OHI Q3 2026 earnings call transcript, November 4, 2026

Hello, everyone. Thank you for joining us and welcome to Omega Healthcare Investors third quarter earnings conference call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. I will now hand the. conference over to Michelle Reber. Please go ahead. Thank you and good morning. With me today is Omega CEO, Matthew Gorman, CFO, Neil Ballou, CIO, Vikas Gupta, and. Megan Krull, Senior Vice President, Data, Intelligence, and Government Relations. Comments made during this conference call that are not historical facts may be forward-looking statements, such as statements regarding our financial projections, potential... ...transactions, operator prospects, and outlook generally. Factors that could cause actual results to differ materially from those in the forward-looking statements are detailed in the company's filings with the SEC. During the call today, we will... ...refer to some non-GAAP financial measures, such as NARIT FFO, Adjusted FFO, FAD, and EBITDA. Reconciliations of these non-GAAP measures to the most comparable measure under generally accepted accounting principles are... ...available in the quarterly supplement. In addition, certain operator coverage and financial information that we discuss is based on data provided by our operators that has not been independently verified by Omega. I will now turn the call over to Matthew.

Thanks, Michelle. Good morning and thank you for joining our third quarter 2026 earnings conference call. Today I will discuss our third quarter financial results as well as some of our recent transactions. Third quarter adjusted funds from operations, AFFO, of $0.82 per share and FAD, funds available for distribution, of $0.78 per share reflect solid year-over-year growth. However, it should be noted that sequentially, these financial metrics were effectively flat, driven by the headwind from $563 million of asset sales late in the second quarter. However, as we have been at pains to stress in our discussions with... investors, we are managing this business to create long-term sustainable value. We believe these dispositions, which were sold at an effective seven cap rate on cash flow, allowed us to exit assets that we're going to... ...require significant capital investment over the longer term, while strengthening the underlying credit support of the related operators. This is an example of the active portfolio management that we've spoken about in recent quarters. We're able to show another example in the third quarter as we transition 32 facilities to PACs, paying a $90 million termination fee to the prior operator and increasing annual cash rents on this portfolio. by $26.1 million in the first year, an effective yield of 29%. This highly accretive transaction addressed the needs of two longstanding operators while supporting continued quality of care for

residents, and we believe there are selective opportunities to achieve similar strong accretion through further active portfolio management efforts in the coming quarters. As we highlighted last quarter, we expected our acquisition run rate to pick up in the second half of the year. And this proved correct, as we've been able to allocate over $1 billion in the second half of the year to date. As with so many of our transactions executed in recent quarters, the majority of these investments are structured to align our interests with those of our operators. With our initial accretive yields not creating an undue burden on the cash flow of the facilities and with an opportunity to benefit in the upside if as we expect an operator improves the financial performance of the portfolio. This philosophy of alignment of interest has been resonating with operators and managers alike and we continue to be disciplined in our capital allocation policies focusing on investment opportunities that provide sufficient upside that each party is able to achieve favorable economics. With an excellent cost of capital, our lowest leverage in the company's history, EBITDA coverage at the highest level in over a decade, robust secular tailwinds, and a portfolio of strong operators looking to grow, we are very optimistic about our ability to create shareholder value for the foreseeable future. I will now turn the call over to Vikas.

Thank you, Matthew, and good morning, everyone. Today, I'll review the latest performance trends across our triple net and operating portfolios, provide updates on Genesis and our recent operator transitions, and discuss our investment activities. and pipeline. Starting with portfolio performance, our core triple net and mortgage loan portfolio continues to demonstrate positive operating trends. Trailing 12-month operator EBITDA coverage as of June 30th, 2026, improved to 1%. 1.67 times compared to 1.65 times in the prior reporting period. Occupancy also increased slightly to 82.7% compared to 82.6% previously. Additionally, our senior housing operating portfolio. or shop continues to perform in line with our underwriting expectations. Turning to portfolio activity, we had two significant developments in October. First, the Genesis Chapter 11 bankruptcy sale was finalized, and our master's lease was assumed and assigned to 101 West Street, an affiliate of NewGen. As part of the transaction, we received repayment of our dip loan and a $150 million term loan. This represents an excellent outcome for Omega. We preserved all of our existing lease economics, resolved our loan exposure to Genesis, and established a new lease relationship with an experienced operator. Importantly, the Genesis portfolio continues to generate coverage above our overall portfolio average. Providing NewGen with a strong foundation as it assumes operations. We know the principles of NewGen well, having transacted with them previously, and look forward to building on their relationship over time. As Matthew mentioned, in October, we also...

