MISSISSAUGA, ON, March 31, 2022 /CNW/ – Chartwell Retirement Residences (“Chartwell”) (TSX: CSH.UN) announced today that it expects to acquire three recently developed retirement residences in Ontario with 467 suites from the entities affiliated with MTCO Holdings on April 1, 2022. The purchase price before transaction costs and customary closing adjustments is $228 million including a deferred payment of $3 million. The residences are located in Collingwood, Barrie and Bowmanville.
“We are pleased to add to our portfolio three modern, high-quality residences located in strong markets where we already have presence and which will allow us to generate meaningful management synergies,” commented Jonathan Boulakia, Chartwell’s Chief Investment Officer and Chief Legal Officer. “This is our second transaction with MTCO affiliated companies. In 2015, we acquired and successfully transitioned three other residences, including Chartwell Montgomery Village, where we recently opened a 122-suite addition. We look forward to welcoming staff and residents of Balmoral Place in Collingwood, Allendale Station in Barrie, and Bowmanville Creek in Bowmanville to the Chartwell family. We are focused on making this transition a positive experience for the residents and staff of these residences and delivering on our vision of Making People’s Lives Better.”
Transaction Details
The following table summarizes key information on the acquired residences:
|
Residence Name |
Location |
Year Built |
Suite count |
Occupancy (3) |
|
Balmoral Place (1) |
Collingwood |
2017 |
181 |
89.5% |
|
Allendale Station |
Barrie |
2019 |
143 |
84.6% |
|
Bowmanville Creek (2) |
Bowmanville |
2017 |
143 |
80.4% |
|
Total Portfolio |
467 |
85.2% |
|
(1) |
Part of a purpose-built adult lifestyle community. Owners of the existing 96 residences enjoy access to certain Balmoral amenities and pay a monthly fee. An additional 132 suite condominium is scheduled to open late 2023 with owners also enjoy access to certain Balmoral amenities under the monthly fee arrangement. |
|
(2) |
Includes 1.8 acres of excess land valued at $3 million for potential development of 112 retirement suites. |
|
(3) |
As of March 1, 2022. |
The purchase price of $228 million includes a deferred payment of $3 million to be paid on the earlier of the completion of a 132-suite condominium development in Balmoral Place, currently in construction, or June 30, 2024. The owners of these condominium units will have access to the amenities of the retirement residence for a monthly fee. In addition, $3 million of the purchase price has been allocated to 1.8 acres of excess land at Bowmanville Creek retirement residence where approximately 112 suites could be developed over time.
The purchase price will be settled by assumption of in place mortgages on two of the acquired properties with an estimated principal balance of $85.6 million, bearing a weighted average interest rate of 3.7% and maturing in November 2023. The remainder of the purchase price will be settled with cash on hand and by utilizing available credit facilities.
Chartwell expects to generate first year Unlevered Net Operating Income Yield (“NOI Yield”) of 5.3% and stabilized NOI Yield upon achieving 95% occupancy of 6.4%.
The residences will be rebranded Chartwell Balmoral Retirement Community, Chartwell Allandale Station Retirement Residence and Chartwell Bowmanville Creek Retirement Residence.
About Chartwell
Chartwell is an unincorporated, open-ended real estate trust which indirectly owns and operates a complete range of seniors housing communities, from independent supportive living through assisted living to long term care. It is the largest operator in the Canadian seniors living sector with over 200 quality retirement communities in four provinces including properties under development. Chartwell is committed to its vision of Making People’s Lives BETTER and to providing a happier, healthier and more fulfilling life experience for its residents. For more information, visit www.chartwell.com
Forward-Looking Information
This press release contains forward-looking information that reflects the current expectations, estimates and projections of management about the future results, performance, achievements, prospects or opportunities for Chartwell and the seniors housing industry. Forward-looking statements are based upon a number of assumptions and are subject to a number of known and unknown risks and uncertainties, many of which are beyond our control, and that could cause actual results to differ materially from those that are disclosed in or implied by such forward-looking statements. There can be no assurance that forward-looking information will prove to be accurate, as actual results and future events could differ materially from those expected or estimated in such statements. Accordingly, readers should not place undue reliance on forward-looking information. These factors are more fully described in the “COVID-19 Business Impacts and Related Risks” section, and the “Risks and Uncertainties and Forward-Looking Information” section in Chartwell’s 2021 MD&A, and in materials filed with the securities regulatory authorities in Canada from time to time, including but not limited to our most recent Annual Information Form.
For more information, please contact:
Chartwell Retirement Residences
Jonathan Boulakia, Chief Investment Officer and Chief Legal Officer
Tel: (905) 501-9219
jboulakia@chartwell.com
SOURCE Chartwell Retirement Residences
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