial Results and Supplemental Information
Diversified Healthcare Trust Fourth Quarter 2023 Financial Results and Supplemental Information Exhibit 99.2 February 26, 2024 Calusa Harbour 2525 First Street Fort Myers, FL
Slide 2: Table of Contents
Q4 2023 2 FINANCIAL RESULTS Diversified Healthcare Trust Announces Fourth Quarter 2023 Financial Results .......................................................................................... 3 Fourth Quarter 2023 Highlights........................................................................
Slide 3: Diversified Healthcare Trust Announces Fourth Quarter 2023 Financial Results
Q4 2023 3 "DHC’s fourth quarter 2023 was highlighted by improvements in our SHOP and Office Portfolio segments. SHOP occupancy increased 300 basis points year-over-year to 79.3% and average monthly rates increased by 5.5%, resulting in a 9.9% increase in SHOP revenues. In our Office Portfolio, we re
Slide 4: Fourth Quarter 2023 Highlights
Q4 2023 4 Financial Results Fourth Quarter 2023 Highlights RETURN TO TABLE OF CONTENTS Operating Update Financing Activities and Liquidity • Net loss of $102.6 million, or $0.43 per share. • Normalized FFO of $8.1 million, or $0.03 per share. • Leased 200,444 square feet in DHC's Office Portfolio at
Slide 5: Fourth Quarter 2023 Results
Q4 2023 5 Fourth Quarter 2023 Results RETURN TO TABLE OF CONTENTS For the Three Months Ended Financial Results December 31, 2023 September 30, 2023 Change December 31, 2022 Change Net loss $ (102,564) $ (65,779) (55.9) % $ (65,322) (57.0) % Net loss per common share $ (0.43) $ (0.28) (53.6) % $ (0.2
Slide 6: Key Financial Data
Q4 2023 6 Key Financial Data RETURN TO TABLE OF CONTENTS As of and For the Three Months Ended 12/31/2023 9/30/2023 6/30/2023 3/31/2023 12/31/2022 Selected Balance Sheet Data: Total gross assets $ 7,466,979 $ 7,496,204 $ 7,493,885 $ 7,545,727 $ 7,830,445 Total assets $ 5,446,136 $ 5,530,256 $ 5,585,4
Slide 7: Condensed Consolidated Balance Sheets
Q4 2023 7 December 31, 2023 December 31, 2022 Assets Real estate properties: Land $ 652,977 $ 668,918 Buildings and improvements 6,165,490 6,023,625 Total real estate properties, gross 6,818,467 6,692,543 Accumulated depreciation (2,020,843) (1,828,352) Total real estate properties, net 4,797,624 4,
Slide 8: Consolidated Statements of Income (Loss)
Q4 2023 8 For the Three Months Ended December 31, For the Year Ended December 31, 2023 2022 2023 2022 Revenues: Rental income $ 67,199 $ 68,973 $ 258,400 $ 260,740 Residents fees and services 294,336 267,912 1,151,908 1,022,826 Total revenues 361,535 336,885 1,410,308 1,283,566 Expenses: Property op
Slide 9: Consolidated Statements of Income (Loss) (Additional Data)
Q4 2023 9 For the Three Months Ended December 31, For the Year Ended December 31, 2023 2022 2023 2022 Additional Data: General and administrative expenses / total assets (at end of period) 0.1 % 0.1 % 0.5 % 0.4 % Non-cash straight line rent adjustments included in rental income $ 238 $ 1,723 $ (1,09
Slide 10: Debt Summary
Q4 2023 10 Coupon Interest Principal Maturity Due at Years to Rate Rate Balance Date Maturity Maturity Unsecured Fixed Rate Debt: Senior unsecured notes due 2025 (1) (2) 9.750% 9.750% $ 500,000 6/15/2025 $ 500,000 1.5 Senior unsecured notes due 2028 4.750% 4.966% 500,000 2/15/2028 500,000 4.1 Senior
Slide 11: Debt Maturity Schedule
Q4 2023 11 $500,000 $500,000 $500,000 $600,000 $1,811 $1,980 $941,422 $291 $310 $331 $353 $376 $401 $6,279 Unsecured Fixed Rate Debt Secured Fixed Rate Debt 2024 2025 2026 2027 2028 2029 2030 2031 2032 Thereafter $0 $200,000 $400,000 $600,000 $800,000 $1,000,000 Debt Maturity Schedule (1) RETURN TO
Slide 12: Leverage Ratios, Coverage Ratios and Bond Covenants
Q4 2023 12 Leverage Ratios, Coverage Ratios and Bond Covenants RETURN TO TABLE OF CONTENTS As of and For the Three Months Ended 12/31/2023 9/30/2023 6/30/2023 3/31/2023 12/31/2022 Leverage Ratios: Net debt / total gross assets 37.6% 33.8% 32.8% 32.4% 30.6% Net debt / gross book value of real estate
