Omega Healthcare Investors (OHI) 3 May 232023 Q1 Earnings call transcript

Greetings, and welcome to the Omega Healthcare Investors First Quarter 2023 Earnings Conference Call. At this time all participants are in a listen-only mode. [Operator Instructions] As a reminder, this conference is being recorded.

I would now like to turn the conference over to Michele Reber.

You may begin.

morning. good and you Thank With me Booth; Vice Pickett; Dan CEO, of are Bob Stephenson; Omega’s CFO, Senior Taylor and Operations. COO, today Megan President Krull,

may that Comments dispositions our regarding or contemplated business or dividend rent our not conference prospects during restructurings, projections, statements and call transitions portfolio generally. financial made historical as and this financial facts portfolio acquisitions, payments, be policy, statements of forward-looking such operators, are outlook condition our

which may and These actual involve forward-looking materially differ the results forward-looking report and uncertainties, XX-K, identify see described without releases those statements differ from on to press Securities including, which actual Please or recent specific our cause events materially. our Commission, risks statements. in results with most factors to limitation, Form cause and that our Exchange filings may

to an the are today, Financial under well these financial adjusted FFO of the FAD and adjusted NAREIT refer During EBITDA. NAREIT the the comparable under our such case our non-GAAP will to section FFO, of in some issued principles, call press the of as recently as explanation FFO, accepted of measures accounting most FFO, non-GAAP Reconciliations we measures, generally non-GAAP measure in available at Information the website and measures of release. www.omegahealthcare.com as and usefulness

verified not independently discuss on data based been is provided Omega. certain addition, we operators financial coverage operator that our that In has information and by by

Taylor. I turn will over now call the to

quarter operator and trends. Today, first XXXX morning. Thanks, operating earnings thank our results, conference And call. restructurings first will our Michele. I quarter key you joining for certain discuss Good financial

payout quarterly share than share per Distribution ratio Available of for expected, dividend resulting XX of our $X.XX $X. first was per As of a share, per Funds XXX%. in our FAD, less dividend quarter

rent paying on expect that Agemo improve April X. payout of quarterly the ratio dividend million rapidly interest and resumed will as We $X.X

contractual have X.X% in rent These FAD along paying quarters. LaVie on strong deferral, assets us to rent the and operators. all transitioned few of the with Homes fully the to May our after related next related operators momentum addition, And been Healthcare with provide restructurings progress restructuring, X.X% In to the X. full completed began new four-month disclosed previously

Fourth X% to excluding EBITDAR positive still strong difficult Turning The rates operating handful of accordingly EBITDAR was reflects times. times Operators operator buckets. XX.X%. continued not Act in payment X. issue. We representing moderation XX.X% support, state rent sheets, should and are to sitting extremely occupancy and on This of strong XX.X% coverage, trends. market. XX can improvement, quarter coverage CARES X.X of of operators therefore, at be into some an level under declined reimbursement the labor balance the a break the strong

relationships. above of the EBITDAR restructurings, excluding facilities operating is above X.X% of representing sale X.X the fourth XX have X.X% representing X. operators active representing represents EBITDAR LaVie's fourth leaves quarter a X% are XX.X% in only coverage anticipated times. eight modestly X.X%, balance quarter or which of of X.X%, which also operators representing Operators leaves LaVie. That times. sized X.X coverage when transition

Lastly, we industry. loss of mourn leaders in senior the two acknowledge and important the housing

real the was CEO his leader REIT former until of estate Chapman, within important George and the influential was George CEO the and industries. first, The ReNew Welltower passing, an of and REIT. healthcare

two associates clinical Maplewood's professional of five-star of friends the with a and entrepreneur second, forward-thinking leaders. important We personal Maplewood. family, hotel-like the hospitality, excellence a condolences great He created and Greg. unparalleled had who then CEO our with combined was The to Smith, Greg envisioned relationship and these was

Bob. to over call the turn now will I

Thanks, Taylor, and good morning.

the nonrecurring items, first financials first asset quarter was adjusting related million for completed quarter the first $XXX of operator is result The discuss, for to sales our million Dan timing restructurings, Turning before as XXXX. for primarily XXXX. to Revenue will for of and year-over-year certain decrease to $XXX the the quarter. compared in

NAREIT as to first $X.XX for or $X.XX quarter million share QX of XXXX. compared Our $XXX per share was per $XXX million FFO or the for

to as reconciliation FAD of for The $X.XX earnings $XXX found as Our release $X.XX $X.XX and adjusted share financial our net or supplemental consistent $X.XX and QX with FFO first FFO than less exclude historical per the practices outlined well both and and adjusted was our was FAD million $XXX income QX was posted for million in FAD share items our or quarter in quarter, our our per our several FAD. to website.

