CareTrust REIT Expands U.K. Care Homes in $1.4B LNT Partnership, Raises 2026 Outlook

Key Points

• CareTrust REIT is partnering with LNT in a transaction valued at approximately $1.4 billion covering 45 new U.K. care homes with 2,970 units. CareTrust acquired 24 lease-up properties for about £576 million, while 21 additional developments are expected to be purchased in 2027 for £504 million.
• The lease-to-SHOP structure allows LNT’s Crystal Care to operate the homes during stabilization before transitioning them to CareTrust’s SHOP platform, helping reduce lease-up risk. The deal is expected to increase SHOP’s share of net operating income from 2% to 20% and senior housing’s portfolio mix from 26% to 40%.
• CareTrust raised its 2026 outlook to $1.54–$1.57 in net income, $2.06–$2.09 in normalized FFO, and $2.02–$2.05 in normalized FAD per share, while expecting pro forma net debt to EBITDA to remain in the mid- to high-two-times range.

CareTrust REIT NYSE: CTRE announced a strategic partnership with U.K. care-home developer and operator LNT, combining the company’s newer growth initiatives in U.K. care homes and senior housing operating partnerships, or SHOP, in a transaction valued at approximately $1.4 billion.

The transaction is expected to ultimately cover 45 U.K. care homes with 2,970 units. CareTrust acquired an initial 24 homes that are in lease-up on Oct. 1 for approximately £576 million. The remaining 21 homes are under development and are expected to be purchased during 2027 for £504 million.

CareTrust said the properties are new, purpose-built, private-pay care homes. LNT’s operating company, Crystal Care, will lease the properties while they move toward stabilized occupancy, with the lease guaranteed by LNT’s parent company. Once stabilized, the properties will transition to a SHOP management structure, with Crystal Care continuing as manager.

Lease-to-SHOP Structure

James Callister, CareTrust’s chief investment officer, said the structure is designed to allow the REIT to acquire care homes while avoiding the earnings dilution typically associated with new developments during their lease-up periods.

“Rather than absorbing the ramp-up, we’re earning through it,” Callister said. He added that the arrangement enables CareTrust to acquire high-quality care homes at scale while the properties move toward stabilization.

CareTrust also received an option to acquire LNT in the future under the agreement. Callister said the portfolio’s eventual conversion to SHOP would provide significant diversification through newly built senior-housing assets.

The company said that, once the properties convert to SHOP, its SHOP net operating income mix is expected to increase from 2% to 20%. Its senior-housing portfolio mix is expected to rise from 26% to 40%, while the transaction would add more than $1.5 billion in asset value, according to the presentation.

CareTrust said the homes are expected to yield in the high-7% range after conversion to SHOP, with further potential for growth.

LNT Development Pipeline

Tri Tran, CareTrust’s senior vice president and head of SHOP investments, said LNT has more than 30 years of experience developing and operating care homes and is currently the most prolific care-home developer in the United Kingdom.

Tran said the 45 homes are located in markets with favorable population, homeownership and home-value characteristics. Each property has en suite wet rooms, which he said supports demand for the new supply.

LNT’s vertically integrated model spans site selection, design, planning, construction and operations, according to CareTrust. Tran said this operating structure has enabled LNT to achieve an approximate 17% yield on cost. Beyond the 45 properties covered by the transaction, LNT has another 132 sites in its development pipeline.

CareTrust said the partnership provides a path to participate in development at scale as demand for senior housing increases, while limiting development and lease-up risk.

Financing and Updated Guidance

Derek Bunker, CareTrust’s chief financial officer, said the initial tranche of the LNT acquisition was funded through a mix of settled forward equity contracts and a draw on the company’s revolving credit facility.

Even after the transaction, CareTrust expects pro forma net debt to EBITDA to remain in the mid- to high-two-times range, Bunker said. He added that the company retains capacity to pursue additional growth opportunities in the United States and United Kingdom.

CareTrust said it is evaluating financing alternatives including equity, term loans, a larger revolver and other capital sources depending on market conditions.

In connection with the LNT transaction and other recently completed investment activity, the company raised its full-year 2026 outlook. CareTrust now expects:

• Net income attributable to CareTrust of approximately $1.54 to $1.57 per share;
• Normalized funds from operations of approximately $2.06 to $2.09 per share; and
• Normalized funds available for distribution of approximately $2.02 to $2.05 per share.

The company previously entered the U.K. market through its acquisition of London-listed Impact Healthcare REIT in a transaction valued at approximately $860 million. Since that acquisition, CareTrust said it has acquired an additional $425 million of care homes. The company also said it expects to have invested roughly $400 million in its SHOP platform and near-term SHOP pipeline during the first 12 months after establishing that business.

About CareTrust REIT (NYSE:CTRE)

CareTrust REIT, Inc is a real estate investment trust that owns, acquires, develops, and leases healthcare-related properties. Its portfolio is primarily focused on skilled nursing facilities, assisted living communities, and other post-acute care properties operated by third-party healthcare providers.

The company generally leases its properties under long-term agreements, including triple-net leases, under which tenants are typically responsible for property-level expenses such as taxes, insurance, and maintenance.

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