Diversified Healthcare Trust Sells 18 Triple Net Leased Senior Living Communities to Brookdale for $135 Million

NEWTON, Mass.–(BUSINESS WIRE)–Diversified Healthcare Trust (Nasdaq: DHC) today announced it has entered into a purchase and sale agreement with Brookdale Senior Living Inc. (NYSE: BKD) whereby Brookdale will acquire 18 triple net leased senior living communities that Brookdale currently leases from DHC for $135 million. Brookdale has leased and operated these 18 communities since February 2003. The 18 communities include 876 units located across 10 states serving primarily assisted living residents as well as memory care residents. DHC intends to use the proceeds from the transaction to pay down its $941 million of senior secured notes due January 2026.

Chris Bilotto, President and Chief Executive Officer of DHC, made the following statement:

“This transaction is a further implementation of our ongoing initiatives to optimize our portfolio and enhance our liquidity. The sale opportunistically monetizes this NNN portfolio at a premium valuation of over $150,000 per unit. The proceeds from the transaction reflect an in-place cap rate on the lease’s annualized income of 7.3% and will allow us to reduce our leverage.”

The properties that Brookdale will acquire as part of the transaction include:

The transaction is expected to close in the fourth quarter of 2024, subject to customary closing conditions.

About Diversified Healthcare Trust

DHC is a real estate investment trust focused on owning high-quality healthcare properties located throughout the United States. DHC seeks diversification across the health services spectrum by care delivery and practice type, by scientific research disciplines and by property type and location. As of June 30, 2024, DHC’s approximately $7.2 billion portfolio included 370 properties in 36 states and Washington, D.C., occupied by approximately 500 tenants, and totaling approximately 8.4 million square feet of life science and medical office properties and more than 27,000 senior living units. DHC is managed by The RMR Group (Nasdaq: RMR), a leading U.S. alternative asset management company with over $41 billion in assets under management as of June 30, 2024 and more than 35 years of institutional experience in buying, selling, financing and operating commercial real estate. DHC is headquartered in Newton, MA. For more information, visit www.dhcreit.com.