Cautionary Language

The information appearing on DHC ’s website includes statements which constitute forward looking statements. These forward looking statements are based upon DHC ’s present intents, beliefs or expectations, but forward looking statements are not guaranteed to occur and may not occur. DHC ’s actual results may differ materially from those contained in DHC ’s forward looking statements. The information contained in DHC ’s filings with the Securities and Exchange Commission, including under “Risk Factors" and “Warnings Concerning Forward Looking Statements” in DHC ’s periodic reports and other filings, identifies important factors that could cause DHC ’s actual results to differ materially from those stated in DHC ’s forward looking statements. DHC ’s filings with the SEC are available on the SEC’s website at www.sec.gov and are also accessible on DHC ’s website at the following link: SEC Filings. You should not place undue reliance upon forward looking statements.

The documents provided in this archived section are provided for historical purposes only. The information contained in each document is accurate only as of the date each document was originally issued or such earlier date stated in those documents. Diversified Healthcare Trust does not undertake any obligation to update any information contained in these documents. For current information about the company, please refer to our most recent public SEC Filings.

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Cautionary Language

Please note that you are about to view content from a third party website. DHC does not by its inclusion imply its endorsement of or concurrence with the data provided on this website.

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Cautionary Statement Regarding Forward Looking Statements

The information appearing on Diversified Healthcare Trust’s (“DHC”) website contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other securities laws. Also, whenever DHC uses words such as “believe”, “expect”, “anticipate”, “intend”, “plan”, “estimate”, “will”, “may” and negatives or derivatives of these or similar expressions, it is making forward-looking statements. These forward-looking statements are based upon DHC’s present intent, beliefs or expectations, but forward-looking statements are not guaranteed to occur and may not occur. Actual results may differ materially from those contained in or implied by DHC’s forward-looking statements as a result of various factors. For example: (a) Office Properties Income Trust (“OPI”) and DHC have entered into a definitive merger agreement and the proposed merger is expected to close in the third quarter of 2023. However, the closing of the proposed merger is subject to the satisfaction or waiver of closing conditions, including DHC shareholder approval and the financing or any consents or approvals required or contemplated in connection with the proposed merger, some of which are beyond DHC’s control, and DHC cannot be sure that any or all of these conditions will be satisfied or waived. Accordingly, the proposed merger may not close on the contemplated terms or at all or it may be delayed; (b) DHC shareholders are expected to benefit from an annual dividend of $1.00 per share of the combined company. However, the Board of Trustees of the combined company will consider many factors when setting distribution rates, and thus future distribution rates may be increased or decreased and DHC cannot be sure as to the rate at which future distributions will be paid; (c) the transactions contemplated by the merger agreement and the terms thereof were evaluated, negotiated and recommended to DHC’s Board of Trustees by a special committee of DHC’s Board of Trustees, comprised solely of DHC’s disinterested, Independent Trustees, and were separately approved by DHC’s Independent Trustees and by DHC’s Board of Trustees. Despite this process, DHC could be subject to claims challenging the proposed merger or other transactions or DHC’s entry into the merger and related agreements because of the multiple relationships among DHC, OPI and The RMR Group LLC (“RMR”) and their related persons and entities or other reasons, and defending even meritless claims could be expensive and distracting to management; and (d) DHC’s website contains statements regarding the expectations for proposed merger and the combined company which may imply that the combined company will achieve its expected strategic and financial goals and the shareholders will benefit from the growth potential of the combined company. However, the combined company will be subject to various risks, including: the risk that the combined businesses will not be integrated successfully or that the integration will be more costly or more time-consuming and complex than anticipated; the risk that cost savings and synergies anticipated to be realized by the merger may not be fully realized or may take longer to realize than expected; risks related to future opportunities, plans and strategy for the combined company, including the uncertainty of expected future financial performance, expected access to cash flows and capital, timing of accretion, distribution rates and results of the combined company following completion of the proposed merger and the challenges facing the industries in which each company currently operates and the combined company will, following the closing of the transaction, operate; risks related to the market value of the OPI common shares of beneficial interest to be issued in the proposed merger; risks associated with indebtedness incurred in connection with the proposed merger, including the potential inability to access, or reduced access to, the capital markets or other capital resources or increased cost of borrowings, including as a result of a credit rating downgrade; risks associated with the level of capital expenditures of each company and the combined company following the proposed merger; and risks associated with the impact of general economic, political and market factors on the combined company. As a result, the combined company may not achieve the long-term growth and value creation for shareholder as expected.

