Q2 2024 Omega Healthcare Investors Inc Earnings Call

Operator: Greetings and welcome to the Omega Healthcare Investors second quarter 2024 earnings conference call. At this time, all participants are in a listen-only mode. After today's presentation, there will be a brief question and answer session. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to Michele Reber. Thank you. You may begin.

Operator: Greetings, and welcome to the Omega Healthcare Investors, 2nd quarter of 2024 earnings conference call. At this time, all participants are in a listen-only mode.

Greetings and welcome to the Omega healthcare investors second quarter 2024 earnings Conference call.

Speaker Change: At this time all participants are in a listen only mode. After today's presentation. There will be a brief question and answer session. If anyone should require operator assistance. During the conference. Please press star zero on your telephone keypad.

Operator: After today's presentation, there will be a brief question-and-answer session. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded.

Speaker Change: As a reminder, this conference is being recorded.

Michele Reber: I would now like to turn the conference over to Michele Reber. Thank you. You may begin.

I would now like to turn the conference over to Michelle Reiber. Thank you you may begin.

Michele Reber: Thank you and good morning.

Michele Reber: Thank you and good morning. With me today is Omega's CEO, Taylor Pickett, COO, Dan Booth, CFO, Bob Stephenson, and Megan Krull, Senior Vice President of Operations. 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.

Speaker Change: Thank you and good morning with me today is Omega CEO Taylor Pickett C O Dan Booth, CFO, Bob Stephenson, and Megan Kroll Senior Vice President of operations.

Michele Reber: With me today is Omega's CEO, Taylor Pickett, COO, Dan Boone, CFO, Bob Stephenson, and Megan Krull, Senior Vice President of Operations. 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.

Speaker Change: 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 factor.

Speaker Change: 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.

Michele Reber: During the call today, we will refer to some non-GAAP financial measures, such as NAV, FFO, adjusted FFO, FAD, and EBITDA. Reconciliation of these non-GAAP measures to the most comparable measure under generally accepted accounting principles is 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.

Michele Reber: During the call today, we will refer to some non-GAAP financial measures, such as NAVREAD 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 Taylor.

Speaker Change: During the call today, we will refer to some non-GAAP financial measures such as NAREIT F. F. L. Adjusted F F L 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 it.

Speaker Change: Based on data provided by our operators that has not been independently verified by Omega I will now turn the call over to Taylor.

Taylor Pickett: I will now turn the call over to Taylor. Thanks, Michelle. Good morning, and thank you for joining our second quarter 2024 earnings conference call. Today I will discuss our second quarter financial results and certain key operating trends. Second quarter FAD funds available for distribution of $0.68 per share was better than expected and should continue to improve as several portfolios are in the process of being transitioned, which will result in fat upside over the next few quarters. Our dividend power ratio is now below 100 percent and should continue to drop into the mid 90 percent range in the upcoming quarters.

Taylor Pickett: Thanks Michele. Good morning, and thank you for joining our second quarter 2024 earnings conference. Today I will discuss our second quarter financial results and certain key operating trends. Second quarter FAD, funds available for distribution of 68 cents per share, was better than expected and should continue to improve as several portfolios are in the process of being transitioned, which will result in fat upside over the next few quarters. Our dividend payout ratio is now below 100% and should continue to drop into the mid 90% range in the upcoming quarter.

Taylor: Thanks, Michele good morning, and thank you for joining our second quarter 2024 earnings Conference call.

Taylor: Today, I will discuss our second quarter financial results and certain key operating trends.

Speaker Change: Second quarter Fad funds available for distribution of <unk> 68 per share it was better than expected and should continue to improve our several portfolios are in the process of being transition.

Speaker Change: Which will result in fine upside over the next few quarters.

Speaker Change: Our dividend payout ratio is now below 100% and should continue to drop into the mid 90% range in the upcoming quarters.

Taylor Pickett: As a result of year-to-date portfolio transitions and acquisitions, we have narrowed and increased our 2024 AFFO guidance to a range of $2.78 per share and $2.84 per share. We have issued a significant amount of equity to fund our robust pipeline, which has helped to further de-labor the balance sheet. As Dan will discuss, key tenant occupancy and rent coverage metrics continue to improve. The under-one times EBITDAR coverage operator metric dropped to 8.9 percent of total rent. In looking at the 8.9 percent balance of below one-times operators, we can break the 8.9 percent into two buckets. Operators representing 6.1 percent of 8.9 percent are strong credits, and therefore payment of rent should not be an issue.

Taylor Pickett: As a result of year-to-date portfolio transitions and acquisitions, we have narrowed and increased our 2024 AFFO guidance to a range of $2.78 per share and $2.84 per share. We have issued a significant amount of equity to fund our robust pipeline, which has helped to further de-lever the balance. As Dan will discuss, key tenant occupancy and rent coverage metrics continue to improve; the under one times EBITDAR coverage operator metric dropped to 8.9% of total rent.

Speaker Change: As a result of year to date portfolio transitions and acquisitions, we have narrowed and increased our 2020 for a F O guidance to a range of $2 78 per share and $2.84 per share.

Speaker Change: We've issued a significant amount of equity to fund our robust pipeline, which has helped to further delever the balance sheet.

Speaker Change: As Dan will discuss key tenant occupancy and rent coverage metrics continued to improve.

Dan: The under one times EBITDAR coverage, operator metric dropped to eight 9% of total rent.

Taylor Pickett: In looking at the 8.9% balance of below one times operators, we can break the 8.9% into two buckets. Operators representing 6.1% of 8.9% are strong credits, and therefore, payment of rent should not be an issue. That leaves operators representing 2.8%, consisting of eight small relationships. On July 24th, we, as the 49% minority partner in a real estate joint venture, closed on the acquisition of the remaining 51% joint venture interest. We now own a 100% interest in the 63 UK facilities previously owned by the joint venture.

Dan: And looking at the 8.9% balance of below one times operators, we can break the 8.9% into two buckets operators, representing six 1% of eight 9% were strong credits and therefore payment of rent should not be an issue.

Taylor Pickett: That leaves operators representing 2.8 percent, consisting of 8 small relationships.

Speaker Change: That leaves operators, representing two 8% consisting of eight small relationships.

Taylor Pickett: On July 24th, we, as the 49 percent minority partner in a real-state joint venture, closed on the acquisition of the remaining 51 percent joint venture interest. We now own a 100 percent interest in the 63 UK facilities previously owned by the joint Betcher. The acquisition included the assumption of $243 million in secured debt. It is our intention to repay the secured debt in November 2025, as pre-payment of the debt prior to November of 2025 will result in significant pre-payment penalties. The interest rate of 10.38% on the assumed debt is significantly above Omega debt market rates.

Taylor Pickett: The acquisition included the assumption of $243 million in secured debt. It is our intention to repay the secured debt in November 2025, as prepayment of the debt prior to November 2025 will result in significant prepayment penalties. The interest rate of 10.38% on the assumed debt is significantly above Omega's debt market rate. For GAAP accounting purposes, the above-market portion of the interest expense is capitalized as part of the joint venture acquisition.

Speaker Change: On July 24th we as the 49% minority partner in a real estate joint venture closed on the acquisition of the remaining 51% joint venture interest.

Dan: We now own a 100% interest in the 63 U K facilities previously owned by the joint venture.

Speaker Change: The acquisition included the assumption of $243 million in secured debt is our intention to repay the secured debt in November 2025.

Speaker Change: As prepayment of the debt prior to November of 2025.

Dan: Will result in significant prepayment penalties.

Dan: The interest rate of 10.38% on the assumed debt is significantly above our mega debt market rates.

Taylor Pickett: For gap accounting purposes, the above-market portion of the interest expense is capitalized as part of the joint venture acquisition. We intend to use this same gap accounting treatment for our FFO, adjusted FFO, and FAD calculations.

Speaker Change: For GAAP accounting purposes, the above market portion of the interest expense is capitalized as part of the joint venture acquisition.

Speaker Change: We intend to use the same GAAP accounting treatment.

Speaker Change: For our <unk>, adjusted <unk> and Fad calculations.

Taylor Pickett: Lastly, after more than four years of COVID-related industry issues, the industry has generally recovered to pre-COVID operating metrics. The combination of strong demographics and limited or no new supply should both well for our operating partners.

Taylor Pickett: We intend to use this same GAP accounting treatment for our FFO, Adjusted FFO, and FAD calculations. Lastly, after more than four years of COVID-related industry issues, the industry has generally recovered to pre-COVID operating models. The combination of strong demographics and limited or no new supply should bode well for our operating partners. I will now turn the call over to Bob.

Speaker Change: Lastly, after more than four years of covert related industry issues the.

Dan: The industry has generally recovered to pre COVID-19 operating metrics the.

Speaker Change: The combination of strong demographics, and limited or no new supply should bode well for our operating partners.

Bob Stephenson: I will now turn the call over to Bob. Thanks, Taylor, and good morning. Turning to our financials for the second quarter. Revenue for the second quarter was $253 million compared to $250 million for the second quarter of 2023. The year-over-year increase is primarily the result of the timing and impact of operator re-structuring, transitions, and revenue from new investments completed throughout 2023 and 2024. Partly offset by asset sales completed during that same time period. Our Navy FFO for the second quarter was $189 million, or 72 cents per share, as compared to $155 million, or 63 cents per share, for the second quarter of 2023.

Dan: I will now turn the call over to Bob.

Bob Stephenson: Thanks Taylor and good morning. Turning to our financials for the second quarter, revenue for the second quarter was $253 million compared to $250 million for the second quarter of 2023. The year-over-year increase is primarily the result of the timing and impact of operator restructurings, transitions, and revenue from new investments completed throughout 2023 and 2024, partially offset by asset sales completed during that same time period.

Bob: Thanks, Taylor and good morning, turning to our financials for the second quarter revenue for the second quarter was $253 million compared to $250 million for the second quarter of 2023.

Bob: The year over year increase is primarily the result of the timing and impact of operator, restructurings transitions and revenue from new investments completed throughout 2023 and 2020 for.