Slide 13: Summary of Capital Expenditures
Q4 2023 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 For the Year Ended 12/31/2023 9/30/2023 6/30/2023 3/31/2023 12/31/2022 12/31/2023 Office Portfolio: Lease related costs $ 13,349 $ 8,
Slide 14: Redevelopment Information
Q4 2023 14 Project Location Type of Property Square Feet (1) Estimated Project Costs Total Costs Incurred as of December 31, 2023 Estimated Completion Date 100 Hampshire Street Mansfield, MA Life Science 124,803 $ 7.8 $ 2.4 Q1 2024 (1) Represents estimated square footage upon project completion. Red
Slide 15: Property Acquisitions / Dispositions Information
Q4 2023 15 Property Acquisitions / Dispositions Information Since January 1, 2023 Acquisitions: DHC has not acquired any properties since January 1, 2023. Dispositions: Date Sold Location Type of Property Number of Properties Gross Sales Price 2/3/2023 Columbia, SC Senior Living (1) 1 $ 1,100 2/28/2
Slide 16: Investments in Unconsolidated Joint Ventures
Q4 2023 16 Investments in Unconsolidated Joint Ventures (1) (dollars in thousands) RETURN TO TABLE OF CONTENTS As of December 31, 2023 Year Ended December 31, 2023 Joint Venture Location Type of Property Number of Properties Square Feet Occupancy at December 31, 2023 Weighted Average Lease Term at D
Slide 17: Investments in Unconsolidated Joint Ventures (continued)
Q4 2023 17 Investments in Unconsolidated Joint Ventures (continued) (1) (dollars in thousands) RETURN TO TABLE OF CONTENTS As of December 31, 2023 (1) DHC's property list, including properties owned by these unconsolidated joint ventures, is available on DHC's website. (2) Based on the aggregate ann
Slide 18: Portfolio Summary by Geographic Diversification and Property Type
Q4 2023 18 FL: 10% CA: 9% TX: 9% GA: 6% NC: 4% MD: 4% WI: 4% VA: 4% IL: 4% IN: 4% 26 Other States + D.C.: 42% (based on Gross Book Value of Real Estate Assets as of December 31, 2023) (1) Senior living communities are categorized by the type of living units which constitute a majority of the living
Slide 19: Portfolio Summary
Q4 2023 19 Portfolio Summary RETURN TO TABLE OF CONTENTS (dollars in thousands, except investment per square foot or unit) As of December 31, 2023 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 Investment P
Slide 20: SHOP Units by Operator
Q4 2023 20 SHOP Units by Operator RETURN TO TABLE OF CONTENTS Unit Count as of December 31, 2023 Manager Location Number of Properties (1) Assisted Living Independent Living and Active Adult Memory Care Skilled Nursing Total Five Star Senior Living Various (28 States) 119 6,470 9,646 1,539 — 17,655
Slide 21: Office Portfolio - Results of Operations
Q4 2023 21 (1) Same property includes those properties classified as same property for the three months ended December 31, 2023 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 Ended 12/3
Slide 22: Office Portfolio - Results of Operations by Type
Q4 2023 22RETURN TO TABLE OF CONTENTS OFFICE PORTFOLIO - RESULTS OF OPERATIONS (dollars and sq. ft. in thousands) As of and For the Three Months Ended December 31, 2023 As of and For the Three Months Ended December 31, 2022 Life Science Medical Office Total Office Portfolio Life Science Medical Offi
Slide 23: SHOP Segment and Same Property - Results of Operations
Q4 2023 23 SHOP Segment and Same Property - Results of Operations RETURN TO TABLE OF CONTENTS SHOP SEGMENT - RESULTS OF OPERATIONS As of and For the Three Months Ended 12/31/2023 9/30/2023 12/31/2022 Number of Properties 232 234 237 Number of Units 25,209 25,302 25,346 Occupancy 79.3 % 78.4 % 76.3 %
Slide 24: SHOP Segment - Five Star and Other Operator Managed
Q4 2023 24RETURN TO TABLE OF CONTENTS As of and For the Three Months Ended December 31, 2023 As of and For the Three Months Ended December 31, 2022 Five Star Managed Communities Other Operator Managed Communities Total SHOP Segment Five Star Managed Communities Other Operator Managed Communities Tot
