Diversified Healthcare Trust Announces 15-Year Net Lease with The Ensign Group for Colorado Skilled Nursing Portfolio
Property-level costs shift to the tenant, with annual rent increases tied to the Consumer Price Index.
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Transition of Seven Communities to Net Lease Structure Expected to Generate First Year Annual Rent of
Under the new lease, first year annual rent is
Chris Bilotto, President and Chief Executive Officer of DHC, made the following statement:
“We are excited to announce this partnership with Ensign, a best-in-class operator with a strong track record in the skilled nursing sector. This transaction is expected to immediately increase the financial contribution from these communities while reducing DHC's future capital expenditure requirements through a long-term triple net lease structure. We believe Ensign's proven operating platform and local market expertise, combined with a structure that is well suited for skilled nursing facilities, will support stable performance at these communities and create long term value for our shareholders. This transaction also reflects our broader strategy of optimizing our portfolio structure, partnering with high quality operators, and driving sustainable NOI growth.”
About Diversified Healthcare Trust
DHC is a real estate investment trust focused on owning high-quality healthcare properties located throughout the United States. DHC’s portfolio is anchored by a strategically curated mix of senior housing, medical office and life science assets that combine high quality care, modern technology and amenity rich environments to meet rising demand across the healthcare continuum. As of June 30, 2026, DHC’s approximately
WARNING CONCERNING FORWARD-LOOKING STATEMENTS
This press release contains statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other securities laws. Also, whenever DHC uses words such as “believe”, “expect”, “anticipate”, “seek”, “intend”, “plan”, “estimate”, “will”, “may” and negatives or derivatives of these or similar expressions, DHC is making forward-looking statements. These forward-looking statements are based upon DHC’s present intent, beliefs or expectations, but forward-looking statements are not guaranteed to occur and may not occur. For example:
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This press release states that the new lease is expected to generate first year annual rent of
$8.0 million , which is substantially greater than the portfolio’s rent during the prior year, to immediately increase the financial contribution from these communities and to reduce DHC’s future capital expenditure requirements and operational volatility. However, DHC’s receipt of rent under the new lease depends on the tenant’s ability to pay, which may be affected by various factors, including occupancy levels, labor costs and staffing availability, and changes in Medicare, Medicaid and other third party reimbursement rates and healthcare regulations; rent increases under the new lease’s CPI-based escalators may not keep pace with DHC’s costs; and DHC may incur additional capital expenditures or other costs at these communities notwithstanding the triple net lease structure. As a result, DHC may not realize the benefits it expects from the new lease.
- Mr. Bilotto states that DHC believes that Ensign's proven operating platform and local market expertise, combined with a structure that is well suited for skilled nursing facilities, will support stable performance at these communities and create long term value for DHC’s shareholders, and that this transaction also reflects DHC’s broader strategy of optimizing its portfolio structure, partnering with high-quality operators, and driving sustainable NOI growth. However, DHC may not realize the benefits it expects from its partnership with Ensign. In addition, DHC may not be able to successfully execute on its portfolio strategies, partner with high quality operators or otherwise optimize its portfolio to drive NOI growth. As a result, DHC may not be able to achieve NOI growth or otherwise create long term value for its shareholders.
Actual results may differ materially from those contained in or implied by DHC’s forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties and other factors, some of which are beyond DHC’s control.
The information contained in DHC’s filings with the Securities and Exchange Commission (the “SEC”), including under “Risk Factors” in DHC’s periodic reports, or incorporated therein, identifies other important factors that could cause DHC’s actual results to differ materially from those stated in or implied by DHC’s forward-looking statements. DHC’s filings with the SEC are available on the SEC’s website at www.sec.gov.
You should not place undue reliance upon forward-looking statements.
Except as required by law, DHC does not intend to update or change any forward-looking statements as a result of new information, future events or otherwise.
A Maryland Real Estate Investment Trust with transferable shares of beneficial interest listed on the Nasdaq.
No shareholder, Trustee or officer is personally liable for any act or obligation of the Trust.
View source version on businesswire.com: https://www.businesswire.com/news/home/20261005193624/en/
Bryan Maher, Senior Vice President
(617) 796-8234
Source: Diversified Healthcare Trust