PACS Group Secures $260M Loan for Senior Housing Portfolio
Plus, there's a preferred equity investment worth $43 million.
A subsidiary of PACS Group, Inc. has been granted a $260 million loan to acquire a housing portfolio.
The borrower was described by lender CareTrust REIT, Inc. as a “large health care real estate owner,” in a statement. The entity has obtained a $260 million senior mortgage, which will support the acquisition of 21 senior housing, and 32 skilled nursing facilities. The portfolio includes a total of 2,713 skilled nursing beds and 1,334 independent and assisting living units.
They are scattered across several states including Arizona, Idaho, California, Montana, Nevada, Oregon, Washington, and Alaska. The facilities will be operated by other subsidiaries of PACS.
The loan is a first-priority lien, which includes an 8.5 percent yield and a five-year maturity. Plus, CareTrust said it is providing funding for a preferred equity investment, worth $43 million to “an uptier parent entity of the borrower.”
It comes with a yield of 11 percent and a minimum required hold period of seven years. There is no maturity date listed.
“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,” James Callister, chief investment officer of CareTrust said.
“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.”
The move by CareTrust follows the $90 million loan it provided in June for a separate senior housing investment.
Year-to-date, the healthcare REIT has invested a total of $765 million, with an average yield of 9.5 percent, according to the company.