Latest news with #CareREIT
Yahoo
12-05-2025
- Business
- Yahoo
CareTrust REIT (NYSE:CTRE) Raises 2025 Earnings Guidance Following Care REIT plc Acquisition
CareTrust REIT recently raised its earnings guidance for 2025, factoring in the acquisition of Care REIT plc, projecting a net income of $1.42 to $1.45 per share. This, combined with a robust Q1 2025 earnings report showing significant year-over-year revenue growth, likely influenced its 13% share price increase last quarter. Additionally, the company's dividend increase and strategic acquisitions in the U.S. supported positive market sentiment. Broader market trends, such as the global upswing following the U.S.-China tariff agreement, also added to the positive momentum seen in CareTrust REIT's performance. Be aware that CareTrust REIT is showing 2 risks in our investment analysis and 1 of those is a bit concerning. Find companies with promising cash flow potential yet trading below their fair value. The recent acquisition of Care REIT is expected to diversify CareTrust's portfolio and enhance U.K. market access, potentially driving revenue with an additional US$68.6 million in annual rents. This expansion aligns with the company's projected net income growth, further supported by the raised earnings guidance for 2025. Over the long term, CareTrust shares have delivered a total return of 101.75% over five years, reflecting robust performance and investor confidence. In comparison, CareTrust recently exceeded the broader U.S. market's 8% growth over the past year, but underperformed the U.S. Health Care REITs industry's 24.1% return, indicating mixed relative momentum. The current valuation reflects this optimism, as the share price climbed 6.9% closer to the analyst consensus target. However, achieving the price target of US$31.67 by 2028 predicates on sustained revenue and earnings growth, which analysts expect to rise to US$686.7 million and US$410.2 million respectively. Potential risks include the impact of assuming US$259 million in Care REIT's debt, which may affect net margins. As such, the recent 13% share price increase positions the stock near its fair value, considering the PE ratio adjustments predicted by analysts. The valuation report we've compiled suggests that CareTrust REIT's current price could be quite moderate. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include NYSE:CTRE. Have feedback on this article? Concerned about the content? with us directly. Alternatively, email editorial-team@ Sign in to access your portfolio
Associated Press
12-05-2025
- Business
- Associated Press
CareTrust REIT Closes Acquisition of Care REIT plc, Enters UK Market
SAN CLEMENTE, Calif.--(BUSINESS WIRE)--May 12, 2025-- CareTrust REIT, Inc. (NYSE:CTRE) ('CareTrust' or the 'Company') announced today that it has closed the acquisition of Care REIT plc, a United Kingdom-based healthcare real estate investment trust listed on the London Stock Exchange. The transaction, first announced on March 11, 2025, marks CareTrust's entrance into the UK market and represents a strategic step in the Company's mission to expand and diversify its portfolio of healthcare real estate assets. With the completion of this transaction, CareTrust adds to its portfolio 132 care homes comprising approximately 7,500 beds and two healthcare facilities leased to the UK's National Health Service, located throughout England, Scotland, and Northern Ireland. All properties are subject to long-term, triple-net leases across 14 operators, with a weighted average remaining lease term of approximately 20.2 years and annual inflation-based rent escalators, most with a 2% floor and 4% cap. 'We are thrilled to close on the acquisition of Care REIT, marking our first M&A deal, our first international investment, and the single largest transaction in our history,' said Dave Sedgwick, President and Chief Executive Officer of CareTrust. 'Last year's exponential growth set the table for double digit growth in 2025. This strategic acquisition is transformative for our company, significantly diversifying our portfolio by operator, geography, payor source, and asset class. The acquisition strengthens our growth profile, while adding approximately $68.6 million of annualized rental revenue and a strong EBITDARM coverage ratio of 2.2x.' Mr. Sedgwick continued, 'While we are excited about the Day 1 impact of this acquisition on our near-term outlook, we also see this transaction as an engine for growth, not just a one-off investment. With the UK's favorable demographics, strong need-based care demand, and fragmented provider landscape, we believe there is ample opportunity to scale. At the same time, we structured our UK entrance so as not to detract from investing in our core U.S. markets and operator relationships, which we remain deeply committed to expand simultaneously with the UK. The Care REIT acquisition brings with it an experienced UK-based team who is hungry to expand our footprint in that market with existing and new operators.' 'Our relationships with our new tenants are off to a strong and collaborative start, many of whom we got to know in the process of carefully evaluating our UK market entrance,' added James Callister, CareTrust's Chief Investment Officer. 