CareTrust REIT Funds $378 Million in New Investments; Announces Replenished Investment Pipeline of $270 Million

CareTrust REIT, Inc. (NYSE:CTRE) announced today that it has funded approximately $378 Million in new investments this week, including the funding of a $260 million senior mortgage loan and a $43 million preferred equity investment in connection with the borrower’s acquisition of a 37-facility skilled nursing and seniors housing portfolio located in the Pacific Northwest. The $378 million in investments was funded using cash on hand.

The portfolio consists of 2,713 operating beds/units with 21 skilled nursing facilities and 16 seniors housing facilities located in Oregon, Washington, Alaska, Arizona, Idaho, California, Montana, and Nevada. The borrower, which is a joint venture between a large health care real estate owner and a subsidiary of PACS Group, Inc., acquired the 37 facilities, which will be operated by other PACS subsidiaries. The loan is secured by a first priority lien on the borrowers’ ownership interest in the real estate and carries a five-year maturity and a starting annual effective yield of 8.5%. CareTrust also funded a $43 million preferred equity investment in an uptier parent entity of the borrower. The preferred equity investment does not have a stated maturity date and has a contractual yield of 11%. Subject to very limited exceptions, the preferred equity investment has a minimum hold period of seven (7) years.

CareTrust’s Chief Investment Officer, James Callister, stated that “We are excited to be a part of such a significant investment opportunity where high-quality assets are being matched with one of the industry’s most elite operators in the PACS Group.” Mr. Callister went on to remark that, “The combination of loan dollars with the longer duration of the preferred equity investment further builds on our commitment to lend with the purpose of developing additional real estate equity investment opportunities.”

“Not only are we and our operating subsidiaries thrilled to welcome these great facilities to the PACS family,” said Derick Apt, CFO of PACS Group, Inc., “we’re also excited to once again work alongside our great partners at CareTrust. We look forward to the respective growth stories of CareTrust and PACS continuing to intersect through this and future transaction opportunities.”

Separately, CareTrust had previously announced in June its funding of $90 million of a $165 million senior mortgage term loan. KeyBank National Association participated the remaining $75 million of the $165 million loan. On July 30^th, CareTrust funded approximately $75 million in connection with the exercise of its right to call the participated loan. CareTrust now holds the entire senior mortgage loan with an outstanding principal balance of approximately $165 million at an interest rate of SOFR (floor 5.15%) + 4.25%.

Dave Sedgwick, CareTrust’s Chief Executive Officer, said, “As of today, our year-to-date investment total equals approximately $765 million at an average yield of 9.5%. The investments announced today are the realization of our consistent messaging that this year would be a unique one in CareTrust’s 10-year history. And we are not done yet.” Mr. Sedgwick also announced a replenished investment pipeline of approximately $270 million of near-term, actionable real estate acquisition opportunities.

About CareTrust™

CareTrust REIT, Inc. is a self-administered, publicly-traded real estate investment trust engaged in the ownership, acquisition, development and leasing of skilled nursing, seniors housing and other healthcare-related properties. With a nationwide portfolio of long-term net-leased properties, and a growing portfolio of quality operators leasing them, CareTrust REIT is pursuing both external and organic growth opportunities across the United States. More information about CareTrust REIT is available at www.caretrustreit.com.

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This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include all statements that are not historical statements of fact and statements regarding the Company’s intent, belief or expectations, including, but not limited to, statements regarding the following: industry and demographic conditions, the investment environment, the Company’s investment pipeline, and financing strategy.

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