Omega Healthcare Investors came out with its first quarter earnings on Monday May 2nd, and its share price soared throughout Tuesday, peaking at 28.89 per share (as of this filming), or up 14.8% from its previous close at $25.13. Granted, that is still not far off of its 52-week low of $24.81, but good news is good news.
First off, the company announced that it successfully sold 22 of its struggling Gulf Coast Health Care skilled nursing facilities, representing the majority of that portfolio for $318 million in cash. Gulf Coast had stopped paying contractual rent in the second quarter of 2021 as it was in the process of filing for chapter 11, so getting these facilities off its plate definitely helps Omega. Plus, CEO Taylor Pickett commented that he continues to believe there is a strong appetite for SNF assets in this market. We certainly agree and we imagine Omega was able to command a high per-bed price for the portfolio. Including five other SNFs divested in the quarter, Omega generated a $114 million gain on the sales.
Omega also announced that it restructured its Guardian portfolio after Guardian was having difficulties paying its full rent. Eight facilities were released to other operators, and two facilities formerly leased to Guardian were sold, and the two parties agreed to rent deferments and reductions. Not everything was rosy in Omega’s earnings, but these moves gave investors reasons to be optimistic.
