CareTrust REIT announced the acquisition of two performing skilled nursing facilities in separate transactions with a total investment amount of approximately $62.1 million. On August 29, the company acquired a 125-bed SNF in the Mid-Atlantic, and on August 7, it closed an investment in a 134-bed SNF located on the West Coast.
CareTrust’s investment in the Mid-Atlantic facility, inclusive of transaction costs, was approximately $37.7 million, or $302,000 per bed, and will generate initial annual base rent of approximately $3.4 million. The company has leased the facility pursuant to a new 15-year, triple-net lease that includes two five-year extension options and annual CPI-based escalators.
The West Coast facility was acquired for approximately $24.5 million, or $183,000 per bed, with a lease in place that expires in mid-2026. The facility covers its current rent of approximately $868,000 by more than 3.0x. Assuming current performance is maintained, CareTrust’s stabilized yield on its investment is projected to be reset to approximately 10% by no later than 2026.
The investments were funded using cash on hand. Subsequent to the second quarter, the company raised $190.2 million at an average price of $27.02 per share under its ATM program bringing its outstanding share count to 161.3 million shares. The company currently has approximately $221 million of cash on hand. Also, on August 29, the company initiated a new $750 million ATM program under its shelf registration statement on Form S-3 filed with the SEC.
As of August 29, CareTrust’s year-to-date investment total equals approximately $827 million at an average yield of 9.5%. A replenished investment pipeline of approximately $230 million of near-term, actionable real estate acquisition opportunities, not including larger portfolio opportunities the company is reviewing, was also announced, so we’ll be hearing more from the REIT in the coming year.