Bob: Partially offset by asset sales completed during that same time period.

Bob Stephenson: Our NAREIT FFO for the second quarter was $189 million, or $0.72 per share, as compared to $155 million, or $0.63 per share, for the second quarter of 2023. Our Adjusted FFO was $185 million, or $0.71 per share for the quarter, and our FAD was $177 million, or $0.68 per share, and both exclude several items outlined in our NARETE FFO, Adjusted FFO, and FAD Reconciliations to Net Income found in our earnings release, as well as in our second quarter financial supplemental posted to our website. Our second quarter FAD was 2.3 cents greater than our first quarter FAD.

Bob: Our NAREIT <unk> for the second quarter was $189 million or 72 cents per share as compared to $155 million or <unk> 63 per share for the second quarter of 2023.

Bob Stephenson: Our adjusted FFO was $185 million or 71 cents per share for the quarter, and our FAD was $177 million or 68 cents per share, and both exclude several items outlined in our Navy FFO, adjusted FFO, and FAD reconciliations to net income found in our earnings release as well as our second quarter financial supplemental posted to our website. Our second quarter FAD was 2.3 cents greater than our first quarter FAD. As outlined in our press release, the Guardian portfolio did not pay in Q1 and was transitioned to a new operator in April with an annual base rent of $5.5 million and additional annual rent up to $6.9 million based on the new operator's revenue.

Bob: Our adjusted <unk> was $185 million or 71 cents per share for the quarter and our fad was $177 million or <unk> 68 per share and.

Bob: Both exclude several items outlined in our NAREIT F F O adjusted <unk> and Fad reconciliations to net income found in our earnings release as well as our second quarter financial supplemental posted to our website.

Bob: Our second quarter Fad was 2.3 cents greater than our first quarter Fad.

Bob Stephenson: As outlined in our press release, the Guardian portfolio did not pay in Q1 and was transitioned to a new operator in April, with an annual base rent of $5.5 million and additional annual rent up to $6.9 million based on the new operator's revenue. In the second quarter, we received rental income of $2.8 million from the new operator, which consisted of $1.3 million of base minimum rent and $1.5 million of incremental rent.

Bob: As outlined in our press release, the Guardian portfolio did not pay in Q1 and was transitioned to a new operator in April with an annual base rent of $5 $5 million in additional annual rent up to $6 $9 million based on the new operators revenue.

Bob Stephenson: In the second quarter, we received rental income of $2.8 million from the new operator, which consisted of $1.3 million of base minimum rent and $1.5 million of incremental rent. Turning to La Vie, they paid an additional $1.5 million into second quarter as the rent increase from $1.5 million per month to $3 million per month starting in June. And lastly, Maplewood paid $11.8 million in the second quarter versus $11.3 million in the first quarter. In July, Maplewood paid $4 million in the second quarter.

Bob: In the second quarter, we received rental income of $2 $8 million from the new operator, which consisted of $1.3 million of base minimum rent and $1.5 million of incremental rent.

Bob Stephenson: Turning to Levy, they paid an additional $1.5 million in the second quarter as their rent payment increased from $1.5 million per month to $3 million per month starting in June. And lastly, Maplewood paid $11.8 million in rent in the second quarter versus $11.3 million in the first quarter. In July, Maplewood paid $4 million in rent.

Bob: Turning to la B, they paid an additional $1.5 million in the second quarter as the rent payment increased from $1 $5 million per month to $3 million per month starting in June.

Bob: And lastly, maplewood paid $11 $8 million of rent in the second quarter versus $11.3 million in the first quarter and July maplewood paid $4 million in rent.

Bob Stephenson: Grant. Our balance sheet continues to remain strong. On April 1st, we repaid our maturing $400 million senior unsecured bond using $360 million of balance sheet cash, April 1st rent collections, and borrowed the balance from the credit facility. In the second quarter, we completed $221 million in new investments, excluding CAPX, and funded the investments to the issuance of 7.6 million shares of common stock, or $245 million in equity proceeds under our ATM program. We ended the quarter with over $35 million in cash on the balance sheet, and over $1.4 billion in credit facility borrowing capacity. At June 30th, 99% of our $4.7 billion in debt was at fixed rates.

Bob Stephenson: Our balance sheet continues to remain strong. On April 1st, we repaid our maturing $400 million senior unsecured bond using $360 million of balance sheet cash, April 1st rent collections, and borrowed the balance from the credit facility. In the second quarter, we completed $221 million in new investments, excluding CapEx, and funded the investments through the issuance of 7.6 million shares of common stock or $245 million in equity proceeds under our ATM program. We ended the quarter with over $35 million in cash on the balance sheet and over $1.4 billion in credit facility borrowing capacity. At June 30th, 99% of our $4.7 billion in debt was at fixed rates.

Bob: Our balance sheet continues to remain strong.

Bob: On April one, we repaid our maturing $400 million senior unsecured bond using $360 million of balance sheet cash April 1st rent collections and borrowed the balance on the credit facility.

Bob: In the second quarter, we completed $221 million in new investments excluding capex.

Bob: And funded the investments through the issuance of $7 6 million shares of common stock or $245 million in equity proceeds under our ATM program.

Bob: We ended the quarter with over $35 million in cash on the balance sheet and over $1 $4 billion credit facility borrowing capacity.

Bob: At June 30th 99% of our $4.7 billion and debt was at fixed rates.

Bob Stephenson: Our net funded debt to analyze adjusted EBIDA was 4.76 times, down from 5.0 times in the first quarter, and our fixed charge coverage ratio was 4.3 times.

Bob Stephenson: Our net funded debt-to-annualized adjusted EBITDA was 4.76 times, down from 5.0 times in the first quarter, and our fixed charge coverage ratio was 4.3 times. Turning to guidance, as Taylor mentioned, we increased our full year adjusted FFO guidance to a range between $2.78 to $2.84 per share. A few of the key assumptions are that we're assuming no change in our revenue related to operators or an accrual basis of revenue recognition. We're assuming Levy continues to pay at the existing rate of $3 million per month, and Maplewood's ability to pay contractual rent continues to improve. We're assuming the new operator of the Guardian Transition Facilities will continue to pay rent of $2.8 million per quarter, consistent with the second quarter.

Bob: Our net funded debt to annualized adjusted EBITDA was 4.76 times down from 5.0 times in the first quarter.

Bob: And our fixed charge coverage ratio was four three times.

Bob Stephenson: Turning the guidance, as Taylor mentioned, we increased our full-year adjusted FFO guidance to range between $2.78 to $2.84 per share. A few of the key assumptions are we're assuming no change in our revenue related to operators on the cruel basis of revenue recognition. We're assuming that the lead continues to pay at the existing rate of $3 million per month, and Maplewood's ability to pay contractual rent continues to improve. We're assuming the new operator of the Guardian Transition Facilities will continue to pay rent on $2.8 million per quarter, consistent with the second quarter. We're assuming $77 million in asset sales in the second half of the year related to facilities classified as assets held for sale at the end of the second quarter, for which we recorded $1.4 million in revenue in the second quarter.

Speaker Change: Turning to guidance as Taylor mentioned, we increased our full year adjusted <unk> guidance to a range between $2 78 to $2.84 per share.

Taylor: A few of the key assumptions are.

Taylor: We're assuming no change in our revenue related to operators on accrual basis of revenue recognition.

Bob: We're assuming leveque continues to pay at the existing rate of $3 million per month, and maplewood ability to pay contractual rent continues to improve.

Bob: We're assuming the new operator of the Guardian transition facilities will continue to pay rent of $2 $8 million per quarter consistent with the second quarter.

Bob Stephenson: We're assuming $77 million in asset sales in the second half of the year related to facilities classified as assets held for sale at the end of the second quarter, for which we recorded $1.4 million in revenue in the second quarter. We've also included the annual impact of the 2024 investments and assumed debt completed through July 31st, as outlined in the press release. We project our quarterly G&A expense to continue to run between $11.5 to $13.5 million per quarter. Additionally, we assume no material changes in market interest rates as they relate to either interest earned or balance sheet cash, or interest expense charged, or credit facility borrowing.

Bob: We're assuming $77 million in asset sales in the second half of the year related to facilities classified as assets held for sale at the end of the second quarter for which we recorded $1 $4 million in revenue in the second quarter.

Bob Stephenson: We've included the annual impact of the 2024 investments and assumed that completed through July 31, as outlined in the press release. We project our quarterly GNA expense to continue to run between $11.5 to $13.5 million per quarter. We assume no material changes in market interest rates as they relate to either interest earned on our balance sheet cash or interest expense charged or credit facility borrowings. Additionally, our $245 million in ATM proceeds in the second quarter were raised through equity, predominantly issued in June. As such, the $7.6 million shares issued only had a weighted average diluted impact of 2.3 million shares in the second quarter.

Bob: We've included the annual impact of the 2024 investments and assumed debt completed through July 31st as outlined in the press release.

Bob: We project, our quarterly G&A expense to continue to run between 11, and a half to 13 and a half million dollars per quarter.

Bob: We assume no material changes in market interest rates as they relate to either interest earned on our balance sheet cash for interest expense charge or credit facility borrowings.

Bob Stephenson: Additionally, our $245 million in ATM proceeds in the second quarter were raised through equity predominantly issued in June. As such, the 7.6 million shares issued only had a weighted average diluted impact of 2.3 million shares in the second quarter. Had all the shares been included within the weighted average, adjusted FFO would have been diluted by approximately one cent. Our weighted average shares for the 3rd quarter will include the full impact of the 7.6 million shares plus any additional shares issued as we continue to fund new investments accretively with equity while maintaining leverage under 5 times.

Bob: Additionally, our $245 million in ATM proceeds in the second quarter were raised through equity predominantly issued in June as such the seven 6 million shares issued only had a weighted average diluted impact of two 3 million shares in the second quarter had all the shares spending.

