Sienna Senior Living (SIA-T) is expanding into Alberta with an agreement to acquire four continuing care homes in the Calgary and Edmonton areas, Fort Saskatchewan and Medicine Hat.

The portfolio comprises 540 rooms in the newly constructed residences - which have an average age of under three years. It is being acquired for a total of $181.6 million.

Three of the facilities have occupancy above 98 per cent, while the fourth is in lease-up.

"We are excited to expand our operations in Alberta, one of Canada’s fastest-growing provinces, welcome new team members and serve the residents and families of Albertans,” Nitin Jain, Sienna’s president and chief executive officer, said in the announcement Wednesday afternoon. 

"This acquisition helps us increase our national footprint and further enhance the size, quality and geographic reach of Sienna’s operating platform."

The facilities being acquired

The acquisition is being made at a discount to replacement value, Sienna states in the announcement, and is forecast to provide an investment yield of approximately 6.5 per cent during the first year, with potential for future growth.

The facilities are:

• Airdrie Care Community, 15 Market Blvd., Calgary area: Completed Q2 2022, 126 suites, 100 per cent occupancy.
• Shasta Care Community, 112 Secord Dr., Edmonton: Completed Q4 2022, 162 suites, 100 per cent occupancy.
• Fort Saskatchewan Care Community, 8540 94 St.: Completed Q3 2023, 126 suites, 98.4 per cent occupancy.
• Medicine Hat Care Community, 1713 Strachan Rd.: Completed Q3 2023, 126 suites, 84.1 per cent occupancy.

They have been owned and/or operated by Edmonton-based Connecting Care, which has a portfolio of almost 20 such facilities across Saskatchewan, Alberta and British Columbia. 

“The portfolio presents a compelling expansion opportunity for Sienna in Alberta, adding new, high-quality properties to the company’s senior housing portfolio in Western Canada, and further diversifying its portfolio,” the announcement states. “As Sienna’s first acquisition in Alberta, it not only provides immediate scale, but also establishes a platform for further expansion opportunities in a desirable growth market in Canada.” 

The facilities will be allocated to Sienna’s long-term care portfolio, and represent an increase of approximately eight per cent to the firm’s total bed count.

Financing and closing of the acquisition

The purchase price is subject to “certain adjustments”, including an additional contingent payment of up to $4 million if certain performance targets are achieved prior to March 2026. 

The acquisition is being financed through the assumption of $150 million of CMHC debt with a weighted average interest rate of 4.6 per cent and a remaining average term of 4.7 years.  The balance is financed with the proceeds from Sienna’s recent equity raise.

The transaction remains subject to customary closing conditions, including regulatory approvals. Sienna expects the acquisition to close in early 2025.

Torys LLP is acting as legal advisor and TD Securities Inc. as financial advisor to Sienna; Newmark Canada is the financial advisor to the vendor.

Sienna is scheduled to release its Q3 earnings update after market close on Monday, Nov. 11.

About Sienna Senior Living

Sienna Senior Living Inc. offers a range of senior living options, including independent living, assisted living and memory care under its Aspira retirement brand, long-term care and specialized programs and services.

It has approximately 12,500 employees across Canada.