One of the more consistently active acquirers in the skilled nursing market is back. CareTrust REIT just made its first post-COVID acquisitions for two skilled nursing facilities in Montana. The off-market transaction consisted of Apple Rehab Cooney, an 80-bed facility located on the campus of the St. Peter’s Health Regional Medical Center in Helena, and Elkhorn Healthcare & Rehabilitation, a 70-bed facility in nearby Clancy. Eduro Healthcare took over operations.
CareTrust paid around $16 million, or $106,700 per bed, for the facilities, inclusive of transaction costs. In addition, the REIT will provide around $500,000 for Eduro to improve the properties, which are already stabilized. The transaction will increase annual cash rent under the existing Eduro master lease by about $1.55 million. There is a remaining term of approximately 9.5 years on the master lease, with two five-year renewal options and CPI-based annual rent escalators. The acquisitions were funded using cash on hand.
The facilities will join Eduro’s other location in Montana, Copper Ridge Health & Rehabilitation in Butte, which CareTrust acquired in February 2018 for $5.7 million, or $58,000 per bed. Built in 1978 with a significant renovation in 2008, that facility was a turnaround opportunity with occupancy just below 70% at the time of acquisition.