Diversified Healthcare Trust Provides Monthly SHOP Performance Update
Diversified Healthcare Trust (NASDAQ:DHC) today provided an update regarding the recent performance of its Senior Housing Operating Portfolio, or SHOP, segment.
Monthly Unaudited Results in DHC's Total SHOP Properties:
- March 2024 occupancy was 78.8%, a decrease of 10 basis points from February 2024, and 150 basis points higher than March 2023.
- March 2024 Resident Fees and Services revenue was $103.1 million, an increase of $0.8 million, or 0.8%, from February 2024, and higher by $8.6 million, or 9.2%, compared to March 2023.
- March 2024 net operating income, or NOI, was $7.3 million, a decrease of $2.8 million, or 27.3%, from February 2024, and higher by $3.0 million, or 68.6%, compared to March 2023.
- March 2024 NOI margin was 7.1%, 280 basis points below February 2024, and 250 basis points above March 2023.
March 2024 total SHOP revenues increased slightly on a sequential month basis. On a year over year basis, total SHOP revenues increased 9.2%, primarily from higher rental rates and occupancy.
March 2024 total SHOP operating expenses increased 3.3% and 6.7% on a sequential month and year over year basis, respectively. The increase on a sequential month basis is primarily due to higher salaries and wages as a result of two additional days in March, partially offset by reduced contract labor. The year over year increase is primarily due to higher salaries and wages driven by inflation, wage adjustments and filling open positions, partially offset by reduced contract labor.
Diversified Healthcare Trust
SHOP Segment - Monthly Results of Operations
(dollars in thousands, except average monthly rate)
|
2024 (1) |
|
|
2024 (1) |
|
$ |
|
% |
|
|
2023 |
|
$ |
|
% |
|||||
|
|
March |
Feb |
Change |
Change |
March |
Change |
Change |
||||||||||||
ALR/Five Star Managed Communities |
||||||||||||||||||||
Number of Properties |
|
|
119 |
|
|
119 |
|
|
|
|
|
|
119 |
|
|
|
|
|||
Number of Units |
|
17,647 |
|
17,655 |
|
17,704 |
||||||||||||||
Occupancy |
|
|
78.7% |
|
|
78.8% |
|
|
|
|
|
|
77.7% |
|
|
|
|
|||
Average Monthly Rate (2) |
$ |
4,772 |
$ |
4,796 |
$ |
(24) |
(0.5)% |
$ |
4,514 |
$ |
258 |
5.7% |
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Residents Fees and Services |
$ |
66,268 |
$ |
66,684 |
$ |
(416) |
(0.6)% |
$ |
61,307 |
$ |
4,961 |
8.1% |
||||||||
Property Operating Expenses |
|
|
(60,657) |
|
|
(57,849) |
|
|
2,808 |
|
4.9% |
|
|
(56,145) |
|
|
4,512 |
|
8.0% |
|
NOI (3) |
|
$ |
5,611 |
$ |
8,835 |
$ |
(3,224) |
(36.5)% |
$ |
5,162 |
$ |
449 |
8.7% |
|||||||
NOI Margin |
|
|
8.5% |
|
|
13.2% |
|
|
|
|
|
|
8.4% |
|
|
|
|
|||
Other Operator Managed Communities |
||||||||||||||||||||
Number of Properties |
|
|
113 |
|
|
113 |
|
|
|
|
|
|
115 |
|
|
|
|
|||
Number of Units |
|
7,573 |
|
7,574 |
|
7,623 |
||||||||||||||
Occupancy |
|
|
79.1% |
|
|
79.1% |
|
|
|
|
|
|
76.5% |
|
|
|
|
|||
Average Monthly Rate (2) |
