NOTE 8 – NON-REAL ESTATE LOANS RECEIVABLE

Our non-real estate loans consist of fixed and variable rate loans to operators or principals. These loans may be either unsecured or secured by the collateral of the borrower, which may include the working capital of the borrower and/or personal guarantees. As of December 31, 2025, we had 40 loans with 27 different borrowers. A summary of our non-real estate loans by borrower and/or guarantor is as follows:

For the years ended December 31, 2025, 2024 and 2023, non-real estate loans generated interest income of $40.5 million, $30.4 million and $22.1 million, respectively. Interest income on non-real estate loans is included within interest income on the Consolidated Statements of Operations.  

The following is a summary of advances and principal repayments under our non-real estate loans:

Included below is additional discussion on any significant new loans issued and significant updates to any existing loans.

Genesis Non-Real Estate Loans

Omega has two secured term loans with Genesis with initial borrowings of $48.0 million and $16.0 million at issuance that previously were included as real estate loans receivables within our Consolidated Balance Sheets. The $48.0 million term loan was issued in July 2016 (the “2016 Term Loan”), with subsequent amendments in 2018, 2019, 2021, 2023 and 2024 (discussed below), and currently bears interest at a fixed rate of 14% per annum. The $16.0 million secured term loan was issued on March 6, 2018 (the “2018 Term Loan,” together with the 2016 Term Loan, the “Genesis Term Loans”), with subsequent amendments in 2021, 2023 and 2024 (discussed below), and bears interest at a fixed rate of 10% per annum. On September 30, 2024, the loans were amended to (i) modify the priority of certain real estate collateral securing the loans so that they are primarily collateralized by a first priority lien on the equity of several ancillary businesses of Genesis, (ii) extend the maturity date from June 30, 2025 to June 30, 2026 and (iii) keep the existing interest rates but reduce the portion of contractual interest permitted to be paid in kind from 9.0% to 3.5% per annum on the 2016 Term Loan and from 5.0% to 2.5% per annum on the 2018 Term Loan beginning September 1, 2025. Following the modification to the priority of certain real estate collateral available to us under the loan agreements, we adjusted our presentation of these loans from real estate loans receivable to non-real estate loans receivable as of September 30, 2024. As of December 31, 2025 and 2024, there was $104.4 million and $93.4 million, respectively, of principal outstanding on the 2016 Term Loan and $24.2 million and $22.5 million, respectively, of principal outstanding on the 2018 Term Loan.

As discussed in Note 5 – Contractual Receivables and Other Receivables and Lease Inducements, in July 2025, Genesis commenced voluntary cases under Chapter 11 of the U.S. Bankruptcy Code in the Bankruptcy Court for the Northern District of Texas, Dallas Division. As described in Genesis’ filings with the Bankruptcy Court, we provided, $8.0 million of a $30.0 million DIP financing, along with other lenders, to Genesis to support sufficient liquidity to, among other things, operate its facilities during bankruptcy. The DIP financing loan bears PIK interest at 14.0% per annum, payable monthly in arrears. The principal is due upon maturity. The DIP loan matures on the earlier of (i) February 4, 2026, (ii) the effective date of a plan of reorganization or liquidation in the Chapter 11 cases or (iii) upon an event of default as defined in the DIP loan agreement. Prior to its maturity on February 4, 2026, the DIP loan was in default. Upon maturity, the DIP loan was not paid, which is another event of default. The DIP loan Agent, on behalf of the DIP lenders, has issued a default notice and reserved all rights and remedies under the DIP loan documents. Omega, along with other DIP and term loan lenders, have agreed to forbear from exercising remedies, except for charging default interest on the DIP and term loans, until February 13, 2026. The DIP lenders hold a third and fourth priority security interest in all of Genesis’ assets, which includes a third priority security interest in cash and accounts receivable, other than (i) certain claims and causes of action arising under the US. Bankruptcy Code and (ii) any causes of action that are not accounts receivable or accounts ((i) and (ii), collectively, the “Excluded Claims”). Proceeds of any future asset sales, claims and causes of action other than the Excluded Claims and debt or equity issuances will all serve as collateral for the DIP loans. The interim DIP order approved, as part of the bankruptcy process, the DIP budget, which allows interest payments due under Omega’s Genesis Term Loans to be satisfied in kind during the bankruptcy, except for budgeted adequate protection payments that will be applied as interest on the 2016 Term Loan. During the year ended December 31, 2025, we received $0.4 million of adequate protection payments.

As part of our ongoing credit loss procedures, we evaluated the fair value of the collateral available to us under the Genesis Term Loan agreements and the DIP financing based on appraisals and market indicators and determined there is sufficient collateral to support the outstanding principal on each of the Genesis Term Loans and the DIP financing. Based on our determination regarding the sufficiency of the collateral, the Genesis Term Loans and the DIP financing remain on an accrual basis. As of December 31, 2025, the internal risk rating on the Genesis Term Loans and the DIP financing is a 4, which we believe appropriately reflects the risks associated with the loans as of December 31, 2025.  As discussed in Note 20 – Commitments and Contingencies, the Statutory Unsecured Claimant’s Committee has filed a proposed Complaint and Preliminary Objection regarding the collateral supporting our term loans and regarding payments received by Omega under its lease and loan obligations in the 90 days prior to the Genesis bankruptcy filing date.

