CareTrust REIT, Inc.

What they do

CareTrust owns skilled nursing facilities (SNFs), senior housing communities and other healthcare properties, leasing them primarily under triple-net master leases in which the tenant pays taxes, insurance, maintenance and capital expenditures. As of December 31, 2025 it owned 407 SNF, senior housing and other properties with 37,628 operational beds and units across 32 states and the United Kingdom. It also originates mortgage secured loans, mezzanine loans and preferred equity, and in 2025 began a RIDEA senior housing operating portfolio (SHOP) platform of properties run by third-party managers.

Revenue drivers

• Triple-net skilled nursing rents — Base rent from SNFs leased to operators under triple-net master leases; as of December 31, 2025, properties leased to Ensign (including Pennant Master Lease guarantees) were $92.1 million, or 23%, of total annualized contractual rental income.
• Senior housing triple-net rents — Rent from senior housing communities leased on a triple-net basis; the first half of 2026 acquisitions included 12 senior housing triple-net properties for $246.6 million of purchase price and $20.7 million of initial annual cash rent.
• Loans and other real estate investments — Interest income from mortgage secured, mezzanine and financing receivables and preferred equity; as of December 31, 2025 these carried $899.3 million (preferred equity, mortgage and mezzanine loans) plus a $92.2 million financing receivable, and new 2026 financing receivables totaled $467.1 million with $45.4 million of initial annual interest income.
• SHOP senior housing operations — Revenue from properties in a RIDEA structure operated by third-party managers, first entered in the fourth quarter of 2025; three senior housing communities (270 units) in Texas were owned this way as of December 31, 2025.

Recent performance

For the quarter ended June 30, 2026, CareTrust reported net income of $89.0 million, or $0.38 per diluted share, up 9% year over year, and Normalized FFO of $119.7 million, or $0.51 per diluted share, up 19%. The company closed $899.6 million of investment activity at a blended stabilized yield of 8.9% in the quarter and reported 100.0% collection of contractual rent and interest. Net debt to annualized normalized run-rate EBITDA was 1.01x, and a quarterly dividend of $0.39 per share was declared.

Strategy

Management is pursuing external growth, deploying approximately $1.5 billion year-to-date 2026 at a blended stabilized yield of roughly 8.7%, and closed a further $307.9 million of investments after quarter end at a 7.8% yield. It has expanded the portfolio beyond skilled nursing into senior housing triple-net and SHOP formats, including in consolidated joint ventures. Funding has come from equity, including $578.2 million of unsettled forward equity, $363.6 million of ATM forward settlements, and a $1.2 billion unsecured revolving credit facility. Year-to-date 2026 acquisitions through June 30 totaled $423.6 million across 20 properties (2,054 beds/units).

Risks

• Tenant and borrower concentration/credit — Ensign-leased properties plus Pennant Master Lease guarantees were $92.1 million, or 23%, of annualized contractual rental income as of December 31, 2025, so tenant payment failure would be materially consequential.
• Reimbursement and regulatory pressure — CMS finalized a 2.4% fiscal 2027 Medicare SNF rate increase but also issued an RFI on PDPM case-mix creep that could lead to future rate recalibrations, and tightened SNF Quality Reporting Program and enforcement rules.
• California wage law — California SB 525 raised healthcare minimum wages to $22-$23 per hour in June 2026 with a further step-up to $25 per hour in 2028, pressuring California tenant operating costs.
• International and RIDEA exposure — The company holds U.K. properties and cites risk that the intended benefits of the Care REIT plc acquisition may not be realized, and it now bears additional operational and legal risk from RIDEA-managed SHOP properties.

Outlook

For 2026, CareTrust guided to net income of approximately $1.53 to $1.56 per share, Normalized FFO of approximately $2.03 to $2.06 per share and Normalized FAD of approximately $2.01 to $2.04 per share, with FFO and FAD midpoints up 16.2% and 15.1% over 2025. Guidance assumes no investments beyond those made year-to-date, 2.5% rent escalators, $147 million of loans repaid during the year and no material GBP/USD change, and is based on a weighted average diluted share count of 233 million. Management cited a $540 million investment pipeline and $605 million of revolver availability as of August 6, 2026.