Bob Stephenson: Had all the shares been included within the weighted average, adjusted FFO would have been diluted by approximately $1.00. Our weighted average shares for the third quarter will include the full impact of the $7.6 million shares, plus any additional shares issued as we continue to fund new investments accretively with equity while maintaining leverage under five times. As a reminder, for every $4 million shares issued, our quarterly adjusted FFO is negatively impacted by approximately $1.00 per share until the cash is put back to work in new investments.

Bob: <unk> within the weighted average adjusted <unk> would have been dilutive by approximately one cent.

Bob: Our weighted average shares for the third quarter will include the full impact of the 7.6 million shares plus any additional shares issued as we continue to fund new investments accretively with equity, while maintaining leverage under five times.

Bob Stephenson: As a reminder, for every 4 million shares issued, our quarterly adjusted FFO is negatively impacted by approximately 1 cent per share until the cash is put back to work in new investments. Our 2024 Adjusted FFO Guidance does not include any additional investments or asset sales, as well as any additional capital transactions, other than what has already been mentioned.

Bob: As a reminder, for every 4 million shares issued are quarterly adjusted F. S. Though is negatively impacted by approximately one cents per share until the cash is put back to work in new investments.

Bob Stephenson: Our 2024 adjusted FFO guidance does not include any additional investments or asset sales, as well as any additional capital transactions other than what has already been mentioned.

Bob: Our 2024 adjusted <unk> guidance does not include any additional investments or asset sales as well as any additional capital transactions other than what has already been mentioned.

Dan Boone: I will now turn the call over to Dan. Thanks, Bob, and good morning, everyone. As of June 30, 2024, Omega had an operating asset portfolio of 900 facilities with approximately 86,000 operating beds. These facilities were spread across 77 third-party operators and located within 42 states in the United Kingdom. Trailing 12-month operator Ibadar coverage for a core portfolio as of March 31, 2024, increased to 1.42 times versus 1.33 times for the trailing 12-month period ended December 31 of 2023. Occupancy for overall core portfolio has continued to recover from a low of 74.6% in January of 2022 to 80.8% as of mid-July 2024, based upon preliminary reporting from our operators.

Dan Booth: I will now turn the call over to Dan.

Bob: I will now turn the call over to Dan.

Dan Booth: Thanks, Bob, and good morning, everyone. As of June 30, 2024, Omega had an operating asset portfolio of 900 facilities with approximately 86,000 operating beds. These facilities were spread across 77 third-party operators and located in 42 states in the United Kingdom. Trailing 12-month Operator EBITDA coverage for our core portfolio as of March 31, 2024 increased to 1.42 times, versus 1.33 times for the trailing 12 month period ended December 31st, 2023. Occupancy for our overall core portfolio has continued to recover from a low of 74.6% in January of 2022 to 80.8% as of mid-July 2024, based upon preliminary reporting from our operators. Turning to Portfolio Matters, Levee.

Dan: Thanks, Bob and good morning, everyone as of June 30th 'twenty 'twenty four.

Dan: They had an operating asset portfolio of 900 facilities with approximately 86000 operating beds.

Dan: These facilities were spread across 77 third party operators.

Dan: And located within 42 states and the United Kingdom.

Dan: Trailing 12 month, operator, EBITDAR coverage for our core portfolio as of March 31st 2024.

Bob: Increased to 1.42 times versus 133 times for the trailing 12 month period ended December 31.

Bob: Of 2023.

Dan: Occupancy for overall core portfolio has continued to recover from a low of 74, 6% in January of 'twenty 'twenty, 2% to 88% as of mid July 2024, based upon preliminary reporting from our operators.

Dan Boone: Turning to portfolio matters, Lovie, as previously announced, Lovie filed for Chapter 11 bankruptcy protection on June 2, 2024, in the Northern District of Georgia. Omega believes this filing was a necessary and important step in creating an entity that is operationally solvent and sustainable, with enhanced liquidity and a strengthened balance sheet. We continue to believe that there is meaningful value in our portfolio of current Lovie assets. Omega has been working with Lovie for over a year to assist it in reducing its continued exposure to underperforming assets, which in turn has alleviated some of the financial burdens on the current Lovie portfolio.

Dan: Turning to portfolio matters.

Dan Booth: As previously announced, Levee filed for Chapter 11 bankruptcy protection on June 2nd, 2024, in the Northern District of Georgia. Omega believes this filing was a necessary and important step in creating an entity that is operationally solvent and sustainable with enhanced liquidity and a strengthened balance sheet. We continue to believe that there is meaningful value in our portfolio of current Levee assets.

Bob: As previously announced will be filed for chapter 11 bankruptcy protection on June 2nd of 2024, and the Northern district of Georgia.

Omega: Omega believes this filing was a necessary and important step in creating an entity that was operationally solvent and sustainable with enhanced liquidity and a strengthened balance sheet.

Bob: We continue to believe that there is meaningful value in our portfolio of current will be assets.

Dan Booth: Omega has been working with LaVie for over a year to assist it in reducing its continued exposure to underperforming assets, which in turn has alleviated some of the financial burdens on the current Libby portfolio. We believe the current cash flow generated by our remaining Libby portfolio is sustainable and will support long-term annualized rent of approximately $36 million, while also retaining sufficient cash within the business to provide for strong clinical care. Laveed paid approximately $3 million in rent in the months of June, July, and August of 2024.

Speaker Change: Omega has been working with Levine for over a year to assist it in reducing its continued exposure to underperforming assets.

Bob: Which in turn has alleviated some of the financial burdens on the current will be portfolio.

Dan Boone: We believe the current cash flow generated by our remaining Lovie portfolio is sustainable and will support long-term annualized rent of approximately $36 million while also retaining sufficient cash within the business to provide for strong clinical care. Lovie paid approximately $3 million in rent in the months of June, July, and August of 2024.

Bob: We believe the current cash flow generated by our remaining <unk> portfolio is sustainable and will support long term annualized rent of approximately $36 million, while also retaining sufficient cash within the business to provide for strong clinical care.

Bob: Levine paid approximately $3 million in rent in the months of June July and August of 2024.

Dan Boone: Although the bankruptcy proceedings are still in process, Omega anticipates that the final resolution will be concluded prior to year end of 2024.

Dan Booth: Although the bankruptcy proceedings are still in process, Omega anticipates that the final resolution will be concluded prior to the year-end of 2024. In addition to the aforementioned restructurings, Omega is working with several other relatively small operators on various restructurings. Turning to new investments, during the second quarter of 2024, Omega completed a total of $254 million in new investments, inclusive of $33 million in CapEx investments. The new investments have a weighted average cash yield of 10.4%, with annual escalators ranging from 2 to 2.5%, and include the following: a $62.7 million sale-leaseback transaction whereby Omega acquired 32 care homes in the UK and leased these facilities back to a new operator.

Bob: Although the bankruptcy proceedings are still in process Omega anticipates that the final resolution will be concluded prior to year end of 2024.

Dan Boone: In addition to the aforementioned restructuring, Omega is working with several other relatively small operators on various restructurings.

Bob: In addition to the aforementioned restructurings Omega is working with several other relatively smaller writers on various restructurings.

Dan Boone: Turning to new investments, during the second quarter of 2024, Omega completed a total of $254 million in new investments, inclusive of $33 million in CAPEX investments. The new investments have a weighted average cash yield of 10.4 percent, with annual escalators ranging from 2 to 2.5 percent, and include the following. A $62.7 million sale-leaseback transaction whereby Omega acquired 32 care homes in the UK and leased these facilities back to a new operator. A $31 million sale-leaseback transaction, whereby Omega acquired one facility in Michigan and leased it back to an existing operator; a $21 million sale-leaseback transaction, where Omega acquired one facility in Louisiana and leased it back to a new operator; and four separate loans to existing operators totaling $106 million.

Dan Booth: A $31 million sale-leaseback transaction whereby Omega acquired one facility in Michigan and leased it back to an existing operator. A $21 million sale-leaseback transaction where Omega acquired one facility in Louisiana and leased it back to a new operator, and four separate loans to existing operators totaling $106 million. Subsequent to the second quarter of 2024, Omega closed on $373 million in new investments, excluding CapEx. These investments include the aforementioned buyout of our 51% JV partner in 63 care homes in the UK.

Speaker Change: Turning to new investments during the second quarter of 2020 for.

Bob: Omega completed a total of $254 million in new investments.

Bob: Pellucid, the $33 million and Capex investments.

Bob: The new investments have a weighted average cash yield of 10, 4% with annual escalators ranging from 2% to 2.5% and include the following.

Bob: Ah $62 $7 million sale leaseback transaction, whereby Omega acquired 32 care homes in the U K and lease these facilities back to a new operator.

Bob: A $31 million sale leaseback transaction, whereby Omega acquired one facility in Michigan and leased it back to an existing operator.

EMEA: A $21 million sale leaseback transaction, where EMEA acquired one facility in Louisiana and leased it back to a new operator.

Bob: In four separate loans to existing operators totaling $106 million.

Dan Boone: Subsequent to the second quarter of 2024, Omega closed on $373 million in new investments, excluding CAPX. These investments include the aforementioned buyout of our 51% JV partner in 63 care homes in the UK. The facilities are leased to two established UK operators with current annual rent of $43.6 million. Omega's total investment is now $436 million, which results in a grocery turn up 10%.

Bob: Subsequent to the second quarter of 2020 for Omega closed on $373 million of new investments excluding capex.

Bob: These investments include the aforementioned buyout of our 51% JV partner in 63 care homes in the U K.

Dan Booth: The facilities are leased to two established UK operators with a current annual rent of $43.6 million. Omega's total investment is now $436 million, which results in a gross return of 10%. Year-to-date through July, Omega has closed on $702 million in new investments, inclusive of CapEx investments through the second quarter. I will now turn the call over to Mark.

Bob: The facilities are leased to establish U K operators with current annual rent of $43 $6 million.

Bob: Omega total investment is now $436 million.

Speaker Change: Which results in a grocery turn up 10%.

Dan Boone: Year to date, through July, Omega has closed on $702 million in new investments, inclusive of CAPX investments through the second quarter.

