California-based CareTrust REIT didn’t travel far to close its last couple of deals, adding five in-state senior care facilities to its portfolio in just a week. First, the REIT acquired a 59-bed skilled nursing facility in Petaluma for $6.9 million, or $116,949 per bed, bringing in a new tenant in West Harbor Healthcare to operate. CareTrust expects the acquisition will generate initial annual rental revenue of approximately $670,000, under an initial 15-year lease, with two five-year extension options and CPI-based rent escalators.

Then, CareTrust bought a senior care portfolio in Northern California, with a skilled nursing facility and an assisted living community each in the towns of Lodi and Turlock. There are a total of 293 skilled nursing beds and 79 assisted living units across the facilities, which were built in the mid- to late-1980s. Altogether the four facilities sold for $34.4 million, or $92,473 per bed/unit. Covenant Care was previously leasing these facilities from multiple related limited partnerships, and will continue to do so. The acquisition is expected to generate an initial cash yield of 9.0% based on the aggregate going-in annual cash rent of $3.1 million under terms of the existing leases, which have initial terms expiring in 2019, with two five-year extension options and CPI-based rent escalators. CareTrust will fund the deal with its $400 million unsecured revolving credit facility, and the REIT will purchase the real estate subject to the existing leases. Rob Reis of Marcus & Millichap handled the transaction.