CareTrust REIT (NYSE: CTRE) continued its aggressive expansion in the second financial quarter and beyond, adding 10 nursing homes to its roster on the heels of a transformative acquisition of Care REIT. And, a robust pipeline of about $600 million is currently made up mostly of skilled nursing opportunities, CEO Dave Sedgwick said in a quarterly earnings call on Thursday.

The REIT is planting early seeds in the United Kingdom nursing home market, but executives maintained that their company’s primary focus remains the U.S. where they plan to diversify operator relationships and asset mix.

The investment landscape for skilled nursing remains unchanged from legislative developments too, with bipartisan support of the sector leading to a carve out in the One Big Beautiful Bill Act (OBBBA). CareTrust’s confidence in the sector’s long-term viability has been bolstered by what leaders are seeing in Congress.

San Clemente, Calif.-based CareTrust provided about 95% of total required investment capital to acquire 10 skilled nursing properties in the Pacific Northwest for $146 million – the properties have been leased to two “high caliber” operators, said Callister.

The deal was completed through a joint venture agreement between the REIT and an unnamed large-third-party health care real estate owner.

“It’s a testament to the hard work of our team up and down the organization to close on a transaction of this size immediately on the heels of the Care REIT deal,” said James Callister, chief investment officer for CareTrust.

Deal flow unaffected by recent policy updates

Similar to Sabra Health Care REIT (Nasdaq: SBRA), CareTrust also didn’t see a meaningful uptick or impact on deal flow from the One Big Beautiful Bill Act (OBBBA), Sedgwick noted.

“It’s pretty much the same buyers at the table in the skilled nursing market as it’s been for a while,” said Sedgwick. “I would say on seniors housing, maybe a few more entrants on the private equity side, private money side, but still, primarily the public and the known private equity groups have been there for a while.”

CareTrust has been encouraged by the broad, bipartisan support for skilled nursing and senior care at the state and federal level for Medicaid in particular, Sedgwick added.

“If there are some pressures more locally, I think that reality will continue to defend the Medicaid rate for senior care and prioritize it above other Medicaid participants that are younger and able bodied,” Sedgwick said of this continued bipartisan support.

During 2Q and beyond, CareTrust closed on about $1.1 billion of investments, highlighted by its acquisition of Care REIT and entry into the UK, Sedgwick said. Since closing on Care REIT, CareTrust closed on another $220 million in investments, announcing this week a reloaded pipeline of about $600 million.

The pipeline primarily consists of skilled nursing facilities, Callister said, with mid- to large-size portfolio transactions along with some singles and doubles.

“Please remember that when we quote our pipe, we only include deals that we have a reasonable level of confidence that we can lock up and close within the next 12 months, we continue to see a robust pipeline of both broker marketed deals and off market opportunities sourced through our operator network and other relationships,” noted Callister.

At the same time, CareTrust is building its pipeline in the UK, evaluating positions and meeting with established and new operators.

“The UK care home sector represents an additional avenue of accretive growth, where our rigorous underwriting, operational expertise, strong balance sheet advantage, cost of capital and proven certainty of closing position us to win,” said Callister.

Still, CareTrust’s primary focus is still on sourcing and executing on acquisitions stateside, Callister added. Moving forward, operator manager relationships continue to be a huge factor in future investments – sourcing the right operator for a particular deal is key, he said.

“We spent quite a bit of time developing a bench of new operators, and that’s been the case from day one, and continues to be the case,” said Sedgwick. “I think, as we continue to execute on this pipe, you’ll continue to see a combination of growing with existing operators and bringing on some new ones.”

Eclipsing investments

In the last 18 months, the REIT deployed about $2.7 billion of investments, “eclipsing” investments in the prior eight years since CareTrust’s inception, he said.

The REIT continues to diversify its operator bench, asset types and payer mix, along with geographic concentration.

CareTrust reported total revenues up 63.3% in 2Q compared to 2Q in 2024. Normalized funds from operations is up 19% and normalized funds available for distribution has increased 16%, both compared to 2Q 2024 data.

While 2Q funds from operations and funds available for distribution missed analyst expectations by two cents each, the pipeline of $600 million and deal execution remains robust, analysts with BMO Capital Markets said in a note. Another positive – regulatory uncertainty for skilled nursing has faded for now, analysts said, with operating fundamentals and coverage improving.

Funds available for distribution bumped up 1.7% for 2025, but still missed expectations.

“We are not done. We very much feel like we’re still in start-up mode and hungry to prove ourselves and produce sustainable shared growth over many years to come, in order to keep the flywheel ripping,” said Sedgwick. “Along with investing in real assets, we’ve been investing in the people and systems to support their integration and our future growth.”

CareTrust has added key professionals to its roster in the U.S., including tax, finance, investments and asset management positions to help the team grow in more diversified ways, Sedgwick said.

CareTrust closed at $32.90, up 35 cents, or 1.08%.