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SAN CLEMENTE, Calif. - CareTrust REIT, Inc. (NYSE:CTRE), a healthcare REIT with a market capitalization of $5.5 billion and impressive 94.5% gross profit margins, in partnership with an unnamed healthcare real estate owner, has expanded its portfolio with the acquisition of 10 skilled nursing facilities across Idaho, Oregon, and Washington. The deal, valued at approximately $146 million including transaction costs, was finalized through a joint venture, with CareTrust contributing around $141 million in equity investments. According to InvestingPro analysis, the company appears undervalued based on its Fair Value assessment.
Funded through available cash and credit line draws, the investment reflects a 9.0% initial yield for CareTrust. The facilities, totaling 911 licensed beds, have been leased to two existing CareTrust tenants under new 15-year triple-net leases, featuring extension options and yearly rent increases. With a strong current ratio of 7.07 and moderate debt levels, InvestingPro data shows the company maintains robust financial health, earning a "GREAT" overall score of 3.31.
James Callister, CareTrust’s Chief Investment Officer, expressed enthusiasm about the growth opportunity in the post-acute sector and the strengthening of ties with existing partners. Joe Callan, Senior Vice President of Investments, highlighted CareTrust’s capability to identify and invest in high-quality tenants, reinforcing the company’s strategic growth. This strategy has contributed to the company’s impressive 43.3% revenue growth over the last twelve months, with analysts expecting continued growth this year, according to InvestingPro data.
The transaction marks a continuation of CareTrust’s active investment strategy, following a year where over $1.5 billion was deployed in the sector and the recent acquisition of Care REIT in May. With a fortified balance sheet, CareTrust aims to pursue further growth in both the US and UK markets.
CareTrust REIT, Inc., a self-administered real estate investment trust, specializes in owning, acquiring, developing, and leasing healthcare-related properties, including skilled nursing and seniors housing across the United States and United Kingdom.
This press release contains forward-looking statements, which are based on current management expectations and are subject to risks and uncertainties that could cause actual results to differ materially. The company remains cautious and does not assure that its expectations will be attained. The information shared is based on a press release statement.
In other recent news, CareTrust REIT, Inc. reported strong financial results for the first quarter of 2025, with revenue reaching $96.62 million, significantly exceeding the forecasted $69.63 million. The company also met its earnings per share forecast of $0.35. CareTrust’s strategic acquisition of UK-based Care REIT has expanded its portfolio and added approximately $69 million in annual contractual rent, enhancing its geographic and operator diversification. Following this acquisition, Fitch Ratings upgraded CareTrust’s Long-Term Issuer Default Ratings to ’BBB-’ from ’BB+’.
Moody’s Ratings also affirmed CareTrust’s Ba1 rating, revising the outlook to positive, citing consistent operational performance and robust credit metrics. The acquisition marks CareTrust’s entry into the UK care home market, which is experiencing favorable supply and demand dynamics. CareTrust’s financial profile is further strengthened by low leverage and strong liquidity, with net debt/EBITDA remaining low. The company’s strategic moves have been supported by a commitment to maintaining modest leverage and sound rent coverage across its leases.
Analysts from Fitch expect CareTrust to complete additional acquisitions, projecting roughly $300 million in 2025. CareTrust has also raised its guidance for normalized funds from operations (FFO) and funds available for distribution (FAD) per share. The REIT’s expansion into the UK is seen as a significant diversification effort, reducing US skilled nursing concentration to 49%. Despite these positive developments, CareTrust faces challenges such as tenant concentration and integration risks associated with its rapid growth.
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