Diversified Healthcare Trust · NASDAQ:DHC
Diversified Healthcare Trust — Q3 2024 Earnings Presentation
43 slides from Diversified Healthcare Trust's earnings presentation, Nov 4, 2024
Slide 1: Third Quarter 2024 Financial Results and Supplemental Information
Diversified Healthcare Trust Third Quarter 2024 Financial Results and Supplemental Information November 4, 2024 Pueblo Norte Senior Living 7090 East Mescal Street Scottsdale, AZ Exhibit 99.2
Slide 2: Table of Contents
Q3 2024 2 FINANCIAL RESULTS Diversified Healthcare Trust Announces Third Quarter 2024 Financial Results ............................................................................................ 3 Third Quarter 2024 Highlights .......................................................................
Slide 3: Diversified Healthcare Trust Announces Third Quarter 2024 Financial Results
Q3 2024 3 "We continued to make progress on our strategic initiatives in the third quarter, including improving SHOP performance and reducing debt leverage. While SHOP NOI in the quarter was less than we forecasted, we did achieve growth in SHOP occupancy and average monthly rate in the quarter. We
Slide 4: Third Quarter 2024 Highlights
Q3 2024 4 Financial Results Third Quarter 2024 Highlights RETURN TO TABLE OF CONTENTS Operating Update Liquidity, Financing and Investing Activities • Net loss of $98.7 million, or $0.41 per share. • Normalized FFO of $4.0 million, or $0.02 per share. • Leased 82,595 square feet in DHC's Medical Off
Slide 5: Third Quarter 2024 Results
Q3 2024 5 Third Quarter 2024 Results RETURN TO TABLE OF CONTENTS For the Three Months Ended Financial Results September 30, 2024 June 30, 2024 Change September 30, 2023 Change Net loss $ (98,689) $ (97,861) (0.8) % $ (65,779) (50.0) % Net loss per share $ (0.41) $ (0.41) 0.0 % $ (0.28) (46.4) % Norm
Slide 6: Key Financial Data
Q3 2024 6 Key Financial Data RETURN TO TABLE OF CONTENTS As of and For the Three Months Ended 9/30/2024 6/30/2024 3/31/2024 12/31/2023 9/30/2023 Selected Balance Sheet Data: Total gross assets $ 7,395,888 $ 7,440,385 $ 7,410,364 $ 7,466,979 $ 7,496,204 Total assets $ 5,285,196 $ 5,333,447 $ 5,348,03
Slide 7: Condensed Consolidated Balance Sheets
Q3 2024 7 September 30, 2024 December 31, 2023 Assets Real estate properties: Land $ 623,322 $ 652,977 Buildings and improvements 6,049,365 6,165,490 Total real estate properties, gross 6,672,687 6,818,467 Accumulated depreciation (2,110,692) (2,020,843) Total real estate properties, net 4,561,995 4
Slide 8: Condensed Consolidated Statements of Income (Loss)
Q3 2024 8 For the Three Months Ended September 30, For the Nine Months Ended September 30, 2024 2023 2024 2023 Revenues: Rental income $ 61,635 $ 63,390 $ 187,155 $ 191,201 Residents fees and services 312,005 293,134 928,653 857,572 Total revenues 373,640 356,524 1,115,808 1,048,773 Expenses: Proper
Slide 9: Condensed Consolidated Statements of Income (Loss) (Additional Data)
Q3 2024 9 For the Three Months Ended September 30, For the Nine Months Ended September 30, 2024 2023 2024 2023 Additional Data: General and administrative expenses / total assets (at end of period) 0.3 % 0.1 % 0.5 % 0.4 % Business management incentive fees included in general and administrative expe
Slide 10: Debt Summary
Q3 2024 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% $ 440,000 6/15/2025 $ 440,000 0.7 Senior unsecured notes due 2028 4.750% 4.966% 500,000 2/15/2028 500,000 3.4 Senior
Slide 11: Debt Maturity Schedule
Q3 2024 11 $440,000 $500,000 $500,000 $600,000 $458 $1,950 $941,390 $257 $274 $292 $312 $332 $354 $125,547 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
Q3 2024 12 Leverage Ratios, Coverage Ratios and Bond Covenants RETURN TO TABLE OF CONTENTS As of and For the Three Months Ended 9/30/2024 6/30/2024 3/31/2024 12/31/2023 9/30/2023 Leverage Ratios: Net debt / total gross assets 38.6% 38.3% 38.4% 37.6% 33.8% Net debt / gross book value of real estate a
Slide 13: Summary of Capital Expenditures
Q3 2024 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 9/30/2024 6/30/2024 3/31/2024 12/31/2023 9/30/2023 Medical Office and Life Science Portfolio: Lease related costs $ 3,504 $ 6,409 $ 6
Slide 14: Redevelopment Information
Q3 2024 14 DHC does not have any significant ongoing redevelopments as of September 30, 2024. (1) Reflects units prior to redevelopment. Redevelopment Information (dollars in millions) RETURN TO TABLE OF CONTENTS Medical Office and Life Science Portfolio As of September 30, 2024 Project Location Typ
