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Item 1. Financial Statements

2025-08-04 compared with 2025-05-05 · 302 added, 160 removed, 555 unchanged (45% of the section changed)

3 unchanged sentences

(dollars in thousands, except share data)

March 31, December 31,

June 30, December 31,

Real estate properties:

13 unchanged sentences

Liabilities and Equity

Secured revolving credit facility $ — $ —

Senior secured notes, net 600,235 826,974

18 unchanged sentences

(amounts in thousands, except per share data)

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Rental income $ 55,167 $ 62,870 $ 113,725 $ 125,520

7 unchanged sentences

Total expenses 421,091 387,055 851,238 784,588

Gain (loss) on sale of properties 110,140 ( 5,874 )

(Loss) gain on sale of properties ( 7,429 ) ( 13,213 ) 102,711 ( 19,087 )

Gain on insurance recoveries — — 7,522 —

Interest and other income 2,982 2,403 5,081 4,640

Interest expense (including net amortization of debt discounts, premiums, issuance costs and interest rate cap of $ 26,087 and $ 24,863 , respectively)

Interest expense (including net amortization of debt discounts, premiums and issuance costs of $ 19,886 , $ 25,591 , $ 45,973 and $ 50,454 , respectively)

( 50,926 ) ( 58,702 ) ( 108,757 ) ( 116,278 )

Loss on modification or early extinguishment of debt ( 126 ) ( 209 ) ( 29,197 ) ( 209 )

Loss before income taxes and equity in net earnings of investees ( 10,424 ) ( 87,970 )

Loss before income taxes and equity in net earnings (losses) of investees ( 93,878 ) ( 85,384 ) ( 104,302 ) ( 173,354 )

Income tax expense ( 843 ) ( 170 ) ( 892 ) ( 357 )

Equity in net earnings of investees 1,487 1,898

Equity in net earnings (losses) of investees 3,082 ( 12,307 ) 4,569 ( 10,409 )

Net loss $ ( 91,639 ) $ ( 97,861 ) $ ( 100,625 ) $ ( 184,120 )

25 unchanged sentences

241,267,819 2,413 4,620,899 1,399,037 4 ( 4,074,302 ) 1,948,051

Net loss — — — ( 91,639 ) — — ( 91,639 )

Other comprehensive income — — — — 14 — 14

Distributions — — — — — ( 2,413 ) ( 2,413 )

Share grants 203,987 2 1,067 — — — 1,069

Share repurchases ( 38,908 ) ( 1 ) ( 102 ) — — — ( 103 )

Share forfeitures ( 12,557 ) — ( 6 ) — — — ( 6 )

Balance at June 30, 2025:

241,420,341 $ 2,414 $ 4,621,858 $ 1,307,398 $ 18 $ ( 4,076,715 ) $ 1,854,973

Balance at December 31, 2023:

7 unchanged sentences

240,393,722 2,404 4,618,950 1,692,019 ( 4 ) ( 4,064,666 ) 2,248,703

Net loss — — — ( 97,861 ) — — ( 97,861 )

Other comprehensive loss — — — — ( 22 ) — ( 22 )

Distributions — — — — — ( 2,404 ) ( 2,404 )

Share grants 259,259 3 937 — — — 940

Share repurchases ( 17,511 ) ( 1 ) ( 41 ) — — — ( 42 )

Share forfeitures ( 16,000 ) — — — — — —

Balance at June 30, 2024:

240,619,470 $ 2,406 $ 4,619,846 $ 1,594,158 $ ( 26 ) $ ( 4,067,070 ) $ 2,149,314

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

2 unchanged sentences

(dollars in thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Cash flows from operating activities:

Net loss $ ( 100,625 ) $ ( 184,120 )

Adjustments to reconcile net loss to cash (used in) provided by operating activities:

Adjustments to reconcile net loss to cash provided by operating activities:

Depreciation and amortization 134,591 138,490

Net amortization of debt discounts, premiums, issuance costs and interest rate cap 26,087 24,863

Net amortization of debt discounts, premiums and issuance costs 45,973 50,454

Payment of accreted interest on senior secured notes

7 unchanged sentences

Unconsolidated joint venture distributions — 1,231

Equity in net earnings of investees ( 1,487 ) ( 1,898 )

Equity in net (earnings) losses of investees ( 4,569 ) 10,409

Change in assets and liabilities:

3 unchanged sentences

Other liabilities 12,114 ( 3,193 )

Net cash (used in) provided by operating activities ( 3,243 ) 28,602

Net cash provided by operating activities 49,777 72,894

Cash flows from investing activities:

5 unchanged sentences

Proceeds from insurance recoveries 1,308 170

Purchase of interest rate cap ( 47 ) —

Net cash provided by (used in) investing activities 270,038 ( 95,691 )

2 unchanged sentences

Redemption of senior secured notes ( 238,555 ) —

Redemption of senior unsecured notes ( 380,000 ) ( 60,000 )

Repayment of other debt ( 1,659 ) ( 1,586 )

3 unchanged sentences

Distributions to shareholders ( 4,826 ) ( 4,808 )

Net cash used in financing activities ( 131,049 ) ( 8,561 )

Increase (decrease) in cash and cash equivalents and restricted cash 156,801 ( 38,798 )

Net cash (used in) provided by financing activities ( 321,088 ) 45,921

(Decrease) increase in cash and cash equivalents and restricted cash ( 1,273 ) 23,124

Cash and cash equivalents and restricted cash at beginning of period 149,854 246,961

4 unchanged sentences

(dollars in thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Supplemental cash flow information:

4 unchanged sentences

Real estate improvements accrued, not paid $ 13,708 $ 16,355

(1) Includes $ 34,700 of accreted interest paid during the three months ended March 31, 2025 on our senior secured notes due 2026.

(1) Includes $ 34,700 of accreted interest paid during the six months ended June 30, 2025 on our senior secured notes due 2026.

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 condensed consolidated balance sheets to the amount shown in our condensed consolidated statements of cash flows:

As of March 31,

As of June 30,

Cash and cash equivalents $ 141,769 $ 265,563

38 unchanged sentences

Real Estate and Other Investments

As of March 31, 2025, we owned 343 properties located in 34 states and Washington, D.C., including 11 properties classified as held for sale and two closed senior living communities, and we owned an equity interest in each of two unconsolidated joint ventures that own medical office and life science properties located in five states.

As of June 30, 2025, we owned 341 properties located in 34 states and Washington, D.C., including 21 properties classified as held for sale and one closed senior living community, and we owned an equity interest in each of two unconsolidated joint ventures that own medical office and life science properties located in five states.

Dispositions:

The table below represents the sale prices, excluding closing costs, of our dispositions for the three months ended March 31, 2025.

The table below represents the sale prices, excluding closing costs, of our dispositions for the six months ended June 30, 2025.

We do not believe these sales represent a strategic shift in our business.