$ |
6,149 |
$ |
5,945 |
$ |
204 |
3.4% |
$ |
5,738 |
$ |
411 |
7.2% |
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Residents Fees and Services |
$ |
36,828 |
$ |
35,618 |
$ |
1,210 |
3.4% |
$ |
33,142 |
$ |
3,686 |
11.1% |
||||||||
Property Operating Expenses |
|
|
(35,103) |
|
|
(34,358) |
|
|
745 |
|
2.2% |
|
|
(33,952) |
|
|
1,151 |
|
3.4% |
|
NOI (3) |
|
$ |
1,725 |
$ |
1,260 |
$ |
465 |
36.9% |
$ |
(810) |
$ |
2,535 |
313.0% |
|||||||
NOI Margin |
|
|
4.7% |
|
|
3.5% |
|
|
|
|
|
|
(2.4)% |
|
|
|
|
|||
Total SHOP |
||||||||||||||||||||
Number of Properties |
|
|
232 |
|
|
232 |
|
|
|
|
|
|
234 |
|
|
|
|
|||
Number of Units |
|
25,220 |
|
25,229 |
|
25,327 |
||||||||||||||
Occupancy |
|
|
78.8% |
|
|
78.9% |
|
|
|
|
|
|
77.3% |
|
|
|
|
|||
Average Monthly Rate (2) |
$ |
5,187 |
$ |
5,142 |
$ |
45 |
0.9% |
$ |
4,879 |
$ |
308 |
6.3% |
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Residents Fees and Services |
$ |
103,096 |
$ |
102,302 |
$ |
794 |
0.8% |
$ |
94,449 |
$ |
8,647 |
9.2% |
||||||||
Property Operating Expenses |
|
|
(95,760) |
|
|
(92,207) |
|
|
3,553 |
|
3.9% |
|
|
(90,097) |
|
|
5,663 |
|
6.3% |
|
NOI (3) |
|
$ |
7,336 |
$ |
10,095 |
$ |
(2,759) |
(27.3)% |
$ |
4,352 |
$ |
2,984 |
68.6% |
|||||||
NOI Margin |
|
|
7.1% |
|
|
9.9% |
|
|
|
|
|
|
4.6% |
|
|
|
|
|||
2023 |
|||||||||||||||||||||||||||||||||||||||
|
|
Jan |
Feb |
Mar |
Apr |
May |
Jun |
Jul |
Aug |
Sep |
Oct |
Nov |
Dec |
YTD |
|||||||||||||||||||||||||
ALR/Five Star Managed Communities |
|||||||||||||||||||||||||||||||||||||||
Number of Properties |
|
119 |
|
|
119 |
|
|
119 |
|
|
119 |
|
|
119 |
|
|
119 |
|
|
119 |
|
|
119 |
|
|
119 |
|
|
119 |
|
|
119 |
|
|
119 |
|
|
119 |
|
Number of Units |
|
17,716 |
|
17,706 |
|
17,704 |
|
17,704 |
|
17,703 |
|
17,699 |
|
17,699 |
|
17,677 |
|
17,655 |
|
17,655 |
|
17,655 |
|
17,655 |
|
17,655 |
|||||||||||||
Occupancy |
|
77.2% |
|
|
77.2% |
|
|
77.7% |
|
|
78.0% |
|
|
78.1% |
|
|
77.6% |
|
|
78.0% |
|
|
78.5% |
|
|
78.7% |
|
|
79.2% |
|
|
79.3% |
|
|
79.1% |
|
|
78.2% |
|
Average Monthly Rate (2) |
$ |
4,409 |
$ |
4,566 |
$ |
4,514 |
$ |
4,527 |
$ |
4,551 |
$ |
4,532 |
$ |
4,530 |
$ |
4,534 |
$ |
4,556 |
$ |
4,542 |
$ |
4,510 |
$ |
4,548 |
$ |
4,526 |
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Residents Fees and Services |
$ |
59,539 |
$ |
61,616 |
$ |
61,307 |
$ |
61,673 |
$ |
62,076 |
$ |
62,268 |
$ |
62,570 |
$ |
62,923 |
$ |
63,276 |
$ |
63,482 |
$ |
63,154 |
$ |
63,558 |
$ |
747,442 |
|||||||||||||
Property Operating Expenses |
|
(53,744) |
|
|
(52,753) |
|
|
(56,145) |
|
|
(51,873) |
|
|
(55,579) |
|
|
(55,416) |
|
|
(56,808) |
|
|
(56,774) |
|
|
(56,355) |
|
|
(56,793) |
|
|
(56,604) |
|
|
(59,851) |
|
|
(668,695) |
|
NOI (3) |
$ |
5,795 |
$ |
8,863 |
$ |
5,162 |
$ |
9,800 |
$ |
6,497 |
$ |
6,852 |
$ |
5,762 |
$ |
6,149 |
$ |
6,921 |
$ |
6,689 |
$ |
6,550 |
$ |
3,707 |
$ |
78,747 |
|||||||||||||
NOI Margin |
|
9.7% |
|
|
14.4% |
|
|
8.4% |
|
|
15.9% |
