MISSISSAUGA, ONTARIO--(CCNMatthews - April 18, 2006) - Chartwell Seniors Housing Real Estate Investment Trust (TSX:CSH.UN) ("Chartwell" or the "REIT") announced today that it would expand the size of its property portfolio by an aggregate of 3,387 suites through the acquisition of interests in 25 facilities in Canada and the United States along with expansions of two existing facilities, the development of a new independent living facility and the addition of a third party management agreement. The REIT's share of the total purchase price of the acquisitions is approximately $295.3 million and the total cost of the development projects and mezzanine financing is approximately $20.9 million as shown in the following chart:
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Acquisitions American Canadian Purchase Purchase Cap Rate
Price Price
Suites Beds/Suites of a 50% Development (if app-
@ 100% Interest Cost or licable)
share $US Mezz Finan-
cing Amount
$Can
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Two US
Portfolios (1) 2,183 $154.1m $177.7m 8.0%
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Castel Royale,
Montreal,
Quebec 251 40.0 8.0%
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Residence le
Riverain,
Granby, Quebec 119 6.3 8.0%
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Mayfield &
Wiser Hall,
Prescott,
Ontario 70 6.3 8.5%
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Langley Gardens
& Village
Square, Langely
B.C. n.a. (2) 25.9 7.5%
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Chateau
Gardens,
Ontario 535 39.1 8.5%
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Sub Total 2,183 975 $154.1m $295.3m n.a.
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Development
Projects
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Rocky Ridge,
Calgary,
Alberta 121 1.6 n.a.
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Hartford,
Morrisburg,
Ontario 22 4.8 n.a.
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Oasis St. Jean,
St.-Jean-sur-
Richelieu,
Quebec 86 14.5 n.a.
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Total 2,183 1,204 $154.1m $316.2m n.a.
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(1) The REIT's joint venture property management company will manage
100% of these properties and the REIT will own a 50% interest
with ING Real Estate Australia.
(2) The REIT already owned a 50% interest and managed 100% of this
property.
Chartwell, along with its joint venture partner, ING Real Estate Australia, expects to expand its existing US portfolio of seniors housing facilities by acquiring a 100% interest in two portfolios of high-end, private-pay retirement homes located in the United States. One of the portfolios is still subject to final due diligence and the REIT's Board approval. In total, the two portfolios comprise 2,183 suites in 12 facilities located in Ohio, Florida, Virginia, Colorado, Michigan, Tennessee, Alabama and Oklahoma.
The total purchase price for a 100% interest will be approximately US $308.2 million. Chartwell and ING Real Estate Australia will each be acquiring a 50% interest. With the completion of these two transactions, Chartwell's US portfolio, jointly owned with ING Real Estate Australia will rise to 3,696 suites, or 16% of the REIT's total portfolio of owned and managed suites. Closing is expected in May 2006. The properties will be managed by Horizon Bay Chartwell, the REIT's joint venture property management company in the United States.
In Canada, Chartwell plans to acquire Castel Royale, a 251 suite, 20-storey seniors apartment building located in Cote-Saint-Luc, Quebec. Situated in the heart of this affluent Montreal retirement neighbourhood, the property is close to numerous services and amenities and has a 5,000 square foot medical clinic attached to the building. The property has recently undergone significant renovations and upgrades to convert the majority of the apartments to a seniors independent living format. The purchase price will be approximately $40 million, with closing expected in April 2006.
Chartwell will further enhance its strong market position in the Province of Quebec with the purchase of Residence le Riverain, a 119 suite seniors residence located in Granby, Quebec, which is east of Montreal. The residence is the only facility in the area to offer the full spectrum of care. The aggregate purchase price will be approximately $6.3 million, with closing expected by the end of May 2006.
Both Quebec properties, Castel Royale and Le Riverain, will be managed by the REIT's and Groupe Melior's joint venture management company.
Chartwell will strengthen its presence in eastern Ontario with the purchase of the Mayfield and Wiser Hall retirement homes in Prescott. These two high quality residences comprise 70 suites, including recently constructed additions, are in keeping with the century-old stone houses that are an integral part of each property. Wiser Hall is located on the shore of the scenic St. Lawrence River. The aggregate purchase price for both facilities will be approximately $6.3 million, with closing expected in May 2006.
Chartwell will enhance its position as British Columbia's largest owner and operator of seniors residential facilities with the planned purchase of the remaining 50% interest in Langley Gardens and Village Square situated in Langley, which is southeast of Vancouver. Chartwell acquired its original 50% interest in the property through the purchase of CPAC (Care) Holdings Ltd. in July 2005. The property consists of two linked four-storey buildings containing a total of 246 suites offering a true campus of care. The purchase price for the remaining 50% interest will be approximately $25.9 million, and the transaction is expected to close in May 2006. As part of the transaction, Chartwell will sell its interest in the commercial space contained in the property to the vendor for approximately $1.3 million.
Finally, Chartwell is awaiting the necessary Ministry of Health approvals to allow it to complete the previously announced acquisition of a 100% interest in a portfolio of six long-term care facilities and one assisted living residence, located primarily in southwest Ontario. The portfolio is currently operated by Chateau Gardens Management Services. Chartwell will purchase a total of 510 beds, including 64 assisted living beds, in the communities of Lancaster, Niagara, Aylmer, Elmira, Parkhill and London. The transaction will also include the assumption of one management contract in Parkhill for an additional 25 beds. The total purchase price will be approximately $39.1 million. Closing is expected in June 2006.