As a result, the results of operations

As a result, the results of operations for these

DIVERSIFIED HEALTHCARE TRUST

1 unchanged sentence

(dollar amounts in thousands, except per share data or as otherwise stated)

for these properties are included in continuing operations through the date of sale of such properties in our condensed consolidated statements of comprehensive income (loss).

Date of Sale State Type of Property Number of Properties Sales Price Gain on Sale

properties are included in continuing operations through the date of sale of such properties in our condensed consolidated statements of comprehensive income (loss).

Date of Sale State Type of Property Number of Properties Sales Price Gain (Loss) on Sale

January 2025 Delaware Senior Living (SHOP) 1 $ 2,900 $ 1,263

6 unchanged sentences

1 7,100 1,529

May 2025 Tennessee Senior Living (SHOP) 1 11,150 ( 5,261 )

May 2025 Missouri Medical Office 1 5,250 ( 2,168 )

26 $ 337,225 $ 102,711

(1) We used aggregate net proceeds of $ 299,158 from the sales of these properties to partially redeem our outstanding senior secured notes due 2026.

As of March 31, 2025, we had 11 properties classified as held for sale in our condensed consolidated balance sheet as follows:

As of June 30, 2025, we had 21 properties classified as held for sale in our condensed consolidated balance sheet as follows:

Segment Number of Properties Real Estate Properties, Net

Medical Office and Life Science (1)

SHOP 15 $ 69,610

Medical Office and Life Science (1)

All Other 1 2,246

(1) The net proceeds from the sale of one of these properties are required to be used to partially redeem our outstanding senior secured notes due 2026, if the sale of that property is completed.

We expect to sell that property during the fourth quarter of 2025 for a sales price of $ 6,500 , excluding closing costs.

Subsequent to March 31, 2025, we sold one property for a sales price of $ 11,150 , excluding closing costs.

As of May 2, 2025, we had 19 properties under agreements or letters of intent to sell for an aggregate sales price of $ 115,773 , excluding closing costs.

The net proceeds from the sales of two of these properties, which have an expected aggregate sales price of $ 13,118 , excluding closing costs, are required to be used to partially redeem our outstanding senior secured notes due 2026, if the sales of such properties are completed.

(1) The net proceeds from the sale of two of these properties are required to be used to partially redeem our outstanding senior secured notes due 2026, if the sales of those properties are completed.

We expect to sell these properties during the fourth quarter of 2025 for an aggregate sales price of $ 13,118 , excluding closing costs.

Subsequent to June 30, 2025, we sold three properties for an aggregate sales price of $ 8,800 , excluding closing costs.

As of August 1, 2025, we had 49 properties under agreements or letters of intent to sell for an aggregate sales price of $ 279,923 , excluding closing costs.

The net proceeds from the sales of 11 of these properties, which have an expected aggregate sales price of $ 90,588 , excluding closing costs, are required to be used to partially redeem our outstanding senior secured notes due 2026, if the sales of such properties are completed.

We may not complete the sales of any or all of the properties we currently plan to sell.

5 unchanged sentences

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 the three months ended March 31, 2025, we recorded impairment charges of $ 38,472 to adjust the carrying value of four medical office properties to their estimated fair value.

These properties were classified as held for sale in our condensed consolidated balance sheet as of March 31, 2025.

During the six months ended June 30, 2025, we recorded impairment charges of $ 52,266 to adjust the carrying value of 10 medical office properties to their estimated fair values.

We sold one of these properties during the six months ended June 30, 2025.

Four of these properties were classified as held for sale in our condensed consolidated balance sheet as of June 30, 2025.

DIVERSIFIED HEALTHCARE TRUST

1 unchanged sentence

(dollar amounts in thousands, except per share data or as otherwise stated)

Subsequent to June 30, 2025, we sold two of these 10 properties, and as of August 1, 2025, seven properties were under agreements or letters of intent to sell.

During the six months ended June 30, 2025, we also recorded impairment charges of $ 17,199 to adjust the carrying value of 10 senior living communities in our senior housing operating portfolio, or SHOP, to their estimated fair values.

These communities were classified as held for sale in our condensed consolidated balance sheet as of June 30, 2025.

Investments and Capital Expenditures:

The following is a summary of capital expenditures, development, redevelopment and other activities for the periods presented:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

SHOP fixed assets and capital improvements $ 24,283 $ 21,623 $ 45,398 $ 31,714

Medical Office and Life Science Portfolio capital expenditures:

2 unchanged sentences

Building improvements (2)

1,518 1,852 3,042 2,771

Recurring capital expenditures - Medical Office and Life Science Portfolio 5,046 8,261 10,417 15,209

Wellness centers lease related costs (1)

SHOP fixed assets and capital improvements 21,115 10,091

— 4,591 — 11,514

Total recurring capital expenditures $ 29,329 $ 34,475 $ 55,815 $ 58,437

Development, redevelopment and other activities - Medical Office and Life Science Portfolio (3)

Development, redevelopment and other activities - SHOP (3)

$ 4,660 $ 5,705 $ 10,228 $ 6,894

Development, redevelopment and other activities - Medical Office and Life Science Portfolio (3)

— 1,112 — 1,825

Total development, redevelopment and other activities $ 4,660 $ 6,817 $ 10,228 $ 8,719

Capital expenditures by segment:

Medical Office and Life Science Portfolio $ 5,371 $ 7,661

SHOP $ 28,943 $ 27,328 $ 55,626 $ 38,608

Medical Office and Life Science Portfolio 5,046 9,373 10,417 17,034

All Other - wellness centers

— 4,591 — 11,514

Total capital expenditures $ 33,989 $ 41,292 $ 66,043 $ 67,156

3 unchanged sentences

Equity Method Investments in Unconsolidated Joint Ventures:

As of March 31, 2025, we had equity investments in unconsolidated joint ventures as follows:

Equity Method Investments in Joint Venture DHC Ownership DHC Carrying Value of Investment at March 31, 2025

As of June 30, 2025, we had equity investments in unconsolidated joint ventures as follows:

Equity Method Investments in Joint Venture DHC Ownership DHC Carrying Value of Investment at June 30, 2025

Number of Properties State Square Feet

5 unchanged sentences

(dollar amounts in thousands, except per share data or as otherwise stated)

The following table provides a summary of the mortgage debts of these joint ventures as of March 31, 2025:

The following table provides a summary of the mortgage debts of these joint ventures as of June 30, 2025:

Joint Venture Coupon Rate Maturity Date Principal Balance (1)

15 unchanged sentences

We account for the unconsolidated joint venture for 10 medical office and life science properties in which we own a 20 % equity interest, or the LSMD JV, and the unconsolidated joint venture for a life science property located in Boston, Massachusetts in which we own a 10 % equity interest, or the Seaport JV, using the equity method of accounting under the fair value option.

We recognized changes in the fair value of our investments in our unconsolidated joint ventures of $ 1,138 and $ 1,613 during the three months ended March 31, 2025 and 2024, respectively.

These amounts are included in equity in net earnings of investees in our condensed consolidated statements of comprehensive income (loss).

