NEWTON, Mass.--(BUSINESS WIRE)--Diversified Healthcare Trust (Nasdaq: DHC) today provided certain business updates regarding the ongoing impacts of the COVID-19 pandemic on DHC’s business and operating results. Five Star Senior Living Inc. (Nasdaq: FVE), DHC’s senior housing operating portfolio, or SHOP, segment operator has partnered with CVS to administer vaccines to SHOP community residents and staff, which commenced in December 2020. DHC expects vaccination clinics for SHOP community residents and staff to be substantially complete by the end of the first quarter of 2021. As it pertains to DHC’s SHOP segment, as of January 29, 2021:

• Approximately 18,000 total residents and staff, or more than 65% of residents and more than 30% of staff at DHC’s SHOP communities, have received vaccinations. This includes over 2,000 residents and staff who have received both doses of the vaccine;
• Approximately 93% of DHC’s SHOP communities are currently open to new admissions; and;
• Approximately 3.5% of DHC’s total SHOP community residents have or have had active cases of COVID-19, and approximately 67% of those who have tested positive for COVID-19 during the pandemic have since recovered, as defined by CDC guidelines.

For the months ended September 30, October 31, November 30 and December 31, 2020, average occupancies in DHC’s SHOP segment were 74.5%, 73.8%, 72.5%, and 70.7%, respectively. Although occupancy has declined because of reduced move-ins by residents, sales leads have increased substantially since the end of 2020. The rolling four-week average sales leads as of January 24, 2021 were 83% higher than the rolling four-week average sales leads at the beginning of the fourth quarter of 2020.

“The progress made to vaccinate residents and staff within our communities is a significant step toward recovery from the COVID-19 pandemic,” stated Jennifer Francis, President and Chief Operating Officer of Diversified Healthcare Trust. “We expect to complete vaccination clinics by the end of the first quarter, and we believe it will vastly improve the health and well-being of our communities as well as enrich the resident experience at our properties. We expect growing confidence in the resident experience to drive resident move-ins, help stabilize our SHOP segment occupancy and lead to a recovery in senior living performance over time. We are also encouraged by the substantial increase in sales leads since the beginning of 2021, which is often an indicator of future move-in activity.”

DHC also announced today that it has amended the agreements governing its revolving credit and term loan facilities. The amendments provide for a waiver of certain financial covenants under its credit and term loan agreements through June 30, 2022, during which period, subject to certain conditions, DHC continues to have access to undrawn amounts under its revolving credit facility, and also provide DHC with the option to further extend the revolving credit facility maturity date. The key terms of the amendments include:

• Certain financial covenants under the credit and term loan facilities have been waived through June 30, 2022;
• DHC has an additional option to extend the maturity of the revolving credit facility to January 2024;
• The revolving credit facility commitments have been reduced from $1 billion to $800 million;
• DHC has pledged the equity interests of certain of its subsidiaries which own properties with an undepreciated book value of $1.4 billion as of December 31, 2020, and has agreed to provide first mortgage liens on 91 medical office and life science properties owned by these subsidiaries to secure its obligations under the credit and term loan facilities;
• The interest rate premiums over LIBOR under the credit and term loan facilities increased by up to 30 basis points;
• DHC has the ability to fund up to $250 million of capital expenditures, as defined, per year, which amount increases to $350 million per year following DHC’s repayment of its $200 million term loan;
• Certain other covenants and conditions, including restrictions on DHC’s ability to make distributions, to incur debt and to acquire real property (in each case subject to various exceptions), and the requirement that DHC maintain a minimum liquidity of $200 million, remain in place through the waiver period; and
• DHC is generally required to apply any net cash proceeds from dispositions or debt refinancings to repay its senior notes due in December 2021, its $200 million term loan and any outstanding borrowings under its revolving credit facility.

Wells Fargo Securities, LLC, Citigroup Global Markets Inc., PNC Capital Markets, LLC and RBC Capital Markets acted as Joint Lead Arrangers for the amendment to DHC’s revolving credit loan agreement and Wells Fargo Securities, LLC and PNC Capital Markets, LLC served as Joint Lead Arrangers for the amendment to term loan term loan agreement. Wells Fargo Bank, National Association is the Administrative Agent for both facilities.

Diversified Healthcare Trust (Nasdaq: DHC) is a real estate investment trust (REIT) focused on owning high-quality healthcare properties located throughout the United States. DHC seeks diversification across the health services spectrum: by care delivery and practice type, by scientific research disciplines, and by property type and location. As of September 30, 2020, DHC’s $8.2 billion portfolio included 407 properties in 37 states and Washington, D.C., occupied by more than 600 tenants, and totaling approximately 12 million square feet of medical office and life science properties and more than 30,000 living units. DHC is managed by the operating subsidiary of The RMR Group Inc., an alternative asset management company that is headquartered in Newton, MA. To learn more about DHC, visit www.dhcreit.com.