CareTrust REIT Acquires U.K. Senior Care REIT in $817M Deal
Care REIT currently holds 7,500 senior housing beds across 137 facilities in England, Scotland and Northern Ireland
By Brian Pascus March 11, 2025 4:01 pm
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A top U.S. health care real estate investment trust (REIT) is advancing into the United Kingdom after it acquired another REIT specializing in senior housing and care complexes.
Los Angeles-based CareTrust REIT purchased U.K.-based Care REIT on Tuesday in a $817 million acquisition. The deal values Care REIT’s stock at $577 million — a 33 percent premium on the $25.81 share price Care REIT closed at on Monday afternoon — and includes a debt assumption of $240 million.
Care REIT presently has 137 senior care complexes and 7,500 beds in a portfolio spread across England, Scotland and Northern Ireland. The REIT works with 15 different operators that lease their buildings, which carry an average remaining lease term of 20 years and an average occupancy of 89 percent.
Care REIT reported annual rent of $66 million as recently as September 2024, according to CareTrust.
Dave Sedgwick, CareTrust’s president and CEO, said in a statement that his firm had been carefully monitoring Care REIT’s performance for a while as it waited “for the right entry point.”
“We believe [Care REIT’s platform] has assembled what we consider to be an excellent, diversified portfolio of U.K. assets and operator partnerships,” he said. “We look forward to combining the Care REIT platform with our own and expanding our mission of growing with great operators in the U.K.”
Some REIT experts believe the deal positions CareTrust away from a U.S. health care marketplace that is poised for upheaval in the years ahead. The Trump administration and House Republicans are negotiating a budget that includes cuts to Medicare and Medicaid, potentially harming the reimbursement marketplace for senior housing and medical facilities.
“Health care is a sector going through ups and downs, but with the baby boomer population, there’s not enough supply for the upcoming growth of demand,” said David Auerbach, chief investment officer at Hoya Capital. “Medicare and Medicaid is always an overhang domestically for these [U.S. REITs], so to expand across the border to reduce U.S. exposure to focus elsewhere on opportunities for growth, we’re for that.”
BMO noted the concerns around Medicaid reform in a note to investors.
“Given concerns on potential U.S. Medicaid cuts, we see the transaction as well-timed and diversifying [CareTrust’s] tenancy,” wrote Juan Sanabria, managing director of BMO Capital Markets.
Moreover, the deal comes as the U.K. faces a growing demographic boom due to the post-World War II baby boomer population. There are currently 22 million people over the age of 50 in England, roughly two out of every five citizens, and that demographic is expected to grow by 19 percent between 2024 and 2044, according to AgeUK.
“Was the pricing just too good to pass up that this is how you diversify away from the U.S. and advance your overseas exposure?” said Auerbach. “It’s not like you’re buying one property — it’s 7,500 beds, so it’s a pretty big transaction that these guys are doing.”
Brian Pascus can be reached at bpascus@commercialobserver.com
