0001590717ctre:CtrPartnershipMemberctre:InnAtBartonCreekMemberctre:AssistedAndIndependentLivingPropertiesMember2023-01-012023-12-31
Table of Contents

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K
 (Mark One)
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 20202023
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____ to _____
Commission file number 001-36181
CareTrust REIT, Inc.
(Exact name of registrant as specified in its charter)
Maryland46-3999490
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
905 Calle Amanecer, Suite 300, San Clemente, CA 92673
(Address of principal executive offices, including zip code)
Registrant’s telephone number, including area code (949) 542-3130
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $0.01 per shareCTREThe NasdaqNew York Stock Market LLCExchange
(Nasdaq Global Select Market)
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes    No 
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes    No 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes    No 
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes    No 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b).
Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Act.) Yes    No 


Table of Contents
State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter: $1.6 $2.0 billion.
As of February 9, 2021,7, 2024, there were 95,893,541130,503,392 shares of the registrant’s common stock outstanding.
DOCUMENTS INCORPORATED BY REFERENCE


Table of Contents
Portions of the definitive Proxy Statement for the registrant’s 20212024 Annual Meeting of Stockholders, which will be filed with the Securities and Exchange Commission within 120 days after the end of fiscal year 2020,2023, are incorporated by reference into Part III of this Report.



Table of Contents
TABLE OF CONTENTS
PART I
Item 1.
Item 1A.
Item 1B.
Item 2.Properties
Item 3.1C.
Legal ProceedingsCybersecurity
Item 4.Mine Safety Disclosures2.
Item 3.
Item 4.
PART II
Item 5.
Item 6.
Selected Financial Data[Reserved]
Item 7.
Item 7A.
Item 8.
Item 9.
Item 9A.
Item 9B.
Item 9C.
PART III
Item 10.
Item 11.
Item 12.
Item 13.
Item 14.
PART IV
Item 15.
Exhibits, Financial StatementsExhibit and Financial Statement Schedules
Item 16.
Signatures



3

Table of Contents
STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
Certain statements in this report may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Those forward-looking statements include all statements that are not historical statements of fact and those regarding our intent, belief or expectations, including, but not limited to, statements regarding: future financing plans, business strategies, growth prospects and operating and financial performance; expectations regarding the making of distributions and the payment of dividends; and compliance with and changes in governmental regulations.
Words such as “anticipate(s),” “expect(s),” “intend(s),” “plan(s),” “believe(s),” “may,” “will,” “would,” “could,” “should,” “seek(s)” and similar expressions, or the negative of these terms, are intended to identify such forward-looking statements. These statements are based on management’s current expectations and beliefs and are subject to a number of risks and uncertainties that could lead to actual results differing materially from those projected, forecasted or expected. Although we believe that the assumptions underlying the forward-looking statements are reasonable, we can give no assurance that our expectations will be attained. Factors which could have a material adverse effect on our operations and future prospects or which could cause actual results to differ materially from our expectations include, but are not limited to: (i) the COVID-19 pandemic and the measures taken to prevent its spread and the related impact on our business or the businesses of our tenants; (ii) the ability and willingness of our tenants to meet and/or perform their obligations under the triple-net leases we have entered into with them, including without limitation, their respective obligations to indemnify, defend and hold us harmless from and against various claims, litigation and liabilities; (ii) the risk that we may have to incur additional impairment charges related to our assets held for sale if we are unable to sell such assets at the prices we expect; (iii) the impact of healthcare reform legislation, including minimum staffing level requirements, on the operating results and financial conditions of our tenants; (iv) the ability of our tenants to comply with applicable laws, rules and regulations in the operation of the properties we lease to them; (iv)(v) the ability and willingness of our tenants to renew their leases with us upon their expiration, and the ability to reposition our properties on the same or better terms in the event of nonrenewal or in the event we replace an existing tenant, as well as any obligations, including indemnification obligations, we may incur in connection with the replacement of an existing tenant; (v)(vi) the availability of and the ability to identify (a) tenants who meet our credit and operating standards, and (b) suitable acquisition opportunities and the ability to acquire and lease the respective properties to such tenants on favorable terms; (vi)(vii) the ability to generate sufficient cash flows to service our outstanding indebtedness; (vii)(viii) access to debt and equity capital markets; (viii)(ix) fluctuating interest rates; (ix)(x) the impact of public health crises, including significant COVID-19 outbreaks as well as other pandemics or epidemics; (xi) the ability to retain our key management personnel; (x)(xii) the ability to maintain our status as a real estate investment trust (“REIT”); (xi)(xiii) changes in the U.S. tax law and other state, federal or local laws, whether or not specific to REITs; (xii)(xiv) other risks inherent in the real estate business, including potential liability relating to environmental matters and illiquidity of real estate investments; and (xiii)(xv) any additional factors included in this report, including in the section entitled “Risk Factors” in Item 1A of this Annual Report, as such risk factors may be amended, supplemented or superseded from time to time by other reports we file with the Securities and Exchange Commission (“SEC”(the “SEC”), including subsequent Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q.
Forward-looking statements speak only as of the date of this report. Except in the normal course of our public disclosure obligations, we expressly disclaim any obligation to release publicly any updates or revisions to any forward-looking statements to reflect any change in our expectations or any change in events, conditions or circumstances on which any statement is based.
TENANT INFORMATION
This Annual Report on Form 10-K includes information regarding certain of our tenants that lease properties from us, some of which are not subject to SEC reporting requirements. The Ensign Group, Inc. (“Ensign”) and The Pennant Group, Inc. (“Pennant”) are subject to the reporting requirements of the SEC and are required to file with the SEC annual reports containing audited financial information and quarterly reports containing unaudited financial information. You are encouraged to review Ensign and Pennant’s publicly available filings, which can be found at the SEC’s website at www.sec.gov.
The information related to our tenants contained or referred to in this Annual Report on Form 10-K was provided to us by such tenants or derived from SEC filings or other publicly available information. We have not verified this information through an independent investigation or otherwise. We have no reason to believe that this information is inaccurate in any material respect, but we cannot provide any assurance of its accuracy. We are providing this data for informational purposes only.

4

Table of Contents
PART I
All references in this report to “CareTrust REIT,” the “Company,” “we,” “us” or “our” mean CareTrust REIT, Inc. together with its consolidated subsidiaries. Unless the context suggests otherwise, references to “CareTrust REIT, Inc.” mean the parent company without its subsidiaries.
ITEM  1.    Business
Our Company
CareTrust REIT is a self-administered, publicly-traded REIT engaged in the ownership, acquisition, financing, development and leasing of skilled nursing, seniors housing and other healthcare-related properties. As of December 31, 2020,2023, CareTrust REIT’s real estate portfolio consisted of 218REIT owned, directly or through joint ventures, and leased to independent operators, 226 skilled nursing facilities (“SNFs”), multi-service campuses, and assisted living facilities (“ALFs”) and independent living facilities (“ILFs”) (including facilities classified as held for sale) consisting of 22,46623,928 operational beds and units located in 28 states with the highest concentration of properties by rental income located in California Texas, Louisiana, Idaho and Arizona.Texas. As of December 31, 2020,2023, we also had other real estate related investments consisting of one preferred equity investment, eight real estate secured loans receivable and one mezzanine loan receivable with a carrying value of $15.0$180.4 million.
The following table summarizes the Company’s acquisitions from January 1, 2023 through February 8, 2024 (dollars in thousands):
Type of Property
Purchase Price(1)
Initial Annual Cash Rent(2)
Number of Properties
Number of Beds/Units(3)
Skilled nursing(4)
$169,181 $13,764 10 1,256 
Multi-service campuses25,276 1,916 168 
Assisted living(5)
50,354 4,517 327 
Total$244,811 $20,197 16 1,751 
(1)Purchase price includes capitalized acquisition costs.
(2)Initial annual cash rent represents initial cash rent for the first twelve months excluding the impact of straight-line rent or rent abatement in the first one to three months, if applicable.
(3)The number of beds/units includes operating beds at acquisition date.
(4)Includes three SNFs held through joint ventures. See Note 3, Real Estate Investments, Net, and Note 11, Variable Interest Entities, for additional information.
(5)Includes one ALF held through a joint venture. See Note 14, Subsequent Events, for additional information.
The following table summarizes other real estate related investments by the Company from January 1, 2023 through February 8, 2024 (dollars in thousands):
Investment TypeInvestment
Annual Initial Interest Income(1)
Number of Properties
Number of Beds/Units(2)
Mortgage secured loans receivable$51,584 $4,806 772 
Mezzanine loans receivable52,165 7,119 N/AN/A
Preferred equity1,782 267 N/AN/A
Total$105,531 $12,192 772 
(1)Represents annualized acquisition-date interest income on any mortgage secured loans receivable and mezzanine loans, less subservicing fees, if applicable. For floating rate loans, interest income has been calculated using the benchmark rate floor.
(2)The number of beds/units includes operating beds at the investment date.
From January 1, 20202023 through February 10, 2021,December 31, 2023, we acquired six skilled nursing facilities,sold one multi-service campusSNF and four ALFs for net proceeds of $18.3 million, resulting in a net gain on sale of property of $2.2 million. Subsequent to December 31, 2023, we closed on the sale of one SNF and one assisted living facility for approximately $89.8 million, which includes capitalized acquisition costs. These acquisitions are expected to generate initial annual cash revenues of approximately $7.6 million andALF with an initial blended yield of approximately 8.5%. We also made one mezzanine loan with aaggregate carrying value of $15.0$1.0 million, with a fixed interest rate of 12.0%.which approximated the net sales proceeds received.
We generate revenues primarily by leasing healthcare-related properties to healthcare operators in triple-net lease arrangements, under which the tenant is solely responsible for the costs related to the property (including property taxes, insurance, maintenance and repair costs and capital expenditures, subject to certain exceptions in the case of properties leased to Ensign)Ensign and Pennant, as defined below). From time to time, we also extend secured mortgage loans to healthcare operators, secured by healthcare-related properties, and secured mezzanine loans to healthcare operators, secured by membership interests in healthcare-related properties. From time to time, we also partner with third-party institutional investors to invest in healthcare
5

Table of Contents
real estate through joint ventures. Pursuant to our joint ventures, we typically contribute 97.5% of the joint venture’s total investment amount and we receive 100% of the preferred equity interest in the joint venture in exchange for 95% of that total investment and a 50% common equity interest in the joint venture in exchange for the remaining 2.5% of that investment. Our joint venture partner contributes the remaining 2.5% of the joint venture’s total investment amount in exchange for a 50% common equity interest in the joint venture.
We conduct and manage our business as one operating segment for internal reporting and internal decision making purposes. We expect to grow our portfolio by pursuing opportunities to acquire additional properties that will be leased to a diverse group of local, regional and national healthcare providers, which may include othernew or existing skilled nursing operators, as well as seniors housing operators, behavioral health facilities and related businesses. We also anticipate diversifying our portfolio over time, including by acquiring properties in different geographic markets, and in different asset classes. In addition, we actively monitor the clinical, regulatory and financial operating results of our tenants, and work to identify opportunities within their operations and markets that could improve their operating results at our facilities. We communicate such observations to our tenants; however, we have no contractual obligation to do so. Moreover, our tenants have sole discretion with respect to the day-to-day operation of the facilities they lease from us, and how and whether to implement any observation we may share with them. We also actively monitor the overall occupancy, skilled mix, and other operating metrics of our tenants on at least a monthly basis including, beginning in the quarter ended June 30, 2020, any stimulus funds received by each tenant.basis. We have replaced tenants in the past, and may elect to replace tenants in the future, if they fail to meet the terms and conditions of their leases with us. In addition, we have, and may from time to time in the future, repurpose facilities for other uses, such as behavioral health. The replacement tenants may include tenants with whom we have had no prior landlord-tenant relationship as well as current tenants with whom we are comfortable expanding our relationships. We have also provided select tenants with strategic capital for facility upkeep and modernization, as well as short-term working capital loans when they are awaiting licensure and certification or conducting turnaround work in one or more of our properties, and we may continue to do so in the future. We have also assisted our tenants with transitioning to lower emissions technologies through our tenant incentive program, where we support efficiency projects through our dedicated tenant capital expenditure budget, providing sustainability incentives rent-free. In addition, we periodically reassess the investments we have made and the tenant relationships we have entered into, and have selectively disposed of facilities or investments, or terminated such relationships, and we expect to continue making such reassessments and, where appropriate, taking such actions.
We elected to be taxed as a REIT for U.S. federal income tax purposes beginning with our taxable year ended December 31, 2014. We believe that we have been organized and have operated, and we intend to continue to operate, in a manner to qualify for taxation as a REIT. We operate through an umbrella partnership, commonly referred to as an UPREIT structure, in which substantially all of our properties and assets are held through CTR Partnership, L.P. (the “Operating Partnership”). The Operating Partnership is managed by CareTrust REIT’s wholly owned subsidiary, CareTrust GP, LLC, which is the sole general partner of the Operating Partnership. To maintain REIT status, we must meet a number of organizational and operational requirements, including a requirement that we annually distribute to our stockholders at least 90% of our REIT taxable income, determined without regard to the dividends paid deduction and excluding any net capital gains.
5

Table of Contents
Our Industry
The skilled nursing industry has evolved to meet the growing demand for post-acute and custodial healthcare services generated by an aging population, increasing life expectancies and the trend toward shifting of patient care to lower cost settings. We believe this evolution has led to a number of favorable improvements in the industry, as described below:
Shift of Patient Care to Lower Cost Alternatives.  The growth of the senior population in the United States continues to increase healthcare costs. In response, federal and state governments have adopted cost-containment measures that encourage the treatment of patients in more cost-effective settings such as SNFs, for which the staffing requirements and associated costs are often significantly lower than acute care hospitals, inpatient rehabilitation facilities and other post-acute care settings. As a result, SNFs are generally serving a larger population of higher-acuity patients than in the past. The same trend is impacting ALFs, which are now generally serving some patients who previously would have received services at SNFs.
Significant Acquisition and Consolidation Opportunities. The skilled nursing industry is large and highly fragmented, characterized predominantly by numerous local and regional providers. We believe this fragmentation provides significant acquisition and consolidation opportunities for us.
Widening Supply and Demand Imbalance. The number of SNFs has declined modestly over the past several years. According to the American Health Care Association, the nursing home industry was comprised of approximately 15,70015,000 facilities as of December 2016,July 2023, as compared with over 16,70015,600 facilities as of December 2000.July 2016. We expect that the supply/demand imbalance in the skilled nursing industry will increasinglyincreasingly favor skilled nursing and assisted living providers due to the shift of patient care to lower cost settings and an aging population and increasing life expectancies.population.
6

Table of Contents
Increased Demand Driven by Aging Populations and Increased Life Expectancy. As life expectancy continues to increase in the United States and seniors account for a higher percentage of the total U.S. population, we believe the overall demand for skilled nursing services will increase. At present, the primary market demographic for skilled nursing services is individuals age 75 and older. The U.S. Census reportedestimates that there were over 5458 million people in the United States in 20192022 over the age of 65. The U.S. Census estimates this group to be one of the fastest growing segments of the United States population, projecting that it will almost double between 20162020 and 2060. According to the Centers for Medicare & Medicaid Services, nursing home care facilities and continuing care retirement expenditures are projected to grow from approximately $169$193.6 billion in 20182022, which includes federal expenditures in response to the COVID-19 pandemic, to approximately $266$283.3 billion in 2028, representing a compounded annual growth rate of 5.0%. We2031. Although seniors housing and skilled nursing occupancy rates have declined during the COVID-19 pandemic, we believe that these trends in population will support an increasing demand for skilled nursing services in the long-term, which in turn will likely support an increasing demand for the services provided within our properties.
While most factors described above indicate projected growth for our industry, labor shortages and proposed minimum staffing requirements from the Centers for Medicare and Medicaid Services (see “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Recent Developments — Regulatory Updates”) have led, and may continue to lead, to increased costs. Additionally, elevated interest rates and volatility in the capital markets have limited the availability of debt capital, increased our costs of capital to finance acquisitions and increased our borrowing costs. Further, our operators have experienced increased costs, liquidity constraints and financing difficulties due to the current market conditions, which could cause them to be unable or unwilling to make rental or interest payments when due. It is difficult to predict the duration of the effects of these economic and market conditions on the industry.
Portfolio Summary
We have a geographically diverse portfolio of properties, consisting of the following types as of December 31, 2020:2023:
Skilled Nursing Facilities. SNFs are licensed healthcare facilities that provide restorative, rehabilitative and nursing care for people not requiring the more extensive and sophisticated treatment available at acute care hospitals. Treatment programs include physical, occupational, speech, respiratory and other therapies, including sub-acute clinical protocols such as wound care and intravenous drug treatment. Charges for these services are generally paid from a combination of government reimbursement and private sources. As of December 31, 2020,2023, our portfolio included 177included 151 SNFs 20 of which(excluding 12 SNFs held for sale). Included in the 151 SNFs are three SNFs held through joint ventures and one SNF which is non-operational. In addition, our portfolio includes 25 SNFs located on campuses that also have assistedALFs or independent living facilities,ILFs, which we refer to as multi-service campuses (see below under “Multi-Service Campuses”).
Assisted Living Facilities. ALFs are licensed healthcare facilities that provide personal care services, support and housing for those who need help with activities of daily living, such as bathing, eating and dressing, yet require limited medical care. The programs and services may include transportation, social activities, exercise and fitness programs, beauty or barber shop access, hobby and craft activities, community excursions, meals in a dining room setting and other activities sought by residents. These facilities are often apartment-like buildings with private residences ranging from single rooms to large apartments. Certain ALFs may offer higher levels of personal assistance for residents requiring memory care as a result of Alzheimer’s disease or other forms of dementia. The level of personal assistance that may be provided at ALFs is based in part on state regulations. Since states often apply differing license classifications, and standards, regulatory requirements may differ significantly between states. As of December 31, 2020,2023, our portfolio included 39 34 ALFs (excluding two ALFs classified as held for sale), some of which also contain independent living and memory care units. Included in the 34 ALFs are two facilities which are in the process of being repurposed and two facilities which are non-operational.
Independent Living Facilities. ILFs, also known as retirement communities or senior apartments, are not healthcare facilities and are not licensed to provide healthcare services to residents. The facilities typically consist of entirely
6

Table of Contents
self contained self-contained apartments, complete with their own kitchens, baths and individual living spaces, as well as parking for tenant vehicles. They are most often rented unfurnished, and generally can be personalized by the tenants, and are typically occupied by an individual or a couple over the age of 55. These facilities offer various services and amenities such as laundry, housekeeping, dining options/meal plans, exercise and wellness programs, transportation, social, cultural and recreational activities, on site security and emergency response programs.programs. As of December 31, 2020,2023, our portfolio included 2two ILFs.
Multi-Service Campuses. Multi-service campuses generally include some combination of co-located SNFs, ALFs, ILFs, and/or memory care units all housed at a single location and operated as a continuum of care. We also refer to continuing care retirement communities as multi-service campuses. These facilities are often marketed as an opportunity for residents to “age in place,” and tend to attract couples where the individuals may require or benefit
7

Table of Contents
from differing levels of care.care. As of December 31, 2020,2023, our portfolio included 2025 facilities that we classify as multi-service campuses.
Our portfolio of SNFs, ALFs, ILFs and multi-service campuses is broadly diversified by geographic location throughout the United States, with concentrations in California Texas, Louisiana, Idaho and ArizonaTexas based on rental income.
Significant Master Leases
As of December 31, 2023, we leased 94 facilities to subsidiaries of Ensign, which have a total of 9,776 operational beds. We have leased a significant number of our properties to subsidiaries of Ensign on a triple-net basis under eight long-term leases, each with its own pool of properties, that have varying maturities and diversity in both property type and geography (each an “Ensign Master Lease” and collectively, the “Ensign Master Leases”). The Ensign Master Leases provide for initial terms in excess of ten years with staggered expiration dates and no purchase options. At Ensign’s option, each Ensign Master Lease may be extended for up to three five yearfive-year renewal terms beyond the initial term and, if elected, the renewal will be effective for all of the leased property then subject to the applicable Ensign Master Lease. During the year ended December 31, 2020, the Company acquired four additional facilities, which have a total of 620 operational beds, leased to subsidiaries of Ensign on a triple-net basis under two separate master lease agreements, each of which are not included under the Ensign Master Leases.contains a purchase option. As of December 31, 2020, the2023, annualized contractual rental income from the Ensign Master Leases was $53.4$63.8 million, or 31%, and annualized contractual rental income from all Ensign leases was$57.2 $67.8 million, or 33.0%,representing 31% and 33% of total annualized contractual rental income.income, respectively. Rent is escalated annually in June under the Ensign Master Leases, and in December for the four additional facilities leased to Ensign, by an amount equal to the product of (1) the lesser of the percentage change in the Consumer Price Index (“CPI”) (but not less than zero) or 2.5%, and (2) the prior year’s rent.rent. The Ensign Master Leases are guaranteed by Ensign and contain cross-default provisions. The obligations under the lease agreements for the four additional facilities leased to subsidiaries of Ensign are guaranteed by Ensign but do not contain cross-default provisions with the Ensign Master Leases.
On October 1, 2019, Ensign completed its previously announced separation of its home health and hospice operations and substantially all of its senior living operations into a separate independent publicly traded company through the distribution of shares of Pennant common stock (the “Pennant Spin”). As a result of the Pennant Spin, on October 1, 2019, the Company amended the Ensign Master Leases to reduce the number of facilities covered by the Ensign Master Leases and entered into one long-term triple-net lease (the “Pennant Master Lease”) to lease those facilities to Pennant. The contractual initial annual cash rent under the Pennant Master Lease was approximately $7.8 million. The Pennant Master Lease carries an initial term of 15 years, with two five-year renewal options and CPI-based rent escalators. The contractual annual cash rent under the amended Ensign Master Leases was reduced by approximately $7.8 million. Ensign has guaranteed the Pennant Master Lease. If Pennant achieves a specified portfolio coverage ratio and continuously maintains it for a specified period, Ensign’s obligations under the guaranty with respect to the Pennant facilities would be released. As of December 31, 2020, the Company leased 89 facilities to subsidiaries of Ensign, which have a total of 9,546 operational beds and 11 facilities to Pennant, which have a total of 1,193 operational beds and Ensign and Pennant represented 33% and 5%, respectively, of the Company’s contractual rental income, exclusive of operating expense reimbursements, on an annualized run-rate basis.
As of December 31, 2020, 2023, 15 of our properties were leased to subsidiaries of Priority Management Group (“PMG”) on a triple-net basis under one long-term lease (the “PMG Master Lease”), and have a total of 2,1452,144 operational beds. The PMG Master Lease commenced on December 1, 2016, and provides for an initial term of fifteen years, with two five-year renewal options. As of December 31, 2020, PMG represented 16% of the Company’s2023, annualized contractual rental income exclusive of operating expense reimbursements, on an annualized run-rate basis.
The Ensign Master Leases account for a substantial portion of our revenues, and Ensign’s financial condition and ability and willingness to (i) satisfy its obligations underfrom the Ensign Master Leases, (ii) renew the Ensign Master Leases upon expiration of the initial base terms thereof, and (iii) satisfy its guaranty obligations under the PennantPMG Master Lease significantly impacts our revenues and our ability to service our indebtedness and to make distributions to our stockholders. There can be no assurance that Ensign has sufficient assets, income and access to financing to enable it to satisfy its obligations under the Ensign Master Leases or its guarantywas $31.2 million, representing 15% of the Pennant Master Lease, and any inability or unwillingness on its part to do so would have a material adverse effect on our business, financial condition, results of operations and liquidity, on our ability to service our indebtedness and other obligations and on our ability to pay dividends to our stockholders, as required for us to qualify, and maintain our status, as a REIT. We also cannot assure you that Ensign will elect to renew the Ensign Master Leasestotal annualized contractual rental income.
7

Table of Contents
with us upon expiration of the initial base terms or any renewal terms thereof or, if such leases are not renewed, that we can reposition the affected properties on the same or better terms. See “Risk Factors - Risks Related to Our Business -and Operations — We are dependent on the healthcare operators that lease our properties to successfully operate their business and make contractual lease payments, and an event that materially and adversely affects their business, financial position or results of operations could materially and adversely affect our business, financial position or results of operations.”
We monitor the creditworthiness of our tenants by evaluating the ability of the tenants to meet their lease obligations to us based on the tenants’ financial performance, including the evaluation of any guarantees of tenant lease obligations. The primary basis for our evaluation of the credit quality of our tenants (and more specifically the tenants’ ability to pay their rent obligations to us) is the tenants’ lease coverage ratios. These coverage ratios compare (i) earnings before interest, income taxes, depreciation, amortization and rent (“EBITDAR”) to rent coverage, and (ii) earnings before interest, income taxes, depreciation, amortization, rent and management fees (“EBITDARM”), to rent coverage. We utilize a standardized 5% management fee when we calculate lease coverage ratios. We obtain various financial and operational information from our tenants each month. We regularly review this information to calculate the above-described coverage metrics, to identify operational trends, to assess the operational and financial impact of the changes in the broader industry environment (including the potential impact of government reimbursement and regulatory changes), and to evaluate the management and performance of the tenant’stenants’ operations. These metrics help us identify potential areas of concern relative to our tenants’ credit quality and ultimately the tenants’ ability to generate sufficient liquidity to meet their ongoing obligations, including their obligations to continue paying contractual rents due to us and satisfying other financial obligations to third parties, as prescribed by our triple-net leases.
8

Table of Contents
Properties by Type:
The following table displays the geographic distribution of our facilities, by property typeexcluding those held for sale, and the related number of beds and units available for occupancy by asset class,property type, as of December 31, 2020.2023. The number of beds or units that are operational may be less than the official licensed capacity.
 TotalSNFsMulti-Service CampusesALFs and ILFs
StatePropertiesBeds/UnitsFacilitiesBedsCampusesBeds/UnitsFacilitiesBeds/Units
CA(1)
46 5,676 32 3,712 1,527 437 
TX45 5,871 40 5,123 536 212 
ID17 1,474 16 1,405 69 — — 
UT13 1,374 913 272 189 
AZ11 1,340 971 — — 369 
IL11 1,053 642 275 136 
WA10 936 839 — — 97 
LA1,164 949 215 — — 
CO785 517 — — 268 
OH609 226 317 66 
IA354 185 169 — — 
MI255 — — — — 255 
NE366 220 146 — — 
MT260 260 — — — — 
NV304 92 — — 212 
MN62 — — — — 62 
NC105 — — — — 105 
NJ98 — — — — 98 
WI89 — — — — 89 
FL80 — — — — 80 
GA148 148 — — — — 
KS102 102 — — — — 
MD120 — — — — 120 
ND83 83 — — — — 
NM124 124 — — — — 
OR53 53 — — — — 
SD81 81 — — — — 
WV67 — — 67 — — 
Total212 23,033 151 16,645 25 3,593 36 2,795 
 TotalSNFsMulti-Service CampusesALFs and ILFs
StatePropertiesBeds/UnitsFacilitiesBedsCampusesBeds/UnitsFacilitiesBeds/Units
TX41 5,207 35 4,426 539 242 
CA34 3,965 25 2,806 710 449 
ID17 1,457 16 1,388 69 — — 
IA15 984 13 815 169 — — 
OH13 1,284 734 550 — — 
UT13 1,392 913 330 149 
WA12 1,082 11 980 — — 102 
AZ11 1,352 986 — — 366 
IL772 644 128 — — 
LA1,164 949 215 — — 
CO785 522 — — 263 
NE366 220 146 — — 
VA279 — — — — 279 
FL404 — — — — 404 
MI189 — — — — 189 
MT260 260 — — — — 
NV304 92 — — 212 
WI206 — — — — 206 
MN62 — — — — 62 
NC100 — — — — 100 
GA105 105 — — — — 
IN162 — — — — 162 
MD120 — — — — 120 
ND110 110 — — — — 
NM136 136 — — — — 
OR53 53 — — — — 
SD99 99 — — — — 
WV67 — — 67 — — 
Total218 22,466 157 16,238 20 2,923 41 3,305 
(1)Includes three SNFs with 385 beds held in consolidated joint ventures.
 
        















9

Table of Contents

Occupancy by Property Type:
The following table displays occupancy by property type for each of the years ended December 31, 20202023 and 2019.2022. Percentage occupancy in the below table is computed by dividing the average daily number of beds occupied by the total number of beds available for use during the periods indicated (beds of acquired facilities are included in the computation following the date of acquisition, or through the date of disposition, only).
 Year Ended December 31,
Property Type20202019
Facilities Leased to Tenants: (1)
  
     SNFs75 %78 %
     Multi-Service Campuses73 %76 %
     ALFs and ILFs86 %83 %
Facilities Operated by CareTrust REIT:(2)
     ILFs91 %89 %
 Year Ended December 31,
Property Type
2023(1)
2022(2)
Facilities Leased to Tenants: (3)
  
     SNFs75 %73 %
     Multi-Service Campuses75 %71 %
     ALFs and ILFs75 %74 %
 
(1)    Occupancy data excludes two facilities which are in the process of being repurposed, one non-operational SNF and two non-operational ALFs.
(2)    Occupancy data excludes two facilities which are in the process of being repurposed and two non-operational ALFs.
(3)    Occupancy data derived solely from information provided by our tenants without independent verification by us. The leased facility financial performance data is presented one quarter in arrears.
(2)    As of December 31, 2019, we owned and operated one ILF. Occupancy data for the year ended December 31, 2020 and December 31, 2019 includes the one ILF owned and operated. We sold the one remaining ILF during the three months ended December 31, 2020.
 
Property Type - Rental Income:
The following tables display the annual rental income and total beds/units for each property type leased to third-party tenants for the years ended December 31, 20202023 and 2019.
 For the Year Ended December 31, 2020
Property TypeRental Income
(in thousands)
Percent
of Total 
Total Beds/
Units 
SNFs$127,200 73 %16,238 
Multi-Service Campuses21,517 13 %2,923 
ALFs and ILFs24,895 14 %3,305 
Total$173,612 100 %22,466 
2022 and total beds/units for each property type as of December 31, 2023 and 2022.
 For the Year Ended December 31, 2023As of December 31, 2023
Property TypeRental Income
(in thousands)
Percent
of Total 
Total Beds/
Units 
SNFs(1)
$145,589 73 %17,366 
Multi-Service Campuses35,779 18 %3,593 
ALFs and ILFs17,231 %2,969 
Total$198,599 100 %23,928 

(1)
Includes three SNFs held in consolidated joint ventures.
 For the Year Ended December 31, 2019
Property TypeRental Income
(in thousands)
Percent
of Total 
Total Beds/
Units 
SNFs$115,362 74 %16,262 
Multi-Service Campuses18,109 12 %2,460 
ALFs and ILFs22,196 14 %3,241 
Total$155,667 100 %21,963 

 For the Year Ended December 31, 2022As of December 31, 2022
Property TypeRental Income
(in thousands)
Percent
of Total 
Total Beds/
Units 
SNFs$135,701 72 %16,193 
Multi-Service Campuses33,149 18 %3,463 
ALFs and ILFs18,656 10 %3,175 
Total$187,506 100 %22,831 






10

Table of Contents

Geographic Concentration - Rental Income:
The following table displays the geographic distribution of annual rental income for properties leased to third-party tenants for the years ended December 31, 20202023 and 2019 (in thousands, except percentages)2022 (dollars in thousands).
 For the Year Ended December 31, 2020For the Year Ended December 31, 2019
State 
Rental Income
Percent of Total 
Rental Income
Percent of Total 
CA$36,853 21 %$35,297 23 %
TX33,276 19 %32,364 21 %
LA16,022 %15,880 10 %
ID13,482 %11,717 %
AZ12,466 %12,461 %
OH9,225 %964 %
UT7,289 %6,740 %
MI5,729 %6,007 %
CO5,561 %5,485 %
WA5,201 %5,145 %
IL4,824 %4,725 %
IA4,672 %2,815 %
VA3,248 %3,171 %
WI2,937 %2,535 %
NV2,092 %2,091 %
FL1,572 %550 — %
NC1,107 %1,097 %
MT1,079 %550 — %
NM1,008 %987 %
NE956 %956 %
SD905 %886 %
IN829 %760 — %
GA810 — %485 — %
WV714 — %384 — %
MD567 — %229 — %
ND442 — %433 — %
OR380 — %376 — %
MN366 — %577 — %
Total$173,612 100 %$155,667 100 %
 For the Year Ended December 31, 2023For the Year Ended December 31, 2022
State 
Rental Income(1)
Percent of Total 
Rental Income
Percent of Total 
CA$58,838 30 %$51,553 27 %
TX43,768 22 %41,021 22 %
LA17,856 %17,092 %
ID14,943 %14,446 %
AZ13,293 %12,968 %
UT7,823 %7,612 %
IL6,975 %6,074 %
CO5,960 %5,796 %
WA4,893 %4,793 %
IA4,584 %5,318 %
OH4,141 %4,128 %
MT2,254 %2,188 %
NV2,231 %2,177 %
MI2,069 %3,003 %
GA1,454 %944 %
MN1,100 %1,064 %
NM1,083 %937 %
NE1,020 %995 %
SD972 *944 *
WV776 *751 *
WI556 *520 *
KS511 *— *
NC505 *1,172 %
ND475 *461 *
OR423 *411 *
MD71 *247 *
FL25 *222 *
VA— *539 *
IN— *130 *
NJ— *— *
Total$198,599 100 %$187,506 100 %

Represents less than 1%
ILFs Operated by CareTrust REIT:
As of December 31, 2019, we owned and operated one ILF, Lakeland Hills Independent Living, located(1)    Includes three SNFs held in Dallas, Texas, with 168 units. During the quarter ended December 31, 2020, we sold the one remaining ILF to a third party leaving us with no remaining owned and operated ILFs at December 31, 2020.consolidated joint ventures.
Investment and Financing Policies
Our investment objectives are to increase cash flow, provide quarterly cash dividends, maximize the value of our properties and acquire properties with cash flow growth potential. We intend to invest primarily in SNFs and seniors housing, including ALFs and ILFs, aILFs. We are expanding our investments into behavioral health facilities andlthough we may determine in the future to expand our investments to include medical office buildings, long-term acute care hospitals and inpatient rehabilitation facilities. We may utilize the RIDEA structure for future acquisitions (see “Business Strategies - Diversify Asset Portfolio” below). Our properties are located in 28 statesstates and we intend to continue to acquire properties in other states throughout the United States. Although our portfolio currently consists primarily of owned real property, we have also invested in joint ventures through which we own properties, as well as mortgage loans receivable and mezzanine loans. We expect that our future investments may also include first mortgages, mezzanine debt and other securities issued by, or joint ventures with, REITs or other entities that own real estate consistent with our investment objectives.
11

Table of Contents
Our Competitive Strengths
We believe that our ability to acquire, integrate and improve facilities is a direct result of the following key competitive strengths:
Geographically Diverse Property Portfolio. Our properties are located in 28 different states, with concentrations in California and Texas baseCalifornia, Texas, Louisiana, Idaho and Arizona basedd on rental income.income. The properties in any one state do not account for more than 21% than 30% of our total rental income as of December 31, 2020.2023. We believe this geographic diversification will limit the effect of changes in any one market on our overall performance.
Long-Term, Triple-Net Lease Structure. All of our owned properties (including properties we own through joint ventures, excluding one SNF which is non-operational), are leased to our tenants under long-term, triple-net leases, pursuant to which the operators are responsible for all facility maintenance and repair, insurance required in connection with the leased properties and the business conducted on the leased properties, taxes levied on or with respect to the leased properties and all utilities and other services necessary or appropriate for the leased properties and the business conducted on the leased properties.
Financially Secure Primary Tenant. Ensign is an established provider of healthcare services with strong financial performance and accounted for 32%33% of our 2020total annualized contractual rental income exclusiveas of operating expense reimbursements.December 31, 2023. Ensign is subject to the reporting requirements of the SEC and is required to file with the SEC annual reports containing audited financial information and quarterly reports containing unaudited financial information. Ensign’s publicly available filings can be found at the SEC’s website at www.sec.gov.
Investments in Joint Ventures. From time to time, we partner with third-party institutional investors to invest in healthcare real estate through joint ventures. Pursuant to our joint ventures, we typically contribute 97.5% of the joint venture’s total investment amount and we receive 100% of the preferred equity interest in the joint venture in exchange for 95% of that total investment and a 50% common equity interest in the joint venture in exchange for the remaining 2.5% of that investment. Our joint venture partner contributes the remaining 2.5% of the joint venture’s total investment amount in exchange for a 50% common ownership interest in the joint venture. These are investments that we typically consolidate as they are variable interest entities and as we are considered to be the primary beneficiary and have the power to direct the activities that most significantly impact the entity’s economic performance and have the obligation to absorb losses of, or the right to receive benefits from, the entity that could potentially be significant.
Lower Cost of Capital. Our ability to access the capital markets provides us greater flexibility to manage our cost of capital and also offers us the ability to fund future acquisitions through the issuance of additional shares, including under our ATM Program (as defined below). During the year ended December 31, 2023, we sold approximately 30.9 million shares at an average gross price of $20.86 for gross proceeds of approximately $643.8 million under our ATM Program to fund future acquisitions.
Ability to Identify Talented Operators. We have purchased 138 properties since June 1, 2014, the date we became a separate and independent publicly-traded company, through December 31, 2020 and have increased total rental income from $41.2 million for the year ended December 31, 2013, the last full fiscal year prior to becoming a separate and independent publicly-traded company, to $173.6 million for the year ended December 31, 2020. We have grown to 22 operators including local, regional and national operators, including Ensign and PMG, which account for 32% and 16% of our total rental income, in each case exclusive of operating expense reimbursements, for the year ended December 31, 2020, respectively. As a result of our management team’s operating experience and network of relationships and insight, we believe that we are able to identify and pursue working relationships with qualified local, regional and national healthcare providers and seniors housing operators. We expect to continue our disciplined focus on pursuing investment opportunities, primarily with respect to stabilized assets but also some strategic investmentinvestments in new and/or improving properties, while seeking dedicated and engaged operators who possess local market knowledge, have solid operating records and emphasize quality services and outcomes. We intend to support these operators by providing strategic capital for facility acquisition, upkeep and modernization. Our management team’s experience gives us a key competitive advantage in objectively evaluating an operator’s financial position, care and service programs, operating efficiencies and likely business prospects.
Experienced Management Team. Gregory K. Stapley,David M. Sedgwick was appointed as our Chief Executive Officer has extensive experienceeffective January 1, 2022. At the time of his appointment, Mr. Sedgwick was serving as our President, a role he had filled since February 2021, and he continues to hold that title. He previously served as our Chief Operating Officer from August 2018 through 2021, and as our Vice President-Operations from CareTrust’s launch as an independent public company in the real estate and healthcare industries.2014 to 2018. Mr. StapleySedgwick has more than 30 years of experience in the acquisition, development, financing and disposition of real estate including healthcare facilities and office, retail and industrial properties, including nearly 15 years at Ensign where he was a co-founder, and was instrumental in assembling the portfolio that we now lease back to Ensign and Pennant. David M. Sedgwick, our President and Chief Operating Officer, has more than 2023 years of experience in the skilled nursing and seniors housing industry. Mr. Sedgwick served as our Vice President-Operations from 2014 to 2018, as ourSedgwick’s President, Chief Operating Officer from 2018 to the present, and was appointedVice President in February 2021. Mr. Sedgwick’s duties involveregularly involved him in matters related to new investments, asset management, tenant relations, portfolio management, portfolio optimization, investor relations and capital markets activities for the Company. Prior to joining CareTrust, Mr. Sedgwick served as the Chief Human Capital Officer and President of CorporateFacility Services at Ensign. Mr. Sedgwick has been a licensed nursing home administrator since 2001.
Our Chief Financial Officer, William M. Wagner, has more than 2530 years of accounting and finance experience, primarily in real estate, including more than 1519 years of experience working extensively for REITs. Most notably, he worked for both Nationwide Health Properties, Inc., a healthcare REIT, and Sunstone Hotel Investors, Inc., a lodging REIT, serving as Senior Vice President and Chief Accounting Officer of each company prior to joining us as our Chief Financial Officer. Mark D. Lamb has served
12

Table of Contents
James B. Callister was appointed as our Executive Vice President effective July 2022 and Chief Investment Officer since August 2018.effective December 31, 2022. Mr. LambCallister continues to serve as Secretary, and previously served as our Director of InvestmentsGeneral Counsel from February 2021 to July 20142022. Prior to August 2018, and has been instrumental in building the Company’s portfolio since becoming a public company. Mr. Lamb is a licensed nursing home administrator and, prior to joiningjoining the Company, in 2014, servedMr. Callister worked as an administratora real estate attorney and a partner at onethe law firm of Plum Healthcare’s flagship post-acute facilities from 2011 to 2014. Prior to 2011, Mr. Lamb served in acquisitionSherry Meyerhoff Hanson & Crance LLP and, portfolio management capacities for various entities for more than nine years. Our executives have yearsbefore that, at the law firm of public company experience, including experience accessing both debt and equity capital markets to fund growth and maintain a flexible capital structure.O’Melveny & Myers LLP.
Flexible UPREIT Structure. We operate through an umbrella partnership, commonly referred to as an UPREIT structure, in which substantially all of our properties and assets are held through the Operating Partnership. Conducting business through the Operating Partnership will allowallows us flexibility in the manner in which we structure the acquisition of properties. In particular, an UPREIT structure enables us to acquire additional properties from sellers in exchange for limited
12

Table of Contents
partnership units, which provides property owners the opportunity to defer the tax consequences that would otherwise arise from a sale of their real properties and other assets to us. As a result, this structure allows us to acquire assets in a more efficient manner and may allow us to acquire assets that the owner would otherwise be unwilling to sell because of tax considerations.
Business Strategies
Our primary goal is to create long-term stockholder value through the payment of consistent cash dividends and the growth of our asset base. To achieve this goal, we intend to pursue a business strategy focused on opportunistic acquisitions and property diversification. We also intend to further develop our relationships with tenants and healthcare providers with a goal to progressively expand the mixture of tenants managing and operating our properties.
The key components of our business strategies include:
Diversify Asset Portfolio. We diversify through the acquisition of new and existing facilities from third parties and the expansion and upgrade of current facilities and strategically investing in new developments with options to acquire the developments at stabilization. We employ what we believe to be a disciplined, opportunistic acquisition strategy with a focus on the acquisition of SNFs, ALFs and ILFs,ILFs. We are expanding our investments into behavioral health facilities and we may determine in the future to expand our acquisitionsinvestments to include medical office buildings, long-term acute care hospitals and inpatient rehabilitation facilities. As we acquire, or invest in, additional properties, we expect to further diversify by geography, asset class and tenant within the healthcare and healthcare-related sectors. We may invest in seniors housing managed communities operated by third-party property managers pursuant to property management agreements utilizing the structure proposed in the REIT Investment Diversification and Empowerment Act of 2007, which is commonly referred to as a “RIDEA” structure. The seniors housing managed communities structure would give us direct exposure to the risks and benefits of the operations of the communities. The third-party property managers would manage our communities in exchange for the receipt of a management fee, and as such, we would not be directly exposed to the credit risk of the property managers in the same manner or to the same extent as our triple-net tenants. Under this management structure, we would be required to rely on a third-party operator to hire and train all facility employees, enter into third-party contracts for the benefit of the facility, comply with laws, and provide resident care and we would be substantially limited in our ability to control or influence day-to-day operators.
Maintain Balance Sheet Strength and Liquidity. We maintain a capital structure that provides the resources and flexibility to support the growth of our business. We intend to maintain a mix of credit facility debt, unsecured debt and possibly secured mortgage debt, which, together with our anticipated ability to complete future equity financings, including issuances of our common stock via registered public offerings or under an at-the-market equity program, we expect will fund the growth of our property portfolio.
Develop New Tenant Relationships. We cultivate new relationships with tenants and healthcare providers in order to expand the mix of tenants operating our properties. We expect that this objective will be achieved over time as part of our overall strategy to acquire new properties and further diversify our portfolio of healthcare properties.
Provide Capital to Underserved Operators. We believe there is a significant opportunity to be a capital source to healthcare operators, through the acquisition and leasing of healthcare properties to them that are consistent with our investment and financing strategy at appropriate risk-adjusted rates of return, which, due to size and other considerations, are not a focus for larger healthcare REITs. We pursue acquisitions and strategic opportunities that meet our investing and financing strategy and that are attractively priced, including funding development of properties through preferred equity or construction loans and thereafter entering into sale and leaseback arrangements with such developers as well as other secured term financing and mezzanine lending. We utilize our management team’s operating experience, network of relationships and industry insight to identify both large and small quality operators in need of capital funding for future growth. In appropriate circumstances, we may negotiate with operators to acquire individual healthcare properties from those operators and then lease those properties back to the operators pursuant to long-term triple-net leases.
Fund Strategic Capital Improvements. We support operators by providing capital to them for a variety of purposes, including capital expenditures and facility modernization. We expect to structure these investments as either lease amendments that produce additional rents or as loans that are repaid by operators during the applicable lease term. We have also assisted our
13

Table of Contents
tenants with transitioning to lower emissions technologies through our tenant incentive program, where we support efficiency projects through our dedicated tenant capital expenditure budget, providing sustainability incentives rent-free.
Pursue Strategic Development Opportunities. We work with operators and developers to identify strategic development opportunities. These opportunities may involve replacing or renovating facilities that may have become less competitive. We also identify new development opportunities that present attractive risk-adjusted returns. We may provide funding to the developer of a property in conjunction with entering into a sale leaseback transaction or an option to enter into a sale leaseback transaction for the property.
Competition
We compete for real property investments with other REITs, investment companies, private equity and hedge fund investors, sovereign funds, pension funds, healthcare operators, lenders and other institutional investors. Some of these competitors are significantly larger and have greater financial resources and lower costs of capital than us. Increased competition will make it more challenging to identify and successfully capitalize on acquisition opportunities that meet our investment objectives. Our ability to compete is also impacted by national and local economic trends, availability of investment alternatives, availability and cost of capital, construction and renovation costs, existing laws and regulations, new legislation and population trends.
In addition, revenues from our properties are dependent on the ability of our tenants and operators to compete with other healthcare operators. Healthcare operators compete on a local and regional basis for residents and patients and their ability to successfully attract and retain residents and patients depends on key factors such as the number of facilities in the local market,
13

Table of Contents
the types of services available, the quality of care, reputation, age and appearance of each facility and the cost of care in each locality. Private, federal and state payment programs and the effect of other laws and regulations may also have a significant impact on the ability of our tenants and operators to compete successfully for residents and patients at the properties.
Sustainability and Corporate Social Responsibility
As a healthcare-focused real estate investment trust,triple-net landlords, our assets are an integral part of the overall healthcare continuumcore responsibility lies in the communities thattracking, educating, and incentivizing our tenants, serve.who hold decision-making authority at the property level, to make sustainable and financially prudent business decisions. We believe that environmental sustainability is an important part of our commitment to helping people live and age well in those communities.communities. We are workingcommitted to implement sustainable practices in our corporate offices and to providing tenant education, support and incentives to avoid or reduce practices in our corporate offices and by our tenantsmake sustainable improvements at our net-leased properties.
In 2023, we published our third annual Corporate Sustainability Report (our “ESG Report”) as part of our ongoing commitment to provide regular reporting on our environmental, social and governance (“ESG”) priorities. Our ESG Report outlines our high priority ESG initiatives and goals for our company and our property portfolio. In our 2022 ESG Report, we included a Global Reporting Initiative (“GRI”) Index in reference to the GRI Standards as well as a Task Force on Climate-Related Financial Disclosures (“TCFD”) index to further align with applicable global standards for sustainability reporting.
Beginning in 2020, with the assistance of an ESG consultant, we designed a monitoring plan to collect key environmental data from a pilot group of 50 of our net-leased properties. The plan’s objective was to benchmark energy and water usage and the impact of our facilities on greenhouse gas emissions and climate change. During 2021, we implemented the plan’s monitoring systems and began collecting data for this pilot group of 50 properties, that may have negative environmental impacts.increasing to 100 properties by the end of 2023. During 2023, we added waste tracking for the 100 properties. We expect the data to help us identify the most promising opportunities for improvement in our portfolio, set informed ESG goals and measure progress over time. In addition, as a landlord and capital supplier to a key segment of the healthcare industry, we intend to seek further opportunities to use our influence to encourage and incentivize fair and healthy work environments for healthcare workers and suitable living conditions for patients and residents, and to promote diversity, inclusion and the ethical treatment of employees, residents, patients and others wherever our activities and influence can be felt.
During 2023, we partnered with a third party to conduct a portfolio level physical climate risk assessment on all standing assets. Physical risks assessed were heat, flood, precipitation, fire, and drought. In the overall portfolio physical climate risk assessment, four risk categories were defined with a portfolio risk percentage provided for each category, addressing each physical risk. The climate risk assessment found that the highest risk for our portfolio was heat caused by higher temperatures.
During 2023, we distributed a Tenant Climate Risk-Opportunity Survey and received a 50% response rate. This survey helped contribute to ESG dialogue with tenants and overall improved our risk management strategy. The survey found transitional risks for our tenants due to transitioning to a low carbon economy including increased material costs, volatility in utilities’ pricing, market preference for greener buildings, and higher insurance premiums.
Also in 2020, we published our Tenant Code of Conduct & Corporate Responsibility (our “Tenant ESG Program”). The Tenant ESG Program provides our eligible triple-net tenants with monetary inducements to make sustainable improvements to our properties. Incentive options include a wide variety of opportunities for tenants to upgrade everything from energy and
14

Table of Contents
environmental systems to water-saving landscaping and more. Our board of directors has authorized annual allocations of up to $500,000 to fund the Tenant ESG Program. As disclosed in our 2022 ESG Report, we tracked $567,304 in environmental improvements at our properties from September 2022 to September 2023.
The foregoing principles and additional ESG initiatives are reflected in our Environmental, Social and Governance policy adopted on October 29, 2021, and previously published Policy on Human Capital, Policy on Human Rights and Responsibilities, Policy on Environmental Sustainability and our proprietary Tenant ESG Program. All of these policies are located on the Investor Relations section of our website at www.caretrustreit.com. The information found on, or otherwise accessible through, our website is not incorporated by reference into, nor does it form a part of, this report or any other document that we file with the SEC.
Governance
Our corporate governance structure was carefully crafted to align with the interests of our investors and other stakeholders with a core leadership team that has over 65 years of collective experience as operators and investors. The members of our board of directors each bring deep expertise in healthcare, real estate, investing, accounting, and/or business development. In this oversight role, our board of directors serves as the ultimate decision-making body of our company, except for those matters reserved to or shared with our stockholders.
Human Capital Resources
SupportingOur employees are the heart of our company. Our Policy on Human Capital reflects our commitment to the dignity and rights of all people, isespecially our employees and others whose professional lives may be impacted by our properties and business activities. It represents a foundational value for us.critical commitment to, and investment in, the current and long-term health and well-being of our organization and its people. We believe our success depends on our ability to attract, develop and retain key personnel.
During 2023, we conducted an employee satisfaction survey with a 100% response rate and an overall satisfaction rate of 86%. The survey found that 70% or more employees agree that our comprehensive benefits package is very competitive and a strong point of working for CareTrust, employees are highly committed to their future at CareTrust, and that CareTrust has a culture that values inclusivity.
CareTrust invests significant time and resources in supporting and developing our employees and creating a desirable workplace. Our core philosophies and policies in this regard include:
Compensation and Benefits. The skills, experience and industry knowledge of key employees significantly benefit our performance. We believe we offer competitive compensation (including salary, incentive bonus and equity) and benefits packages (including a 401(k) plan with a fixed employer contribution, and Flexible Spending Accounts (FSAs), among others)employer-funded employee assistance program (EAP), a generous vacation, holiday and personal time off policy, and an array of voluntary benefits options and other benefits for employees and their families). Our compensation program is designed to attract and reward talented individuals who possess the skills necessary to support our business objectives, assist in the achievement of our strategic goals and create long-term value for our stockholders.
As of December 31, 2020,2023, we employed approximately 15 employed 17 full-time employeesemployees (including our executive officers), none of whom is subject to a collective bargaining agreement. PriorOur comprehensive benefits package includes flexible work hours, the option to the COVID-19 pandemic, all of our employees were based out of our corporate office in San Clemente, California, other than three full-time employees who worked remotely. With the COVID-19 pandemic, we have temporarily closed our corporate officework remotely, and most of our employees are currently working remotely. To address the dynamic nature of COVID-19 and remote work, the Company has offered workforce flexibility for all employees.company workspaces/amenities.
Retention and Turnover. Recruiting, hiring, training and retaining excellent employees is a high priority for us. These activities carry real and substantial costs, which we regard as a meaningful investment in our workforce and our company. We believe that employee turnover is costly both in direct and indirect ways, and we are committed to employee retention and satisfaction.satisfaction. During the year ended December 31, 2020, and excluding the ILF that we sold during 2020,2023, we experienced turnover of twothree full-time employees, neither of whom wereexcluding our executive officers.
Sphere of Influence.Training and Education. We believe that the creation of an engagingCareTrust’s culture values continuous learning, improvement and mutually supportive corporate culture that acknowledgesprofessional development. This helps our employees to keep their skills current and celebrates the valueto adapt to new responsibilities and contributions of all stakeholders is coreemerging market needs. CareTrust provides financial support for professional associate dues and memberships, continuing education credits, and fees and travel expenses to our long-term success. As an extension of our commitment to the many people who contribute to our success, we encourageattend relevant conferences and incentivize our triple-net tenants through subsidies and other economic incentives to reflect a similar commitment to integrity and corporate responsibility by voluntarily participating in our Tenant Code of Conduct and Corporate Responsibility Program (the “Tenant ESG Program”), and particularly by valuing the healthcare workers in their employ who deliver care in our facilities every day. These principles are reflected in our Policy on Human Capital, our Policy on Human Rights and Responsibilities and our proprietary Tenant ESG Program.seminars.
Government Regulation, Licensing and Enforcement
Overview
As operators of healthcare facilities, tenants of our healthcare properties are typically subject to extensive and complex federal, state and local healthcare laws and regulations relating to fraud and abuse practices, government reimbursement, licensure and certificate of need and similar laws governing the operation of healthcare facilities, and we expect that the healthcare industry, in general, will continue to face significant regulation and pressure in the areas of fraud, waste and abuse,
15

Table of Contents
cost control, healthcare management and provision of services, among others. These regulations are wide-ranging and can subject our tenants to civil, criminal and administrative sanctions. Affected tenants may find it increasingly difficult and costly to comply with this complex and evolving regulatory environment because of a relative lack of guidance in many areas as certain of our healthcare properties are subject to oversight from several government agencies and the legal requirements often vary from one jurisdiction to another. Changes in laws and regulations and reimbursement enforcement activity and regulatory non-compliance by our tenants could have a significant effect on their operations and financial condition, which in turn may adversely affect us, as detailed below and set forth under “Risk Factors - Risks Related to Our Business.Business and Operations.
14

Table of Contents
The following is a discussion of certain laws and regulations generally applicable to our tenants (as operators of our healthcare facilities) and, in certain cases, to us.
Enforcement
There are various extremely complex federal and state laws and regulations governing healthcare providers’ relationships and arrangements and prohibiting fraudulent and abusive practices by such providers. These laws include, but are not limited to, (i) federal and state false claims acts, which, among other things, prohibit providers from filing false claims or making false statements to receive payment from Medicare, Medicaid or other federal or state healthcare programs, (ii) federal and state anti-kickback and fee-splitting statutes, including the Medicare and Medicaid anti-kickback statute, which prohibit the payment or receipt of remuneration to induce referrals or recommendations of healthcare items or services, (iii) federal and state provider self-referral laws (including the federal law commonly referred to as the “Stark Law”), which generally prohibit referrals by physicians and in some cases other providers to entities with which the physician or an immediate family member has a financial relationship, and (iv) the federal Civil Monetary Penalties Law, which prohibits, among other things, the knowing presentation of a false or fraudulent claim for certain healthcare services. Violations of healthcare fraud and abuse laws carry civil, criminal and administrative sanctions, including punitive sanctions, monetary penalties, imprisonment, denial of Medicare and Medicaid reimbursement and potential exclusion from Medicare, Medicaid or other federal or state healthcare programs. These laws are enforced by a variety of federal, state and local agencies and can also be enforced by private litigants through, among other things, federal and state false claims acts, which allow private litigants to bring qui tam or “whistleblower” actions. Ensign and our other tenants are (and many of our future tenants are expected to be) subject to these laws, and some of them may in the future become the subject of governmental enforcement actions if they fail to comply with applicable laws.
State and Federal “Fraud and Abuse” Laws and Regulations. The Medicare and Medicaid anti-fraud and abuse amendments to the Social Security Act (the “Anti-Kickback Law”) make it a felony, subject to certain exceptions, for any person to engage in illegal remuneration arrangements with vendors, physicians and other health care providers for the referral of Medicare beneficiaries or Medicaid recipients. When a violation occurs, the government may proceed criminally or civilly. If the government proceeds criminally, a violation is a felony and may result in imprisonment for up to five years, fines of up to $25,000 and mandatory exclusion from participation in all federal health care programs. If the government proceeds civilly, it may impose a civil monetary penalty of $50,000 per violation and an assessment of not more than three times the total amount of remuneration involved, and it may exclude the parties from participation in all federal health care programs. Violations of the Anti-Kickback Statute also serve as a basis for federal False Claims Act cases. Many states have enacted laws similar to, and in some cases broader than, the Anti-Kickback Law.
The scope of prohibited payments in the Anti-Kickback Law is broad. The U. S.U.S. Department of Health and Human Services (“HHS”) has promulgated regulations which describe certain “safe harbor” arrangements that will not be deemed to constitute violations of the Anti-Kickback Law. An arrangement that fits squarely into a safe harbor is immune from prosecution under the Anti-Kickback Statute. The safe harbors described in the regulations are narrow and do not cover a wide range of economic relationships which many SNFs, physicians and other health care providers consider to be legitimate business arrangements not prohibited by the statute. Because the regulations describe safe harbors and do not purport to describe comprehensively all lawful and unlawful economic arrangements or other relationships between health care providers and referral sources, health care providers entering into these arrangements or relationships may be required to alter them in order to ensure compliance with the Anti-Kickback Law and may be subject to significant liability should an arrangement that does not fully satisfy a safe harbor be determined to be illegal. On November 20, 2020, the US Department of Health and Human Services (“HHS”)HHS promulgated significant new Anti-Kickback Law regulations, including changes to existing safe harbors and the creation of new safe harbors, in an effort to reduce regulatory burden and incentivize coordinated care, including value-based arrangements.
The False Claims Act provides that any person who “knowingly presents, or causes to be presented” a “false or fraudulent claim for payment or approval” to the U.S. government, or its agents and contractors, is liable for a civil penalty ranging from $5,500 to $11,000 per claim, plus three times the amount of damages sustained by the government. Under the False Claims Act’s so-called “reverse false claims,” liability also could arise for “using” a false record or statement to “conceal,” “avoid” or “decrease” an “obligation” (which can include the retention of an overpayment) “to pay or transmit money or property to the government.” The False Claims Act also empowers and
16

Table of Contents
provides incentives to private citizens (commonly referred to as qui tam relator or whistleblower) to file suit on the government’s behalf. The qui tam relator’s share of the recovery can be between 15% and 25% in cases in which the government intervenes, and 25% to 30% in cases in which the government does not intervene. Notably, the Affordable Care Act amended certain jurisdictional bars to the False Claims Act, effectively narrowing the “public disclosure bar” (which generally requires that a whistleblower suit not be based on publicly disclosed information) and expanding the “original source” exception (which generally permits a whistleblower suit based on publicly
15

Table of Contents
disclosed information if the whistleblower is the original source of that publicly disclosed information), thus potentially broadening the field of potential whistleblowers.
Restrictions on Referrals. The federal physician self-referral law and its implementing regulations (commonly referred to as the “Stark Law”) prohibits providers of “designated health services” from billing Medicare or Medicaid if the patient is referred by a physician (or his/her immediate family member) with a financial relationship with the entity, unless an exception applies. “Designated health services” include clinical laboratory services; physical therapy services; occupational therapy services; outpatient speech-language pathology; radiology services, including magnetic resonance imaging, computerized axial tomography scans, and ultrasound services; radiation therapy services and supplies; durable medical equipment and services; parenteral and enteral nutrients, equipment and services; prosthetics, orthotics, and prosthetic devices and supplies; home health services; outpatient prescription drugs; and inpatient and outpatient hospital services. The Stark Law also prohibits the furnishing entity from submitting a claim for reimbursement or otherwise billing Medicare or any other person or entity for improperly referred designated health services. Many designated health services are commonly provided in SNFs and ALFs. The new regulations promulgated by HHS, discussed above in “State and Federal ‘Fraud and Abuse’ Laws and Regulations”, include significant changes to the Stark Law regulations, including (i) new exceptions designed to enable more value-based arrangements, (ii) a modification to the existing exception for electronic health records items and services, and (iii) new exceptions for limited remuneration to physicians and for cybersecurity technology and related services.
An entity that submits a claim for reimbursement in violation of the Stark Law must refund any amounts collected and may be: (1) subject to a civil penalty of up to $15,000 for each self-referred service; and (2) excluded from participation in federal health care programs. In addition, a physician or entity that has participated in a “scheme” to circumvent the operation of the Stark Law is subject to a civil penalty of up to $100,000 and possible exclusion from participation in federal health care programs.
Reimbursement
Sources of revenue for our tenants include (and for our future tenants is expected to include), among other sources, governmental healthcare programs, such as the federal Medicare program and state Medicaid programs, and non-governmental payors, such as insurance carriers and health maintenance organizations. As federal and state governments focus on healthcare reform initiatives, and as the federal government and many states face significant budget deficits, efforts to reduce costs by these payors will likely continue, which may result in reduced or slower growth in reimbursement for certain services provided by Ensign and our other tenants. Federal and state authorities are likely to continue to implement new and modified reimbursement methodologies, including value-based methodologies, that could have a negative impact on our tenants. Such changes to reimbursement methodologies could have a material impact on our tenants and we cannot provide assurances that the current revenue levels will be maintained under any future reimbursement arrangements. In addition, the impact of other health care reform efforts, such as “Medicare for all” or the provision of a new Medicare-like public option for consumers to receive health insurance, are impossible to predict.
The Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010 (collectively, the “Affordable Care Act”) serves as the primary vehicle for comprehensive healthcare reform in the United States. Efforts initiated by the Trumpprevious administration and certain members of Congress to repeal or make significant changes to the Affordable Care Act, its implementation and/or its interpretation including the successful repeal of the penalty associated with the individual mandate of the Affordable Care Act, continue to cast uncertainty on the future of the Affordable Care Act. For example, on December 14, 2018, a U.S. District Court in Texas ruled the Affordable Care Act unconstitutional in its entirety. This decision was appealed, and on December 18, 2019, the Fifth Circuit Court of Appeals ruled that the Affordable Care Act’s individual mandate was unconstitutional but remanded the case for further analysis. On November 10, 2020,The decision was appealed, and on June 17, 2021, the Supreme Court of the United States heard oral arguments, but a decision has not yet been issued. This and other changesruled that the plaintiffs lacked standing to challenge the Affordable Care Act’s minimum essential coverage provision. These types of challenges may impact the number of individuals that elect to obtain public or private health insurance or the scope of such coverage, if purchased.
Given the change in controldivided nature of Congress, we anticipateit is unclear whether Congress will renew efforts tosuccessfully expand health insurance coverage and to assess alternative health care delivery and payment systems. Congress may in the future propose and adopt legislation effecting additional fundamental changes in the health care system. For example, some members of Congress have suggested expanding the coverage of government-funded programs, including single-payor models. The Biden administration supports building on PPACA to expand health insurance coverage to more citizens, including through the addition of a Medicare-like public option, increasing the value of certain tax credits to lower premiums, and expanding access to Medicaid; it has not yet publicly supported a single-payor model. In addition, although the DemocraticRepublican Party nowcurrently controls the United States House of Representatives (by a slim majority) and the Democratic Party currently controls the Senate (by virtuea slim majority). Due
17