...completed the previously announced transition of 32 skilled nursing facilities in Florida from Aramid-affiliated operators to PACS, one of our largest operating partners. The facilities were added to our existing PACS master lease with... ...first year annual contractual rent of $58 million, representing a $26.1 million increase over the prior rent. In year two, rent will increase by 4.3%, or approximately $2.5 million, followed by annual escalators of 2% thereafter. To facilitate the transaction, Omega paid a $90 million lease termination fee to AirVid. We are pleased to support PAX's expansion into Florida, a new operating state for them. Importantly, the transaction is expected to generate approximately 6.5 cents... per share in annualized fad accretion, representing a highly attractive outcome for our shareholders. I want to emphasize that this transition was not driven by performance or rent collection issues. AirMaid has been a strong, long-standing operator for Omega. and we greatly value their partnership. Rather, this transaction reflects the proactive approach to asset management that Matthew mentioned earlier, where we identify an opportunity to unlock additional value within our existing portfolio. While transactions of this magnitude may be unique, we remain focused on identifying opportunities to enhance the value of our existing portfolio. These include similar lease termination and releasings transactions, dispositions of non-core assets and attractive cap rates, and lease restructurings that allow Omega to participate.

Now turning to new investments. During the third quarter, we completed $181 million in new investments, consisting of $167 million in real estate acquisitions and $14 million in real estate. Home fundings. Our acquisitions included $73 million of skilled nursing facilities leased to a new operator, $16 million for six UK care homes leased to an existing operator, and $78 million for five senior housing committees placed into a righty structure with an existing operating partner. In addition, during the quarter, we invested $48 million to convert 30 UK care homes across two operator relationships from triple net leases to Rydia structures. These portfolios were already performing well. coverage above 1.4 times and we believe there is an opportunity to capture additional upside through the operating structure. To manage these facilities, we are partnering with three established UK operators with whom we have existing relationships. These conversions further expand our UK operating platform and demonstrate our willingness to evolve our investment structures when we believe doing so can enhance long-term returns. Also during the quarter, the Sabre PropCode Joint Venture, in which Omega owns a 49%... ...equity interest, acquired five skilled nursing facilities for $88 million, funded through existing cash and third-party debt. Importantly, no additional equity was required from either Sabre or Omega. This is exactly the type of opportunity we envision.

...when we initially invested in Sabre's real estate and operating platforms. As Sabre improves operations and stabilizes these facilities, we have the opportunity to participate in value creation at both the real estate and operating company levels. Turning to our new investment activity... subsequent to quarter end. We have already completed $946 million in new investments during the fourth quarter. Our largest transaction was the Runwood UK investment consisting of an $846 million mortgage loan. Secured by a portfolio of 55 care homes, including seven leasehold interests located across the southeast in Midlands regions of England. Our borrower, Foundation Partners, is an existing Omega tenant and an established UK operator. With a strong track record of performance in comparable portfolios. The loan carries an initial interest rate of 8.72% and is expected to convert to a lease once we exercise our purchase option following the satisfaction of customary regulatory. conditions. The initial lease yield will be consistent with the loan yield with the potential to generate additional returns through a future rent reset tied to improved portfolio performance. We believe this is an attractive investment. that combines a strong initial yield with meaningful potential upside while significantly expanding our presence in the UK through a partnership with an operator we know well and trust. Also subsequent to quarter-end, we completed approximately $100 million of additional investment.

across six senior housing communities. Five of these communities will operate under RIDEA structures with two third-party managers, while the sixth, a continuing care retirement community, will be added to an existing operator's master lease. In total, we've completed approximately $1.5 billion in new investments year-to-date, including more than $1.1 billion since the beginning of the third quarter. As I have outlined, these transactions span skilled nursing, senior housing, and UK care homes, and reflect our team's ability to identify attractive investment opportunities, structure transactions creatively, and deploy capital alongside strong operating partners. Finally, turning to our pipeline. We continue to see attractive marketed and off-market opportunities across both the US and the UK, and we remain focused on disciplined capital deployment, high-quality real estate, experienced operating partners, and attractive risk-adjusted returns. Our pipeline remains strong. With numerous opportunities, we are actively pursuing for potential closing in the fourth quarter and early 2027. Building on our recent investment momentum and successful portfolio initiatives, we believe Omega is well-positioned to continue generating attractive at the same time. And long-term shareholder value. I'll now turn the call over to Neil.

