SAN CLEMENTE, Calif. — CareTrust REIT Inc. (NYSE: CTRE), a publicly traded healthcare REIT based in San Clemente, funded approximately $378 million in new investments last week.
The transactions include the funding of a $260 million senior mortgage loan and a $43 million preferred equity investment in connection with the borrower’s acquisition of a 37-facility skilled nursing and seniors housing portfolio located in the Pacific Northwest. The $378 million in investments was funded using cash on hand.
The portfolio consists of 2,713 operating beds/units with 21 skilled nursing facilities and 16 seniors housing facilities located in Oregon, Washington, Alaska, Arizona, Idaho, California, Montana and Nevada. The borrower, which is a joint venture between a large healthcare real estate owner and a subsidiary of PACS Group Inc., acquired the 37 facilities, which will be operated by other PACS subsidiaries.
The loan is secured by a first priority lien on the borrowers’ ownership interest in the real estate and carries a five-year maturity and a starting annual effective yield of 8.5 percent. CareTrust also funded a $43 million preferred equity investment in a parent entity of the borrower. The preferred equity investment does not have a stated maturity date and has a contractual yield of 11 percent. Subject to very limited exceptions, the preferred equity investment has a minimum hold period of seven years.
“As of today, our year-to-date investment total equals approximately $765 million at an average yield of 9.5 percent,” says Dave Sedgwick, CareTrust’s CEO. Sedgwick also announced a replenished investment pipeline of approximately $270 million of near-term, actionable real estate acquisition opportunities.