|
|
10.5% |
|
|
11.0% |
|
|
9.2% |
|
|
9.8% |
|
|
10.9% |
|
|
10.5% |
|
|
10.4% |
|
|
5.8% |
|
|
10.5% |
|
Other Operator Managed Communities |
|||||||||||||||||||||||||||||||||||||||
Number of Properties |
|
118 |
|
|
115 |
|
|
115 |
|
|
115 |
|
|
115 |
|
|
115 |
|
|
115 |
|
|
115 |
|
|
115 |
|
|
114 |
|
|
113 |
|
|
113 |
|
|
113 |
|
Number of Units |
|
7,623 |
|
7,623 |
|
7,623 |
|
7,623 |
|
7,623 |
|
7,623 |
|
7,623 |
|
7,647 |
|
7,647 |
|
7,572 |
|
7,571 |
|
7,554 |
|
7,554 |
|||||||||||||
Occupancy |
|
74.8% |
|
|
76.3% |
|
|
76.5% |
|
|
77.4% |
|
|
77.1% |
|
|
78.0% |
|
|
78.3% |
|
|
78.6% |
|
|
78.6% |
|
|
79.2% |
|
|
79.4% |
|
|
79.6% |
|
|
77.8% |
|
Average Monthly Rate (2) |
$ |
5,732 |
$ |
5,450 |
$ |
5,738 |
$ |
5,569 |
$ |
5,652 |
$ |
5,644 |
$ |
5,762 |
$ |
5,797 |
$ |
5,987 |
$ |
5,815 |
$ |
5,745 |
$ |
5,896 |
$ |
5,733 |
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Residents Fees and Services |
$ |
32,486 |
$ |
31,502 |
$ |
33,142 |
$ |
32,576 |
$ |
32,953 |
$ |
33,300 |
$ |
34,109 |
$ |
34,559 |
$ |
35,697 |
$ |
34,605 |
$ |
34,275 |
$ |
35,262 |
$ |
404,466 |
|||||||||||||
Property Operating Expenses |
|
(34,312) |
|
|
(31,423) |
|
|
(33,952) |
|
|
(32,932) |
|
|
(33,428) |
|
|
(32,731) |
|
|
(33,688) |
|
|
(35,301) |
|
|
(33,519) |
|
|
(34,361) |
|
|
(34,421) |
|
|
(36,328) |
|
|
(406,396) |
|
NOI (3) |
$ |
(1,826) |
$ |
79 |
$ |
(810) |
$ |
(356) |
$ |
(475) |
$ |
569 |
$ |
421 |
$ |
(742) |
$ |
2,178 |
$ |
244 |
$ |
(146) |
$ |
(1,066) |
$ |
(1,930) |
|||||||||||||
NOI Margin |
|
(5.6)% |
|
|
0.3% |
|
|
(2.4)% |
|
|
(1.1)% |
|
|
(1.4)% |
|
|
1.7% |
|
|
1.2% |
|
|
(2.1)% |
|
|
6.1% |
|
|
0.7% |
|
|
(0.4)% |
|
|
(3.0)% |
|
|
(0.5)% |
|
Total SHOP |
|||||||||||||||||||||||||||||||||||||||
Number of Properties |
|
237 |
|
|
234 |
|
|
234 |
|
|
234 |
|
|
234 |
|
|
234 |
|
|
234 |
|
|
234 |
|
|
234 |
|
|
233 |
|
|
232 |
|
|
232 |
|
|
232 |
|
Number of Units |
|
25,339 |
|
25,329 |
|
25,327 |
|
25,327 |
|
25,326 |
|
25,322 |
|
25,322 |
|
25,324 |
|
25,302 |
|
25,227 |
|
25,226 |
|
25,209 |
|
25,209 |
|||||||||||||
Occupancy |
|
76.5% |
|
|
77.0% |
|
|
77.3% |
|
|
77.8% |
|
|
77.8% |
|
|
77.7% |
|
|
78.1% |
|
|
78.5% |
|
|
78.6% |
|
|
79.2% |
|
|
79.3% |
|
|
79.3% |
|
|
78.1% |
|
Average Monthly Rate (2) |
$ |
4,800 |
$ |
4,831 |
$ |
4,879 |
$ |
4,840 |
$ |
4,880 |
$ |
4,866 |
$ |
4,900 |
$ |
4,914 |
$ |
4,986 |
$ |
4,922 |
$ |
4,879 |
$ |
4,952 |
$ |
4,888 |
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Residents Fees and Services |
$ |
92,025 |
$ |
93,118 |
$ |
94,449 |
$ |
94,249 |
$ |
95,029 |
$ |
95,568 |
$ |
96,679 |
$ |
97,482 |
$ |
98,973 |
$ |
98,087 |
$ |
97,429 |
$ |
98,820 |
$ |
1,151,908 |
|||||||||||||
Property Operating Expenses |
|
(88,056) |
|
|
(84,176) |
|
|
(90,097) |
|
|
(84,805) |
|
|
(89,007) |
|
|
(88,147) |
|
|
(90,496) |
|
|
(92,075) |
|
|
(89,874) |
|
|
(91,154) |
|
|
(91,025) |
|
|
(96,179) |
|
|
(1,075,091) |
|
NOI (3) |
$ |
3,969 |
$ |