Thanks, Vickus, and good morning. Turning to financials for the third quarter of 2026. Revenue for the third quarter was $341 million. Compared to $312 million for the third quarter of 2025. The year-over-year increase was primarily the result of $31 million in resident fees and services from our operating portfolio, which we continue to grow through new acquisitions and triple net conversions. Net income available to common shareholders for Q3-2026 was $83 million, or $0.27 per diluted common share, compared to $180 million, or $0.59 per diluted common share. For Q3-2025, the year-over-year decrease was primarily the result of $60 million of acquisition, merger, and transition-related expenses in Q3-2026, substantially all related to the... ...terminating of our leases with the operators of the 30 UK care homes converted to RIDEA structures, and a $28 million gain on asset sales in Q3-2025. Adjusted FFO was $262 million, or $0.82... ...per share for the quarter, and FAD was $250 million, or $0.78 per share. Reconciliations of these non-GAAP measures to net income are included in our earnings release and third quarter financial supplemental posted to our website. As expected, Q3 2026 AFFO per share decreased by approximately one penny compared to Q2 AFFO due to the approximate $775 million in asset sales and loan repayments over the past two quarters. Which reduced Q3 AFFO by $8.8 million. The decrease was partially offset by incremental income from $308 million in new investments completed during the second and third quarters.

$124 million in net investment activity by the Sabre Propco JV during the second and third quarters, and lower net interest expense of approximately $5 million driven by lower average revolver borrowings and higher interest income. on cash balances. Our balance sheet remains incredibly strong, our debt is well laddered, and we have significant liquidity. During the quarter we issued 4.7 million common shares through our ATM and DRIP programs for gross proceeds of $234 million at an average price of $49.44. At quarter end, we had no borrowings outstanding on our $2 billion revolver and $196 million in cash. Our fixed charge coverage ratio is 6.9 times and our leverage decreased to 3.1 times. Historically, we have targeted long-term leverage of between 4 and 5 times adjusted normalized EBITDA. However, given the current rate environment and our ability to accretively fund investments through equity, we are targeting to maintain leverage under 4 times for the foreseeable future. Subsequent to quarter end, we funded the $846 million. foundation mortgage loan, using a combination of balance sheet cash, capital recycled from loan repayments, and borrowings on our revolver. We continue to have access to the capital markets and have ample liquidity and optionality to fund investments. on both the next scheduled debt maturity due in april 2027 and to raise capital to accretively fund the investment pipeline turning to guidance as we announced in yesterday's press release we increased and tightened our full year adjusted FFO guide.

to a range of $3.28 to $3.30 per share from our prior range of $3.22 to $3.26 per share. with that change the midpoint of our guidance increased to $3.29 per share. five penny increase over the midpoint of our july guidance. our revised 2026 midpoint of $3.29 per share also represents a 19 cent increase over 2025. a full year AFFO of $3.10. this would represent a six percent year-over-year increase in AFFO while also paying out a dividend yield of nearly six percent. our updated guidance reflects the nine hundred and forty six million dollars of new investments completed since quarter end including the eight hundred and forty six million dollar foundation mortgage loan as well as the transition of 32 Florida facilities to PACS which increases annual contract will rent on those facilities by twenty six point one million dollars and annual straight line revenue of thirty three point eight million in the first year. With that said I'd like to take a moment to highlight a few of the guidance assumptions we outlined in our earnings release. Guidance includes the impact of new investments completed through November 3rd and does not include any additional investments not outlined in our press release. Guidance assumes that no additional operators are placed on a cash basis for revenue recognition that new gen. It pays its full contractual rent of $13.3 million per quarter following its assumption of our lease, which will equate to approximately $14 million in straight line revenue per quarter, and that Maplewood continues to pay monthly rent of $6 million.