Table of the Vice President casting the tie-breaking vote),Contents
to this, healthcare reform legislation would likely require at least some support from both Republican and Democratic lawmakers to become law. At this time,law and it is uncertain whether any additional healthcare reform legislation will ultimately become law and welaw. We cannot predict the ultimate content, timing or effect of any healthcare reform legislation or the impact of potential legislation on our business. If our
16

Table of Contents
tenants’ residents do not have insurance, it could adversely impact the tenants’ ability to satisfy their obligations to us. Expansion of health insurance coverage to more citizens could have a positive financial impact on our tenants’tenants and their ability to satisfy their obligations to us.
Other legislative changes have been proposed and adopted since the Affordable Care Act was enacted, which also may impact our business. For instance, CMS is required to measure, track, and publish readmission rates of SNFs and to implement a value-based purchasing program for SNFs (the “SNF VBP Program”). The SNF VBP Program increases Medicare reimbursement rates for SNFs that achieve certain levels of quality performance measures developed by CMS, relative to other facilities. The value-based payments authorized by the SNF VBP Program are funded by reducing Medicare payment for all SNFs by 2% and redistributing up to 70% of those funds to high-performing SNFs. However, there is no assurance that payments made by CMS as a result of the SNF VBP Program will be sufficient to cover a facility’s costs. If Medicare reimbursement provided to our healthcare tenants is reduced under the SNF VBP Program, that reduction may have an adverse impact on the ability of our tenants to meet their obligations to us.
See “Risk Factors - Risks Related to Our Business -and Operations — Healthcare reform legislation impacts cannot accurately be predicted and could adversely affect our results of operations” for additional risks related to changes in Medicare reimbursement.
Increased Government Oversight of Skilled Nursing Facilitiesand Transparency
Section 1150B of the Social Security Act requires employees of federally funded long-term care facilities to immediately report any reasonable suspicion of a crime committed against a resident of that facility. Those reports must be submitted to at least one law enforcement agency and the applicable Centers for Medicare & Medicaid Services (“CMS”) Survey Agency. Covered individuals who fail to report under Section 1150B are subject to various penalties, including civil monetary penalties of up to $300,000 and possible exclusion from participation in any Federal health care program. Medicare regulations require SNFs to establish and implement written policies to ensure the reporting of crimes that occur in federally funded SNFs in accordance with Section 1150B.
In August 2017, the U.S. Department of Health & Human Services (“HHS”)HHS Office of Inspector General (“OIG”) issued a preliminary report regarding quality of care concerns by operators of SNFs. In its report, the OIG determined that CMS has inadequate procedures in place to ensure that incidents of potential abuse or neglect of Medicare beneficiaries residing in SNFs are identified and reported. The report was issued in connection with the OIG’s ongoing review of potential abuse and neglect of Medicare beneficiaries residing in SNFs.
As a result of the OIG report, CMS enforcement activity against SNF operators may increase, especially with regard to the reporting of potential abuse or neglect of SNF residents. If any of our tenants or their employees are found to have violated any applicable reporting requirements, they may become subject to penalties or other sanctions up to and including loss of licensure.
In November 2023, CMS adopted a final rule implementing certain portions of the Affordable Care Act, requiring the disclosure of certain ownership, managerial, and other information regarding Medicare SNFs and Medicaid nursing facilities. This final rule defines the term “real estate investment trust,” which sets the stage for Medicare SNFs to disclose whether each direct or indirect owning or managing entity is a real estate investment trust. This may enable CMS and others to scrutinize more closely how direct and indirect ownership and management correlate with care outcomes and to determine which environments are more likely to deliver better care for residents and patients.
Healthcare Licensure and Certificate of Need
Our healthcare facilities are subject to extensive federal, state and local licensure, certification and inspection laws and regulations. In addition, various licenses and permits are required to operate SNFs and ALFs, dispense narcotics, operate pharmacies, handle radioactive materials and operate equipment. Many states require certain healthcare providers to obtain a certificate of need, which requires prior approval for the construction, modification and closure of certain healthcare facilities. The ability to obtain such approval and/or the approval process may impact some of our tenants’ abilities to expand or change their businesses. Any failure to comply with any of these laws, regulations, or standards could result in penalties which may include loss or restriction of license, loss of accreditation, denial of reimbursement, imposition of fines, suspension or decertification from federal and state healthcare programs, or closure of the facility.
Privacy, Security and Data Breach Notification Laws
The Health Insurance Portability and Accountability Act of 1996, as amended (“HIPAA”) regulates the privacy and security of certain health information (“Protected Health Information”) and requires entities subject to HIPAA to provide notification of breaches of Protected Health Information. Entities subject to HIPAA include health plans, healthcare
18

Table of Contents
clearinghouses, and most health care providers (including many of our tenants). Business associates of these entities who create, receive, maintain or transmit Protected Health Information are also subject to HIPAA. Violations of the HIPAA requirements may result in civil monetary penalties of up to $50,000 per violation with a maximum civil penalty of $1.5 million in a calendar year for violations of the same requirement. However, a single breach or incident can result in violations of multiple requirements, resulting in possible penalties well in excess of $1.5 million. Breaches of unsecured Protected Health Information and other violations of HIPAA may have other material adverse consequences including material loss of business, business interruption, loss of patient or other critical data, regulatory enforcement, substantial legal liability and reputational harm. Certain violations of HIPAA can result in criminal penalties and enforcement.
17

Table of Contents
Various other state and federal laws relate to privacy, security and the reporting of data breaches involving personal information (together with HIPAA, “Privacy Laws”). For example, various state laws and regulations may regulate the privacy and security of personal information, and require notification of affected individuals in the event of a data breach involving such individual’s personal information (including an individual’s name plus social security number, date of birth or credit card information, for example). Failure of the Company or its tenants to comply with applicable Privacy Laws could have a materially adverse effect on our Company. Failure of our tenants to comply with applicable Privacy Laws could have a material adverse effect on their ability to meet their obligations to us. Furthermore, the adoption of new Privacy Laws at the federal and state level could require us or our tenants to incur significant compliance costs.
Americans with Disabilities Act (the “ADA”)
Although most of our properties are not required to comply with the ADA because of certain “grandfather” provisions in the law, some of our properties must comply with the ADA and similar state or local laws to the extent that such properties are “public accommodations,” as defined in those statutes. These laws may require removal of barriers to access by persons with disabilities in certain public areas of our properties where such removal is readily achievable. Under our triple-net lease structure, our tenants would generally be responsible for additional costs that may be required to make our facilities ADA-compliant. Noncompliance with the ADA could result in the imposition of fines or an award of damages to private litigants.
Environmental Matters
A wide variety of federal, state and local environmental and occupational health and safety laws and regulations affect healthcare facility operations. These complex federal and state statutes, and their enforcement, involve a myriad of regulations, many of which involve strict liability on the part of the potential offender. Some of these federal and state statutes may directly impact us. Under various federal, state and local environmental laws, ordinances and regulations, an owner of real property, such as us, may be liable for the costs of removal or remediation of hazardous or toxic substances at, under or disposed of in connection with such property, as well as other potential costs relating to hazardous or toxic substances (including government fines and damages for injuries to persons and adjacent property). The cost of any required remediation, removal, fines or personal or property damages and the owner’s liability therefore could exceed or impair the value of the property and/or the assets of the owner. In addition, the presence of such substances, or the failure to properly dispose of or remediate such substances, may adversely affect the owner’s ability to sell or rent such property or to borrow using such property as collateral which, in turn, could reduce our revenues. See “Risk Factors - General Risk Factors - Environmental compliance costs and liabilities may materially impair the value of properties owned by us.”
Labor and Employment Matters
A wide variety of federal, state and local labor and employment laws and regulations impact healthcare facility operations. Our tenants are required to comply with all applicable federal, state and local laws and regulations relating to employment, including occupational safety and health requirements, minimum staffing, wage and hour laws, overtime and other compensation requirements, employee benefits and other leave and sick pay requirements, proper classification of workers as employee or independent contractors, and immigration and equal employment opportunity laws, among others. These laws and regulations can vary significantly among jurisdictions, can change, and can be highly technical and involve strict liability for noncompliance with technical detail. Costs and expenses related to these requirements are a significant operating expense and may increase as laws and regulations change. For example, on October 13, 2023, California Senate Bill No. 525 (“SB 525”) was signed into law, requiring a substantial increase in the minimum wage for workers operating in certain health care facilities. As a result of SB 525, certain health care facilities (including licensed skilled nursing facilities) operating in California are required to increase the wages of their covered health care employees to at least $21 per hour from June 1, 2024 to May 31, 2026, $22 or $23 per hour (depending on facility type) from June 1, 2026 to May 31, 2028, and $25 per hour after June 1, 2028.
REIT Qualification
We elected to be taxed as a REIT for U.S. federal income tax purposes beginning with our taxable year ended December 31, 2014. Our qualification as a REIT will depend upon our ability to meet, on a continuing basis, various complex
19

Table of Contents
requirements under the Internal Revenue Code of 1986, as amended (the “Code”), relating to, among other things, the sources of our gross income, the composition and values of our assets, our distribution levels to our stockholders and the concentration of ownership of our capital stock. We believe that we are organized in conformity with the requirements for qualification and taxation as a REIT under the Code and that our manner of operation has and will enable us to continue to meet the requirements for qualification and taxation as a REIT.
The Operating Partnership
We own substantially all of our assets and properties and conduct our operations through the Operating Partnership. We believe that conducting business through the Operating Partnership provides flexibility with respect to the manner in which we structure the acquisition of properties. In particular, an UPREIT structure enables us to acquire additional properties from sellers in tax deferred transactions. In these transactions, the seller would typically contribute its assets to the Operating Partnership in exchange for units of limited partnership interest in the Operating Partnership (“OP Units”). Holders of OP Units will have the right, after a 12-month holding period, to require the Operating Partnership to redeem any or all of such OP Units for cash based upon the fair market value of an equivalent number of shares of CareTrust REIT’s common stock at the time of the redemption. Alternatively, we may elect to acquire those OP Units in exchange for shares of our common stock on a one-for-one basis. The number of shares of common stock used to determine the redemption value of OP Units, and the number of shares issuable in exchange for OP Units, is subject to adjustment in the event of stock splits, stock dividends, distributions of warrants or stock rights, specified extraordinary distributions and similar events. The Operating Partnership is managed by our wholly owned subsidiary, CareTrust GP, LLC, which is the sole general partner of the Operating Partnership and owns one percent of its outstanding partnership interests. As of December 31, 2020,2023, CareTrust REIT is the only limited partner of the Operating Partnership, owning 99% of its outstanding partnership interests, and we have not issued OP Units to any other party.
18

Table of Contents
The benefits of our UPREIT structure include the following:
Access to capital. We believe the UPREIT structure provides us with access to capital for refinancing and growth. Because an UPREIT structure includes a partnership as well as a corporation, we can access the markets through the Operating Partnership issuing equity or debt as well as the corporation issuing capital stock or debt securities. Sources of capital include possible future issuances of debt or equity through public offerings or private placements.
Growth. The UPREIT structure allows stockholders, through their ownership of common stock, and the limited partners, through their ownership of OP Units, an opportunity to participate in future investments we may make in additional properties.
Tax deferral. The UPREIT structure provides property owners who transfer their real properties to the Operating Partnership in exchange for OP Units the opportunity to defer the tax consequences that otherwise would arise from a sale of their real properties and other assets to us or to a third party. As a result, this structure allows us to acquire assets in a more efficient manner and may allow us to acquire assets that the owner would otherwise be unwilling to sell because of tax considerations.
Insurance
We maintain, or require in our leases that our tenants maintain, all applicable lines of insurance on our properties and their operations. The amount and scope of insurance coverage provided by our policies and the policies maintained by our tenants is customary for similarly situated companies in our industry. However, we cannot assure you that our tenants will maintain the required insurance coverages, and the failure by any of them to do so could have a material adverse effect on us. We also cannot assure you that we will continue to require the same levels of insurance coverage under our leases, including the Ensign Master Leases, that such insurance will be available at a reasonable cost in the future or that the insurance coverage provided will fully cover all losses on our properties upon the occurrence of a catastrophic event, nor can we assure you of the future financial viability of the insurers.
Available Information
We file annual, quarterly and current reports, proxy statements and other information with SEC. The SEC maintains an internet site that contains these reports, and other information about issuers, like us, which file electronically with the SEC. The address of that site is http://www.sec.gov. We make available our reports on Form 10-K, 10-Q, and 8-K (as well as all amendments to these reports), and other information, free of charge, on the Investor Relations section of our website at www.caretrustreit.com. The information found on, or otherwise accessible through, our website is not incorporated by reference into, nor does it form a part of, this report or any other document that we file with the SEC.

1920

Table of Contents
ITEM 1A.    Risk Factors
Risks Related to Our Business and Operations
We are dependent on the healthcare operators that lease our properties to successfully operate their businesses and make contractual lease payments, and an event that materially and adversely affects their business, financial position or results of operations could materially and adversely affect our business, financial position or results of operations.
Because all of ourthe properties we own, except for one SNF which is non-operational, are operated by our tenants pursuant to triple-net master leases (including properties we own through joint ventures), we are unable to directly implement strategic business decisions regarding the daily operation and marketing of these properties. While we have rights as the property owner under our triple-net leases and monitor our tenants’ and operators’ performance, we may have limited recourse under our master leases if we believe that a tenant or operator is not performing adequately, and any failure by a tenant to effectively conduct its operations or to maintain and improve our properties could adversely affect its business reputation and its ability to attract and retain residents in our properties, which in turn, could adversely affect their ability to make rental payments to us and otherwise adversely affect our results of operations, including our ability to repay our outstanding indebtedness or our ability to pay dividends to our stockholders as required to maintain our REIT status. Additionally, because each master lease is a triple-net lease, we depend on our tenants to pay all insurance, taxes, utilities and maintenance and repair expenses and to indemnify, defend and hold us harmless from and against various claims, litigation and liabilities arising in connection with their business. There can be no assurance that our tenants will have sufficient assets, income and financing to enable them to satisfy their contractual lease payment or indemnification obligations.obligations and our tenants have in the past, and may in the future, fail to make rent payments when due, or our tenants may declare bankruptcy.
Ensign leases or provides a guaranty for a significant portion of our properties. As of December 31, 2020,2023, properties leased to Ensign under all Ensign leases represented $57.2represented $67.8 million, or 33%, of ourof total annualized contractual rental income, exclusive of operating expense reimbursements, on an annualized run-rate basis, and properties leased to Pennant under the Pennant Master Lease for which Ensign provides a guaranty (the “Pennant Guaranty”) represented $7.8$7.3 million, or 5%4%, of ourtotal annualized contractual rental income, exclusive of operating expense reimbursements, on an annualized run-rate basis.income. Ensign’s inability or unwillingness to meet its lease obligations or its obligations pursuant to the Pennant Guaranty could materially adversely affect our business, financial position or results of operations. In addition, Ensign’s inability to satisfy its other lease obligations including payment of insurance, taxes and utilities, could materially and adversely affect the condition of the properties leased to Ensign as well as Ensign’s business, financial position and results of operations. Accordingly, if Ensign were to experience a material and adverse effect on its business, financial position or results of operations, our business, financial position or results of operations could also be materially and adversely affected.
Further, our dependence on Ensign’s rental payments for a substantial portion of our rental income may limit our ability to enforce our rights under the Ensign leases or the Pennant Guaranty or to terminate the Ensign leases. Ensign’s failure to comply with its lease obligations or its obligations pursuant to the Pennant Guaranty, or with federal and state healthcare laws and regulations to which the leased properties are subject, could require us to find another lessee for such leased properties and result in a decrease in or cessation of rental payments. In such event, we may be unable to locate a suitable lessee at similar rental rates or at all, which would reduce our rental income.
The ongoing COVID-19 pandemicUnstable market and measures intended to prevent its spread couldeconomic conditions may have a materialserious adverse effectconsequences on our business, results of operations, cash flows and financial condition.
Long-term care residents are at high risk for infection and severe illness or possible death from COVID-19 due to their advanced age, likelihood of underlying medical conditions, and the group living setting of long-term care facilities. To date, there have been significant COVID-19 outbreaks in long-term care facilities all over the world. These outbreaks have affected not only the residents, but also the health care providers and visitors to these facilities. The COVID-19 pandemic has led governments and other authorities around the world, including federal, state and local authorities in the United States, to impose measures intended to reduce its spread. These measures impose restrictions on movement and business operations such as travel bans, border closings, business limitations and closures (subject to exceptions for essential operations and businesses), quarantines and shelter-in-place orders. Although some of these restrictions have been lifted or scaled back, resurgences of COVID-19 and the emergence of more readily transmissible variants have resulted in the re-imposition of certain restrictions and may lead to other restrictions being implemented.
Recently, two COVID-19 vaccines were approved for full use. While the supply of COVID-19 vaccine in the United States is currently limited, states have generally prioritized residents of long-term care facilities, health care providers, and, increasingly, people 65 and older to receive the vaccine. However, distribution of the vaccine has taken longer than expected due to logistics, lack of resources, scheduling, staffing issues and vaccine resistance, and availability is expected to remain scarce for the next several months, even as newer, more contagious variants of COVID-19 circulate worldwide. To meet these challenges, the Biden administration has announced a vaccine offensive plan that calls for greatly expanding access to the vaccine and using the Defense Production Act to expand vaccine production. Experts do not know how long immunity lasts after vaccination or exactly what percentage of the population would need to be vaccinated to achieve herd (or population)
20

Table of Contents
immunity to COVID-19. The Biden administration also proposed a $1.9 trillion spending package to combat the economic downturn and the pandemic, including $20 billion for a national vaccine program. At this time, it is uncertain whether any such proposal will ultimately become law and we cannot predict the ultimate content, timing or effect of any such legislation or the impact of potential legislation on our business.
Given the adverse impact the pandemic and pandemic-related restrictions have had, and may continue to have, on the economy generally and the prevalence of outbreaks within long-term care facilities, our business, results of operations and financial conditioncondition.
Global credit and financial markets have been adversely impacted,experienced extreme volatility and maydisruptions over the past several years, including declines in consumer confidence, concerns about declines in economic growth, increases in the future be materially adversely impacted,rate of inflation, increases in borrowing rates and changes in liquidity and credit availability, and uncertainty about economic stability, including most recently in connection with actions undertaken by the COVID-19 pandemic.
TheU.S. Federal Reserve Board to address inflation, the military conflicts in Ukraine and Gaza, the continuing effects of the COVID-19 pandemic and measures to prevent its spread subject us to various riskssupply chain disruptions. While consumer sentiment is on the rise, concerns about declines in economic growth have faded and uncertainties, some of which haveinflation has cooled there can be no assurance that further deterioration in credit and financial markets and confidence in economic conditions will not occur. Our general business strategy may be adversely affected ourby any such economic downturn, volatile business environment or unpredictable and all of which could materially adversely affect our business, results of operations and financial condition, includingunstable market conditions. In addition, increased costs due to inflationary conditions may have material adverse effects on the following:
the inabilityoperating expenses of our tenants to pay contractual rent in full, on a timely basis or at all due to increases in operating costs incurred by our tenants or declines in occupancy rates atand their facilities, which would adversely impact our rental income, and the adverse impact on our rental income if we grant rent deferrals, reductions or other restructurings or accommodations to any of our tenants;
the possibility that we may be required to write-off unpaid rental payments, incur lease accounting charges due to the uncollectibility of rental payments and/or accede to unfavorable modifications of lease terms if a tenant is unable to pay contractual rent; and/or the possibility that adverse market conditions or declines in the operating performance of our tenants or borrowers may result in asset impairment charges or credit losses on our loans receivable if we determine that the full amount of our investments are not recoverable;
the financial deterioration of one or more of our tenants or borrowers (which has, and could continue to result from, among other reasons (i) temporary cessation or limitations on certain medical procedures which in turn results in a reduction in hospital patients and the need for post-acute care services offered by our tenants, (ii) increased operating costs and staffing requirements related to compliance with Centers for Disease Control and Prevention (“CDC”) protocols, (iii) increased scrutiny by regulators of infection control and prevention measures, (iv) potential repayments of relief funds received by tenants as changes in federal guidelines are published and potential false claims act and whistleblower liability for violations of relief fund terms and conditions, (v) nursing or other staffing shortages exacerbated by the pandemic; or (vi) decisions by elderly individuals to avoid or delay entrance into assisted living and other long-term care facilities in order to minimize their potential for exposure to COVID-19 in group living situations), which may result in such tenant(s) experiencing insolvency or initiating bankruptcy or similar proceedings which adversely affect our ability to collect rent or interest payments from such tenants and result in increased costs to us;
increased costs or delays that we have incurred, and may continue to incur, if we need to reposition or transition any of our currently-leased properties to another tenant or operator, which have, and may continue to, adversely impact our revenues and results of operations;
risks related to lawsuits and regulatory enforcement actions related to COVID-19 outbreaks involving us, our tenants, operators or borrowers, including increases in the costs of business, negative publicity and/or further decreases in occupancy and/or profitability at our facilities (we note, however, that liability protections provided to health care providers under the PREP Act, as summarized below, may reduce the risk of legal liability for certain actions taken by our operators in connection with the COVID-19 pandemic);
deterioration of state and local economic conditions and job losses, which has, and may continue to, decrease demand for and occupancy levels of our properties and cause our rental rates and property values to be negatively impacted;
possible complete or partial closures of, or other operational issues at, one or more of our properties resulting from government actions or directives, which may intensify the risk of rent deferrals or non-payment of contractual obligations by our tenants or operators;
material increases in COVID-19 related claims and litigation against nursing home and seniors housing operators (whether by residents, employees, contractors, suppliers, etc.) causing their insurance coverage to increase to levels which could negatively impact their financial performance and ability to meet their contractual lease obligations to us;
limitations on our access to capitalus and other sources of funding, which could adversely affectmay also increase the availability and terms of future borrowings or refinancings or other forms of capital raising, including issuances under our New ATM Program (as defined below), and which could adversely impact our abilitycosts for us to make new property investments;
our ability to continue to make cash distributionscapital improvements to our stockholders commensurate with historical levels;facilities.
Our business could also be adversely impacted by volatility caused by geopolitical events, such as the conflicts in Ukraine and Gaza. A significant downturn in economic activity may cause a reduction in spending on healthcare matters and our tenants may need to seek to lower their costs by renegotiating leases. Such reductions may disproportionately affect our revenue. In addition, if the current equity and credit markets deteriorate, it may make any necessary debt or equity financing more difficult, more costly, and more dilutive. Furthermore, our stock price may decline due in part to the volatility of the stock market and the general economic downturn.
21

Table of Contents
our ability to repay outstanding debt or maintain compliance with covenants under our Amended Credit Facility (as defined below) and the indenture governing our Notes.
The Public Readiness and Emergency Preparedness Act (the “PREP Act”), enacted in 2005, authorizes the HHS Secretary to issue a declaration to provide liability immunity to certain individuals and entities, including health care providers, against any claim of loss caused by, arising out of, relating to, or resulting from the manufacture, distribution, administration or use of medical countermeasures, including a qualified pandemic, except for cases involving willful misconduct. The HHS Secretary first declared on January 31, 2020 that a public health emergency exists under the PREP Act in connection with the COVID-19 pandemic, which triggered the PREP Act provisions. A declaration lasts until the HHS Secretary declares that the public health emergency no longer exists or upon the expiration of the 90-day period beginning on the date that the HHS Secretary declared a public health emergency exists, whichever occurs first. The HHS Secretary has renewed this declaration multiple times, and is currently set to be in force through April 2021. The PREP Act is intended to protect health care providers, including many of our tenants, operators or borrowers, from liability for using or administering medical devices or medications that have been sanctioned on some level, even if not formally approved by the United States Food and Drug Administration or CDC. The PREP Act is especially important for our tenants that want to offer treatment options to their residents who test positive for COVID-19. If courts do not enforce the provisions of the PREP Act to provide liability immunity for certain health care providers, such as nursing home and seniors housing operators, or if the Biden administration scales back or rescinds any previous declarations to invoke the PREP Act, our tenants, operators or borrowers, the financial performance of our tenants, operators or borrowers and ability to meet their contractual obligations to us could be adversely affected.
The duration and extent of the COVID-19 pandemic’s effect on our operational and financial performance, and the operational and financial performance of our tenants, will depend on future developments, which are highly uncertain and cannot be predicted at this time, including new information which may emerge concerning the severity of COVID-19 and the current and future variants thereof, actions taken to contain COVID-19, resurgences of COVID-19 that may continue to occur, the efficacy of COVID-19 vaccines and how quickly and to what extent normal economic and operating conditions resume. Even after the COVID-19 pandemic has subsided, we may experience adverse impacts to our business, financial condition, results of operations, and prospects as a result of its global economic impact, including any economic downturn or recession that has occurred or may occur in the future. The adverse impact of the COVID-19 pandemic on our business, results of operations and financial condition could be material.
Our tenants depend on reimbursement from government and other third-party payors and if reimbursement rates from such payors are reduced by future legislative reform, it could cause our tenants’ revenues to decline and could affect their ability to meet their obligations to us.
Sometimes, governmental payors freeze or reduce payments to healthcare providers, or provide annual reimbursement rate increases that are smaller than expected, due to budgetary and other pressures. Healthcare reimbursement will likely continue to be of significant importance to federal and state authorities. For example, the federal government and a number of states are currently managing budget deficits and, as a result, many states are focusing on the reduction of expenditures under their Medicaid programs, which may result in a freeze on Medicaid rates or a decrease in reimbursement rates for our tenants. The need to control Medicaid expenditures may be exacerbated by the potential for increased enrollment in Medicaid due to unemployment and declines in family incomes. These potential reductions could be compounded by the potential for federal cost-cutting efforts that could lead to reductions in reimbursement to our tenants under both the Medicaid and Medicare programs. Additionally, in July 2023, Medicare excluded marriage and family therapist services and mental health counselor services from SNF consolidated billing. While these services may still be billed by the clinicians providing the services, such services may not be covered under the SNFs Medicare Part A payment. While we cannot make any assessment as to the ultimate timing or the effect that any future legislative reforms may have on our tenants’ costs of doing business and on the amount of reimbursement by government and other third-party payors, potential reductions in Medicaid and Medicare reimbursement, or in non-governmental third-party payor reimbursement, to our tenants could reduce the revenues of our tenants and their ability to meet their obligations to us.
Bankruptcy, insolvency or financial deterioration of our tenants could delay or prevent collection of unpaid rents or require us to find new tenants.
We receive substantially all of our income as rental payments under leases of properties we own directly or through our properties.joint ventures. We have no control over the success or failure of our tenants’ businesses and, at any time, any of our tenants may experience a downturn in its business that may weaken its financial condition. As a result, our tenants have in the past, and may in the future, fail to make rent payments when due, or our tenants may declare bankruptcy. Tenant bankruptcies or failures to make rent payments when due could result in termination of the tenant’s lease and could have a material adverse effect on our business, financial condition and results of operations and our ability to make distributions to our stockholders (which could adversely affect our ability to raise capital or service our indebtedness). This risk is magnified where we lease multiple properties to a single tenant, such as Ensign.
If a tenant is unable to comply with the terms of its lease, we may be forced to write off unpaid amounts due to us from the tenant, move to a cash basis method of accounting for recognizing rental income from the tenant or otherwise modify the tenant’s lease in ways that are unfavorable to us. Alternatively, failure of a tenant to perform under a lease could require us to declare a default, repossess the property, find a suitable replacement tenant, hire third-party managers to operate the property or
22

Table of Contents
sell the property. See Note 2, Summary of Significant Accounting Policies and Note 3, Real Estate Investments, Net for further information.
If one or more of our tenants files for bankruptcy relief, the U.S. Bankruptcy Code provides that a debtor has the option to assume or reject the unexpired lease within a certain period of time. Any bankruptcy filing by or relating to one of our tenants could bar all efforts by us to collect pre-bankruptcy debts from that tenant or seize its property. A tenant bankruptcy could also delay our efforts to collect past due balances under the leases and could ultimately preclude collection of all or a portion of these sums. It is possible that we may recover substantially less than the full value of any unsecured claims we hold, if any, which may have a material adverse effect on our business, financial condition and results of operations, and our ability to make distributions to our stockholders.
Replacement tenants or operators may be difficult to identify and we may be required to incur substantial renovation costs to make our healthcare properties suitable for such tenants or operators.
If our tenants terminate or do not renew their leases with us, we would attempt to reposition the properties with another tenant or operator. Rental payments on such properties could decline or cease altogether while we reposition the properties with a suitable replacement tenant or operator and we may be required to fund certain expenses and obligations (e.g., real estate taxes, debt costs and maintenance expenses) to preserve the value of, and avoid the imposition of liens on, such properties while they are being repositioned.
Healthcare facilities are typically highly customized and may not be easily adapted to non-healthcare-related uses. The improvements generally required to conform a property to healthcare use, such as upgrading electrical, gas and plumbing infrastructure and security, are costly and at times tenant-specific. A new or replacement tenant may require different features in a property, depending on that tenant’s particular operations. If a current tenant is unable to pay rent and vacates a property, we may incur substantial expenditures to modify a property before we are able to secure another tenant. Supply chain volatility and labor shortages may increase these construction costs. In addition, approvals of local authorities for any required modifications
22

Table of Contents
and/or renovations may be necessary, resulting in delays in transitioning a facility to a new tenant. These expenditures or renovations and delays could materially and adversely affect our business, financial condition or results of operations.
In addition, we may fail to identify suitable replacements or enter into leases or other arrangements with new tenants or operators on a timely basis or on terms as favorable to us as our current leases, if at all. If we experience a significant number of un-leased properties not under a lease due to the inability to find suitable replacement tenants or successfully reposition the property, our operating expenses could increase significantly. Even after a suitable replacement tenant or operator has taken over operation of a property, it may still take an extended period of time before such property is fully repositioned and value restored, if at all. Any of these results could have a material adverse effect on our business, financial condition and results of operations and our ability to make distributions to stockholders.
We have and may in the future incur impairment charges, which could negatively impact our results of operations.
At each reporting period, we evaluate our real estate investments and other assets for impairment indicators whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. The existence of impairment indicators is based on factors such as market conditions, operating performance and legal structure. If we determine that an impairment has occurred, we are required to adjust the net carrying value of the asset, which could have a material adverse effect on our results of operations in the period in which the write-off occurs. For example, in the twelve months ended December 31, 2023, we recorded impairment charges of approximately $36.3 million.
The geographic concentration of some of our facilities could leave us vulnerable to an economic downturn, regulatory changes or acts of nature in those areas.
As a result of the concentration of our properties in California Texas, Louisiana, Idaho and ArizonaTexas as described in “Portfolio Summary” under Item 1 of this Annual Report on Form 10-K, the conditions of local economies and real estate markets, including increases in real estate taxes, changes in governmental rules, regulations and reimbursement rates or criteria, changes in demographics, state funding, acts of nature, the impacts of climate change and other factors that may result in a decrease in demand and/or reimbursement for skilled nursing services in these states could have a disproportionately adverse effect on our tenants’ revenue, costs and results of operations, which may affect their ability to meet their obligations to us.
Our facilities located in Texas and Louisianacertain other states in the southeast are especially susceptible to natural disasters such as hurricanes, tornadoes and flooding and our facilities located in California are particularly susceptible to natural disasters such as fires, earthquakes and mudslides. These types of natural disasters will likely increase in number, scope and intensity as a result of climate change. Further, these acts of nature may cause disruption to our tenants, their employees and our facilities, which could have an adverse impact on our tenants’ patients and businesses. In order to provide patient care, our tenants are dependent on consistent and reliable delivery of food, pharmaceuticals, utilities and other goods to our facilities, and the availability of employees to provide services at the facilities. If the power supply, delivery of goods or the ability of employees to reach our facilities is interrupted in any material respect due to a natural disaster or other reasons, it would have a significant impact on our facilities and our tenants’ businesses at those facilities. Furthermore, the impact, or impending threat, of a natural disaster may require that our tenants evacuate one or more facilities, which would be costly and would involve risks, including potentially fatal risks, for the patients at such facilities. The impact of disasters and similar events is inherently uncertain. Such events could harm our tenants’ patients and employees, severely damage or destroy one or more of our facilities, harm our tenants’ business, reputation, financial condition and financial performance, or otherwise cause our tenants’ businesses to suffer in ways that we currently cannot predict.
In addition, to the extent that significant changes in the climate occur in areas where our properties are located, we may experience extreme weather, and changesincluding higher temperatures, increases in precipitation, fire, drought and temperature,flood, all of which may result in physical damage to or a decrease in demand for properties located in these areas or affected by these conditions. Based on our overall portfolio physical climate risk assessment, we found that the highest climate risk for our portfolio was heat caused by higher temperatures, which may result in higher operating and energy costs for our tenants and higher capital costs for resiliency measures for us and our tenants to maintain the property and its value. Should the impact of climate change be
23

Table of Contents
material in nature, including destruction or degradation of our properties, or occur for lengthy periods of time, our financial condition or results of operations may be adversely affected. Increased costs to our tenants to maintain the properties and take appropriate resiliency measures could harm the financial condition and financial performance of our tenants. In addition, changes in federal and state legislation and regulation on climate change could result in increased capital expenditures to improve the energy efficiency of our existing properties and could also require us to spend more on our new development properties without a corresponding increase in revenue.
We are subject to risks associated with public health crises, including significant COVID-19 outbreaks as well as other pandemics or epidemics.
We are subject to risks associated with public health crises and government measures to prevent the spread of infectious diseases, including the global health concerns related to the COVID-19 pandemic. The COVID-19 pandemic adversely
23

Table of Contents
impacted nearly all aspects of our business. Public health crises, including significant COVID-19 outbreaks and any future epidemics or pandemic, could result in similar adverse impacts on our business, results of operations, cash flows and financial condition. Risks to our business that have been associated with the COVID-19 pandemic, and may be associated with future COVID-19 outbreaks or other public health crises, include:
one or more of our tenants or borrowers could experience deteriorating financial conditions and be unable or unwilling to pay rent on time and in full (which has, and could continue to result from, among other reasons (i) increased operating costs and staffing requirements related to compliance with Centers for Disease Control and Prevention (“CDC”) protocols, (ii) decreased occupancy rates, (iii) increased scrutiny by regulators, (iv) potential repayments of relief funds received by tenants, (v) nursing or other staffing shortages; or (vi) decisions by elderly individuals to avoid or delay entrance into assisted living and other long-term care facilities);
the possibility we may have to restructure tenants’ obligations and may not be able to do so on terms that are favorable to us;
the potential need to recognize asset impairment charges or credit losses on our loans receivable if we determine that the full amount of our investments are not recoverable;
increased costs or delays that we have incurred, and may continue to incur, if we need to reposition or transition any of our currently-leased properties to another tenant or operator, which have adversely impacted, and may in the future adversely impact, our revenues and results of operations;
risks related to lawsuits and regulatory enforcement actions related to pandemic outbreaks involving us, our tenants, operators or borrowers, including increases in the costs of business, negative publicity and/or further decreases in occupancy and/or profitability at our facilities;
the expiration, or lack of enforcement, of certain liability immunity for health care providers in relation to a qualified pandemic under the Public Readiness and Emergency Preparedness Act (the “PREP Act”);
complete or partial closures of, or other operational issues at, one or more of our properties resulting from government actions or directives;
limitations on our access to capital and other sources of funding, which could adversely impact our ability to make new property investments;
our ability to continue to make cash distributions to our stockholders commensurate with historical levels; and
our ability to repay outstanding debt or maintain compliance with covenants under our Second Amended Credit Facility (as defined below) and the indenture governing our Notes.
The extent to which the COVID-19 pandemic, or other future health crises, may impact our business, results of operations, cash flows and financial condition depends on many factors which are highly uncertain and are difficult to predict. These factors include, but are not limited to, the duration and spread of any outbreak, the timing, distribution and efficacy of vaccines and other treatments, Unites States and foreign government actions to respond to the outbreak, the extent of disruption to our business and the business of our tenants and borrowers, and how quickly and to what extent normal operation conditions can resume.
We pursue property acquisitions and seek strategic opportunities in the ordinary course of our business, which may result in significant usage of management resources or costs, and we may not fully realize the potential benefits of such transactions.
We regularly review, evaluate, engage in discussions regarding, and pursue acquisitions of properties and seek other strategic opportunities in the ordinary course of business in order to maximize stockholder value. We may devote a significant amount of our management resources to, and incur significant costs in connection with, such transactions, which may not result in definitive agreements or the completion of any transaction and could negatively impact our operations. In addition, there is no assurance that we will fully realize the potential benefits of any past or future acquisition or strategic transaction.
Additionally, from time to time, we may invest in preferred equity interests in joint ventures. Our use of joint ventures may be subject to risks that may not be present with other ownership methods. Our joint ventures may involve property development, which presents additional risks that could render a development project less profitable or not profitable at all and, under certain circumstances, may prevent completion of development activities once undertaken.
If we cannot identify and purchase a sufficient quantity of suitable properties at favorable prices or if we are unable to finance acquisitions on commercially favorable terms, or at all, our business, financial position or results of operations could be materially and adversely affected. Furthermore, any future acquisitions may require the issuance of securities, the incurrence of debt, assumption of contingent liabilities or incurrence of significant expenditures, each of which could materially adversely impact our business, financial condition or results of operations. Additionally, the fact that we must distribute 90% of our REIT taxable income in order to maintain our qualification as a REIT may limit our ability to rely upon rental payments from our leased properties or subsequently acquired properties in order to finance acquisitions. As a result, if debt or equity financing is not available on acceptable terms, further acquisitions might be limited.
Investments through joint ventures involve risks not present in investments in which we are the sole investor.
24

Table of Contents
We have invested, and may continue to invest, as a joint venture partner in joint ventures. Such investments may involve risks not otherwise present when acquiring real estate directly, including for example:

the joint venture partner(s) may at any time have economic or business interests or goals which are or which may become inconsistent with our business interests or goals, including inconsistent goals relating to the sale of properties held in the joint venture or the timing of termination or liquidation of the joint venture;
the possibility that the joint venture partner(s) might become insolvent or bankrupt;
the possibility that we may incur liabilities as a result of an action taken by the joint venture partner(s);
joint ventures may share certain approval rights over major decisions;
a joint venture partner may be in a position to take action contrary to our instructions or requests or contrary to our policies or objectives, including our policy with respect to qualifying and maintaining our qualification as a REIT;
our ability to sell or transfer our interest in the joint ventures on advantageous terms when we so desire may be limited or restricted under the terms of our agreements with the counterparties in the joint ventures;
we may be required to contribute additional capital if the counterparties in the joint ventures fail to fund their share of required capital contributions;
disputes between us and a joint venture partner may result in litigation or arbitration that would increase our expenses and distract our officers and directors from focusing their time and effort on our business and result in subjecting the properties owned by the applicable joint venture to additional risk; or
under certain joint venture arrangements, neither joint venture partner may have the power to control the venture, and an impasse could be reached which might have a negative influence on the joint venture.

In the future, our joint ventures may also involve property development, which presents additional risks that could render a development project less profitable or not profitable at all and, under certain circumstances, may prevent completion of development activities once undertaken.
Increased competition has resulted and may further result in lower net revenues for some of our tenants and may affect their ability to meet their financial and other contractual obligations to us.
The healthcare industry is highly competitive. The occupancy levels at, and results of operations from, our facilities are dependent on our ability and the ability of our tenants to compete with other tenants and operators on a number of different levels, including the quality of care provided, reputation, the physical appearance of a facility, price, the range of services offered, family preference, amenities, alternatives for healthcare delivery, the supply of competing properties, physicians, staff, referral sources, location, and the size and demographics of the population in the surrounding area. Operating expenses such as food, utilities, taxes, insurance, labor costs (including due to minimum wage laws) and rent or debt service continue to increase. In addition, our tenants face an increasingly competitive labor market for skilled management personnel and nurses together with Medicaid reimbursement in some states that does not cover the full cost of caring for residents. Significant turnover, or a shortage of nurses or other trained personnel or general inflationary pressures on wages, may force tenants to enhance pay and benefits packages to compete effectively for skilled personnel, or to use more expensive contract personnel, but they may be unable to offset these added costs by increasing the rates charged to residents. Any increase in labor costs and other property operating expenses or any failure by our tenants to attract and retain qualified personnel could reduce the revenues of our tenants and their ability to meet their obligations to us.
Our tenants also compete with numerous other companies providing similar healthcare services or alternatives such as home health agencies, life care at home, community-based service programs, retirement communities and convalescent centers. We cannot be certain that our tenants will be able to achieve occupancy and rate levels, or manage their expenses, in a way that will enable them to meet all of their obligations to us. Further, many competing companies may have resources and attributes that are superior to those of our tenants. They may encounter increased competition that could limit their ability to maintain or attract residents or expand their businesses or to manage their expenses, either of which could adversely affect their ability to meet their obligations to us, potentially decreasing our revenues, impairing our assets, and/or increasing our collection and dispute costs.
In addition, if development of seniors housing facilities outpaces demand for those assets in markets in which we are located, those markets may become saturated and our seniors housing tenants and operators could experience decreased occupancy, which may affect their ability to meet their financial and other contractual obligations to us.
Required regulatory approvals can delay or prohibit transfers of our healthcare properties, which could result in periods in which we are unable to receive rent for such properties.
Our tenants that operate SNFs and other healthcare facilities must be licensed under applicable state law and, depending upon the type of facility, certified or approved as providers under the Medicare and/or Medicaid programs. Prior to the transfer of the operations of such healthcare properties to successor operators, the new operator generally must become licensed under state law and, in certain states, receive change of ownership approvals under certificate of need laws (which provide for a
2425

Table of Contents
certification that the state has made a determination that a need exists for the beds located on the property) and, if applicable, file for a Medicare and Medicaid change of ownership. Upon termination or expiration of existing leases, delays or the failure of the new tenant in receiving regulatory approvals from the applicable federal, state or local government agencies, may prolong the period during which we are unable to collect rent and the property may experience performance declines. We could also incur substantial additional expenses in connection with any licensing, receivership or change of ownership proceedings.
We may not be able to sell properties when we desire because real estate investments are relatively illiquid, which could materially and adversely affect our business, financial position or results of operations.
Real estate investments are generally illiquid. As a result, we may be unable to vary our portfolio promptly in response to changes in the real estate market. A downturn in the real estate market could materially and adversely affect the value of our properties and our ability to sell such properties for acceptable prices or terms. We also cannot predict the length of time needed to find a willing purchaser and to close the sale of a property or portfolio of properties. These factors and any others that would impede our ability to respond to adverse changes in the performance of our properties could materially and adversely affect our business, financial position or results of operations and our ability to pay dividends and make distributions.
We or our tenants may experience uninsured or underinsured losses, which could result in a significant loss of the capital we have invested in a property, decrease anticipated future revenues or cause us to incur unanticipated expenses.
Our lease agreements require that the tenant maintain general and professional liability insurance and comprehensive liability and hazard insurance. However, there are certain types of losses (including, but not limited to, losses arising from environmental conditions or of a catastrophic nature, such as earthquakes, wildfires, hurricanes and floods) that may be uninsurable or not economically insurable. In addition, insurance coverage may be insufficient to pay the full current market value or replacement cost of any loss. Inflation, changes in tort liability laws, changes in building codes and ordinances, environmental considerations, and other factors also might make it infeasible to use insurance proceeds to protect a tenant in a liability claim or replace a property after such property has been damaged or destroyed. Under such circumstances, the insurance proceeds received might not be adequate to restore the economic position with respect to such tenant or property.
If one of our tenants experiences a material general or professional liability loss that is uninsured or exceeds policy coverage limits, it may be unable to satisfy its lease payment obligations to us. If one of our properties experiences a loss that is uninsured or that exceeds policy coverage limits, we could lose the capital invested in the damaged property as well as the anticipated future cash flows from the property.
In addition, even if damage to our properties is covered by insurance, business disruptions caused by a casualty event may result in lost revenue for our tenants or us for which insurance may not fully compensate them or us for such loss of revenue. If one of our tenants experiences such a loss, it may be unable to satisfy its lease payment obligations to us.
The ownership by our chief executive officer, Gregory K. Stapley, of shares of Ensign and Pennant common stock may create, or may create the appearance of, conflicts of interest.
Because of his former position with Ensign, our chief executive officer, Gregory K. Stapley, owns shares of Ensign common stock. Mr. Stapley also owns shares of our common stock. In 2019, in connection with the Pennant Spin, each holder of Ensign common stock received one half share of Pennant common stock per share of Ensign common stock. As a result, Mr. Stapley now also owns shares of Pennant common stock. His individual holdings of shares of our common stock, Ensign common stock and Pennant common stock may be significant compared to his respective total assets. These equity interests may create, or appear to create, conflicts of interest when he is faced with decisions that may not benefit or affect CareTrust REIT, Ensign or Pennant in the same manner.
We are, and may continue to be, exposed to contingent rent escalators, which could hinder our profitability and growth. 
We derive revenue primarily by leasing our assets under long-term triple-net leases with rental rates that, subject to certain limitations, are generally fixed with annual rent escalations contingent on changes in the Consumer Price Index, subject to maximum fixed percentages. If the Consumer Price Index does not increase, our revenues may not increase. In addition, if economic conditions resultresult in significant increases in the Consumer Price Index, but the escalations under our leases are capped, our growth and profitability also may be limited.
Cybersecurity incidents or other damage to the information systems and technology of us or our tenants could harm our business.
We rely on information technology networks, enterprise and other cloud-based applications and other information systems to process, transmit and store electronic information, and to manage and support our business processes, including financial transactions and records, and to maintain personal information and tenant and lease data. We purchase some of our information technology, including software and cloud-based technology, from third party service providers, on whom we and our systems depend. While we have taken steps to protect the security of our information systems, we have, from time to time, experienced cybersecurity incidents of varying degrees, although none of these cyber incidents have had a material adverse impact on our business, financial condition or results of operations. The technology infrastructure and systems of some of our cloud solution and other third party service providers have also in the past experienced, and may in the future experience, cybersecurity incidents of varying degrees. Cybersecurity incidents can be caused by ransomware, computer denial-of-service attacks, worms, and other malicious software programs or other attacks, including the covert introduction of malware to computers and networks, and the use of techniques or processes that change frequently, may be disguised or difficult to detect, or are designed to remain dormant until a triggering event, and may continue undetected for an extended period of time. Cybersecurity incidents also result from social engineering or impersonation of authorized users as well as efforts to discover and exploit any design flaws, bugs, security vulnerabilities or security weaknesses, intentional or unintentional acts by employees or other insiders with access privileges, intentional acts of vandalism or fraud by third parties and sabotage. The risk
26

Table of Contents
of cybersecurity incidents has generally increased as the number, intensity and sophistication of attacks and intrusions from around the world have increased.
We have engaged a third-party cybersecurity firm who serves as our dedicated information technology and cybersecurity team and helps us oversee, implement and manage our processes and controls to assess, identify and manage risks from cybersecurity threats. It is possible that our processes and controls will not detect or protect against all cybersecurity threats or incidents. In addition, any failure on the part of our outsourced cybersecurity team to effectively monitor and protect our information systems could make us more vulnerable to cybersecurity incidents. Our technology infrastructure and information systems are also vulnerable to damage or interruption from natural disasters, power loss and telecommunications failures. Failure to maintain proper function, security and availability of our information systems or the loss or misuse of the data maintained in those systems could interrupt our operations, damage our reputation, subject us to significant costs to respond and implement remediation measures and liability claims or regulatory penalties and could have a material adverse effect on our business, financial condition and results of operations.
Our tenants may also from time to time experience cybersecurity incidents or other damage or interruption to their information systems that disrupt their operations or result in the loss or misuse of confidential information or other sensitive or personal information. Any resulting financial impact to our tenants, including liability claims or regulatory penalties, costs to respond and implement remediation measures as well as operational consequences or business impacts resulting from any damage to their reputation or harm to their business relationships, could negatively impact the ability of our tenants to meet their financial and other contractual obligations to us, which could have a material adverse effect on our business, financial condition and results of operations.
Bank failures or other events affecting financial institutions could have a material adverse effect on our and our tenants’ liquidity, results of operations, and financial condition.
The failure of a bank, or events involving limited liquidity, defaults, non-performance, or other adverse conditions in the financial or credit markets impacting financial institutions, or concerns or rumors about such events, may adversely impact us, either directly or through an adverse impact on our tenants, operators, and borrowers. A bank failure or other event affecting financial institutions could lead to disruptions in our or our tenants’, operators’, and borrowers’ access to bank deposits or borrowing capacity, including access to letters of credit from certain of our tenants relating to lease obligations. In addition, in the event of a bank failure or liquidity crisis, our or our tenants’, operators’, and borrowers’ deposits in excess of the Federal Deposit Insurance Corporation (“FDIC”) limits may not be backstopped by the U.S. government, and banks or financial institutions with which we or our tenants, operators, and borrowers do business may be unable to obtain needed liquidity from other banks, government institutions, or by acquisition. Any adverse effects to our tenants’, operators’, or borrowers’ liquidity or financial performance could affect their ability to meet their financial and other contractual obligations to us, which could have a material adverse effect our business, results of operations, and financial condition.
Risks Related to Laws and Regulations
Healthcare reform legislation impacts cannot accurately be predicted and could adversely affect our results of operations.
We and the healthcare operators leasing our properties depend on the healthcare industry and are susceptible to risks associated with healthcare reform. Legislative proposals are introduced each year that would introduce major changes in the healthcare system, both nationally and at the state level. In light of the transfer of power from the Trump administration to the Biden administration, and the change in control of the United States Senate,For example, we believe that efforts may be made to, among other things: (i) repeal much of the deregulation and regulatory changes made to the PPACA during the previous
25

Table of Contents
administration; (ii) expand health insurance coverage to more individuals, potentially by enacting legislation creating a single-payor health insurance model; and (iii)things, transition Federal payment programs further in the direction of value based care, but we cannot predict whether or in what form any of these measures willmay be enacted, or what effect they would have on our business or the businesses of our tenants if enacted. Efforts may also be made to reduce the age at which individuals become eligible for Medicare, which could have an adverse impact on our tenants because Medicare sometimes reimburses long term care providers at rates lower than those paid by commercial payors. We also believeIn addition, the Biden Administration announced a focus on implementing minimum staffing requirements and increased inspections as part of nursing home reforms announced in the 2022 State of the Union Address, and in July 2022, CMS announced it was evaluating a proposed federal staffing mandate for SNFs. Specifically, CMS sought input on establishing minimum staffing requirements for long-term care facilities and issued updates to guidance on minimum health and safety standards that long-term care facilities must meet to participate in Medicare and Medicaid and updated and developed new guidance in the State Operations Manual to address issues that significantly affect residents of long-term care facilities. In September 2023, CMS issued the Minimum Staffing Standards for Long-Term Care Facilities and Medicaid Institutional Payment Transparency Reporting proposed rule, which, if implemented as written would establish minimum nurse staffing standards, RN on-site requirements and staffing assessment requirements. It is uncertain whether the proposed rule will be implemented as written and, if it is, whether it will be accompanied by additional resources may be dedicatedfunding to regulatory enforcement, which couldoffset any increased staffing requirements for our operators. If additional funding is unavailable at sufficient levels or at all, a mandate to increase our tenants’ costs of doing business and negatively impact their ability to pay their rent obligations to us. Additional stimulus funding for state and local governmentsstaffing levels in SNFs may have a positivematerial adverse effect on the operating results and financial condition of our tenants. We cannot predict whether any future legislative proposals will be adopted or, if adopted, the impact these proposals would have on our tenants because it may alleviate some pressures on state and local governments to reduce overall Medicaid expenditures.or our business.
27

Table of Contents
Our tenants are subject to extensive federal, state and local laws and regulations affecting the healthcare industry that include those relating to, among other things, licensure, conduct of operations, ownership of facilities, addition of facilities and equipment, allowable costs, services, prices for services, qualified beneficiaries, quality of care, patient rights and insurance, fraudulent or abusive behavior, labor and employment issues and financial and other arrangements that may be entered into by healthcare providers. See “Government Regulation, Licensing and Enforcement” in Item 1 of this Annual Report on Form 10-K for more information. If our tenants or operators fail to comply with the laws, regulations and other requirements applicable to their businesses and the operation of our properties, they could become ineligible to receive reimbursement from governmental and private third-party payor programs, face bans on admissions of new patients or residents, suffer civil or criminal penalties or be required to make significant operational changes. The cost to comply with these laws, regulations and other requirements results in increased costs of doing business for our tenants and operators. For example, on October 13, 2023, California Senate Bill No. 525 (“SB 525”) was signed into law, requiring a substantial increase in the minimum wage for workers operating in certain health care facilities. As a result of SB 525, certain health care facilities (including licensed skilled nursing facilities) operating in California are required to increase the wages of their covered health care employees to at least $21 per hour from June 1, 2024 to May 31, 2026, $22 or $23 per hour (depending on facility type) from June 1, 2026 to May 31, 2028, and $25 per hour after June 1, 2028. If our tenants are unable to offset these increased costs, the operating results and financial condition of our tenants will be adversely impacted and they may be unable to satisfy their rent obligations to us.
We believe that additional resources may be dedicated to regulatory enforcement, which could further increase our tenants’ costs of doing business and negatively impact their ability to pay their rent obligations to us. Changes in enforcement policies by federal and state governments have also resulted in a significant increase in inspection rates, citations of regulatory deficiencies and sanctions, including terminations from Medicare and Medicaid programs, bars on Medicare and Medicaid payments for new admissions, civil monetary penalties and criminal penalties. Our tenants and operators could be forced to expend considerable resources responding to an investigation, lawsuit or other enforcement action under applicable laws or regulations. Additionally, if our tenants’ residents do not have insurance, it could adversely impact the tenants’ ability to satisfy their obligation to us. We cannot predict whether any future legislative proposals will be adopted or, if adopted, the impact these proposals would have on our tenants or our business.
Tenants that fail to comply with applicable requirements of governmental reimbursement programs, such as Medicare or Medicaid, may cease to operate or be unable to meet their financial and other contractual obligations to us.
Our tenants are subject to the following risks, among others, relating to governmental healthcare reimbursement programs: statutory and regulatory changes; retroactive rate adjustments; recovery of program overpayments or set-offs; administrative rulings; policy interpretations; payment or other delays by fiscal intermediaries or carriers; government funding restrictions (at a program level or with respect to specific facilities); and interruption or delays in payments due to any ongoing governmental investigations and audits.
We expect healthcare reimbursement will continue to be a significant focus for federal and state authorities in their cost control efforts. We cannot predict the timing or effects of any future legislative reforms on our tenants’ business costs or government and other third-party payor reimbursement. More generally, because of the dynamic nature of the legislative and regulatory environment for health care products and services, and in light of existing federal budgetary concerns, we cannot predict the impact that broad-based, far-reaching legislative or regulatory changes could have on the U.S. economy, our business or that of our operators and tenants. The failure of any of our tenants to comply with these laws, requirements and regulations could materially and adversely affect their ability to meet their financial and contractual obligations to us.
Government investigations and enforcement actions brought against the health care industry have increased dramatically over the past several years and are expected to continue, particularly in the area of Medicare/Medicaid false claims, as well as an increase in the intensity of enforcement actions resulting from these investigations. Some of these enforcement actions represent novel legal theories and expansions in the application of the False Claims Act.
Medicare, Medicaid and other governmental health care payors require reporting of extensive financial information in a specific format or content. These requirements are technical and complex and may not be properly implemented by billing or reporting personnel. For certain required information, False Claims Act violations may occur without any intent to defraud by mere negligence or recklessness in information submission to the government. New billing systems, medical procedures and procedures for which there is not clear guidance may all result in liability. In addition, violations of the Anti-Kickback Law or Stark Law and, for provider tenants who received pandemic relief funds, the failure to comply with terms and conditions related to receipt or repayment of those funds, may form the basis for a federal False Claims Act violation. See “Government Regulation, Licensing and Enforcement,” in Item 1 of this Annual Report on Form 10-K for more information.
Many states have adopted laws similar to the False Claims Act, some of which apply to claims submitted to private and commercial payors, not just governmental payors. Violations of such laws by an operator of a health care property could result in loss of accreditation, denial of reimbursement, imposition of fines, suspension or decertification from government healthcare programs, civil liability, and in certain limited instances, criminal penalties, loss of license or closure of the property and/or the incurrence of considerable costs arising from an investigation or regulatory action.
2628

Table of Contents
If we or our tenants fail to adhere to applicable privacy and data security laws, or experience a security incident or breach, this could have a material adverse effect on us or on our tenants’ ability to meet their obligations to us.
We and our tenants are subject to HIPAA and various other state and federal laws that relate to privacy and data security, andincluding the reporting of data breaches involving personal information as discussed in “Government Regulation, Licensing and Enforcement - Privacy, Security and Data Breach Notification Laws” in Item 1 of this Annual Report on Form 10-K. Failure by us or our tenants to comply with these requirements could have a materiallymaterial adverse effect on us and the ability of our tenants to meet their obligations to us. Furthermore, the adoption of new privacy, security and data breach notification laws at the federal and state level could require us or our tenants to incur significant compliance costs.
While we In addition, the cost and our tenants maintain various security controls, there is a riskoperational consequences of security incidents orresponding to data breaches resulting from unintentional or deliberate acts by third parties or insiders attempting to obtain unauthorized access to information, destroy or manipulate data, or disrupt or sabotage information systems. The trend toward increased remote work and rapid implementation of telehealth within the health care industry in response to the pandemic may have created new or increased cyber risks. Cyber-attacks range from individual attempts to gain unauthorized access to our IT systems to sophisticated attacks by hacking groups and some nation-state actors. Information technology systems are a vital part of the business of our Company and our tenants, and a security incident or breachimplementing remediation measures could result in a material loss of business, business interruption, loss of patient or other critical data, regulatory enforcement, substantial legal liability and reputational harm. Despite the deployment of commercially reasonable efforts and sophisticated techniques to prevent cyber-attacks, information systems remain potentially vulnerable because the techniques used by hackers continue to evolve and may not be identified until launched against a target, and may be designed not to be detected. In fact, some cyber-attacks may not be detected for an extended period of time. As a result, we or our tenants may be unsuccessful in implementing successful cybersecurity protections. A successful cyber-attack, security incident or breach occurring at or involving the Company could have a material adverse impact on our Company. Where the cyber-attack, incident or breach occurs at or involves a tenant, this could jeopardize the tenant’s ability to fulfill its obligations to us.significant.
Tenants that fail to comply with federal, state and local licensure, certification and inspection laws and regulations may cease to operate our healthcare facilities or be unable to meet their financial and other contractual obligations to us.
The healthcare operators to whom we lease properties are subject to extensive federal, state, local and industry-related licensure, certification and inspection laws, regulations and standards. Our tenants’ failure to comply with any of these laws, regulations or standards could result in adverse publicity and reputational harm as well as penalties which may include loss or restriction of license, loss of accreditation, denial of reimbursement, imposition of fines, suspension or decertification from federal and state healthcare programs, or closure of the facility. Though the regulatory environment in which SNFs operate is more restrictive than for ALFs, ALFs face similar penalties for noncompliance with applicable legal requirements. For example, operations at our properties may require a license, registration, certificate of need, provider agreement or certification. Failure of any tenant to obtain, or the loss or imposition of restrictions on any required license, registration, certificate of need, provider agreement or certification would prevent a facility from operating in the manner intended by such tenant. Additionally, failure of our tenants to generally comply with applicable laws and regulations could adversely affect facilities owned by us, result in adverse publicity and reputational harm, and therefore could materially and adversely affect us. See “Government Regulation, Licensing and Enforcement - Healthcare Licensure and Certificate of Need” in Item 1 of this Annual Report on Form 10-K for additional information.
Environmental compliance costs and liabilities may materially impair the value of properties owned by us.
Under various federal, state and local laws, ordinances and regulations, as a current or previous owner of real estate, we may be required to investigate and clean up certain hazardous or toxic substances or petroleum released at a property, and may be held liable to a governmental entity or to third parties for property damage and for investigation and cleanup costs incurred by the third parties in connection with the contamination. In addition, some environmental laws create a lien on the contaminated site in favor of the government for damages and the costs it incurs in connection with the contamination. Neither we nor our tenants carry environmental insurance on our properties. Contamination or the failure to remediate contamination may materially adversely affect our ability to sell or lease the real estate or to borrow using the real estate as collateral. As the owner of a site, we may also be held liable to third parties for damages and injuries resulting from environmental contamination emanating from the site. Although we generally require our tenants, as operators of our healthcare properties, to indemnify us for environmental liabilities they cause, such liabilities could exceed the financial ability of the tenant to indemnify us or the value of the contaminated property. We may also experience environmental liabilities arising from conditions not known to us.
Risks Related to Our Status as a REIT
If we fail to qualify or remain qualified as a REIT, we will be subject to U.S. federal income tax as a regular corporation and could face substantial tax liability, which could adversely affect our ability to raise capital or service our indebtedness.
We currently operate, and intend to continue to operate, in a manner that will allow us to continue to qualify to be taxed as a REIT for U.S. federal income tax purposes. We elected to be taxed as a REIT for U.S. federal income tax purposes
27

Table of Contents
beginning with our taxable year ended December 31, 2014. We received an opinion of our counsel with respect to our qualification as a REIT in connection with the Spin-Off.becoming a public company. Investors should be aware, however, that opinions of advisors are not binding on the IRS or any court. The opinion of our counsel represents only the view of our counsel based on its review and analysis of existing law and on certain representations as to factual matters and covenants made by us, including representations relating to the values of our assets and the sources of our income. The opinion is expressed as of the date issued. Our counsel has no obligation to advise us or the holders of any of our securities of any subsequent change in the matters stated, represented or assumed or of any subsequent change in applicable law. Furthermore, both the validity of the opinion of our counsel and our qualification as a REIT will depend on our satisfaction of certain asset, income, organizational, distribution, stockholder ownership and other requirements on a continuing basis, the results of which will not be monitored by our counsel. Our ability to satisfy the asset tests depends upon our analysis of the characterization and fair market values of our assets, some of which are not susceptible to a precise determination, and for which we will not obtain independent appraisals.
If we fail to qualify to be taxed as a REIT in any year, we would be subject to U.S. federal income tax, including any applicable alternative minimum tax, on our taxable income at regular corporate rates, and dividends paid to our stockholders
29

