After spending most of 2019 pruning its portfolio, CareTrust REIT (Nasdaq: CTRE) is adding senior housing to its asset mix.
The San Clemente, California-based health care real estate investment trust on Tuesday announced the acquisition of four rental continuing care retirement communities (CCRC) in Southern California, as well as a new operator relationship.
The campuses in Camarillo, Carlsbad, Rancho Mirage and San Juan Capistrano were all developed between 1999 and 2000 by hotel conglomerate Marriott International.
CareTrust’s initial investment in the communities is estimated at $126.1 million, including capital expenditure commitments. The deal was funded through the REIT’s $600 million unsecured revolving credit facility.
Escondido, California-based Bayshire Senior Communities assumed management of the Carlsbad and Rancho Mirage campuses, rebranded them Bayshire Carlsbad and Bayshire Rancho Mirage, respectively. CareTrust added them to the operator’s existing master lease. The two communities were among four sold by Brookdale Senior Living (NYSE: BKD) as part of its ongoing portfolio optimization initiative.
The Camarillo and San Juan Capistrano CCRCs will be managed by Aspen Skilled Healthcare, an operator based in Laguna Niguel, California, under a new 15-year master lease with CareTrust.
CareTrust has had a busy 2021. Last month, the company promoted COO David Sedgwick to president and COO. In other personnel moves, James Callister was hired as general counsel and secretary, and Lauren Beale was promoted to senior vice president and controller.
CareTrust entered 2020 with an eye toward growth, after spending most of 2019 disposing of underperforming assets, but those plans were complicated by the pandemic.
Its efforts to strengthen its portfolio mix and bottom line contributed to an “outperform” rating in a recent BMO Capital Markets report on senior housing’s post-pandemic recovery. The report predicted an elongated recovery for the sector, with cash flows and occupancy not returning to pre-pandemic levels until 2025.