Omega Healthcare Investors

Omega Healthcare Investors (NYSE: OHI) operates as a self-administered real estate investment trust (REIT), structuring itself as a critical financial partner to the long-term healthcare industry. Founded in 1992 by Essel Bailey Jr., the company launched through an initial public offering in a manner similar to today's special purpose acquisition companies (SPACs), raising capital to acquire its initial portfolio of 37 skilled nursing facilities. This strategic focus on financing and owning income-producing healthcare facilities, primarily skilled nursing facilities (SNFs) and assisted living facilities (ALFs), remains the core of its business.

The company's business model centers on providing capital to healthcare operators through customized triple-net lease agreements and mortgage financing. Under a triple-net lease structure, the operator, or tenant, is responsible for property-level expenses such as taxes, insurance, and maintenance, which insulates Omega from operating volatility. Revenue is primarily generated from fixed rental payments, often with built-in annual escalators, providing a predictable income stream. This model allows Omega to function as a capital provider, focusing on the creditworthiness and operational strength of its partner operators rather than the day-to-day management of the facilities.

Omega's history includes periods of significant growth and challenge. After its founding, the portfolio grew to over 250 properties by 1998 before facing headwinds from the Balanced Budget Act of 1997, which impacted Medicare reimbursements and operator profitability. C. Taylor Pickett was appointed CEO in 2001 to navigate these challenges, deleverage the balance sheet, and stabilize the company. Pickett's background includes senior financial roles at Integrated Health Services, Inc., and positions at KPMG Peat Marwick, providing him with deep expertise in healthcare finance and mergers. Under his leadership, the company has grown substantially, marked by key milestones such as the merger with Aviv REIT in 2015.

The trust's portfolio is geographically diversified across the United States and the United Kingdom. As of mid-2025, the portfolio included over 1,000 properties operated by more than 90 different third-party operators, with total real estate investments valued at over $11 billion. The company selectively invests in well-maintained properties in favorable demographic locations and partners with experienced operators. This strategy includes both acquiring existing facilities and financing the development of new ones to meet market demand. Recent activity includes a significant expansion in the U.K. with the acquisition of a 45-property portfolio.

Keywords: healthcare REIT, skilled nursing facilities, real estate investment trust, triple-net lease, senior housing, assisted living facilities, healthcare finance, property investment, long-term care, portfolio diversification