SAN CLEMENTE, Calif. — CareTrust REIT Inc. (NYSE: CTRE) has acquired two skilled nursing facilities in separate transactions with a total investment amount of $62.1 million.
The company acquired a 125-bed skilled nursing facility in the Mid-Atlantic and a 134-bed skilled nursing facility on the West Coast.
CareTrust’s investment in the Mid-Atlantic facility, inclusive of transaction costs, was approximately $37.7 million and will generate an initial annual base rent of approximately $3.4 million. The company has leased the facility pursuant to a new 15-year, triple-net lease that includes two five-year extension options and annual CPI-based escalators.
The acquisition cost for the West Coast facility was approximately $24.5 million. The property was acquired with a lease in place that expires in mid-2026. The facility covers its current rent of approximately $868,000 by more than three times. Assuming current performance is maintained, CareTrust’s stabilized yield on its investment is projected to be reset to approximately 10 percent by no later than 2026.
The seller and names of the properties were not disclosed.
The investments were funded using cash on hand. At the end of the quarter ended June 30, the San Clemente-based company raised $190.2 million at an average price of $27.02 per share under its program bringing its outstanding share count to 161.3 million. The company currently has approximately $221 million of cash on hand.
“As of today, our year-to-date investment total equals approximately $827 million at an average yield of 9.5 percent,” says James Callister, CareTrust’s chief investment officer.