DIVERSIFIED HEALTHCARE TRUST 10-K

Item 9A. Controls and Procedures. As of the end of the period covered by this Annual Report on Form 10-K, our management carried out an evaluation, under the supervision and with the participation of our President and Chief Executive Officer and our Chief Financial Officer and Treasurer, of the effectiveness of our disclosure controls and procedures pursuant to Rules 13a-15 and 15d-15 under the Exchange Act. Based upon that evaluation, our President and Chief Executive Officer and our Chief Financial Officer and Treasurer concluded that our disclosure controls and procedures are effective. There have been no changes in our internal control over financial reporting during the quarter ended December 31, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Management Report on Assessment of Internal Control Over Financial Reporting. We are responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control system is designed to provide reasonable assurance to our management and Board of Trustees regarding the preparation and fair presentation of published financial statements. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2023. In making this assessment, it used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control—Integrated Framework (2013 framework). Based on this assessment, we believe that, as of December 31, 2023, our internal control over financial reporting is effective. Deloitte & Touche LLP, the independent registered public accounting firm that audited our 2023 Consolidated Financial Statements included in Part IV, Item 15 of this Annual Report on Form 10-K, has issued an attestation report on our internal control over financial reporting. The report appears elsewhere herein. Item 9B. Other Information. During the three months ended December 31, 2023, none of our Trustees and officers adopted or terminated a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement", as each term is defined in Item 408(a) of Regulation S-K. Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections. Not applicable. PART III Item 10. Directors, Executive Officers and Corporate Governance. We have a Code of Conduct that applies to our officers and Trustees. Our Code of Conduct is posted on our website, www.dhcreit.com . A printed copy of our Code of Conduct is also available free of charge to any person who requests a copy by writing to our Secretary, Diversified Healthcare Trust, Two Newton Place, 255 Washington Street, Suite 300, Newton, MA 02458-1634. We intend to satisfy the requirements under Item 5.05 of Form 8-K regarding disclosure of amendments to, or waivers from, provisions of our Code of Conduct that apply to our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, on our website. The remainder of the information required by Item 10 is incorporated by reference to our definitive Proxy Statement. Item 11. Executive Compensation. The information required by Item 11 is incorporated by reference to our definitive Proxy Statement. 83 Table of Contents Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. Equity Compensation Plan Information. We may award common shares to our officers and other employees of RMR under our Amended and Restated 2012 Equity Compensation Plan, or the 2012 Plan. In addition, each of our Trustees receives common shares as part of his or her annual compensation for serving as a Trustee and such shares are awarded under the 2012 Plan. The terms of awards made under the 2012 Plan are determined by the Compensation Committee of our Board of Trustees at the time of the awards. The following table is as of December 31, 2023: Number of securities to be issued upon exercise of outstanding options, warrants and rights Weighted-average exercise price of outstanding options, warrants and rights Number of securities remaining available for future issuance under our equity compensation plan excluding securities reflected in column (a) Plan Category (a) (b) (c) Equity compensation plans approved by securityholders—2012 Plan None. None. 1,938,197 (1) Equity compensation plan not approved by securityholders None. None. None. Total None. None. 1,938,197 (1) (1) Consists of common shares available for issuance pursuant to the terms of the 2012 Plan. Share awards that are repurchased or forfeited will be added to the common shares available for issuance under the 2012 Plan. Payments by us to RMR employees are described in Notes 5 and 8 to our Consolidated Financial Statements included in Part IV, Item 15 of this Annual Report on Form 10-K. The remainder of the information required by Item 12 is incorporated by reference to our definitive Proxy Statement. Item 13. Certain Relationships and Related Transactions, and Director Independence. The information required by Item 13 is incorporated by reference to our definitive Proxy Statement. Item 14. Principal Accountant Fees and Services. The information required by Item 14 is incorporated by reference to our definitive Proxy Statement. 84 Table of Contents PART IV Item 15. Exhibits and Financial Statement Schedules. (a) Index to Financial Statements and Financial Statement Schedules The following consolidated financial statements and financial statement schedules of Diversified Healthcare Trust are included on the pages indicated: Page Reports of Independent Registered Public Accounting Firm (PCAOB ID No. 34 ) F- 1 Consolidated Balance Sheets as of December 31, 2023 and 2022 F- 4 Consolidated Statements of Operations for each of the three years in the period ended December 31, 2023 F- 5 Consolidated Statements of Shareholders' Equity for each of the three years in the period ended December 31, 2023 F- 6 Consolidated Statements of Cash Flows for each of the three years in the period ended December 31, 2023 F- 7 Notes to Consolidated Financial Statements F- 9 Schedule III – Real Estate and Accumulated Depreciation as of December 31, 2023 S- 1 All other schedules for which provision is made in the applicable accounting regulations of the SEC are not required under the related instructions, or are inapplicable, and therefore have been omitted. 85 Table of Contents (b) Exhibits Exhibit Number Description 3.1 Composite Copy of Articles of Amendment and Restatement, dated September 20, 1999, as amended to date. (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2020.) 3.2 Articles Supplementary, dated May 11, 2000. (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2000.) 3.3 Articles Supplementary, dated June 30, 2017. (Incorporated by reference to the Company’s Current Report on Form 8-K filed on June 30, 2017.) 3.4 Articles Supplementary, dated May 19, 2020. (Incorporated by reference to the Company’s Current Report on Form 8-K filed on May 20, 2020.) 3.5 Third Amended and Restated Bylaws of the Company, adopted November 1, 2023. (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2023.) 4.1 Form of Common Share Certificate. (Incorporated by reference to the Company’s Current Report on Form 8-K filed on January 2, 2020.) 4.2 Indenture, dated as of December 20, 2001, between the Company and U.S. Bank Trust Company, National Association (as successor in interest to U.S. Bank National Association, as successor trustee to State Street Bank and Trust Company). (Incorporated by reference to the Company’s Registration Statement on Form S-3, File No. 333-76588.) 4.3 Supplemental Indenture No. 7, dated as of July 20, 2012, between the Company and U.S. Bank Trust Company, National Association (as successor in interest to U.S. Bank National Association), related to 5.625% Senior Notes due 2042, including form thereof. (Incorporated by reference to the Company’s Registration Statement on Form 8-A filed on July 20, 2012.) 4.4 Indenture, dated as of February 18, 2016, between the Company and U.S. Bank Trust Company, National Association (as successor in interest to U.S. Bank National Association). (Incorporated by reference to the Company’s Current Report on Form 8-K filed on February 18, 2016.) 4.5 First Supplemental Indenture, dated as of February 18, 2016, between the Company and U.S. Bank Trust Company, National Association (as successor in interest to U.S. Bank National Association), related to 6.25% Senior Notes due 2046, including form thereof. (Incorporated by reference to the Company’s Current Report on Form 8-K filed on February 18, 2016.) 4.6 Second Supplemental Indenture, dated as of February 12, 2018, between the Company and U.S. Bank Trust Company, National Association (as successor in interest to U.S. Bank National Association), related to 4.75% Senior Notes due 2028, including form thereof. (Incorporated by reference to the Company’s Annual Report on Form 10-K for the year ended December 31, 2017.) 4.7 Third Supplemental Indenture, dated as of June 2, 2020, among the Company, certain subsidiaries of the Company named therein as guarantors and U.S. Bank Trust Company, National Association (as successor in interest to U.S. Bank National Association), related to 9.750% Senior Notes due 2025, including form thereof. (Incorporated by reference to the Company’s Current Report on Form 8-K filed on June 5, 2020.) 4.8 Supplemental Indenture, dated as of March 5, 2021, among the Company, certain subsidiaries of the Company named therein as guarantors and U.S. Bank Trust Company, National Association (as successor in interest to U.S. Bank National Association), related to 9.750% Senior Notes due 2025. (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2021.) 4.9 Supplemental Indenture, dated as of September 9, 2022, among the Company, certain subsidiaries of the Company named therein as guarantors and U.S. Bank Trust Company, National Association (as successor in interest to U.S. Bank National Association), related to 9.750% Senior Notes due 2025. (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2022.) 4.10 Supplemental Indenture, dated as of November 22, 2022, among the Company, certain subsidiaries of the Company named therein as guarantors and U.S. Bank Trust Company, National Association (as successor in interest to U.S. Bank National Association), related to 9.750% Senior Notes due 2025. (Incorporated by reference to the Company's Annual Report on Form 10-K for the year ended December 31, 2022.) 4.11 Fourth Supplemental Indenture, dated as of February 8, 2021, among the Company, certain subsidiaries of the Company named therein as guarantors and U.S. Bank Trust Company, National Association (as successor in interest to U.S. Bank National Association), related to 4.375% Senior Notes due 2031, including form thereof. (Incorporated by reference to the Company’s Annual Report on Form 10-K for the year ended December 31, 2020.) 4.12 Supplemental Indenture, dated as of March 5, 2021, among the Company, certain subsidiaries of the Company named therein as guarantors and U.S. Bank Trust Company, National Association (as successor in interest to U.S. Bank National Association), related to 4.375% Senior Notes due 20 31 . (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2021.) 86 Table of Contents 4.13 Supplemental Indenture, dated as of September 9, 2022, among the Company, certain subsidiaries of the Company named therein as guarantors and U.S. Bank Trust Company, National Association (as successor in interest to U.S. Bank National Association), related to 4.375% Senior Notes due 2031. (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2022.) 4.14 Supplemental Indenture, dated as of November 22, 2022, among the Company, certain subsidiaries of the Company named therein as guarantors and U.S. Bank Trust Company, National Association (as successor in interest to U.S. Bank National Association), related to 4.375% Senior Notes due 2031. (Incorporated by reference to the Company's Annual Report on Form 10-K for the year ended December 31, 2022.) 4.15 Indenture, dated as of December 21, 2023, among the Company, certain subsidiaries of the Company named therein as guarantors and U.S. Bank Trust Company, National Association. (Incorporated by reference to the Company's Current Report on Form 8-K filed on December 22, 2023.) 4.16 Registration Rights and Lock-Up Agreement, dated as of June 5, 2015, among the Company, ABP Trust (f/k/a Reit Management & Research Trust) and Adam D. Portnoy. (Incorporated by reference to the Company’s Current Report on Form 8-K filed on June 8, 2015.) 4.17 Description of Securities. (Filed herewith.) 8.1 Opinion of Sullivan & Worcester LLP as to certain tax matters. (Filed herewith.) 10.1 Second Amended and Restated Business Management Agreement, dated as of June 5, 2015, between the Company and The RMR Group LLC.(+) (Incorporated by reference to the Company’s Current Report on Form 8-K filed on June 8, 2015.) 10.2 First Amendment to Second Amended and Restated Business Management Agreement, effective as of August 1, 2021, between the Company and The RMR Group LLC.(+) (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2021.) 10.3 Third Amended and Restated Property Management Agreement, dated as of June 9, 2021, between the Company and The RMR Group LLC.(+) (Incorporated by reference to the Company’s Current Report on Form 8-K filed on June 9, 2021.) 10.4 Diversified Healthcare Trust Amended and Restated 2012 Equity Compensation Plan.(+) (Incorporated by reference to the Company’s Current Report on Form 8-K filed on June 6, 2022.) 10.5 Form of Share Award Agreement.(+) (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2020.) 10.6 Form of Share Award Agreement.(+) (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2022.) 10.7 Form of Share Award Agreement.(+) (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2023.) 10.8 Form of Indemnification Agreement.(+) (Filed herewith.) 10.9 Release of Certain Guarantors, dated as of March 5, 2021, related to 9.750% Senior Notes due 2025, among the Company, certain subsidiaries of the Company named therein and U.S. Bank Trust Company, National Association (as successor in interest to U.S. Bank National Association). (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2021.) 10.10 Release of Certain Guarantors, dated as of January 28, 2022, related to 9.750% Senior Notes due 2025, among the Company, certain subsidiaries of the Company named therein and U.S. Bank Trust Company, National Association (as successor in interest to U.S. Bank National Association). (Incorporated by reference to the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.) 10.11 Release of Certain Guarantors, dated as of October 12, 2023, related to 9.750% Senior Notes due 2025, among the Company, certain subsidiaries of the Company named therein and U.S. Bank Trust Company, National Association (as successor in interest to U.S. Bank National Association). (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2023.) 10.12 Release of Certain Guarantors, dated as of December 21, 2023, related to 9.750% Senior Notes due 2025, among the Company, certain subsidiaries of the Company named therein and U.S. Bank Trust Company, National Association (as successor in interest to U.S. Bank National Association). (Filed herewith.) 10.13 Release of Certain Guarantors, dated as of January 28, 2022, related to 4.375% Senior Notes due 2031, among the Company, certain subsidiaries of the Company named therein and U.S. Bank Trust Company, National Association (as successor in interest to U.S. Bank National Association). (Incorporated by reference to the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.) 10.14 Release of Certain Guarantors, dated as of October 12, 2023, related to 4.375% Senior Notes due 2031, among the Company, certain subsidiaries of the Company named therein and U.S. Bank Trust Company, National Association (as successor in interest to U.S. Bank National Association). (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2023.) 10.15 Release of Certain Guarantors, dated as of December 2 1 , 2023, related to 4.375% Senior Notes due 2031, among the Company, certain subsidiaries of the Company named therein and U.S. Bank Trust Company, National Association (as successor in interest to U.S. Bank National Association). (Filed herewith.) 87 Table of Contents 10.16 Amended and Restated Master Management Agreement, dated as of June 9, 2021, among the Company and certain of its subsidiaries, and AlerisLife Inc. and certain of its subsidiaries. (Incorporated by reference to the Company’s Current Report on Form 8-K filed on June 9, 2021.) 10.17 Amended and Restated Guaranty Agreement, dated as of June 9, 2021, by AlerisLife Inc. for the benefit of certain subsidiaries of the Company. (Incorporated by reference to the Company’s Current Report on Form 8-K filed on June 9, 2021.) 10.18 Stockholders Agreement, dated as of February 1 6 , 2024, by and among AlerisLife Inc., the Company, DHC Holdings LLC and ABP Trust. (Filed herewith.) 21.1 Subsidiaries of the Company. (Filed herewith.) 22.1 List of Subsidiary Guarantors. (Filed herewith.) 23.1 Consent of Deloitte & Touche LLP. (Filed herewith.) 23.2 Consent of Sullivan & Worcester LLP. (Contained in Exhibit 8.1.) 31.1 Rule 13a-14(a) Certification. (Filed herewith.) 31.2 Rule 13a-14(a) Certification. (Filed herewith.) 32.1 Section 1350 Certification. (Furnished herewith.) 97.1 Clawback Policy. (Filed herewith.) 101.INS XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. 101.SCH XBRL Taxonomy Extension Schema Document. (Filed herewith.) 101.CAL XBRL Taxonomy Extension Calculation Linkbase Document. (Filed herewith.) 101.DEF XBRL Taxonomy Extension Definition Linkbase Document. (Filed herewith.) 101.LAB XBRL Taxonomy Extension Label Linkbase Document. (Filed herewith.) 101.PRE XBRL Taxonomy Extension Presentation Linkbase Document. (Filed herewith.) 104 Cover Page Interactive Data File. (Formatted as Inline XBRL and contained in Exhibit 101.) (+) Management contract or compensatory plan or arrangement. 88 Table of Contents Item 16. Form 10-K Summary. None. 89 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Trustees and Shareholders of Diversified Healthcare Trust Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Diversified Healthcare Trust (the "Company") as of December 31, 2023 and 2022, the related consolidated statements of operations, shareholders' equity, and cash flows, for each of the three years in the period ended December 31, 2023, and the related notes and the schedule listed in the Index at Item 15(a) (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 26, 2024, expressed an unqualified opinion on the Company's internal control over financial reporting. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Impairment of Real Estate Properties - Refer to Note 3 to the financial statements Critical Audit Matter Description The Company's real estate properties are evaluated for impairment periodically or when events or changes in circumstances indicate that the carrying amount of a real estate property may not be recoverable. Impairment indicators may include declining tenant or resident occupancy, weak or declining profitability from the property, decreasing tenant cash flows or liquidity, the Company's decision to dispose of a property before the end of its estimated useful life, and legislative, market or industry changes that could permanently reduce the value of a property. If indicators of impairment are identified for any real estate property, the Company evaluates the recoverability of that real estate property by comparing undiscounted future cash flows expected to be generated by the real estate property over the Company's expected remaining hold period to the respective carrying amount. The Company's undiscounted future cash flows analysis requires management to make significant estimates and assumptions related to expected remaining hold periods, market rents, and terminal capitalization rates. F-1 Table of Contents We identified the impairment of real estate properties as a critical audit matter, specifically the significant estimates and assumptions management makes to evaluate the recoverability of real estate properties. This required a high degree of auditor judgment and an increased extent of effort when performing audit procedures to evaluate the reasonableness of the significant estimates and assumptions related to expected remaining hold periods, market rents, and terminal capitalization rates within management's undiscounted future cash flows analysis which are sensitive to future market or industry considerations. How the Critical Audit Matter Was Addressed in the Audit Our audit procedures related to the undiscounted cash flows analysis for each real estate property or group of properties with possible impairment indicators included the following among others: • We tested the effectiveness of controls over management's evaluation of the recoverability of real estate properties, including the key assumptions utilized in estimating the undiscounted future cash flows. • We evaluated the undiscounted cash flow analysis including estimates of expected remaining hold period, market rents, and terminal capitalization rates for each real estate property or group of properties with possible impairment indicators by (1) evaluating the source information and assumptions used by management and (2) comparing management's projections to external market sources and evidence obtained in other areas of our audit. • We evaluated the reasonableness of management's undiscounted future cash flows analysis by developing an independent expectation of future undiscounted cash flows based on third party market data and compared that independent estimate to the carrying amount of the real estate property or group of properties with possible indicators of impairment. We compared our analysis of the recoverability of the real estate property or group of properties to the Company's analysis. • We made inquiries of management about the current status of potential transactions and about management's judgments to understand the probability of future events that could affect the expected remaining hold period and other cash flow assumptions for the properties. /s/ Deloitte & Touche LLP Boston, Massachusetts February 26, 2024 We have served as the Company's auditor since 2020. F-2 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Trustees and Shareholders of Diversified Healthcare Trust Opinion on Internal Control over Financial Reporting We have audited the internal control over financial reporting of Diversified Healthcare Trust (the “Company”) as of December 31, 2023, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2023, of the Company and our report dated February 26, 2024, expressed an unqualified opinion on those financial statements. Basis for Opinion The Company's management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management Report on Assessment of Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company's internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control over Financial Reporting A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ Deloitte & Touche LLP Boston, Massachusetts February 26, 2024 F-3 Table of Contents DIVERSIFIED HEALTHCARE TRUST CONSOLIDATED BALANCE SHEETS (dollars in thousands, except share data) December 31, 2023 2022 ASSETS Real estate properties: Land $ 652,977 $ 668,918 Buildings and improvements 6,165,490 6,023,625 Total real estate properties, gross 6,818,467 6,692,543 Accumulated depreciation ( 2,020,843 ) ( 1,828,352 ) Total real estate properties, net 4,797,624 4,864,191 Investments in unconsolidated joint ventures 129,916 155,477 Assets of properties held for sale 9,447 385 Cash and cash equivalents 245,939 658,065 Restricted cash 1,022 30,237 Investments in equity securities — 5,880 Due from affiliates 6,081 8,716 Acquired real estate leases and other intangible assets, net 33,948 45,351 Other assets, net 222,159 233,791 Total assets $ 5,446,136 $ 6,002,093 LIABILITIES AND SHAREHOLDERS' EQUITY Secured credit facility $ — $ 700,000 Senior secured notes, net 731,211 — Senior unsecured notes, net 2,072,618 2,317,700 Secured debt and finance leases, net 13,020 30,177 Liabilities of properties held for sale 32 — Accrued interest 22,847 29,417 Due to affiliates 7,061 5,202 Other liabilities 262,456 280,986 Total liabilities 3,109,245 3,363,482 Commitments and contingencies Shareholders' equity: Common shares of beneficial interest, $ .01 par value: 300,000,000 shares authorized, 240,423,898 and 239,694,842 shares issued and outstanding, respectively 2,405 2,397 Additional paid in capital 4,618,470 4,617,031 Cumulative net income 1,778,278 2,071,850 Cumulative distributions ( 4,062,262 ) ( 4,052,667 ) Total shareholders' equity 2,336,891 2,638,611 Total liabilities and shareholders' equity $ 5,446,136 $ 6,002,093 The accompanying notes are an integral part of these consolidated financial statements. F-4 Table of Contents DIVERSIFIED HEALTHCARE TRUST CONSOLIDATED STATEMENTS OF OPERATIONS (amounts in thousands, except per share data) Year Ended December 31, 2023 2022 2021 Revenues: Rental income $ 258,400 $ 260,740 $ 408,589 Residents fees and services 1,151,908 1,022,826 974,623 Total revenues 1,410,308 1,283,566 1,383,212 Expenses: Property operating expenses 1,174,151 1,109,070 1,091,812 Depreciation and amortization 284,083 239,280 271,131 General and administrative 26,131 26,435 34,087 Acquisition and certain other transaction related costs 10,853 2,605 17,506 Impairment of assets 18,380 — ( 174 ) Total expenses 1,513,598 1,377,390 1,414,362 Gain on sale of properties 1,205 321,862 492,272 Gains and losses on equity securities, net 8,126 ( 25,660 ) ( 42,232 ) Interest and other income 15,536 15,929 20,635 Interest expense (including net amortization of debt premiums, discounts and issuance costs of $ 11,811 , $ 8,658 and $ 13,408 , respectively) ( 191,775 ) ( 209,383 ) ( 255,759 ) Loss on modification or early extinguishment of debt ( 2,468 ) ( 30,043 ) ( 2,410 ) (Loss) income from continuing operations before income tax expense and equity in net (losses) earnings of investees ( 272,666 ) ( 21,119 ) 181,356 Income tax expense ( 445 ) ( 710 ) ( 1,430 ) Equity in net (losses) earnings of investees ( 20,461 ) 6,055 — Net (loss) income ( 293,572 ) ( 15,774 ) 179,926 Net income attributable to noncontrolling interest — — ( 5,411 ) Net (loss) income attributable to common shareholders $ ( 293,572 ) $ ( 15,774 ) $ 174,515 Weighted average common shares outstanding (basic and diluted) 238,836 238,314 237,967 Per common share amounts (basic and diluted) Net (loss) income attributable to common shareholders $ ( 1.23 ) $ ( 0.07 ) $ 0.73 The accompanying notes are an integral part of these consolidated financial statements. F-5 Table of Contents DIVERSIFIED HEALTHCARE TRUST CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (dollars in thousands) Number of Shares Common Shares Additional Paid In Capital Cumulative Net Income Cumulative Distributions Total Equity Attributable to Common Shareholders Total Equity Attributable to Noncontrolling Interest Total Shareholders' Equity Balance at December 31, 2020: 238,268,478 $ 2,383 $ 4,613,904 $ 1,913,109 $ ( 4,033,559 ) $ 2,495,837 $ 123,385 $ 2,619,222 Net income — — — 174,515 — 174,515 5,411 179,926 Distributions — — — — ( 9,540 ) ( 9,540 ) — ( 9,540 ) Share grants 838,000 8 1,956 — — 1,964 — 1,964 Share repurchases ( 109,384 ) ( 1 ) ( 382 ) — — ( 383 ) — ( 383 ) Share forfeitures ( 2,200 ) — ( 3 ) — — ( 3 ) — ( 3 ) Distributions to noncontrolling interest — — — — — — ( 22,348 ) ( 22,348 ) Sale of interest in joint venture — — — — — — ( 106,448 ) ( 106,448 ) Balance at December 31, 2021: 238,994,894 2,390 4,615,475 2,087,624 ( 4,043,099 ) 2,662,390 — 2,662,390 Net loss — — — ( 15,774 ) — ( 15,774 ) — ( 15,774 ) Distributions — — — — ( 9,568 ) ( 9,568 ) — ( 9,568 ) Share grants 847,000 8 1,737 — — 1,745 — 1,745 Share repurchases ( 133,752 ) ( 1 ) ( 170 ) — — ( 171 ) — ( 171 ) Share forfeitures ( 13,300 ) — ( 11 ) — — ( 11 ) — ( 11 ) Balance at December 31, 2022: 239,694,842 2,397 4,617,031 2,071,850 ( 4,052,667 ) 2,638,611 — 2,638,611 Net loss — — — ( 293,572 ) — ( 293,572 ) — ( 293,572 ) Distributions — — — — ( 9,595 ) ( 9,595 ) — ( 9,595 ) Share grants 960,000 9 1,841 — — 1,850 — 1,850 Share repurchases ( 184,344 ) ( 1 ) ( 392 ) — — ( 393 ) — ( 393 ) Share forfeitures ( 46,600 ) — ( 10 ) — — ( 10 ) — ( 10 ) Balance at December 31, 2023: 240,423,898 $ 2,405 $ 4,618,470 $ 1,778,278 $ ( 4,062,262 ) $ 2,336,891 $ — $ 2,336,891 The accompanying notes are an integral part of these consolidated financial statements. F-6 Table of Contents DIVERSIFIED HEALTHCARE TRUST CONSOLIDATED STATEMENTS OF CASH FLOWS ( dollars in thousands) Year Ended December 31, 2023 2022 2021 CASH FLOWS FROM OPERATING ACTIVITIES: Net (loss) income $ ( 293,572 ) $ ( 15,774 ) $ 179,926 Adjustments to reconcile net (loss) income to cash provided by (used in) operating activities: Depreciation and amortization 284,083 239,280 271,131 Net amortization of debt premiums, discounts and issuance costs 11,811 8,658 13,408 Straight line rental income 1,095 ( 8,916 ) ( 5,846 ) Amortization of acquired real estate leases and assumed real estate lease obligations, net ( 242 ) 245 ( 7,211 ) Loss on modification or early extinguishment of debt 2,468 30,043 2,410 Impairment of assets 18,380 — ( 174 ) Gain on sale of properties ( 1,205 ) ( 321,862 ) ( 492,272 ) Gains and losses on equity securities, net ( 8,126 ) 25,660 42,232 Other non-cash adjustments, net ( 1,932 ) ( 2,038 ) ( 1,811 ) Unconsolidated joint venture distributions 5,100 8,769 — Equity in net losses (earnings) of investees 20,461 ( 6,055 ) — Change in assets and liabilities: Deferred leasing costs, net ( 9,834 ) ( 7,874 ) ( 20,701 ) Other assets 10,672 10,946 ( 51,201 ) Accrued interest ( 6,570 ) ( 428 ) 7,654 Other liabilities ( 22,106 ) ( 1,007 ) ( 868 ) Net cash provided by (used in) operating activities 10,483 ( 40,353 ) ( 63,323 ) CASH FLOWS FROM INVESTING ACTIVITIES: Real estate acquisitions and deposits — ( 75,105 ) — Real estate improvements ( 235,007 ) ( 299,387 ) ( 227,605 ) Proceeds from sale of properties, net 18,356 822 103,257 Proceeds from sale of properties to joint venture, net — 638,488 — Proceeds from sale of interest in joint venture, net — 108,424 367,033 Proceeds from insurance recoveries 534 14,466 — Proceeds from AlerisLife Inc. tender offer 14,006 — — Distributions in excess of earnings from Affiliates Insurance Company — — 11 Net cash (used in) provided by investing activities ( 202,111 ) 387,708 242,696 CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from issuance of senior unsecured notes, net — — 492,500 Proceeds from issuance of senior secured notes, net 750,001 — — Proceeds from borrowings on secured credit facility — — 800,000 Repayments of borrowings on secured credit facility ( 700,000 ) ( 100,000 ) — Redemption of senior unsecured notes ( 250,000 ) ( 500,000 ) ( 300,000 ) Repayment of term loan — — ( 200,000 ) Repayment of other debt ( 17,049 ) ( 39,067 ) ( 3,159 ) Loss on early extinguishment of debt settled in cash ( 978 ) ( 24,375 ) — Payment of debt issuance costs ( 21,699 ) ( 2,817 ) ( 10,347 ) Repurchase of common shares ( 393 ) ( 171 ) ( 383 ) Distributions to noncontrolling interest — — ( 22,348 ) Distributions to shareholders ( 9,595 ) ( 9,568 ) ( 9,540 ) Net cash (used in) provided by financing activities ( 249,713 ) ( 675,998 ) 746,723 (Decrease) increase in cash and cash equivalents and restricted cash ( 441,341 ) ( 328,643 ) 926,096 Cash and cash equivalents and restricted cash at beginning of period 688,302 1,016,945 90,849 Cash and cash equivalents and restricted cash at end of period $ 246,961 $ 688,302 $ 1,016,945 The accompanying notes are an integral part of these consolidated financial statements. F-7 Table of Contents DIVERSIFIED HEALTHCARE TRUST CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED) ( dollars in thousands) Year Ended December 31, 2023 2022 2021 SUPPLEMENTAL CASH FLOW INFORMATION: Interest paid $ 186,534 $ 201,153 $ 235,994 Income taxes paid $ 677 $ 935 $ 2,798 NON-CASH INVESTING ACTIVITIES: Decrease in assets and liabilities resulting from the deconsolidation of investments that were previously consolidated: Real estate, net $ — $ ( 355,669 ) $ ( 686,320 ) Mortgage notes, net $ — $ — $ 618,452 Real estate improvements accrued, not paid $ 38,777 $ 32,064 $ 20,031 Capitalized interest $ — $ — $ 1,297 Supplemental disclosure of cash and cash equivalents and restricted cash: The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within our consolidated balance sheets to the amount shown in our consolidated statements of cash flows: As of December 31, 2023 2022 2021 Cash and cash equivalents $ 245,939 $ 658,065 $ 634,848 Restricted cash (1) 1,022 30,237 382,097 Total cash and cash equivalents and restricted cash shown in our consolidated statements of cash flows $ 246,961 $ 688,302 $ 1,016,945 (1) As of December 31, 2022 and 2021, restricted cash consisted of proceeds from the sale of assets and proceeds from the sale of joint venture interests held as collateral pursuant to the agreement governing our former credit facility, or our credit agreement. In December 2023, we repaid all $ 450,000 outstanding under such secured credit facility with Wells Fargo Bank, National Association, as administrative agent and a lender, and a syndicate of other lenders, and then terminated our credit agreement in accordance with its terms and without penalty. As such, we are no longer required to hold any proceeds from the sale of properties as restricted cash. Restricted cash also consists of amounts escrowed for real estate taxes, insurance and capital expenditures at certain of our mortgaged properties. The accompanying notes are an integral part of these consolidated financial statements. F-8 Table of Contents DIVERSIFIED HEALTHCARE TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (dollar amounts in thousands, except per share data or as otherwise stated) Note 1. Business Diversified Healthcare Trust is a real estate investment trust, or REIT, organized under Maryland law, which owns medical office and life science properties, senior living communities and other healthcare related properties throughout the United States. As of December 31, 2023, we owned 371 properties located in 36 states and Washington, D.C. On that date, the gross book value of our real estate assets was $ 6,818,467 , excluding properties held for sale, if any. As of December 31, 2023, we also owned an equity interest in each of two unconsolidated joint ventures that own medical office and life science properties located in five states with an aggregate of approximately 2.2 million rentable square feet. Going Concern The senior living industry has been adversely affected by a slow recovery from the COVID-19 pandemic, as well as economic and market conditions. These conditions continue to have a significant negative impact on our results of operations, financial position and cash flows. Although there have been signs of recovery and increased demand when compared to the low levels during the COVID-19 pandemic, the recovery of our senior housing operating portfolio, or SHOP, segment has been slower than previously anticipated and uneven, and we cannot be sure when or if the senior living business will return to historic pre-pandemic levels. To mitigate the effects of the slow recovery coming from the COVID-19 pandemic and the increased variability in operating cash flows from our SHOP communities, we continue to work with our senior living operators to manage costs, especially labor costs, and to increase rates and occupancy. However, increased operating costs resulting from difficult labor market conditions, wage and commodity price inflation and increased insurance costs, among other things, continue to negatively impact margins. Additionally, while our senior living operators have increased rates, those rates are increasing gradually and are not increasing at the same pace as our costs, putting further pressure on our margins. In order to increase the probability of a recovery of our cash flows, we have continued to invest capital in our SHOP segment. As a result of the slow recovery of our SHOP segment and having $ 700,000 of outstanding debt then becoming due within one year and only $ 338,431 in cash and cash equivalents as of June 30, 2023, we concluded as of May 8, 2023 that there was a substantial doubt about our ability to continue as a going concern for at least one year from the date of issuance of those condensed consolidated financial statements. Additionally, as of November 1, 2023 we were unable to demonstrate that our plans to alleviate the substantial doubt about our ability to continue as a going concern would be probable in mitigating the conditions that raised the substantial doubt given our plans were beyond our control. On December 21, 2023, we completed a private offering of $ 940,534 in aggregate principal amount at maturity of senior secured notes due January 2026, with a one-year extension option. The net proceeds from the offering were approximately $ 730,359 after deducting initial purchaser discounts and estimated offering costs. We used a portion of the net proceeds to repay in full the $ 450,000 outstanding under our then secured credit facility and to redeem $ 250,000 of our senior notes that were scheduled to mature in May 2024. As a result of these transactions, we have no significant debt maturities until June 2025 when $ 500,000 of our senior notes will become due, and as of December 31, 2023, we had $ 245,939 of cash and cash equivalents. Additionally, as of December 31, 2023, our ratio of consolidated income available for debt service to debt service is above the 1.5 x incurrence requirement under our debt covenants, on a pro forma basis. As a result, we are able to refinance existing or maturing debt and issue new debt as long as this ratio continues to be at or above 1.5 x on a pro forma basis at the time of such refinancing or issuance. With a significant amount of unencumbered assets, including our entire SHOP segment properties, we believe we can refinance existing or maturing debt as maturities near or we believe the terms of any new debt are satisfactory. Our management has concluded that these transactions have successfully alleviated the conditions that raised the substantial doubt about our ability to continue as a going concern and that no substantial doubt about our ability to continue as going concern exists as of the date of issuance of these financial statements, or February 26, 2024. Note 2. Summary of Significant Accounting Policies BASIS OF PRESENTATION. Our consolidated financial statements include the accounts of Diversified Healthcare Trust, we, us or our, and our subsidiaries, all of which are 100 % owned directly or indirectly by us as of December 31, 2023. All intercompany transactions and balances with or among our consolidated subsidiaries have been eliminated. REAL ESTATE PROPERTIES. We record properties at our cost and calculate depreciation on real estate investments on a straight line basis over estimated useful lives generally up to 40 years. F-9 Table of Contents We allocate the purchase prices of our properties to land, building and improvements based on determinations of the fair values of these assets assuming the properties are vacant. We determine the fair value of each property using methods similar to those used by independent appraisers, which may involve estimated cash flows that are based on a number of factors, including capitalization rates and discount rates, among others. In some circumstances, we engage independent real estate appraisal firms to provide market information and evaluations which are relevant to our purchase price allocations and determinations of depreciable useful lives; however, we are ultimately responsible for the purchase price allocations and determinations of useful lives. We allocate a portion of the purchase price to above market and below market leases based on the present value (using an interest rate which reflects the risks associated with acquired in place leases at the time each property was acquired by us) of the difference, if any, between (i) the contractual amounts to be paid pursuant to the acquired in place leases and (ii) our estimates of fair market lease rates for the corresponding leases, measured over a period equal to the terms of the respective leases. The terms of below market leases that include bargain renewal options, if any, are further adjusted if we determine that renewal is probable. We allocate a portion of the purchase price to acquired in place leases and tenant relationships based upon market estimates to lease up the property based on the leases in place at the time of purchase. In making these allocations, we consider factors such as estimated carrying costs during the expected lease up periods, including real estate taxes, insurance and other operating income and expenses and costs, such as leasing commissions, legal and other related expenses, to execute similar leases in current market conditions at the time a property was acquired by us. We allocate this aggregate value between acquired in place lease values and tenant relationships based on our evaluation of the specific characteristics of each tenant's lease. However, we have not separated the value of tenant relationships from the value of acquired in place leases because such value and related amortization expense is immaterial to our consolidated financial statements. If the value of tenant relationships becomes material in the future, we may separately allocate those amounts and amortize the allocated amount over the estimated life of the relationships. We amortize capitalized above market lease values (included in acquired real estate leases and other intangible assets, net in our consolidated balance sheets) as a reduction to rental income over the remaining non-cancelable terms of the respective leases. We amortize capitalized below market lease values (included in other liabilities in our consolidated balance sheets) as an increase to rental income over the non-cancelable periods of the respective leases. For the years ended December 31, 2023, 2022 and 2021, such amortization resulted in a net increase in rental income of $ 242 , $( 245 ) and $ 7,211 , respectively. We amortize the value of in place leases exclusive of the value of above market and below market in place leases to expense over the remaining non-cancelable periods of the respective leases. During the years ended December 31, 2023, 2022 and 2021, such amortization included in depreciation and amortization expense totaled $ 10,996 , $ 11,524 and $ 42,783 , respectively. If a lease is terminated prior to its stated expiration, the unamortized amount relating to that lease is written off. As of December 31, 2023 and 2022, our acquired real estate leases and assumed real estate lease obligations, excluding properties held for sale, if any, were as follows: December 31, 2023 2022 Acquired real estate leases: Capitalized above market lease values $ 3,804 $ 5,187 Less: accumulated amortization ( 3,001 ) ( 3,978 ) Capitalized above market lease values, net 803 1,209 Lease origination value 88,569 107,171 Less: accumulated amortization ( 55,424 ) ( 63,029 ) Lease origination value, net 33,145 44,142 Acquired real estate leases and other intangible assets, net $ 33,948 $ 45,351 Assumed real estate lease obligations: Capitalized below market lease values $ 2,340 $ 3,685 Less: accumulated amortization ( 1,872 ) ( 2,567 ) Assumed real estate lease obligations, net $ 468 $ 1,118 As of December 31, 2023, the weighted average amortization periods for capitalized above market lease values, lease origination value and capitalized below market lease values were 4.8 years, 7.3 years and 3.7 years, respectively. Future amortization of net intangible acquired real estate lease assets and obligations to be recognized over the current terms of the F-10 Table of Contents associated leases as of December 31, 2023 are estimated to be $ 7,501 in 2024, $ 5,167 in 2025, $ 4,473 in 2026, $ 3,506 in 2027, $ 2,553 in 2028 and $ 10,280 thereafter. CASH AND CASH EQUIVALENTS. We consider highly liquid investments with original maturities of three months or less at the date of purchase to be cash equivalents. RESTRICTED CASH. Restricted cash consists of amounts escrowed for real estate taxes, insurance and capital expenditures at certain of our mortgaged properties. Prior to our repayment in full of the $ 450,000 outstanding under our then secured credit facility and termination of our credit agreement in December 2023, restricted cash also consisted of amounts held as collateral pursuant to our credit agreement. INVESTMENTS IN EQUITY SECURITIES. We classified the common shares we formerly owned of AlerisLife Inc., or AlerisLife, as an equity method investment. This equity method investment was included in investments in equity securities in our consolidated balance sheets. In February 2023, in connection with the acquisition by ABP Trust of all of the publicly held outstanding AlerisLife common shares, at a price of $ 1.31 per share, or the Tender Offer Price, by tender offer, or the AlerisLife Transaction, we agreed to tender all the AlerisLife common shares that we and our subsidiary then owned into the tender offer at the Tender Offer Price, subject to the right, but not the obligation, to purchase, on or before December 31, 2023, AlerisLife common shares at the Tender Offer Price, and otherwise pursuant to a stockholders agreement to be entered into at the time of any such purchase. On December 20, 2023, we and ABP Trust extended our right to purchase AlerisLife common shares until March 31, 2024. At December 31, 2023 and 2022, our investment in AlerisLife had a fair value of $ 0 and $ 5,880 , respectively, including a realized gain of $ 8,126 and an unrealized loss of $ 25,660 , respectively. We concluded that we had significant influence, but not control, over AlerisLife's most significant activities and therefore we determined that AlerisLife was not a variable interest entity, or VIE, and accounted for our former investment in AlerisLife as an equity method investment. We elected the fair value option for our investment in AlerisLife. See Note 8 for further information regarding our former investment in AlerisLife. EQUITY METHOD INVESTMENTS. As of December 31, 2023, we owned a 10 % equity interest in an unconsolidated joint venture that owns