CareTrust REIT funded $90 million of a senior mortgage loan in connection with the borrower’s acquisition of a eight-facility skilled nursing portfolio in the southeastern United States. The portfolio, comprising 1,011 skilled nursing beds and 150 assisted living beds, has been acquired by an experienced, regional health care real estate owner/operator.
The loan is secured by a first priority lien on the borrowers’ ownership interest in the real estate and carries a five-year maturity with two, six-month extension options and a starting annual effective yield of 10.7%. CareTrust’s $90 million loan is part of a $165 million senior mortgage term loan with an interest rate of SOFR plus 4.25%. Concurrently with closing, KeyBank National Association purchased a $75 million participation in the mortgage loan from CareTrust.
In addition, CareTrust also funded a $9 million preferred equity investment in an uptier parent entity of the borrower. CareTrust’s initial contractual yield on its preferred equity investment is 11%. Prepayment of the preferred equity investment is restricted, subject to certain carveouts, prior to the senior mortgage loan being paid off in full.
CareTrust also announced the related acquisition of five skilled nursing properties for $81 million. The investments were funded using cash on hand. With these two related investments, CareTrust’s year-to-date investments total approximately $386 million, and the investment pipeline is reloaded with approximately $460 million of near-term, actionable opportunities. Today’s cash on hand is approximately $230 million.
