Canada’s Largest Owner Of Retirement Homes Has A New Look

Megadeal Saw Retirement Home Giants Divide Canadian Portfolio

Canada’s largest owner of retirement homes has a new look after Chartwell Retirement Residences’ Chief Executive Officer Vlad Volodarski engineered a deal with Toledo, Ohio-based Welltower that involves 40 retirement homes across Canada.

Chartwell’s CEO sat down with U.S.-based retirement home giant Welltower last year to take on the daunting task of dividing the portfolio that comprises 8,476 units the companies have co-owned together since 2012.

“Some time last year [Welltower] asked us to split the partnership, to determine the terms of the separation and negotiate all other terms,” Volodarski told CoStar News in an interview.

The deal, announced in early November, resulted from a detailed negotiation process that saw both sides pick their properties and then haggle over the details.

“They had a list of their desired properties and we had ours. There was some overlap, so it was a negotiation,” said Volodarski, who says that the main aim of his publicly traded company was to keep control of retirement homes located closer to its existing operations.

The final deal, which is expected to close in the second quarter, saw Welltower emerge with 23 properties and Chartwell with 16, with one retirement home to remain shared. Welltower also compensated Chartwell with a cash payment of CA$97.2 million. “You never achieve 100% of your goals in these types of negotiations but we are happy with the outcome,” said Volodarski.

Chartwell, which is Canada’s largest retirement home chain and oversees 25,000 residents in four provinces, will remain focused on its ongoing occupancy recovery initiative and is aiming to reduce labour costs, notably through increased use of technology, Volodarski said. But the company is also not ruling out opening new homes. “We are well positioned, whether it’s through new development or acquisitions, to add to our portfolio, alone or with partners,” Volodarski said.

Chartwell would like to increase its portfolio in Western Canada, specifically British Columbia, where it considers the retirement home market to be underserved. Volodarski, like many other commercial real estate executives, feels that current economic conditions remain unfavourable to new builds due to high construction costs and other associated financial challenges. “The numbers don’t quite pan out but I expect in the next year or two we will have more opportunities to do more developments ourselves or with partners. When the time is opportune we will definitely move forward.”

Since 2014, Chartwell has maintained a development partnership with EMD-Batimo, a 25-year-old Quebec-based company led by Marc Dubuc and Francis Charron. EMD Batimo finds land to develop and Chartwell provides financing or Batimo develops a property on its own and Chartwell purchases the operation once it has attained a 90% stabilized occupancy level.

Welltower, which has been led since 2020 by CEO Shankh Mitratake, takes over 13 of the 20 co-owned retirement homes in Quebec and 10 of the 19 homes in Ontario, British Columbia and Alberta. Welltower, like Chartwell, has also partnered with a company based in Quebec, which is a lucrative market for retirement homes, as Montreal-based Cogir will manage some of Welltower’s 23 properties under its Jazz brand. The deal cost Welltower real estate investment trust a total of CA$113.3 million. The 23 properties have a “lower average age, higher occupancy and margins, and feature core locations across strategic Canadian markets,” according to Welltower’s latest earnings update.

Retirement homes totaling 3,511 units are now owned solely by Chartwell:

1. Whispering Pines, 140 Letitia St. in Barrie, Ontario, 108 units;
2. Tranquility Place, 436 Powerline Road in Brantford, Ontario, 218 units;
3. McConnell Retirement Residence, 801 Fourth St. E in Cornwall, Ontario, 210 units;
4. Scarlett Heights Retirement Residence, 4005 Eglinton Ave. W in Etobicoke, Ontario, 208 units;
5. Royal on Gordon Retirement Residence, 1691 Gordon St. in Guelph, Ontario, 112 units;
6. Avondale Retirement, 1238 Queen St. E in Toronto, 79 units;
7. Lansing Retirement, 10 Senlac Road in Toronto, 90 units;
8. Imperial Place, 13853 102 Av in Surrey, British Columbia, 104 units;
9. Fountains of Mission, 222 25th Ave. SW in Calgary, Alberta, 96 units;
10. Domaine des Trembles, 250 Saint-Raymond Blvd. in Gatineau, Quebec, 238 units;
11. Les Écores, 1800 Cartier Blvd. E in Laval, Quebec, 197 units;
12. Belvédères de Lachine, 3000 Notre-Dame St. in Montreal, 264 units;
13. Manoir et Cours, 545 Francis-Byrne St. in Quebec City, 616 units;
14. Manoir Archer, 217 de l’Église in Quebec City, 246 units;
15. Manoir Saint-Jérôme, 335 Des Pins St. in Saint-Jérôme, Quebec, 513 units;
16. Notre-Dame, 222 Notre-Dame St. W in Victoriaville, Quebec, 212 units.

Retirement homes totaling 4,633 units are now owned solely by Welltower:

1. Christopher Terrace, 3131 New St. in Burlington, Ontario, 71 units;
2. Kingsville Retirement, 240 Main St. E in Kingsville, Ontario, 98 units;
3. Leamington Retirement, 1 Henry Ave. in Leamington, Ontario, 82 units;
4. Royalcliffe Retirement, 609 Wharncliffe Road S in London, Ontario, 146 units;
5. Alexander Muir, 197 Prospect St. in Newmarket, Ontario, 84 units;
6. Belcourt Résidence, 1344 Belcourt Blvd., Orléans, Ontario, 106 units;
7. Héritage Résidence, 624 Wilson St. in Ottawa, 170 units;
8. Guildwood Retirement, 65 Livingstone Road in Scarborough, Ontario, 172 units;
9. Royal Marquis, 590 Grand Marais Road E in Windsor, Ontario, 83 units;
10. Renaissance Retirement, 6676 203 in St . Langley, British Columbia, 128 units;
11. Domaine Harmonie, 1024 Charcot St. in Boucherville, Quebec, 176 units;
12. Villa Rive-Sud, 3460 De Chambly Road in Longueuil, Quebec, 223 units;
13. Bois-de-Boulogne, 10005 Bois-de-Boulogne Ave. in Montreal, 219 units;
14. Manoir Pointe-aux-Trembles, 3478 32nd Ave. in Montreal, 246 units;
15. Le Wellesley, 230 Hymus Pointe-Claire Blvd. in Quebec, 157 units;
16. Faubourg Giffard, 2321 De La Canardière Road in Quebec City, 380 units;
17. Villa Jonquière, 3978l Harvey Blvd. in Saguenay, Quebec, 199 units;
18. Villa Chicoutimi, 220 Don-Bosco St. in Saguenay, Quebec, 194 units;
19. Villa Saguenay, 1901 Des Roitelets St. in Saguenay, Quebec, 235 units;
20. Villa de l’Estrie, 3300 des Chênes St. in Sherbrooke, Quebec, 246 units;
21. Le St-Gabriel, 5885 De Chambly Road in St. Hubert, Quebec, 345 units;
22. Le Teasdale, 950 Boul Lucille-Teasdale Blvd. in Terrebonne, Quebec, 564 units;
23. Jardins Laviolette, 2975 Laviolette Blvd. in Trois-Rivières, Quebec, 30 units.

The property to remain under co-ownership between Chartwell and Welltower:

• The Sumach by Chartwell, 146 Sumach St. in Mississauga, Ontario, 332 units.

Chartwell will no longer manage two properties totaling 314 units that were already fully owned by Welltower:

• Pembroke Heritage, 1111 Pembroke St. W in Pembroke, Ontario, 139 units;
• Stonehaven Retirement, 70 Stonehaven Drive in Kanata, Ontario, 175 units.

Source CoStar. Click here to read a full story.