Taylor morning, Dan's many color release updates comments Instead want filed I changes details on press related and quarterly repetitive, some the being operators. and in provided this specific summarize include operator and along provide of our QX to FAD QX. with to yesterday

approximately FAD related that FAD our was Healthcare Dan expense decrease QX For operators $XX.X X.X% our share to small will operators representing additional Maplewood, discuss, well LaVie, X.X% an QX timing, XXXX QX increase disease these the operators decrease in million FAD-related G&A per XXXX with as Homes, our Agemo, discussed, million, in two or due $X.XX $X.XX as $XX.X including to was a an FAD. in million $XX in QX operator, and operator transitions operator or

$XX restructurings of be of based case, rate approximately these at provided our approximately the on rent run exception in anticipate the for with million In to the transitions QX the to executed QX related full pool each same in operators contractual XXXX with $XX operators LaVie. and the FAD XXXX date million. to We of

these to monthly million basis, to The we have the that of payments they only of the million. in us are only year. FAD. $X.XX each in assumed with therefore, $X.X XXXX to paid negotiations amount $X.X noting this first As in this four months operators of When restructuring. QX record operators pool comparing run QX equates a important in doesn't we to are FAD drop are in most only a factor cash LaVie FAD extent to the worth I also the projected will related this current of decrease It's received. rate XXXX, $X.XX on final LaVie, It's note decrease and

as press the $XXX produce or quarter million to we release, FAD. FAD second $X.X $X.XX incremental expected in of These FAD almost approximately year-to-date. in Additionally, incremental are the million investments completed the to quarter and $X.X investments in of million of new $X.XX third in outlined

we In XXs the to ratio path short, a not anticipate XXX% payout to although yet low year we FAD a we to XXs in return a full to providing QX high ratio are in with under in return guidance, payout normalized will XXXX.

sheet. to Turning the balance

sheet protect previous since in to the to the improve highlighted our start maturity pandemic of capital debt. remain cost further steps taken thanks liquidity, overall we've of ladder strong, continues our our help balance As and stack, the calls, to

the At cash. we $XXX XXXX, of The as majority billion to million second well was March had complete in $X.XX availability XX, as the quarter in our used facility under credit cash revolving acquisitions.

of due Our August. maturity X.XXX% [ph] notes is next debt million in $XXX

plan this our entered million do significant our proceeds and was the credit annualized was The refinance EBITDA facility. XX% the XX, August into of $XXX times, At of swaps at not repay cash our X.XXXX%. an X.X million swaps net are at plan notes $XXX with XXXX, of available our $XX combination XXXX debt as when XX-year our a rates expire billion provide certainty in at rate interest These us fixed funded at we upcoming revolving to we terminate adjusted to was swaps average and million in from cost bonds. In X.X We March we XX, debt March fixed $X.X coverage swaps valued of due ratio time. and using of swap rate of times. to charge and in

the call Dan. over turn to now will I

good everyone. and morning, Bob, Thanks,

operators states XX, spread As operating United the and These portfolio asset of operating approximately XXXX, Omega March XXX XX with facilities across located within XX Kingdom. of were an in beds. facilities had XX,XXX third-party

XX-month operator versus ended and for December X.XX times, flat respectively, September and to coverage core XXXX, the remained times and XX, at trailing XX, as times, XX Turning respectively, EBITDAR X. period X.XX% XX-month portfolio of XXXX. for our EBITDARM X.XX

During during quarter third cumulatively in approximately XXXX, funds to as million recorded compared our the the of stimulus approximately quarter. recorded federal million fourth operators $XX $XX.X

and compared for quarter when third EBITDARM $XX stand-alone funds, of million including of and of X.XX times third fourth during quarter and funds. respectively, without $XX.X X.XX million benefit respectively. the the XXXX This X.XX EBITDAR stimulus for in quarter EBITDAR and with times the the was to have stimulus the and ended federal X.XX portfolio XX/XX/XX, times stand-alone for our compares would X.XX coverage federal X.XX to as times federal X.XX operator excluding any the favorably XX-month federal quarter respectively, funds. Trailing increased times excluding times, core stimulus and times, to coverage of times, X.XX stimulus

up has XX.X% based of January from continued Occupancy low mid-April a as from core overall XX.X% for trend reporting our XXXX upon portfolio of our preliminary operators. in to to XXXX of

Turning comprises of housing XXXX the Today, assets had in a X.XX results, memory on of increased the this end the which Based has XX% XXXX. end in remained United third mid-April lease steady our covered times. UK. fourth independent portfolio overall of assisted This senior to and at investment of pure-play our X.XX at States preliminary care as compared quarter XXX housing the its portfolio for coverage times portfolio. senior living to EBITDAR and the living, XX% at basis trailing the occupancy upon quarter, January as versus XX-month

Agemo. portfolio to Turning matters.

would portfolio this Omega its the facilities overall contractual in LaVie, million quarter, restructuring per the that in LaVie underperforming facilities. remaining certain an its interest Taylor facilities earnest and of previously, fourth involve April consisting as annum, Kentucky mentioned Agemo XX around year, of mentioned, in began reduction on of XX in during discussions $XX.X resume portfolio and As and rent Tennessee.

transitions approvals other been or to To multiple and either a are an to in name diligence transitioned of XX potentially subject host and being XX process are date, third-party including parties. The sold to and facilities transactions the third XX have facilities a of documentation, conditions, include governmental due facility additional regulatory and few. released

in of to discussions XX% ongoing contractual restructuring to XXXX. that that be Also It rent restructuring, this months rent future The quantified. these agreed partial deferral be equates the are an should as four noted cannot and part discount deferral approximately rent. first of outcome Omega full the definitively to a the

revenue. Omega allow assist needs we rent revenue discussed through XXXX have position. a agreed liquidity the Homes discussed, two potential to Healthcare with previously XXXX, Homes potential Healthcare of four-month of as well Homes to XXXX. any build to future divestiture in census of deferral its X.X% facilities Healthcare Homes, as payments prior for one continue April to underperforming January from deferrals operators, in Thus to rent review liquidity evaluate achieved Omega order tight May resumed Healthcare quarters, one as as will certain monitor In continue for representing candidates. and X.X% representing and

the quarter, third with XX to were associated two all facilities these During first operators transitioned parties.

from modest and rent from per quarter, second combined of first successfully rent transitioned million per facilities operators. equals subsequently compares representing new $XX.X decline Omega annum, The $XX.X new combined $XX.X combined of The facilities a the to contractual LaVie annum. historical million annual from million. the rent tenants rent favorably Also third-party the XX during relatively and two of million in smaller $XX.X previous annual two quarter new the to

to addition various operators with working on aforementioned Omega several transitions, is small the relatively and other In restructurings. restructuring

the in XXXX, at lease an new $XXX.X the master Turning transaction United facilities million part lease homes to West purchase rate closed sale X.X% the financing Virginia, quarter, XX, of facilities for on transaction an XXXX, with these X.X% on and two to operator lease of a to Omega a Omega same closed million cash escalators. to care mezzanine Kingdom. the amended existing XX the with million consisted first on purchase a an four initial On operator, closed On in with a transaction. initial a notable $XXX with and care with bears $XX four financing XX, mezzanine the was $XXX an additional annual X.X% Concurrently to six leaseback acquisitions, investments. cash Omega facilities X% operator's Omega entered West stack Omega include into capital of April transactions. Virginia. Concurrently master XX% million for of of interest existing March homes which given transaction, was for in acquisition, Subsequent yield with escalators. The annual yield the new

