CareTrust REIT (NYSE:CTRE) executives used the company’s fourth-quarter 2025 earnings call to highlight what CEO Dave Sedgwick called a “transformational year,” pointing to record investment activity, a significantly expanded team, and new operating platforms in the United Kingdom and seniors housing operating properties (SHOP).
Sedgwick also noted the recent retirement of “Dollar Bill Wagner,” crediting him with helping build the company’s foundation. Looking ahead, management said it is entering 2026 with what it described as a deeper organization, a stable operating backdrop in skilled nursing, and additional growth avenues through UK care homes and SHOP.
2025 investment activity and portfolio evolution
CareTrust reported total investments of $1.8 billion during 2025, which management said surpassed the company’s prior record set in 2024. Sedgwick said the investment activity supported 17.3% year-over-year normalized FFO per share growth. He also emphasized increasing diversification across geography, asset type, operator/borrower/manager relationships, and payer sources, while pointing to “continual improvement” in EBITDA rent coverage.
Sedgwick added that CareTrust ended the year with market capitalization growth of 61% to $8.2 billion, and cited an approximate 439% total shareholder return over the ten years through year-end.
Fourth-quarter deals, pipeline, and sector competition
Chief Investment Officer James Callister said the company completed approximately $562 million of investments in the fourth quarter. Highlights included CareTrust’s first SHOP investment: three communities in Texas totaling 270 assisted living and memory care units, with Sinceri Senior Living engaged to help manage the communities.
Callister said fourth-quarter investments also included:
- About $84 million of loans, mostly in skilled nursing
- Approximately $27 million to acquire two senior housing communities triple-net leased to an established operator
- Acquisition of 14 skilled nursing facilities across three transactions
Callister said the blended stabilized yield on fourth-quarter investments was 8.8%.
Since year-end, CareTrust has closed another approximately $215 million of investments, including:
- Six skilled nursing facilities in the Mid-Atlantic, leased to a “quality operator” in a new CareTrust relationship
- Two UK care homes net leased to an existing operator
On the call’s Q&A portion, management identified the Mid-Atlantic operator as the Larry H. Miller Group, adding it is not affiliated with “anything else anybody has announced,” and specifically noted it is not Sabra.
Callister said the company’s pipeline stood at approximately $500 million and described the mix as roughly half UK care homes, about a third U.S. skilled nursing, one small SHOP deal, and the remainder a combination of loans and senior housing triple-net opportunities. He emphasized that CareTrust only includes in quoted pipeline figures deals it has “a reasonable level of confidence” it can lock up and close within 12 months, and that larger portfolios under review may not be included.
On competition, Callister said the company is seeing the most competitive conditions in SHOP, where cap rates have been compressing as investors seek exposure to improving operating trends. He said CareTrust is still finding SHOP opportunities that meet its return objectives, while also benefiting from its push into the UK and its skilled nursing pipeline.
Financial results and 2026 guidance
CFO Derek Bunker reported that in the fourth quarter, normalized FFO increased 42.7% over the prior quarter to $104.1 million, and normalized FAD increased 38.7% to $103 million. On a per-share basis, normalized FFO increased $0.07, or 17.5%, to $0.47, while normalized FAD rose $0.05, or 12.2%, to $0.46.
For the full year, Bunker said normalized FFO per share rose $0.26, or 17.3%, to $1.76. Normalized FAD per share increased $0.22, or 14.3%, to $1.76.
CareTrust also provided initial 2026 guidance of:
- Normalized FFO per share: $1.90 to $1.95
- Normalized FAD per share: $1.90 to $1.95
Bunker said the midpoints of both ranges represent 9.4% year-over-year increases. He added that guidance does not assume any new investments, dispositions, debt repayments, or debt/equity issuances beyond those announced to date, and assumes the company’s equity forward contracts settle at year-end.
Capital, balance sheet, and funding approach
In the fourth quarter, CareTrust sold 6.5 million shares on a forward basis at an average price of $37.30, for gross proceeds of approximately $242.5 million. After year-end, the company sold another 3.5 million shares on a forward basis for gross proceeds of $129.5 million. Bunker said gross proceeds pending from unsettled equity forward contracts under the ATM program totaled about $372 million, which the company anticipates using to fund its acquisition pipeline.
Bunker said liquidity remained strong, including approximately $100 million of cash on hand as of February 11, 2026, and full availability on a $1.2 billion revolving credit facility. He also cited low leverage metrics as of year-end, including net debt to EBITDA of 0.7x, net debt to enterprise value of 3.7%, and a fixed charge coverage ratio of 10.5x.
Asked about funding future growth given minimal leverage, management said it expects “more of the same” and described weighing the balance between equity levels and revolver usage, with a potential shift toward carrying more on the revolver and later looking to the bond market “especially as we fully realize the IG savings that we think we can get.”
Operating commentary: skilled nursing, SHOP underwriting, and future opportunities
On skilled nursing, Sedgwick said the operating environment is “in a really good place,” citing improved labor conditions and supportive state reimbursement and regulatory dynamics. He said CareTrust’s skilled nursing occupancy was “right around 79% to 80%,” leaving what he characterized as “quite a bit of upside” as occupancy rises, which could help offset ongoing industry headwinds.
Regarding SHOP, management reiterated its underwriting objective of achieving an unlevered IRR in the low double digits. Callister said underwriting standards have not materially changed, but cap rate compression has shifted how the company evaluates the “path” to meeting return targets, including factors such as lease-up status, capital expenditure needs, and expectations for revenue and expense growth.
In response to questions on yields, management said skilled nursing facility yields are expected to remain in the 9s, while SHOP cap rates have been compressing with a wider range depending on asset characteristics. For UK care homes, management described typical yields as pre-tax mid-8s to higher and post-tax mid-7s to higher. Bunker also stated the company typically does not exclude the impact of UK withholding tax when providing blended stabilized yield figures.
Management also addressed longer-term possibilities, saying UK operator relationships have expressed interest in continuing triple-net growth and that applying CareTrust’s SHOP platform to the UK is “more likely than not” over time. On development, management said it generally does not “pencil” in a significant way in the U.S. today, but it would consider limited development in the right circumstances with the right operator and location.
About CareTrust REIT (NYSE:CTRE)
CareTrust REIT, Inc is a real estate investment trust based in Deerfield Beach, Florida, specializing in the ownership, acquisition and management of net-leased healthcare properties. The company primarily focuses on seniors housing and post-acute care facilities, entering into long-term, triple-net lease agreements with leading operators in the skilled nursing, assisted living, memory care, inpatient rehabilitation and specialty hospital sectors. Through its portfolio, CareTrust REIT aims to provide investors with stable and predictable rental income while supporting the ongoing demand for quality healthcare real estate across the United States.
Since its initial public offering in September 2013, CareTrust REIT has pursued a disciplined acquisition strategy, targeting properties in primary and select secondary markets.