The information contained in DHC's periodic reports filed with the Securities and Exchange Commission (the “SEC”), including under “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” or incorporated therein, also identifies important factors that could cause DHC's actual results to differ materially from those stated in or implied by DHC's forward-looking statements. DHC's filings with the SEC are available on the SEC's website at www.sec.gov and are also accessible on DHC ’s website at the following link: SEC Filings.

You should not place undue reliance upon any forward-looking statements. Except as required by law, DHC does not intend to update or change any forward-looking statements as a result of new information, future events or otherwise.

The documents provided in this section are provided for historical purposes only. The information contained in each document is accurate only as of the date each document was originally issued or such earlier date stated in those documents. DHC does not undertake any obligation to update any information contained in these documents. For current information about DHC, please refer to DHC’s most recent public SEC Filings.

IMPORTANT ADDITIONAL INFORMATION ABOUT THE MERGER

The information appearing on DHC ’s website may be deemed to be solicitation material in respect of the proposed merger between DHC and OPI. In connection with the proposed merger, OPI filed a registration statement on Form S-4 with the SEC containing a joint proxy statement/prospectus of DHC and OPI. On July 21, 2023, the registration statement was declared effective by the SEC and DHC and OPI each filed with the SEC and commenced mailing to their respective shareholders the definitive joint proxy statement/prospectus. The proposed transaction involving DHC and OPI will be submitted to DHC’s and OPI’s shareholders for their consideration at special meetings of shareholders to be held on August 30, 2023. BEFORE MAKING ANY VOTING OR INVESTMENT DECISION, INVESTORS ARE URGED TO CAREFULLY READ THE REGISTRATION STATEMENT, THE JOINT PROXY STATEMENT/PROSPECTUS AND ANY OTHER DOCUMENTS THAT ARE FILED OR WILL BE FILED WITH THE SEC IN CONNECTION WITH THE MERGER OR INCORPORATED BY REFERENCE IN THE REGISTRATION STATEMENT AND JOINT PROXY STATEMENT/PROSPECTUS BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION ABOUT DHC, OPI AND THE MERGER. Investors are also able to obtain copies of the registration statement and the joint proxy statement/prospectus and other relevant documents (when they become available) free of charge at the SEC’s website (www.sec.gov). Additional copies of documents filed by DHC with the SEC may be obtained for free on DHC’s Investor Relations website at www.dhcreit.com/investors or by contacting the DHC Investor Relations department at 1-617-796-8234. In addition to the registration statement and the joint proxy statement/prospectus, DHC files annual, quarterly and current reports and other information with the SEC. DHC’s filings with the SEC are also available to the public from commercial document-retrieval services and at the website maintained by the SEC at www.sec.gov.

NO OFFER OR SOLICITATION

The information appearing on DHC ’s website is for informational purposes only and is not intended to and does not constitute an offer to sell, or the solicitation of an offer to subscribe for or buy, any securities or a solicitation of any vote or approval in any jurisdiction with respect to the merger or otherwise, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful, prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the U.S. Securities Act of 1933, as amended.

PARTICIPANTS IN THE SOLICITATION

DHC and certain of its trustees and executive officers, OPI and certain of its trustees and executive officers, and RMR, the manager of DHC and OPI, and its parent and certain of their respective directors, officers and employees may be deemed to be participants in the solicitation of proxies from DHC’s and OPI’s shareholders in connection with the merger. Certain information regarding these trustees, executive officers, directors, officers and employees and a description of their direct and indirect interests are set forth in the registration statement and the joint proxy statement/prospectus filed with the SEC by DHC and/or OPI. Information about DHC’s trustees and executive officers is also included in the proxy statement for DHC’s 2023 annual meeting of shareholders, which was filed with the SEC on April 20, 2023. Information about OPI’s trustees and executive officers is included in the proxy statement for OPI’s 2023 annual meeting of shareholders, which was filed with the SEC on April 6, 2023. Copies of the foregoing documents may be obtained as provided above.

