Diversified Healthcare Trust (DHC) Q2 2026 earnings summary

Executive summary

• Delivered second quarter results exceeding analyst estimates, with significant operational progress in the SHOP segment, improved margins, and NOI growth driven by higher occupancy and average monthly rates, as well as reduced expenses per occupied room.

• Portfolio consists of 285 healthcare properties valued at $6.3 billion across 33 states and D.C., including senior living, medical office, and life science assets; 2.2 million sq. ft. in joint ventures 99% leased with a 13.6-year average lease term.

• Medical Office and Life Science Portfolio maintained strong performance, with occupancy rising to 95.8% and robust leasing activity at higher rents and long lease terms.

• Balance sheet strengthened, with net debt to annualized adjusted EBITDAre improving to 7.1x from 8.7x a year ago.

• Strategic focus on optimizing performance through data-driven reviews, operator transitions, and potential dispositions.

Financial highlights

• Q2 2026 total revenues were $365.4 million, with consolidated NOI up 20.4% year-over-year to $84.4 million.

• Q2 normalized FFO was $38.9 million ($0.16/share), adjusted EBITDAre $82.1 million, and net loss was $(37.4) million ($(0.16)/share).

• SHOP segment same-property NOI grew 37.2% year-over-year to $52 million, with occupancy at 83.1% and a 6.2% increase in average monthly rate.

• Medical Office/Life Science segment same-property occupancy rose to 95.8%, with $24.1 million NOI, flat year-over-year.

• Year-to-date capital expenditures totaled $47.6 million, a 28% reduction from the prior year.

Outlook and guidance

• Reaffirmed full-year 2026 guidance: total NOI $307M–$323M, SHOP NOI $185M–$195M, adjusted EBITDAre $300M–$315M, normalized FFO $0.56–$0.62/share.

• SHOP NOI guidance unchanged; updated assumptions: occupancy growth 200 bps, revenue growth 6.6%, average monthly rate growth 5.5%.

• Expense control offsets revenue changes; operating expense growth 2.5%, ExpPOR growth 1.5%.

• Medical Office/Life Science NOI expected to decline due to 2025 property sales.

• Sufficient liquidity expected for at least the next 12 months; $116.8M cash and $150M undrawn revolver as of June 30, 2026.