CareTrust’s $43.9M Deal in California; Invesque’s $70M Portfolio Sale in Georgia

CareTrust REIT (Nasdaq: CTRE) this week announced the $49.3 million acquisition of four skilled nursing facilities in California operated by Covenant Care, Inc.

The 503-bed portfolio comes to the San Clemente, Calif.-based real estate investment trust (REIT) through a sale-leaseback arrangement, with initial annual cash lease payments of $4 million and a 15-year term. The Aliso Viejo, Calif.-based Covenant will see Consumer Price Index-based rent escalators, with a pair of five-year renewal options.

Covenant already had four leases with CareTrust, with the four additional buildings involved in the sale-leaseback covered by three standalone agreements with fewer than five years remaining. CareTrust retained an option to replace Covenant as a tenant at one of the buildings at the REIT’s discretion moving forward.


“This latest transaction not only brought four very good properties into the CareTrust portfolio, but also allowed us to consolidate the three standalone Covenant Care leases into a single, unified long-term master lease for all eight assets,” CareTrust chief investment officer Mark Lamb said in a statement announcing the deal.

The REIT also extended a short-term, $11.4 million loan as part of the arrangement, secured by a portfolio of five SNFs owned and operated by Covenant Care affiliates in Illinois. The loan has an interest rate of 9%.

Invesque’s Portfolio Turnaround in Georgia

Real estate investment firm Invesque (OTC: MHIVF) and its operating partner, Traditions Senior Management, offloaded a seven-building skilled nursing portfolio in Georgia for $70 million, according to Chicago-based brokerage Blueprint Healthcare Real Estate Advisors.


The Carmel, Ind.-based Invesque — formerly known as Mainstreet Health Investments prior to late 2017 — picked up the portfolio less than two years ago, implementing cost controls and new reimbursement strategies, while also investing in a regional pharmacy company. The turned-around facilities began generating $50 million in total revenues, Blueprint noted, and are poised to benefit from statewide Medicaid rate increases.

Blueprint worked with HHC Finance to land acquisition debt on the 726-bed portfolio; the final sale price of about $96,000 per bed represents a record for a SNF deal located entirely within the Peach State, according to the brokerage.

Blueprint’s Ben Firestone, Christopher Hyldahl, and Michael Segal led the transaction.

Mozart Picks Up Seven Facilities in Texas

Blueprint also facilitated the sale of eight skilled nursing facilities in Texas — seven of which went to the Skokie, Ill.-based Mozart Healthcare.

The unidentified seller was a national nursing home owner based in New York, which had seen about $55.5 million in total revenues across the portfolio despite occupancy rate around 65%.

Mozart will lease the properties in the Dallas and San Antonio markets to Summit LTC, with the remaining buildings in the Houston region going to Paradigm, which has some of the same ownership ties as Mozart.

Trinity Healthcare picked up the eighth property in the deal, with plans to expand its existing presence in the San Antonio metropolitan area.

Hyldahl and Gideon Orion managed the transaction for Blueprint.

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