CareTrust REIT, Inc. acquired a skilled nursing portfolio in the Mid-Atlantic consisting of four facilities and 396 beds/units. One of the four facilities is a skilled nursing and assisted living campus, which includes 47 assisted living units. The purchase price, inclusive of transaction costs, was approximately $74.7 million, or $188,600 per bed/unit.
In connection with the acquisition, CareTrust entered into a triple-net master lease with a new operator relationship. The operator is experienced in skilled nursing and has managed facilities across multiple states. The new master lease has an initial term of 15 years with two, five-year extension options and provides for a year one contractual lease yield of 9.3% (inclusive of transaction costs) with annual CPI-based escalators.
To facilitate certain local constraints, the acquisition of one of the facilities was structured as a mortgage loan extended by CareTrust to the operator, with the mortgage loan having substantially the same economics, maturity and other terms as the master lease. The investment was funded using cash on hand. CareTrust’s year-to-date investments now total over $900 million, and it is actively seeking to execute upon additional acquisition opportunities.
In September, the company raised $309.9 million at an average price of $30.38 per share under its new $750 million ATM program bringing its outstanding share count to 171.5 million shares. Also in September, CareTrust paid off its $200 million term loan. The company is currently in the process of amending and extending its existing credit facility. As of today, CareTrust currently has approximately $280 million of cash on hand.
CareTrust also reported that subsequent to the closing of this acquisition, the reloaded investment pipeline sits at $240 million of near-term, actionable opportunities, not including larger portfolios the company is reviewing. The acquisition represents a quadrupling of the company’s average annual rate of investments.
