Key Highlights

  • Revenues were USD 367.7 million, down from USD 388.7 million, as resident fees and rental income declined.
  • The net loss narrowed to USD 50.2 million from USD 164.0 million, helped by a smaller Impairment charge.
  • Property operating expenses fell to USD 286.9 million from USD 325.4 million, or 78% of revenue.
  • Interest expense fell to USD 37.2 million from USD 48.9 million, as Debt discount amortization declined.

Quarter in Numbers

Diversified Healthcare Trust (NASDAQ:DHC), a real estate Investment trust owning senior living communities and medical office and life science properties, reported third-quarter 2026 revenues of USD 367.7 million versus USD 388.7 million. Rental income fell to USD 47.7 million from USD 55.3 million, and resident fees and services fell to USD 319.9 million from USD 333.4 million. Total revenues therefore fell about 5.4% by our calculation.

Property operating expenses fell to USD 286.9 million from USD 325.4 million, which by our calculation lowered the ratio to Revenue to 78.0% from 83.7%. Depreciation and amortization was USD 62.9 million versus USD 65.3 million, and general and administrative expense rose to USD 14.6 million from USD 12.8 million. Acquisition and certain other transaction related costs were USD 3.3 million versus USD 1.2 million. Impairment of Assets was USD 14.5 million versus USD 93.2 million, so total expenses fell to USD 382.3 million from USD 497.9 million.

Net Loss

After a loss on sale of real estate of USD 0.9 million and interest expense of USD 37.2 million versus USD 48.9 million, the loss before income taxes and Equity in Earnings was USD 52.2 million versus USD 168.8 million. Interest expense included USD 2.3 million of net amortization of debt discounts, premiums and issuance costs, against USD 20.1 million a year earlier, and the prior year also had an USD 11.2 million loss on modification or early extinguishment of debt. Equity in net earnings of investees was USD 2.7 million versus USD 5.1 million. The net loss was USD 50.2 million versus USD 164.0 million.

Nine-Month Results

For the nine months, revenues were USD 1,099.5 million versus USD 1,158.3 million, property operating expenses were USD 858.4 million versus USD 952.3 million, and the net loss narrowed to USD 130.9 million from USD 264.7 million. The prior nine-month period included a gain on sale of real estate of USD 104.0 million and an impairment of USD 162.7 million, whereas this year included impairments of USD 14.5 million and a loss on sale of USD 2.7 million. Interest expense fell to USD 111.3 million from USD 157.6 million.

Manager Transitions and Indicators

The company reported transition costs from moving senior living communities to both new and existing third-party managers in the current and prior year periods. Normalized FFO includes estimated incentive management fees of USD 5.4 million for the quarter versus USD 5.7 million, USD 0.02 per share in both periods, and USD 22.0 million for the nine months versus USD 12.2 million. No equity in net earnings of AlerisLife was recognized in the quarter.

Items to track include occupancy and resident fee trends at managed communities, the pace of impairments, interest expense as debt discounts amortize, incentive management fees and the effect of further manager transitions on operating costs.