Julian Blouin

Julian Blouin from Goldman Sachs questioned the sourcing of Omega Healthcare Investors' fourth-quarter and subsequent acquisitions (on-market vs. off-market) and the motivations of the sellers, particularly if they were distressed situations. He also asked if current high tenant coverage levels would allow for releasing at positive spreads in future years or primarily increase renewal likelihood.

Answer

Vikas Gupta, CIO of Omega Healthcare Investors, stated that acquisition sourcing was a mixed bag, with many off-market deals coming through existing relationships, notably the Saber deal. Seller motivations also varied, including liquidity needs, exits, and some turnaround situations with new operators. Matthew Gourmand, President, clarified that high tenant coverage primarily increases the likelihood of lease renewals due to unilateral tenant options, limiting opportunities for significant incremental rent pickups in the near term (next 3-4 years).

Julian Blouin inquired about the sourcing of acquisitions closed in Q4 2025 and subsequent to quarter-end, asking if they were mostly on- or off-market and about the motivations of the sellers, particularly if they were distressed situations.

Answer

CIO Vikas Gupta stated that the deals were a mixed bag, with several off-market transactions coming through current relationships, notably the Saber deal. Seller motivations also varied, including liquidity needs, exits, and some turnaround situations where new operators were introduced, such as the Georgia transaction. Julian Blouin also asked if Omega's rising tenant coverage levels would allow for positive spreads on future lease renewals or if it primarily increases renewal likelihood. President Matthew Gourmand clarified that due to unilateral tenant renewal options, rising coverage mainly increases the likelihood of renewals, limiting immediate opportunities for significant incremental rent pickups, with no meaningful impact expected in the next three to four years.