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NON-REAL ESTATE LOANS RECEIVABLE

6 Months Ended

Jun. 30, 2025

NON-REAL ESTATE LOANS RECEIVABLE [Abstract]

NOTE 6 – NON-REAL ESTATE LOANS RECEIVABLE

Our non-real estate loans consist of fixed and variable rate loans to operators or principals. These loans may be either unsecured or secured by the collateral of the borrower, which may include the working capital of the borrower and/or personal guarantees. As of June 30, 2025, we had 46 loans with 32 different borrowers. A summary of our non-real estate loans by loan type is as follows:


	As of June 30, 2025
	Weighted		Weighted
	Average		Average Years		June 30,		December 31,
	Interest Rate		to Maturity		2025		2024

					(in thousands)
Working capital loans receivable	9.5	%	0.9	⁽¹⁾	$	60,766	$	57,071
Other loans receivable	10.2	%	3.8	⁽²⁾		379,695		397,998
Non-real estate loans receivable – gross						440,461		455,069
Allowance for credit losses on non-real estate loans receivable						(107,121)		(122,795)
Total non-real estate loans receivable – net					$	333,340	$	332,274

(1)	Consists of revolving working capital loans receivable collateralized by the accounts receivable of the borrower with maturity dates ranging from 2025 to 2029 (with $29.9 million maturing in 2025).

(2)

Consists of other loans receivable with maturity dates ranging from 2025 to 2037 (with $41.5 million maturing in 2025). Two of the other notes outstanding with an aggregate principal balance of $10.0 million are past due and have been reserved down to the estimated fair value of the underlying collateral of zero through our allowance for credit losses.

For the three and six months ended June 30, 2025, non-real estate loans generated interest income of $10.0 million and $20.0 million, respectively. For the three and six months ended June 30, 2024, non-real estate loans generated interest income of $7.1 million and $14.2 million, respectively. Interest income on non-real estate loans is included within interest income on the Consolidated Statements of Operations.

The following is a summary of advances and principal repayments under our non-real estate loans:


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2025		2024		2025		2024

	(in thousands)				(in thousands)
Advances on new non-real estate loans receivable⁽¹⁾	$	3,757	$	10,400	$	3,879	$	10,400
Advances on existing non-real estate loans receivable		10,177		9,601		24,582		13,711
Principal repayments on non-real estate loans receivable⁽²⁾		(12,578)		(45,896)		(28,598)		(52,811)
Net cash advances (repayments) on non-real estate loans receivable	$	1,356	$	(25,895)	$	(137)	$	(28,700)

(1)

For the three and six months ended June 30, 2025, consists of advances under three and four new non-real estate loans, respectively, originated during 2025 with a weighted average interest rate of 10.0%. For the three and six months ended June 30, 2024, consists of advances under five new non-real estate loans with a weighted average interest rate of 10.0%.

(2)

Excludes principal recoveries on loans written off in prior periods and cash recoveries related to interest payments received on loans that are written down to fair value and are being accounted for under the cost recovery method in which any payments received are applied directly against the principal balance outstanding.

Included below is additional discussion on any significant new loans issued and/or significant updates to any existing loans.

Genesis Non-Real Estate Loans

As of June 30, 2025, we had two secured term loans outstanding with Genesis that had an aggregate balance of $120.8 million both maturing on June 30, 2026. The loans currently bear interest at a weighted average fixed interest rate of 13.2% per annum, of which 8.2% per annum is PIK interest and 5.0% per annum is cash interest. The loans are collateralized by a first lien on the equity of several ancillary businesses of Genesis. Genesis made all required interest payments under both of the term loans during the three and six months ended June 30, 2025. As discussed in Note 4 – Contractual Receivables and Other Receivables and Lease Inducements, Omega applied collateral to cover March 2025 contractual rent under its lease agreement and March 2025 contractual interest due under a $13.0 million other real estate loan agreement with Genesis, which was subsequently settled in May 2025. As part of our ongoing credit loss procedures, we evaluated the fair value of the collateral available to us under the two term loan agreements and estimate there is sufficient collateral to support the outstanding principal on the loans. As a result of this collateral, the loans remain on an accrual basis. As of June 30, 2025, the internal risk rating on the two loans is a 4, which we believe appropriately reflects the risks associated with the loans as of June 30, 2025. See the allowance for credit losses attributable to non-real estate loans with a 4 internal risk rating within Note 7 – Allowance for Credit Losses.

As discussed in Note 4 – Contractual Receivables and Other Receivables and Lease Inducements, in July 2025, Genesis commenced voluntary cases under Chapter 11 of the U.S. Bankruptcy Code in the Bankruptcy Court for the Northern District of Texas, Dallas Division. As described in Genesis’ filings with the Bankruptcy Court, in July 2025 we agreed to provide, along with other lenders, up to $8.0 million of a $30.0 million DIP financing to Genesis to support sufficient liquidity to, among other things, operate its facilities during bankruptcy. The DIP loan bears PIK interest at 15.0%, per annum, payable monthly in arrears. The principal is due upon maturity. Currently, the DIP loan matures on the earlier of (i) February 4, 2026, (ii) the effective date of a plan of reorganization or liquidation in the Chapter 11 cases or (iii) upon an event of default as defined in the DIP loan agreement. The DIP lenders hold a third and fourth priority security interest in all of Genesis’ assets, which includes a third priority security interest in cash and accounts receivable. Proceeds of any future asset sales, claims and causes of action and debt or equity issuances will all serve as collateral for the DIP loans. The interim DIP order approved the DIP budget which allows payments due under the DIP loan and Omega’s existing term loans to be satisfied in kind during the bankruptcy, except for budgeted adequate protection payments that will be made on Omega’s existing term loans.