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Diversified Healthcare Trust Closes $140 Million Mortgage Financing Secured by 14 SHOP Properties

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Diversified Healthcare Trust (DHC) has closed a $140 million mortgage financing secured by 14 senior living communities across nine states, comprising 1,375 units managed by Five Star Senior Living. The non-recourse loan features:

- Three-year term with March 2028 initial maturity and two one-year extension options
- Variable interest rate: SOFR plus 2.50% margin
- 24-month interest-only payments with two possible six-month extensions
- One-year interest rate cap with 4.50% SOFR strike rate
- 62% loan-to-value ratio
- 7.0% implied capitalization rate ($163,500 per unit)

DHC plans to use proceeds to redeem part of its 9.750% senior notes due 2025. The company expects to close $200 million in additional secured financings within 45 days and currently holds $145 million in cash.

Diversified Healthcare Trust (DHC) ha concluso un finanziamento ipotecario di 140 milioni di dollari garantito da 14 comunità per anziani in nove stati, comprendenti 1.375 unità gestite da Five Star Senior Living. Il prestito senza ricorso presenta:

- Termine di tre anni con scadenza iniziale a marzo 2028 e due opzioni di estensione di un anno
- Tasso d'interesse variabile: SOFR più un margine del 2,50%
- Pagamenti solo di interessi per 24 mesi con due possibili estensioni di sei mesi
- Limite del tasso d'interesse di un anno con un tasso SOFR di strike del 4,50%
- Rapporto prestito-valore del 62%
- Tasso di capitalizzazione implicito del 7,0% (163.500 dollari per unità)

DHC prevede di utilizzare i proventi per rimborsare parte delle sue note senior al 9,750% in scadenza nel 2025. L'azienda si aspetta di chiudere finanziamenti aggiuntivi garantiti per 200 milioni di dollari entro 45 giorni e attualmente detiene 145 milioni di dollari in contante.

Diversified Healthcare Trust (DHC) ha cerrado un financiamiento hipotecario de 140 millones de dólares asegurado por 14 comunidades de vida asistida en nueve estados, que comprenden 1,375 unidades gestionadas por Five Star Senior Living. El préstamo sin recurso presenta:

- Plazo de tres años con vencimiento inicial en marzo de 2028 y dos opciones de extensión de un año
- Tasa de interés variable: SOFR más un margen del 2.50%
- Pagos solo de intereses durante 24 meses con dos posibles extensiones de seis meses
- Límite de tasa de interés de un año con una tasa de strike SOFR del 4.50%
- Relación préstamo-valor del 62%
- Tasa de capitalización implícita del 7.0% (163,500 dólares por unidad)

DHC planea utilizar los ingresos para redimir parte de sus notas senior al 9.750% que vencen en 2025. La compañía espera cerrar financiamientos adicionales asegurados por 200 millones de dólares dentro de 45 días y actualmente tiene 145 millones de dólares en efectivo.

다양화된 헬스케어 신탁(DHC)는 14개의 노인 생활 커뮤니티를 담보로 한 1억 4천만 달러의 모기지 금융을 완료했습니다. 이 커뮤니티는 9개 주에 걸쳐 있으며, 1,375개 유닛이 Five Star Senior Living에 의해 관리되고 있습니다. 이 무담보 대출의 조건은 다음과 같습니다:

- 2028년 3월 초기 만기일과 1년 연장 옵션 2개가 포함된 3년 기간
- 변동 이자율: SOFR 플러스 2.50% 마진
- 24개월 동안 이자만 지불하며 6개월 연장 옵션 2개
- 4.50% SOFR 스트라이크 금리가 있는 1년 이자율 한도
- 62%의 대출 대 가치 비율
- 7.0%의 암시적 자본화율(유닛당 163,500달러)

DHC는 수익금을 사용하여 2025년 만기 예정인 9.750%의 선순위 채권 일부를 상환할 계획입니다. 회사는 45일 이내에 2억 달러의 추가 담보 금융을 마감할 것으로 예상하며, 현재 1억 4천 5백만 달러의 현금을 보유하고 있습니다.

