CareTrust REIT Acquires Continuing Care Portfolio for $126.1M
The four-property portfolio comprises 637 assisted living, skilled nursing and memory care beds throughout Southern California.
SAN CLEMENTE, CA – CareTrust REIT Inc. has purchased four continuing care retirement communities in Southern California for $126.1 million.
Located in the submarkets of Camarillo, Carlsbad, Rancho Mirage and San Juan Capistrano, the multi-service senior living campuses comprise 637 assisted living, skilled nursing and memory care beds.
The communities were originally developed between 1999 and 2000 by Marriott International Inc.
The acquisition of the communities was funded by utilizing CareTrust’s $600 million unsecured revolving credit facility.
The campuses’ aggregate annual cash rent of the first year is $8.6 million, and increases to $9.4 million in the second year with CPI-based annual escalators thereafter.
As an existing CareTrust tenant, based in San Diego, CA, Bayshire Senior Communities will lease and operate the Rancho Mirage and Carlsbad campuses under an amendment to its existing master lease.
“We are excited to grow here in San Diego, and to expand into the demographically-attractive Coachella Valley,” says Scott Kirby, CEO of Bayshire. “The CareTrust team exceeded our expectations, not only as a capital provider but also as thought partners in how to structure a deal to mitigate the risks of taking over healthcare operations during COVID.”
Aspen Skilled Healthcare, based in Laguna Niguel, CA, will lease and operate the San Juan Capistrano and Camarillo campuses under a new 15-year master lease with CareTrust.
“We are excited for the opportunity to operate these beautiful communities and to begin our relationship with CareTrust,”says Jay Brady, president of Aspen Skilled Healthcare.
CareTrust worked closely with the seller, the outgoing manager and Aspen Skilled Healthcare to facilitate Aspen’s early transition into the buildings. “Early access has given us an invaluable head start on executing our business plan,” says Brady.
“We have known the principals of both Bayshire and Aspen for many years, and have witnessed their competency and commitment to excellence first-hand,” states Dave Sedgwick, president and chief operating officer of CareTrust. “Bayshire has performed extraordinarily well with our existing assets, and we were eager to help them add additional scale in North County San Diego and expand into the Inland Empire.”
Sedgwick adds, “And we are thrilled to finally welcome Aspen to the CareTrust family, having watched with admiration as Jay and his partners have built Aspen into one of the premier post-acute care providers on the West Coast,”
The new lease with Aspen Skilled Healthcare and the lease amendment with Bayshire Senior Communities will officially commence upon receipt of licensing approval. The two companies have been managing the operations since February 1, 2021, under a contractual arrangement with the seller and existing licensee, who has temporarily leased the assets back from CareTrust pending re-licensure.