Inclusive totaled of on quarter, annual purchased investments lease West $XX.X existing XX% additional second May million an yield in and new facility of was X.X% million. $XX.X these Also with added Omega's XXXX, year-to-date capital an The Omega in million. for the with $XXX Virginia to cash X, facility operator's expenditures, escalators. one initial transactions an master in two

dispositions. Turning to

two a quarter in proceeds. total Omega the of facilities divested XXXX, of million first During $XX for

to I Megan. turn will now call over the

recovered After occupancy increases. core of in good XXXX, of everyone. towards end Thanks, we XXXX, to return occupancy Dan, the and but morning, from steady have fully XX% occupancy in seen the that above have off of now The is the facilities up XX%, recovery while tapering from number at/or reported of yet slow, another the third quarter, occupancy. an XX% not recovered, slightly perspective core facilities are XX%

where quarter staffing patient better to has was hear times clearly our others. six off portfolio decreased than basis day about it certain last versus perspective, a from sector expense the operators times to a we positive While our for for quarter. XXXX continue five recovered fourth markets not from on core XXXX per in Agency with momentum

industry is yet, on of the emergency. is of certainly, direction in the of but that just heels of out woods This announcement any not the say public welcome, health the the move is end the right the to especially

We the of add-on down monitor FMAP year-end. of Medicaid the rate setting closely continue in wind to light through

rates paying to are Texas we and coming the weeks. should attention be finalized in Florida, which Specifically, close

perhaps what we room, other We optimistic soon that too to states, And are obviously, given the is the but seen leaves cautiously mandate. have the staffing tell. in elephant in it

recommended the release until is issuance only the of payment delay have as less hour X.X around, where moving the a but the likely is mandate to adopted patient that been towards of for of been proposed you had rule latest result draconian We that instead expected it's number than released. reason. could Many in in staffing that is CMS have although the what XXXX, is otherwise can proposed staffing to with a defer a hope might spring. proposed mandate decided in mandate But that per CMS heard of this day a a which go? later back never rule, thrown

If level ACA not attention a final data currently. CMS data, is facilities seems do that requiring they reports as XX% that collect, of of level unlikely in that staffing fact paying that same is meet which outcome. to that

CMS. to there However, are many available levers

LPNs Florida requirement For instance, to be set last a for be has could rolled years. fully be care, year, implemented RNs, also did set a industry delayed exceptional a just from tier until and with of gets outside to and basic care for perspective, the one the staff CNAs. level system could similar staffing recovered Whatever could or several could be what include out or over

two spread but time then also we that is this too adjustment years. that PDPM lesser year, to a seen rules It such parity change And last by ultimately full to payment funding can soon the Recall go, CMS rule over there's proposed a any get the obviously, final. substantially adjustment back is the becomes parity had in direction the have a rule it, which mandate. of for what say we will tell all can question

what understanding even doesn't of of would but everyone in being a is the the government to working ensure So meet, unfunded ACA under mandate such any draconian I remind solution, all rather up of meet that we imposing the here of only staffing don't CMS exist the regardless a circumstances recovery but from problem has when itself. the recognize post-pandemic not ends of facilities is majority the key requirements the a at ultimate to height a is and far sort that and that make proposed, to sure rule employ that Nonetheless, palatable. tirelessly something firm issues of can't

for up will now open questions. call I the

Thank you.

a comes conducting first James. be Instructions] question now from Hughes session question. will proceed Please Jonathan question-and-answer with your [Operator Raymond Our with We

the we repeat of XQ operators maybe Hey, year remarks where year Could good in those kind year-end. a by FAD Question appreciate trajectory could this of commentary detailed, for there the exit and I morning. third initiatives, the to quarter and Bob. helpful. prepared Thanks you summary FAD very just from and of lot the and you numbers restructured contribution for last there. detailed are but from were maybe

I'll Hey, want you anyone. Jonathan, you. be after do happy with and I'll call, through the details, thank it And actually go to do if to that

as QX was QX was Healthcare and by said, driven converted to LaVie deferral was, So was less FAD our Maplewood FAD and than really I $X.XX PIK. and Homes interest that

So, then a over as point. to moving QX is really starting

represented and QX million $XX operators of eight -- there So, FAD our FAD. were million that X so operators $XXX was

Just quickly, that two X.X, mentioned, year. this And Dan Agemo, X.X. operators those eight Maplewood, Healthcare the other as operators transitioned the Homes,

the operators $XXX operators FAD. expect represent FAD. to generate $XX million of or of QX, In incremental those $XX eight we $XX million million those million So, QX of

