372,106 Square Feet of Leasing Activity at Over 28% Higher Rents During Third Quarter

New Agreements for 107 of the Transitioning Communities have been Executed with Transitions Expected to be Completed by Year End

Diversified Healthcare Trust (Nasdaq: DHC) today announced its financial results for the quarter ended September 30, 2021.

“In the third quarter, we made substantial progress transitioning the management of a number of our senior living communities from Five Star to new third party managers,” stated Jennifer Francis, President and Chief Executive Officer of Diversified Healthcare Trust. “As of today, we have signed new management agreements for 107 transitioning communities, and 99 of these communities have been transitioned, with the expectation that the remaining eight will be transitioned by year end.

Same property average monthly occupancy in our SHOP segment increased 100 basis points between July 2021 and September 2021 despite the pervasiveness of the COVID-19 Delta variant which has slowed our recovery. Our Office Portfolio segment continues to perform well. We completed 372,000 square feet of new and renewal leases in the quarter at weighted average rents that were approximately 28% higher than prior rents for the same space. With approximately $800 million of cash and minimal near-term debt maturities, our balance sheet continues to provide us with flexibility to continue investing in our portfolio to maximize the benefits from improving industry fundamentals and long-term demographic tailwinds.”

Quarterly Results:

• Reported net loss attributable to common shareholders of $89.3 million, or $0.38 per share.
• Reported normalized funds from operations, or Normalized FFO, attributable to common shareholders of $(9.4) million, or $(0.04) per share.

Reconciliations of net income (loss) attributable to common shareholders determined in accordance with U.S. generally accepted accounting principles, or GAAP, to funds from operations, or FFO, attributable to common shareholders and Normalized FFO attributable to common shareholders for the quarters ended September 30, 2021 and 2020 appear later in this press release. Reconciliations of net income (loss) attributable to common shareholders determined in accordance with GAAP to net operating income, or NOI, and Cash Basis NOI, and a reconciliation of NOI to same property NOI and a calculation of same property Cash Basis NOI, for the quarters ended September 30, 2021, June 30, 2021 and September 30, 2020, as applicable, also appear later in this press release.

Office Portfolio Segment:

• Same property Cash Basis NOI increased compared to the third quarter of 2020 primarily resulting from increased parking revenue, partially offset by decreases in occupancy.
• DHC entered into new and renewal leases for an aggregate of 372,106 rentable square feet at weighted average rents that were 28.1% higher than prior rents for the same space.

SHOP Segment:

• Same property Cash Basis NOI decreased compared to the third quarter of 2020, primarily resulting from decreases in occupancy related to the COVID-19 pandemic, partially offset by decreases in operating expenses due to decreases in occupancy.
• On September 13, 2021, Five Star Senior Living Inc. (Nasdaq: FVE), or Five Star, reported full compliance with its previously announced requirement that all of its team members at DHC's communities be fully vaccinated against COVID-19. Five Star's team members and residents at DHC's communities continue to have access to the vaccine.
• Recent same property occupancy rates in DHC's senior housing operating portfolio, or SHOP, segment consisting of 159 communities are as follows:

Management Transition Progress:

As of November 3, 2021, DHC had executed agreements with 10 new third party managers to transition 107 senior living communities. DHC has now entered into new management agreements representing almost all of its 108 senior living communities to be transitioned from Five Star to other third party managers as previously announced. Of these 107 senior living communities, 99 have been transitioned to new third party managers. DHC expects to complete the remaining eight transitions before year end 2021. DHC plans to close and is assessing opportunities to redevelop the one remaining community without a signed new management agreement located in Delaware with 106 units.

Liquidity and Financing Activities:

• As of September 30, 2021, DHC had approximately $811.4 million of cash and cash equivalents and restricted cash.
• On September 3, 2021, DHC and its lenders amended the agreement governing DHC's revolving credit facility. Among other things, the amendment sets forth the mechanics for establishing a replacement benchmark rate under DHC's revolving credit facility at such time as LIBOR is no longer available to calculate interest payable on amounts outstanding thereunder. Also on September 3, 2021, DHC completed the previously announced first mortgage liens on 61 medical office and life science properties owned by its pledged subsidiaries with an aggregate gross book value of real estate assets of approximately $1.0 billion as of September 30, 2021 to secure the obligations under the credit agreement.
• As of September 30, 2021, DHC's ratio of consolidated income available for debt service to debt service was below the 1.5x incurrence requirement under DHC's revolving credit facility and its public debt covenants, as the effects of the COVID-19 pandemic continued to adversely impact DHC's operations. DHC is prohibited from incurring additional debt while this ratio is below 1.5x on a pro forma basis.
• In October 2021, DHC exercised its option to extend the maturity date of its revolving credit facility by one year to January 2023. Subject to the payment of an extension fee and meeting other conditions, DHC has an additional option to extend the maturity date of the facility by one year to January 2024.