Slide 15: Property Dispositions Information
Q3 2024 15 Property Dispositions Information Since January 1, 2024 Dispositions: Date Sold Location Segment Number of Properties Gross Sales Price Gross Sales Price Per Square Foot Occupancy (1) 3/28/2024 Phoenix, AZ Medical Office and Life Science Portfolio 1 $ 3,600 $ 28.55 100.0 % 6/3/2024 Irving
Slide 16: Investments in Unconsolidated Joint Ventures
Q3 2024 16 Investments in Unconsolidated Joint Ventures (1) (dollars in thousands) RETURN TO TABLE OF CONTENTS As of September 30, 2024 Three Months Ended September 30, 2024 Joint Venture Location Type of Property Number of Properties Square Feet Occupancy Weighted Average Lease Term DHC Ownership D
Slide 17: Investments in Unconsolidated Joint Ventures (continued)
Q3 2024 17 Investments in Unconsolidated Joint Ventures (continued) (1) (dollars in thousands) RETURN TO TABLE OF CONTENTS As of September 30, 2024 (1) DHC's property list, including properties owned by these unconsolidated joint ventures, is available on DHC's website. (2) In August 2024, Vertex Ph
Slide 18: Portfolio Summary by Geographic Diversification and Property Type
Q3 2024 18 FL: 10% CA: 9% TX: 9% GA: 7% MD: 4% NC: 4% WI: 4% VA: 4% IN: 4% IL: 4% 26 Other States + D.C.: 41% (based on Gross Book Value of Real Estate Assets as of September 30, 2024) (1) Senior living communities are categorized by the type of living units which constitute a majority of the living
Slide 19: Portfolio Summary
Q3 2024 19 Portfolio Summary RETURN TO TABLE OF CONTENTS (dollars in thousands, except investment per square foot or unit) As of September 30, 2024 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
Slide 20: Medical Office and Life Science Portfolio Results of Operations
Q3 2024 20 (1) Same property includes those properties classified as same property for the three months ended September 30, 2024 for all periods presented. RETURN TO TABLE OF CONTENTS CONSOLIDATED RESULTS OF OPERATIONS (dollars and sq. ft. in thousands) As of and For the Three Months Ended 9/30/2024
Slide 21: Medical Office and Life Science Results of Operations by Type
Q3 2024 21RETURN TO TABLE OF CONTENTS CONSOLIDATED RESULTS OF OPERATIONS (dollars and sq. ft. in thousands) As of and For the Three Months Ended September 30, 2024 As of and For the Three Months Ended September 30, 2023 Medical Office Life Science Total Medical Office and Life Science Portfolio Medi
Slide 22: SHOP Units by Operator
Q3 2024 22 SHOP Units by Operator RETURN TO TABLE OF CONTENTS Unit Count as of September 30, 2024 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 6,439 9,603 1,564 — 17,606
Slide 23: SHOP Segment and Same Property - Results of Operations
Q3 2024 23 SHOP Segment and Same Property - Results of Operations RETURN TO TABLE OF CONTENTS CONSOLIDATED RESULTS OF OPERATIONS As of and For the Three Months Ended 9/30/2024 6/30/2024 9/30/2023 Number of Properties 232 232 234 Number of Units 25,152 25,230 25,302 Occupancy 79.4 % 79.0 % 78.4 % Ave
Slide 24: SHOP Segment - Five Star and Other Operator Managed Communities
Q3 2024 24RETURN TO TABLE OF CONTENTS As of and For the Three Months Ended September 30, 2024 As of and For the Three Months Ended September 30, 2023 Five Star Managed Communities Other Operator Managed Communities Total SHOP Segment Five Star Managed Communities Other Operator Managed Communities T
Slide 25: Senior Living NOI by Manager
Q3 2024 25 Senior Living NOI by Manager RETURN TO TABLE OF CONTENTS Q3 2024 NOI Manager Number of Properties SHOP Triple Net Leased Senior Living Communities Total NOI % of Total Q3 2024 NOI (1) Five Star Senior Living 119 $ 23,024 $ — $ 23,024 70.5% Stellar Senior Living 14 1,075 1,050 2,125 6.5% P
Slide 26: Senior Living Results of Operations by Location
Q3 2024 26 Senior Living Results of Operations by Location RETURN TO TABLE OF CONTENTS Q3 2024 NOI Core-Based Statistical Areas Number of Properties SHOP Triple Net Leased Senior Living Communities Total NOI % of Total Q3 2024 NOI Chicago, IL 2 $ 2,819 $ — $ 2,819 8.6% Washington, DC 6 2,087 — 2,087
Slide 27: Portfolio Leasing Summary
Q3 2024 27 Portfolio Leasing Summary (1) (1) The leasing summary on this page is based on leases entered into during the periods indicated. (2) Leasing data is only presented for periods in which there is leasing activity. (3) Percent difference in prior rents charged for same space or, in the case