a life science property located in Boston, Massachusetts, or the Seaport JV, and a 20 % equity interest in an unconsolidated joint venture for 10 medical office and life science properties, or the LSMD JV. The property owned by the Seaport JV is encumbered by an aggregate $ 620,000 of mortgage debts. The properties owned by the LSMD JV are encumbered by an aggregate $ 456,625 of mortgage debts. We do not control the activities that are most significant to these joint ventures and, as a result, we account for our investment in these joint ventures under the equity method of accounting under the fair value option. See Notes 3, 10 and 11 for more information regarding these joint ventures. DEBT ISSUANCE COSTS. Debt issuance costs include issuance or assumption costs related to borrowings and we amortize those costs as interest expense over the terms of the respective loans. During 2023, we repaid all amounts outstanding under our then secured credit facility, including repayment in full of $ 450,000 under such credit facility in December 2023, and terminated the agreement governing such credit facility. As a result, we expensed unamortized debt issuance costs and recorded an aggregate loss on early extinguishment of debt of $ 1,389 during the year ended December 31, 2023. Debt issuance costs for our former credit facility totaled $ 0 and $ 29,717 at December 31, 2023 and 2022, respectively, and accumulated amortization of debt issuance costs totaled $ 0 and $ 26,315 at December 31, 2023 and 2022, respectively, and are included in other assets, net in our consolidated balance sheets. Debt issuance costs for our senior secured and unsecured notes and other secured debt totaled $ 67,475 and $ 47,661 at December 31, 2023 and 2022, respectively, and accumulated amortization of debt issuance costs totaled $ 22,065 and $ 19,791 , respectively, and are presented in our consolidated balance sheet as a direct deduction from the associated debt liability. Future amortization of debt issuance costs to be recognized with respect to our loans as of December 31, 2023 are estimated to be $ 14,226 in 2024, $ 13,279 in 2025, $ 2,417 in 2026, $ 1,955 in 2027, $ 1,581 in 2028 and $ 11,952 thereafter. DEFERRED LEASING COSTS. Deferred leasing costs include capitalized brokerage costs and inducements associated with the successful negotiation of leases. We amortize deferred leasing costs, which are included in depreciation and amortization expense, and inducements, which are included as a reduction in rental income, on a straight line basis over the terms of the respective leases. Deferred leasing costs are included in other assets, net in our consolidated balance sheets. Deferred leasing costs totaled $ 62,980 and $ 55,043 at December 31, 2023 and 2022, respectively, and accumulated amortization of deferred leasing costs totaled $ 19,985 and $ 15,482 at December 31, 2023 and 2022, respectively. At December 31, 2023, the remaining weighted average amortization period is approximately 8.2 years. Future amortization of F-11 Table of Contents deferred leasing costs to be recognized during the current terms of our existing leases as of December 31, 2023 are estimated to be $ 7,090 in 2024, $ 6,613 in 2025, $ 6,059 in 2026, $ 5,032 in 2027, $ 4,344 in 2028 and $ 13,857 thereafter. REVENUE RECOGNITION. We are a lessor of medical office and life science properties, senior living communities and other healthcare related properties. Our leases provide our tenants with the contractual right to use and economically benefit from all of the premises demised under the leases; therefore, we have determined to evaluate our leases as lease arrangements. Our leases provide for base rent payments and in addition may include variable payments. Rental income from operating leases, including any payments derived by index or market based indices, is recognized on a straight line basis over the lease term when we have determined that the collectability of substantially all of the lease payments is probable. Some of our leases have options to extend or terminate the lease exercisable at the option of our tenants, which are considered when determining the lease term. We do not include in our measurement of our lease receivables certain variable payments, including changes in the index or market based indices after the inception of the lease, certain tenant reimbursements and other income until the specific events that trigger the variable payments have occurred. Certain of our leases contain non-lease components, such as property level operating expenses and capital expenditures reimbursed by our tenants as well as other required lease payments. We have determined that all of our leases qualify for the practical expedient to not separate the lease and non-lease components because (i) the lease components are operating leases and (ii) the timing and pattern of recognition of the non-lease components are the same as those of the lease components. We apply Codification Topic 842, Leases, to the combined component. Income derived by our leases is recorded in rental income in our consolidated statements of operations. Certain tenants are obligated to pay directly their obligations under their leases for insurance, real estate taxes and certain other expenses. These obligations, which have been assumed by the tenants under the terms of their respective leases, are not reflected in our consolidated financial statements. To the extent any tenant responsible for any such obligations under the applicable lease defaults on such lease or if it is deemed probable that the tenant will fail to pay for such obligations, we would record a liability for such obligations. For the years ended December 31, 2023, 2022 and 2021, we recognized the rental income from our operating leases on a straight line basis over the term of each lease agreement. We recognized percentage rents when realizable and earned, which was generally during the fourth quarter of the year. For the years ended December 31, 2023, 2022 and 2021, percentage rents earned aggregated $ 2,949 , $ 2,978 and $ 1,993 , respectively. For leases where we are the lessee, we recognized a right of use asset and a lease liability equal to the present value of the minimum lease payments with rental payments being applied to the lease liability and the right of use asset being amortized over the term of the lease. The right of use assets and related lease liabilities are included within other assets, net and other liabilities, respectively, within our consolidated balance sheets. In addition, we lease equipment at certain of our managed senior living communities. These leases are short term in nature, are cancelable with no fee or do not result in an annual expense in excess of our capitalization policy and, as a result, are not recorded on our consolidated balance sheets. As of December 31, 2023, we owned 232 senior living communities that are managed by third party managers for our account. We derive our revenues at these managed senior living communities primarily from services our managers provide to residents on our behalf and we record revenues when the services are provided. We use the taxable REIT subsidiary, or TRS, structure authorized by the REIT Investment Diversification and Empowerment Act for nearly all of our managed senior living communities. Under the Coronavirus Aid, Relief, and Economic Security Act, or the CARES Act, the U.S. Department of Health and Human Services established a Provider Relief Fund. Subsequently, the American Rescue Plan Act, or ARPA, was enacted. Retention and use of the funds received under the CARES Act and ARPA are subject to certain terms and conditions. The terms and conditions require that the funds be utilized to compensate for lost revenues that are attributable to the COVID-19 pandemic and for eligible costs to prevent, prepare for and respond to the COVID-19 pandemic that are not covered by other sources. Further, fund recipients are required to be participating in Medicare at the time of distribution and are subject to certain other terms and conditions, including quarterly reporting requirements. In addition, fund recipients are required to have billed Medicare during 2019 and to continue to provide care after January 31, 2020 for diagnosis, testing or care for individuals with possible or actual COVID-19 cases. Any funds not used in accordance with the terms and conditions must be returned. We recognize income from government grants on a systematic and rational basis over the period in which we recognize the related expenses or loss of revenues for which the grants are intended to compensate when there is reasonable assurance that we will comply with the applicable terms and conditions of the grant and there is reasonable assurance that the grant will be received. During the years ended December 31, 2023, 2022 and 2021, we received $ 1,581 , $ 605 and $ 20,800 , respectively, in funds to be F-12 Table of Contents used to support the operations of our managed senior living communities; we have currently determined that $ 1,581 , $ 4,327 and $ 19,554 , of such funds meet the required terms and conditions. We have recognized $ 1,581 , $ 4,327 and $ 19,554 as interest and other income in our consolidated statements of operations with respect to our SHOP segment for the years ended December 31, 2023, 2022 and 2021, respectively. As of December 31, 2023 and 2022, we have recognized all funds and no amount remained in other liabilities in our consolidated balance sheets. PER COMMON SHARE AMOUNTS. We calculate basic earnings per common share by dividing net income (loss) by the weighted average number of our common shares of beneficial interest, $ .01 par value, or our common shares, outstanding during the period. We calculate diluted earnings per common share using the more dilutive of the two class method or the treasury stock method. Unvested share awards and other potentially dilutive common shares and the related impact on earnings, are considered when calculating diluted earnings per share. INCOME TAXES. We have elected to be taxed as a REIT under the United States Internal Revenue Code of 1986, as amended, and, as such, are generally not subject to federal and most state income taxation on our operating income provided we distribute our taxable income to our shareholders and meet certain organization and operating requirements. We do, however, lease our managed senior living communities to our wholly owned TRSs that, unlike most of our subsidiaries, file a separate consolidated federal corporate income tax return and are subject to federal and state income taxes. Our consolidated income tax provision includes the income tax provision related to the operations of our TRSs and certain state income taxes we incur despite our taxation as a REIT. Our current income tax expense (or benefit) fluctuates from period to period based primarily on the timing of our income, including gains on the disposition of properties or losses in a particular quarter. The Income Taxes Topic of the Codification prescribes how we should recognize, measure and present in our financial statements uncertain tax positions that have been taken or are expected to be taken in a tax return. Tax benefits are recognized to the extent that it is “more likely than not” that a particular tax position will be sustained upon examination or audit. To the extent the “more likely than not” standard has been satisfied, the benefit associated with a tax position is measured as the largest amount that has a greater than 50% likelihood of being realized upon settlement. We classify interest and penalties related to uncertain tax positions, if any, in our financial statements as a component of general and administrative expense. USE OF ESTIMATES. Preparation of these financial statements in conformity with accounting principles generally accepted in the United States, or GAAP, requires us to make estimates and assumptions that affect the amounts reported in these consolidated financial statements and related notes. The actual results could differ from these estimates. Significant estimates in the consolidated financial statements include purchase price allocations, useful lives of fixed assets and assessment of impairment of real estate and the related intangibles. SEGMENT REPORTING. As of December 31, 2023, we operate in, and report financial information for, the following two segments: our portfolio of medical office and life science properties, or our Office Portfolio, and SHOP. We aggregate the operating results of our properties in these two reporting segments based on their similar operating and economic characteristics. See Note 12 for further information regarding our reportable operating segments. RECENT ACCOUNTING PRONOUNCEMENTS. On November 27, 2023, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures , or ASU No. 2023-07, which requires public entities to: (i) provide disclosures of significant segment expenses and other segment items if they are regularly provided to the Chief Operating Decision Maker, or the CODM, and included in each reported measure of segment profit or loss; (ii) provide all annual disclosures about a reportable segment’s profit or loss and assets currently required by ASC 280, Segment Reporting, or ASC 280, in interim periods; and (iii) disclose the CODM’s title and position, as well as an explanation of how the CODM uses the reported measures and other disclosures. Public entities with a single reportable segment must apply all the disclosure requirements of ASU No. 2023-07, as well as all the existing segment disclosures under ASC 280. The amendments in ASU No. 2023-07 are incremental to the requirements in ASC 280 and do not change how a public entity identifies its operating segments, aggregates those operating segments, or applies the quantitative thresholds to determine its reportable segments. ASU No. 2023-07 should be applied retrospectively to all prior periods presented in the financial statements and is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. We are currently evaluating the impact ASU No. 2023-07 will have on our consolidated financial statements and disclosures. On December 14, 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures , or ASU No. 2023-09, which requires public entities to enhance its annual income tax disclosures by requiring: (i) consistent categories and greater disaggregation of information in the rate reconciliation, and (ii) income taxes paid disaggregated by jurisdiction. ASU No. 2023-09 should be applied prospectively but entities have the option to apply it retrospectively to all prior periods presented in the financial statements. ASU No. 2023-09 is effective for annual periods F-13 Table of Contents beginning after December 15, 2024, with early adoption permitted. We are currently evaluating the impact ASU No. 2023-09 will have on our consolidated financial statements and disclosures. Note 3. Real Estate Investments As of December 31, 2023, our owned properties include: 102 medical office and life science properties with approximately 8.6 million rentable square feet; 259 senior living communities, including independent living (including active adult), assisted living, memory care and skilled nursing facilities, or SNFs, with 27,271 living units; and 10 wellness centers with approximately 812,000 square feet of interior space plus outdoor developed facilities. Acquisitions: The table below represents the purchase price allocations (including net closing adjustments) of acquisitions for the years ended December 31, 2023, 2022 and 2021: Date Location 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, 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 Acquisitions during the year ended December 31, 2021: We did not acquire any properties during the year ended December 31, 2021. (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 2023, we recorded impairment charges of $ 14,034 to adjust the carrying value of four life science and medical office properties to their estimated fair value. We sold three of these life science and medical office 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 operations. During 2022, no impairment charges were recorded. Dispositions: During the years ended December 31, 2023 and 2021, we sold eight and five properties, respectively, for aggregate sales prices of $ 18,880 and $ 104,500 , respectively, excluding closing costs, as presented in the table below. During the year ended December 31, 2022, we did no t dispose of any properties. 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 operations. F-14 Table of Contents Date of Sale Location Type of Property Number of Properties Square Feet or Number of Units Sales Price (1) Gain (Loss) on Sale Dispositions during the year ended December 31, 2023: February 2023 Pennsylvania and South Carolina Senior Living 3 — units (2) $ 2,800 $ 293 October 2023 Pennsylvania Medical Office 1 30,866 sq. ft. 1,800 15 October 2023 Tennessee Senior Living 1 — units (2) 2,830 627 October 2023 Maryland Life Science 1 58,880 sq. ft. 6,200 ( 360 ) November 2023 Virginia Senior Living 1 — units (2) 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. Dispositions during the year ended December 31, 2021: February 2021 Pennsylvania Medical Office 1 92,000 sq. ft. $ 9,000 $ ( 122 ) April 2021 Florida Life Science / Medical Office 4 263,656 sq. ft. 95,500 30,760 5 $ 104,500 $ 30,638 (1) Sales price excludes closing costs. (2) 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, 2023, we had one medical office property classified as held for sale. As of December 31, 2022, we had one closed senior living community classified as held for sale. Investments and Capital Expenditures: During 2023, we committed an aggregate $ 62,180 for leasing related costs related to 0.9 million and 0.2 million square feet of leases executed at our medical office and life science properties and wellness centers, respectively. During 2022, we committed $ 22,911 for leasing related costs related to 0.9 million square feet of leases executed at our medical office and life science properties. Committed and unspent tenant related obligations based on executed leases as of December 31, 2023 and 2022 were $ 54,124 and $ 39,314 , respectively. 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 operations. 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 operations. We received $ 534 and $ 3,213 in cash in excess of our losses during the F-15 Table of Contents years ended December 31, 2023 and 2022, respectively. These amounts are included in other liabilities in our consolidated balance sheets. Unconsolidated Joint Venture Investments: As of December 31, 2023, 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, 2023 Number of Properties Location Square Feet Seaport Innovation LLC 10 % $ 85,699 1 MA 1,134,479 The LSMD Fund REIT LLC 20 % 44,217 10 CA, MA, NY, TX, WA 1,068,763 $ 129,916 11 2,203,242 The following table provides a summary of the mortgage debts of these joint ventures: Joint Venture Coupon Rate Maturity Date Principal Balance at December 31, 2023 (1) Mortgage Notes Payable (secured by one property in Massachusetts) (2) 3.53 % 8/6/2026 $ 620,000 Mortgage Notes Payable (secured by nine properties in five states) (3) 3.46 % 2/11/2032 189,800 Mortgage Notes Payable (secured by one property in California) (3)(4) 5.90 % 2/9/2025 266,825 Weighted Average / Total 4.10 % $ 1,076,625 (1) Amounts are not adjusted for our minority equity interest. (2) Following the deconsolidation in December 2021 of the net assets of the Seaport JV, we no longer include this $ 620,000 of secured debt financing in our consolidated balance sheet; however, we continue to provide certain guaranties on this debt. (3) The debt securing these properties is non-recourse to us. (4) The joint venture exercised its option to extend the maturity date of this mortgage loan by one year to February 9, 2025, and this mortgage loan requires interest to be paid at an annual rate of SOFR, plus a premium of 1.90 %. The interest rate is as of December 31, 2023. This joint venture has also purchased an interest rate cap through February 2025 with a SOFR strike rate equal to 4.48 % and an initial premium of $ 1,200 . The maturity date of this mortgage loan is subject to two remaining one-year extension options. In March 2017, we entered into the Seaport JV with an institutional investor. The investor owned a 45 % equity interest in the joint venture, and we owned the remaining 55 % equity interest in the joint venture. We determined that, while we owned a 55 % equity interest in this joint venture, this joint venture was a VIE as defined under the Consolidation Topic of the Financial Accounting Standards Board Codification. We concluded that we must consolidate this VIE, and we did so, until we sold an additional 35 % equity interest in the joint venture in December 2021. We reached this determination because we were the entity with the power to direct the activities that most significantly impacted the VIE's economic performance and we had the obligation to absorb losses of, and the right to receive benefits from, the VIE that could be significant to the VIE, and therefore were the primary beneficiary of the VIE. The joint venture investor's interest in this consolidated entity was reflected as noncontrolling interest in our consolidated financial statements. In December 2021, we sold an additional 35 % equity interest from our then remaining 55 % equity interest in the Seaport JV to another third party institutional investor for $ 378,000 , before closing costs and other adjustments. Effective as of the date of the sale, we deconsolidated the net assets of this joint venture and recognized a net gain on sale of $ 461,434 related to this transaction during the year ended December 31, 2021, which is included in gain on sale of properties in our consolidated statements of operations. After giving effect to the sale, we owned a 20 % equity interest in this joint venture but determined that we were no longer the primary beneficiary. Effective as of the date of the sale, we deconsolidated this joint venture, and we now account for this joint venture using the equity method of accounting under the fair value option. Prior to the deconsolidation of the net assets of this joint venture, the joint venture investor's interest in this consolidated entity was reflected as noncontrolling interest in our consolidated financial statements. In June 2022, we sold an additional 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 gain on sale of properties in our consolidated statements of operations. After giving effect to these sales, 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. See Note 10 for more information regarding the valuation of our investment in this joint venture. F-16 Table of Contents 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 gain on sale of properties in our consolidated statements of operations. 