Bob: Year to date through July Omega closed on $702 million in new investments inclusive of Capex investments through the second quarter.

Megan Krull: I will now turn the call over to Megan.

Bob: I'll now turn the call over to Megan.

Megan Krull: Thanks, standing.

Megan Krull: Thanks, Dan, and good morning, everyone. As discussed last quarter, the staffing mandate was finalized in April despite the inability of most facilities to meet the requirements and with limited visibility into the structural implications from a labor perspective in terms of how to create access to the level of staffing required by the mandate. While it is unlikely that any of the levers, legislative or otherwise, to adjust or overturn the rule would be successful prior to the election, it is important to note that, as previously expected, certain industry associations, along with several operators, have filed a lawsuit to overturn the mandate.

Megan: Thanks, Dan and good morning, everyone.

Megan Krull: Good morning, everyone. As discussed last quarter, the staffing mandate was finalized in April, despite the inability of most facilities to meet the requirements, and with limited visibility into the structural implication from a labor perspective in terms of how to create access to the level of staffing required of the mandate. While it is unlikely that any of the levers legislated or otherwise to adjust or overturn the rule would be successful prior to the election, it is important to note that, as previously expected, certain industry associations, along with several operators, have filed a lawsuit to overturn the mandate.

Megan: As discussed last quarter, the staffing mandate was finalized in April despite the inability of most facilities to meet the requirement.

Megan: The limited visibility into the structural implication from a labor perspective in terms of how to create access to the level of staffing required of the mandate.

Bob: While it is unlikely that any of the levers legislative or otherwise to adjust or overturn the rule would be successful prior to the election. It is important to note that as previously expected certain industry Association along with several operators have filed a lawsuit to overturn the mandate.

Megan Krull: Although it will take some time for the outcome of the lawsuit to be determined, both the Supreme Court's recent move to overturn the Chevron doctrine, which gave deference to regulatory bodies in interpreting laws, and the fact that the attorney who successfully argued for Chevron to be overturned is the same as being used in the case against the mandate. Certainly, it appeared a way in favor of the ultimate success of the lawsuit against the staffing mandate.

Megan Krull: Although it will take some time for the outcome of the lawsuit to be determined, both the Supreme Court's recent move to overturn the Chevron Doctrine, which gave deference to regulatory bodies in interpreting laws, and the fact that the attorney who successfully argued for Chevron to be overturned is the same as being used in the case against the staffing mandate, certainly appeared to be in favor of the ultimate success of the lawsuit against the staffing mandate. The fundamentals of the business continue to improve.

Megan: Although it will take some time for the outcome of the lawsuit to be determined both the Supreme courts recent move to overturn the Chevron doctrine, which gave deference to regulatory bodies and interpreting laws and the fact that the attorney who successfully argued for chevron to be a return is the same as being used in the case against the mandate certainly appear to weigh in favor.

Megan: The ultimate success of the lawsuit against the staffing mandate.

Megan Krull: The fundamentals of the business continue to improve. While not at pre-pandemic levels, occupancy has stabilized, and the recovery from a coverage perspective is indicative of the fact that many states have and continue to step up in meaningful ways to provide the support necessary in recovery efforts. We hope they do the same in the face of any and all regulatory pressures going forward.

Speaker Change: The fundamentals of the business continue to improve while not at pre pandemic levels occupancy has stabilized and the recovery from a coverage perspective is indicative of the fact that many states have and continue to step up in meaningful ways to provide the support necessary and recovery efforts. We hope they do the same in the face of any.

Megan Krull: While not at pre-pandemic levels, occupancy has stabilized, and the recovery from a coverage perspective is indicative of the fact that many states have and continue to step up in meaningful ways to provide the support necessary in recovery. We hope they do the same in the face of any and all regulatory pressures going forward. CMS also issued its final 2025 payment rule this week, resulting in a net increase of 4.2% or approximately $1.4 billion, which is slightly better than the 4.1% provided for in the proposed rule.

Megan: Regulatory pressures going forward.

Megan Krull: CMS, as well, issued its final 2025 payment rule this week, resulting in a net increase of 4.2 percent or approximately $1.4 billion, which is slightly better than the 4.1 percent provided for in the proposed rule. This included a 3 percent market basket increase, plus a 1.7 percent market basket forecast error adjustment, offset by a 0.5 percent productivity adjustment. So while there continues to be, and likely always will be, some level of pressure on the industry from a regulatory perspective, hopefully cooler heads will always prevail, and the ultimate scrutiny will be well-balanced and achieve a level of reasonableness indicative of an understanding of the industry as a whole.

Speaker Change: CNS as well issued its final 2025 payment role this week, resulting in a net increase of 4.2% or approximately $1 $4 billion, which is slightly better than the 4.1% provided for in the proposed rule. This included a 3% market basket increase plus a 1.7% market.

Megan: Basket forecast error adjustments offset by a 0.5% productivity adjustment.

Megan Krull: This included a 3% market basket increase plus a 1.7% market basket forecast error adjustment offset by a 0.5% productivity adjustment. Thus, there continues to be, and likely always will be, some level of pressure on the industry from a regulatory perspective. Hopefully, cooler heads will always prevail, and the ultimate scrutiny will be well balanced and achieve a level of reasonableness indicative of an understanding of the industry as a whole. I will now open the call to questions.

Speaker Change: So while there continues to be and likely always will be some level of pressure on the industry from a regulatory perspective, hopefully cooler heads will always prevail and the ultimate scrutiny will be well balanced and achieve a level of reasonableness from ticketing of an understanding of the industry as a whole.

Megan Krull: I will now open the call. Thank you.

Speaker Change: I will now open the call up for questions.

Operator: Thank you. We will now conduct the question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key.

Speaker Change: Thank you we will now be conducting the question and answer session. If you would like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is another question queue.

Operator: We will now be conducting the question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line isn't the question cue. You may press star two if you would like to remove your question from the cue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

Operator: We ask that you please limit your questions to one question and one follow-up to allow time for as many questions as possible. Our first question is coming from the line of Jonathan Hughes with Raymond James. Please proceed.

Speaker Change: You May press star two if he would like to remove your question from the queue for participants using speaker equipment. It may be necessary to pick up your handset before pressing the star keys, we ask that you. Please limit your questions to one question and one follow up to allow time for as many questions as possible.

Operator: We ask that you please limit your questions to one question and one follow-up to allow time for as many questions as possible.

Jonathan Hughes: Our first question is coming from the line of Jonathan Hughes with Raymond James. Please proceed. Hi, good morning. Thank you for the prepared remarks and commentary.

Speaker Change: Our first question is coming from the line of Jonathan Hughes with Raymond James. Please proceed.

Jonathan Hughes: Hi, good morning. Thank you for the prepared remarks and commentary. I was hoping you could share some details of what the investment pipeline looks like today in terms of size, yield, Skill Nursing vs. Assisted Living, and then Acquisitions vs. Law.

Jonathan Hughes: Hi, Good morning. Thank you for the prepared remarks and commentary I was hoping you could share some details of what the investment pipeline looks like today in terms of size yields skill.

Taylor Pickett: I was hoping you could share some details of what the investment pipeline looks like today in terms of size, yields, skilled nursing versus assisted living and then acquisitions versus loans.

Jonathan Hughes: Skilled nursing versus assisted living and then acquisitions versus loans.

Taylor Pickett: Sure, so we indicated last quarter remains today. Our pipeline is very active. We're seeing a lot of deals both here in the States and over in the UK. Our average yield is a little of more than 10%, which is consistent with what we're seeing in the market. You know, if you compare that, you know what, as we indicated on the call, we did just over $700 million of deals through July of 2024. If you compare that to last year, we had found just over 300 million of deals through the same time period. So it would more than double that.

Taylor Pickett: Sure. So, um, as we indicated last quarter and today, our pipeline is very active. We're seeing a lot of deals, both here in the States and over in the UK. You know, our average yield is a little more than 10%, which is consistent with what we're seeing in the market. Um, you know, if you compare that to, you know what? As we indicated on the call, we did just over $700 million in deals through July of 2024.

Speaker Change: Sure so.

Speaker Change: Last quarter remains today small pipeline is very active we're seeing a lot of deals.

Speaker Change: I'm here in the states and over in the UK.

Speaker Change: No our average yield is a little north of 10%.

Speaker Change: 4% in the market.

Speaker Change:

Speaker Change: If you compare that you know what.

Speaker Change: As we indicated on the call. We did just over $700 million of deals through July of 2024, if you compare that to.

Taylor Pickett: If you compare that to last year, we did just over 300 million deals through the same time period, so we've more than doubled that, and once again, that's as a result of a very active pipeline.

Speaker Change: Last year, we found just over $300 million of deals through the same time parents I would more than double that.

Taylor Pickett: And once again, that's just a result of a very active pipeline.

Speaker Change: And once again, that's as a result of a very active pipeline.

Taylor Pickett: Okay, are you seeing, you know, any more private capital competitors come back to the space, or are they still largely on the sidelines, you know, due to the challenging bank lending environment?

Speaker Change: Yeah.

Jonathan Hughes: Okay, are you seeing, you know, any more private capital competitors come back into the space? Or are they still largely on the sidelines, you know, due to the challenging bank lending environment?

Speaker Change: Okay are you seeing any more private capital competitors come back to the space or are they still largely on the sidelines due to the challenging bank lending environment.

Taylor Pickett: So we haven't seen them, so if they've come back, we're not seeing them in any material form.

Bob Stephenson: So we haven't seen them. So when they come back, we're not seeing them in any material form.

Speaker Change: So we haven't seen them, so they've come back, but we're not seeing them in any material.

Bob Stephenson: Okay, and then just one more for me for Bob. The equity raised view of the ATM in the quarter. I think it was the most in the second quarter last year. And obviously it's an included source of capital to fund acquisitions and leverages now. You have sub five times.

Speaker Change: Okay.