"With these announcements, so far this year we have added over 3,400 suites to our growing portfolio, and the REIT is over half-way to achieving its stated goal of investing $625 million in new acquisition for the year" commented Stephen Suske, Vice Chair and President. "In addition, these transactions are expected to be accretive to distributable income per unit, enhance the value of our property portfolio and will be readily absorbed by our strong operating platforms."
Chartwell also announced today two internal growth projects to add new suites to existing properties:
- 22 new suites will be added to the Hartford Retirement Centre in Morrisburg, Ontario. Acquired at the time of Chartwell's IPO, the property currently contains 65 suites and has experienced high occupancies since its construction in 1988. Construction costs are estimated to be $4.8 million of which 80% is expected to be financed with a construction loan.
- 86 new suites will be added to the Oasis St. Jean facility in St.-Jean-sur-Richelieu, south of Montreal. The facility currently has 237 suites, and is fully occupied with a waiting list. The construction costs are estimated to be $14.5 million, of which $9.7 million is expected to be financed with a construction loan. This development project will be overseen by Melior Developments.
In addition, Chartwell will extend a mezzanine loan of $1.6 million to Spectrum Seniors Housing Development LP for the development of an independent living facility in the Rocky Ridge area of Calgary, Alberta. The facility will have 121 suites on three floors with an unobstructed view of the Rocky Mountains. Chartwell will receive interest on its loan of 10% per annum as well as a development fee of $500,000 and a financing fee of $175,000. Project costs are estimated to be $21 million, with an anticipated completion date in the summer of 2007. Chartwell will be entitled to acquire the facility once it is fully stabilized.
With the closing of these transactions, Chartwell's portfolio will continue to be diversified by geography and level of care as shown below:
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Geographic Distribution Owned/Managed Percentage (1)
Beds/Suites (1)
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Ontario (GTA) 3,601 16%
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Ontario (West) 2,651 11%
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Ontario (East) 1,601 7%
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Ontario (North) 1,486 6%
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Subtotal Ontario 9,339 40%
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Quebec 6,123 26%
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British Columbia 3,012 13%
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Alberta 895 4%
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Saskatchewan 157 1%
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United States 3,696 16%
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Total 23,222 100%
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Level Of Care Owned/Managed Percentage (1)
Beds/Suites (1)
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Independent Living 11,828 51%
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Light Care Retirement Home 5,633 24%
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Full Care Retirement Home 2,365 10%
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Assisted Living 382 2%
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Long Term Care 3,014 13%
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Total 23,222 100%
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Total Units Owned/ Managed Percentage (1)
Beds/Suites (1)
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Canada:
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Owned Beds/Suites 10,136 44%
Managed Beds/Suites 3,002 13%
Beds/Suites in Development/Lease Up 6,388 27%
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Total 19,526 84%
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United States:
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Owned Suites 3,696 16%
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Total 23,222 100%
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(1) Existing facilities as of March 21, 2006, plus announced
acquisitions, developments and mezz financings.
Chartwell also announced today that it has filed an amended MD&A for the year ended December 31, 2005 to make the following non-material corrections to the MD&A that it filed on February 28, 2006 on www.sedar.com:
(1) The total amount shown in the last column entitled "Change" in each of the
Fees table at page 22 and the Revenues table at page 36 has been corrected
to read "(507)".
(2) The number of Series A Interests referred to in the second line of page 26
has been corrected to read "144,405".
(3) The total contractual obligations set forth under the columns entitled
"2010" and "Thereafter" of the table on page 43 have been corrected to read
"54,812" and "266,125", respectively.
Chartwell REIT is a growth-oriented investment trust owning and managing a complete spectrum of seniors housing properties. It is currently the second largest participant in the Canadian seniors housing business with a growing presence in the United States. Chartwell will capitalize on the strong demographic trends present in its markets to grow internally and through accretive acquisitions. Chartwell REIT also has an exclusive option to purchase stabilized facilities from Spectrum Seniors Housing Development LP, Canada's largest and fastest growing seniors housing development company.
Chartwell's Distribution Reinvestment Plan (DRIP) allows Unitholders to have their monthly cash distributions used to purchase units without incurring commission or brokerage fees, and receive bonus units equal to 3% of their monthly cash distributions. More information can be obtained at www.chartwellreit.ca
Certain statements contained in this news release may include forward-looking information with respect to Chartwell Seniors Housing Real Estate Investment Trust's operations and future financial results. Such statements are based on current expectations, are subject to a number of uncertainties and risks, and actual results may differ materially from those contained in such statements. These uncertainties and risks include, but are not limited to, availability of resources, competitive pressures, changes in market activity and regulatory requirements. Further information can be found in the disclosure documents filed by Chartwell Seniors Housing Real Estate Investment Trust with the securities regulatory authorities, available at www.sedar.com.
FOR FURTHER INFORMATION PLEASE CONTACT:
Chartwell Seniors Housing Real Estate Investment Trust
Mr. Stephen Suske
Vice Chair and President
(905) 501-4701
Fax: (905) 501-9107
ssuske@chartwellreit.ca
Source: Chartwell Seniors Housing REIT