8,942 |
$ |
4,352 |
$ |
9,444 |
$ |
6,022 |
$ |
7,421 |
$ |
6,183 |
$ |
5,407 |
$ |
9,099 |
$ |
6,933 |
$ |
6,404 |
$ |
2,641 |
$ |
76,817 |
|||||||||||||
NOI Margin |
|
4.3% |
|
|
9.6% |
|
|
4.6% |
|
|
10.0% |
|
|
6.3% |
|
|
7.8% |
|
|
6.4% |
|
|
5.5% |
|
|
9.2% |
|
|
7.1% |
|
|
6.6% |
|
|
2.7% |
|
|
6.7% |
|
(1) |
The information regarding DHC's SHOP segment results for February and March 2024 reflects preliminary estimates with respect to certain results of DHC for such periods, based on currently available information. Because the quarterly financial close process and review for these periods is not yet complete, DHC's final results upon completion of its quarterly close process and review may vary from these preliminary estimates. |
|
|
|
|
(2) |
Previously, average monthly rate was calculated as average daily rate (revenue divided by occupied days) multiplied by 30 days. Retroactively to January 2023, we are now calculating the average monthly rate as the average daily rate multiplied by the exact number of days in the month. This change in methodology is now largely consistent with changes in revenue and occupancy as they are based on the same time period. |
|
|
|
|
(3) |
The calculation of NOI shown excludes certain components of net income (loss) in order to provide results that are more closely related to DHC's property level results of operations. DHC defines NOI as income from its real estate less its property operating expenses. NOI excludes amortization of capitalized tenant improvement costs and leasing commissions that DHC records as depreciation and amortization. DHC uses NOI to evaluate individual and company-wide property level performance. Other real estate companies and real estate investment trusts, or REITs, may calculate NOI differently than DHC does. |
Calculation and Reconciliation of NOI for SHOP Segment |
|||||
(dollars in thousands) |
|||||
For the Month Ended |
|||||
March 31, 2023 |
March 31, 2024 |
||||
Calculation of NOI: |
SHOP |
SHOP |
|||
Residents fees and services |
$ |
94,449 |
|
$ |
103,096 |
Property operating expenses |
|
(90,097) |
|
(95,760) |
|
NOI |
$ |
4,352 |
|
$ |
7,336 |
For the Month Ended |
||||||||
March 31, 2023 |
February 29, 2024 |
March 31, 2024 |
||||||
SHOP |
SHOP |
SHOP |
||||||
Residents fees and services |
$ |
94,449 |
|
$ |
102,302 |
|
$ |
103,096 |
|
||||||||
Expenses: |
|
|
|
|
|
|||
Property operating expenses |
|
90,097 |
|
92,207 |
|
95,760 |
||
Depreciation and amortization |
|
14,280 |
|
|
15,644 |
|
|
15,683 |
Total expenses |
|
104,377 |
|
107,851 |
|
111,443 |
||
|
|
|
|
|
|
|||
Gain on sale of properties |
|
2,723 |
|
- |
|
- |
||
Interest expense |
|
- |
|
|
(23) |
|
|
(22) |
Impairment |
|
(3,617) |
||||||
Net loss |
|
(10,822) |
|
|
(5,572) |
|
|
(8,369) |
|
||||||||
Add (less): Interest expense |
|
- |
|
|
23 |
|
|
22 |
Interest and other income |
|
- |
|
- |
|
- |
||
Depreciation and amortization |
|
14,280 |
|
|
15,644 |
