Evans Senior Investments facilitated the sale of two senior living communities in Texas on behalf of a regional owner/operator. ESI targeted seniors housing investors and secured multiple offers before a local owner/operator was selected as the ultimate buyer.
Evans also announced that it represented the seller in CareTrust REIT, Inc.’s acquisition of three California CCRCs that, combined, feature 475 skilled nursing, assisted living and memory care beds/units. The total purchase price was around $60 million, or $126,900 per bed/unit. The communities are in Los Angeles, Orange and San Diego counties. The incoming operator for these three communities is Southern California-based Bayshire Senior Communities, an existing CareTrust tenant.
Torrey Pines Senior Living is in San Diego, California, and was acquired for a total investment amount of approximately $32.3 million, inclusive of transaction costs. Annual cash rent for the first year is about $2.6 million, increasing to around $3.0 million in the second year with CPI-based annual escalators thereafter.
Meanwhile, the acquisition of the communities in Los Angeles and Orange counties was completed through a joint venture between CareTrust (the managing member) and a third-party regional healthcare real estate investor. CareTrust provided a combined common equity and preferred equity investment amount totaling approximately $28.0 million.
The communities are being leased to Bayshire pursuant to a new, triple-net master lease agreement with an initial term of 15 years and two, five-year extension options. CareTrust’s initial contractual yield on its combined preferred and common equity investments in the joint venture is approximately 9.1%. Agreed upon annual increases to base rent and to CareTrust’s preferred rate of return increase CareTrust’s contractual yield to 9.7% and 10.2% in years two and three, respectively. Commencing in year four, contractual base rent increases by a fixed 2% annually.
