Senior Housing Investments & Transactions: Chartwell, Ensign

Chartwell Acquires Five Premier Ontario Residences for C$254 Million

Chartwell Retirement Residences, Canada’s largest owner and operator of seniors housing, has entered into a definitive agreement to acquire five premier retirement residences in Ontario, Canada, for an aggregate purchase price of C$254 million from five distinct groups of vendors.

The properties include Hollandview Trail Retirement Community in Aurora; The Rockcliffe Retirement Residence in Ottawa; St. Clair Beach Retirement Community in Tecumseh; Oak Ridges Retirement Community in Richmond Hill; and Clair Hills Retirement Community in Waterloo.

“This transaction is fully in line with our strategy to expand our portfolio with new, high-quality properties, located in strong and growing markets,” said Vlad Volodarski, Chartwell’s chief financial officer and chief investment officer. “Including this transaction, in 2015 we have invested C$586.9 million in accretive acquisitions in Canada and have announced, together with our partners, over C$300 million in development projects. While we have substantially completed reinvestment of the net proceeds from the recent sale of our U.S. portfolio, we maintain ample balance sheet capacity and continue our work on sourcing and evaluating other acquisition and development opportunities.”

Chartwell is an unincorporated, open-ended trust that indirectly owns and operates a full range of seniors housing communities, from independent supported living through assisted living to long-term care. More than 25,000 seniors live in Chartwell communities, and the company has over 13,500 employees in its more than 180 retirement and long-term care residences.

Hollandview Trail Retirement Community is a 125-suite residence located in Aurora that includes a dedicated 37-suite assisted living unit. The building, which opened in 2009, is currently 98% occupied.

The 127-suite Rockcliffe Retirement Residence, which opened in 2008, includes a dedicated 17-suite assisted living unit. The residence is presently 100% occupied. 

St. Clair Beach Retirement Community is a 115-suite independent supportive living residence located on the shores of Lake St. Clair in Tecumseh. The building opened in 2013 and is presently 98% occupied.

Oak Ridges Retirement Community is a 129-suite residence located in Richmond Hill that features a dedicated 19-suite assisted living unit. The building, which opened in 2012, is currently 76% occupied.

Clair Hills Retirement Community is a 120-suite residence located in Waterloo. The property has a dedicated 20-suite assisted living unit. The building opened in 2012 and is currently 74% occupied.

Oak Ridges and Clair Hills will initially be owned by two limited partnerships in which vendors’ affiliates will retain interests. Signature Retirement Living Corp., an affiliate of the vendors, is set to continue to manage these properties until Dec. 31, 2018, under management contracts with Chartwell. The vendors provided Chartwell with a yearly Net Operating Income guarantee during the Initial Term. Upon expiration of the Initial Term, Chartwell is set to acquire the vendors’ interests in the limited partnerships and assume management of these properties. The purchase price for the vendors’ interests in the partnerships will be based on the actual results achieved by these properties during the last year of the Initial Term.

Chartwell expects to use its available cash and its credit facility to finance the cash portion of the aggregate purchase price and closing costs, which are estimated at C$5.7 million. The closing of the transaction, subject to normal closing conditions, is anticipated to occur this November.

The Ensign Group Purchases Skilled Nursing Facilities in California, South Carolina, Arizona 

The Ensign Group, Inc. (NASDAQ:ENSG), the parent company of the Ensign group of skilled nursing, rehabilitative care services, assisted living, hospice care, home health care and urgent care companies, announced that its subsidiary has acquired the underlying real estate of Somerset Subacute and Rehabilitation, a skilled nursing facility with 46 beds in El Cajon, California. A subsidiary of Ensign has been operating the facility since December 2014 as part of a long-term lease.

The acquisition became effective on November 1, 2015.

In different transactions on the same day, Ensign announced that it acquired two skilled nursing facilities in Arizona and the operations and real estate of a skilled nursing facility in West Columbia, South Carolina — its first operation on the East Coast. Both transactions also went into effect on Nov. 1, 2015.

Specifically, The Ensign Group announced that its subsidiaries acquired the real estate and operations of Millennium Post Acute Rehabilitation, a skilled nursing facility with 125 beds in West Columbia, South Carolina.

