Diversified Healthcare Trust saw “continued improvement” within its senior housing operating portfolio, or SHOP, during the first quarter, President and CEO Christopher Bilotto told analysts and investors Tuesday morning.
“General market fundamentals supporting favorable trends for healthcare and senior housing, along with the senior housing construction supply, demand and balance, continue to be a bright spot as we advance through the year,” Bilottonoted on the Newton, MA-based real estate investment trust’s first-quarter earnings call.
Bilotto said that the REIT continues to accelerate investments as the year progresses.
“Prudent investments in our senior living communities is a key initiative to continue driving the NOI [net operating income] recovery,” he said.
Bilotto, former president and CEO of Office Properties Income Trust, or OPI, took the reins of the REIT Jan. 1 following the retirement of Jennifer Francis.
Relative to the same period a year ago, he said, the REIT’s NOI increased 9.5%.
“Prudent investments in our senior living communities is a key initiative to continue driving the NOI recovery,” Chief Financial Officer and Treasurer Mathew Brown said. “First-quarter results reflect the strength of our underlying portfolio and continued momentum in the SHOP segment supported by higher occupancy and rates.”
Financially, DHC is reaffirming its 2024 SHOP NOI guidance of $120 million to $140 million.
“While our Q1 results fell just short of forecast, we remain confident in our full-year guidance as we expect the majority of the growth to come in the second half of the year,” Brown said.
More details about DHC’s 2024 SHOP guidance will be provided in an investor presentation that the company will publish soon, he said.
According to Brown, the REIT is “no longer going to issue SHOP results every month, “given the volatility in results from month to month, which can be caused by many factors, including the number of days in a given month.”
DHC’s SHOP portfolio included more than 27,000 units as of March 31.
