CareTrust’s buying spree continues

CareTrust REIT entered the Michigan market, acquiring four assisted living/memory care communities in the state for $30.8 million, or $163,830 per unit. The assisted living/memory care portfolio includes a 46-unit community in Clarkston, a just-built 40-unit community in Goodrich, a 62-unit community in Burton and a 40-unit community in Lapeer. Similar to previous transactions this year, CareTrust immediately leased the communities to an existing operating partner, this time the REIT amending a master lease with Premier Senior Living. The lease will generate approximately $2.7 million in annual rental revenue, but because of the brand-new Goodrich community, CareTrust gave Premier a partial rent concession for the first lease year, resulting in an initial GAAP yield of 8.9%, with CPI-based rent escalators starting after the second year. To fund the acquisition, CareTrust used proceeds from its recent 8.5 million share equity offering. This is the 12^th acquisition for the REIT so far in 2016, and it brings its year-to-date property haul to 25 (in 10 different states, no less).