$6.9 million, consistent with September. Guidance assumes $306 million of loans outstanding at September 30, 2026 are repaid in Q4, including $150 million of Genesis. As we said at the beginning of the year, we are always seeking to prune and strengthen our portfolio, which could include $15 to $25 million in asset sales each quarter. Guidance also assumes quarterly G&A expense of approximately $14 million to $15. $15.5 million. And lastly, the guidance includes the dividend announced last week of $0.68 per share. The high end of our guidance range includes, but is not limited to, additional payments from cash basis. Operators. Exposure to our operating portfolio through RIDEA and JV Investments. And GNA at the lower end of the range. Our 2026 adjusted FFO guidance does not include any additional investments, portfolio activity, asset sales, loan. Repayments or capital market transactions other than what I just mentioned or what was included in the earnings release. I will now turn the call over to Megan.

Thanks, Neil. And good morning, everyone. Fundamentals continue to be strong and reimbursement has been generally as expected this. year, with no notable disruptions in our portfolio related to the future impact of the OBBBA. That said, certain Senate Finance Committee minority members, along with select non-member Democrats, have recently renewed their focus. On quality in the long-term care sector, including the potential for increased or modified regulatory oversight. While the recent scrutiny has been decidedly partisan in nature, the underlying focus is not new to the industry. We currently see limited risk that these efforts will translate into meaningful regulatory change in the near term. We are, however, mindful of the congressional elections and how a changing political environment could alter that calculus over the longer term. Partnering with... ...operators focused on quality of care is of the utmost importance to us as a REIT. At the same time, regulatory requirements need to be thoughtful and appropriately targeted to be effective. We therefore continue to engage with various... ...industry associations to help ensure that the policy dialogue is grounded in a contextualized understanding of the data, rather than the broad generalizations that sometimes characterize these policy debates. We are hopeful that when the time is right... ...both sides of the aisle will work together to ensure that any proposed regulation or legislation is reasonable and appropriately balanced. And encouragingly, given the current and impending demographic wave, we are pleased to see leaders on both sides...

...making current and future staffing concerns in the industry a high priority. I will now open the call up to questions.

We will now begin the question and answer session. Please limit yourself to one question and... ...one follow-up. If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, press star 1 again. We ask that you pick up your handset when asking a question to allow... ...for optimum sound quality. If you are meeting vocally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes in the line of Zach... Bergy with Citi. Your line is open. Please go ahead. Hi, good morning. Thanks for taking my question. I guess I just wanted to kind of dig in a little bit more to kind of the mortgage flow. And just some more background on it. How did that kind of structure come to be? What's kind of the estimated timeline to exercise the purchase option? How does... the underwriting rent coverage compared to your existing UK care home portfolio? And was that an off-market transaction? Or can you just talk a little bit about how it came to be? Thanks. Yeah. This is Vikas. Yeah, I'll try to cover your questions. It was a marketed transaction, a very competitive process, which I believe Omega's track record and speed helped us win the deal. And part of the speed was the mortgage loan structure, which we've done before, helped. showed the seller that we could quickly close on the transaction. And similar to what we've done in the past, we plan to convert this as soon as regulatory approvals have happened, which we expect to be in about one year.

Average will be good day one, but we believe our new operator, Foundation, who is an established operator and has operated similar portfolios before, will realize some upside through pushing acuity and rate increases. So there is when our rent reset will take effect and we'll be able to get a return close to as if we started at 10% return.

Great. And then just how do you see... ...making kind of the landscape change at all, if at all, with some of the move and the 10-year and kind of the number that are out there for assets.

So, so far we haven't really seen too much, Seth. I think that... Clearly there will be an impact over time, but it's happened relatively recently, so a lot of the deals that have been struck were either previously agreed to or financed. Thankfully our cost of capital on the equity side of things remains very robust. So from our standpoint, we're just going to continue underwriting exactly as we have. It has been a very competitive environment. We've been able to obviously deploy a solid amount of capital and some very compelling investments should. The competitive environment become a little less challenging. Obviously, that would be great, but I don't think we're planning on that happening, and I don't think that we're relying on that to continue to deploy capital thoughtfully. So we should be okay either way.

Great. Thank you.

Your next question comes from the line of Michael Goldsmith with UBS. Your line is open. Please go ahead.

