CareTrust Grows with Eduro in $16.5M Off-Market Deal; Houston SNF Sells for $4.3M

The Villa Toscana at Cypress Woods, a 120-bed skilled nursing facility in a Houston suburb, was sold to the SNF-focused private equity firm O&M Investments for $5.3 million.

The transaction was handled by the Chicago-based senior living brokerage firm Heavenrich & Company on behalf of a publicly traded real estate investment trust (REIT) and owner-operator StoneGate Senior Living.

At the time of the sale, which was announced on September 2, occupancy at Villa Toscana was 76%.

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O&M Investments Closes on Odessa, Texas SNF

In a different transaction, Nick Martinez and Todd Okum of O&M Investments closed on a SNF in Odessa, Texas, that runs at 75% occupancy for a purchase price of $32,000 per bed.

Under the deal, the firm assumes a long-term lease “with a strong regional operator,” Martinez told Skilled Nursing News via e-mail on September 1.

CareTrust Adds Two Montano SNFs in Off-Market Deal

CareTrust REIT (Nasdaq: CTRE) acquired two SNFs in Montana for $16.5 million in an off-market transaction. The deal was funded using cash on hand.

The 80-bed Apple Rehab Cooney in Helena and the 70-bed Elkhorn Healthcare & Rehabilitation in Clancy will be operated by Eduro Healthcare, which operates 16 SNFs.

The total investment was $16.5 million, inclusive of transaction costs and $500,000 provided to Eduro to make improvements to the properties. The facilities were added to the existing CareTrust-Eduro master lease, with annual cash rent increasing by approximately $1.55 million. The lease has a remaining term of about nine and a half years, with two five-year renewal options and Consumer Price Index-based annual rent escalators.

“We are excited because these facilities are already clinically and operationally sound, and with the added support that Eduro can provide from behind the scenes, we believe they will just keep improving,” Eduro managing partner Michael Bewsey said in a release announcing the deal.

The deal was CareTrust’s first to be initiated and closed during the COVID-19 pandemic.

“Underwriting assets involves some added challenges in these somewhat unusual times, but these buildings were well-run and the parties were pragmatic in dealing with those uncertainties,” Dave Sedgwick, CareTrust’s COO, said in a statement.

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