CareTrust REIT (NYSE: CTRE) has acquired a 46-facility skilled nursing and senior housing portfolio for $97 million, the San Clemente, California-based real estate investment trust announced Monday morning.

The portfolio is located in the Midwest and is being acquired “in coordination with the bankruptcy and sale of all assets of the debtor/seller,” according to CareTrust’s press release on the deal. The properties were formerly part of the Petersen Health Care portfolio, CareTrust President and CEO Dave Sedgwick confirmed to Skilled Nursing News in an email.

A skilled nursing investor and operator, unnamed in the release, is entering into a triple-net master lease agreement with CareTrust on the portfolio and will sublease the properties to “several” licensed subtenant operators. Seven of the 46 facilities are skilled nursing and assisted living campuses, while seven are assisted living facilities, according to the press release.

“This transaction commences a new relationship with a skilled nursing investor and operator we are very excited about and look forward to growing with in the future,” stated CareTrust Chief Investment Officer James Callister. “The creative and opportunistic deal structure on this acquisition aligns incentives with the aim of improving clinical and operational performance at these facilities.”

At 3,820 beds, the price-per-bed for the deal comes in at roughly $25,400, which Sedgwick said “reflects how opportunistic the acquisition is for all parties.”

The master tenant has purchase options on each sub-portfolio in the deal, with most purchase options opening in lease years four and five. The exercise of such options could trigger additional rent payments to CareTrust, up to an aggregate, annual 12.5% yield on the amount that the REIT invested.

Having the purchase options should help align and incentivize all parties to make “needed long-term changes and investments” to the properties, Sedgwick told SNN. With the properties coming out of bankruptcy, he acknowledged that some have “relatively low occupancy” and are in need of “some good turnaround work to get stabilized.”

CareTrust expects to invest more than $8 million in capital improvements for the portfolio and will invest further as needs are identified, he stated.

Peoria, Illinois-based Petersen Health Care filed for bankruptcy protection in March 2024. At that time, the provider’s portfolio numbered 90 facilities across Illinois, Missouri and Iowa. The company subsequently has been involved in various efforts to restructure and sell its portfolio. In July, a federal bankruptcy court approved the sale of a majority of Petersen’s properties to Skokie, Illinois-based health care real estate investment firm Cascade Capital Partners.

In the public announcement of the deal on Monday, Cascade was not identified as a party involved in the transaction with CareTrust. When asked by SNN, CareTrust declined to name the investor and operator partner working with the REIT on the deal.

Also on Monday, CareTrust announced that the company has closed on an initial group of 14 facilities involved in the 31-facility acquisition that was first announced in late October 2024. That $500 million transaction represents CareTrust’s largest acquisition to date. It involves 30 locations in Tennessee and one in Alabama, which will be operated by PACS Group (NYSE: PACS), The Ensign Group (Nasdaq: ENSG), Links Healthcare Group, and an operator that CareTrust did not identify by name at the time of the deal being announced.