CareTrust REIT’s Central Valley Expansion

CareTrust REIT made a major expansion into California’s Central Valley, acquiring two senior care facilities in a pair of off-market transactions. The targets were a 70-bed skilled nursing facility in Modesto, and a senior care campus in Sacramento with 99 skilled nursing bed and 72 assisted living units. Both were leased to an existing CareTrust tenant, Kalesta Healthcare, LLC, under a master lease with about 14 years left on the initial term. There are also two five-year renewal options. Scheduled cash rent for the first two years is expected to be about $3.9 million with CPI-based escalators thereafter.

CareTrust also committed to provide a revenue-producing $1.0 million fund for capital expenditures to improve the Sacramento campus. The REIT used a combination of cash on hand and a drawing on its $600 million unsecured revolving credit facility to fund the $22.8 million, or $94,600 per unit, purchase price.

 

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