Chartwell Retirement To Acquire Two Senior Housing Portfolios
Chartwell Retirement To Acquire Two Senior Housing Portfolios
Toronto-Area REIT To Spent $511 Million for Quebec Properties
Chartwell Retirement Real Estate Investment Trust has entered into agreements to increase its holdings by 3,233 senior housing suites as part of a major expansion of its Quebec portfolio.
The Toronto-area REIT said it has agreed to separate deals to purchase a 100% ownership interest in a portfolio of five retirement complexes with 1,428 suites in greater Montreal, Gatineau, and Sherbrooke for $297 million and a 50% ownership interest in a five-property portfolio with 1,805 suites in the Quebec City area and Shawinigan for $214 million.
The aggregate purchase price for the two portfolios is $511 million, Chartwell said.
Chartwell, with its head office in Mississauga, just outside Toronto, did not name the sellers on the deals, both of which are expected to close in the third quarter.
“The acquired properties are expected to enhance the quality of Chartwell’s portfolio and fit strategically with Chartwell’s growth objectives, increasing its presence in key cities in Quebec,” said the REIT.
The REIT also said it has closed on the purchase of an 85% ownership interest in residences with 685 suites from EMD-Batimo for $166 million. The units are in complexes known as Chartwell Le Prescott and Chartwell Trait-Carré.
On a combined basis, the deals for the two portfolios and the Batimo acquisition are expected to result in Chartwell acquiring 12 properties containing a total of 3,918 suites. The average age of the suites is five years, and their current occupancy level is 95%, excluding two assets in lease-up, Chartwell said.
Chartwell said the purchase price per suite for all properties to be acquired is approximately $230,000, 30% below current replacement costs.
The acquired properties will reduce Chartwell’s weighted average portfolio age by approximately three years on a pro forma basis, Chartwell said. Since they are relatively newer, the properties should have lower capital expenditure requirements than Chartwell’s existing portfolio, the REIT said
The acquisitions are being funded through proceeds from previously announced dispositions, the assumption of in-place debt and net proceeds from a $300 million offering.
Chartwell has agreed with a syndicate of underwriters led by TD Securities Inc., Scotiabank, and RBC Capital Markets to issue to the public, on a bought-deal basis, 24,600,000 trust units.
Source CoStar. Click here to read a full story.
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