Agemo Non-Real Estate Loans

As discussed in Note 5 – Contractual Receivables and Other Receivables and Lease Inducements, in the first quarter of 2023, Omega entered into a restructuring agreement and a replacement loan agreement that modified existing Agemo loans. Under the restructuring agreement, the outstanding principal of a $32.0 million secured term loan was refinanced into a new $32.0 million loan (“Agemo Replacement Loan A”). The outstanding principal of a $25.0 million secured working capital loan and the aggregate rent deferred and outstanding under the Agemo lease agreement was combined and refinanced into a new $50.2 million loan (“Agemo Replacement Loan B” and with Agemo Replacement Loan A, the “Agemo Replacement Loans”). The Agemo Replacement Loans bore interest at 5.63% per annum through October 2024 but increased following October 2024 to 5.71% per annum until maturity. The Agemo Replacement Loans mature on December 31, 2036. Beginning in January 2025, Agemo was required to make principal payments on the Agemo Replacement Loans dependent on certain metrics. These amendments were treated as loan modifications provided to a borrower experiencing financial difficulty. Both of these loans are on non-accrual status, and we are utilizing the cost recovery method, under which any payments, if received, are applied against the principal amount. The loans are reserved down to the estimated fair value of the underlying collateral.

During the years ended December 31, 2025, 2024, 2023, we received $4.7 million, $4.7 million and $3.2 million, respectively, of interest payments from Agemo that we applied against the outstanding principal of the loans and recognized a recovery for credit loss equal to the amount of payments applied against the principal. As of December 31, 2025 and 2024, the amortized cost basis of these loans was $67.3 million and $73.1 million, respectively, which represents 15.6% and 16.1%, respectively, of the total amortized cost basis of all non-real estate loans receivables. As of December 31, 2025 and 2024, the total reserves related to the Agemo Replacement loans were $66.4 million and $70.9 million, respectively.  

$50.0 million Secured Term Loan

In December 2023, the Company entered into a $50.0 million secured term loan with a principal of an operator that bears interest at a fixed rate of 11% per annum and matures on December 19, 2026. In connection with entering into this loan, we also entered into two lease amendments to extend the term of two leases with entities associated with this principal. The loan is collateralized by a pledge of equity interests in a closely held corporation of which the principal is the majority owner. The loan requires monthly interest and principal payments commencing January 19, 2024. As of December 31, 2025 and 2024, there was $43.9 million and $47.1 million, respectively, outstanding on the secured term loan.

$45.0 million Unsecured Revolving Credit Facility

On July 8, 2019, the Company entered into an unsecured revolving credit facility agreement with a principal of an operator, that has been subsequently amended multiple times in 2022, 2023, 2024 and 2025. In February 2024, we amended the revolving credit facility agreement to, among other changes, extend the maturity date to December 31, 2025, reduce the maximum principal under the loan from $55.0 million to $45.0 million and modify the mandatory principal payments required under the loan. Additionally, the amendment increased the interest rate on principal balances exceeding $15.0 million to 8% in January 2024, with further interest rate increases to 9% and 10% in April 2024 and June 2024, respectively. The interest rate remains at 7.5% for borrowings that do not exceed $15.0 million. In December 2024, the loan was amended to increase the interest rate on the entire balance outstanding to 12.5% per annum beginning January 1, 2025 and modify the principal payment schedule. During fourth quarter of 2025, the maturity date of this loan was extended to June 30, 2026 and required additional principal payments contingent upon the completion of certain restructuring transactions by the operator. As of December 31, 2025 and 2024, the outstanding principal on the loan was $32.5 million and $42.5 million, respectively.

LaVie Non-Real Estate Loans

As discussed in Note 5 – Contractual Receivables and Other Receivables and Lease Inducements, on June 2 and 3, 2024, LaVie commenced voluntary cases under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Northern District of Georgia, Atlanta Division. As described in LaVie’s filings with the Bankruptcy Court, we provided $10.0 million of DIP financing to LaVie in order to support sufficient liquidity to, among other things, effectively operate its facilities during bankruptcy. Another lender, also agreed to provide $10.0 million of DIP financing to LaVie, which is pari passu to Omega’s loan. The DIP loan bore interest at 10.0% and was paid-in-kind in arrears on a monthly basis. The principal was due upon maturity.

In addition to the DIP financing discussed above, we also had a $25.0 million term loan and an $8.3 million term loan with LaVie.

Given the risks associated with the bankruptcy process, LaVie’s liquidity issues and insufficient collateral, we evaluated the risk of loss on all of Omega’s loans with LaVie on an individual basis and wrote down any remaining unreserved balances associated with these loans during the course of 2024 and 2025. We recorded provisions for credit losses of $4.0 million and $9.6 million associated with LaVie’s outstanding loans for the years ended December 31, 2025 and 2024. During the second quarter of 2025, the DIP loan and $8.3 million term loan were discharged as part of the LaVie plan of reorganization that was made effective on June 1, 2025 and we wrote off the principal and allowance associated with these loans. As of December 31, 2025 and 2024, the amortized cost basis of the one and three, respectively, LaVie loans outstanding was $24.5 million and $38.3 million, which represents 5.7% and 8.4% respectively, of the total amortized cost basis of all non-real estate loan receivables. The total reserve as of December 31, 2025 related to the remaining LaVie loan was $24.5 million.

No interest income was recorded for any LaVie loans during the years ended December 31, 2025, 2024 and 2023 as all three loans were on non-accrual status.