DHC - These Troubled Dividend Stocks Are Joining Forces to Survive
2023-04-12 08:02:00 ET
The pandemic has had a lasting effect on the real estate industry. On the one hand, it boosted the long-term tailwinds driving demand for some property types like rental housing and logistics properties. However, it has hurt demand for other property types like office and senior housing. Conditions in those sectors continue to deteriorate, especially now that interest rates are much higher. Because of that, many real estate investment trusts ( REITs ) focused on those property types are struggling.
Office REIT Office Properties Income Trust (NASDAQ: OPI) and healthcare REIT Diversified Healthcare Trust (NASDAQ: DHC) are among the many REITs struggling in the current environment. It's leading them to take drastic action by joining forces to create one larger diversified REIT . Here's a closer look at the deal, why they're combining, and what it means for their dividends.
Office Properties Income Trust is acquiring Diversified Healthcare Trust in an all-stock transaction. Diversified Healthcare Trust investors will receive 0.147 shares of Office Properties Income Trust for each share of the healthcare REIT they currently hold. That exchange rate values the company at $1.70 per share, which is a 20% premium to its average price over the last 30 trading days.
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These Troubled Dividend Stocks Are Joining Forces to Survive