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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April 02, 2020

Diversified Healthcare Trust Announces Liquidity Measures to Address COVID-19 Impact

Reduces Quarterly Common Share Dividend Per Share to $0.01 to Preserve Capital

Deferring Planned Capital Projects

Sufficient Liquidity to Fund Operations for a Sustained Period

NEWTON, Mass.--(BUSINESS WIRE)-- Diversified Healthcare Trust (Nasdaq: DHC) today announced that, in response to the operating challenges and uncertainty surrounding the COVID-19 (coronavirus) pandemic and market disruptions, DHC’s Board of Trustees has decided to reduce the Company’s regular quarterly cash dividend on its common shares for the first quarter to $0.01 per share, conserving approximately $33.3 million of cash per calendar quarter. The dividend will be paid to DHC’s common shareholders on record as of the close of business on April 13, 2020 and distributed on or about May 21, 2020. The Company’s Board of Trustees believes the dividend reduction is the most prudent course of action as it continues to monitor the Company’s financial performance and expects to reevaluate the level of any subsequent regular quarterly dividends on a quarterly basis. DHC currently expects that its dividends to its common shareholders in 2020 will be at least equal to the minimum amounts required in order for DHC to remain a real estate investment trust, or REIT, for federal tax purposes.

DHC also expects to conserve capital by deferring certain previously planned non-essential capital investments which is expected to save up to $150 million in 2020. DHC will re-evaluate all deferred 2020 capital projects later in 2020 as clarity improves on the impact of the COVID-19 pandemic and the overall economic environment on DHC’s financial condition. Since the fourth quarter 2019 earnings conference call, DHC has closed on the sale of four assets for approximately $56 million. However, because of current market conditions, DHC anticipates the pace of future sales will slow considerably.

One of DHC’s highest priorities is the health and well-being of the residents at its senior living communities, the tenants at its medical office buildings, and all of its other stakeholders. As of March 31, 2020, DHC has been notified of 41 confirmed cases of the novel coronavirus (COVID-19) in its managed and leased properties, including 31 residents and tenants, and 10 employees across 23 properties, primarily in its SHOP portfolio.

Due to restrictions intended to prevent the spread of the virus, including limitations on in person tours and the uncertain environment created by the virus, the Company’s senior living operators are experiencing significant challenges in attracting new residents to their communities. Additionally, the Company’s senior living operators are experiencing cost increases as a result of the pandemic. These increases are primarily due to the combination of elevated labor costs, including increased use of overtime, as well as the increased cost and usage of supplies, including personal protective equipment.

As such, DHC’s measures taken today are in direct response to today’s operating environment. Jennifer Francis, President and Chief Operating Officer of Diversified Healthcare Trust, made the following statement:

“The U.S. has entered an unprecedented period of uncertainty impacting every aspect of our business as well as the U.S. economy overall. Our first priority at DHC is helping ensure the health and safety of the residents in our communities and the tenants and employees at our properties. We continue to carefully monitor developments related to the virus and support our senor living manager, Five Star Senior Living, and tenants following recommendations provided by the CDC and federal, state and local regulatory authorities. From a financial perspective, we believe we are taking all of the appropriate steps to preserve capital, maintain liquidity, and meet our debt obligations during this crisis. In addition to the many cost saving steps we are proactively taking, we anticipate that our G&A expenses will be materially reduced because of the lower fees we will pay to our manager, The RMR Group LLC, as a result of the decline in our share price since this crisis began. Finally, we note that we are a large healthcare REIT with a strong base of diverse, high-quality assets, and we are confident we will weather the current business conditions, just as we have survived other challenges in the past, adapting our business model and protocols as needed.”

Diversified Healthcare Trust (Nasdaq: DHC) is a real estate investment trust (REIT) 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, by property type and location. As of December 31, 2019, DHC’s $8.4 billion portfolio included more than 420 properties in 39 states and Washington, D.C., occupied by more than 600 tenants, and totaling approximately 12 million square feet of medical office and life science properties and more than 30,000 living units. DHC is managed by the operating subsidiary of The RMR Group Inc. an alternative asset management company that is headquartered in Newton, MA. To learn more about DHC, visit www.dhcreit.com.