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. See Note 10 for more information regarding the valuation of our investment in this joint venture. Note 4. Leases We are a lessor of medical office and life science properties, senior living communities and other healthcare related properties. Our leases provide our tenants with the contractual right to use and economically benefit from all of the premises demised under the leases; therefore, we have determined to evaluate our leases as lease arrangements. Our leases provide for base rent payments and, in addition, may include variable payments. Rental income from operating leases, including any payments derived by index or market based indices, is recognized on a straight line basis over the lease term when we have determined that the collectability of substantially all of the lease payments is probable. Some of our leases have options to extend or terminate the lease exercisable at the option of our tenants, which are considered when determining the lease term. We increased rental income to record revenue on a straight line basis by $( 1,095 ), $ 8,916 and $ 5,846 for the years ended December 31, 2023, 2022 and 2021, respectively. Rents receivable, excluding receivables related to our properties classified as held for sale, if any, include $ 75,306 and $ 76,363 of straight line rent receivables at December 31, 2023 and 2022, respectively, and are included in other assets, net in our consolidated balance sheets. We do not include in our measurement of our lease receivables certain variable payments, including changes in the index or market based indices after the inception of the lease, certain tenant reimbursements and other income until the specific events that trigger the variable payments have occurred. Such payments totaled $ 51,367 , $ 47,669 and $ 74,860 for the years ended December 31, 2023, 2022 and 2021, respectively, of which tenant reimbursements totaled $ 48,215 , $ 44,470 and $ 72,690 , respectively. The following table presents our operating lease maturity analysis, excluding lease payments from properties classified as held for sale, if any, as of December 31, 2023: Year Amount 2024 $ 191,360 2025 182,672 2026 174,881 2027 153,170 2028 131,872 Thereafter 597,208 Total $ 1,431,163 Right of Use Asset and Lease Liability . For leases where we are the lessee, we recognized a right of use asset and a lease liability equal to the present value of the minimum lease payments with rental payments being applied to the lease liability and the right of use asset being amortized over the term of the lease. The values of the right of use assets and related liabilities representing our future obligation under the respective lease arrangements for which we are the lessee were $ 23,366 and $ 23,748 , respectively, as of December 31, 2023, and $ 26,508 and $ 26,889 , respectively, as of December 31, 2022. The right of use assets and related lease liabilities are included within other assets, net and other liabilities , respectively, within our consolidated balance sheets. In addition, we lease equipment at certain of our managed senior living communities. These leases are short term in nature, are cancelable with no fee or do not result in an annual expense in excess of our capitalization policy and, as a result, are not recorded on our consolidated balance sheets. F-17 Table of Contents Note 5. Shareholders' Equity We have common shares available for issuance under the terms of our equity compensation plan adopted in 2012, as amended, or the 2012 Plan. During the years ended December 31, 2023, 2022 and 2021, we awarded to our officers and other employees of The RMR Group LLC, or RMR, annual share awards of 800,000 , 707,000 and 718,000 of our common shares, respectively, valued at $ 1,864 , $ 919 and $ 2,448 , in aggregate, respectively. In accordance with our Trustee compensation arrangements, we also awarded each of our then Trustees 20,000 common shares with an aggregate value of $ 244 ($ 35 per Trustee), 20,000 common shares with an aggregate value of $ 300 ($ 43 per Trustee) and 20,000 common shares with an aggregate value of $ 444 ($ 74 per Trustee) in 2023, 2022 and 2021, respectively. Also in September 2023, in connection with the election of one of our Trustees, we awarded 20,000 of our common shares to this Trustee with a value of $ 45 . The values of the share awards were based upon the closing price of our common shares trading on The Nasdaq Stock Market LLC, or Nasdaq, on the dates of awards. The common shares awarded to our Trustees vested immediately. The common shares awarded to our officers and certain other employees of RMR (in those capacities) vest in five equal annual installments beginning on the date of award. We include the value of awarded shares in general and administrative expenses in our consolidated statements of operations ratably over the vesting period. At December 31, 2023, 1,938,197 of our common shares remain available for issuance under the 2012 Plan. A summary of shares awarded, forfeited, vested and unvested under the terms of the 2012 Plan from January 1, 2021 to December 31, 2023 is as follows: Number of Shares Weighted Average Award Date Fair Value Unvested shares at December 31, 2020 434,550 $ 6.15 Shares awarded in 2021 838,000 $ 3.45 Shares vested / forfeited in 2021 ( 426,930 ) $ 4.98 Unvested shares at December 31, 2021 845,620 $ 4.07 Shares awarded in 2022 847,000 $ 1.44 Shares vested / forfeited in 2022 ( 576,620 ) $ 3.24 Unvested shares at December 31, 2022 1,116,000 $ 2.50 Shares awarded in 2023 960,000 $ 2.24 Shares vested / forfeited in 2023 ( 847,800 ) $ 2.53 Unvested shares at December 31, 2023 1,228,200 $ 2.28 The 1,228,200 unvested shares as of December 31, 2023 are scheduled to vest as follows: 428,200 shares in 2024, 377,200 shares in 2025, 270,400 shares in 2026 and 152,400 shares in 2027. As of December 31, 2023, the estimated future compensation for the unvested shares was $ 2,489 based on the adjusted award date fair value of these shares. At December 31, 2023, the weighted average period over which the compensation expense will be recorded is approximately 1.8 years. We recorded share based compensation expense of $ 1,840 in 2023, $ 1,733 in 2022 and $ 1,960 in 2021. We recognize forfeitures as they occur. During 2023, 2022 and 2021, we purchased an aggregate of 184,344 , 133,752 and 109,384 , respectively, of our common shares from certain of our Trustees and officers and certain other current and former officers and employees of RMR in satisfaction of tax withholding and payment obligations in connection with the vesting of awards of our common shares. See Note 8 for further information regarding these purchases. A summary of cash distributions paid to common shareholders, for federal income tax purposes, are as follows for the periods presented: Annual Per Characterization of Distribution Share Total Ordinary Capital Return of Year Distribution Distribution Income Gain Capital 2023 $ 0.04 $ 9,595 — % — % 100.0 % 2022 $ 0.04 $ 9,568 — % 14.0 % 86.0 % 2021 $ 0.04 $ 9,540 — % 100.0 % — % F-18 Table of Contents On January 11, 2024, we declared a quarterly distribution to common shareholders of record on January 22, 2024 of $ 0.01 per share, or approximately $ 2,403 in aggregate. We paid this distribution on February 15, 2024, using cash on hand. Note 6. Senior Living Community Management Agreements Our managed senior living communities are operated by third parties pursuant to management agreements. Five Star, which is an operating division of AlerisLife, manages many of our SHOP communities, and we lease nearly all of our senior living communities managed by third party managers, to our TRSs. Management Arrangements with Five Star. On June 9, 2021, we and Five Star entered into an amended and restated master management agreement, or the Master Management Agreement, for the senior living communities that Five Star manages for us and interim management agreements for the senior living communities that we and Five Star agreed to transition to other third party managers. In addition, AlerisLife delivered to us an amended and restated guaranty agreement pursuant to which AlerisLife is continuing to guarantee the payment and performance of each of its applicable subsidiary’s obligations under the applicable management agreements. The principal changes to the management arrangements included: • that Five Star agreed to cooperate with us in transitioning 108 of our senior living communities with approximately 7,500 living units to other third party managers without our payment of any termination fee to Five Star; • that we no longer have the right to sell up to an additional $ 682,000 of senior living communities currently managed by Five Star and terminate Five Star's management of those communities without our payment of a fee to Five Star upon sale; • that Five Star is continuing to manage 119 of the 120 of our senior living communities that were included as part of the management arrangements (the management for one active adult community was terminated by mutual agreement effective October 31, 2022), and that the skilled nursing units in all of our continuing care retirement communities that Five Star is continuing to manage, which then included approximately 1,500 living units, were closed and are being evaluated and repositioned; • that beginning in 2025, we will have the right to terminate up to 10 % of the senior living communities that Five Star is continuing to manage, based on total revenues per year for failure to meet 80 % of a target earnings before interest, taxes, depreciation and amortization, or EBITDA, for the applicable period; • that the incentive fee that Five Star may earn in any calendar year for the senior living communities that Five Star is continuing to manage is no longer subject to a cap and that any senior living communities that are undergoing a major renovation or repositioning are excluded from the calculation of the incentive fee; • that RMR will oversee any major renovation or repositioning activities at the senior living communities that Five Star is continuing to manage; and • that the term of our management agreements with Five Star for our senior living communities that Five Star is continuing to manage was extended by two years to December 31, 2036. Pursuant to the Master Management Agreement, Five Star receives a management fee equal to 5 % of the gross revenues realized at the applicable senior living communities plus reimbursement for its direct costs and expenses related to such communities. Five Star may receive an annual incentive fee equal to 15 % of the amount by which the annual EBITDA of all communities on a combined basis exceeds the target EBITDA for all communities on a combined basis for such calendar year. The target EBITDA for those senior living communities on a combined basis is increased annually based on the greater of the annual increase of the consumer price index, or CPI, or 2 %, plus 6 % of any capital investments funded at the managed senior living communities on a combined basis in excess of the target capital investment. Unless otherwise agreed, the target capital investment increases annually based on the greater of the annual increase of CPI or 2 %. Any senior living communities that are undergoing a major renovation or repositioning are excluded from the calculation of the incentive fee. The Master Management Agreement expires in 2036, subject to Five Star's right to extend for two consecutive five year terms if Five Star achieves certain performance targets for the combined managed communities portfolio, unless earlier terminated. Pursuant to the Master Management Agreement, beginning in 2025, we have the right to terminate up to 10 % of the senior living communities that Five Star is continuing to manage, based on total revenues per year for failure to meet 80 % of a target EBITDA for the applicable period. F-19 Table of Contents In connection with ABP Trust’s acquisition of AlerisLife on March 20, 2023, we amended the Master Management Agreement to eliminate any change of control default or event of default provisions effective upon the consummation of the AlerisLife acquisition by ABP Trust. See Note 8 for further information regarding ABP Trust’s acquisition of AlerisLife. In 2021, we completed the transition of 107 of the 108 senior living communities, containing 7,340 living units, from Five Star to other third party managers. The remaining senior living community was closed in February 2022 and we are assessing opportunities to redevelop that property. We recorded $ 0 , $ 2,096 and $ 17,363 for the years ended December 31, 2023, 2022 and 2021, respectively, of costs that we incurred related to retention and other transition costs to acquisition and certain other transaction related costs in our consolidated statements of operations. Our Senior Living Communities Managed by Five Star. Five Star managed 119 , 119 and 120 of our senior living communities as of December 31, 2023, 2022 and 2021, respectively. We lease our senior living communities that are managed by Five Star to our TRSs, and Five Star manages these communities pursuant to the Master Management Agreement. Effective October 31, 2022, Five Star ceased managing an active adult community we own located in Plano, TX, and RMR assumed management of that community pursuant to our property management agreement with RMR. We paid Five Star a termination fee of $ 350 in connection with the termination of Five Star's management of this community. We incurred management fees payable to Five Star of $ 40,119 , $ 37,037 and $ 47,479 for the years ended December 31, 2023, 2022 and 2021, respectively. For the years ended December 31, 2023, 2022 and 2021, $ 37,436 , $ 33,737 and $ 43,864 , respectively, of the total management fees were expensed to property operating expenses in our consolidated statements of operations and $ 2,683 , $ 3,300 and $ 3,615 , respectively, were capitalized in our consolidated balance sheets. The amounts capitalized are being depreciated over the estimated useful lives of the related capital assets. In addition to providing management services to us, Five Star also provides certain other services to residents at some of the senior living communities it manages for us, such as rehabilitation services. At senior living communities Five Star manages for us where Five Star provides rehabilitation services on an outpatient basis, the residents, third party payers or government programs pay Five Star for those rehabilitation services. At senior living communities Five Star manages for us where Five Star provides both inpatient and outpatient rehabilitation services, we generally pay Five Star for those rehabilitation services and charges for these services are included in amounts charged to residents, third party payers or government programs. During 2023, Five Star closed all inpatient clinics and as such we do not expect to incur these fees to Five Star in the future. We incurred fees of $ 1,213 , $ 6,289 and $ 11,233 for the years ended December 31, 2023, 2022 and 2021, respectively, with respect to rehabilitation services Five Star provided at our senior living communities that are payable by us. These amounts are included in property operating expenses in our consolidated statements of operations. Since January 1, 2021, we sold certain senior living communities that were then managed by Five Star. We and Five Star terminated our management agreements for these senior living communities in connection with these sales. See Note 3 for further information regarding these sales. We lease to Five Star space at certain of our senior living communities, which it uses to provide certain outpatient rehabilitation and wellness services. Our Senior Living Communities Managed by Other Third Party Managers. As of December 31, 2023, 2022 and 2021, respectively, our other third party managers managed 113 , 111 and 107 of our senior living communities. The terms of the management agreements with the other third party managers are generally as follows: the other third party managers will receive a management fee equal to 5 % to 6 % of the gross revenues realized at the applicable senior living communities plus reimbursement for direct costs and expenses related to such communities. These agreements generally also provide for the other third party managers to earn a minimum base fee for a portion of the term of the agreement. Additionally, the other third party managers have the ability to earn incentive fees equal to 15 % to 25 % of the amount by which EBITDA of the applicable communities exceeds the target EBITDA for the applicable communities. The other third party managers can also earn a construction supervision fee ranging between 3 % and 5 % of construction costs. The initial terms of the management agreements with the other third party managers are generally five years , subject to automatic extensions of successive terms of two years each unless earlier terminated or timely notice of nonrenewal is delivered. The management agreements with the other third party managers also generally provide us with the right to terminate the management agreements for communities that do not earn 70 % to 80 % of the target EBITDA for such communities, after an agreed upon stabilized period. In December 2023, we notified one of our third party managers which manages certain of our communities located in Wisconsin and Illinois that we will be terminating our management agreement with respect to these communities. We expect to F-20 Table of Contents transition these communities during the first half of 2023 to another third party manager which we have an existing relationship with. We expect the terms of the management agreement for these communities to be generally consistent with the terms outlined above. We expect to pay a termination fee of approximately $ 1,000 in connection with this transition. We incurred management fees payable to our other third party managers of $ 21,863 , $ 20,739 and $ 6,239 for the years ended December 31, 2023, 2022 and 2021, respectively. These amounts are included in property operating expenses in our consolidated statements of operations. The following table presents residents fees and services revenue from all of our managed senior living communities disaggregated by the type of contract and payer: Year Ended December 31, Revenue from contracts with customers: 2023 2022 2021 Basic housing and support services $ 915,528 $ 806,500 $ 750,644 Medicare and Medicaid programs 89,613 82,106 98,273 Private pay and other third party payer SNF services 146,767 134,220 125,706 Total residents fees and services $ 1,151,908 $ 1,022,826 $ 974,623 Note 7. Business and Property Management Agreements with RMR We have no employees. The personnel and various services we require to operate our business are provided to us by RMR. We have two agreements with RMR to provide management services to us: (1) a business management agreement, which relates to our business generally; and (2) a property management agreement, which relates to the property level operations of many of our properties, including our medical office and life science properties, and major renovation or repositioning activities at our senior living communities that we may request RMR to manage from time to time. See Note 8 for further information regarding our relationship, agreements and transactions with RMR. Management Agreements with RMR. Our management agreements with RMR provide for an annual base management fee, an annual incentive management fee and property management and construction supervision fees, payable in cash, among other terms: • Base Management Fee . The annual base management fee payable to RMR by us for each applicable period is equal to the lesser of: ◦ the sum of (a) 0.5 % of the daily weighted average of the aggregate book value of our real estate assets owned by us or our subsidiaries as of October 12, 1999, or the Transferred Assets, plus (b) 0.7 % of the average aggregate historical cost of our real estate investments excluding the Transferred Assets up to $ 250,000 , plus (c) 0.5 % of the average aggregate historical cost of our real estate investments excluding the Transferred Assets exceeding $ 250,000 ; and ◦ the sum of (a) 0.7 % of the average closing price per share of our common shares on the stock exchange on which such shares are principally traded during such period, multiplied by the average number of our common shares outstanding during such period, plus the daily weighted average of the aggregate liquidation preference of each class of our preferred shares outstanding during such period, plus the daily weighted average of the aggregate principal amount of our consolidated indebtedness during such period, or, together, our Average Market Capitalization, up to $ 250,000 , plus (b) 0.5 % of our Average Market Capitalization exceeding $ 250,000 . The average aggregate historical cost of our real estate investments includes our consolidated assets invested, directly or indirectly, in equity interests in or loans secured by real estate and personal property owned in connection with such real estate (including acquisition related costs and costs which may be allocated to intangibles or are unallocated), all before reserves for depreciation, amortization, impairment charges or bad debts or other similar non-cash reserves. • Incentive Management Fee . The incentive management fee which may be earned by RMR for an annual period is calculated as follows: F-21 Table of Contents • An amount, subject to a cap, based on the value of our common shares outstanding, equal to 12.0 % of the product of: ◦ our equity market capitalization on the last trading day of the year immediately prior to the relevant three year measurement period, and ◦ the amount (expressed as a percentage) by which the total return per share, as defined in the business management agreement and further described below, of our common shareholders (i.e., share price appreciation plus dividends) exceeds the total shareholder return of the applicable market index, or the benchmark return per share, for the relevant measurement period. The MSCI U.S. REIT/Health Care REIT Index is the benchmark index for periods on or after August 1, 2021, and the SNL U.S. REIT Healthcare Index is the benchmark index for periods prior to August 1, 2021. For purposes of the total return per share of our common shareholders, share price appreciation for a measurement period is determined by subtracting (1) the closing price of our common shares on Nasdaq on the last trading day of the year immediately before the first year of the applicable measurement period, or the initial share price, from (2) the average closing price of our common shares on the 10 consecutive trading days having the highest average closing prices during the final 30 trading days in the last year of the measurement period. ◦ The calculation of the incentive management fee (including the determinations of our equity market capitalization, initial share price and the total return per share of our common shareholders) is subject to adjustments if we issue or repurchase our common shares, or if our common shares are forfeited, during the measurement period. ◦ No incentive management fee is payable by us unless our total return per share during the measurement period is positive. ◦ The