Conference Call:

At 10:00 a.m. Eastern Time tomorrow morning, President and Chief Executive Officer, Jennifer Francis, and Chief Financial Officer and Treasurer, Richard Siedel, will host a conference call to discuss DHC's third quarter 2021 financial results. The conference call telephone number is (877) 329-4297. Participants calling from outside the United States and Canada should dial (412) 317-5435. No pass code is necessary to access the call from either number. Participants should dial in about 15 minutes prior to the scheduled start of the call. A replay of the conference call will be available through 11:59 p.m. on Thursday, November 11, 2021. To access the replay, dial (412) 317-0088. The replay pass code is 10160352.

A live audio webcast of the conference call will also be available in a listen-only mode on DHC's website, www.dhcreit.com. Participants wanting to access the webcast should visit DHC's website about five minutes before the call. The archived webcast will be available for replay on DHC's website following the call for about one week. The transcription, recording and retransmission in any way of DHC's third quarter conference call are strictly prohibited without the prior written consent of DHC.

Supplemental Data:

A copy of DHC's Third Quarter 2021 Supplemental Operating and Financial Data is available for download at DHC's website, www.dhcreit.com. DHC's website is not incorporated as part of this press release.

DHC is a real estate investment trust, or REIT, focused on owning high-quality healthcare properties located throughout the United States. DHC seeks diversification across the health services spectrum: by care delivery and practice type, by scientific research disciplines, and by property type and location. As of September 30, 2021, DHC’s $8.2 billion portfolio included 392 properties in 36 states and Washington, D.C., occupied by approximately 600 tenants, and totaling approximately 10.9 million square feet of life science and medical office properties and more than 27,000 senior living units. DHC is managed by the operating subsidiary of The RMR Group Inc. (Nasdaq: RMR), an alternative asset management company that is headquartered in Newton, MA. To learn more about DHC, visit www.dhcreit.com.

Non-GAAP Financial Measures:

DHC presents certain "non-GAAP financial measures" within the meaning of applicable rules of the Securities and Exchange Commission, or SEC, including FFO attributable to common shareholders, Normalized FFO attributable to common shareholders, NOI, Cash Basis NOI, same property NOI and same property Cash Basis NOI for the three and nine months ended September 30, 2021 and 2020, as well as certain of these measures for the prior three quarters. These measures do not represent cash generated by operating activities in accordance with GAAP and should not be considered alternatives to net income (loss) or net income (loss) attributable to common shareholders as indicators of DHC's operating performance or as measures of DHC's liquidity. These measures should be considered in conjunction with net income (loss) and net income (loss) attributable to common shareholders as presented in DHC's condensed consolidated statements of income (loss). DHC considers these non-GAAP measures to be appropriate supplemental measures of operating performance for a REIT, along with net income (loss) and net income (loss) attributable to common shareholders. DHC believes these measures provide useful information to investors because by excluding the effects of certain historical amounts, such as depreciation and amortization, they may facilitate a comparison of DHC's operating performance between periods and with other REITs and, in the case of NOI, Cash Basis NOI, same property NOI and same property Cash Basis NOI, reflecting only those income and expense items that are generated and incurred at the property level may help both investors and management to understand the operations of DHC's properties.

Please see the pages attached hereto for a more detailed statement of DHC's operating results and financial condition, and for an explanation of DHC's calculation of FFO attributable to common shareholders, Normalized FFO attributable to common shareholders, NOI, Cash Basis NOI, same property NOI and same property Cash Basis NOI and a reconciliation of those amounts to amounts determined in accordance with GAAP.

