Diversified Healthcare Trust DHCNL

Diversified Healthcare Trust is a real estate investment trust specializing in healthcare-related properties across the United States. Founded in 1998 and organized under Maryland law, the company primarily owns senior living communities, medical office buildings, and life science properties. As of December 31, 2025, its portfolio included 298 properties spanning 33 states and Washington, D. C., with an additional equity interest in two unconsolidated joint ventures holding approximately 2.2 million rentable square feet of medical office and life science space. The company’s strategy leverages demographic trends, including an aging U. S. population, to capitalize on the growing demand for healthcare real estate.

Diversified Healthcare Trust generates revenue primarily through lease agreements and management fees associated with its properties. Senior living communities contribute income via triple-net leases, where tenants bear operating expenses, while medical office and life science properties yield rental income under various lease structures, including triple-net, net, modified gross, and full-service leases. The company also earns management fees from third-party operators overseeing its senior living communities, calculated as a percentage of gross revenues. Additionally, it selectively sells properties to optimize its portfolio, reinvesting proceeds into acquisitions or property improvements to enhance long-term cash flow and shareholder distributions.

The company operates through the following segments:

• SHOP: This segment encompasses senior living communities, including independent living, assisted living, memory care, and skilled nursing facilities. Independent living communities cater to residents capable of high degrees of autonomy, offering bundled services such as meals, housekeeping, and social programming. Assisted living and memory care communities provide specialized support for residents requiring daily assistance, including medical reminders and secure environments for individuals with cognitive impairments. Skilled nursing facilities deliver extensive nursing and healthcare services. The segment’s revenue stems from lease agreements with third-party operators and management fees tied to community performance.

• Medical Office and Life Science Portfolio: This segment consists of properties leased to healthcare providers, clinics, biotechnology laboratories, and administrative facilities. Tenants include physicians, hospitals, healthcare insurers, and life science companies engaged in drug development and medical research. Leases are structured to include periodic rent increases, with the company responsible for property maintenance under certain lease types. The segment benefits from long-term lease agreements, with an average remaining lease term of 14.2 years as of December 31, 2025.

Diversified Healthcare Trust occupies a resilient position within the healthcare real estate sector, driven by the sector’s defensive characteristics and long-term growth prospects. The company competes with other REITs, financial institutions, and private investors for acquisitions, tenants, and residents, with success hinging on factors such as location, lease terms, and property quality. Its competitive advantages include a diversified portfolio of high-quality assets, strong tenant credit profiles, and experienced third-party managers. The constrained supply of senior living communities, coupled with rising demand from an aging population, further strengthens its market position. However, the company faces regulatory risks, including changes in Medicare and Medicaid reimbursement policies, which could impact tenant profitability and rental income.

The company’s customer base is broadly segmented into two categories. For its senior living communities, customers include residents and their families seeking independent living, assisted living, memory care, or skilled nursing services. In the medical office and life science segment, tenants comprise healthcare providers, biotechnology firms, hospitals, and administrative entities. Notable third-party managers operating its senior living communities include Sinceri Senior Living, Discovery Senior Living, Tutera Senior Living, Charter Senior Living, and Phoenix Senior Living, which collectively managed 76.1% of the company’s gross real estate value as of December 31, 2025.