Diversified Healthcare Trust (DHC) a conclu un financement hypothécaire de 140 millions de dollars garanti par 14 communautés de vie pour seniors réparties dans neuf États, comprenant 1 375 unités gérées par Five Star Senior Living. Le prêt non remboursable présente les caractéristiques suivantes :

- Durée de trois ans avec une échéance initiale en mars 2028 et deux options de prolongation d'un an
- Taux d'intérêt variable : SOFR plus une marge de 2,50%
- Paiements d'intérêts uniquement pendant 24 mois avec deux prolongations possibles de six mois
- Plafond de taux d'intérêt d'un an avec un taux de strike SOFR de 4,50%
- Ratio prêt-valeur de 62%
- Taux de capitalisation implicite de 7,0% (163 500 dollars par unité)

DHC prévoit d'utiliser les produits pour racheter une partie de ses obligations senior à 9,750% arrivant à échéance en 2025. La société s'attend à conclure 200 millions de dollars de financements supplémentaires garantis dans les 45 jours et détient actuellement 145 millions de dollars en espèces.

Diversified Healthcare Trust (DHC) hat eine Hypothekenfinanzierung über 140 Millionen Dollar abgeschlossen, die durch 14 Seniorenwohnanlagen in neun Bundesstaaten gesichert ist, die insgesamt 1.375 Einheiten umfasst, die von Five Star Senior Living verwaltet werden. Der nicht rückzahlbare Kredit hat folgende Merkmale:

- Dreijährige Laufzeit mit anfälliger Fälligkeit im März 2028 und zwei einjährigen Verlängerungsoptionen
- Variabler Zinssatz: SOFR plus 2,50% Marge
- 24 Monate nur Zinszahlungen mit zwei möglichen sechsmonatigen Verlängerungen
- Einjährige Zinsobergrenze mit einem SOFR-Strike-Zins von 4,50%
- 62% Verhältnis von Darlehen zu Wert
- Implizierte Kapitalisierungsrate von 7,0% (163.500 Dollar pro Einheit)

DHC plant, die Erlöse zu verwenden, um einen Teil seiner 9,750% Senior Notes, die 2025 fällig werden, einzulösen. Das Unternehmen erwartet, innerhalb von 45 Tagen weitere gesicherte Finanzierungen über 200 Millionen Dollar abzuschließen und hält derzeit 145 Millionen Dollar in bar.

Positive
  • Secured $140M mortgage financing at favorable terms (SOFR + 2.50%)
  • Strong property valuation at $163,500 per unit
  • Additional $200M in secured financings expected within 45 days
  • Healthy $145M cash position
  • Reduction in financing costs through refinancing of 9.750% senior notes
Negative
  • High existing debt cost (9.750% senior notes)
  • Variable interest rate exposure despite rate cap

Insights

DHC's successful $140 million mortgage financing represents a significant refinancing win in the current interest rate environment. The company is strategically using these funds to redeem a portion of its 9.750% senior notes due 2025, effectively reducing its cost of capital through this new financing at SOFR + 2.50%.

The 62% loan-to-value ratio and 7.0% implied capitalization rate demonstrate lender confidence in DHC's SHOP (Senior Housing Operating Portfolio) assets, which were valued at $163,500 per unit. This valuation provides a solid benchmark for DHC's senior living portfolio in today's market.

With $145 million cash on hand and $200 million in additional secured financings expected to close within 45 days, DHC is building a substantial liquidity position to address its upcoming debt maturities. The interest rate cap with a 4.50% SOFR strike rate also provides meaningful protection against interest rate volatility over the next year.

This transaction demonstrates DHC's ability to access the capital markets on reasonable terms and execute on its refinancing strategy. The non-recourse structure with flexible prepayment options (2% penalty in year one, 1% in year two, none thereafter) gives DHC operational flexibility while maintaining a sensible debt structure for these income-producing assets.

