Chartwell Completes Acquisition of Remaining Joint Venture Interests in Its Quebec Property Manager and Properties

Chartwell Seniors Housing Real Estate Investment Trust and Groupe Melior announced today that Chartwell has completed the acquisition of the remaining 50% interest owned by Residences Melior (an affiliate of Groupe Melior) in seven retirement properties in the Province of Quebec, as well as Melior’s 50% interest in the joint venture property management company managing all of Chartwell’s senior housing communities in Quebec.

Under the terms of an agreement with Melior, Chartwell paid approximately $63.3 million for the 50% interest in the seven properties and the management company. The price was determined by independent appraisers. The closing was funded with cash on hand of approximately $14 million, with the remainder of the purchase price being satisfied by the assumption of mortgages of approximately $46.1 million, bearing a weighted average interest rate of 4.8% and having a remaining term of 2.75 years, the assumption of other liabilities of approximately $0.5 million, and the discharge of approximately $2.7 million of mezzanine loans issued by Chartwell.

The seven communities in which Chartwell purchased the 50% interest that it did not already own are as follows:

- Monastere d’Aylmer in Aylmer containing 272 suites
- Notre Dame de Hull in Hull containing 225 suites
- Marquis de Tracy I in Sorel containing 123 suites
- Marquis de Tracy II in Sorel containing 138 suites
- Domaine du Chateau de Bordeaux in Quebec City containing 150 suites
- Residence Principale in Cowansville containing 197 suites
- Residence St-Pierre in Rouyn-Noranda containing 121 suites

“We are very pleased to be bringing all of our Quebec properties and management functions under one platform. By owning and managing our Quebec seniors housing portfolio, we expect solid performance improvements in the Quebec portfolio going forward. We believe this transaction will allow Chartwell and our Quebec team to improve occupancies, increase operating margins and take advantage of significant synergies. All in all, we are confident our operating performance will improve dramatically in that province,” commented Stephen Suske, Chief Executive Officer and Vice Chair. “Groupe Melior has been a terrific partner as we established our presence in the Province, and we wish them well in their future endeavors.”

“This transaction constitutes a turning point for Melior to pursue new development projects, improve and invest in properties currently owned by Melior, and create new housing products for the seniors of today and tomorrow, ” commented Jean Maynard, President and CEO of Groupe Melior. “Over the years, Melior has become a leading name in Quebec and we will continue to build on that reputation.”

In addition, Chartwell announced today that internal growth projects on three of Chartwell’s properties in Quebec are completed with the new space now in lease-up. Residence Ste-Marthe in St. Hyacinthe, Manoir Pierrefonds in Montreal, and Maison Herron in Dorval have added an aggregate of 278 suites to the portfolio, and Chartwell is in the process of marketing these new suites in each of their strong markets.

Chartwell is an investment trust focused on generating sustainable, stable and growing cash distributions from owning and managing a complete spectrum of seniors housing communities. It is the largest participant in the Canadian seniors housing business and the third largest in North America. Chartwell will 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 also has an exclusive option to purchase stabilized communities from Spectrum, Canada’s largest and fastest growing seniors housing development company.

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.