Warning Concerning Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other securities laws. Whenever DHC uses words such as “believe”, “expect”, “anticipate”, “intend”, “plan”, “estimate”, "will", “may” and negatives or derivatives of these or similar expressions, DHC is making forward-looking statements. These forward-looking statements are based upon DHC's present intent, beliefs or expectations, but forward-looking statements are not guaranteed to occur and may not occur. Actual results may differ materially from those contained in or implied by DHC's forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties and other factors, some of which are beyond DHC's control. For example,

• Ms. Francis's statements regarding DHC's substantial progress transitioning the management of DHC's senior living communities from Five Star to new third party managers may imply that DHC's senior living communities will realize increased operating results and returns from its SHOP segment and that the transitions will be completed on the timing DHC expects. However, DHC may not realize these increases as a result of transitioning operations for these senior living communities to new managers. In addition, certain of these communities have not yet been transitioned and those transitions are subject to conditions. As a result, these transitions may not occur or they may be delayed or their terms may change. In addition, DHC may not be successful in finding a redevelopment opportunity for one of the senior living communities remaining to be transitioned, and any redevelopment opportunity DHC may pursue may not achieve anticipated results,
• Ms. Francis's statement regarding DHC's occupancy for its SHOP segment may imply that DHC will continue to achieve similar or better occupancy in the future. However, occupancy depends on various factors, including market conditions, competition and the severity and duration of the COVID-19 pandemic and its economic impact. As a result, DHC may not realize similar increases in SHOP occupancy in future periods and DHC's SHOP occupancy may decline,
• Ms. Francis's statement regarding DHC's leasing activity for its Office Portfolio segment may imply that DHC will continue to achieve similar or better leasing results in the future. However, leasing activity depends on various factors, including market conditions, timing of lease negotiations, competition and the severity and duration of the COVID-19 pandemic and its economic impact. As a result, DHC may not realize similar or increased leasing results in future periods and its leasing activities may decline,
• Ms. Francis's statements regarding DHC's liquidity and financial flexibility may imply that DHC will be able to sustain sufficient liquidity. However, if the duration and severity of the COVID-19 pandemic and its impacts on DHC and its managers and tenants significantly worsen for a sustained period, DHC may be required to utilize all or a significant portion of its cash and cash equivalents to fund its business and operations, which may reduce or eliminate the financial flexibility DHC believes it has,
• Ms. Francis's statements regarding DHC's portfolio investments and positive industry trends may imply that DHC's business and operating results will benefit as a result. However, DHC may not realize the benefits it expects from these investments and the improving industry fundamentals and long-term demographic tailwinds may not continue,
• Ms. Francis states that, with approximately $800 million of cash and minimal near-term debt maturities, DHC's balance sheet continues to provide it with flexibility to continue investing in its portfolio to maximize the benefits from improving fundamentals and long-term demographic tailwinds. However, DHC's credit agreement limits the amount DHC may invest and imposes other requirements that may limit DHC's ability to invest in its portfolio. Further, the improving fundamentals and long-term demographic tailwinds DHC expects to benefit from may not continue or meet DHC's expectations and DHC may not realize the benefits it expects, and
• Although DHC has obtained a waiver from compliance with certain financial covenants under its credit agreement through June 30, 2022, if DHC's operating results and financial condition are further adversely impacted by current economic conditions or otherwise, it may fail to comply with the terms of the waiver and other requirements under its credit agreement, and DHC may also fail to satisfy certain financial requirements under the agreements governing its public debt. For example, DHC's ratio of consolidated income available for debt service to debt service was below the 1.5x incurrence requirement under its revolving credit facility and its public debt covenants as of September 30, 2021, and DHC cannot be certain how long this ratio will remain below 1.5x. DHC is prohibited from incurring additional debt while this ratio is below 1.5x on a pro forma basis, but is not required to repay outstanding debt as a result of failure to comply with this requirement. DHC is currently fully drawn under its revolving credit facility and could also be required to repay its outstanding debt as a result of non-compliance with certain other requirements of its credit agreement or the agreements governing its public debt. DHC may therefore experience future liquidity constraints, as it is prohibited from incurring additional debt under its credit agreement or otherwise for failure to comply with the requirements of its credit agreement or the agreements governing its public debt, and DHC will be limited to its cash on hand or be forced to raise additional sources of capital or take other measures to maintain adequate liquidity.

The information contained in DHC's filings with the SEC, including under “Risk Factors” in DHC's periodic reports, or incorporated therein, identifies important factors that could cause DHC's actual results to differ materially from those stated in or implied by DHC's forward-looking statements. DHC's filings with the SEC are available on the SEC's website at www.sec.gov. You should not place undue reliance upon forward-looking statements. Except as required by law, DHC does not intend to update or change any forward-looking statements as a result of new information, future events or otherwise.

A Maryland Real Estate Investment Trust with transferable shares of beneficial interest listed on the Nasdaq.

No shareholder, Trustee or officer is personally liable for any act or obligation of the Trust.

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