Diversified Healthcare Trust reported a net loss of $43.3 million for the first quarter of 2026, compared to a loss of $9.0 million in the same period of 2025. Total revenues decreased to $366.5 million from $386.9 million year-over-year, primarily driven by a decline in rental income and resident fees. Rental income fell to $49.2 million from $58.6 million, while resident fees and services decreased to $317.2 million from $328.3 million. The company attributed the revenue decline to lower occupancy rates and increased operating expenses, particularly in labor and insurance.
In terms of operational metrics, the company owned 285 properties across 33 states and Washington, D.C., as of March 31, 2026. The total assets decreased to $4.27 billion from $4.36 billion at the end of 2025. The company’s cash and cash equivalents increased to $121.8 million from $105.4 million, reflecting improved cash flow from operations, which generated $8.3 million in the first quarter, compared to a negative cash flow of $3.2 million in the prior year. The company also reported a significant reduction in interest expense, which fell to $37.0 million from $57.8 million, contributing to a more favorable cash position.
Strategically, Diversified Healthcare Trust transitioned the management of 116 senior living communities to various third-party managers, following the wind-down of AlerisLife. This transition is expected to enhance operational efficiency and improve financial performance. Additionally, the company completed the sale of 13 properties for $23 million during the quarter, which it does not view as a strategic shift in its business model. In April 2026, the company acquired two land parcels in Lexington, Kentucky, for $14.5 million, further expanding its portfolio.
Looking ahead, the company remains optimistic about the senior living market, citing favorable supply and demand dynamics that could lead to improved occupancy and revenue growth. However, it acknowledges ongoing challenges, including inflationary pressures and labor market conditions, which may impact operational costs. The company plans to continue monitoring economic conditions closely and is committed to optimizing its asset management strategies to enhance performance across its portfolio.
About DIVERSIFIED HEALTHCARE TRUST
Diversified Healthcare Trust is a REIT specializing in healthcare real estate, including medical office, life science properties, senior living communities, and wellness centers across the U.S. It owns and manages a diverse portfolio of properties leased primarily through triple net and other lease structures. The company focuses on long-term value creation, strategic acquisitions, and portfolio optimization within the resilient healthcare sector.
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