Real Estate and Other Investments

3 Months Ended

Mar. 31, 2025

As of March 31, 2025, we owned 343 properties located in 34 states and Washington, D.C., including 11 properties classified as held for sale and two closed senior living communities, and we owned an equity interest in each of two unconsolidated joint ventures that own medical office and life science properties located in five states.

Dispositions:

The table below represents the sale prices, excluding closing costs, of our dispositions for the three months ended March 31, 2025. We do not believe these sales represent a strategic shift in our business. As a result, the results of operations

for these properties are included in continuing operations through the date of sale of such properties in our condensed consolidated statements of comprehensive income (loss).


Date of Sale	State	Type of Property	Number of Properties	Sales Price		Gain on Sale
January 2025	Delaware	Senior Living (SHOP)	1	$	2,900	$	1,263
January 2025	California	Life Science (1)	3	159,025		9,723
February 2025	Arizona	Life Science	1	16,800		65
February 2025	Various	Senior Living (1)	18	135,000		97,560
March 2025	Connecticut	Medical Office (1)	1	7,100		1,529
			24	$	320,825	$	110,140

(1)We used aggregate net proceeds of $299,158 from the sales of these properties to partially redeem our outstanding senior secured notes due 2026.

As of March 31, 2025, we had 11 properties classified as held for sale in our condensed consolidated balance sheet as follows:


Segment	Number of Properties	Real Estate Properties, Net
Medical Office and Life Science (1)	5	$	25,368
SHOP	5	45,813
All Other	1	2,240
	11	$	73,421

(1)The net proceeds from the sale of one of these properties are required to be used to partially redeem our outstanding senior secured notes due 2026, if the sale of that property is completed. We expect to sell that property during the fourth quarter of 2025 for a sales price of $6,500, excluding closing costs.

Subsequent to March 31, 2025, we sold one property for a sales price of $11,150, excluding closing costs. As of May 2, 2025, we had 19 properties under agreements or letters of intent to sell for an aggregate sales price of $115,773, excluding closing costs. The net proceeds from the sales of two of these properties, which have an expected aggregate sales price of $13,118, excluding closing costs, are required to be used to partially redeem our outstanding senior secured notes due 2026, if the sales of such properties are completed. We may not complete the sales of any or all of the properties we currently plan to sell. Also, we may sell some or all of these properties at amounts that are less than currently expected and/or less than the carrying values of such properties, and we may incur losses on any such sales as a result.

Impairment:

We regularly evaluate our assets for indicators of impairment. Impairment indicators may include declining tenant or resident occupancy, weak or declining profitability from the property, decreasing tenant cash flows or liquidity, our decision to dispose of an asset before the end of its estimated useful life and legislative, market or industry changes that could permanently reduce the value of an asset. If indicators of impairment are present, we evaluate the carrying value of the affected assets by comparing it to the expected future undiscounted cash flows to be generated from those assets. The future cash flows are subjective and are based in part on assumptions regarding hold periods, market rents and terminal capitalization rates. If the sum of these expected future cash flows is less than the carrying value, we reduce the net carrying value of the asset to its estimated fair value.

During the three months ended March 31, 2025, we recorded impairment charges of $38,472 to adjust the carrying value of four medical office properties to their estimated fair value. These properties were classified as held for sale in our condensed consolidated balance sheet as of March 31, 2025.

Investments and Capital Expenditures:

The following is a summary of capital expenditures, development, redevelopment and other activities for the periods presented:


	Three Months Ended March 31,
	2025		2024
Medical Office and Life Science Portfolio capital expenditures:
Lease related costs (1)	$	3,847	$	6,029
Building improvements (2)	1,524		919
Recurring capital expenditures - Medical Office and Life Science Portfolio	5,371		6,948
Wellness centers lease related costs (1)	—		6,923
SHOP fixed assets and capital improvements	21,115		10,091
Total recurring capital expenditures	$	26,486	$	23,962

Development, redevelopment and other activities - Medical Office and Life Science Portfolio (3)	$	—	$	713
Development, redevelopment and other activities - SHOP (3)	5,568		1,189
Total development, redevelopment and other activities	$	5,568	$	1,902

Capital expenditures by segment:
Medical Office and Life Science Portfolio	$	5,371	$	7,661
SHOP	26,683		11,280
All Other - wellness centers	—		6,923
Total capital expenditures	$	32,054	$	25,864

(1)Includes capital expenditures to improve tenants' space or amounts paid directly to tenants to improve their space and other leasing related costs, such as brokerage commissions and tenant inducements.

