CareTrust REIT, Inc. announced together with a joint venture partner, it has entered into a binding agreement to acquire a portfolio of skilled nursing facilities for a purchase price of approximately $500 million. The portfolio consists of 31 skilled nursing facilities and a total of 3,290 licensed beds, with 30 of the facilities located in Tennessee and one in Alabama. The acquisition is subject to customary closing conditions, and there can be no assurance that the transaction will close in the anticipated timeframe, or at all. The company anticipates that the transaction will close in the fourth quarter of 2024.
It is anticipated that most of the facilities will be operated by existing CareTrust tenant relationships, including affiliates of The Ensign Group, PACS Group, Inc., and Links Healthcare Group. PACS has agreed to operate 12 of the facilities, Ensign affiliates nine of the facilities, and Links seven of the facilities. Three facilities will be master leased to a regional operator that is a new tenant relationship for CareTrust. Three of Ensign’s nine facilities will be acquired by Ensign’s real estate subsidiary with the remaining six to be included in a new master lease.
The acquisition will be completed through a joint venture arrangement entered into between CareTrust and a large third-party healthcare real estate owner. In connection with the joint venture’s acquisition of the portfolio, CareTrust expects to provide a combined common equity and preferred equity investment amount totaling approximately $442 million at an initial contractual yield on its combined preferred and common equity investments in the joint venture of approximately 9.0 percent.
CareTrust also reported that, inclusive of this pending transaction, the reloaded investment pipeline sits at approximately $700 million of near-term, actionable opportunities, not including larger portfolios the company is reviewing.