SAN CLEMENTE, Calif. - CareTrust REIT, Inc. (NYSE:CTRE) has expanded its portfolio with the acquisition of a skilled nursing facility portfolio in the Southeastern U.S. for approximately $80.9 million, including transaction costs. The investment, funded by cash on hand, involved a new partnership with YAD Healthcare, marking the beginning of a new operator relationship for CareTrust.
The portfolio consists of five facilities with a total of 498 licensed beds. The deal includes a 10-year initial term triple-net master lease with two 5-year extension options to YAD Healthcare, which operates multiple skilled nursing facilities across the Mid-Atlantic and Southeastern regions. The lease agreement anticipates a first-year contractual lease yield of 9.0%, with annual escalators based on the Consumer Price Index (CPI).
James Callister, Chief Investment Officer at CareTrust, expressed enthusiasm for the acquisition, citing the region's potential for future growth. The acquisition is part of a larger transaction in which CareTrust has provided approximately $99 million in financing to a regional skilled nursing facilities operator.
Senior Vice President of Investments at CareTrust, Eric Gillis, highlighted the strong track record of YAD Healthcare in caring for their employees and patients. Hershy Alter, CEO of YAD Healthcare, acknowledged CareTrust as an ideal transaction partner, expressing gratitude for the opportunity to extend their high level of care to additional facilities within their existing footprint.
In addition to the acquisition, CareTrust noted that its year-to-date investments have reached approximately $386 million, with a pipeline of about $460 million in near-term opportunities. The company has also issued 2.5 million shares under its ATM program at $24.90 per share, raising $62.3 million and increasing the total outstanding shares to 144.6 million. CareTrust's current cash on hand stands at approximately $230 million.
InvestingPro Insights
CareTrust REIT, Inc. (NYSE:CTRE), a real estate investment trust focused on healthcare-related properties, recently made a significant addition to its portfolio through the strategic acquisition of a skilled nursing facility portfolio. Reflecting on the company's financial health and market position, InvestingPro data reveals some key metrics that could interest investors monitoring CareTrust's performance.
The company currently holds a market capitalization of approximately $3.66 billion, which underscores its substantial presence in the healthcare REIT sector. Additionally, CareTrust's price-to-earnings (P/E) ratio stands at 46.99, indicating investors' expectations of future earnings growth. This is supported by a strong adjusted P/E ratio of 35.2 for the last twelve months as of Q1 2024, suggesting that the market may be recognizing the company's earning potential. Moreover, CareTrust has demonstrated a robust revenue growth of 14.97% over the last twelve months as of Q1 2024, which aligns with the company's strategic acquisitions and expansion efforts.
InvestingPro Tips for CareTrust further enrich the narrative of the company's promising outlook. CareTrust has consistently raised its dividend for 8 consecutive years, which may attract income-focused investors seeking stable and growing returns. Furthermore, analysts anticipate sales growth in the current year, which could be a testament to the company's successful expansion strategy and operational efficiency. These insights, along with an additional 7 InvestingPro Tips available at https://www.investing.com/pro/CTRE, could provide investors with a deeper understanding of CareTrust's potential in the healthcare real estate market.
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