CareTrust’s $47.6M Texas Portfolio Purchase; New Management for Five Genesis SNFs in Vermont

CareTrust REIT (Nasdaq: CTRE) acquired four post-acute care facilities in the Dallas-Fort Worth area for $47.6 million, inclusive of transaction costs, in an off-market deal, the San Clemente, Calif.-based real estate investment trust (REIT) announced last week.

The portfolio includes 554 skilled nursing beds and 24 assisted living beds across Beacon Harbor Healthcare & Rehabilitation in Rockwall, Rowlett Health & Rehabilitation Center in Rowlett, Crestwood Health & Rehabilitation in Wills Point, and Pleasant Manor Healthcare & Rehabilitation in Waxahachie.

The purchase was funded with cash on hand and CareTrust’s $600 million unsecured revolving credit facility.

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Longtime partner The Ensign Group (Nasdaq: ENSG) serves as the operating tenant of the facilities.

The in-place EBITDAR [earnings before interest, taxes, depreciation, amortisation and restructuring or rent costs] rent coverage for the portfolio is well over 2.0x, according to CareTrust chief investment officer Mark Lamb.

“While underwriting has been significantly complicated by the effects of the current pandemic, the portfolio’s good market, strong lease coverage — and especially having Ensign as the tenant — gave us significant comfort with the investment,” Lamb said in the release announcing the transaction.

Ensign took over the operations a year ago from an operator in bankruptcy and made improvements to the culture and operating fundamentals at the properties, CareTrust COO David Sedgwick said in the release.

“The acquisition takes our rent concentration with Ensign from 31.5% to 33.0%, and we couldn’t be more pleased to be expanding our relationship with them,” he said.

CareTrust assumed the two existing leases held by the sellers in the transaction, with aggregate annual cash rent of approximately $3.8 million and Consumer Price Index-based escalators.

Both leases have a remaining term of about 14 years with three five-year renewal options. They also include a tenant option to purchase the properties later in the initial term.

California Hospital Makes Plans for New SNF

The Plumas District Hospital in Quincy, Calif., is moving ahead with plans to build a new skilled nursing facility, Plumas News reported on November 13.

The board of directors approved a design services agreement with Aspen Street Architects for $199,340, while a project management services agreement with Kasa Enterprises for $512,340, according to the publication.

The design work is slated for approximately six months, while a 38-month construction process is planned. The initial phase of the project would include 24 beds, with three phases to an eventual 72 beds.

The facility is estimated to cost $15 million, with the bulk of the funding coming from a loan from the U.S. Department of Agriculture (USDA).

Five Genesis Nursing Homes in Vermont Under New Management

Five Genesis Healthcare (NYSE: GEN) nursing homes in Vermont received new management on October 30, VTDigger reported November 13, with Priority Healthcare Group providing “consulting services to each facility” as of that date, according to the application to buy the five Vermont facilities.

Three New York-based owners — David Gamzeh, Akiva Glatzer, and Akiko Ike — have also filed an application to buy the facilities, which are located in Bennington, Burlington, Berlin, Springfield, and St. Johnsbury, Vt.

Gamzeh and Glatzer own “more than a dozen elder care facilities in Pennsylvania” via their company Priority Healthcare Group, VTDigger reported.

According to the article, Gamzeh owns a stake in at least 36 nursing homes, while Glatzer is involved in 39.

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