CareTrust, JV Partner to Acquire 31 Skilled Nursing Facilities in $500 Million Deal

With reporting from Amy Stulick

CareTrust REIT (NYSE: CTRE) and a joint venture partner have reached an agreement to acquire a portfolio of 31 skilled nursing facilities for approximately $500 million, the company’s largest acquisition to date.

San Clemente, California-based CareTrust anticipates that most of the facilities will be operated by existing partners of the REIT, including The Ensign Group (Nasdaq: ENSG), PACS Group (NYSE: PACS) and Links Healthcare Group, the company announced Tuesday.

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The portfolio being acquired totals 3,290 licensed beds, with 30 of the locations in Tennessee and one in Alabama. CareTrust anticipates that the deal will close in the fourth quarter of 2024.

CareTrust’s joint venture partner is a large, third-party health care real estate owner, according to Tuesday’s press release.

“The successful closing of this transaction in the fourth quarter will, not including other opportunities we continue to pursue, bring our annual investment total to approximately $1.4 billion,” Dave Sedgwick, CareTrust’s President and CEO, stated. “Combining the full-year impact of this year’s investments with a reloading pipeline, the table is set for 2025 to be another tremendous year for CareTrust and the many operators we support.”

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James Callister, chief investment officer for CareTrust, said the REIT is “incredibly excited” to start a new relationship with an unnamed operator, as well as expand its relationships with Ensign, PACS and Links.

PACS will be adding 12 of the 31 properties to its ranks, all 12 are in Tennessee; PACS currently operates 276 post-acute care and senior living facilities across 15 states. This is a new state for the Utah-based operator. PACS may purchase the real estate on six of the facilities between years four and seven of the lease with CareTrust, PACS said in a statement.

“Tennessee has been an attractive market for PACS for some time, and we’re grateful for this opportunity to bring our model of post-acute care to the Volunteer State. We’ll be thrilled to welcome the great staff and residents of these facilities to the PACS family,” said Jason Murray, PACS chairman and CEO.

The team at PACS plans to continue leveraging its decentralized leadership model, as well as prior experience with larger portfolio acquisitions like this one, added PACS President and COO Josh Jergensen.

Ensign, meanwhile, will add nine of the 31 properties to its portfolio, eight in Tennessee and one in Alabama, and the remaining 10 will be operated by Links.

According to its LinkedIn profile, Links Healthcare was founded in 2017, and started out as a support services company dedicated to the training and development of health care leaders in the skilled nursing industry.

“We are very excited to add eight operations to our three existing locations in Tennessee, which is one of our newest states, bringing our total operations in Tennessee to 11. Our leadership team in Tennessee has been laying the foundation for this growth for several years and these operations are a perfect fit to form local clusters, which are a key to our scalable growth model,” Barry Port, Ensign CEO, said in a statement.

One of Ensign’s long-time leaders is relocating to establish a new market in a state the team has been targeting for some time, Port said of Alabama. Upon closing this transaction, Ensign’s growing portfolio will consist of 332 health care operations.

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