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CareTrust Buys 4 Nursing Facilities in Mid-Atlantic for $74.7M
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In an effort to expand its portfolio, CareTrust REIT, Inc. (CTRE - Free Report) recently acquired four skilled nursing facilities in Mid-Atlantic. The company shelled out $74.7 million, inclusive of transaction costs, for this portfolio acquisition and the transaction was funded with cash on hand.
One of the four facilities acquired is a skilled nursing and assisted living campus, which includes 47 assisted living units.
In relation to the acquisition, the company has established a triple-net master lease with a new operator. This operator is recognized for its expertise in skilled nursing facilities, having successfully managed facilities across multiple states.
The newly formed master lease features an initial term of 15 years and includes two optional extensions of five years. It ensures a first-year contractual lease yield of 9.3% (including transaction costs) with annual Consumer Price Index-based escalators.
To address particular local constraints, the purchase of one of the facilities was arranged as a mortgage loan provided by CareTrust to the operator. This mortgage loan was designed to have terms, maturity and economics that closely align with those of the master lease.
Following the completion of this acquisition, the updated investment pipeline of CareTrust stands at $240 million of near-term, actionable opportunities, excluding the larger portfolios currently under review by the company. Moreover, the company’s year-to-date investments sum up to more than $900 million.
Wrapping Up
CareTrust pursues an impressive inorganic growth strategy and its solid financial position serves as a cushion for it to pursue investments related to its growth efforts. The latest expansion in the Mid-Atlantic with an experienced operator will add to its top-line growth.
Over the past six months, shares of this Zacks Rank #3 (Hold) company have gained 24.9%, outperforming the industry’s growth of 16.5%.
Image: Bigstock
CareTrust Buys 4 Nursing Facilities in Mid-Atlantic for $74.7M
In an effort to expand its portfolio, CareTrust REIT, Inc. (CTRE - Free Report) recently acquired four skilled nursing facilities in Mid-Atlantic. The company shelled out $74.7 million, inclusive of transaction costs, for this portfolio acquisition and the transaction was funded with cash on hand.
One of the four facilities acquired is a skilled nursing and assisted living campus, which includes 47 assisted living units.
In relation to the acquisition, the company has established a triple-net master lease with a new operator. This operator is recognized for its expertise in skilled nursing facilities, having successfully managed facilities across multiple states.
The newly formed master lease features an initial term of 15 years and includes two optional extensions of five years. It ensures a first-year contractual lease yield of 9.3% (including transaction costs) with annual Consumer Price Index-based escalators.
To address particular local constraints, the purchase of one of the facilities was arranged as a mortgage loan provided by CareTrust to the operator. This mortgage loan was designed to have terms, maturity and economics that closely align with those of the master lease.
Following the completion of this acquisition, the updated investment pipeline of CareTrust stands at $240 million of near-term, actionable opportunities, excluding the larger portfolios currently under review by the company. Moreover, the company’s year-to-date investments sum up to more than $900 million.
Wrapping Up
CareTrust pursues an impressive inorganic growth strategy and its solid financial position serves as a cushion for it to pursue investments related to its growth efforts. The latest expansion in the Mid-Atlantic with an experienced operator will add to its top-line growth.
Over the past six months, shares of this Zacks Rank #3 (Hold) company have gained 24.9%, outperforming the industry’s growth of 16.5%.
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked stocks from the broader REIT sector are SL Green Realty (SLG - Free Report) and Alpine Income Property Trust (PINE - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for SL Green’s 2024 FFO per share is pegged at $7.58, which suggests year-over-year growth of 53.4%.
The Zacks Consensus Estimate for Alpine’s full-year FFO per share stands at $1.65, which indicates an increase of 12.2% from the year-ago period.
Note: Anything related to earnings presented in this write-up represents FFO, a widely used metric to gauge the performance of REITs.