C
areTrust REIT, Inc. (NYSE: CTRE) has made a bold move in the California healthcare market with two strategic acquisitions worth approximately $55 million.
The company's portfolio is set to gain momentum as it strengthens its ties with top-tier operators and expands into key markets. This latest development underscores CareTrust's commitment to forging long-term partnerships that drive growth and success.
In Los Alamitos, a 150-bed skilled nursing facility and a 140-bed residential care facility for the elderly have been acquired through a joint venture with a third-party owner. CareTrust invested $34 million in common equity and preferred equity, securing an initial return of 9.7% on its investment.
The facilities are now leased to affiliates of The Ensign Group (NASDAQ: ENSG) under a 15-year NNN lease agreement, complete with two 5-year extension options and annual CPI-based rent escalations. CareTrust's Chief Investment Officer, James Callister, expressed enthusiasm for partnering with Ensign Group once again, citing their exceptional track record in healthcare operations.
"We're thrilled to add these high-performing facilities to our portfolio," said Callister. "Our partnership with The Ensign Group is a testament to our shared commitment to delivering outstanding care and services to the communities we serve."
In Concord, CareTrust acquired a 160-bed residential care facility for the elderly from Kalesta Healthcare Group. The total cost of the acquisition was approximately $20.6 million, including transaction expenses. This facility will be operated by affiliates of Kalesta and has been added to CareTrust's existing master lease agreement.
Joe Callan, Senior Vice President at CareTrust, highlighted the value of expanding its relationship with Kalesta Healthcare Group. "This acquisition represents a significant opportunity for us to partner with an operator of Kalesta's caliber, further solidifying our commitment to delivering high-quality care and services to seniors."
Both acquisitions were funded using CareTrust's available cash on hand, demonstrating the company's strong financial position. With these strategic moves, CareTrust REIT is poised for continued growth in the California healthcare market, driven by its partnerships with experienced operators like The Ensign Group and Kalesta Healthcare Group.
