Larger nursing home chains have been selective in making acquisitions amid an abundance of facilities for sale. However, now seems to be a good time for growth, as several industry players announced on Wednesday the acquisition of nursing homes and other long-term care assets.

Ensign and CareTrust partnered in a transaction involving a California-based campus with skilled nursing and residential units, with Ensign also acquiring a skilled nursing facility (SNF) in Washington. Meanwhile, Diverscare announced the completion of its acquisition of three skilled nursing facilities – two in Tennessee and one in North Carolina.

CareTrust-Ensign partnership 

CareTrust REIT (NYSE: CTRE) announced the acquisition of two facilities in separate transactions with a total investment amount of approximately $55 million.

CareTrust acquired a skilled nursing and assisted living campus facility located in Los Alamitos, Calif., in a partnership with The Ensign Group (NASDAQ: ENSG). The campus includes a 150-bed skilled nursing facility and a 140-bed residential care facility. 

CareTrust’s acquisition of the campus facility was completed through a joint venture arrangement entered into between CareTrust and a third-party health care real estate owner. At closing, CareTrust provided a combined common equity and preferred equity investment totaling approximately $34 million at an initial contractual yield on its combined preferred and common equity investments in the joint venture of approximately 9.7%, the company said in a press release.

The joint venture has leased the facility to affiliates of Ensign pursuant to a new 15-year triple net lease that includes two, 5-year extension options and annual CPI-based escalators.

CareTrust also acquired another long-term care asset in a separate transaction.

“We are excited to add two additional, solidly-performing facilities to our portfolio,” said James Callister, CareTrust’s chief investment officer. “We are always excited to expand our relationship with affiliates of The Ensign Group as they bring their outstanding operating expertise to the employees, residents, and patients of this Los Alamitos community.”

The investments were funded using cash on hand.

In its year-end conference call in February, CareTrust executives noted a pipeline of around $325 million, which included deals that the San Clemente-Calif.-based REIT was actively pursuing and expected to close within the next 12 months.

“We finished off the year with what is for us, an unprecedented quarter of investment activity, with every department in the company putting an impressive effort,” he said. “During the quarter, we added 81 triple net facilities to the portfolio, along with several new operators,” Callister said at the time.

Ensign’s additional transaction

Ensign announced Wednesday that in addition to the partnership with CareTrust, it acquired the real estate and operations of Pacific Haven Subacute and Healthcare Center, a 99-bed skilled nursing facility located in Garden Grove, Calif. The real estate was acquired by a subsidiary of Standard Bearer Healthcare REIT, Ensign’s captive real estate company, and will be operated by an Ensign-affiliated tenant.

“We are truly honored to have been entrusted to continue the legacy we inherit in this operation, which has been owned and operated by the prior owner for decades,” Barry Port, Ensign’s chief executive officer, said in a press release. “We are also excited to add to our existing footprint in one of our most mature markets while simultaneously increasing Standard Bearer’s footprint.”

Adam Willits President of Flagstone Healthcare South LLC, Ensign’s California-based subsidiary, added, “Pacific Haven has such an incredible clinical reputation within the community, that we couldn’t be more excited to partner with the amazing team of caregivers there to continue that tradition of excellence they have earned over a long period of time.”

As for the partnership with CareTrust, Ensign said that it acquired the operations of Alamitos West Health and Rehabilitation.

According to occupancy figures shared by analysts at Stephens Inc., Alamitos had an average occupancy of approximately 88.1% in 2024, while Pacific Haven had an average occupancy of around 99.3% in 2024 versus Ensign’s average of about 92.2% and the sector average of roughly 87.1% in California.

Standard Bearer also acquired the real estate of Mother Joseph Care Center, a 152-bed skilled nursing facility located in Olympia, Washington. 

All facilities will be operated by a third-party operator and are subject to long-term triple-net leases.

These acquisitions are effective as of April 1, and bring Ensign’s growing portfolio to 343 health care operations, which includes 44 senior living operations, across 17 states. Ensign subsidiaries, including Standard Bearer, own 143 real estate assets. 

Ensign is actively seeking opportunities to acquire real estate and to lease both well-performing and struggling skilled nursing, senior living and other health care related businesses throughout the United States, Port said.

Diversicare’s deals

Diversicare Healthcare Services said it had completed its acquisition of three new skilled nursing facilities. These acquisitions bring the Tennessee-based company’s total number of centers to 49.

In Tennessee, Diversicare acquired Etowah Health & Rehabilitation Center, formerly Etowah Health Care Center, and Diversicare of Copper Basin, formerly Copper Basin Health and Rehabilitation.

The company also acquired Mountain View of Bryson City, formerly Mountain View Manor Nursing Center, in North Carolina.

“We are thrilled with the opportunity to expand our footprint in Tennessee and enter the North Carolina market,” Steve Nee, CEO of Diversicare, said in a press release. “Etowah Health & Rehabilitation, Mountain View of Bryson City, and Diversicare of Copper Basin each have decades of service in their communities, and we look forward to upholding their legacy of providing quality care.”

These centers are under the leadership of Regional Vice President Scott Goins, the company said.