Jonathan Hughes: Okay, and then just one more for me for Bob. The equity rate near the ATM in the quarter, I think it was the highest since the second quarter last year, and obviously is an incredible source of capital to fund acquisitions and leverage is now, you know, sub five times. There's plenty of capacity on the revolver. I'm hoping you could just talk more about how you think of funding investment activity going forward and early thoughts on addressing the 2025 debt maturities. Thanks.

Speaker Change: Okay.

Speaker Change: And just one more for me for Bob.

Bob: That's the equity raised through the ATM in the quarter. It was the lowest in second quarter last year, and obviously isn't an accretive source of capital to fund acquisitions and leverage is now sub.

Speaker Change: Sub five times, there's plenty of capacity on the revolver, hoping you could just talk more about how you think a funding investment activity going forward and early thoughts on addressing the 2025 dead trees.

Bob Stephenson: There's plenty of capacity on the revolver, hoping you could just talk more about how you think of funding investment activity going forward in early thoughts on addressing the 2025 debt injuries. Thanks. Absolutely. I think your first statement hit it dead. We could do all acquisitions, incredibly, using equity right now. And we want to continue to do that to maintain our leverage less than five times. So I would look, you know, looking forward. We'll continue to do that.

Bob Stephenson: Absolutely, I think your first statement hit it that we could do all acquisitions and creatively use equity right now. And we want to continue to do that to maintain our leverage less than five times. So I would look, you know, looking forward, and we'll continue to do that.

Speaker Change: Absolutely I think your first statement here that we could do all acquisitions Accretively using equity right now and we want to attempt to do that to maintain our leverage less than five times, so I've been lucky.

Speaker Change: Looking forward, we'll continue to do that.

Bob Stephenson: And then just thought on the maturities for next year. Yeah, you know, we have 400 million coming up on January 15th, and we'll get in front of that similar to the way we got in front of our 400 million that we just paid off in April. So in the fourth quarter, you know, we'll sit down and look at the market to see whether it's bomb for bomb, but more likely it would be equity. Thank you.

Jonathan Hughes: And then just thoughts on the maturities for next year. And, you know, we have a...

Speaker Change: Okay, and then just thoughts on the maturities for next year.

Bob Stephenson: Yeah, you know, we have 400 million coming up on January 15. And we'll get in front of that similar to the way we got in front of our 400 million that we just paid off in April. So in the fourth quarter, we'll sit down and look at the market to see whether it's bomb for bomb, but more likely, it would be equity.

Speaker Change: Yeah, we have a $400 million coming up in January 15th and will.

Speaker Change: Get in front of that similar to way, we got in front of our $400 million that we just paid off on April so in the fourth quarter, we will sit down and look at the market to see whether it's Bob for Bob but more likely it would be equity.

Speaker Change: Thanks for the time.

Michael Griffin: Thank you. Our next question is coming from the line of Michael Griffin with Citi. Please proceed with your question.

Michael Griffin: Our next question is coming from the line of Michael Griffin with City, please to see with your question. So, I wonder if you could give some more color just on the buyout of your partner's take in the CINTAB joint center. You know, can you give us a sense whether any capital or a necessity to get a claim that your partner had, might have been wanting to, you know, for them to sell their take kind of driving force behind that, and then you forward the interest for it on it.

Speaker Change: Thank you. Our next question is coming from the line of Michael Griffin with Citi. Please proceed with your question.

Michael Griffin: I'm wondering if you could give some more color just on the buyout of your partner's stake in the Synpops joint venture. You know, can you give us a sense of whether there were any capital or liquidity constraints that your partner had? You might have been wanting to, you know, for them to sell their stake, the driving force behind that. And then you quoted the interest rate on it. If you were to rebuy it, I guess when the bet comes in next year, how much benefit from the accretion do you think you'd get?

Michael Griffin: I Wonder if you could give some more color just on the buyout of your partners, taking the pin pad and center.

Speaker Change: Gunther.

Michael Griffin: Give us a sense were there any capital or liquidity can experience that your partner had.

Gunther: Might've been wanting to for them to tell.

Speaker Change: Hello there.

Speaker Change: The driving force behind that and then you quoted the interest rate on it if you want to refi I I got from it that can be next year not much benefit from the accretion do you think you'd get.

Taylor Pickett: If you want to re-buy it, I guess in the back comes the next here. How much benefit definitely a creep and do you think you'd get? Yeah, Michael, you're coming out; it was a little bit difficult to hear you, but I think I got your question. The same relationship within the JV, when we first set it up, we had buy-sell provisions, and we just felt like the timing was good from a market perspective to trigger that. The 51% partner had the opportunity to match the bid and take us out, and they elected not to do so.

Taylor Pickett: Yeah, I think Michael, you're coming out. It was a little bit difficult to hear you.

Speaker Change: Yes.

Michael Griffin: But I think I have your question on the relationship within the JV. When we first set it up, we had a buy-sell provision. And we just felt like the timing was good from a market perspective to trigger that. The 51% partner had the opportunity to match the bid and take us out, but they elected not to do so. We thought we got it at a really attractive price when you look at 10% yields on that asset. Unfortunately, it came with a piece of paper that's not all that attractive.

Speaker Change: Well, so you're coming out of it because there's a little bit difficult to hear you, but I.

Speaker Change: I think I got your question.

Speaker Change: Since the relationship.

Speaker Change: Within the JV.

Speaker Change: When we first set it up we had buy sell provisions.

Speaker Change: And we just felt like the timing was good from a market perspective to trigger that.

Speaker Change:

Speaker Change: The 51% partner had the opportunity to match the bed and take us out.

Speaker Change: And they like to not to do so we thought we got it at a.

Taylor Pickett: We thought we got it at a really attractive price when you look at 10% yields, ultimately on that asset. Unfortunately, it came with a piece of paper that's not all that attractive. Our cost of capital, that capital would be about 6%; so you look at the differential there, it's 4.38% on $243 million. I mean, that's essentially to pick up with the RE-5.

Speaker Change: Really attractive price when you look at.

Speaker Change: 10% yields ultimately on that asset. Unfortunately, it came with a piece of paper that is not all that attractive.

Speaker Change: Our.

Taylor Pickett: Our cost of capital, that capital would be about 6%. So you look at the differential there, it's 4.38% on $243 million. I mean, that's essentially the pickup with the refi.

Speaker Change: Our cost of capital that capital would be about 6%.

Speaker Change: So you look at the differential there its 4.38%.

Speaker Change: $243 million made that's essentially to pick up.

Speaker Change: With the refi.

Speaker Change: Okay.

Taylor Pickett: Great.

Michael Griffin: Great. Appreciate the color there, Taylor. And then just on the Guardian portfolio, just wanted to get a sense, is there something that the new operator is doing differently that Guardian wasn't? You know, I thought Pennsylvania was a relatively tough state to operate in, but any color you have there would be helpful.

Taylor Pickett: Three to the color of their tailor. And then, just on the body and portfolio, just wanted to get a sense, is there something that the new operator is doing differently than the Cardian wasn't? You know, I thought the Pennsylvania was a relatively tough state to operate in, but any color you have there would be helpful. I'm not sure I heard all that question. The facilities in Pennsylvania were struggling; I can tell you that. We moved in then the second quarter, you know, we set up kind of unique rent structure that was basically a revenue picker embedded in it. If the operator performed well, which they did.

Speaker Change: Great.

Speaker Change: Colored or Taylor and then on the Barbie and portfolio just wanted to get a sense.

Speaker Change: There's some things that the new operator is doing.

Speaker Change: Separately the Guardian wasn't.

Speaker Change: Pennsylvania with a relatively upbeat to operate in but any color you have there would be helpful.

Taylor Pickett: I'm not sure I heard all those questions. The facilities in Pennsylvania were struggling, I can tell you that. We moved them in the second quarter. You know, we set up kind of a unique rent structure that had basically a revenue kicker embedded in it. If the operator performed well, which they did, the kicker, if you will, kicked in in the second quarter, and we were able to receive the higher rent. And we expect that to go forward through the remainder of the year.

Speaker Change: I'm not sure I heard all of that question.

Speaker Change: As always in Pennsylvania, where we're struggling I can tell you that.

Speaker Change: And then the second quarter.

Speaker Change: We set up kind of a unique rent structure.

Speaker Change: Oh that was had basically a revenue.

Speaker Change: Embedded in that if the operator performed well, which they did.

Taylor Pickett: The kicker, if you will, kicked in in the second quarter; we were able to receive the higher rent, and we expect that to go forward through the remainder of the year.

Speaker Change: Kicker if you will kicked in in the second quarter.

Speaker Change: We were able to receive the higher.

Speaker Change: Higher rent.

Speaker Change: And we expect that to go forward through the remainder of the year.

Taylor Pickett: Great.

Michael Griffin: Great, that's it for me. Thanks for the time.

Taylor Pickett: That's it for me.

Speaker Change: Great. That's it for me thanks for the time.

Taylor Pickett: Thanks for the time.

Operator: Thank you.

Jamie Feldman: Our next question is coming from Jamie Feldman with Wells Fargo. Please proceed with your question. Great. Thanks for taking the question. I guess just starting, you have a decent number of mortgage and other real estate back investments in matured in 24 and 25. Can you talk about the plans for those and the opportunity to refine, you know, to put that capital to work at a similar rate, or are you think that plays out for earning? So, you know, we've got the kind of ones in mortgages that are coming to do over the course of the next 12 months.

Speaker Change: Thank you. Our next question is coming from Jamie Feldman with Wells Fargo. Please proceed with your question.

Michael Griffin: Great, thanks for taking the question. I guess, just starting out, you have a decent number of mortgage and other real estate-backed investments maturing in 24 and 25.

Jamie Feldman: Great. Thanks for taking the question.

Jamie Feldman: I guess just starting.

Jamie Feldman: Have a decent number of mortgages and other real estate back in basketball Shirting in 'twenty four 'twenty five.

Jamie Feldman: You talk about the plans for those and the opportunity to refi.

Speaker Change: To put that capital to work at a similar rate or how do you think that plays out for earnings.