Thank you very much. You've seen we've allocated a lot of capital there in the past few years. We have, over the course of a decade, curated a thoughtful pipeline of operators with whom we have strong relationships and that these are proven quality operators from a clinical standpoint and from a financial standpoint. So such that there are opportunities there, we will continue to work with our operators. managers and try to understand whether we want to do that in a triple net or ideas format. In terms of the opportunities generally, we see a good amount of opportunities across the platform in all areas. And we kind of term ourselves equal opportunity capitalists. So from that standpoint, we don't start out with any premeditated expectations as to where we're going to allocate capital. We allocate each deal and then underwrite each deal. With a view of trying to buy quality real estate, partnering with quality operators and managers to create an accretive and sustainable yield over time. And we're just going to continue to do that. And ultimately, where we allocate capital is going to be determined. through that lens. Thanks for that. And then separately, you know, you mentioned additional lease terminations, releasings and restructuring. So the taxes magnitude may be unique. Like how significant can we, should we be thinking about the opportunity. And then along the same lines, right? You, you converted 30 homes in the UK to over data structure. So I just, maybe just talk about the opportunity, uh, to, to, to, for continued active portfolio management. Now, now that you've got.

A couple pieces of evidence of, of what you've been able to accomplish. I think the good news is that when you've got a portfolio of a 12 plus billion dollars worth of real estate, there are always opportunities. Um, we talk about alignment of interest and that's never more relevant than when you're looking at these situations, right? You need a willing partner on the other side, uh, to agree. Um, and so it's very tough to quantify. what it looks like in the near term. I think you know as well enough that we, we like to, uh, under promise on these things. So I think it's, it's clearly there. We've seen a couple of examples. I think we'll see more, um, in the next 12 months and over the next five. to 10 years, I think it's just going to become more and more, uh, available to us, but in terms of quantifying it, it's going to be very much determined by finding partners, um, who, who want to transact in these situations. As you've seen, the. Yields that one is able to achieve in many of these structures, um, are so compelling that you don't need a great deal from a dollar standpoint, uh, to be quite powerful from an earning standpoint. So the, the team continue to look for opportunities. Continue to engage with operators. And, uh, the only thing I can reassure you is, um, if the opportunity is there, we're gonna do it. Thank you very much. Good luck in the fourth quarter. Thanks.

Your next question comes from the line of Julian Boulin with Goldman Sachs. Your line is open. Please go ahead.

on regulatory, um, changes. Um, but we've dealt with that before in the past. It's not a new issue for us. And quite frankly, you know, we're somewhat aligned in that the Democrats are really looking from a regulatory perspective to make sure that there's quality of care in nursing. And that's what we're looking forward to. The only way that we're successful on a long-term basis, because we are a long-term. Holder of the real estate is to make sure that we align ourselves with operators who provide quality of care, right? So then it just becomes how does that regulation get implemented and making sure that we have a voice in that to make sure that through our association. that Congress has an understanding of what the reality is and making sure that they're doing something that actually has the benefit they're looking for. Okay, thank you so much.

Your next...

The next question comes from the line of Rich Anderson with Cantor Fitzgerald. Your line is open. Please go ahead. Hey, thanks. Good morning and congrats, Matt, on your first call, CEO. So...

Yeah, sure good. Thanks, sorry. Go ahead. I was going to say on the straight line piece, good question. We've been asked this question in the past. We just wanted to give the pieces and be transparent, right? So Genesis, you know, going through bankruptcy, they were on a cash basis, but with new gen having a good credit. On a straight line basis, we're just trying to give you the pieces of what the straight line gap revenue is going to be of that $14 million per year. Okay. And what is your appetite to grow with them? You mentioned sort of, you know, sort of portfolio management. efforts. But, you know, are you open to growing in the future with NewGen? Yeah, so we knew NewGen through some sale transactions we had done with them previously. But through this process, we really dug in, spent time with them. And at this point we're generally impressed with their operating model. They have a proven locally focused business model. And we think that'll work well, especially for these buildings that are spread across the U.S. So the proof is in the pudding. And if things go well. I think, yes, we would be open to more acquisition opportunities and just just a quick, you know, to close out my questions, they don't have any obligations or around the unsecured creditors or anything like that. That's outside of this new company. Is that correct? That's correct. Okay. Thank you. Your next question comes from the line of Omotayo Okusanya with Deutsche Bank. Your line is open. Please go ahead.

