Chartwell Retirement Residences announced that it has entered into an agreement to wind-up its existing joint venture with Welltower Inc. Chartwell and Welltower jointly own a portfolio of 40 retirement residences located across Canada comprising 8,476 suites. Under the terms of the agreement (the "Transaction"), Chartwell will convey its interest in 23 assets to Welltower in exchange for Welltower's interest in 16 assets and a cash payment of $97.2 million. At this time, Chartwell and Welltower will continue to co-own one remaining property.

Terms of the Transaction Under the terms of the Transaction, Chartwell will convey its ownership interest in 23 assets to Welltower for consideration of: (i) Welltower's ownership interest in 16 assets (the "Chartwell Assets") and (ii) $97.2 million in cash with net proceeds to Chartwell after taxes and closing costs estimated at approximately $71.0 million, subject to customary closing adjustments (the "Cash Consideration"). Closing of the Transaction, subject to the required regulatory and lender approvals, is expected in second quarter 2024. On Closing, Chartwell will assume approximately $140.3 million in debt on the Chartwell Assets, bearing a weighted average interest rate of 2.8% and a weighted average term to maturity of 4.4 years.

The net change to total debt on Chartwell's balance sheet will be a reduction of approximately $51.0 million, before any impact of the Cash Consideration. The debt and Cash Consideration estimates above are based on an assumed closing as of April 1, 2024. Chartwell expects to use the Cash Consideration to repay debt and enhance balance sheet flexibility to support future growth of its portfolio.

As a result of this transaction, Chartwell's Adjusted Net Operating Income for the trailing 12 months ending September 30, 2023 would have been reduced by approximately $7.7 million. On Closing, Chartwell will transfer management of the Welltower Assets and two other residences currently wholly owned by Welltower to a third party.