Senior Housing Investments & Transactions: CareTrust, LTC

CareTrust REIT Announces Two Acquisitions

CareTrust REIT, Inc. (NASDAQ: CTRE) has acquired a portfolio of nine skilled nursing facilities in Iowa. CareTrust is a publicly-traded real estate investment trust (REIT) that focuses on the acquisition and leasing of seniors housing and health care-related properties.

The portfolio includes 518 operating skilled nursing beds that will be leased to Trillium Healthcare Group, LLC, a post-acute health care company that operates 29 skilled nursing and senior living communities throughout the Southeast and Midwest. The additional beds will be added through an amendment to the existing master lease between CareTrust REIT and Trillium.

The purchase price, including the estimated transaction costs, was approximately $32.7 million, with initial annual rental revenue of approximately $3.16 million to CareTrust under the terms of the master lease, which carries an initial term of 14.5 years with two five-year renewal options and CPI-based rent escalators.

At the same time, CareTrust also announced it has acquired New Haven of San Angelo, a 30-unit assisted living and memory care facility in San Angelo, Texas. The property will be operated by New Haven Assisted Living under a master lease arrangement. The facility includes land for potential future expansions to up to 60 units.

The asset acquisition and new, triple-net master lease with New Haven were effective as of Feb. 1. The purchase price, including the estimated transaction costs, was approximately $4.9 million with an initial annual rental revenue of approximately $404,000 to CareTrust. The terms of the master lease include an initial 15-year term with two five-year renewal options and CPI-based rent escalators.

Civitas Senior Living Acquires Two Brookdale Communities to be Rebranded

Civitas Senior Living, a Fort Worth, Texas-based senior living operator and developer of senior housing properties, has acquired two senior living communities in Harlingen, Texas—Brookdale Harlingen and Brookdale Plaza Harlingen.

Both communities will undergo renovations in early 2016 and will be renamed Valley View Senior Living. Civitas will operate the communities and oversee the rebranding.

The assisted and independent living communities include 58 apartments, 65 assisted living units and 36 units for memory care.

LTC Acquires New Texas Skilled Nursing Center

LTC Properties, Inc. (NYSE: LTC), a real estate investment trust (REIT) that primarily invests in seniors housing and health care properties, has acquired a skilled nursing center in the Dallas-Fort Worth metropolitan area for $16 million.

The newly constructed property opened mid-2015 and holds 126 licensed beds. It has been added to an existing master lease with an affiliate of Fundamental Administrative Services, LLC at an incremental initial cash yield of 8.5%. Rent will escalate annually by 2.5%.

Marcus & Millichap Arranges CCRC Sale for $19 Million

Ray Giannini of Marcus & Millichap sold a not-for-profit continuing care retirement community (CCRC) in Milwaukee, Wisconsin, for $19 million. The deal was approximately $53,670 per unit with approximately a 9% cap rate.

The community was originally built in the early 1970s and mid-1980s and was substantially renovated in 2011. It features 187 units of independent living, 80 assisted living units and an 87-bed (62-unit) skilled nursing facility. The campus altogether is 90% occupied and operates at a 13%margin (driven largely by the SNF) on about $13 million of revenues.

The seller of the CCRC, Wisconsin-based not-for-profit operator VMP, will use the proceeds to settle its debt and consolidate its services at its other Wisconsin location. The Illinois-based private buyer can capitalize on the community’s already good reputation by improving operations and expanding on the extra land.

Kisco Senior Living Acquires 183-Unit Community in Utah

Kisco Senior Living, a Carlsbad, California-based senior living operator with 22 communities in seven states, has acquired a 183-unit independent and assisted living community in Sandy, Utah.

The newly renovated Cedarwood at Sandy sits on six acres and includes 122 independent and 61 assisted living residences. The property was formally Atria at Sandy and is now the second Utah location, joining Sagewood at Daybreak, located in South Jordan, Utah.

Kisco also acquired four acres adjacent to Cedarwood, which was formerly a nursing home, where it will build a state-of-the-art assisted living and memory care addition to be called Cedar Court. The addition will consist of 100 units and is slated for construction later this year.

Lutheran Senior Services Acquires The Cedars

Lutheran Senior Services (LSS), a non-profit senior living operator with eight communities with continuing care, is purchasing The Cedars of Town and Country, a senior care center with deep Jewish roots in Missouri.

The purchase price of the 252-unit center is $34 million. LSS plans to spend approximately $5 million on renovations and eventually wants to build independent living apartments on eight acres it is purchasing.