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REAL ESTATE ASSETS

9 Months Ended

Sep. 30, 2025

REAL ESTATE ASSET ACQUISITIONS AND DEVELOPMENT [Abstract]

REAL ESTATE ASSETS

NOTE 2 – REAL ESTATE ASSETS

At September 30, 2025, our leased real estate properties included 569 SNFs, 343 ALFs, 20 ILFs, 18 specialty facilities and one medical office building. The following table summarizes the Company’s rental income:


	Three Months Ended September 30,							Nine Months Ended September 30,
	2025			2024				2025			2024

	(in thousands)							(in thousands)
Fixed income from operating leases	$	260,744		$	227,934			$	724,535		$	641,780
Variable income from operating leases		3,796			3,301				11,205			10,188
Interest income from direct financing leases		—			250				180			753
Total rental income	$	264,540		$	231,485			$	735,920		$	652,721

Our variable income from operating leases primarily represents the reimbursement by operators for real estate taxes that Omega pays directly.

Asset Acquisitions

The following table summarizes the asset acquisitions that occurred during the nine months ended September 30, 2025:


		Number of						Total Real Estate			Initial
		Facilities						Assets Acquired⁽¹⁾			Annual
Period		SNF	ALF	ILF		Country/State		(in millions)			Cash Yield⁽²⁾
Q1		—	2	—		TX		$	10.6		9.9	%
Q1		—	4	—		U.K.			47.7		10.0	%
Q2		—	45	—		U.K. & Jersey			344.2	⁽³⁾	10.0	%
Q2		—	1	—		CA			11.6		10.0	%
Q2		—	2	—		NM			32.0		10.0	%
Q2		—	1	—		SC			8.5		10.0	%
Q2		8	—	—		TX			105.8		10.0	%
Q3		—	1	—		U.K.			8.6		10.0	%
Q3		—	1	—		U.K.			10.3	⁽⁴⁾	10.3	%
Q3		—	—	1		NJ			58.6		10.0	%
Total		8	57	1				$	637.9

(1)

Represents the acquisition cost that was allocated to our real estate assets on a relative fair value basis. This also represents the total cost of the acquisition unless specifically noted within the table, as the assets acquired in our acquisitions typically consist of only real estate assets. From time to time, we may have acquisitions in which additional assets and liabilities are assumed.

(2)	Initial annual cash yield reflects the initial annual contractual cash rent divided by the purchase price.

(3)

In April 2025, the Company acquired 45 facilities in the U.K. and the Bailiwick of Jersey (“Jersey”) for $344.2 million and leased the facilities to four existing and two new operators with a weighted average initial annual cash yield of 10.0% with annual escalators of 1.7% that ultimately increase to 2.5% after year 5.

(4)

Relates to a non-cash acquisition of one facility previously subject to a mortgage loan with Omega in which the principal amount under the loan agreement was settled in exchange for title to the facility (see Note 5 – Real Estate Loans Receivable) and $0.2 million of transaction costs incurred related to the non-cash acquisition.

Construction in Progress and Capital Expenditure Investments

We invested $23.0 million and $85.7 million under our construction in progress and capital improvement programs during the three and nine months ended September 30, 2025, respectively. We invested $25.4 million and $81.6 million under our construction in progress and capital improvement programs during the three and nine months ended September 30, 2024, respectively. As of September 30, 2025, construction in progress included three projects consisting of the development of a SNF in Virginia, a SNF in Florida and a SNF in Maryland.

In February 2025, we completed and placed into service the $201.8 million Inspir Embassy Row construction in progress project, an ALF in Washington D.C., and began recognizing rental income from the facility. The facility is subject to a 24-year single facility lease with an entity that is jointly owned by Maplewood Senior Living (along with affiliates, “Maplewood”) and a third-party investor. We recognized full contractual rental income of $3.3 million and $8.6 million related to the lease for the new facility for the three and nine months ended September 30, 2025, respectively.

Direct Financing Lease

As of December 31, 2024, we had one direct financing lease with a net investment of $9.5 million. During the first quarter of 2025, we terminated the direct financing lease, along with several operating leases with the same operator, and entered into a new consolidated operating lease for all facilities leased to the operator. In connection with the termination of the direct financing lease, we reclassified $9.4 million from investment in direct financing lease to real estate assets during the first quarter of 2025. In connection with the execution of the new consolidated lease agreement, we paid $10.0 million to the operator, which was treated as lease inducement. As this operator is on a cash basis of revenue recognition, the inducement was immediately expensed and was recorded as a reduction to the rental income recognized for the three months ended March 31, 2025.