DIVERSIFIED HEALTHCARE TRUST
For the period ended May 31, 2024. Filed Mar 26, 2024.
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May 31, 2024 · Filed Mar 26, 2024
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )
| | ☑ | | | Filed by the Registrant | | | ☐ | | | Filed by a Party other than the Registrant | |
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| | | Check the appropriate box: | | | ||||
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| | | ☐ | | | | Preliminary Proxy Statement | | |
| | | ☐ | | | | CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY (AS PERMITTED BY RULE 14a-6(e)(2)) | | |
| | | ☑ | | | | Definitive Proxy Statement | | |
| | | ☐ | | | | Definitive Additional Materials | | |
| | | ☐ | | | | Soliciting Material under §.240.14a-12 | | |
Diversified Healthcare Trust
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
| | | Payment of Filing Fee (Check the appropriate box): | | | ||||
|---|---|---|---|---|---|---|---|---|
| | | ☑ | | | | No fee required. | | |
| | | ☐ | | | | Fee paid previously with preliminary materials. | | |
| | | ☐ | | | | Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11. | | |
Notice of 2024 Annual Meeting
of Shareholders and Proxy Statement
Friday, May 31, 2024 at 9:30 a.m., Eastern time
Live Webcast Accessible at
https://www.virtualshareholdermeeting.com/DHC2024
LETTER TO OUR SHAREHOLDERS
FROM YOUR BOARD OF TRUSTEES
Dear Fellow Shareholders:
Please join us for our 2024 Annual Meeting of Shareholders, which will be held virtually at 9:30 a.m., on Friday, May 31, 2024. The business to be conducted at the meeting is explained in the attached Notice of Meeting and Proxy Statement. We believe furnishing these materials over the internet expedites your receipt of these important materials while reducing the cost and environmental impact of our annual meeting.
2023 was a pivotal year for DHC as we made significant progress improving operational performance across our portfolio, contributing to a full year 2023 increase to Normalized FFO of 207% to $41.1 million. Throughout the year, we refreshed or fully renovated 65 of our SHOP communities in addition to other projects across our SHOP communities for a total cost of $183 million. We expect the completed projects will serve as a bridge to occupancy and NOI growth in 2024 and beyond and contributed to our 2023 Cash Basis NOI increase to $236.2 million, a 43% increase over the prior year. We ended the fourth quarter with SHOP occupancy of 79.3%, an increase of 300 basis points and an average monthly rate increase of 5.5% year over year. We also began to transition 13 non-performing communities to a different operating partner with the goal of improving performance.
In December, we took a meaningful step forward to support our growth with the issuance of $940.5 million of zero coupon senior secured notes. We used the proceeds to repay in full all of our $700 million of outstanding debt maturing in 2024. As a result of the bond issuance and repayments, we also regained debt covenant compliance.
During 2023, we sold 8 non-core properties that were located in markets where we believe that there is minimal NOI growth potential or required excessive capital investment. Total proceeds from these sales were $18.9 million.
With respect to our medical office and life science assets, in 2023, we executed 886,000 square feet of leases with an average rent rollup of 11.1%. We are actively marketing properties with vacancies and upcoming expirations.
We continue to monitor changing events and circumstances with an eye to managing for the global good, mitigating the negative impact on our business and best positioning us for stability and recovery. We take seriously our role in the oversight of our Company’s long term business strategy, which we believe is the best path to long term value creation for our shareholders.
We thank you for your investment in our Company and for the trust you place in us to oversee your interests in our business.
March 26, 2024
| | | | | Jennifer F. Francis | | | Phyllis M. Hollis | |
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| | | | | John L. Harrington | | | Adam D. Portnoy | |
| | | | | Lisa Harris Jones | | | Jeffrey P. Somers | |
NOTICE OF 2024 ANNUAL MEETING OF SHAREHOLDERS OF DIVERSIFIED HEALTHCARE TRUST
| | Location: Live Webcast Accessible at https://www.virtual shareholdermeeting.com/DHC2024 Date: Friday, May 31, 2024 Time: 9:30 a.m., Eastern time | | | Agenda: • Elect the Trustee nominees identified in the accompanying Proxy Statement to our Board of Trustees; • Advisory vote to approve executive compensation; • Ratify the appointment of Deloitte & Touche LLP as our independent auditors to serve for the 2024 fiscal year; and • Transact such other business as may properly come before the meeting and at any postponements or adjournments of the meeting. | |
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| | | | | Record Date: You can vote if you were a shareholder of record as of the close of business on March 22, 2024 (the “Record Date”). | |
| | | | | Attending Our 2024 Annual Meeting: To provide all of our shareholders an opportunity to participate in our 2024 Annual Meeting, our 2024 Annual Meeting will be a completely virtual meeting of shareholders which will be conducted exclusively by webcast. Shareholders will be able to listen, vote and submit questions during our 2024 Annual Meeting. In order to attend and participate in our 2024 Annual Meeting, shareholders must register in advance at www.proxyvote.com by 11:59 p.m. Eastern time, on May 30, 2024. | |
| | | | | • Record Owners: If you are a shareholder as of the close of business on the Record Date who holds shares directly, you may participate in our 2024 Annual Meeting by visiting https://www.virtualshareholdermeeting.com/DHC2024 and entering the 16 digit control number located on your Notice Regarding the Availability of Proxy Materials or proxy card. | |
| | | | | • Beneficial Owners: If you are a shareholder as of the close of business on the Record Date who holds shares indirectly through a brokerage firm, bank or other nominee, you may participate in our 2024 Annual Meeting by visiting https://www.virtualshareholdermeeting.com/DHC2024 and entering the 16 digit control number located on your Notice Regarding the Availability of Proxy Materials, proxy card or voting instruction form. Please follow the instructions from your bank, broker or nominee included with these proxy materials, or contact your bank, broker or nominee to request a control number if needed. | |
| | | | | Please see the accompanying Proxy Statement for additional information. | |
| | | | | By Order of our Board of Trustees, Jennifer B. Clark Secretary March 26, 2024 | |
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