|
|
15,683 |
Impairment of assets |
|
3,617 |
|
- |
|
- |
||
Gain on sale of properties |
|
(2,723) |
|
|
- |
|
|
- |
NOI |
$ |
4,352 |
$ |
10,095 |
$ |
7,336 |
||
About Diversified Healthcare Trust:
DHC is a real estate investment trust 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 of December 31, 2023, DHC's approximately $7.2 billion portfolio included 371 properties in 36 states and Washington, D.C., occupied by approximately 500 tenants, and totaling approximately 8.6 million square feet of life science and medical office properties and more than 27,000 senior living units. DHC is managed by The RMR Group (NASDAQ:RMR), a leading U.S. alternative asset management company with over $41 billion in assets under management as of December 31, 2023 and more than 35 years of institutional experience in buying, selling, financing and operating commercial real estate. To learn more about DHC, visit www.dhcreit.com.
Warning Concerning Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other securities laws. Also, whenever DHC uses words such as "believe", "expect", "anticipate", "intend", "plan", "estimate", "will", "may" and negatives or derivatives of these or similar expressions, it is making forward-looking statements. These forward-looking statements are based upon DHC's present intent, beliefs or expectations, but forward-looking statements are not guaranteed to occur and may not occur. Actual results may differ materially from those contained in or implied by DHC's forward-looking statements as a result of various factors. For example, the information regarding DHC's SHOP segment results provided in this press release reflects certain preliminary estimates based on currently available information, and DHC's final results upon completion of its quarterly financial close process and review may vary from these preliminary estimates, and as a result, the information provided herein may not provide a meaningful measure of DHC's SHOP segment results as expected.
The information contained in DHC's periodic reports filed with the Securities and Exchange Commission, or the SEC, including under "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations," or incorporated therein, also identifies important factors that could cause DHC's actual results to differ materially from those stated in or implied by DHC's forward-looking statements. DHC's filings with the SEC are available on the SEC's website at www.sec.gov.
You should not place undue reliance upon any forward-looking statements. Except as required by law, DHC does not intend to update or change any forward-looking statements as a result of new information, future events or otherwise.
A Maryland Real Estate Investment Trust with transferable shares of beneficial interest listed on the Nasdaq.
No shareholder, Trustee or officer is personally liable for any act or obligation of the Trust.
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