Table of Contents
would not be deductible by us in computing our taxable income. Any resulting corporate liability could be substantial and would reduce the amount of cash available for distribution to our stockholders, which could have an adverse impact on the value of our common stock. Unless we were entitled to relief under certain Code provisions, we also would be disqualified from re-electing to be taxed as a REIT for the four taxable years following the year in which we failed to qualify to be taxed as a REIT, which could adversely affect our financial condition and results of operations.
Legislative or other actions affecting REITs could have a negative effect on us.
The rules dealing with U.S. federal income taxation are constantly under review by persons involved in the legislative process and by the IRS and the U.S. Department of the Treasury (the “Treasury”). Changes to the tax laws or interpretations thereof, with or without retroactive application, could materially and adversely affect our investors or us. We cannot predict how changes in the tax laws, including any tax reform called for by the newcurrent presidential administration, might affect our investors or us. New legislation, Treasury regulations, administrative interpretations or court decisions could significantly and negatively affect our ability to qualify to be taxed as a REIT or the U.S. federal income tax consequences to our investors and us of such qualification. For instance, the “Tax Cuts and Jobs Act” (the “Act”) significantly changed the U.S. federal income tax laws applicable to businesses and their owners, including REITs and their shareholders. Technical corrections or other amendments to the Act or administrative guidance interpreting the Act may be forthcoming at any time. We cannot predict the long-term effect of the Act or any future law changes on REITs or their shareholders. Changes to the U.S. federal tax laws and interpretations thereof, whether under the Act or otherwise, could adversely affect an investment in our stock
No prediction can be made regarding whether new legislation or regulation (including new tax measures) will be enacted by legislative bodies or governmental agencies, nor can we predict what consequences would result from this legislation or regulation. Accordingly, no assurance can be given that the currently anticipated tax treatment of an investment will not be modified by legislative, judicial or administrative changes, possibly with retroactive effect.
We could fail to qualify to be taxed as a REIT if income we receive from our tenants is not treated as qualifying income.
Under applicable provisions of the Code, we will not be treated as a REIT unless we satisfy various requirements, including requirements relating to the sources of our gross income. Rents received or accrued by us from our tenants will not be treated as qualifying rent for purposes of these requirements if the leases are not respected as true leases for U.S. federal income tax purposes and are instead treated as service contracts, joint ventures or arrangement.other arrangements. If the leases are not respected as true leases for U.S. federal income tax purposes, we will likely fail to qualify to be taxed as a REIT.
In addition, subject to certain exceptions, rents received or accrued by us from our tenants will not be treated as qualifying rent for purposes of these requirements if we or a beneficial or constructive owner of 10% or more of our stock beneficially or constructively owns 10% or more of the total combined voting power of all classes of stock entitled to vote or 10% or more of the total value of all classes of stock. CareTrust REIT’s charter provides for restrictions on ownership and transfer of CareTrust REIT’s shares of stock, including restrictions on such ownership or transfer that would cause the rents received or accrued by us from our tenants to be treated as non-qualifying rent for purposes of the REIT gross income requirements. Nevertheless, there can be no assurance that such restrictions will be effective in ensuring that rents received or accrued by us from our tenants will not be treated as qualifying rent for purposes of REIT qualification requirements.
Dividends payable by REITs do not qualify for the reduced tax rates available for some dividends.
The maximum U.S. federal income tax rate applicable to income from “qualified dividends” payable by U.S. corporations to U.S. stockholders that are individuals, trusts and estates is currently 20%. Dividends payable by REITs, however, generally are not eligible for the reduced rates. However, for taxable years beginning after December 31, 2017 and before January 1, 2026, under the recently enacted Tax Cuts and Jobs Act, noncorporate taxpayers may deduct up to 20% of certain qualified business income, including "qualified REIT dividends" (generally, dividends received by a REIT shareholder that are not
28

Table of Contents
designated as capital gain dividends or qualified dividend income), subject to certain limitations, resulting in an effective maximum U.S. federal income tax rate of 29.6% on such income.  Although these rules do not adversely affect the taxation of REITs, the more favorable rates applicable to regular corporate qualified dividends, together with the recently reduced corporate tax rate (currently, 21%), could cause investors who are individuals, trusts and estates to perceive investments in REITs to be relatively less attractive than investments in the stocks of non-REIT corporations that pay dividends, which could adversely affect the value of the stock of REITs, including our stock. Although these rules do not adversely affect the taxation of REITs, the more favorable rates applicable to regular corporate qualified dividends could cause investors who are individuals, trusts and estates to perceive investments in REITs to be relatively less attractive than investments in the stocks of non-REIT corporations that pay dividends, which could adversely affect the value of the stock of REITs, including our stock.
REIT distribution requirements could adversely affect our ability to execute our business plan.
We generally must distribute annually at least 90% of our REIT taxable income, determined without regard to the dividends paid deduction and excluding any net capital gains, in order for us to qualify to be taxed as a REIT (assuming that certain other requirements are also satisfied) so that U.S. federal corporate income tax does not apply to earnings that we
30

Table of Contents
distribute. To the extent that we satisfy this distribution requirement and qualify for taxation as a REIT but distribute less than 100% of our REIT taxable income, determined without regard to the dividends paid deduction and including any net capital gains, we will be subject to U.S. federal corporate income tax on our undistributed net taxable income. In addition, we will be subject to a 4% nondeductible excise tax if the actual amount that we distribute to our stockholders in a calendar year is less than a minimum amount specified under U.S. federal income tax laws. We intend to make distributions to our stockholders to comply with the REIT requirements of the Code.
Our funds from operations are generated primarily by rents paid under leases with our tenants. From time to time, we may generate taxable income greater than our cash flow as a result of differences in timing between the recognition of taxable income and the actual receipt of cash or the effect of nondeductible capital expenditures, the creation of reserves or required debt or amortization payments. If we do not have other funds available in these situations, we could be required to borrow funds on unfavorable terms, sell assets at disadvantageous prices or distribute amounts that would otherwise be invested in future acquisitions in order to make distributions sufficient to enable us to pay out enough of our taxable income to satisfy the REIT distribution requirement and to avoid being subject to corporate income tax and the 4% excise tax in a particular year. These alternatives could increase our costs or reduce our equity.
Even if we remain qualified as a REIT, we may face other tax liabilities that reduce our cash flow.
Even if we remain qualified for taxation as a REIT, we may be subject to certain U.S. federal, state, and local taxes on our income and assets, including taxes on any undistributed income and state or local income, property and transfer taxes. For example, we may hold some of our assets or conduct certain of our activities through one or more taxable REIT subsidiaries (each, a “TRS”) or other subsidiary corporations that will be subject to U.S. federal, state, and local corporate-level income taxes as regular C corporations. In addition, we may incur a 100% excise tax on transactions with a TRS if they are not conducted on an arm’s-length basis. Any of these taxes would decrease cash available for distribution to our stockholders.
Complying with REIT requirements may cause us to forgo otherwise attractive acquisition opportunities or liquidate otherwise attractive investments.
To qualify as a REIT for U.S. federal income tax purposes, we must on an ongoing basis satisfy tests concerning, among other things, the sources of our income, the nature and diversification of our assets, the amounts we distribute to our stockholders and the ownership of our shares of beneficial interest. We may be required to make distributions to our stockholders at disadvantageous times or when we do not have funds readily available for distribution. Thus, compliance with the REIT requirements may hinder our ability to make certain attractive investments.
Complying with REIT requirements may limit our ability to hedge effectively and may cause us to incur tax liabilities.
The REIT provisions of the Code substantially limit our ability to hedge our assets and liabilities. Income from certain hedging transactions that we may enter into to manage risk of interest rate changes with respect to borrowings made or to be made to acquire or carry real estate assets does not constitute “gross income” for purposes of the 75% or 95% gross income tests that apply to REITs, provided that certain identification requirements are met. For taxable years beginning after December 31, 2015, income from new transactions entered into to hedge the income or loss from prior hedging transactions, where the indebtedness or property which was the subject of the prior hedging transaction was extinguished or disposed of, will not constitute gross income for purposes of the 75% or 95% gross income tests. To the extent that we enter into other types of hedging transactions or fail to properly identify such transaction as a hedge, the income is likely to be treated as non-qualifying income for purposes of both of the gross income tests. As a result of these rules, we may be required to limit our use of advantageous hedging techniques or implement those hedges through a TRS. This could increase the cost of our hedging activities because the TRS may be subject to tax on gains or expose us to greater risks associated with changes in interest rates
29

Table of Contents
than we would otherwise want to bear. In addition, losses in the TRS will generally not provide any tax benefit, except that such losses could theoretically be carried back or forward against past or future taxable income in the TRS.
Risks Related to Our Capital Resources and Indebtedness
From time to time, we may have substantial indebtedness and we are able to incur significant additional indebtedness.
As of December 31, 2020,2023, we had approximately $550.0$600.0 million of indebtedness, consisting of $300.0$400.0 million representing our 5.25%3.875% Senior Notes due 20252028 (the “Notes”), $200.0 million under our unsecured term loan credit facility (the “Term Loan”) and $50.0 million inno borrowings outstanding under our unsecured revolving credit facility (the “New Revolving“Revolving Facility”). High levels of indebtedness could have one or more of the following adverse consequences, among others: require us to dedicate a substantial portion of our cash flow from operations to make principal and interest payments on our indebtedness, thereby reducing our cash flow available to fund working capital, dividends, capital expenditures and acquisitions and other general corporate purposes; require us to maintain certain debt coverage and other financial ratios at specified levels, thereby reducing our financial flexibility; make it more difficult for us to satisfy our financial obligations, including the Notes and borrowings under the Second Amended Credit Facility (as defined below); increase our vulnerability to general adverse economic and
31

Table of Contents
industry conditions or a downturn in our business; limit, along with the financial and other restrictive covenants in our indebtedness, our ability to borrow additional funds on favorable terms or at all to expand our business or ease liquidity constraints; limit our ability to refinance all or a portion of our indebtedness on or before maturity on the same or more favorable terms or at all; and require us to dispose of one or more of our properties at disadvantageous prices in order to service our indebtedness or to raise funds to pay such indebtedness at maturity.
In addition, failure to satisfy our obligations under the Notes or our other debt or to comply with the financial and other restrictive covenants contained in the indenture governing the Notes or the Second Amended Credit Agreement (as defined below), could result in an event of default, which could result in all of our debt becoming immediately due and payable and permit certain of our lenders to foreclose on our assets securing such debt. Further, our Second Amended Credit Agreement and the indenture governing the Notes permit us to incur substantial additional debt, including secured debt, subject to our compliance with certain financial covenants set forth in the Second Amended Credit Agreement and our ability to satisfy certain covenants in the indenture governing the Notes. See “Risk Factors - Risks Related to Our Capital Resources and Indebtedness - Covenants in our debt agreements restrict our activities and could adversely affect our business” for a summary of these covenants.
We may be unable to service our indebtedness.
Our ability to make scheduled payments on and to refinance our indebtedness depends on and is subject to our future financial and operating performance, which in turn is affected by general and regional economic, financial, competitive, business and other factors beyond our control, including the availability of financing in the international banking and capital markets. Our business may fail to generate sufficient cash flow from operations or future borrowings may be unavailable to us under the Second Amended Credit Facility or from other sources in an amount sufficient to enable us to service our debt, to refinance our debt or to fund our other liquidity needs. If we are unable to meet our debt obligations or to fund our other liquidity needs, we will need to restructure or refinance all or a portion of our debt. We may be unable to refinance such debt on commercially reasonable terms or at all. If we were unable to make payments or refinance our debt or obtain new financing under these circumstances, we would have to consider other options, such as asset sales, equity issuances and/or negotiations with our lenders to restructure such debt. The Second Amended Credit Agreement and the indenture governing the Notes restrict, and market or business conditions may limit our ability to take, these actions. Any debt restructuring or refinancing could be at higher interest rates and may require us to comply with more onerous covenants that could further restrict our business operations.
We rely on our subsidiaries for our operating funds.
We conduct our operations through subsidiaries and depend on our subsidiaries for the funds necessary to operate and repay our debt obligations, including funds transfers to us which are necessary to make the payments due under the Notes. WhileThe obligations under the Notes are fully and unconditionally guaranteed, jointly and severally, on an unsecured basis, by us and all of our existing and future subsidiaries are currently guarantors of(other than CTR Partnership, L.P. and CareTrust Capital Corp.) that guarantee obligations under the Notes,Second Amended Credit Facility. However, under certain circumstances, one or more of our subsidiaries may be released from, or may not be required to provide, a guarantee of the Notes, and in such circumstances, will not be responsible for any obligations with respect to the Notes. Each of our subsidiaries is a distinct legal entity and has no obligation, contingent or otherwise, to transfer funds to us. In addition, the ability of our subsidiaries to transfer funds to us could be restricted by the terms of subsequent financings.
Covenants in our debt agreements restrict our activities and could adversely affect our business.
Our debt agreements contain covenants that limit our and our subsidiaries’ ability to engage in various transactions including, as applicable: incurring or guaranteeing additional secured and unsecured debt; creating liens on our and our subsidiaries’ assets; paying dividends or making other distributions on, redeeming or repurchasing capital stock; making investments or other restricted payments; entering into transactions with affiliates; issuing stock of or interests in subsidiaries; engaging in non-healthcare related business activities; creating restrictions on the ability of our subsidiaries to pay distributions
30

Table of Contents
or other amounts to us; selling assets; effecting a consolidation or merger or selling all or substantially all of our assets; making acquisitions; and amending certain material agreements, including material leases and debt agreements.organizational documents.
These covenants limit our operational flexibility and could prevent us from taking advantage of business opportunities as they arise, growing our business or competing effectively. The Second Amended Credit Agreement requires us to comply with financial maintenance covenants to be tested quarterly and also contains customary events of default, including the failure to make timely payments under the Second Amended Credit Facility or other material indebtedness, failure to satisfy certain covenants (including financial maintenance covenants), the occurrence of a change of control and specified events of bankruptcy and insolvency. We also must maintain total unencumbered assets of at least 150% of our unsecured indebtedness under the indenture governing the Notes. Our ability to meet these requirements may be affected by events beyond our control and, if we fail to do so, we may be unable to obtain waivers from the lenders or amend the covenants.
32

Table of Contents
Increases in interest rates could increase our existing and future debt borrowing costs and adversely affect our stock price.
Certain of our existing debt obligations require interest and related payments to vary with the movement of certain indices, such as the Secured Overnight Financing Rate, and we may incur additional indebtedness in connection with new credit facilities or financing of acquisitions or development activities. Increased interestInterest rates wouldin recent years have increased, and may continue to increase, our interest costs for any new debt and our obligations under our New Revolving Facility and Term Loan, which could make acquisition financings more costly or lower our current period earnings. Rising interest rates could limit our ability to refinance existing debt when it matures or cause us to pay higher interest rates upon refinancing. In addition, interest rate increases could decrease credit access globally, thereby decreasing the amount others are willing to pay for our assets and limiting our ability to reposition our portfolio promptly in response to changes in economic or other conditions. Further, the dividend yield on our common stock, as a percentage of the price of such common stock, will influence the price of such common stock. Thus, an increase in market interest rates may lead prospective purchasers of our common stock to expect a higher dividend yield, which could adversely affect the market price of our common stock.
Our Amended Credit Agreement uses LIBOR as a reference rate for our Term Loan and Revolving Facility, such that the interest rate applicable to such loans may, at our option, be calculated based on LIBOR. In July 2017, the U. K.’s Financial Conduct Authority, which regulates LIBOR, announced that it intends to phase out LIBOR by the end of 2021. In the U.S., it is anticipated that publication of 1-week and 2-month U.S. dollar LIBOR will end on December 31, 2021, with all other U.S. dollar LIBOR tenors ceasing on June 30, 2023. The U.S. Federal Reserve has begun publishing a Secured Overnight Funding Rate (“SOFR”), which is intended to replace U.S. dollar LIBOR, and has proposed a paced market transition plan to SOFR from LIBOR. Organizations are currently working on industry wide and company specific transition plans as it relates to financial and other derivative contracts exposed to LIBOR. Additionally, plans for alternative reference rates for other currencies have also been announced. From time to time, we have material borrowings under our Amended Credit Agreement that are indexed to LIBOR.  We cannot predict how markets will respond to these proposed alternative rates or the effect of any changes to LIBOR or the discontinuation of LIBOR. However, if future rates based upon a successor reference rate such as SOFR (or a new method of calculating LIBOR) are higher than LIBOR rates as currently determined or if our lenders have increased costs due to changes in LIBOR, we may experience increases in interest rates on our variable rate debt, which could adversely impact our interest expense, results of operations and cash flows.
A credit rating downgrade could impair our ability to obtain additional debt financing on favorable terms, if at all, and significantly reduce the trading price of our common stock.
Our credit rating can affect the amount, type and terms of capital financings we obtain. Factors affecting our credit rating include, among others, our financial performance, success in raising sufficient equity capital, adverse changes in our debt and fixed charge coverage ratios, our capital structure, level of indebtedness and future changes in the regulatory framework applicable to our operators and industry. We may be unable to maintain our current credit ratings, and in the event that our current credit ratings deteriorate, a ratings agency downgrades our credit rating or places our rating under watch or review for possible downgrade, we would likely incur higher borrowing costs, which would make it more difficult or expensive to obtain additional financing or refinance existing obligations and commitments and the trading price of our common stock may decline.
Risks Related To Our Common Stock and Organizational Documents
Our charter restricts the ownership and transfer of our outstanding stock, which may have the effect of delaying, deferring or preventing a transaction or change of control of our company.
In order for us to qualify to be taxed as a REIT, not more than 50% in value of our outstanding shares of stock may be owned, beneficially or constructively, by five or fewer individuals at any time during the last half of each taxable year after our first taxable year as a REIT. Additionally, at least 100 persons must beneficially own our stock during at least 335 days of a taxable year (other than our first taxable year as a REIT). Our charter, with certain exceptions, authorizes our board of directors to take such actions as are necessary and desirable to preserve our qualification as a REIT. Our charter also provides that, unless exempted by the board of directors, no person may own more than 9.8% in value or in number of shares, whichever is more restrictive, of the outstanding shares of our common stock, or more than 9.8% in value of the outstanding shares of all classes or
31

Table of Contents
series of our stock. The constructive ownership rules are complex and may cause shares of stock owned directly or constructively by a group of related individuals or entities to be constructively owned by one individual or entity. These ownership limits could delay or prevent a transaction or a change in control of us that might involve a premium price for shares of our stock or otherwise be in our stockholders’ best interests. The acquisition of less than 9.8% of our outstanding stock by an individual or entity could cause that individual or entity to own constructively in excess of 9.8% in value of our outstanding stock, and thus violate our charter’s ownership limit. Our charter also prohibits any person from owning shares of our stock that would result in our being “closely held” under Section 856(h) of the Code or otherwise cause us to fail to qualify to be taxed as a REIT. In addition, our charter provides that (i) no person shall beneficially or constructively own shares of stock to the extent such beneficial or constructive ownership of stock would result in us failing to qualify as a “domestically controlled qualified investment entity” within the meaning of Section 897(h) of the Code, and (ii) no person shall beneficially or constructively own shares of stock to the extent such beneficial or constructive ownership would cause us to own, beneficially or constructively, more than a 9.9% interest (as set forth in Section 856(d)(2)(B) of the Code) in a tenant of our real property. Any attempt to own or transfer shares of our stock in violation of these restrictions may result in the transfer being automatically void.
Maryland law and provisions in our charter and bylaws may inhibit our stockholders from realizing a premium on their stock by delaying or preventing takeover attempts by third parties.
Our charter, bylaws and Maryland law contain provisions intended to deter coercive takeovers and inadequate takeover bids and to encourage prospective acquirors to negotiate with our board of directors rather than to attempt a hostile takeover. As currently in effect, our charter and bylaws, among other things, (1) contain transfer and ownership restrictions on the percentage by number and value of outstanding shares of our stock that may be owned or acquired by any stockholder; (2) prohibit stockholders action by non-unanimous written consent; (3) permit the board of directors, without further action of the stockholders, to amend the charter to increase or decrease the aggregate number of authorized shares or the number of shares of any class or series that may be issued; (4) permit the board of directors to classify or reclassify any unissued shares of common or preferred stock and set the preferences, rights and other terms of the classified or reclassified shares; (5) establish certain
33

Table of Contents
advance notice procedures for stockholder proposals, and provide procedures for the nomination of candidates for our board of directors; (6) provide that special meetings of stockholders may only be called by the Company or upon written request of 25% of all the votes entitled to be cast at such meeting; (7) provide that a director may only be removed by stockholders for cause and upon the vote of two-thirds of the outstanding shares of common stock; and (8) require supermajority approval to amend or repeal certain charter provisions. In addition, specific anti-takeover provisions of the Maryland General Corporation Law (“MGCL”) could make it more difficult for a third party to attempt a hostile takeover, including:
“business combination” provisions that, subject to limitations, prohibit certain business combinations between us and an “interested stockholder” (defined generally as any person who beneficially owns 10% or more of the voting power of our shares or an affiliate thereof) for five years after the most recent date on which the stockholder becomes an interested stockholder, and thereafter impose special appraisal rights and special stockholder voting requirements on these combinations; and
“control share” provisions that provide that “control shares” of our company (defined as shares which, when aggregated with other shares controlled by the stockholder, entitle the stockholder to exercise one of three increasing ranges of voting power in electing directors) acquired in a “control share acquisition” (defined as the direct or indirect acquisition of ownership or control of “control shares”) have no voting rights except to the extent approved by our stockholders by the affirmative vote of at least two-thirds of all the votes entitled to be cast on the matter, excluding all interested shares.
We believe these provisions protect our stockholders from coercive or unfair takeover tactics by requiring potential acquirors to negotiate with our board of directors and by providing our board of directors with more time to assess any acquisition proposal. These provisions are not intended to prevent all takeovers, but they may delay, defer or prevent a change of control transaction even if such transaction involves a premium price for our common stock or our stockholders it is in theirour stockholders’ best interests. These provisions may also prevent or discourage attempts to remove and replace incumbent directors.
Our bylaws provide that the Circuit Court for Baltimore City, Maryland will be the sole and exclusive forum for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or other employees.
Our bylaws provide that, unless we consent in writing to the selection of an alternative forum, the Circuit Court for Baltimore City, Maryland is the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of us, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee, (iii) any action asserting a claim arising pursuant to any provision of the MGCL, or (iv) any action asserting a claim governed by the internal affairs doctrine, and any of our record or beneficial stockholders who commences such an action shall cooperate in a request that the action be assigned to the Court’s Business & Technology Case Management Program. This exclusive forum provision is intended to apply to claims arising under the MGCL and would not apply to claims brought pursuant to the Exchange Act of
32

Table of Contents
1934 or Securities Act of 1933, each as amended, or any other claim for which the federal courts have exclusive jurisdiction. The exclusive forum provision in our bylaws will not relieve us of our duties to comply with the federal securities laws and the rules and regulations thereunder, and our stockholders will not be deemed to have waived our compliance with these laws, rules and regulations.
This exclusive forum provision may limit a stockholder's ability to bring a claim in a judicial forum of its choosing for disputes with us or our directors, officers or other employees, which may discourage lawsuits against us and our directors, officers and other employees. In addition, stockholders who do bring a claim in the Circuit Court for Baltimore City, Maryland could face additional litigation costs in pursuing any such claim, particularly if they do not reside in or near Maryland. The Circuit Court for Baltimore City, Maryland may also reach different judgments or results than would other courts, including courts where a stockholder would otherwise choose to bring the action, and such judgments or results may be more favorable to us than to our stockholders. However, the enforceability of similar exclusive forum provisions in other companies' certificates of incorporation has been challenged in legal proceedings, and it is possible that a court could find this type of provision and/or the jurisdictional limitation contained therein to be inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings. If a court were to find the exclusive forum provision contained in our bylaws to be inapplicable or unenforceable in an action, we might incur additional costs associated with resolving such action in other jurisdictions.
General Risk Factors
We rely on information technology in our operations, and any material failure, inadequacy, interruption or security failure of that technology could harm our business.
We rely on information technology networks and systems, including the internet, to process, transmit and store electronic information, and to manage or support our business processes, including financial transactions and records, and maintaining personal information and tenant and lease data. We purchase some of our information technology from vendors, on whom our systems depend. We rely on commercially available systems, software, tools and monitoring to provide security for the processing, transmission and storage of confidential tenant and customer data, including financial account information. Although we have taken steps to protect the security of our information systems, we have, from time to time, experienced threats to our data and systems, including malware and computer virus attacks and it is possible that in the future our safety and security measures will not prevent the systems’ improper functioning or damage, or the improper access or disclosure of personally identifiable information such as in the event of cyber-attacks. In addition, due to the fast pace and unpredictability of cyber threats, long-term implementation plans designed to address cybersecurity risks become obsolete quickly.
Security breaches, including physical or electronic break-ins, computer viruses, malware, works, attacks by hackers or foreign governments, disruptions from unauthorized access and tampering (including through social engineering such as phishing attacks), coordinated denial-of-service attacks, impersonation of authorized users and similar breaches, can create system disruptions, shutdowns or result in a loss of company assets or unauthorized disclosure of confidential information. The risk of security breaches has generally increased as the number, intensity and sophistication of attacks and intrusions from around the world have increased. In some cases, it may be difficult to anticipate or immediately detect such incidents and the damage they cause. In addition, our technology infrastructure and information systems are vulnerable to damage or interruption from natural disasters, power loss and telecommunications failures. Failure to maintain proper function, security and availability of our information systems and the data maintained in those systems could interrupt our operations, damage our reputation, subject us to liability claims or regulatory penalties and could have a material adverse effect on our business, financial condition and results of operations.
We have and may in the future incur impairment charges, which could negatively impact our results of operations.
At each reporting period, we evaluate our real estate investments and other assets for impairment indicators whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. The existence of impairment indicators is based on factors such as market conditions, operator performance and legal structure. If we determine that an impairment has occurred, we are required to adjust the net carrying value of the asset, which could have a material adverse effect on our results of operations in the period in which the write-off occurs. For example, in the three months ended September 30, 2019, we recorded impairment charges of approximately $16.7 million, resulting in a net loss of $10.1 million for the quarter. Such impairment charges may make it more difficult for us to meet the financial ratios in our Amended Credit Agreement and may reduce the borrowing base available to us under our Revolving Facility, which may reduce the amounts of cash we would otherwise have available to pay expenses, service other indebtedness and operate our business.
Environmental, social and governance matters may cause us to incur additional costs, make personnel changes, and affect the attractiveness of our stock to investors.
Shareholder, public and governmental expectations have been increasing with respect to corporate responsibility, sustainability, diversity and inclusion and related environmental, social and governance (collectively “ESG”) matters. Shareholder advisory services and other organizations have developed and publish, and others may in the future develop and
33

Table of Contents
publish, rating systems and other scoring and reporting mechanisms to evaluate and compare the ESG performance of our Company and others. These ratings systems frequently change, and scores are often based on a relative ranking which may cause a company’s score to deteriorate if peer companies’ rankings improve. Keeping up with such changes may divert management’s time and attention from other business priorities. In addition, current shareholders and prospective investors may use these ratings and/or their own internal ESG benchmarks to determine whether and to what extent they may choose to invest in our securities, engage with us to advocate for improved ESG performance or disclosure, make voting decisions as shareholders, or take other actions to hold us and our board of directors accountable with respect to ESG matters.
Some legislatures, government agencies and listing exchanges have mandated or proposed, and others may in the future further mandate, certain ESG disclosure or performance. For example, board diversity and inclusion is an ESG topic that is receiving heightened attention from lawmakers and listing exchanges. The State of California, where we currently maintain our principal executive offices, has enacted laws requiring companies to meet stated gender and diversity requirements on their boards of directors by specific deadlines. In addition, the Nasdaq Stock Market LLC, where our common stock is currently listed, has filed a proposal with the SEC that, if approved, would require most Nasdaq-listed companies to meet specified board diversity requirements within a defined compliance period and face potential delisting if they do not explain any failure to meet the requirements. If we are unable to recruit, attract and/or retain qualified members of our board of directors to maintain compliance with the diversity requirements of applicable mandates within the prescribed timelines, we could be exposed to costly fines and penalties. We may also face reputational damage in the event our corporate responsibility initiatives or objectives, including with respect to board diversity, do not meet the standards or expectations of shareholders, prospective investors, lawmakers, listing exchanges or other constituencies, or if we are unable to achieve acceptable ESG ratings from third party rating services. Failure to comply with ESG-related laws, exchange policies or stakeholder expectations could materially and adversely impact the value of our stock and related cost of capital, and limit our ability to fund future growth.
We cannot assure you of our ability to pay dividends in the future.
We expect to make quarterly dividend payments in cash with the annual dividend amount no less than 90% of our annual REIT taxable income, determined without regard to the dividends paid deduction and excluding any net capital gains. Our ability to pay dividends may be adversely affected by a number of factors, including the risk factors described in this annual report. Dividends are authorized by our board of directors and declared by us based upon a number of factors, including but not limited to actual results of operations, restrictions under Maryland law or applicable debt covenants, our financial condition, our taxable income, the annual distribution requirements under the REIT provisions of the Code and our operating expenses. There is no assurance that our operating results will allow for specified levels of cash dividends or year-to-year increases in the future.
34

Table of Contents
Furthermore, while we are required to pay dividends in order to maintain our REIT status (as described under “Risks Related to Our Status as a REIT - REIT distribution requirements could adversely affect our ability to execute our business plan”), we may elect not to maintain our REIT status and discontinue paying dividends. Even if we do elect to maintain our REIT status, after completing various procedural steps, we may elect to comply with the applicable distribution requirements by distributing, under certain circumstances, a portion of the required amount in the form of shares of our common stock in lieu of cash. Either of these actions could negatively affect our business and financial condition as well as the market price of our common stock.
ITEM 1B.    Unresolved Staff Comments
None.
ITEM 1C.Cybersecurity
Cybersecurity Risk Management and Strategy
We have implemented several cybersecurity processes and controls to aid in our efforts to assess, identify, and manage material risks from cybersecurity threats, as such term is defined in Item 106(a) of Regulation S-K. We have engaged a third-party cybersecurity firm who serves as our dedicated information technology (IT) and cybersecurity team and helps us oversee, implement and manage these processes and controls.
To identify and assess material risks from cybersecurity threats, we consider cybersecurity threat risks individually and alongside other company risks as part of our overall risk assessment process. Management determines and prioritizes appropriate risk responses for each identified enterprise risk. In doing so, management coordinates with relevant subject matter specialists as appropriate for each relevant risk area, including our third-party IT and cybersecurity team with respect to information technology and security risks.
Management is accountable for our day to day risk management activities. With the assistance of our third-party IT and cybersecurity team, we employ a range of tools and services, including a governance, risk and compliance platform to inform our managements’ risk identification and assessment relating to our technology program. With this platform, we map our cybersecurity and risk management program to the Center for Internet Security (“CIS”) framework.

Processes and controls we have implemented with the assistance of our third-party IT and cybersecurity team to assess, identify, manage and protect against material risks from cybersecurity threats include the following:

perform 24/7 security monitoring through an automated detection software managed by our third party cybersecurity firm;
conduct annual cybersecurity management and incident training for employees involved in our systems and processes that handle sensitive data;
conduct regular phishing email training for all employees with access to corporate email and other systems to enhance awareness and responsiveness to such possible threats;
leverage the CIS Controls incident handling framework to help us identify, protect, detect, respond, and recover when there is an actual or potential cybersecurity incident.

At least annually, our third-party IT and cybersecurity firm conducts a cybersecurity risk assessment. We periodically review reporting on these risks and our cybersecurity threats, the status of our security infrastructure, our risk management activities and the status of, and our responses to, any cybersecurity incidents.

Through our incident response policy, we have designated an incident response team composed of representatives of management and other employees as well as representatives from our outsourced cybersecurity firm that has responsibility for overseeing cybersecurity incidents. Led by management, our third-party IT and cybersecurity team is responsible for the day-to-day investigation of and response to potential information security-related incidents. Pursuant to our incident response policy, incidents meeting specified severity levels are required to be escalated to the incident response team for review and response. The goal of the policy is to prevent, detect and react to information security incidents, determine their scope and risk, respond appropriately to the incident, communicate the results and risk to relevant stakeholders, and reduce the likelihood of the incident from reoccurring.

Pursuant to our incident response policy, if we are notified of a cybersecurity incident impacting a third-party service provider that affects our information systems or data, we will respond on the same basis as any other incident. We are implementing a business use case review process and vendor risk assessment for all third-party service providers that will
34
35

Table of Contents
access or implicate our materially significant technology or data. If we deem the cybersecurity risk of a particular service provider too great, such service provider will not be approved or access will be terminated.

Based on information known to us, we also do not believe any risks from cybersecurity threats, including as a result of previous cybersecurity incidents, have materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations or financial condition. We can give no assurance that we have detected or protected against all cybersecurity threats or incidents. Please refer to “Cybersecurity incidents or other damage to the information systems and technology of us or our tenants could harm our business” and “If we or our tenants fail to adhere to applicable privacy and data security laws, this could have a material adverse effect on us or on our tenants’ ability to meet their obligations to us” included “Item 1A, Risk Factors” of this Annual Report on Form 10-K for additional information about material risks related to cybersecurity threats.

Cybersecurity Governance

As described above, we have engaged a third-party IT and cybersecurity firm to whom we have outsourced primary responsibility to oversee, implement and manage our processes and controls to assess, identify, and manage material risks from cybersecurity threats. Members of this dedicated third-party IT and cybersecurity team include a virtual chief information security officer (vCISO) who is responsible for the overall development and implementation of our cybersecurity strategy and responses as well as individuals having the position of cybersecurity analyst, cybersecurity engineer, and director of information security. Our management, including our Chief Executive Officer, oversees the work of our third-party IT and cybersecurity team and regularly communicates with members of the team. Through the policies and controls described above, including our incident response policy, representatives of the third-party IT and cybersecurity team as well as members of our management, including our Chief Executive Officer, are informed about cybersecurity threats and incidents affecting our information systems and direct our efforts to prevent, detect, mitigate and remediate cybersecurity threats and incidents. The representatives of our third-party IT and cybersecurity team who lead our cybersecurity risk management and risk assessment process have collectively over 30 years of prior work experience in various roles managing information systems, developing cybersecurity strategy, implementing information security and cybersecurity programs, identifying and assessing cybersecurity risks and establishing incident response plans. The members of the cybersecurity team hold degrees in computer engineering and cybersecurity as well as advanced cybersecurity certifications, including a Certified Information Systems Security Professional (CISSP) certification, a Certified Information Systems Auditor (CISA) credential and a Certified Information Security Manager (CISM) certification. Other members of our third-party cybersecurity team have also obtained various professional certifications and advanced training in the areas of information security and cybersecurity.

Our audit committee is responsible for overseeing our overall risk assessment and risk management program as well as our policies and practices related to our information technology systems, information security and cybersecurity risks. The audit committee reviews at least annually our enterprise risks and related risk management program. In addition, on a quarterly basis, the audit committee receives a report from management on our cybersecurity threat risk management and strategic processes covering topics such as cybersecurity incidents and any remedial actions, if needed, data security posture, the results of third-party risk assessments as well as our cybersecurity risk management processes and strategies. Outside of quarterly presentations, the chair of the audit committee would be notified following any cybersecurity incident meeting specified severity levels, and the audit committee would also be expected to review management’s materiality assessment regarding any cybersecurity incident requiring disclosure to the Securities and Exchange Commission. Through their participation in meetings of the audit committee, other members of the Board are also kept apprised of material risks from cybersecurity threats and our related risk management activities.
36

Table of Contents
ITEM 2. Properties

As of December 31, 2020,2023, all of ourthe properties we own are leased under long-term, triple-net leases.leases (including properties we own through joint ventures), except for one SNF which is non-operational. The following table displays the expiration of the annualized contractual cash rental income under our lease agreements as of December 31, 20202023, excluding properties classified as held for sale, one SNF which is non-operational and two ALFs which are being repurposed, by year and total investment (dollars in thousands) and, in each case, without giving effect to any renewal or purchase options:

LeaseLease
MaturityMaturityPercent of TotalPercent of
Maturity
MaturityPercent of TotalPercent of
YearYear
Investment(1)
Investment
Rent(1)
Total RentYearInvestmentInvestment
Rent(1)
Total Rent
20242024$15,800 0.8 %$1,583 0.8 %
2027202746,801 2.4 %5,476 2.7 %
2026$58,157 3.3 %$5,241 3.0 %
202746,801 2.6 %4,897 2.8 %
202868,193 3.8 %7,573 4.4 %
2029
2029
20292029114,040 6.4 %8,624 5.0 %149,476 7.6 7.6 %11,339 5.6 5.6 %
20302030207,160 11.6 %18,925 10.9 %203051,487 2.6 2.6 %5,107 2.5 2.5 %
20312031558,768 31.3 %53,356 30.8 %2031490,317 24.9 24.9 %51,160 25.4 25.4 %
20322032200,931 11.2 %19,495 11.2 %2032178,836 9.1 9.1 %18,502 9.2 9.2 %
20332033214,247 12.0 %23,147 13.3 %2033136,782 6.9 6.9 %20,804 10.3 10.3 %
20342034318,373 17.8 %32,173 18.6 %2034352,416 17.9 17.9 %33,984 16.8 16.8 %
20362036146,486 7.4 %14,209 7.0 %
20382038401,514 20.4 %39,575 19.7 %
TotalTotal$1,786,670 100.0 %$173,431 100.0 %
Total
Total$1,969,915 100.0 %$201,739 100.0 %
(1)    Amounts exclude our one mezzanine loan receivable and properties classified asIncludes three SNFs held for sale as of December 31, 2020.in consolidated joint ventures.
See the “Tenant Purchase Options” section of Note 3, Real Estate Investments, Net in the Notes to consolidated financial statements for additional information on leases subject to purchase options.
The information set forth under “Portfolio Summary” in Item 1 of this Annual Report on Form 10-K is incorporated by reference herein.
ITEM  3.    Legal Proceedings
The Company and its subsidiaries are and may become from time to time a party to various claims and lawsuits arising in the ordinary course of business, but none of the Company or any of its subsidiaries is, and none of their respective properties are, the subject of any material legal proceedings. Claims and lawsuits may include matters involving general or professional liability asserted against our tenants, which are the responsibility of our tenants and for which we are entitled to be indemnified by our tenants under the insurance and indemnification provisions in the applicable leases.
ITEM  4.    Mine Safety Disclosures
None.
PART II
ITEM  5.    Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of
Common Equity
Our common stock is listed on the Nasdaq Global Select MarketNew York Stock Exchange under the symbol “CTRE.”
At February 9, 2021,7, 2024, we had approximately 43 stockholders of record.

To maintain REIT status, we are required each year to distribute to stockholders at least 90% of our annual REIT taxable income after certain adjustments. All distributions will be made by us at the discretion of our board of directors and will depend on our financial position, results of operations, cash flows, capital requirements, debt covenants (which include limits on distributions by us), applicable law, and other factors as our board of directors deems relevant. For example, while the Notes and our Second Amended Credit Agreement permit us to declare and pay any dividend or make any distribution that is
37

Table of Contents
necessary to maintain our REIT status, those distributions are subject to certain financial tests under the indenture governing the Notes, and therefore, the amount of cash distributions we can make to our stockholders may be limited.

35

Table of Contents
Distributions with respect to our common stock can be characterized for federal income tax purposes as taxable ordinary dividends, nondividendnon-dividend distributions or a combination thereof. Following is the characterization of our annual cash dividends on common stock:
 Year Ended December 31,
Common Stock20202019
Ordinary dividend$0.6435 $0.8120 
Non-dividend distributions0.1065 0.0880 
Total taxable distribution0.7500 0.9000 
Distributions allocated to subsequent tax year(1)
0.2500 — 
Total distributions declared$1.0000 $0.9000 
 Year Ended December 31,
Common Stock20232022
Ordinary dividend$0.8218 $0.4291 
Non-dividend distributions0.2932 0.6609 
Total taxable distribution1.1150 1.0900 
Distributions allocated from prior tax year(1)
(0.2750)(0.2650)
Distributions allocated to subsequent tax year(2)
0.2800 0.2750 
Total distributions declared$1.1200 $1.1000 
(1) Because our aggregate 2020 cash distributions exceeded our 2020annual earnings and profits, the cash distribution declared in the fourth quarter of 20202022 and paid in January 2021,2023, of $0.25$0.275 per share, will be treated as a 20212023 distribution for federal income tax purposes.
Unregistered Sales of Equity Securities

During(2) Because our aggregate cash distributions exceeded our annual earnings and profits, the three months ended December 31, 2020, we acquired shares of our common stock held by an employee who tendered shares to satisfy tax withholding obligations upon the vesting of previously issued restricted stock awards. Specifically, the number of shares of common stock acquired from the employee and the average prices paid per share for each monthcash distribution declared in the fourth quarter ended December 31, 2020 areof 2023 and paid in January 2024, of $0.280 per share, will be treated as follows:
PeriodTotal Number of Shares PurchasedAverage Price Paid per Share
October 1 - October 31, 2020533 $17.10 
November 1 - November 30, 2020— $— 
December 1 - December 31, 2020— $— 
Total533 $17.10 
On March 20, 2020, our board of directors authorized a share repurchase program to repurchase up to $150.0 million of outstanding shares of our common stock (the “Repurchase Program”). Repurchases under the Repurchase Program, which expires on March 31, 2023, may be made through open market purchases, privately negotiated transactions, structured or derivative transactions, including accelerated share repurchase transactions, or other methods of acquiring shares, in each case subject to market conditions and at such times as shall be permitted by applicable securities laws and determined by management. Repurchases under the Repurchase Program may also be made pursuant to a plan adopted under Rule 10b5-1 promulgated under the Exchange Act. We expect to finance any share repurchases under the Repurchase Program using available cash and may also use short-term borrowings under the Revolving Facility. We did not repurchase any shares of common stock under the Repurchase Program during the year ended December 31, 2020. The Repurchase Program may be modified, discontinued or suspended at any time.2024 distribution for federal income tax purposes.
3638

Table of Contents

Stock Price Performance Graph
The graph below compares the cumulative total return of our common stock, the S&P 500 Index, the S&P 500 REIT Index, the RMS (MSCI U.S. REIT Total Return Index) and the SNL U.S. REIT HealthcareRussell 2000 Index for the period from December 31, 2015 to December 31, 2020.(“Russell 2000”). Total cumulative return is based on a $100 investment in CareTrust REIT common stock and in each of the indices at the market close on December 31, 20152018 and assumes quarterly reinvestment of dividends before consideration of income taxes. Stockholder returns over the indicated periods should not be considered indicative of future stock prices or stockholder returns.
 COMPARISON OF CUMULATIVE TOTAL RETURN
AMONG S&P 500 S&P 500 REIT INDEX, RMS, SNL US REIT HEALTHCARERUSSELL 2000 AND CARETRUST REIT, INC.
RATE OF RETURN TREND COMPARISON
DECEMBER 31, 20152018 - DECEMBER 31, 202029, 2023
(DECEMBER 31, 20152018 = $100)
Stock Price Performance Graph Total Return
The stock performance graph shall not be deemed soliciting material or to be filed with the SEC or subject to Regulation 14A or 14C under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or to the liabilities of Section 18 of the Exchange Act, nor shall it be incorporated by reference into any past or future filing under the Securities Act of 1933 or the Exchange Act, except to the extent we specifically request that it be treated as soliciting material or specifically incorporate it by reference into a filing under the Securities Act of 1933 or the Exchange ActAct.
ctre-20201231_g1.jpg
December 31,
201520162017201820192020
CareTrust REIT Inc.$100.00 $146.86 $167.48 $193.93 $225.46 $256.27 
S&P 500$100.00 $111.96 $136.40 $130.42 $171.49 $203.04 
RMS$100.00 $108.60 $114.11 $108.89 $137.03 $126.65 
SNL US REIT Healthcare$100.00 $105.24 $106.44 $114.12 $138.67 $129.69 
S&P 500 Real Estate$100.00 $103.39 $114.61 $112.06 $144.58 $141.44 
Stock Price Graph 2023.jpg
3739

Table of Contents
December 31,
201820192020202120222023
CareTrust REIT, Inc.$100.00 $116.26 $132.15 $142.56 $123.03 $156.49 
RMS$100.00 $125.84 $116.31 $166.39 $125.61 $142.87 
Russell 2000$100.00 $125.53 $150.58 $172.90 $137.56 $160.85 
S&P 500 Real Estate Index$100.00 $129.01 $126.21 $184.52 $136.31 $153.15 
40

Table of Contents

ITEM 6.    Selected Financial Data[Reserved]
The following table sets forth selected financial data and other data for our company on a historical basis. The following data should be read in conjunction with our audited consolidated financial statements and notes thereto and Management’s Discussion and Analysis of Financial Condition and Results of Operations included elsewhere in this Annual Report on Form 10-K. Our historical operating results may not be comparable to our future operating results. The comparability of the selected financial data presented below is significantly affected by our acquisitions and new investments in each of the years presented. See Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
 
As of or For the Year Ended December 31, 
 20202019201820172016
(dollars in thousands, except per share amounts)
Income statement data:   
Total revenues$178,332 $163,401 $156,941 $132,982 $104,679 
Income before provision for income taxes80,867 46,359 57,923 25,874 29,353 
Net income80,867 46,359 57,923 25,874 29,353 
Net income per share, basic0.85 0.49 0.73 0.35 0.52 
Net income per share, diluted0.85 0.49 0.72 0.35 0.52 
Balance sheet data:
Total assets$1,503,559 $1,518,861 $1,291,762 $1,184,986 $925,358 
Senior unsecured notes payable, net296,669 295,911 295,153 294,395 255,294 
Senior unsecured term loan, net198,925 198,713 99,612 99,517 99,422 
Unsecured revolving credit facility50,000 60,000 95,000 165,000 95,000 
Total equity914,142 927,591 768,247 594,617 452,430 
Other financial data:
Dividends declared per common share$1.00 $0.90 $0.82 $0.74 $0.68 
FFO(1)133,617113,029101,536 62,275 61,483 
FAD(1)139,280117,751104,989 66,406 65,118 
(1)    We believe that net income, as defined by U.S. generally accepted accounting principles (“GAAP”), is the most appropriate earnings measure. We also believe that Funds From Operations (“FFO”), as defined by the National Association of Real Estate Investment Trusts (“NAREIT”), and Funds Available for Distribution (“FAD”) are important non-GAAP supplemental measures of operating performance for a REIT. Because the historical cost accounting convention used for real estate assets requires straight-line depreciation except on land, such accounting presentation implies that the value of real estate assets diminishes predictably over time. However, since real estate values have historically risen or fallen with market and other conditions, presentations of operating results for a REIT that uses historical cost accounting for depreciation could be less informative. Thus, NAREIT created FFO as a supplemental measure of operating performance for REITs that excludes historical cost depreciation and amortization, among other items, from net income, as defined by GAAP. FFO is defined as net income computed in accordance with GAAP, excluding gains or losses from real estate dispositions, plus real estate related depreciation and amortization and real estate impairment charges. We define FAD as FFO excluding noncash income and expenses such as amortization of stock-based compensation, amortization of deferred financing costs and the effect of straight-line rent. We believe that the use of FFO and FAD, combined with the required GAAP presentations, improves the understanding of operating results of REITs among investors and makes comparisons of operating results among such companies more meaningful. We consider FFO and FAD to be useful measures for reviewing comparative operating and financial performance because, by excluding gains or losses from real estate dispositions, impairment charges and real estate depreciation and amortization, and, for FAD, by excluding noncash income and expenses such as amortization of stock-based compensation, amortization of deferred financing costs, and the effect of straight-line rent, FFO and FAD can help investors compare our operating performance between periods and to other REITs. However, our computation of FFO and FAD may not be comparable to FFO and FAD reported by other REITs that do not define FFO in accordance with the current NAREIT definition or that interpret the current NAREIT definition or define FAD differently than we do. Further, FFO and FAD do not represent cash flows from operations or net income as defined by GAAP and should not be considered an alternative to those measures in evaluating our liquidity or operating performance.
38

Table of Contents
The following table reconciles our calculations of FFO and FAD for the five years ended December 31, 2020, 2019, 2018, 2017 and 2016 to net income, the most directly comparable financial measure according to GAAP, for the same periods:
 For the Year Ended December 31,
 20202019201820172016
(dollars in thousands)
Net income$80,867 $46,359 $57,923 $25,874 $29,353 
Real estate related depreciation and amortization52,713 51,755 45,664 39,049 31,865 
Loss (gain) on sale of real estate37 (1,777)(2,051)— 265 
Impairment of real estate investments— 16,692 — 890 — 
Gain on disposition of other real estate investment— — — (3,538)— 
FFO133,617 113,029 101,536 62,275 61,483 
Amortization of deferred financing costs1,950 2,003 1,938 2,059 2,239 
Amortization of stock-based compensation3,790 4,104 3,848 2,416 1,546 
Straight-line rental income(77)(1,385)(2,333)(344)(150)
FAD$139,280 $117,751 $104,989 $66,406 $65,118 

ITEM 7.    Management’s Discussion and Analysis of Financial Condition and Results of Operations
The discussion below contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those which are discussed in the section titled “Risk Factors.” Also see “Statement Regarding Forward-Looking Statements” preceding Part I.
The following discussion and analysis should be read in conjunction with the “Selected Financial Data” above and our accompanying consolidated financial statements and the notes thereto.
Our Management’s Discussion and Analysis of Financial Condition and Results of Operations is organized as follows:
Overview
Recent Developments
Results of Operations
Liquidity and Capital Resources
Obligations and Commitments
Capital Expenditures
Critical Accounting PoliciesEstimates
Impact of Inflation
Off-Balance Sheet Arrangements
Overview
CareTrust REIT is a self-administered, publicly-traded REIT engaged in the ownership, acquisition, financing, development and leasing of skilled nursing, seniors housing and other healthcare-related properties. As of December 31, 2020, CareTrust REIT’s real estate portfolio consisted of 2182023, we owned, directly or indirectly through joint ventures, and leased to independent operators 226 skilled nursing facilities (“SNFs”), multi-service campuses, and assisted living facilities (“ALFs”) and independent living facilities (“ILFs”), consisting of 22,46623,928 operational beds and units located in 28 states with the highest concentration of properties by rental income located in California Texas, Louisiana, Idaho and Arizona.Texas. As of December 31, 2020,2023, we also had other real estate related investments consisting of one preferred equity investment, eight real estate secured loans receivable and one mezzanine loan receivable with a carrying value of $15.0$180.4 million.
39

Table of Contents
Recent Developments
COVID-19Market Trends and Uncertainties
The COVID-19 pandemicCurrent macroeconomic conditions, particularly inflation (including higher wages and supply costs), elevated interest rates and related changes to consumer spending, including, but not limited to, causing individuals to delay or defer moves to seniors housing, has led governmentsadversely impacted and other authorities around the world, including federal, state and local authorities in the United States,could continue to impose measures intendedadversely impact our tenants’ ability to reduce its spread, including restrictions on freedom of movement and business operations such as travel bans, border closings, business limitations and closures (subject to exceptions for essential operations and businesses), quarantines and shelter-in-place orders. Althoughmeet some of these governmental restrictions have since been lifted or scaled back, resurgencestheir financial obligations to us. Higher interest rates also increase our costs of COVID-19capital to finance acquisitions and increase our borrowing costs. In addition, current macroeconomic conditions and the emergenceresulting market volatility may adversely impact our ability to sell properties on acceptable terms, if at all, which could result in additional impairment charges.
As a result of new variants thereof have resulted in the reimposition of certain restrictions and may lead to other restrictions being implementedabove factors, together with the additional protective measures taken by our tenants in response to efforts to reduce the spread of COVID-19 and its variants. Given the dynamic nature of these circumstances and the related adverse impact these restrictions have had, and may continue to have, on the economy generally, our business, results of operations and financial condition may be adversely impacted byfollowing the COVID-19 pandemic.
Tenantspandemic, our tenants are continuing to experience increased operating our properties pursuant to triple-net master leases have been adversely impacted, and we expect that they will continue to be adversely impacted, by the COVID-19 pandemic.costs at their facilities. Our tenants are also experiencing increasedlabor shortages resulting in reduced admissions and higher operating costs as a result of actions they are taking to prevent or mitigate the outbreak or spread of COVID-19 at their facilities, including in connection with their implementation of safety protocols and procedures, the cost of increased purchases of personal protective equipment, the costs of mandated testing and other regulatory requirements, and increased staffing costs. To assist and protect our tenants and their residents, patients and staffs, we employed our scale and purchasing power to procure approximately $1.2 million of then-scarce personal protective equipment (“PPE”) from March 27, 2020 to December 31, 2020, and offered it to our tenants at our volume-discounted cost. This not only enabled them to obtain critical PPE at a time when its availability was limited to smaller purchasers, it also enabled them to benefit from the cost efficiencies of our bulk order. Tenants who received PPE from us have fully reimbursed the discounted cost thereof to us as of December 31, 2020.
At a portfolio wide level, occupancy levels at our seniors housing facilities, have remained relatively stable fromcomprising our ALFs and ILFs, are continuing to show signs of recovery following the onset of the COVID-19 pandemic, through the third quarter of 2020, but beganalthough they have not yet fully normalized to decline slightly in the fourth quarter of 2020, whilepre-pandemic levels. Within our SNFs, occupancy levels athave continued to improve since their trough in January 2021 and are reaching pre-COVID occupancy levels for most of our skilled nursing facilities (“SNFs”), which declined attenants.
As a result of impacts experienced by our tenants since the onset of the COVID-19 pandemic, continued to decline during the three months ended December 31, 2020 compared to occupancy levels in the third quarter of 2020, and may continue to decline primarily due to, among other things, (i) state mandated temporary suspensions on new admissions during COVID-19 outbreaks, (ii) with respect to our SNFs, governmental restrictions that require the temporary deferral of elective surgeries in referring hospitals, (iii) with respect to our SNFs, the imposition of strict visitation policies that may deter prospective patients from seeking admission, and (iv) with respect to our seniors housing properties, declines in inquiries and tours, deferred move-ins and increased move-outs due to concerns about possible COVID-19 outbreaks. Beginning in early 2020, the federal government temporarily suspended the three-day hospital stay requirement for a patient’s Medicare benefits to refresh. Providers can now “skill in place,” eliminating the risk of transferring the patient to the hospital. Because of this temporary rule change, skilled mix in some facilities has continued to increase during the three months ended December 31, 2020, compared to the third quarter of 2020, while overall occupancy has declined. An increase in skilled mix could, but may not necessarily, offset some or all of the adverse financial impact to the operator of the SNF from a decline in occupancy.
The higher operating costs affecting our tenants, and the impact of lower occupancy levels, have adversely impacted and may continue to adversely impact the ability of some of our tenants to satisfymeet their rentalfinancial obligations to us in full or on a timely basis. Two SNF tenants proposed rent deferrals shortly afterhas been negatively impacted. See “Impairment of Real Estate Assets, Assets Held for Sale and Asset Sales” below. During the pandemic was declared; however, after undergoing a financialthree and operating performance review, and considering the impact of stimulus funding, both tenants determined that no rent deferral or other assistance was necessary. One seniors housing tenant proposed partial rent relief, and in the fourth quarter of 2020 the five facilities operated by the tenant were transitioned to another operator with whom we had an existing landlord-tenant relationship, with all outstanding rent paid in full upon transition. While we have not seen a need to grant any rent relief to any tenant to date, future adverse changes to tenants’ operating fundamentals, or a reduction in or discontinuation of government support, could change our expectations. Approximately 100%of our contractual rent obligations due for January 2021 have been collected from our tenants before considering any cash deposits on-hand from which we may offset any shortfalls in rent received. Additionally, all of our outstanding mortgage loans receivable were repaid during the yeartwelve months ended December 31, 2020, except for one mezzanine loan entered into during2023, we collected 100.0% and 97.7% of contractual rents due from our operators excluding cash deposits, respectively. From time to time in the fourth quarter of 2020 which is current but not yet due.
The following relief programs enacted by the governmentpast, we have provided, and we expect will continuetaken actions to provide some benefits to our tenants subject to the programs’ respective terms and conditions, including, but not limited to, attestation, recordkeeping and reporting requirements to Department of Health and Human Services (“HHS”):
40

Table of Contents
The Families First Coronavirus Response Act (“Families First Act”) - Under the Families First Act, a temporary 6.2% increase in Federal Medical Assistance Percentages (“FMAP”) was approved retroactive to January 1, 2020, and several states have directed FMAP funds to SNFs, including some of our tenants.
The Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) - Under the CARES Act, a substantial number of our tenants have received, or are expected to receive, assistance from a relief fund in excess of $100 billion (such funds, the “Provider Relief Funds”) provided for eligible health care providers, which includes operators of SNFs. Additionally, a Payroll Protection Program was established under the CARES Act to provide Small Business Administration loans to businesses with fewer than 500 employees that may be partially forgivable. The CARES Act also includes a temporary suspension from May 1, 2020 through March 31, 2021 of a 2% Medicare sequestration cut, and a deferral of the employer’s Social Security remittances through December 31, 2020 with a repayment period through December 31, 2021.
On December 27, 2020, the President signed a stimulus package which includes two important provisions impacting the Provider Relief Funds for those recipients that acceptedreposition one or more payments exceeding $10,000 in the aggregate. Recipients of relief funds will be required to report their use of funds by submitting healthcare related expenses attributable to COVID-19 that another source has not reimbursed and lost revenues, up to the amount of difference between such provider’s budgeted revenue and actual revenue if such budgeted revenue had been established and approved prior to March 27, 2020 or by comparing year-over-year revenue. The new stimulus package allows the parent organization to allocate all or any portion of such reimbursement among the subsidiary eligible health care providers of the parent organization. Under the current rules, recipients of Provider Relief Funds have until June 30, 2021 to expend relief funds. Any funds received in excess of expenses attributable to COVID-19 and the recipient’s lost revenue, as described above, will be required to be returned. The estimated federal and state COVID-19-related relief approved, received and retained to date by our operators, as reported by our operators, is approximately $150.8 million. At December 31, 2020, two of our operators who have received Provider Relief Funds have disclosed that they have returned, or plan to return, all or a portion of the Provider Relief Funds issued to them.
In July 2020, the federal government announced that it would send point-of-care testing supplies for COVID-19 to all SNFs in the country. In connection with the initiatives discussed above, the federal government is requiring that all SNFs in statesproperties with a 5% positivity ratereplacement tenant or greater test all SNF staff each week. The new testing mandate has resultedsell the property and, in higher operating costs whencertain cases, we have also restructured tenants’ long-term obligations. In the amount of tests received does not cover the amount of tests required by each facility.
In December 2020, the U.S. Food and Drug Administration issued the first emergency use authorization for a vaccine for the prevention of COVID-19 which allows distribution in the United States, followed by a second vaccine in the same month. The Centers for Disease Control and Prevention recommends that health care workers, long-term care workers and residents of long-term care facilities should be among the first to receive the vaccine. As of February 10, 2021, based on information provided by operators who have reported such information to us, the majority of our operators’ residents have received the first dose of the vaccine, while less than half of such operators’ staff have been vaccinated.
The duration and extent of the COVID-19 pandemic’s effect on our operational and financial performance, and the operational and financial performance ofevent our tenants will depend on future developments, which are highly uncertain and cannot be predicted at this time, including new information which may emerge concerning the severity of COVID-19, timing of vaccine rollouts, public acceptance and usage of vaccines and the effectiveness of vaccines in limiting the spread of COVID-19 and its variants, actions takenunable to contain the spread of COVID-19, resurgences of COVID-19 and its variants that may continuesatisfy their obligations to occur, and how quickly and to what extent normal economic and operating conditions can resume. The adverse impact of the COVID-19 pandemic on our business, results of operations and financial condition could be material.
Portfolio Changes
Twenty/20 Lease Termination and New Noble Master Lease
On December 1, 2020, five assisted living facilities in Virginia operated by Twenty/20 Management, Inc. (“Twenty/20”) were transferred to affiliates of Noble Senior Services (“Noble”). In connection with the transfer, we entered into a new triple-net master lease with Noble. The new lease has a remaining initial term of approximately 14 years, with two five-year renewal options and CPI-based rent escalators. Initial annual cash rent under the new lease is approximately $3.2 million.

41

Table of Contents
Asset Salesus and Assets Heldwe are unable to effect these actions on terms that are as favorable to us as those currently in place, our rental income would be adversely impacted and we may incur additional expenses or obligations and be required to recognize additional impairment charges.
For more information regarding the potential impact of public health crises, including COVID-19, and macroeconomic conditions on our business, see “Risk Factors” in Item 1A of this report.
Regulatory Updates
In July 2023, The Centers for SaleMedicare and Medicaid Services (“CMS”) approved its payment rate update to SNF reimbursements for fiscal 2024, which commenced October 1, 2023, and includes a net increase of 4.0%, or approximately $1.4 billion, in Medicare Part A payments to SNFs. This increase is expected to partially offset some of our tenants’ higher operating costs.
On February 14, 2020, we closedSeptember 1, 2023, CMS issued proposed rules regarding minimum staffing requirements and increased inspections at nursing homes in order to establish comprehensive nurse staffing requirements. The proposed rule consists of three core staffing proposals: (1) minimum nurse staffing standards of 0.55 hours per resident day for registered nurses and 2.45 hours of care from a nurse aid per resident per day; (2) a requirement to have a registered nurse onsite 24 hours a day, seven days a week; and (3) enhanced facility assessment requirements. The proposed rule also includes a staggered implementation approach and possible hardship exemptions for select facilities. Comments on the sale of six skilled nursing facilities formerly operatedproposed rule had to be submitted by affiliates of Metron Integrated Health Systems (“Metron”). In connection withNovember 6, 2023. It is uncertain when the sale for $36.0 million, we received $3.5 million in cashproposed rules will be finalized and provided subsidiaries of Cascade Capital Group, LLC (“Cascade”),become effective, what the purchaserultimate scope and timing of the properties,staffing requirements will be thereunder, and whether any such requirements will be accompanied by additional funding to offset any increased costs associated with meeting these requirements for our operators. Depending on the ultimate level of staffing required, an unfunded mandate to increase staff may have a short-term mortgage loan secured by these properties for $32.4 million. The mortgage loan bore interest at 7.5%material and initially had a maturity dateadverse impact on the financial condition of March 31, 2020. In connection with the sale, we recognized a loss of approximately $0.1 million during the three months ended March 31, 2020. In April 2020, the mortgage loan was settled in connection with a new mortgage loan transaction between us and a third-party institutional lender as co-lenders, pursuant to which we received $18.9 million in cash and a new mortgage loan for $13.9 million. The new mortgage loan with Cascade was secured by the same six skilled nursing facilities purchased by Cascade and was for a combined principal amount of $33.9 million, with our $13.9 million portion of the indebtedness initially bearing interest at a variable rate equal to LIBOR plus 4.00%, subject to a LIBOR floor of 1.75%. The new mortgage loan had a maturity date of April 29, 2022 and included two six-month extension options. In July 2020, prepayment for the mortgage loan of $13.9 million and accrued interest was received in full by us.tenants.
On NovemberOctober 13, 2023, California Senate Bill No. 525 (“SB 525”) was signed into law, requiring a substantial increase in the minimum wage for workers operating in certain health care facilities. As a result of SB 525, certain health care facilities (including licensed skilled nursing facilities) operating in California are required to increase the wages of their covered health care employees to at least $21 per hour from June 1, 2024 to May 31, 2026, $22 or $23 per hour (depending on facility type) from June 1, 2026 to May 31, 2028, and $25 per hour after June 1, 2028.
Recent Investments
The following table summarizes the Company’s acquisitions from January 1, 2023 through February 8, 2024 (dollars in thousands):
Type of Property
Purchase Price(1)
Initial Annual Cash Rent(2)
Number of Properties
Number of Beds/Units(3)
Skilled nursing(4)
$169,181 $13,764 10 1,256 
Multi-service campuses25,276 1,916 168 
Assisted living(5)
50,354 4,517 327 
Total$244,811 $20,197 16 1,751 
(1)Purchase price includes capitalized acquisition costs.
(2)Initial annual cash rent represents initial cash rent for the first twelve months excluding the impact of straight-line rent or rent abatement in the first one to three months, if applicable.
(3)The number of beds/units includes operating beds at acquisition date.
(4)Includes three SNFs held through joint ventures. See Note 3, Real Estate Investments, Net, 2020, we sold our one remaining owned and operated independent living facility consisting of 168 units located in Texas with an aggregate carrying value of $4.2 millionNote 11, Variable Interest Entities for gross proceeds of $4.5 million. In connection with the sale, we recognized a gain of $20,000.additional information.
During the fourth quarter of 2020, we met the criteria to classify one skilled nursing facility operated by affiliates of Five Oaks as(5)Includes on ALF held for sale. As of December 31, 2020, the property continued to be held for sale and the carrying value of $7.2 million is primarily comprised of real estate assets. In February 2021, the property was sold.through a joint venture. See Note 13,14, Subsequent Events, for further detail.additional information.
42

Table of Contents
The following table summarizes other real estate related investments, by the Company from January 1, 2023 through February 8, 2024 (dollars in thousands):
Investment TypeInvestment
Annual Initial Interest Income(1)
Number of Properties
Number of Beds/Units(2)
Mortgage secured loans receivable$51,584 $4,806 772 
Mezzanine loans receivable52,165 7,119 N/AN/A
Preferred equity1,782 267 N/AN/A
Total$105,531 $12,192 772 
(1)Represents annualized acquisition-date interest income on any mortgage secured loans receivable and mezzanine loans, less subservicing fees, if applicable. For floating rate loans, interest income has been calculated using the benchmark rate floor.

