CareTrust REIT Expands Mid-Atlantic Portfolio with $74.7M Acquisition; Pipeline Reaches $240M

CareTrust REIT, Inc. (NYSE:CTRE) has announced a significant expansion of its Mid-Atlantic portfolio with the acquisition of four skilled nursing facilities for $74.7 million. This strategic move not only bolsters the company's regional presence but also reaffirms its commitment to growth and investment in the skilled nursing sector.

The acquisition includes a 396-bed/unit portfolio, with one facility being a skilled nursing and assisted living campus featuring 47 assisted living units. CareTrust has entered into a triple-net master lease with a new operator, who is an experienced skilled nursing operator with a presence in multiple states. The master lease has an initial term of 15 years, with two 5-year extension options, and provides a year 1 contractual lease yield of 9.3% (inclusive of transaction costs), along with annual CPI-based escalators.

The acquisition was funded using cash on hand, with CareTrust raising $309.9 million in September 2024 through its new $750 million ATM program at an average price of $30.38 per share. The company also paid off a $200 million term loan during the same month. As of October 3, 2024, CareTrust has approximately $280 million in cash on hand and a reloaded investment pipeline of $240 million in near-term, actionable opportunities.

Dave Sedgwick, CareTrust's Chief Executive Officer, stated that the acquisition represents a quadrupling of the company's average annual rate of investments and an acceleration of its mission to facilitate growth for strong skilled nursing and seniors housing operators where they are needed. With this acquisition, CareTrust's year-to-date investments now total over $900 million.

The acquisition of these four skilled nursing facilities further diversifies CareTrust's regional portfolio, strengthening its presence in the Mid-Atlantic region. The terms of the master lease and the mortgage loan structure support CareTrust's long-term growth strategy by providing a stable and predictable revenue stream, as well as the flexibility to adapt to changing market conditions.

In comparison to CareTrust's previous investments in skilled nursing facilities, this acquisition demonstrates the company's continued commitment to growth and expansion in the sector. The reloaded pipeline of $240 million reflects CareTrust's ongoing pursuit of new opportunities to invest in high-quality facilities and operators, further solidifying its position as a leading player in the skilled nursing and seniors housing industry.

As CareTrust REIT continues to grow and expand its portfolio, investors can expect the company to remain focused on strategic acquisitions and investments that drive long-term value and growth. With a strong balance sheet and a robust pipeline of near-term opportunities, CareTrust is well-positioned to capitalize on the growing demand for skilled nursing and seniors housing services.