Earnings

DHC Raises 2026 Guidance After SHOP Margin Expansion

The Tip Desk · August 3, 2026 · 4 min read

Same-property SHOP cash-basis NOI reached $52.0 million in the second quarter, up 37.2% from a year earlier.

Diversified Healthcare Trust (DHC), a healthcare-focused real estate investment trust, said same-property SHOP cash-basis NOI reached $52.0 million in the three months ended June 30, 2026, up 37.2% from a year earlier, as operator transitions continued to lift occupancy, rates and expense control.

The sequential step-up was 17.3%, from $44.32 million in the prior quarter. Same-property SHOP NOI margin rose to 17.3%, up 240 basis points sequentially and 390 basis points year over year. The company attributed the margin gain to growth in occupancy and average monthly rate as well as reduced ExPOR. Same-property SHOP occupancy was 83.1%, and same-property average monthly rate grew 6.2% year over year.

Consolidated same-property cash-basis NOI was $82.96 million, up 20.2% from a year earlier. Medical Office and Life Science same-property NOI was $24.05 million; same-property occupancy in that portfolio was 95.8%. All Other same-property NOI was $6.93 million.

Total revenues were $365.39 million. NOI was $84.44 million and Adjusted EBITDAre was $82.08 million. Normalized FFO was $38.90 million, or $0.16 a share, up 109.4% from $18.57 million, or $0.08 a share, a year earlier. Net loss narrowed to $37.42 million, or $0.16 a share.

Net debt to annualized Adjusted EBITDAre improved to 7.1x from 7.8x last quarter. Adjusted EBITDAre to interest expense was 2.2x. Total liquidity was $266.8 million, including $150.0 million available on an undrawn secured revolving credit facility and $116.8 million of cash and cash equivalents. Gross book value of unencumbered properties was $4.0 billion, or 64.6% of the portfolio.

In April 2026 DHC acquired two SHOP land parcels previously subject to finance leases for $14.50 million, excluding closing costs. In March it sold 13 SHOP communities, 669 units, for $23.00 million. As of June 30, 2026 the portfolio was about $6.3 billion, with 285 properties, 23,797 senior living units and about 5.6 million square feet of medical office and life science space.

The company’s updated full-year 2026 guidance is consistent with its June 1, 2026 release, which raised midpoints by $10.0 million each in SHOP NOI, Adjusted EBITDAre and Normalized FFO versus the February outlook. Full-year 2026 guidance is SHOP NOI of $185.0 million to $195.0 million, Adjusted EBITDAre of $300.0 million to $315.0 million, and Normalized FFO of $135.0 million to $150.0 million, or $0.56 to $0.62 a share. Medical Office / Life Science NOI is guided at $94.0 million to $98.0 million and All Other NOI at $28.0 million to $30.0 million. Total NOI is $307.0 million to $323.0 million. Recurring capital expenditures are $100.0 million to $115.0 million.

Midpoint same-property SHOP NOI assumptions were cut: occupancy growth of about 200 basis points, a reduction of 100 basis points from prior; revenue growth of about 6.6%, a reduction of 140 basis points; operating expense growth of about 2.5%, a reduction of 200 basis points; and ExPOR growth of about 1.5%, a reduction of 70 basis points. Average monthly rate growth was raised to about 5.5%, an increase of 20 basis points. Guidance assumes no acquisitions other than the two April land parcels and no dispositions other than the 13 March communities.

Medical Office and Life Science NOI is expected to decline from $108.13 million in 2025 largely because DHC sold 31 such properties during 2025 that contributed $12.33 million of NOI in the year ended December 31, 2025. Normalized FFO is expected to increase from $64.42 million in 2025 largely because DHC was impacted by discount accretion of $63.24 million on then senior secured notes due 2026.

On July 9, 2026 DHC declared a quarterly distribution of $0.01 a share on common shares, payable on or about August 13, 2026. President and Chief Executive Officer Christopher Bilotto said the company remains focused on executing operational improvements across the SHOP segment, advancing portfolio optimization and prudently deploying capital to support long-term earnings growth.

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