CareTrust REIT Expands Portfolio with $74.7 Million Acquisition
CareTrust REIT Expands Portfolio with Significant Acquisition
CareTrust REIT, Inc. (NYSE:CTRE) has made a remarkable move by acquiring a portfolio consisting of four skilled nursing facilities, amounting to a total investment of about $74.7 million. This expansion signifies a strategic advance for CareTrust as it aims to enhance its footprint in the lucrative healthcare real estate market.
Details of the Acquisition
The newly acquired portfolio comprises a total of 396 beds/units, providing significant operational capacity. Notably, one of these facilities includes a skilled nursing and assisted living campus that features 47 assisted living units, showcasing CareTrust's commitment to versatile healthcare offerings.
Master Lease Agreement
In conjunction with this acquisition, CareTrust entered into a triple-net master lease with a new operator relationship. This operator brings extensive experience, having managed similar facilities across multiple states. The master lease spans an initial term of 15 years with two optional extensions of five years each. The financial structure includes a strong year 1 contractual lease yield of 9.3% along with annual escalators tied to the Consumer Price Index (CPI), reinforcing the investment’s profitability.
Investment Funding Strategy
For this acquisition, CareTrust utilized cash reserves, indicating prudent financial management. Earlier in September 2024, the company successfully raised $309.9 million under its $750 million At-The-Market (ATM) program. This strategic fundraising effort increased CareTrust’s outstanding share count to 171.5 million shares. Furthermore, the company strategically paid off a $200 million term loan, enhancing its financial agility.
Future Financial Outlook
Currently, CareTrust possesses approximately $280 million in cash on hand, which is a strong position for pursuing additional investments. The company anticipates further leveraging its financial resources as it continues to seek out opportunities for growth in the healthcare sector.
Investment Pipeline and Future Growth
Following the recent acquisition, CareTrust has indicated a reloaded investment pipeline totaling $240 million. This reflects the company’s proactive approach to identifying actionable opportunities within the skilled nursing and seniors housing sectors. Dave Sedgwick, the Chief Executive Officer of CareTrust, highlighted the transformative nature of this acquisition, emphasizing a significant acceleration in their annual investment rate.
Commitment to Operators
CareTrust’s strategy focuses on collaborating with strong skilled nursing and seniors housing operators, ensuring that they facilitate growth where it is most essential. This commitment aligns with the company’s overarching goal to meet the ever-growing demand for high-quality healthcare facilities while fostering relationships with reliable operators.
About CareTrust REIT
CareTrust REIT, Inc. is a noteworthy player in the real estate investment trust (REIT) space, specifically focusing on the ownership, acquisition, development, and leasing of skilled nursing and senior housing properties. The company boasts a diverse portfolio of long-term net-leased properties across the nation while continually seeking both external and organic growth opportunities. CareTrust remains committed to enhancing its operational portfolio and delivering value to investors and communities alike.
Frequently Asked Questions
What recent acquisition has CareTrust REIT made?
CareTrust REIT recently acquired a portfolio of four skilled nursing facilities for approximately $74.7 million.
How does the acquisition impact CareTrust's investment strategy?
This acquisition is part of a larger strategy to significantly grow CareTrust's investment pipeline, which now stands at $240 million.
What is the length and structure of the master lease associated with the new acquisition?
The master lease has an initial term of 15 years, with options for two additional five-year extensions.
What financial strategies has CareTrust implemented recently?
CareTrust raised $309.9 million through an ATM program and paid off a $200 million term loan, strengthening its financial position.
What is CareTrust's mission regarding skilled nursing facilities?
CareTrust aims to facilitate growth for strong skilled nursing and seniors housing operators, addressing the needs within the healthcare sector.
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