HELENA AND CLANCY, MONT. — CareTrust REIT Inc. (NASDAQ: CTRE) has acquired two skilled nursing facilities in an off-market transaction.
The first property is Apple Rehab Cooney, an 80-bed facility located on the campus of the St. Peter’s Health Regional Medical Center in Helena. The second is Elkhorn Healthcare & Rehabilitation, a 70-bed facility located in neighboring Clancy.
National skilled nursing operator Eduro Healthcare will manage the communities. The transaction was CareTrust’s first to be initiated and closed in the midst of the COVID-19 pandemic.
“Underwriting assets involves some added challenges in these somewhat unusual times, but these buildings were well-run and the parties were pragmatic in dealing with those uncertainties,” says Dave Sedgwick, CareTrust’s chief operating officer.
CareTrust’s total initial investment for the two assets was $16.5 million, inclusive of transaction costs and $500,000 of funding to Eduro to improve the facilities.
Annual cash rent under the existing Eduro master lease, to which the two properties were added, will increase by approximately $1.6 million. The master lease has a remaining term of approximately 9.5 years, with two five-year renewal options and CPI-based annual rent escalators. The acquisitions were funded using cash on hand.