(2)Includes capital expenditures to replace obsolete building components that extend the useful life of existing assets or other improvements to increase the marketability of the property.

(3)Includes capital expenditures that reposition a property or result in change of use or new sources of revenue.

Equity Method Investments in Unconsolidated Joint Ventures:

As of March 31, 2025, we had equity investments in unconsolidated joint ventures as follows:


Equity Method Investments in Joint Venture	DHC Ownership	DHC Carrying Value of Investment at March 31, 2025		Number of Properties	State	Square Feet
Seaport Innovation LLC	10%	$	89,870	1	MA	1,134,479
The LSMD Fund REIT LLC	20%	43,927		10	CA, MA, NY, TX, WA	1,068,763
		$	133,797	11		2,203,242

The following table provides a summary of the mortgage debts of these joint ventures as of March 31, 2025:


Joint Venture	Coupon Rate	Maturity Date	Principal Balance (1)
Mortgage Notes Payable (secured by one property in Massachusetts) (2) (3)	3.53%	11/6/2028	$	620,000
Mortgage Notes Payable (secured by nine properties in five states) (4)	3.46%	2/11/2032	189,800
Mortgage Notes Payable (secured by one property in California) (4) (5)	7.64%	2/9/2026	266,825
	4.54%		$	1,076,625

(1)Amounts are not adjusted for our minority equity interest.

(2)We provide certain guaranties on this debt.

(3)This mortgage loan requires interest only payments until the anticipated repayment date on August 6, 2026, at which time all accrued and unpaid interest along with the principal balance of $620,000 is expected to be repaid. This mortgage loan matures on November 6, 2028 and any unpaid principal from the anticipated repayment date through the maturity date bears interest at a variable rate of the greater of 6.53% or the then effective U.S. swap rate terminating on the maturity date plus 5.00%.

(4)The debt securing these properties is non-recourse to us.

(5)The joint venture has one remaining one-year extension option for the maturity date of this mortgage loan, subject to satisfaction of certain conditions, and this mortgage loan requires that interest be paid at an annual rate of the one month term secured overnight financing rate, or SOFR, plus a premium of 1.90%. The joint venture has purchased an interest rate cap through February 2026 with a SOFR strike rate equal to 5.74%.

We account for the unconsolidated joint venture for 10 medical office and life science properties in which we own a 20% equity interest, or the LSMD JV, and the unconsolidated joint venture for a life science property located in Boston, Massachusetts in which we own a 10% equity interest, or the Seaport JV, using the equity method of accounting under the fair value option. We recognized changes in the fair value of our investments in our unconsolidated joint ventures of $1,138 and $1,613 during the three months ended March 31, 2025 and 2024, respectively. These amounts are included in equity in net earnings of investees in our condensed consolidated statements of comprehensive income (loss). See Note 6 for further information regarding the valuation of our investment in these joint ventures.

Equity Method Investment in AlerisLife:

As of March 31, 2025, we owned approximately 34.0% of the outstanding common shares of AlerisLife Inc., or AlerisLife. We do not control the activities that are most significant to AlerisLife and, as a result, we account for our non-controlling interest in AlerisLife using the equity method of accounting.

As of March 31, 2025, our investment in AlerisLife had a carrying value of $7,965. The cost basis of our investment in AlerisLife exceeded our proportionate share of AlerisLife's total stockholders' equity book value on the date of acquisition of our initial interest in AlerisLife, which was February 16, 2024, by an aggregate of $29,500. As required under GAAP, we are amortizing this difference to equity in earnings of an investee over 21 years, the weighted average remaining useful life of the real estate assets owned by AlerisLife and the intangible contract asset with us as of the date of acquisition. We recorded amortization of the basis difference of $351 and $174 for the three months ended March 31, 2025 and 2024, respectively. We recognized income of $(2) and $111 related to our investment in AlerisLife for the three months ended March 31, 2025 and 2024, respectively. These amounts are included in equity in net earnings of investees in our condensed consolidated statements of comprehensive income (loss). On February 14, 2025, AlerisLife paid an aggregate cash dividend of $50,000 to its stockholders. Our pro rata share of this cash dividend was $17,000 and our basis in the equity method investment in AlerisLife was reduced by such amount. See Note 11 for further information regarding our investment in AlerisLife.

Other:

In September 2022, certain of our managed senior living communities located in Florida experienced hurricane related damage. We carry comprehensive property, casualty, flood and business interruption insurances which covered our losses at these senior living communities, subject to a deductible. During the three months ended March 31, 2025, we recognized a gain on insurance recoveries of $7,522 as a result of insurance proceeds received for these damaged senior living communities and the closing of the associated claim.