Chartwell Retirement Residences intends to invest $382.5 million to acquire a 30 per cent ownership stake in a $1.3-billion portfolio of 23 Canadian seniors residences currently owned by Fengate Asset Management on behalf of the LiUNA Pension Fund of Central and Eastern Canada.

The transaction, announced in Chartwell’s quarterly financial statement, indicates Chartwell will serve as operations manager for the Seasons Retirement Communities portfolio while Toronto-based Fengate will provide asset management services. The agreement also provides Chartwell, which is based in Mississauga, the opportunity to acquire up to an additional 20 per cent ownership if it can achieve a series of “milestones.”

"This transaction reflects the continued execution of our disciplined investment strategy focused on acquiring high-quality residences in core markets with strong demographic profiles and long-term demand fundamentals," Jonathan Boulakia, chief investment officer of Chartwell, said in the release. "The transaction also provides us with meaningful upside while managing capital deployment prudently with a 30 per cent investment.”

Chartwell has been one of the most active investors in the seniors housing sector in recent years, adding significantly to its portfolio. The company owns and operates a portfolio of over 25,000 seniors housing units. This acquisition is aligned with a strategy to acquire “high-quality assets through partnerships with institutional capital.” 

The Fengate / LiUNA portfolio

The transaction is expected to close by the end of Q2, subject to customary closing conditions, third-party consents and regulatory approvals.

“The portfolio's embedded lease-up and operational optimization opportunities, combined with Chartwell's proven operating platform and expertise, position us to deliver strong risk-adjusted returns for our unitholders,” Boulakia said in the release. “In addition, the partnership with Fengate, a leading real estate investment and development firm, represents an opportunity to align with a new development partner in Ontario for future growth and brings together two experienced organizations with a shared commitment to the long-term stewardship of retirement communities."

The portfolio is comprised of seniors housing communities totalling 2,943 suites with 14 properties in Ontario, two in Vancouver, B.C., and seven in Alberta. The properties accommodate a broad range of seniors, and are approximately 86 per cent occupied.

Chartwell expects to fund the purchase through the assumption of approximately $195.8 million of in-place mortgages with a weighted average interest rate of 4.47 per cent and a weighted average term to maturity of 3.7 years, with the balance to be paid in cash. 

RBC Capital Markets acted as the financial advisor to Chartwell.

As part of an ongoing partnership, Chartwell will also have an option to participate in Fengate's future development of retirement residences in Ontario. If Chartwell participates in a future development, it will provide operations management services for the property.

Other recent Chartwell transactions

Chartwell has also been aggressively retooling its portfolio through other acquisitions and divestments, including:

• March 2: acquired the remaining 15 per cent ownership interest in Chartwell L'Unique, a 421-suite retirement residence in the Saint-Eustache suburb of Montreal, from Batimo for $18.8 million. Chartwell now has 100 per cent ownership of the residence.
• March 24: completed the sale of one non-core property in Ottawa for $49 million.
• April 2: completed the acquisition of six seniors housing communities comprising 1,024 suites located in London, Waterloo and Mississauga, for a total of $416.2 million.
• Also on April 2: entered a forward purchase agreement for 29 townhomes under development in London, Ont. for $15.8 million. Construction completion is anticipated in Q1 2027.
• April 15: entered agreement to acquire Palermo Village Retirement Residence (116 suites) in Oakville, Ont. for $43 million. The transaction is expected to close in Q2.
• April 25: entered an agreement to sell nine non-core Ontario properties for $117.9 million. Net proceeds are expected to be $82.1 million. The properties are in Stratford, Belleville, Whitby, Morrisburg, Aurora, Pembroke, Brockville, Sudbury and Renfrew. They were constructed during the 1980s and ‘90s, and comprise 677 independent supportive living units. The transaction is expected to close in Q2.
• May 1: entered an agreement to sell Chartwell Ballycliffe LTC in Ajax, Ont. for $68.3 million. This transaction is expected to close in Q4 2026.