Chartwell Retirement Residences announced on October 29, 2015, that it entered into a definitive agreement to acquire five premier retirement residences located in Ontario for an aggregate purchase price of $254.0 million from five separate groups of vendors.
The properties are:
- The Rockcliffe Retirement Residence in Ottawa
- Hollandview Trail Retirement Community in Aurora
- St. Clair Beach Retirement Community in Tecumseh
- Clair Hills Retirement Community in Waterloo
- Oak Ridges Retirement Community in Richmond Hill
"We are pleased to be growing Chartwell's presence in Canada with these premium residences and are looking forward to bringing our vision of Making People's Lives Better and our values of RESPECT to even more seniors across the country," commented Vlad Volodarski, Chartwell's Chief Financial Officer and Chief Investment Officer.
As Canada's largest owner and operator of seniors housing, over 25,000 seniors currently call Chartwell home and over 13,500 employees are already dedicated to helping Chartwell deliver on its commitment to service excellence in over 180 retirement and long term care residences.
"This transaction is fully in line with our strategy to expand our portfolio with new, high-quality properties, located in strong and growing markets," added Mr. Volodarski. "Including this transaction, in 2015 we have invested $586.9 million in accretive acquisitions in Canada and have announced, together with our partners, over $300 million in development projects. While we have substantially completed reinvestment of the net proceeds from the recent sale of our U.S. portfolio, we maintain ample balance sheet capacity and continue our work on sourcing and evaluating other acquisition and development opportunities."
The Rockcliffe Retirement Residence is a 127-suite residence located in a unique setting on Porter's Island in close proximity to the downtown core of Ottawa. It has excellent exposure, high visibility and includes a dedicated 17-suite assisted living unit. The residence opened in 2008 and is currently 100% occupied. The property is subject to a land lease with the City of Ottawa that expires in 2056. It is encumbered by a $29.2 million mortgage bearing interest at 3.95%, maturing in May 2019. A portion of the purchase price will be settled by Chartwell issuing to the vendor $15.0 million of Exchangeable Class B Units of Chartwell Master Care LP.
Hollandview Trail Retirement Community is a 125-suite residence located in Aurora, in close proximity to the local seniors centre and town hall. The property includes a dedicated 37-suite assisted living unit. The building opened in 2009 and is currently 98% occupied. The property is encumbered by a $23.1 million mortgage bearing interest at 5.2%, maturing in September 2021.
St. Clair Beach Retirement Community is a 115-suite independent supportive living residence located in Tecumseh, on the shores of Lake St. Clair. The building opened in 2013 and is currently 98% occupied.
Clair Hills Retirement Community ("Clair Hills") is a 120-suite residence located in Waterloo. The property includes a dedicated 20-suite assisted living unit. The building opened in 2012 and is presently 74% occupied.
Oak Ridges Retirement Community ("Oak Ridges") is a 129-suite residence located in Richmond Hill. The property includes a dedicated 19-suite assisted living unit. The building opened in 2012 and is presently 76% occupied.
Clair Hills and Oak Ridges will initially be owned by two limited partnerships in which vendors' affiliates will retain interests. Signature Retirement Living Corp., an affiliate of the vendors, will continue to manage these properties until December 31, 2018 (the "Initial Term") under management contracts with Chartwell. The vendors provided Chartwell with an annual Net Operating Income guarantee during the Initial Term. Upon expiration of the Initial Term, Chartwell will acquire the vendors' interests in the limited partnerships and assume management of these properties. The purchase price for the vendors' interests in the partnerships will be based on the actual results achieved by these properties during the last year of the Initial Term.
Chartwell expects to utilize its available cash and its credit facility to finance the cash portion of the aggregate purchase price and closing costs which are estimated at $5.7 million. The closing of the transaction, subject to normal closing conditions, is expected in November 2015.
Chartwell is an unincorporated, open-ended trust which indirectly owns and operates a complete range of seniors housing communities from independent supported living through assisted living to long term care. It is the largest owner and operator of seniors residences in Canada. Chartwell's aim is to capitalize on the strong demographic trends present in its markets to maximize the value of its existing portfolio of retirement residences, and prudently avail itself of opportunities to grow internally and through accretive acquisitions. More information can be obtained at www.chartwell.com
(photos courtesy of Chartwell Retirement Residences)