FARGO, N.D. — CareTrust REIT Inc. (NASDAQ:CTRE) has acquired The Meadows on University, a 110-bed skilled nursing facility in Fargo.
An affiliate of HCR ManorCare sold the property for $4.75 million.
CareTrust added the property to its existing master lease with Salt Lake City-based Eduro Healthcare LLC.
"We are excited to be growing our footprint in the upper Midwest, which has long been a target market for us," says Michael Bewsey, Eduro's managing director. In addition to the North Dakota property, Eduro affiliates operate facilities in Utah, Montana, New Mexico, Wisconsin and South Dakota. "The Dakota facilities give us direct access to two markets that have been very receptive to the sophisticated patient-outcome-driven care models that we follow, and we are looking forward to becoming part of the outstanding medical communities there."
The North Dakota transaction was the second leg of a two-facility acquisition from HCR ManorCare, which began with CareTrust's acquisition of HCR ManorCare's Prairie Heights Healthcare Center in Aberdeen, S.D., last July. The Aberdeen facility is also operated by an Eduro affiliate under the CareTrust-Eduro master lease.
The Fargo facility is the fourth property to be added to the master lease this year, and the fifth overall. The initial increase in annual cash rent from Eduro's amended master lease will be approximately $425,000. Eduro's amended master lease has approximately 12 years remaining on the initial term, plus two five-year renewal options, and carries CPI-based annual rent escalators.
CareTrust funded the acquisition using cash on hand.