Tuesday Omega Healthcare Investors (OHI) issued an investor presentation that contained a warning of a decline in cash flow in the first quarter of 2023.

The company proposed restructuring two large tenants, LaVie and Mapelwood because they are not covering rent obligations. As a result, Omega will be divesting 11 LaVie properties and placed Maplewood on a cash basis for revenue recognition. Five of Omega’s sixty-one tenants are already on a cash basis for rent collection with more in the coming quarters.

Government aid is winding down and occupancy rates are weak. With the restructurings Omega’s payout ratio may rise above 100% for the first time in about a decade.

Some analysts believe a 20% to 30% dividend cut may be in order.