WARNING REGARDING FORWARD-LOOKING STATEMENTS

This press release contains statements that constitute 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, DHC 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. Forward-looking statements involve known and unknown risks, uncertainties and other factors, some of which are beyond DHC’s control. For example:

  • In this press release, DHC announced several actions it has taken and plans to take in response to the current operating challenges and uncertainty surrounding the COVID-19 pandemic, including reducing its regular quarterly dividend on its common shares to $0.01 per share per quarter and deferring certain previously planned non-essential capital investments. However, if the severity of the COVID-19 pandemic continues for an extended period or if business activity and the economy fail to sufficiently improve if and when the negative impacts of the COVID-19 abate, these actions may not be sufficient in preventing DHC from potentially realizing sustained losses and liquidity challenges. Further, DHC may incur increased operating expenses, particularly at its senior living communities, for supplies and personnel to address the current COVID-19 pandemic and it may be prevented from accepting additional residents at certain of its senior living communities if it becomes restricted from doing so due to the COVID-19 pandemic. In addition, upcoming debt maturities, including DHC’s $200 million unsecured senior notes that mature on April 15, 2020 and $200 million aggregate principal term loan that matures on June 12, 2020 will reduce its available liquidity to fund its operations. In addition, under the current economic conditions, DHC’s tenants and managers may not be able to profitably operate their businesses at DHC’s properties, and DHC’s tenants may become unable or unwilling to pay rent owed to DHC or the managers of DHC’s senior living communities may be unable to generate DHC’s minimum returns for sustained periods. Additionally, DHC’s ability to borrow under its credit facility is subject to it satisfying financial and other covenants, and if it defaults under its credit facility or other debt obligations, it may be required to repay its outstanding borrowings and other debt. Further, although DHC has taken steps to enhance its ability to maintain sufficient liquidity, unanticipated events, such as emergencies in addition to, or as an expansion of, the current impact of the COVID-19 pandemic may require DHC to expend amounts not currently planned.
  • This press release states that DHC has reduced its regular quarterly dividend on its common shares to $0.01 per share per quarter and that DHC’s Board of Trustees expects to reevaluate the level of any subsequent regular quarterly dividend on a quarterly basis. An implication of this statement may be that DHC will resume paying regular quarterly dividends on its common shares at or near historic levels in the near future. In fact, DHC may not resume paying regular quarterly dividends at or near historic levels in the near future and its reduction of its regular quarterly dividend on its common shares may extend for an indefinite period. Moreover, capital market conditions may not improve or DHC's own financial circumstances may change so that it becomes unable or unwilling to increase its regular quarterly dividends on its common shares. Also, DHC’s historical rate of dividends on its common shares may be changed because of changes in DHC’s earnings, liquidity, financial leverage or other circumstances.
  • DHC has indicated that it expects that the pace of its future asset sales to slow considerably because of current market conditions. This may imply that asset sales will re-commence if market conditions improve; however, any future asset sales may be delayed indefinitely, they may not occur or, if they do occur, assets may be sold at prices less than previously expected and DHC may realize losses from those assets and any reduction in its financial leverage resulting from any such sales may be less than previously planned.
  • Ms. Francis references DHC having survived other challenges in the past as support for DHC’s confidence that it will weather the current challenging business conditions. However, those past successes are no guarantee of future success and the challenges posed by the current business conditions may differ from those earlier challenges and more drastically negatively impact DHC and its tenants and managers than did those past events, including that the current conditions may last longer and be more detrimental, resulting in a longer period of recovery and return to more normal business.

The information contained in DHC’s filings with the Securities and Exchange Commission, or SEC, including under “Risk Factors” in DHC’s periodic reports, or incorporated therein, identifies other 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.

You should not place undue reliance upon 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.

Michael Kodesch, Director, Investor Relations
(617) 796-8234
www.dhcreit.com

Source: Diversified Healthcare Trust

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