Slide 25: Portfolio Leasing Summary
Q4 2023 25 Portfolio Leasing Summary (1) (1) The leasing summary on this page is based on leases entered into during the periods indicated. (2) Percent difference in prior rents charged for same space or, in the case of vacant space acquired, market rental rates for similar space in the building at
Slide 26: Tenants Representing 1% Or More of Total Annualized Rental Income
Q4 2023 26 As of December 31, 2023 Tenants Representing 1% Or More of Total Annualized Rental Income RETURN TO TABLE OF CONTENTS (dollars in thousands) Tenant Type of Property Annualized Rental Income % of Annualized Rental Income Expiration 1 Advocate Aurora Health Medical office $ 16,939 6.7% 2026
Slide 27: Office Portfolio Lease Expiration Schedule
Q4 2023 27 Office Portfolio Lease Expiration Schedule RETURN TO TABLE OF CONTENTS (dollars in thousands) As of December 31, 2023 Office Portfolio Annualized Rental Income Expiring Year Annualized Rental Income Expiring % of Total Annualized Rental Income Expiring Cumulative % of Total Annualized Ren
Slide 28: Non-Segment Lease Expiration Schedule
Q4 2023 28 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 2024 — — $ — —% —% 2025 3 129,500 sq. ft. 1,458 3.7
Slide 29: The Company
Q4 2023 29 The Company: DHC is a REIT focused on owning high-quality healthcare properties located throughout the United States. DHC seeks diversification across the health services spectrum by care delivery and practice type, by scientific research disciplines and by property type and location. As
Slide 30: Board of Trustees and Executive Officers
Q4 2023 30 Board of Trustees John L. Harrington Phyllis M. Hollis Independent Trustee Independent Trustee Lisa Harris Jones Jeffrey P. Somers Lead Independent Trustee Independent Trustee Jennifer F. Francis Adam D. Portnoy Managing Trustee Chair of the Board & Managing Trustee Executive Officers Chr
Slide 31: Calculation and Reconciliation of NOI and Cash Basis NOI
Q4 2023 31 Calculation and Reconciliation of NOI and Cash Basis NOI (dollars in thousands) RETURN TO TABLE OF CONTENTS For the Three Months Ended For the Year Ended 12/31/2023 9/30/2023 6/30/2023 3/31/2023 12/31/2022 12/31/2023 12/31/2022 Calculation of NOI and Cash Basis NOI: Revenues: Rental incom
Slide 32: Reconciliation of NOI by Segment
Q4 2023 32 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) For the Three Months Ended December 31, 2023 For the Three Months Ended September 30, 2023 For the Three Months Ended Dec
Slide 33: Calculation and Reconciliation of EBITDA, EBITDAre and Adjusted EBITDAre
Q4 2023 33 Calculation and Reconciliation of EBITDA, EBITDAre and Adjusted EBITDAre (dollars in thousands) For the Three Months Ended For the Year Ended 12/31/2023 9/30/2023 6/30/2023 3/31/2023 12/31/2022 12/31/2023 12/31/2022 Net loss $ (102,564) $ (65,779) $ (72,571) $ (52,658) $ (65,322) $ (293,5
Slide 34: Calculation and Reconciliation of FFO and Normalized FFO
Q4 2023 34 Calculation and Reconciliation of FFO and Normalized FFO (amounts in thousands, except per share data) RETURN TO TABLE OF CONTENTS For the Three Months Ended For the Year Ended 12/31/2023 9/30/2023 6/30/2023 3/31/2023 12/31/2022 12/31/2023 12/31/2022 Net loss $ (102,564) $ (65,779) $ (72,
Slide 35: Non-GAAP Financial Measures
Q4 2023 35 Non-GAAP Financial Measures DHC presents 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, depreciation and
Slide 36: Definitions
Q4 2023 36 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 AlerisLife Inc. Annua
Slide 37: Definitions (continued)
Q4 2023 37 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 writedowns, if any. G
Slide 38: Definitions (continued)
Q4 2023 38 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. DHC's medical office and life science property leases incl
Slide 39: Forward-Looking Statements
Q4 2023 39 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”, “
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