Agemo represent million and $XX that payments Healthcare resume in Homes QX. to both making million of $XX

six was to million $X other the The operators. related remaining

QX, just In those from healthcare seven eight expect timing $X FAD transitions. generating $X additional driven million, by the really that's other incremental an $X representing million and incrementally we operators of these of and homes million million with or $XX

And remember, to are these of the to the a going upside in some then these, cash fee related I'm depending say, on on basis. we lot meaningfully the timing operators restructuring. have a And of

impact may So, cash timing it.

more of the like today have back I'll for And What's Appreciate back and again. color. competitors the between to because investment through still appreciate me. see over market already and assisted-living. pullback few the in And and that were skilled you seen starting past active have years? you from acquisition capital pull that read SNF I'm mix that yields, I Okay. the a nursing or then are in transcripts private the pipeline go size, we detail. just glad terms one look

both to We're UK. now our pipeline up. pick the quoting figures the US want we mostly and It's seen it, dollar have don't but around SNF It's assets. I in put So, certainly cap we talking compete the few And rates that directly folks last north quarters. with X%. get these as that quite some about, of we don't of of while seen you're have private

right. All the time. Appreciate

from with next is question. Siversky Our Please proceed with Connor Wells your question Securities. Fargo

Megan. appreciate color the there. Good remarks, from morning and out particularly the I prepared

take on the minimum is I that helpful. requirements think very staffing

activity. Just a little bit more on investment

I'm portfolios? wondering at maybe environment. kind worst of emerging to the on Have underwriting from coverage of related targets new we're your changed the as COVID-XX rent all,

how others, And than hikes you or attractive more or then geographies? end addressing the seek better given Medicaid going the forward? look this any does different change others, of states by Do PHE, than out areas avoid some sell looking and the suddenly offering any at responses of rate to certain would you're look to where

So, as geography, Buckets part become There it. Florida. change. have we're been not of states some component that right? of i. from our always have have great were great, so not That's and at key underwriting unfortunately, or time-to-time, criteria, looking they a states forever e.,

And carefully of as so we look our do that at underwriting. part

hasn't We a a really at is look -- to the bit to look behind What analysis Our credit X.X tenant. the does coverage we changed. little X.X carefully coverage. more

we're at. new new a a new be very bid deal with to deal a that lower that's we're bidding existing If we're coverage, a coverage. at bidding willing tenant underlying strong with might an tenant, it what if So slightly looking we has very,

well. So comes play into that as

that covered think I all.

just rents perhaps are reflect then occupancy what in of facilities? event portfolio? still that the sell hurdle that like for out to that Okay. the kind those or these going on transition on And Understood. still And color event LaVie, undergoing of that performance within that Thanks understanding maybe then you're process. indication any the the look in within could that subdued assets it's assets anecdotally, And in this does transitioned wondering XX-some-odd or looking restructuring I'm -- that. quickly for

a and terms XX%. median. ever slightly rent. actually, sales occupancy quantify So than looking above We're the LaVie of both is so in for too higher looking It's little the to what we're early bit It's at at releases.

the that The be the a what from just receive But will I dollars it first of we’ve predict in it's happen. I confident reporting in point at upside that feel exact time. that quarter. been both. material early combination we do little see a So to too this will

Okay. Understood. for time. Thanks the

question question. with from Citi. is Griffin Michael next proceed Please Our with your

on the the financing Virginia facilities Great. read Thanks. future? way? curious LaVie deal maybe the from quarter -- Maybe almost external in loan maybe X% XX% last just on I a And some I think correct rate. sticking these fund. growth that thinking I in that's at mezz Am of that about it there. I point a in negating was the West was that could you an loan-to-own seller possibility that is kind the it's there was as purchase

Mezzanine Just to be Michael, is Mezz. made, we clear, that the traditional

own is obviously, a But it's on where that's it So not are the that, we And of credit it. It's a it's part of that's of today, we mezz things see in market XX% remember, within with mezz the go and part underwrite idea rate. all the credit, loan willing crossed. you based portfolio terms cap bigger why the -- stack. if we're our of sideways bidding much to much,