'We're already finding alignment in our mutual desire to expand thoughtfully and sustainably while taking advantage of current market conditions. Many of these operators are eager to grow their own portfolios and have already engaged with us in exploring additional investment opportunities in the care home space. We believe that by leveraging our competitive advantages—deep underwriting and operating experience, pristine balance sheet, access to and cost of capital, and certainty of closing—we can help our UK operators further their missions to successfully deliver strong outcomes for their patients, residents, and communities, and for our stakeholders alike.' Mr. Callister also reiterated that the Company's replenished US investment pipeline sits at approximately $500 million of near-term, actionable opportunities—not including larger portfolios the Company is reviewing—and that it is actively seeking additional growth opportunities in the US and abroad. 2025 Guidance and Liquidity In conjunction with the closing of the Care REIT acquisition, Bill Wagner, CareTrust's Chief Financial Officer, updated management's 2025 guidance to include the impact of the transaction, projecting net income of approximately $1.42 to $1.45 per common share, normalized FFO of approximately $1.75 to $1.78 per common share, and normalized FAD of approximately $1.75 to $1.78 per common share. He noted that the 2025 guidance is based on diluted weighted-average common shares outstanding of 190.6 million and assumes the following: 'We are excited by the near- and long-term growth potential the Care REIT transaction unlocks, and we believe it positions us to deliver compounding value to stakeholders over time,' said Bill Wagner, Chief Financial Officer. 'After a period of integration, which we anticipate lasting through 2025, we expect to achieve annual run rate synergies of approximately $5 million. Incorporating the realization of these savings, we anticipate the fully-synergized acquisition to be approximately 9.4% accretive to normalized FFO per share and 5.7% accretive to normalized FAD per share, both relative to the guidance in place when the acquisition was announced on March 11, 2025.' Based on the British Pound Sterling to U.S. Dollar exchange rate on May 9, 2025, the terms of the Care REIT acquisition represent a total purchase price of approximately $840.5 million, of which $595.4 million represents cash consideration to acquire Care REIT common shares, together with the assumption of $245.1 million net debt and exclusive of transaction fees. Mr. Wagner noted that the Company intends to pay off the assumed debt and recapitalize the portfolio through a combination of cash on hand, a draw from its revolving credit facility, and a new $500 million unsecured term loan expected to be finalized in the second quarter, subject to ordinary closing conditions. Prior to completion of this refinancing, net debt-to-normalized EBITDA is expected to be below 2.0x. Piper Sandler Ltd and JP Morgan Securities LLC acted as financial advisors and Jones Day acted as legal advisor to CareTrust. 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 portfolio of long-term net-leased properties spanning the United States and United Kingdom, and a growing portfolio of quality operators leasing them, CareTrust is pursuing both external and organic growth opportunities across the US and internationally. More information about CareTrust REIT is available at Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 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: future financial and financing plans; strategies related to the Company's business and its portfolio, including acquisition opportunities and disposition plans; expectations regarding the integration of Care REIT plc; growth prospects; operating and financial performance; and the performance of the Company's tenants and operators and their respective facilities. Words such as 'anticipate,' 'believe,' 'could,' 'expect,' 'estimate,' 'intend,' 'may,' 'plan,' 'seek,' 'should,' 'will,' 'would,' and similar expressions, or the negative of these terms, are intended to identify such forward-looking statements, though not all forward-looking statements contain these identifying words. The Company's forward-looking statements are based on management's current expectations and beliefs, and are subject to a number of risks and uncertainties that could lead to actual results differing materially from those projected, forecasted or expected. Although the Company believes that the assumptions underlying these forward-looking statements are reasonable, they are not guarantees and the Company can give no assurance that its expectations will be attained. Factors which could have a material adverse effect on the Company's operations and future prospects or which could cause actual results to differ materially from expectations include, but are not limited to: (i) our ability to integrate Care REIT's operations into our business and achieve the benefits expected to result from the acquisition; (ii) the ability and willingness of our tenants and borrowers to meet and/or perform their obligations under the agreements we have entered