Diversified Healthcare Trust (DHC) Q2 2026 earnings summary

Executive summary

• Delivered second quarter results exceeding analyst estimates, with strong operational progress and margin expansion in the SHOP segment, driven by higher occupancy, average monthly rates, and reduced expenses per occupied room.

• 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.

• 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.

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

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

Financial highlights

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

• Normalized FFO was $38.9 million ($0.16/share), up 109.4% year-over-year; adjusted EBITDAre reached $82.1 million, an 11.5% increase.

• SHOP segment same-property NOI grew 37.2% year-over-year to $52 million, with occupancy up 160 bps to 83.1% and average monthly rate up 6.2%.

• Q2 net loss was $37.4 million ($(0.16)/share), improved from prior year.

• Year-to-date capital expenditures totaled $47.6 million, down 28% 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.

• Updated assumptions: occupancy growth 200 bps, revenue growth 6.6%, average monthly rate growth 5.5%.

• Expense growth assumptions reduced, with operating expense growth at 2.5% and ExpPOR growth at 1.5%.

• SHOP NOI tracking toward high end of guidance; seasonality in Q3 expected but not material.

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