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AgeCare, Axium to buy 2 more Chartwell LTC homes in B.C.

Chartwell Retirement Residences (CSH-UN-T) announced today it has agreements to divest two Britis...

IMAGE: IMAAGE: Chartwell Retirement Residences Logo (Courtesy Chartwell Retirement Residences)Chartwell Retirement Residences (CSH-UN-T) announced today it has agreements to divest two British Columbia long-term care homes containing 264 beds to AgeCare Health Services Inc. and Axium Infrastructure Inc. for $112 million.

The move is the latest step in Chartwell’s strategic plan to transition out of long-term care in Canada and focus on its growing retirement residence business. When Chartwell made that announcement earlier this year, it said the LTC sector had dropped to less than 10 per cent of its business operations.

Although Chartwell did not identify the two residences involved in the transaction, according to its website the firm owns only two properties in British Columbia which are wholly LTC facilities – a 128-bed facility in Burnaby and a 136-bed property in Nanaimo.

“Substantial growth in our retirement portfolio over the years and our recently announced transition of the Ontario LTC platform has led us to the decision to sell these LTC residences in British Columbia,” said Vlad Volodarski, Chartwell’s chief executive officer, in the announcement.

Ontario LTC portfolio sale

Chartwell announced in March the sale of the Ontario portfolio of 16 operating LTC facilities, and an additional facility which remains under construction, to the AgeCare and Axium partnership. That transaction, which comprises 2,418 beds, is valued at about $446.5 million.

Its management platform which serves these homes as well as six other homes comprising an additional 866 beds is included in that original transaction.

“Our experience working with AgeCare and Axium as the transition of our Ontario LTC platform furthers strengthened my confidence that they are exactly the right partners to continue the legacy of Chartwell’s long-term care operations at these homes.

“We are committed to work closely with AgeCare, Axium, and all our stakeholders to ensure a smooth and successful transition.”

Net proceeds to Chartwell after paying off debt, taxes and closing cost is estimated at approximately $56.8 million.

Axiom is to assume or repay the existing property-specific debt, with an estimated balance at Dec. 31, 2022 of $41.9 million, bearing a weighted average interest rate of 3.25 per cent.

Chartwell expects to use net proceeds from the sale to repay credit facilities used to fund growth and developments.

Subject to required approvals, Chartwell expects this transaction to close in 2022.

About Chartwell, Axium, AgeCare

Chartwell is an unincorporated, open-ended real estate trust which indirectly owns and operates a 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 190 retirement communities in four provinces including properties under development.

Axium Infrastructure (comprised of Axium Infrastructure Inc. and its affiliated entities) is an independent portfolio management firm with $9.4 billion in assets under management as of June 20, 2022, as well as approximately $1.7 billion in co-investments.

Focus is placed on assets supported by robust market demand and under long-term contract with creditworthy partners. Since 2010, it has invested in a diversified portfolio of over 250 North American infrastructure assets.

Founded in 1998 by two physicians, AgeCare operates 22 seniors long-term care and supported living communities in Alberta and B.C., offering care and services including long-term care, supportive living, mental health, hospice and adult day programs.

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