measurement periods are three year periods ending with the year for which the incentive management fee is being calculated. ◦ If our total return per share exceeds 12.0 % per year in any measurement period, the benchmark return per share is adjusted to be the lesser of the total shareholder return of the applicable market index for such measurement period and 12.0 % per year, or the adjusted benchmark return per share. In instances where the adjusted benchmark return per share applies, the incentive management fee will be reduced if our total return per share is between 200 basis points and 500 basis points below the applicable market index in any year, by a low return factor, as defined in the business management agreement, and there will be no incentive management fee paid if, in these instances, our total return per share is more than 500 basis points below the applicable market index in any year, determined on a cumulative basis (i.e. between 200 basis points and 500 basis point per year multiplied by the number of years in the measurement period and below the applicable market index). ◦ The incentive management fee is subject to a cap. The cap is equal to the value of the number of our common shares which would, after issuance, represent 1.5 % of the number of our common shares then outstanding multiplied by the average closing price of our common shares during the 10 consecutive trading days having the highest average closing prices during the final 30 trading days of the relevant measurement period. ◦ Incentive management fees we paid to RMR for any period may be subject to “clawback” if our financial statements for that period are restated due to material non-compliance with any financial reporting requirements under the securities laws as a result of the bad faith, fraud, willful misconduct or gross negligence of RMR and the amount of the incentive management fee we paid was greater than the amount we would have paid based on the restated financial statements. Pursuant to our business management agreement with RMR, we recognized net business management fees of $ 13,965 ,$ 16,646 and $ 23,378 for the years ended December 31, 2023, 2022 and 2021, respectively. The net business management fees we recognized are included in general and administrative expenses in our consolidated statements of operations for these periods. The net business management fees we recognized for the years ended December 31, 2023, 2022 and 2021 reflect a reduction of $ 2,974 , for each of those years for the amortization of the liability we recorded in connection with our former investment in RMR Inc. F-22 Table of Contents We did not recognize an incentive management fee payable to RMR for the years ended December 31, 2023, 2022 or 2021. • Property Management and Construction Supervision Fees . The property management fees payable to RMR by us for each applicable period are equal to 3.0 % of gross collected rents and the construction supervision fees payable to RMR by us for each applicable period are equal to 5.0 % of construction costs. In connection with our entry into the Master Management Agreement, on June 9, 2021, we and RMR amended our property management agreement to, among other things, provide for RMR's oversight of any major capital projects and repositionings at our senior living communities, including our senior living communities which Five Star is continuing to manage, and that RMR receives the same fee previously paid to Five Star for such services, which is equal to 3.0 % of the cost of any such major capital project or repositioning. We recognized aggregate net property management and construction supervision fees of $ 8,886 , $ 10,329 and $ 12,504 for the years ended December 31, 2023, 2022 and 2021, respectively. The net property management and construction supervision fees we recognized for the years ended December 31, 2023, 2022 and 2021 reflect a reduction of $ 797 for each of those years for the amortization of the liability we recorded in connection with our former investment in RMR Inc., as further described in Note 8. For the years ended December 31, 2023, 2022 and 2021, $ 5,686 , $ 5,657 and $ 9,684 , respectively, of the total property management fees were expensed to property operating expenses in our consolidated statements of operations and $ 3,200 , $ 4,672 and $ 2,820 , respectively, were capitalized as building improvements in our consolidated balance sheets. The amounts capitalized are being depreciated over the estimated useful lives of the related capital assets. Expense Reimbursement . We are generally responsible for all our operating expenses, including certain expenses incurred or arranged by RMR on our behalf. We are generally not responsible for payment of RMR's employment, office or administrative expenses incurred to provide management services to us, except for the employment and related expenses of RMR's employees assigned to work exclusively or partly at our properties, our share of the wages, benefits and other related costs of RMR's centralized accounting personnel, our share of RMR's costs for providing our internal audit function, or as otherwise agreed. Our property level operating expenses are generally incorporated into the rents charged to our tenants, including certain payroll and related costs incurred by RMR. We reimbursed RMR $ 14,587 , $ 12,901 and $ 13,161 for these expenses and costs for the years ended December 31, 2023, 2022 and 2021, respectively. These amounts are included in property operating expenses or general and administrative expenses, as applicable, in our consolidated statements of operations for these periods. Term . Our management agreements with RMR have terms that end on December 31, 2043, and automatically extend on December 31st of each year for an additional year, so that the terms of our management agreements thereafter end on the 20th anniversary of the date of the extension. Termination Rights . We have the right to terminate one or both of our management agreements with RMR: (i) at any time on 60 days' written notice for convenience, (ii) immediately on written notice for cause, as defined therein, (iii) on written notice given within 60 days after the end of an applicable calendar year for a performance reason, as defined therein, and (iv) by written notice during the 12 months following a change of control of RMR, as defined therein. RMR has the right to terminate the management agreements for good reason, as defined therein. Termination Fee. If we terminate one or both of our management agreements with RMR for convenience, or if RMR terminates one or both of our management agreements for good reason, we have agreed to pay RMR a termination fee in an amount equal to the sum of the present values of the monthly future fees, as defined therein, for the terminated management agreement(s) for the term that was remaining prior to such termination, which, depending on the time of termination would be between 19 and 20 years. If we terminate one or both of our management agreements with RMR for a performance reason, we have agreed to pay RMR the termination fee calculated as described above, but assuming a 10 year term was remaining prior to the termination. We are not required to pay any termination fee if we terminate our management agreements with RMR for cause or as a result of a change of control of RMR. Transition Services. RMR has agreed to provide certain transition services to us for 120 days following an applicable termination by us or notice of termination by RMR, including cooperating with us and using commercially reasonable efforts to facilitate the orderly transfer of the management and real estate investment services provided under our business management agreement and to facilitate the orderly transfer of the management of the managed properties under our property management agreement, as applicable. Vendors . Pursuant to our management agreements with RMR, RMR may from time to time negotiate on our behalf with certain third party vendors and suppliers for the procurement of goods and services to us. As part of this arrangement, we F-23 Table of Contents may enter agreements with RMR and other companies to which RMR or its subsidiaries provide management services for the purpose of obtaining more favorable terms from such vendors and suppliers. Investment Opportunities . Under our business management agreement with RMR, we acknowledge that RMR may engage in other activities or businesses and act as the manager to any other person or entity (including other REITs) even though such person or entity has investment policies and objectives similar to ours and we are not entitled to preferential treatment in receiving information, recommendations and other services from RMR. Management Agreements between our Joint Ventures and RMR. We have two separate joint venture arrangements with third party institutional investors, the Seaport JV and the LSMD JV. RMR provides management services to both of these joint ventures. Our joint ventures are not our consolidated subsidiaries and, as a result, we are not obligated to pay management fees to RMR under our management agreements with RMR for the services it provides regarding the joint ventures. Prior to December 23, 2021, the Seaport JV was our consolidated subsidiary and, as such, we were previously obligated to pay management fees to RMR under our management agreements with RMR for the services it provided that joint venture; however, that joint venture paid management fees directly to RMR, and those fees were credited against the fees payable by us to RMR. In addition, we wholly owned the 10 medical office and life science properties included in the LSMD JV until the contribution of these properties to the LSMD JV in January 2022, and we paid management fees to RMR for the management services it provided to us for those properties until the contribution of those properties to the LSMD JV. Note 8. Related Person Transactions We have relationships and historical and continuing transactions with AlerisLife (including Five Star), RMR, RMR Inc. and others related to them, including other companies to which RMR or its subsidiaries provide management services and some of which have trustees, directors or officers who are also our Trustees or officers. RMR Inc. is the managing member of RMR. The Chair of our Board of Trustees and one of our Managing Trustees, Adam D. Portnoy, is the sole trustee, an officer and the controlling shareholder of ABP Trust, which is the controlling shareholder of RMR Inc., chair of the board of directors, a managing director and the president and chief executive officer of RMR Inc., an officer and employee of RMR and, until the acquisition of AlerisLife by ABP Trust on March 20, 2023, the chair of the board of directors and a managing director of AlerisLife, and currently a director of AlerisLife. Jennifer F. Francis, our other Managing Trustee, our former President and Chief Executive Officer and a former managing director of AlerisLife served as an officer of RMR until December 31, 2023 and will remain an employee of RMR until her retirement on July 1, 2024. Our current President and Chief Executive Officer and our Chief Financial Officer and Treasurer are also employees and officers of RMR. Jennifer B. Clark, our Secretary and former Managing Trustee, also serves as a managing director and the executive vice president, general counsel and secretary of RMR Inc., an officer and employee of RMR, an officer of ABP Trust and secretary of AlerisLife and, until March 20, 2023, a managing director of AlerisLife. Certain of AlerisLife's officers are officers and employees of RMR. Some of our Independent Trustees also serve as independent trustees of other public companies to which RMR or its subsidiaries provide management services. Adam D. Portnoy serves as the chair of the board and as a managing trustee of these companies. Other officers of RMR, including Ms. Clark and certain of our officers, serve as managing trustees, or officers of certain of these companies. In addition, officers of RMR and RMR Inc. serve as our officers and officers of other companies to which RMR or its subsidiaries provide management services. As of December 31, 2023, ABP Trust and Adam D. Portnoy owned 9.8 % of our outstanding common shares. AlerisLife. Until March 20, 2023, we were AlerisLife's largest stockholder, owning approximately 31.9 % of AlerisLife's outstanding common shares, and ABP Acquisition LLC, or ABP Acquisition, a subsidiary of ABP Trust, together with ABP Trust, owned approximately 6.1 % of AlerisLife's outstanding common shares. Five Star is an operating division of AlerisLife. Five Star manages certain of the senior living communities we own pursuant to the Master Management Agreement. RMR provides management services to both us and AlerisLife. AlerisLife participates in our property insurance program for the senior living communities AlerisLife owns. The premiums AlerisLife pays for this coverage are allocated pursuant to a formula based on the profiles of the properties included in the program. See Note 6 for further information regarding our relationships, agreements and transactions with AlerisLife (including Five Star) and Note 10 for further information regarding our investment in AlerisLife. On February 2, 2023, AlerisLife entered into an Agreement and Plan of Merger, or the ALR Merger Agreement, with certain subsidiaries of ABP Trust, pursuant to which ABP Trust acquired all of the publicly held outstanding AlerisLife common shares at a price of $ 1.31 per share by tender offer. In connection with the ALR Merger Agreement, on February 2, 2023, we agreed to tender all the AlerisLife common shares that we and our subsidiary then owned into the tender offer at the Tender Offer Price, subject to the right, but not the obligation, to purchase, on or before December 31, 2023, AlerisLife common shares at the Tender Offer Price, and otherwise F-24 Table of Contents pursuant to a stockholders agreement to be entered into at the time of any such purchase. On December 20, 2023, we and ABP Trust extended our right to purchase AlerisLife common shares until March 31, 2024. On February 16, 2024, we exercised this purchase right and acquired, together with our applicable TRS, approximately 34.0 % of the currently outstanding AlerisLife common shares from ABP Trust at the Tender Offer Price, for a total purchase price of $ 14,890 , and we, our applicable TRS, ABP Trust and AlerisLife entered into a stockholders agreement. Following this acquisition, ABP Trust owns the remaining approximate 66.0 % of AlerisLife. See Note 6 for further information regarding our relationships, agreements and transactions with AlerisLife (including Five Star) and Note 10 for further information regarding our investment in AlerisLife. Termination of the Merger Agreement with Office Properties Income Trust. As previously disclosed, on April 11, 2023, we and Office Properties Income Trust, or OPI, entered into an Agreement and Plan of Merger, or the Merger Agreement, pursuant to which we and OPI agreed that we would merge with and into OPI, with OPI as the surviving entity in the merger. On September 1, 2023, we and OPI mutually terminated the Merger Agreement, effective September 1, 2023. Neither we nor OPI were required to pay any termination fee as a result of the mutual decision to terminate the Merger Agreement, and we and OPI bore our and its respective costs and expenses related to the Merger Agreement in accordance with the terms of the Merger Agreement. We recorded $ 9,900 of expenses during the year ended December 31, 2023 related to the terminated merger with OPI, which is included in acquisition and certain other transaction related costs in our consolidated statement of operations. Our Manager, RMR. We have two agreements with RMR to provide management services to us: (1) a business management agreement, which relates to our business generally; and (2) a property management agreement, which relates to the property level operations of many of our properties, including our medical office and life science properties, and major renovation or repositioning activities at our senior living communities that we may request RMR to manage from time to time. See Note 7 for further information regarding our management agreements with RMR. Our Joint Ventures . In connection with our entering into the LSMD JV in January 2022, we paid mortgage escrow amounts and closing costs that were payable by that joint venture. The remaining costs totaled $ 6,080 as of December 31, 2023 and are included in other assets, net, in our consolidated balance sheet. RMR provides management services to each of the Seaport JV and the LSMD JV. See Note 7 for further information regarding those management agreements with RMR. Leases with RMR . We lease office space to RMR in certain of our properties for RMR's property management offices. We recognized rental income from RMR for leased office space of $ 196 , $ 303 and $ 190 for the years ended December 31, 2023, 2022 and 2021, respectively. Our office space leases with RMR are terminable by RMR if our management agreements with RMR are terminated. Share Awards to RMR Employees. As described in Note 5, we award shares to our officers and other employees of RMR annually. Generally, one fifth of these awards vest on the grant date and one fifth vests on each of the next four anniversaries of the grant dates. In certain instances, we may accelerate the vesting of an award, such as in connection with the award holder's retirement as an officer of us or an officer or employee of RMR. These awards to RMR employees are in addition to the share awards to our Managing Trustees, as Trustee compensation, and the fees we paid to RMR. See Note 5 for information regarding our share awards and activity as well as certain share purchases we made in connection with share award recipients satisfying tax withholding obligation on vesting share awards. Note 9. Indebtedness At December 31, 2023 and 2022, our outstanding indebtedness consisted of the following: Principal Balance as of December 31, Floating Rate Debt Maturity 2023 2022 Credit facility (1) N/A $ — $ 700,000 Total floating rate debt $ — $ 700,000 (1) In December 2023, we repaid the remaining principal balance of our then credit facility which had an original maturity date of January 2024 and terminated the agreement. F-25 Table of Contents December 31, 2023 December 31, 2022 Senior Unsecured Notes (1) Coupon Maturity Face Amount Unamortized Discount Face Amount Unamortized Discount Senior unsecured notes 4.750 % May 2024 $ — — $ 250,000 105 Senior unsecured notes (2) 9.750 % June 2025 500,000 — 500,000 — Senior unsecured notes 4.750 % February 2028 500,000 3,483 500,000 4,325 Senior unsecured notes (2) 4.375 % March 2031 500,000 — 500,000 — Senior unsecured notes 5.625 % August 2042 350,000 — 350,000 — Senior unsecured notes 6.250 % February 2046 250,000 — 250,000 — Total senior unsecured notes $ 2,100,000 $ 3,483 $ 2,350,000 $ 4,430 (1) As of December 31, 2023 and 2022, the unamortized net debt issuance costs on certain of these notes were $ 23,899 and $ 27,870 , respectively. (2) These notes are fully and unconditionally guaranteed, on a joint, several and unsecured basis, by all of our subsidiaries, except for certain excluded subsidiaries. The notes and the guarantees are effectively subordinated to all of our and the subsidiary guarantors' secured indebtedness, respectively, to the extent of the value of the collateral securing such secured indebtedness, and are structurally subordinated to all indebtedness and other liabilities and any preferred equity of any of our subsidiaries that do not guarantee the notes. Principal Balance as of December 31, Number of Properties as Collateral Net Book Value of Collateral as of December 31, Secured and Other Debt 2023 (1) 2022 (1) Interest Rate Maturity At December 31, 2023 2023 2022 Mortgage note $ — $ 14,732 6.64 % June 2023 1 $ — $ 24,645 Senior secured notes (2)(3)(4) 940,534 — 0.00 % January 2026 95 1,075,889 — Mortgage note 9,109 9,997 6.44 % July 2043 1 13,589 13,234 Finance Leases 3,911 5,339 7.70 % April 2026 2 22,765 20,624 Total secured $ 953,554 $ 30,068 99 $ 1,112,243 $ 58,503 (1) The principal balances are the amounts stated in the contracts. In accordance with GAAP, our carrying values and recorded interest expense may be different because of market conditions at the time we assumed certain of these debts. As of December 31, 2023 and 2022, the unamortized net premiums and debt issuance costs on certain of these mortgages were $ 0 and $( 109 ), respectively. (2) These notes are fully and unconditionally guaranteed, on a joint, several and senior secured basis by certain of our subsidiaries that own 95 properties, or the Collateral Guarantors, and on a joint, several and unsecured basis, by all our subsidiaries other than the Collateral Guarantors, except for certain excluded subsidiaries, or the Non-Collateral Guarantors. These notes and the guarantees provided by the Collateral Guarantors are secured by a first priority lien and security interest on each of the collateral properties and 100 % of the equity interests in each of the Collateral Guarantors. The guarantees provided by the Non-Collateral Guarantors are effectively subordinated to all of the subsidiary guarantors' secured indebtedness to the extent of the value of the collateral securing such secured indebtedness, and the notes and the guarantees are structurally subordinated to all indebtedness and other liabilities and any preferred equity of any of our subsidiaries that do not guarantee the notes. (3) These notes require no cash interest to accrue prior to maturity and will accrete at a rate of 11.25 % per annum compounded semiannually on January 15 and July 15 of each year, such that the accreted value will equal the principal amount at maturity. These notes have an unamortized discount balance of $ 187,813 and unamortized net debt issuance costs of $ 21,510 as of December 31, 2023, respectively. (4) We have a one-time option to extend the maturity date of these notes by one year , to January 15, 2027, subject to satisfaction of certain conditions and payment of an extension fee. If we exercise this option, interest payments will be due semiannually during the extension period at an initial interest rate of 11.25 % with increases of 50 basis points every 90 days these notes remain outstanding. Until its repayment in full on December 21, 2023, we had a $ 450,000 credit facility that was fully drawn. At December 21, 2023, our former credit facility required interest to be paid on borrowings at the annual rate of 8.4 %, plus a facility fee of $ 338 per quarter. As of December 31, 2023, our former credit facility is fully paid off and our credit agreement is terminated. The weighted average annual interest rates for borrowings under our credit facility were 7.9 %, 4.5 % and 2.9 % for the years ended December 31, 2023, 2022 and 2021, respectively. F-26 Table of Contents As of December 31, 2023, all $ 940,534 of our senior secured notes due 2026 are fully and unconditionally guaranteed, on a joint, several and senior secured basis by the