An older skilled nursing facility that recently underwent a major renovation sold to CareTrust REIT in a deal valued at $12 million, or $81,000 per bed. Located about 40 miles south of Atlanta, Georgia, in the town of Spalding, the 148-bed facility was originally built in 1968 and was recently put on the special focus facility list. A recent renovation modernized the amenities, which added to the facility’s appeal and helped boost occupancy. At the time of marketing, it was around 95% occupied, and according to CareTrust’s press release, the facility is expected to generate first-year annual cash rent of $1.17 million.
A regional owner/operator hired Evans Senior Investments to sell the facility, and after receiving several competitive offers after just a few weeks on the market, they selected CareTrust as the buyer. The REIT’s deep pockets helped smooth the transaction process (CareTrust funded the deal using its $600 million unsecured revolving credit facility), and the deal closed four months after going to market.
CareTrust is partnering with Florida-based Elevation Group to operate the facility going forward. Elevation entered into a 15-year triple net lease with CareTrust that includes two, five-year extension options and annual CPI-based rent escalators.