We recognized changes in the fair value of our investments in our unconsolidated joint ventures of $ 2,654 and $( 21,493 ) during the three months ended June 30, 2025 and 2024, respectively, and $ 3,792 and $( 19,880 ) during the six months ended June 30, 2025 and 2024, respectively.

These amounts are included in equity in net earnings (losses) of investees in our condensed consolidated statements of comprehensive income (loss).

See Note 6 for further information regarding the valuation of our investment in these joint ventures.

Equity Method Investment in AlerisLife:

As of March 31, 2025, we owned approximately 34.0 % of the outstanding common shares of AlerisLife Inc., or AlerisLife.

As of June 30, 2025, we owned approximately 34.0 % of the outstanding common shares of AlerisLife Inc., or AlerisLife.

We do not control the activities that are most significant to AlerisLife and, as a result, we account for our non-controlling interest in AlerisLife using the equity method of accounting.

As of March 31, 2025, our investment in AlerisLife had a carrying value of $ 7,965 .

As of June 30, 2025, our investment in AlerisLife had a carrying value of $ 8,418 .

The cost basis of our investment in AlerisLife exceeded our proportionate share of AlerisLife's total stockholders' equity book value on the date of acquisition of our initial interest in AlerisLife, which was February 16, 2024, by an aggregate of $ 29,500 .

As required under GAAP, we are amortizing this difference to equity in earnings of an investee over 21 years, the weighted average remaining useful life of the real estate assets owned by AlerisLife and the intangible contract asset with us as of the date of acquisition.

We recorded amortization of the basis difference of $ 351 and $ 174 for the three months ended March 31, 2025 and 2024, respectively.

We recognized income of $( 2 ) and $ 111 related to our investment in AlerisLife for the three months ended March 31, 2025 and 2024, respectively.

These amounts are included in equity in net earnings of investees in our condensed consolidated statements of comprehensive income (loss).

We recorded amortization of the basis difference of $ 351 and $ 352 for the three months ended June 30, 2025 and 2024, respectively, and $ 702 and $ 526 for the six months ended June 30, 2025 and 2024, respectively.

We recognized income of $ 77 and $ 8,834 related to our investment in AlerisLife for the three months ended June 30, 2025 and 2024, respectively, and $ 75 and $ 8,945 for the six months ended June 30, 2025 and 2024, respectively.

These amounts are included in equity in net earnings (losses) of investees in our condensed consolidated statements of comprehensive income (loss).

On February 14, 2025, AlerisLife paid an aggregate cash dividend of $ 50,000 to its stockholders.

Our pro rata share of this cash dividend was $ 17,000 and our basis in the equity method investment in AlerisLife was reduced by such amount.

On July 15, 2025, AlerisLife paid an aggregate cash dividend of $ 10,000 to its stockholders.

Our pro rata share of this cash dividend was $ 3,400 and our basis in the equity method investment in AlerisLife will be reduced by such amount.

See Note 11 for further information regarding our investment in AlerisLife.

1 unchanged sentence

We carry comprehensive property, casualty, flood and business interruption insurances which covered our losses at these senior living communities, subject to a deductible.

During the three months ended March 31, 2025, we recognized a gain on insurance recoveries of $ 7,522 as a result of insurance proceeds received for these damaged senior living communities and the closing of the associated claim.

During the six months ended June 30, 2025, we recognized a gain on

DIVERSIFIED HEALTHCARE TRUST

1 unchanged sentence

(dollar amounts in thousands, except per share data or as otherwise stated)

insurance recoveries of $ 7,522 as a result of insurance proceeds received for these damaged senior living communities and the closing of the associated claim.

We are a lessor of medical office and life science properties, senior living communities and other healthcare related properties.

4 unchanged sentences

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 $ 455 and $ 291 for the three months ended March 31, 2025 and 2024, respectively.

Rents receivable, excluding receivables related to our properties classified as held for sale, if any, include $ 69,948 and $ 69,814 of straight line rent receivables at March 31, 2025 and December 31, 2024, respectively, and are included in other assets, net in our condensed consolidated balance sheets.

We decreased rental income to record revenue on a straight line basis by $ 146 for the three months ended June 30, 2025.

We increased rental income to record revenue on a straight line basis by $ 309 for the six months ended June 30, 2025 and $ 656 and $ 947 for the three and six months ended June 30, 2024, respectively.

Rents receivable, excluding receivables related to our properties classified as held for sale, if any, include $ 69,749 and $ 69,814 of straight line rent receivables at June 30, 2025 and December 31, 2024, respectively, and are included in other assets, net in our condensed 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 $ 10,838 and $ 11,350 for the three months ended March 31, 2025 and 2024, respectively, of which tenant reimbursements totaled $ 10,423 and $ 11,284 , respectively.

Such payments totaled $ 9,812 and $ 11,635 for the three months ended June 30, 2025 and 2024, respectively, of which tenant reimbursements totaled $ 9,768 and $ 11,586 , respectively, and $ 20,650 and $ 22,985 for the six months ended June 30, 2025 and 2024, respectively, of which tenant reimbursements totaled $ 20,191 and $ 22,870 , respectively.

Right of Use Asset and Lease Liability:

For leases where we are the lessee, we recognize 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 $ 19,169 and $ 19,555 , respectively, as of March 31, 2025, and $ 20,025 and $ 20,411 , respectively, as of December 31, 2024.

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 $ 18,301 and $ 18,689 , respectively, as of June 30, 2025, and $ 20,025 and $ 20,411 , respectively, as of December 31, 2024.

The right of use assets and related lease liabilities are included within other assets, net and other liabilities , respectively, within our condensed consolidated balance sheets.

1 unchanged sentence

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 condensed consolidated balance sheets.

At March 31, 2025 and December 31, 2024, our outstanding indebtedness consisted of the following:

DIVERSIFIED HEALTHCARE TRUST

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(dollar amounts in thousands, except per share data or as otherwise stated)

At June 30, 2025 and December 31, 2024, our outstanding indebtedness consisted of the following:

Senior Unsecured Notes:

Principal Balance as of

Coupon Rate Maturity March 31, 2025 December 31, 2024

Senior unsecured notes (1)(2)

9.750 % June 2025 $ 380,000 $ 380,000

Coupon Rate Maturity June 30, 2025 December 31, 2024

Senior unsecured notes 9.750 % June 2025 $ — $ 380,000

Senior unsecured notes 4.750 % February 2028 500,000 500,000

8 unchanged sentences

(1) These notes are fully and unconditionally guaranteed, on a joint, several and unsecured basis, by all of our subsidiaries except certain excluded subsidiaries.

DIVERSIFIED HEALTHCARE TRUST

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(dollar amounts in thousands, except per share data or as otherwise stated)

subordinated to all indebtedness and other liabilities and any preferred equity of any of our subsidiaries that do not guarantee the notes.

(2) In April 2025, we used the net proceeds from the $ 140,000 floating rate mortgage loan executed in March 2025 and cash on hand to partially redeem $ 140,000 of these senior unsecured notes.

