Omega Healthcare Investors exceeded the expectations of some analysts in the third quarter, reporting adjusted funds from operations of 82 cents per share in its third-quarter earnings report on Thursday, beating the 79 cents per share predicted by Mizuho Securities USA. The Hunt Valley, MC-based real estate investment trust also benefited from a healthy 99% contractual rent and mortgage payment collections during the third quarter and into October, even despite its previously announced $142 million non-recurring write-down of primarily straight-line receivables and lease inducements related to struggling tenants.
Omega, with a portfolio that includes 69 operators in 40 states and the United Kingdom, invested $22 million in capital renovations and new construction projects during the third quarter. The firm’s skilled nursing and assisted living tenants have benefited from the government support provided throughout the pandemic, noted Taylor Pickett, Omega’s CEO, on a Friday earnings call.
“This support has saved lives, allowing operators to fund increased personal protective equipment and labor costs, to protect and care for this particularly vulnerable segment of our society,” Pickett said. “The efforts of both federal and state governments have highlighted their understanding of the vital role skilled nursing facilities play within the healthcare continuum. We are hopeful that this support will remain forthcoming as the industry continues to battle the impacts of COVID-19.”
The firm’s third-quarter earnings also included the announcement of improved liquidity as a result of the issuance of $700 million in senior notes due in 2031 at 3.375%, a record low for Omega for 10-year unsecured paper, noted Mizuho analysts Omotayo Okusanya and Zachary Silverberg, in an investor note on the REIT’s third-quarter results.
The move was made “with the intent of paying down any outstanding balance on its credit facilities, as well as potentially funding acquisitions or investments opportunities,” the analysts said.
Read additional coverage of Omega’s earnings call on McKnight’s Senior Living and McKnight’s Long-Term Care News.
