Diversified Healthcare Trust closed two fixed rate mortgage financings totaling $94.3 million, secured by six seniors housing communities managed by Five Star Senior Living, the operating division of AlerisLife Inc. The financings consist of a $64 million, five-year mortgage loan and a $30.3 million, ten-year Fannie Mae mortgage loan. Proceeds from these loans, together with cash on hand, will be used to repay the remaining $100 million of DHC’s 9.75% senior notes due June 2025.
The $64 million loan bears a fixed interest rate of 6.75% and is secured by four communities totaling 1,079 units with an appraised value per unit of approximately $171,000. The Fannie Mae loan bears a fixed interest rate of 6.36%, is interest only for the first three years, and is secured by two communities comprising 464 units with an appraised value of approximately $142,000 per unit. Based on the 2024 NOI of the six collateral communities, the appraised value reflects an implied cap rate of 5.8%, or approximately $162,000 per unit.
Since March 2025, DHC has closed on an aggregate of $343 million of mortgage financings secured by 27 SHOP communities. On a combined basis, these financing reflect an average per unit valuation of approximately $174,000 and a weighted average interest rate of 6.55%. Now that the company has completed the financings to repay its 2025 notes with attractive valuations for the collateral assets, it is turning its attention to paying off the balance of its 2026 notes. DHC intends to address this maturity with proceeds from a combination of $330 million to $380 million of asset sales and new financings.
