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CareTrust (CTRE) Buys Three Nursing Facilities for $55.6 Million
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In an effort to expand its portfolio, CareTrust REIT, Inc. (CTRE - Free Report) recently acquired two skilled nursing facilities in Houston, Texas, and one nursing facility in Columbia, MO. The company shelled out $55.6 million, inclusive of transaction costs, for this portfolio acquisition, and the transaction was funded with cash on hand.
Reflecting positive sentiments, shares of CTRE gained marginally during Wednesday’s regular trading session, though the gains were partially eroded on Thursday due to broader market concerns.
CareTrust will add the portfolio, which consists of 210 skilled nursing beds and 24 assisted living units, to its existing master lease with affiliates of PACS Group, Inc., which has been operating the facilities on behalf of a third-party landlord.
As a result of this move, CareTrust's partnership with PACS is expanded with three facilities and the annual rent under the existing master lease is raised by approximately $5 million. Tenant will have the option to buy two of the facilities after the fourth anniversary of the closing.
James Callister, chief investment officer of CareTrust, stated, “PACS continues to show a determined focus on patient-centered care and on local leadership and confidence is high that they will continue to deliver best-in-class results for their residents and staff in these buildings.”
This healthcare real estate investment trust (REIT) engages in the ownership, acquisition, financing, development and leasing of skilled nursing, seniors housing and other healthcare-related properties. The latest expansion of its relationship with PACS will add to its top-line growth. In fact, with this transaction, there will be more than 1,200 beds/units under the CareTurst/PACS partnership.
As of Dec 31, 2023, the company owned, directly or through joint ventures, and leased to independent operators, 226 skilled nursing facilities, multi-service campuses, assisted living facilities and independent living facilities consisting of 23,928 operational beds and units located in 28 states.
CareTrust pursues an impressive inorganic growth strategy and its solid financial position serves as a cushion for it to pursue investments related to its growth efforts. Management keeps an eye on detecting opportunistic acquisitions and investments.
In February, CareTrust reported fourth-quarter 2023 normalized funds from operations (FFO) of 36 cents per share, which was in line with the Zacks Consensus Estimate. This compares to FFO per share of 15 cents per share reported a year ago.
CareTrust reported 100% of contractual rent collections for the fourth quarter, thereby reaching full-year collections of 99.7%.
The company reported investments of $43.2 million in the fourth quarter at a projected stabilized return of 11.4%, after rent ramps or resets under the lease are completed. For 2023, it reported investments of $288.1 million at a projected stabilized return of 9.8%.
Over the past month, shares of this Zacks Rank #3 (Hold) company have gained 5.0% compared with the industry's upside of 4.5%.
The Zacks Consensus Estimate for IRM’s 2024 funds from operations (FFO) per share is pegged at $4.38, suggesting year-over-year growth of 6.3%.
The Zacks Consensus Estimate for LAMR’s 2024 FFO per share stands at $7.74, indicating an increase of 3.6% from the year-ago quarter.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO), a widely used metric to gauge the performance of REITs.
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CareTrust (CTRE) Buys Three Nursing Facilities for $55.6 Million
In an effort to expand its portfolio, CareTrust REIT, Inc. (CTRE - Free Report) recently acquired two skilled nursing facilities in Houston, Texas, and one nursing facility in Columbia, MO. The company shelled out $55.6 million, inclusive of transaction costs, for this portfolio acquisition, and the transaction was funded with cash on hand.
Reflecting positive sentiments, shares of CTRE gained marginally during Wednesday’s regular trading session, though the gains were partially eroded on Thursday due to broader market concerns.
CareTrust will add the portfolio, which consists of 210 skilled nursing beds and 24 assisted living units, to its existing master lease with affiliates of PACS Group, Inc., which has been operating the facilities on behalf of a third-party landlord.
As a result of this move, CareTrust's partnership with PACS is expanded with three facilities and the annual rent under the existing master lease is raised by approximately $5 million. Tenant will have the option to buy two of the facilities after the fourth anniversary of the closing.
James Callister, chief investment officer of CareTrust, stated, “PACS continues to show a determined focus on patient-centered care and on local leadership and confidence is high that they will continue to deliver best-in-class results for their residents and staff in these buildings.”
This healthcare real estate investment trust (REIT) engages in the ownership, acquisition, financing, development and leasing of skilled nursing, seniors housing and other healthcare-related properties. The latest expansion of its relationship with PACS will add to its top-line growth. In fact, with this transaction, there will be more than 1,200 beds/units under the CareTurst/PACS partnership.
As of Dec 31, 2023, the company owned, directly or through joint ventures, and leased to independent operators, 226 skilled nursing facilities, multi-service campuses, assisted living facilities and independent living facilities consisting of 23,928 operational beds and units located in 28 states.
CareTrust pursues an impressive inorganic growth strategy and its solid financial position serves as a cushion for it to pursue investments related to its growth efforts. Management keeps an eye on detecting opportunistic acquisitions and investments.
In February, CareTrust reported fourth-quarter 2023 normalized funds from operations (FFO) of 36 cents per share, which was in line with the Zacks Consensus Estimate. This compares to FFO per share of 15 cents per share reported a year ago.
CareTrust reported 100% of contractual rent collections for the fourth quarter, thereby reaching full-year collections of 99.7%.
The company reported investments of $43.2 million in the fourth quarter at a projected stabilized return of 11.4%, after rent ramps or resets under the lease are completed. For 2023, it reported investments of $288.1 million at a projected stabilized return of 9.8%.
Over the past month, shares of this Zacks Rank #3 (Hold) company have gained 5.0% compared with the industry's upside of 4.5%.
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked stocks from the REIT sector are Iron Mountain (IRM - Free Report) and Lamar Advertising (LAMR - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for IRM’s 2024 funds from operations (FFO) per share is pegged at $4.38, suggesting year-over-year growth of 6.3%.
The Zacks Consensus Estimate for LAMR’s 2024 FFO per share stands at $7.74, indicating an increase of 3.6% from the year-ago quarter.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO), a widely used metric to gauge the performance of REITs.