CareTrust REIT, Inc. (NYSE:CTRE) announced today that it has acquired a 4-facility, 396-bed/unit skilled nursing portfolio located in the Mid-Atlantic for a total investment amount of approximately $74.7 million (inclusive of transaction costs). One of the four facilities acquired is a skilled nursing and assisted living campus, which includes 47 assisted living units.
In connection with the acquisition, the company entered into a triple-net master lease with a new operator relationship for the company. The operator is an experienced skilled nursing operator who has operated facilities across multiple states. The new master lease has an initial term of 15 years with two, 5-year extension options and provides for a year 1 contractual lease yield of 9.3% (inclusive of transaction costs) with annual CPI-based escalators. To facilitate certain local constraints, the acquisition of one of the facilities was structured as a mortgage loan extended by CareTrust to the operator, with the mortgage loan having substantially the same economics, maturity, and other terms as the master lease.
James Callister, CareTrust's Chief Investment Officer, said, "Today, we are thrilled to announce the acquisition of additional facilities in the Mid-Atlantic region and to begin a new relationship with an operator we are very excited about." Mr. Callister went on to state that, "Our year-to-date investments now total over $900 million and we continue to actively seek and look to execute upon additional acquisition opportunities."
The investment was funded using cash on hand. In September 2024, the company raised $309.9 million at an average price of $30.38 per share under its new $750 million ATM program bringing its outstanding share count to 171.5 million shares. Also in September 2024, the company paid off its $200 million term loan. The company is currently in the process of amending and extending its existing credit facility. As of today, the company currently has approximately $280 million of cash on hand.
CareTrust also reported that subsequent to the closing of this acquisition, the reloaded investment pipeline sits at $240 million of near-term, actionable opportunities, not including larger portfolios the company is reviewing. Dave Sedgwick, CareTrust's Chief Executive Officer, stated that "Today's announcement not only represents a quadrupling of our average annual rate of investments; but it also represents an acceleration of our mission to facilitate growth for strong skilled nursing and seniors housing operators where they are needed." Mr. Sedgwick continued, "As we head into the final quarter of 2024, given the progress made throughout the organization, the company has never been better positioned to grow than now."