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November 12, 2010

Senior Housing Properties Trust to Buy 27 Medical Properties for $470 Million

NEWTON, Mass.--(BUSINESS WIRE)-- Senior Housing Properties Trust (NYSE: SNH) today announced that it has agreed to purchase 27 medical office properties for $470 million. The properties to be purchased include approximately 2.8 million sq.ft. and are located in 12 states.

The properties being purchased have a current average occupancy (weighted by leasable area) of approximately 95% and are leased, primarily to medical services providers and other tenants in medical related businesses. The largest properties are two office towers totaling 331,000 sq.ft., plus garages for 1,705 cars, which are attached by an enclosed walkway to Cedars Sinai Hospital in Los Angeles and are primarily leased to medical practice groups affiliated with that hospital.

The combined purchase prices for all the properties to be purchased represents a weighted (by purchase prices) average capitalization of annual property level net operating income during the remaining lease terms of approximately 9.0% p.a.. However, the purchase price capitalization rate for certain properties, such as the office building attached to Cedars Sinai Hospital, are lower. Because of the blended capitalization rate which SNH was able to achieve by agreeing to purchase all 27 properties, SNH believes this transaction may be accretive to earnings on a combined basis.

SNH believes that an important benefit it may realize as a result of these purchases is the diversification of its investments and revenues. After these purchases are completed, SNH will have approx. $3.9 billion invested in 326 properties located in 37 states and Washington, DC, including 88 office properties primarily leased to approximately 450 medical services businesses which will be responsible for approximately 37% of SNH's total rents. For details concerning the diversification impacts of this transaction upon SNH, please see the schedule below.

The 27 properties are being purchased from CommonWealth REIT (NYSE: CWH). SNH was a 100% owned subsidiary of CWH until it was spun out to CWH shareholders in 1999. Both SNH and CWH are managed by Reit Management & Research LLC ("RMR"). As a result of agreements entered in connection with the spin out and since then, SNH has a right of first refusal to purchase certain properties majority leased to tenants in medical related businesses when CWH determines to sell. All of the properties in the transaction announced today are properties included in SNH's rights of first refusal.

Because SNH and CWH are both managed by RMR and have certain common trustees, the sale prices for the properties to be purchased by SNH were established by reference to an appraisal report by a national recognized real estate appraisal firm and the terms of the sales were negotiated by special committees of each company's Board, composed of Independent Trustees who are not also trustees of the other company, each represented by separate counsel.

SNH currently expects to purchase these 27 properties free and clear of any mortgage debts using cash on hand and drawings under its unsecured revolving bank credit facility. The sales are expected to be completed in a series of separate closings before June 30, 2011.

Senior Housing Properties Trust is a real estate investment trust, or REIT, which owns independent and assisted living communities, nursing homes, rehabilitation hospitals, wellness centers and medical office buildings. SNH is headquartered in Newton, MA.

WARNING REGARDING FORWARD LOOKING STATEMENTS

THIS PRESS RELEASE 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 SNH'S CURRENT BELIEFS AND EXPECTATIONS; BUT THEY ARE NOT GUARANTEED TO OCCUR AND MAY NOT OCCUR FOR VARIOUS REASONS, INCLUDING SOME REASONS WHICH ARE BEYOND SNH'S CONTROL. FOR EXAMPLE:

