DHCNI · Diversified Healthcare Trust -

Diversified Healthcare Trust reported first quarter 2026 results that underscore continued operational momentum. Same property SHOP NOI grew 13.5% year-over-year to $44.3 million, driven by a 110 basis point occupancy improvement to 82.4% and a 5.9% increase in average monthly rates. The Medical Office and Life Science portfolio also performed well, with same property occupancy rising 60 basis points to 95.3% and cash basis NOI increasing 3.0%. Consolidated same property cash basis NOI rose 8.6% to $75.9 million. On a GAAP basis, total revenues were $366.5 million, down from $386.9 million in the prior year, primarily due to property sales. Net loss widened to $43.3 million from $9.0 million, largely reflecting the absence of prior year gains on sale and higher incentive management fees. However, normalized FFO improved significantly to $33.1 million ($0.14 per share) from $14.3 million ($0.06 per share), driven by strong NOI growth and lower interest expense. Adjusted EBITDAre was $74.0 million, roughly flat year-over-year. Leverage continued to improve, with net debt to annualized Adjusted EBITDAre declining to 7.8x from 8.8x a year ago. Management highlighted the successful transition of SHOP communities to new operators, which is already contributing to margin expansion. For full year 2026, DHC guided total NOI of $297-$313 million, Adjusted EBITDAre of $290-$305 million, and normalized FFO per share of $0.52-$0.58, implying significant growth from 2025 levels. The company also declared a quarterly distribution of $0.01 per share.