Diversified Healthcare Trust (DHC) investor relations material

Portfolio overview and performance

• Owns a $6.2 billion portfolio of 285 healthcare properties, including over 22,000 senior housing units and 5.6 million sq ft of medical outpatient and life science properties.

• Achieved a 165% total return on stock over the past 12 months.

• SHOP (senior housing operating portfolio) represents about 62% of projected NOI for the year.

• Portfolio has been right-sized through asset sales and operator transitions, with 82% occupancy at quarter-end.

• Transitioned management of most communities to seven new operators, completed at the end of last year.

Strategic initiatives and growth outlook

• Focused on embedded growth within the existing portfolio rather than acquisitions.

• Raised guidance for the year due to benefits from new operators, including expense reductions and improved sales programs.

• Plans to convert 25 vacant skilled nursing wings into IL, AL, and memory care units at 16 communities, with $80 million CapEx targeting mid-teens returns.

• Margin profile currently in the mid-teens, with a target to reach mid-20s as operational improvements take effect.

• Internal growth and skilled nursing conversions prioritized over new acquisitions.

Market trends and demand drivers

• Demographic trends, including the "silver tsunami," are driving strong demand for senior housing, with a projected 5% CAGR over the next five years.

• Affordability for seniors is supported by accumulated wealth and rising home values.

• Supply growth is restrained due to high construction costs and interest rates, limiting new product over the next few years.

• Rate growth for senior housing has moderated after outsized increases in recent years.