The notes and related guarantees are effectively subordinated to all of our and the subsidiary guarantors' secured indebtedness, respectively, to the extent of the value of the applicable collateral, 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.

Secured and Other Debt:

Properties Securing Principal Balance as of (1)

Net Book Value of Collateral

At March 31, 2025 At December 31, 2024 March 31, 2025 December 31, 2024 Interest

Rate Maturity March 31, 2025 December 31, 2024

Net Book Value of Collateral as of

At June 30, 2025 At December 31, 2024 June 30, 2025 December 31, 2024 Interest

Rate Maturity June 30, 2025 December 31, 2024

Secured revolving credit facility

14 — $ — $ — 7.05 % June 2029 $ 327,702 $ —

Senior secured notes (2)(3)

73 95 641,376 940,534 0.00 % January 2026 863,318 1,064,171

Mortgage note 8 8 120,000 120,000 6.86 % June 2034 188,869 191,186

Mortgage note 1 1 7,044 7,464 6.44 % July 2043 12,986 13,097

Floating rate mortgage loan (4)

14 — 140,000 — 6.82 % March 2028 144,293 —

Mortgage note 4 — 64,000 — 6.57 % June 2030 136,775 —

Mortgage note 8 8 120,000 120,000 6.86 % June 2034 186,577 191,186

Mortgage notes (5)

7 — 108,873 — 6.22 % May 2035 150,658 —

Mortgage notes (6)

2 — 30,284 — 6.36 % June 2035 35,540 —

Mortgage note 1 1 6,652 7,464 6.44 % July 2043 12,863 13,097

Finance Leases 2 2 1,491 2,338 7.70 % April 2026 20,895 21,606

1 unchanged sentence

Unamortized discount ( 36,710 ) ( 101,035 )

( 53,017 ) ( 101,035 )

Unamortized debt issuance costs (7)

( 18,783 ) ( 15,716 )

Total secured and other debt, net $ 1,057,183 $ 953,585

3 unchanged sentences

These notes and the guarantees provided by the Collateral Guarantors are secured by a first priority lien on and security interest in each of the collateral properties and 100 % of the equity interests in each of the Collateral Guarantors.

The guarantees provided by all our subsidiaries other than the Collateral Guarantors and certain excluded subsidiaries are effectively subordinated to all of the subsidiary guarantors' secured indebtedness to the extent of the value of the applicable collateral, and the notes and related 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.

The unamortized discount is related to these notes.

The guarantees provided by all our subsidiaries other than the Collateral Guarantors and certain excluded

DIVERSIFIED HEALTHCARE TRUST

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(dollar amounts in thousands, except per share data or as otherwise stated)

subsidiaries are effectively subordinated to all of the subsidiary guarantors' secured indebtedness to the extent of the value of the applicable collateral, and the notes and related 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) We have a one-time option to extend the maturity date of these senior secured 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 senior secured notes remain outstanding.

(5) We have two one-year extension options for the maturity date of this loan, subject to satisfaction of certain conditions and payment of an extension fee.

This loan requires that interest be paid at an annual rate of SOFR plus a premium of 2.50 %, with interest-only payments through March 2027, and we have two six-month extension options for the interest-only period, subject to satisfaction of certain conditions.

In connection with this loan, we have purchased an interest rate cap for $ 47 through March 2026 with a SOFR strike rate equal to 4.50 %.

As of March 31, 2025, all $ 641,376 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 all our subsidiaries other than the Collateral Guarantors and certain excluded subsidiaries, and all $ 380,000 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 certain excluded subsidiaries.

(4) This mortgage loan requires that interest be paid at an annual rate of SOFR plus a premium of 2.50 % with interest-only payments through April 2027, and we have two six-month extension options of the interest-only period, subject to satisfaction of certain conditions.

In connection with this mortgage loan, we have purchased an interest rate cap with a SOFR strike rate equal to 4.50 % pursuant to the terms of the applicable loan agreement.

(5) These mortgage loans require interest-only payments through May 2030.

(6) These mortgage loans require interest-only payments through June 2028.

(7) Excludes unamortized debt issuance costs for our revolving credit facility as these costs are included in other assets, net in our condensed consolidated balance sheets.

As of June 30, 2025, all $ 641,376 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 all our subsidiaries other than the Collateral Guarantors and certain excluded subsidiaries, 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 certain excluded subsidiaries.

The notes and related 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 applicable collateral, and the notes and related 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 March 31, 2025.

As of May 2, 2025, we are under agreements to sell two additional properties that secure these senior secured notes for an expected aggregate sales price of $ 13,118 , excluding closing costs.

Our remaining $ 1,100,000 of senior unsecured notes do not have the benefit of any guarantees as of June 30, 2025.

As of August 1, 2025, we are under agreements or letters of intent to sell 11 additional properties that secure our senior secured notes due 2026 for an expected aggregate sales price of $ 90,588 , excluding closing costs.

The net proceeds from these sales are required to be used to partially redeem these senior secured notes, if these sales are completed.

DIVERSIFIED HEALTHCARE TRUST

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(dollar amounts in thousands, except per share data or as otherwise stated)

Our senior secured notes due 2026 and the guarantees provided by the Collateral Guarantors are secured by a first priority lien and security interest in each of the collateral properties and 100 % of the equity interests in each of the Collateral Guarantors.

1 unchanged sentence

The accreted value of these notes will increase 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.

During the three months ended March 31, 2025 and 2024, we recognized discount accretion of $ 22,122 and $ 20,659 , respectively, for our senior secured notes due 2026 in interest expense in our condensed consolidated statements of comprehensive income (loss).

The table below represents our indebtedness repayments, excluding scheduled payments on amortizing debt, for the three months ended March 31, 2025:

We recognized discount accretion of $ 16,307 and $ 21,440 for the three months ended June 30, 2025 and 2024, respectively, and $ 38,429 and $ 42,099 for the six months ended June 30, 2025 and 2024, respectively, for our senior secured notes due 2026 in interest expense in our condensed consolidated statements of comprehensive income (loss).

DIVERSIFIED HEALTHCARE TRUST

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(dollar amounts in thousands, except per share data or as otherwise stated)

The table below represents our indebtedness repayments, excluding scheduled payments on amortizing debt, for the six months ended June 30, 2025:

Date Debt Instrument Secured Property Count Interest Rate Original Maturity Date Outstanding Principal Balance Repayment Amount Remaining Principal Balance Loss on Modification or Early Extinguishment of Debt

Repayments during the three months ended March 31, 2025:

Repayments during the six months ended June 30, 2025:

March 2025 (1)

Senior secured notes 73 — % January 2026 $ 940,534 $ 299,158 $ 641,376 $ 29,071

(1) During the three months ended March 31, 2025, we sold 22 properties that secured our senior secured notes due 2026.

April 2025 Senior unsecured notes — 9.75 % June 2025 $ 380,000 140,000 $ 240,000 82

May 2025 Senior unsecured notes — 9.75 % June 2025 $ 240,000 140,000 $ 100,000 44

June 2025 Senior unsecured notes — 9.75 % June 2025 $ 100,000 100,000 $ — —

Total $ 679,158 $ 29,197

(1) During the six months ended June 30, 2025, we sold 22 properties that secured our senior secured notes due 2026.

