CareTrust REIT Acquires Southern California Assisted Living Facility in Joint Venture Investment

by Jeff Shaw

SAN BERNARDINO, Calif. — CareTrust REIT Inc. (NYSE: CTRE) has acquired The Villas at San Bernardino, a 78-unit assisted living and memory care facility located in the Inland Empire city of San Bernardino.

In connection with its acquisition of the facility, CareTrust and a third-party regional healthcare real estate investor entered into a joint venture arrangement under which CareTrust provided a combined common equity and preferred equity investment amount totaling $10.7 million. 

CareTrust is the managing member of the joint venture entity. CareTrust’s initial contractual yield on its combined preferred and common equity investments in the joint venture is approximately 9.3 percent.

Oxford Health Group will operate the community, a new partner for CareTrust. Oxford is a midsize California seniors housing operator that focuses on strategically integrating healthcare services into its communities, allowing higher acuity residents to further age in the community setting. 

Oxford and the joint venture landlord entered into a triple-net lease agreement that provides for 2 percent fixed annual rent escalators (commencing with the third lease year), a 10-year initial term, and four five-year extension options.

The investments were funded using cash on hand.

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