are yields above the standard SNF 10 with 2.5% escalators. So it's quite a nuanced thing. And then you have to think about it from a standpoint also of what's the quality of the real estate you're getting in these situations as well. So we look at each deal very specifically. As you've seen, given where we've been allocating capital over the last couple of years, we are relatively agnostic as to where that capital is allocated as long as it fits our criteria in terms of yield, quality of real estate and quality. operating or managing partner. Gotcha. That's helpful. And then on the regulatory side, any update? I know like over the summer, there was some talk from CMS about potential recalibration of PDPM because of concerns about upcoding. Any kind of news in the past few months around those lines? You know, there's kind of the change in the Senate and the House kind of potentially create more fiscal matter in 2027. Like, how do you kind of think about that? No, we haven't really heard anything on that front. Neither have our industry partners. Gotcha. All right. Thanks again. Well done. Thanks. Your next question comes from the line of Dave Rogers with Raymond James. Your line is open. Please go ahead.

Your next question comes from the line of Nick Uliko with Scotiabank.

And so, you know, I think we do, as I said, the talking, um, you know, we, we, we, we, we, we, we, we, we, we, we, we, we,

points, have a lot of optionality and flexibility. Um, do you have that revolver there for these instances of being able to, you know, credibly put capital to work, but you're right at this point, given this price, you know, you could see us. Issuing equity to pay down the revolver and then looking forward to next quarter, um, you know, the $700 million bond coming due April 1st. Um, given where bond pricing is today, doesn't look that compelling, but I think there's a scenario where you could see us. do a combination of term loan and, um, ATM proceeds to take down that bond issuance.

Okay. Thanks guys.

Your next question comes.

in the line of Dave Rogers with Raymond James. Your line is open. Please go ahead.

Good morning. Sorry about that guys. Uh, technology issues. Um, my internet down, so I don't know if I'll get these numbers right, but I am curious. Um, the returns on the PACs deal. We're pretty clear and pretty strong. I'm curious about the returns on the RIDEA buyouts in, in the UK and those conversions. I think the return on that may be a little less clear just from the way that you put it in the press release. So I was kind of curious if you can kind of talk about how you thought about some of those returns, uh, on top. of what you've done in the US. Yeah, certainly. Great question. I'll walk you through the quick math here. So in the press release, we give you that we wrote a 48 million dollar check to buy out those operators and we also gave you. The I'll give it to you in dollars. The annual rent on or those 30 facilities was twenty six point seven million dollars. And with the EBITDA coverage of the one point four seven, the math there shows it's twelve and a half million dollars of cash. flow after paying our rent. So effect in effect by us taking over these properties and our idea structure, we're going to continue to get the proceeds of that rent and that twelve and a half million dollars on top. So the twelve and a half. divided by the 48 million dollar outlay is a 26 percent yield. I think that's the math I would think through. So not quite as good, but we're still happy with it. And I would say that we do believe there's operational upside.

So we would say that that is kind of great. That's helpful. I appreciate you running through that. And then with regard to Maplewood, it seems like they're getting pretty close to stabilization at this point. I know you guys still provide kind of the core. I don't really run rate for that one, but how close are we to stabilization there and getting comfortable to the point of maybe not providing the detail on Maplewood each quarter? Yeah, I think let me give you some occupancy that'll help you a little bit. Second, Avenue, our New York properties at 95%, our DC properties at 78%, and the whole core portfolio which includes Second Avenue in New York is 96%. So it isn't stabilized because of DC, but again we think of this as right idea effectively and all of their cash flow comes to us as you saw quarter over quarter that cash flow continues to increase. We still have a few years so we stabilize or I should say one to two years in our eyes but that is still TBD. I would also say that

and the ability to push rate and continue to find value.

upon quote-unquote stabilization, there's still meaningful growth to come from this portfolio for me.

Your next question comes from the line...

F1 Sanabria with BMO Capital Markets. Your line is open. Please go ahead.

Good morning. Thanks for the time. Just hoping to piggyback on Dave's question with regards to the UK shop transitions of those 30 assets. If you could... a little time talking about the age or vintage of the asset mix on the big bathroom, generally how you view kind of triple net versus shop type in the UK given, you know, the divergences.