We used aggregate net proceeds of $ 299,158 from the sales of these properties to partially redeem these senior secured notes.

In March 2025, we executed a $ 140,000 floating rate mortgage loan secured by 14 senior living communities in our senior housing operating portfolio, or SHOP, segment.

This mortgage loan matures in March 2028 and requires that interest be paid at an annual rate of SOFR plus a premium of 2.50 %, with interest-only payments through March 2027, and we have two six-month extension options of the interest-only period, subject to satisfaction of certain conditions.

In connection with this mortgage loan, we have purchased an interest rate cap for $ 47 through March 2026 with a SOFR strike rate equal to 4.50 %.

In April 2025, we used the net proceeds from this mortgage loan and cash on hand to partially redeem $ 140,000 of our then outstanding 9.75 % senior unsecured notes due June 2025.

In April 2025, we executed a $ 108,873 fixed rate mortgage loan secured by seven SHOP communities.

This mortgage loan matures in May 2035 and requires that interest be paid at an annual rate of 6.22 %, with interest-only payments through May 2030.

Also in April 2025, we provided notice to the holders of our 9.75 % senior unsecured notes due June 2025 to redeem $ 140,000 of these notes in May 2025 using these loan proceeds and cash on hand.

Additionally, we have executed term sheets with additional lenders for expected aggregate proceeds of $ 94,030 for loans that will be secured by an aggregate of six SHOP communities.

We intend to use these proceeds and cash on hand to fully redeem the remaining outstanding principal amount of our 9.75 % senior unsecured notes due in June 2025, which is our next significant debt maturity.

The closings of the additional loans are subject to conditions;

accordingly, we cannot be sure if we will close such loans for the expected proceeds or at all or that these closings will not be delayed.

Interest on our senior unsecured notes is payable either semi-annually or quarterly in arrears;

In March 2025, we executed a $ 140,000 floating rate mortgage loan secured by 14 SHOP communities.

This mortgage loan matures in March 2028 and requires that interest be paid at an annual rate of SOFR plus a premium of 2.50 % with interest-only payments through April 2027.

In April 2025, we executed a $ 108,873 fixed rate mortgage financing secured by seven SHOP communities.

These mortgage loans mature in May 2035 and require that interest be paid at an annual rate of 6.22 % with interest-only payments through May 2030.

In May 2025, we executed a $ 64,000 fixed rate mortgage loan secured by four SHOP communities.

This mortgage loan matures in June 2030 and requires that interest be paid at an annual rate of 6.57 %.

In May 2025, we executed a $ 30,284 fixed rate mortgage financing secured by two SHOP communities.

These mortgage loans mature in June 2035 and require that interest be paid at an annual rate of 6.36 % with interest-only payments through June 2028.

From April through June 2025, we used the net proceeds from the 2025 mortgage financings, together with cash on hand, to fully redeem the remaining $ 380,000 principal balance of our 9.75 % senior unsecured notes due June 2025.

In June 2025, we obtained a $ 150,000 revolving credit facility secured by 14 senior living communities in our SHOP segment.

Our revolving credit facility is available for general business purposes, including acquisitions.

We can borrow, repay and reborrow funds available under our revolving credit facility, and no principal repayments are due, until maturity.

Availability of borrowings under the agreement governing our revolving credit facility, or our credit agreement, is subject to satisfying certain financial covenants and other credit facility conditions.

Our revolving credit facility matures in June 2029 and we have two six-month extension options for the maturity date of the facility, subject to satisfaction of certain conditions and payment of an extension fee.

Interest payable on borrowings under our revolving credit facility is based on SOFR plus a premium of 2.50 % to 3.00 %, depending on our net leverage ratio, as defined in our credit agreement, which was 2.50 % as of June 30, 2025.

We also pay an unused commitment fee of 25 to 35 basis points per annum based on amounts outstanding under our revolving credit facility.

As of June 30, 2025, the annual interest rate payable on borrowings under our revolving credit facility was 7.05 %.

As of June 30, 2025 and August 1, 2025, we had no borrowings under our revolving credit facility and $ 150,000 available for borrowings.

Interest on our senior unsecured notes is payable either semiannually 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.

Our mortgage note due June 2034 requires monthly interest payments and no principal payment is due until maturity, and our mortgage note due July 2043 requires monthly principal and interest payments.

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.

Our mortgage loan maturing in June 2034 requires monthly interest payments and no principal payment is due until maturity, while our mortgage loans maturing in March 2028, May 2035 and June 2035 require monthly interest payments and no principal payment is due for a specified amount of time.

Our mortgage loans maturing in June 2030 and July 2043 require

DIVERSIFIED HEALTHCARE TRUST

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(dollar amounts in thousands, except per share data or as otherwise stated)

monthly principal and interest payments.

Payments under our finance leases are due monthly.

We include amortization of finance lease assets in depreciation and amortization expense.

Our credit agreement, our mortgage loan agreements and 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 credit agreement and 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.

Borrowings under our revolving credit facility are subject to satisfying certain financial covenants and other credit facility conditions.

We believe we were in compliance with the terms and conditions of our debt agreements as of June 30, 2025.

Fair Value of Assets and Liabilities

The following table presents certain of our assets that are measured at fair value at March 31, 2025 and December 31, 2024, categorized by the level of inputs as defined in the fair value hierarchy under GAAP, used in the valuation of each asset.

As of March 31, 2025 As of December 31, 2024

The following table presents certain of our assets that are measured at fair value at June 30, 2025 and December 31, 2024, categorized by the level of inputs as defined in the fair value hierarchy under GAAP, used in the valuation of each asset.

As of June 30, 2025 As of December 31, 2024

Description Carrying Value Carrying Value

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Real estate properties held for sale (Level 2) (4)

$ 20,586 $ 24,074

(1) The 10 % equity interest we own in the Seaport JV is included in investments in unconsolidated joint ventures in our condensed consolidated balance sheet, and is reported at fair value, which is based on significant unobservable inputs (Level 3 inputs).

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(4) We have assets in our condensed consolidated balance sheets that are measured at fair value on a non-recurring basis.

During the three months ended March 31, 2025, we recorded impairment charges of $ 38,472 to reduce the carrying value of four medical office properties that are classified as held for sale to its estimated sales price, less estimated costs to sell, of $ 20,586 under agreements to sell that we have entered into with third parties.

During the three months ended June 30, 2025, we recorded impairment charges of $ 13,794 to reduce the carrying value of seven medical office properties, two of which are classified as held for sale, to their estimated sales price, less estimated costs to sell, of $ 17,892 under agreements or letters or intent to sell that we have entered into with third parties.

During the three months ended June 30, 2025, we also recorded impairment charges of $ 17,199 to reduce the carrying value of 10 senior living communities classified as held for sale to their estimated sales price, less estimated costs to sell, of $ 23,042 under agreements to sell that we have entered into with third parties.