into with them, including without limitation, their respective obligations to indemnify, defend and hold us harmless from and against various claims, litigation and liabilities; (iii) the risk that we may have to incur additional impairment charges related to our assets held for sale if we are unable to sell such assets at the prices we expect; (iv) the impact of healthcare reform legislation, including minimum staffing level requirements, on the operating results and financial conditions of our tenants and borrowers; (v) the ability of our tenants and borrowers to comply with applicable laws, rules and regulations in the operation of the properties we lease to them or finance; (vi) the ability and willingness of our tenants to renew their leases with us upon their expiration, and the ability to reposition our properties on the same or better terms in the event of nonrenewal or in the event we replace an existing tenant, as well as any obligations, including indemnification obligations, we may incur in connection with the replacement of an existing tenant; (vii) the availability of and the ability to identify (a) tenants who meet our credit and operating standards, and (b) suitable acquisition opportunities and the ability to acquire and lease the respective properties to such tenants on favorable terms; (viii) the ability to generate sufficient cash flows to service our outstanding indebtedness; (ix) access to debt and equity capital markets; (x) fluctuating interest and foreign currency exchange rates; (xi) the impact of public health crises, including significant COVID-19 outbreaks as well as other pandemics or epidemics; (xii) the ability to retain our key management personnel; (xiii) the ability to maintain our status as a real estate investment trust ('REIT'); (xiv) changes in the U.S. tax law and other state, federal or local laws, whether or not specific to REITs; (xv) other risks inherent in the real estate business, including potential liability relating to environmental matters and illiquidity of real estate investments; and (xvi) any additional factors included in our Annual Report on Form 10-K for the year ended December 31, 2024, and our Quarterly Report on Form 10-Q for the quarter ended March 31, 2025, including in the sections entitled 'Risk Factors' in Item 1A of such reports, as such risk factors may be amended, supplemented or superseded from time to time by other reports we file with the SEC. The Company expressly disclaims any obligation to update or revise any information in this press release, including forward-looking statements, whether to reflect any change in the Company's expectations, any change in events, conditions or circumstances, or otherwise. As used in this press release, unless the context requires otherwise, references to 'CTRE,' 'CareTrust,' 'CareTrust REIT' or the 'Company' refer to CareTrust REIT, Inc. and its consolidated subsidiaries. GAAP refers to generally accepted accounting principles in the United States of America. Non-GAAP Financial Measures Funds from Operations ('FFO'), as defined by the National Association of Real Estate Investment Trusts ('Nareit'), and Funds Available for Distribution ('FAD') are important non-GAAP supplemental measures of operating performance for a REIT. Because the historical cost accounting convention used for real estate assets requires straight-line depreciation except on land, such accounting presentation implies that the value of real estate assets diminishes predictably over time. Since real estate values have historically risen or fallen with market and other conditions, presentations of operating results for a REIT that uses historical cost accounting for depreciation could be less informative. Thus, Nareit created FFO as a supplemental measure of operating performance for REITs that excludes historical cost depreciation and amortization, among other items, from net income, as defined by GAAP. FFO is defined by Nareit as net income computed in accordance with GAAP, excluding gains or losses from dispositions of real estate investments, real estate related depreciation and amortization and real estate impairment charges, adjustments for the share of consolidated joint ventures, and adjustments for unconsolidated partnerships and joint ventures. Noncontrolling interests' pro rata share information is prepared by applying noncontrolling interests' actual ownership percentage for the period and is intended to reflect noncontrolling interests' proportionate economic interest in the financial position and operating results of properties in our portfolio. The Company computes FFO attributable to CareTrust REIT, Inc. in accordance with Nareit's definition. FAD attributable to CareTrust REIT, Inc. is defined as FFO attributable to CareTrust REIT, Inc. excluding noncash income and expenses, such as amortization of stock-based compensation, amortization of deferred financing fees, amortization of above and below market intangibles, amortization of lease incentives, the effects of straight-line rent, adjustments for the share of consolidated joint ventures and non-cash interest income. The Company considers FAD attributable to CareTrust REIT, Inc. to be a useful supplemental measure