CareTrust REIT announced Tuesday that it purchased four California continuing care retirement communities in the upscale Southern California submarkets of Camarillo, Carlsbad, Palm Springs and San Juan Capistrano.
The firm’s initial investment in the four rental CCRCs, inclusive of capital expenditure commitments and transaction costs, was approximately $126.1 million, according to the San Clemente, CA-based real-estate investment trust.
The multi-service senior living campuses, originally developed by Marriott International between 1999 and 2000, include a total of 637 assisted living, memory care and skilled nursing beds.
As part of the acquisition, CareTrust welcomed Laguna Niguel, CA-based skilled nursing operator Aspen Skilled Healthcare into the REIT’s portfolio. Aspen will lease and operate the San Juan Capistrano and Camarillo campuses under a new 15-year master lease with CareTrust.
The Palm Springs and Carlsbad campuses will be leased and operated by an existing CareTrust tenant, San-Diego-based Bayshire Senior Communities, under an amendment to Bayshire’s existing master lease.
Aggregate annual cash rent for the first year is approximately $8.6 million, increasing to $9.4 million in the second year with CPI-based annual escalators thereafter. The acquisition was funded using CareTrust’s $600 million unsecured revolving credit facility.
“We have known the principals of both Bayshire and Aspen for many years and have witnessed their competency and commitment to excellence first-hand,” said Dave Sedgwick, CareTrust’s president and chief operating officer. “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. And we are thrilled to finally welcome Aspen to the CareTrust family, having watched with admiration as Jay Brady, the firm’s president, and his partners have built Aspen into one of the premier post-acute care providers on the West Coast.”