Omega Execs Tout Nursing Home Operator Credit Quality, Predict Strong 2026, Offer Genesis Sale Updates
•February 6, 2026
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Why It Matters
The results underscore Omega’s ability to generate cash and strengthen its balance sheet despite sector headwinds, positioning it for growth in a fragmented skilled‑nursing market. Successful resolution of the Genesis bankruptcy will further solidify the REIT’s credit profile and free capital for new acquisitions.
Key Takeaways
- •Q4 EPS $0.55 beats $0.49 consensus
- •AFFO guidance $3.15‑$3.25 exceeds consensus
- •Saber JV to become top revenue source
- •Operator EBITDA coverage rises to 1.57×
- •Genesis sale expected to clear Omega loans
Pulse Analysis
Omega Healthcare Investors (OHI) is navigating a turning point in the skilled‑nursing REIT space. By delivering earnings that outpaced Wall Street forecasts, the company demonstrated that its capital‑intensive model can still thrive amid demographic shifts and regulatory scrutiny. The modest beat in EPS and adjusted FFO reflects not only operational efficiencies but also the impact of a $334 million investment pipeline that broadened geographic exposure and deepened relationships with high‑quality operators. Investors are watching the AFFO guidance closely, as the $3.15‑$3.25 per‑share range signals robust cash flow generation capable of supporting dividend growth and future debt reduction.
A central theme of Omega’s 2025 performance is the strategic elevation of tenant credit quality. The firm’s active portfolio management lifted the triple‑net mortgage core’s EBITDA coverage to 1.57×, surpassing industry averages and providing a safety net for both landlords and operators. The expanded partnership with Saber Healthcare, now a 58.9% equity stake valued at $315 million, is poised to become Omega’s largest revenue source, offering a blend of stable lease income and upside participation in operating profits. This dual‑track approach—combining traditional NNN leases with equity‑based joint ventures—aligns capital with operators that have proven turnaround capabilities, enhancing overall risk‑adjusted returns.
The ongoing Genesis HealthCare bankruptcy remains a pivotal risk‑reward scenario. Omega’s $129 million term loan and $8 million DIP financing are secured by lease payments that have continued uninterrupted, and the anticipated sale to 101 West State Street is expected to settle these obligations by Q3‑Q4 2026. Successful closure will not only erase lingering credit concerns but also free up capital for Omega’s stated 2026 pipeline, which emphasizes “rifle‑shot” acquisitions—smaller, off‑market deals that promise better economics than bulk portfolio purchases. This disciplined acquisition strategy, coupled with a strong balance sheet, positions Omega to capture growth opportunities as the senior‑care market consolidates.
Omega Execs Tout Nursing Home Operator Credit Quality, Predict Strong 2026, Offer Genesis Sale Updates
Omega Healthcare Investors (NYSE: OHI) is entering 2026 with few headwinds and strong earnings, bolstered by its Saber Healthcare joint venture, expected to become its largest revenue source.
Executives also said the year could mark a historic milestone in the financial strength and reliability of its tenant operators.
“Our momentum from 2025 should carry us forward for another strong year in 2026,” said CEO Taylor Pickett during the company’s conference call to discuss year-end and fourth quarter results. Omega plans to actively strengthen operator credit quality and deploy capital across all geographies and property types, including RIDEA, he said.
Pickett also singled out Omega’s expanded relationship with Saber as a key 2025 achievement, with significant earnings potential.
“It is likely by year end that Saber will be our largest source of revenue” he said, adding, “The credit quality of our operators continued to improve as a result of active portfolio management and the overall improvement in industry fundamentals … by year end, it is likely that we will have the strongest tenant-credit profile and balance sheet in Omega’s history.”
Omega reported stronger-than expected fourth quarter results of $0.55 per share, beating the Wall Street consensus estimate of $0.49. The real estate investment trust (REIT) posted an adjusted FFO of $0.80 per share, above the $0.78 estimate, driven by about $334 million in new investments and increased operator EBITDAR coverage. Revenue rose to $319 million, beating the $317 million expected.
Omega’s 2026 AFFO guidance of $3.15 to $3.25 per share sits slightly above the consensus of about $3.18.
Midday Friday, Omega’s shares traded at $45.36, down slightly by 21 cents, or 0.46%
Omega operating fundamentals in the skilled nursing portfolio continued to improve in 2025, said Vikas Gupta, chief financial officer of Omega, adding that the trailing 12-month operator EBITDA coverage for Omega’s triple-net mortgage core portfolio increasing to 1.57 times in the third quarter, compared with 1.55 times earlier in the year and the second quarter, and it remains strong.