to evaluate the Company's operating results excluding these income and expense items to help investors, analysts and other interested parties compare the operating performance of the Company between periods or as compared to other companies on a more consistent basis. In addition, the Company reports Normalized FFO attributable to CareTrust REIT, Inc. and Normalized FAD attributable to CareTrust REIT, Inc., which adjust FFO and FAD for certain revenue and expense items that the Company does not believe are indicative of its ongoing operating results, such as write-off of deferred financing costs, provision for loan losses, non-routine transaction costs, provision for doubtful accounts and lease restructuring, loss on extinguishment of debt, extraordinary incentive plan payment, unrealized loss on other real estate related investments, recovery of previously reversed rent, lease termination revenue and property operating expenses. By excluding these items, investors, analysts and our management can compare Normalized FFO and Normalized FAD between periods more consistently. While FFO, Normalized FFO, FAD and Normalized FAD are relevant and widely-used measures of operating performance among REITs, they do not represent cash flows from operations or net income as defined by GAAP and should not be considered an alternative to those measures in evaluating the Company's liquidity or operating performance. FFO, Normalized FFO, FAD and Normalized FAD do not purport to be indicative of cash available to fund future cash requirements. Further, the Company's computation of FFO, Normalized FFO, FAD and Normalized FAD may not be comparable to FFO, Normalized FFO, FAD and Normalized FAD reported by other REITs that do not define FFO in accordance with the current Nareit definition or that interpret the current Nareit definition or define FAD differently than the Company does. View source version on CONTACT: CareTrust REIT, Inc. (949) 542-3130 [email protected] KEYWORD: EUROPE UNITED STATES UNITED KINGDOM NORTH AMERICA CALIFORNIA INDUSTRY KEYWORD: COMMERCIAL BUILDING & REAL ESTATE CONSTRUCTION & PROPERTY HOSPITALS REIT HEALTH INSURANCE OTHER HEALTH MANAGED CARE GENERAL HEALTH HEALTH RESIDENTIAL BUILDING & REAL ESTATE SOURCE: CareTrust REIT, Inc. Copyright Business Wire 2025. PUB: 05/12/2025 06:01 AM/DISC: 05/12/2025 06:01 AM
Business Wire
12-05-2025
- Business
- Business Wire
CareTrust REIT Closes Acquisition of Care REIT plc, Enters UK Market
SAN CLEMENTE, Calif.--(BUSINESS WIRE)--CareTrust REIT, Inc. (NYSE:CTRE) ('CareTrust' or the 'Company') announced today that it has closed the acquisition of Care REIT plc, a United Kingdom-based healthcare real estate investment trust listed on the London Stock Exchange. The transaction, first announced on March 11, 2025, marks CareTrust's entrance into the UK market and represents a strategic step in the Company's mission to expand and diversify its portfolio of healthcare real estate assets. With the completion of this transaction, CareTrust adds to its portfolio 132 care homes comprising approximately 7,500 beds and two healthcare facilities leased to the UK's National Health Service, located throughout England, Scotland, and Northern Ireland. All properties are subject to long-term, triple-net leases across 14 operators, with a weighted average remaining lease term of approximately 20.2 years and annual inflation-based rent escalators, most with a 2% floor and 4% cap. 'We are thrilled to close on the acquisition of Care REIT, marking our first M&A deal, our first international investment, and the single largest transaction in our history,' said Dave Sedgwick, President and Chief Executive Officer of CareTrust. 'Last year's exponential growth set the table for double digit growth in 2025. This strategic acquisition is transformative for our company, significantly diversifying our portfolio by operator, geography, payor source, and asset class. The acquisition strengthens our growth profile, while adding approximately $68.6 million of annualized rental revenue and a strong EBITDARM coverage ratio of 2.2x.' Mr. Sedgwick continued, 'While we are excited about the Day 1 impact of this acquisition on our near-term outlook, we also see this transaction as an engine for growth, not just a one-off investment. With the UK's favorable demographics, strong need-based care demand, and fragmented provider landscape, we believe there is ample opportunity to scale. At the same time, we structured our UK entrance so as not to detract from investing in our core U.S. markets and operator relationships, which we remain deeply committed to expand simultaneously with the UK. The Care REIT acquisition brings with it an experienced UK-based team who is hungry to expand our footprint in that market with existing and new operators.' 'Our relationships with our new tenants are off to a strong and collaborative start, many of whom we got to know in the process of carefully evaluating our UK market entrance,' added James Callister, CareTrust's Chief Investment Officer. 