A little over a month after CareTrust REIT first acquired four CCRCs in California, then a 150-bed skilled nursing facility in Santa Barbara, the company has made another Golden State purchase. The latest deal features a 123-bed skilled nursing facility located adjacent to the El Centro Regional Medical Center in El Centro (Imperial County). The seller was a private individual who had owned the facility for more than 20 years. They experienced high staff turnover and occupancy decline as a result of the pandemic and decided to seek a sale. The seller had fallen out of contract with a previous buyer but was still highly motivated to exit.
That led to San Diego-based Bayshire Senior Communities sourcing the off-market deal and bringing it to CareTrust to finance and close. Paying all cash, the REIT added the facility to a master lease with Bayshire, increasing annual cash rent under it by $804,000 in year-one and $940,000 in year-two, with CPI-based escalators thereafter. The remaining lease term is 13 years, plus two five-year extensions. CareTrust also committed to $150,000 of initial capital improvements for the property.