Expects to Close $200 Million of Additional Secured Financings in the Next 45 Days

NEWTON, Mass.--(BUSINESS WIRE)-- Diversified Healthcare Trust (Nasdaq: DHC) today announced that it closed a $140 million mortgage financing secured by 14 senior living communities located in nine states and consisting of 1,375 units that are managed by Five Star Senior Living, an operating division of AlerisLife Inc. This non-recourse, three-year loan has an initial maturity date of March 31, 2028, and two one-year extension options, subject to certain conditions. DHC intends to use the loan proceeds to redeem a portion of its outstanding 9.750% senior notes due 2025.

The loan has a variable interest rate based on Secured Overnight Financing Rate, or SOFR, plus a margin of 2.50% per annum with 24 months of interest-only payments and two six-month extension options of the interest only period, subject to certain conditions. In connection with this financing, DHC purchased a one-year interest rate cap with a SOFR strike rate equal to 4.50%. The loan to value ratio on the financing is approximately 62% and the implied capitalization rate of the collateral communities based on the appraised value is 7.0%, or $163,500 per unit. The loan also allows for a portion of the principal to be prepaid with a prepayment penalty of 2% in year one, 1% in year two and no penalty thereafter.

As previously disclosed, DHC has executed three additional term sheets with various lenders for total loan proceeds of approximately $200 million, which loans are expected to close in the next 45 days.

Matt Brown, Chief Financial Officer and Treasurer of DHC, made the following statement:

“This loan reflects continued progress on our strategy to reduce DHC’s financing costs and highlights the value of our SHOP assets with an appraised value of $163,500 per unit. With $145 million of cash on hand and $200 million of additional secured financings expected to close in the coming weeks, we remain confident in our plans to address DHC’s upcoming debt maturities while positioning the company for growth and delivering meaningful value for shareholders.”

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, 2024, DHC’s approximately $7.2 billion portfolio included 367 properties in 36 states and Washington, D.C., occupied by approximately 450 tenants, and totaling approximately 8.0 million square feet of medical office and life science 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 $40 billion in assets under management as of December 31, 2024 and more than 35 years of institutional experience in buying, selling, financing and operating commercial real estate. DHC is headquartered in Newton, MA. For more information, visit www.dhcreit.com.

WARNING CONCERNING 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. For example:

  • DHC currently intends to use the loan proceeds to redeem a portion of its outstanding 9.75% senior notes due 2025; however, the redemption may not occur or may be delayed;
  • DHC has executed three term sheets with lenders for total loan proceeds of approximately $200.0 million, which loans are expected to close in the next 45 days. However, DHC cannot be sure it will close these loans for the expected proceeds or at all or that the closings of these loans will not be delayed; and
  • Mr. Brown’s statement regarding DHC’s strategy to reduce DHC’s financing costs may imply that DHC will be able to execute additional financing at reduced interest rates; however, DHC may not be able to execute on its financing strategies or have sufficient liquidity available to fund its upcoming debt maturities and capital needs, position itself for growth or deliver meaningful value for shareholders.

Actual results may differ materially from those contained in or implied by DHC’s forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties and other factors, some of which are beyond DHC’s control.

The information contained in DHC’s filings with the SEC, including under the caption “Risk Factors” in DHC’s periodic reports, or incorporated therein, identifies other important factors that could cause differences from 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.

Bryan Maher, Senior Vice President

(617) 796-8234

Source: Diversified Healthcare Trust

FAQ

What is the value per unit of DHC's senior living communities based on the recent mortgage financing?

Based on the appraised value in the mortgage financing, DHC's senior living communities are valued at $163,500 per unit with a 7.0% implied capitalization rate.

How much additional financing does DHC expect to secure in the next 45 days?

DHC has executed term sheets with various lenders and expects to close approximately $200 million in additional secured financings within the next 45 days.

What are the terms of DHC's new $140 million mortgage financing?

The loan has a 3-year term until March 2028, SOFR plus 2.50% interest rate, 24 months interest-only payments, and two one-year extension options.

How will DHC use the proceeds from the $140 million mortgage financing?

DHC intends to use the loan proceeds to redeem a portion of its outstanding 9.750% senior notes due 2025.
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