'We're already finding alignment in our mutual desire to expand thoughtfully and sustainably while taking advantage of current market conditions. Many of these operators are eager to grow their own portfolios and have already engaged with us in exploring additional investment opportunities in the care home space. We believe that by leveraging our competitive advantages—deep underwriting and operating experience, pristine balance sheet, access to and cost of capital, and certainty of closing—we can help our UK operators further their missions to successfully deliver strong outcomes for their patients, residents, and communities, and for our stakeholders alike.' Mr. Callister also reiterated that the Company's replenished US investment pipeline sits at approximately $500 million of near-term, actionable opportunities—not including larger portfolios the Company is reviewing—and that it is actively seeking additional growth opportunities in the US and abroad. 2025 Guidance and Liquidity In conjunction with the closing of the Care REIT acquisition, Bill Wagner, CareTrust's Chief Financial Officer, updated management's 2025 guidance to include the impact of the transaction, projecting net income of approximately $1.42 to $1.45 per common share, normalized FFO of approximately $1.75 to $1.78 per common share, and normalized FAD of approximately $1.75 to $1.78 per common share. He noted that the 2025 guidance is based on diluted weighted-average common shares outstanding of 190.6 million and assumes the following: All investments and dispositions made to date; No new debt incurrences or new equity issuances; and Estimated 2.5% rent escalators under the Company's inflation-based triple net leases. 'We are excited by the near- and long-term growth potential the Care REIT transaction unlocks, and we believe it positions us to deliver compounding value to stakeholders over time,' said Bill Wagner, Chief Financial Officer. 'After a period of integration, which we anticipate lasting through 2025, we expect to achieve annual run rate synergies of approximately $5 million. Incorporating the realization of these savings, we anticipate the fully-synergized acquisition to be approximately 9.4% accretive to normalized FFO per share and 5.7% accretive to normalized FAD per share, both relative to the guidance in place when the acquisition was announced on March 11, 2025.' Based on the British Pound Sterling to U.S. Dollar exchange rate on May 9, 2025, the terms of the Care REIT acquisition represent a total purchase price of approximately $840.5 million, of which $595.4 million represents cash consideration to acquire Care REIT common shares, together with the assumption of $245.1 million net debt and exclusive of transaction fees. Mr. Wagner noted that the Company intends to pay off the assumed debt and recapitalize the portfolio through a combination of cash on hand, a draw from its revolving credit facility, and a new $500 million unsecured term loan expected to be finalized in the second quarter, subject to ordinary closing conditions. Prior to completion of this refinancing, net debt-to-normalized EBITDA is expected to be below 2.0x. Piper Sandler Ltd and JP Morgan Securities LLC acted as financial advisors and Jones Day acted as legal advisor to CareTrust. 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 portfolio of long-term net-leased properties spanning the United States and United Kingdom, and a growing portfolio of quality operators leasing them, CareTrust is pursuing both external and organic growth opportunities across the US and internationally. More information about CareTrust REIT is available at Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 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: future financial and financing plans; strategies related to the Company's business and its portfolio, including acquisition opportunities and disposition plans; expectations regarding the integration of Care REIT plc; growth prospects; operating and financial performance; and the performance of the Company's tenants and operators and their respective facilities. Words such as 'anticipate,' 'believe,' 'could,' 'expect,' 'estimate,' 'intend,' 'may,' 'plan,' 'seek,' 'should,' 'will,' 'would,' and similar expressions, or the negative of these terms, are intended to identify such forward-looking statements, though not all forward-looking statements contain these identifying words. The Company's forward-looking statements are based on management's current expectations and beliefs, and are subject to a number of risks and uncertainties that could lead to actual results differing materially from those projected, forecasted or expected. Although the Company believes that the assumptions underlying these forward-looking statements are reasonable, they are not guarantees and the Company can give no assurance that its expectations will be attained. Factors which could have a material adverse effect on the Company's operations and future prospects or which could cause actual results to differ materially from expectations include, but are not limited to: (i) our ability to integrate Care REIT's operations into our business and achieve the benefits expected to result from the acquisition; (ii) the ability and willingness of our tenants and borrowers to meet and/or perform their obligations under the agreements we have entered into with them, including