SAN CLEMENTE, Calif., Dec. 19, 2014 (GLOBE NEWSWIRE) -- CareTrust REIT, Inc. (Nasdaq:CTRE) today announced that it has acquired Prelude at Woodbury, an upscale memory care facility in Woodbury, Minnesota, a Minneapolis suburb, for $7.2 million. The transaction was a sale-leaseback with Prelude Homes & Services, LLC, which developed the 30-bed facility in 2011 and has operated it since it opened.
"We couldn't be more pleased in coming together on this transaction with CareTrust," said Phil Dommer, Founder and President of Prelude. Mr. Dommer noted that, as a smaller but growing entity, Prelude hasn't historically had the "attention, operational insight and expediency" from other prospective funders that it received from CareTrust's senior executives. "While capital providers are numerous, in CareTrust we found a business savvy capital ally with operational depth, an understanding of a growing provider, and integrity. That's a unique combination worth building on," he added.
Mark Lamb, CareTrust's Director of Investments, agreed that the Prelude-CareTrust pairing is a good match. "Phil and Prelude are exactly the kind of operating partner we look for," he said. "They approach caregiving with a true sense of mission, while making sure that they have the day-to-day profitability, reputation and success necessary to continue and expand that mission."
In connection with the sale, Prelude entered into a long-term triple-net master lease with CareTrust. The lease has an initial term of 15 years with two five-year renewal options and CPI-based rent escalators. The Woodbury investment carries an initial cash yield of 8.25% on EBITDAR lease coverage of 1.30x, producing initial annual lease revenue of $0.6 million. CareTrust also secured an option to purchase and lease back Prelude's next senior housing project, which is currently under development in nearby White Bear Lake, Minnesota.
About Prelude
Prelude Homes & Services, LLC is a private for-profit senior housing provider currently developing and operating memory care facilities in the Minneapolis-St. Paul area. More information about Prelude is available at www.preludecares.com.
About CareTrustTM
CareTrust REIT, Inc. is a real estate investment company that is engaged in the ownership, acquisition and leasing of seniors housing and healthcare-related properties. CareTrust is organized and conducts its operations to qualify as a REIT for U.S. federal income tax purposes. With 97 net-leased healthcare properties and three operated seniors housing properties in ten states, CareTrust is pursuing opportunities nationwide to acquire additional properties that will be leased to a diverse group of local, regional and national seniors housing operators, healthcare services providers, and other healthcare-related businesses. More information about CareTrust is available at www.caretrustreit.com.