San Clemente, Calif.– CareTrust REIT, Inc. (NYSE: CTRE) has made a strategic move by acquiring two healthcare facilities in California, in two separate transactions totaling approximately $55 million.
These acquisitions are poised to strengthen the company’s portfolio in key healthcare real estate markets and enhance its relationships with top-tier operators.
Acquisition of Los Alamitos Skilled Nursing and Assisted Living Campus
On April 1, 2025, CareTrust finalized the acquisition of a prominent skilled nursing and assisted living campus located in Los Alamitos, California. This campus includes a 150-bed skilled nursing facility and a 140-bed residential care facility for the elderly. The deal was structured as a joint venture with a third-party healthcare real estate owner. CareTrust provided a combined common equity and preferred equity investment totaling roughly $34 million, yielding an initial contractual return of approximately 9.7% on its investments in the joint venture.
The Los Alamitos campus is now leased to affiliates of The Ensign Group (NASDAQ: ENSG) under a 15-year NNN lease agreement, which includes two 5-year extension options and annual escalators tied to the Consumer Price Index (CPI). CareTrust has expressed enthusiasm about partnering with Ensign Group once again, citing their strong track record in healthcare operations.
“We are excited to add two additional, solidly-performing facilities to our portfolio,” said James Callister, CareTrust’s Chief Investment Officer. “We are always excited to expand our relationship with affiliates of The Ensign Group as they bring their outstanding operating expertise to the employees, residents, and patients of this Los Alamitos community.”
Concord Residential Care Facility Acquisition
In addition to the Los Alamitos campus, CareTrust also acquired a 160-bed residential care facility for the elderly in Concord, California on March 1, 2025. The total cost of the acquisition, including transaction expenses, was approximately $20.6 million. This facility will be operated by affiliates of Kalesta Healthcare Group and has been added to CareTrust’s existing master lease agreement with Kalesta. The first year’s annual cash rent for this facility is expected to be about $1.9 million, with future CPI-based rent escalations.
Joe Callan, Senior Vice President at CareTrust, expressed his satisfaction with this acquisition, emphasizing the value of expanding the company’s relationship with Kalesta Healthcare Group. “To expand our relationship with an operator of Kalesta’s quality is an exciting seniors housing opportunity for us as we continue our mission of matching opportunities with best-in-class operators,” Callan said.
Funding and Future Prospects
Both acquisitions were funded using CareTrust’s available cash on hand, further solidifying its strong financial position. The company continues to pursue strategic opportunities to grow its healthcare real estate portfolio while ensuring the long-term success of its investments through partnerships with experienced and reputable operators.
With these recent acquisitions, CareTrust REIT continues to expand its footprint in the California healthcare market, positioning itself for continued success in a rapidly evolving industry.
As CareTrust builds upon its existing relationships with operators like The Ensign Group and Kalesta Healthcare Group, the company is poised for continued growth, ensuring high-quality care for seniors and strong returns for its investors.