Speaker Change: Okay.

Bob Stephenson: So, you know, we've got, they're kind of onesie mortgages that are coming due over the course of the next, call it, 12 months. But no one in particular is that material.

Speaker Change: So you know we've got there.

Speaker Change: Once the mortgages that are coming due over the course of the next call. It 12 months no. One in particular is that material. We expect some of those to pay off and we expect some of those can be extended I don't think we're going to see a.

Jamie Feldman: No one in particular is that material. We expect some of those to pay off. We expect some of those to be extended. I don't think we're going to see a lot of dollars rolling back, but yeah, there were short-term mortgage loans for the most part. A little mess sprinkled in there. Ok, I mean, do you think it ends, that you think like, I guess it's obviously in 24, but for 25, you think it's neutral to earnings? Or you can… Yeah, it shouldn't have any material impact at all on earnings. Okay.

Michael Griffin: We expect some of those to pay off, and we expect some of those to be extended. I don't think we're going to see a lot of dollars rolling back, but yeah, they were short-term mortgage loans for the most part, with a little mess sprinkled in there.

Speaker Change: A lot of adult dollar falling back but.

Speaker Change: Yes, there were short term once for the most part I was a little mezz sprinkled in there.

Speaker Change: Yeah.

Bob Stephenson: Okay. I mean, do you think it ends, you think, like, I guess, obviously in 24, but for 25, you think it's neutral to earnings? Or do you think it can...

Speaker Change: Okay. I mean do you think it ends that you didn't quite get it.

Speaker Change: They say in 'twenty four but for twenty-five you. Thank.

Speaker Change: Neutral to earnings or you can.

Michael Griffin: Yeah, it shouldn't have any material impact at all on earnings. Okay.

Speaker Change: Yes, it shouldn't have any material impact at all on earnings.

Speaker Change: Okay.

Jamie Feldman: And then it looks like the investment environment has been pretty favorable this year. Can you talk about what you're seeing more, and particularly in the UK, which seems like you've had more opportunities recently? How much do you think you might put to work there, and what the opportunity set looks like going forward? You know, both the States and the UK are quite active right now. I think we have more force in the UK is that there's not as many capital players over there just yet. I mean, they had a quicker recovery overall from COVID. So we got in there pretty quick, and we haven't seen a lot of capital players come into that market yet.

Michael Griffin: And then it looks like the investment environment's been pretty favorable this year. Can you talk about what you're seeing more of, particularly in the UK, where you seem like you've had more opportunities recently? How much you think you might put to work there and what the opportunity set looks like going forward?

Speaker Change: And then it looks like the investment environment has been pretty favorable. This year can you talk about what you're seeing more in particularly in the U K, where it seems like you've had more opportunities recently about you think you might put to work there and what the opportunity set looks like going forward.

Speaker Change: Yes.

Taylor Pickett: Both the States and the UK are quite active right now. I think what we have going for us in the UK is that there's not as many capital players over there just yet. I mean, they had a quicker recovery overall from COVID, so we got in there pretty quick. And we haven't seen a lot of capital players come into that market yet, so we're able to pick and choose, and we're being opportunistic at this point in the UK, looking at really kind of all facets of heirlooms.

Speaker Change: But with the states in the U K is quite active right now I think.

Speaker Change: Well, we have more enforce in the UK is that there's not as many.

Speaker Change: Capital players over there just yet I mean, they had a quicker recovery.

Speaker Change: And so we got in there pretty quickly and we haven't seen a lot of capital players come into that market, yet so we're able to pick and choose them, we're being opportunistic at this point and are in the U K.

Jamie Feldman: So we're able to pick and choose, and where are we on opportunities to get this point in the UK looking at really kind of all facets of our own. Okay, well, how would you frame like the magnitude of the investment opportunity? I would think about the pipeline. The pipeline that created the opportunities that we've seen the first seven months of this year has been changed. So you never can predict when stuff's going to come through, but it's a similar pipeline in terms of the opportunity set that we're seeing.

Speaker Change: You cannot really count on.

Aaron: All facets of Aaron's.

Speaker Change: Yeah.

Michael Griffin: Okay, well, how would you frame the magnitude of the investment opportunity?

Speaker Change: Okay, well, how would you frame the magnitude of the investment opportunity.

Taylor Pickett: I would think about the pipeline, the pipeline that created the opportunities that we've seen in the first seven months of this year hasn't changed. So you never can predict when stuff's gonna come through, but it's a similar pipeline in terms of the opportunity set that we're seeing.

Speaker Change: I would think about the pipeline.

Speaker Change: The pipeline that created the opportunities that we've seen the first seven months of this year Hasnt changed. So you never can predict when stuff's going to come through but it's a similar.

Speaker Change: Lifeline.

Speaker Change: In terms of the opportunity set that we're seeing.

Jamie Feldman: Okay, and then finally, can you just give an update on the Second Avenue, Michael with project, what your thoughts on Lisa, how you think that develops into the back after 24 and early 25? Yeah, so Second Avenue continues to ramp up in the market where there's a lot of new products. We're the first in, but there's three buildings that followed us in Manhattan, and we're doing well 67% occupied, and we'll continue to trend up. But remember also the building has matured, so you have residents that pass away and are being back filled with new residents.

Speaker Change: Yeah.

Michael Griffin: Okay, and then finally, can you just give an update on the Second Avenue Maplewood project? What your thoughts are on resets, and how you think that develops into the back half of 24 and early 25?

Speaker Change: Okay and then finally can you just give an update on the second happened in Maplewood project.

Speaker Change: Your thoughts at least that how do you think that develops into the back half of 'twenty four in early 'twenty five.

Taylor Pickett: Yeah, so... Second Avenue continues to ramp up in the market, where there's a lot of new product. I mean, we were the first in, but there are three buildings that followed us in Manhattan, and we're doing well, 67% occupied, and we'll continue to trend upward. But remember, also, the building has matured, so you have residents that pass away and are being backfilled with new residents. Yeah, I'm not sure it's tough to predict when we get to 90%. But there's certainly a pathway, and they continue to do so.

Speaker Change: Yeah. So.

Michael Griffin: Okay, all right; thank you for your thoughts.

Speaker Change: Second Avenue continues to ramp up in <unk>.

Speaker Change: Market, where theres a lot of new products were the first in but there's three buildings that have followed us in Manhattan that were doing well.

Speaker Change: 67% occupied.

Speaker Change: We will continue to trend up.

Speaker Change: But remember also the building.

Speaker Change: Has matured so you have residents.

Speaker Change: That.

Speaker Change: That passed away and are being backfill with new residents. So it's.

Jamie Feldman: So it's, you know, I'm not sure it's tough to predict what we get to 90%, but there's certainly a pathway, and they continue to do well. Okay, all right, thank you for your thoughts.

Speaker Change: Yeah, I'm not sure it's it's tough to predict when we get to 90%.

Speaker Change: But theres certainly a pathway they continue to do well.

Speaker Change: Okay, Alright, thank you for your thoughts.

Speaker Change: Yeah.

Khramahul Trust: Thank you. The next question is coming from the line of the Khramahul Trust with Mizuhau. Please proceed with your question. Good morning, thanks for the question. I just wanted if you could expand on the Maplewood point and maybe just also give us an update just on DC, but just in New York, it seems like you said there's a lot of competition, maybe some discounting, these ups a bit slower. Any statistics you can share, like I think you did it nearly, to give us some sticks on move and move out sort of occupancy. Just what are you anticipating for the leads up to sort of a run rate where you can get a full run.

Vikram Malhotra: Thank you. The next question is coming from the line of Vikram Malhotra with Mizuho. Please proceed with your question.

Speaker Change: Thank you. The next question is coming from the line of Vikram Malhotra with Mizuho. Please proceed with your question.

Vikram Malhotra: Good morning. Thanks for the question. I just wondered if you could expand on the Maplewood point and maybe also give us an update just on DC. But just in New York, it seems like you said there's a lot of competition, maybe some discounting, and lease-ups a bit slower. Any statistics you can share? I think you did it, Mary, to give us some statistics on move-in, move-out sort of occupancy? Just what are you anticipating for the lease-up to sort of a run rate where you can get a full rent?

Vikram Malhotra: Hi morning, Thanks for taking the question.

Vikram Malhotra: Just wondering if you could expand on the on the Maplewood point and maybe just also give US an update just on D C. But just in New York. It. It seems like you said, there's a lot of competition, maybe some discounting these ups a bit slower.

Speaker Change: Any statistics you can share like I think you did at NAREIT you gave us some 600 move in move out sort of occupancy just what are you anticipating for the needs up to sort of a run rate where you can get the food right.

Khramahul Trust: Yeah, timing is impossible to predict, but I will say that there has been, as you mentioned, there's been some discounting of product in Manhattan. Fortunately, there's not so much price sensitivity in Manhattan; there's somebody in a property desirable, you can pretty much call prices. So you think about, on 2nd Avenue, which has 120 residents, so it's a vibrant community already, it shows very well, the care is exceptional, and that's why we're able to get revpore of $22,000 a month.

Taylor Pickett: Yeah, I'm timing is Passport. Passport, but I will say this, there has been, as you mentioned, there's been some discounting of product in Manhattan. Fortunately.

Speaker Change: Yeah timing is it.

Speaker Change: It's impossible to predict but.

Speaker Change: I will say this there has been.

Speaker Change: As you mentioned, there's been some discounting of product in Manhattan.

Speaker Change: Fortunately.

Vikram Malhotra: There's not so much price sensitivity in Manhattan. If somebody's property is desirable, you can pretty much hold prices. So you think about Second Avenue, which has 120 residents, so it's a vibrant community already, it shows very well, the care is exceptional, and that's why we're able to get RevPoor of $22,000 a month. So I think we have everything headed in the right direction, but to answer the question of when 67% will get to 90%, probably not this year. You're looking at 25.

Speaker Change: Theres not theres not so much price sensitivity in Manhattan, if somebody.

Speaker Change: As you know property is desirable you can pretty much home prices, so you'd think about.