Ensign’s subsidiaries also acquired Shea Post Acute Rehabilitation Center, a 105-bed skilled nursing facility in Scottsdale, Arizona, and Chandler Post Acute and Rehabilitation, a 120-bed skilled nursing facility in Chandler, Arizona.

The prices of the acquisitions were not disclosed.

These acquisitions bring Ensign’s growing portfolio to 182 skilled nursing and assisted living operations, 29 of which are owned. Ensign’s portfolio also includes 15 home health agencies, 14 hospice agencies, three home care businesses and 17 urgent care clinics across 14 states.

Christopher Christensen, Ensign’s president and CEO, said Ensign continues to see a very healthy pipeline for growth opportunities in new markets and within its existing footprint. Christensen also indicated that the organization is actively seeking several additional transactions to acquire real estate and to lease both struggling and well-performing skilled nursing, assisted living and other healthcare-related businesses.

NorthStar Realty Finance Corp. and NorthStar Realty Europe Corp. Announce Completion of Spin-Off of European REIT

NorthStar Realty Finance Corp. (NYSE: NRF) and NorthStar Realty Europe Corp. (NYSE: NRE) jointly announced the successful completion of the spin-off of NorthStar Realty’s European real estate business, NRE.

NorthStar Realty, a diversified commercial real estate company that is organized as a REIT and is managed by an affiliate of NorthStar Asset Management Group, also announced the effectiveness of its previously announced one-for-two reverse stock split.  

Starting with the opening of trading on Nov. 2, NorthStar Realty’s common stock will trade on the New York Stock Exchange on a split-adjusted basis under the ticker symbol “NRF,” and it will have a new CUSIP number: 66704R 803.

On Nov. 2, NRE will also start regular trading on the NYSE under the ticker symbol “NRE”.  

Additionally, NRE will be added to the MSCI U.S. REIT Index (RMZ), effective once the market closes on Nov. 2.

“NRE currently has a portfolio of high-quality predominately office properties located across top European markets, including London, Paris and Frankfurt and we believe it is well-positioned for continued strong growth with the pipeline of opportunities we are seeing across Europe,” said David T. Hamamoto, chairman. “We remain focused on seeking additional opportunities to further unlock value for our stockholders.”

National Church Residences Completes Sale of Ocean View Senior Apartments to BRIDGE Housing

The largest nonprofit provider of affordable senior housing in the United States, National Church Residences, has completed the sale of Ocean View Senior Apartments to BRIDGE Housing, a California-based nonprofit developer, owner and manager of affordable housing. 

The price of the transaction was not disclosed.

National Church Residences acquired the 100-unit Ocean View Senior Apartments in 2000 at the request of the city of Pacifica, California, with the intention of sustaining the property’s affordability.

Recently, National Church Residences had been pursuing a refinancing of Ocean View to address capital needs and repay two maturing loans. 

“We determined it was in the best interest of the Ocean View community to engage a mission-minded partner like ourselves with the local presence needed to execute new financing terms and oversee the rehabilitation,” said Steve Bodkin, chief operating officer, housing, National Church Residences.

The organization reached out to BRIDGE Housing, which creates, owns and manages a variety of high-quality, affordable homes for seniors and working families.

BRIDGE is set to begin renovations next month with new financing in place, including tax-exempt bonds, additional funding through California Housing Finance Agency, restructuring of existing debt with the San Mateo County and the Housing Endowment and Regional Trust (HEART), and the addition of low-income housing tax-credit equity.

The renovations are expected to replace aging building elements and systems with higher-performing and more efficient alternatives, enhance and restore the physical condition of the building, and ultimately enhance residents’ quality of life. 

The recapitalization also provides funding to enhance on-site services. Residents will have access to programs such as nutrition and wellness classes and referral services, for free. 

Additionally, all current residents will be able to stay in their units for the long term, and new deed restrictions have been placed on the property to guarantee rent restrictions will continue for 55 years.

Ocean View is affordable to seniors whose annual incomes range from about $14,928 to $84,500 (minimum income standard to 80% of Area Median Income, depending on household size), however 31 apartments will have additional subsidy provided by the Housing Authority of the County of San Mateo to serve individuals with lower incomes.

National Church Residences, headquartered in Upper Arlington, Ohio, has 340 communities in 28 states and Puerto Rico.

Written by Mary Kate Nelson