Diversified Healthcare Trust Announces Further Management Transition Progress

Rhea-AI Summary

Diversified Healthcare Trust (Nasdaq: DHC) recently announced new management agreements with Navion Senior Solutions for five assisted living communities in South Carolina and Omega Senior Living for one community in Nebraska. This brings the total to approximately 96% of communities transitioning from Five Star Senior Living to new operators. DHC is expected to finalize all management transitions by year-end 2021. The company's portfolio includes 392 properties and 28,000 senior living units, valued at $8.2 billion as of June 30, 2021.

Positive

• New management agreements represent a significant transition for 96% of communities.
• Expected finalization of transition by year-end could streamline operations.

Negative

• Uncertainty exists in identifying operators for the remaining 4 out of 108 communities.
• Management terms with new operators may not be as favorable as current arrangements.

Enters into Management Agreement for Five Communities with Navion Senior Solutions

Enters into Management Agreement for One Community with Omega Senior Living

New Agreements for Approximately 96% of the Transitioning Communities Have Been Executed

NEWTON, Mass.--(BUSINESS WIRE)-- Diversified Healthcare Trust (Nasdaq: DHC) today announced that it has entered into a new management agreement with Navion Senior Solutions for five assisted living communities in South Carolina totaling 259 units within its Senior Housing Operating Portfolio, or SHOP. Additionally, DHC has entered into a new management agreement with Omega Senior Living for a 69-unit assisted living community in Nebraska within its SHOP. DHC has now entered into new management agreements representing approximately 96% of its SHOP communities to be transitioned from Five Star Senior Living Inc. (Nasdaq: FVE), or Five Star, to other third-party operators as previously announced. DHC continues to expect to complete all of the management community transitions 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 4 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 Securities and Exchange Commission, or 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/20210930005962/en/

Michael Kodesch, Director, Investor Relations

(617) 796-8234

www.dhcreit.com

Source: Diversified Healthcare Trust

FAQ

What is the significance of DHC's recent management agreements with Navion Senior Solutions and Omega Senior Living?

These agreements mark the transition of nearly 96% of DHC's senior housing communities from Five Star Senior Living to new operators, potentially improving operational efficiency.

What percentage of DHC's senior communities have transitioned to new management?

Approximately 96% of DHC's senior housing communities have entered new management agreements.

What challenges might Diversified Healthcare Trust face with its management transitions?

DHC may struggle to find qualified operators for the remaining 4 of 108 communities, with potential unfavorable terms compared to current arrangements.

When does DHC expect to complete its management community transitions?

DHC anticipates finalizing all transitions by year-end 2021.