“Our core portfolio coverage continues to trend in a favorable direction above industry average coverage levels, and as discussed in prior quarters, this provides us with confidence that our operating partners have sufficient means to provide superior clinical service to residents, in addition to the strong credit support,” Gupta said.
Omega currently has investments in more than 1,100 facilities, consisting of 1,027 in its real estate and mortgage loan portfolio and 84 facilities in joint ventures with operating partners and third party real estate investors. Of the total number of facilities, 62% are skilled nursing and transitional care facilities, and 38% are U.S. senior housing and U.K. care home market.
Even coverage on Omega’s troubled Genesis HealthCare portfolio remains above the company’s average, generating approximately $52 million in annual rent, Gupta said.
In addition to its lease exposure to Genesis, Omega holds a $129 million term loan to Genesis. Gupta stated that Omega believes the loan is fully secured. Although the unsecured creditors’ committee has challenged the collateral’s valuation during the bankruptcy proceedings, Omega considers these arguments without merit based on lease coverage and asset support. Management views Omega’s overall credit position with Genesis as strong.
Genesis, Omega’s most closely watched skilled nursing operator, has continued to pay full contractual rent to Omega each month since filing for bankruptcy, he said.
“Genesis continues to pay us full contractual rent each month since filing bankruptcy due to the delays that came with having a second auction,” Gupta said.
Genesis filed for Chapter 11 bankruptcy protection in July 2025. Omega leases 31 skilled nursing facilities to Genesis.
Progress on Genesis asset sale
Executives also shared insights on the progress with the sale of Genesis’ assets, for which 101 West State Street received court approval in late January. The group currently operates approximately 60 skilled nursing facilities on the West Coast, Gupta said, and has posted a $54 million hard deposit with 85 days to finalize financing commitments sufficient to fund the cash portion of its bid. If 101 West State Street completes the acquisition, Omega expects it will assume its leases, and the sale proceeds will be sufficient to fully repay both Omega’s debtor-in-possession (DIP) loan and term loan.
Omega has committed $8 million as part of a $30 million DIP loan to support Genesis during the bankruptcy. The timing and outcome of the bankruptcy proceedings remain subject to court proceedings and other uncertainties, but the process is currently expected to conclude in the third or fourth quarter of 2026.
“The bankruptcy process is now anticipated to conclude in Q3 or Q4 of 2026 if 101 West Street consummates its purchase of the Genesis assets,” he said.
SNF Investment activity
While Omega’s overall investment activity in 2025 exceeded $1.1 billion, Gupta said the company’s pipeline for 2026 remains strong, including meaningful U.S. skilled nursing opportunities, as Omega plans to expand and deepen its network of SNF partners.
‘We continue to seek off-market opportunities through our operating partners, including our new RIDEA partners and managers,’ Gupta said.”
A prime example of Omega’s investment philosophy is its expanded relationship with Saber Healthcare, he said. In 2025, Omega completed a $222 million real estate investment for a 49% equity interest in 64 skilled nursing facilities operated by Saber. Subsequent to year-end, Omega completed the second step of this strategic investment by acquiring a 9.9% equity interest in Saber’s operating company for $93 million. This investment carries a minimum 8% cash return, with additional cash flow expected over time as Saber grows.
The joint venture pairs Omega’s capital and geographic reach with Saber’s operating expertise, Gupta noted, adding that the deal gives both parties flexibility to pursue future skilled nursing growth opportunities across multiple deal structures, including traditional triple-net leases, joint ventures, and operating company participation.
In addition to the Saber transactions during the fourth quarter, Omega acquired 13 skilled nursing facilities for $109 million after quarter end.
Pipeline and skilled nursing outlook
Omega’s skilled nursing investment strategy is centered on smaller, selective deals rather than large portfolio acquisitions, executives also said.
“We are looking at smaller deals… rifle-shot deals, as opposed to larger portfolio deals. You tend to find a little bit better economics in that situation,” said President Matthew Gourmand.
Omega often targets assets that require operational improvement, he said.
“A lot of the deals we’re looking at are deals that need a little bit of love, a little bit of turnaround, either lower occupancy, lower margin,” Gorman said, adding that Omega aligns with operators that have demonstrated ability to turnaround facilities and have expertise in specific regions and asset classes.
The post Omega Execs Tout Nursing Home Operator Credit Quality, Predict Strong 2026, Offer Genesis Sale Updates appeared first on Skilled Nursing News.
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