See Note 3 for further information about impairment charges and the properties we have classified as held for sale.

In addition to the assets described in the table above, our financial instruments at March 31, 2025 and December 31, 2024 included cash and cash equivalents, restricted cash, certain other assets, senior unsecured notes, senior secured notes, secured debt and finance leases and certain other unsecured obligations and liabilities.

In addition to the assets described in the table above, our financial instruments at June 30, 2025 and December 31, 2024 included cash and cash equivalents, restricted cash, certain other assets, our revolving credit facility, senior unsecured notes, senior secured 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 condensed consolidated financial statements as of such dates, except as follows:

As of March 31, 2025 As of December 31, 2024

DIVERSIFIED HEALTHCARE TRUST

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(dollar amounts in thousands, except per share data or as otherwise stated)

As of June 30, 2025 As of December 31, 2024

Description Carrying Value (1)

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(1) Includes unamortized net discounts, premiums and debt issuance costs, if any.

We estimated the fair values of our two issuances of senior unsecured notes due 2042 and 2046 based on the closing price on The Nasdaq Stock Market LLC, or Nasdaq, as of March 31, 2025 and December 31, 2024 (Level 1 inputs as defined in the fair value hierarchy under GAAP).

We estimated the fair values of our three issuances of senior unsecured notes due 2025,

DIVERSIFIED HEALTHCARE TRUST

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(dollar amounts in thousands, except per share data or as otherwise stated)

2028 and 2031 and our issuance of senior secured notes due 2026 using an average of the bid and ask price on Nasdaq on or about March 31, 2025 and December 31, 2024 (Level 2 inputs as defined in the fair value hierarchy under GAAP).

We estimated the fair values of our two issuances of senior unsecured notes due 2042 and 2046 based on the closing price on The Nasdaq Stock Market LLC, or Nasdaq, as of June 30, 2025 and December 31, 2024 (Level 1 inputs as defined in the fair value hierarchy under GAAP).

We estimated the fair values of our three issuances of senior unsecured notes due 2025, 2028 and 2031 and our issuance of senior secured notes due 2026 using an average of the bid and ask price on Nasdaq on or about June 30, 2025 and December 31, 2024 (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).

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Common Share Awards:

On March 20, 2025, in accordance with our Trustee compensation arrangements, we awarded 33,582 of our common shares in connection with the election of one of our Trustees in March 2025, valued at $ 2.68 per share, the closing price of our common shares on Nasdaq on that day .

On March 20, 2025, in accordance with our Trustee compensation arrangements, we awarded 33,582 of our common shares in connection with the election of one of our Trustees, valued at $ 2.68 per share, the closing price of our common shares on Nasdaq on that day .

On May 29, 2025, in accordance with our Trustee compensation arrangements, we awarded to each of our seven Trustees 29,141 of our common shares, valued at $ 3.26 per share, the closing price of our common shares on Nasdaq on that day.

Common Share Purchases:

During the three months ended March 31, 2025, we purchased 2,035 of our common shares, valued at a share price of $ 2.68 , from a former employee of The RMR Group LLC, or RMR, in satisfaction of tax withholding and payment obligations in connection with the vesting of awards of our common shares.

We withheld and purchased these common shares at their fair market values based upon the trading price of our common shares at the close of trading on Nasdaq on the purchase date.

During the three and six months ended June 30, 2025, we purchased an aggregate of 38,908 and 40,943 of our common shares, respectively, valued at a weighted average share price of $ 2.64 , from certain former officers and employees of The RMR Group LLC, or RMR, in satisfaction of tax withholding and payment obligations in connection with the vesting of prior awards of our common shares.

We withheld and purchased these common shares at their fair market values based upon the trading prices of our common shares at the close of trading on Nasdaq on the applicable purchase dates.

Distributions:

During the three months ended March 31, 2025, we paid a quarterly distribution to common shareholders as follows:

During the six months ended June 30, 2025, we declared and paid quarterly distributions to common shareholders as follows:

Declaration Date Record Date Payment Date Distribution Per Share Total Distributions

January 16, 2025 January 27, 2025 February 20, 2025 $ 0.01 $ 2,413

On April 10, 2025, we declared a quarterly distribution to common shareholders of record on April 22, 2025 of $ 0.01 per share, or approximately $ 2,413 .

We expect to pay this distribution on or about May 15, 2025 using cash on hand.

April 10, 2025 April 22, 2025 May 15, 2025 0.01 2,413

$ 0.02 $ 4,826

On July 10, 2025, we declared a quarterly distribution to common shareholders of record on July 21, 2025 of $ 0.01 per share, or approximately $ 2,414 .

We expect to pay this distribution on or about August 14, 2025 using cash on hand.

DIVERSIFIED HEALTHCARE TRUST

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(dollar amounts in thousands, except per share data or as otherwise stated)

Segment Reporting

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The CODM is our President and Chief Executive Officer.

Our two reportable segments are Medical Office and Life Science Portfolio and SHOP.

Our Medical Office and Life Science Portfolio segment primarily consists of medical office properties leased to medical providers and other medical related businesses, as well as life science properties primarily leased to biotech laboratories and other similar tenants.

Our two reportable segments are SHOP and Medical Office and Life Science Portfolio.

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.

The significant expense categories and amounts presented below align with the segment-level information that is regularly provided to our CODM.

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(dollar amounts in thousands, except per share data or as otherwise stated)

For the Three Months Ended March 31, 2025

Medical Office and Life Science Portfolio SHOP

For the Three Months Ended June 30, 2025

Medical Office and Life Science Portfolio Total

Rental income $ — $ 48,056 $ 48,056

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Acquisition and certain other transaction related costs ( 75 )

Interest and other income 2,982

Interest expense ( 43,794 )

Loss on modification or early extinguishment of debt ( 126 )

Income tax expense ( 843 )

Equity in net earnings of an investee 428

Net loss $ ( 91,639 )

(1) Revenue and net income from our triple net leased wellness centers and senior living communities that are leased to third party operators, which we do not consider to be sufficiently material to constitute a separate reportable segment.

(2) Other operating expenses for each reportable segment include expenses such as management fees, repairs and maintenance, cleaning and other costs incurred in connection with the operation of our properties.

(3) Other segment items for each reportable segment include impairment of assets, gain (loss) on sale of properties, gain (loss) on modification or early extinguishment of debt, equity in net earnings (losses) of investees, interest and other income and gain on insurance recoveries, as applicable.

