CareTrust REIT Acquires 5 Skilled Nursing Facilities in Southeast for $81 Million; Reports Expanded Pipeline of $460 Million
CareTrust REIT (NYSE: CTRE) has acquired a portfolio of 5 skilled nursing facilities in the Southeastern U.S. for approximately $80.9 million, including transaction costs. The acquisition involves a new triple-net master lease with YAD Healthcare, featuring a 10-year initial term, two 5-year extension options, and a first-year lease yield of 9%. The deal was funded with cash on hand. Additionally, CareTrust provided $99 million in portfolio acquisition financing to a regional operator, bringing year-to-date investments to $386 million and the investment pipeline to $460 million.
The company issued 2.5 million shares at $24.90 each, generating $62.3 million in gross proceeds and now holds $230 million in cash. The outstanding share count stands at 144.6 million.
- Acquisition of 5 skilled nursing facilities for $80.9 million.
- New master lease with YAD Healthcare, offering a 9% first-year lease yield.
- Year-to-date investments reached $386 million.
- Investment pipeline includes $460 million in near-term opportunities.
- Generated $62.3 million in gross proceeds from share issuance.
- Cash on hand is approximately $230 million.
- Share issuance could lead to shareholder dilution, with the total share count now at 144.6 million.
Insights
The recent acquisition of five skilled nursing facilities for
From a financial standpoint, the funding of this acquisition using cash on hand indicates a solid liquidity position. Additionally, CareTrust's issuance of 2.5 million shares at
For retail investors, this acquisition could signify potential for stable and growing dividend payouts given the attractive lease terms and solid financial footing. However, investors should monitor the integration of these assets and the performance of YAD Healthcare as an operator to ensure the expected returns are realized.
CareTrust REIT’s acquisition of five skilled nursing facilities aligns with the broader trend in the healthcare real estate market towards consolidation and expansion in high-growth regions. The Southeastern United States is particularly appealing due to its aging population and increasing demand for skilled nursing care. By expanding their portfolio in this region, CareTrust is positioning itself to capitalize on these demographic trends.
Furthermore, the announcement of a
For investors, it's essential to consider the long-term demographic shifts and the increasing demand for senior and healthcare-related properties. While the immediate financials look promising, the real value lies in CareTrust’s ability to navigate and capitalize on these market dynamics.
In connection with the acquisition, the company entered into a new triple-net master lease with affiliates of YAD Healthcare, a new operator relationship for the company and an experienced skilled nursing operator with facilities across multiple states in the Mid-Atlantic and Southeastern regions. The new master lease has an initial term of 10 years with two, 5-year extension options and provides for a year 1 contractual lease yield of
James Callister, CareTrust’s Chief Investment Officer, said, “Today, we are thrilled to announce the acquisition of these 5 facilities in an area of the country that we have been targeting for future growth.” Pursuant to a separate press release issued today by the company, Mr. Callister reported that the acquisition was part of a larger transaction that closed concurrently in which CareTrust provided approximately
Eric Gillis, Senior Vice President of Investments, added, “We are excited to be able to officially begin a new relationship with YAD Healthcare who has a strong track record of commitment to taking care of their employees and patients in this region of the country. As with most of our operators, we hope to continue to match them with opportunities for future growth.” YAD Healthcare’s Chief Executive Officer, Hershy Alter, said, “CareTrust has been an ideal transaction partner and we are grateful for the opportunity to spread YAD Healthcare’s commitment to the highest level of care, excellence, and innovation to additional facilities in our existing footprint.”
CareTrust also reported that with these two related investments, the Company’s year-to-date investments now total approximately
About CareTrust™
CareTrust REIT, Inc. is a self-administered, publicly-traded real estate investment trust engaged in the ownership, acquisition, development and leasing of skilled nursing, seniors housing and other healthcare-related properties. With a nationwide portfolio of long-term net-leased properties, and a growing portfolio of quality operators leasing them, CareTrust REIT is pursuing both external and organic growth opportunities across
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995:
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include all statements that are not historical statements of fact and statements regarding the Company’s intent, belief or expectations, including, but not limited to, statements regarding the following: industry and demographic conditions, the investment environment, the Company’s investment pipeline, and financing strategy.
Words such as “anticipate,” “believe,” “could,” “expect,” “estimate,” “intend,” “may,” “plan,” “seek,” “should,” “will,” “would,” and similar expressions, or the negative of these terms, are intended to identify such forward-looking statements, though not all forward-looking statements contain these identifying words. The Company’s forward-looking statements are based on management’s current expectations and beliefs, and are subject to a number of risks and uncertainties that could lead to actual results differing materially from those projected, forecasted or expected. Although the Company believes that the assumptions underlying these forward-looking statements are reasonable, they are not guarantees and the Company can give no assurance that its expectations will be attained. Factors which could have a material adverse effect on the Company’s operations and future prospects or which could cause actual results to differ materially from expectations include, but are not limited to: (i) the ability and willingness of our tenants to meet and/or perform their obligations under the triple-net leases we have entered into with them, including without limitation, their respective obligations to indemnify, defend and hold us harmless from and against various claims, litigation and liabilities; (ii) the risk that we may have to incur additional impairment charges related to our assets held for sale if we are unable to sell such assets at the prices we expect; (iii) the impact of healthcare reform legislation, including minimum staffing level requirements, on the operating results and financial conditions of our tenants; (iv) the ability of our tenants to comply with applicable laws, rules and regulations in the operation of the properties we lease to them; (v) the ability and willingness of our tenants to renew their leases with us upon their expiration, and the ability to reposition our properties on the same or better terms in the event of nonrenewal or in the event we replace an existing tenant, as well as any obligations, including indemnification obligations, we may incur in connection with the replacement of an existing tenant; (vi) the availability of and the ability to identify (a) tenants who meet our credit and operating standards, and (b) suitable acquisition opportunities and the ability to acquire and lease the respective properties to such tenants on favorable terms; (vii) the ability to generate sufficient cash flows to service our outstanding indebtedness; (viii) access to debt and equity capital markets; (ix) fluctuating interest rates; (x) the impact of public health crises, including significant COVID-19 outbreaks as well as other pandemics or epidemics; (xi) the ability to retain our key management personnel; (xii) the ability to maintain our status as a real estate investment trust (“REIT”); (xiii) changes in the
View source version on businesswire.com: https://www.businesswire.com/news/home/20240603053263/en/
CareTrust REIT, Inc.
(949) 542-3130
ir@caretrustreit.com
Source: CareTrust REIT, Inc.
FAQ
What did CareTrust REIT (CTRE) recently acquire?
Who is the new operator for CareTrust REIT's recent acquisition?
What is the lease yield for CareTrust REIT's new acquisition?
How much did CareTrust REIT invest year-to-date?
What is CareTrust REIT's current investment pipeline worth?
How much cash does CareTrust REIT currently have on hand?
How many shares did CareTrust REIT issue recently and at what price?
What is the total outstanding share count for CareTrust REIT after the recent issuance?
