CareTrust REIT Invests $60 Million in Acquisition of Three Southern California Continuing Care Retirement Communities
April 02 2024 - 5:01AM
Business Wire
CareTrust REIT, Inc. (NYSE:CTRE) announced today that it has
purchased three continuing care retirement communities (CCRCs)
located in Los Angeles, Orange, and San Diego counties. The
multi-service senior living campuses include 475 assisted living,
skilled nursing, and memory care beds/units. All three facilities
will be operated by Bayshire Senior Communities, an existing
CareTrust tenant based in Southern California.
CareTrust acquired Torrey Pines Senior Living, a CCRC located in
San Diego, California, for a total investment amount of
approximately $32.3 million (inclusive of transaction costs). The
Torrey Pines facility has been added to CareTrust’s existing master
lease with Bayshire. Annual cash rent for the first year is
approximately $2.6 million, increasing to approximately $3.0
million in the second year with CPI-based annual escalators
thereafter.
Acquisition of the other two CCRCs was completed through a joint
venture arrangement entered into between CareTrust and a
third-party regional healthcare real estate investor. Pursuant to
the arrangement, CareTrust is the managing member of the joint
venture entity. CareTrust provided a combined common equity and
preferred equity investment amount totaling approximately $28.0
million.
The joint venture landlord has leased these facilities to
Bayshire pursuant to a new, triple-net master lease agreement with
an initial term of 15 years with two, 5-year extension options.
CareTrust’s initial contractual yield on its combined preferred and
common equity investments in the joint venture is approximately
9.1%. Agreed upon annual increases to base rent and to CareTrust’s
preferred rate of return increase CareTrust’s contractual yield to
9.7% and 10.2% in years 2 and 3 respectively. Commencing in year 4,
contractual base rent increases by a fixed 2% annually.
Scott Kirby, Bayshire’s Chief Executive Officer, said, “We are
thrilled to grow by adding three great Southern California
facilities to our operating platform.” Mr. Kirby went on to state
that, “Our relationship with CareTrust continues to be a vital part
of our growth strategy and these acquisitions demonstrate
CareTrust’s commitment to facilitating significant growth
opportunities for operators like me.”
“Bayshire’s performance in our existing portfolio has
demonstrated their focus on providing excellent care to their
residents and patients and made us eager to help them add
additional scale in Southern California,” said James Callister,
CareTrust’s Chief Investment Officer. Joe Callan, a Senior Vice
President at CareTrust, stated that, “to expand our relationship
with an operator of Bayshire’s quality is an exciting opportunity
for us as we continue our mission of matching opportunities with
best-in-class operators.”
The investments were funded using cash on hand.
About CareTrustTM
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 the United States. More
information about CareTrust REIT is available at
www.caretrustreit.com.
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CareTrust REIT, Inc., (949) 542-3130, ir@caretrustreit.com
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