Omega Acquires 31-Property SNF Portfolio for $337 Million

Major skilled nursing real estate investment trust (REIT) Omega Healthcare Investors (NYSE: OHI) saw a positive third quarter, with a handful of acquisitions—the largest being a $337 million deal, which included 31 skilled nursing facilities.

The Hunt Valley, Maryland-based REIT completed $428 million in new investments during the third quarter, with a large portion coming from the skilled nursing deal completed in September. That number is up from the second quarter of this year when the company saw $220 million in new investments.

The lease transaction in September included skilled nursing facilities located in Florida, Kentucky and Tennessee with 4,407 operating beds, Daniel Booth, COO at Omega, explained Tuesday during the company’s earnings call.


The facilities were leased to one of Omega’s existing 80 operators, Louisville-based Signature HealthCare, pursuant to a 12-year master lease. The addition of the 31 buildings brings Signature’s grand total leased to Omega up to 63 facilities, Booth said.

There are six facilities in Florida, five in Kentucky and 20 in Tennessee.

Booth did not disclose the seller.


Overall, M&A activity has seen a slowdown, although the company is looking to sell $100 million in assets.

“When we think about our pace for 2016 at $1.2 billion and I look at the pipeline today, we don’t see that type of pace today in our pipeline,” Taylor Pickett, CEO of Omega said on the earnings call. “Now, come January 2017, that could change, yet, but not nearly to the type of pace we have seen in the last 12 months.”

Omega has a portfolio of 973 properties, which includes skilled nursing facilities and assisted living facilities in the U.S. and U.K. The company reported a net income of $82.1 million, or $0.40 per common share, for the quarter ending on September 30, 2016, according to the company.

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Omega fell just short of analyst expectations for third quarter funds from operations by a penny and revenue was missed by $0.51M.

The company’s stock was down by 3.39% to $30.75 at market close on Tuesday, according to Yahoo Finance.

Written by Alana Stramowski

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