(2)
The number of beds/units includes operating beds at the investment date.
At-The-Market Offering of Common Stock
On March 10, 2020,February 24, 2023, we entered into an equity distribution agreement to issue and sell, from time to time, up to $500.0 million in aggregate offering price of our common stock through an “at-the-market” equity offering program (the “Previous ATM Program”). On September 15, 2023, we terminated the Previous ATM Program and entered into a new equity distribution agreement to issue and sell, from time to time, up to $500.0 million in aggregate offering price of our common stock through an “at-the-market” equity offering program (the “New ATM Program” and together with the Previous ATM Program, the “ATM Program”). In connectionaddition to the issuance and sale of shares of our common stock, we may also enter into one or more forward sales agreements (each, an “ATM forward contract”) with sales agents for the entry intosale of shares of our common stock under the equity distribution agreement and the commencement of the New ATM Program, our “at-the-market” equity offering program pursuant to our prior equity distribution agreement, datedProgram. There were no outstanding ATM forward contracts that had not settled as of March 4, 2019, was terminated (the “Prior ATM Program”). There was no New ATM Program or PriorDecember 31, 2023.
The following tables summarize the ATM Program activity (or activity under any predecessor at-the-market equity offering programs) for the year ended December 31, 2023 (in thousands, except per share amounts).
For the Year Ended
December 31, 2023
Number of shares30,869 
Average sales price per share$20.86 
Gross proceeds(1)
$643,802 
(1) Total gross proceeds is before $8.3 million of commissions paid to the sales agents and forward adjustments during 2020.the year ended December 31, 2023, under the ATM Program.
As of December 31, 2020,2023, we had $500.0$274.1 million available for future issuances under the New ATM Program. See Liquidity
Impairment of Real Estate Assets, Assets Held for Sale, and Capital Resources for additional information.Asset Sales
Share Repurchase ProgramImpairment of Real Estate Assets
On March 20, 2020, our board of directors authorized a share repurchase program to repurchase up to $150.0 million of outstanding shares of our common stock (the “Repurchase Program”). Repurchases under the Repurchase Program, which expires on March 31, 2023, may be made through open market purchases, privately negotiated transactions, structured or derivative transactions, including accelerated share repurchase transactions, or other methods of acquiring shares, in each case subject to market conditions and at such times as shall be permitted by applicable securities laws and determined by management. Repurchases under the Repurchase Program may also be made pursuant to a plan adopted under Rule 10b5-1 promulgated under the Exchange Act. We expect to finance any share repurchases under the Repurchase Program using available cash and may also use short-term borrowings under the Revolving Facility. We did not repurchase any shares of common stock under the Repurchase Program duringDuring the year ended December 31, 2020. The Repurchase Program may be modified, discontinued or suspended at any time.
Recent Investments
From January 1, 2020 through February 10, 2021,2023, we acquired six skilled nursing facilities, one multi-service campusrecognized aggregate impairment charges of $36.3 million, of which $26.8 million related to properties held for sale, $8.0 million related to properties held for investment, and one assisted living facility for approximately $89.8$1.5 million which includes capitalized acquisition costs. These acquisitions are expectedrelated to generate initial annual cash revenues of approximately $7.6 million and an initial blended yield of approximately 8.5%. See Note 3, Real Estate Investments, Net in the Notes to consolidated financial statements for additional information.
In November 2020, we provided Next VA Star Realty Holdings, LLC a mezzanine loan for nine skilled nursing facilities secured by membership interests in affiliates of Next VA Star Realty Holdings, LLC for approximately $15.0 million, at an annual fixed interest rate of 12%. The loan requires monthly interest payments, is set to mature on November 30, 2025 and may (subject to certain restrictions) be prepaid before the maturity date if paid in full and for an exit fee ranging from 1% to 3% of the loan plus unpaid interest payments equal to 24 months (less the amount of monthly interest payments made by the borrower through the date of the prepayment).

properties that were sold.
4243

Table of Contents
Asset Sales and Held for Sale Reclassifications
The following table summarizes our dispositions for the twelve months ended December 31, 2023 (dollars in thousands):
Twelve Months Ended December 31,
2023
Number of facilities5
Net sales proceeds$18,313 
Net carrying value16,095 
Net gain on sale$2,218 
The following table summarizes our assets held for sale activity for the periods presented (dollars in thousands):
Net Carrying ValueNumber of Facilities
December 31, 2022$12,291 5
Additions to assets held for sale47,114 14 
Assets sold(16,095)(5)
Impairment of real estate held for sale(28,299)— 
December 31, 2023(1)
$15,011 14 
(1)Includes two facilities sold subsequent to December 31, 2023.
Subsequent to December 31, 2023, we closed on the sale of one SNF and one ALF with an aggregate carrying value of $1.0 million, which approximated the net sales proceeds received. These facilities were classified as held for sale as of December 31, 2023.
44

Table of Contents

Results of Operations

Operating Results
Our primary business consists of acquiring, developing, financing and owning real property to be leased to third party tenants in the healthcare sector.
Year Ended December 31, 20202023 Compared to Year Ended December 31, 20192022  
 Year Ended December 31,Increase
(Decrease)
Percentage
Difference
 20232022
 (dollars in thousands)
Revenues:
Rental income$198,599 $187,506 $11,093 %
Interest and other income19,171 8,626 10,545 122 %
Expenses:
Depreciation and amortization51,199 50,316 883 %
Interest expense40,883 30,008 10,875 36 %
Property taxes6,170 4,333 1,837 42 %
Impairment of real estate investments36,301 79,062 (42,761)(54)%
Provision for loan losses, net— 3,844 (3,844)(100)%
Property operating expenses3,423 5,039 (1,616)(32)%
General and administrative21,805 20,165 1,640 %
Other (loss) income:
Gain (loss) on sale of real estate, net2,218 (3,769)5,987 (159)%
Unrealized loss on other real estate related investments, net(6,485)(7,102)617 (9)%
Net loss attributable to noncontrolling interests
Net loss attributable to noncontrolling interests(13)— (13)*
 Year Ended December 31,Increase
(Decrease)
Percentage
Difference
 20202019
 (dollars in thousands)
Revenues:
Rental income$173,612 $155,667 $17,945 12 %
Independent living facilities2,077 3,389 (1,312)(39)%
Interest and other income2,643 4,345 (1,702)(39)%
Expenses:
Depreciation and amortization52,760 51,822 938 %
Interest expense23,661 28,125 (4,464)(16)%
Property taxes2,836 3,048 (212)(7)%
Independent living facilities1,869 2,898 (1,029)(36)%
Impairment of real estate investments— 16,692 (16,692)(100)%
Provision for loan losses— 1,076 (1,076)(100)%
General and administrative16,302 15,158 1,144 %
Other (loss) income:
(Loss) gain on sale of real estate(37)1,777 (1,814)(102)%
Not meaningful
Rental income. Rental income was $173.6increased by $11.1 million as detailed below:
Year Ended
(in thousands)December 31, 2023December 31, 2022Increase/(Decrease)
Contractual cash rent$192,746 $186,131 $6,615 
Tenant reimbursements5,498 2,775 2,723 
Total contractual rent198,244 188,906 9,338 
Straight-line rent(29)17 (46)
Below market lease384 — 384 
Adjustment for collectibility— (1,417)1,417 
Total amount in rental income$198,599 $187,506 $11,093 

Total contractual rent includes initial contractual cash rent and tenant reimbursements, as adjusted for the year ended December 31, 2020 compared to $155.7 million for the year ended December 31, 2019. The $17.9 million, or 12%, increase inapplicable rental income is primarilyescalators and rent increases due to $12.9capital expenditures funded by us. For tenants on a cash basis, this represents the lesser of the amount that would be recognized on a straight-line basis or cash that has been received. Total contractual cash rent increased by $9.3 million due to an increase of $9.1 million in contractual cash rent from real estate investments made after January 1, 2019, a $11.7 million reversal for collectibility2022, an increase of rental income during the year ended December 31, 2019, $1.8$5.7 million from increases in rental rates for our existing tenants $1.2 million of lease termination revenue, $1.0 million from recovery of previously reversed rent, and $0.3a $2.7 million increase in tenant reimbursements, partially offset by a $6.2$7.8 million decrease in rental income duerelated to the disposalcertain tenants on a cash basis method of assets in September 2019accounting and February 2020, a $4.4 million decrease in cash rents due to lease amendments and $0.4 million decrease from replacing existing tenants during the prior year.
Independent living facilities.Revenues for the ILFs that we owned and operated was $2.1 million fordue to dispositions. During the year ended December 31, 2020 compared to $3.42022, the Company wrote off $1.4 million for the year ended December 31, 2019. The $1.3 million, or 39%, decrease in ILF revenues is primarily due to a reduction in revenue of $1.5 million related to the saleuncollectible rent.
45

Table of one ILF to a third party and the lease of a second ILF to Ensign concurrently with the Pennant Spin during the fourth quarter ended December 31, 2019, partially offset by a $0.2 million increase in revenue for our remaining ILF, due to occupancy increases, through the date of sale on November 1, 2020. Expenses for the ILFs were $1.9 million for the year ended December 31, 2020 compared to $2.9 million for the year ended December 31, 2019. The $1.0 million, or 36%, decrease in expenses was primarily for the same reasons indicated for the decrease in revenues.Contents
Interest and other income. InterestThe $10.5 million, or 122%, increase in interest and other income decreased $1.7is primarily due to an increase of $10.3 million or 39%, forrelated to the origination of loans receivable subsequent to January 1, 2022, an increase of $1.3 million in interest income on money market funds and an increase of $0.6 million related to prepayment penalties, partially offset by a decrease of $1.4 million related to repayments of loans receivable and a decrease of $0.3 million related to a loan origination fee during the year ended December 31, 2020 to $2.6 million compared to $4.3 million2022. See above under “Recent Developments” for additional information on the year ended December 31, 2019. The decrease was primarily due to a decrease in preferred return related to the repaymentorigination of two preferred equity investments in June 2019 and January 2020, respectively, of $1.3 million and a decrease in interest income of $1.6 million due to the repayment of mortgage loans receivable by Covenant Care in August 2019, Providence Group in December 2019, Manteca in May 2020 and CommuniCare in May 2020, partially offset by approximately $1.2 million of interest income related to our mortgage and other loans receivable that we provided to Manteca in July 2019, CommuniCare in September 2019, Cascade in February 2020 and a mezzanine loan to Next VA Star Realty Holdings, LLC in November 2020. See Note 4, Other Real Estate Investments, Net.receivable.
Depreciation and amortization. Depreciation and amortization expense increased $0.9 million, or 2%, for the year ended December 31, 20202023 to $52.8$51.2 million compared to $51.8$50.3 million for the year ended December 31, 2019.2022. The $0.9 million increase in depreciation and amortization was primarily due to depreciation and amortizationan increase of $3.4$4.0 million related to new real estate investments and capital improvements made after
43

Table of Contents
January 1, 2019,2022 and an increase of $1.1 million related to properties reclassified to held for investment during the year ended December 31, 2022, partially offset by $2.0 milliona decrease in depreciation of depreciation related to the disposal of assets and $0.5$2.8 million due to assets becoming fully depreciated during the year ended December 31, 2020.after January 1, 2022 and a $1.4 million decrease from assets sold and classified as held for sale.
Interest expense. Interest expense decreased $4.5increased by $10.9 million as detailed below:
Change in interest expense for the year ended December 31, 2023 compared to the year ended December 31, 2022
(in thousands)
Increase in interest rates for the senior unsecured term loan$6,826 
Increase in interest rates for the unsecured revolving credit facility5,275 
Decrease in outstanding borrowing amount for the unsecured revolving facility, net(1,607)
Other changes in interest expense381 
Total change to interest expense$10,875 
Property taxes. Property taxes increased $1.8 million, or 16%42%, for the year ended December 31, 2020 to $23.7 million compared to $28.1 million for the year ended December 31, 2019 due to a lower weighted average debt balance of approximately $18.0 million and lower weighted average interest rates of approximately 0.7%.
Property taxes. Property taxes decreased $0.2 million, or 7%, for the year ended December 31, 20202023 compared to December 31, 2019.2022. The decreaseincrease was primarily due to $1.0a $1.4 million ofincrease in property taxes related to the disposal of assets and the transfer of certain properties to new operators in the year ended December 31, 2020 that make direct tax payments, partially offset by property taxes of $0.8 million due to new real estate investments made after January 1, 2019.2022, a $0.9 million increase due to property taxes expected to be paid directly by us as a result of certain assets being designated as held for sale, a $0.4 million increase in property taxes due to existing operators that no longer make direct tax payments and an increase of $0.2 million of property taxes due to reassessments and increased effective tax rates, partially offset by a decrease of $1.0 million related to properties sold after January 1, 2022 and a decrease of $0.1 million due to the transfer of certain properties to new operators that make direct tax payments.
Impairment of real estate investments.On September 1, 2019, we sold three of During the seven skilled nursing properties in Ohio operated by Trillium for a purchase price of $28.0 million. Prior to the disposition, we recorded an impairment of approximately $7.8 million during the threetwelve months ended September 30, 2019. Additionally, during the three months ended September 30, 2019,December 31, 2023, we met the criteriarecognized aggregate impairment charges of $36.3 million, of which $26.8 million related to classify six skilled nursing facilities operated by Metron asproperties held for sale, which resulted in an impairment expense of approximately $8.8$8.0 million related to reduce the carrying valueproperties held for investment, and $1.5 million related to fair value less costs to sell the facilities. There was no impairment of real estate investments duringproperties that were sold. During the year ended December 31, 2020.2022, we recognized aggregate impairment charges of $79.1 million, of which $14.4 million related to properties held for sale, $19.7 million related to properties held for investment, and $45.0 million related to properties that were sold. See above under “Recent Developments” for additional information.
Provision for loan losses.losses, net. During the year ended December 31, 2019,2022, we determined the remaining contractual obligations under the bridge loan agreement to Priority Life Care, LLC (“Priority”) were not collectible and recorded a $1.1$4.6 million provision forexpected credit loss related to two other loans receivable that were placed on non-accrual status, partially offset by a $0.8 million recovery related to one other loan losses. Therereceivable that was nopreviously written off. No provision for loan losses was recognized during the year ended December 31, 2020.2023.
Property operating expenses. During the years ended December 31, 2023 and 2022, we recognized $3.4 million and $5.0 million, respectively, of property operating expenses related to assets we plan to sell or repurpose, re-tenant, or have sold.
46

Table of Contents
General and administrative expense. General and administrative expense increased $1.1by $1.6 million or 8%, for the year ended December 31, 2020 to $16.3 million compared to $15.2 million for the year ended December 31, 2019. The increase is primarily related to higher cash wages of $1.0 million, an increase of $0.4 million in state franchise tax and a $0.2 million increase in due diligence costs, partially offset by a decrease of $0.3 million related to stock-based compensation and $0.1 million related to other corporate expenses.as detailed below:
Year Ended
(in thousands)December 31, 2023December 31, 2022Increase/(Decrease)
Cash compensation$5,636 $6,107 $(471)
Incentive compensation5,350 3,550 1,800 
Share-based compensation5,153 5,758 (605)
Professional services2,399 1,897 502 
Other administrative expense1,041 923 118 
Taxes and insurance908 897 11 
Other expenses1,318 1,033 285 
Total change in general and administrative expense$21,805 $20,165 $1,640 
Gain (loss) on sale of real estate, net. During the year ended December 31, 2020,2023, we recorded a $2.3 million gain on sale of real estate related to the sale of 2 ALFs and one SNF, partially offset by a $0.1 million loss on sale of real estate related to the sale of six skilled nursing facilities andtwo ALFs. During the year ended December 31, 2022, we recorded a $20,000 gain$3.8 million loss on sale of real estate related to the sale of our last remaining ownedsix SNFs, five ALFs and operated ILF. During the year ended December 31, 2019, we recordedone multi-service campus and a $1.6$0.2 million gainloss on sale of real estate related to the sale of one independent living facility anda land parcel, partially offset by a $0.2 million gain on sale of real estate related to the sale of three skilled nursing facilities.one SNF.
Unrealized loss on other real estate related investments, net. During the year ended December 31, 2023, we recorded an unrealized loss of $8.1 million on our secured and mezzanine loans receivable due to rising interest rates and a $0.3 million loss due to a loan origination fee paid, partially offset by unrealized gains of $0.7 million due to a decrease in projected forward interest rates and a reversal of a previously recognized unrealized loss of $1.2 million related to the repayment of one mezzanine loan receivable and the partial repayment of one mortgage loan receivable. During the year ended December 31, 2022, we recorded a $7.1 million unrealized loss on our secured and mezzanine loans receivable. The unrealized loss was due to rising interest rates.

Year Ended December 31, 20192022 Compared to Year Ended December 31, 20182021
For discussion related to the results of operations and changes in financial condition for fiscal 20192022 compared to fiscal 2018,2021, refer to Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our fiscal 20192022 Annual Report on Form 10-K, which was filed with the SEC on February 20, 2020.9, 2023.
Liquidity and Capital Resources
To qualify as a REIT for federal income tax purposes, we are required to distribute at least 90% of our REIT taxable income, determined without regard to the dividends paid deduction and excluding any net capital gains, to our stockholders on an annual basis. Accordingly, we intend to make, but are not contractually bound to make, regular quarterly dividends to common stockholders from cash flow from operating activities. All such dividends are at the discretion of our board of directors.
AsOur short-term liquidity requirements consist primarily of December 31, 2020, we had cashoperating and cash equivalents of $18.9 million.
During the year ended December 31, 2019, we sold 2.5 million shares of common stock underinterest expenses directly associated with our predecessor ATM Program for gross proceeds of $47.9 million. No shares of common stock were sold under the New ATM Program or Prior ATM Program during the year ended December 31, 2020 and, as of December 31, 2020, we had $500.0 million available for future issuances under the New ATM Program.properties, including:
As of December 31, 2020, there was $50.0 million outstanding under the Revolving Facility (as defined below). We believe that our available cash, expected operating cash flows,interest expense and the availability under the New ATM Program and Amended Credit Facility (as defined below) will provide sufficient funds for our operations, anticipated scheduled debt service paymentsmaturities on outstanding indebtedness;
general and dividend plans for at least the next twelve months.administrative expenses;
44dividend plans;

Tableoperating lease obligations; and
capital expenditures for improvements to our properties.
Our long-term liquidity needs consist primarily of Contents
funds necessary to pay for acquisitions and other investments (including mortgage and mezzanine loan originations), capital expenditures, and scheduled debt maturities. We intend to invest in and/or develop additional healthcare and seniors housing properties as suitable opportunities arise and so long as adequate sources of financing are available. We expect that future investments in and/or development of properties, including any improvements or renovations of current or newly-acquired properties, will depend on and will be financed by, in whole or in part, our existing cash, borrowings available to us under the Second Amended Credit Facility (as defined below), future borrowings or the proceeds from sales of shares of our common stock pursuant to our New ATM Program or additional issuances of
47

Table of Contents
common stock or other securities. In addition, we may seek financing from U.S. government agencies, including through Fannie Mae and the U.S. Department of Housing and Urban Development, in appropriate circumstances in connection with acquisitions and refinancing of existing mortgage loans.
We believe that our expected operating cash flow from rent collections and interest payments on our other real estate related investments, together with our cash balance of $294.4 million, available borrowing capacity of $600.0 million under the Revolving Facility (as defined below), and availability of $274.1 million under the ATM Program, each at December 31, 2023, will be sufficient to meet ongoing debt service requirements, dividend plans, operating lease obligations, capital expenditures, working capital requirements and other needs for at least the next 12 months. We expect to meet our long-term liquidity needs with cash flows from operations and financing arrangements. While we are currently pursuing the sale, re-tenanting or repurposing of certain of our assets in connection with our ongoing review and monitoring of our investment portfolio, we currently do not expect to sell any of our properties to meet liquidity needs, although we may do so in the future. Our quarterly cash dividend and any failure of our operators to pay rent or of our borrowers to make interest or principal payments may impact our available capital resources.
We have filed an automatic shelf registration statement with the U.S. Securities and Exchange Commission that expires in March 2023, which will allowFebruary 2026 and at or prior to such time we expect to file a new shelf registration statement. The shelf registration statement allows us or certain of our subsidiaries, as applicable, to offer and sell shares of common stock, preferred stock, warrants, rights, units and debt securities through underwriters, dealers or agents or directly to purchasers, in one or more offerings on a continuous or delayed basis, in amounts, at prices and on terms we determine at the time of the offering. On September 15, 2023, we entered into the New ATM Program. In addition to the issuance and sale of shares of our common stock, we may also enter into one or more ATM forward contracts with sales agents for the sale of shares of our common stock under the ATM Program. See “At-The-Market Offering of Common Stock” for information regarding activity under the ATM Program.
Although we are subject to restrictions on our ability to incur indebtedness, we expect that we will be able to refinance existing indebtedness or incur additional indebtedness for acquisitions or other purposes, if needed. However, there can be no assurance that we will be able to refinance our indebtedness, incur additional indebtedness or access additional sources of capital, such as by issuing common stock or other debt or equity securities, on terms that are acceptable to us or at all.
We currently are in compliance with all debt covenants on our outstanding indebtedness.
Cash Flows
The following table presents selected data from our consolidated statements of cash flows for the years presented:
 Year Ended December 31,
 20202019
 (dollars in thousands)
Net cash provided by operating activities$145,735 $126,295 
Net cash used in investing activities(41,582)(316,007)
Net cash (used in) provided by financing activities(105,561)173,247 
Net decrease in cash and cash equivalents(1,408)(16,465)
Cash and cash equivalents at beginning of period20,327 36,792 
Cash and cash equivalents at end of period$18,919 $20,327 
 Year Ended December 31,
 20232022
 (dollars in thousands)
Net cash provided by operating activities$154,767 $144,415 
Net cash used in investing activities(267,815)(127,400)
Net cash provided by (used in) financing activities394,318 (23,732)
Net increase (decrease) in cash and cash equivalents281,270 (6,717)
Cash and cash equivalents as of the beginning of period13,178 19,895 
Cash and cash equivalents as of the end of period$294,448 $13,178 
Year Ended December 31, 20202023 Compared to Year Ended December 31, 20192022
Net cash provided by operating activities for the year ended December 31, 20202023 was $145.7$154.8 million compared to $126.3$144.4 million for the year ended December 31, 2019,2022, an increase of $19.4$10.4 million. Operating cash inflows are derived primarily from the rental payments received under our lease agreements, including as a result of new investments, and interest payments received on our other real estate related investments. Operating cash outflows consist primarily of interest expense on our borrowings and general and administrative expenses. The net increase wasof $10.4 million in cash provided by operating activities for the year ended December 31, 2022 is primarily due to an increase of $12.9 million in rental income due to acquisitions, $5.0 million in improved rent collections compared to the prior year, $1.8 million in increases in rental rates for existing tenants subsequent to December 31, 2018,received, interest income received on our other real estate related investments, and a decrease of $4.5 million in interestcash paid on outstanding indebtedness duefor operating expenses related to lower weighted average interest rates and a lower weighted average debt balance, $1.2 million of lease termination revenue and $1.0 million from recovery of previously reversed rent,assets we plan to sell, have sold, or repurpose, partially offset by a decreasean increase in rental incomecash paid for interest expense.
48

Table of $6.2 million due to the disposal of assets in September 2019 and February 2020 and higher cash wages of $1.0 million.Contents
Cash used in investing activities for the year ended December 31, 20202023 was primarily comprised of $123.1$297.9 million in acquisitions of real estate and investments in real estate mortgage related investments and other loans receivable, $11.0 million of purchases of equipment, furniture and fixtures and improvements to real estate, and $1.8 million in preferred equity investments, partially offset by $26.5 million of payments received on real estate related investments and other loans receivable and escrow deposits for potential acquisitions, and $8.3 million of purchases of, and improvements to, equipment, furniture and fixtures and real estate, partially offset by $83.3 million of payments received from our preferred equity investment and mortgage and other loans receivable and $6.6$16.3 million in net proceeds from real estate sales. CashCash used in investing activities for the year ended December 31, 20192022 was primarily comprised of $339.7$171.6 million in acquisitions of real estate and investments in real estate mortgagerelated investments and other loans receivable and $6.3$7.3 million of purchases of and improvements to, equipment,equipment, furniture and fixtures and improvements to real estate,, partially offset by $26.5$6.3 million of payments received from our preferred equity investment and mortgage and other loans receivable and $3.5$45.1 million in net proceeds from real estate sales.
 
Our cash flows provided by financing activities for the year ended December 31, 2023 were primarily comprised of $634.4 million of net proceeds from the issuance of common stock under the ATM Program and $1.9 million in net contributions from noncontrolling interests, partially offset by $125.0 million in net payments under our Revolving Credit Facility (as defined below), $115.5 million in dividends paid and $1.5 million in net settlement adjustment on restricted stock. Our cash flows used in financing activities for the year ended December 31, 20202022 were primarily comprised of $93.2$106.1 million in dividends paid, a $2.0 million net settlement adjustment on restricted stock, $0.4 million in costs paid for the issuance
45

Table of Contents
of common stock and $10.0 million in net repayments under our Amended Credit Facility (as defined below). Our cash flows provided by financing activities for the year ended December 31, 2019 were primarily comprised of $196.0 million in net proceeds from common stock sales under our predecessor ATM Program and April 2019 equity offering and $65.0 million in net borrowings under our Amended Credit Facility and Prior Credit Facility, partially offset by $80.6 million in dividends paid, $4.5$5.4 million in payments of deferred financing costs and $2.5a $4.5 million net settlement adjustment on restricted stock.stock, partially offset by $47.2 million of net proceeds from the issuance of common stock under the Prior ATM Program and $45.0 million in net borrowings under our Revolving Facility.

Year Ended December 31, 20192022 Compared to Year Ended December 31, 20182021
For discussion related to the cash flows for fiscal 20192022 compared to fiscal 2018,2021, refer to Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our fiscal 20192022 Annual Report on Form 10-K, which was filed with the SEC on February 20, 2020.9, 2023.

IndebtednessMaterial Cash Requirements
5.25%Our material cash requirements from known contractual and other obligations include:
3.875% Senior Unsecured Notes due 2025 and Issuer and Guarantor Financial Information2028
On May 10, 2017, June 17, 2021, our wholly owned subsidiary, CTR Partnership, L.P. (the “Operating Partnership”), and its wholly owned subsidiary, CareTrust Capital Corp. (together with the Operating Partnership, the “Issuers”), completed a publicprivate offering of $300.0$400.0 million aggregate principal amount of 5.25%3.875% Senior Notes due 20252028 (the “Notes”). The Notes were issued at par, resulting in gross proceeds of $300.0 million and net proceeds of approximately $294.0 million after deducting underwriting fees and other offering expenses. The Notes mature on June 1, 2025 and bear30, 2028. The Notes accrue interest at a rate of 5.25%3.875% per year. Interest on the Notes isannum payable semiannually in arrears on June 130 and December 130 of each year, beginningcommencing on December 1, 2017.
As of June 1, 2020, the Issuers may redeem the Notes any time at the redemption prices set forth in the indenture. As of December 31, 2020, the Issuers have not elected to redeem any of the Notes. If certain changes of control of CareTrust REIT occur, holders of the Notes will have the right to require the Issuers to repurchase their Notes at 101% of the principal amount plus accrued and unpaid interest, if any, to, but not including, the repurchase date.
30, 2021. The obligations under the Notes are fully and unconditionally guaranteed, jointly and severally, on an unsecured basis, by CareTrust REIT (the “Parent Guarantor”)us and CareTrust REIT’s wholly owned existing and, subject to certain exceptions, future materialall of our subsidiaries (other than the Issuers) (the “Subsidiary Guarantors”); provided, however, that such guarantees are subject to automatic release under certain customary circumstances, including if the Subsidiary Guarantor is sold or sells all or substantially all of its assets, the Subsidiary Guarantor is designated “unrestricted” for covenant purposes under the indenture, the Subsidiary Guarantor’s guarantee of other indebtedness which resulted in the creation of the guarantee of the Notes is terminated or released, or the requirements for legal defeasance or covenant defeasance or to discharge the indenture have been satisfied.
The following provides information regarding the entity structure of the Parent Guarantor, the Issuers and the Subsidiary Guarantors:
CareTrust REIT, Inc. – The Parent Guarantor was formed on October 29, 2013 and became a separate and independent publicly-traded company on June 1, 2014. The Parent Guarantor has not conducted any operations or had any business since that time.
CTR Partnership, L.P. and CareTrust Capital Corp. – The Issuers, each of which is a wholly owned subsidiary of the Parent Guarantor, were formed on May 8, 2014 and May 9, 2014, respectively. The Issuers did not conduct any operations or have any business prior to June 1, 2014, the date the Parent Guarantor became a separate and independent publicly-traded company. The Operating Partnership directly invests in real estate and real estate related assets and therefore does not rely solely on the cash flow generated by the Subsidiary Guarantors and their ability to make cash available to the Issuers, by dividend or otherwise. However, in the event that the earnings or available assets of the Issuers are insufficient, the Issuers’ ability to pay principal and interest on the Notes could be dependent on the cash flow generated by the Subsidiary Guarantors and their ability to make such cash available to the Issuers. CareTrust Capital Corp., a co-issuer of the Notes, has no material assets and conducts no operations. Therefore, it has no independent ability to service the interest and principal obligations under the Notes.
Subsidiary Guarantors – The Subsidiary Guarantors consist of all of the subsidiaries of the Parent Guarantor other than the Issuers. The Parent Guarantor conducts a substantial portion of its business operations through the Subsidiary Guarantors.
The assets and liabilities and results of operations of the combined guarantors (the Parent Issuer and the Subsidiary Guarantors) and the Issuers of the Notes are not materially different than the corresponding amounts presented in our consolidated financial statements.
46

Table of Contents
The indenture contains customary covenants such as limiting the ability of CareTrust REIT and its restricted subsidiaries to: incur or guarantee additional indebtedness; incur or guarantee secured indebtedness; make certain investments or other restricted payments; sell assets; enter into transactions with affiliates; merge or consolidate or sell all or substantially all of their assets, and pay dividends or distributions on, or redeem or repurchase, capital stock, including a restriction on the ability of the Issuers and their restricted subsidiaries to pay dividends or other amounts to the Issuers, subject to certain other exceptions, unless: (i) there is no default or event of default under the indenture; (ii) the Issuers are in compliance with specified limitations on indebtedness under the indenture; and (iii) the payments do not exceed a specified restricted payment basket. Dividends or distributions are also permitted if the Parent Guarantor’s board of directors believes in good faith they are necessary to maintain Parent Guarantor’s REIT status or to avoid any excise tax or income tax imposed on Parent Guarantor, provided there is no default or event of default under the indenture. Further, the Issuers and their restricted subsidiaries are not permitted to create or cause to become effective any encumbrance or restriction on the ability of the Issuers to, among other things, pay dividends or make distributions, pay indebtedness, make loans or advances to the Issuers or their restricted subsidiaries or transfer property or assets to the Issuers or their restricted subsidiaries, other than in connection with certain customary exceptions such as in respect of the indenture or theSecond Amended Credit Facility.
The indenture also requires CareTrust REIT and its restricted subsidiaries to maintain a specified ratio of unencumbered assets to unsecured indebtedness. These covenants are subject to a number of important and significant limitations, qualifications and exceptions. The indenture also contains customary events of default.
Facility (as defined below). As of December 31, 2020,2023, we were in compliance with all applicable financial covenants under the indenture.indenture governing the Notes. See Note 7, Debt, to our consolidated financial statements included in this report for further information about the Notes.
Unsecured Revolving Credit Facility and Term Loan
On August 5, 2015, the Company, CareTrust GP, LLC, the Operating Partnership, as the borrower, andDecember 16, 2022, we, together with certain of its wholly ownedour subsidiaries, entered into a credit and guaranty agreement with KeyBank National Association, as administrative agent, an issuing bank and swingline lender, and the lenders party thereto (the “Prior Credit Agreement”). As later amended on February 1, 2016, the Prior Credit Agreement provided the following: (i) a $400.0 million unsecured asset based revolving credit facility (the “Prior Revolving Facility”), (ii) a $100.0 million non-amortizing unsecured term loan (the “Prior Term Loan” and, together with the Prior Revolving Facility, the “Prior Credit Facility”), and (iii) a $250.0 million uncommitted incremental facility. The Prior Revolving Facility was scheduled to mature on August 5, 2019, subject to two, six-month extension options. The Prior Term Loan was scheduled to mature on February 1, 2023, and could be prepaid at any time subject to a 2% premium in the first year after issuance and a 1% premium in the second year after issuance.
On February 8, 2019, the Operating Partnership, as the borrower, the Company, as guarantor, CareTrust GP, LLC, and certain of the Operating Partnership’s wholly owned subsidiaries entered into an amended and restated credit and guaranty agreement with KeyBank National Association, as administrative agent, an issuing bank and swingline lender and(as amended from time to time, the lenders party thereto (the “Amended“Second Amended Credit Agreement”). The Operating Partnership is the borrower under the Second Amended Credit Agreement, and the obligations thereunder are guaranteed, jointly and severally, on an unsecured basis, by us and substantially all of our subsidiaries. The Second Amended Credit Agreement, which amends and restates our amended and restated credit and guaranty agreement, dated as of February 8, 2019 (as amended, the Prior“Prior Credit Agreement,Agreement”) provides for: (i) an unsecured revolving credit facility (the “Revolving Facility”) with revolving commitments in an aggregate principal amount of $600.0 million, including a letter of credit subfacility for 10% of the then available revolving commitments and a swingline loan subfacility for 10% of the then available revolving commitments and (ii) anthe continuation of the unsecured term loan credit facility which was previously extended under the Prior Credit Agreement (the “Term Loan” and together with the Revolving Facility, the “Amended“Second Amended Credit Facility”) in an aggregate principal amount of $200.0 million. Borrowing availability under the Revolving Facility is subject to no default or event of default under the Amended Credit Agreement having occurred at the time of borrowing. The proceeds of the Term Loan were used, in part, to repay in full all outstandingFuture borrowings under the Prior Term Loan and Prior Revolving Facility under the Prior Credit Agreement. Future borrowings under theSecond Amended Credit Facility will be used for working capital purposes, for capital expenditures, to fund acquisitions and for general corporate purposes.
On October 10, 2023, we entered into the First Amendment to the Second Amended Credit Agreement with KeyBank National Association (the “First Amendment”). The First Amendment restates the definition of Consolidated Total Asset Value
49

Table of Contents
to include net proceeds from at-the-market forward commitments executed but not yet closed as of the relevant date as if such proceeds had actually been received.
As of December 31, 2023, we had $200.0 million outstanding under the Term Loan and no borrowings outstanding under the Revolving Facility. The Revolving Facility has a maturity date of February 9, 2027, and includes, at our sole discretion, two, six-month extension options. The Term Loan has a maturity date of February 8, 2026.
The interest rates applicable to loans under the Revolving Facility are, at the Operating Partnership’s option, equal to either a base rate plus a margin ranging from 0.10% to 0.55% per annum or LIBORAdjusted Term SOFR or Adjusted Daily Simple SOFR (each as defined in the Second Amended Credit Agreement) plus a margin ranging from 1.10% to 1.55% per annum based on the debt to asset value ratio of the Company and itsour consolidated subsidiaries (subject to decrease at the Operating Partnership’s election if the Company obtainswe obtain certain specified investment grade ratings on itsour senior long-term unsecured debt). The interest rates applicable to loans under the Term Loan are, at the Operating Partnership’s option, equal to either a base rate plus a margin ranging from 0.50% to 1.20% per annum or LIBORAdjusted Term SOFR or Adjusted Daily Simple SOFR plus a margin ranging from 1.50% to 2.20% per annum based on the debt to asset value ratio of the Company and itsour consolidated subsidiaries (subject to decrease at the Operating Partnership’s election if the Company obtainswe obtain certain specified investment grade ratings on itsour senior long-term unsecured debt). In addition, the Operating Partnership will pay a facility fee on the revolving commitments under the Revolving Facility ranging from 0.15% to 0.35% per annum, based on the debt to asset value ratio of the Company and itsour consolidated subsidiaries (unless the Company obtainswe obtain certain specified investment grade ratings on itsour senior long-term unsecured debt and the Operating Partnership elects to decrease the applicable margin as described above, in which case the Operating Partnership will pay a facility fee on the revolving commitments ranging from 0.125% to 0.30% per annum based off
47

Table of Contents
the credit ratings of the Company’sour senior long-term unsecured debt).
As of December 31, 2020,2023, we had $200.0 million outstanding under the Term Loan and $50.0 million outstanding under the Revolving Facility.
The Revolving Facility has a maturity date of February 8, 2023, and includes, at our sole discretion, two, six-month extension options. The Term Loan has a maturity date of February 8, 2026.
The Amended Credit Facility is guaranteed, jointly and severally, by the Company and its wholly-owned subsidiaries that are party to the Amended Credit Agreement (other than the Operating Partnership). The Amended Credit Agreement contains customary covenants that, among other things, restrict, subject to certain exceptions, the ability of the Company and its subsidiaries to grant liens on their assets, incur indebtedness, sell assets, make investments, engage in acquisitions, mergers or consolidations, amend organizational documents and pay certain dividends and other restricted payments. The Amended Credit Agreement requires the Company to comply with financial maintenance covenants to be tested quarterly, consisting of a maximum debt to asset value ratio, a minimum fixed charge coverage ratio, a minimum tangible net worth, a maximum cash distributions to operating income ratio, a maximum secured debt to asset value ratio, a maximum secured recourse debt to asset value ratio, a maximum unsecured debt to unencumbered properties asset value ratio, a minimum unsecured interest coverage ratio and a minimum rent coverage ratio. The Amended Credit Agreement also contains certain customary events of default, including the failure to make timely payments under the Amended Credit Facility or other material indebtedness, the failure to satisfy certain covenants (including the financial maintenance covenants), the occurrence of change of control and specified events of bankruptcy and insolvency.
As of December 31, 2020, the Company waswere in compliance with all applicable financial covenants under the Second Amended Credit Agreement.
Obligations and Commitments
The following table summarizesSee Note 7, Debt, to our contractual obligations and commitments at December 31, 2020 (in thousands):
 Payments Due by Period
 TotalLess
than
1 Year
1 Year
to Less
than
3 Years
3 Years
to Less
than
5 Years
More
than
5 years
Senior unsecured notes payable (1)$370,875 $15,750 $31,500 $323,625 $— 
Senior unsecured term loan (2)217,071 3,348 6,679 6,687 200,357 
Unsecured revolving credit facility (3)53,262 1,551 51,711 — — 
Operating lease3,793 261 337 104 3,091 
Total$645,001 $20,910 $90,227 $330,416 $203,448 
(1)Amounts include interest payments of $70.9 million.
(2)Amounts include interest payments of $17.1 million.
(3)Amounts include payments related toconsolidated financial statements included in this report for further information about the credit facility fee of $1.9 million and interest payments of $1.3 million.Second Amended Credit Agreement.
Capital Expenditures
Capital expenditures for each propertyAs of December 31, 2023, we had committed to fund expansions, construction, capital improvements and ESG incentives at certain triple-net leased under our triple-net leases are generally the responsibilityfacilities totaling $9.2 million, of the tenant, except that, for the facilities leasedwhich $2.4 million is subject to subsidiaries of The Ensign Group, Inc. and The Pennant Group, Inc., the tenant will have an option to require us to finance certain capital expenditures up to an aggregate of 20% of our initial investment in such property, subject to a corresponding rent increase at the time of funding. ForWe expect to fund the capital expenditures in the next one to two years. See Note 12, Commitments and Contingencies, to our otherconsolidated financial statements included in this report for further information regarding our obligation to finance certain capital expenditures under our triple-net master leases, subjectleases.
Dividend Plans
We are required to approval by us, the tenants may request capital expenditure funding that would generally be subjectpay dividends in order to a corresponding rent increase at the time of funding, which are subjectmaintain our REIT status, and we expect to tenant compliancemake quarterly dividend payments in cash with the conditionsannual dividend amount no less than 90% of our annual REIT taxable income, determined without regard to the dividends paid deduction and excluding any net capital gains. See Note 8, Equity, to our approvalconsolidated financial statements included in this report for a summary of the cash dividends per share of our common stock declared by our board of directors for 2023, 2022 and funding of their requests. As of December 31, 2020, we had committed to fund expansions, construction and capital improvements at certain triple-net leased f2021.acilities totaling $15.4 million, of which $14.2 million is subject to rent increase at the time of funding.
Critical Accounting PoliciesEstimates
The preparation of financial statements in conformity with GAAP accounting principles generally accepted in the United States (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Management believes that the assumptions and estimates used in preparation of the underlying consolidated financial statements are reasonable. Actual results, however, could differ from those estimates and assumptions. 
48

TableAccounting estimates are deemed critical if they involve a significant level of Contents
Certain accounting policiesestimation uncertainty and have had or are consideredreasonably likely to be critical accounting policies. Critical accounting policies are those policies that require management to make significant estimates and/or assumptions about matters that are
uncertain at the time the estimates and/or assumptions are made or where we are required to make significant judgments and assumptions with respect to the practical application of accounting principles in our business operations. Critical accounting policies are by definition those policies that are material to our financial statements and for which the impact of changes in estimates, assumptions, and judgments could have a material impact toon our financial statements.
The followingcondition or results of operations. Below is a summary of the critical accounting policies discussion reflects what we believe are the most significant estimates
assumptions, and judgments used in the preparation of our consolidated financial statements. This discussion of our
critical accounting policies is intended to supplement the description of our accounting policies in the footnotes to our consolidated financial statements and to provide additional insight into the information used by management when evaluating significant estimates, assumptions, and judgments. For furthera discussion of our significant accounting policies, see Note 2, Summary of Significant Accounting Policies, to our consolidated financial statements included in this report.
Real Estate Depreciation and Amortization. Real estate costs related to the acquisition and improvement of properties are capitalized and amortized over the expected useful life of the asset on a straight-line basis. Repair and maintenance costs are charged to expense as incurred and significant replacements and betterments are capitalized. Repair and maintenance costs include all costs that do not extend the useful life of the real estate asset. We consider the period of future benefit of an asset to determine its appropriate useful life. Expenditures for tenant improvements are capitalized and amortized over the shorter of the tenant’s lease term or expected useful life. Determining whether expenditures meet the criteria for capitalization and the assignment of depreciable lives requires management to exercise significant judgment. We anticipate the estimated useful lives of our assets by class to be generally as follows:
Buildings25-40 years
Building improvements10-25 years
Tenant improvementsShorter of lease term or expected useful life
Integral equipment, furniture and fixtures5 years
Identified intangible assetsShorter of lease term or expected useful life
Real Estate Acquisition Valuation. In accordance with Accounting Standards Codification (“ASC”) 805, Business Combinations, our acquisitions of real estate investments generally do not meet the definition of a business, and are treated as asset acquisitions. The assets acquired and liabilities assumed are measured at their acquisition date relative fair values. Acquisition costs are capitalized as incurred. We allocate the acquisition costs to the tangible assets, identifiable intangible assets/liabilities and assumed liabilities on a relative fair value basis. We exercise judgment to determine the key assumptions used to allocate the purchase price of real estate acquired among its components. We assess fair value based on available market information, such as capitalization and discount rates, comparable sale transactions and relevant per square foot or unit cost information. A real estate asset’s fair value may be determined utilizing cash flow projections that incorporate such market information. Estimates of future cash flows are based on a number of factors including historical operating results, known and anticipated trends, as well as market and economic conditions. The fair value of land is derived from comparable sales of land within the same submarket and/or region. The fair value of buildings and improvements and integral equipment, furniture and fixtures considers the value of the property as if it was vacant as well as replacement costs, depreciation factors, and other relevant market information. The use of different assumptions in these fair value inputs could significantly affect the reported amounts of the allocation of the acquisition on a relative fair value basis and the related depreciation expense recorded for such assets. We have not materially changed the assumptions used in the analysis during the year ended December 31, 2020.
As part of the real estate acquisitions, we may commit to provide contingent payments to a seller or lessee (e.g., an earn-out payable upon the applicable property achieving certain financial metrics). Typically, when the contingent payments are funded, cash rent is increased by the amount funded multiplied by a rate stipulated in the agreement. Generally, if the contingent payment is an earn-out provided to the seller, the payment is capitalized to the property’s basis when the earn-out becomes probable and estimable. If the contingent payment is an earn-out provided to the lessee, the payment is recorded as a lease incentive and is amortized as a yield adjustment over the life of the lease.
Impairment of Long-Lived Assets. At each reporting period, we evaluate our real estate investments to be held and usedfor use for potential impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be
50

Table of Contents
recoverable. The judgment regarding the existence of impairment indicators, used to determine if an impairment assessment is necessary, is based on factors such as, but not limited to, market conditions, operator performance and legal structure. If indicators of impairment are present, we evaluate the carrying value of the related real estate investments in relation to the future undiscounted cash flows of the underlying facilities. The most significant inputs to the undiscounted cash flows include, but are not limited to, historical and projected facility level financial results, a lease coverage ratio, the intended hold period by the Company,us, and a
49

Table of Contents
terminal capitalization rate. The analysis is also significantly impacted by determining the lowest level of cash flows, which generally would be at the master lease level of cash flows. Provisions for impairment losses related to long-lived assets are recognized when expected future undiscounted cash flows are determined to be less than the carrying values of the assets. The impairment is measured as the excess of carrying value over fair value. All impairments are takenThe fair value of the real estate investment is based on current market conditions and considers matters such as a period cost at that time,the forecasted operating cash flows, lease coverage ratios, capitalization rates, and, depreciation is adjusted going forward to reflectwhere applicable, terms of recent lease agreements or the new value assigned to the asset.results of negotiations with prospective tenants.
We classify our real estate investments as held for sale when the applicable criteria have been met, which entailsincludes a formal plan to sell the properties that is expected to be completed within one year, among other criteria. Upon designation as held for sale, we write down the excess of the carrying value over the estimated fair value less costs to sell, resulting in an impairment of the real estate investments, if necessary, and cease depreciation. The fair value of the assets held for sale is based on estimated sales prices, which are considered to be Level 3 measurements within the fair value hierarchy. Estimated sales prices are determined using a market approach (comparable sales model), which relies on certain assumptions by management, including: (i) comparable market transactions, (ii) estimated prices per unit, and (iii) binding agreements for sales and non-binding offers to purchase from unrelated third-parties. There are inherent uncertainties in making these assumptions.
InIf circumstances arise that previously were considered unlikely and, as a result, we decide not to sell a real estate investment previously classified as held for sale or otherwise no longer meets the eventheld for sale criteria, the respective assets are reclassified as real estate investments held for use. A real estate investment that is reclassified is measured and recorded individually at the lower of impairment,(a) its carrying amount before the real estate investment was classified as held for sale, adjusted for any depreciation expense that would have been recognized had the real estate investment been continuously classified as held for use, or (b) the fair value at the date of the decision not to sell or change in circumstances that led to the real estate investment no longer meeting the criteria of held for sale. The fair value of the real estate investment is based on current market conditions and considers matters such asdetermined in a similar manner to the forecasted operating cash flows, lease coverage ratios, capitalization rates, comparable sales data, and, where applicable, contracts or the results of negotiations with purchasers or prospective purchasers.fair value determination for real estate investments held for use described above.
Our ability to accurately estimate future cash flows and estimate and allocate fair values impacts the timing and recognition of impairments. While we believe our assumptions are reasonable, changes in these assumptions may have a material impact on financial results.results. Given the impacts of current macroeconomic events, the projected cash flows that we use to assess fair value for purposes of impairment testing are subject to greater uncertainty than normal. If in the future we reduce our estimate of cash flow projections, we may need to impair our real estate assets. We have not materially changed the assumptions used in the analysis during the year ended December 31, 2020.
Other Real Estate Investments. Included in other real estate investments, net on our consolidated balance sheets at December 31, 2020, is one mezzanine loan receivable. At December 31, 2019, included in other real estate investments, net is one preferred equity investment and two mortgage loans receivable. The preferred equity investment was accounted for at unpaid principal balance, plus accrued return, net of reserves. We recognize return income on a quarterly basis based on the outstanding investment including any accrued and unpaid return, to the extent there is outside contributed equity or cumulative earnings from operations. As the preferred member of the joint venture, we are not entitled to share in the joint venture’s earnings or losses. Rather, we are entitled to receive a preferred return, which is deferred if the cash flow of the joint venture is insufficient to pay all of the accrued preferred return. The unpaid accrued preferred return is added to the balance of the preferred equity investment up to the estimated economic outcome assuming a hypothetical liquidation of the book value of the joint venture. Any unpaid accrued preferred return, whether recorded or unrecorded by us, will be repaid upon redemption or as available cash flow is distributed from the joint venture.
Prior to the adoption of Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments - Credit Losses (Subtopic 326) (“ASU 2016-13”), mortgage and mezzanine loans receivable were recorded at amortized cost, which consists of the outstanding unpaid principal balance, net of unamortized costs and fees directly associated with the origination of the loan. Interest income on our mortgage and mezzanine loans receivable was recognized over the life of the applicable investment using the interest method. Origination costs and fees directly related to loans receivable were amortized over the term of the loan as an adjustment to interest income.
For instruments recorded at amortized cost, we evaluated at each reporting period each of our other real estate investments for indicators of impairment. An investment is impaired when, based on current information and events, it was probable that we would be unable to collect all amounts due according to the existing contractual terms. A reserve would be established for the excess of the carrying value of the investment over its fair value.
We adopted ASU 2016-13 on January 1, 2020. With our primary business being leasing real property to third-party tenants, the majority of receivables that arise in the ordinary course of business qualify as operating leases and are not in the scope of ASU 2016-13. However, based on the instruments held upon adoption on January 1, 2020, the standard applied to our then outstanding mortgage loans receivable, for which we elected the fair value option as provided for by ASU 2019-05. Fair value was estimated using an internal valuation model that considered the expected future cash flows of the investment, the underlying collateral value, market interest rates and other credit enhancements. Instruments for which the fair value option has been elected are measured at fair value on a recurring basis with changes in fair value recognized in other income (loss) on our consolidated income statements. Interest income is recognized as earned within interest and other income in the consolidated income statements. As of December 31, 2020, we had one mezzanine loan receivable for which the fair value option had been elected.2023.
Revenue Recognition. We recognize lease revenue in accordance with ASC 842, Leases. Our lease agreements typically contain annual escalators based on the percentage change See Note 2, Summary of Significant Accounting Policies, in the Consumer Price Index which are accountedNotes to Consolidated Financial Statements for as variable lease payments in the period in which the change occurs. For lease agreements that contain fixed rent escalators, we generally recognize lease revenue on a straight-line basis of accounting. We generate revenues primarily by leasing healthcare-related
50

Table of Contents
properties to healthcare operators in triple-net lease arrangements, under which the tenant is solely responsible for the costs related to the property. Tenant reimbursements related to property taxes and insurance paid by lessee directly to a third party on behalf of a lessor are required to be excluded from variable payments and from recognition in the lessors’ income statements. Otherwise, tenant recoveries for taxes and insurance are classified as additional rental income recognized by the lessor on a gross basis in its income statements.
For the year ended December 31, 2018, we recognized tenant recoveries for real estate taxes of $11.9 million, which were classified as tenant reimbursements on our consolidated income statements. Prior to the adoption of ASC 842, we recognized tenant recoveries as tenant reimbursement revenues regardless of whether the third party was paid by the lessor or lessee. Effective January 1, 2019, such tenant recoveries are recognized to the extent that we pay the third party directly and classified as rental income on our consolidated income statements. Due to the application of ASC 842, we recognized, on a gross basis, tenant recoveries related to real estate taxes of $3.1 million and $2.9 million, for the years ended December 31, 2020 and December 31, 2019, respectively.
further detail. Our assessment of collectibility of tenant receivables includes a binary assessment of whether or not substantially all of the amounts due under a tenant’s lease agreement are probable of collection. This assessment involves significant judgment by management and considers the operator’s performance and anticipated trends, payment history, and the existence and creditworthiness of guarantees, among other factors, in making this determination. For such leases that are deemed probable of collection, revenue continues to be recorded on a straight-line basis over the lease term, if applicable. For such leases that are deemed not probable of collection, revenue is recorded as the lesser of (i) the amount which would be recognized on a straight-line basis or (ii) cash that has been received from the tenant, with any tenant and deferred rent receivable balances charged as a direct write-off against rental income in the period of the change in the collectibility determination. SuchManagement’s judgement can impact the timing of write-offs and recoveries are recorded as decreases or increases through rental income on our consolidated income statements. Forrecovery adjustments. We did not materially change the assumptions used in the analysis during the year ended December 31, 2020, we recorded recovery adjustments2023.
Fair Value of $1.0 million and did not recognize any write-off adjustments to rental income. For the year ended December 31, 2019, we recorded $11.8 million of write-off adjustments to rental income related to rental income recognized in prior periods. See Note 3,Other Real Estate Investments, Net,Related Investments. We have elected the fair value option for our other real estate related investments for which such election is permitted, as provided for under ASC 825, Financial Instruments (“ASC 825”). For financial instruments that are traded in an "active market," the best measure of fair value is the quoted market price. In cases where market-observable data is not available, the data used for the measurement must reflect assumptions that market participants would use in pricing the asset or liability (including adjustments that market participants demand for the risk associated with the unobservable data or the model used to determine fair value). We have concluded to use a present value technique, a discounted cash flow model, to determine fair value.
51

Table of Contents
The determination of estimated fair value of our other real estate related investments requires the use of both macroeconomic and microeconomic assumptions and/or inputs, which are generally based on current market and economic conditions, such as changes in the Notesrisk-free or benchmark rate and changes attributable to instrument-specific credit risk (e.g., changes in credit spread associated with the Consolidated Financial Statements for further detail.instrument). Changes in market and/or economic conditions could have a significant adverse effect on the estimated fair value of our financial instruments. Changes to assumptions, including assumed benchmark rates and credit spreads, may significantly impact the estimated fair value of our investments.
Income Taxes.We elected to be taxed as a real estate investment trust (“REIT”) underBecause of the Internal Revenue Codeinherent uncertainty of 1986, as amended (the “Code”). We believe wevaluation, the estimated fair value of our financial instruments may differ significantly from the values that would have been organizedused had a ready market for the financial instruments existed, and have operated, and we intend to continue to operate, in a manner to qualify for taxation as a REIT under the Code. To qualify as a REIT, we must meet certain organizational and operational requirements, including a requirement to distributedifferences could be material to our stockholders at least 90% of our annual REIT taxable income (computed without regard to the dividends paid deduction or net capital gain and which does not necessarily equal net income as calculated in accordance with GAAP). As a REIT, we generally will not be subject to federal income tax to the extent we distribute as qualifying dividends all of our REIT taxable income to our stockholders. If we fail to qualify as a REIT in any taxable year, we will be subject to federal income tax on our taxable income at regular corporate income tax rates and generally will not be permitted to qualify for treatment as a REIT for federal income tax purposes for the four taxable years following the year during which qualification is lost unless the Internal Revenue Service grants us relief under certain statutory provisions. consolidated financial statements.
Impact of Inflation
Our rental income in future years will be impacted by changes in inflation. Almost all of our triple-net lease agreements, including the Ensign leases, provide for an annual rent escalator based on the percentage change in the Consumer Price Index (but not less than zero), subject to maximum fixed percentages.
Off-Balance Sheet Arrangements
None.

ITEM 7A.     Quantitative and Qualitative Disclosures About Market Risk
Our primary market risk exposure is interest rate risk with respect to our variable rate indebtedness.
Our Second Amended Credit Agreement provides for: (i) an unsecured revolving credit facility (the “Revolving Facility”) with revolving commitments in an aggregate principal amount of $600.0 million, including a letter of credit subfacility for 10% of the then available revolving commitments and a swingline loan subfacility for 10% of the then available revolving commitments and (ii) an unsecured term loan credit facility (the “Term Loan”) in an aggregate principal amount of $200.0 million from a syndicate of banks and other financial institutions.
51

Table of Contents
The interest rates applicable to loans under the Revolving Facility are, at ourthe Operating Partnership’s option, equal to either a base rate plus a margin ranging from 0.10% to 0.55% per annum or LIBORAdjusted Term SOFR or Adjusted Daily Simple SOFR (each as defined in the Second Amended Credit Agreement) plus a margin ranging from 1.10% to 1.55% per annum based on the debt to asset value ratio of the Company and itsour consolidated subsidiaries (subject to decrease at the Operating Partnership’s election if we obtain certain specified investment grade ratings on our senior long-term unsecured debt). The interest rates applicable to loans under the Term Loan are, at ourthe Operating Partnership’s option, equal to either a base rate plus a margin ranging from 0.50% to 1.20% per annum or LIBORAdjusted Term SOFR or Adjusted Daily Simple SOFR plus a margin ranging from 1.50% to 2.20% per annum based on the debt to asset value ratio of the Company and itsour consolidated subsidiaries (subject to decrease at the Operating Partnership’s election if we obtain certain specified investment grade ratings on our senior long-term unsecuredunsecured debt). As of December 31, 2020,2023, we had a $200.0 million Term Loan outstanding and there was $50.0 million outstanding no borrowings outstanding under the Revolving Facility.
Based on our outstanding debt balance as of December 31, 2023 described above and the interest rates applicable to our outstanding debt at December 31, 2023, assuming a 100 basis point increase in the interest rates related to our variable rate debt, interest expense would have increased approximately $2.0 million for the year ended December 31, 2023.
An increase in interest rates could make the financing of any acquisition by us more costly as well as increase the costs of our variable rate debt obligations. Rising interest rates could also limit our ability to refinance our debt when it matures or cause us to pay higher interest rates upon refinancing and increase interest expense on refinanced indebtedness. Increased inflation may also have a pronounced negative impact on the interest expense we pay in connection with our outstanding indebtedness, as these costs could increase at a rate higher than our rents.
In addition, there is currently uncertainty around whether LIBOR will continue to exist after 2021. If LIBOR ceases to exist, we will need to enter into an amendment to the Amended Credit Agreement and we cannot predict what alternative index would be negotiated with our lenders. If our lenders have increased costs due to changes in LIBOR, we may experience potential increases in interest rates on our variable rate debt, which could adversely impact our interest expense, results of operations and cash flows. Based on our outstanding debt balance as of December 31, 2020 described above and the interest rates applicable to our outstanding debt at December 31, 2020, assuming a 100 basis point increase in the interest rates related to our variable rate debt, interest expense would have increased approximately $2.5 million for the year ended December 31, 2020.
We may, in the future, manage, or hedge, interest rate risks related to our borrowings by means of interest rate swap agreements. However, the REIT provisions of the Code substantially limit our ability to hedge our assets and liabilities. See “Risk Factors - Risks Related to Our Status as a REIT - Complying with REIT requirements may limit our ability to hedge effectively and may cause us to incur tax liabilities.” As of December 31, 2020,2023, we had no swap agreements to hedge our interest rate risks. We also expect to manage our exposure to interest rate risk by maintaining a mix of fixed and variable rates for our indebtedness.
ITEM  8. Financial Statements and Supplementary Data
See the Index to Consolidated Financial Statements on page F-1 of this report.
52

Table of Contents
ITEM  9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosures
None.
ITEM  9A.    Controls and Procedures
Disclosure Controls and Procedures
We maintain disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) that are designed to ensure that information required to be disclosed in our reports under the Exchange Act is processed, recorded, summarized and reported within the time periods specified in the SEC’s rules and regulations and that such information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.
As of December 31, 2020,2023, we carried out an evaluation, under the supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer, regarding the effectiveness of our disclosure controls and procedures. Based on the foregoing, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of December 31, 2020.2023.
Management’s Annual Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) to provide reasonable assurance regarding the reliability of our
52

Table of Contents
financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets; (ii) provide reasonable assurance that the transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and our directors; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.
We carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, regarding the effectiveness of our internal control over financial reporting using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control - Integrated Framework (2013). Based on this evaluation, our management concluded that our internal control over financial reporting was effective as of December 31, 2020.2023.
Changes in Internal Control over Financial Reporting
There has been no change in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the quarter ended December 31, 2020,2023, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Attestation Report of the Independent Registered Public Accounting Firm

The effectiveness of our internal control over financial reporting as of December 31, 20202023 has been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report which is included herein.
53

Table of Contents


REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the stockholders and the Board of Directors of CareTrust REIT, Inc.

Opinion on Internal Control over Financial Reporting

We have audited the internal control over financial reporting of CareTrust REIT, Inc. and subsidiaries (the “Company”) as of December 31, 2020,2023, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”)(COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2020,2023, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2020,2023, of the Company and our report dated February 10, 2021,8, 2024, expressed an unqualified opinion on those financial statements.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.


