CareTrust Expands Health Care Portfolio

By Alex Ciorogar

CareTrust REIT Inc. has acquired three skilled nursing facilities (SNFs), providing mortgage financing for a fourth Southern California facility. The company developed a new relationship with Providence Group, which has been operating the facilities since 2015.

“We have long known and admired the Providence Group leadership team and we couldn’t be more pleased to help them recapitalize these assets,” said Mark Lamb, CareTrust’s director of investments, in prepared remarks. “They understand the importance of providing superior patient outcomes in today’s evolving post-acute environment and we look forward to growing this relationship for years to come.”

Industry expertise

The four facilities allow Providence Group to create additional real estate equity value. “We are excited about our relationship with CareTrust REIT. Their long-term commitment to us, the market and the post-acute care industry will allow us to continue serving the residents and staff of these wonderful facilities for many years,” said Jason Murray, Providence Group’s CEO, in a prepared statement. “With their long operating backgrounds and deep understanding of our industry, the CareTrust REIT team really understood our needs and priorities as an operator in what was a very complex transaction,” Murray added.

The total investment for the 528-bed portfolio was $69 million, which will yield approximately $6 million in initial annual cash rent. The master lease carries an initial term of fifteen years with two five-year renewal options and CPI-based rent escalators. The acquisition was funded using CareTrust REIT’s $400 million unsecured revolving credit facility.