CareTrust REIT spends $60M to acquire 3 California CCRCs

CareTrust REIT has acquired three continuing care retirement communities for $60 million. The properties are located in the California counties of Los Angeles, Orange and San Diego.

The CCRCs will be managed by existing tenant Bayshire Senior Communities located in southern California. All together, the communities include 475 assisted living, skilled nursing, and memory care beds/units.

“Bayshire’s performance in our existing portfolio has demonstrated their focus on providing excellent care to their residents and patients and made us eager to help them add additional scale in Southern California,” CareTrust’s Chief Investment Officer James Callister said Tuesday in a statement. 

CareTrust, a San Clemente, CA-based real estate investment trust, acquired one of the three CCRCs, Torrey Pines Senior Living, in San Diego for approximately $32.3 million. Bayshire’s annual cash rent for the first year is approximately $2.6 million, and will increase to approximately $3 million in the second year with consumer price index-based annual escalators thereafter, CareTrust said.

“We are thrilled to grow by adding three great Southern California facilities to our operating platform,” Bayshire’s Chief Executive Officer Scott Kirby said. “Our relationship with CareTrust continues to be a vital part of our growth strategy and these acquisitions demonstrate CareTrust’s commitment to facilitating significant growth opportunities for operators like me.” 

The other two acquisitions were completed through a joint venture arrangement between the REIT and a third-party regional healthcare real estate investor, with CareTrust as the managing member.  CareTrust provided a combined common equity and preferred equity investment amount totaling approximately $28 million. 

“To expand our relationship with an operator of Bayshire’s quality is an exciting opportunity for us as we continue our mission of matching opportunities with best-in-class operators,” said Joe Callan, a senior vice president at CareTrust.

The investments were funded using cash on hand, the REIT said.

During an earnings call in February, CareTrust’s President and CEO Dave Sedgwick told investors that the REIT had a record stash of credit and cash that would allow the company to be bullish on investments.