without limitation, their respective obligations to indemnify, defend and hold us harmless from and against various claims, litigation and liabilities; (iii) the risk that we may have to incur additional impairment charges related to our assets held for sale if we are unable to sell such assets at the prices we expect; (iv) the impact of healthcare reform legislation, including minimum staffing level requirements, on the operating results and financial conditions of our tenants and borrowers; (v) the ability of our tenants and borrowers to comply with applicable laws, rules and regulations in the operation of the properties we lease to them or finance; (vi) the ability and willingness of our tenants to renew their leases with us upon their expiration, and the ability to reposition our properties on the same or better terms in the event of nonrenewal or in the event we replace an existing tenant, as well as any obligations, including indemnification obligations, we may incur in connection with the replacement of an existing tenant; (vii) the availability of and the ability to identify (a) tenants who meet our credit and operating standards, and (b) suitable acquisition opportunities and the ability to acquire and lease the respective properties to such tenants on favorable terms; (viii) the ability to generate sufficient cash flows to service our outstanding indebtedness; (ix) access to debt and equity capital markets; (x) fluctuating interest and foreign currency exchange rates; (xi) the impact of public health crises, including significant COVID-19 outbreaks as well as other pandemics or epidemics; (xii) the ability to retain our key management personnel; (xiii) the ability to maintain our status as a real estate investment trust ('REIT'); (xiv) changes in the U.S. tax law and other state, federal or local laws, whether or not specific to REITs; (xv) other risks inherent in the real estate business, including potential liability relating to environmental matters and illiquidity of real estate investments; and (xvi) any additional factors included in our Annual Report on Form 10-K for the year ended December 31, 2024, and our Quarterly Report on Form 10-Q for the quarter ended March 31, 2025, including in the sections entitled 'Risk Factors' in Item 1A of such reports, as such risk factors may be amended, supplemented or superseded from time to time by other reports we file with the SEC. The Company expressly disclaims any obligation to update or revise any information in this press release, including forward-looking statements, whether to reflect any change in the Company's expectations, any change in events, conditions or circumstances, or otherwise. As used in this press release, unless the context requires otherwise, references to 'CTRE,' "CareTrust," 'CareTrust REIT' or the 'Company' refer to CareTrust REIT, Inc. and its consolidated subsidiaries. GAAP refers to generally accepted accounting principles in the United States of America. Non-GAAP Financial Measures Funds from Operations ('FFO'), as defined by the National Association of Real Estate Investment Trusts ('Nareit'), and Funds Available for Distribution ('FAD') are important non-GAAP supplemental measures of operating performance for a REIT. Because the historical cost accounting convention used for real estate assets requires straight-line depreciation except on land, such accounting presentation implies that the value of real estate assets diminishes predictably over time. Since real estate values have historically risen or fallen with market and other conditions, presentations of operating results for a REIT that uses historical cost accounting for depreciation could be less informative. Thus, Nareit created FFO as a supplemental measure of operating performance for REITs that excludes historical cost depreciation and amortization, among other items, from net income, as defined by GAAP. FFO is defined by Nareit as net income computed in accordance with GAAP, excluding gains or losses from dispositions of real estate investments, real estate related depreciation and amortization and real estate impairment charges, adjustments for the share of consolidated joint ventures, and adjustments for unconsolidated partnerships and joint ventures. Noncontrolling interests' pro rata share information is prepared by applying noncontrolling interests' actual ownership percentage for the period and is intended to reflect noncontrolling interests' proportionate economic interest in the financial position and operating results of properties in our portfolio. The Company computes FFO attributable to CareTrust REIT, Inc. in accordance with Nareit's definition. FAD attributable to CareTrust REIT, Inc. is defined as FFO attributable to CareTrust REIT, Inc. excluding noncash income and expenses, such as amortization of stock-based compensation, amortization of deferred financing fees, amortization of above and below market intangibles, amortization of lease incentives, the effects of straight-line rent, adjustments for the share of consolidated joint ventures and non-cash interest income. The Company considers FAD attributable to CareTrust REIT, Inc. to be a useful supplemental measure to evaluate the Company's