Community Healthcare Trust buys Florida inpatient rehab via $28.5M 1031 exchange
- Acquired Florida inpatient rehab for about $28.5M, fully leased to 2040 with expected ~9.3% return.
- Financed via a Section 1031 exchange using proceeds from three property sales totaling about $31.6M.
- Redeploying capital into longer‑dated leases and higher‑yield assets; five properties under agreements totaling ~$122.5M.
Community Healthcare Trust tightens rehab-hospital footprint
Portfolio rotation centers on Florida inpatient rehab acquisition via 1031 exchange
Community Healthcare Trust is reshaping its post-acute portfolio by acquiring a newly completed inpatient rehabilitation facility in Florida for about $28.5 million in cash, a move the company frames as a targeted upgrade of its leased healthcare assets. The property is fully leased with a lease term running to 2040 and the company projects an expected return near 9.3%, fitting its stated yield profile for stabilized healthcare real estate.
The acquisition is financed through a like‑kind exchange under Section 1031 of the Internal Revenue Code, with net proceeds from the sale of an inpatient rehabilitation facility in Texas used to fund the Florida purchase. During the quarter the company disposes of three buildings, including the Texas facility, generating roughly $31.6 million in aggregate net proceeds and recognizing a net gain of about $12.3 million on those sales, underscoring an active capital recycling strategy.
Community Healthcare Trust signals further portfolio activity, with the Florida purchase representing a broader effort to redeploy capital into assets with longer‑dated leases and higher projected returns. The company emphasizes asset-level metrics — lease term, occupancy and targeted yield — as drivers of its acquisition decisions as it balances dispositions and accretive purchases through tax‑deferred exchange mechanics.
Earnings and liquidity snapshot
For the quarter ended Dec. 31, 2025, Community Healthcare Trust reports net income of approximately $14.4 million, or $0.51 per diluted common share, with funds from operations (FFO) of $0.49 and adjusted FFO (AFFO) of $0.55 per diluted common share. The company does not issue any shares under its at-the-market equity program in the quarter and on Feb. 12, 2026 sells the property previously classified as held for sale, receiving about $5.2 million in net proceeds.
Tenant developments and acquisition pipeline
A geriatric behavioral hospital tenant that occupies six of the trust’s properties pays $0.2 million in rent and interest in the quarter, while a July 2025 letter of intent contemplates a sale of that tenant’s business to another behavioral healthcare provider that would assume new leases. The buyer’s legal and business due diligence remains ongoing and closing timing is uncertain. Meanwhile, the company has five properties under definitive purchase agreements totaling about $122.5 million, with expected returns roughly between 9.1% and 9.75% and anticipated closings beginning in Q1 2026 and continuing through 2027.