Healthcare REIT Goes On $628M Buying Spree Spanning 2 Continents
CareTrust REIT announced more than half a billion dollars in acquisitions this month, a major expansion for a publicly traded real estate firm that comes as private investors are pulling firms out of the stock market.
The healthcare and senior housing REIT disclosed $628M in acquisitions, the largest of which was the $380M purchase of 15 skilled nursing facilities across California that were leased back to the operators. The latest deals bring the REIT’s 2026 acquisition activity to $990M across more than a dozen transactions in the increasingly popular asset class.
The combined investments have a blended stabilized yield of 8.8% and were funded with equity and debt from the REIT’s revolving credit facility. CEO Dave Sedgwick added that the REIT has a pipeline of $450M near-term, actionable opportunities for acquisitions.
“The brisk pace and variety of the deal flow we’re seeing right now is a direct product of the deep relationships our team has cultivated over many years,” Joe Callan, senior vice president of investments at CareTrust, said in a statement. “Our platform is sourcing high-quality, actionable transactions across every one of our growth engines.”
Shares in CareTrust were up more than 1.5% in early trading Monday. The firm’s shares have risen more than 6% since the start of the year.
As part of the sale-leaseback of the California properties, which have a combined 1,700 beds, CareTrust provided two loans to affiliates of the sellers: a $55M five-year, fully amortized note at an 8.7% interest rate and a $108M interest-only loan at a 9.5% interest rate that the REIT expects will be repaid by the end of 2026.
CareTrust also spent roughly $57M on four senior care homes with a combined 202 beds in the UK Midlands and the north of England while agreeing to buy a fifth property for $12M in a second transaction that has yet to close. The net-lease properties have long-term leases in place with annual inflation-based rent escalations.
The REIT spent $20M acquiring a 124-bed, net-lease skilled nursing facility in Wyoming. It also originated a $7.5M loan backed by a 60-unit senior housing facility in Oregon. CareTrust declined to provide a list of the specific properties it acquired.
Separately, Moody's Ratings upgraded the California-based REIT’s issuer rating and unsecured debt ratings to investment grade and shifted its outlook to positive from stable.
In February, CareTrust reported $111M in profits for the fourth quarter, up 72% year-over-year, and a 96% increase in net income for the year, which hit $320M. Its expansion is counter to the string of REIT buyouts the market has seen this year, with more than $28B in first-quarter M&A when including real estate services firms.
Medical office and senior housing have become top targets for a large swath of commercial real estate investors looking for a demographic investment thesis — a bet that the aging baby boomer population will fuel demand — amid otherwise choppy macroeconomic conditions.
Blue Owl Capital also announced this month a plan to spend $2.4B to take Sila Realty Trust private and acquire its 140 mostly single-tenant properties. In March, Healthpeak Properties split its senior housing assets into a separate REIT called Janus Living that was priced at $20 per share but opened above $23 apiece after the initial public offering.
UPDATE, APRIL 27, 1:50 P.M. ET: This story has been updated to reflect CareTrust declined to provide details on the properties it acquired.
