Omega Healthcare Raises 2026 Profit Outlook To $3.28-$3.30 A Share As $946 Million Of Deals Close After Quarter-End
The care-home landlord lifted its forecast even as third-quarter net income fell to $87 million.
Omega Healthcare Investors, a real estate investment trust that owns and finances nursing homes and senior housing, raised its 2026 forecast for adjusted funds from operations to $3.28 to $3.30 per diluted share, up from $3.22 to $3.26, the company said Tuesday in an 8-K. The raise follows $946 million of new investments completed since the quarter ended September 30, led by a U.K. care-home mortgage loan.
Quarter: cash profit up, net income down
Adjusted funds from operations, a REIT profit measure that adds back non-cash charges, reached $262 million, or $0.82 per diluted share, in the third quarter. A year earlier it was $243 million, or $0.79.
Net income fell to $87 million, or $0.27 per diluted share. The result absorbed $59.9 million of acquisition, merger and transition costs and $18.8 million of severance. An $11.4 million net impairment charge on one facility also hit the quarter.
Revenue rose to $340.6 million. The company has now raised its outlook again; CEO Matthew Gourmand said the midpoint moved up five cents to $3.29. He said the company reduced leverage to "the lowest level in the Company's history."
A $846 million U.K. loan leads the spending
Omega has invested about $1.5 billion this year, including $182 million in the third quarter. Of the $945.5 million completed since October 1, the largest piece is an $846 million loan: £631.7 million ($845.7 million) funded in November to an affiliate of Foundation Partners Asset Management, an existing operator.
The loan carries 8.72% interest, rising to 8.94% in year two, matures in November 2031, and is secured by 48 U.K. care homes plus leasehold interests in seven more. Omega expects to exercise a purchase option on the properties once regulatory conditions are met, then lease them back to Foundation.
The rest includes $49.3 million for five senior housing communities in Texas, Florida and South Carolina, and a $50.5 million Georgia retirement community acquired in November.
PACS takes over 32 Florida facilities
On October 1, Omega moved 32 Florida skilled nursing facilities from Airamid Health Services to PACS Group. Annual contractual rent on them is now $58.0 million, up $26.1 million, with a further $2.5 million increase in year two. Omega paid Airamid a $90.0 million termination fee.
The Genesis Chapter 11 bankruptcy sale was finalized in October. Omega's lease passed to affiliates of NewGen, and Omega received $149.5 million in loan repayments.
In the third quarter, Omega also paid £35.8 million ($48.0 million) to acquire the operators of 30 U.K. care homes, converting them from triple-net leases to RIDEA structures, where Omega shares in operating results.
Balance sheet and next dates
Omega had $4.1 billion of debt at September 30, at a weighted average rate of 4.2%, and $2.0 billion of undrawn revolver capacity. It sold 4.7 million shares in the quarter for $234 million.
The new outlook assumes all the portfolio activity above and that NewGen pays $13.3 million of rent per quarter.
Management hosts its call Wednesday at 10 a.m. Eastern; the $0.68 dividend is payable November 16 to holders of record on November 5.
Sources
- 8-K Filing — OMEGA HEALTHCARE INVESTORS INC (OHI) — SEC EDGAR
- Exhibit ohi-ex99d1.htm — OMEGA HEALTHCARE INVESTORS INC 8-K exhibit — SEC EDGAR
