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

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.}

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Bryan Maher, Senior Vice President

(617) 796-8234

Source: Diversified Healthcare Trust