Welltower (NYSE: WELL) and Chartwell Retirement are ending a joint-venture arrangement and dividing a senior living portfolio the companies owned together under that agreement in Canada.
Chartwell is handing ownership of 23 assets to Welltower in exchange for the Toledo, Ohio-based real estate investment trust’s (REIT’s) interest in 16 assets and a payment of $97.2 million in cash. The 39 properties are located in Ontario, Alberta, British Columbia and Quebec.
Welltower is transitioning the properties it is taking on from Chartwell to Cogir and the operating platform the two companies are currently readying for deployment.
Once the deal closes, Chartwell is slated to assume approximately $140.3 million in debt on the properties it is taking on. The loans represent a weighted average interest rate of 2.8% and a weighted average term to maturity of 4.4 years.
The two companies will continue to co-own one remaining property for now.
“We established our partnership with Welltower in 2012 with equal ownership of the properties, where the interests of both partners were strongly aligned,” said Chartwell CEO Vlad Volodarski. “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.”
Volodarski added: “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.”
Chartwell is the largest operator in Canada with more than 25,000 residents living at its communities.
Welltower noted in a Nov. 13 business update that its incremental investment would ultimately be $113.3 million CAD, which would register at a roughly 30% discount to replacement cost.
Welltower also last week announced a sale totaling $1.5 billion in gross proceeds from a public offering of 17.5 million shares of common stock, with a goal of buying skilled nursing and senior housing properties.
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