SAN CLEMENTE, Calif. - CareTrust REIT, Inc. (NYSE:CTRE), a real estate investment trust company, has recently been involved in originating over $52M in mezzanine loans. These loans are secured by a collection of healthcare properties across Virginia, Missouri, and California, encompassing a total of 3,050 skilled nursing beds and 186 assisted living units.
In Virginia, CareTrust has committed $35M towards mezzanine financing for 15 properties, which include 1,675 skilled nursing beds and 34 assisted living units. Similarly, in Missouri, the company provided roughly $9.8M for 10 properties with 1,245 skilled nursing beds and 152 assisted living units. These loans, which have a 42-month term and a variable interest rate of 1-Month SOFR + 8.75% with a SOFR floor of 6%, are secured by facilities operated by regional leaders known for their quality of care and stabilization of facilities.
James Callister, Chief Investment Officer at CareTrust, highlighted the significance of partnering with the Northwind Group, a co-lender in the Virginia and Missouri financings. The Northwind Group boasts investments in nearly 200 skilled nursing and senior living communities.
Additionally, CareTrust completed a mezzanine loan of approximately $7.4M for the acquisition of a 130-bed skilled nursing facility in Pasadena, California. This loan, with a 5-year term and a fixed interest rate of 11.5%, supports a regional healthcare real estate investor. The Southern California facility will be operated by an existing tenant of CareTrust, known for their expertise in skilled nursing.
Callister also noted that these financial engagements are reflective of CareTrust's strategy to foster relationships with borrowers and operators, paving the way for future real estate-based acquisitions.
The funding for these investments was sourced from CareTrust's available cash reserves. This move is part of the company's broader aim to expand its portfolio and operational partnerships across the United States. The information disclosed is based on a press release statement from CareTrust REIT, Inc.
InvestingPro Insights
As CareTrust REIT, Inc. (NYSE:CTRE) continues to expand its portfolio through strategic mezzanine loans, investors keeping an eye on the company's financial health will find the latest InvestingPro Data insightful. With a market capitalization of $2.43B and a robust gross profit margin of 95.73% over the last twelve months as of Q3 2023, CareTrust appears to be in a strong financial position. The company's revenue also showed healthy growth, with an 8.14% increase over the same period. This is complemented by an impressive dividend yield of 5.49%, which reflects the company's commitment to returning value to its shareholders, having raised its dividend for 8 consecutive years—an important factor for income-focused investors.
InvestingPro Tips suggest that while CareTrust is trading at a high earnings multiple, with a P/E ratio (adjusted) of 27.69 as of Q3 2023, the company's net income is expected to grow this year. Additionally, the stock's RSI indicates it is in oversold territory, which may interest value investors looking for potential entry points. For those considering a deeper dive into CareTrust's financials, the InvestingPro platform offers even more detailed analysis, with several additional tips available for subscribers.
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