Omega Healthcare Investors Inc.

For the month of July, collections declined slightly to 98% as the company was notified by an operator that it would be unable to make its contractual rental payments for the foreseeable future. As a result, Omega placed this operator on cash basis accounting and recorded a $17.4 million reduction to rental income related to the write-down of straight-line receivables. Though operators are better prepared to deal with another wave of COVID-19, in part due to high vaccination rates within facilities, a resurgence of cases around the country and in the U.K. could result in a slower recovery than otherwise expected and further operator troubles within Omega's portfolio. Additionally, staff shortages are slowing move-ins and driving increased wages, which account

...Rent collection and coverage have remained strong, supported by government stimulus, though the pandemic remains a near-term concern. While the company's portfolio was pressured during the pandemic, with occupancy declining to a low of 72.3% in January 2021 from a pre-pandemic rate of 84% in January 2020, both rent collections and operator coverage levels have held up reasonably well. Omega Healthcare Investors Inc. collected over 99% of its contractual rent for the second quarter of 2021, a mark it has achieved each quarter since the start of the pandemic (excluding rental payments due from Daybreak, which was under a forbearance agreement). Operator EBITDAR (earnings before interest, taxes, depreciation, amortization, and rent) coverage for the 12 months ended March 31, 2021, was 1.44x, an improvement from 1.32x a year prior. However, EBITDAR coverage for the stand-alone quarter ended March 31, 2021, was 1.17x, including $74 million of federal stimulus funds, and 0.83x without, underscoring...

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