Shares of Diversified Healthcare Trust (DHC) are on an upward trajectory today, propelled by the company’s announcement of the sale of 18 senior living communities to Brookdale Senior Living Inc. (BKD). This transaction, valued at $135 million, marks a significant step in Diversified Healthcare’s ongoing efforts to streamline its portfolio and improve its financial standing.
Brookdale has been the long-term lessee and operator of these communities, spread across various states, since February 2003. The sale is seen as a strategic move by Diversified Healthcare, allowing them to capitalize on the value of these assets and bolster their financial position.
Chris Bilotto, the CEO of Diversified Healthcare, highlighted the benefits of this deal, stating, “This transaction is a further implementation of our ongoing initiatives to optimize our portfolio and enhance our liquidity. The sale opportunistically monetizes this NNN portfolio at a premium valuation of over $150,000 per unit. The proceeds from the transaction reflect an in-place cap rate on the lease’s annualized income of 7.3% and will allow us to reduce our leverage.”
Diversified Healthcare plans to utilize the proceeds from the sale to make significant progress in reducing its outstanding debt, specifically targeting its $941 million of senior secured notes due in January 2026.
How to Invest in Diversified Healthcare Trust
If the news of DHC’s stock climb has piqued your interest, you might be wondering how to get involved in the market for this company. The simplest way to invest is by buying shares through a brokerage account. Many online brokerages offer the ability to purchase fractional shares, allowing you to own a portion of a stock without having to buy a whole share. This is particularly helpful for expensive stocks like Berkshire Hathaway or Amazon.com.
In the case of Diversified Healthcare, which is trading at $4.13 per share at the time of writing, you could invest $100 and acquire 24.21 shares.
If you’re looking to take a more speculative approach and bet against the company, the process is more complex. This typically involves options trading or short-selling, both of which require a greater understanding of the market and specific trading platforms.