/s/ DELOITTEDeloitte & TOUCHETouche LLP

Costa Mesa, California
February 10, 20218, 2024
54

Table of Contents

ITEM 9B.    Other Information
AppointmentInsider Trading Arrangements
None.

ITEM  9C.Disclosure Regarding Foreign Jurisdictions That Prevent Inspections
Not applicable.

55

Table of New PresidentContents
On February 9, 2021, our board of directors appointed David Sedgwick, who has served as our Chief Operating Officer since August 2018, to serve as our President, effective immediately. Mr. Sedgwick will continue to serve as Chief Operating Officer. Mr. Sedgwick’s biographical information is described in our definitive proxy statement on Schedule 14A, filed with the SEC on March 20, 2020. In connection with his appointment to President, Mr. Sedgwick’s annual base salary has been increased t
o $495,000 effective as of January 1, 2021.
There are no arrangements or understandings between Mr. Sedgwick and any other person pursuant to which Mr. Sedgwick was appointed as President and Chief Operating Officer and there are no transactions in which Mr. Sedgwick has an interest that would require disclosure under Item 404(a) of Regulation S-K. Other than as disclosed in our definitive proxy statement on Schedule 14A filed with the SEC on March 20, 2020, no family relationship exists between Mr. Sedgwick and any director or other executive officer of the Company.
Concurrently with Mr. Sedgwick’s appointment as President and Chief Operating Officer, Mr. Greg Stapley relinquished the position of President. Mr. Stapley will continue to serve as Chief Executive Officer and Chairman of the Board of Directors.
PART III
ITEM  10.    Directors, Executive Officers and Corporate Governance
The information required under Item 10 is incorporated herein by reference to our definitive proxy statement to be filed with the SEC within 120 days after the end of our fiscal year ended December 31, 20202023 in connection with our 20212024 Annual Meeting of Stockholders.
Code of Conduct and Ethics
We have adopted a code of business conduct and ethics that applies to all employees, including employees of our subsidiaries, as well as each member of our Board of Directors. The code of business conduct and ethics is available at our website at www.caretrustreit.com under the Investors-Corporate GovernanceInvestors-Governance section. We intend to satisfy any disclosure requirement under applicable rules of the Securities and Exchange Commission or Nasdaqthe New York Stock MarketExchange regarding an amendment to, or waiver from, a provision of this code of business conduct and ethics by posting such information on our website, at the address specified above.
ITEM  11.    Executive Compensation
The information required under Item 11 is incorporated herein by reference to our definitive proxy statement to be filed with the SEC within 120 days after the end of our fiscal year ended December 31, 20202023 in connection with our 20212024 Annual Meeting of Stockholders.
ITEM  12.    Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The information required under Item 12 is incorporated herein by reference to our definitive proxy statement to be filed with the SEC within 120 days after the end of our fiscal year ended December 31, 20202023 in connection with our 20212024 Annual Meeting of Stockholders.
ITEM 13. Certain Relationships and Related Transactions, and Director Independence

The information required under Item 13 is incorporated herein by reference to our definitive proxy statement to be filed with the SEC within 120 days after the end of our fiscal year ended December 31, 20202023 in connection with our 20212024 Annual Meeting of Stockholders.
ITEM  14.    Principal Accountant Fees and Services
The information required under Item 14 is incorporated herein by reference to our definitive proxy statement to be filed with the SEC within 120 days after the end of our fiscal year ended December 31, 20202023 in connection with our 20212024 Annual Meeting of Stockholders.
5556

Table of Contents
PART IV


Table of Contents
ITEM  15.    Exhibits, Financial StatementsExhibit and Financial Statement Schedules
(a)(1)Financial Statements
 See Index to Consolidated Financial Statements on page F-1 of this report.
(a)(2)Financial Statement Schedules
 Schedule III: Real Estate Assets and Accumulated Depreciation
Schedule IV: Mortgage Loans on Real Estate
 Note: All other schedules have been omitted because the required information is presented in the financial statements and the related notes or because the schedules are not applicable.
(a)(3)Exhibits


Table of Contents
58

Table of Contents
*101.INSInline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
*101.SCHXBRL Taxonomy Extension Schema Document
*101.CALXBRL Taxonomy Extension Calculation Linkbase Document
*101.DEFXBRL Taxonomy Extension Definition Linkbase Document
*101.LABXBRL Taxonomy Extension Label Linkbase Document
*101.PREXBRL Taxonomy Extension Presentation Linkbase Document
*104Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)
 
*    Filed herewith.
**    Furnished herewith.
+    Management contract or compensatory plan or arrangement.
59

Table of Contents
ITEM 16.     Form 10-K Summary
None.
5760

Table of Contents



SIGNATURESBasis for Opinion
PursuantThe Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the requirements of Section 13 or 15(d)Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange ActCommission and the PCAOB.
We conducted our audit in accordance with the standards of 1934, the registrant has duly caused this reportPCAOB. Those standards require that we plan and perform the audit to be signedobtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on its behalf by the undersigned, thereunto duly authorized.assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

CARETRUST REIT, INC.
By:
/S/ GREGORY K. STAPLEY
Gregory K. Stapley
Chief Executive Officer
Dated: February 10, 2021
Definition and Limitations of Internal Control over Financial Reporting
PursuantA company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the requirementsmaintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalfassets of the registrantcompany; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the capacitiescompany; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the dates indicated.financial statements.
Name
Title
Date
/s/ GREGORY K. STAPLEYDirector and Chief Executive Officer (Principal Executive Officer)February 10, 2021
Gregory K. Stapley
/s/ WILLIAM M. WAGNERChief Financial Officer and Treasurer (Principal Financial Officer and Principal Accounting Officer)February 10, 2021
William M. Wagner
/s/ ALLEN C. BARBIERIDirectorFebruary 10, 2021
Allen C. Barbieri
/s/ JON D. KLINEDirectorFebruary 10, 2021
Jon D. Kline
/s/ DIANA LAINGDirectorFebruary 10, 2021
Diana Laing
/s/ SPENCER PLUMBDirectorFebruary 10, 2021
Spencer Plumb
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.


/s/ Deloitte & Touche LLP

Costa Mesa, California
February 8, 2024
54

Table of Contents

ITEM 9B.Other Information
Insider Trading Arrangements
None.

ITEM  9C.Disclosure Regarding Foreign Jurisdictions That Prevent Inspections
Not applicable.

5855

Table of Contents

PART III
ITEM  10.Directors, Executive Officers and Corporate Governance
The information required under Item 10 is incorporated herein by reference to our definitive proxy statement to be filed with the SEC within 120 days after the end of our fiscal year ended December 31, 2023 in connection with our 2024 Annual Meeting of Stockholders.
Code of Conduct and Ethics
We have adopted a code of business conduct and ethics that applies to all employees, including employees of our subsidiaries, as well as each member of our Board of Directors. The code of business conduct and ethics is available at our website at www.caretrustreit.com under the Investors-Governance section. We intend to satisfy any disclosure requirement under applicable rules of the Securities and Exchange Commission or the New York Stock Exchange regarding an amendment to, or waiver from, a provision of this code of business conduct and ethics by posting such information on our website, at the address specified above.
ITEM  11.Executive Compensation
The information required under Item 11 is incorporated herein by reference to our definitive proxy statement to be filed with the SEC within 120 days after the end of our fiscal year ended December 31, 2023 in connection with our 2024 Annual Meeting of Stockholders.
ITEM  12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The information required under Item 12 is incorporated herein by reference to our definitive proxy statement to be filed with the SEC within 120 days after the end of our fiscal year ended December 31, 2023 in connection with our 2024 Annual Meeting of Stockholders.
ITEM 13. Certain Relationships and Related Transactions, and Director Independence

The information required under Item 13 is incorporated herein by reference to our definitive proxy statement to be filed with the SEC within 120 days after the end of our fiscal year ended December 31, 2023 in connection with our 2024 Annual Meeting of Stockholders.
ITEM  14.Principal Accountant Fees and Services
The information required under Item 14 is incorporated herein by reference to our definitive proxy statement to be filed with the SEC within 120 days after the end of our fiscal year ended December 31, 2023 in connection with our 2024 Annual Meeting of Stockholders.
56

Table of Contents
INDEX TO CONSOLIDATED FINANCIAL STATEMENTSPART IV
Page
Reports of Independent Registered Public Accounting Firms with respect to CareTrust REIT, Inc.
Consolidated Balance Sheets as of December 31, 2020 and 2019
Consolidated Income Statements for the years ended December 31, 2020, 2019 and 2018
Consolidated Statements of Equity for the years ended December 31, 2020, 2019 and 2018
Consolidated Statements of Cash Flows for the years ended December 31, 2020, 2019 and 2018
Notes to Consolidated Financial Statements
Schedule III: Real Estate Assets and Accumulated Depreciation
Schedule IV: Mortgage Loans on Real Estate

F-1

Table of Contents
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMITEM  15.Exhibit and Financial Statement Schedules
(a)(1)Financial Statements
See Index to Consolidated Financial Statements on page F-1 of this report.
(a)(2)Financial Statement Schedules
Schedule III: Real Estate Assets and Accumulated Depreciation
Schedule IV: Mortgage Loans on Real Estate
Note: All other schedules have been omitted because the required information is presented in the financial statements and the related notes or because the schedules are not applicable.
(a)(3)Exhibits
58

Table of Contents
*101.INSInline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
*101.SCHXBRL Taxonomy Extension Schema Document
*101.CALXBRL Taxonomy Extension Calculation Linkbase Document
*101.DEFXBRL Taxonomy Extension Definition Linkbase Document
*101.LABXBRL Taxonomy Extension Label Linkbase Document
*101.PREXBRL Taxonomy Extension Presentation Linkbase Document
*104Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)
*    Filed herewith.
**    Furnished herewith.
+    Management contract or compensatory plan or arrangement.
59

Table of Contents
ITEM 16.     Form 10-K Summary
None.
60

Table of Contents

To the stockholders and the Board of Directors of CareTrust REIT, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of CareTrust REIT, Inc. and subsidiaries (the "Company") as of December 31, 2020 and 2019, the related consolidated income statements and statements of equity and cash flows, for each of the two years in the period ended December 31, 2020, and the related notes and the schedules listed in the Index at Item 15 (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2020, in conformity with accounting principles generally accepted in the United States of America.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 10, 2021, expressed an unqualified opinion on the Company's internal control over financial reporting.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.


/s/ Deloitte & Touche LLP

Costa Mesa, California
February 8, 2024
54

Table of Contents

ITEM 9B.Other Information
Insider Trading Arrangements
None.

ITEM  9C.Disclosure Regarding Foreign Jurisdictions That Prevent Inspections
Not applicable.

55

Table of Contents

PART III
ITEM  10.Directors, Executive Officers and Corporate Governance
The information required under Item 10 is incorporated herein by reference to our definitive proxy statement to be filed with the SEC within 120 days after the end of our fiscal year ended December 31, 2023 in connection with our 2024 Annual Meeting of Stockholders.
Code of Conduct and Ethics
We have adopted a code of business conduct and ethics that applies to all employees, including employees of our subsidiaries, as well as each member of our Board of Directors. The code of business conduct and ethics is available at our website at www.caretrustreit.com under the Investors-Governance section. We intend to satisfy any disclosure requirement under applicable rules of the Securities and Exchange Commission or the New York Stock Exchange regarding an amendment to, or waiver from, a provision of this code of business conduct and ethics by posting such information on our website, at the address specified above.
ITEM  11.Executive Compensation
The information required under Item 11 is incorporated herein by reference to our definitive proxy statement to be filed with the SEC within 120 days after the end of our fiscal year ended December 31, 2023 in connection with our 2024 Annual Meeting of Stockholders.
ITEM  12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The information required under Item 12 is incorporated herein by reference to our definitive proxy statement to be filed with the SEC within 120 days after the end of our fiscal year ended December 31, 2023 in connection with our 2024 Annual Meeting of Stockholders.
ITEM 13. Certain Relationships and Related Transactions, and Director Independence

The information required under Item 13 is incorporated herein by reference to our definitive proxy statement to be filed with the SEC within 120 days after the end of our fiscal year ended December 31, 2023 in connection with our 2024 Annual Meeting of Stockholders.
ITEM  14.Principal Accountant Fees and Services
The information required under Item 14 is incorporated herein by reference to our definitive proxy statement to be filed with the SEC within 120 days after the end of our fiscal year ended December 31, 2023 in connection with our 2024 Annual Meeting of Stockholders.
56

Table of Contents
PART IV


Table of Contents
ITEM  15.Exhibit and Financial Statement Schedules
(a)(1)Financial Statements
See Index to Consolidated Financial Statements on page F-1 of this report.
(a)(2)Financial Statement Schedules
Schedule III: Real Estate Assets and Accumulated Depreciation
Schedule IV: Mortgage Loans on Real Estate
Note: All other schedules have been omitted because the required information is presented in the financial statements and the related notes or because the schedules are not applicable.
(a)(3)Exhibits
58

Table of Contents
*101.INSInline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
*101.SCHXBRL Taxonomy Extension Schema Document
*101.CALXBRL Taxonomy Extension Calculation Linkbase Document
*101.DEFXBRL Taxonomy Extension Definition Linkbase Document
*101.LABXBRL Taxonomy Extension Label Linkbase Document
*101.PREXBRL Taxonomy Extension Presentation Linkbase Document
*104Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)
*    Filed herewith.
**    Furnished herewith.
+    Management contract or compensatory plan or arrangement.
59

Table of Contents
ITEM 16.     Form 10-K Summary
None.
60

Table of Contents



SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
CARETRUST REIT, INC.
By:
/S/ DAVID M. SEDGWICK
David M. Sedgwick
President and Chief Executive Officer
Dated: February 8, 2024
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Name
Title
Date
/s/ DAVID M. SEDGWICKPresident and Chief Executive Officer (Principal Executive Officer)February 8, 2024
David M. Sedgwick
/s/ WILLIAM M. WAGNERChief Financial Officer and Treasurer (Principal Financial Officer and Principal Accounting Officer)February 8, 2024
William M. Wagner
/s/ DIANA LAINGDirectorFebruary 8, 2024
Diana Laing
/s/ ANNE OLSONDirectorFebruary 8, 2024
Anne Olson
/s/ SPENCER PLUMBDirectorFebruary 8, 2024
Spencer Plumb
/s/ CAREINA WILLIAMSDirectorFebruary 8, 2024
Careina Williams



61

Table of Contents
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Page
Report of Independent Registered Public Accounting Firm (PCAOB ID No. 34) with respect to CareTrust REIT, Inc.
Consolidated Balance Sheets as of December 31, 2023 and 2022
Consolidated Statements of Operations for the years ended December 31, 2023, 2022 and 2021
Consolidated Statements of Equity for the years ended December 31, 2023, 2022 and 2021
Consolidated Statements of Cash Flows for the years ended December 31, 2023, 2022 and 2021
Notes to Consolidated Financial Statements
Schedule III: Real Estate Assets and Accumulated Depreciation
Schedule IV: Mortgage Loans on Real Estate

F-1

Table of Contents
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the stockholders and the Board of Directors of CareTrust REIT, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of CareTrust REIT, Inc. and subsidiaries (the "Company") as of December 31, 2023 and 2022, the related consolidated statements of operations, equity, and cash flows, for each of the three years in the period ended December 31, 2023, and the related notes and the schedules listed in the Index at Item 15 (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 8, 2024, expressed an unqualified opinion on the Company's internal control over financial reporting.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Impairment of Long-LivedReal Estate Investments, Assets Held for Sale, Net and Asset Sales — Refer to NoteNotes 2 and 4 to the financial statements
Critical Audit Matter Description
At each reporting period, theThe Company evaluatesclassifies its real estate investments as held for sale when the applicable criteria have been met, which includes a formal plan to sell the properties that is expected to be completed within one year, among other criteria. Upon designation as held and used for potential impairment whenever events or changes in circumstances indicate thatsale, the Company writes down the excess of the carrying amountvalue over the estimated fair value less costs to sell, resulting in an impairment of the real estate investments, if necessary.
The fair value of the assets may not be recoverable. The judgment regarding the existence of impairment indicators, used to determine if an impairment assessment is necessary,held for sale is based on factors such as, but not limiteda market approach using estimated sales prices (comparable sales model), which relies on certain assumptions by management, including: (i) comparable market transactions, (ii) estimated prices per unit, and (iii) binding agreements for sales and non-binding offers to market conditions, operator performance and legal structure. If indicators of impairmentpurchase from unrelated third-parties. There are present, the Company evaluates the carrying value of the related real estate investmentsinherent uncertainties in relation to the future undiscounted cash flows of the underlying facilities. The most significant inputs to the undiscounted cash flows include, but are not limited to, facility level financial results, a lease coverage ratio, the intended hold period by the Company, and a terminal capitalization rate. The analysis is also significantly impacted by determining the lowest level of cash flows, which generally would be at the master lease level of cash flows. Provisions for impairment losses related to long-lived assets are recognized when expected future undiscounted cash flows are determined to be less than the carrying values of the assets. The impairment is measured as the excess of carrying value over fair value.making these assumptions.
We identified the impairment of long-lived assetsreal estate investments held for sale as a critical audit matter because of the significant estimates and assumptions management makes to determine the fair value of real estate investments held for sale. This required
F-2

Table of Contents
management makes to evaluate the recoverability of the long-lived assets, specifically the estimates of lease coverage ratio, the intended hold period by the Company, and a terminal capitalization rate for the applicable long lived assets or group of assets.
Auditing the assumptions used by the Company in estimating future undiscounted cash flows required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists, when performing audit procedures to evaluate the reasonableness of management’s estimate of fair value.
As of December 31, 2023, the Company’s recoverability analysis.Company had real estate investments held for sale of $15.0 million, net of impairment loss of $26.8 million.
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to the significant inputs to the recoverability assessmentfair value of undiscounted cash flowsreal estate investments held for sale included the following, among others:
We tested the effectiveness of controls over management’s evaluation of the recoverabilitybalance sheet classification and determination of long-lived assets based on undiscounted cash flows, including those over the lease coverage ratio, the intended hold period by the Company, and a terminal capitalization rate used in the assessment.fair value for real estate investments held for sale.
We evaluatedassessed the reasonableness of significant assumptionsthe valuation methodology used and the concluded real estate investment fair value by obtaining sales comparison data, while also engaging in discussions with management to understand portfolio-specific factors impacting the undiscounted cash flow analyses, including estimates of the lease coverage ratio, the intended hold period by the Company, and a terminal capitalization rate, for properties with impairment indicators.Company’s fair value determination.
We evaluatedused the reasonablenessassistance of management’s assertions regarding the intended hold period of its real estate assets, more specifically by performing the following:
Engagedour fair value specialists in discussions with management, including the Chief Executive Officer and Chief Financial Officer,
Inspected Board of Directors meeting minutes regarding the assumptions utilized in the determination of intended hold periods,
Performed a retrospective review around the Company’s estimates of hold periods used in previous periods in relation to real estate assets with impairment indicators, including those that were subsequently disposed of, and
Evaluated audit evidence to determine whether it supported or contradicted the conclusions reached by management.obtaining relevant market data, where necessary.
We developed independent estimatesconsidered the properties disposed in the period and subsequent period to evaluate if the retrospective review provides any indication of error or bias in the lease coverage ratio and a terminal capitalization rate, focusing on property type, historical transactions of the Company and external market sources and compared our independent estimates to the estimates and assumptions used by the Company.fair value estimates.
In addition, we testedRead and considered terms of executed arrangements and evidence regarding terms for arrangements in the mathematical accuracyprocess of negotiation at or near the undiscounted cash flow analyses.
We evaluated whether the assumptions were consistent with evidence obtained in other areas of the audit.valuation date.

/s/ DELOITTEDeloitte & TOUCHETouche LLP
Costa Mesa, California
February 10, 20218, 2024

We have served as the Company's auditor since 2019.

F-3

Table of Contents
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and Board of Directors of CareTrust REIT, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated income statement, statement of equity and cash flows of CareTrust REIT, Inc. (the Company) for the year ended December 31, 2018, and the related notes and the financial statement schedules listed in the Index at Item 15(a)(2) (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company at December 31, 2018, and the consolidated results of its operations and its cash flows for the year ended December 31, 2018, in conformity with U.S. generally accepted accounting principles.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ ERNST & YOUNG LLP

We served as the Company’s auditor from 2014 to 2019.
Irvine, California
February 13, 2019



F-4

Table of Contents
CARETRUST REIT, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share amounts)
December 31,
20232022
Assets:
Real estate investments, net$1,567,119 $1,421,410 
Other real estate related investments (including accrued interest of $1,727 and $1,320 as of December 31, 2023 and 2022, respectively)180,368 156,368 
Assets held for sale, net15,011 12,291 
Cash and cash equivalents294,448 13,178 
Accounts and other receivables395 416 
Prepaid expenses and other assets, net23,337 11,690 
Deferred financing costs, net4,160 5,428 
Total assets$2,084,838 $1,620,781 
Liabilities and Equity:
Senior unsecured notes payable, net$396,039 $395,150 
Senior unsecured term loan, net199,559 199,348 
Unsecured revolving credit facility— 125,000 
Accounts payable, accrued liabilities and deferred rent liabilities33,992 24,360 
Dividends payable36,531 27,550 
Total liabilities666,121 771,408 
Commitments and contingencies (Note 12)
Equity:
Preferred stock, $0.01 par value; 100,000,000 shares authorized, no shares issued and outstanding as of December 31, 2023 and 2022— — 
Common stock, $0.01 par value; 500,000,000 shares authorized, 129,992,796 and 99,010,112 shares issued and outstanding as of December 31, 2023 and 2022, respectively1,300 990 
Additional paid-in capital1,883,147 1,245,337 
Cumulative distributions in excess of earnings(467,628)(396,954)
Total stockholders' equity1,416,819 849,373 
Noncontrolling interests1,898 — 
Total equity1,418,717 849,373 
Total liabilities and equity$2,084,838 $1,620,781 
December 31,
20202019
Assets:
Real estate investments, net$1,448,099 $1,414,200 
Other real estate investments, net15,000 33,300 
Assets held for sale, net7,226 34,590 
Cash and cash equivalents18,919 20,327 
Accounts and other receivables, net1,823 2,571 
Prepaid expenses and other assets, net10,450 10,850 
Deferred financing costs, net2,042 3,023 
Total assets$1,503,559 $1,518,861 
Liabilities and Equity:
Senior unsecured notes payable, net$296,669 $295,911 
Senior unsecured term loan, net198,925 198,713 
Unsecured revolving credit facility50,000 60,000 
Accounts payable and accrued liabilities19,572 14,962 
Dividends payable24,251 21,684 
Total liabilities589,417 591,270 
Commitments and contingencies (Note 10)00
Equity:
Preferred stock, $0.01 par value; 100,000,000 shares authorized, 0 shares issued and outstanding as of December 31, 2020 and December 31, 2019
Common stock, $0.01 par value; 500,000,000 shares authorized, 95,215,797 and 95,103,270 shares issued and outstanding as of December 31, 2020 and December 31, 2019, respectively952 951 
Additional paid-in capital1,164,402 1,162,990 
Cumulative distributions in excess of earnings(251,212)(236,350)
Total equity914,142 927,591 
Total liabilities and equity$1,503,559 $1,518,861 
See accompanying notes to consolidated financial statements.

F-4

Table of Contents
CARETRUST REIT, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
 Year Ended December 31,
 202320222021
Revenues:
Rental income$198,599 $187,506 $190,195 
Interest and other income19,171 8,626 2,156 
Total revenues217,770 196,132 192,351 
Expenses:
Depreciation and amortization51,199 50,316 55,340 
Interest expense40,883 30,008 23,677 
Property taxes6,170 4,333 3,574 
Impairment of real estate investments36,301 79,062 — 
Provision for loan losses, net— 3,844 — 
Property operating expenses3,423 5,039 — 
General and administrative21,805 20,165 26,874 
Total expenses159,781 192,767 109,465 
Other loss:
Loss on extinguishment of debt— — (10,827)
Gain (loss) on sale of real estate, net2,218 (3,769)(77)
Unrealized loss on other real estate related investments, net(6,485)(7,102)— 
Total other loss(4,267)(10,871)(10,904)
Net income (loss)53,722 (7,506)71,982 
Net loss attributable to noncontrolling interests(13)— — 
Net income (loss) attributable to CareTrust REIT, Inc.$53,735 $(7,506)$71,982 
Earnings (loss) per common share attributable to CareTrust REIT, Inc:
Basic$0.50 $(0.08)$0.74 
Diluted$0.50 $(0.08)$0.74 
Weighted-average number of common shares:
Basic105,956 96,703 96,017 
Diluted106,152 96,703 96,092 
See accompanying notes to consolidated financial statements.

F-5

Table of Contents
CARETRUST REIT, INC.
CONSOLIDATED INCOME STATEMENTS OF EQUITY
(in thousands, except share and per share amounts)
 Year Ended December 31,
 202020192018
Revenues:
Rental income$173,612 $155,667 $140,073 
Tenant reimbursements— — 11,924 
Independent living facilities2,077 3,389 3,379 
Interest and other income2,643 4,345 1,565 
Total revenues178,332 163,401 156,941 
Expenses:
Depreciation and amortization52,760 51,822 45,766 
Interest expense23,661 28,125 27,860 
Property taxes2,836 3,048 11,924 
Independent living facilities1,869 2,898 2,964 
Impairment of real estate investments16,692 
Provision for loan losses1,076 
General and administrative16,302 15,158 12,555 
Total expenses97,428 118,819 101,069 
Other (loss) income:
(Loss) gain on sale of real estate(37)1,777 2,051 
Net income$80,867 $46,359 $57,923 
Earnings per common share:
Basic$0.85 $0.49 $0.73 
Diluted$0.85 $0.49 $0.72 
Weighted-average number of common shares:
Basic95,200 93,088 79,386 
Diluted95,207 93,098 79,392 
 Common StockAdditional
Paid-in
Capital
Cumulative
Distributions
in Excess
of Earnings
Total Stockholders’ EquityNoncontrolling InterestsTotal
Equity
SharesAmount
Balance as of December 31, 202095,215,797 $952 $1,164,402 $(251,212)$914,142 $— $914,142 
Issuance of common stock, net990,000 10 22,936 — 22,946 — 22,946 
Vesting of restricted common stock, net of shares withheld for employee taxes90,876 (1,331)— (1,330)— (1,330)
Amortization of stock-based compensation— — 10,832 — 10,832 — 10,832 
Common dividends ($1.06 per share)— — — (102,815)(102,815)— (102,815)
Net income— — — 71,982 71,982 — 71,982 
Balance as of December 31, 202196,296,673 963 1,196,839 (282,045)915,757 — 915,757 
Issuance of common stock, net2,405,000 24 47,212 — 47,236 — 47,236 
Vesting of restricted common stock, net of shares withheld for employee taxes308,439 (4,472)— (4,469)— (4,469)
Amortization of stock-based compensation— — 5,758 — 5,758 — 5,758 
Common dividends ($1.10 per share)— — — (107,403)(107,403)— (107,403)
Net loss— — — (7,506)(7,506)— (7,506)
Balance as of December 31, 202299,010,112 990 1,245,337 (396,954)849,373 — 849,373 
Issuance of common stock, net30,868,714 309 634,137 — 634,446 — 634,446 
Vesting of restricted common stock, net of shares withheld for employee taxes113,970 (1,480)— (1,479)— (1,479)
Amortization of stock-based compensation— — 5,153 — 5,153 — 5,153 
Common dividends ($1.12 per share)— — — (124,409)(124,409)— (124,409)
Distributions to noncontrolling interests— — — — — (41)(41)
Contributions from noncontrolling interests— — — — — 1,952 1,952 
Net income (loss)— — — 53,735 53,735 (13)53,722 
Balance as of December 31, 2023129,992,796 $1,300 $1,883,147 $(467,628)$1,416,819 $1,898 $1,418,717 
See accompanying notes to consolidated financial statements.

F-6

Table of Contents
CARETRUST REIT, INC.
CONSOLIDATED STATEMENTS OF EQUITY
(in thousands, except share and per share amounts)
 Common StockAdditional
Paid-in
Capital
Cumulative
Distributions
in Excess
of Earnings
Total
Equity
SharesAmount
Balance as of December 31, 201775,478,202 $755 $783,237 $(189,375)$594,617 
Issuance of common stock, net10,264,981 103 179,783 — 179,886 
Vesting of restricted common stock, net of shares withheld for employee taxes123,861 (1,290)— (1,289)
Amortization of stock-based compensation— — 3,848 — 3,848 
Common dividends ($0.82 per share)— — — (66,738)(66,738)
Net income— — — 57,923 57,923 
Balance as of December 31, 201885,867,044 859 965,578 (198,190)768,247 
Issuance of common stock, net9,100,250 91 195,833 — 195,924 
Vesting of restricted common stock, net of shares withheld for employee taxes135,976 (2,525)— (2,524)
Amortization of stock-based compensation— — 4,104 — 4,104 
Common dividends ($0.90 per share)— — — (84,519)(84,519)
Net income— — — 46,359 46,359 
Balance as of December 31, 201995,103,270 951 1,162,990 (236,350)927,591 
Issuance of common stock, net(404)— (404)
Vesting of restricted common stock, net of shares withheld for employee taxes112,527 (1,996)— (1,995)
Amortization of stock-based compensation— — 3,812 — 3,812 
Common dividends ($1.00 per share)— — — (95,729)(95,729)
Net income— — — 80,867 80,867 
Balance as of December 31, 202095,215,797 $952 $1,164,402 $(251,212)$914,142 
See accompanying notes to consolidated financial statements.

F-7

Table of Contents
CARETRUST REIT, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
 Year Ended December 31,
 202020192018
Cash flows from operating activities:
Net income$80,867 $46,359 $57,923 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization (including below-market ground leases)52,819 51,866 45,783 
Amortization of deferred financing costs1,950 2,003 1,938 
Amortization of stock-based compensation3,790 4,104 3,848 
Straight-line rental income(77)(1,385)(2,333)
Adjustment for collectibility of rental income11,774 
Noncash interest income(797)(238)
Loss (gain) on sale of real estate37 (1,777)(2,051)
Interest income distribution from other real estate investment1,346 463 
Impairment of real estate investments16,692 
Provision for loan losses1,076 
Change in operating assets and liabilities:
Accounts and other receivables, net825 (6,283)(3,800)
Prepaid expenses and other assets, net387 (495)(270)
Accounts payable and accrued liabilities3,791 2,695 (1,443)
Net cash provided by operating activities145,735 126,295 99,357 
Cash flows from investing activities:
Acquisitions of real estate, net of deposits applied(89,650)(321,458)(111,640)
Purchases of, and improvements to, equipment, furniture and fixtures and real estate(8,297)(6,289)(9,012)
Investment in real estate mortgage and other loans receivable(30,498)(18,246)(5,648)
Principal payments received on real estate mortgage and other loans receivable80,928 24,283 3,227 
Repayment of other real estate investment2,327 2,204 
Escrow deposits for potential acquisitions of real estate(3,000)(5,000)
Net proceeds from sales of real estate6,608 3,499 13,004 
Net cash used in investing activities(41,582)(316,007)(115,069)
Cash flows from financing activities:
Proceeds from (costs paid for) the issuance of common stock, net(404)195,924 179,882 
Proceeds from the issuance of senior unsecured term loan200,000 
Borrowings under unsecured revolving credit facility65,000 243,000 65,000 
Payments on senior unsecured term loan(100,000)
Payments on unsecured revolving credit facility(75,000)(278,000)(135,000)
Payments of deferred financing costs(4,534)
Net-settle adjustment on restricted stock(1,996)(2,524)(1,288)
Dividends paid on common stock(93,161)(80,619)(62,999)
Net cash (used in) provided by financing activities(105,561)173,247 45,595 
Net (decrease) increase in cash and cash equivalents(1,408)(16,465)29,883 
Cash and cash equivalents, beginning of period20,327 36,792 6,909 
Cash and cash equivalents, end of period$18,919 $20,327 $36,792 
Supplemental disclosures of cash flow information:
Interest paid$21,691 $26,005 $25,941 
Supplemental schedule of noncash investing and financing activities:
Increase in dividends payable$2,568 $3,900 $3,739 
Right-of-use asset obtained in exchange for new operating lease obligation$599 $1,010 $
Transfer of pre-acquisition costs to acquired assets$168 $242 $
Sale of real estate settled with notes receivable$32,400 $27,500 $
 Year Ended December 31,
 202320222021
Cash flows from operating activities:
Net income (loss)$53,722 $(7,506)$71,982 
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization (including below-market ground leases)51,257 50,378 55,394 
Amortization of deferred financing costs2,436 2,095 2,052 
Loss on extinguishment of debt— — 10,827 
Unrealized losses on other real estate related investments, net6,485 7,102 — 
Amortization of stock-based compensation5,153 5,758 10,832 
Straight-line rental income29 (17)(32)
Amortization of below market rent(384)— — 
Adjustment for collectibility of rental income— 1,417 — 
Noncash interest income(407)(1,165)(155)
(Gain) loss on sale of real estate, net(2,218)3,769 77 
Impairment of real estate investments36,301 79,062 — 
Provision for loan losses, net— 3,844 — 
Change in operating assets and liabilities:
Accounts and other receivables(9)604 (562)
Prepaid expenses and other assets, net(21)123 399 
Accounts payable, accrued liabilities and deferred rent liabilities2,423 (1,049)6,057 
Net cash provided by operating activities154,767 144,415 156,871 
Cash flows from investing activities:
Acquisitions of real estate, net of deposits applied(233,776)(21,915)(192,718)
Purchases of equipment, furniture and fixtures and improvements to real estate(10,976)(7,292)(6,013)
Preferred equity investments(1,782)— — 
Investment in real estate related investments and other loans receivable(60,319)(149,650)(1,253)
Principal payments received on real estate related investments and other loans receivable26,525 6,308 393 
Escrow deposits for potential acquisitions of real estate(3,800)— — 
Net proceeds from sales of real estate16,313 45,149 6,958 
Net cash used in investing activities(267,815)(127,400)(192,633)
Cash flows from financing activities:
Proceeds from the issuance of common stock, net634,446 47,236 22,946 
Proceeds from the issuance of senior unsecured notes payable— — 400,000 
Borrowings under unsecured revolving credit facility185,000 160,000 220,000 
Payments on senior unsecured notes payable— — (300,000)
Payments on unsecured revolving credit facility(310,000)(115,000)(190,000)
Payments on debt extinguishment and deferred financing costs(68)(5,361)(14,095)
Net-settle adjustment on restricted stock(1,479)(4,469)(1,331)
Dividends paid on common stock(115,492)(106,138)(100,782)
Contributions from noncontrolling interests1,952 — — 
Distributions to noncontrolling interests(41)— — 
Net cash provided by (used in) financing activities394,318 (23,732)36,738 
Net increase (decrease) in cash and cash equivalents281,270 (6,717)976 
Cash and cash equivalents as of the beginning of period13,178 19,895 18,919 
Cash and cash equivalents as of the end of period$294,448 $13,178 $19,895 
Supplemental disclosures of cash flow information:
Interest paid$40,028 $25,912 $22,838 
Supplemental schedule of noncash investing and financing activities:
Increase in dividends payable$8,982 $1,265 $2,033 
Right-of-use asset obtained in exchange for new operating lease obligation$369 $— $— 
Transfer of pre-acquisition costs to acquired assets$— $$358 
Sale of real estate settled with notes receivable$2,000 $12,000 $— 
See accompanying notes to consolidated financial statements.
F-8F-7

Table of Contents
CARETRUST REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. ORGANIZATION
Description of Business—CareTrust REIT, Inc.’s (“CareTrust REIT” or the “Company”) primary business consists of acquiring, financing, developing and owning real property to be leased to third-party tenants in the healthcare sector. As of December 31, 2020,2023, the Company owned directly or through a joint venture and leased to independent operators, 218226 skilled nursing facilities (“SNFs”), multi-service campuses, assisted living facilities (“ALFs”) and independent living facilities (“ILFs”) consisting of 22,46623,928 operational beds and units located in 28 states with the highest concentration of properties by rental income located in California Texas, Louisiana, Idaho and Arizona.Texas. As of December 31, 2023, the Company also had other real estate related investments consisting of one preferred equity investment, eight real estate secured loans receivable and one mezzanine loan receivable with a carrying value of $180.4 million.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation—The accompanying consolidated financial statements of the Company reflect, for all periods presented, the historical financial position, results of operations and cash flows of the Company and its wholly-owned subsidiaries prepared in accordance with accounting principles generally accepted in the United States (“GAAP”).
Consolidation—The accompanying consolidated financial statements include the accounts of CareTrust REIT, its wholly-owned subsidiaries, and variable interest entities (“VIEs”) over which the Company exercises control. All intercompany transactions and account balances within the Company have been eliminated.
Recent Accounting Standards Adoptedeliminated, and net earnings are reduced by the Companyportion of net earnings attributable to noncontrolling interests.
Variable Interest EntitiesIn June 2016,The Company is required to continually evaluate its VIE relationships and consolidate these entities when it is determined to be the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurementprimary beneficiary of Credit Losestheir operations. A VIE is broadly defined as an entity where either: (i) the equity investment at risk is insufficient to finance that entity’s activities without additional subordinated financial support, (ii) substantially all of an entity’s activities either involve or are conducted on Financial Instruments (“ASU 2016-13”),behalf of an investor that changeshas disproportionately few voting rights, or (iii) the impairment model forequity investors as a group lack any of the following: (a) the power through voting or similar rights to direct the activities of an entity that most financial instrumentssignificantly impact the entity’s economic performance, (b) the obligation to absorb the expected losses of an entity, or (c) the right to receive the expected residual returns of an entity. Criterion (iii) above is generally applied to limited partnerships and similarly structured entities by requiring companiesassessing whether a simple majority of the limited partners hold substantive rights to recognizeparticipate in the significant decisions of the entity or have the ability to remove the decision maker or liquidate the entity without cause. If neither of those criteria are met, the entity is a VIE.
The designation of an allowance for expected creditentity as a VIE is reassessed upon certain events, including, but not limited to: (i) a change to the contractual arrangements of the entity or in the ability of a party to exercise its participation or kick-out rights, (ii) a change to the capitalization structure of the entity, or (iii) acquisitions or sales of interests that constitute a change in control.
A variable interest holder is considered to be the primary beneficiary of a VIE if it has the power to direct the activities of a VIE that most significantly impact the entity’s economic performance and has the obligation to absorb losses rather than incurred losses as previously requiredof, or the right to receive benefits from, the entity that could potentially be significant to the VIE. The Company qualitatively assesses whether it is (or is not) the primary beneficiary of a VIE. The Company’s consideration of various factors include, but is not limited to, which activities most significantly impact the entity’s economic performance and the ability to direct those activities, its form of ownership interest, its representation on the VIE’s governing body, the size and seniority of its investment, its ability and the rights of other investors to participate in policy making decisions, its ability to manage its ownership interest relative to the other interest holders, and its ability to replace the VIE manager and/or liquidate the entity.
For any investment in a joint venture that is not considered to be VIE, the Company would evaluate the type of ownership rights held by limited partner(s) that may preclude consolidation by the other-than-temporary impairment model. ASU 2016-13 applies to most financial assets measured at amortized costmajority interest holder. The assessment of limited partners’ rights and certain other instruments, including trade and other receivables, loans receivable, held-to-maturity debt securities, net investments in leases, and off-balance-sheet credit exposures (e.g., loan commitments). In November 2018, the FASB released ASU No. 2018-19, Codification Improvements to Topic 326 Financial Instruments - Credit Losses (“ASU 2018-19”). ASU2018-19 clarifies that receivables arising from operating leases are not within the scope of ASU 2016-13. Instead, impairment of receivables arising from operating leases should be accounted for under Subtopic 842-30 “Leases - Lessor.” Additionally, the FASB issued ASU No. 2019-05, Targeted Transition Relief (“ASU 2019-05”), to allow companies to irrevocably elect, upon adoption of ASU 2016-13, the fair value option on financial instruments. The fair value option election does not apply to held-to-maturity debt securities. Entities are required to make this election on an instrument-by-instrument basis. ASU 2016-13 became effective for reporting periods beginning after December 15, 2019, and was applied as a cumulative adjustment to retained earnings as of the effective date. The Company adopted ASU 2016-13 on January 1, 2020. With the Company’s primary business being leasing real property to third-party tenants, the majority of receivables that arise in the ordinary course of business qualify as operating leases and are not in the scope of ASU 2016-13.  However, based on the instruments held upon adoption on January 1, 2020, the standard applied to the Company’s then outstanding mortgage loans receivable, for which the Company elected the fair value option as provided for by ASU 2019-05. Instruments for which the fair value option has been elected are measured at fair value on a recurring basis with changes in fair value recognized in other (loss) income on the Company’s consolidated income statements. Interest income is recognized as earned within interest and other income in the consolidated income statements. As of December 31, 2020, the Company had one mezzanine loan receivable for which the fair value option had been elected.
In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820) (“ASU 2018-13”), which modifies the disclosure requirements for fair value measurements by removing, modifying or adding certain disclosures. ASU 2018-13 was effective for annual periods beginning after December 15, 2019 and interim periods within those annual periods, with early adoption permitted. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. The Company adopted ASU 2018-13 on January 1, 2020. Adoption of the new standard did not have a material impact on the Company’s consolidated financial statements.
In October 2020,control of a joint venture should be made at inception of the FASB issued ASU No. 2020-09,joint venture and continually reassessed. See Note 11, Debt (Topic 470)Variable Interest Entities (“ASU 2020-09”), which amends and supersedes the SEC paragraphs in the Accounting Standards Codification (“ASC”) to reflect the issuance of SEC Release No. 33-10762. In March 2020, the SEC adopted amendments to reduce and simplify the financial disclosure requirements for guarantors and issuers of guaranteed registered securities. The amendments were effective January 4, 2021, but voluntary compliance with the amendments in advance of January 4, 2021 was permitted. The Company elected to comply with these amendments effective in the first quarter of 2020. As a result, the Company will no longer include in the financial statement footnotes of its Quarterly and Annual Reports on Form 10-Q and Form 10-K separate condensed consolidating financialadditional information.
F-9F-8

Table of Contents
CARETRUST REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
information for its wholly owned subsidiariesNoncontrolling Interests—The Company presents the portion of any equity that issued or guaranteed the Notes (See Note 6, Debt, for further detail). In addition,Company does not own in accordance withentities that the amendments adopted by the SECCompany controls (and thus consolidates) as noncontrolling interests and FASB, because the assets, liabilities and resultsclassifies those interests as a component of operations of the combined issuers and guarantors of the Notes are not materially different than the corresponding amounts presented inconsolidated equity, separate from stockholders' equity, on the Company’s consolidated financialbalance sheets. For consolidated joint ventures, the Company allocates net income or loss utilizing the hypothetical liquidation at book value method, in which the Company allocates income or loss based on the change in each unitholders’ claim on the net assets of the joint venture partners at period end after adjusting for any distributions or contributions made during such period. The Company includes net income (loss) attributable to the noncontrolling interests in net income (loss) in the consolidated statements it is also not required to present combined summary financial information regarding such subsidiary issuers and guarantors.of operations.
Lessor Accounting—The Company recognizes lease revenue in accordance with ASCAccounting Standards Codification (“ASC”) 842, Leases. The Company’s lease agreements typically contain annual escalators based on the percentage change in the Consumer Price Index which are accounted for as variable lease payments in the period in which the change occurs. For lease agreements that contain fixed rent escalators, the Company generally recognizes lease revenue on a straight-line basis of accounting. The Company generates revenues primarily by leasing healthcare-related properties to healthcare operators in triple-net lease arrangements, under which the tenant is solely responsible for the costs related to the property. Tenant reimbursements related to property taxes and insurance paid by the lessee directly to a third-partythird party on behalf of a lessor are required to be excluded from variable payments and from recognition in the lessor’s income statements.statements of operations. Otherwise, tenant recoveries for taxes and insurance are classified as additional rental revenues recognized by the lessor on a gross basis in its income statements.
For the year ended December 31, 2018, the Company recognized tenant recoveries for real estate taxesstatements of $11.9 million which was classified as tenant reimbursements on the Company’s consolidated income statements. Prior to the adoption of ASC 842, the Company recognized tenant recoveries as tenant reimbursement revenues regardless of whether the third party was paid by the lessor or lessee. Effective January 1, 2019, such tenant recoveries are recognized to the extent that the Company pays the third party directly and classified as rental income on the Company’s consolidated income statements. Due to the application of ASC 842, the Company recognized, on a gross basis, tenant recoveries related to real estate taxes of $3.1 million and $2.9 million, for the years ended December 31, 2020 and December 31, 2019, respectively.operations.
The Company’s assessment of collectibility of its tenant receivables includes a binary assessment of whether or not substantially all of the amounts due under a tenant’s lease agreement are probable of collection. The Company considers the operator’s performance and anticipated trends, payment history, and the existence and creditworthiness of guarantees, among other factors, in making this determination. For such leases that are deemed probable of collection, revenue continues to be recorded on a straight-line basis over the lease term, if applicable. For such leases that are deemed not probable of collection, revenue is recorded as the lesser of (i) the amount which would be recognized on a straight-line basis or (ii) cash that has been received from the tenant, with any tenant and deferred rent receivable balances charged as a direct write-off against rental income in the period of the change in the collectibility determination. Such write-offs and recoveries are recorded as decreases or increases through rental income on the Company’s consolidated income statements.statements of operations. For the yearyears ended December 31, 2020,2023 and 2021, the Company recordeddid not record any recovery adjustments of $1.0 million and did 0t recognize anyor write-off adjustments to rental income. For the year ended December 31, 2019,2022, the Company recorded $11.8did not record any recovery adjustments and wrote-off $1.4 million of write-off adjustments to rental income related to rental income recognized in prior periods.income. See Note 3, Real Estate Investments, Net for further detail.
Estimates and Assumptions—The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Management believes that the assumptions and estimates used in preparation of the underlying consolidated financial statements are reasonable. Actual results, however, could differ from those estimates and assumptions.
Real Estate Acquisition Valuation— In accordance with ASC 805, Business Combinations, the Company’s acquisitions of real estate investments generally do not meet the definition of a business, and are treated as asset acquisitions. The assets acquired and liabilities assumed are measured at their acquisition date relative fair values. Acquisition costs are capitalized as incurred. The Company allocates the acquisition costs to the tangible assets, identifiable intangible assets/liabilities and assumed liabilities on a relative fair value basis. The Company assesses fair value based on available market information, such as capitalization and discount rates, comparable sale transactions and relevant per square foot or unit cost information. A real estate asset’s fair value may be determined utilizing cash flow projections that incorporate such market information. Estimates of future cash flows are based on a number of factors including historical operating results, known and anticipated trends, as well as market and economic conditions. The fair value of tangible assets of an acquired property is based on the value of the property as if it is vacant.

As partThe Company recognizes acquired “above or below market” leases at their fair value (for asset acquisitions) using discount rates which reflect the risks associated with the leases acquired. The fair value is based on the present value of the Company’s real estate acquisitions,difference between (i) the Company may commitcontractual amounts due pursuant to provide contingent paymentseach in-place lease and (ii) management’s estimate of fair market lease rates for each in-place lease, generally measured over a period equal to a seller or lessee (e.g.,the remaining term of the lease for above market leases and the initial term plus the extended term for any leases with renewal options that are reasonably certain to be exercised. Other intangible assets acquired include amounts for in-place lease values that are based on an earn-out payable uponevaluation of the applicable property achieving certain financial metrics). Typically, when the contingent payments are funded, cash rent is increased by the amount funded multiplied by a rate stipulated in the agreement.
F-10F-9

Table of Contents
CARETRUST REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Generally, ifspecific characteristics of each property and the contingent payment is an earn-out providedacquired tenant lease(s). Factors considered include estimates of carrying costs during hypothetical expected lease-up periods, market conditions, and costs to execute similar leases. In estimating carrying costs, the seller,Company includes estimates of lost rents at market rates during the payment is capitalizedhypothetical expected lease-up periods, which are dependent on local market conditions and expected trends. In estimating costs to execute similar leases, the property’s basis when earn-out becomes probableCompany considers leasing commissions, legal, and estimable. Ifother related costs. As of December 31, 2023, the contingent payment is an earn-out provided to the lessee, the payment is recorded asCompany had gross below market lease liabilities of $7.3 million, accumulated amortization of $0.4 million and a lease incentive and is amortized as a yield adjustment over the lifeweighted average remaining amortization period of the lease.3 years.
Impairment of Long-Lived Assets—At each reporting period, the Company evaluates its real estate investments to be held and usedfor use for potential impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. The judgment regarding the existence of impairment indicators, used to determine if an impairment assessment is necessary, is based on factors such as, but not limited to, market conditions, operator performance and legal structure. If indicators of impairment are present, the Company evaluates the carrying value of the related real estate investments in relation to the future undiscounted cash flows of the underlying facilities. The most significant inputs to the undiscounted cash flows include, but are not limited to, historical and projected facility level financial results, a lease coverage ratio, the intended hold period by the Company, and a terminal capitalization rate. The analysis is also significantly impacted by determining the lowest level of cash flows, which generally would be at the master lease level of cash flows. Provisions for impairment losses related to long-lived assets are recognized when expected future undiscounted cash flows are determined to be less than the carrying values of the assets. The impairment is measured as the excess of carrying value over fair value. All impairments are taken as a period cost at that time, and depreciation is adjusted going forward to reflect the new value assigned to the asset.

The Company classifies its real estate investments as held for sale when the applicable criteria have been met, which entailsincludes a formal plan to sell the properties that is expected to be completed within one year, among other criteria. Upon designation as held for sale, the Company writes down the excess of the carrying value over the estimated fair value less costs to sell, resulting in an impairment of the real estate investments, if necessary, and ceases depreciation.

In the event of impairment, the fair value of the real estate investment is based on current market conditions and considers matters such as the forecasted operating cash flows, lease coverage ratios, capitalization rates, comparable sales data, and, where applicable, contracts or the results of negotiations with purchasers or prospective purchasers.
If circumstances arise that previously were considered unlikely and, as a result, the Company decides not to sell a real estate investment previously classified as held for sale or otherwise no longer meets the held for sale criteria, the respective assets are reclassified as real estate investments held for use. A real estate investment that is reclassified is measured and recorded individually at the lower of (a) its carrying amount before the real estate investment was classified as held for sale, adjusted for any depreciation expense that would have been recognized had the real estate investment been continuously classified as held for use, or (b) the fair value at the date of the decision not to sell or change in circumstances that led to the real estate investment no longer meeting the criteria of held for sale.

The Company’s ability to accurately estimate future cash flows and estimate and allocate fair values impacts the timing and recognition of impairments. While the Company believes its assumptions are reasonable, changes in these assumptions may have a material impact on financial results.
For the years ended December 31, 2023 and 2022, the Company recorded an impairment charge of $36.3 million and $79.1 million, respectively. See Note 4, Impairment of Real Estate Investments, Asset Held For Sale, Net and Asset Sales, for additional information.
Other Real Estate Related Investments—Included in other real estate related investments net, on the Company’s consolidated balance sheets at December 31, 2020, is2023, are one preferred equity investment, eight real estate secured loans receivable and one mezzanine loan receivable. At December 31, 2019, includedThe Company elected the fair value option for all secured and mezzanine loans receivable. Instruments for which the fair value option has been elected are measured at fair value on a recurring basis with changes in fair value recognized in other real estate investments, netincome (loss) on the consolidated statements of operations. Fair value was estimated using an internal valuation model that considered the expected future cash flows of the investment, the underlying collateral value, market interest rates and other credit enhancements. Interest income is one preferred equity investmentrecognized as earned within interest and two mortgage loans receivable.other income in the consolidated statements of operations. The preferred equity investment wasis accounted for at unpaid principal balance, plus accrued return, net of reserves. The Company recognizes return income on a quarterlymonthly basis based on the
F-10

Table of Contents
CARETRUST REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
outstanding investment including any accrued and unpaid return, to the extent there is outside contributed equity or cumulative earnings from operations. As the preferred member of the joint venture, the Company is not entitled to share in the joint venture’s earnings or losses. Rather, the Company is entitled to receive a preferred return, which is deferred if the cash flow of the joint venture is insufficient to pay all of the accrued preferred return. The unpaid accrued preferred return is added to the balance of the preferred equity investment up to the estimated economic outcome assuming a hypothetical liquidation of the book value of the joint venture. Any unpaid accrued preferred return, whether recorded or unrecorded by the Company, will be repaid upon redemption or as available cash flow is distributed from the joint venture.
Prior to the adoption of ASU 2016-13, mortgage and mezzanine loans receivable were recorded at amortized cost, which consists of the outstanding unpaid principal balance, net of unamortized costs and fees directly associated with the origination of the loan. Interest income on the Company’s mortgage and mezzanine loans receivable was recognized over the life of the applicable investment using the interest method. Origination costs and fees directly related to loans receivable were amortized over the term of the loan as an adjustment to interest income.
For instruments recorded at amortized cost, the Company evaluates at each reporting period each of its other real estate investments for indicators of impairment. An investment is impaired when, based on current information and events, it is probable that the Company will be unable to collect all amounts due according to the existing contractual terms. A reserve is established for the excess of the carrying value of the investment over its fair value.
The Company adopted ASU 2016-13 on January 1, 2020. Fair value was estimated using an internal valuation model that considered the expected future cash flows of the investment, the underlying collateral value, market interest rates and other credit enhancements. Instruments for which the fair value option has been elected are measured at fair value on a
F-11

Table of Contents
CARETRUST REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
recurring basis with changes in fair value recognized in other (loss) income on our consolidated income statements. Interest income is recognized as earned within interest and other income in the consolidated income statements. As of December 31, 2020, the Company had one mezzanine loan receivable for which the fair value option had been elected.
Prepaid expenses and other assets—Prepaid expenses and other assets consist of prepaid expenses, deposits, pre-acquisition costs and other loans receivable. Included in other loans receivable at December 31, 2019 is a bridge loan to Priority Life Care, LLC (“Priority”) under which the Company agreed to fund up to $1.4 million until the earlier of (i) October 31, 2019, (ii) the date that a new credit facility is established such that the borrower may submit draw requests to the applicable lender, or (iii) the date on which Priority’s lease is terminated with respect to any facility. Borrowings under the bridge loan accrue interest at an annual base rate of 8.0%. During the year ended December 31, 2019,2022, the Company determined that the remaining contractual obligations under the bridge loan agreement to Prioritytwo other loans receivable were not collectible and recorded a $1.1$4.6 million expected credit loss, net of a loan loss recovery of $0.8 million related to a loan previously written-off. The Company did not record an expected credit loss or recovery during the year ended December 31, 2023. Expected credit losses and recoveries are recorded in provision for loan losses, net in the consolidated statements of operations.
The Company’s other loans receivable are reflected at amortized cost, net of an allowance for credit loss, on the accompanying consolidated income statements.balance sheets. The amortized cost of a loan receivable is the outstanding unpaid principal balance, net of unamortized discounts, costs and fees directly associated with the origination of the loan.
Income Taxes—The Company has elected to be taxed as a real estate investment trust (“REIT”) under the Internal Revenue Code of 1986, as amended (the “Code”). The Company believes it has been organized and has operated, and the Company intends to continue to operate, in a manner to qualify for taxation as a REIT under the Code. To qualify as a REIT, the Company must meet certain organizational and operational requirements, including a requirement to distribute to its stockholders at least 90% of the Company’s annual REIT taxable income (computed without regard to the dividends paid deduction or net capital gain and which does not necessarily equal net income as calculated in accordance with GAAP). As a REIT, the Company generally will not be subject to federal income tax to the extent it distributes as qualifying dividends all of its REIT taxable income to its stockholders. If the Company fails to qualify as a REIT in any taxable year, it will be subject to federal income tax on its taxable income at regular corporate income tax rates and generally will not be permitted to qualify for treatment as a REIT for federal income tax purposes for the four taxable years following the year during which qualification is lost unless the Internal Revenue Service grants the Company relief under certain statutory provisions. 
Real Estate Depreciation and Amortization—Real estate costs related to the acquisition and improvement of properties are capitalized and amortized over the expected useful life of the asset on a straight-line basis. Repair and maintenance costs are charged to expense as incurred and significant replacements and betterments are capitalized. Repair and maintenance costs include all costs that do not extend the useful life of the real estate asset. The Company considers the period of future benefit of an asset to determine its appropriate useful life. Expenditures for tenant improvements are capitalized and amortized over the shorter of the tenant’s lease term or expected useful life. The Company anticipates the estimated useful lives of its assets by class to be generally as follows:
Building25-40 years
Building improvements10-25 years
Tenant improvementsShorter of lease term or expected useful life
Integral equipment, furniture and fixtures5 years
Identified intangible assetsShorter of lease term or expected useful life
 Cash and Cash Equivalents—Cash and cash equivalents consist of bank term deposits and money market funds with original maturities of three months or less at time of purchase and therefore approximate fair value. The fair value of these investments is determined based on “Level 1” inputs, which consist of unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets. The Company places its cash and short-term investmentscash equivalents with high credit quality financial institutions.
The Company’s cash and cash equivalents balance periodically exceeds federally insurable limits. The Company monitors the cash balances in its operating accounts and adjusts the cash balances as appropriate; however, these cash balances could be impacted if the underlying financial institutions fail or are subject to other adverse conditions in the financial markets. To date, the Company has experienced no loss or lack of access to cash in its operating accounts.
F-11

Table of Contents
CARETRUST REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Deferred Financing Costs—External costs incurred from placement of the Company’s debt are capitalized and amortized on a straight-line basis over the terms of the related borrowings, which approximates the effective interest method. For senior unsecured notes payable and the senior unsecured term loan, deferred financing costs are netted against the outstanding debt amounts on the consolidated balance sheet.sheets. For the unsecured revolving credit facility, deferred financing costs are included in assets on the Company’s consolidated balance sheet.sheets. Amortization of deferred financing costs is classified as interest expense in
F-12

Table of Contents
CARETRUST REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
the consolidated income statements.statements of operations. Accumulated amortization of deferred financing costs was $9.0$4.8 million and $7.1$2.5 million at December 31, 20202023 and December 31, 2019,2022, respectively.
When financings are terminated, unamortized deferred financing costs, as well as charges incurred for the termination, are expensed at the time the termination is made. Gains and losses from the extinguishment of debt are presented within other income from continuing operations(loss) in the Company’s consolidated income statements.statements of operations. During the year ended December 31, 2021, the Company recorded a loss on extinguishment of debt of $10.8 million. See Note 7, Debt, for further detail.
Stock-Based Compensation—The Company accounts for share-based payment awards in accordance with ASC Topic 718, Compensation – Stock Compensation (“ASC 718”). ASC 718 requires all entities to apply a fair value-based measurement method in accounting for share-based payment transactions with directors, officers and employees. The Company measures and recognizes compensation expense for all share-based payment awards made to directors, officers and employees based on the grant date fair value, amortized over the requisite service period of the award. Compensation expense for awards with performance-based vesting conditions is recognized based upon the probability that the performance target will be met. Compensation expense for awards with market-based vesting conditions is recognized based upon the estimated number of awards to be earned and is recognized provided that the requisite service is rendered, regardless of when, if ever, the market condition is satisfied. Forfeitures of stock-based awards are recognized as they occur. Net income (loss) reflects stock-based compensation expense of $3.8$5.2 million, $4.1$5.8 million and $3.8$10.8 million for the years ended December 31, 2020, 20192023, 2022 and 2018,2021, respectively.
Concentration of Credit Risk—The Company is subject to concentrations of credit risk consisting primarily of operating leases on its owned properties. See Note 11,13, Concentration of Risk, for a discussion of major operator concentration.
Segment Disclosures —The Company is subject to disclosures about segments of an enterprise and related information in accordance with ASC Topic 280, Segment Reporting. The Company has 1one reportable segment consisting of investments in healthcare-related real estate assets.
Earnings Per Share—The Company calculates earnings per share (“EPS”) in accordance with ASC 260, Earnings Per Share. Basic EPS is computed by dividing net income applicable to common stock by the weighted-average number of common shares outstanding during the period. Diluted EPS reflects the additional dilution for all potentially-dilutive securities.
Beds, Units, Occupancy and Other Measures—Beds, units, occupancy and other non-financial measures used to describe real estate investments included in these Notes to the consolidated financial statements are presented on an unaudited basis and are not subject to audit by the independent registered public accounting firm in accordance with the standards of the Public Company Accounting Oversight Board.
Recent Accounting Pronouncements In March 2020,On November 27, 2023, the FASBFinancial Accounting Standards Board (“FASB”) issued ASUAccounting Standards Update (“ASU”) No. 2020-04,2023-07, Reference Rate ReformSegment Reporting (Topic 848) - Facilitation of the Effects of Reference Rate Reform on Financial Reporting280): Improvements to Reportable Segment Disclosures (“ASU 2020-04”2023-07”), that provides optional relief to applying reference rate reform to contracts, hedging relationships,improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The guidance is effective for fiscal years beginning after December 15, 2023 and other transactions that reference the London Interbank Offered Rate (“LIBOR”), which will be discontinued by the end of 2021. The amendments in this update are effective immediately and may be applied throughinterim periods within fiscal years beginning after December 31, 2022.15, 2024. Early adoption is permitted. The Company is still evaluating its adoption timeline and the impact of ASU 2020-04 and expects to take full advantage of the offered optional expedients and exceptions, but does not expect the adoption of the standard to have a material impact on the Company’s consolidated financial statements.its disclosures.

