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Jun 30, 2022
Diversified Heal Q2 2022 Earnings Report
Announced second quarter 2022 results, reporting a net loss attributable to common shareholders of $0.46 per share and normalized FFO attributable to common shareholders of ($0.04) per share.
Key Takeaways
Diversified Healthcare Trust reported a net loss attributable to common shareholders of $109.4 million, or $0.46 per share, and normalized FFO attributable to common shareholders of ($10.4) million, or ($0.04) per share. The company saw improvements in its senior living portfolio and strong leasing activity in its office portfolio. DHC sold a 10% equity interest in a life science property joint venture for $108 million and redeemed $500 million of senior notes, reducing annual interest expense by approximately $49 million.
SHOP communities occupancy improved 60 basis points and NOI increased by $6.3 million from the first quarter.
Office Portfolio leasing activity was strong with a 9.1% roll up from prior rents on 263,000 square feet of leasing.
Same property Office Portfolio cash basis NOI increased 2.4% sequentially.
Adjusted EBITDAre increased 23.3% due to overall improvement in portfolios' results.
Forward Guidance
Forward-looking statements involve risks and uncertainties, including the COVID-19 pandemic, economic and market conditions, leasing activity, and the company's ability to execute its strategic plan.
Positive Outlook
- Continued recovery of the senior living portfolio.
- Potential for further NOI and occupancy growth in future sequential quarters from its SHOP segment.
- Positive leasing results and roll up in rents from 2022 second quarter leasing activity in DHC's Office Portfolio segment.
- Potential for continued improvements in DHC's same property Office Portfolio segment cash basis NOI and in adjusted EBITDAre.
- Ability to sustain sufficient liquidity and successfully execute its plan regarding capital improvements and reducing its debt.
Challenges Ahead
- DHC's SHOP segment is subject to various risks, many of which are beyond its control, including the COVID-19 pandemic and other economic and market conditions, such as the current inflationary conditions, increasing interest rates and a possible recession.
- DHC's ability to realize positive leasing activity and occupancy depends on various factors, including market conditions and tenants' demands for DHC's Office Portfolio properties, the timing of lease expirations and DHC's ability to successfully compete for tenants, among other factors.
Historical Earnings Impact
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