Speaker Change: Second Avenue.

Speaker Change: Instead of 120 residents so it's a vibrant community.

Speaker Change: Already.

Speaker Change: It shows very well.

Speaker Change: Karen is exceptional and that's why we're able to get revpar of $22000 a month.

Khramahul Trust: So, I think we have everything headed the right direction, but to answer the question of 167%, get to 90%, not this year probably, you're looking at 25.

Speaker Change: So yeah.

Speaker Change: I think we have everything headed the right direction, but to answer the question of $1 67 per cent get to 90%.

Speaker Change:

Speaker Change: Not this year, probably looking at 25.

Khramahul Trust: And then, just to close the loop on Maplewood, there were really three key three things for us, with that team. One is transitioning operations out of the Greg Smith estate, one was stabilizing that operating balance sheet, and the last is the ramp up of 2nd Avenue. The balance sheet has been stabilized, the transition of operations is in process, and the ramp up is on its way. The rest of that core portfolio, the other 16 facilities do incredibly well, so you have this solid base that fully supports the current rent, and we feel really good about the outlook; it's just timing is impossible to predict.

Speaker Change: And then just.

Speaker Change: Close the loop on April one.

Taylor Pickett: And then just to close the loop on Maplewood. There were really three key things for us with that team. One is transitioning operations out of the Greg Smith estate, one is stabilizing the operating balance sheet, and the last is the ramp-up of 2nd Avenue. The balance sheet's been stabilized, the transition of operations is in process, and the ramp-up's on its way. The rest of that core portfolio, the other 16 facilities, do incredibly well. So you have this solid base that fully supports the current ramp, and we feel really good about the outlook. It's just timing is impossible. Okay, thanks.

Speaker Change: There were really three key three key things for us.

Speaker Change: With that tier one is transitioning operations out of the Greg Smith. The state one was stabilizing that operating balance sheet and the last is the ramp up of a second Avenue.

Speaker Change: Balance sheet has been stabilized the transition of operations is in process and the ramp ups on its way the rest of that core portfolio. The other 16 facilities do incredibly well. So you have a solid base.

Speaker Change: <unk> supports the current rent.

Speaker Change: And we feel really good about the outlook, it's just timing is impossible correct.

Khramahul Trust: Okay, thanks, and then just follow up on the, you mentioned the share count impact into 3Q, but just putting everything together, just on FAD. Am I correct in the ballpark that you're 68 cents in the quarter, sort of goes to 71 in the back off? That's the math that would fit the range. Yes. Got it. Okay, and then just, sorry, just to clarify, you said you mentioned the acquisition that closed in the quarter; that also includes, that's basically the loan, as well as the deal that you've done in terms of the impact going forward into 3Q and 4Q, correct?

Vikram Malhotra: Okay, thanks. And then just Bob, a follow-up on the share count impact into 3Q, but just putting everything together, just on FAD, am I correct in the ballpark that your 68 cents in the quarter sort of goes to 70, 71 in the back half?

Speaker Change: Okay. Thanks, and then just bought but a follow up on the you mentioned the share count impact into <unk>, but just putting everything together just on fad.

Speaker Change: Am I correct in the ballpark that just 68 cents in the quarter sort of.

Speaker Change: Goes to 70 71 in the in the back half.

Speaker Change: Okay.

Speaker Change: [laughter].

Bob Stephenson: That's the map that would fit the rate chart. Yes.

Speaker Change: That's the math that would fit the rate change yes.

Vikram Malhotra: Got it. Okay. And then just, sorry, just to clarify, you mentioned the acquisitions that closed in the quarter, that are basically the loans as well as the deals that you've done in terms of the impact going forward into 3Q and 4Q, correct? In terms of the deal that you announced in the 3Q, as you bake that into the runway, I just wanted to clarify the timing of those deals just so that we can model them out into the third and fourth quarters.

Speaker Change: Got it Okay, and then just sorry, just to clarify you said you mentioned the the acquisition.

Speaker Change: That that that closed.

Speaker Change: In the quarter.

Speaker Change: That that also includes that that's basically the loans as well as the the deals that you've done in terms of the impact going forward into into three two in pork you're correct.

Speaker Change: Yeah.

Khramahul Trust: In terms of the deals that you're announcing to 3Q, as you bake that into the runway, I just want to clarify the timing of those deals just so that we can model it out into the third and fourth quarter. We've baked those in, I said, all acquisitions completed through July 30th for baked into that divide. Got it.

Speaker Change: In terms of the the the deal that you're announcing that CQ as your bacon baked that into the run rate I just wanted to clarify the timing of those deals just so that we can model it out into the third and fourth quarter.

Bob Stephenson: We faked those in. I said all acquisitions completed through July 30th were faked into that device. Got it, okay.

Speaker Change: We've baked those in like I said, all acquisitions completed through.

Speaker Change: July 30th baked into that.

Speaker Change: Hey, guys.

Vikram Malhotra: Got it. Okay. Thanks so much and congratulations on a strong quarter. Thank you. Our next question is coming from the line of Juan Sanabria.

Khramahul Trust: Okay, thanks so much, and congrats on the strong quarter.

Speaker Change: Got it okay. Thanks, so much and congrats on a strong quarter.

Juan Sanabria: Thank you. Our next question is coming from the line of Juan Sonabria with BMO Capital Markets. Please proceed with your question.

Juan Sanabria: Thank you. Our next question is coming from the line of Juan Sanabria with BMO Capital Markets. Please proceed with your question.

Speaker Change: Thank you. Our next question is coming from the line of Juan Sanabria with BMO capital markets. Please proceed with your question.

Juan Sanabria: This is Robin sitting as a Juan. Just curious on May 3rd, why did Washington, D.C. develop and budget increased by about 50 million? Oh yeah, DC, that really relates to what we've seen in construction costs over the last three years. Not just in this industry, but across almost all construction industries is 25% increase, and it just reflects the fact that when we close this out, that's what's going to end up awesome.

Robin: This is robin fitting in for Juan just curious on Maplewood, why did to Washington D. C development budget increase by about $50 million.

Juan Sanabria: Oh yeah, T.C. That really relates to what we've seen in construction costs over the last three years.

Speaker Change: Oh, Yeah D C.

Speaker Change: That really relates to what we've seen in construction costs over the last three years.

Taylor Pickett: Not just in this industry but across almost all construction industries, there is a 25% increase, and it just reflects the fact that when we close this out, that's what it's going to end up costing. Okay, and on the sub-one coverage, what's the expected trend into 25 and how long can this exposure reasonably get to?

Speaker Change: Not just in this industry by cross.

Speaker Change: All construction industry is 25%.

Speaker Change: Increase it just reflects the fact that that when we close this out that's what it's going to happen.

Speaker Change: Austin.

Speaker Change: Yeah.

Juan Sanabria: Okay, and on the sub one coverage, let's expect a trend into 25 and how long can this exposure recently get to? So, I think there's a couple of things that are interesting there. We have a number of operators that the even dorm coverage is above one, and so there's a handful of those operators that I think just naturally work their way out of the bucket, including one larger, the largest operators, and then there's a handful smaller operators that are currently working through some restructuring activity. I think they'll come out of the bucket, and we probably settle it less than 2% going into 2025, but that's that would be the goal, and that's normal.

Speaker Change: Okay and on the sub one coverage are what's the expected trend into 'twenty, five and Hello, Hello, Hello can this exposure recently to get to.

Dan Booth: So, um, I think there's a couple of things that are interesting there. Uh, you have a number of operators that even have dorm coverage above one. And so there's a handful of those operators that I think just naturally work their way out of the bucket, including one larger, the largest operator. And then there's a handful.

Speaker Change: So I think there's a couple of things that are interesting there.

Speaker Change: Do you have a number of operators that the EBITDAR coverage is above one.

Speaker Change: And so there's a handful of those operators I think just naturally worked their way out of the bucket.

Speaker Change: Adding one larger the largest operators.

Speaker Change: And then there's a handful of.

Speaker Change: Smaller operators that are.

Dan Booth: We're currently working through some restructuring activity, and I think it's all come out of the bucket. And we probably will settle at less than 2%. Going into 2025, that's the goal. And that's normal. If you look at our history for 20 years, we've always had 2-4% in that box. Thank you. Our next question is coming from the line of Justin Hasbeek with RBC Capital.

Speaker Change: We're currently working through some restructuring activity I think.

Speaker Change: Come out of the bucket.

Speaker Change: And we'd probably settling.

Speaker Change: Less than 2%.

Speaker Change: Going into 2025.

Speaker Change: That would be the goal.

Speaker Change: And that's normal if you look at our history for 20 years, we've always had.

Juan Sanabria: If you look at our history for 20 years, we've always had 2 to 4% in that bucket. Thank you.

Speaker Change: 2% to 4% in that bucket.

Speaker Change: Yeah.

Speaker Change: Thank you.

Speaker Change: Okay.

Justin Hasbeek: Thank you. Our next question is coming from the line of Justin Hasbeek with RBC Capital Markets. Please proceed with your question. Yeah, thanks. You mentioned that the new op...

Speaker Change: Thank you. Our next question is coming from the line of Justin Heartbeat with RBC capital markets. Please proceed with your question.

Justin Haaspeak: Our next question is coming from the line of Justin Haaspeak with RBC Capital Markets. Please proceed with your question. Yeah, thanks. You mentioned that the new operator for the Guardian Assets can continue to pay 2.8 million in total quarterly rent for the remainder of the year.

Justin Heartbeat: Yeah. Thanks, you mentioned that the new operator for the Guardian assets can continue to pay $2 8 million in total quarterly rent for the remainder of the year.

Justin Haaspeak: How should we think about this portfolio going forward into next year, and just how volatile could this rent be going forward? You know, once again, there's a revenue-based kicker, so we could move around. But right now, based upon second quarter results, we think that that is sustainable and that's what we're going to see going forward.

Justin Heartbeat: How should we think about this portfolio going forward into next year and I'm, just how how volatile could this rent be going forward.