DIVERSIFIED HEALTHCARE TRUST

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(dollar amounts in thousands, except per share data or as otherwise stated)

For the Six Months Ended June 30, 2025

Medical Office and Life Science Portfolio Total

Rental income $ — $ 97,819 $ 97,819

Residents fees and services 655,851 — 655,851

Total segment revenues 655,851 97,819 753,670

Reconciliation of revenue:

Other revenue (1)

Total revenues 769,576

Senior living labor and benefits 327,664 — 327,664

Dietary 41,531 — 41,531

Utilities 36,938 6,390 43,328

Real estate taxes 24,044 11,806 35,850

Insurance 18,332 1,223 19,555

Other operating expenses (2)

133,899 25,057 158,956

Interest expense 4,927 4,524 9,451

Depreciation and amortization 96,361 33,496 129,857

Other segment items (3)

13,657 39,343 53,000

Segment loss ( 41,502 ) ( 24,020 ) ( 65,522 )

Reconciliation of segment loss:

Other income (1)

General and administrative ( 20,177 )

Acquisition and certain other transaction related costs ( 99 )

Gain on sale of properties 97,560

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(dollar amounts in thousands, except per share data or as otherwise stated)

For the Three Months Ended March 31, 2024

Medical Office and Life Science Portfolio SHOP Total

For the Three Months Ended June 30, 2024

SHOP Medical Office and Life Science Portfolio Total

Rental income $ — $ 54,555 $ 54,555

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Interest expense ( 57,747 )

Loss on modification or early extinguishment of debt ( 209 )

Income tax expense ( 170 )

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As of March 31, 2025 As of December 31, 2024

Medical Office and Life Science Portfolio $ 1,474,576 $ 1,688,034

DIVERSIFIED HEALTHCARE TRUST

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(dollar amounts in thousands, except per share data or as otherwise stated)

For the Six Months Ended June 30, 2024

SHOP Medical Office and Life Science Portfolio Total

Rental income $ — $ 108,704 $ 108,704

Residents fees and services 616,648 — 616,648

Total segment revenues 616,648 108,704 725,352

Reconciliation of revenue:

Other revenue (1)

Total revenues 742,168

Senior living labor and benefits 312,607 — 312,607

Dietary 41,496 — 41,496

Utilities 34,809 6,399 41,208

Real estate taxes 23,132 14,239 37,371

Insurance 22,547 1,780 24,327

Other operating expenses (2)

128,363 25,761 154,124

Interest expense 129 1,116 1,245

Depreciation and amortization 93,833 39,715 133,548

Other segment items (3)

— 57,654 57,654

Segment loss ( 40,268 ) ( 37,960 ) ( 78,228 )

Reconciliation of segment loss:

Other income (1)

General and administrative ( 13,830 )

Acquisition and certain other transaction related costs ( 1,912 )

Interest and other income 4,640

Interest expense ( 115,033 )

Loss on modification or early extinguishment of debt ( 209 )

Income tax expense ( 357 )

Equity in net earnings of an investee 9,471

Net loss $ ( 184,120 )

As of June 30, 2025 As of December 31, 2024

SHOP $ 3,004,547 $ 3,084,101

Medical Office and Life Science Portfolio 1,441,873 1,688,034

All Other 310,021 364,870

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AlerisLife guarantees the payment and performance of each of its applicable subsidiary's obligations under the applicable management agreements.

We lease our managed senior living communities to our taxable REIT subsidiaries, or TRSs.

Our Senior Living Communities Managed by Five Star.

Five Star managed 118 and 119 of our senior living communities as of March 31, 2025 and 2024, respectively.

We lease our senior living communities that are managed by Five Star to our taxable REIT subsidiaries, or TRSs.

We incurred management fees payable to Five Star of $ 11,234 and $ 10,407 for the three months ended March 31, 2025 and 2024, respectively.

For the three months ended March 31, 2025 and 2024, $ 10,639 and $ 9,998 , respectively, of the total management fees were expensed to property operating expenses in our condensed consolidated statements of comprehensive income (loss) and $ 595 and $ 409 , respectively, were capitalized in our condensed consolidated balance sheets.

Five Star managed 118 and 119 of our senior living communities as of June 30, 2025 and 2024, respectively.

We incurred management fees payable to Five Star of $ 11,140 and $ 10,444 for the three months ended June 30, 2025 and 2024, respectively, and $ 22,374 and $ 20,851 for the six months ended June 30, 2025 and 2024, respectively.

For the three months ended June 30, 2025 and 2024, $ 10,636 and $ 9,995 , respectively, of the total management fees were expensed to property operating expenses in our condensed consolidated statements of comprehensive income (loss) and $ 504 and $ 449 , respectively, were capitalized in our condensed consolidated balance sheets.

For the six months ended June 30, 2025 and 2024, $ 21,275 and $ 19,993 , respectively, of the total management fees were expensed to property operating expenses in our condensed consolidated statements of comprehensive income (loss) and $ 1,099 and $ 858 , respectively, were capitalized in our condensed consolidated balance sheets.

The amounts capitalized are being depreciated over the estimated useful lives of the related capital assets.

Our Senior Living Communities Managed by Other Third Party Managers.

Several other third party managers managed 113 and 111 of our senior living communities as of March 31, 2025 and 2024, respectively.

We lease our senior living communities that are managed by these third party managers to our TRSs.

We incurred management fees payable to these third party managers of $ 6,334 and $ 5,725 for the three months ended March 31, 2025 and 2024, respectively.

Additionally, we incurred incentive management fees to certain of our other third party operators of $ 351 and $ 0 during the three months ended March 31, 2025 and 2024, respectively.

Several other third party managers managed 112 and 111 of our senior living communities as of June 30, 2025 and 2024, respectively.

We incurred management fees payable to these third party managers of $ 5,970 and $ 5,758 for the three months ended June 30, 2025 and 2024, respectively, and $ 12,304 and $ 11,483 for the six months ended June 30, 2025 and 2024, respectively.

Additionally, we incurred incentive management fees payable to certain of these third party managers of $ 351 for the six months ended June 30, 2025.

These amounts are included in property operating expenses in our condensed consolidated statements of comprehensive income (loss).

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:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

Revenue from contracts with customers:

2025 2024 2025 2024

Basic housing and support services $ 256,114 $ 241,116 $ 508,886 $ 484,771

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Business Management Agreements with RMR.

Pursuant to our business management agreement and in accordance with GAAP, we accrued estimated incentive management fees during the three months ended March 31, 2025 and 2024.

Pursuant to our business management agreement and in accordance with GAAP, we accrued estimated incentive management fees during the three and six months ended June 30, 2025 and 2024, if any.

The actual amount of incentive management fees incurred for 2025, if any, will be based on our common share total return, as defined in our business management agreement, for the three year period ending December 31, 2025, and will be payable to RMR in January 2026.

We did not incur any incentive management fees for the year ended December 31, 2024.

Expense Reimbursement.

We are generally responsible for all our operating expenses, including certain expenses incurred or arranged by RMR on our behalf.

DIVERSIFIED HEALTHCARE TRUST

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(dollar amounts in thousands, except per share data or as otherwise stated)

costs of RMR's centralized accounting personnel, our share of RMR's costs for providing our internal audit function, or as otherwise agreed.

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.

