Regal Lifestyle Communities Inc. (TSX:RLC), which completed its $138.8 million initial public offering last month, acquired four of the properties from Retirement Living Ottawa. Regal CEO Simon Nyilassy said the other two retirement residences - the Portobello Manor and the Windsor Park Manor - were privately held, but were part of the same ownership group that controlled Retirement Living Ottawa.
“We think (Ottawa) is a great market,” says Mr. Nyilassy. “There are solid demographics, good incomes … (and) we found a couple of very good operators.”
In total, Regal says it spent $340.1 million on 10 properties: eight in Ontario, one in Saskatchewan and one in Newfoundland and Labrador. That gives Regal more than 1,400 suites, according to its website.
Mr. Nyilassy declined to provide the price for the 891-suite Ottawa portfolio. Other officials say it was slightly more than $200 million, which Mr. Nyilassy says “is in the right ballpark.” Commercial property data firm RealTrack lists the sale price of the Barrhaven Manor at 110 Berrigan Dr. as $22.54 million.
Primecorp Commercial Realty broker Raffaele Guglielmelli acted as the exclusive advisor on the transaction and says that after several quiet years, he expects the retirement property market to pick up in Ottawa.
“We’re going to see more activity,” he says.
That’s in part to the strong presence of pensioned seniors who can afford to move into a retirement residence, he says. More broadly, Ottawa continues to be a highly sought after market across all asset classes for investors.
Mr. Guglielmelli says the Regal transaction had an approximate cap rate of 7.25 per cent. Cap rates are used to gauge a buyer's return on investment.
Mr. Nyilassy says Regal operates its property itself and that many of the property’s current employees would be transferred to the new company.
“All of the staff who have been running the homes - the general manager, the director of care, the restaurant and food staff - have all come over with us.”
- Alta Vista Manor (751 Peter Morand Cres.) - 201 suites
- Barrhaven Manor (110 Berrigan Dr.) - 106 suites
- Portobello Manor (691 Valin St.) - 135 suites
- Prince of Wales Manor (22 Barnstone Dr.) - 139 suites
- Valley Stream Manor (2 Valley Stream Dr.) - 178 suites
- Windsor Park Manor (990 Hunt Club Rd.) - 132 Suites
Source: Primecorp Commercial Realty