  • THIS PRESS RELEASE STATES THAT SNH HAS AGREED TO PURCHASE 27 PROPERTIES FOR $470 MILLION AND THAT THESE PURCHASES ARE EXPECTED TO BE COMPLETED IN A SERIES OF SEPARATE CLOSINGS BEFORE JUNE 30, 2011. SNH'S OBLIGATIONS TO COMPLETE THESE PURCHASES ARE SUBJECT TO VARIOUS CONDITIONS TYPICAL OF LARGE, COMMERCIAL REAL ESTATE TRANSACTIONS. IN THE EVENT THESE CONDITIONS ARE NOT SATISFIED, SOME OF THESE PURCHASES MAY BE DELAYED OR MAY NOT OCCUR;
  • THIS PRESS RELEASE STATES THAT THE PURCHASE PRICES FOR ALL OF THE PROPERTIES COMBINED REPRESENTS A WEIGHTED (BY PURCHASE PRICE) AVERAGE CAPITALIZATION OF ANNUAL PROPERTY LEVEL NET OPERATING INCOME DURING REMAINING LEASE TERMS OF APPROXIMATELY 9.0%. THE ANNUAL PROPERTY LEVEL NET OPERATING INCOME PURCHASE PRICE CAPITALIZATION RATE FOR EACH OF THE PROPERTIES IS DIFFERENT; SOME ARE HIGHER AND SOME ARE LOWER THAN THIS STATED PERCENTAGE. ACCORDINGLY, IF LESS THAN ALL OF THE 27 PROPERTIES ARE PURCHASED, THE CAPITALIZATION RATE FOR THE COMPLETED TRANSACTION MAY BE DIFFERENT;
  • THIS PRESS RELEASE STATES THAT SNH BELIEVES THAT THE TRANSACTION DESCRIBED MAY BE ACCRETIVE TO ITS EARNINGS. THE ACCRETION TO EARNINGS, IF ANY, WHICH MAY RESULT FROM THIS TRANSACTION DEPENDS IN LARGE PART UPON SNH'S COSTS OF CAPITAL TO LONG TERM FINANCE THESE PURCHASES. SNH'S COSTS OF CAPITAL WILL DEPEND UPON THE TYPES OF CAPITAL (E.G., EQUITY VS. DEBT CAPITAL) AND MARKET CONDITIONS AT THE TIME SNH RAISES THIS CAPITAL. THE ACCRETION TO EARNINGS WHICH SNH MAY REALIZE WILL ALSO DEPEND UPON SNH'S ABILITY TO MAINTAIN OR INCREASE RENTS AND CONTROL EXPENSES AT THE PROPERTIES BEING ACQUIRED, WHICH ALSO DEPEND UPON FUTURE MARKET CONDITIONS. SNH HAS NO CONTROL OVER MARKET CONDITIONS. ACCORDINGLY, THIS TRANSACTION MAY NOT BE ACCRETIVE TO SNH'S FUTURE EARNINGS;
  • THIS PRESS RELEASE STATES, AND THE SCHEDULE ATTACHED TO THIS PRESS RELEASE INCLUDES A PRO FORMA TABLE WHICH IMPLIES, THAT SNH'S TENANT DIVERSIFICATION WILL INCREASE WHEN THE PURCHASES OF THE 27 PROPERTIES ARE COMPLETED. IF LESS THAN ALL OF THESE PROPERTIES ARE PURCHASED, THE DIVERSIFICATION NUMBERS AND PERCENTAGES PRESENTED IN THIS PRESS RELEASE AND IN THE SCHEDULE WILL BE DIFFERENT; AND
  • THIS PRESS RELEASE STATES THAT THE PURCHASE PRICES TO BE PAID BY SNH WERE ESTABLISHED BY REFERENCE TO AN APPRAISAL REPORT AND THAT THE SALES TERMS WERE NEGOTIATED BY SPECIAL COMMITTEES OF INDEPENDENT TRUSTEES OF EACH OF SNH AND CWH REPRESENTED BY SEPARATE COUNSEL. AN IMPLICATION OF THESE STATEMENTS MAY BE THAT THE PURCHASE PRICES ARE THE AMOUNTS WHICH SNH WOULD HAVE PAID IN AN ARMS LENGTH TRANSACTION. SNH AND CWH ARE BOTH MANAGED BY RMR AND HAVE COMMON TRUSTEES. ACCORDINGLY, SNH AND CWH MAY BE CONSIDERED RELATED PARTIES AND THERE CAN BE NO ASSURANCE THAT THE PURCHASE PRICES WHICH SNH PAYS ARE THE SAME OR AS LOW AS SNH WOULD HAVE PAID IN AN ARMS LENGTH TRANSACTION BETWEEN UNRELATED PARTIES.

