TOLEDO, Ohio--(BUSINESS WIRE)--Feb. 15, 2012-- Health Care REIT, Inc. (NYSE:HCN) announced today it will partner with Chartwell Seniors Housing REIT (TSX:CSH.UN) to own and operate a portfolio of 42 high-quality seniors housing and care communities with approximately 8,200 units located in attractive Canadian markets. The portfolio is comprised primarily of independent living residences, with many of the communities offering a continuum of care that includes assisted living and memory care. The portfolio is being acquired from each of Maestro Retirement Residences Fund, L.P., Maestro Retirement Residences Fund II, L.P., Maestro Retirement Residences Fund III, L.P., Maestro Retirement Residences Fund IV, L.P. and Maestro Retirement Residences Fund V, L.P. for $925.2 million. All currency references are in US dollars and are based upon an exchange rate of CAD to USD of 1:1. Thirty-nine of the properties will be owned 50% each by the company and Chartwell. HCN will wholly own the remaining three properties. Post-closing, Chartwell will manage the communities under an incentive-based management contract.

Transaction Highlights

• High-quality seniors housing and care portfolio, consisting of 42 facilities with approximately 8,200 units
• Attractive markets with favorable demographics. One-half of the portfolio is located in the five largest Canadian markets with most of the remaining facilities located in the top 35 Canadian census metropolitan areas. The buildings in the portfolio are located in the provinces of Quebec (19), Ontario (19), British Columbia (3) and Alberta (1)
• HCN’s investment has a projected first year NOI yield of approximately 7.4% after management fees
• Expected to be immediately accretive to HCN’s FFO with future NOI growth of 4% to 5% over the long-term
• Chartwell is the premier publicly traded operator in Canada with a reputation for quality care and strong financial results
• Substantial geographic overlap with Chartwell’s existing portfolio that offers potential operating efficiencies
• Potential for occupancy growth beyond the current rate of 88% to be gained through enhanced operational strategies and efficiencies and newly developed communities that are still in lease up
• Properties that support a care delivery model that fulfills the needs of residents across the continuum of senior care
• Strong alignment of incentives between HCN and Chartwell through a shared ownership and governance structure and a management contract with Chartwell with a variable fee structure based on performance
• Planned future growth with rights of first offer on acquisitions and new development opportunities within defined geographic areas

“The investment with Chartwell provides Health Care REIT with the opportunity to partner with a premier seniors housing operator in Canada and to invest in high-quality real estate in attractive markets,” said George L. Chapman, Chairman, Chief Executive Officer and President of Health Care REIT. “This investment takes our successful U.S. investment strategy and applies it to the Canadian market. HCN will gain a meaningful foothold in Canada’s largest and most attractive markets with a portfolio of high-quality private pay facilities, and benefit from a relationship with Canada’s leading seniors housing operator.”

Chartwell owns, operates and manages 195 communities with over 24,500 units across the full continuum of seniors housing in North America as of September 30, 2011. Chartwell is publicly traded on the Toronto stock exchange and has an enterprise value of approximately $3 billion.

“Our relationship with Health Care REIT reinforces Chartwell’s position as the leading seniors housing operator in Canada in prime markets with favorable demographics and demand fundamentals. It will allow us to attract additional opportunities in the marketplace, positioning Chartwell for continued growth,” said Brent Binions, Chief Executive Officer of Chartwell. “This portfolio’s geographic overlap with Chartwell’s existing seniors housing and care portfolio also presents excellent opportunities for increased operational efficiencies and economies of scale.”

Transaction Terms
The investment will be structured to comply with the REIT Investment Diversification and Empowerment Act (RIDEA). Thirty-nine of the communities will be owned 50% each by HCN and Chartwell with governance shared equally. Three of the communities will be wholly owned by HCN. Chartwell will manage all 42 communities under an incentive-based management contract. HCN’s consideration for its interest in the portfolio will be through a combination of approximately $259.4 million of cash and the pro-rata assumption of existing and newly arranged secured debt. The key transaction terms for the components of the portfolio are summarized in the table below.

(1) Debt amounts may vary based on timing of close and other variables.
(2) Includes estimate of interest rate on floating rate debt.

The company intends to discuss the strategic benefits and financial implications of this investment in greater detail on its fourth quarter 2011 earnings conference call scheduled for Thursday, February 16, 2012 at 10:00 a.m. Eastern Standard Time.

To learn more about our investment with Chartwell Seniors Housing REIT and to watch an interview with Brent Binions, visit Health Care REIT’s website at www.hcreit.com/featuredpartners/Chartwell.

BofA Merrill Lynch was exclusive financial advisor to Health Care REIT on the transaction.

Transaction Timing
The transaction has been approved by the Boards of Directors of both companies. Completion of the transaction is subject to receipt of regulatory approvals and other customary closing conditions. The transaction is expected to close in the second quarter of 2012, although there can be no assurance that the transaction will close or, if it does, when the closing will occur.

About Health Care REIT, Inc. Health Care REIT, Inc., an S&P 500 company with headquarters in Toledo, Ohio, is a real estate investment trust that invests across the full spectrum of seniors housing and health care real estate. The company also provides an extensive array of property management and development services. As of September 30, 2011, the company’s broadly diversified portfolio consisted of 898 properties in 45 states. More information is available on the company’s website at www.hcreit.com.

About Chartwell Seniors Housing REIT. Chartwell is a Mississauga, Ontario based company that owns and operates seniors housing communities offering a continuum of care including independent living, assisted living, memory care, and long-term care. 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 communities and to grow prudently through accretive acquisitions in its existing markets.

This document may contain “forward-looking” statements as defined in the Private Securities Litigation Reform Act of 1995. When the company uses words such as “may,” “will,” “intend,” “should,” “believe,” “expect,” “anticipate,” “project,” “estimate” or similar expressions, it is making forward looking statements. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties. The company’s expected results may not be achieved, and actual results may differ materially from expectations. This may be a result of various factors, including, but not limited to, the satisfaction of closing conditions to the transaction, including, among other things, the obtainment of certain lender consents; the parties’ performance of their obligations under the transaction agreements; the receipt of applicable healthcare licenses and governmental approvals; the movement of U.S. and Canadian exchange rates; compliance with applicable IRS guidance; competition within the seniors housing industry; unanticipated difficulties and/or expenditures relating to the transaction and the relationship; Chartwell’s ability to realize operating efficiencies; and the parties’ ability to cooperate and reach agreement on major decisions. Additional factors are discussed in the company’s Annual Report on Form 10-K and in its other reports filed from time to time with the Securities and Exchange Commission. The company assumes no obligation to update or revise any forward-looking statements or to update the reasons why actual results could differ from those projected in any forward-looking statements.

Source: Health Care REIT, Inc.

Health Care REIT, Inc.
Scott Estes, 419-247-2800
Jay Morgan, 419-247-2800