Diversified Healthcare Trust

What they do

DHC is a Maryland-organized REIT that owns and leases senior living communities, medical office and life science properties, and wellness centers. As of June 30, 2026, it owned 285 properties in 33 states and Washington, D.C., and had equity interests in two unconsolidated joint ventures (Seaport JV and LSMD JV) holding medical office and life science properties. The portfolio is managed by The RMR Group.

Revenue drivers

• SHOP (senior housing operating portfolio) — Largest segment, 63.4% of NOI; 199 properties with 22,469 units; generates revenue through managed senior living communities with third-party managers.
• Medical Office and Life Science Portfolio — 28.1% of NOI; 67 properties with 5,558,089 sq. ft.; generates rental income from medical office and life science tenants, 99% leased at the JV level.
• Triple net leased senior living communities — 4.1% of NOI; 9 properties with 1,328 units; generates stable rental income under long-term triple net leases.
• Wellness centers — 4.4% of NOI; 10 properties with 812,246 sq. ft.; generates rental income from wellness-focused tenants.

Recent performance

Revenue for Q2 2026 was $365.4M, down from $388.7M in Q3 2025 and $379.6M in Q4 2025. Full-year 2025 revenue was $1.54B with a net loss of $285.9M and diluted EPS of -$1.19. Operating cash flow was -$19.6M in 2025. SHOP occupancy improved to 82.5% for all properties in Q2 2026, up from 80.6% a year earlier, with average monthly rate up to $5,693 from $5,440.

Strategy

Management plans to benefit from aging demographics and constrained senior housing supply by investing in properties, acquiring, and structuring leases with periodic rent increases. It selectively sells underperforming properties to reduce leverage or pursue better opportunities, and reviews non-performing communities for disposition or operator transitions. The company also focuses on data-driven asset management to optimize performance.

Risks

• Labor, insurance, and food cost inflation — Rising costs in the SHOP segment could pressure margins and reduce returns.
• Interest rate and capital market volatility — Uncertainty in debt and equity markets could increase cost of capital and restrict access to financing.
• Property impairments and dispositions — The company has recorded significant net losses in recent years, partly from impairments and dispositions, which may continue.
• Concentration in senior living — Dependence on senior living communities makes results sensitive to occupancy, operator performance, and demographic trends.

Outlook

Management expects favorable supply/demand dynamics to drive further occupancy growth in SHOP, with cost increases moderating and allowing revenue to outpace expense growth. They are closely monitoring economic conditions including interest rates, inflation, tariffs, and geopolitical tensions. Updated full-year 2026 guidance was provided on August 3, 2026, consistent with June 1, 2026 guidance.