F-12
3. REAL ESTATE INVESTMENTS, NET
The following table summarizes the Company’s investment in owned properties at December 31, 2020 and December 31, 2019 (dollars in thousands):
December 31, 2020December 31, 2019
Land$205,356 $204,154 
Buildings and improvements1,477,849 1,400,927 
Integral equipment, furniture and fixtures97,836 93,005 
Identified intangible assets2,352 1,650 
Real estate investments1,783,393 1,699,736 
Accumulated depreciation and amortization(335,294)(285,536)
Real estate investments, net$1,448,099 $1,414,200 
F-13

Table of Contents
CARETRUST REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
3. REAL ESTATE INVESTMENTS, NET
The following table summarizes the Company’s investment in owned properties, and properties held in consolidated joint ventures, held for use at December 31, 2023 and 2022 (dollars in thousands):
December 31, 2023December 31, 2022
Land$279,276 $238,738 
Buildings and improvements1,620,014 1,483,133 
Integral equipment, furniture and fixtures100,504 97,199 
Identified intangible assets5,283 2,832 
Real estate investments2,005,077 1,821,902 
Accumulated depreciation and amortization(437,958)(400,492)
Real estate investments, net$1,567,119 $1,421,410 
As of December 31, 2020, 852023, 94 of the Company’s 218226 facilities were leased to subsidiaries of The Ensign Group, Inc. (“Ensign”) on a triple-net basis under multiple long-term leases (each, an “Ensign Master Lease” and, collectively, the “Ensign Master Leases”) which commenced on June 1, 2014 and were subsequently modified (see “Pennant Spin” below for further information).modified. The obligations under the Ensign Master Leases are guaranteed by Ensign. A default by any subsidiary of Ensign with regard to any facility leased pursuant to an Ensign Master Lease will result in a default under all of the Ensign Master Leases. As of December 31, 2020,2023, annualized contractual rental income from the Ensign Master leasesLeases was $53.4$63.8 million and areis escalated annually, in June, by an amount equal to the product of (1) the lesser of the percentage change in the Consumer Price Index (“CPI”) (but not less than 0)zero) or 2.5%, and (2) the prior year’s rent. In addition to rent, the subsidiaries of Ensign that are tenants under the Ensign Master Leases are solely responsible for the costs related to the leased properties (including property taxes, insurance, and maintenance and repair costs). During the year ended December 31, 2020, the Company acquired 4four additional facilities leased to subsidiaries of Ensign on a triple-net basis under two separate master lease agreements, each of which are not included under the Ensign Master Leases.contains a purchase option. As of December 31, 2020,2023, annualized contractual rental income from the 4four additional Ensign facilities was $3.8$4.0 million and areis escalated annually, in December, by an amount equal to the product of (1) the lesser of the percentage change in the CPI (but not less than 0)zero) or 2.5%, and (2) the prior year’s rent. In addition to rent, the subsidiaries of Ensign that are tenants under the four additional facilities are solely responsible for the costs related to the leased properties (including property taxes, insurance, and maintenance and repair costs). The 4obligations under the lease agreements for the four additional facilities leased to subsidiaries of Ensign are guaranteed by Ensign but do not contain cross-default provisions with the Ensign Master Leases. See below under “Lease Amendments and Terminations” for further detail on Ensign lease amendments. Ensign provides a guaranty for properties leased to The Pennant Group, Inc. (“Pennant”) under the Pennant Master Lease (defined below), which represent $7.3 million of total annualized contractual rental income as of December 31, 2023.
As of December 31, 2020,2023, 15 of the Company’s facilities were leased to subsidiaries of Priority Management Group (“PMG”) on a triple-net basis under one long-term lease (the “PMG Master Lease”). The PMG Master Lease commenced on December 1, 2016, and provides an initial term of fifteen years, with 2two five-year renewal options. As of December 31, 2020,2023, annualized contractual rental income from the PMG Master Lease were $27.9was $31.2 million and areis escalated annually by an amount equal to the product of (1) the lesser of the percentage change in the CPI (but not less than 0)zero) or 3.0%, and (2) the prior year’s rent. In addition to rent, the subsidiaries of PMG that are tenants under the PMG Master Lease are solely responsible for the costs related to the leased properties (including property taxes, insurance, and maintenance and repair costs).
As of December 31, 2020, 1142023, 108 of the Company’s 218226 facilities were leased to various other operators under triple-net leases. All of these leases contain annual escalators based on the percentage change in the CPI (but not less than zero), some of which are subject to a cap, or fixed rent escalators.
During the second and third quarters of 2022, the Company entered into triple-net lease agreements for two of the Company’s 226 facilities which are being repurposed to behavioral health facilities. Two of the Company’s 226 facilities are non-operational and are leased under a long term lease with rent commencing 12 months following lease commencement. In addition, as of December 31, 2023, the master lease for one of the Company’s 226 facilities was terminated and the facility is non-operational while undergoing renovations. See below under “Lease Amendments and Terminations” for further detail. As of December 31, 2020, the Company’s total future contractual minimum rental income2023, 14 facilities were held for allsale. See Note 4, Impairment of its tenants, excluding operating expense reimbursements, were (dollars in thousands):
YearAmount
2021$174,400 
2022174,497 
2023174,193 
2024174,294 
2025174,396 
Thereafter1,026,675 
$1,898,455 
Real Estate Investments, Assets Held for Sale, Net and Asset Sales
for additional information.
F-14F-13

Table of Contents
CARETRUST REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2023, the Company’s total future contractual minimum rental income for all of its tenants, excluding operating expense reimbursements, assets held for sale and assets being repurposed, was as follows (dollars in thousands):
YearAmount
2024$200,650 
2025201,648 
2026200,530 
2027197,378 
2028195,140 
Thereafter970,806 
$1,966,152 
Tenant Purchase Options
Certain of the Company’s operators hold purchase options allowing them to acquire properties they currently lease from the Company. A summary of these purchase options is presented below (dollars in thousands):
Asset Type(1)
PropertiesLease Expiration
Option Period Open Date(2)
Option Type(3)
Current Cash Rent(4)
SNF1March 20294/1/2022(5)
A / B(7)
$832 
SNF / Campus1(8)October 20321/1/2024(6)A947 
SNF4November 203412/1/2024(5)A3,988 
Asset TypePropertiesLease Expiration1st Option Open DateOption Type
Current Cash Rent(1)
ALF7October 20341/1/2021A$3,207 
SNF11January 20311/1/2022C$4,800 
SNF1March 20304/1/2022
B / C(2)
$766 
SNF / Campus2October 20321/1/2023B$959 
SNF4November 203412/1/2024B$3,789 
ALF2October 20341/1/2026A$1,559 
(1)Excludes a purchase option on an 11 building SNF portfolio classified as held for sale as of December 31, 2023 and representing $5.1 million of current cash rent. Tenant is currently not eligible to elect the option.
(2)The Company has not received notice of exercise for the option periods that are currently open.
(3)Option Type:type includes:
A - Fixed base price plus a specified share on any appreciation.price.
B - Fixed base price.
C - Fixed capitalization rate on lease revenue.
Notes:
(1) (4)Based on annualized cash revenue for contracts in place atas of December 31, 2020.2023.
(2) (5)Option window is open until the expiration of the lease term.
(6)Option window is open for six months from the option period open date.
(7)Purchase option reflects two option types.
(8)Excludes one property classified as held for sale as of December 31, 2023 and subsequently sold in the first quarter of 2024.
Rental Income
The following table summarizes components of the Company’s rental income (dollars in thousands):
For the Year Ended December 31,
20202019
Rental Income
Contractual rent due(1)
$171,309 $166,056 
Straight-line rent77 1,385 
Adjustment for collectibility(2)
(11,774)
Recovery of previously reversed rent(3)
1,047 
Lease termination revenue(4)
1,179 
Total$173,612 $155,667 

For the Year Ended December 31,
202320222021
Rental Income
Contractual rent due(1)
$198,244 $188,906 $190,100 
Straight-line rent(29)17 32 
Amortization of below-market lease intangible384 — — 
Adjustment for collectibility(2)
— (1,417)— 
Lease termination revenue(3)
— — 63 
Total$198,599 $187,506 $190,195 
(1)Includes initial cash rent and tenant operating expense reimbursements, as adjusted for applicable rental escalators and rent increases due to capital expenditures funded by the Company. For tenants on a cash basis, this represents the lesser of the amount that would be recognized on a straight-line basis or cash that has been received. Tenant operating expense reimbursements for the years ended December 31, 2023, 2022 and 2021 were $5.5 million, $2.8 million, and $3.6 million, respectively.
(2)During the year ended December 31, 2019,2022, and in accordance with ASC 842, the Company evaluated the collectibility of lease payments through maturity and determined that it was not probable that the Company would collect substantially all of the contractual obligations from 5 operators through maturity.five existing and former operators. As such, the Company reversed $7.8$0.7 million of contractual rent, $3.5operating expense reimbursements, $0.2 million of straight-linecontractual rent and $0.5 million of property tax reimbursementsstraight-line rent during the year ended December 31, 2019.2022. If lease payments are subsequently deemed probable of collection, the Company increaseswill reestablish the receivable which will result in an increase in rental income for such recoveries.
(3)During the year ended December 31, 2020, the Company recovered $1.0 million in rental income that was previously written off related to 1 operator.
(4)During the year ended December 31, 2020, inIn connection with the agreement to terminate its lease agreements with affiliates of Metron Integrated Health Systems (“Metron”) and to sell the facilities to a third-party, the Company received $1.2 millioncertain lease termination payments from Metron affiliates.

Metron.
F-15F-14

Table of Contents
CARETRUST REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Recent Real Estate Acquisitions
The following table summarizes the Company’s acquisitions for the yearyears ended December 31, 20202023, 2022 and 2021 (dollar amounts in thousands):
Type of Property
Purchase Price(1)
Initial Annual Cash Rent(2)
Number of Properties
Number of Beds/Units(3)
December 31, 2023
Skilled nursing(4) (5)
$169,181 $13,764 10 1,256 
Multi-service campuses(5)
25,276 1,916 168 
Assisted living39,318 3,495 241 
Total$233,775 $19,175 15 1,665 
December 31, 2022
Skilled nursing$8,918 $815 135 
Multi-service campuses13,003 1,235 130 
Total$21,921 $2,050 265 
December 31, 2021
Skilled nursing$57,973 $4,499 509 
Multi-service campuses125,708 8,604 (6)640 
Assisted living12,395 — (7)98 
Total$196,076 $13,103 10 1,247 
Type of Property
Purchase Price(1)
Initial Annual Cash Rent(2)
Number of Properties
Number of Beds/Units(3)
Skilled nursing$75,545 $6,453 715 
Multi-service campuses6,876 555 184 
Assisted living7,396 590 62 
Total$89,817 $7,598 961 
The following table summarizes the Company’s acquisitions for the year ended December 31, 2019 (dollar amounts in thousands):
Type of Property
Purchase Price(1)
Initial Annual Cash Rent(2)
Number of Properties
Number of Beds/Units(3)
Skilled nursing$254,760 $22,909 17 2,099 
Multi-service campuses59,344 5,203 762 
Assisted living12,596 1,031 96 
Total$326,700 $29,143 22 2,957 
The following table summarizes the Company’s acquisitions for the year ended December 31, 2018 (dollar amounts in thousands):
Type of Property
Purchase Price(1)
Initial Annual Cash Rent(2)
Number of Properties
Number of Beds/Units(3)
Skilled nursing$85,814 $7,715 10 926 
Multi-service campuses27,520 (4)2,240 177 
Assisted living
Total$113,334 $9,955 12 1,103 
(1)Purchase price includes capitalized acquisition costs.
(2)Initial annual cash rent excludes ground lease income.represents initial cash rent for the first twelve months excluding the impact of straight-line rent or rent abatement in the first one to three months, if applicable.
(3)The number of beds/units includes operating beds at acquisition date.
(4)Includes three SNFs held through joint ventures. See Note 11, Variable Interest Entities, for additional information. One SNF is currently leased under a short-term lease and a new long-term lease has been entered into with one of the Company’s existing operators and it is expected that this lease will become effective once regulatory approval is obtained. Initial annual cash rent does not consider a rent deferral of $420,000 in the first year upon commencement of the long-term lease to be repaid in 15 installments beginning in year 2. The Company committedtwo other SNFs held through a joint venture are under separate leases with an initial annual rent of $2.0 million. The leases provide for a rent reset in which the joint venture may propose rent, capped at 10% of gross revenues, effective January 1, 2027. If the proposed rent reset is not accepted, the joint venture has the option to fund approximately $1.4replace the current tenant.
(5)One acquisition including three SNFs and one multi-service campus provides for annual fixed increases from $6.8 million in revenue-producing capital expenditures over 24year one to $7.6 million in year two and $8.9 million in year three.
(6)Initial annual cash rent represents the first twelve months based onof rent upon commencement of the in-place yield,Company’s long-term net leases, which was includedoccurred during the three months ended June 30, 2021, upon the tenant’s receipt of licensing approval and increases to $9.4 million in the purchase price.second year with CPI-based annual escalators thereafter.
(7)Initial annual cash rent is zero until transfer of operations upon receipt of licensing approval.

Lease Amendments and Terminations
Twenty/20New Embassy Lease Termination and New Noble MasterHillstone Lease Amendment and Termination. . On DecemberEffective January 1, 2020, 5 assisted living facilities in Virginia operated by Twenty/20 Management, Inc. (“Twenty/20”) were transferred to affiliates of Noble Senior Services (“Noble”). In connection with the transfer,2024, the Company entered into a new triple-net master lease with Noble.Embassy Healthcare Holdings, Inc. (“Embassy”) with respect to one multi-service campus, formerly leased to an affiliate of Hillstone Healthcare, Inc. (“Hillstone”). The newEmbassy lease has a remaininghad an initial term at the date of the lease of approximately 1410 years with 2two five-year renewal options and CPI-based rent escalators. Initial annualAnnual cash rent under the lease is approximately $0.6 million and the master lease provides Embassy with a partial rent abatement until required authorizations with respect to the ALF portion of the facility are obtained and occupancy levels reach a certain percentage.
On March 24, 2023, the Company amended its master lease with affiliates of Hillstone. In connection with the lease amendment, the Company agreed to defer rent of approximately $0.7 million for 12 months from December 2022 through November 2023 to be repaid as a percentage of adjusted gross revenues of one underlying facility, as defined in the amended lease, beginning January 1, 2025, until deferred rent has been paid in full. On December 31, 2023, the Company terminated its master lease with Hillstone. Annual cash rent under the Hillstone master lease prior to lease termination was approximately $1.3 million. Hillstone paid a lease termination fee of approximately $0.8 million to cover unpaid contractual rent.
F-15

Table of Contents
CARETRUST REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Noble NJ Lease Termination and New Ridgeline NJ Lease. On October 24, 2023, the Company entered into a new master lease (the “Ridgeline NJ Lease”) with affiliates of Ridgeline Properties, LLC (“Ridgeline”) to lease two ALFs in New Jersey which were non-operational and under a short-term lease (the “Noble NJ Lease”) which was terminated in connection with the Ridgeline NJ Lease. The Ridgeline NJ Lease had an initial term at the date of the lease of approximately 10 years from the facility opening date, which is expected to occur in the second quarter of 2024 upon final regulatory approval and final licensing of both facilities, with two five-year renewal options and CPI-based escalators. Annual cash rent under the Ridgeline NJ Lease is approximately $1.0 million beginning on the first day of the second lease year.
Premier Termination and Amended Ridgeline Lease. Effective September 1, 2023, six ALFs in Michigan and North Carolina were removed from the master lease with affiliates of Premier Senior Living, LLC (“Premier”) and the Company terminated the Premier master lease. Annual cash rent under the Premier master lease prior to lease termination was approximately $2.7 million. In connection with the lease termination, the Company amended its existing triple-net master lease with affiliates of Ridgeline with respect to the six ALFs. The Ridgeline lease had a remaining term at the date of the lease amendment of approximately 15 years with two five-year renewal options and CPI-based rent escalators. Annual cash rent under the amended lease increased by approximately $2.7 million. The amended lease provides for $0.2 million in rent abatement and a $0.2 million rent deferral to be repaid beginning in December 2024.
Amended Pennant Lease. On July 6, 2023, the Company amended its master lease with affiliates of Pennant (the “Pennant Master Lease”). In connection with the lease amendment, the Company extended the initial lease term. The Pennant Master Lease, as amended, had a remaining term at the date of amendment of approximately 15 years, with two five-year renewal options and CPI-based rent escalators. Annual cash rent under the amended Pennant Master Lease remained unchanged.
Amended Momentum Lease. On April 1, 2023, the Company acquired one SNF. In connection with the acquisition, the Company amended its existing triple-net master lease with affiliates of Momentum Skilled Services (“Momentum”) to include the one SNF and extended the initial lease term. The Momentum master lease, as amended, had a remaining term at the date of amendment of approximately 15 years, with two five-year renewal options and CPI-based rent escalators. Annual cash rent under the amended lease increased by approximately $1.0 million.
Noble VA Lease Termination and New Pennant Lease. Effective March 16, 2023, two ALFs in Wisconsin were removed from a master lease with affiliates of Noble VA Holdings (“Noble VA”) and the Company terminated the applicable Noble VA master lease. Annual cash rent under the applicable Noble VA master lease prior to lease termination was approximately $2.3 million. In connection with the lease termination, the Company entered into a new lease (the “New Pennant Lease”) with Pennant with respect to the two ALFs. The New Pennant Lease had an initial term at the date of the lease of approximately 15 years with two five-year renewal options and CPI-based rent escalators. Annual cash rent under the new lease iswas approximately $3.2$0.8 million. and the master lease provides Pennant with three months deferred rent to be repaid before the expiration or termination of the lease.
Pennant SpinNoble Partial Lease Termination and New Landmark Leases.. On October 1, 2019, Ensign completed its previously announced separationIn June and August of its home health2022, one ALF in Florida and hospice operationsone ALF in Maryland were removed from a master lease with affiliates of Noble Senior Services (“Noble”) and substantially all of its senior living operations into a separate independent publicly traded company through the distribution of shares of common stock of Pennant. As a result of the Pennant Spin, as of October 1, 2019, the Company amended the applicable Noble master lease to reflect the removal of the two ALFs. Annual cash rent under the applicable Noble master lease decreased by approximately $1.1 million. In connection with the partial lease termination, the Company entered into a lease with Landmark Recovery of Maryland, LLC and Landmark Recovery of Florida, LLC (collectively “Landmark”) to repurpose the facilities to behavioral health treatment centers. Rent under the leases will commence 12 - 18 months following commencement of the lease term or, if earlier, upon Landmark obtaining all licensure, permits, and other required regulatory authorizations with respect to operating the facility. The leases will expire on the 20th anniversary of the rent commencement date and both contain one 10-year renewal option and CPI-based rent escalators.
Pennant Partial Lease Termination and Amended Ensign Master Leases. On April 1, 2022, operations at two ALFs in California and Washington operated by Pennant were transferred to Ensign. In connection with the transfers, the Company amended the Pennant Master Lease to reflect the removal of the two ALFs and amended two existing Ensign Master Leases to lease 85 facilities to subsidiaries ofinclude the two ALFs. The applicable Ensign whichMaster Leases, as amended, had a totalremaining term at the date of 8,908 operational beds,amendment of approximately five years and entered into a new triple-net master lease16 years, respectively, both with subsidiariesthree five-year renewal options and CPI-based rent escalators. Annual cash rent under each of Pennant (the “Pennantthe two applicable Ensign Master Lease”) to lease 11 facilities, which had a total of 1,151 operational beds. The contractual initialLeases, as amended, increased by approximately $0.4 million and annual cash rent under the Pennant Master Lease, is approximately $7.8as amended, decreased by $0.8 million. The Pennant Master Lease carried an initial term of 15 years, with 2 five-year renewal options and CPI-based rent escalators. The contractual annual cash rent under the amended Ensign Master Leases was reduced by approximately $7.8 million. Ensign continues to guarantee obligations under the Ensign Master Leases and the Pennant Master Lease. If Pennant achieves a specified portfolio coverage and continuously maintains it for a specified period, Ensign’s obligations under the guaranty with respect to the Pennant Master Lease would be released.
F-16

Table of Contents
CARETRUST REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Trillium Lease Termination and New Master Lease.On July 15, 2019, the Company terminated its existing master lease (the “Original Trillium Lease”) withMarch 1, 2022, operations at one ALF in Arizona operated by affiliates of Trillium Healthcare Group, LLC (“Trillium”), which covered 10 properties in Iowa, 7 properties in Ohio and 1 property in Georgia.  On August 16, 2019, the Company entered into a new master lease (the “New Trillium Lease”) with Trillium’s Iowa and Georgia affiliates covering the 10 properties in Iowa and the 1 property in Georgia. The Company recorded an adjustment to reduce rental income recognized under the Original Trillium Lease for unpaid contractual rent, straight-line rent and property tax reimbursements by approximately $3.8 million in the three months ended September 30, 2019.
On September 1, 2019, 4 of the 7 skilled nursing properties in Ohio operated by Trillium under the Original Trillium LeasePennant were transferred to affiliates of Providence Group, Inc. (“Providence”).Ensign. In connection with the transfer, the Company amended the Pennant Master Lease to reflect the removal of the ALF and amended an existing Ensign Master Lease to include the one ALF. The applicable Ensign Master Lease, as amended, had a remaining term at the date of amendment of approximately 11 years, with two five-year renewal options and CPI-based rent escalators. Annual cash rent under the applicable Ensign Master Lease, as amended, increased by approximately $0.3 million and annual cash rent under the Pennant Master Lease, as amended, decreased by the same amount.
Amended Eduro Master Lease.On February 1, 2022, the Company acquired one SNF. In conjunction with the acquisition, the Company amended its existing triple-net master lease with Providence.affiliates of Eduro Healthcare, LLC (“Eduro”) to include the one SNF and extended the initial lease term. The Eduro master lease, as amended, lease had a remaining term at the date of amendment of approximately 12 years, with two five-year renewal options and CPI-based rent escalators. Annual cash rent under the Eduro master lease, as amended, increased by approximately $0.8 million.
Amended WLC Master Lease. On March 1, 2022, the Company acquired one multi-service campus. In conjunction with the acquisition, the Company amended its existing triple-net master lease with affiliates of WLC Management Firm, LLC (“WLC”) to include the one multi-service campus. The WLC master lease, as amended, had a remaining term at the date of amendment of approximately 12 years, with two five-year renewal options and CPI-based rent escalators. Annual cash rent under the WLC master lease, as amended, increased by approximately $1.2 million.
Amended Noble Master Leases and New Noble NJ Master Lease.During the three months ended September 30, 2021, the Company did not collect a portion of rent from affiliates of Noble Senior Services and Noble VA Holdings, LLC (collectively, “Noble”). On September 23, 2021, the Company amended its two existing triple-net master leases with Noble. The lease amendment granted a deferral for a total of $1.8 million of unpaid base rent, which represented approximately 4% of the Company’s total contractual base rent for the three months ended September 30, 2021. In connection with its agreement to the rent deferral, the Company also entered into a purchase agreement with Noble to acquire two assisted living facilities owned by Noble. The lease amendment required the deferred rent, as well as all contractual rent for the fourth quarter of 2021, to be paid in full upon the closing of the purchase of the two facilities. The Company closed on the acquisition of the two facilities in December 2021 and the deferred rent, as well as all contractual rent for the fourth quarter of 2021, was paid in full. The two facilities were leased back to Noble under a short-term lease agreement while the Company pursued other tenants for the long-term.
Amended Ensign Master Lease. On August 1, 2021, the Company acquired two skilled nursing facilities. The facilities were leased to affiliates of Ensign. In conjunction with the acquisition of the two facilities, the Company amended and extended the initial term of an existing Ensign Master Lease to include the two skilled nursing facilities. The Ensign Master Lease, as amended, had a remaining term at the date of amendment of approximately 1317 years, as of September 1, 2019, and includes 2with three five-year renewal options and CPI-based rent escalators. Annual cash rent under the amended lease increased by approximately $2.1 million.$2.2 million, with GAAP rent increasing by $2.5 million due to a $5.0 million prepayment of rent made at closing, which is being amortized on a straight-line basis over the remaining lease term.
TrioFive Oaks Lease Amendment.Termination and Amended Ensign Master Lease. On November 4, 2019,June 1, 2021, operating affiliates of Ensign acquired certain operations and assets of Five Oaks Healthcare, LLC (“Five Oaks”) under an agreement with Five Oaks. The agreement granted Ensign the right to occupy and operate four of the Company’s skilled nursing facilities in Washington that were previously being operated by Five Oaks. In conjunction with consenting to the transfer, the Company terminated the existing Five Oaks master lease, and amended itsand extended the term of an existing triple-net master lease with affiliates of Trio Healthcare, Inc. (“Trio”), which covered 7 facilities based in Dayton, Ohio.Ensign to include the four skilled nursing facilities. The Ensign lease, as amended, lease hashad a remaining initial term at the date of amendment of approximately 1315 years, with 2three five-year renewal options and CPI-based rent escalators. TheAnnual cash rent under the terminated Five Oaks master lease was approximately $2.6 million, and annual basecash rent due under the amended Ensign lease with Trio is approximately $4.7 million and provides for payment of percentage rent if Trio achieves certain increases in portfolio revenue.
Pristine Lease Termination. On February 27, 2018, the Company announced that it entered into a Lease Termination Agreement (the “LTA”) with Pristine for its 9 remaining properties, with a target completion date of April 30, 2018. Under the LTA, Pristine agreed to continue to operate the facilities until possession could be surrendered, and the operations therein transitioned, to operator(s) designatedincreased by the Company. Among other things, Pristine also agreed to amend certain pending agreements to sell the rights to certain Ohio Medicaid beds (the “Bed Sales Agreements”) and cooperate with the Company to turn over any claim or control it might have had with respect to the sale process and the proceeds thereof, if any, to the Company. The transactions were timely completed, and on May 1, 2018, Trio took over operations in the 7 facilities based primarily in the Dayton, Ohio area under a new 15-year master lease, while Hillstone Healthcare, Inc. (“Hillstone”) assumed the operation of the 2 facilities in Willard and Toledo, Ohio under a new 12-year master lease. In addition, amendments to the Bed Sales Agreements were subsequently executed, confirming the Company as the sole seller of the bed rights and the sole recipient of any proceeds therefrom. The aggregate annual base rent due under the new master leases with Trio and Hillstone is approximately $10.0 million, subject to CPI-based or fixed escalators.
Under the LTA, the Company agreed, upon Pristine’s full performance of the terms thereof, to terminate Pristine’s master lease and all future obligations of the tenant thereunder; however, under the terms of the master lease the Company’s security interest in Pristine’s accounts receivable has survived any such termination. Such security interest was subject to the prior lien and security interest of Pristine’s working capital lender, Capital One, National Association (“CONA”), with whom the Company has an existing intercreditor agreement that defines the relative rights and responsibilities of CONA and with its respect to the loan and lease collateral represented by Pristine’s accounts receivable and the Company’s respective security interests therein.
Impairment of Real Estate Investments, Asset Sales and Assets Held for Sale
On September 1, 2019, the Company sold 3 of the 7 skilled nursing properties in Ohio operated by Trillium under the Original Trillium Lease for a purchase price of $28.0 million. During the three months ended September 30, 2019 and prior to the disposition, the Company recorded an impairment expense of approximately $7.8 million. In connection with the sale, the Company provided affiliates of CommuniCare Family of Companies (“CommuniCare”), the purchaser of the 3 Ohio properties, with a mortgage loan secured by the 3 Ohio properties for approximately $26.5 million. See Note 4, Other Real Estate Investments, Net for additional information.
As of September 30, 2019, the Company met the criteria to classify 6 skilled nursing facilities operated by affiliates of Metron as held for sale, which resulted in an impairment expense of approximately $8.8 million to reduce the carrying value to fair value less costs to sell the properties. The fair values of the assets impaired during the three months ended September 30, 2019 were based on contractual sales prices, which are considered to be Level 2 measurements within the fair value hierarchy. As of December 31, 2019, the properties continued to be held for sale and the carrying value of $34.6 million was primarily comprised of real estate assets. In February 2020, the 6 skilled nursing facilities were sold. In connection withsame amount.
F-17

Table of Contents
CARETRUST REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
the sale for $36.0 million, the Company received $3.5 millionPremier Partial Lease Termination and Amended Noble VA Master Lease. On March 10, 2021 and July 1, 2021, two assisted living facilities in cash and provided subsidiariesWisconsin operated by affiliates of Cascade Capital Group, LLC (“Cascade”), the purchaserPremier were transferred to affiliates of the properties, with a short-term mortgage loan secured by these properties for $32.4 million. The mortgage loan bore interest at 7.5% and initially had a maturity date of March 31, 2020.Noble VA. In connection with the sale,transfer, the Company recognizedpartially terminated the Premier master lease and amended the existing triple-net master lease with Noble VA to include the two assisted living facilities. The Noble VA master lease, as amended, had a lossremaining term at the date of amendment of approximately $0.113 years, with two five-year renewal options and CPI-based rent escalators. Initial annual cash rent under the amended Noble VA master lease increased by approximately $1.3 million duringon March 10, 2021 and approximately $1.0 million on July 1, 2021 and annual cash rent under the three months ended March 31, 2020. In April 2020,partially terminated Premier master lease decreased by approximately the mortgage loan was settled in connectionsame amount. See above under “Noble VA Lease Termination and New Pennant Lease” and “Amended Noble Master Leases and New Noble NJ Master Lease” for additional information regarding the Company’s leases with a new mortgage loan transaction between the Company and a third-party institutional lender as co-lenders, pursuant to which we received $18.9 million in cash and a new mortgage loan for $13.9 million. In July 2020, the Company received prepayment in full, including accrued interest, for the new $13.9 million mortgage loan. See Note 4, Noble.
Other
4. IMPAIRMENT OF REAL ESTATE INVESTMENTS, ASSETS HELD FOR SALE, NET AND ASSET SALES
Impairment of Real Estate Investments Net,Held for further detail on the new mortgage loan.
On November 1, 2020, the Company sold the 1 remaining owned and operated independent living facility consisting of 168 units located in Texas with an aggregate carrying value of $4.2 million for gross proceeds of $4.5 million. In connection with the sale, the Company recognized a gain of $20,000.Sale
During the year ended December 31, 2019, the Company sold 1 of its owned and operated independent living facilities consisting of 38 units located in Texas with an aggregate carrying value of $1.7 million for net proceeds of $3.3 million. In connection with the sale,2023, the Company recognized aggregate impairment charges of $36.3 million, of which $26.8 million related to properties held for sale, $8.0 million related to properties held for investment, and $1.5 million related to properties that were sold. During the year ended December 31, 2022, the Company recognized aggregate impairment charges of $79.1 million, of which $14.4 million related to properties held for sale, $19.7 million related to properties held for investment, and $45.0 million related to properties that were sold. These charges are reported in impairment of real estate investments in the consolidated statements of operations. During the year ended December 31, 2021, the Company did not recognize any impairment charges.
As of December 31, 2023, there were 14 facilities classified as held for sale, all of which have been marked down to fair value less estimated costs to sell.
The fair values of the assets held for sale were based on estimated sales prices, which are considered to be Level 3 measurements within the fair value hierarchy. Estimated sales prices were determined using a gainmarket approach (comparable sales model), which relies on certain assumptions by management, including: (i) comparable market transactions, (ii) estimated prices per unit, and (iii) binding agreements for sales and non-binding offers to purchase from unrelated third-parties. There are inherent uncertainties in making these assumptions. For the Company’s impairment calculations on assets held for sale during the twelve months ended December 31, 2023, the Company’s fair value estimates primarily relied on a market approach and utilized prices per unit ranging from $8,000 to $85,000, with a weighted average price per unit of $1.6 million.$20,000. For the Company’s impairment calculations on assets held for sale during the twelve months ended December 31, 2022, the Company’s fair value estimates primarily relied on a market approach and utilized prices per unit ranging from $20,000 to $85,000, with a weighted average price per unit of $55,000.
Impairment of Real Estate Investments Held for Investment
During the year ended December 31, 2018,2023, the Company sold 3 assisted living facilities consistingrecognized an impairment charge of 102 units located in Idaho with an aggregate$8.0 million related to one SNF. The Company wrote down its carrying value of $10.9$8.7 million for an aggregate priceto its estimated fair value of $13.0 million. In connection with$0.7 million, which is included in real estate investments, net on the sale,Company’s consolidated balance sheets. The fair value of the asset was based on comparable market transactions and considered Level 3 measurements within the fair value hierarchy. For the Company’s impairment calculation, the Company’s fair value estimates primarily relied on a market approach and utilized prices per unit of $7,000.
During the year ended December 31, 2022, the Company recognized an impairment charge of $1.7 million related to one SNF. The Company wrote down its carrying value of $2.8 million to its estimated fair value of $1.1 million, which is included in real estate investments, net on the Company’s condensed consolidated balance sheets. The fair value of the asset was based on comparable market transactions and considered Level 3 measurements within the fair value hierarchy. For the Company’s impairment calculation, the Company’s fair value estimates primarily relied on a gainmarket approach and utilized prices per unit of $2.1 million.$20,000.
During the fourththird quarter of 2020,2022, the Company met the criteria to classify 1 skilled nursing facility operated by affiliatesdetermined that one ALF, with a carrying value of Five Oaks$4.9 million, that was classified as held for sale. Assetssale at June 30, 2022 no longer met the held for sale includes the net book value of property thecriteria. The Company plans to sell within the next year. If the determination is made that the Company no longer expects to sell an asset within the next year, the asset is reclassified this ALF out of assets held for sale. As of December 31, 2020, the property continued to be held for sale and the carryingat its fair value of $7.2 million is primarily comprised of real estate assets. In February 2021, the property was sold. See Note 13, Subsequent Events, for additional information.

4. OTHER REAL ESTATE INVESTMENTS, NET

Mezzanine Loan Receivable—In November 2020, the Company provided Next VA Star Realty Holdings, LLC a mezzanine loan for 9 skilled nursing facilities secured by membership interests in affiliates of Next VA Star Realty Holdings, LLC for approximately $15.0 million, at an annual interest rate of 12%. The loan requires monthly interest payments, is set to mature on November 30, 2025, and may (subject to certain restrictions) be prepaid before the maturity date if paid in full and for an exit fee ranging from 1% to 3% of the loan plus unpaid interest payments equal to 24 months (less the amount of monthly interest payments made by the borrower through the date of prepayment).
Mortgage Loans Receivable—In October 2017, the Company provided an affiliate of Providence a mortgage loan secured by a skilled nursing facility for approximately $12.5 million inclusive of transaction costs, which bore a fixed interest rate of 9%. The mortgage loan, which required Providence to make monthly principal and interest payments, was set to mature on October 26, 2020 and had an option to be prepaid before the maturity date. During the three months ended December 31, 2019, Providence exercised its option to prepay the loan in full, and prepayment was received by the Company.
In February 2019, the Company provided affiliates of Covenant Care a mortgage loan secured by first mortgages on 5 skilled nursing facilities for approximately $11.4 million, at an annual interest rate of 9%. The loan required monthly interest payments, was set to mature on February 11, 2020, and included 2, six-month extension options. During the three months ended September 30, 2019, Covenant Care exercised its option to prepay the loan in full, and prepayment was received by the Company.
In July 2019, the Company provided MCRC, LLC a real estate loan secured by a 176 bed skilled nursing facility in Manteca, California for $3.0 million, which bore a fixed interest rate of 8% and required monthly interest payments. Concurrently, the Company entered into a purchase and sale agreement to purchase the Manteca facility from MCRC, LLC for approximately $16.4 million subject to normal diligence and other contingencies. The loan documents provided for a maturity date of the earlier to occur of the closing date of the acquisition, or five business days following the termination of the purchase and sale agreement. MCRC, LLC breached its obligationdecision not to sell the Manteca facility to the Company on the terms outlined in the purchase and sale agreement and to repay the real estate loan upon its stated maturity. Asof approximately $4.9 million, or a result, the Company commenced non-judicial foreclosure proceedings with respect to the Manteca facility. In January 2020, the borrower further collateralized the loan by causing one of its affiliates to grant the Company a deed of trust in the real estate and improvements that constituteweighted average
F-18

Table of Contents
CARETRUST REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Palm Gardens Assisted Living Facility in Yolo County, California.price per unit of $125,000. During the three monthsyear ended June 30, 2020, payment for the loan principal and accrued interest, including default interest, as well as reimbursement for attorney’s fees and certain other costs of suit, were received in full byDecember 31, 2022, the Company and, as a result,recognized approximately $1.4 million in impairment charges related to this one ALF.
During the fourth quarter of 2022, the Company withdrew all foreclosure-related proceedingsdetermined that nine ALFs, with a carrying value of $50.8 million, that were classified as held for sale at September 30, 2022, no longer met the held for sale criteria. The Company reclassified the nine ALFs out of assets held for sale at their fair value at the date of the decision not to sell of approximately $47.8 million. During the year ended December 31, 2022, the Company recognized approximately $16.6 million in impairment charges related to these nine ALFs. The fair value of assets reclassified as real estate investments held for use was based on an income approach using current market conditions and considers matters such as the Manteca facility loan.
In September 2019,forecasted operating cash flows, lease coverage ratios, capitalization rates, and, where applicable, terms of recent lease agreements or the Company provided affiliatesresults of CommuniCare a $26.5 million loan secured by mortgages on the 3 skilled nursing facilities sold to CommuniCare,negotiations with prospective tenants, which bore a fixed interest rate of 10%. The mortgage loan, which required CommuniCare to make monthly interest payments, was set to mature on February 29, 2020, and included an optionare considered to be prepaid beforeLevel 3 measurements within the maturity date. In January 2020, the Company amended the mortgage loan’s maturity date to April 30, 2020. In April 2020, the Company amended the mortgage loan’s maturity date to May 29, 2020. During the three months ended June 30, 2020, payment for the mortgage loan and accrued interest was receivedfair value hierarchy. There are inherent uncertainties in full by the Company.
In February 2020, the Company provided provided subsidiaries of Cascade a $32.4 million loan secured by mortgages on the 6 skilled nursing facilities formerly operated by affiliates of Metron sold to Cascade in February 2020, as discussed in Note 3, Real Estate investments, Net. The mortgage loan bore interest at 7.5% and initially had a maturity date of March 31, 2020. In April 2020, the mortgage loan was settled in connection with a new mortgage loan transaction between the Company and a third-party institutional lender as co-lenders, pursuant to which the Company received $18.9 million in cash and a new mortgage loan for $13.9 million. The new mortgage loan with Cascade was secured by the same 6 skilled nursing facilities purchased by Cascade and was for a combined principal amount of $33.9 million, withmaking these assumptions. For the Company’s $13.9 million portion ofimpairment calculations, the indebtedness initially bearing interest at a variable rate equalCompany’s fair value estimates primarily relied on an income approach. When utilizing an income approach, assumptions include, but are not limited to, LIBOR plus 4.00%, subjectterminal capitalization rates ranging from 7.5% to a LIBOR floor of 1.75%8.75% and discount rates ranging from 8.5% to 9.75%.
Asset Sales and Held for Sale Reclassifications
The new mortgage loan had a maturity date of April 29, 2022 and included 2 six-month extension options. In July 2020, prepaymentfollowing table summarizes the Company’s dispositions for the mortgage loan of $13.9 million and accrued interest was received in full by the Company.
As of December 31, 2020, the Company had 0 remaining mortgage loan receivables.
During the years ended December 31, 2020, 20192023, 2022 and 2018, the Company recognized $2.3 million, $2.8 million2021 (dollars in thousands):
Twelve Months Ended December 31,
2023
2022(1)
2021(1)
Number of facilities5131
Net sales proceeds(2)
$18,313 $57,149 $7,178 
Net carrying value16,095 60,918 7,255 
Net gain (loss) on sale$2,218 $(3,769)$(77)
(1)Net sales proceeds, net carrying value and $1.2 million, respectively,net gain (loss) on sale also reflect a land parcel that was sold in each of interest income related to the mortgage and mezzanine loans. During the years ended December 31, 2020, 20192022 and 2018,2021, which is not included in the Company recognized $0.3number of facilities.
(2)Net sales proceeds includes $2 million $0.2 million and $0.2 million, respectively, of interest income related to its other loans receivable.
Preferred Equity Investments—In July 2016, the Company completed a $2.2 million preferred equity investment with an affiliate of Cascadia Development, LLC. The preferred equity investment yielded a return equal to prime plus 9.5% butseller financing in no event less than 12.0% calculated on a quarterly basis on the outstanding carrying value of the investment. The investment was used to develop a 99-bed skilled nursing facility in Nampa, Idaho. In connection with its investment, CareTrust REIT obtained an option to purchase the development at a fixed-formula price upon stabilization, with an initial lease yieldsale of at least 9.0%. The project was completedone ALF in the fourth quarterJune 2023. Net sales proceeds includes $12 million of 2017 and began lease-up during the first quarter of 2018. In June 2019, the Company purchased the skilled nursing facility for approximately $16.2 million, inclusive of transaction costs. The Company paid $12.9 million after receiving back its initial investment of $2.2 million and cumulative contractual preferred return through June 18, 2019, the acquisition date, of $1.1 million.
In September 2016, the Company completed a $2.3 million preferred equity investment with an affiliate of Cascadia Development, LLC. The preferred equity investment yielded a return equal to prime plus 9.5% butseller financing in no event less than 12.0% calculated on a quarterly basis on the outstanding carrying value of the investment. The investment was used to develop a 99-bed skilled nursing facility in Boise, Idaho. In connection with its investment, CareTrust REIT obtained an option to purchase the development at a fixed-formula price upon stabilization, with an initial lease yieldsale of at least 9.0%. six SNFs and one multi-service campus in September 2022.
The project was completed infollowing table summarizes the first quarter of 2018 and began lease-up duringCompany’s assets held for sale activity for the second quarter of 2018. In January 2020, the Company purchased the skilled nursing facility for approximately $18.7 million, inclusive of transaction costs. The Company paid $15.0 million after receiving back its initial investment of $2.3 million and cumulative contractual preferred return through January 17, 2020, the acquisition date, of $1.4 million.
During the yearsyear ended December 31, 2020, 2019 and 2018, the Company recognized less than $0.1 million, $1.3 million (including $0.6 million for unrecognized preferred return related to prior periods) and $0.2 million, respectively, of interest income related to these preferred equity investments.2023 (dollars in thousands):
As of December 31, 2020, the Company had 0 remaining preferred equity investments.
Net Carrying ValueNumber of Facilities
December 31, 2022$12,291 5
Additions to assets held for sale47,114 14 
Assets sold(16,095)(5)
Impairment of real estate held for sale(28,299)— 
December 31, 2023$15,011 14 

F-19

Table of Contents
CARETRUST REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
5. OTHER REAL ESTATE RELATED AND OTHER INVESTMENTS

As of December 31, 2023 and 2022, the Company’s other real estate related investments, at fair value, consisted of the following (dollar amounts in thousands):
As of December 31, 2023
InvestmentFacility Count and TypePrincipal Balance as of December 31, 2023Fair Value as of December 31, 2023Fair Value as of December 31, 2022Weighted Average Contractual Interest RateMaturity Date
Mortgage secured loans receivable30 SNF, 3 ALF, 2 Campus & ILF$165,197 $156,769 $117,684 8.9 %(1), (2)5/31/2024 - 6/29/2033
Mezzanine loans receivable18 SNF/Campus25,000 21,799 38,684 11.0 %6/30/2032
Total$190,197 $178,568 $156,368 
(1)Rates are net of subservicing fee, if applicable.
(2)Two mortgage secured loans receivable use term secured overnight financing rate (“SOFR”). Term SOFR used as of December 31, 2023 was 5.35%. Rates are net of subservicing fees.
The following table summarizes the Company’s other real estate related investments activity for the years ended December 31, 2023, 2022, and 2021 (dollars in thousands):
For the Year Ended December 31,
202320222021
Origination of other real estate related investments$53,834 $147,150 $— 
Accrued interest, net388 1,165 155 
Unrealized loss on other real estate related investments, net(6,485)(7,102)— 
Prepayments of other real estate related investments(25,537)— — 
Net increase in other real estate related investments, at fair value$22,200 $141,213 $155 
2023 Other Real Estate Related Investment Transactions
On December 15, 2023, a partial payment of $10.5 million was made on one $22.3 million mortgage loan receivable. See below under “2022 Other Real Estate Related Investment Transactions” for further detail. On March 30, 2023, one $15.0 million mezzanine loan was prepaid in full. The $15.0 million mezzanine loan was originated in 2020 for nine skilled nursing facilities secured by membership interests in the borrower, with an annual interest rate of 12%.
On November 29, 2023, the Company extended a $6.3 million mortgage loan to an assisted living real estate owner. The mortgage loan is secured by one ALF and bears interest at a rate of 9.9%. The mortgage loan is set to mature on June 1, 2026, with two six-month extension options and may (subject to certain restrictions) be prepaid in whole before the maturity date for an exit fee of 2% of the loan plus unpaid interest payments; provided, however, that no exit fee is payable in connection with the loan being refinanced pursuant to a loan (or loans) provided by Fannie Mae, Freddie Mac, Federal Housing Administration, or a similar governmental authority. The Company elected the fair value option for the mortgage loan.
On September 29, 2023, the Company extended a $3.6 million mortgage loan as part of a larger, multi-tranche real estate secured term loan facility to a skilled nursing real estate owner. The secured term loan was structured with an “A” and a “B” tranche (with the payments on the “B” tranche being subordinate to the “A” tranche pursuant to the terms of a written agreement between the lenders). The Company’s $3.6 million secured mortgage loan constituted the entirety of the “B” tranche with its payments subordinated accordingly and bears interest at a rate of 12.0%. The mortgage loan is secured by three SNFs. The mortgage loan is set to mature on September 29, 2026, with two six-month extension options and may (subject to certain restrictions) be prepaid in whole before the maturity date for an exit fee ranging from 0% to 2% of any proposed financing in connection with the loan being refinanced by the U.S. Department of Housing and Urban Development (“HUD”). The Company elected the fair value option for the mortgage loan.
F-20

Table of Contents
CARETRUST REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
On July 17, 2023, the Company extended a $15.7 million mortgage loan to a skilled nursing real estate owner. The mortgage loan is secured by two SNFs and bears interest at a rate of 9.0%. The mortgage loan is set to mature on August 1, 2028, with one five-year extension option and may (subject to certain restrictions) be prepaid in whole before the maturity date for an exit fee ranging from 2% to 3% of the loan plus unpaid interest payments; provided, however, that no exit fee is payable in connection with the loan being refinanced pursuant to a loan (or loans) provided by Fannie Mae, Freddie Mac, Federal Housing Administration, or a similar governmental authority. The Company elected the fair value option for the mortgage loan.
On June 29, 2023, the Company extended a $26.0 million mortgage loan to a skilled nursing real estate owner. The mortgage loan is secured by one SNF campus and one ILF and bears interest at a rate of 9.0%. The mortgage loan is set to mature on June 29, 2033 and may (subject to certain restrictions) be prepaid in whole before the maturity date for an exit fee ranging from 0% to 3% of the loan plus unpaid interest payments. The Company elected the fair value option for the mortgage loan.
On June 1, 2023, the Company closed on the sale of one ALF. In connection with the sale, the Company provided affiliates of the purchaser of the properties with a $2.0 million mortgage loan which bears interest at a rate of 9.0%. The mortgage loan is secured by the ALF and is set to mature on May 31, 2024. The mortgage loan has a one-year extension option and may be prepaid in whole before the maturity date. The Company elected the fair value option for the mortgage loan.
2022 Other Real Estate Related Investment Transactions
In September 2022, the Company extended a $24.9 million term loan as part of a larger, multi-tranche real estate secured term loan facility to a skilled nursing real estate owner. The secured term loan was structured with an “A” and a “B” tranche (with the payments on the “B” tranche being subordinate to the “A” tranche pursuant to the terms of a written agreement between the lenders). The Company’s $24.9 million secured term loan constituted the entirety of the “B” tranche with its payments subordinated accordingly. The secured term loan is primarily secured by four skilled nursing facilities operated by an operator in the Southeast. The “B” tranche secured term loan is set to mature on September 8, 2025, with two one-year extension options and may (subject to certain restrictions) be prepaid in whole or in part before the maturity date for an exit fee ranging from 1% to 3% of the loan plus unpaid interest payments; provided, however, that no exit fee is payable in connection with portions of the loan being refinanced pursuant to a loan (or loans) provided by or insured by the United States Department of Housing and Urban Development, Federal Housing Administration, or a similar governmental authority. The “B” tranche secured term loan provides for an earnout advance of $4.7 million if certain conditions are met. The "B" tranche secured term loan bears interest at a rate based on term SOFR, calculated as a fraction, with the numerator being the difference between (i) the monthly payment of interest of term SOFR plus a 4.50% spread and (ii) the amount of such monthly payment of interest of term SOFR plus a 2.85% spread, and with the denominator being the average daily balance of the outstanding principal amount during the applicable month, with such fraction expressed as a percentage and annualized, with a term SOFR floor of 1.0% and less a subservicing fee of 100% over 9.00%. The “B” tranche secured term loan requires monthly interest payments. The Company elected the fair value option for the “B” tranche secured term loan.
F-21

Table of Contents
CARETRUST REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
In August 2022, the Company extended a $22.3 million term loan as part of a larger, multi-tranche real estate secured term loan facility to a skilled nursing real estate owner. The secured term loan was structured with an “A” and a “B” tranche (with the payments on the “B” tranche being subordinate to the “A” tranche pursuant to the terms of a written agreement between the lenders). The Company’s $22.3 million secured term loan constituted the entirety of the “B” tranche with its payments subordinated accordingly. The secured term loan is primarily secured by five skilled nursing facilities, four of which are operated by an existing operator and one of which is operated by a large, regional skilled nursing operator. The “B” tranche secured term loan is set to mature on August 1, 2025, with two one-year extension options and may (subject to certain restrictions) be prepaid in whole or in part before the maturity date for an exit fee ranging from 2% to 3% of the loan plus unpaid interest payments; provided, however, that no exit fee is payable in connection with portions of the loan being refinanced pursuant to a loan (or loans) provided by or insured by HUD, Federal Housing Administration, or a similar governmental authority. The "B" tranche secured term loan bears interest at a rate based on term secured overnight financing rate, calculated as a fraction, with the numerator being the difference between (i) the monthly payment of interest of term SOFR plus a 4.25% spread and (ii) the amount of such monthly payment of interest of term SOFR plus a 2.75% spread, and with the denominator being the average daily balance of the outstanding principal amount during the applicable month, with such fraction expressed as a percentage and annualized, with a term SOFR floor of 1.0% and less a subservicing fee of 50% over 8.25%. The “B” tranche secured term loan requires monthly interest payments. The Company elected the fair value option for the “B” tranche secured term loan. In December 2023, in accordance with the terms and conditions set forth in the loan agreement, the borrower elected to cause one of the skilled nursing facilities to be released from the loan, and in connection with the same, the borrower partially prepaid the loan in the amount of $10.5 million.
In June 2022, the Company extended a $75.0 million term loan to a skilled nursing real estate owner as part of a larger, multi-tranche, senior secured term loan facility. The senior secured term loan was structured with an “A” tranche, a “B” tranche, and a “C” tranche (with the “C” tranche being the most subordinate). The Company’s $75.0 million term loan constituted the entirety of the “C” tranche with its payments subordinated accordingly. The senior secured term loan facility is secured by an 18-facility skilled nursing portfolio in the Mid-Atlantic region, operated by a large, regional skilled nursing operator. In connection with the senior secured term loan facility and the borrower’s acquisition of the skilled nursing portfolio, the Company also extended to the borrower group a $25.0 million mezzanine loan. The “C” tranche of the senior secured term loan bears interest at 8.5%, less a servicing fee equal to the positive difference, if any, between the lesser of the contractual interest payment and actual payment of interest made by the borrower and a hypothetical interest payment at a rate of 8.25%, resulting in an effective interest rate of 8.375%. The “C” tranche senior secured term loan is set to mature on June 30, 2027 and may (subject to certain restrictions) be prepaid in whole or in part before the maturity date for an exit fee ranging from 1% to 3% of the loan plus unpaid interest payments through the end of the month of prepayment; provided, however, that no exit fee is payable in connection with portions of the loan being refinanced pursuant to a loan (or loans) provided by or insured by HUD, Federal Housing Administration, or a similar governmental authority. The mezzanine loan bears interest at 11% and is secured by a pledge of membership interests in an up-tier affiliate of the borrower group. The mezzanine loan is set to mature on June 30, 2032, and may (subject to certain restrictions) be prepaid in whole or in part before the maturity date, commencing on June 30, 2029, for an exit fee ranging from 1% to 3% of the loan plus unpaid interest payments through the date of prepayment. The “C” tranche senior secured term loan and mezzanine loan both require monthly interest payments. The Company elected the fair value option for both the “C” tranche term loan and the mezzanine loan.
The fair value option is elected on an instrument by instrument basis and must be applied to an entire instrument and is irrevocable once elected. The Company’s primary purpose in electing the fair value option for these instruments was to align with management’s view of the underlying economics of the loans and the manner in which they are managed.
Preferred Equity Investment
In December 2023, the Company completed a $1.8 million preferred equity investment in E3 Acquisition, LLC, which owns the borrowers under the $3.6 million mortgage loan noted above under “2023 Other Real Estate Related Investment Transactions.” The preferred equity investment yields a return of 15% calculated on the outstanding carrying value of the investment. The preferred equity investment is expected to be repaid with proceeds from the refinancing of the Company’s $3.6 million mortgage loan with HUD, provided, however, that if the repayment occurs sooner than 15 months from the investment date, the Company will receive the amount had the preferred equity investment remained outstanding for the full 15 months.

F-22

Table of Contents
CARETRUST REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Other Loans Receivables
As of December 31, 2023 and 2022, the Company’s other loans receivable, included in prepaid expenses and other assets, net on the Company’s consolidated balance sheets, consisted of the following (dollars in thousands):
As of December 31, 2023
InvestmentPrincipal Balance as of December 31, 2023Book Value as of December 31, 2023
Book Value as of December 31, 2022
Weighted Average Contractual Interest RateMaturity Date
Other loans receivable$17,094 $17,156 $9,600 8.8 %6/30/2024 - 5/31/2026
Expected credit loss— (2,094)(2,094)
Total$17,094 $15,062 $7,506 
The following table summarizes the Company’s other loans receivable activity for the years endedDecember 31, 2023,2022 and 2021 (dollars in thousands):
For the Year Ended December 31,
202320222021
Origination of loans receivable$8,486 $14,500 $1,253 
Principal payments(988)(6,307)(393)
Accrued interest, net58 (4)(6)
Provision for loan losses, net— (3,844)— 
Net increase in other loans receivable$7,556 $4,345 $854 
Expected credit losses and recoveries are recorded in provision for loan losses, net in the consolidated statements of operations. During the year ended December 31, 2022, the Company recorded a $4.6 million expected credit loss related to two other loans receivable that have been placed on non-accrual status, including an unfunded loan commitment of $0.4 million, net of a loan loss recovery of $0.8 million related to a loan previously written-off. During the year ended December 31, 2022, the Company fully reserved and wrote-off $2.5 million, related to one other loan receivable, in connection with the sale of six SNFs and one multi-service campus. During the years ended December 31, 2023 and 2021, the Company had no additional expected credit loss and did not consider any loan receivable investments to be impaired.
The following table summarizes the interest and other income recognized from the Company’s loans receivable and other investments during the years ended December 31, 2023, 2022 and 2021 (dollar amounts in thousands):
For the Year Ended December 31,
Investment202320222021
Mortgage secured loans receivable$13,329 $4,853 $— 
Mezzanine loans receivable3,683 3,489 1,825 
Preferred equity investments18 — — 
Other loans receivable847 284 331 
Other1,294 — — 
Total$19,171 $8,626 $2,156 

6. FAIR VALUE MEASUREMENTS
The Company determines fair value based on quoted prices when available or through the use of alternative approaches, such as discounting the expected cash flows using market interest rates commensurate with the credit quality and duration of the investment. GAAP guidance defines three levels of inputs that may be used to measure fair value:

F-23

Table of Contents
CARETRUST REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Level 1 – Quoted prices in active markets for identical assets and liabilities that the reporting entity has the ability to access at the measurement date.

Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability or can be corroborated with observable market data for substantially the entire contractual term of the asset or liability.

Level 3 – Unobservable inputs reflect the entity’s own assumptions about the assumptions that market participants would use in the pricing of the asset or liability and are consequently not based on market activity, but rather through particular valuation techniques.

The determination of where an asset or liability falls in the hierarchy requires significant judgment and considers factors specific to the asset or liability. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company evaluates its hierarchy disclosures each quarter and, depending on various factors, it is possible that an asset or liability may be classified differently from quarter to quarter. Changes in the type of inputs may result in a reclassification for certain assets. The Company does not expect that changes in classifications between levels will be frequent.
Items Measured at Fair Value on a Recurring Basis
The following table presents information about the Company’s assets and liabilities measured at fair value on a recurring basis as of December 31, 2020,2023 and 2022, aggregated by the level in the fair value hierarchy within which those instruments fall (dollars in thousands):
Level 1Level 2Level 3Balance as of December 31, 2023
Assets:
Mortgage secured loans receivable$— $— $156,769 $156,769 
Mezzanine loan receivable— — 21,799 21,799 
Total$— $— $178,568 $178,568 
Level 1Level 2Level 3Balance as of December 31, 2022
Assets:
Mortgage secured loans receivable$— $— $117,684 $117,684 
Mezzanine loans receivable— — 38,684 38,684 
Total$— $— $156,368 $156,368 
Level 1Level 2Level 3Balance as of December 31, 2020
Assets:
Mezzanine loan receivable$$$15,000 $15,000 
The following table details the Company’s assets measured at fair value on a recurring basis using Level 3 inputs (dollars in thousands):
Investments in Real Estate Secured LoansInvestments in Mezzanine Loans
Balance at December 31, 2022$117,684 $38,684 
Loan originations53,834 — 
Accrued interest, net543 (155)
Unrealized losses on other real estate related investments, net(4,755)(1,730)
Repayments(10,537)(15,000)
Balance as of December 31, 2023$156,769 $21,799 
Mezzanine loanReal estate secured and mezzanine loans receivable: The fair value of the secured and mezzanine loan receivable wasloans receivables were estimated using an internal valuation model that considered the expected future cash flows of the investment, the underlying collateral value, market interest rates and other credit enhancements. As such, the Company classifies theeach instrument as Level 3 due to the significant unobservable inputs used in determining market interest rates for investments with similar terms. However,During the fair value is not sensitiveyear ended December 31, 2023, the Company recorded an unrealized loss of $8.1 million on the Company’s secured and mezzanine loans receivable due to changes in marketrising interest rates and a $0.3 million loss due to a loan origination fee paid, partially offset by unrealized gains of $0.7 million due to a decrease in projected forward interest rates and a reversal
F-24

Table of Contents
CARETRUST REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
of a previously recognized unrealized loss of $1.2 million related to the recent issuancerepayment of one mezzanine loan receivable and partial repayment of one mortgage loan receivable. During the loan at marketyear ended December 31, 2022, the Company recorded an unrealized loss of $7.1 million on the Company’s secured and mezzanine loans receivable due to rising interest rates. Future changes in market interest rates or collateral value could materially impact the estimated discounted cash flows.flows that are used to determine the fair value of the secured and mezzanine loans receivable. As of December 31, 2020,2023 and 2022, the Company did not have any loans that were 90 days or more past due.
The following table shows the quantitative information about unobservable inputs related to the Level 3 fair value measurements comprising the investments in secured and mezzanine loans receivables as of December 31, 2023:
TypeBook Value as of December 31, 2023Valuation TechniqueUnobservable InputsRange
Mortgage secured loans receivable$156,769 Discounted cash flowDiscount Rate10% - 15%
Mezzanine loan receivable21,799 Discounted cash flowDiscount Rate12% - 15%
For the year ended December 31, 2020,2023, there were no classification changes in assets and liabilities with Level 3 inputs in the fair value hierarchy.
Items Measured at Fair Value on a Non-Recurring Basis
Real Estate Investments: The Company performs quarterly impairment review procedures, primarily through continuous monitoring of events and changes in circumstances that could indicate the carrying value of its real estate assets may not be recoverable. The Company estimates fair values using Level 3 inputs and uses a combined income and market approach. Specifically, thethe fair value of the real estate investment is based on current market conditions and considers matters such as the forecasted operating cash flows, lease coverage ratios, capitalization rates, comparable sales data, and, where applicable, contracts or the results of negotiations with purchasers or prospective purchasers. For the years ended December 31, 2023 and 2022, the Company recorded impairment charges of $36.3 million and $79.1 million, respectively. For the year ended December 31, 2020,2021, there were no real estate assets deemed to be impaired. For the year ended December 31, 2019, the Company recorded an impairment expense of $16.7 million.impaired. See Note 3, 4, Impairments of Real Estate Investments, Assets Held for Sale, Net and Asset Sales, for additional information.
F-20

Table of Contents
CARETRUST REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Items Disclosed at Fair Value
Considerable judgment is necessary to estimate the fair value disclosure of financial instruments. The estimates of fair value presented herein are not necessarily indicative of the amounts that could be realized upon disposition of the financial instruments. A summary of the face values,value, carrying amountsamount and fair valuesvalue of the Company’s financial instruments as of December 31, 2020 and December 31, 2019 using Level 2 inputs for the Notes (as defined in Note 6,7, Debt, below), as of December 31, 2023 and 2022 using Level 32 inputs for all other financial instruments, is as follows (dollars in thousands):  
 December 31, 2020December 31, 2019
Face
Value
Carrying
Amount
Fair
Value
Face
Value
Carrying
Amount
Fair
Value
Financial assets:
Preferred equity investments$$$$2,327 $3,800 $3,674 
Mortgage loans receivable29,500 29,500 29,500 
Financial liabilities:
Senior unsecured notes payable$300,000 $296,669 $311,430 $300,000 $295,911 $312,750 
 December 31, 2023December 31, 2022
LevelFace
Value
Carrying
Amount
Fair
Value
Face
Value
Carrying
Amount
Fair
Value
Financial assets:
Preferred equity investment3$1,782 $1,801 $1,801 $— $— $— 
Financial liabilities:
Senior unsecured notes payable2$400,000 $396,039 $362,500 $400,000 $395,150 $345,036 
Cash and cash equivalents, accounts and other receivables, other loans receivable, and accounts payable, and accrued liabilities: These balancesThe carrying values for these instruments approximate their fair values due to the short-term nature of these instruments.
Preferred equity investmentsinvestments: : The fair valuesvalue of the preferred equity investments wereinvestment was estimated using an internal valuation model that considered the expected future cash flows of the investment, the underlying collateral value, market interest rates and other credit enhancements.
Mortgage loans receivable: The Company utilized discount rates ranging from 14% to 16% with a weighted average of 15% in its fair values ofvalue calculation. As such, the mortgage loans receivable were estimated using an internal valuation model that considered the expected future cash flows of the investments, the underlying collateral value, market interest rates and other credit enhancements.Company classifies these instruments as Level 3.
Senior unsecured notes payable: The fair value of the Notes (as defined in Note 6, Debt, below) was determined using third-party quotes derived from orderly trades.
F-25

Table of Contents
CARETRUST REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Unsecured revolving credit facility and senior unsecured term loan: The fair values approximate their carrying values as the interest rates are variable and approximate prevailing market interest rates and spreads for similar debt arrangements.

