NOTE 4 – ASSETS HELD FOR SALE, DISPOSITIONS AND IMPAIRMENTS

We periodically sell facilities to reduce our concentration in certain operators, geographies and non-strategic assets or due to the exercise of a tenant purchase option.

The following is a summary of our assets held for sale:

(1) Relates to a property adjacent to one of our existing facilities.

Asset Sales

2025 Activity

During the year ended December 31, 2025, we sold 49 facilities (45 SNFs and four ALFs) for approximately $282.8 million in net cash proceeds, recognizing a net gain of approximately $67.3 million.

2024 Activity

During the year ended December 31, 2024, we sold 21 facilities (14 SNFs, six ALFs and one specialty facility) for $95.0 million in net cash proceeds, recognizing a net gain of approximately $13.2 million.

2023 Activity

During the year ended December 31, 2023, we sold 69 facilities (64 SNFs, two ALFs, one ILF and two specialty facilities) for $585.0 million in net cash proceeds, recognizing net gains of $79.7 million. Our 2023 facility sales were primarily driven by restructuring transactions and negotiations related to our lease agreements with LaVie Care Centers, LLC (“LaVie”) and Guardian Healthcare (“Guardian”).

During 2023, we sold 37 facilities subject to operating agreements with LaVie for $402.3 million in aggregate consideration, which included cash proceeds of $119.4 million and $282.9 million of pay-offs of the outstanding principal and accrued interest on 29 HUD mortgages on the sold properties made by the buyer, on Omega’s behalf. The sales resulted in an aggregate net gain of $1.0 million. Also in the third quarter of 2023, we recognized the sale of 11 facilities, previously leased to LaVie, related to a December 2022 transaction, that did not meet the contract criteria to be recognized under ASC 610-20 at the legal sale date. During the third quarter of 2023, Omega received an aggregate $104.8 million of principal prepayments for the mortgage from the seller. As a result of the principal prepayments, the Company determined the transaction met the contract criteria under ASC 610-20 and recognized the sale, resulting in a $50.2 million gain during the year ended December 31, 2023, which includes a $25 million contract liability and $5.7 million of deferred interest income received to date.

During 2023, we sold five facilities that were previously leased to Guardian for net cash proceeds of $23.8 million, with no gain or loss on the sale as the facilities had already been impaired down to the estimated fair value less costs to sell. We legally sold one additional facility during 2023, also previously leased to Guardian, that did not meet the contract criteria to be recognized under ASC 610-20.

Sales Not Recognized

As of December 31, 2025 and 2024, we had one and three facility sales, respectively, that were not recognized as a result of not meeting the contract criteria under ASC 610-20 at the legal sale date. During the years ended December 31, 2025 and 2024, we received interest of $5.6 million and $1.7 million, respectively, related to seller financing provided in connection with sales that were not recognized at the legal sale date. The interest received was deferred and recorded as a contract liability within accrued expenses and other liabilities on our Consolidated Balance Sheets.

Real Estate Impairments

2025 Activity

During the year ended December 31, 2025, we recorded impairments of approximately $22.6 million on eight facilities. Of the $22.6 million, $6.3 million related to two facilities that were classified as held for sale and $16.3 million related to six held for use facilities.

2024 Activity

During the year ended December 31, 2024, we recorded impairments of approximately $23.8 million on 14 facilities. Of the $23.8 million, $10.9 million related to six facilities that were classified as held for sale and $12.9 million related to eight held for use facilities.

2023 Activity

During the year ended December 31, 2023, we recorded impairments of approximately $91.9 million on 25 facilities. Of the $91.9 million, $2.6 million related to two facilities that were classified as held for sale and $89.3 million related to 23 held for use facilities.

To estimate the fair value of the facilities, for the impairments noted above, we utilized a market approach which considered binding sale agreements (a Level 1 input) or non-binding offers from unrelated third parties and/or broker quotes (a Level 3 input).