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Omega Healthcare Investors working to bring its lease with Agemo back into compliance after the operator has not paid rent for the last three months.

Executives during a third-quarter earnings call on Friday reported that the operator — which represents about $53 million, or 5.3% of its annual revenue — stopped paying rent and interest in August and also failed to pay in September and October. 

Omega, in response, drew upon and exhausted its existing security deposit with Agemo worth about $9.5 million to pay all rent due for August, September and a portion of October. 

“We are in ongoing discussions with Agemo to bring this lease back into compliance and begin the resumption of lease payments,” Omega COO Daniel Booth said during the call. 

In other business, Omega reported that its total portfolio occupancy improved to 75.5%, which is up from a low of 72.3% in January. Additionally, about 20% of its facilities are at or above pre-COVID occupancy levels. However, the lack of federal relief funding has limited the gains, executives said. 

“The lack of or delay in additional federal and state stimulus in certain circumstances coupled with a very slow occupancy recovery and a tough labor market have put a strain on the cash flow of our operators with certain operators being hit particularly hard,” Booth said.