INVESTMENTS IN UNCONSOLIDATED ENTITIES

12 Months Ended

Dec. 31, 2025

INVESTMENTS IN UNCONSOLIDATED ENTITIES [Abstract]

INVESTMENTS IN UNCONSOLIDATED ENTITIES

NOTE 11 – INVESTMENTS IN UNCONSOLIDATED ENTITIES

Unconsolidated Entities

Omega owns an interest in a number of entities which generally invest in the long-term healthcare industry. The following is a summary of our investments in unconsolidated entities (dollars in thousands):


								Carrying Amount
		Ownership		Facility		Facility		December 31,			December 31,
Entity		% ⁽¹⁾		Type		Count⁽¹⁾		2025			2024
SHH Holdings, LLC		49%		Various		65		$	222,161		$	—
In Substance Real Estate Investments⁽²⁾		N/A		ALF		12			75,353			—
Lakeway Realty, L.L.C.⁽³⁾		51%		Specialty facility		1			64,699			67,541
Liberty JVs		49%		CCRC		1			42,754			—
Other Healthcare JVs⁽⁴⁾⁽⁵⁾		9% – 25%		N/A		N/A			7,429			7,317
Other Real Estate JVs^(4)(6)(7)		20% – 50%		Various		6			1,731			6,736
Second Spring Healthcare Investment		15%		N/A		—			—			7,117
								$	414,127		$	88,711

(1)

Ownership percentages and facility counts are as of December 31, 2025.

(2)

During the third quarter of 2025, we entered into three mortgage loan agreements with maximum borrowings of $77.7 million that are secured by 12 facilities. Under the three mortgage loan agreements, we are able to participate in the residual profits of the facilities, subject to the mortgage, upon a sale or refinancing. We evaluated the characteristics of these three investments, including the associated risks and rewards, and have determined they are more similar to those associated with an investment in real estate than a loan. Arrangements with characteristics in line with real estate JVs are treated as in substance real estate investments and accounted for using the equity method. We have determined that the three borrowers under the mortgage loans are VIEs but we have not consolidated the borrowers because we are not the primary beneficiary.

(3)

The JV owns the Lakeway Regional Medical Center (the “Lakeway Hospital”) in Lakeway, Texas. Our initial basis difference of approximately $69.9 million is being amortized on a straight-line basis over 40 years to income (loss) from unconsolidated entities in the Consolidated Statements of Operations. The lessee of the Lakeway Hospital has an option to purchase the facility from the JV. The lessee also has a right of first refusal and a right of first offer in the event the JV intends to sell or otherwise transfer Lakeway Hospital.

(4)

As of December 31, 2025 and 2024, we had an aggregate of $22.0 million and $18.5 million, respectively, of loans outstanding with these JVs.

(5)

As of December 31, 2025, includes six JVs engaged in business that support the long-term healthcare industry and our operators.

(6)

As of December 31, 2025, includes two JVs formed for the purpose of owning or providing financing for SNFs or ALFs.

(7)

During the third quarter of 2024, one of the other real estate JVs, OMG Senior Holdings, LLC, sold one specialty facility to an unrelated third party for approximately $40.7 million in net cash proceeds and recognized a gain on sale of approximately $12.9 million ($6.5 million of which represents the Company’s share of the gain).

SHH Holdings, LLC

In October 2025, the Company formed a JV, SHH Holdings, LLC, with affiliates of Saber Healthcare Holdings, LLC (“Saber”) to own and lease 64 facilities. SHH Holdings, LLC was previously wholly owned by affiliates of Saber. The Company issued approximately 5.5 million Omega OP Units with a fair value of $222.4 million in exchange for a 49% equity interest in the JV. Affiliates of Saber will retain a 51% equity interest in the JV and are responsible for day-to-day operations of the JV and management of its properties, subject to obtaining approval of the Company for major decisions (including investments, dispositions, financings, major capital expenditures and annual budgets). As of the transaction date, 51 of the 64 facilities were encumbered with $448.6 million of mortgage debt with a weighted average interest rate of 6.1% per annum, which is non-recourse to the Company. The JV is required to distribute a portion of its available cash from operating activities on a monthly basis in proportion to each member’s equity ownership. This JV will be accounted for as an equity method investment. Subsequent to our investment, SHH Holdings, LLC acquired an additional facility which was primarily funded through a $7.5 million mortgage loan, with no additional contributions from Omega. The 65 facilities now held by the JV are subject to triple net leases, with subsidiaries of Saber, that generate $70.2 million in contractual rent per annum. Omega’s initial basis difference was approximately $215.3 million which will be amortized over a weighted average life of 21 years. During the year ended December 31, 2025, we recognized income of $1.4 million (inclusive of basis amortization) and received distributions totaling $2.7 million from SHH Holdings, LLC for the two-month period following the investment closing.

Liberty-Omega HBP PropCo JV, LLC and Liberty-Omega HBP OpCo JV, LLC

On December 30, 2025, the Company formed two JVs, Liberty-Omega HBP PropCo JV, LLC (the “Liberty PropCo JV”) and Liberty-Omega HBP OpCo JV, LLC (the “Liberty OpCo JV” and collectively with the Liberty PropCo JV, the “Liberty JVs”). The Liberty JVs were formed to own and operate, through a RIDEA structure, a CCRC in North Carolina. Omega acquired a 49% equity interest in the Liberty JVs for aggregate consideration of $42.7 million. Affiliates of Liberty will retain the remaining 51% of the Liberty JVs and are responsible for day-to-day operations of the JV and management of its properties, subject to obtaining Omega’s approval for certain major decisions (including investments, dispositions, financings, major capital expenditures and annual budgets). As of the transaction date, the Liberty JVs have third-party debt of approximately $215.3 million. The Liberty JVs will be accounted for as equity method investments.