CareTrust, Eduro Pick Up Another ManorCare SNF; 5-Building Deal in Ohio

CareTrust Buys Another ManorCare Building for $4.75M

CareTrust REIT (Nasdaq: CTRE) on Monday announced the purchase of The Meadows on University, a skilled nursing facility in Fargo, N.D. formerly owned by HCR ManorCare.

The 110-bed SNF sold for $4.75 million, including transaction costs, and marked the second installment of a two-part deal between the real estate investment trust (REIT) and ManorCare. Back in July, CareTrust purchased the 99-bed Prairie Heights Healthcare Center, another former ManorCare property, for $9.7 million.

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In both cases, CareTrust installed the Salt Lake City-based Eduro Healthcare as the new operator. The two firms now have five buildings in their master lease, with the latest acquisition in Fargo adding $425,000 to the annual cash rent.

“The Dakota facilities give us direct access to two markets that have been very receptive to the sophisticated patient-outcome-driven care models that we follow, and we are looking forward to becoming part of the outstanding medical communities there,” Michael Bewsey, managing director at Eduro, said in a statement announcing the deal.

Four of the five CareTrust-Eduro buildings were added to the shared lease this year, with Eduro targeting deals in secondary markets outside of major metropolitan areas — particularly in the Mountain West and Upper Midwest.

“There’s just not a ton of competition for buildings,” Bewsey told Skilled Nursing News in August. “We’ve found a pretty good market to get in there and find buildings where we can be successful.”

The two parties have 12 years remaining on the initial term of the master lease, with a pair of five-year renewal options. CareTrust used cash on hand to finance the most recent purchase.

Capital Funding Group Finances Five-Building Deal

The Baltimore-based Capital Funding Group arranged a multimillion-dollar bridge-to-HUD loan for the purchase of five skilled nursing facilities in Ohio.

The buyer, an affiliate of Vantage Point Capital, leased out the facilities to Crown Healthcare Group; Capital Funding Group also closed a multimillion-dollar line of credit for Crown, which allows the operator to borrow against unbilled accounts receivable.

Capital Funding Group’s Tim Eberhardt and Erik Howard handled the real estate financing; Jeffrey Stein, meanwhile, arranged the working capital line of credit.

Kindred Plots New Inpatient Rehabilitation Hospital

Kindred Healthcare last week announced the planned development of a 40-bed inpatient rehabilitation hospital in Iowa, which would join another rehab facility opened earlier this year in the Hawkeye State.

The Louisville, Ky.-based operator — which was once a dominant player in skilled nursing before exiting the business last year — received a certificate of need for the facility in Coralville, Iowa, with a planned opening date in the second quarter of 2020. Kindred will run the day-to-day operations of the facility, which will be developed in a joint venture with Mercy Iowa City, an acute care hospital.

“We look forward to partnering with Mercy Iowa City to build and operate this facility, our second hospital with Mercy in the state of Iowa, to address the growing need for inpatient rehabilitation services in the state,” said Jason Zachariah, president of Kindred Rehabilitation Services, said in a statement announcing the deal.

The two companies opened Mercy Medical Center — Des Moines in the suburb of Clive this past June, currently the only freestanding inpatient rehab hospital in the state.

The Coralville inpatient rehab hospital will host residents who have suffered strokes, spinal and brain injuries, and other neurological diseases, according to Kindred.

“We know there is a tremendous need for inpatient rehabilitation care in our service area,” Mercy Iowa City president and CEO Sean Williams said in the statement. “By working with Kindred we can provide an extraordinary level of care for patients much closer to home which is beneficial for both the patients and their loved ones.”

Written by Alex Spanko

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