operating results excluding these income and expense items to help investors, analysts and other interested parties compare the operating performance of the Company between periods or as compared to other companies on a more consistent basis. In addition, the Company reports Normalized FFO attributable to CareTrust REIT, Inc. and Normalized FAD attributable to CareTrust REIT, Inc., which adjust FFO and FAD for certain revenue and expense items that the Company does not believe are indicative of its ongoing operating results, such as write-off of deferred financing costs, provision for loan losses, non-routine transaction costs, provision for doubtful accounts and lease restructuring, loss on extinguishment of debt, extraordinary incentive plan payment, unrealized loss on other real estate related investments, recovery of previously reversed rent, lease termination revenue and property operating expenses. By excluding these items, investors, analysts and our management can compare Normalized FFO and Normalized FAD between periods more consistently. While FFO, Normalized FFO, FAD and Normalized FAD are relevant and widely-used measures of operating performance among REITs, they do not represent cash flows from operations or net income as defined by GAAP and should not be considered an alternative to those measures in evaluating the Company's liquidity or operating performance. FFO, Normalized FFO, FAD and Normalized FAD do not purport to be indicative of cash available to fund future cash requirements. Further, the Company's computation of FFO, Normalized FFO, FAD and Normalized FAD may not be comparable to FFO, Normalized FFO, FAD and Normalized FAD reported by other REITs that do not define FFO in accordance with the current Nareit definition or that interpret the current Nareit definition or define FAD differently than the Company does.
Yahoo
10-05-2025
- Business
- Yahoo
Why now is the perfect time to unlock passive income from UK real estate
For investors seeking passive income opportunities, few sectors are offering the stellar bargains currently in British real estate. Right now, almost every real estate investment trust on the London Stock Exchange is trading at a discount. And opportunistic investors have started to take notice. In the last couple of months, we've seen massive takeover deals being signed and rejected within this space. That includes Care REIT, which agreed to a £450m takeover, Urban Logistics REIT, which has accepted a £674m deal, and Assura at a whopping £1.6bn buyout. But not everyone is giving in to tempting takeover bids. Warehouse REIT (LSE:WHR) is one such business that rejected the recent attempt to take over its operations. This move sent its shares flying. Yet despite sitting close to its 52-week high, the shares are still trading at a 15% discount to net asset value, paying a tasty 5.9% dividend yield. Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Since REITs have to pay the vast majority of their net rental income out as dividends, most are reliant on debt financing to expand their real estate portfolios. That was fine in the pre-pandemic days. But in 2025, with interest rates still elevated, debt is now far more expensive. And a lot of firms are struggling to cope. Pairing this with lower property prices, if businesses can't keep up with debt servicing costs, they might be forced to start gutting their real estate portfolios. In other words, the discounted valuations are a reflection of the risk of investing in debt-heavy businesses right now. However, investors haven't really been differentiating between the weak REITs and the strong. Given Warehouse REIT's firm rejection of the recent takeover attempt, it seems this stock, along with several others, belongs in the second category. At a near 6% yield, the passive income offered by Warehouse REIT in 2025 firmly beats the FTSE 100's 3.5%. And with the Bank of England steadily cutting interest rates, the group's financial performance has been slowly improving. In its last trading update, management confirmed another 25 new, renewed, or renegotiated leases with tenants totalling just shy of £3.5m in annualised contracted rent. That brings the total across the nine months leading to December 2024 to 71 customer transactions and £9m of annual rent – up 22.1% versus previous tenancy agreements. Needless to say, higher income is great news for income investors since that means there's more money to support the dividend. But it's important to highlight that the firm, like many other REITs has a significant pile of debt to deal with. As of September 2024, there's about £294m of loans & equivalents on its balance sheet, incurring around £22m in annual interest expenses. And it was this debt burden that caused institutional investors to downgrade the stock in 2024, on fears that management wouldn't be able to keep up with both interest and dividends. Despite these fears, the firm continues to pay both. To be fair, some sacrifices had to be made in its property portfolio. But the end result is its debts being refinanced and hedged to a more manageable position. And with property prices now back on the rise and interest rates falling, this strong position is set to improve throughout 2025 and beyond. That's why I've already added Warehouse REIT shares to my passive income portfolio. The post Why now is the perfect time to unlock passive income from UK real estate appeared first on The Motley Fool UK. More reading 5 Stocks For Trying To Build Wealth After 50 One Top Growth Stock from the Motley Fool Zaven Boyrazian has positions in Warehouse REIT Plc. The Motley Fool UK has recommended Warehouse REIT Plc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. Motley Fool UK 2025