So mezz the very solid. is behind represents the for of we just coupled feel The financing. where that credit is type extremely market very, that XX% loan that

operating is York much not there be expectation think or out higher West California, , And or specific there might states rate really that for or as is there in is don’t mean, it is specific? I just much I of more like operator it New about are but just in know, anything Virginia other Virginia West to specific, people there Medicaid

little of Virginia is low. a a strong, it’s is great question. relatively Reimbursement supply It’s both, West

And So it's operator. the strong. supply-demand an with economics are

We have a excellent with relationship today. coverage great has who

throw a us. together, those factors good asset it's three deal underwriting pretty you an for So

in like permanent. it Texas North it have health decouple Texas. if public I the this in it from rate think imbursement states with the prepared don’t decoupled on expectations ending, health was emergency apologies, the on made FMAP, know any on I public or side, has found And then her the just – maybe from but Megan emergency, regulatory update the remarks, touched Carolina but Medicaid was don't I

helpful? color any there be would So

still because launch them Yeah. are we're they five North have the didn't increase some and watching almost XX top states states Texas Carolina two just payments. of our two. of recall, are rate Those any

So the to emergency have an the public really there. it's doesn't end health impact

and Virginia cautiously period we're still so rates already go-forward Texas Carolina. California North of those for that watching it in In We're we're optimistic going time, closely. mean, to had a and included I see in rate good hearing until price October operators those keeping of next from something both wouldn't the those That about we're we in be states, kick and few Texas, should weeks. about our the Xst.

The for association the to to step FMAP on XXXX is state pushing that October. bridge also them up and

again, cautiously tell, that there. So soon a going to we're too good little but optimistic see to days

Awesome. Thanks That’s time. for it for the me.

is Valiquette Please question. next with Barclays. question your Steven Our with proceed from

morning Great. Thanks. Good everybody.

So sure I in on coming whether I just operators SNF on calendar for skilled of guess, way, color in those not more the if so me, guess, far the of, I XXXX? slow-and-steady comments different one I payments in trends also senior still are curious or back either XXXX. the both those housing just are far versus gains or any housing the you other, related whether occupancy XXX% nursing so overall, senior wasn't and to guess sort to recovery have for just Thanks. occupancy

the we're had but I more is of outside up really picked SNF think it an It quite had not The been. side earlier. is as seeing steady where the same increase,

in growth both. So bit a but difference, there's still a little positive of

that to deeper. just bit little into dive And a Okay.

there calendar in very think knows and so that inpatient I increase been the XXXX, hospital noticeable into for sector volume that a track post-acute SNF has translate should far operators. greater volumes in in anybody growth

So post-acute that just where from? Medicare progression from operators Is general sentiment SNF I'm wondering, just helpful, Medicare maybe would the you just specific on gains? on of that related specific coming of the are too, most gains tied component color qualitative on Thanks. if to on be any can post-acute. your just the occupancy comment Just

some issues that don't say, increase know not dealing we're staffing people preventing will quality yet. to I still play out seeing the that. on. there We that new with mix from related But that taking in We're residents are

a still. So bit that causing issue is an of

it. got Okay,

Okay. Thanks.

Our question. next proceed question America with Merrill your Bank Joshua of with Lynch. from Please is Dennerlein

curious cap or Yeah, hey, guys you changes before for just everyone. external market, something of just rates the just in your restart it Thanks kind for you really what fundamentally. internally in growth. I'm Is portfolio time. the are private in the looking

hear Just curious to your thoughts.

we've And is restarted. now, perspective, really that look little it's as From to million bit pipeline $XXX if driven you And by allocated the our at the returns active we've a yields. just can the Dan of nine we're those on at quoting work. SNFs mentioned, levels, and we're XX our deals, of at at deals XX seeing and north deals and all we make math

traditional So, clearer available. the opened of sources opportunities a see the marketplace think financing pipeline up, more and we'll just becomes lot I we've as it in aren't

Okay.

