CareTrust CEO: Senior Housing Makes Up ‘Vast Majority’ of 32 Outgoing Assets

Real estate investment trust CareTrust (Nasdaq: CTRE) has outlined 32 properties it marked for sale or repurposing — and the “vast majority” of them are senior housing, according to the company’s top executive.

“We have a portfolio of skilled nursing facilities that we are selling, and then the rest are all senior housing,” CEO David Sedgwick said during Friday’s first-quarter earnings call with investors and analysts.

Since announcing the move in February, CareTrust has already signed leases with a behavioral health provider to convert three assisted living communities into substance addiction recovery centers. Assuming all goes according to plan, redevelopment work should kick off this summer.


Another 27 assets are in early stages of being sold, with interest in the properties “in line with our expectations,” Sedgwick said. The REIT may also “decide to retain and re-tenant select facilities instead of selling them,” he added.

Sedgwick said he believes there is still some rent left to collect in the portfolio, though he added it’s too early to say how much.

Among the company’s 226 assets, 160 are skilled nursing facilities, while 41 are senior housing and another 25 are “multi-service campuses.” Looking ahead, Sedgwick noted that the REIT “will continue to invest in, grow with, and support senior housing operators along with skilled nursing.”


“We’ve never had a target mix in mind for the company between skilled nursing facilities or senior housing,” he told Senior Housing News. “The mix may vary year to year depending on investment opportunities.”

The REIT’s senior housing occupancy increased 100 basis points to 77% occupancy in the first quarter of 2022, compared to pre-pandemic occupancy levels of 84% and a low of 75% last November.

In the first quarter, CareTrust reported a net loss of $43.3 million and a net loss per share of $0.45. Although “senior housing assets continue to flood the market,” Chief Investment Officer Mark Lamb noted the assets were non-stable and non-strategic that don’t fit into a triple net structure.

“The mergers and acquisitions market continues to be a mixed bag for skilled nursing and seniors housing assets,” Lamb said.

Common headwinds from labor to inflation will force more under-capitalized operators to bring properties to market, Lamb added.

Overall, rental income decreased $3.1 million in the first quarter. The REIT also recorded a $59.7 million impairment charge based on the anticipated net proceeds from the sales of the 27 assets.

Companies featured in this article: