Office Properties Income Trust Announces Filing of Definitive Proxy Materials and Recommends Shareholders to Vote “FOR” Merger with Diversified Healthcare Trust

Office Properties Income Trust (Nasdaq: OPI) (“OPI” or the “Company”) today filed its definitive proxy statement with the Securities and Exchange Commission (“SEC”) in connection with its pending merger with Diversified Healthcare Trust (Nasdaq: DHC) (“DHC”).  The Company also today announced that the OPI Board of Trustees (the “Board”) has scheduled a Special Meeting of Shareholders (the “Special Meeting”) to be held on Wednesday, August 30, 2023, at 10:00 a.m. Eastern Time for OPI in connection with OPI’s pending merger with DHC.  OPI shareholders of record at close on June 16, 2023, will be eligible to vote at the Special Meeting.  

The Board is unanimous in its view that the pending transaction with DHC is in the best interests of the Company and its shareholders, and unanimously recommends that OPI shareholders vote “FOR” all transaction-related proposals at the Special Meeting.

As previously announced, under the terms of the merger agreement, OPI will acquire all of the outstanding common shares of DHC in an all-stock transaction. Following the close of the transaction, OPI shareholders will own approximately 58% of the combined company, and DHC shareholders will own approximately 42%.

Highlights of the transaction include:

• Increased diversification: The merger will create a stronger and more resilient combined company with more diversified revenue sources. Specifically, OPI will complement its high quality office and mixed-use portfolio with DHC’s attractive, unencumbered portfolio of Medical Office Buildings (MOBs) and Life Science (LS) properties, while also standing to benefit from the expected recovery in DHC’s Senior Housing Operating Portfolio (SHOP).

• Increased access to capital sources: As a combined entity, OPI expects to benefit from access to additional capital sources, including from low-cost government-sponsored sources, such as Fannie Mae and Freddie Mac.

• Strengthened financial profile with enhanced opportunities for investment: This transaction will provide OPI with access to stabilized cash flows from DHC’s MOBs and LS portfolio and NOI growth potential from its senior housing portfolio. The transaction is expected to be accretive to OPI leverage in the second half of 2024 and accretive to OPI Normalized Funds from Operations (NFFO) and Cash Available for Distribution (CAD) in the second half of 2024.

• Cost savings synergies: The transaction is expected to generate approximately $2 million to $3 million of identified cost savings synergies annually.

• Stabilized and sustainable annual dividend: Following the close of the transaction, OPI shareholders are expected to receive an annual dividend of $1.00 per share, with potential for growth in the future.

Subject to the approval of DHC shareholders and OPI shareholders and other customary closing conditions, the merger is expected to close during the third quarter of 2023.