should kind for continue the or year-to-date, it's So, we I first of seems guess, from in necessarily look to kind of our perspective, it going something like that forward? one-off wasn't quarter

million if it would pace, we capital at where think when will not Xst, million Yes. is with I done, May allocation Well, are that's at I'm $XXX-plus it a through that's pace pretty good sure the but $XXX this pace. year the be. and be

of the you out do for be and should appreciate or think else -- industry about that kind point we're there trough? watching the then we're maybe your portfolio, the would risk trough with is thinking And within when of operators, we market that. something the paying I at of just past this

is The don't that, optimistic to other lot fact perspective, that that unknowns. I a in of closing in indicator XX% But an good our become from fact minimum and think staffing for that state any -- levers are it general, is don't issue. out see we on important. is, cautiously the great clouds pointed occupancy pretty the there, important. we're has horizon. I will there trough. many could pull which a for, I'm that Megan have The past support is save

Thanks. awesome. Okay,

Our is next Mizuho. from question proceed with with Please Malhotra Vikram your question.

the taking for Thanks question.

Just year-end. coverage maybe -- at your comments will the of first one to end on coverage where clarify the up dividend towards sort -- the

acquisitions from through, incremental sub-XXX% I activity think any made, XX%. bake interest does said through year-end? coming that income you've of you investment loan also it in include towards including but income sort Does

my of comments pipeline that and in Well, based transitions any building the no, on I'm talked not to Vikram, all we've the below it's the about XXX%. get

Okay. deals But terms loan? as as in announced well it you've like include would whatever of

includes it to the date in completed Yes, press were new that release. all investments

Got it.

environment Okay. on, there, mean, I cap Texas SNF -- but the as I now? rates is phased, have there the moving cap several stuff talked on the a probably bottoming you optimistic scenario years And well. about steady remained broadly in then plus staffing trends, minimum know Is just every hopefully, very for rates -- asset

basis either bed wondering, see scenario a SNFs? rate up down over you basis, cap go next cap I'm there a could months where actually in So, the or rates is XX a or for on go per values

see I see do rates going I that not up. cap scenario.

bed if would you X that for And to XX where what are and -- nursing to what next skilled -- cap or you months? the per over are, rates values were today where say, be venture broadly would change

what Per can predict. is which to state. is north value bed very I by nine. just tell tough we're today, quoting a you That's of dramatically

really the an across quote would it So per any would be be board, bed average given value meaningless. it's to that hard in

so Okay. much. Thanks

from Tayo is question proceed question. Suisse. with next with Please your Credit Okusanya Our

Hello?

you on Where now. Tayo. morning, Good you Listening mute?

Okay, perfect. Excellent.

again, details around So level. Megan two the thank the the state all for reimbursement quick at ones me. from you

pertains quarter. with one that It's during you peers they the to that of and exposure reimbursement, of what to data any your state? in states. to your Could just seeing you're top that talk operators five that challenges it your as that Michigan impact did of on mention some One have had

a more does strong which operator a hoping to our on Carolina, related rate moderate been been hasn't put But increase Virginia, all that's strain exposed also Michigan too Ohio, Michigan, we're now. and those good this There operators. year. for is delayed North a are to have increases, thankfully, should to they states payments one are perspective bad, which right material rate from setting and is very

concerning of need So catch-up a But stuff again, I think they just not perspective. too it's the from Michigan, today. that that

you. Got

the that peers again, a to pipeline, space investing the regards the there heavily health. over Okay. some That's in skilled are to in your Again, behavioral And fast-growing nursing helpful. then sector. have argument investment is pivoted of in

rates, You're on type behavioral health cap the side. risks reimbursement have not SNF like still getting may same the you of

it's Just actively class would and curious at another invest that what as that are in? something your Omega asset look space to thoughts if on

have It's different Tayo, an space. models, we're involved a you It interesting in. -- couple of that

have substance disorder. You use

you psych have You general psych. have and geriatric

have not We and have disorder. specific space. but are behavioral operators investments that use geriatric in substance We have operator, handful of do we psych SNF in that a a

it. at So it. understand We we look

operators, a think we they so now, their much at better us behavioral type seeing credits for we're opportunity lever is will into looking and new allocation operators. with Right capital existing than of

priority but not space, a us for today. good So

Got you.

you. Thank Okay.

floor Taylor There to like Instructions] [Operator time. I'd turn Pickett further this are no closing back the questions over comments. at to for

Thanks, joining Rob. for Thanks everyone today. us

As always, the to a team Have of questions. to any your great will respond be day. prepared

This concludes today's teleconference.

for you You time may participation. we your your lines this and disconnect at thank