For the three months ended March 31, 2025 and 2024, the business management fees, incentive management fees, property management fees and construction supervision fees and expense reimbursements recognized in our condensed consolidated financial statements were as follows:

Three Months Ended March 31,

For the three and six months ended June 30, 2025 and 2024, the business management fees, incentive management fees, property management fees and construction supervision fees and expense reimbursements recognized in our condensed consolidated financial statements were as follows:

Three Months Ended June 30, Six Months Ended June 30,

Financial Statement Line Item 2025 2024 2025 2024

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Construction supervision fees Building and improvements (3)

208 274 434 640

Total $ 1,400 $ 1,720 $ 2,890 $ 3,624

Expense Reimbursement:

Property level expenses General and administrative expenses $ 50 $ 82

Property level expenses Property operating expenses $ 3,318 $ 3,631 $ 7,059 $ 7,277

Other reimbursed expenses General and administrative expenses 50 82 100 164

Total $ 3,368 $ 3,713 $ 7,159 $ 7,441

(1) The net business management fees we recognized for the three months ended March 31, 2025 and 2024 reflect a reduction of $ 744 for each of those periods for the amortization of the liability we recorded in connection with our former investment in The RMR Group Inc., or RMR Inc.

(2) The net property management and construction supervision fees we recognized for the three months ended March 31, 2025 and 2024 reflect a reduction of $ 199 for each of those periods for the amortization of the liability we recorded in connection with our former investment in RMR Inc..

(1) The net business management fees we recognized reflect a reduction of $ 743 for each of the three months ended June 30, 2025 and 2024 and $ 1,487 for each of the six months ended June 30, 2025 and 2024, for the amortization of the liability we recorded in connection with our former investment in The RMR Group Inc., or RMR Inc.

(2) The net property management and construction supervision fees we recognized reflect a reduction of $ 199 for each of the three months ended June 30, 2025 and 2024 and $ 398 for each of the six months ended June 30, 2025 and 2024, for the amortization of the liability we recorded in connection with our former investment in RMR Inc.

(3) Amounts capitalized as building improvements are depreciated over the estimated useful lives of the related capital assets.

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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.

Related Person Transactions

We have relationships and historical and continuing transactions with RMR, RMR Inc., AlerisLife (including Five Star), 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 is a majority owned subsidiary of RMR Inc.

The Chair of our Board of Trustees and one of our Managing Trustees, Adam Portnoy, is the sole trustee, an officer and the

DIVERSIFIED HEALTHCARE TRUST

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(dollar amounts in thousands, except per share data or as otherwise stated)

controlling shareholder of ABP Trust, which is the controlling shareholder of RMR Inc., the 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 the sole director of AlerisLife.

Related Person Transactions

We have relationships and historical and continuing transactions with RMR, RMR Inc., AlerisLife (including Five Star) 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 is a majority owned subsidiary of RMR Inc.

The Chair of our Board of Trustees and one of our Managing Trustees, Adam Portnoy, is the sole trustee, an officer and the controlling shareholder of ABP Trust, which is the controlling shareholder of RMR Inc., the 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 the sole director of AlerisLife.

Christopher Bilotto, our other Managing Trustee and President and Chief Executive Officer, and Matthew Brown, our Chief Financial Officer and Treasurer, are also officers and employees of RMR.

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serve as our officers and officers of other companies to which RMR or its subsidiaries provide management services.

As of March 31, 2025, ABP Trust and Mr.

As of June 30, 2025, ABP Trust and Mr.

Portnoy owned 9.8 % of our outstanding common shares.

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Our pro rata share of this cash dividend was $ 17,000 .

On July 15, 2025, AlerisLife paid an aggregate cash dividend of $ 10,000 to its stockholders.

Our pro rata share of this cash dividend was $ 3,400 .

See Note 9 for further information regarding our relationships, agreements and transactions with AlerisLife (including Five Star).

1 unchanged sentence

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 $ 4,056 as of March 31, 2025 and are included in other assets, net, in our condensed consolidated balance sheet.

The remaining costs totaled $ 4,056 as of June 30, 2025 and are included in other assets, net, in our condensed consolidated balance sheet.

RMR provides management services to each of the Seaport JV and the LSMD JV.

5 unchanged sentences

We lease office space to RMR in certain of our properties for RMR’s property management offices.

We recognized rental income from RMR for this leased office space of $ 107 and $ 109 for the three months ended March 31, 2025 and 2024, respectively.

We recognized rental income from RMR for this leased office space of $ 102 and $ 148 for the three months ended June 30, 2025 and 2024, respectively, and $ 209 and $ 257 for the six months ended June 30, 2025 and 2024, respectively.

For further information about these and other such relationships and certain other related person transactions, see our Annual Report.

DIVERSIFIED HEALTHCARE TRUST

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(dollar amounts in thousands, except per share data or as otherwise stated)

Derivatives and Hedging Activities

5 unchanged sentences

We do not anticipate that any of the counterparties will fail to meet their obligations.

DIVERSIFIED HEALTHCARE TRUST

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(dollar amounts in thousands, except per share data or as otherwise stated)

Our interest rate cap agreement is designated as a cash flow hedge of interest rate risk and is measured on a recurring basis at fair value.

See Notes 5 and 6 for further information regarding the debt our interest rate cap is related to and the fair value of our interest rate cap.

The following table summarizes the terms of our outstanding interest rate cap agreement as of March 31, 2025:

The following table summarizes the terms of our outstanding interest rate cap agreement as of June 30, 2025:

Balance Sheet Line Item Underlying Instrument Maturity Date Strike Rate Notional Amount Fair Value

6 unchanged sentences

Amounts reported in cumulative other comprehensive income (loss) related to derivatives will be reclassified to interest expense as interest payments are made, if any, on our applicable debt.

The following table summarizes the activity related to our cash flow hedges within cumulative other comprehensive income (loss) for the period shown:

Three Months Ended March 31, 2025

The following table summarizes the activity related to our cash flow hedges within cumulative other comprehensive income (loss) for the periods shown:

Three Months Ended June 30, 2025

Six Months Ended June 30, 2025

Amount of loss recognized on derivative in other comprehensive income (loss) $ ( 23 ) $ ( 29 )

Amount of gain (loss) reclassified from cumulative other comprehensive income (loss) into interest expense $ —

Amount of loss reclassified from cumulative other comprehensive income (loss) into interest expense $ ( 12 ) $ ( 12 )

Total amount of interest expense presented in the condensed consolidated statements of comprehensive income (loss) $ ( 50,926 ) $ ( 108,757 )

3 unchanged sentences

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.

For the three months ended March 31, 2025 and 2024, we recognized income tax expense of $ 49 and $ 187 , respectively.

For the three months ended June 30, 2025 and 2024, we recognized income tax expense of $ 843 and $ 170 , respectively, and for the six months ended June 30, 2025 and 2024, we recognized income tax expense of $ 892 and $ 357 , respectively.

DIVERSIFIED HEALTHCARE TRUST

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(dollar amounts in thousands, except per share data or as otherwise stated)

Weighted Average Common Share s

2 unchanged sentences

Unvested share awards and other potentially dilutive common shares, together with the related impact on earnings, are considered when calculating diluted earnings per share.

T a ble of Contents

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements