Real Estate Investments

12 Months Ended

Dec. 31, 2024

Real Estate [Abstract]

Real Estate Investments

Real Estate Investments

Acquisitions:

The table below represents the purchase price allocations (including net closing adjustments) of acquisitions for the years ended December 31, 2024, 2023 and 2022:

Date

State

Type of Property

Number of Properties

Square Feet

Cash Paid (1)

Land

Buildings and Improvements

Acquired Real Estate Leases

Acquisitions during the year ended December 31, 2024:

We did not acquire any properties during the year ended December 31, 2024.

Acquisitions during the year ended December 31, 2023:

We did not acquire any properties during the year ended December 31, 2023.

Acquisitions during the year ended December 31, 2022: (2)

July 2022

California

Life Science

1

88,508

$

75,105

$

15,774

$

45,249

$

14,082

(1)Cash paid includes closing costs.

(2)We have accounted for our 2022 acquisition as an acquisition of assets. We funded this acquisition using cash on hand.

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 2024, we recorded impairment charges of $70,734 to adjust the carrying value of six medical office and life science properties to their estimated fair value. We sold three of these medical office and life science properties in 2024. Three of these medical office and life science properties were classified as held for sale in our consolidated balance sheet as of December 31, 2024. These impairment charges, in aggregate, are included in impairment of assets in our consolidated statements of comprehensive income (loss).

During 2023, we recorded impairment charges of $14,034 to adjust the carrying value of four medical office and life science properties to their estimated fair value. We sold three of these medical office and life science properties in 2023. One of these medical office properties was classified as held for sale in our consolidated balance sheet as of December 31, 2023. During 2023, we also recorded impairment charges of $4,346 to adjust the carrying values of two senior living communities to their aggregate estimated fair value. We sold one of these senior living communities in 2023. These impairment charges, in aggregate, are included in impairment of assets in our consolidated statements of comprehensive income (loss).

Dispositions:

The table below represents the sale prices (excluding closing costs) of dispositions for the years ended December 31, 2024, 2023 and 2022. The sales of these properties do not represent significant dispositions, individually or in the aggregate, and 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 consolidated statements of comprehensive income (loss).

Date of Sale	State	Type of Property	Number of Properties	Square Feet or Number of Units		Sales Price		Gain (Loss) on Sale
Dispositions during the year ended December 31, 2024:
March 2024	Arizona	Medical Office	1	126,084	sq. ft.	$	3,600	$	(5,874)
June 2024	Texas	Medical Office	1	94,137	sq. ft.	4,200		(13,213)
July 2024	Illinois and Minnesota	Medical Office	2	205,673	sq. ft.	21,275		111
November 2024	Kansas	Life Science	1	239,366	sq. ft.	6,600		38
			5			$	35,675	$	(18,938)
Dispositions during the year ended December 31, 2023:
February 2023	Pennsylvania and South Carolina	Senior Living	3	—	units (1)	$	2,800	$	293
October 2023	Pennsylvania	Medical Office	1	30,866	sq. ft.	1,800		15
October 2023	Tennessee	Senior Living	1	—	units (1)	2,830		627
October 2023	Maryland	Life Science	1	58,880	sq. ft.	6,200		(360)
November 2023	Virginia	Senior Living	1	—	units (1)	1,800		945
December 2023	South Carolina	Medical Office	1	115,108	sq. ft.	3,450		(1,255)
			8			$	18,880	$	265
Dispositions during the year ended December 31, 2022:
We did not dispose of any properties during the year ended December 31, 2022.

(1)These communities were closed prior to their respective dispositions.

During the year ended December 31, 2023, we recognized a gain of $940 related to the sales of skilled nursing bed licenses at certain of our senior living communities.

We classify all properties as held for sale in our consolidated balance sheets that meet the applicable criteria for that treatment as set forth in the Property, Plant and Equipment Topic of the Codification. As of December 31, 2024, we had 32 properties classified as held for sale as follows:

Segment	Number of Properties	Real Estate Properties, Net
Medical Office and Life Science	7	$	175,948
SHOP	6	47,535
All Other - triple net leased senior living communities	19	37,900
	32	$	261,383

In January 2025, we sold three life science properties for a sales price of $159,025, excluding closing costs. As of December 31, 2024, these three properties were classified as held for sale. The net proceeds from the sale of these three properties will be used to partially redeem our outstanding senior secured notes due 2026. Additionally, in January and February 2025, we sold one life science property for a sales price of $16,800, excluding closing costs, and one senior living community for a sales price of $2,900, excluding closing costs, both of which were classified as held for sale as of December 31, 2024.

As of February 24, 2025, we had 26 properties under agreements or letters of intent to sell for an aggregate sales price of $219,580, excluding closing costs. The net proceeds from 19 of these properties, which have an expected aggregate sales price, excluding closing costs, of $142,100, will 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. As of December 31, 2024, all 26 of these properties were classified as held for sale.

Investments and Capital Expenditures:

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

	For the Year Ended December 31,
	2024		2023		2022
Medical Office and Life Science Portfolio capital expenditures:
Lease related costs (1)	$	21,289	$	38,070	$	25,227
Building improvements (2)	6,002		12,984		11,955
Recurring capital expenditures - Medical Office and Life Science Portfolio	27,291		51,054		37,182
SHOP fixed assets and capital improvements	93,043		100,981		109,529
Wellness centers lease related costs (1)	20,618		9,721		—
Total recurring capital expenditures	$	140,952	$	161,756	$	146,711
Development, redevelopment and other activities - Medical Office and Life Science Portfolio (3)	$	3,012	$	9,244	$	48,390
Development, redevelopment and other activities - SHOP (3)	46,558		82,207		118,601
Total development, redevelopment and other activities	$	49,570	$	91,451	$	166,991
Capital expenditures by segment:
Medical Office and Life Science Portfolio	$	30,303	$	60,298	$	85,572
SHOP	139,601		183,188		228,130
All Other - wellness centers	20,618		9,721		—
Total capital expenditures	$	190,522	$	253,207	$	313,702

(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 new sources of revenue.

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 that we anticipate will cover our losses at these senior living communities, subject to a deductible. During the year ended December 31, 2022, we incurred total losses of $11,253 related to the property damage sustained and deductible incurred. For the year ended December 31, 2022, we recognized a loss of $7,635 for the involuntary conversion of nonmonetary assets and wrote off a portion of the net book value of the damaged assets and included this amount in our consolidated statements of comprehensive income (loss). During the year ended December 31, 2022, we received $14,466 in cash from our insurance provider, and as such, we have recovered the total losses of $11,253 incurred during the year ended December 31, 2022. The loss of $7,635 for the involuntary conversion of nonmonetary assets, recovery of those $7,635 in losses and the deductible of $3,618 are included in property operating expenses in our consolidated statements of comprehensive income (loss). We received $1,698, $534 and $3,213 in cash in excess of our losses during the years ended December 31, 2024, 2023 and 2022, respectively. These amounts are included in other liabilities in our consolidated balance sheets.

Equity Method Investments in Unconsolidated Joint Ventures:

As of December 31, 2024, we had equity investments in unconsolidated joint ventures as follows:

Equity Method Investments in Joint Venture	DHC Ownership	DHC Carrying Value of Investment at December 31, 2024		Number of Properties	State	Square Feet
Seaport Innovation LLC	10%	$	81,949	1	MA	1,134,479
The LSMD Fund REIT LLC	20%	44,910		10	CA, MA, NY, TX, WA	1,068,763
		$	126,859	11		2,203,242

The following table provides a summary of the mortgage debts of these joint ventures as of December 31, 2024:

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)	6.38%	2/9/2025	266,825
Weighted Average / Total	4.22%		$	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 exercised its option to extend the maturity date of this mortgage loan by one year to February 9, 2026, and this mortgage loan requires interest to be paid at an annual rate of the one month term secured overnight financing rate, or SOFR, plus a premium of 1.90%. This joint venture has also purchased an interest rate cap through February 2026 with a SOFR strike rate equal to 5.74%. The maturity date of this mortgage loan is subject to one remaining one-year extension option.

We account for the Seaport JV using the equity method of accounting under the fair value option. In June 2022, we sold a 10% equity interest from our then remaining 20% equity interest in the Seaport JV to an existing joint venture investor for $108,000, before closing costs and other adjustments. We received net proceeds of $108,424 from this transaction, which included working capital prorations and formation costs. We recognized a net loss on sale of $1,428 related to this transaction during the year ended December 31, 2022, which is included in (loss) gain on sale of properties in our consolidated statements of comprehensive income (loss). After giving effect to this sale, we continue to own a 10% equity interest in this joint venture. Our initial investment amount was based on a property valuation of $1,700,000, less $620,000 of existing mortgage debts on the property that this joint venture assumed.

In January 2022, we entered into the LSMD JV with two unrelated third party institutional investors. We sold equity interests in this joint venture to those investors for aggregate proceeds, before closing costs and other adjustments, of approximately $653,300. We deconsolidated the net assets of these properties effective as of the date of the sale and recognized a net gain on sale of $322,468 related to this transaction during the year ended December 31, 2022, which is included in (loss) gain on sale of properties in our consolidated statements of comprehensive income (loss). The equity interests that the investors acquired from us equaled 41% and 39%, respectively, of the total equity interests in the joint venture, and we retained a 20%

equity interest in the joint venture. Following the sale, we account for this joint venture using the equity method of accounting under the fair value option. The initial investment amounts were based upon a property valuation of approximately $702,500, less approximately $456,600 of secured debt on the properties incurred by this joint venture.

We recognized changes in the fair value of our investments in our unconsolidated joint ventures of $(7,550), $(20,461) and $6,055 during the years ended December 31, 2024, 2023 and 2022, respectively. These amounts are included in equity in net earnings (losses) of investees in our consolidated statements of comprehensive income (loss). See Note 10 for more information regarding the valuation of our investment in these joint ventures.

Equity Method Investment in AlerisLife:

As of December 31, 2024, 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 December 31, 2024, our investment in AlerisLife had a carrying value of $24,590. 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 $1,228 for the year ended December 31, 2024. We recognized income of $7,919 related to our investment in AlerisLife for the year ended December 31, 2024. These amounts are included in equity in net earnings (losses) of investees in our consolidated statements of comprehensive income (loss). See Notes 2 and 8 for more information regarding our investment in AlerisLife.