Diversified Healthcare Trust Completes Sale of 18 Triple Net Leased Senior Living Communities to Brookdale for $135 Million, or $154,000 per Unit

Rhea-AI Summary

Diversified Healthcare Trust (DHC) has completed the sale of 18 triple-net leased senior living communities to Brookdale Senior Living Inc. (BKD) for $135 million, representing approximately $154,000 per unit. The portfolio comprises 876 units across 10 states.

DHC will utilize the sale proceeds to reduce its senior secured notes due in January 2026. Following this payment and the previous reduction from the $159.0 million MUSE building sale in San Diego in January, the outstanding balance of these senior secured notes will be approximately $647 million.

According to CEO Chris Bilotto, this divestment aligns with DHC's strategy to focus on high-performing communities with significant upside potential while reducing leverage to better position for future value-enhancing opportunities.

Positive

• Sale generates $135 million in cash proceeds
• Reduction in outstanding senior secured notes
• Strategic divestment of non-core assets

Negative

• Reduction in property portfolio and revenue-generating assets

DHC to Use the Proceeds to Pay Down Senior Secured Notes Due January 2026

NEWTON, Mass.--(BUSINESS WIRE)-- Diversified Healthcare Trust (Nasdaq: DHC) today announced the closing of the previously announced sale of 18 triple-net leased senior living communities to Brookdale Senior Living Inc. (NYSE: BKD) for $135 million, a valuation of approximately $154,000 per unit. The 18 communities include 876 units located across 10 states.

DHC will use the proceeds from the sale to pay down its senior secured notes due in January 2026. Following this pay down and the previous pay down with the proceeds of the $159.0 million sale of the MUSE building in San Diego in January, approximately $647 million of these senior secured notes will remain outstanding.

Chris Bilotto, President and Chief Executive Officer of DHC, commented:

“By divesting of these non-core assets, we are continuing to focus DHC’s portfolio on high-performing communities with significant upside potential. The proceeds from this transaction will enable us to reduce our leverage, positioning us more favorably to capitalize on future opportunities that can further enhance shareholder value.”

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 life science and medical office 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, this press release states that DHC will use the proceeds from the sale of 18 triple-net leased senior living communities to pay down its senior secured notes due January 2026, and that the sale will allow DHC to reduce leverage and position it to invest in opportunities that further enhance shareholder value. However, DHC may not be able to successfully use the proceeds from this sale as it currently intends to reduce its debt and, as a result, DHC may be unable to reduce leverage or invest in opportunities that further enhance shareholder value.

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 Securities and Exchange Commission (“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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250302538512/en/

Timothy Bonang, Senior Vice President

(617) 796-8234

www.dhcreit.com

Source: Diversified Healthcare Trust

FAQ

How much did DHC sell its 18 senior living communities for?

DHC sold the 18 senior living communities to Brookdale for $135 million, or approximately $154,000 per unit.

How will DHC use the proceeds from the $135 million sale?

DHC will use the proceeds to pay down its senior secured notes that are due in January 2026.

How many senior living units were included in DHC's sale to Brookdale?

The sale included 876 units located across 10 states.

What is the remaining balance of DHC's senior secured notes after recent sales?

After this sale and the MUSE building sale, approximately $647 million of senior secured notes remain outstanding.

What is DHC's strategic reason for selling these properties?

DHC is divesting non-core assets to focus on high-performing communities with upside potential and reduce leverage for future opportunities.