CareTrust (NYSE: CTRE) provided more details Thursday on its second mega deal of the year – a $437 million acquisition following the close of the third financial quarter.

Significant activity in the U.K. care homes market has seen the involvement of large U.S. REITs, including CareTrust and Welltower.

San Clemente, California-based CareTrust completed approximately $59 million in investments during 3Q, with the $437 million of investments coming after the close of the quarter, comprising 12 skilled nursing facilities and one SNF campus in the Southeast and Mid-Atlantic.

CareTrust also closed on a nursing home and two assisted living communities in California following the quarter’s end.

“This feels a little like déjà vu. Around this time last year, we were in the middle of closing on a significant volume of new investments that were to be giving us a running head start coming into 2025,” said CareTrust CEO Dave Sedgwick during the company’s quarterly conference call.

Toward the beginning of the year, CareTrust announced a recommended cash offer of $817 million for U.K. real estate investment trust Care REIT, which has a diversified portfolio of assets and operator partnerships.

“They’d really been at a standstill for a number of years,” James Callister, CareTrust’s chief investment officer, said of Care REIT. “It takes time to build that pipeline up and get those deals under contract and ultimately closed. When we talk about a third of our pipe right now being UK care homes, you see that pipeline swelling and getting more productive and busier. We definitely see the trend going that way.”

Welltower (NYSE: WELL), meanwhile, just last month acquired a Barchester Healthcare portfolio for about $6.92 billion. Barchester is one of the largest U.K. providers of residential and nursing care. The portfolio comprises 111 communities managed by Barchester in a RIDEA structure, 152 communities part of a long-term triple-net lease, and 21 ongoing developments.

CareTrust’s bread and butter

In terms of future investments, skilled nursing will continue to be CareTrust’s “bread and butter,” Sedgwick said, with the sector being the “single engine of growth” for CareTrust despite many triple net deals in senior housing.

“In order to position CareTrust to grow in the next decade – like we did in our first – we need another growth engine. And, we decided to add two for good measure, the second one was officially bolted on to CareTrust with our U.K. acquisition in the second quarter,” said Sedgwick.

The investment pipeline remains active, Callister added, with a mix of broker transactions and proprietary opportunities generated through operator relationships and other channels. There’s a “measured but meaningful rise” in transaction activity, especially in the care home and seniors housing.

The REIT has integrated a London-based team of professionals, along with talent throughout the organization, from staff to support investments, to asset management, tax, finance and data science professionals.

“Our investment in data science is going to really have a global reach and throughout the company, across all departments, making us smarter and faster across the board,” said Sedgwick. “We really do expect to see a positive impact, both to productivity, decision making and efficiency throughout the whole organization as we continue to scale.”

About one-third of the REIT’s $600 million total pipeline is made up of the U.K. expansion, a half being U.S. skilled nursing and the rest being same store operating portfolio (SHOP).

“Our sights are set on where we will be in 10-plus years, and how we can get there at a similar pace that drove the second highest total shareholder return amongst all REITs over the past decade,” said Sedgwick. “It’s with that vision that we undertake transformative investments in the UK and in SHOP.”

CareTrust missed analyst expectations for guidance by about 1 cent per share, mostly due to “putting capital to work,” analysts from BMO Capital Markets said in a note. Normalized funds from operations at 45 cents per share missed analyst expectations of 47 cents.

Outgoing CareTrust CFO Bill Wagner said his goodbyes on the call, while expressing excitement for Derek Bunker to take on the role. Bunker is currently the REIT’s senior vice president of strategy and investor relations, joining just this year to lead the U.K. acquisition.