CareTrust REIT (NYSE: CTRE) announced Thursday the acquisition of a four-facility, 396-bed skilled nursing portfolio located in the Mid-Atlantic region for approximately $74.7 million.
This acquisition includes a skilled nursing and assisted living campus with 47 assisted living units.
As part of the acquisition, CareTrust entered into a triple-net master lease with a new operator known for its extensive experience in managing skilled nursing facilities across multiple states. The master lease is set for an initial term of 15 years and includes options for two additional five-year extensions. The lease will generate a contractual yield of 9.3% in the first year, incorporating transaction costs with annual adjustments based on Consumer Price Index (CPI) escalators.
The acquisition was financed using cash reserves. CareTrust raised $309.9 million in In September at an average price of $30.38 per share under its new $750 million ATM program bringing its outstanding share count to 171.5 million shares. Also during the month, the company paid off its $200 million term loan. The company is currently in the process of amending and extending its existing credit facility. As of today, the company currently has approximately $280 million of cash on hand.
To navigate local regulatory constraints, one of the facilities was acquired through a mortgage loan extended by CareTrust to the operator, mirroring the lease terms in structure and financials.
“Today, we are thrilled to announce the acquisition of additional facilities in the Mid-Atlantic region and to begin a new relationship with an operator we are very excited about,” James Callister, CareTrust’s chief investment officer, said in a press release.
Callister noted that CareTrust’s year-to-date investments have surpassed $900 million, with ongoing efforts to identify further acquisition opportunities.
“We continue to actively seek and look to execute upon additional acquisition opportunities,” he said.
Prior to the closing of this acquisition, CareTrust also said that its investment pipeline sits at $240 million of near-term, actionable opportunities, not including larger portfolios the company is reviewing.
“Today’s announcement not only represents a quadrupling of our average annual rate of investments but also accelerates our mission to support strong skilled nursing and seniors housing operators where they are needed,” CEO Dave Sedgwick said in the press release.
With the final quarter of 2024 approaching, Sedgwick noted the company is exceptionally well-positioned for future growth, underlining the progress made across the organization.
CareTrust is a publicly-traded real estate investment trust (REIT) engaged in the ownership, acquisition, development and leasing of skilled nursing, seniors housing and other healthcare-related properties. It has a portfolio of long-term net-leased properties across the U.S., and a growing portfolio of quality operators leasing them.