CareTrust REIT has announced its largest acquisition in company history, a $500 million portfolio of 31 skilled nursing facilities spanning seven states. The transaction, expected to close in Q1 2026, significantly expands CareTrust’s skilled nursing footprint and signals sustained institutional investor appetite for the sector despite regulatory uncertainty.
Deal Structure
The portfolio includes approximately 3,800 licensed beds across facilities in Texas (9), Ohio (6), Indiana (5), Kentucky (4), Tennessee (3), Arizona (2), and Nevada (2). The seller, a regional operating company backed by a private equity sponsor, is divesting the real estate while retaining operational control through a new triple-net master lease.
The transaction values the portfolio at approximately $132,000 per bed, a premium to recent comparable transactions in secondary markets but below the $150,000+ per-bed valuations seen in primary markets. CareTrust will fund the acquisition through a combination of cash on hand and draws on its recently expanded $1.2 billion revolving credit facility.
Strategic Rationale
CareTrust CEO Dave Sedgwick characterized the acquisition as “a unique opportunity to acquire a high-quality portfolio at attractive yields in markets with favorable demographic trends.” The initial cash yield on the transaction is expected to be 7.8%, with annual rent escalators of 2.5%.
The portfolio has an average occupancy of 83%, above the national average, and a weighted average CMS star rating of 3.4. Approximately 65% of revenue comes from Medicaid, 25% from Medicare, and 10% from private pay and managed care.
Market Context
The CareTrust deal is part of a broader resurgence in SNF real estate investment. After a pandemic-era pullback, healthcare REITs have returned to the market aggressively in 2025. Welltower completed a $6.9 billion acquisition of UK-based Barchester Healthcare, while Omega Healthcare has deployed over $400 million in SNF acquisitions year-to-date.
Analysts attribute the renewed interest to several factors: stabilizing occupancy rates, improved operator financial performance, and attractive risk-adjusted yields compared to other real estate sectors. SNF cap rates of 7.5-8.5% compare favorably to multifamily (5-6%) and industrial (6-7%) assets.
Operator Implications
For operators, the influx of REIT capital creates both opportunities and risks. Sale-leaseback transactions provide liquidity that can fund operations, acquisitions, or debt reduction. However, the shift to lease obligations increases fixed costs and can limit operational flexibility during periods of census or reimbursement volatility.
CareTrust’s expansion also intensifies competition for quality operators. REITs increasingly differentiate based on tenant quality metrics, potentially creating a two-tier market where strong operators attract favorable terms while struggling operators face limited capital access.