Chartwell Retirement Residences and Welltower Inc. have announced plans to wind up an 11-year-old joint venture which has seen them partner on the ownership of 40 Canadian retirement residences comprising 8,476 suites.
Mississauga-based Chartwell will convey its interest in 23 of the assets to Welltower in exchange for Welltower's interest in 16 assets and a cash payment of $97.2 million. For now, Chartwell and Welltower will continue to co-own one remaining property.
"We established our partnership with Welltower in 2012 with equal ownership of the properties, where the interests of both partners were strongly aligned,” Vlad Volodarski, chief executive officer of Chartwell, said in the announcement. “Over the years, we worked together to enhance the services delivered to our residents, improve our assets and drive results for our investors.
“As the parties' strategic priorities evolved, we worked in the same spirit of collaboration to arrive at a mutually beneficial arrangement to divide the portfolio to allow each party to independently pursue its strategic objectives.
“With this transaction, Chartwell obtains full control over 16 high-quality assets with high growth potential and receives cash proceeds, further improving its balance sheet flexibility.”
Homes involved in the transaction are concentrated in Ontario and Quebec, with others in British Columbia and Alberta.
Closing of the transaction, which remains subject to regulatory and lender approvals, is expected in Q2 2024.
Details of the transaction
On closing, Chartwell will assume approximately $140.3 million in debt on its assets, at a weighted average interest rate of 2.8 per cent and a weighted average term to maturity of 4.4 years. The net change to total debt on Chartwell's balance sheet will be a reduction of approximately $51 million.
Chartwell expects to use portions of the cash payment to further repay debt and enhance balance sheet flexibility.
Chartwell expects the transaction to reduce its adjusted net operating income for the trailing 12 months (ending Sept. 30, 2023) by approximately $7.7 million.
On closing, Chartwell will transfer management of the Welltower assets and two other residences currently wholly owned by Welltower to a third party.
“Combined with the recently completed sale of our Ontario long-term care platform and other announced and completed non-core asset dispositions, this transaction solidifies control of our property portfolio, furthers its repositioning toward high-growth high-quality assets, and improves our financial position and flexibility for future growth,” Jonathan Boulakia, Chartwell’s chief investment officer, said in the announcement.
“We are committed to working collaboratively with Welltower and their affiliates to ensure a smooth transition for the residents and staff of the Welltower Assets.”
Chartwell is an unincorporated, open-ended real estate trust which indirectly owns and operates a range of seniors housing communities, from independent living to assisted living and long-term care.
Chartwell is the largest operator in Canada, serving over 25,000 residents in four provinces. For more information visit www.chartwell.com.
The charts below contain a listing of the individual residences which are being retained by each of the companies, the city and the number of beds.
Chartwell Assets – JV interest being acquired by Chartwell
- Whispering Pines: Barrie, 108;
- Tranquility Place: Brantford, Ont., 218;
- McConnell Retirement: Cornwall, Ont., 210;
- Scarlett Heights: Etobicoke, 208;
- Royal on Gordon: Guelph, 112;
- Avondale Retirement: Toronto, 79;
- Lansing Retirement: Toronto, 90;
- Imperial Place: Surrey, 104;
- Fountains of Mission: Calgary, 96;
- Domaine des Tremble:s Gatineau, Que., 238;
- Les Écores: Laval, Que., 197;
- Belvédères de Lachine: Montréal, 264;
- Manoir et Cours: Québec City, 616;
- Manoir Archer: Québec City, 246;
- Manoir Saint-Jérôme: Saint-Jérôme, Que., 513;
- Notre-Dame: Victoriaville, Que., 212;
- Total 3,511 beds.
Welltower Assets – JV interest being acquired by Welltower
- Christopher Terrace: Burlington, 71;
- Kingsville Retirement: Kingsville, Ont., 98;
- Leamington Retirement: Leamington, Ont., 82;
- Royalcliffe Retirement: London, Ont., 146;
- Alexander Muir: Newmarket, 84;
- Belcourt résidence: Orléans, Ont., 106;
- Héritage résidence: Ottawa, 170;
- Guildwood Retirement: Scarborough, 172;
- Royal Marquis: Windsor, 83;
- Renaissance Retirement: Langley, B.C., 128;
- Domaine Harmonie: Boucherville, Que., 176;
- Villa Rive-Sud: Longueuil, Que., 223;
- Bois-de-Boulogne: Montréal, 219;
- Manoir Pointe: Montréal, 246;
- Le Wellesley: Pointe-Claire, Que., 157;
- Faubourg Giffard: Québec City, 380;
- Villa Jonquière: Saguenay, Que., 199;
- Villa Chicoutimi: Saguenay, 194;
- Villa Saguenay: Saguenay, 235;
- Villa de lEstrie: Sherbrooke, Que., 246;
- Le St-Gabriel: St. Hubert, Que., 345;
- Le Teasdale: Terrebonne, Que., 564;
- Jardins Laviolette: Trois-Rivières, Que., 309;
- Total 4,633 beds.
Welltower assets - Chartwell managed homes
- Pembroke Heritage, Pembroke, Ont., 139;
- Stonehaven Retirement, Kanata, 175;
- Total 314 beds.