You break up a little bit at the end there, but I will give it a go and if we miss some of your questions, please follow up. So yeah, in terms of the vintage of the assets that we converted, it's kind of consistent with most of our portfolio. It's what we would term kind of middle market assets. They're predominantly purpose. Built assets with en-suites. They're fit for purpose for the longer term. There's, quite frankly, a lack of real estate in the market over there to meet these needs. So we feel very high conviction that the quality. This real estate will be there for the long term. And then in terms of how we look at the quality, the real estate as part of the context of whether we do RIDEA or TripleNet, it's- it's not really a primary determining factor. Ultimately, a lot of the time, it's determined by what the operator slash manager wants. So if they believe there's meaningful upside, there's a far greater appetite- amongst operators in the UK to take triple net leases than there are in the US senior housing space. So from that standpoint, it's not surprising when a number of operators want to take that side of things. Obviously- all of the assets that we look to buy, be they in a RIDEA format or in a triple net format, have to be fit for purpose long term. And that's something that we spend an awful lot of time looking at making sure that they have the requisite number of en suites or wet rooms.

That they were primarily built as purpose-built and that whether they are capable of effectively providing the clinical needs and the quality of home care that residents. We're going to be looking for the foreseeable future. So it's a major, major consideration that there's no point buying assets that ultimately in five to 10 years are just not going to be set for purpose.

Thanks for that, Matthew. Just as a follow up, I'm hoping you could talk a little bit about the pipeline going forward and the mix across the different buckets and how that's maybe changing prospectively, if at all, if you've seen any pick up implications for maybe change. changes you're seeing in HUD or lack thereof with regards to maybe tilting back towards U.S. skilled nursing that I think you said maybe had the highest initial yields, any color would be on top of it. Yeah, this is Vikas. I'll jump in on this one. So as I said in my prepared remarks, our pipeline is strong and we're looking at all three asset classes, skilled nursing, senior housing, and U.K. It is competitive, but I will say there's a lot of volume. Hence, we were able to do the deal volume we've done and hence our pipeline continues to be strong. As for where we continue to see opportunities, I would say it's leaning a little bit more towards senior housing, RIDEA, and care homes, both U.K. care homes, both in TripleNet and RIDEA. When it comes to skilled nursing, it is very competitive, but with that said, we do have skilled nursing deals. and we continue to keep pursuing them. And then the only thing I'd follow up on is just with your comment on HUD. We have heard feedback from some very sophisticated players within the space. That is possibly changing the ability to borrow and the like. We haven't seen that as of yet, but I wouldn't discount what other people are seeing. We just haven't seen it ourselves.

Your next question comes from the line of Michael Carroll with RBC Capital Markets. Your line is open. Please go ahead.

Um, that has those, um, good price, low cap rate type transactions, or is that something that just kind of comes up randomly? Um, when, uh, something like that arises. Everything has a price. Um, if anyone wishes to pay, um, very large amounts of money for our assets, please call Vickers. Your next question comes from the line of Michael Stoyer.

Got it. That's helpful. Maybe one on occupancy. It's been essentially flat over the past year or so. I guess how much of that is just because of investment activity versus more organic occupancy? I guess you said differently. What does occupancy grow? What has that growth been like over the past year or so on more of a same-store basis? A lot of what you are seeing is those ins and outs of what's going on transactionally. So from the same-store basis, we are seeing increased growth. And we are continuing to see increased growth into this next quarter.

Okay. Understood. Thank you.

Your next question comes from the line of Feral Granite with Bank of America.

cap rates haven't changed a lot historically, but there's a lot of players out there. So senior housing is very competitive in the US. You've all the other REITs playing in their private equity playing in their care homes. We also have REITs playing there as well now made run with a very competitive process. You can see the cap rate we're entering at this deal, which is a bit more aggressive than we've done historically. So in general, I would just say cap rates are more aggressive than what we've seen historically. But we are structuring things in ways that we can over time, go back and get our normal returns of 10%. Okay, thank you. We have reached the end of the Q&A session. I will now turn the call back to Matthew Gourmand, CEO for closing remarks. Thanks everyone for joining us today. If you have any questions, reach out to the group and I would just like to take this opportunity to thank the team as well. The results that you're seeing are a result of huge amounts of hard work on the part of all the employees of the company. So I want to acknowledge that and thank them. Thanks everyone. Bye. This concludes today's call. Thank you for attending. You may now disconnect.