Chartwell to Buy Out Seniors Housing JV

Residences Melior, an affiliate of Groupe Melior, of Montreal, has exercised its right under a joint venture agreement with Chartwell Seniors Housing REIT to sell to Chartwell the remaining 50 percent interest owned by Melior in seven assisted-living properties in the Province of Quebec. The companies announced that the price for the transaction, which will include Melior’s 50 percent interest in the joint venture property management company, will be determined by independent appraisers. Assuming that regulatory approval is obtained, the deal could close within 60 days. The seven properties are: * Monastere d’Aylmer, Aylmer, 272 suites. * Notre Dame de Hull, Hull, 225 suites.* Marquis de Tracy I, Sorel, 123 suites. * Marquis de Tracy II, Sorel, 138 suites. * Domaine du Chateau de Bordeaux (pictured), Quebec City, 150 suites. * Residence Principale, Cowansville, 197 suites. * Residence St-Pierre, Rouyn-Noranda, 121 suites. “Melior’s right to sell its interest in the seven joint venture properties was planned when the partnership with Chartwell was created in 2004,” Groupe Melior president & CEO Jean Maynard said in a prepared statement. Melior’s portfolio will still include two dozen communities, all in the Province of Quebec, and the company meanwhile is developing eight more, which will open spring 2009 through winter 2010. Chartwell is the largest participant in the Canadian seniors housing business and the third largest in North America. Lisa Brush, a veteran senior housing executive based in Toronto, told CPN, “Quebec is a little different province to operate in.” For example, she noted, similar to the culture in France, “People tend to be renters in Quebec, rather than buyers.” Based on differences like this, Brush guesses that Chartwell found the Melior JV useful for getting to know the Quebec market. She also notes that Sunrise Senior Living Inc. recently opened three properties in the Montreal area and that the company is careful about using local managers as much as possible. Overall, Brush noted that the independent living and assisted living are in divergent situations in Quebec right now. The province has seen “a significant amount of building” in IL, both by large players and regionals, to the point that this sector is possibly on the verge of overbuilding. The other side of the coin, Brush said, is that Quebec is probably underserved in terms of assisted living, particularly of the higher-acuity type.