Diversified Healthcare Trust Announces Further Management Transition Progress

Rhea-AI Summary

Diversified Healthcare Trust (Nasdaq: DHC) has entered a management agreement with Cedarhurst Senior Living for eight healthcare communities in Illinois, comprising 486 units. This agreement represents approximately 78% of the total transitioning communities, as DHC shifts management from Five Star Senior Living (Nasdaq: FVE). The company anticipates completing the transition of all 108 communities by the end of the year. DHC's portfolio, valued at $8.2 billion, consists of 392 properties across 36 states.

Positive

• New management agreement with Cedarhurst for 8 communities enhances operational management.
• Approximately 78% of transitioning communities now have new management agreements, indicating progress in transitions.
• Expected completion of transitions by year-end 2021 could stabilize operations.

Negative

• Risk of not securing new operators for the remaining 24 communities, which could affect management continuity.
• Potential unfavorable terms in future management agreements compared to existing arrangements with Five Star.

Enters into Management Agreement for 8 Communities in Illinois with Cedarhurst Senior Living

New Agreements Now Executed for Approximately 78% of the Transitioning Communities

NEWTON, Mass.--(BUSINESS WIRE)-- Diversified Healthcare Trust (Nasdaq: DHC) announced today that it has entered into a new management agreement with Cedarhurst Senior Living for seven assisted living communities and one memory care community within its Senior Housing Operating Portfolio (“SHOP”). All of these communities are located in Illinois and include 486 units. DHC has now entered into new management agreements representing approximately 78% of its SHOP communities to be transitioned from Five Star Senior Living Inc. (Nasdaq: FVE) to other third-party operators as previously announced. DHC continues to expect to complete all of the management transitions at the 108 transitioning communities by year end.

Diversified Healthcare Trust (Nasdaq: DHC) is a real estate investment trust (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 of June 30, 2021, DHC’s $8.2 billion portfolio included 392 properties in 36 states and Washington, D.C., occupied by almost 600 tenants, and totaling approximately 10.9 million square feet of life science and medical office properties and approximately 28,000 senior living units. DHC is managed by the operating subsidiary of The RMR Group Inc. (Nasdaq: RMR), an alternative asset management company that is headquartered in Newton, MA. To learn more about DHC, visit www.dhcreit.com.

WARNING REGARDING FORWARD-LOOKING STATEMENTS

This press release contains statements that constitute 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, DHC 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. Forward-looking statements involve known and unknown risks, uncertainties and other factors, some of which are beyond DHC's control. For example:

• DHC may be unable to identify additional new operators for the other 24 of 108 senior living communities being transitioned from Five Star that DHC believes are sufficiently qualified or may be unable to reach agreement with any such operators on management terms before year end 2021 or at all, and any agreement DHC may reach with any such operators may not be on the terms DHC currently expects or desires, and may not be equal to or more favorable to DHC than the terms of DHC’s current management arrangements with Five Star.

The information contained in DHC’s filings with the SEC including under “Risk Factors” in DHC’s periodic reports, or incorporated therein, identifies other 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 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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210824005185/en/

Michael Kodesch, Director, Investor Relations

(617) 796-8234

www.dhcreit.com

Source: Diversified Healthcare Trust

FAQ

What management agreement did Diversified Healthcare Trust enter into recently?

Diversified Healthcare Trust entered into a management agreement with Cedarhurst Senior Living for eight healthcare communities in Illinois.

How many communities does Diversified Healthcare Trust have transitioning from Five Star Senior Living?

DHC is transitioning management for a total of 108 communities from Five Star Senior Living.

What percentage of communities has Diversified Healthcare Trust secured management agreements for?

DHC has secured management agreements for approximately 78% of the transitioning communities.

What is the total number of units involved in the new management agreement with Cedarhurst?

The new management agreement with Cedarhurst involves 486 units across eight communities.

When does Diversified Healthcare Trust expect to complete management transitions?

DHC expects to complete all management transitions by the end of 2021.