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Diversified Healthcare Trust: A Must Avoid REIT


tdub303/E+ via Getty Images Among all United States based healthcare REITs, Diversified Healthcare Trust (NASDAQ: DHC ) is the worst performing one. I was extremely critical of this REIT, the last time I covered this stock on 9th March, 2022. The stock was trading around $3 at that point of time, and that was almost 30 percent lower than its 52 week high price of $4.34 (recorded on 1st July, 2021). I expected a further downward rally for this stock, and almost 10 weeks later, the stock has reached a 52 week low at $2.02 on 12th May, 2022. That’s a drop of almost 33 percent from March 9th and 54 percent from 1st July, 2021.

As expected, Diversified Healthcare Trust has invested hugely in properties in the Senior Housing Operating Portfolio (SHOP) segment, primarily independent living communities, assisted living communities and skilled nursing facilities. Operators in the SHOP segment were facing troubles much before the covid-19 pandemic impacted the economic growth and stock market. However, DHC has suffered much more than the other SHOP focused REITs due to its faulty business model.

In my last coverage, I discussed DHC’s SHOP portfolio’s operating model in detail. Diversified Healthcare Trust pays fees […]

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