Yahoo
03-05-2025
- Business
- Yahoo
CareTrust REIT Inc (CTRE) Q1 2025 Earnings Call Highlights: Record Growth and Strategic UK Expansion
Normalized FFO: Increased 67.4% to $77.8 million. Normalized FAD: Increased 66% to $80.8 million. Normalized FFO per Share: Increased $0.07 or 20% to $0.42 per share. Normalized FAD per Share: Increased $0.06 or 16.2% to $0.43 per share. Investment Total: Year-to-date investments totaled approximately $82 million at a yield of approximately 10%. Cash Rental Revenues: Projected to be approximately $284 million for the year. Interest Income: Approximately $90 million, with $76 million from the loan portfolio and $14 million from cash invested in money market funds. Interest Expense: Approximately $24.3 million, including $4 million of amortization of deferred financing fees. G&A Expense: Approximately $33 million to $37 million, including $11.7 million of deferred stock costs. Leverage: Net debt to normalized EBITDA ratio of 0.5 times; expected to be below 2.5 times post-UK transaction. Fixed Charge Coverage Ratio: 15.2 times. Warning! GuruFocus has detected 6 Warning Signs with CTRE. Release Date: May 02, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. CareTrust REIT Inc (NYSE:CTRE) announced the strategic acquisition of Care REIT, marking its entry into the UK market and the largest deal in its history. The acquisition diversifies CTRE's business in terms of operator concentration, geography, payer sources, and asset classes. CTRE completed three new investments totaling over $47 million at a yield of approximately 10% during the first quarter. Normalized FFO increased 67.4% over the prior year quarter to $77.8 million, and normalized FAD increased by 66% to $80.8 million. CTRE's liquidity remains strong with a net debt to normalized EBITDA ratio of 0.5 times and a fixed charge coverage ratio of 15.2 times. The acquisition of Care REIT involves assuming existing debt of approximately $259 million, which CTRE plans to refinance. There is uncertainty regarding potential Medicaid cuts, which could impact CTRE's portfolio. The UK acquisition pipeline is still developing, and it may take time to mature to the level of the US pipeline. Interest expense increased due to the line draw for the escrow account related to the UK transaction. CTRE's guidance assumes no additional investments or further debt or equity issuances this year, which could limit growth opportunities. Q: Can you comment on the potential impacts of policy and provider taxes on your portfolio? A: David Sedgwick, President and CEO, stated that there is no change in their outlook on potential Medicaid cuts. They are monitoring the process, and there is bipartisan support for Medicaid, especially for seniors in nursing homes. Q: What conditions lead you to choose debt investments over property acquisitions? A: David Sedgwick explained that acquisitions are prioritized, but debt investments are considered strategic if they can build relationships with key operators, potentially leading to future acquisitions. Q: Are there any changes to the earnings or FAD accretion from the Care REIT transaction? A: David Sedgwick mentioned that they will provide detailed answers regarding the transaction's financial impact once the deal is officially announced. Q: What is the expected investment pipeline volume for the UK market, and what yields are you seeing? A: David Sedgwick noted that the UK pipeline will take time to mature. They are currently looking at various deals with cap rates ranging from 7% to 9%, depending on the specifics. Q: How are the properties performing relative to initial underwriting, and what is the outlook for PAC? A: David Sedgwick stated that they have no updates on PAC beyond the data and coverage ratios provided, and they are awaiting further disclosures. Q: Does the UK acquisition put you on the map for new relationships, and will you start lending there? A: David Sedgwick confirmed that the acquisition has generated significant interest from operators in the UK, but they are not currently looking to lend in that market. Q: How is the US skilled nursing facility (SNF) market changing, and is there less capital available? A: James Callister, Chief Investment Officer, stated that the market remains unchanged with consistent deal flow and competitive landscape, with no significant shifts in capital availability. Q: What is the status of the term loan related to the UK acquisition, and what are the expected costs? A: William Wagner, CFO, explained that the term loan will be an amendment to their existing credit facility, with pricing just inside their revolver, and it will not be in pounds. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus.
