Diversified Healthcare Trust Stock Earnings Reports

Key points for investors: DHC reported a strong Q1 2026 with normalized FFO of $33.1 million ($0.14/share) and adjusted EBITDAre of $74 million, both above consensus. Consolidated NOI rose 4.7% y/y to $75.9 million, with the same-property SHOP portfolio driving performance — SHOP same-property NOI increased 13.5% y/y (82.4% occupancy) supported by 110 bps occupancy improvement, average monthly rate growth (~5.9% y/y in SHOP), and meaningful expense reductions (notably dietary and contract labor). Management is executing active asset management and operator transitions that are already producing margin expansion and cost savings. They have a pipeline to convert underutilized skilled nursing wings into IL/AL/memory care across 16 communities (6 initial projects: ~$20 million capex, ~150 added units, expected mid-teens returns and near-term accretion). Medical office & life science portfolio showed healthy leasing (169k sq ft in Q1; rents ~12% above prior rents) and high occupancy (~95.3%). Capital recycling continues: 13 non-core SHOP assets sold for $23 million, and two land-lease purchases for $14.5 million to eliminate ground rent and capture higher returns. Balance sheet/liquidity: $272 million total liquidity (including $122M cash and full $150M revolver), net debt / annualized adjusted EBITDAre 7.8x (down from 8.8x), and interest coverage improved to ~2x. Moody’s upgraded DHC to B3 with a positive outlook. Management reaffirmed 2026 guidance (SHOP NOI $175–185M; MO/LS NOI $94–98M; triple-net NOI $28–30M; adjusted EBITDAre $290–305M; normalized FFO $0.52–0.58), reiterated recurring CapEx guidance of $100–115M (including ~$80–90M for SHOP recurring CapEx) and expects maintenance CapEx per unit to decline over time. Management expects continued NOI and margin improvement from operator execution and to prioritize reinvesting capital into the portfolio (including ROI projects) rather than acquisitions in the near term.