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CareTrust REIT said it closed about $740 million in investments in the third quarter, including U.S. skilled nursing facilities and U.K. care homes, at a blended stabilized yield of 8.3%. CEO David Sedgwick said the company intends to invest across care settings, while reporting 2.62x lease coverage for skilled nursing assets. Details on the REIT’s interest-rate outlook were limited in the source material.
CareTrust REIT closed about $740 million in investments during the third quarter, at a blended stabilized yield of 8.3%, CEO David Sedgwick said on the company’s earnings call. The investments included skilled nursing facilities and U.K. care homes, as the healthcare property owner said it plans to pursue opportunities across care settings rather than concentrate on one asset class.
The largest transaction was a $400 million acquisition of 20 skilled nursing facilities in the U.S. Southwest. Chief Investment Officer James Callister said the deal was sourced off-market and completed through a joint venture with a repeat partner. CareTrust also spent about $269 million to acquire 16 U.K. care homes, according to the report.
Sedgwick said the company sees similar risk-adjusted returns over the next several years among U.S. skilled nursing and seniors housing, as well as U.K. care home strategies. He said CareTrust evaluates deals individually and bases its decisions on underwriting and expected returns, rather than choosing one care setting over another.
CareTrust reported third-quarter net income of $83.7 million, compared with $74.9 million in the same quarter of 2025. Normalized funds from operations were $129.2 million, up from $94.7 million a year earlier. The company’s shares rose 2.8% on Friday to $38.22, while reported earnings per share of 36 cents were below the cited analyst estimate of 38 cents.
Investment Mix and Rent Coverage
The investment total and portfolio mix show how CareTrust is pursuing growth across several types of care property, rather than relying only on skilled nursing. That approach matters to investors because the assets involve different operators, markets and operating models; the company’s returns depend in part on its ability to select tenants and structure transactions to manage those risks.
CareTrust reported skilled nursing lease coverage of 2.62x and EBITDAR coverage of 3.26x in the third quarter. Sedgwick said the properties are licensed and operated by independent tenants, which retain revenue above fixed rent. Those figures offer a snapshot of operators’ reported ability to cover rent, but they do not guarantee future performance or show how coverage may vary among individual tenants.
Sedgwick also described replacing operators when coverage weakened as one way to protect the portfolio. He said CareTrust recently replaced a Midwest skilled nursing operator with a longtime tenant that agreed to a 6% rent increase. The example suggests the REIT may seek both more stable operators and improved rent through portfolio changes, although the source does not give details about the facility or the financial effect of that transaction.
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CareTrust’s Cross-Market Strategy
CareTrust owns healthcare-related real estate, including U.S. skilled nursing and seniors housing properties and care homes in the United Kingdom. The company’s third-quarter activity follows a larger investment year: Callister said its 2026 investments totaled about $2.9 billion year to date, including roughly $1.1 billion in the U.K. and $1.1 billion across U.S. skilled nursing and seniors housing. He put the investment pipeline at just over $1.2 billion.
CareTrust began a strategic relationship with U.K. developer LNT Care Developments on Oct. 1. The arrangement is intended to deliver about 30 care homes a year. The initial closing covered 45 homes for £1.1 billion: 23 were acquired on Oct. 1, with the remaining 22 expected to be acquired on a rolling basis through 2027, according to the report.
U.K. care homes combine services that may resemble both skilled nursing and assisted living in the United States. Sedgwick said the LNT properties are new-build facilities designed with ensuite wet rooms. The company’s stated plan is to move the portfolio from a ramp-up phase under triple-net leases to its SHOP operating model; the report said the annual return would be about 7% during that phase and could grow to double digits in later years.
“We love all of our kids the same.”
— David Sedgwick, CareTrust CEO
Returns and Rates Still Unclear
The source provides CareTrust’s reported investment and coverage figures, but does not break down the 8.3% blended stabilized yield by transaction or care setting. It also does not provide property-level coverage figures, the number of operators included in the skilled nursing average, or details about the terms and financial impact of the Midwest tenant replacement.
The company’s projected returns from the LNT relationship are forward-looking statements described by Sedgwick, not realized results. The report says the yield may reach double digits in later years but does not specify a timetable or the assumptions behind that projection. Sedgwick also mentioned challenging interest rates, but the available source text ends before giving further detail on the company’s rate outlook or financing plans.
LNT Acquisitions and Pipeline
The next identified milestone in the LNT arrangement is the planned transfer of the remaining 22 care homes through 2027. CareTrust has said the relationship is designed to support about 30 new care homes a year, though the source does not give a schedule for future annual closings or confirm the timing of all planned development.
Investors will also be watching how CareTrust deploys its reported $1.2 billion-plus pipeline, whether the company continues replacing operators where coverage weakens, and whether its 2026 investment pace translates into operating results. The source does not identify specific upcoming deals or provide additional guidance on interest rates.
Key Questions
How much did CareTrust invest in the third quarter?
CareTrust said it closed about $740 million in investments in the third quarter, with a blended stabilized yield of 8.3%.
What were the main third-quarter investments?
The largest was a $400 million deal for 20 skilled nursing facilities in the Southwest. CareTrust also spent about $269 million acquiring 16 U.K. care homes.
What rent coverage did CareTrust report for skilled nursing?
The company reported 2.62x lease coverage and 3.26x EBITDAR coverage for its skilled nursing assets in the third quarter.
What is the CareTrust-LNT relationship?
CareTrust began a strategic relationship with U.K. developer LNT Care Developments on Oct. 1. The initial £1.1 billion closing covered 45 care homes, with 22 of them scheduled for acquisition on a rolling basis through 2027.
What remains unknown about CareTrust’s plans?
The source does not provide property-level coverage data, a detailed breakdown of the reported yield, or further specifics about the company’s interest-rate outlook. The projected future returns from the LNT portfolio have not yet been reported as realized results.
Source: skillednursingnews.com
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