CareTrust REIT bought a California senior care campus and brought on a new tenant in its latest transaction. Formerly owned by the Catholic not-for-profit Our Lady of Fatima, the Saratoga campus consists of 85 skilled nursing beds and 37 assisted living units, with both components well occupied. It sold for $19.0 million (which includes transaction costs), or $152,500 per bed/unit, with a roughly 12.8% cap rate.
Under the management of CareTrust’s new lessee, Kalesta Healthcare, it is expected to bring in approximately $1.7 million in cash rent for each of the next two years, which thereafter escalates based on CPI. The lease term comes with an initial term of 15 years and two five-year renewal options. Funding the purchase with cash on hand, CareTrust will also fund $1.4 million in revenue-producing capital expenditures over the next 24 months based on the in-place lease yield.