6.7. DEBT
The following table summarizes the balance of the Company’s indebtedness as of December 31, 20202023 and 2019 (in2022 (dollars in thousands):
December 31, 2023December 31, 2022
PrincipalDeferredCarryingPrincipalDeferredCarrying
AmountLoan FeesAmountAmountLoan FeesAmount
Senior unsecured notes payable$400,000 $(3,961)$396,039 $400,000 $(4,850)$395,150 
Senior unsecured term loan200,000 (441)199,559 200,000 (652)199,348 
Unsecured revolving credit facility(1)
— — — 125,000 — 125,000 
$600,000 $(4,402)$595,598 $725,000 $(5,502)$719,498 
December 31, 2020December 31, 2019
PrincipalDeferredCarryingPrincipalDeferredCarrying
AmountLoan FeesValueAmountLoan FeesValue
Senior unsecured notes payable$300,000 $(3,331)$296,669 $300,000 $(4,089)$295,911 
Senior unsecured term loan200,000 (1,075)198,925 200,000 (1,287)198,713 
Unsecured revolving credit facility50,000 50,000 60,000 60,000 
$550,000 $(4,406)$545,594 $560,000 $(5,376)$554,624 
(1)Deferred financing fees are included in deferred financing costs, net on the balance sheet, and not reflected as a reduction to the unsecured revolving credit facility.
Senior Unsecured Notes Payable
2028 Senior Notes.On May 10, 2017,June 17, 2021, the Company’s wholly owned subsidiary, CTR Partnership, L.P. (the “Operating Partnership”), and its wholly owned subsidiary, CareTrust Capital Corp. (together with the Operating Partnership, the “Issuers”), completed an underwritten publica private offering of $300.0$400.0 million aggregate principal amount of 5.25%3.875% Senior Notes due 20252028 (the “Notes”). to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A and to non-U.S. persons outside the United States in reliance on Regulation S under the Securities Act of 1933, as amended. The Notes were issued at par, resulting in gross proceeds of $300.0$400.0 million and net proceeds of approximately $294.0$393.8 million after deducting underwriting fees and other offering expenses. The Company used the net proceeds from the offering of the Notes to redeem all $260.0 million aggregate principal amount outstanding of its 5.875% Senior Notes due 2021, including payment of
F-21

Table of Contents
CARETRUST REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
the redemption price at 102.938% and all accrued and unpaid interest thereon. The Company used the remaining portion of the net proceeds of the Notes offering to pay borrowings outstanding under its senior unsecured revolving credit facility. The Notes mature on June 1, 2025 and bear30, 2028. The Notes accrue interest at a rate of 5.25%3.875% per year. Interestannum payable semiannually in arrears on June 30 and December 30 of each year, commencing on December 30, 2021.
The Issuers may redeem some or all of the Notes at any time prior to March 30, 2028 at a price equal to 100% of the principal amount of the Notes redeemed plus accrued and unpaid interest on the Notes, is payableif any, to, but not including, the redemption date, plus a “make-whole” premium. At any time on June 1 and December 1 of each year, beginning on December 1, 2017.
As of June 1, 2020,or after March 30, 2028, the Issuers may redeem some or all of the Notes at a redemption price equal to 100% of the principal amount of the Notes redeemed plus accrued interest on the Notes, if any, to, but not including, the redemption date. In addition, at any time on or prior to June 30, 2024, up to 40% of the aggregate principal amount of the Notes may be redeemed with the net proceeds of certain equity offerings at a redemption price of 103.875% of the aggregate principal amount of Notes to be redeemed plus accrued and unpaid interest on the Notes, if any, to, but not including, the redemption prices set forth in the indenture. As of December 31, 2020, the Issuers have not elected to redeem any of the Notes.date. If certain changes of control of the Company occur, the Issuers will be required to make an offer to holders of the Notes will have the right to require the Issuers to repurchase their Notes at a price of 101% of thetheir principal amount plus accrued and unpaid interest, if any, to, but not including, the repurchase date.
The obligations under the Notes are fully and unconditionally guaranteed, jointly and severally, on an unsecured basis, by the Company and certainall of the Company’s wholly ownedCareTrust’s existing and subject to certain exceptions, future material subsidiaries (other than the Issuers) that guarantee obligations under the Amended Credit Facility (as defined below); provided, however, that such guarantees are subject to automatic release under certain customary circumstances, including if the subsidiary guarantor is sold or sells all or substantially all of its assets, the subsidiary guarantor is designated “unrestricted” for covenant purposes under the indenture, the subsidiary guarantor’s guarantee of other indebtedness which resulted in the creation of the guarantee of the Notes is terminated or released, or the requirements for legal defeasance or covenant defeasance or to discharge the indenture have been satisfied.circumstances.
The indenture governing the Notes contains customary covenants such as limiting the ability of the Company and its restricted subsidiaries to: incur or guarantee additional indebtedness; incur or guarantee secured indebtedness; pay dividends or distributions on, or redeem or repurchase, capital stock; make certain investments or other restricted payments; sell assets; enter into transactions with affiliates; merge or consolidate or sell all or substantially all of their assets; and create restrictions on the ability of the Issuers and their restricted subsidiaries to pay dividends or other amounts to the Issuers. The indenture governing the Notes also requires the Company and its restricted subsidiaries to maintain a specified ratio of unencumbered assets to unsecured indebtedness. These covenants are subject to a number of important and significant limitations, qualifications and exceptions. The indenture governing the Notes also contains customary events of default.
F-26

Table of Contents
CARETRUST REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2020,2023, the Company was in compliance with all applicable financial covenants under the indenture.indenture governing the Notes.
2025 Senior Notes. On May 10, 2017, the Issuers completed an underwritten public offering of $300.0 million aggregate principal amount of 5.25% Senior Notes due 2025 (the “2025 Notes”). The 2025 Notes were issued at par, resulting in gross proceeds of $300.0 million and net proceeds of approximately $294.0 million after deducting underwriting fees and other offering expenses. The 2025 Notes were scheduled to mature on June 1, 2025 and bore interest at a rate of 5.25% per year. Interest on the 2025 Notes was payable on June 1 and December 1 of each year. On July 1, 2021 (the “Redemption Date”), the Issuers redeemed all $300.0 million aggregate principal amount of the 2025 Notes at a redemption price equal to 102.625% of the principal amount of the 2025 Notes, plus accrued and unpaid interest thereon up to, but not including, the Redemption Date. During the year ended December 31 2021, the Company recorded a loss on extinguishment of debt of $10.8 million in the consolidated statements of operations, including a prepayment penalty of $7.9 million and a $2.9 million write-off of deferred financing costs associated with the redemption of the 2025 Notes.

Unsecured Revolving Credit Facility and Term Loan
On August 5, 2015, the Company, CareTrust GP, LLC, the Operating Partnership, as the borrower, and certain of its wholly owned subsidiaries entered into a credit and guaranty agreement with KeyBank National Association, as administrative agent, an issuing bank and swingline lender, and the lenders party thereto (the “Prior Credit Agreement”). As later amended on February 1, 2016, the Prior Credit Agreement provided the following: (i) a $400.0 million unsecured asset based revolving credit facility (the “Prior Revolving Facility”), (ii) a $100.0 million non-amortizing unsecured term loan (the “Prior Term Loan” and, together with the Prior Revolving Facility, the “Prior Credit Facility”), and (iii) a $250.0 million uncommitted incremental facility. The Prior Revolving Facility was scheduled to mature on August 5, 2019, subject to 2, six-month extension options. The Prior Term Loan was scheduled to mature on February 1, 2023 and could be prepaid at any time subject to a 2% premium in the first year after issuance and a 1% premium in the second year after issuance.
On February 8, 2019,December 16, 2022, the Operating Partnership, as the borrower, the Company, as guarantor, CareTrust GP, LLC, and certain of the Operating Partnership’s wholly owned subsidiaries, entered into ana second amended and restated credit and guaranty agreement with KeyBank National Association, as administrative agent, an issuing bank and swingline lender and( as amended from time to time, the lenders party thereto (the “Amended“Second Amended Credit Agreement”). The Second Amended Credit Agreement, which amends and restates the Company’s amended and restated credit and guaranty agreement, dated as of February 8, 2019 (as amended, the Prior“Prior Credit Agreement,Agreement”) provides for: (i) an unsecured revolving credit facility (the “Revolving Facility”) with revolving commitments in an aggregate principal amount of $600.0 million, including a letter of credit subfacility for 10% of the then available revolving commitments and a swingline loan subfacility for 10% of the then available revolving commitments and (ii) anthe continuation of the unsecured term loan credit facility which was previously extended under the Prior Credit Agreement (the “Term Loan” and together with the Revolving Facility, the “Amended“Second Amended Credit Facility”) in an aggregate principal amount of $200.0 million. Borrowing availability under the Revolving Facility is subject to no default or event of default under the Amended Credit Agreement having occurred at the time of borrowing. The proceeds of the Term Loan were used, in part, to repay in full all outstandingFuture borrowings under the Prior Term Loan and Prior Revolving Facility under the Prior Credit Agreement. Future borrowings under theSecond Amended Credit Facility will be used for working capital purposes, for capital expenditures, to fund acquisitions and for general corporate purposes.
F-22

TableOn October 10, 2023, the Operating Partnership, the Company, CareTrust GP, LLC, certain of Contents
CARETRUST REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
the Operating Partnership’s wholly owned subsidiaries and KeyBank National Association entered into the First Amendment to the Second Amended Credit Agreement (the “First Amendment”). The First Amendment restates the definition of Consolidated Total Asset Value to include net proceeds from at-the-market forward commitments executed but not yet closed as of the relevant date as if such proceeds had actually been received.
The interest rates applicable to loans under the Revolving Facility are, at the Operating Partnership’s option, equal to either a base rate plus a margin ranging from 0.10% to 0.55% per annum or LIBORAdjusted Term SOFR or Adjusted Daily Simple SOFR (each as defined in the Second Amended Credit Agreement) plus a margin ranging from 1.10% to 1.55% per annum based on the debt to asset value ratio of the Company and its consolidated subsidiaries (subject to decrease at the Operating Partnership’s election if the Company obtains certain specified investment grade ratings on its senior long-term unsecured debt). The interest rates applicable to loans under the Term Loan are, at the Operating Partnership’s option, equal to either a base rate plus a margin ranging from 0.50% to 1.20% per annum or LIBORAdjusted Term SOFR or Adjusted Daily Simple SOFR plus a margin ranging from 1.50% to 2.20% per annum based on the debt to asset value ratio of the Company and its consolidated subsidiaries (subject to decrease at the Operating Partnership’s election if the Company obtains certain specified investment grade ratings on its senior long-term unsecured debt). In addition, the Operating Partnership will pay a facility fee on the revolving commitments under the Revolving Facility ranging from 0.15% to 0.35% per annum, based on the debt to asset value ratio of the Company and its consolidated subsidiaries (unless the Company obtains certain specified investment grade ratings on its senior long-term unsecured debt and the Operating Partnership elects to decrease the applicable margin as described above, in which case the Operating Partnership will pay a facility fee on the revolving commitments ranging from 0.125% to 0.30% per annum based on the credit ratings of the Company’s senior long-term unsecured debt). As of December 31, 2020,2023, the Operating Partnership had $200.0 million of borrowings outstanding under the Term Loan and $50.0 millionno borrowings outstanding under the Revolving Facility.
The Revolving Facility has a maturity date of February 8, 2023,9, 2027, and includes, at the sole discretion of the Operating Partnership, 2,two six-month extension options. The Term Loan has a maturity date of February 8, 2026.
F-27

Table of Contents
CARETRUST REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The Second Amended Credit Facility is guaranteed, jointly and severally, by the Company and its wholly owned subsidiaries that are party to the Second Amended Credit Agreement (other than the Operating Partnership). The Second Amended Credit Agreement contains customary covenants that, among other things, restrict, subject to certain exceptions, the ability of the Company and its subsidiaries to grant liens on their assets, incur indebtedness, sell assets, make investments, engage in acquisitions, mergers or consolidations, amend organizational documents and pay certain dividends and other restricted payments. The Second Amended Credit Agreement requires the Company to comply with financial maintenance covenants to be tested quarterly, consisting of a maximum debt to asset value ratio, a minimum fixed charge coverage ratio, a minimum tangible net worth, a maximum cash distributions to operating income ratio, a maximum secured debt to asset value ratio, a maximum secured recourse debt to asset value ratio, a maximum unsecured debt to unencumbered properties asset value ratio, a minimum unsecured interest coverage ratio and a minimum rent coverage ratio. The Second Amended Credit Agreement also contains certain customary events of default, including the failure to make timely payments under the Second Amended Credit Facility or other material indebtedness, the failure to satisfy certain covenants (including the financial maintenance covenants), the occurrence of change of control and specified events of bankruptcy and insolvency.
As of December 31, 2020,2023, the Company was in compliance with all applicable financial covenants under the Second Amended Credit Agreement.
Schedule of Debt Maturities
As of December 31, 2020,2023, the Company’s debt maturities were (dollars in thousands):  
YearYearAmountYearAmount
2021$
2022
202350,000 
20242024
20252025300,000 
2026
2027
2028
ThereafterThereafter200,000 
$550,000 

F-23

Table of Contents
CARETRUST REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
7.8. EQUITY
Common Stock
Public Offering of Common Stock—On April 15, 2019, the Company completed an underwritten public offering of 6,641,250 shares of its common stock, par value $0.01 per share, at an initial price to the public of $23.35, including 866,250 shares of common stock sold pursuant to the full exercise of an option to purchase additional shares of common stock granted to the underwriters, resulting in approximately $149.0 million in net proceeds, after deducting the underwriting discount and offering expenses. The Company used the proceeds from the offering to repay a portion of the outstanding borrowings on its Revolving Facility, which had been used to fund a portion of the purchase price of acquisitions in the second quarter of 2019.
At-The-Market Offering—On March 10, 2020,February 24, 2023, the Company entered into an equity distribution agreement to issue and sell, from time to time, up to $500.0 million in aggregate offering price of its common stock through an “at-the-market” equity offering program (the “Previous ATM Program”). On September 15, 2023, the Company terminated the Previous ATM Program and entered into a new equity distribution agreement to issue and sell, from time to time, up to $500.0 million in aggregate offering price of its common stock through an “at-the-market” equity offering program (the “New ATM Program”). In connection and together with the entry into the equity distribution agreement and the commencement of the NewPrevious ATM Program, the Company’s “at-the-market” equity offering program pursuant“ATM Program”). In addition to the Company’s prior equity distribution agreement, dated asissuance and sale of March 4, 2019, was terminated (the “Prior ATM Program”).
There was 0 New ATM Programshares of its common stock, the Company may also enter into one or Prior ATM Program activity (or activity under any predecessor at-the-market equity offering programs) for 2020. The following table summarizes predecessor at-the-market equity offering program activitymore forward sales agreements (each, an “ATM forward contract”) with sales agents for the year ended 2019 (in thousands, except per share amounts):
For the Year Ended December 31,
2019
Number of shares2,459 
Average sales price per share$19.48 
Gross proceeds(1)
$47,893 
(1)    Total gross proceeds is before $0.6 million of commissions paid to the sales agents during the year ended December 31, 2019 under the predecessor ATM Program.
As of December 31, 2020, the Company had $500.0 million available for future issuances under the New ATM Program.
Share Repurchase Program — On March 20, 2020, the Company’s Board of Directors authorized a share repurchase program up to $150.0 million of outstanding sharessale of the Company’s common stock (the “Repurchase Program”). Repurchases under the Repurchase Program, which expires on March 31, 2023, may be made through open market purchases, privately negotiated transactions, structured or derivative transactions, including accelerated share repurchase transactions, or other methods of acquiring shares, in each case subject to market conditions and at such times as shall be permitted by applicable securities laws and determined by management. Repurchases under the Repurchase Program may also be made pursuant to a plan adopted under Rule 10b5-1 promulgated under the Exchange Act. The Company expects to finance any share repurchases under the Repurchase Program using available cash and may also use short-term borrowings under the Revolving Facility. The Company did 0t repurchase any shares of common stock under the Repurchase Program during the year ended December 31, 2020. The Repurchase Program may be modified, discontinued or suspended at any time.ATM Program.
F-24F-28

Table of Contents
CARETRUST REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The Company expects to fully physically settle forward equity sales by delivery of shares of common stock to the forward purchaser and receive cash proceeds upon one or more settlement dates, which are typically a one-year term, at the Company’s discretion, prior to the final settlement date, at which time the Company expects to receive aggregate net cash proceeds at settlement equal to the number of shares sold on a forward basis multiplied by the relevant forward price per share. The weighted average forward sale price that the Company expects to receive upon physical settlement will be subject to adjustment for (i) a floating interest rate factor equal to a specified daily rate less a spread, (ii) the forward purchaser’s stock borrowing costs and (iii) scheduled dividends through the settlement. There were no outstanding ATM forward contracts that had not settled as of December 31, 2023.
The following tables summarize ATM Program activity (or activity under any predecessor at-the-market equity offering programs) for the years ended December 31, 2023, 2022 and 2021 (in thousands, except per share amounts):
For the Year Ended December 31,
202320222021
Number of shares30,869 2,405 990 
Average sales price per share$20.86 $20.00 $23.74 
Gross proceeds(1)
$643,802 $48,100 $23,505 
(1)Total gross proceeds is before $8.3 million, $0.6 million, and $0.3 million of commissions paid to the sales agents and forward adjustments during the years ended December 31, 2023, 2022 and 2021, respectively, under the ATM Program. In addition, total gross proceeds is before other costs related to the ATM Program.
As of December 31, 2023, the Company had $274.1 million available for future issuances under the ATM Program.
Dividends on Common Stock — The following table summarizes the cash dividends per share of common stock declared by the Company’s Boardboard of Directorsdirectors for 2020, 20192023, 2022 and 20182021 (dollars in thousands, except per share amounts):
For the Three Months Ended
2023March 31,June 30,September 30,December 31,
Dividends declared per share$0.28 $0.28 $0.28 $0.28 
Dividends payment dateApril 14, 2023July 14, 2023October 13, 2023January 12, 2024
Dividends payable as of record date[1]
$27,846 $27,853 $32,403 $36,531 
Dividends record dateMarch 31, 2023June 30, 2023September 29, 2023December 29, 2023
2022
Dividends declared per share$0.275 $0.275 $0.275 $0.275 
Dividends payment dateApril 15, 2022July 15, 2022October 14, 2022January 13, 2023
Dividends payable as of record date[1]
$26,691 $26,683 $26,683 $27,386 
Dividends record dateMarch 31, 2022June 30, 2022September 30, 2022December 30, 2022
2021
Dividends declared per share$0.265 $0.265 $0.265 $0.265 
Dividends payment dateApril 15, 2021July 15, 2021October 15, 2021January 14, 2022
Dividends payable as of record date[1]
$25,633 $25,714 $25,714 $25,755 
Dividends record dateMarch 31, 2021June 30, 2021September 30, 2021December 31, 2021
For the Three Months Ended
2020March 31,June 30,September 30,December 31,
Dividends declared$0.25 $0.25 $0.25 $0.25 
Dividends payment dateApril 15, 2020July 15, 2020October 15, 2020January 15, 2021
Dividends payable as of record date$23,931 $23,931 $23,934 $23,933 
Dividends record dateMarch 31, 2020June 30, 2020September 30, 2020December 31, 2020
2019
Dividends declared$0.225 $0.225 $0.225 $0.225 
Dividends payment dateApril 15, 2019July 15, 2019October 15, 2019January 15, 2020
Dividends payable as of record date$20,011 $21,508 $21,500 $21,500 
Dividends record dateMarch 29, 2019June 28, 2019September 30, 2019December 31, 2019
2018
Dividends declared$0.205 $0.205 $0.205 $0.205 
Dividends payment dateApril 13, 2018July 13, 2018October 15, 2018January 15, 2019
Dividends payable as of record date$15,608 $16,224 $17,196 $17,710 
Dividends record dateMarch 30, 2018June 29, 2018September 28, 2018December 31, 2018
(1)Dividends payable includes dividends on performance stock awards that will be paid if and when the shares subject to such awards vest if deemed probable of meeting their performance condition.

F-29
8.

Table of Contents
CARETRUST REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
9. STOCK-BASED COMPENSATION
All stock-based awards are subject to the terms of the CareTrust REIT, Inc. and CTR Partnership, L.P. Incentive Award Plan (the “Plan”). The Plan provides for the granting of stock-based compensation, including stock options, restricted stock, performance awards, restricted stock units, relative total stockholder return-based stock awards and other incentive awards to officers, employees and directors in connection with their employment with or services provided to the Company.
The following table summarizes restricted stock award and performance award activity Under the Plan, 5,000,000 shares have been authorized for the years ended December 31, 2020 and 2019:
SharesWeighted Average Share Price
Unvested balance at December 31, 2018519,272 $14.69 
Granted180,629 22.22 
Vested(247,534)14.50 
Forfeited(134)15.21 
Unvested balance at December 31, 2019452,233 17.90 
Granted270,191 19.11 
Vested(201,563)17.41 
Forfeited(3,175)20.30 
Unvested balance at December 31, 2020517,686 $18.71 
awards.

The following table summarizesUnder the stock-based compensation expense recognized (dollars in thousands):
 For Year Ended December 31,
 202020192018
Stock-based compensation expense$3,790 $4,104 $3,848 
F-25

Table of Contents
CARETRUST REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2020, there was $5.5 million of unamortized stock-based compensation expense related to these unvested awards and the weighted-average remaining vesting period of such awards was 2.3 years.
In connection with the separation of Ensign’s healthcare business and its real estate business into 2 separate and independently publicly traded companies (the “Spin-Off”) on June 1, 2014, employees of Ensign who had unvested shares of restricted stock were given 1 share of CareTrust REIT unvested restricted stock totaling 207,580 shares at the Spin-Off. These restricted shares were subject to a time vesting provision only and the Company did not recognize any stock compensation expense associated with these awards. During the year ended December 31, 2020, 1,760 shares were forfeited. At December 31, 2020, there were 0 unvestedPlan, restricted stock awards outstanding.
In January(“RSAs”) vest in equal annual installments over a three year period for the RSAs granted after 2020 and March 2020,a four year period for the Compensation CommitteeRSAs granted in 2020. RSAs granted to non-employee members of the board of directors (“Board Awards”) vest in full on the earlier to occur of the Company’s Boardnext Annual Meeting of Directors granted 27,000 and 107,790 shares of restricted stock, respectively, to officers and employees. Each share had a fair market value on the date of grant of $22.18 and $19.06 per share, respectively, based on the closing market price of the Company’s common stock on that date, and the shares vest in 4 equal installments beginning on the first anniversary of the grant date. Additionally, in March 2020, the Compensation Committee granted 107,790 performanceStockholders or one year. Performance stock awards to officers. Each share had a fair market value on the date of grant of $19.06 per share, based on the closing market price of the Company’s common stock on that date. Performance stock awards(“PSAs”) granted are subject to both time and performance based conditions and vest over a one-to four-year period.three year period for PSAs granted in 2021 and over a one-to-four year period for PSAs granted in 2020. The amount of performance awardssuch PSAs that will ultimately vest is dependent on the Company’s Normalized Funds from Operations (“NFFO”) per share, as defined by the Compensation Committee, meeting or exceeding a fixedspecified per share amount.
In April 2020,amount for the Compensation Committee of the Company’s Board of Directorsapplicable vesting period. Relative total shareholder return units (“TSR Units”) granted 27,611 shares of restricted stock to members of the Board of Directors. Each share had a fair market value on the date of grant of $16.48 per share, based on the closing market price of the Company’s common stock on that date, and the shares vest in full on the earlier to occur of April 29,since 2021 or the Company’s 2021 Annual Meeting of Stockholders.
In February 2019, the Compensation Committee of the Company’s Board of Directors granted 91,440 shares of restricted stock to officers and employees. Each share had a fair market value on the date of grant of $22.00 per share, based on the closing market price of the Company’s common stock on that date, and the shares vest in 4 equal annual installments beginning on the first anniversary of the grant date. Additionally, in February 2019, the Compensation Committee granted 71,440 performance stock awards to officers. Each share had a fair market value on the date of grant of $22.00 per share, based on the closing market price of the Company’s common stock on that date. Performance stock awards are subject to both time and performancemarket based conditions and cliff vest overafter a one- to four-yearthree-year period. The amount of performancesuch market awards that will ultimately vest is dependent on the Company’s Normalized Fundstotal shareholder return (“TSR”) performance relative to a custom TSR peer group consisting of other publicly traded healthcare REITs and will range from Operations (“NFFO”) per share, as defined by the Compensation Committee, meeting or exceeding fiscal year over year growth of 5.0% or greater.
In May 2019, the Compensation Committee0% to 200% of the Company'sTSR Units initially granted. The RSAs, PSAs, and Board of Directors granted 17,749 shares of restricted stock to members of the Board of Directors. Each share had a fair market valueAwards are valued on the date of grant of $24.23 per share, based on the closing market price of the Company'sCompany’s common stock, while the TSR Units are valued on the date of grant using a Monte Carlo valuation model. The vesting of certain awards may accelerate, as defined in the grant agreement, upon retirement, a change in control or other events.
The following table summarizes the status of the restricted stock award and performance award activity for the year ended December 31, 2023:
SharesWeighted Average Share Price
Unvested balance at December 31, 2022573,609 $20.63 
Granted:
RSAs166,122 22.41 
Board Awards24,768 19.38 
Vested(185,767)20.94 
Forfeited(68,136)20.85 
Unvested balance at December 31, 2023510,596 $21.01 
As of December 31, 2023, the weighted-average remaining vesting period of such awards was1.7 years.
The following table summarizes the Company’s RSAs and Board Awards grants during the year ended December 31, 2023 (dollars in thousands, except per share amounts):
GrantsVested
SharesWeighted Average Share PriceGrant Date Fair ValueSharesVest Date Fair Value
During year ended December 31, 2023(1)
RSAs166,122 $22.41 $3,722 138,438 $2,855 
PSAs— — — 21,337 438 
Board Awards24,768 19.38 480 25,992 504 
(1)The Compensation Committee granted annual awards for 2024 in December 2023.
F-30

Table of Contents
CARETRUST REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The following table summarizes the Company’s RSA, PSA and Board Award grants during the years ended December 31, 2022 and 2021 (dollars in thousands, except per share amounts):
Grants
SharesWeighted Average Share PriceGrant Date Fair Value
During year ended December 31, 2022(1)
RSAs159,663 $19.56 $3,123 
Board Awards25,992 16.93 440 
During year ended December 31, 2021(2)
RSAs394,863 $21.92 $8,654 
PSAs108,414 22.48 2,437 
Board Awards20,266 24.18 490 
(1)The Compensation Committee granted annual awards for 2023 in December 2022.
(2)In 2021, the Compensation Committee changed the structure of the grants that resulted in two long-term equity incentive awards being granted to the Company’s named executive officers in 2021. The Compensation Committee also granted annual awards for 2022 in December 2021.
The fair value of the TSR Units is estimated on the date of the grant using a Monte Carlo valuation model. The risk-free rate is based on the U.S. Treasury yield curve in effect at the grant date for the expected performance period. Expected volatility is based on historical volatility for the most recent weighted average period ending on the grant date for the Company and the shares vestedselected TSR peer group, and is calculated on a daily basis. The following table reflects the weighted-average key assumptions used in full on April 30, 2020.this valuation for awards granted during the years ended December 31, 2023, 2022 and 2021:
For the Year Ended December 31, 2023For the Year Ended December 31, 2022For the Year Ended December 31, 2021
Risk-free interest rate4.08 %3.91 %0.60 %
Expected stock price volatility26.44 %52.90 %52.42 %
Expected service period3.04 years3.04 years2.93 years
Expected dividend yield (assuming full reinvestment)— %— %— %
Fair value per share at date of grant$27.41 $26.53 $29.10 
The total fair value of the TSR Units granted during the years ended December 31, 2023, 2022 and 2021 was $2.9 million, $2.5 million and $5.3 million, respectively.
The following table summarizes the stock-based compensation expense recognized (dollars in thousands):
 For Year Ended December 31,
 202320222021
Stock-based compensation expense$5,153 $5,758 $10,832 
As of December 31, 2023, there was $10.4 million of unamortized stock-based compensation expense related to the unvested RSAs, PSAs, Board Awards, and TSR Units.

F-26F-31

Table of Contents
CARETRUST REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
9.10. EARNINGS (LOSS) PER COMMON SHARE
The following table presents the calculation of basic and diluted EPSearnings (loss) per common share attributable to CareTrust REIT, Inc. (“EPS”) for the Company’s common stock for the years ended December 31, 2020, 20192023, 2022 and 2018,2021, and reconciles the weighted-average common shares outstanding used in the calculation of basic EPS to the weighted-average common shares outstanding used in the calculation of diluted EPS for the years ended December 31, 2020, 20192023, 2022 and 20182021 (amounts in thousands, except per share amounts):
 Year Ended December 31,
 202020192018
Numerator:
Net income$80,867 $46,359 $57,923 
Less: Net income allocated to participating securities(298)(296)(364)
Numerator for basic and diluted earnings available to common stockholders$80,569 $46,063 $57,559 
Denominator:
Weighted-average basic common shares outstanding95,200 93,088 79,386 
   Dilutive performance stock awards10 
Weighted-average diluted common shares outstanding95,207 93,098 79,392 
Earnings per common share, basic$0.85 $0.49 $0.73 
Earnings per common share, diluted$0.85 $0.49 $0.72 
The Company’s unvested restricted shares associated with its incentive award plan and unvested restricted shares issued to employees of Ensign at the Spin-Off have been excluded from the above calculation of earnings per share for the years ended December 31, 2020, 2019 and 2018, when their inclusion would have been anti-dilutive.
 Year Ended December 31,
 202320222021
Numerator:
Net income (loss) attributable to CareTrust REIT, Inc.$53,735 $(7,506)$71,982 
Less: Net income allocated to participating securities(400)(440)(507)
Numerator for basic and diluted earnings available to common stockholders$53,335 $(7,946)$71,475 
Denominator:
Weighted-average basic common shares outstanding105,956 96,703 96,017 
Dilutive potential common shares - performance stock awards164 — 75 
Dilutive potential common shares - forward equity agreements32 — — 
Weighted-average diluted common shares outstanding106,152 96,703 96,092 
Earnings (loss) per common share attributable to CareTrust REIT, Inc., basic$0.50 $(0.08)$0.74 
Earnings (loss) per common share attributable to CareTrust REIT, Inc., diluted$0.50 $(0.08)$0.74 
Antidilutive unvested restricted stock awards, total shareholder units, performance awards, and forward equity shares excluded from the computation475 744 591 

F-32
10.

Table of Contents
CARETRUST REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
11. VARIABLE INTEREST ENTITIES
Noncontrolling Interests—The Company has entered into ventures with unrelated third parties to own real estate and has concluded that such ventures are VIEs. As the Company exercises power over and receives economic benefits from the VIEs, the Company is considered the primary beneficiary and consolidates the VIEs.
In August 2023, the Company entered into a joint venture (“JV”), pursuant to which the Company contributed $2.4 million into the JV, that was used to satisfy a deposit on a potential real estate acquisition.
In September 2023, the Company entered into a JV, pursuant to which the Company contributed $25.5 million into the JV that purchased one SNF located in California for $26.1 million. The JV partner contributed the remaining $0.6 million of equity.
In October 2023, the Company entered into a JV, pursuant to which the Company contributed $34.3 million into the JV that purchased two SNFs located in California for $35.1 million. The JV partner contributed the remaining $0.8 million of equity.
Pursuant to the Company’s JVs, the Company typically contributes 97.5% of the JVs total investment amount and the Company receives 100% of the preferred equity interest in the JV in exchange for 95% of that total investment and a 50% common equity interest in the JV in exchange for the remaining 2.5% of that investment. The JV partner contributes the remaining 2.5% of the JVs total investment amount in exchange for a 50% common ownership interest in the JV.
Total assets and total liabilities on the Company’s consolidated balance sheets include VIE assets and liabilities as follows (in thousands):
December 31, 2023
Assets:
Real estate investments, net$68,106 
Prepaid and other assets2,800 
Total assets70,906 
Liabilities:
Accounts payable, accrued liabilities and deferred rent liabilities7,239 
Total liabilities$7,239 
F-33

Table of Contents
CARETRUST REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
12. COMMITMENTS AND CONTINGENCIES
The Company and its subsidiaries are and may become from time to time a party to various claims and lawsuits arising in the ordinary course of business, which are not individually or in the aggregate anticipated to have a material adverse effect on the Company’s results of operations, financial condition or cash flows. Claims and lawsuits may include matters involving general or professional liability asserted against the Company’s tenants, which are the responsibility of the Company’s tenants and for which the Company is entitled to be indemnified by its tenants under the insurance and indemnification provisions in the applicable leases.
In the normal course of business, the Company enters into various commitments, typically consisting of funding of capital expenditures and short-term working capital loans to existing tenants while they await licensure and certification or are conducting turnaround work in one or more of the Company’s properties.
Capital expenditures for each property leased under the Company’s triple-net leases are generally the responsibility of the tenant, except that, for the facilities leased tounder certain master lease agreements, with certain subsidiaries of Ensign and Pennant, under the Ensign Master Leases, and The Pennant Group, Inc.,which the tenant will have an option to require the Company to finance certain capital expenditures up to an aggregate of 20% of itsthe Company’s initial investment in such property, subject to a corresponding rent increase at the time of funding. For the Company’s other triple-net master leases, the tenants also have the option to request capital expenditure funding that would generally be subject to a corresponding rent increase at the time of funding, which are subject to tenant compliance with the conditions to the Company’s approval and funding of their requests. The Company has also provided select tenants with strategic capital for facility upkeep and modernization. The Company’s Tenant Code of Conduct and Corporate Responsibility policy (the “Tenant ESG Program”) provides eligible triple-net tenants of the Company with monetary inducements to make sustainable improvements to the Company’s properties. Incentive options include a wide variety of opportunities for tenants to upgrade everything from energy and environmental systems to water-saving landscaping and more. The Company’s board of directors has authorized annual allocations of up to $500,000 to fund the Tenant ESG Program.
The table below summarizes the Company’s existing, known commitments and contingencies as of December 31, 2023 (in thousands):
Remaining Commitment
Capital expenditures(1)
$9,206 
Mortgage loans(2)
4,700 
$13,906 
(1)As of December 31, 2020,2023, the Company had committed to fund expansions, construction, and capital improvements and ESG incentives at certain triple-net leased facilities totaling $15.4$9.2 million, of which $14.2$2.4 million is subject to rent increase at the time of funding.
(2)One mortgage loan includes an earnout advance upon satisfaction of certain conditions.

11.13. CONCENTRATION OF RISK
Major operator concentration – AsConcentrations of December 31, 2020, Ensign leased 89 skilled nursing, assisted living and independent living facilities which had a total of 9,546 beds and units and are located in Arizona, California, Colorado, Idaho, Iowa, Nebraska, Nevada, Texas, Utah and Washington. The 4 states in which Ensign leases the highest concentration of properties are Texas, California, Arizona and Utah. During the years ended December 31, 2020, 2019 and 2018, Ensign represented 32%, 38% and 42%, respectively, ofcredit risk arise when one or more tenants, operators, or obligors related to the Company’s rental income, exclusive of operating expense reimbursements. On October 1, 2019, Ensign completedinvestments are engaged in similar business activities or activities in the Pennant Spin. See Note 3, Real Estate Investments, Net, for additional information regarding the Company’s facilities leasedsame geographic region, or have similar economic features that would cause their ability to Ensign subsequentmeet contractual obligations, including those to the Pennant Spin.Company, to be similarly affected by changes in economic conditions.
F-27F-34

Table of Contents
CARETRUST REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Major operator concentration – The Company has operators from which it derived 10% or more of its revenue for the years ended December 31, 2023, 2022 and 2021. The following table sets forth information regarding the Company’s major operators as of December 31, 2023, 2022 and 2021:
 Number of FacilitiesNumber of Beds/UnitsPercentage of Total Revenue
Operator(1)
SNFCampusALF/ILFSNFCampusALF/ILF
December 31, 2023(2)
Ensign83 88,738 997661 32 %
PMG13 2— 1,742 402— 14 %
December 31, 2022(3)
Ensign83 88,741 997 661 35 %
PMG13 2— 1,742 402 — 16 %
December 31, 2021(3)
Ensign83 88,756 997 395 32 %
PMG13 2— 1,742 402 — 15 %
(1)See Note 3, Real Estate Investments, Net, for further information regarding Ensign and PMG. Ensign is subject to the registration and reporting requirements of the SEC and is required to file with the SEC annual reports containing audited financial information and quarterly reports containing unaudited financial information. Ensign’s financial statements, as filed with the SEC, can be found at http://www.sec.gov. The Company has not verified this information through an independent investigation or otherwise.
As(2)The Company’s rental income and interest income on other real estate related investments, exclusive of December 31, 2020, PMG leased 15 skilled nursing facilitiesoperating expense reimbursements and adjustments for collectibility.
(3)The Company’s rental income, exclusive of operating expense reimbursements and adjustments for collectibility.
Major geographic concentration – The following table provides information regarding the Company’s concentrations with respect to certain states, from which had a totalthe Company derived 10% or more of 2,145 beds and units and are located in Louisiana and Texas. Duringits revenue for the yearsyear ended December 31, 2020, 20192023, 2022 and 2018, PMG represented 16%, 15%2021:
 Number of FacilitiesNumber of Beds/UnitsPercentage of Total Revenue
StateSNFCampusALF/ILFSNFCampusALF/ILF
December 31, 2023(1)
CA40 94,615 1,527 656 28 %
TX40 35,123 536212 21 %
December 31, 2022(2)
CA27 83,048 1,359 437 26 %
TX38 34,849 536 242 22 %
December 31, 2021(2)
CA27 83,048 1,359 449 25 %
TX37 34,694 536 242 20 %
(1)Based on the Company’s rental income and 8%, respectively,interest income on other real estate related investments, exclusive of operating expense reimbursements and adjustments for collectibility.
(2)Based on the Company’s rental income, exclusive of operating expense reimbursements.reimbursements and adjustments for collectibility.

12. SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)
The following table presents selected quarterly financial data for the Company. This information has been prepared on a basis consistent with that of the Company’s audited consolidated financial statements. The Company’s quarterly results of operations for the periods presented are not necessarily indicative of future results of operations. This unaudited quarterly data should be read together with the accompanying consolidated financial statements and related notes thereto (in thousands, except per share amounts):
 For the Year Ended December 31, 2020
 First
Quarter
Second
Quarter
Third
Quarter
Fourth
Quarter
Operating data:
Total revenues$44,340 $44,168 $45,687 $44,137 
Net income$19,325 $18,935 $21,552 $21,055 
Earnings per common share, basic$0.20 $0.20 $0.23 $0.22 
Earnings per common share, diluted$0.20 $0.20 $0.23 $0.22 
Other data:
Weighted-average number of common shares outstanding, basic95,161 95,208 95,214 95,215 
Weighted-average number of common shares outstanding, diluted95,161 95,208 95,214 95,244 
 For the Year Ended December 31, 2019
 First
Quarter
Second
Quarter
Third
Quarter
Fourth
Quarter
Operating data:
Total revenues$39,658 $46,201 $33,314 $44,228 
Net income (loss)$16,053 $19,698 $(10,054)$20,662 
Earnings per common share, basic$0.18 $0.21 $(0.11)$0.22 
Earnings per common share, diluted$0.18 $0.21 $(0.11)$0.22 
Other data:
Weighted-average number of common shares outstanding, basic88,010 94,036 95,103 95,103 
Weighted-average number of common shares outstanding, diluted88,010 94,036 95,103 95,144 

13.14. SUBSEQUENT EVENTS
The Company evaluates subsequent events in accordance with ASC 855, Subsequent Events. The Company evaluates subsequent events up until the date the consolidated financial statements are issued.
Asset Sale
F-35

Table of Contents
CARETRUST REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Recent Acquisitions and Investments
On January 3, 2024, the Company contributed $10.7 million into a JV that purchased one ALF located in California for $11.0 million. In exchange, the Company holds 100% of the preferred equity interests in the JV and 50% of the common equity interest in the JV. The JV partner contributed the remaining $0.3 million of the total investment in exchange for 50% of the common equity interest in the JV. The new lease has an initial term of approximately 10 years, with four five-year renewal options and 2% fixed rent escalators beginning in year 3. Annual cash rent under the lease is approximately $1.0 million.
On January 25, 2024, the Company extended a $9.8 million mezzanine loan to a skilled nursing real estate owner in connection with a portfolio of ten SNFs located in Missouri. The mezzanine loan is secured by a pledge of membership interests in an affiliate of the borrower. The loan bears interest at term SOFR plus 8.75%, with a term SOFR floor of 6%, payable monthly and net of a 0.75% subservicing fee. Commencing on February 1, 2026, monthly principal payments shall be due. The mezzanine loan is set to mature on July 25, 2027, with two six-month extension options and may (subject to certain restrictions) be prepaid in whole before the maturity date for an exit fee ranging from 1% to 2% of the loan plus unpaid interest payments equal to 24 months (less the amount of monthly interest payments made by the borrower through the date of prepayment).
On February 1, 2021,2024, the Company extended a $7.4 million mezzanine loan to a skilled nursing real estate owner for one SNF located in California. The mezzanine loan is secured by a pledge of membership interests in an affiliate of the borrower. The loan bears interest at 11.5%, payable monthly. The mezzanine loan is set to mature on January 31, 2029 and may (subject to certain limited exceptions) not be prepaid prior to the date that is 18 months following the loan closing.
On February 2, 2024, the Company extended a $35.0 million mezzanine loan to a skilled nursing real estate owner in connection with 15 SNFs located in Virginia. The mezzanine loan is secured by a pledge of membership interests in an affiliate of the borrower. The loan bears interest at term SOFR plus 8.75%, with a term SOFR floor of 6%, payable monthly and net of a 0.75% subservicing fee. Commencing on February 2, 2026, monthly principal payments shall be due. The mezzanine loan is set to mature on August 1, 2027, with two six-month extension options and may (subject to certain restrictions) be prepaid in whole before the maturity date for an exit fee ranging from 1% to 2% of the loan plus unpaid interest payments equal to 18 months (less the amount of monthly interest payments made by the borrower through the date of prepayment).
New Lease Agreement
Effective January 1, 2024, in connection with the December 31, 2023 Hillstone lease termination, one multi-service campus was removed from the Hillstone master lease. In connection with the lease termination, the Company entered into a new lease with Embassy Healthcare Holdings, Inc. (“Embassy”) with respect to the one multi-service campus. The Embassy lease had an initial term at the date of the lease of approximately 10 years with two five-year renewal options and CPI-based rent escalators. Annual cash rent under the lease is approximately $0.6 million and the master lease provides Embassy with a partial rent abatement until required authorizations with respect to the ALF portion of the facility are obtained and occupancy levels reach a certain percentage.
Asset Sales
Subsequent to December 31, 2023, the Company closed on the sale of 1 skilled nursing facility consisting of 90 units located in Washingtonone SNF and one ALF with aan aggregate carrying value of $7.2$1.0 million, for grosswhich approximated the net sales proceeds of $7.3 million. The Company does not expect to record a material gain or loss in connection with the sale. The facility was classified as held for sale as of December 31, 2020.

received.
F-28F-36

SCHEDULE III
REAL ESTATE ASSETS AND ACCUMULATED DEPRECIATION
DECEMBER 31, 20202023
(dollars in thousands)

Initial Cost to Company Gross Carrying Value
Initial Cost to Company
Initial Cost to Company
Initial Cost to Company
Description
Description
DescriptionDescriptionFacilityLocationEncum.LandBuilding
Improvs.
Costs
Cap.
Since
Acq.
LandBuilding
Improvs.
Total (1)Accum. Depr.Const./Ren. DateAcq.
Date
FacilityLocationEncum.LandBuilding
Improvs.
Improvs.LandBuilding
Improvs.
Total (1)Accum. Depr.Const./Ren. DateAcq.
Date
Skilled Nursing Properties:Skilled Nursing Properties:
Ensign Highland LLC
Ensign Highland LLC
Ensign Highland LLCEnsign Highland LLCHighland ManorPhoenix, AZ$$257 $976 $926 $257 $1,902 $2,159 $(1,311)20132000Highland ManorPhoenix, AZ$— $$257 $$976 $$926 $$257 $$1,902 $$2,159 $$(1,549)201320132000
Meadowbrook Health Associates LLCMeadowbrook Health Associates LLCSabino CanyonTucson, AZ425 3,716 1,940 425 5,656 6,081 (3,103)20122000Meadowbrook Health Associates LLCSabino CanyonTucson, AZ— 425 425 3,716 3,716 1,940 1,940 425 425 5,656 5,656 6,081 6,081 (3,700)(3,700)201220122000
Terrace Holdings AZ LLCTerrace Holdings AZ LLCDesert TerracePhoenix, AZ113 504 971 113 1,475 1,588 (865)20042002Terrace Holdings AZ LLCDesert TerracePhoenix, AZ— 113 113 504 504 971 971 113 113 1,475 1,475 1,588 1,588 (1,103)(1,103)200420042002
Rillito Holdings LLCRillito Holdings LLCCatalinaTucson, AZ471 2,041 3,055 471 5,096 5,567 (3,029)20132003Rillito Holdings LLCCatalinaTucson, AZ— 471 471 2,041 2,041 3,055 3,055 471 471 5,096 5,096 5,567 5,567 (3,826)(3,826)201320132003
Valley Health Holdings LLCValley Health Holdings LLCNorth MountainPhoenix, AZ629 5,154 1,519 629 6,673 7,302 (3,801)20092004Valley Health Holdings LLCNorth MountainPhoenix, AZ— 629 629 5,154 5,154 1,519 1,519 629 629 6,673 6,673 7,302 7,302 (4,630)(4,630)200920092004
Cedar Avenue Holdings LLCCedar Avenue Holdings LLCUplandUpland, CA2,812 3,919 1,994 2,812 5,913 8,725 (3,475)20112005Cedar Avenue Holdings LLCUplandUpland, CA— 2,812 2,812 3,919 3,919 1,994 1,994 2,812 2,812 5,913 5,913 8,725 8,725 (4,054)(4,054)201120112005
Granada Investments LLCGranada Investments LLCCamarilloCamarillo, CA3,526 2,827 1,522 3,526 4,349 7,875 (2,595)20102005Granada Investments LLCCamarilloCamarillo, CA— 3,526 3,526 2,827 2,827 1,522 1,522 3,526 3,526 4,349 4,349 7,875 7,875 (3,150)(3,150)201020102005
Plaza Health Holdings LLCPlaza Health Holdings LLCPark ManorWalla Walla, WA450 5,566 1,055 450 6,621 7,071 (3,878)20092006Plaza Health Holdings LLCPark ManorWalla Walla, WA— 450 450 5,566 5,566 1,055 1,055 450 450 6,621 6,621 7,071 7,071 (4,660)(4,660)200920092006
Mountainview Communitycare LLCMountainview Communitycare LLCPark View GardensSanta Rosa, CA931 2,612 653 931 3,265 4,196 (2,082)19632006Mountainview Communitycare LLCPark View GardensSanta Rosa, CA— 931 931 2,612 2,612 653 653 931 931 3,265 3,265 4,196 4,196 (2,434)(2,434)196319632006
CM Health Holdings LLCCM Health Holdings LLCCarmel MountainSan Diego, CA3,028 3,119 2,071 3,028 5,190 8,218 (2,981)20122006CM Health Holdings LLCCarmel MountainSan Diego, CA— 3,028 3,028 3,119 3,119 2,071 2,071 3,028 3,028 5,190 5,190 8,218 8,218 (3,571)(3,571)201220122006
Polk Health Holdings LLCPolk Health Holdings LLCTimberwoodLivingston, TX60 4,391 1,167 60 5,558 5,618 (3,116)20092006Polk Health Holdings LLCTimberwoodLivingston, TX— 60 60 4,391 4,391 1,167 1,167 60 60 5,558 5,558 5,618 5,618 (3,722)(3,722)200920092006
Snohomish Health Holdings LLCSnohomish Health Holdings LLCEmerald HillsLynnwood, WA741 1,663 1,998 741 3,661 4,402 (2,564)20092006Snohomish Health Holdings LLCEmerald HillsLynnwood, WA— 741 741 1,663 1,663 1,998 1,998 741 741 3,661 3,661 4,402 4,402 (2,986)(2,986)200920092006
Cherry Health Holdings LLCCherry Health Holdings LLCPacific CareHoquiam, WA171 1,828 2,038 171 3,866 4,037 (2,525)20102006Cherry Health Holdings LLCPacific CareHoquiam, WA— 171 171 1,828 1,828 2,038 2,038 171 171 3,866 3,866 4,037 4,037 (3,163)(3,163)201020102006
Golfview Holdings LLCGolfview Holdings LLCCambridge SNFRichmond, TX1,105 3,110 1,067 1,105 4,177 5,282 (2,246)20072006Golfview Holdings LLCCambridge SNFRichmond, TX— 1,105 1,105 3,110 3,110 1,067 1,067 1,105 1,105 4,177 4,177 5,282 5,282 (2,704)(2,704)200720072006
Tenth East Holdings LLCTenth East Holdings LLCArlington HillsSalt Lake City, UT332 2,426 2,507 332 4,933 5,265 (3,054)20132006Tenth East Holdings LLCArlington HillsSalt Lake City, UT— 332 332 2,426 2,426 2,507 2,507 332 332 4,933 4,933 5,265 5,265 (3,872)(3,872)201320132006
Trinity Mill Holdings LLCTrinity Mill Holdings LLCCarrolltonCarrollton, TX664 2,294 902 664 3,196 3,860 (2,262)20072006Trinity Mill Holdings LLCCarrolltonCarrollton, TX— 664 664 2,294 2,294 902 902 664 664 3,196 3,196 3,860 3,860 (2,670)(2,670)200720072006
Cottonwood Health Holdings LLCCottonwood Health Holdings LLCHolladaySalt Lake City, UT965 2,070 958 965 3,028 3,993 (2,275)20082007Cottonwood Health Holdings LLCHolladaySalt Lake City, UT— 965 965 2,070 2,070 958 958 965 965 3,028 3,028 3,993 3,993 (2,706)(2,706)200820082007
Verde Villa Holdings LLCVerde Villa Holdings LLCLake VillageLewisville, TX600 1,890 470 600 2,360 2,960 (1,438)20112007Verde Villa Holdings LLCLake VillageLewisville, TX— 600 600 1,890 1,890 470 470 600 600 2,360 2,360 2,960 2,960 (1,745)(1,745)201120112007
Mesquite Health Holdings LLCMesquite Health Holdings LLCWillow BendMesquite, TX470 1,715 8,661 470 10,376 10,846 (7,112)20122007Mesquite Health Holdings LLCWillow BendMesquite, TX— 470 470 1,715 1,715 8,632 8,632 441 441 10,376 10,376 10,817 10,817 (8,813)(8,813)201220122007
Arrow Tree Health Holdings LLCArrow Tree Health Holdings LLCArbor GlenGlendora, CA2,165 1,105 324 2,165 1,429 3,594 (1,010)19652007Arrow Tree Health Holdings LLCArbor GlenGlendora, CA— 2,165 2,165 1,105 1,105 324 324 2,165 2,165 1,429 1,429 3,594 3,594 (1,214)(1,214)196519652007
Fort Street Health Holdings LLCFort Street Health Holdings LLCDraperDraper, UT443 2,394 759 443 3,153 3,596 (1,603)20082007Fort Street Health Holdings LLCDraperDraper, UT— 443 443 2,394 2,394 759 759 443 443 3,153 3,153 3,596 3,596 (1,945)(1,945)200820082007
Trousdale Health Holdings LLCTrousdale Health Holdings LLCBrookfieldDowney, CA1,415 1,841 1,861 1,415 3,702 5,117 (2,052)20132007Trousdale Health Holdings LLCBrookfieldDowney, CA— 1,415 1,415 1,841 1,841 1,861 1,861 1,415 1,415 3,702 3,702 5,117 5,117 (2,554)(2,554)201320132007
Ensign Bellflower LLCEnsign Bellflower LLCRose VillaBellflower, CA937 1,168 357 937 1,525 2,462 (925)20092007Ensign Bellflower LLCRose VillaBellflower, CA— 937 937 1,168 1,168 357 357 937 937 1,525 1,525 2,462 2,462 (1,096)(1,096)200920092007
RB Heights Health Holdings LLCRB Heights Health Holdings LLCOsbornScottsdale, AZ2,007 2,793 1,762 2,007 4,555 6,562 (2,528)20092008RB Heights Health Holdings LLCOsbornScottsdale, AZ— 2,007 2,007 2,793 2,793 1,762 1,762 2,007 2,007 4,555 4,555 6,562 6,562 (3,036)(3,036)200920092008
San Corrine Health Holdings LLCSan Corrine Health Holdings LLCSalado CreekSan Antonio, TX310 2,090 719 310 2,809 3,119 (1,456)20052008San Corrine Health Holdings LLCSalado CreekSan Antonio, TX— 310 310 2,090 2,090 719 719 310 310 2,809 2,809 3,119 3,119 (1,648)(1,648)200520052008
Temple Health Holdings LLCTemple Health Holdings LLCWellingtonTemple, TX529 2,207 1,163 529 3,370 3,899 (1,806)20082008Temple Health Holdings LLCWellingtonTemple, TX— 529 529 2,207 2,207 1,163 1,163 529 529 3,370 3,370 3,899 3,899 (2,181)(2,181)20082008
Anson Health Holdings LLCAnson Health Holdings LLCNorthern OaksAbilene, TX369 3,220 1,725 369 4,945 5,314 (2,544)20122008Anson Health Holdings LLCNorthern OaksAbilene, TX— 369 369 3,220 3,220 1,725 1,725 369 369 4,945 4,945 5,314 5,314 (3,108)(3,108)201220122008
Willits Health Holdings LLCWillits Health Holdings LLCNorthbrookWillits, CA490 1,231 500 490 1,731 2,221 (889)20112008Willits Health Holdings LLCNorthbrookWillits, CA— 490 490 1,231 1,231 500 500 490 490 1,731 1,731 2,221 2,221 (1,078)(1,078)201120112008
Lufkin Health Holdings LLCLufkin Health Holdings LLCSouthlandLufkin, TX467 4,644 782 467 5,426 5,893 (1,630)19882009Lufkin Health Holdings LLCSouthlandLufkin, TX— 467 467 4,644 4,644 782 782 467 467 5,426 5,426 5,893 5,893 (2,063)(2,063)198819882009
Lowell Health Holdings LLCLowell Health Holdings LLCLittletonLittleton, CO217 856 1,735 217 2,591 2,808 (1,421)20122009Lowell Health Holdings LLCLittletonLittleton, CO— 217 217 856 856 1,735 1,735 217 217 2,591 2,591 2,808 2,808 (1,815)(1,815)201220122009
Jefferson Ralston Holdings LLCJefferson Ralston Holdings LLCArvadaArvada, CO280 1,230 834 280 2,064 2,344 (920)20122009Jefferson Ralston Holdings LLCArvadaArvada, CO— 280 280 1,230 1,230 834 834 280 280 2,064 2,064 2,344 2,344 (1,159)(1,159)201220122009
Lafayette Health Holdings LLCLafayette Health Holdings LLCJulia TempleEnglewood, CO1,607 4,222 6,195 1,607 10,417 12,024 (5,021)20122009Lafayette Health Holdings LLCJulia TempleEnglewood, CO— 1,607 1,607 4,222 4,222 6,195 6,195 1,607 1,607 10,417 10,417 12,024 12,024 (6,529)(6,529)201220122009
F-29F-37

SCHEDULE III
REAL ESTATE ASSETS AND ACCUMULATED DEPRECIATION
DECEMBER 31, 20202023
(dollars in thousands)
Hillendahl Health Holdings LLC
Hillendahl Health Holdings LLC
Hillendahl Health Holdings LLCHillendahl Health Holdings LLCGolden AcresDallas, TX2,133 11,977 1,421 2,133 13,398 15,531 (5,530)19842009Golden AcresDallas, TX— 2,133 2,133 11,977 11,977 1,421 1,421 2,133 2,133 13,398 13,398 15,531 15,531 (7,046)(7,046)198419842009
Price Health Holdings LLCPrice Health Holdings LLCPinnaclePrice, UT193 2,209 849 193 3,058 3,251 (1,102)20122009Price Health Holdings LLCPinnaclePrice, UT— 193 193 2,209 2,209 849 849 193 193 3,058 3,058 3,251 3,251 (1,418)(1,418)201220122009
Silver Lake Health Holdings LLCSilver Lake Health Holdings LLCProvoProvo, UT2,051 8,362 2,011 2,051 10,373 12,424 (3,208)20112009Silver Lake Health Holdings LLCProvoProvo, UT— 2,051 2,051 8,362 8,362 2,011 2,011 2,051 2,051 10,373 10,373 12,424 12,424 (4,037)(4,037)201120112009
Jordan Health Properties LLCJordan Health Properties LLCCopper RidgeWest Jordan, UT2,671 4,244 1,507 2,671 5,751 8,422 (1,817)20132009Jordan Health Properties LLCCopper RidgeWest Jordan, UT— 2,671 2,671 4,244 4,244 1,507 1,507 2,671 2,671 5,751 5,751 8,422 8,422 (2,353)(2,353)201320132009
Regal Road Health Holdings LLCRegal Road Health Holdings LLCSunviewYoungstown, AZ767 4,648 729 767 5,377 6,144 (2,063)20122009Regal Road Health Holdings LLCSunviewYoungstown, AZ— 767 767 4,648 4,648 155 155 193 193 5,377 5,377 5,570 5,570 (2,587)(2,587)201220122009
Paredes Health Holdings LLCParedes Health Holdings LLCAlta VistaBrownsville, TX373 1,354 190 373 1,544 1,917 (464)19692009Paredes Health Holdings LLCAlta VistaBrownsville, TX— 373 373 1,354 1,354 190 190 373 373 1,544 1,544 1,917 1,917 (589)(589)196919692009
Expressway Health Holdings LLCExpressway Health Holdings LLCVerandaHarlingen, TX90 675 430 90 1,105 1,195 (455)20112009Expressway Health Holdings LLCVerandaHarlingen, TX— 90 90 675 675 430 430 90 90 1,105 1,105 1,195 1,195 (594)(594)201120112009
Rio Grande Health Holdings LLCRio Grande Health Holdings LLCGrand TerraceMcAllen, TX642 1,085 870 642 1,955 2,597 (934)20122009Rio Grande Health Holdings LLCGrand TerraceMcAllen, TX— 642 642 1,085 1,085 870 870 642 642 1,955 1,955 2,597 2,597 (1,214)(1,214)201220122009
Fifth East Holdings LLCFifth East Holdings LLCParamountSalt Lake City, UT345 2,464 1,065 345 3,529 3,874 (1,355)20112009Fifth East Holdings LLCParamountSalt Lake City, UT— 345 345 2,464 2,464 1,065 1,065 345 345 3,529 3,529 3,874 3,874 (1,720)(1,720)201120112009
Emmett Healthcare Holdings LLCEmmett Healthcare Holdings LLCRiver's EdgeEmmet, ID591 2,383 69 591 2,452 3,043 (801)19722010Emmett Healthcare Holdings LLCRiver's EdgeEmmet, ID— 591 591 2,383 2,383 69 69 591 591 2,452 2,452 3,043 3,043 (1,018)(1,018)197219722010
Burley Healthcare Holdings LLCBurley Healthcare Holdings LLCParke ViewBurley, ID250 4,004 424 250 4,428 4,678 (1,589)20112010Burley Healthcare Holdings LLCParke ViewBurley, ID— 250 250 4,004 4,004 424 424 250 250 4,428 4,428 4,678 4,678 (1,986)(1,986)201120112010
Josey Ranch Healthcare Holdings LLCJosey Ranch Healthcare Holdings LLCHeritage GardensCarrollton, TX1,382 2,293 478 1,382 2,771 4,153 (934)19962010Josey Ranch Healthcare Holdings LLCHeritage GardensCarrollton, TX— 1,382 1,382 2,293 2,293 478 478 1,382 1,382 2,771 2,771 4,153 4,153 (1,206)(1,206)199619962010
Everglades Health Holdings LLCEverglades Health Holdings LLCVictoria VenturaVentura, CA1,847 5,377 682 1,847 6,059 7,906 (1,667)19902011Everglades Health Holdings LLCVictoria VenturaVentura, CA— 1,847 1,847 5,377 5,377 682 682 1,847 1,847 6,059 6,059 7,906 7,906 (2,033)(2,033)199019902011
Irving Health Holdings LLCIrving Health Holdings LLCBeatrice ManorBeatrice, NE60 2,931 245 60 3,176 3,236 (1,063)20112011Irving Health Holdings LLCBeatrice ManorBeatrice, NE— 60 60 2,931 2,931 245 245 60 60 3,176 3,176 3,236 3,236 (1,374)(1,374)20112011
Falls City Health Holdings LLCFalls City Health Holdings LLCCareage Estates of Falls CityFalls City, NE170 2,141 82 170 2,223 2,393 (677)19722011Falls City Health Holdings LLCCareage Estates of Falls CityFalls City, NE— 170 170 2,141 2,141 82 82 170 170 2,223 2,223 2,393 2,393 (895)(895)197219722011
Gillette Park Health Holdings LLCGillette Park Health Holdings LLCCareage of CherokeeCherokee, IA163 1,491 12 163 1,503 1,666 (576)19672011Gillette Park Health Holdings LLCCareage of CherokeeCherokee, IA— 163 163 1,491 1,491 12 12 163 163 1,503 1,503 1,666 1,666 (757)(757)196719672011
Gazebo Park Health Holdings LLCGazebo Park Health Holdings LLCCareage of ClarionClarion, IA80 2,541 97 80 2,638 2,718 (1,052)19782011Gazebo Park Health Holdings LLCCareage of ClarionClarion, IA— 80 80 2,541 2,541 97 97 80 80 2,638 2,638 2,718 2,718 (1,366)(1,366)197819782011
Oleson Park Health Holdings LLCOleson Park Health Holdings LLCCareage of Ft. DodgeFt. Dodge, IA90 2,341 759 90 3,100 3,190 (1,527)20122011Oleson Park Health Holdings LLCCareage of Ft. DodgeFt. Dodge, IA— 90 90 2,341 2,341 759 759 90 90 3,100 3,100 3,190 3,190 (2,025)(2,025)201220122011
Arapahoe Health Holdings LLCArapahoe Health Holdings LLCOceanviewTexas City, TX158 4,810 759 128 5,599 5,727 (2,030)20122011Arapahoe Health Holdings LLCOceanviewTexas City, TX— 158 158 4,810 4,810 759 759 128 128 5,599 5,599 5,727 5,727 (2,659)(2,659)201220122011
Dixie Health Holdings LLCDixie Health Holdings LLCHurricaneHurricane, UT487 1,978 98 487 2,076 2,563 (525)19782011Dixie Health Holdings LLCHurricaneHurricane, UT— 487 487 1,978 1,978 98 98 487 487 2,076 2,076 2,563 2,563 (696)(696)197819782011
Memorial Health Holdings LLCMemorial Health Holdings LLCPocatelloPocatello, ID537 2,138 698 537 2,836 3,373 (1,077)20072011Memorial Health Holdings LLCPocatelloPocatello, ID— 537 537 2,138 2,138 698 698 537 537 2,836 2,836 3,373 3,373 (1,398)(1,398)200720072011
Bogardus Health Holdings LLCBogardus Health Holdings LLCWhittier EastWhittier, CA1,425 5,307 1,079 1,425 6,386 7,811 (2,258)20112011Bogardus Health Holdings LLCWhittier EastWhittier, CA— 1,425 1,425 5,307 5,307 1,079 1,079 1,425 1,425 6,386 6,386 7,811 7,811 (2,879)(2,879)20112011
South Dora Health Holdings LLCSouth Dora Health Holdings LLCUkiahUkiah, CA297 2,087 1,621 297 3,708 4,005 (2,096)20132011South Dora Health Holdings LLCUkiahUkiah, CA— 297 297 2,087 2,087 1,621 1,621 297 297 3,708 3,708 4,005 4,005 (2,334)(2,334)201320132011
Silverada Health Holdings LLCSilverada Health Holdings LLCRosewoodReno, NV1,012 3,282 103 1,012 3,385 4,397 (803)19702011Silverada Health Holdings LLCRosewoodReno, NV— 1,012 1,012 3,282 3,282 103 103 1,012 1,012 3,385 3,385 4,397 4,397 (1,070)(1,070)197019702011
Orem Health Holdings LLCOrem Health Holdings LLCOremOrem, UT1,689 3,896 3,235 1,689 7,131 8,820 (2,940)20112011Orem Health Holdings LLCOremOrem, UT— 1,689 1,689 3,896 3,896 3,235 3,235 1,689 1,689 7,131 7,131 8,820 8,820 (3,791)(3,791)20112011
Wisteria Health Holdings LLCWisteriaAbilene, TX746 9,903 290 746 10,193 10,939 (2,267)20082011
Wisteria Health HoldingsWisteria Health HoldingsWisteriaAbilene, TX— 746 9,903 290 746 10,193 10,939 (2,826)20082011
Renee Avenue Health Holdings LLCRenee Avenue Health Holdings LLCMonte VistaPocatello, ID180 2,481 966 180 3,447 3,627 (1,219)20132012Renee Avenue Health Holdings LLCMonte VistaPocatello, ID— 180 180 2,481 2,481 966 966 180 180 3,447 3,447 3,627 3,627 (1,664)(1,664)201320132012
Stillhouse Health Holdings LLCStillhouse Health Holdings LLCStillhouseParis, TX129 7,139 129 7,145 7,274 (1,079)20092012Stillhouse Health Holdings LLCStillhouseParis, TX— 129 129 7,139 7,139 129 129 7,145 7,145 7,274 7,274 (1,456)(1,456)200920092012
Fig Street Health Holdings LLCFig Street Health Holdings LLCPalomar VistaEscondido, CA329 2,653 1,094 329 3,747 4,076 (1,627)20072012Fig Street Health Holdings LLCPalomar VistaEscondido, CA— 329 329 2,653 2,653 1,094 1,094 329 329 3,747 3,747 4,076 4,076 (1,914)(1,914)200720072012
Lowell Lake Health Holdings LLCLowell Lake Health Holdings LLCOwyheeOwyhee, ID49 1,554 29 49 1,583 1,632 (312)19902012Lowell Lake Health Holdings LLCOwyheeOwyhee, ID— 49 49 1,554 1,554 29 29 49 49 1,583 1,583 1,632 1,632 (423)(423)199019902012
Queensway Health Holdings LLCQueensway Health Holdings LLCAtlantic MemorialLong Beach, CA999 4,237 2,331 999 6,568 7,567 (2,886)20082012Queensway Health Holdings LLCAtlantic MemorialLong Beach, CA— 999 999 4,237 4,237 2,331 2,331 999 999 6,568 6,568 7,567 7,567 (3,211)(3,211)200820082012
Long Beach Health Associates LLCLong Beach Health Associates LLCShorelineLong Beach, CA1,285 2,343 2,172 1,285 4,515 5,800 (1,943)20132012Long Beach Health Associates LLCShorelineLong Beach, CA— 1,285 1,285 2,343 2,343 2,172 2,172 1,285 1,285 4,515 4,515 5,800 5,800 (2,415)(2,415)201320132012
Kings Court Health Holdings LLCKings Court Health Holdings LLCRichland HillsFt. Worth, TX193 2,311 318 193 2,629 2,822 (635)19652012Kings Court Health Holdings LLCRichland HillsFt. Worth, TX— 193 193 2,311 2,311 318 318 193 193 2,629 2,629 2,822 2,822 (866)(866)196519652012
51st Avenue Health Holdings LLC51st Avenue Health Holdings LLCLegacyAmarillo, TX340 3,925 32 340 3,957 4,297 (895)1970201351st Avenue Health Holdings LLCLegacyAmarillo, TX— 340 340 3,925 3,925 32 32 340 340 3,957 3,957 4,297 4,297 (1,238)(1,238)197019702013
Ives Health Holdings LLCIves Health Holdings LLCSan MarcosSan Marcos, TX371 2,951 274 371 3,225 3,596 (697)19722013Ives Health Holdings LLCSan MarcosSan Marcos, TX— 371 371 2,951 2,951 274 274 371 371 3,225 3,225 3,596 3,596 (974)(974)197219722013
Guadalupe Health Holdings LLCGuadalupe Health Holdings LLCThe Courtyard (Victoria East)Victoria, TX80 2,391 15 80 2,406 2,486 (422)20132013Guadalupe Health Holdings LLCThe Courtyard (Victoria East)Victoria, TX— 80 80 2,391 2,391 15 15 80 80 2,406 2,406 2,486 2,486 (587)(587)20132013
49th Street Health Holdings LLC49th Street Health Holdings LLCOmahaOmaha, NE129 2,418 24 129 2,442 2,571 (629)1960201349th Street Health Holdings LLCOmahaOmaha, NE— 129 129 2,418 2,418 24 24 129 129 2,442 2,442 2,571 2,571 (875)(875)196019602013
Willows Health Holdings LLCWillows Health Holdings LLCCascade VistaRedmond, WA— 1,388 2,982 202 1,388 3,184 4,572 (1,244)19702013
Tulalip Bay Health Holdings LLCTulalip Bay Health Holdings LLCMountain ViewMarysville, WA— 1,722 2,642 (980)742 2,642 3,384 (925)19662013
F-30F-38

