Chartwell Seniors Housing REIT
TSX : CSH.UN

Chartwell Seniors Housing REIT

October 21, 2009 17:04 ET

Chartwell Completes Reorganization of Relationship With Horizon Bay Acquires Retirement Community in Thunder Bay, Ontario

MISSISSAUGA, ONTARIO--(Marketwire - Oct. 21, 2009) - Chartwell Seniors Housing Real Estate Investment Trust (TSX:CSH.UN) announced today that it had amended the terms governing the relationships between Horizon Bay Realty, L.L.C. ("HB Realty"), Horizon Bay Chartwell L.L.C. ("HBC") and Horizon Bay Chartwell II, LLC ("HBCII"). The amendments, and the changes to Chartwell's arrangements with Horizon Bay Management LLC ("HBM"), include the following:

  • HB Realty distributed to CSH Master Care a portion of its interest in HBCII and CSH Master Care sold its 49% interest in HB Realty to HB Partners, LLC ("HBP") for nominal consideration, with the result that Chartwell's effective ownership interest in HBC decreased from 74.5% to 50% and its effective ownership interest in HBCII increased from 74.5% to 80%;
  • Chartwell no longer has exposure to the 25 seniors housing facilities leased by subsidiaries of HB Realty and managed by HBM.
  • The management agreements relating to facilities managed by HBC and HBCII will be amended to provide more favourable termination rights to Chartwell and its joint venture partners and to amend certain noncompetition covenants granted by HB Partners, LLC in favour of each of HBC and HBCII; and
  • Chartwell Master Care Corporation and HBM or HB Realty will no longer have an obligation to bring to the attention of each other any opportunities to acquire stabilized seniors housing facilities; however, HB Realty and its affiliates will be subject to certain non-competition covenants in favour of each of HBC and HBCII while HBR has any interest in HBC or HBCII.

"These amendments simplify our corporate structure, eliminate exposure to negative cash flows and future obligations under the lease agreements and, with the increased ownership in HBCII, improve cash flow from our U.S. platform," commented Brent Binions, Chartwell's President and Chief Executive Officer.

ACQUISITION
Chartwell also announced today that it acquired from Spectrum Seniors Housing Development LP 100% of Chartwell Select Thunder Bay, an independent living community comprised of a 102-suite main residence and seven townhouses. The current occupancy is approximately 71% and management expects occupancies will stabilize at approximately 95% within one year. There is also the opportunity to construct an additional nine townhouses on excess land included with the property The total purchase price is approximately $23.2 million, which subject to normal working capital adjustments, will be settled by the assumption of the existing construction debt of $17.2 million, settlement of mezzanine loans of approximately $3.0 million and settlement of approximately $3.0 million of other amounts owing to Chartwell by Spectrum.

Chartwell is a real estate investment trust focused on generating sustainable, stable and growing cash distributions from owning and managing a complete range of seniors housing communities. It is one of the largest participants in the North American seniors housing business. Chartwell's aim is to capitalize on the strong demographic trends present in its markets to maximize the value of its existing portfolio of seniors housing facilities, and prudently avail itself of opportunities to grow internally and through accretive acquisitions.

Chartwell's Distribution Reinvestment Plan (DRIP) allows Unitholders to have their monthly cash distributions used to purchase units without incurring commission or brokerage fees, and receive bonus units equal to 3% of their monthly cash distributions. More information can be obtained at www.chartwellreit.ca.

This press release contains forward-looking information that reflect the current expectations of management about the future results, performance, achievements, prospects or opportunities for Chartwell and the seniors housing industry. These statements generally can be identified by use of forward-looking words such as "may", "will", "expect", "estimate", "anticipate", "believe", "project", "should" or "continue" or the negative thereof or similar variations. Forward-looking statements are based upon a number of assumptions and are subject to a number of known and unknown risks and uncertainties, many of which are beyond Chartwell's control that could cause actual results to differ materially from those that are disclosed in or implied by such forward-looking statements.

While we anticipate that subsequent events and developments may cause our views to change, we do not have an intention to update this forward-looking information, except as required by applicable securities laws. This forward-looking information represents our views as of the date of this press release and such information should not be relied upon as representing our views as of any date subsequent to the date of this document. We have attempted to identify important factors that could cause actual results, performance or achievements to vary from those current expectations or estimated expressed or implied by the forward-looking information. However, there may be other factors that cause results, performance or achievements not to be as expected or estimated and that could cause actual results, performance or achievements to differ materially from current expectations. There can be no assurance that forward-looking information will prove to be accurate, as actual results and future events could differ materially from those expected or estimated in such statements. Accordingly, readers should not place undue reliance on forward-looking information. These factors are not intended to represent a complete list of the factors that could affect us. See "Risks and Uncertainties" in our MD&A and risk factors highlighted in materials filed with the securities regulatory authorities in Canada from time to time, including but not limited to our most recent annual information form.

Contact Information

  • Chartwell Seniors Housing Real Estate Investment Trust
    Vlad Volodarski
    Chief Financial Officer
    (905) 501-4709
    (905) 501-4710 (FAX)
    vvolodarski@chartwellreit.ca