Regal Lifestyle Communities Inc. Announces $20 Million Public Offering of Common Shares and the Pending Acquisition of Two Retirement Homes

TORONTO, ONTARIO--(Marketwired - Feb. 26, 2014) -

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Regal Lifestyle Communities Inc. ("Regal" or the "Company") (TSX:RLC) announced today that it has reached an agreement with a syndicate of underwriters co-led by CIBC and TD Securities Inc., to issue to the public on a bought deal basis, and subject to regulatory approval, 2,581,000 Common Shares, at a price of $7.75 per Common Share for total gross proceeds of approximately $20 million (the "Offering"). Regal has also granted the underwriters an overallotment option to purchase up to an additional $3 million Common Shares on the same terms and conditions, exercisable in whole or in part at any time, up to 30 days after the closing of the Offering.

The aggregate net proceeds from the Offering are expected to be used by Regal to fund the acquisition of two "current generation" retirement homes and for general corporate purposes.

The two recently built retirement homes (collectively, the "Properties") are located in Maple Ridge, British Columbia and Milton, Ontario, and consist of 93 and 104 independent living suites, respectively. The Properties are currently approximately 84% leased in the aggregate. Regal has signed an agreement with respect to the acquisition of the retirement home in Maple Ridge with an expected closing date in mid-March 2014. Regal is in the final stages of negotiating a purchase and sale agreement with the vendor with respect to the acquisition of the retirement home in Milton. Based on the current state of negotiations with the vendor, Regal expects the Milton acquisition will close on or before March 31, 2014. Both acquisitions will be subject to certain closing conditions typical for transactions of this type.

Regal expects to pay an aggregate of approximately $44 million, excluding closing costs, to acquire the Properties on their respective closing dates. Regal also expects to arrange approximately $29 million of mortgage financing secured against each of the Properties to partially fund the acquisitions. Regal also expects that the purchase and sale agreements relating to the acquisitions will provide for contingent payments of a further $13.5 million to the respective vendors upon achievement of certain pre-determined leasing and net operating income targets. These investments are expected to represent a cap rate of approximately 7.25% as at the applicable closing dates and approximately 7.75% upon the stabilization of such retirement homes.

"Regal is committed to delivering growth for our shareholders," said Mr. Simon Nyilassy, Regal's President and CEO. He added, "We expect the investments in these two current generation retirement homes to be immediately accretive to Regal's AFFO per share."

The Offering is expected to close on March 21, 2014, and is subject to customary conditions, including regulatory approval. The Offering is conditional upon the execution of a binding agreement of purchase and sale for the Milton property between Regal and the vendor. There can be no assurance that the expected terms of the Milton acquisition as described above will be reflected in the agreement of purchase and sale in respect of this property, or that all conditions to closing of both acquisitions will be satisfied or waived. In the event that the Offering is completed but the acquisitions of one or both of the Properties do not close, the net proceeds of the Offering will be used to fund future acquisitions and for general corporate purposes.

The Company will, on March 4, 2014, file with the securities commissions and other similar regulatory authorities in each of the provinces and territories of Canada, a preliminary short form prospectus relating to the issuance of the Common Shares.

The Common Shares have not been, nor will they be, registered under the United States Securities Act of 1933, as amended, and may not be offered, sold or delivered, directly or indirectly, in the United States or to, or for the account or benefit of, "U.S. persons" (as defined in Regulation S under the United States Securities Act of 1933, as amended), except pursuant to an exemption from the registration requirements of the 1933 Act. This press release does not constitute an offer to sell or a solicitation of an offer to buy any of the Common Shares in the United States or to, or for the account or benefit of, U.S. Persons.

About Regal Lifestyle Communities Inc.

Regal Lifestyle Communities Inc. is a corporation incorporated under the laws of the Province of Ontario which currently owns a portfolio of fourteen income-producing retirement communities offering a continuum of care, from independent serviced living to a full range of assisted living programs. The fourteen retirement communities comprise over 1,900 suites, primarily located in the Province of Ontario and including a property located in each of the Provinces of Saskatchewan and Newfoundland and Labrador.

Forward-Looking Information

Certain information in this press release may constitute forward-looking statements that involve a number of risks and uncertainties, including statements with respect to the Company and its operations, strategy, financial performance and financial condition, as well as with respect to the acquisition of the Properties and the effects of the acquisition of the Properties on the financial performance of the Company. Forward-looking statements use the words "believe", "expect", "anticipate", "may", "should", "intend", "estimate" and other similar terms, which do not relate to historical matters. Such forward-looking statements involve known and unknown risks and uncertainties and other factors that may cause the actual results to differ materially from those indicated. Such factors include, but are not limited to, general economic conditions, the failure to sign a binding agreement of purchase and sale for the Milton property, the failure to receive any required approvals or consents in connection with the acquisition of the Properties or the failure to satisfy or waive any other condition to the acquisition of the Properties, the failure of the Company to realize expected benefits from the acquisition of the Properties, the failure of the Company to satisfy the conditions of the Offering or otherwise close the Offering. Also see the risk factors identified in the public filings of the Company available on www.sedar.com. The Company believes that the expectations reflected in its forward-looking statements are based on reasonable assumptions; however, the Company can give no assurance that actual results will be consistent with these forward-looking statements. Except as required by applicable law, the Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise. Readers should be cautioned not to place undue reliance on the forward-looking statements.

"AFFO" and net operating income ("NOI") are not measures recognized under International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board and do not have any standardized meaning prescribed by IFRS. AFFO and NOI are supplemental measures of a company's performance and management believes that AFFO and NOI are useful in the assessment of the Company's operating performance for valuation purposes, and is also a relevant measure of the ability of the Company to earn and declare dividends to shareholders. AFFO and NOI, as computed by the Company, may differ from similar computations as reported by other similar organizations and, accordingly, may not be comparable to AFFO and NOI reported by such organizations. AFFO and NOI should not be construed as alternatives to comprehensive income or cash flow from operating activities determined in accordance with IFRS as indicators of Regal's performance. For additional information regarding these non-IFRS measures, including the definitions thereof, refer to the Company's most recent management's discussion and analysis of results of operations and financial condition, a copy of which is available at www.sedar.com.

For more information, visit the Company's issuer profile at www.sedar.com.