Taylor Pickett: You know, once again, it's revenue; there are revenue-based kickers. So we could move around, but right now, based upon the second-quarter results, we think that that's sustainable, and that's what we're going to see going forward.

Speaker Change: You know it's once again, it's revenue there's a revenue base kickers, so it could move around but right now based upon <unk>.

Speaker Change: Second quarter results, we think that that's sustainable and that's what I'm gonna see going forward.

Speaker Change: Yeah.

Speaker Change: Yeah.

Speaker Change: Okay.

Justin Haaspeak: Thank you.

Operator: Thank you. We'll move on to our next question, which is coming from the line of Alex Sagan with Baird. Please proceed with your question. Hello.

Alex Sagan: We'll move on to our next question, which is coming from the line of Alex Sagan with Baird. Please proceed with your question. Hello. Good morning. Thank you for taking my question. First, I'm on the SIMDAD JV, which you guys bought out. How are the two operators in that portfolio performing? Can you share any metrics about the Bidara coverage or anything else? Their coverage is consistent with what we see in our overall portfolio. So, in nothing unusual there, in terms of underwriting, really cut down the middle type portfolio as for us.

Speaker Change: Thank you we'll move onto our next question, which is coming from the line of Alex <unk> with Baird. Please proceed with your question.

Alex Sagan: Hello, good morning. Thank you for taking my question. First, on the SimDedJV that you guys bought out, how are the two operators in that portfolio performing? Can you share any metrics about EBITDA coverage or anything else?

Alex: Hello. Good morning, Thank you for taking my question first.

Speaker Change: The first of.

Alex: On the JV, which you guys bought out how are the two operators in that portfolio are performing can you share any metrics about EBITDAR coverage or anything else.

Speaker Change: Okay.

Taylor Pickett: Their coverage is consistent with what we see in our overall portfolio, so nothing unusual there in terms of underwriting, really cutting down the middle type portfolios for us. All right. And, uh... We'll see you next time.

Speaker Change:

Speaker Change: Their coverage is consistent with what we see in our overall portfolio. So nothing.

Speaker Change: Unusual there in terms of underwritings.

Speaker Change: Really cut down the middle type portfolios for us.

Speaker Change: Yeah.

Alex Sagan: All right. And would you be able to provide an update on the 109 million other real estate loans that were due in 2024 that were extended from March 29 to June 28 for those paid out, or any update there?

Alex Sagan: All right, and would you be able to provide an update on the 109 million of other real estate loans that would do in 2024 that were extended from March 29th to June 28th, with those paid dialoger standing up there. Well, yeah, I mean, it's a fully collateralized loan. There's plenty of liquidity in the market, but it's a little tough to borrow, and so we were very comfortable extending that one out. But the loan was extended to June 28th. 2024, has that been paid back or extended again? You know what, we're all looking at each other trying to figure out what loan it is.

Speaker Change: Alright.

Speaker Change: Would you be able to provide an update.

Speaker Change: On the 109 million of other real estate loans that were due in 2024 that were extended to March 29, 28 for those are paid out or just any update there.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change:

Speaker Change: Right.

Speaker Change: Oh yeah.

Taylor Pickett: Yeah, I mean, it's a fully collateralized loan. There's plenty of liquidity in a market that's a little tough to borrow from, and so we were very comfortable extending that loan out.

Speaker Change: Yeah, I mean, it's a fully collateralized model.

Speaker Change: There's plenty of liquidity.

Speaker Change: In a market that's a little tough to borrow and so we were very comfortable extending that one out.

Alex Sagan: but the loan was extended to June 28th, 2024. Has that, has that been paid back or expended again?

Speaker Change: But the the loan was extended to June 28.

Speaker Change: 'twenty 'twenty four has got.

Speaker Change: Has that been paid back or extended again.

Speaker Change: Yes.

Taylor Pickett: You know what? We're all looking at each other trying to figure out what loan it is. Can I just have Bob Circle back with you on that? Because I don't want to.

Speaker Change: You know what we're all looking each other trying to figure out what loan. It is can I just add Bob circle back with you on that because I don't want them to stay.

Alex Sagan: Can I just have Bob circle back with you on that, because I don't want to state anything. Yeah, no worries.

Speaker Change: Okay.

Alex Sagan: Yeah, no worries. That's it for me. Thank you, guys.

Speaker Change: Yeah no worries.

Alex Sagan: That's all for me. Thank you, guys.

Speaker Change: That's it for me Thank you guys.

Operator: Thank you.

Joshua Dennerlein: Thank you. The next question is coming from Joshua Dennerlein with Bank of America. Please proceed with your question.

Operator: The next question is coming from Joshua Dennerline with Bank of America. Please proceed with your question.

Speaker Change: Thank you. The next question is coming from Joshua 10 are lined with bank of America. Please proceed with your question.

Hi, this is Farrell Grida on behalf of Josh. I was wondering if you could also go back to the Guardian assets or the new tenants. Just understanding mechanics and what the rent and I understand with the revenue kicker, is that evaluated throughout the quarter? Is there a certain timing adjustment that we should be thinking that if they're hitting certain revenue goals, that that's being evaluated, that that would be increased? So it was evaluated in the second quarter, as I indicated. They did meet the criterion of having to take our kick in, and to the extent that we reported it.

Joshua Dennerlein: Hi, this is Farrell Gredeth on behalf of Josh. I was wondering if you could also go back to, excuse me, the Guardian assets or the new tenants. Just in understanding the mechanics and with the rent, and I understand with the revenue kicker, is that evaluated throughout the quarter? Is there a certain timing adjustment that we should be thinking about that if they're hitting certain revenue goals that that's being evaluated, that that would be increased?

Speaker Change: Hi, This is farrell, great us on behalf of Josh.

Farrell: I was wondering if you could also go back to them, but the excuse me the Guardian, Oh, sorry toward the new tenants.

Speaker Change: Understanding the mechanics, and then what the rent and I understand with the revenue kicker is that evaluated throughout the quarter is it is there a certain timing adjustment that we should be thinking that if they're hitting certain revenue goals, that's being evaluated but that would be increased.

Taylor Pickett: So it was evaluated in the second quarter. As I indicated, they did meet the criterion of having the taker kick in. To the extent that we recorded it, we do believe it's sustainable. It will continue to go forward quarter after quarter throughout the year.

Speaker Change: So it was evaluated in the second quarter as I indicated they didn't meet the criteria of having to take a kick in it.

Farrell: To the extent that we reported and we do believe its sustainable it will continue to go forward quarter after quarter throughout the year.

We do believe it's sustainable. It will continue to go for quarter after quarter throughout the year. There's no more magic to it. Or at least does it get reevaluated from going forward for that excess amount that they could continue to go up? Once again, I think that the revenue that they recorded in the second quarter is sustainable. So I don't think it's going to go either up or down. It's going to pretty much remain flat. Okay.

Joshua Dennerlein: There's no more magic to it.

Speaker Change: There is no more magic to it.

Farrell: Yeah.

Taylor Pickett: Or at least does it get re-evaluated from going forward for that excess amount that they could continue to go up?

Speaker Change: Or at least does does it get reevaluated from going forward for that excess amount that they could continue to go up.

Joshua Dennerlein: Once again, I think that the revenue that they recorded in the second quarter is sustainable, so I don't think it's going to... go either up or down; it's going to pretty much remain flat.

Speaker Change: Once again I think that the revenues that they recorded in the second quarter is sustainable so I don't think it's going to.

Speaker Change: Go either either up or down it's kind of pretty much remain flat.

Joshua Dennerlein: Okay, thank you so much, and also, in terms of the uptick that we saw in the occupancy and coverage data of your operators, is there any specific, at least facility type or operator, that's performing better than others or a standout?

Thank you so much.

Speaker Change: Okay. Thank you so much and also in terms of the uptick that we saw in the occupancy and coverage eight of your operators is there any specific at least facility type or operator that performing better than others were a standout.

And also in terms of the uptake that we saw in the occupancy and coverage data of your operators. Is there any specific, at least facility type or operator that's performing better than others or stand out? You mean in terms of like SNF versus Al for? Yes. I mean, I think, you know, we've historically, since COVID, seen the health product come back a little bit quicker. But I think, generally speaking, we're seeing census increase at all of them. The SNF is now screw catching up. Okay. Thank you so much.

Taylor Pickett: You mean in terms of like SNP versus ALF or something like that? Yeah. I mean, we've historically since COVID seen the ALF product come back a little bit quicker, but I think, generally speaking, we're seeing census increase at all of them. The SNF is now catching up.

Speaker Change: You mean in terms of like Smith first with Alpha.

Speaker Change: Yes.

Joshua Dennerlein: Okay, thank you so much.

Speaker Change: I mean, I think you know, we historically since Covid CME health product come back a little bit quicker, but I think generally speaking, we're seeing census increase at all of them snippets now scrap catching up.

Speaker Change: Okay. Thank you so much.

Thank you.

Taylor Pickett: Thank you. There are no further questions at this time. I would like to turn the floor back over to Taylor Pickett for closing comments.

Speaker Change: Thank you there are no further questions at this time I would like to turn the floor back over to Taylor Pickett for closing comments.

There are no further questions at this time.

I would like to just floor back over to Taylor Pickett for closing comments. Thanks everyone for joining our call today. Please feel free to follow up with the team.

Taylor Pickett: Thanks, everyone, for joining our call today. Please feel free to follow up with the team. Thank you. This concludes today's teleconference.

Taylor Pickett: Thanks, everyone for joining our call today. Please.

Taylor Pickett: Please feel free to follow up with the team.

Speaker Change: Sure.

Thank you.

Speaker Change: Okay.

Operator: Thank you. This concludes today's teleconference. You may disconnect your lines at this time. We thank you for your participation.

This concludes today's public conference. You may disconnect your lines at this time. We thank you for your participation. Thank you.

Taylor Pickett: Thank you. This concludes today's teleconference. You may disconnect. Your lines at this time, we thank you for your participation.

Operator: [inaudible]

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: [music].

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