San Clemente, California-based CareTrust REIT acquired a memory care community in nearby Escondido (located about 20 miles north of San Diego) and retained the in-place operator Bayshire, LLC, which has managed the property for the seller since 2016. Originally built in 1981 as a skilled nursing facility, the property was converted to memory care and extensively renovated in 2015. It now includes 96 licensed beds in 52 units.
Including about $100,000 in transaction costs, the REIT paid $12.6 million, or $242,300 per unit, for the recently-renovated community. Cushman & Wakefield’s team that includes Rick Swartz, Jay Wagner, Aaron Rosenzweig, Dan Baker, Tim Hosmer and Bailey Nygard represented the seller, Torrey Pines Development Group (TPDG), in the transaction.
The deal allows Bayshire principal Scott Kirby, who was also a partner of TPDG, to recapitalize the community and acquire sole ownership of the operating company. Bayshire will lease the community from CareTrust under a 15-year master lease, with two five-year renewal options. Initial annual cash rent is expected to be about $1.03 million, and there are annual CPI-based rent escalators. CareTrust funded the deal with cash on hand.