Q1 2024 CareTrust REIT Inc Earnings Call Transcript
Key Points
- CareTrust REIT Inc (CTRE) reported a robust phase of growth with significant investments, closing approximately $205 million in new investments with high yields.
- The company has a strong balance sheet with $345 million in cash and an undrawn $600 million line of credit, providing substantial financial flexibility.
- Normalized Funds From Operations (FFO) increased by 32.9% and Funds Available for Distribution (FAD) increased by 33.1% compared to the prior year.
- CareTrust REIT Inc (CTRE) has a strategic approach to lending, focusing on relationships that may lead to future real estate acquisitions, attributing about $260 million of real estate acquisitions in the last 12 months to this strategy.
- The company's lease coverage ratios remain strong, indicating healthy operational performance at the property level.
- Increased borrowing costs due to higher interest rates, although partially offset by strategic financial management.
- Some portfolio properties, specifically those managed by Priority Management Group and WLC, reported declining coverage due to one-time reserve accruals and operational headwinds.
- Challenges in the regulatory environment, particularly with the CMS staffing mandate, which could impact operational capabilities in skilled nursing facilities.
- The company is still under contract to sell a portfolio of 11 skilled nursing assets with negative EBITDA, facing financing challenges although progress is being made.
- CareTrust REIT Inc (CTRE) collected 98% of rents, with 2% uncollected due to underperformance in some senior housing operations, although improvements are expected.
Thank you for standing by, and my name is Mark and I will be your conference operator today. At this time, I would like to welcome everyone to CareTrust REIT, Inc. First Quarter 2020 for operating results. (Operator Instructions)
I would now like to turn the call over to Lauren Beale, Senior Vice President and Controller.
Welcome to CareTrust REIT's first quarter 2024 earnings call. Participants should be aware that this call is being recorded, and listeners are advised that any forward-looking statements made on today's call are based on management's current expectations, assumptions and beliefs about CareTrust's business and the environment in which it operates.
These statements may include projections regarding future financial performance, dividends, acquisitions, investment return financings, and other matters. It may or may not reference other matters affecting the company's business or the businesses of its tenants, including factors that are beyond their control, such as natural
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