Omega Healthcare Investors (NYSE:OHI) reported fourth-quarter 2025 results that management said reflected “strong revenue and EBITDA growth,” supported by acquisitions and portfolio management activity completed throughout 2024 and 2025.
CEO Taylor Pickett said the company generated adjusted funds from operations (AFFO) of $0.80 per share and funds available for distribution (FAD) of $0.76 per share in the quarter. Pickett added that the dividend payout ratio declined to 84% of AFFO and 88% of FAD. For the full year, he said AFFO and FAD growth exceeded 8% year over year, aided by $1.1 billion in capital deployment.
Quarterly financial results and balance sheet actions
Stephenson reported adjusted FFO of $250 million ($0.80 per share) and FAD of $238 million ($0.76 per share). He said fourth-quarter FAD increased by one cent compared with the third quarter, driven largely by incremental revenue from the timing and completion of $485 million in new investments during the third and fourth quarters, as well as approximately $1 million of lower net interest expense following debt payoffs. These benefits were partially offset by the impact of $100 million in asset sales and $61 million in loan repayments over the past two quarters, plus dilution from the issuance of 7.8 million common shares and OP units over the same period to fund investments.
On leverage and liquidity, Stephenson said Omega reduced funded debt by more than $700 million during the quarter by repaying $600 million of senior unsecured notes, a GBP 183 million secured mortgage loan, and a $428.5 million term loan, all ahead of scheduled maturities. He said the next scheduled maturity is in April 2027. Omega also entered into a new $2 billion at-the-market (ATM) program, and ended 2025 with $27 million of cash and over $1.7 billion of revolver capacity. Stephenson cited a fixed charge coverage ratio of 5.8x and leverage reduced to 3.51x.
Portfolio performance and Genesis bankruptcy update
Chief Investment Officer Vikas Gupta said Omega’s operating portfolio totals 1,111 facilities, including 1,027 in the owned real estate and mortgage loan portfolio and 84 in joint ventures. By mix, he said 62% are skilled nursing and transitional care facilities and 38% are U.S. senior housing and U.K. care homes.
Gupta reported trailing 12-month operator EBITDAR coverage for the triple net and mortgage core portfolio of 1.57x as of Sept. 30, 2025, up from 1.55x in second-quarter reporting. He said coverage remained above industry-average levels and was trending favorably.
On Genesis, Gupta reiterated that Genesis filed for Chapter 11 in July 2025. He said Omega leases Genesis 31 facilities for annual rent payments of $52 million, and also has a $129 million term loan position secured by a first lien on essentially all Genesis assets other than accounts receivable. Omega also committed $8 million of a $30 million debtor-in-possession (DIP) loan, and Gupta said Genesis has continued to pay full contractual rent each month since the filing.
Gupta said the first auction results were not approved in November 2025, leading to a second auction on Jan. 13, 2026. The winning bidder, 101 West State Street, was approved by the bankruptcy court on Jan. 26. He said the group operates about 60 facilities on the West Coast and has submitted a $54 million hard deposit, with up to 85 days (including extensions requiring additional deposits) to demonstrate it has procured financing commitments. Due to the second auction, management now anticipates the bankruptcy process will conclude in Q3 or Q4 of 2026. Gupta said if the purchase closes, Omega expects the buyer to assume its lease and that sale proceeds would be sufficient to repay the DIP loan and term loan in full, while noting the process remains subject to developments and the company cannot be certain of the outcome.
In response to a question on redeployment timing, Stephenson said Omega’s guidance assumes Genesis-related loan repayments (a combined $137 million, reflecting the $8 million DIP and $129 million term loan balance at 12/31) are received mid-year. He said proceeds would first be used to pay down any credit facility balance, with remaining cash invested at roughly 3.5% overnight rates until redeployed.
Investment activity: RIDEA expansion, Saber alignment, and Canada entry
Gupta said Omega’s 2025 transaction activity exceeded $1.1 billion and highlighted the company’s expansion into RIDEA structures for U.S. senior housing and U.K. care homes. He said a little over $700 million of 2025 new investments (about 66%) were in senior housing facilities or U.K. care homes.
During the fourth quarter, Gupta said Omega completed $334 million in new investments (excluding $31 million in CapEx), including:
- Four senior housing RIDEA acquisitions in New Jersey, Wisconsin, and Indiana for $37 million, operated by third-party managers.
- A $43 million investment for a 49% equity interest in a Class A rental CCRC in North Carolina, also via a RIDEA structure.
- A $16 million U.K. care home purchase and $16 million in real estate loans priced at 10%, with an option for Omega to realize upside upon a refinance or sale.
Subsequent to quarter end, Gupta said Omega closed $212 million of additional investments, including a $93 million purchase of 9.9% of Saber’s operating company equity. Omega will receive a minimum 8% cash return, with additional amounts accrued as cash is retained for Saber’s growth. Gupta described this as step two of a broader Saber strategy, following Omega’s earlier $222 million real estate investment for a 49% equity interest in 64 facilities operated by Saber.
Gupta also noted post-quarter-end purchases of 13 skilled nursing facilities in Georgia for $109 million leased to a current Omega operator at a 10.6% lease yield, and one senior housing facility in Alabama for $10.3 million operated under RIDEA with a third-party manager. On the Georgia transaction, Gupta said pricing reflected an off-market opportunity and that the company is “still quoting 10% for all SNF deals today.”
In Canada, Gupta announced a commitment to fund up to $64 million for development of five replacement long-term care facilities in Ontario. The loan carries a 10% current pay interest rate and includes an option convertible to a 34.9% equity stake in a borrower entity owning 21 facilities. Management said collateral is the entire 21-facility portfolio, valued at over $130 million. Executives characterized the investment as idiosyncratic and said they would not expect to significantly grow across the broader Canadian senior housing market given typical yields relative to Omega’s cost of capital, though they remain open to additional opportunities with the same operator.
Guidance and policy commentary
Stephenson provided full-year 2026 adjusted FFO guidance of $3.15 to $3.25 per share. He said guidance includes the impact of investments completed as of Feb. 4 and excludes additional investments beyond those described in the company’s press release. Assumptions also include scheduled loan repayments, potential asset sales, and a quarterly asset sales pace of approximately $15 million to $25 million.
Megan Krull, senior vice president of data intelligence and government relations, said an automatic 4% Medicare cut tied to deficit mechanics had been addressed legislatively and was no longer an issue. She also said HHS repealed minimum staffing standards through an interim final rule, which Omega “applaud[ed].” On Medicare Advantage, Krull said CMS’s proposal for relatively flat rates in 2027 would likely have minimal impact on Omega’s portfolio, citing low Medicare Advantage exposure and current operator coverage levels.
During Q&A, management also discussed its approach to RIDEA underwriting, describing a conservative, “toe-in-the-water” expansion supported by new hires with senior housing experience and detailed operating diligence. The company also said it was “getting closer to needing to increase the dividend,” though executives emphasized it remains a board decision and referenced a low-80s FAD payout level as a potential threshold tied to tax considerations.
About Omega Healthcare Investors (NYSE:OHI)
Omega Healthcare Investors, Inc is a real estate investment trust (REIT) that specializes in the ownership and management of healthcare-related facilities. The company’s core business involves acquiring and leasing long-term care properties, including skilled nursing facilities and assisted living communities, under net lease agreements. Its portfolio is designed to provide stable, inflation-protected cash flows from operators responsible for day-to-day property management.
Founded in 1992 and headquartered in Hunt Valley, Maryland, Omega Healthcare Investors has grown its holdings to encompass hundreds of facilities across the United States, with a smaller presence in select international markets.
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