SAN CLEMENTE, Calif — CareTrust REIT Inc. (NASDAQ: CTRE), a healthcare REIT focused on skilled nursing, has acquired three skilled nursing facilities in Southern California, and provided mortgage financing on a fourth.
CareTrust entered into a tenant agreement with Providence Group, which has operated all four facilities since 2015. The names of the facilities were not disclosed.
The total investment for the three-facility, 528-bed portfolio was approximately $69 million inclusive of transaction costs. The properties will yield approximately $6.1 million in initial annual cash rent, according to CareTrust.
The mortgage on the 104-bed skilled nursing facility was $12.5 million inclusive of transaction costs, at an annual interest income of 9 percent.
The master lease carries an initial term of 15 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.