Diversified Healthcare Sees No Path To Refinance $700M In Debt

Diversified Healthcare Trust said in a statement Monday that it sees “no path” to refinance $700M in debt until mid-2024, well after the debt is due.

The company, which specializes in senior housing but has inked an unfinished merger with Office Properties Income Trust, said the debt wall means there is “substantial doubt” about DHC's ability to remain in business. As an alternative to going out of business, the REIT's management recommends that the merger go forward.

OPI agreed to acquire Diversified Healthcare Trust in April in an all-stock deal that would create a new entity called Diversified Properties Trust. The rationale for the deal, according to OPI, is that DHC would reduce its exposure to the troubled office sector.

OPI has 160 office properties totaling about 21M SF. The merger would add DHC's 105 healthcare, life sciences and senior housing properties totaling 8.8M SF.

In its statement, DHC also reported weak numbers. Its senior housing net operating income was $32.7M in aggregate, or $6.5M per month on average, from January through May. That is $9.9M, or only 60%, what DHC said is necessary for it to keep current with its debt.

DHC stock was down almost 8% on Monday and is off nearly 7% year-over-year. OPI, on the other hand, gained about 7.5% on Monday, though it is down nearly 62% since this time last year.

Continue reading this story with a free account

Log in or register
Sign up for more articles like this
Subscribe to Bisnow's National Newsletters
Related Stories

JVP Development Is Betting $37M Of Its Own Money That Frisco Is Ready For Spec Office

Wall Street Impatient For Big Tech Returns On Data Center Spending

As AI Adoption Ramps Up, Half A Million Property Managers Are In The Crosshairs

Treasuries Hover Around 4.7% As Wall Street Questions If Warsh Is A 'Dove In Hawk's Clothing'

Avison Young Had Assets Frozen By Bank Over Unpaid Taxes

Camden Property Trust Sells West Coast Portfolio, Clears $1.5B Target

Churchill Downs Plans To Sell 9 Casinos, Focus On Horse Racing

Bringing Stability And Savings To CRE Insurance Through Working Layer

More Hotel Owners In Need Of Cash Are Getting It From The Big Brands

Former Arms Dealer Targeting Heartland Apartment Takeover Files For Bankruptcy

SEC Charges REIT, Its Founders With Alleged $152M Fraud Scheme

Equinix Ramps Up Spending Plans Amid Faster-Than-Expected AI Shift