Greystone Real Estate Advisors headed north of the border for its latest transaction, where along with TD Securities, they represented an owner in its sale of five retirement communities in the Edmonton, Alberta area to Canadian REIT Chartwell Retirement Residences. With a weighted average age of six years, the portfolio consists of four existing communities with 450 independent living, 237 assisted living and 88 memory care units (plus a 52-unit addition at one community expected to finish in the first half of 2018) and a 256-unit community currently under development and expected to open in late 2019. There is a 58% private pay census across the portfolio, with 42% being funded by the Alberta Health Services.
Altogether, the five properties are expected to sell for $327.88 million (CAD$418 million), or $318,000 per unit, with a roughly 6.1% cap rate representing stabilized operations. In addition, the seller will pay CAD$7.5 million of income support to Chartwell for the two years after opening. With this transaction, Chartwell, which was advised by RBC Capital Markets, expands its Western Canada portfolio (from 13% of its total portfolio to 17%) and also received the right of first refusal to purchase four additional retirement communities in Edmonton currently owned by the seller as well as a three-year non-compete agreement stipulating that the seller not undertake any further developments in the area unless it offers Chartwell at least a 50% undivided interest in it.
