Q1 2024 Diversified Healthcare Trust Earnings Call Transcript
Key Points
- Diversified Healthcare Trust reported a 9.5% year-over-year increase in same property cash basis NOI, reflecting strong performance in the SHOP segment.
- Revenue in the SHOP segment increased by 10% over the previous year, supported by a 200 basis point increase in occupancy and a 6.8% increase in total RevPAR.
- Diversified Healthcare Trust successfully leased approximately 101,000 square feet at weighted average rents that were 11.5% higher than prior rents for the same space.
- The company is actively managing its capital and liquidity profile, targeting secured financing on select properties to improve liquidity and repay upcoming debt maturities.
- Diversified Healthcare Trust is undertaking capital refresh and renovation projects expected to yield an ROI of 8% to 10%, enhancing community attractiveness and potentially driving further revenue growth.
- The company faces challenges with higher operating expenses, particularly in the SHOP segment, where increased salaries, benefits, and insurance costs partially offset revenue gains.
- Diversified Healthcare Trust reported a 3.6% decline in same-property cash basis NOI in the medical office and life science portfolio, primarily due to lower revenue related to vacancies.
- There are ongoing concerns with vacancies in the medical office and life science segments, with significant space needing to be re-leased or potentially disposed of.
- The company's strategy involves some level of uncertainty regarding the disposition of properties and the impact on occupancy and NOI.
- While Diversified Healthcare Trust is making efforts to improve its financial position, the reliance on securing new financing and the execution of dispositions introduce risks related to market conditions and execution capabilities.
Good morning, and welcome to the Diversified Healthcare Trust first-quarter 2024 earnings conference call. (Operator Instructions) Please note this event is being recorded.
I would now like to turn the call over to Kevin Brady, Director of Investor Relations. Please go ahead.
Thanks, Nick, and good morning. Joining me on today's call are Chris Bilotto, President and Chief Executive Officer; and Matt Brown, Chief Financial Officer and Treasurer.
Today's call includes a presentation by management, followed by a question and answer session with sell-side analysts. Please note that the recording and retransmission of today's conference call is prohibited. Without the prior written consent of the company.
Today's conference call contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other securities laws. These forward-looking statements are based upon DHT's beliefs and expectations as of today, Tuesday,
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