In announcing its first quarter earnings results, Omega Healthcare Investors Inc. (NYSE: OHI) said Tuesday that it completed $233 million in new investments so far in the second quarter of 2023.
These new investments include Omega’s acquisition on April 14 of four skilled nursing facilities (SNFs) in West Virginia for $114.8 million, which it leased to an existing operator, the company shared in a press release. The four SNFs were added to the master lease of this undisclosed operator with an initial annual cash yield of 9.5%, with 2.5% annual escalators.
Along with the acquisition, the company loaned an additional $104.6 million to the operator in order to finance the operator’s purchase of 13 additional West Virginia SNFs. The loans have a yield of 12.0%, the company said.
In the first quarter of 2023, Omega’s reported adjusted FFO of $160 million, or 66 cents per share, beating consensus estimates by 4 cents per share. For the same period in 2022, the company’s FFO was $184 million, or 74 cents per share.
Also, Omega reported a revenue of $218.2 million in Q1, beating analyst estimates by $43.06 million.
“Our first quarter financial performance was in line with expectations, as our earnings reflected the impact of the previously disclosed operator restructurings,” Taylor Pickett, Omega’s CEO, said. “As we indicated last quarter, we expect our financial performance to improve in the coming quarters, as restructurings are concluded, restructured operators begin paying rent again, and proceeds from asset sales are redeployed.”
Additionally, on May 1 Omega added another SNF in West Virginia for $13.8 million and leased it to an existing operator. The SNF was added to the master lease of the unnamed operator with an initial annual cash yield of 10%, with 2.5% annual escalators.
The company also announced that it had completed $26 million in real estate acquisitions and funded $11 million in capital renovation and construction-in-progress projects in the first quarter of the year.
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