Net operating income in Diversified Healthcare Trust’s senior housing operating portfolio, or SHOP, has fallen 54.4% since November, the Newton, MA-based real estate investment trust reported Wednesday.
DHC’s SHOP includes 117 properties managed by AlerisLife / Five Star Senior Living and 106 properties managed by other operators.
The company’s reported NOI was $2.8 million in December. That’s $9.8 million, or 77.9%, below the December 2019 level and $3.3 million, or 54.4%, below November 2023. December 2023’s NOI margin was 2.9%, 930 basis points below December 2019 and 350 basis points below November 2023.
As of Dec. 31, year-to-date NOI was $74.8 million, $127.7 million or 63.1% below the same period in 2019. Year-to-date NOI margin through Dec. 31 was 6.7%, or 980 basis points, below the same period in 2019.
Occupancy also has continued to drop, according to the REIT. December occupancy was 80%, or 580 basis points, below December 2019, and it was 10 basis points below November occupancy. Year-to-date occupancy for 2023 through Dec. 31 was 78.7%, or 760 basis points, below the same period in 2019, according to the data.
In November, Chief Financial Officer and Treasurer Matt Brown said during a third-quarter earnings call that the REIT was implementing a recovery strategy in an effort to return the company to a position of growth, pinning its hopes on continued improvement in its SHOP.
“We are actively evaluating all strategies to strengthen DHC’s balance sheet, regain debt covenant compliance, source additional capital to fund our ongoing SHOP recovery and best position the company for long-term growth,” he said during the call.
DHC saw change at the top on Jan. 1 with the retirement of President and CEO Jennifer Francis. She was succeeded by Christopher Bilotto, former president and CEO of Office Properties Income Trust, or OPI, with which DHC planned to merge before the arrangement was called off in August.
Both DHC and OPI are managed by The RMR Group.