SCHEDULE III
REAL ESTATE ASSETS AND ACCUMULATED DEPRECIATION
DECEMBER 31, 20202023
(dollars in thousands)
Willows Health Holdings LLCCascade VistaRedmond, WA1,388 2,982 202 1,388 3,184 4,572 (909)19702013
Tulalip Bay Health Holdings LLCMountain ViewMarysville, WA1,722 2,642 (980)742 2,642 3,384 (660)19662013
Sky Holdings AZ LLC
Sky Holdings AZ LLC
Sky Holdings AZ LLCSky Holdings AZ LLCBella Vita Health and Rehabilitation CenterGlendale, AZ228 1,124 1,380 228 2,504 2,731 (1,727)20042002Bella Vita Health and Rehabilitation CenterGlendale, AZ— 228 228 1,124 1,124 1,380 1,380 228 228 2,504 2,504 2,732 2,732 (2,021)(2,021)200420042002
Lemon River Holdings LLCLemon River Holdings LLCPlymouth TowerRiverside, CA152 357 1,493 152 1,850 2,002 (1,163)20122009Lemon River Holdings LLCPlymouth TowerRiverside, CA— 152 152 357 357 1,493 1,493 152 152 1,850 1,850 2,002 2,002 (1,510)(1,510)201220122009
CTR Partnership, L.P.CTR Partnership, L.P.Bethany Rehabilitation CenterLakewood, CO1,668 15,375 56 1,668 15,431 17,099 (2,285)19892015CTR Partnership, L.P.Bethany Rehabilitation CenterLakewood, CO— 1,668 1,668 15,375 15,375 61 61 1,668 1,668 15,436 15,436 17,104 17,104 (3,445)(3,445)198919892015
CTR Partnership, L.P.CTR Partnership, L.P.Mira Vista Care CenterMount Vernon, WA1,601 7,425 1,601 7,425 9,026 (1,067)19892015CTR Partnership, L.P.Mira Vista Care CenterMount Vernon, WA— 1,601 1,601 7,425 7,425 — — 1,601 1,601 7,425 7,425 9,026 9,026 (1,624)(1,624)198919892015
CTR Partnership, L.P.CTR Partnership, L.P.Shoreline Health and Rehabilitation CenterShoreline, WA1,462 5,034 1,462 5,034 6,496 (703)19872015CTR Partnership, L.P.Shoreline Health and Rehabilitation CenterShoreline, WA— 1,462 1,462 5,034 5,034 — — 1,462 1,462 5,034 5,034 6,496 6,496 (1,080)(1,080)198719872015
CTR Partnership, L.P.Shamrock Nursing and Rehabilitation CenterDublin, GA251 7,855 251 7,855 8,106 (1,080)20102015
CTR Partnership, L.P.BeaverCreek Health and RehabBeavercreek, OH892 17,159 13 892 17,172 18,064 (2,254)20142015
CTR Partnership, L.P.CTR Partnership, L.P.Premier Estates of Cincinnati-RiverviewCincinnati, OH833 18,086 192 833 18,278 19,111 (2,416)19922015
CTR Partnership, L.P.CTR Partnership, L.P.Englewood Health and RehabEnglewood, OH1,014 18,541 88 1,014 18,629 19,643 (2,464)19622015
CTR Partnership, L.P.CTR Partnership, L.P.Portsmouth Health and RehabPortsmouth, OH282 9,726 428 282 10,154 10,436 (1,400)20082015Premier Estates of Cincinnati-RiverviewCincinnati, OH— 833 833 18,086 18,086 792 792 833 833 18,878 18,878 19,711 19,711 (3,936)(3,936)199219922015
CTR Partnership, L.P.
CTR Partnership, L.P.
CTR Partnership, L.P.West Cove Care & Rehabilitation CenterToledo, OH— 93 10,365 811 1,185 1,191 — 20072015
CTR Partnership, L.P.
CTR Partnership, L.P.
CTR Partnership, L.P.CTR Partnership, L.P.West Cove Care & Rehabilitation CenterToledo, OH93 10,365 93 10,365 10,458 (1,360)20072015Shaw Mountain at CascadiaBoise, ID— 1,801 1,801 6,572 6,572 395 395 1,801 1,801 6,967 6,967 8,768 8,768 (1,520)(1,520)198919892016
CTR Partnership, L.P.CTR Partnership, L.P.BellBrook Health and RehabBellbrook, OH214 2,573 231 214 2,804 3,018 (385)20032015
CTR Partnership, L.P.CTR Partnership, L.P.Xenia Health and RehabXenia, OH205 3,564 23 205 3,587 3,792 (471)19812015
CTR Partnership, L.P.CTR Partnership, L.P.Jamestown Place Health and RehabJamestown, OH266 4,725 268 266 4,993 5,259 (694)19672015Arbor Nursing CenterLodi, CA— 768 768 10,712 10,712 — — 768 768 10,712 10,712 11,480 11,480 (1,986)(1,986)198219822016
CTR Partnership, L.P.CTR Partnership, L.P.Casa de PazSioux City, IA119 7,727 119 7,727 7,846 (950)19742016CTR Partnership, L.P.Broadmoor Medical LodgeRockwall, TX— 1,232 1,232 22,152 22,152 — — 1,232 1,232 22,152 22,152 23,384 23,384 (3,924)(3,924)198419842016
CTR Partnership, L.P.CTR Partnership, L.P.Denison Care CenterDenison, IA96 2,784 96 2,784 2,880 (342)20152016CTR Partnership, L.P.Decatur Medical LodgeDecatur, TX— 990 990 24,909 24,909 — — 990 990 24,909 24,909 25,899 25,899 (4,411)(4,411)201320132016
CTR Partnership, L.P.CTR Partnership, L.P.Garden View Care CenterShenandoah, IA105 3,179 105 3,179 3,284 (391)20132016CTR Partnership, L.P.Royse City Medical LodgeRoyse City, TX— 606 606 14,660 14,660 — — 606 606 14,660 14,660 15,266 15,266 (2,596)(2,596)200920092016
CTR Partnership, L.P.CTR Partnership, L.P.Grandview Health Care CenterDayton, IA39 1,167 39 1,167 1,206 (143)20142016CTR Partnership, L.P.Saline Care Nursing & Rehabilitation CenterHarrisburg, IL— 1,022 1,022 5,713 5,713 — — 1,022 1,022 5,713 5,713 6,735 6,735 (976)(976)200920092017
CTR Partnership, L.P.CTR Partnership, L.P.Grundy Care CenterGrundy Center, IA65 1,935 65 1,935 2,000 (238)20112016CTR Partnership, L.P.Carrier Mills Nursing & Rehabilitation CenterCarrier Mills, IL— 775 775 8,377 8,377 — — 775 775 8,377 8,377 9,152 9,152 (1,431)(1,431)196819682017
CTR Partnership, L.P.CTR Partnership, L.P.Iowa City Rehab and Health Care CenterIowa City, IA522 5,690 522 5,690 6,212 (699)20142016CTR Partnership, L.P.StoneBridge Nursing & Rehabilitation CenterBenton, IL— 439 439 3,475 3,475 — — 439 439 3,475 3,475 3,914 3,914 (594)(594)201420142017
CTR Partnership, L.P.CTR Partnership, L.P.Lenox Care CenterLenox, IA31 1,915 31 1,915 1,946 (235)20122016CTR Partnership, L.P.DuQuoin Nursing & Rehabilitation CenterDuQuoin, IL— 511 511 3,662 3,662 — — 511 511 3,662 3,662 4,173 4,173 (626)(626)201420142017
CTR Partnership, L.P.CTR Partnership, L.P.OsageOsage, IA126 2,255 126 2,255 2,381 (277)20142016CTR Partnership, L.P.Pinckneyville Nursing & Rehabilitation CenterPinckneyville, IL— 406 406 3,411 3,411 — — 406 406 3,411 3,411 3,817 3,817 (583)(583)201420142017
CTR Partnership, L.P.CTR Partnership, L.P.Pleasant Acres Care CenterHull, IA189 2,544 189 2,544 2,733 (313)20142016CTR Partnership, L.P.Wellspring Health and Rehabilitation of CascadiaNampa, ID— 775 775 5,044 5,044 336 336 775 775 5,380 5,380 6,155 6,155 (869)(869)201120112017
CTR Partnership, L.P.CTR Partnership, L.P.Cedar Falls Health Care CenterCedar Falls, IA324 4,366 324 4,366 4,690 (518)20152016CTR Partnership, L.P.The Rio at Fox HollowBrownsville, TX— 1,178 1,178 12,059 12,059 — — 1,178 1,178 12,059 12,059 13,237 13,237 (1,985)(1,985)201620162017
CTR Partnership, L.P.CTR Partnership, L.P.Premier Estates of HighlandsNorwood, OH364 2,199 282 364 2,481 2,845 (293)20122016CTR Partnership, L.P.The Rio at CabezonAlbuquerque, NM— 2,055 2,055 9,749 9,749 — — 2,055 2,055 9,749 9,749 11,804 11,804 (1,605)(1,605)201620162017
CTR Partnership, L.P.CTR Partnership, L.P.Shaw Mountain at CascadiaBoise, ID1,801 6,572 395 1,801 6,967 8,768 (908)19892016CTR Partnership, L.P.Eldorado Rehab & HealthcareEldorado, IL— 940 940 2,093 2,093 — — 940 940 2,093 2,093 3,033 3,033 (340)(340)199319932017
CTR Partnership, L.P.CTR Partnership, L.P.The OaksPetaluma, CA3,646 2,873 110 3,646 2,983 6,629 (353)20152016CTR Partnership, L.P.Secora Health and Rehabilitation of CascadiaPortland, OR— 1,481 1,481 2,216 2,216 110 110 1,481 1,481 2,326 2,326 3,807 3,807 (369)(369)201220122017
CTR Partnership, L.P.CTR Partnership, L.P.Arbor Nursing CenterLodi, CA768 10,712 768 10,712 11,480 (1,183)19822016CTR Partnership, L.P.Mountain ValleyKellogg, ID— 916 916 7,874 7,874 — — 916 916 7,874 7,874 8,790 8,790 (1,247)(1,247)197119712017
CTR Partnership, L.P.CTR Partnership, L.P.Broadmoor Medical LodgeRockwall, TX1,232 22,152 1,232 22,152 23,384 (2,262)19842016CTR Partnership, L.P.Caldwell CareCaldwell, ID— 906 906 7,020 7,020 516 516 906 906 7,536 7,536 8,442 8,442 (1,155)(1,155)194719472017
CTR Partnership, L.P.CTR Partnership, L.P.Decatur Medical LodgeDecatur, TX990 24,909 990 24,909 25,899 (2,543)20132016CTR Partnership, L.P.Canyon WestCaldwell, ID— 312 312 10,410 10,410 461 461 312 312 10,871 10,871 11,183 11,183 (1,687)(1,687)196919692017
CTR Partnership, L.P.CTR Partnership, L.P.Royse City Medical LodgeRoyse City, TX606 14,660 606 14,660 15,266 (1,497)20092016CTR Partnership, L.P.Lewiston Health and RehabilitationLewiston, ID— 625 625 12,087 12,087 215 215 625 625 12,302 12,302 12,927 12,927 (1,907)(1,907)196419642017
CTR Partnership, L.P.CTR Partnership, L.P.The OrchardsNampa, ID— 785 8,923 272 785 9,195 9,980 (1,417)19582017
CTR Partnership, L.P.CTR Partnership, L.P.Weiser CareWeiser, ID— 80 4,419 389 80 4,808 4,888 (723)19642017
CTR Partnership, L.P.CTR Partnership, L.P.Aspen ParkMoscow, ID— 698 5,092 274 698 5,366 6,064 (875)19652017
CTR Partnership, L.P.CTR Partnership, L.P.Ridgmar Medical LodgeFort Worth, TX— 681 6,587 1,256 681 7,843 8,524 (1,447)20062017
CTR Partnership, L.P.CTR Partnership, L.P.Mansfield Medical LodgeMansfield, TX— 607 4,801 1,073 607 5,874 6,481 (1,077)20062017
CTR Partnership, L.P.CTR Partnership, L.P.Grapevine Medical LodgeGrapevine, TX— 1,602 4,536 891 1,602 5,427 7,029 (1,004)20062017
F-31F-39

SCHEDULE III
REAL ESTATE ASSETS AND ACCUMULATED DEPRECIATION
DECEMBER 31, 20202023
(dollars in thousands)
CTR Partnership, L.P.Saline Care Nursing & Rehabilitation CenterHarrisburg, IL1,022 5,713 1,022 5,713 6,735 (547)20092017
CTR Partnership, L.P.Carrier Mills Nursing & Rehabilitation CenterCarrier Mills, IL775 8,377 775 8,377 9,152 (803)19682017
CTR Partnership, L.P.StoneBridge Nursing & Rehabilitation CenterBenton, IL439 3,475 439 3,475 3,914 (333)20142017
CTR Partnership, L.P.DuQuoin Nursing & Rehabilitation CenterDuQuoin, IL511 3,662 511 3,662 4,173 (351)20142017
CTR Partnership, L.P.Pinckneyville Nursing & Rehabilitation CenterPinckneyville, IL406 3,411 406 3,411 3,817 (327)20142017
CTR Partnership, L.P.Wellspring Health and Rehabilitation of CascadiaNampa, ID774 5,044 111 774 5,155 5,929 (462)20112017
CTR Partnership, L.P.The Rio at Fox HollowBrownsville, TX1,178 12,059 1,178 12,059 13,237 (1,080)20162017
CTR Partnership, L.P.The Rio at CabezonAlbuquerque, NM2,055 9,749 2,055 9,749 11,804 (873)20162017
CTR Partnership, L.P.Eldorado Rehab & HealthcareEldorado, IL940 2,093 940 2,093 3,033 (183)19932017
CTR Partnership, L.P.Secora Health and Rehabilitation of CascadiaPortland, OR1,481 2,216 110 1,481 2,326 3,807 (194)20122017
CTR Partnership, L.P.Mountain ValleyKellogg, ID916 7,874 916 7,874 8,790 (656)19712017
CTR Partnership, L.P.Caldwell CareCaldwell, ID906 7,020 516 906 7,536 8,442 (585)19472017
CTR Partnership, L.P.Canyon WestCaldwell, ID312 10,410 431 312 10,841 11,153 (868)19692017
CTR Partnership, L.P.Lewiston Health and RehabilitationLewiston, ID625 12,087 152 625 12,239 12,864 (982)19642017
CTR Partnership, L.P.The OrchardsNampa, ID785 8,923 47 785 8,970 9,755 (725)19582017
CTR Partnership, L.P.Weiser CareWeiser, ID80 4,419 30 80 4,449 4,529 (359)19642017
CTR Partnership, L.P.Aspen ParkMoscow, ID698 5,092 274 698 5,366 6,064 (438)19652017
CTR Partnership, L.P.Ridgmar Medical LodgeFort Worth, TX681 6,587 1,256 681 7,843 8,524 (702)20062017
CTR Partnership, L.P.Mansfield Medical LodgeMansfield, TX607 4,801 1,178 607 5,979 6,586 (513)20062017
CTR Partnership, L.P.CTR Partnership, L.P.Grapevine Medical LodgeGrapevine, TX1,602 4,536 891 1,602 5,427 7,029 (486)20062017
CTR Partnership, L.P.CTR Partnership, L.P.Brookfield Health and RehabBattle Ground, WA320 500 320 500 820 (42)20122017
CTR Partnership, L.P.CTR Partnership, L.P.The Oaks at LakewoodTacoma, WA1,000 1,779 1,000 1,779 2,779 (145)19892017The Oaks at LakewoodTacoma, WA— 1,001 1,001 1,779 1,779 — — 1,001 1,001 1,779 1,779 2,780 2,780 (278)(278)198919892017
CTR Partnership, L.P.CTR Partnership, L.P.The Oaks at TimberlineVancouver, WA445 869 445 869 1,314 (71)19722017CTR Partnership, L.P.The Oaks at TimberlineVancouver, WA— 446 446 869 869 — — 446 446 869 869 1,315 1,315 (136)(136)197219722017
CTR Partnership, L.P.CTR Partnership, L.P.Providence Waterman Nursing CenterSan Bernardino, CA3,831 19,791 3,831 19,791 23,622 (1,608)19672017CTR Partnership, L.P.Providence Waterman Nursing CenterSan Bernardino, CA— 3,831 3,831 19,791 19,791 — — 3,831 3,831 19,791 19,791 23,622 23,622 (3,092)(3,092)196719672017
CTR Partnership, L.P.CTR Partnership, L.P.Providence Orange TreeRiverside, CA2,897 14,700 2,897 14,700 17,597 (1,194)19692017CTR Partnership, L.P.Providence Orange TreeRiverside, CA— 2,897 2,897 14,700 14,700 345 345 2,897 2,897 15,045 15,045 17,942 17,942 (2,366)(2,366)196919692017
CTR Partnership, L.P.CTR Partnership, L.P.Providence OntarioOntario, CA4,204 21,880 4,204 21,880 26,084 (1,778)19802017CTR Partnership, L.P.Providence OntarioOntario, CA— 4,204 4,204 21,880 21,880 — — 4,204 4,204 21,880 21,880 26,084 26,084 (3,419)(3,419)198019802017
CTR Partnership, L.P.CTR Partnership, L.P.Greenville Nursing & Rehabilitation CenterGreenville, IL188 3,972 188 3,972 4,160 (366)19732017CTR Partnership, L.P.Greenville Nursing & Rehabilitation CenterGreenville, IL— 188 188 3,972 3,972 — — 188 188 3,972 3,972 4,160 4,160 (721)(721)197319732017
CTR Partnership, L.P.CTR Partnership, L.P.Copper Ridge Health and Rehabilitation CenterButte, MT220 4,974 220 4,974 5,194 (398)20102018CTR Partnership, L.P.Copper Ridge Health and Rehabilitation CenterButte, MT— 220 220 4,974 4,974 39 39 220 220 5,013 5,013 5,233 5,233 (814)(814)201020102018
CTR Partnership, L.P.CTR Partnership, L.P.Prairie Heights Healthcare CenterAberdeen, SD1,372 7,491 1,372 7,491 8,863 (510)19652018
CTR Partnership, L.P.
CTR Partnership, L.P.Prairie Heights Healthcare CenterAberdeen, SD— 1,372 7,491 — 1,372 7,491 8,863 (1,133)19652018
CTR Partnership, L.P.CTR Partnership, L.P.The Meadows on UniversityFargo, ND989 3,275 989 3,275 4,264 (196)19662018CTR Partnership, L.P.The Meadows on UniversityFargo, ND— 989 989 3,275 3,275 — — 989 989 3,275 3,275 4,264 4,264 (468)(468)196619662018
CTR Partnership, L.P.CTR Partnership, L.P.The Suites - ParkerParker, CO1,178 17,857 1,178 17,857 19,035 (952)20122018
CTR Partnership, L.P.
CTR Partnership, L.P.The Suites - ParkerParker, CO— 1,178 17,857 — 1,178 17,857 19,035 (2,322)20122018
CTR Partnership, L.P.CTR Partnership, L.P.Huntington Park Nursing CenterHuntington Park, CA— 3,131 8,876 299 3,131 9,175 12,306 (1,232)19552019
CTR Partnership, L.P.CTR Partnership, L.P.Shoreline Care CenterOxnard, CA— 1,699 9,004 — 1,699 9,004 10,703 (1,136)19622019
CTR Partnership, L.P.CTR Partnership, L.P.Downey Care CenterDowney, CA— 2,502 6,141 — 2,502 6,141 8,643 (776)19672019
CTR Partnership, L.P.CTR Partnership, L.P.Courtyard Healthcare CenterDavis, CA— 2,351 9,256 — 2,351 9,256 11,607 (1,191)19692019
Gulf Coast Buyer 1 LLCGulf Coast Buyer 1 LLCAlpine Skilled Nursing and RehabilitationRuston, LA— 2,688 23,825 — 2,688 23,825 26,513 (2,985)20142019
Gulf Coast Buyer 1 LLCGulf Coast Buyer 1 LLCThe Bradford Skilled Nursing and RehabilitationShreveport, LA— 3,758 21,325 17 3,758 21,342 25,100 (2,694)19802019
Gulf Coast Buyer 1 LLCGulf Coast Buyer 1 LLCColonial Oaks Skilled Nursing and RehabilitationBossier City, LA— 1,635 21,180 — 1,635 21,180 22,815 (2,591)20132019
Gulf Coast Buyer 1 LLCGulf Coast Buyer 1 LLCThe Guest House Skilled Nursing and RehabilitationShreveport, LA— 3,437 20,889 2,845 3,437 23,734 27,171 (2,992)20062019
Gulf Coast Buyer 1 LLCGulf Coast Buyer 1 LLCPilgrim Manor Skilled Nursing and RehabilitationBossier City, LA— 2,979 24,617 1,978 2,979 26,595 29,574 (3,082)20082019
Gulf Coast Buyer 1 LLCGulf Coast Buyer 1 LLCShreveport Manor Skilled Nursing and RehabilitationShreveport, LA— 676 10,238 602 676 10,840 11,516 (1,350)20082019
Gulf Coast Buyer 1 LLCGulf Coast Buyer 1 LLCBooker T. Washington Skilled Nursing and RehabilitationShreveport, LA— 2,452 9,148 113 2,452 9,261 11,713 (1,221)20132019
Gulf Coast Buyer 1 LLCGulf Coast Buyer 1 LLCLegacy West Rehabilitation and HealthcareCorsicana, TX— 120 6,682 436 120 7,118 7,238 (1,004)20022019
Gulf Coast Buyer 1 LLCGulf Coast Buyer 1 LLCLegacy at JacksonvilleJacksonville, TX— 173 7,481 127 173 7,608 7,781 (1,025)20062019
Gulf Coast Buyer 1 LLCGulf Coast Buyer 1 LLCPecan Tree Rehabilitation and HealthcareGainesville, TX— 219 10,097 255 219 10,352 10,571 (1,356)19902019
Lakewest SNF Realty, LLCLakewest SNF Realty, LLCLakewest Rehabilitation and Skilled CareDallas, TX— — 6,905 — — 6,905 6,905 (901)20112019
CTR Partnership, L.P.CTR Partnership, L.P.Cascadia of NampaNampa, ID— 880 14,117 — 880 14,117 14,997 (1,719)20172019
CTR Partnership, L.P.CTR Partnership, L.P.Valley Skilled NursingModesto, CA— 798 7,671 — 798 7,671 8,469 (845)20162019
CTR Partnership, L.P.CTR Partnership, L.P.Cascadia of BoiseBoise, ID— 1,597 15,692 — 1,597 15,692 17,289 (1,647)20182020
CTR Partnership, L.P.CTR Partnership, L.P.Cooney Healthcare and RehabilitationHelena, MT— 867 7,431 20 867 7,451 8,318 (656)19842020
F-32F-40

SCHEDULE III
REAL ESTATE ASSETS AND ACCUMULATED DEPRECIATION
DECEMBER 31, 20202023
(dollars in thousands)
CTR Partnership, L.P.CTR Partnership, L.P.Huntington Park Nursing CenterHuntington Park, CA3,131 8,876 299 3,131 9,175 12,306 (464)19552019
CTR Partnership, L.P.CTR Partnership, L.P.Shoreline Care CenterOxnard, CA1,699 9,004 1,699 9,004 10,703 (443)19622019
CTR Partnership, L.P.CTR Partnership, L.P.Downey Care CenterDowney, CA2,502 6,141 2,502 6,141 8,643 (303)19672019Elkhorn Healthcare and RehabilitationClancy, MT— 183 183 7,380 7,380 504 504 183 183 7,884 7,884 8,067 8,067 (700)(700)196019602020
CTR Partnership, L.P.CTR Partnership, L.P.Courtyard Healthcare CenterDavis, CA2,351 9,256 2,351 9,256 11,607 (464)19692019CTR Partnership, L.P.Beacon Harbor Healthcare and RehabilitationRockwall, TX— 1,295 1,295 17,069 17,069 — — 1,295 1,295 17,069 17,069 18,364 18,364 (1,446)(1,446)199619962020
Gulf Coast Buyer 1 LLCAlpine Skilled Nursing and RehabilitationRuston, LA2,688 23,825 2,688 23,825 26,513 (1,100)20142019
Gulf Coast Buyer 1 LLCThe Bradford Skilled Nursing and RehabilitationShreveport, LA3,758 21,325 17 3,758 21,342 25,100 (992)19802019
Gulf Coast Buyer 1 LLCColonial Oaks Skilled Nursing and RehabilitationBossier City, LA1,635 21,180 1,635 21,180 22,815 (954)20132019
Gulf Coast Buyer 1 LLCThe Guest House Skilled Nursing and RehabilitationShreveport, LA3,437 20,889 184 3,437 21,073 24,510 (984)20062019
Gulf Coast Buyer 1 LLCPilgrim Manor Skilled Nursing and RehabilitationBossier City, LA2,979 24,617 2,979 24,617 27,596 (1,123)20082019
Gulf Coast Buyer 1 LLCShreveport Manor Skilled Nursing and RehabilitationShreveport, LA676 10,238 361 676 10,599 11,275 (481)20082019
Gulf Coast Buyer 1 LLCBooker T. Washington Skilled Nursing and RehabilitationShreveport, LA2,452 9,148 113 2,452 9,261 11,713 (447)20132019
Gulf Coast Buyer 1 LLCLegacy West Rehabilitation and HealthcareCorsicana, TX120 6,682 409 120 7,091 7,211 (340)20022019
Gulf Coast Buyer 1 LLCLegacy at JacksonvilleJacksonville, TX173 7,481 127 173 7,608 7,781 (369)20062019
Gulf Coast Buyer 1 LLCPecan Tree Rehabilitation and HealthcareGainesville, TX219 10,097 285 219 10,382 10,601 (481)19902019
Lakewest SNF Realty, LLCLakewest Rehabilitation and Skilled CareDallas, TX6,905 6,905 6,905 (322)20112019
CTR Partnership, L.P.CTR Partnership, L.P.Pleasant Manor Healthcare and RehabilitationWaxahachie, TX— 629 7,433 — 629 7,433 8,062 (635)19722020
CTR Partnership, L.P.CTR Partnership, L.P.Rowlett Health and Rehabilitation CenterRowlett, TX— 1,036 10,516 — 1,036 10,516 11,552 (886)19902020
160 North Patterson Avenue, LLC160 North Patterson Avenue, LLCBuena Vista Care CenterGoleta, CA— 7,987 7,237 — 7,987 7,237 15,224 (543)19672021
CTR Partnership, L.P.CTR Partnership, L.P.Cascadia of NampaNampa, ID880 14,117 880 14,117 14,997 (594)20172019CTR Partnership, L.P.El Centro Post-Acute CareEl Centro, CA— 1,283 1,283 8,133 8,133 135 135 1,283 1,283 8,268 8,268 9,551 9,551 (594)(594)196219622021
CTR Partnership, L.P.CTR Partnership, L.P.Valley Skilled NursingModesto, CA798 7,671 798 7,671 8,469 (249)20162019CTR Partnership, L.P.Sedona Trace Health and WellnessAustin, TX— 3,282 3,282 12,763 12,763 — — 3,282 3,282 12,763 12,763 16,045 16,045 (865)(865)201720172021
CTR Partnership, L.P.CTR Partnership, L.P.Cascadia of BoiseBoise, ID1,597 15,692 1,597 15,692 17,289 (412)20182020CTR Partnership, L.P.Cedar Pointe Health and Wellness SuitesCedar Park, TX— 3,325 3,325 11,738 11,738 — — 3,325 3,325 11,738 11,738 15,063 15,063 (786)(786)201720172021
CTR Partnership, L.P.CTR Partnership, L.P.Cooney Healthcare and RehabilitationHelena, MT867 7,431 867 7,431 8,298 (65)19842020CTR Partnership, L.P.Ennis Care CenterEnnis,TX— 568 568 8,055 8,055 — — 568 568 8,055 8,055 8,623 8,623 (421)(421)198219822022
CTR Partnership, L.P.CTR Partnership, L.P.Elkhorn Healthcare and RehabilitationClancy, MT183 7,380 183 7,380 7,563 (66)19602020CTR Partnership, L.P.Park Bend Rehabilitation and Healthcare CenterBurleson, TX— 1,877 1,877 6,616 6,616 717 717 1,877 1,877 7,333 7,333 9,210 9,210 (148)(148)198819882023
CTR Partnership, L.P.CTR Partnership, L.P.Beacon Harbor Healthcare and RehabilitationRockwall, TX1,295 17,069 1,295 17,069 18,364 (76)19962020CTR Partnership, L.P.Prairie Ridge Health and RehabiliationOverland Park , KS— 1,301 1,301 5,025 5,025 — — 1,301 1,301 5,025 5,025 6,326 6,326 (104)(104)198719872023
CTR Partnership, L.P.CTR Partnership, L.P.Pleasant Manor Healthcare and RehabilitationWaxahachie, TX629 7,433 629 7,433 8,062 (33)19722020CTR Partnership, L.P.Spalding Post AcuteGriffin , GA— 680 680 11,044 11,044 — — 680 680 11,044 11,044 11,724 11,724 (209)(209)202220222023
CTR Partnership, L.P.CTR Partnership, L.P.Rowlett Health and Rehabilitation CenterRowlett, TX1,036 10,516 1,036 10,516 11,552 (47)19902020CTR Partnership, L.P.Casa Azul Skilled Nursing and RehabilitationKaty , TX— 3,413 3,413 10,451 10,451 — — 3,413 3,413 10,451 10,451 13,864 13,864 (165)(165)200520052023
145,155 963,927 92,226 144,145 1,057,163 1,201,307 (194,390)
8665 La Mesa Boulevard, LLC8665 La Mesa Boulevard, LLCCommunity Convalescent Hospital of La MesaLa Mesa , CA— 5,346 21,528 — 5,346 21,528 26,874 (321)19682023
7039 Alonda Boulevard, LLC7039 Alonda Boulevard, LLCParamount Meadows Nursing CenterParamount , CA— 3,640 15,380 — 3,640 15,380 19,020 (230)19692023
10625 Leffingwell Road, LLC10625 Leffingwell Road, LLCNorwalk Meadows Nursing CenterNorwalk , CA— 4,932 14,229 — 4,932 14,229 19,161 (216)19642023
247 E. Bobier Drive, LLC247 E. Bobier Drive, LLCLa Fuente Post AcuteVista , CA— 4,882 20,793 — 4,882 20,793 25,675 (187)19902023
Capitola 1935 Realty LLCCapitola 1935 Realty LLCPacific Coast ManorCapitola , CA— 5,231 16,321 — 5,231 16,321 21,552 (70)19642023
Morgan Hills Realty LLCMorgan Hills Realty LLCPacific Hills ManorMorgan Hill , CA— 3,239 14,418 — 3,239 14,418 17,657 (64)20142023
Multi-Service Campus Properties:Multi-Service Campus Properties:
Multi-Service Campus Properties:
Multi-Service Campus Properties:
Ensign Southland LLC
Ensign Southland LLC
Ensign Southland LLCEnsign Southland LLCSouthland CareNorwalk, CA966 5,082 2,213 966 7,295 8,261 (5,292)20111999Southland CareNorwalk, CA— 966 966 5,082 5,082 2,213 2,213 966 966 7,295 7,295 8,261 8,261 (6,116)(6,116)201120111999
Mission CCRC LLCMission CCRC LLCSt. Joseph's VillaSalt Lake City, UT1,962 11,035 464 1,962 11,499 13,461 (3,327)19942011Mission CCRC LLCSt. Joseph's VillaSalt Lake City, UT— 1,962 1,962 11,035 11,035 464 464 1,962 1,962 11,499 11,499 13,461 13,461 (4,221)(4,221)199419942011
Wayne Health Holdings LLCWayne Health Holdings LLCCareage of WayneWayne, NE130 3,061 122 130 3,183 3,313 (994)19782011Wayne Health Holdings LLCCareage of WayneWayne, NE— 130 130 3,061 3,061 122 122 130 130 3,183 3,183 3,313 3,313 (1,302)(1,302)197819782011
4th Street Holdings LLC4th Street Holdings LLCWest Bend Care CenterWest Bend, IA— 180 3,352 — 180 3,352 3,532 (1,304)20062011
Big Sioux River Health Holdings LLCBig Sioux River Health Holdings LLCHillcrest HealthHawarden, IA— 110 3,522 75 110 3,597 3,707 (1,317)19742011
Prairie Health Holdings LLCPrairie Health Holdings LLCColonial Manor of RandolphRandolph, NE— 130 1,571 22 130 1,593 1,723 (998)2011
Salmon River Health Holdings LLCSalmon River Health Holdings LLCDiscovery Care CenterSalmon, ID— 168 2,496 — 168 2,496 2,664 (712)2012
CTR Partnership, L.P.
CTR Partnership, L.P.
CTR Partnership, L.P.Liberty Nursing Center of WillardWillard, OH— 144 11,097 50 144 11,147 11,291 (2,324)19852015
CTR Partnership, L.P.CTR Partnership, L.P.Premier Estates of Middletown/Premier Retirement Estates of MiddletownMiddletown, OH— 990 7,484 380 990 7,864 8,854 (1,676)19852015
F-33F-41

SCHEDULE III
REAL ESTATE ASSETS AND ACCUMULATED DEPRECIATION
DECEMBER 31, 20202023
(dollars in thousands)
4th Street Holdings LLCWest Bend Care CenterWest Bend, IA180 3,352 180 3,352 3,532 (991)20062011
Big Sioux River Health Holdings LLCHillcrest HealthHawarden, IA110 3,522 75 110 3,597 3,707 (998)19742011
Prairie Health Holdings LLCColonial Manor of RandolphRandolph, NE130 1,571 22 130 1,593 1,723 (758)20112011
Salmon River Health Holdings LLCDiscovery Care CenterSalmon, ID168 2,496 168 2,496 2,664 (525)20122012
CTR Partnership, L.P.Centerville Senior Independent LivingDayton, OH3,912 22,458 117 3,781 22,706 26,487 (3,018)20072015
CTR Partnership, L.P.CTR Partnership, L.P.Liberty Nursing Center of WillardWillard, OH143 11,097 50 143 11,147 11,290 (1,477)19852015
CTR Partnership, L.P.CTR Partnership, L.P.Premier Estates of Middletown/Premier Retirement Estates of MiddletownMiddletown, OH990 7,484 172 990 7,656 8,646 (1,025)19852015
CTR Partnership, L.P.CTR Partnership, L.P.Premier Estates of Norwood Towers/Premier Retirement Estates of Norwood TowersNorwood, OH1,316 10,071 499 1,316 10,570 11,886 (1,249)19912016Premier Estates of Norwood Towers/Premier Retirement Estates of Norwood TowersNorwood, OH— 1,316 1,316 10,071 10,071 1,021 1,021 1,316 1,316 11,092 11,092 12,408 12,408 (2,216)(2,216)199119912016
CTR Partnership, L.P.CTR Partnership, L.P.Turlock Nursing and Rehabilitation CenterTurlock, CA1,258 16,526 1,258 16,526 17,784 (1,825)19862016CTR Partnership, L.P.Turlock Nursing and Rehabilitation CenterTurlock, CA— 1,258 1,258 16,526 16,526 — — 1,258 1,258 16,526 16,526 17,784 17,784 (3,064)(3,064)198619862016
CTR Partnership, L.P.CTR Partnership, L.P.Bridgeport Medical LodgeBridgeport, TX980 27,917 980 27,917 28,897 (2,850)20142016CTR Partnership, L.P.Bridgeport Medical LodgeBridgeport, TX— 980 980 27,917 27,917 — — 980 980 27,917 27,917 28,897 28,897 (4,944)(4,944)201420142016
CTR Partnership, L.P.CTR Partnership, L.P.The Villas at SaratogaSaratoga, CA8,709 9,736 1,396 8,709 11,132 19,841 (617)20042018CTR Partnership, L.P.The Villas at SaratogaSaratoga, CA— 8,709 8,709 9,736 9,736 1,397 1,397 8,709 8,709 11,133 11,133 19,842 19,842 (1,789)(1,789)200420042018
CTR Partnership, L.P.CTR Partnership, L.P.Madison Park HealthcareHuntington, WV601 6,385 601 6,385 6,986 (359)19242018CTR Partnership, L.P.Madison Park HealthcareHuntington, WV— 601 601 6,385 6,385 — — 601 601 6,385 6,385 6,986 6,986 (856)(856)192419242018
CTR Partnership, L.P.CTR Partnership, L.P.Oakview Heights Nursing & Rehabilitation CenterMt. Carmel, IL298 8,393 298 8,393 8,691 (455)20042019CTR Partnership, L.P.Oakview Heights Nursing & Rehabilitation CenterMt. Carmel, IL— 298 298 8,393 8,393 — — 298 298 8,393 8,393 8,691 8,691 (1,167)(1,167)200420042019
Gulf Coast Buyer 1 LLCGulf Coast Buyer 1 LLCSpring Lake Skilled Nursing and RehabilitationShreveport, LA3,217 21,195 2,525 3,217 23,720 26,937 (1,008)20082019Gulf Coast Buyer 1 LLCSpring Lake Skilled Nursing and RehabilitationShreveport, LA— 3,217 3,217 21,195 21,195 2,729 2,729 3,217 3,217 23,924 23,924 27,141 27,141 (3,313)(3,313)200820082019
Gulf Coast Buyer 1 LLCGulf Coast Buyer 1 LLCThe Village at Heritage OaksCorsicana, TX143 11,429 549 143 11,978 12,121 (560)20072019Gulf Coast Buyer 1 LLCThe Village at Heritage OaksCorsicana, TX— 143 143 11,429 11,429 482 482 143 143 11,911 11,911 12,054 12,054 (1,619)(1,619)200720072019
CTR Partnership, L.P.CTR Partnership, L.P.City Creek Post-Acute and Assisted LivingSacramento, CA3,980 10,106 408 3,980 10,514 14,494 (344)19902019CTR Partnership, L.P.City Creek Post-Acute and Assisted LivingSacramento, CA— 3,980 3,980 10,106 10,106 1,488 1,488 3,980 3,980 11,594 11,594 15,574 15,574 (1,494)(1,494)199019902019
CTR Partnership, L.P.CTR Partnership, L.P.Crestwood Health and Rehabilitation CenterWills Point, TX143 6,075 143 6,075 6,218 (28)19802020CTR Partnership, L.P.Crestwood Health and Rehabilitation CenterWills Point, TX— 143 143 6,075 6,075 — — 143 143 6,075 6,075 6,218 6,218 (538)(538)198019802020
29,336 198,991 8,612 29,205 207,734 236,939 (27,700)
Northshore Healthcare Holdings LLCNorthshore Healthcare Holdings LLCSan Juan Capistrano Senior LivingSan Juan Capistrano, CA— 11,176 25,298 350 11,176 25,648 36,824 (1,923)19992021
Northshore Healthcare Holdings LLCNorthshore Healthcare Holdings LLCCamarillo Senior LivingCamarillo, CA— 7,516 30,552 — 7,516 30,552 38,068 (2,227)20002021
Northshore Healthcare Holdings LLCNorthshore Healthcare Holdings LLCBayshire CarlsbadCarlsbad, CA— 7,398 19,714 — 7,398 19,714 27,112 (1,459)19992021
Northshore Healthcare Holdings LLCNorthshore Healthcare Holdings LLCBayshire Rancho MirageRancho Mirage, CA— 4,024 16,790 — 4,024 16,790 20,814 (1,267)20002021
CTR Partnership, L.P.CTR Partnership, L.P.Imboden Creek Living CenterDecatur, IL— 131 12,499 91 131 12,590 12,721 (644)20032022
4075 54th Street, LLC4075 54th Street, LLCJacob Healthcare CenterSan Diego , CA— 4,949 20,227 — 4,949 20,227 25,176 (308)19942023
Assisted and Independent Living Properties:Assisted and Independent Living Properties:
Assisted and Independent Living Properties:
Assisted and Independent Living Properties:
Avenue N Holdings LLC
Avenue N Holdings LLC
Avenue N Holdings LLCAvenue N Holdings LLCCambridge ALFRosenburg, TX124 2,301 392 124 2,693 2,817 (1,367)20072006Cambridge ALFRosenburg, TX— 124 124 2,301 2,301 392 392 124 124 2,693 2,693 2,817 2,817 (1,613)(1,613)200720072006
Moenium Holdings LLCMoenium Holdings LLCGrand CourtMesa, AZ1,893 5,268 1,210 1,893 6,478 8,371 (3,453)19862007Moenium Holdings LLCGrand CourtMesa, AZ— 1,893 1,893 5,268 5,268 1,210 1,210 1,893 1,893 6,478 6,478 8,371 8,371 (4,100)(4,100)198619862007
Lafayette Health Holdings LLCLafayette Health Holdings LLCChateau Des MonsEnglewood, CO420 1,160 189 420 1,349 1,769 (433)20112009Lafayette Health Holdings LLCChateau Des MonsEnglewood, CO— 420 420 1,160 1,160 189 189 420 420 1,349 1,349 1,769 1,769 (546)(546)201120112009
Expo Park Health Holdings LLCExpo Park Health Holdings LLCCanterbury GardensAurora, CO570 1,692 248 570 1,940 2,510 (858)19862010Expo Park Health Holdings LLCCanterbury GardensAurora, CO— 570 570 1,692 1,692 248 248 570 570 1,940 1,940 2,510 2,510 (1,102)(1,102)198619862010
Wisteria Health Holdings LLCWisteria Health Holdings LLCWisteria INDAbilene, TX244 3,241 81 244 3,322 3,566 (1,487)20082011Wisteria Health Holdings LLCWisteria INDAbilene, TX— 244 244 3,241 3,241 81 81 244 244 3,322 3,322 3,566 3,566 (2,045)(2,045)200820082011
Everglades Health Holdings LLCEverglades Health Holdings LLCLexingtonVentura, CA1,542 4,012 113 1,542 4,125 5,667 (894)19902011Everglades Health Holdings LLCLexingtonVentura, CA— 1,542 1,542 4,012 4,012 113 113 1,542 1,542 4,125 4,125 5,667 5,667 (1,141)(1,141)199019902011
Flamingo Health Holdings LLCFlamingo Health Holdings LLCDesert Springs ALFLas Vegas, NV908 4,767 281 908 5,048 5,956 (2,509)19862011Flamingo Health Holdings LLCDesert Springs ALFLas Vegas, NV— 908 908 4,767 4,767 281 281 908 908 5,048 5,048 5,956 5,956 (3,267)(3,267)198619862011
18th Place Health Holdings LLC18th Place Health Holdings LLCRose CourtPhoenix, AZ1,011 2,053 490 1,011 2,543 3,554 (937)1974201118th Place Health Holdings LLCRose CourtPhoenix, AZ— 1,011 1,011 2,053 2,053 490 490 1,011 1,011 2,543 2,543 3,554 3,554 (1,238)(1,238)197419742011
Boardwalk Health Holdings LLCBoardwalk Health Holdings LLCPark PlaceReno, NV367 1,633 51 367 1,684 2,051 (510)19932012Boardwalk Health Holdings LLCPark PlaceReno, NV— 367 367 1,633 1,633 52 52 367 367 1,685 1,685 2,052 2,052 (679)(679)199319932012
Willows Health Holdings LLCWillows Health Holdings LLCCascade PlazaRedmond, WA2,835 3,784 395 2,835 4,179 7,014 (1,199)20132013Willows Health Holdings LLCCascade PlazaRedmond, WA— 2,835 2,835 3,784 3,784 395 395 2,835 2,835 4,179 4,179 7,014 7,014 (1,648)(1,648)20132013
Lockwood Health Holdings LLCLockwood Health Holdings LLCSanta MariaSanta Maria, CA1,792 2,253 585 1,792 2,838 4,630 (1,248)19672013Lockwood Health Holdings LLCSanta MariaSanta Maria, CA— 1,792 1,792 2,253 2,253 585 585 1,792 1,792 2,838 2,838 4,630 4,630 (1,707)(1,707)196719672013
Saratoga Health Holdings LLCSaratoga Health Holdings LLCLake RidgeOrem, UT— 444 2,265 176 444 2,441 2,885 (630)19952013
Sky Holdings AZ LLCSky Holdings AZ LLCDesert Sky Assisted LivingGlendale, AZ— 61 304 372 61 676 737 (546)20042002
Lemon River Holdings LLCLemon River Holdings LLCThe Grove Assisted LivingRiverside, CA— 342 802 3,360 342 4,162 4,504 (3,397)20122009
Mission CCRC LLCMission CCRC LLCSt. Joseph's Villa INDSalt Lake City, UT— 411 2,312 258 411 2,570 2,981 (1,947)19942011
CTR Partnership, L.P.CTR Partnership, L.P.Prelude Cottages of WoodburyWoodbury, MN— 430 6,714 289 430 7,003 7,433 (1,539)20112014
F-34F-42

SCHEDULE III
REAL ESTATE ASSETS AND ACCUMULATED DEPRECIATION
DECEMBER 31, 20202023
(dollars in thousands)
Saratoga Health Holdings LLCLake RidgeOrem, UT444 2,265 176 444 2,441 2,885 (464)19952013
Sky Holdings AZ LLCDesert Sky Assisted LivingGlendale, AZ61 304 372 61 676 738 (466)20042002
Lemon River Holdings LLCThe Grove Assisted LivingRiverside, CA342 802 3,360 342 4,162 4,504 (2,616)20122009
Mission CCRC LLCSt. Joseph's Villa INDSalt Lake City, UT411 2,312 258 411 2,570 2,981 (1,432)19942011
CTR Partnership, L.P.CTR Partnership, L.P.Prelude Cottages of WoodburyWoodbury, MN430 6,714 430 6,714 7,144 (1,007)20112014
CTR Partnership, L.P.CTR Partnership, L.P.English Meadows Senior Living CommunityChristiansburg, VA250 6,114 43 250 6,157 6,407 (919)20112014
CTR Partnership, L.P.CTR Partnership, L.P.Bristol Court Assisted LivingSaint Petersburg, FL645 7,322 421 645 7,512 8,157 (1,013)20102015Fort Myers Assisted LivingFort Myers, FL— 1,489 1,489 3,531 3,531 5,864 5,864 1,489 1,489 9,395 9,395 10,884 10,884 (869)(869)202320232016
CTR Partnership, L.P.Asbury Place Assisted LivingPensacola, FL212 4,992 240 212 5,213 5,425 (672)19972015
CTR Partnership, L.P.New Haven Assisted Living of San AngeloSan Angelo, TX284 4,478 284 4,478 4,762 (550)20122016
CTR Partnership, L.P.Lamplight Inn of Fort WayneFort Wayne, IN452 8,703 214 452 8,889 9,341 (1,052)20152016
CTR Partnership, L.P.Lamplight Inn of West AllisWest Allis, WI97 6,102 173 97 6,255 6,352 (737)20132016
CTR Partnership, L.P.Lamplight Inn of BaltimoreBaltimore, MD3,697 267 3,919 3,919 (447)20142016
CTR Partnership, L.P.Fort Myers Assisted LivingFort Myers, FL1,489 3,531 765 1,489 4,665 6,154 (455)19802016
CTR Partnership, L.P.English Meadows Elks Home CampusBedford, VA451 9,023 268 451 9,291 9,742 (1,107)20142016
CTR Partnership, L.P.Croatan VillageNew Bern, NC312 6,919 312 6,919 7,231 (807)20102016
CTR Partnership, L.P.Countryside VillagePikeville, NC131 4,157 131 4,157 4,288 (485)20112016
CTR Partnership, L.P.The Pines of ClarkstonVillage of Clarkston, MI603 9,326 603 9,326 9,929 (1,069)20102016
CTR Partnership, L.P.The Pines of GoodrichGoodrich, MI241 4,112 241 4,121 4,362 (471)20142016
CTR Partnership, L.P.The Pines of BurtonBurton, MI492 9,199 492 9,199 9,691 (1,054)20142016
CTR Partnership, L.P.CTR Partnership, L.P.The Pines of LapeerLapeer, MI302 5,773 302 5,773 6,075 (662)20082016
CTR Partnership, L.P.CTR Partnership, L.P.Arbor PlaceLodi, CA392 3,605 392 3,605 3,997 (398)19842016
CTR Partnership, L.P.CTR Partnership, L.P.Applewood of BrookfieldBrookfield, WI493 14,002 493 14,002 14,495 (1,371)20132017Croatan VillageNew Bern, NC— 312 312 6,919 6,919 155 155 299 299 5,820 5,820 6,119 6,119 (172)(172)201020102016
CTR Partnership, L.P.CTR Partnership, L.P.Applewood of New BerlinNew Berlin, WI356 10,812 356 10,812 11,168 (1,059)20162017CTR Partnership, L.P.Countryside VillagePikeville, NC— 131 131 4,157 4,157 — — 125 125 3,404 3,404 3,529 3,529 (102)(102)201120112016
CTR Partnership, L.P.CTR Partnership, L.P.Tangerine Cove of BrooksvilleBrooksville, FL995 927 463 995 1,364 2,359 (114)19842017CTR Partnership, L.P.The Pines of ClarkstonVillage of Clarkston, MI— 603 603 9,326 9,326 523 523 5,334 5,334 5,857 5,857 (160)(160)201020102016
CTR Partnership, L.P.CTR Partnership, L.P.Memory Care Cottages in White Bear LakeWhite Bear Lake, MN1,611 5,633 1,611 5,633 7,244 (493)20162017CTR Partnership, L.P.The Pines of GoodrichGoodrich, MI— 241 241 4,112 4,112 923 923 207 207 4,327 4,327 4,534 4,534 (122)(122)201420142016
CTR Partnership, L.P.CTR Partnership, L.P.CulpeperCulpepper, VA318 3,897 85 318 3,982 4,300 (374)19972017CTR Partnership, L.P.The Pines of BurtonBurton, MI— 492 492 9,199 9,199 93 93 426 426 7,843 7,843 8,269 8,269 (237)(237)201420142016
CTR Partnership, L.P.CTR Partnership, L.P.LouisaLouisa, VA407 4,660 97 407 4,757 5,164 (455)20022017CTR Partnership, L.P.The Pines of LapeerLapeer, MI— 302 302 5,773 5,773 — — 261 261 4,066 4,066 4,327 4,327 (122)(122)200820082016
CTR Partnership, L.P.CTR Partnership, L.P.WarrentonWarrenton, VA1,238 7,247 98 1,238 7,345 8,583 (671)19992017CTR Partnership, L.P.Arbor PlaceLodi, CA— 392 392 3,605 3,605 — — 392 392 3,605 3,605 3,997 3,997 (668)(668)198419842016
CTR Partnership, L.P.CTR Partnership, L.P.Vista Del LagoEscondido, CA4,362 7,997 4,362 7,997 12,359 (279)20152019CTR Partnership, L.P.Applewood of BrookfieldBrookfield, WI— 493 493 14,002 14,002 44 44 242 242 6,030 6,030 6,272 6,272 (178)(178)201320132017
CTR Partnership, L.P.CTR Partnership, L.P.Inn at Barton CreekBountiful, UT2,479 4,804 15 2,479 4,819 7,298 (119)19992020CTR Partnership, L.P.Applewood of New BerlinNew Berlin, WI— 356 356 10,812 10,812 50 50 189 189 5,083 5,083 5,272 5,272 (148)(148)201620162017
32,006 201,593 11,359 32,006 212,952 244,959 (37,713)
CTR Partnership, L.P.
CTR Partnership, L.P.
CTR Partnership, L.P.Memory Care Cottages in White Bear LakeWhite Bear Lake, MN— 1,611 5,633 — 1,611 5,633 7,244 (915)20162017
$206,497 $1,364,511 $112,197 $205,356 $1,477,849 $1,683,205 $(259,803)
CTR Partnership, L.P.
CTR Partnership, L.P.
CTR Partnership, L.P.Vista Del LagoEscondido, CA— 4,362 7,997 — 4,362 7,997 12,359 (908)20152019
CTR Partnership, L.P.CTR Partnership, L.P.Inn at Barton CreekBountiful, UT— 2,480 4,804 15 2,480 4,819 7,299 (510)19992020
CTR Partnership, L.P.CTR Partnership, L.P.Bridgeton Essentia NeighborhoodBridgeton, NJ— 245 5,795 — 190 4,509 4,699 (166)2021
CTR Partnership, L.P.CTR Partnership, L.P.Rio Grande Essentia NeighborhoodRio Grande, NJ— 224 5,652 — 224 5,652 5,876 (325)2021
CTR Partnership, L.P.CTR Partnership, L.P.Chapters Living of Northwest ChicagoBartlett , IL— 1,964 5,650 — 1,964 5,650 7,614 (106)20172023
CTR Partnership, L.P.CTR Partnership, L.P.Chapters Living of ElmhurstElmhurst , IL— 2,852 7,348 — 2,852 7,348 10,200 (135)20172023
CTR Partnership, L.P.CTR Partnership, L.P.The Ridge at LansingLansing , MI— 888 9,871 — 888 9,871 10,759 (163)20182023
CTR Partnership, L.P.CTR Partnership, L.P.The Ridge at BeavercreekBeavercreek , OH— 1,165 8,616 — 1,165 8,616 9,781 (140)20182023
(1) The aggregate cost of real estate for federal income tax purposes was $1.71.9 billion.
F-35F-43

SCHEDULE III
REAL ESTATE ASSETS AND ACCUMULATED DEPRECIATION
DECEMBER 31, 20202023
(dollars in thousands)

Year Ended December 31, Year Ended December 31,
Real estate:Real estate:202020192018Real estate:202320222021
Balance at the beginning of the periodBalance at the beginning of the period$1,605,081 $1,368,157 $1,266,484 
AcquisitionsAcquisitions84,630 318,070 106,208 
ImprovementsImprovements7,223 3,103 7,230 
ImpairmentImpairment(21,465)
Sales of real estate(13,729)(62,784)(11,765)
Impairment
Impairment
Sales and/or transfers to assets held for sale, net
Balance at the end of the periodBalance at the end of the period$1,683,205 $1,605,081 $1,368,157 
Accumulated depreciation:Accumulated depreciation:
Balance at the beginning of the periodBalance at the beginning of the period$(220,359)$(185,926)$(152,185)
Balance at the beginning of the period
Balance at the beginning of the period
Depreciation expenseDepreciation expense(41,914)(40,373)(34,676)
ImpairmentImpairment5,220 
Sales of real estate2,470 720 935 
Sales and/or transfers to assets held for sale, net
Balance at the end of the periodBalance at the end of the period$(259,803)$(220,359)$(185,926)

F-36F-44

SCHEDULE IV
MORTGAGE LOANS ON REAL ESTATE
DECEMBER 31, 20202023
(dollars in thousands)


DescriptionContractual Interest RateMaturity DatePeriodic Payment TermsPrior LiensPrincipal Balance
Book Value (1)
Carrying Amount of Loans Subject to Delinquent Principal or Interest
Mortgage Secured Loans:
West Virginia (18 SNF facilities)8.4 %2027(3)$482,000 (4)$75,000 $68,913 N/A
California (4 SNF facilities)10.7 %(2)2025(3)28,112 (5)11,713 11,501 N/A
Georgia (4 SNF facilities)9.0 %(2)2025(3)72,700 (5)24,900 22,962 N/A
Florida (2 SNF facilities)9.0 %2028(3)— 15,727 15,399 N/A
California (3 SNF facilities)12.0 %2026(3)30,294 (6)3,564 3,439 N/A
Indiana (1 ALF facility)9.0 %2024(3)— 2,000 2,016 N/A
California (2 SNF Campus & ILF facility)9.0 %2033(3)— 25,993 26,194 N/A
California (1 ALF facility)9.9 %2026(3)— 6,300 6,345 N/A
Mezzanine Loans:
West Virginia (18 SNF facilities)11.0 %2032(3)557,000 (4)25,000 21,799 N/A
$1,170,106 $190,197 $178,568 

(1)
The aggregate cost for federal income tax purposes was $190.2 million as of December 31, 2023.
DescriptionContractual Interest RateMaturity DatePeriodic Payment TermsPrior LiensPrincipal Balance
Book Value (2)
Carrying Amount of Loans Subject to Delinquent Principal or Interest
Mezzanine Loan:
Virginia (9 SNF facilities)12.0 %2025(1)$110,000 (3)$15,000 $15,000 N/A
$110,000 $15,000 $15,000 
(2)Interest rates are variable and represent the rate in effect as of December 31, 2023.

(3)
(1)     Interest is due monthly, and principal is due at the maturity date.
(2)    (4)The aggregate costsecured term loan was structured with an “A” tranche, a “B” tranche, and a “C” tranche, with the “C” tranche being the most subordinate. The Company’s loan constituted the entirety of investments in real estate mortgage loans for federal income tax purposesthe “C” tranche. The Company also extended a mezzanine loan to the borrower group. Accordingly, the amounts of the prior liens at December 31, 2023 are estimated.
(5)The secured term loan was $15.0 million.structured with an “A” and a “B” tranche, with the “B” tranche being subordinate to the “A” tranche pursuant to the terms of a written agreement between the lenders. The Company’s loan constituted the entirety of the “B” tranche. Accordingly, the amounts of the prior liens at December 31, 2023 are estimated.
(3)    (6)The first mortgage loans on these properties are not held by the Company. Accordingly, the amounts of the prior liens at December 31, 20202023 are estimated.

F-45

SCHEDULE IV
MORTGAGE LOANS ON REAL ESTATE
DECEMBER 31, 2023
(dollars in thousands)
Changes in mortgage secured and mezzanine loans are summarized as follows (in thousands):

Year Ended December 31,Year Ended December 31,
2023202320222021
Year Ended December 31,
202020192018
Balance at beginning of period
Balance at beginning of period
Balance at beginning of periodBalance at beginning of period$29,500 $12,375 $12,517 
Additions during period:Additions during period:
New mortgage loans61,258 40,889 
New mortgage and mezzanine loans
New mortgage and mezzanine loans
New mortgage and mezzanine loans
Interest income added to principal
Deductions during period:Deductions during period:
Paydowns/RepaymentsPaydowns/Repayments(75,758)(23,764)(142)
Paydowns/Repayments
Paydowns/Repayments
Unrealized losses, net
Balance at end of periodBalance at end of period$15,000 $29,500 $12,375 

F-37F-46