Collateral Guarantors and on a joint, several and unsecured basis by the Non-Collateral Guarantors, and all $ 500,000 of our 9.75 % senior notes due 2025 and all $ 500,000 of our 4.375 % senior notes due 2031 were fully and unconditionally guaranteed, on a joint, several and unsecured basis, by all of our subsidiaries, except for certain excluded subsidiaries. The notes and the guarantees (other than our senior secured notes and the guarantees provided by the Collateral Guarantors) are effectively subordinated to all of our and the subsidiary guarantors' secured indebtedness, respectively, to the extent of the value of the collateral securing such secured indebtedness, and the notes and the guarantees are structurally subordinated to all indebtedness and other liabilities and any preferred equity of any of our subsidiaries that do not guarantee the notes. Our remaining $ 1,100,000 of senior unsecured notes do not have the benefit of any guarantees as of December 31, 2023. In February 2022, we and our lenders amended our credit agreement. Pursuant to the amendment, among other things, the facility commitments were reduced from $ 800,000 to $ 700,000 following our repayment of $ 100,000 . In February 2022, we exercised our option to extend the maturity date of our former credit facility by one year to January 2024. In January 2023, pursuant to our credit agreement, we repaid $ 113,627 in outstanding borrowings under our former credit facility and the facility commitments were reduced to $ 586,373 . In February 2023, we and our lenders further amended our credit agreement. Pursuant to the amendment the facility commitments were reduced from $ 586,373 to $ 450,000 following our repayment of $ 136,373 in then outstanding borrowings, and as a result of the reduction in commitments, we recorded a loss on modification or early extinguishment of debt of $ 1,075 for the year ended December 31, 2023. In February 2021, we issued $ 500,000 aggregate principal amount of our 4.375 % senior notes due 2031 in an underwritten public offering raising net proceeds of $ 491,357 , after deducting estimated offering expenses and underwriters' discounts. These notes are guaranteed by all of our subsidiaries, except for certain excluded subsidiaries, and require semi-annual interest payments through maturity. We used the net proceeds from this offering to prepay in full in February 2021 our $ 200,000 term loan which was scheduled to mature in September 2022. The weighted average interest rate under our $ 200,000 term loan was 2.9 % for the period from January 1, 2021 to February 7, 2021. As a result of the prepayment of our $ 200,000 term loan, we recorded a loss on early extinguishment of debt of $ 1,477 for the year ended December 31, 2021. In June 2021, we used the remaining net proceeds from this offering and cash on hand to redeem all of our outstanding 6.75 % senior notes due 2021 for a redemption price equal to the principal amount of $ 300,000 plus accrued and unpaid interest of $ 10,125 , when these notes became redeemable with no prepayment premium. In connection with this redemption, we recorded a loss on early extinguishment of debt of $ 370 for the year ended December 31, 2021. In April 2022, we prepaid a mortgage note secured by one of our medical office properties with an outstanding principal balance of approximately $ 10,934 , a maturity date in July 2022 and an annual interest rate of 6.28 %, using cash on hand. In June 2022, we redeemed $ 500,000 of our outstanding 9.75 % senior notes due 2025 for a redemption price equal to 104.875 % of the $ 500,000 principal amount of the notes being redeemed plus accrued and unpaid interest of $ 1,083 , using restricted cash on hand. As a result of this redemption, we recorded a loss on early extinguishment of debt of $ 29,576 for the year ended December 31, 2022. In July 2022, we prepaid a mortgage note secured by two of our senior living communities with an outstanding principal balance of approximately $ 15,273 , a maturity date in October 2022 and an annual interest rate of 5.75 %, using cash on hand. In October 2022, we repaid at maturity a mortgage note secured by one of our life science properties with an outstanding principal balance of approximately $ 10,287 and an annual interest rate of 4.85 %, using cash on hand. In April 2023, we prepaid a mortgage note secured by one of our senior living communities with an outstanding principal balance of approximately $ 14,565 , a maturity date in June 2023 and an annual interest rate of 6.64 % using cash on hand. In December 2023, we issued $ 940,534 in aggregate principal amount at maturity of our senior secured notes due 2026 in a private offering, raising net proceeds of $ 730,359 , after deducting initial purchaser discounts and estimated offering costs. These notes are fully and unconditionally guaranteed, on a joint, several and senior secured basis, by the Collateral Guarantors, and on a joint, several and unsecured basis, by the Non-Collateral Guarantors. These notes and the guarantees provided by the Collateral Guarantors are secured by a first priority lien and security interest on each of the collateral properties and 100 % of the equity interests in each of the Collateral Guarantors. These notes require no cash interest payments to accrue prior to maturity. The accreted value of these secured notes will increase at a rate of 11.25 % per annum compounded semiannually on F-27 Table of Contents January 15 and July 15 of each year. We used the net proceeds from this offering to repay in full and terminate our then $ 450,000 secured credit facility and to redeem all $ 250,000 of our outstanding 4.750 % senior notes, which were scheduled to mature in January 2024 and May 2024, respectively. As a result of the prepayment in full of our credit facility and redemption of our 4.750 % senior notes, we recorded a loss on modification or early extinguishment of debt of $ 314 and $ 1,079 for the year ended December 31, 2023, respectively. Interest on our senior unsecured notes are payable either semi-annually or quarterly in arrears; however, no principal repayments are due until maturity. No interest is payable on our senior secured notes with the full principal amount due at maturity. Required monthly payments on our mortgages include principal and interest. Payments under our finance leases are due monthly. We include amortization of finance lease assets in depreciation and amortization expense. Our senior notes indentures and their supplements provide for acceleration of payment of all amounts outstanding upon the occurrence and continuation of certain events of default. Our senior notes indentures and their supplements also contain covenants that restrict our ability to incur debts, including debts secured by mortgages on our properties, in excess of calculated amounts and require us to maintain various financial ratios. Required principal payments on our outstanding debt as of December 31, 2023, were as follows: Year Principal Payment 2024 $ 1,811 2025 501,980 2026 941,422 2027 291 2028 500,310 Thereafter 1,107,740 (1) (1) The carrying value of our total debt outstanding as of December 31, 2023, including unamortized debt issuance costs, premiums and discounts was $ 2,816,849 . Note 10. Fair Value of Assets and Liabilities The following table presents certain of our assets that are measured at fair value at December 31, 2023 and 2022, categorized by the level of inputs as defined in the fair value hierarchy under GAAP, used in the valuation of each asset. As of December 31, 2023 As of December 31, 2022 Description Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value Recurring Fair Value Measurements Assets: Investment in AlerisLife (Level 1) (1) $ — $ — $ 5,880 $ 5,880 Investment in unconsolidated joint venture (Level 3) (2) $ 85,699 $ 85,699 $ 104,697 $ 104,697 Investment in unconsolidated joint venture (Level 3) (3) $ 44,217 $ 44,217 $ 50,780 $ 50,780 (1) On February 2, 2023, in connection with the proposed acquisition of AlerisLife by a subsidiary of ABP Trust, which is the controlling shareholder of RMR Inc., we agreed to tender all of the 10,691,658 AlerisLife common shares we owned at a price of $ 1.31 per share, and the acquisition was completed on March 20, 2023. Prior to March 20, 2023, these AlerisLife common shares were included in investments in equity securities in our consolidated balance sheets and were reported at fair value, which was based upon quoted market prices on Nasdaq (Level 1 inputs). During the years ended December 31, 2023 and 2022, we recorded unrealized gains (losses) of $ 8,126 and $ 25,660 , respectively, which are included in gains and losses on equity securities, net in our consolidated statements of operations, to adjust the carrying value of our former investment in AlerisLife common shares to their fair value. See Notes 6 and 8 for further information about our investment in AlerisLife. (2) The 10 % equity interest we own in the Seaport JV is included in investments in unconsolidated joint ventures in our consolidated balance sheet, and is reported at fair value, which is based on significant unobservable inputs (Level 3 inputs). The significant unobservable inputs used in the fair value analysis are a discount rate of 8.00 %, an exit F-28 Table of Contents capitalization rate of 6.00 %, a holding period of 10 years and market rents. The assumptions made in the fair value analysis are based on the location, type and nature of the property, and current and anticipated market conditions, which are derived from appraisers. See Note 3 for further information regarding this joint venture. (3) The 20 % equity interest we own in the LSMD JV is included in investments in unconsolidated joint ventures in our consolidated balance sheet, and is reported at fair value, which is based on significant unobservable inputs (Level 3 inputs). The significant unobservable inputs used in the fair value analysis are discount rates of between 6.25 % and 8.00 %, exit capitalization rates of between 4.75 % and 7.00 %, holding periods of 10 years and market rents. The assumptions we made in the fair value analysis are based on the location, type and nature of each property, and current and anticipated market conditions, which are derived from appraisers. See Note 3 for further information regarding this joint venture. In addition to the assets described in the table above, our financial instruments at December 31, 2023 and December 31, 2022 included cash and cash equivalents, restricted cash, certain other assets, our former credit facility, senior unsecured notes, secured debt and finance leases and certain other unsecured obligations and liabilities. The fair values of these financial instruments approximated their carrying values in our consolidated financial statements as of such dates, except as follows: As of December 31, 2023 As of December 31, 2022 Description Carrying Amount (1) Estimated Fair Value Carrying Amount (1) Estimated Fair Value Senior unsecured notes, 4.750 % coupon rate, due 2024 $ — $ — $ 249,628 $ 211,250 Senior unsecured notes, 9.750 % coupon rate, due 2025 497,454 490,750 495,710 478,985 Senior secured notes, zero coupon rate, due 2026 731,211 771,981 — — Senior unsecured notes, 4.750 % coupon rate, due 2028 494,746 384,110 493,473 284,375 Senior unsecured notes, 4.375 % coupon rate, due 2031 493,845 375,000 492,986 317,130 Senior unsecured notes, 5.625 % coupon rate, due 2042 342,946 211,400 342,565 151,200 Senior unsecured notes, 6.250 % coupon rate, due 2046 243,627 154,000 243,338 115,300 Secured debts (2) 13,020 12,284 30,177 28,275 $ 2,816,849 $ 2,399,525 $ 2,347,877 $ 1,586,515 (1) Includes unamortized net debt issuance costs, premiums and discounts. (2) We assumed certain of these secured debts in connection with our acquisition of certain properties. We recorded the assumed mortgage notes at estimated fair value on the date of acquisition and we are amortizing the fair value adjustments, if any, to interest expense over the respective terms of the mortgage notes to adjust interest expense to the estimated market interest rates as of the date of acquisition. We estimated the fair values of our two issuances of senior unsecured notes due 2042 and 2046 based on the closing price on Nasdaq (Level 1 inputs as defined in the fair value hierarchy under GAAP) as of December 31, 2023 and 2022. We estimated the fair values of our four issuances of senior unsecured notes due 2024, 2025, 2028 and 2031 and our senior secured notes due 2026 using an average of the bid and ask price on Nasdaq on or about December 31, 2023 and 2022 (Level 2 inputs as defined in the fair value hierarchy under GAAP). We estimated the fair values of our secured debts by using discounted cash flows analyses and currently prevailing market terms as of the measurement date (Level 3 inputs as defined in the fair value hierarchy under GAAP). Because Level 3 inputs are unobservable, our estimated fair values may differ materially from the actual fair values. Note 11. Noncontrolling Interest In March 2017, we entered into the Seaport JV. The investor owned a 45 % equity interest in the joint venture, and we owned the remaining 55 % equity interest in the joint venture. We determined that, while we owned a 55 % equity interest in this joint venture, this joint venture was a VIE and that we controlled the activities that most significantly impacted the economic performance of this entity; we therefore consolidated the results of this joint venture in our financial statements. In December 2021, we sold an additional 35 % equity interest in the Seaport JV to another third party institutional investor. After giving effect to the sale, we owned a 20 % equity interest in this joint venture but determined that we are no longer the primary beneficiary. Effective as of the date of the sale, we deconsolidated these properties and accounted for this joint venture using the equity method of accounting under the fair value option. In June 2022, we sold an additional 10 % equity interest from our then remaining 20 % equity interest in this joint venture to an existing joint venture investor and continue to account for this joint venture using the equity method of accounting under the fair value option. The portion of the joint venture's net income and comprehensive income not attributable to us, or $ 5,411 for the year ended December 31, 2021, is reported as a F-29 Table of Contents noncontrolling interest in our consolidated statements of operations. This joint venture made aggregate cash distributions to the other joint venture investor of $ 22,348 for the year ended December 31, 2021, which are reflected as a decrease in total equity attributable to noncontrolling interest in our consolidated statements of shareholders' equity. Note 12. Segment Reporting We operate in, and report financial information for, the following two segments: Office Portfolio and SHOP. We aggregate the operating results of our properties in these two reporting segments based on their similar operating and economic characteristics. Our Office Portfolio segment consists of medical office properties leased to medical providers and other medical related businesses, as well as life science properties leased to biotech laboratories and other similar tenants. Our SHOP segment consists of managed senior living communities that provide short term and long term residential living and, in some instances, care and other services for residents where we pay fees to managers to operate the communities on our behalf. We also report “non-segment” operations, which consists of triple net leased senior living communities and wellness centers that are leased to third party operators from which we receive rents, which we do not consider to be sufficiently material to constitute a separate reporting segment, and any other income or expenses that are not attributable to a specific reporting segment. For the Year Ended December 31, 2023 Office Portfolio SHOP Non-Segment Consolidated Revenues: Rental income $ 220,530 $ — $ 37,870 $ 258,400 Residents fees and services — 1,151,908 — 1,151,908 Total revenues 220,530 1,151,908 37,870 1,410,308 Expenses: Property operating expenses 97,964 1,075,091 1,096 1,174,151 Depreciation and amortization 98,205 175,926 9,952 284,083 General and administrative — — 26,131 26,131 Acquisition and certain other transaction related costs — — 10,853 10,853 Impairment of assets 14,034 4,346 — 18,380 Total expenses 210,203 1,255,363 48,032 1,513,598 (Loss) gain on sale of properties ( 1,600 ) 2,805 — 1,205 Gains on equity securities, net — — 8,126 8,126 Interest and other income — 1,581 13,955 15,536 Interest expense ( 449 ) ( 551 ) ( 190,775 ) ( 191,775 ) Loss on modification or early extinguishment of debt — — ( 2,468 ) ( 2,468 ) Income (loss) from continuing operations before income tax expense and equity in net losses of investees 8,278 ( 99,620 ) ( 181,324 ) ( 272,666 ) Income tax expense — — ( 445 ) ( 445 ) Equity in net losses of investees ( 20,461 ) — — ( 20,461 ) Net loss $ ( 12,183 ) $ ( 99,620 ) $ ( 181,769 ) $ ( 293,572 ) As of December 31, 2023 Office Portfolio SHOP Non-Segment Consolidated Total assets $ 1,866,422 $ 3,134,978 $ 444,736 $ 5,446,136 F-30 Table of Contents For the Year Ended December 31, 2022 Office Portfolio SHOP Non-Segment Consolidated Revenues: Rental income $ 222,390 $ — $ 38,350 $ 260,740 Residents fees and services — 1,022,826 — 1,022,826 Total revenues 222,390 1,022,826 38,350 1,283,566 Expenses: Property operating expenses 94,299 1,014,100 671 1,109,070 Depreciation and amortization 76,007 151,930 11,343 239,280 General and administrative — — 26,435 26,435 Acquisition and certain other transaction related costs — — 2,605 2,605 Total expenses 170,306 1,166,030 41,054 1,377,390 Gain on sale of properties 321,040 822 — 321,862 Losses on equity securities, net — — ( 25,660 ) ( 25,660 ) Interest and other income — 4,327 11,602 15,929 Interest expense ( 913 ) ( 1,534 ) ( 206,936 ) ( 209,383 ) Gain (loss) on modification or early extinguishment of debt 16 — ( 30,059 ) ( 30,043 ) Income (loss) from continuing operations before income tax expense and equity in net earnings of investees 372,227 ( 139,589 ) ( 253,757 ) ( 21,119 ) Income tax expense — — ( 710 ) ( 710 ) Equity in net earnings of investees 6,055 — — 6,055 Net income (loss) $ 378,282 $ ( 139,589 ) $ ( 254,467 ) $ ( 15,774 ) As of December 31, 2022 Office Portfolio SHOP Non-Segment Consolidated Total assets $ 1,967,244 $ 3,147,785 $ 887,064 $ 6,002,093 F-31 Table of Contents For the Year Ended December 31, 2021 Office Portfolio SHOP Non-Segment Consolidated Revenues: Rental income $ 367,597 $ — $ 40,992 $ 408,589 Residents fees and services — 974,623 — 974,623 Total revenues 367,597 974,623 40,992 1,383,212 Expenses: Property operating expenses 127,313 964,499 — 1,091,812 Depreciation and amortization 127,632 132,044 11,455 271,131 General and administrative — — 34,087 34,087 Acquisition and certain other transaction related costs — — 17,506 17,506 Impairment of assets — ( 174 ) — ( 174 ) Total expenses 254,945 1,096,369 63,048 1,414,362 Gain on sale of properties 492,072 200 — 492,272 Losses on equity securities, net — — ( 42,232 ) ( 42,232 ) Interest and other income — 19,554 1,081 20,635 Interest expense ( 23,477 ) ( 2,089 ) ( 230,193 ) ( 255,759 ) Loss on modification or early extinguishment of debt — — ( 2,410 ) ( 2,410 ) Income (loss) before income tax expense 581,247 ( 104,081 ) ( 295,810 ) 181,356 Income tax expense — — ( 1,430 ) ( 1,430 ) Net income (loss) 581,247 ( 104,081 ) ( 297,240 ) 179,926 Net income attributable to noncontrolling interest ( 5,411 ) — — ( 5,411 ) Net income (loss) attributable to common shareholders $ 575,836 $ ( 104,081 ) $ ( 297,240 ) $ 174,515 As of December 31, 2021 Office Portfolio SHOP Non-Segment Consolidated Total assets $ 2,282,652 $ 2,995,819 $ 1,345,043 $ 6,623,514 Note 13. Income Taxes Our provision for income taxes consists of the following: For the Year Ended December 31, 2023 2022 2021 Current: Federal $ ( 168 ) $ — $ 200 State 613 710 1,230 445 710 1,430 Deferred: Federal — — — State — — — — — — Income tax provision $ 445 $ 710 $ 1,430 F-32 Table of Contents A reconciliation of our effective tax rate and the U.S. federal statutory income tax rate is as follows: For the Year Ended December 31, 2023 2022 2021 Taxes at statutory U.S. federal income tax rate 21.0 % 21.0 % 21.0 % Nontaxable income ( 21.0 ) % ( 21.0 ) % ( 21.0 ) % Federal excise tax 0.1 % — % 0.1 % State and local income taxes, net of federal tax benefit ( 0.2 ) % ( 4.5 ) % 0.8 % Effective tax rate ( 0.1 ) % ( 4.5 ) % 0.9 % Deferred income tax balances reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities in our consolidated balance sheets and the amounts used for income tax purposes and are stated at enacted tax rates expected to be in effect when taxes are actually paid or recovered. Significant components of our deferred tax assets and liabilities were as follows: For the Year Ended December 31, 2023 2022 Deferred tax assets: Deferred income $ 1,849 $ 3,277 Fair market value adjustment — 6,556 Other 1,196 1,010 Tax loss carryforwards 83,707 60,188 86,752 71,031 Valuation allowance ( 86,752 ) ( 71,031 ) — — Net deferred income taxes $ — $ — Because of our TRSs' history of losses, we are not able to conclude that it is more likely than not we will realize the future benefit of our deferred tax assets; thus we have provided a 100 % valuation allowance as of December 31, 2023 and 2022. If and when we believe it is more likely than not that we will recover our deferred tax assets, we will reverse the valuation allowance as an income tax benefit in our consolidated statements of operations. As of December 31, 2023, our consolidated TRSs had net operating loss carry forwards for federal income tax purposes of approximately $ 316,314 , which do not expire. As of December 31, 2023, we, excluding our subsidiaries, had net operating loss carry forwards for federal income tax purposes of approximately $ 403,477 , which do not expire. In the normal course of business, income tax authorities in various income tax jurisdictions conduct routine audits of our income tax returns filed in prior years. Income tax years subsequent to 2019 may be open to examination in some of the income tax jurisdictions in which we operate. Note 14. Weighted Average Common Shares (share amounts in thousands) We calculate basic earnings per common share using the two class method. We calculate diluted earnings per share using the more dilutive of the two class method or the treasury stock method. Unvested share awards and other potentially dilutive common shares, together with the related impact on earnings, are considered when calculating diluted earnings per share. F-33 Table of Contents DIVERSIFIED HEALTHCARE TRUST SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION DECEMBER 31, 2023 (dollars in thousands) Initial Cost to Company Cost at December 31, 2023 Address City State Encumbrances (1) Land Buildings, Improvements & Equipment Cost Capitalized Subsequent to Acquisition Impairment Cost Basis Adjustment (2) Land Buildings, Improvements & Equipment Total (3) Accumulated Depreciation (4) Date Acquired Original Construction Date 2184 Parkway Lake Drive Birmingham AL $ — $ 580 $ 5,980 $ 2,838 $ — $ — $ 580 $ 8,818 $ 9,398 $ 3,209 8/1/2008 2001 2634 Valleydale Road Birmingham AL — 600 7,574 2,988 — ( 83 ) 1,559 9,520 11,079 3,526 8/1/2008 2000 2021 Dahlke Drive NE Cullman AL — 287 3,415 1,015 — ( 301 ) 287 4,129 4,416 1,857 11/19/2004 1998 101 Tulip Lane Dothan AL — 3,543 14,619 2,825 — ( 80 ) 3,543 17,364 20,907 3,331 12/27/2017 2000 49 Hughes Road Madison AL — 334 3,981 1,377 — ( 243 ) 334 5,115 5,449 2,292 11/19/2004 1998 200 Terrace Lane Priceville AL — 1,300 9,447 2,919 — ( 202 ) 1,365 12,099 13,464 3,566 2/1/2012 2006 413 Cox Boulevard Sheffield AL — 394 4,684 2,151 — ( 294 ) 394 6,541 6,935 2,612 11/19/2004 1998 2435 Columbiana Road Vestavia Hills AL — 843 23,472 5,010 — ( 379 ) 902 28,044 28,946 7,069 7/12/2016 1991 4461 N Crossover Road Fayetteville AR — 733 10,432 1,572 — — 733 12,004 12,737 2,842 5/1/2015 2011 4210 S Caraway Road Jonesboro AR — 653 9,515 733 — — 653 10,248 10,901 2,601 5/1/2015 2008 672 Jones Road Springdale AR — 572 9,364 2,427 — — 572 11,791 12,363 2,855 5/1/2015 2007 13840 North Desert Harbor Drive Peoria AZ — 2,687 15,843 11,561 — ( 2,481 ) 2,693 24,917 27,610 11,840 1/11/2002 1990 11209 N. Tatum Boulevard Phoenix AZ — 1,380 6,349 6,927 — ( 711 ) 1,586 12,359 13,945 4,143 9/30/2011 1987 2444 West Las Palmaritas Drive Phoenix AZ — 3,820 6,669 3,459 — ( 170 ) 3,831 9,947 13,778 4,299 12/22/2010 1982 4121 East Cotton Center (5) Phoenix AZ — 5,166 12,724 4,091 — — 5,205 16,776 21,981 3,034 1/29/2015 2000 3850 North US Hwy 89 Prescott AZ — 2,017 17,513 9,599 — ( 221 ) 2,017 26,891 28,908 5,347 2/1/2018 1986 6001 East Thomas Road Scottsdale AZ — 941 8,807 6,602 — ( 971 ) 946 14,433 15,379 8,477 9/1/2012 1990 7090 East Mescal Street Scottsdale AZ — 2,315 13,650 27,818 — ( 2,257 ) 2,349 39,177 41,526 12,745 1/11/2002 1984 17225 North Boswell Boulevard Sun City AZ — 1,189 10,569 5,225 — ( 836 ) 1,189 14,958 16,147 8,750 9/1/2012 1990 14001 W. Meeker Boulevard (5) Sun City West AZ — 395 3,307 — — ( 192 ) 395 3,115 3,510 1,625 2/28/2003 1998 1415 West 3rd Street Tempe AZ — 2,186 13,446 4,334 — — 4,896 15,070 19,966 3,195 1/29/2015 1981 2500 North Rosemont Boulevard Tucson AZ — 4,429 26,119 11,276 — ( 3,197 ) 4,576 34,051 38,627 17,043 1/11/2002 1989 710 North Euclid Anaheim CA — 2,850 6,964 2,586 ( 1,350 ) ( 2,405 ) 2,518 6,127 8,645 1,179 7/9/2008 1992 5000 Marina Boulevard (5) Brisbane CA — 7,957 13,430 752 — — 7,965 14,174 22,139 2,370 11/14/2017 2000 5770 Armada Drive (5) Carlsbad CA — 3,875 18,543 100 — — 3,875 18,643 22,518 4,134 1/29/2015 1997 1350 South El Camino Real Encinitas CA — 1,510 18,042 4,126 — ( 53 ) 1,517 22,108 23,625 7,956 3/31/2008 1999 47071 Bayside Parkway Fremont CA — 15,774 45,249 9,648 — — 15,774 54,897 70,671 2,317 7/27/2022 1991 47201 Lakeview Boulevard (5) Fremont CA — 3,200 10,177 805 — — 3,226 10,956 14,182 3,152 9/30/2011 1990 47211/47215 Lakeview Boulevard (5) Fremont CA — 3,750 12,656 3,891 — — 3,782 16,515 20,297 4,894 9/30/2011 1985 577 South Peach Street (5) Fresno CA — 738 2,577 4,175 — ( 211 ) 738 6,541 7,279 3,285 12/28/1990 1963 6075 North Marks Avenue Fresno CA — 880 12,751 2,014 — — 889 14,756 15,645 5,646 3/31/2008 1996 1319 Brookside Avenue Redlands CA — 1,770 9,982 2,437 — — 1,770 12,419 14,189 4,592 3/31/2008 1999 110 Sterling Court Roseville CA — 1,620 10,262 3,420 — — 1,620 13,682 15,302 4,918 3/31/2008 1998 S-1 Table of Contents DIVERSIFIED HEALTHCARE TRUST SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION DECEMBER 31, 2023 (dollars in thousands) Initial Cost to Company Cost at December 31, 2023 Address City State Encumbrances (1) Land Buildings, Improvements & Equipment Cost Capitalized Subsequent to Acquisition Impairment Cost Basis Adjustment (2) Land Buildings, Improvements & Equipment Total (3) Accumulated Depreciation (4) Date Acquired Original Construction Date 16925 & 16916 Hierba Drive San Diego CA — 9,142 53,904 32,832 — ( 7,115 ) 9,180 79,583 88,763 35,169 1/11/2002 1987 3030 Science Park (5) San Diego CA — 2,466 46,473 45,393 — ( 15,755 ) 2,466 76,111 78,577 19,158 8/6/2009 1986 3040 Science Park (5) San Diego CA — 1,225 23,077 24,823 — — 1,225 47,900 49,125 11,020 8/6/2009 1986 3050 Science Park (5) San Diego CA — 1,508 28,753 36,057 — — 1,535 64,783 66,318 14,535 8/6/2009 1986 3530 Deer Park Drive Stockton CA — 670 14,419 3,345 — — 682 17,752 18,434 6,511 3/31/2008 1999 877 East March Lane Stockton CA — 1,176 11,171 8,427 — ( 2,159 ) 1,411 17,204 18,615 7,777 9/30/2003 1988 28515 Westinghouse Place (5) Valencia CA — 4,669 41,440 1,536 — — 4,689 42,956 47,645 9,270 1/29/2015 2008 1866 San Miguel Drive Walnut Creek CA — 2,010 9,290 6,937 — ( 1,421 ) 3,417 13,399 16,816 3,956 12/1/2011 1996 1950 South Dayton Street Aurora CO — 3,062 46,195 11,422 — ( 340 ) 3,120 57,219 60,339 13,355 5/1/2015 1987 515 Fairview Avenue Canon City CO — 292 6,228 4,298 ( 3,512 ) ( 517 ) 299 6,490 6,789 2,908 9/26/1997 1970 110 West Van Buren Street Colorado Springs CO — 245 5,236 5,556 ( 3,031 ) ( 810 ) 245 6,951 7,196 2,893 9/26/1997 1972 3920 East San Miguel Street Colorado Springs CO — 1,380 8,894 4,315 — ( 370 ) 1,612 12,607 14,219 4,417 7/31/2012 1977 2050 South Main Street Delta CO — 167 3,570 3,261 — ( 415 ) 167 6,416 6,583 3,153 9/26/1997 1963 2501 Little Bookcliff Drive Grand Junction CO — 204 3,875 4,078 — ( 974 ) 207 6,976 7,183 3,673 12/30/1993 1968 2825 Patterson Road Grand Junction CO — 173 2,583 4,831 — ( 786 ) 173 6,628 6,801 3,639 12/30/1993 1978 1599 Ingalls Street Lakewood CO — 232 3,766 8,014 — ( 1,339 ) 232 10,441 10,673 5,092 12/28/1990 1972 5555 South Elati Street Littleton CO — 185 5,043 7,019 — ( 1,409 ) 191 10,647 10,838 5,763 12/28/1990 1965 8271 South Continental Divide Road (5) Littleton CO — 400 3,507 — — ( 202 ) 400 3,305 3,705 1,724 2/28/2003 1998 9005 Grant Street (5) Thornton CO — 961 10,867 1,203 — — 1,269 11,762 13,031 3,408 12/28/2012 2001 7809 W. 38th Avenue (5) Wheat Ridge CO — 470 3,373 86 — — 475 3,454 3,929 1,178 4/1/2010 2004 40 Sebethe Drive (5) Cromwell CT — 570 5,304 2,071 — ( 424 ) 798 6,723 7,521 2,278 12/22/2010 1998 1145 19th Street NW Washington DC — 13,600 24,880 37,553 — ( 1,580 ) 13,600 60,853 74,453 17,007 5/20/2009 1976 2141 K Street, NW Washington DC — 13,700 8,400 7,174 — ( 1,353 ) 13,700 14,221 27,921 4,746 12/22/2008 1966 255 Possum Park Road Newark DE — 2,010 11,852 14,103 — ( 1,903 ) 2,761 23,301 26,062 8,339 1/11/2002 1982 4175 Ogletown Stanton Rd Newark DE — 1,500 19,447 3,158 — — 1,563 22,542 24,105 8,556 3/31/2008 1998 1212 Foulk Road Wilmington DE — 1,179 6,950 10,870 — ( 1,460 ) 1,202 16,337 17,539 4,701 1/11/2002 1974 1912 Marsh Road Wilmington DE — 4,365 25,739 10,752 — ( 2,436 ) 4,431 33,989 38,420 16,438 1/11/2002 1988 2723 Shipley Road Wilmington DE — 869 5,126 13,168 — ( 1,934 ) 1,034 16,195 17,229 4,502 1/11/2002 1989 407 Foulk Road Wilmington DE — 38 227 2,838 — ( 531 ) 84 2,488 2,572 1,013 1/11/2002 1965 22601 Camino Del Mar Boca Raton FL — 3,200 46,800 11,991 — ( 3,307 ) 3,204 55,480 58,684 16,339 12/15/2011 1990 1325 S Congress Avenue Boynton Beach FL — 1,620 5,341 2,623 — ( 207 ) 1,628 7,749 9,377 2,274 7/27/2012 1985 1425 Congress Avenue Boynton Beach FL — 2,390 14,768 5,497 — ( 1,370 ) 2,390 18,895 21,285 5,856 8/9/2011 1994 1416 Country Club Blvd. (5) Cape Coral FL — 400 2,907 — — ( 173 ) 400 2,734 3,134 1,426 2/28/2003 1998 S-2 Table of Contents DIVERSIFIED HEALTHCARE TRUST SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION DECEMBER 31, 2023 (dollars in thousands) Initial Cost to Company Cost at December 31, 2023 Address City State Encumbrances (1) Land Buildings, Improvements & Equipment Cost Capitalized Subsequent to Acquisition Impairment Cost Basis Adjustment (2) Land Buildings, Improvements & Equipment Total (3) Accumulated Depreciation (4) Date Acquired Original Construction Date 8500 Royal Palm Boulevard Coral Springs FL — 3,410 20,104 35,126 — ( 4,015 ) 3,421 51,204 54,625 22,010 1/11/2002 1984 1208 South Military Trail Deerfield Beach FL — 1,690 14,972 36,321 — ( 5,778 ) 1,777 45,428 47,205 18,727 10/1/2012 1986 3001 DC Country Club Boulevard Deerfield Beach FL — 3,196 18,848 25,317 — ( 3,198 ) 3,222 40,941 44,163 18,302 1/11/2002 1990 12780 Kenwood Lane Fort Myers FL — 369 2,174 5,302 — ( 1,148 ) 859 5,838 6,697 2,215 1/11/2002 1990 2525 First Street Fort Myers FL — 2,385 21,137 45,642 — ( 13,880 ) 2,577 52,707 55,284 16,771 10/1/2012 1984 1825 Ridgewood Avenue Holly Hill FL — 700 16,700 6,818 ( 2,636 ) ( 8,866 ) 684 12,032 12,716 1,528 7/22/2011 1926/2006 2480 North Park Road Hollywood FL — 4,500 40,500 25,358 — ( 3,431 ) 4,556 62,371 66,927 19,243 12/15/2011 1986 8901 Tamiami Trail East Naples FL — 3,200 2,898 16,214 — ( 837 ) 3,200 18,275 21,475 7,084 8/31/2006 1984 12780 Waterford Lakes Parkway (5) Orlando FL — 977 3,946 820 — — 1,052 4,691 5,743 1,218 12/18/2013 2002 1603 S. Hiawassee Road Orlando FL — 488 2,621 434 — ( 81 ) 488 2,974 3,462 794 12/18/2013 2003 1825 N. Mills Avenue (5) Orlando FL — 519 1,799 670 — ( 117 ) 580 2,291 2,871 768 12/22/2008 1997 1911 N. Mills Avenue (5) Orlando FL — 1,946 7,197 2,903 — ( 538 ) 2,042 9,466 11,508 2,779 12/22/2008 1997 1925 N. Mills Avenue (5) Orlando FL — 135 532 307 — ( 107 ) 199 668 867 239 12/22/2008 1997 250 N. Alafaya Trail (5) Orlando FL — 967 4,362 477 — — 967 4,839 5,806 1,291 12/18/2013 1999 45 Katherine Boulevard Palm Harbor FL — 3,379 29,945 12,316 — ( 2,428 ) 3,392 39,820 43,212 26,071 10/1/2012 1992 900 West Lake Road Palm Harbor FL — 3,449 20,336 15,210 — ( 3,395 ) 3,493 32,107 35,600 15,662 1/11/2002 1989 8500 West Sunrise Boulevard Plantation FL — 4,700 24,300 12,975 — ( 5,391 ) 4,717 31,867 36,584 9,840 12/15/2011 1989 1371 South Ocean Boulevard Pompano Beach FL — 2,500 15,500 18,386 — ( 3,554 ) 2,560 30,272 32,832 9,888 12/15/2011 1991 2701 North Course Drive Pompano Beach FL — 7,700 2,127 44,391 — ( 2,857 ) 7,700 43,661 51,361 17,371 8/31/2006 1985 20480 Veterans Boulevard Port Charlotte FL — 400 11,934 3,729 — ( 3,147 ) 440 12,476 12,916 3,839 7/22/2011 1996 1699 S.E. Lyngate Drive Port St. Lucie FL — 1,242 11,009 5,634 — ( 1,055 ) 1,249 15,581 16,830 9,768 10/1/2012 1993 501 N.W. Cashmere Boulevard Port St. Lucie FL — 890 9,345 3,760 — ( 463 ) 1,673 11,859 13,532 3,680 7/22/2011 2007 900 South Harbour Island Blvd. (5) Tampa FL — 4,850 6,349 6,168 — — 4,850 12,517 17,367 2,574 10/30/2007 1986 111 Executive Center Drive West Palm Beach FL — 2,061 12,153 24,463 — ( 3,077 ) 2,075 33,525 35,600 14,185 1/11/2002 1988 2347 Cedarcrest Road Acworth GA — 1,674 — 88 — — 1,674 88 1,762 — 5/1/2016 2008 2351 Cedarcrest Road Acworth GA — 326 6,674 832 — ( 511 ) 327 6,994 7,321 1,409 5/1/2016 2014 1200 Bluegrass Lakes Parkway Alpharetta GA — 1,689 15,936 201 — — 1,761 16,065 17,826 3,594 1/29/2015 2001 855 North Point Pkwy (5) Alpharetta GA — 5,390 26,712 — — — 5,390 26,712 32,102 10,266 8/21/2008 2006 253 N. Main Street Alpharetta GA — 1,325 12,377 1,320 — ( 155 ) 1,221 13,646 14,867 3,448 5/1/2015 1997 1291 Cedar Shoals Drive Athens GA — 337 4,006 1,844 — ( 290 ) 368 5,529 5,897 2,433 11/19/2004 1998 1515 Sheridan Road (5) Atlanta GA — 5,800 9,305 3,225 — — 5,800 12,530 18,330 3,751 11/30/2007 1978 240 Marietta Highway Canton GA — 806 8,555 3,445 — ( 378 ) 806 11,622 12,428 3,237 10/1/2013 1997 4500 South Stadium Drive Columbus GA — 294 3,505 1,161 — ( 225 ) 298 4,437 4,735 1,910 11/19/2004 1999 S-3 Table of Contents DIVERSIFIED HEALTHCARE TRUST SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION DECEMBER 31, 2023 (dollars in thousands) Initial Cost to Company Cost at December 31, 2023 Address City State Encumbrances (1) Land Buildings, Improvements & Equipment Cost Capitalized Subsequent to Acquisition Impairment Cost Basis Adjustment (2) Land Buildings, Improvements & Equipment Total (3) Accumulated Depreciation (4) Date Acquired Original Construction Date 1352 Wellbrook Circle Conyers GA — 342 4,068 1,994 ( 1,366 ) ( 2,032 ) 206 2,800 3,006 416 11/19/2004 1997 1501 Milstead Road Conyers GA — 750 7,796 1,204 — ( 116 ) 777 8,857 9,634 2,999 9/30/2010 2008 3875 Post Road Cumming GA — 954 12,796 446 — — 960 13,236 14,196 3,610 5/1/2015 2007 4960 Jot Em Down Road Cumming GA — 1,548 18,666 13,418 — ( 1,057 ) 3,416 29,159 32,575 8,089 8/1/2013 2011 5610 Hampton Park Drive Cumming GA — 3,479 14,771 330 — ( 938 ) 3,498 14,144 17,642 3,010 9/3/2015 2014 7955 Majors Road Cumming GA — 1,325 7,770 1,107 — ( 115 ) 1,325 8,762 10,087 2,217 5/1/2015 2009 2470 Dug Gap Road Dalton GA — 262 3,119 1,434 — ( 133 ) 262 4,420 4,682 1,947 11/19/2004 1997 101 West Ponce De Leon Avenue Decatur GA — 3,500 13,179 12,007 — — 3,500 25,186 28,686 4,346 5/30/2012 1992 2801 North Decatur Road (5) Decatur GA — 3,100 4,436 3,084 — ( 519 ) 3,260 6,841 10,101 2,430 7/9/2008 1986 114 Penland Street Ellijay GA — 496 7,107 1,625 — ( 157 ) 496 8,575 9,071 2,419 10/1/2013 2008 353 North Belair Road Evans GA — 230 2,663 1,608 — ( 244 ) 230 4,027 4,257 1,694 11/19/2004 1998 1294 Highway 54 West Fayetteville GA — 853 9,903 1,542 — ( 148 ) 943 11,207 12,150 2,987 5/1/2015 1999 2435 Limestone Parkway Gainesville GA — 268 3,186 1,694 — ( 224 ) 268 4,656 4,924 1,941 11/19/2004 1998 3315 Thompson Bridge Road Gainesville GA — 934 30,962 3,436 — ( 352 ) 956 34,024 34,980 8,204 5/1/2015 1999 5373 Thompson Mill Road Hoschton GA — 944 12,171 509 — — 959 12,665 13,624 3,286 5/1/2015 2011 8080 Summit Business Parkway Jonesboro GA — 1,800 20,664 6,676 — ( 1,579 ) 1,800 25,761 27,561 8,261 6/20/2011 2007 6191 Peake Road Macon GA — 183 2,179 1,540 ( 848 ) ( 1,142 ) 110 1,802 1,912 270 11/19/2004 1998 1360 Upper Hembree Road (5) Roswell GA — 1,080 6,138 843 — — 1,095 6,966 8,061 2,091 5/7/2012 2007 1 Savannah Square Drive Savannah GA — 1,200 19,090 10,362 ( 6,993 ) ( 8,926 ) 835 13,898 14,733 2,166 10/1/2006 1987 5200 Habersham Street Savannah GA — 800 7,800 2,821 ( 3,082 ) ( 2,754 ) 476 5,109 5,585 698 6/23/2011 2005 7410 Skidaway Road Savannah GA — 400 5,670 2,319 ( 1,870 ) ( 2,626 ) 252 3,641 3,893 520 11/1/2006 1989 2078 Scenic Highway Snellville GA — 870 4,030 1,791 — ( 256 ) 870 5,565 6,435 1,843 12/10/2009 1997 475 Country Club Drive Stockbridge GA — 512 9,560 1,312 — ( 206 ) 551 10,627 11,178 2,754 5/1/2015 1998 1300 Montreal Road Tucker GA — 690 6,210 2,366 — ( 469 ) 694 8,103 8,797 3,431 6/3/2005 1997 1100 Ward Avenue (5) Honolulu HI — 11,200 55,618 9,811 — ( 304 ) 11,247 65,078 76,325 19,381 6/18/2012 1961 2340 West Seltice Way Coeur d'Alene ID — 910 7,170 3,687 — ( 214 ) 1,052 10,501 11,553 3,454 7/31/2012 1993 850 Lincoln Drive Idaho Falls ID — 510 6,640 3,599 — ( 147 ) 760 9,842 10,602 3,161 7/31/2012 1978 1250 West Central Road Arlington Heights IL — 3,665 32,587 17,225 — ( 1,932 ) 3,781 47,764 51,545 28,468 11/1/2012 1986 1450 Busch Parkway Buffalo Grove IL — 3,800 11,456 1,173 — ( 122 ) 3,837 12,470 16,307 4,159 9/16/2010 2009 2601 Patriot Boulevard (5) Glenview IL — 2,285 9,593 — — — 2,285 9,593 11,878 2,139 1/29/2015 2005 1373 D'Adrian Professional Park Godfrey IL — 281 15,088 1,986 — ( 210 ) 281 16,864 17,145 3,988 5/1/2015 2010 900 43rd Avenue Moline IL — 482 7,651 746 — ( 76 ) 482 8,321 8,803 1,972 5/1/2015 2003 / 2012 221 11th Avenue Moline IL — 161 7,244 1,759 — ( 54 ) 161 8,949 9,110 2,290 5/1/2015 2008 S-4 Table of Contents DIVERSIFIED HEALTHCARE TRUST SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION DECEMBER 31, 2023 (dollars in thousands) Initial Cost to Company Cost at December 31, 2023 Address City State Encumbrances (1) Land Buildings, Improvements & Equipment Cost Capitalized Subsequent to Acquisition Impairment Cost Basis Adjustment (2) Land Buildings, Improvements & Equipment Total (3) Accumulated Depreciation (4) Date Acquired Original Construction Date 2700 14th Street Pekin IL — 171 11,475 747 — ( 280 ) 172 11,941 12,113 2,956 5/1/2015 2009 7130 Crimson Ridge Drive Rockford IL — 200 7,300 3,135 — ( 389 ) 1,596 8,650 10,246 2,624 5/1/2011 1999 1220 Lakeview Drive (5) Romeoville IL — 1,120 19,582 ( 61 ) — — 1,058 19,583 20,641 7,526 8/21/2008 2005 1201 Hartman Lane Shiloh IL — 743 7,232 2,369 — ( 620 ) 1,237 8,487 9,724 1,669 12/8/2016 2003 900 Southwind Road Springfield IL — 300 6,744 3,227 — ( 403 ) 300 9,568 9,868 3,949 8/31/2006 1990 2705 Avenue E Sterling IL — 341 14,331 1,030 — ( 144 ) 343 15,215 15,558 3,830 5/1/2015 2008 39 Dorothy Drive Troy IL — 1,002 7,010 1,781 — ( 626 ) 1,002 8,165 9,167 1,590 12/8/2016 2003 100 Grand Victorian Place Washington IL — 241 12,046 542 — ( 57 ) 241 12,531 12,772 3,113 5/1/2015 2009 1615 Lakeside Drive (5) Waukegan IL — 2,700 9,590 4,262 — ( 944 ) 3,515 12,093 15,608 3,760 9/30/2011 1990 1675 Lakeside Drive (5) Waukegan IL — 2,420 9,382 3,568 — ( 957 ) 2,906 11,507 14,413 3,510 9/30/2011 1998 406 Smith Drive Auburn IN — 380 8,246 874 — ( 253 ) 524 8,723 9,247 3,328 9/1/2008 1999 6990 East County Road 100 North Avon IN — 850 11,888 1,905 — ( 333 ) 850 13,460 14,310 5,025 9/1/2008 1999 2455 Tamarack Trail Bloomington IN — 5,400 25,129 34,518 — ( 621 ) 6,339 58,087 64,426 17,846 11/1/2008 1983 2460 Glebe Street (5) Carmel IN — 2,108 57,741 1,493 — ( 148 ) 2,133 59,061 61,194 14,252 5/1/2015 2008 701 East County Line Road (5) Greenwood IN — 1,830 14,303 1,410 — ( 305 ) 1,877 15,361 17,238 4,793 12/1/2011 2007 8505 Woodfield Crossing Boulevard Indianapolis IN — 2,785 16,396 9,462 — ( 2,183 ) 2,838 23,622 26,460 11,528 1/11/2002 1986 2501 Friendship Boulevard Kokomo IN — 512 13,009 2,286 — ( 58 ) 512 15,237 15,749 2,752 12/27/2017 1997 603 Saint Joseph Drive Kokomo IN — 220 5,899 1,413 — ( 256 ) 220 7,056 7,276 2,647 9/1/2008 1998 1211 Longwood Drive La Porte IN — 770 5,550 1,772 — ( 288 ) 923 6,881 7,804 2,586 9/1/2008 1998 1590 West Timberview Drive Marion IN — 410 5,409 1,691 — ( 267 ) 410 6,833 7,243 2,428 9/1/2008 2000 1473 East McKay Road Shelbyville IN — 190 5,328 1,550 — ( 236 ) 190 6,642 6,832 2,313 9/1/2008 1999 17441 State Road 23 (5) South Bend IN — 400 3,107 ( 38 ) — ( 182 ) 363 2,924 3,287 1,526 2/28/2003 1998 222 South 25th Street Terra Haute IN — 300 13,115 1,527 — ( 492 ) 300 14,150 14,450 5,295 9/1/2008 2005 150 Fox Ridge Drive Vincennes IN — 110 3,603 2,380 — ( 208 ) 110 5,775 5,885 2,349 9/1/2008 1985 1501 Inverness Drive Lawrence KS — 1,600 18,565 5,131 — ( 1,232 ) 1,758 22,306 24,064 7,896 10/1/2009 1988 5799 Broadmoor Street (5) Mission KS — 1,522 7,246 2,846 — — 1,530 10,084 11,614 2,271 1/17/2017 1986 3501 West 95th Street Overland Park KS — 2,568 15,140 12,521 — ( 2,232 ) 2,580 25,417 27,997 10,978 1/11/2002 1989 6555 West 75th Street Overland Park KS — 1,274 1,126 17,556 — ( 1,102 ) 1,487 17,367 18,854 8,003 10/25/2002 1985 6700 W. 115th Street Overland Park KS — 4,503 29,387 501 — — 4,537 29,854 34,391 4,494 1/3/2018 2006 981 Campbell Lane Bowling Green KY — 365 4,345 1,987 — ( 203 ) 365 6,129 6,494 2,620 11/19/2004 1999 102 Leonardwood Drive Frankfort KY — 560 8,282 4,134 — ( 605 ) 579 11,792 12,371 4,604 8/31/2006 1989 4190 Lafayette Road Hopkinsville KY — 316 3,761 1,348 — ( 246 ) 316 4,863 5,179 2,054 11/19/2004 1999 690 Mason Headley Road (6) Lexington KY 3,144 — 10,848 18,298 — ( 1,441 ) 42 27,663 27,705 13,260 1/11/2002 1985 S-5 Table of Contents DIVERSIFIED HEALTHCARE TRUST SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION DECEMBER 31, 2023 (dollars in thousands) Initial Cost to Company Cost at December 31, 2023 Address City State Encumbrances (1) Land Buildings, Improvements & Equipment Cost Capitalized Subsequent to Acquisition Impairment Cost Basis Adjustment (2) Land Buildings, Improvements & Equipment Total (3) Accumulated Depreciation (4) Date Acquired Original Construction Date 700 Mason Headley Road (6) Lexington KY 767 — 6,394 10,364 — ( 1,061 ) 52 15,645 15,697 7,377 1/11/2002 1980 200 Brookside Drive Louisville KY — 3,524 20,779 13,048 — ( 3,357 ) 3,549 30,445 33,994 14,828 1/11/2002 1984 1517 West Broadway Mayfield KY — 268 2,730 2,197 — ( 305 ) 268 4,622 4,890 1,986 11/19/2004 1999 1700 Elmdale Road Paducah KY — 450 5,358 2,034 — ( 416 ) 451 6,975 7,426 3,108 11/19/2004 2000 100 Neighborly Way Somerset KY — 200 4,919 1,315 — — 200 6,234 6,434 2,558 11/6/2006 2000 1295 Boylston Street (5) Boston MA — 7,600 18,140 3,166 — ( 109 ) 7,625 21,172 28,797 7,366 1/26/2011 1930 549 Albany Street Boston MA — 4,576 45,029 — — — 4,569 45,036 49,605 11,638 8/22/2013 1895 4 Maguire Road Lexington MA — 3,600 15,555 34,794 ( 7,255 ) ( 1,003 ) 3,884 41,807 45,691 6,595 12/22/2008 1994 100 Hampshire Street (5) Mansfield MA — 2,090 8,215 4,079 — — 2,486 11,898 14,384 3,339 12/22/2010 1975 15 Hampshire Street (5) Mansfield MA — 1,360 7,326 992 — — 1,748 7,930 9,678 2,676 12/22/2010 1988 5 Hampshire Street (5) Mansfield MA — 1,190 5,737 2,962 — ( 143 ) 1,477 8,269 9,746 2,949 12/22/2010 1988 299 Cambridge Street Winchester MA — 3,218 18,988 15,791 — ( 2,473 ) 3,218 32,306 35,524 14,557 1/11/2002 1991 2717 Riva Road Annapolis MD — 1,290 12,373 3,828 — ( 150 ) 1,290 16,051 17,341 5,381 3/31/2008 2001 658 Boulton Street (5) Bel Air MD — 4,750 16,504 2 — — 4,750 16,506 21,256 6,651 11/30/2007 1980 7600 Laurel Bowie Road Bowie MD — 408 3,421 2,730 — ( 464 ) 408 5,687 6,095 2,250 10/25/2002 2000 8100 Connecticut Avenue Chevy Chase MD — 15,170 92,830 17,817 — ( 3,997 ) 15,177 106,643 121,820 32,365 12/15/2011 1990 8220 Snowden River Parkway Columbia MD — 1,390 10,303 2,035 — — 1,390 12,338 13,728 4,483 3/31/2008 2001 700 Port Street Easton MD — 383 4,555 4,506 — ( 633 ) 394 8,417 8,811 3,751 10/25/2002 2000 3004 North Ridge Road Ellicott City MD — 1,409 22,691 14,819 — ( 2,730 ) 1,613 34,576 36,189 15,552 3/1/2004 1997 1820 Latham Drive Frederick MD — 385 3,444 2,158 — ( 444 ) 385 5,158 5,543 2,247 10/25/2002 1998 2100 Whittier Drive Frederick MD — 1,260 9,464 4,088 — ( 109 ) 1,260 13,443 14,703 4,771 3/31/2008 1999 10116 Sharpsburg Pike Hagerstown MD — 1,040 7,471 6,270 — ( 661 ) 1,044 13,076 14,120 4,780 3/31/2008 1999 4000 Old Court Road Pikesville MD — 2,000 4,974 1,190 — ( 82 ) 2,125 5,957 8,082 2,374 12/22/2008 1987 715 Benfield Road Severna Park MD — 229 9,798 3,261 — ( 1,258 ) 246 11,784 12,030 5,820 10/25/2002 1998 14400 Homecrest Road Silver Spring MD — 1,200 9,288 10,440 — ( 1,568 ) 1,207 18,153 19,360 7,829 10/25/2002 1996 720 & 734 N. Pine Road (5) Hampton MI — 300 2,406 — — ( 142 ) 300 2,264 2,564 1,181 2/28/2003 1998 4004 & 4012 Waldo Road (5) Midland MI — 400 2,606 — — ( 162 ) 400 2,444 2,844 1,275 2/28/2003 1998 1605 & 1615 Fredericks Drive (5) Monroe MI — 300 2,506 — — ( 152 ) 300 2,354 2,654 1,228 2/28/2003 1998 3150 & 3100 Old Centre Road (5) Portage MI — 300 2,206 — — ( 133 ) 300 2,073 2,373 1,082 2/28/2003 1998 2445 & 2485 Mc Carty Road (5) Saginaw MI — 600 5,212 — — ( 305 ) 600 4,907 5,507 2,560 2/28/2003 1998 11855 Ulysses Street NE (5) Blaine MN — 2,774 9,276 2,274 — ( 190 ) 2,781 11,353 14,134 2,773 12/21/2012 2007 1305 Corporate Center Drive Eagan MN — 2,300 13,105 12,996 — ( 72 ) 2,735 25,594 28,329 7,613 12/22/2010 1986 8301 Golden Valley Road (5) Golden Valley MN — 1,256 4,680 1,202 — — 1,288 5,850 7,138 1,145 2/10/2016 1998 S-6 Table of Contents DIVERSIFIED HEALTHCARE TRUST SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION DECEMBER 31, 2023 (dollars in thousands) Initial Cost to Company Cost at December 31, 2023 Address City State Encumbrances (1) Land Buildings, Improvements & Equipment