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

Business Wire 29-Sep-2024 8:25 PM

DHC Will Use the Proceeds to Pay Down Debt

Diversified Healthcare Trust (NASDAQ:DHC) today announced it has entered into a purchase and sale agreement with Brookdale Senior Living Inc. (NYSE:BKD) ("Brookdale") whereby Brookdale will acquire 18 triple net leased senior living communities that Brookdale currently leases from DHC for $135 million. Brookdale has leased and operated these 18 communities since February 2003. The 18 communities include 876 units located across 10 states serving primarily assisted living residents as well as memory care residents. DHC intends to use the proceeds from the transaction to pay down its $941 million of senior secured notes due January 2026.

Chris Bilotto, President and Chief Executive Officer of DHC, made the following statement:

"This transaction is a further implementation of our ongoing initiatives to optimize our portfolio and enhance our liquidity. The sale opportunistically monetizes this NNN portfolio at a premium valuation of over $150,000 per unit. The proceeds from the transaction reflect an in-place cap rate on the lease's annualized income of 7.3% and will allow us to reduce our leverage."

The properties that Brookdale will acquire as part of the transaction include:

The transaction is expected to close in the fourth quarter of 2024, subject to customary closing conditions.

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 June 30, 2024, DHC's approximately $7.2 billion portfolio included 370 properties in 36 states and Washington, D.C., occupied by approximately 500 tenants, and totaling approximately 8.4 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 $41 billion in assets under management as of June 30, 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 the transaction is expected to close in the fourth quarter of 2024, and that DHC intends to use the proceeds to pay down debt under its senior secured notes due January 2026. This press release also states that t that the transaction is a further implementation of DHC's ongoing initiatives to optimize its portfolio and enhance its liquidity and the proceeds will allow DHC to reduce its leverage. However, the transaction is subject to closing conditions, and it may not close on the contemplated terms or at all or it may be delayed. DHC may not achieve the results it expects from the transaction or may incur losses on the transaction. Further, DHC may not be able to successfully use the proceeds as it currently intends. As a result, DHC may be unable to sustain or improve its liquidity or reduce its leverage.

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.

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