Dhc Ceo: After Alerislife Transitions, New Operating Partners Have ‘unique Opportunities To Drive Performance’ 

Diversified Healthcare Trust (NASDAQ: DHC) will focus in 2026 on “narrowing the gap” on occupancy and margin fueled by new operator relationships, according to DHC President and CEO Chris Bilotto.

At the end of last year, DHC finalized the transition of 116 AlerisLife communities to seven new operators, a move at the time Bilotto said helped put DHC on the offensive. 

A majority of those transitions went to Discovery Senior Living (44 properties), Sinceri Senior Living (38 communities) and Tutera Senior Living (19 communities). Additionally, Stellar Senior Living manages six communities (1,032 units), WellQuest Living took on five (796 units), Phoenix Senior Living assumed control of three (366 units) and Ciel Senior Living manages a single 308-unit property.

While unable to comment directly on the impact the transitions had on operating performance ahead of next week’s first-quarter earnings call, the effort “has gone very well,” according to Bilotto.

“I think the operators have found unique opportunities to drive performance,” Bilotto said. “I think with these new operators, we found the runway and the cadence to get there.”

Based on DHC’s annual guidance, Bilotto sees potential to improve occupancy 300 basis points and notch a 25% increase in same-store net operating income within the REIT’s senior housing operating portfolio (SHOP), highlighting projected “overall improvement to the portfolio and growth trajectory” for the company.

“The goal is to illustrate and unlock the potential within the portfolio,” Bilotto said. “It’s an opportunity for us to focus on operational improvements across the portfolio.”

To get there, Bilotto said the real estate investment trust sees an opportunity to “rein in” staffing issues amid the transitions with the operators that took on former AlerisLife properties being both regionally and densely focused compared to the past configuration.

“We’re able to roll these properties into their network without taking on the burden of additional head count, and so we’re going to get more flow-through and less costly labor burden,” Bilotto said.

To reduce operating costs further, Bilotto said the REIT has worked with operators to find cost savings within dining operations. Taken together, this focus on pruning labor and culinary costs “will have outsized impacts on margin improvement,” Bilotto told SHN. That’s been done through new procurement initiatives in the ways operators purchase food and equipment to meet today’s dining expectations of senior living residents, Bilotto said.

This comes as DHC embarked on a spree of capital improvement projects in 2024 and 2025. In the company’s fourth quarter 2026 earnings investor presentation, DHC highlighted three projects spanning $6.3 million to $10 million. Those efforts would continue in 2026, Bilotto added.

Since the cost to make new development work is still unattractive, capital projects help continue growth and help improve existing communities’ competitiveness in a market.

With new operating partners onboard, Bilotto said it gives DHC the opportunity to drive leads during a period of strong demand and expand the sales capabilities among operating partners by sharing ideas and best practices.

“Now that we’re on the other side of the transition, the wheels are in motion,” Bilotto said.

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