FOR THESE FOREGOING REASONS, AMONG OTHERS, INVESTORS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE UPON FORWARD LOOKING STATEMENTS IN THIS PRESS RELEASE. OTHER FACTORS WHICH MAY CAUSE THE FORWARD LOOKING STATEMENTS IN THIS PRESS RELEASE TO NOT OCCUR ARE DESCRIBED UNDER "ITEM 1A RISK FACTORS" IN SNH'S ANNUAL REPORT ON SEC FORM 10K FOR THE YEAR ENDED DECEMBER 31, 2009, AS THE SAME MAY HAVE BEEN OR BE REVISED OR UPDATED IN SUBSEQUENT FILINGS WITH THE SEC, EACH OF WHICH IS AVAILABLE AT THE SEC WEBSITE: www.sec.gov.

EXCEPT AS MAY BE REQUIRED BY LAW, SNH DOES NOT INTEND TO IMPLY ANY OBLIGATION TO MAKE UPDATES TO THE FORWARD LOOKING STATEMENTS IN THIS PRESS RELEASE.

Location of Properties to be Acquired

and Impact Upon SNH Diversification

 
 

Properties to be acquired:

   
 
AZ (1 property, approx. 126,000 sq.ft.)

NH (1 property, approx. 211,000 sq.ft.)

CA (2 properties, approx. 331,000 sq.ft.)

NM (6 properties, approx. 616,000 sq.ft)

CT (2 properties, approx. 97,000 sq.ft.)

OH (1 property, approx. 125,000 sq.ft.)

GA (1 property, approx. 95,000 sq.ft.) PA (4 properties, approx. 448,000 sq.ft.)
MA (4 properties, approx. 414,000 sq.ft.) SC (2 properties, approx. 104,000 sq.ft.)
MN (1 property, approx. 141,000 sq.ft.) TX (2 properties, approx. 96,000 sq.ft.)

 

Diversification:

As of September 30, 2010

 

Actual

Pro Forma1

 
Size and geography: $3.4 billion $3.9 billion
invested in invested in
298 properties 326 properties
in 35 States in 37 States
and Wash. D.C. and Wash. D.C.
 
No. of tenants, approximately: 230 460
 
Average remaining lease
term (weighted by rents): 12 years 11 years
 
Property type based upon
rents:
Assisted living: 28% 24%
Independent living: 33% 28%
Skilled nursing: 6% 5%
Rehabilitation hospitals: 3 % 2%
Wellness centers: 5% 4%
Medical offices, clinics,
biotech labs, etc.
leased to medical
service providers and
other medical related
businesses ("MOBs") 25% 37%
 
Totals: 100% 100%
 
Tenant concentration based
upon rents:
 
Five Star Quality Care, Inc. 56% 47%
 
Other operators of assisted
and independent living
communities (8 tenants) 14% 12%
 
Lifetime Fitness and
Starmark/Wellbridge
(wellness centers) 5% 4%
 
MOBs 25% 37%
 
Totals: 100% 100%

1 Pro Forma for the acquisition of all 27 MOB properties for $470 million and one MOB acquired in October 2010 for $15 million.

A Maryland Real Estate Investment Trust with transferable shares of beneficial interest listed on the New York Stock Exchange.

No shareholder, Trustee or officer is personally liable for any act or obligation of the Trust.

Senior Housing Properties Trust
Timothy A. Bonang, 617-796-8234
Vice President, Investor Relations
or
Elisabeth A. Heiss, 617-796-8234
Manager, Investor Relations
www.snhreit.com

Source: Senior Housing Properties Trust

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