Slide 28: Tenants Representing 1% Or More of Total Annualized Rental Income
Q3 2024 28 As of September 30, 2024 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 6.8% 202
Slide 29: Medical Office and Life Science Portfolio Lease Expiration Schedule
Q3 2024 29 Medical Office and Life Science Portfolio Lease Expiration Schedule RETURN TO TABLE OF CONTENTS (dollars in thousands) As of September 30, 2024 Annualized Rental Income Expiring (1) Year Annualized Rental Income Expiring % of Total Annualized Rental Income Expiring Cumulative % of Total A
Slide 30: Non-Segment Lease Expiration Schedule
Q3 2024 30 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 — — — —% —% 2026 — — — —% —% 2027 4 533
Slide 31: The Company
Q3 2024 31 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 32: Board of Trustees and Executive Officers
Q3 2024 32 Board of Trustees Christopher J. Bilotto John L. Harrington Managing Trustee Independent Trustee Lisa Harris Jones Phyllis M. Hollis Lead Independent Trustee Independent Trustee Dawn K. Neher Adam D. Portnoy Independent Trustee Chair of the Board & Managing Trustee Jeffrey P. Somers Indep
Slide 33: Calculation and Reconciliation of NOI and Cash Basis NOI
Q3 2024 33 Calculation and Reconciliation of NOI and Cash Basis NOI (dollars in thousands) RETURN TO TABLE OF CONTENTS For the Three Months Ended For the Nine Months Ended 9/30/2024 6/30/2024 3/31/2024 12/31/2023 9/30/2023 9/30/2024 9/30/2023 Calculation of NOI and Cash Basis NOI: Revenues: Rental i
Slide 34: Reconciliation of NOI, Same Property NOI by Segment
Q3 2024 34 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 September 30, 2024 For the Three Months Ended June 30, 2024 For the Three Months Ended Septemb
Slide 35: Calculation and Reconciliation of EBITDA, EBITDAre and Adjusted EBITDAre
Q3 2024 35 Calculation and Reconciliation of EBITDA, EBITDAre and Adjusted EBITDAre (dollars in thousands) For the Three Months Ended For the Nine Months Ended 9/30/2024 6/30/2024 3/31/2024 12/31/2023 9/30/2023 9/30/2024 9/30/2023 Net loss $ (98,689) $ (97,861) $ (86,259) $ (102,564) $ (65,779) $ (2
Slide 36: Calculation and Reconciliation of FFO, Normalized FFO and CAD
Q3 2024 36 Calculation and Reconciliation of FFO, Normalized FFO and CAD (dollars in thousands) RETURN TO TABLE OF CONTENTS For the Three Months Ended For the Nine Months Ended 9/30/2024 6/30/2024 3/31/2024 12/31/2023 9/30/2023 9/30/2024 9/30/2023 Net loss $ (98,689) $ (97,861) $ (86,259) $ (102,564
Slide 37: Calculation and Reconciliation of FFO, Normalized FFO and CAD (continued)
Q3 2024 37 Calculation and Reconciliation of FFO, Normalized FFO and CAD (continued) (amounts in thousands, except per share data) RETURN TO TABLE OF CONTENTS For the Three Months Ended For the Nine Months Ended 9/30/2024 6/30/2024 3/31/2024 12/31/2023 9/30/2023 9/30/2024 9/30/2023 Normalized FFO $
Slide 38: Non-GAAP Financial Measures
Q3 2024 38 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 39: Definitions: Adjusted total assets, Annualized rental income
Q3 2024 39 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 40: Definitions: Development, redevelopment and other activities
Q3 2024 40 Development, redevelopment and other activities Development, redevelopment and other activities generally include capital expenditures that reposition a property or result in new sources of revenue. From time to time DHC invests in revenue producing capital improvements at certain of its
Slide 41: Definitions: Non-Segment, Occupancy, Medical Office and Life Science Portfolio
Q3 2024 41 Non-Segment Non-Segment operations consists of triple net leased senior living communities and wellness centers that are leased to third party operators from which DHC receives rents, and any other income or expenses that are not attributable to a specific reporting segment. Occupancy Occ
Slide 42: Definitions: SNF, SOFR, Square feet
Q3 2024 42 SNF SNF is a skilled nursing facility. SOFR SOFR is the one month term secured overnight financing rate. Square feet Square feet measurements are subject to modest changes when space is periodically remeasured or reconfigured for new tenants. Square feet for prior periods exclude space re
Slide 43: Forward-Looking Statements
Q3 2024 43 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”, “
Diversified Healthcare Trust — Q3 2024 Earnings Presentation on 6ix