Cost Capitalized Subsequent to Acquisition Impairment Cost Basis Adjustment (2) Land Buildings, Improvements & Equipment Total (3) Accumulated Depreciation (4) Date Acquired Original Construction Date 8401 Golden Valley Road (5) Golden Valley MN — 1,510 5,742 3,672 — — 1,543 9,381 10,924 2,167 2/10/2016 1998 8501 Golden Valley Road (5) Golden Valley MN — 1,263 4,288 2,356 — — 1,295 6,612 7,907 1,394 2/10/2016 1998 1201 Northland Drive (5) Mendota Heights MN — 1,220 10,208 1,294 — ( 771 ) 1,496 10,455 11,951 3,484 1/25/2011 1989 12700 Whitewater Drive (5) Minnetonka MN — 5,453 8,108 8,415 — — 5,453 16,523 21,976 4,776 10/2/2017 1998 20600 South Diamond Lake Road Rogers MN — 2,760 45,789 4,465 ( 20,359 ) ( 15,686 ) 1,195 15,774 16,969 4,455 3/1/2008 1999 2200 County Road C West (5) Roseville MN — 590 702 731 — ( 82 ) 792 1,149 1,941 436 9/30/2011 1991 4166 Lexington Avenue N Shoreview MN — 1,300 4,547 1,285 — — 1,508 5,624 7,132 1,863 5/20/2011 1988 1365 Crestridge Lane (5) West St. Paul MN — 400 2,506 — — ( 292 ) 400 2,214 2,614 1,155 2/28/2003 1998 305 & 315 Thompson Avenue (5) West St. Paul MN — 400 3,608 99 — ( 402 ) 400 3,305 3,705 1,724 2/28/2003 1998 5351 Gretna Road Branson MO — 743 10,973 1,395 — ( 288 ) 754 12,069 12,823 2,964 5/1/2015 2002 845 N New Ballas Court Creve Coeur MO — 1,582 16,328 2,534 — — 2,181 18,263 20,444 3,010 1/22/2018 2006 3828 College View Drive Joplin MO — 260 11,382 2,182 — ( 136 ) 260 13,428 13,688 4,211 8/31/2012 2003 14100 Magellan Plaza Maryland Heights MO — 3,719 37,304 5,449 — — 3,179 43,293 46,472 12,371 1/29/2015 2003 640 E Highland Avenue Nevada MO — 311 5,703 888 — — 311 6,591 6,902 1,629 5/1/2015 1997 2410 W Chesterfield Blvd Springfield MO — 924 12,772 1,100 — — 924 13,872 14,796 3,361 5/1/2015 1999 3540 East Cherokee Street Springfield MO — 1,084 11,339 1,611 — ( 123 ) 1,129 12,782 13,911 3,258 5/1/2015 1996 4700 North Hanley Road St. Louis MO — 5,166 41,587 150 — — 5,166 41,737 46,903 9,393 1/29/2015 2014 118 Alamance Road Burlington NC — 575 9,697 2,632 — ( 449 ) 575 11,880 12,455 3,724 6/20/2011 1998 1050 Crescent Green Drive Cary NC — 713 4,628 4,438 — ( 1,123 ) 713 7,943 8,656 3,536 10/25/2002 1999 2220 & 2230 Farmington Drive (5) Chapel Hill NC — 800 6,414 — — ( 375 ) 800 6,039 6,839 3,151 2/28/2003 1996 2101 Runnymede Lane Charlotte NC — 2,475 11,451 3,345 — ( 1,122 ) 2,458 13,691 16,149 4,121 6/20/2011 1999 5920 McChesney Drive & 6101 Clarke Creek Parkway Charlotte NC — 1,320 21,750 3,977 — ( 1,310 ) 1,320 24,417 25,737 8,409 11/17/2009 1999 / 2001 500 Penny Lane NE Concord NC — 1,687 17,603 2,124 — — 1,687 19,727 21,414 4,658 6/29/2016 1997 1002 Highway 54 Durham NC — 595 5,200 1,853 — ( 212 ) 595 6,841 7,436 1,923 6/20/2011 1988 4505 Emperor Boulevard (5) Durham NC — 1,285 16,932 1,672 — — 1,474 18,415 19,889 3,151 10/11/2017 2001 5213 South Alston Avenue Durham NC — 1,093 31,377 559 — — 1,093 31,936 33,029 7,103 1/29/2015 2010 2755 Union Road Gastonia NC — 1,104 17,834 1,766 — ( 1,133 ) 1,104 18,467 19,571 3,827 6/29/2016 1998 1001 Phifer Road Kings Mountain NC — 655 8,283 1,875 — ( 497 ) 657 9,659 10,316 3,029 6/23/2011 1998 128 Brawley School Road Mooresville NC — 595 7,305 1,766 — ( 467 ) 613 8,586 9,199 2,721 6/23/2011 1999 1309 , 1321, & 1325 McCarthy Boulevard New Bern NC — 1,245 20,898 3,309 — ( 507 ) 1,245 23,700 24,945 7,554 6/20/2011 2001/2005/2008 13150 & 13180 Dorman Road Pineville NC — 1,180 22,800 4,440 — ( 1,338 ) 1,180 25,902 27,082 9,008 11/17/2009 1998 801 Dixie Trail Raleigh NC — 3,233 17,788 2,558 — ( 1,114 ) 3,236 19,229 22,465 3,867 6/29/2016 1992 2744 South 17th Street Wilmington NC — 1,134 14,771 2,301 — ( 1,290 ) 1,139 15,777 16,916 3,494 4/18/2016 1998 S-7 Table of Contents DIVERSIFIED HEALTHCARE TRUST SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION DECEMBER 31, 2023 (dollars in thousands) Initial Cost to Company Cost at December 31, 2023 Address City State Encumbrances (1) Land Buildings, Improvements & Equipment Cost Capitalized Subsequent to Acquisition Impairment Cost Basis Adjustment (2) Land Buildings, Improvements & Equipment Total (3) Accumulated Depreciation (4) Date Acquired Original Construction Date 1730 Parkwood Boulevard West Wilson NC — 610 14,787 2,763 — ( 465 ) 610 17,085 17,695 5,225 6/20/2011 2004/2006 17007 Elm Plaza (5) Omaha NE — 4,680 22,022 — — — 4,680 22,022 26,702 8,464 8/21/2008 2007 3030 South 80th Street Omaha NE — 650 5,850 2,580 — ( 419 ) 650 8,011 8,661 3,349 6/3/2005 1992 490 Cooper Landing Road Cherry Hill NJ — 1,001 8,175 3,344 ( 6,080 ) ( 4,163 ) 2,240 37 2,277 — 12/29/2003 1999 1400 Route 70 Lakewood NJ — 4,885 28,803 20,018 — ( 2,965 ) 4,905 45,836 50,741 18,507 1/11/2002 1987 2 Hillside Drive Mt. Arlington NJ — 1,375 11,232 2,786 — ( 471 ) 1,393 13,529 14,922 6,301 12/29/2003 2001 655 Pomander Walk Teaneck NJ — 4,950 44,550 17,236 — ( 3,897 ) 4,984 57,855 62,839 14,803 12/15/2011 1989 10500 Academy Road NE Albuquerque NM — 3,828 22,572 10,440 — ( 2,603 ) 3,828 30,409 34,237 14,804 1/11/2002 1986 4100 Prospect Avenue NE (5) Albuquerque NM — 540 10,105 8 — — 540 10,113 10,653 4,096 10/30/2007 1977 4300 Landau Street NE (5) Albuquerque NM — 1,060 9,875 8 — — 1,060 9,883 10,943 4,003 10/30/2007 1973 4411 The 25 Way (5) Albuquerque NM — 3,480 25,245 6,864 — ( 1,980 ) 4,103 29,506 33,609 9,384 12/22/2010 1970 4420 The 25 Way (5) Albuquerque NM — 1,430 2,609 1,519 — ( 152 ) 1,711 3,695 5,406 1,166 12/22/2010 1970 9190 Coors Boulevard NW (5) Albuquerque NM — 1,660 9,173 8 — — 1,660 9,181 10,841 3,719 10/30/2007 1983 2200 East Long Street Carson City NV — 622 17,900 1,517 — ( 213 ) 622 19,204 19,826 4,753 5/1/2015 2009 3201 Plumas Street Reno NV — 2,420 49,580 10,179 — ( 1,648 ) 2,420 58,111 60,531 17,188 12/15/2011 1989 4939 Brittonfield Parkway (5) East Syracuse NY — 720 17,084 2,256 ( 2,826 ) ( 5,312 ) 1,004 10,918 11,922 1,782 9/30/2008 2001 5008 Brittonfield Parkway (5) East Syracuse NY — 420 18,407 2,080 ( 3,144 ) ( 5,393 ) 586 11,784 12,370 1,651 7/9/2008 1999 200 Old County Road Mineola NY — 4,920 24,056 17,255 — ( 851 ) 4,920 40,460 45,380 12,814 9/30/2011 1971 537 Riverdale Avenue Yonkers NY — 8,460 90,561 16,695 — ( 2,978 ) 8,463 104,275 112,738 31,888 8/31/2012 2000 4590 Knightsbridge Boulevard Columbus OH — 3,623 27,778 22,843 — ( 4,233 ) 3,732 46,279 50,011 20,394 1/11/2002 1989 3929 Hoover Road (5) Grove City OH — 332 3,081 1,015 — — 332 4,096 4,428 2,786 6/4/1993 1965 7555 Innovation Way (5) Mason OH — 1,025 12,883 — — — 1,025 12,883 13,908 2,334 10/6/2016 2015 8709 S.E. Causey Avenue Portland OR — 3,303 77,428 4,813 ( 26,073 ) ( 9,815 ) 2,201 47,455 49,656 6,498 5/1/2015 1985 / 1991 71 Darlington Road Beaver Falls PA — 1,500 13,500 2,679 — ( 879 ) 1,523 15,277 16,800 6,381 10/31/2005 1997 950 Morgan Highway Clarks Summit PA — 1,001 8,233 2,355 — ( 277 ) 1,017 10,295 11,312 4,564 12/29/2003 2001 600 N. Pottstown Pike Exton PA — 1,001 8,233 3,748 — ( 395 ) 1,001 11,586 12,587 4,921 12/29/2003 2000 242 Baltimore Pike Glen Mills PA — 1,001 8,233 4,183 — ( 382 ) 1,001 12,034 13,035 4,564 12/29/2003 2001 20 Capital Drive (5) Harrisburg PA — 397 9,333 15 — — 397 9,348 9,745 2,084 1/29/2015 2013 210 Mall Boulevard King of Prussia PA — 1,540 4,743 2,757 — — 1,952 7,088 9,040 2,843 8/8/2008 1970 5300 Old William Penn Highway (5) Murrysville PA — 300 2,506 — — ( 272 ) 300 2,234 2,534 1,165 2/28/2003 1998 800 Manor Drive New Britain (Chalfont) PA — 979 8,052 3,469 — ( 440 ) 981 11,079 12,060 4,814 12/29/2003 1998 7151 Saltsburg Road (5) Penn Hills PA — 200 904 — — ( 103 ) 200 801 1,001 418 2/28/2003 1997 5750 Centre Avenue Pittsburgh PA — 3,000 11,828 5,879 — ( 354 ) 3,788 16,565 20,353 6,481 6/11/2008 1991 S-8 Table of Contents DIVERSIFIED HEALTHCARE TRUST SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION DECEMBER 31, 2023 (dollars in thousands) Initial Cost to Company Cost at December 31, 2023 Address City State Encumbrances (1) Land Buildings, Improvements & Equipment Cost Capitalized Subsequent to Acquisition Impairment Cost Basis Adjustment (2) Land Buildings, Improvements & Equipment Total (3) Accumulated Depreciation (4) Date Acquired Original Construction Date 730 Holiday Drive Pittsburgh PA — 2,480 6,395 6,123 — ( 1,445 ) 2,751 10,802 13,553 3,841 12/22/2010 1985 700 Northampton Street Tiffany Court (Kingston) PA — — 5,682 2,764 — ( 499 ) — 7,947 7,947 3,536 12/29/2003 1997 5250 Meadowgreen Drive Whitehall PA — 1,599 14,401 4,882 — ( 1,106 ) 1,599 18,177 19,776 7,657 10/31/2005 1987 1304 McLees Road Anderson SC — 295 3,509 1,961 — ( 253 ) 295 5,217 5,512 2,104 11/19/2004 1999 109 Old Salem Road Beaufort SC — 188 2,234 1,714 ( 807 ) ( 1,514 ) 104 1,711 1,815 438 11/19/2004 1999 1119 Pick Pocket Plantation Drive Beaufort SC — 1,200 10,810 1,940 ( 3,927 ) ( 3,270 ) 733 6,020 6,753 681 6/20/2011 2005 719 Kershaw Highway Camden SC — 322 3,697 2,114 — ( 432 ) 324 5,377 5,701 2,503 11/19/2004 1999 2333 Ashley River Road Charleston SC — 848 14,000 3,483 ( 7,118 ) ( 4,761 ) 377 6,075 6,452 1,538 6/20/2011 1999 320 Seven Farms Drive Charleston SC — 1,092 6,605 1,856 — ( 333 ) 1,092 8,128 9,220 2,595 5/29/2012 1998 251 Springtree Drive (5) Columbia SC — 300 1,905 — — ( 112 ) 300 1,793 2,093 935 2/28/2003 1998 355 Berkmans Lane Greenville SC — 700 7,240 2,139 ( 2,593 ) ( 2,456 ) 417 4,613 5,030 550 11/17/2009 2002 116 Enterprise Court Greenwood SC — 310 2,790 1,445 — ( 213 ) 310 4,022 4,332 1,708 6/3/2005 1999 1901 West Carolina Avenue Hartsville SC — 401 4,775 2,671 — ( 302 ) 401 7,144 7,545 2,928 11/19/2004 1999 218 Old Chapin Road Lexington SC — 363 4,322 1,549 — ( 400 ) 363 5,471 5,834 2,535 11/19/2004 1999 491 Highway 17 Little River SC — 750 9,018 2,746 — ( 562 ) 750 11,202 11,952 3,441 6/23/2011 2000 1010 Anna Knapp Boulevard Mt. Pleasant SC — 1,797 6,132 759 ( 3,618 ) ( 1,486 ) 806 2,778 3,584 183 6/29/2016 1997 601 Mathis Ferry Road Mt. Pleasant SC — 1,687 12,612 706 ( 10,794 ) ( 2,021 ) 2,190 — 2,190 — 6/29/2016 1999 937 Bowman Road Mt. Pleasant SC — 3,898 31,613 9,928 — ( 2,245 ) 3,830 39,364 43,194 12,313 7/1/2012 1997 / 1983 9547 Highway 17 North Myrtle Beach SC — 543 3,202 12,360 ( 3,192 ) ( 4,437 ) 333 8,143 8,476 1,137 1/11/2002 1980 2306 Riverbank Drive Orangeburg SC — 303 3,607 1,530 — ( 358 ) 303 4,779 5,082 2,191 11/19/2004 1999 1920 Ebenezer Road (5) Rock Hill SC — 300 1,705 — — ( 162 ) 300 1,543 1,843 805 2/28/2003 1998 15855 Wells Highway Seneca SC — 396 4,714 1,629 — ( 417 ) 396 5,926 6,322 2,654 11/19/2004 2000 One Southern Court (5) West Columbia SC — 520 3,831 765 — ( 557 ) 557 4,002 4,559 1,268 12/22/2010 2000 6716 Nolensville Road Brentwood TN — 1,528 6,037 418 — — 1,528 6,455 7,983 1,824 11/30/2012 2010 207 Uffelman Drive Clarksville TN — 320 2,994 2,368 — ( 161 ) 320 5,201 5,521 1,875 12/31/2006 1997 51 Patel Way Clarksville TN — 800 10,322 9,261 — ( 619 ) 833 18,931 19,764 5,182 12/19/2012 2005 2900 Westside Drive NW Cleveland TN — 305 3,627 2,533 — ( 284 ) 305 5,876 6,181 2,263 11/19/2004 1998 1010 East Spring Street Cookeville TN — 322 3,828 2,226 — ( 230 ) 322 5,824 6,146 2,476 11/19/2004 1998 105 Sunrise Circle Franklin TN — 322 3,833 1,588 — ( 268 ) 329 5,146 5,475 2,250 11/19/2004 1997 1085 Hartsville Pike Gallatin TN — 280 3,327 2,293 — ( 212 ) 282 5,406 5,688 2,154 11/19/2004 1998 2025 Caldwell Drive (5) Goodlettsville TN — 400 3,507 8,547 — ( 202 ) 400 11,852 12,252 4,344 2/28/2003 1998 1200 North Parkway Jackson TN — 295 3,506 2,004 — ( 300 ) 299 5,206 5,505 1,941 11/19/2004 1999 550 Deer View Way Jefferson City TN — 940 8,057 2,546 — ( 228 ) 948 10,367 11,315 2,821 10/15/2013 2001 S-9 Table of Contents DIVERSIFIED HEALTHCARE TRUST SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION DECEMBER 31, 2023 (dollars in thousands) Initial Cost to Company Cost at December 31, 2023 Address City State Encumbrances (1) Land Buildings, Improvements & Equipment Cost Capitalized Subsequent to Acquisition Impairment Cost Basis Adjustment (2) Land Buildings, Improvements & Equipment Total (3) Accumulated Depreciation (4) Date Acquired Original Construction Date 10914 Kingston Pike Knoxville TN — 613 12,410 1,414 — — 613 13,824 14,437 2,673 6/29/2018 2008 3030 Holbrook Drive Knoxville TN — 352 7,128 1,985 — — 360 9,105 9,465 1,798 6/29/2018 1999 100 Chatuga Drive West Loudon TN — 580 16,093 33,065 — — 580 49,158 49,738 5,306 1/19/2018 2003 511 Pearson Springs Road (5) Maryville TN — 300 3,207 100 — ( 192 ) 300 3,115 3,415 1,625 2/28/2003 1998 1710 Magnolia Boulevard Nashville TN — 750 6,750 18,680 — ( 1,190 ) 750 24,240 24,990 6,876 6/3/2005 1979 350 Volunteer Drive Paris TN — 110 12,100 2,011 — ( 905 ) 110 13,206 13,316 2,469 6/29/2016 1997 971 State Hwy 121 (5) Allen TX — 2,590 17,912 — — — 2,590 17,912 20,502 6,884 8/21/2008 2006 6818 Austin Center Boulevard (5) Austin TX — 1,540 27,467 4,283 — ( 862 ) 1,620 30,808 32,428 11,254 10/31/2008 1994 7600 N Capital Texas Highway Austin TX — 300 4,557 1,608 — — 300 6,165 6,465 1,980 12/22/2010 1996 4620 Bellaire Boulevard Bellaire TX — 1,238 11,010 7,166 — ( 1,011 ) 1,325 17,078 18,403 10,260 10/1/2012 1991 120 Crosspoint Drive Boerne TX — 220 4,926 1,873 — — 227 6,792 7,019 2,480 2/7/2008 1990 4015 Interstate 45 Conroe TX — 620 14,074 2,285 — ( 373 ) 620 15,986 16,606 5,142 10/26/2010 2009 5455 La Sierra Drive Dallas TX — 2,300 25,200 11,156 — ( 1,822 ) 2,324 34,510 36,834 10,833 12/15/2011 1989 7831 Park Lane Dallas TX — 4,709 27,768 26,448 — ( 3,163 ) 5,432 50,330 55,762 22,734 1/11/2002 1990 1575 Belvidere Street El Paso TX — 2,301 13,567 10,846 — ( 1,779 ) 2,316 22,619 24,935 9,932 1/11/2002 1987 96 Frederick Road Fredericksburg TX — 280 4,866 6,976 — ( 182 ) 280 11,660 11,940 3,580 2/7/2008 1999 6435 S.F.M. 549 Heath TX — 1,135 7,892 1,152 ( 288 ) ( 1,493 ) 1,192 7,206 8,398 1,094 12/31/2012 2004 13215 Dotson Road (5) Houston TX — 990 13,887 2,338 — ( 735 ) 990 15,490 16,480 4,403 7/17/2012 2007 777 North Post Oak Road Houston TX — 5,537 32,647 36,370 — ( 4,749 ) 5,540 64,265 69,805 27,118 1/11/2002 1989 10030 North MacArthur Boulevard Irving TX — 2,186 15,869 3,319 — — 2,186 19,188 21,374 3,912 1/29/2015 1999 9812 Slide Road (5) Lubbock TX — 1,110 9,798 680 — — 1,110 10,478 11,588 3,474 6/4/2010 2009 605 Gateway Central Marble Falls TX — 1,440 7,125 2,319 — ( 502 ) 1,440 8,942 10,382 2,713 12/19/2012 1994 / 2002 7150 N. President George Bush Turnpike (5) North Garland TX — 1,981 8,548 1,203 ( 346 ) ( 1,616 ) 1,941 7,829 9,770 1,179 12/31/2012 2006 500 Coit Road Plano TX — 3,463 44,841 324 — — 3,468 45,160 48,628 4,844 12/20/2019 2016 2265 North Lakeshore Drive (5) Rockwall TX — 497 3,582 11 — — 497 3,593 4,090 798 1/29/2015 2013 18302 Talavera Ridge San Antonio TX — 6,855 30,630 160 — — 6,855 30,790 37,645 6,828 1/29/2015 2008 21 Spurs Lane San Antonio TX — 3,141 23,142 5,271 — ( 68 ) 3,192 28,294 31,486 6,851 4/10/2014 2006 311 West Nottingham Place San Antonio TX — 4,283 25,256 17,068 — ( 3,823 ) 4,359 38,425 42,784 18,283 1/11/2002 1989 511 & 575 Knights Cross Drive San Antonio TX — 2,300 20,400 4,573 — ( 1,150 ) 2,306 23,817 26,123 8,257 11/17/2009 2003 5055 West Panther Creek Drive Woodlands TX — 3,694 21,782 12,628 — ( 3,490 ) 3,706 30,908 34,614 14,733 1/11/2002 1988 491 Crestwood Drive Charlottesville VA — 641 7,633 3,473 — ( 732 ) 646 10,369 11,015 4,569 11/19/2004 1998 1005 Elysian Place Chesapeake VA — 2,370 23,705 3,823 — ( 791 ) 2,381 26,726 29,107 8,476 6/20/2011 2006 4027 Martinsburg Pike (5) Clear Brook VA — 3,775 21,768 — — — 3,775 21,768 25,543 4,853 1/29/2015 2013 S-10 Table of Contents DIVERSIFIED HEALTHCARE TRUST SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION DECEMBER 31, 2023 (dollars in thousands) Initial Cost to Company Cost at December 31, 2023 Address City State Encumbrances (1) Land Buildings, Improvements & Equipment Cost Capitalized Subsequent to Acquisition Impairment Cost Basis Adjustment (2) Land Buildings, Improvements & Equipment Total (3) Accumulated Depreciation (4) Date Acquired Original Construction Date 4001 Fair Ridge Drive (5) Fairfax VA — 2,500 7,147 3,769 — ( 222 ) 2,646 10,548 13,194 3,985 12/22/2008 1990 20 HeartFields Lane Fredericksburg VA — 287 8,480 2,661 — ( 884 ) 287 10,257 10,544 5,048 10/25/2002 1998 2800 Polo Parkway Midlothian VA — 1,103 13,126 5,611 — ( 1,340 ) 1,108 17,392 18,500 7,410 11/19/2004 1996 655 Denbigh Boulevard Newport News VA — 581 6,921 2,649 — ( 553 ) 584 9,014 9,598 3,939 11/19/2004 1998 6160 Kempsville Circle (5) Norfolk VA — 3,263 7,615 4,771 — ( 115 ) 3,374 12,160 15,534 2,660 12/22/2017 1987 6161 Kempsville Road (5) Norfolk VA — 1,530 9,531 4,336 — ( 686 ) 1,530 13,181 14,711 4,690 12/22/2008 1999 6311 Granby Street Norfolk VA — 1,920 16,538 5,430 — ( 595 ) 1,932 21,361 23,293 6,874 6/20/2011 2005 885 Kempsville Road (5) Norfolk VA — 1,780 8,354 3,857 — ( 976 ) 2,014 11,001 13,015 3,893 5/20/2009 1981 531 Wythe Creek Road Poquoson VA — 220 2,041 1,671 — ( 275 ) 220 3,437 3,657 1,337 5/30/2003 1987 10800 Nuckols Road (7) Glen Allen VA 9,109 2,863 11,105 1,687 — — 2,863 12,792 15,655 2,066 3/28/2018 2000 3000 Skipwith Road Richmond VA — 732 8,717 2,253 — ( 655 ) 732 10,315 11,047 4,508 11/19/2004 1999 9900 Independence Park Drive Richmond VA — 326 3,166 636 — ( 226 ) 326 3,576 3,902 983 11/22/2011 2005 9930 Independence Park Drive Richmond VA — 604 4,975 1,194 — ( 84 ) 700 5,989 6,689 1,823 11/22/2011 2005 5620 Wesleyan Drive Virginia Beach VA — 893 7,926 4,409 — ( 283 ) 893 12,052 12,945 7,307 9/1/2012 1990 4132 Longhill Road Williamsburg VA — 270 2,468 1,875 ( 945 ) ( 1,583 ) 162 1,923 2,085 270 5/30/2003 1987 440 McLaws Circle Williamsburg VA — 1,466 17,340 859 — ( 1,040 ) 1,466 17,159 18,625 3,298 6/29/2016 1998 516 Kenosia Avenue South Kent WA — 1,300 8,458 3,835 — ( 304 ) 1,368 11,921 13,289 3,923 7/31/2012 1971 555 16th Avenue (5) Seattle WA — 256 4,869 68 — ( 513 ) 256 4,424 4,680 3,333 11/1/1993 1964 3003 West Good Hope Road (5) Glendale WI — 1,500 33,747 — — — 1,500 33,747 35,247 12,023 9/30/2009 1963 7007 North Range Line Road Glendale WI — 250 3,797 — — — 250 3,797 4,047 1,353 9/30/2009 1964 215 Washington Street (5) Grafton WI — 500 10,058 — — — 500 10,058 10,558 3,583 9/30/2009 2009 N168W22022 Main Street Jackson WI — 188 5,962 1,383 — ( 308 ) 192 7,033 7,225 1,741 12/1/2014 2005 8351 Sheridan Road Kenosha WI — 750 7,669 1,621 — — 758 9,282 10,040 3,328 1/1/2008 2000 5601 Burke Road Madison WI — 700 7,461 2,086 — — 712 9,535 10,247 3,436 1/1/2008 2000 7707 N. Brookline Drive Madison WI — 2,615 35,545 4,605 — ( 509 ) 2,631 39,625 42,256 9,978 12/1/2014 1999 / 2004 10803 North Port Washington Road Mequon WI — 800 8,388 3,922 — ( 221 ) 805 12,084 12,889 3,633 1/1/2008 1999 701 East Puetz Road Oak Creek WI — 650 18,396 3,331 — ( 213 ) 1,375 20,789 22,164 8,330 1/1/2008 2001 W231 N1440 Corporate Court (5) Pewaukee WI — 3,900 41,140 — — — 3,900 41,140 45,040 14,656 9/30/2009 1994 8348 & 8400 Washington Avenue (5) Racine WI — 1,150 22,436 — — — 1,150 22,436 23,586 7,993 9/30/2009 1986 1221 North 26th Street (5) Sheboygan WI — 300 975 — — — 300 975 1,275 348 9/30/2009 1987 1222 North 23rd Street (5) Sheboygan WI — 120 4,014 — — — 120 4,014 4,134 1,430 9/30/2009 1987 2414 Kohler Memorial Drive (5) Sheboygan WI — 1,400 35,168 — — — 1,400 35,168 36,568 12,529 9/30/2009 1986 S-11 Table of Contents DIVERSIFIED HEALTHCARE TRUST SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION DECEMBER 31, 2023 (dollars in thousands) Initial Cost to Company Cost at December 31, 2023 Address City State Encumbrances (1) Land Buildings, Improvements & Equipment Cost Capitalized Subsequent to Acquisition Impairment Cost Basis Adjustment (2) Land Buildings, Improvements & Equipment Total (3) Accumulated Depreciation (4) Date Acquired Original Construction Date 1125 N Edge Trail Verona WI — 1,365 9,581 2,095 — ( 458 ) 1,372 11,211 12,583 3,126 11/1/2013 2001 3289 North Mayfair Road (5) Wauwatosa WI — 2,300 6,245 — — — 2,300 6,245 8,545 2,225 9/30/2009 1964 503 South 18th Street Laramie WY — 191 3,632 4,623 — ( 941 ) 202 7,303 7,505 3,879 12/30/1993 1964 1901 Howell Avenue Worland WY — 132 2,508 5,502 — ( 649 ) 132 7,361 7,493 3,178 12/30/1993 1970 Total $ 13,020 $ 630,902 $ 4,726,568 $ 1,941,514 $( 124,053 ) $( 356,464 ) $ 652,977 $ 6,165,490 $ 6,818,467 $ 2,020,843 Property Held for Sale — 1,900 12,858 1,943 ( 2,790 ) ( 4,534 ) 1,464 7,913 9,377 — Grand Total $ 13,020 $ 632,802 $ 4,739,426 $ 1,943,457 $( 126,843 ) $( 360,998 ) $ 654,441 $ 6,173,403 $ 6,827,844 $ 2,020,843 (1) Represents mortgage debts and finance leases. (2) Represents reclassifications between accumulated depreciation and buildings, improvements and equipment made to record certain properties at fair value in accordance with GAAP. (3) Aggregate cost for federal income tax purposes is approximately $ 7,189,441 . (4) We depreciate buildings and improvements over periods ranging up to 40 years and equipment over periods ranging up to 12 years. (5) These properties are collateral for our $ 940,534 senior secured notes due 2026. (6) These properties are subject to our $ 3,911 of finance leases . (7) These properties are collateral for our $ 9,109 of mortgage notes. S-12 Table of Contents DIVERSIFIED HEALTHCARE TRUST SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION DECEMBER 31, 2023 (dollars in thousands) Analysis of the carrying amount of real estate and equipment and accumulated depreciation during the period: Real Estate and Equipment Accumulated Depreciation Balance as of December 31, 2020 $ 7,410,730 $ 1,694,901 Additions 229,735 223,039 Disposals ( 910,372 ) ( 158,523 ) Impairment 174 — Cost basis adjustment (1) ( 29,762 ) ( 29,762 ) Reclassification of assets held for sale, net 113,051 8,152 Balance as of December 31, 2021 6,813,556 1,737,807 Additions 372,443 220,536 Disposals ( 452,233 ) ( 96,788 ) Cost basis adjustment (1) ( 40,838 ) ( 33,203 ) Reclassification of assets held for sale, net ( 385 ) — Balance as of December 31, 2022 6,692,543 1,828,352 Additions 241,720 264,171 Disposals ( 16,750 ) — Impairment ( 18,380 ) — Cost basis adjustment (1) ( 71,608 ) ( 71,608 ) Reclassification of assets held for sale, net ( 9,058 ) ( 72 ) Balance as of December 31, 2023 $ 6,818,467 $ 2,020,843 (1) Represents reclassifications between accumulated depreciation and buildings, improvements and equipment made to record certain properties at fair value in accordance with GAAP. S-13 Table of Contents SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. DIVERSIFIED HEALTHCARE TRUST By: /s/ Christopher J. Bilotto Christopher J. Bilotto President and Chief Executive Officer Dated: February 26, 2024 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Signature Title Date /s/ Christopher J. Bilotto President and Chief Executive Officer February 26, 2024 Christopher J. Bilotto /s/ Matthew C. Brown Chief Financial Officer and Treasurer (principal financial and accounting officer) February 26, 2024 Matthew C. Brown /s/ Jennifer F. Francis Managing Trustee February 26, 2024 Jennifer F. Francis /s/ John L. Harrington Independent Trustee February 26, 2024 John L. Harrington /s/ Phyllis M. Hollis Independent Trustee February 26, 2024 Phyllis M. Hollis /s/ Lisa Harris Jones Independent Trustee February 26, 2024 Lisa Harris Jones /s/ Adam D. Portnoy Managing Trustee February 26, 2024 Adam D. Portnoy /s/ Jeffrey P. Somers Independent Trustee February 26, 2024 Jeffrey P. Somers S-14