Diversified Healthcare Trust (DHC) Q4 2024 earnings summary

Executive summary

• Reported Q4 2024 total revenues of $379.6 million, a 5% year-over-year increase, and normalized FFO of $5.3 million, or $0.02 per share, exceeding consensus estimates.

• Achieved 80% SHOP occupancy for the first time since Q1 2020, with a 56% improvement in SHOP NOI and 7.3% increase in SHOP revenues year-over-year, driving a 250 basis point margin expansion.

• Portfolio as of December 31, 2024, valued at approximately $7.2 billion, comprising 367 properties in 36 states and Washington, D.C., including 8 million sq. ft. of medical office/life science space and over 27,000 senior living units.

• Completed $6.6 million in office building sales in Q4 and $179 million in property sales in Q1 2025, including the Muse Life Science Campus for $159 million.

• Ended the year with a $145 million cash balance and executed agreements for further property sales expected to generate $77 million.

Financial highlights

• Q4 2024 net loss was $87.4 million ($0.36 per share), an improvement from Q4 2023's $102.6 million loss.

• Normalized FFO for Q4 was $5.3 million, up 31% sequentially but down from $8.1 million in Q4 2023; same property cash basis NOI was $63.7 million, up 18.7% year-over-year.

• Adjusted EBITDAre increased 13.3% year-over-year to $67.0 million.

• Annualized dividend declared per common share was $0.04, with a 1.7% yield and a 50% normalized FFO payout ratio.

• Non-recurring weather-related expenses totaled $4.4 million, impacting Q4 results.

Outlook and guidance

• 2025 CapEx expected between $150-$170 million, with $105-$120 million for senior living communities, representing a 16% reduction from 2024.

• SHOP NOI guidance for 2025 is $120-$135 million; medical office and life science segment NOI guidance is $104-$112 million.

• Confident in meeting $380 million June 2025 debt maturity and proactively addressing $940 million zero-coupon bonds due January 2026.

• Management remains optimistic about the SHOP segment and expects continued improvement in 2025.