HealthLease Properties Real Estate Investment Trust Provides Q&A Update for 2013 First Quarter

TORONTO, May 9, 2013 /CNW/ - HealthLease Properties Real Estate Investment Trust (HLP.UN) ("HealthLease" or "the REIT") provides below answers to questions received since our last Q&A Update on April 29, 2013.

Question 1: What is the value / cap rate on the property being offered to the REIT by Mainstreet in May?

Answer: The details surrounding this property's acquisition by the REIT have not yet been made public, but will be made so at the appropriate time.  Generally, however, the REIT will release details of the acquisition once it has been officially approved and completed.

Question 2: For G&A - you guide to 6% of revenue - is this stabilized revenue including the recently closed acquisitions? G&A under that scenario would be about $500,000 per quarter - is this your expectation going forward?

Answer: We have significant acquisition activity; thus, we are conservatively estimating trust expenses at 6% for 2013.  It remains to be seen if this is a long-term run rate.  For the near future, however, 6% would be a decent estimate given the level of acquisition activity being seen.

Question 3: The Michigan transactions - was this a tax-efficient structure for the vendor? Or is this a method of acquiring properties you are going to use going forward?

Answer: This is to a third-party operator (Persimmon) on existing cash flowing assets.  Persimmon is a great operator who we are excited to partner with.  Although this is technically a loan due to certain state of Michigan regulations, these mortgages are structured to act much like leases.  If we were to acquire more assets in Michigan, they would follow this same structure.  In any other state, this same acquisition would have been structured as a market lease.

Question 4: What kind of credit risk is the REIT assuming? What kind of recourse does the REIT have in case the borrower defaults?

Answer: We are in effectively the same position with this transaction as we are on our other leases.  The risk is commensurate with a lease scenario. 

Question 5: SP portfolio - What will be the quality mix of the portfolio pro-forma the SP acquisition?

Answer: The portfolio includes a large number of assisted living units.  For reference, assisted living, by nature, is 100% quality mix.  The portfolio has 10 assisted living facilities.  The three remaining skilled nursing facilities are in line with our current skilled portfolio.

Question 6: Why was your Q1/13 G&A 9% higher than that in Q4/12?

Answer: There was $60,000 worth of cost associated with forming the Long Term Incentive Plan.  This is one-time in nature.  In addition, we continued to have costs associated with sourcing new acquisitions.

Question 7: What is a good run rate for straight-line rents going forward?

Answer:  Our straight-line rent should be around $2.7 million annually.

Question 8: What are the occupancy and coverage ratios of your U.S. assets?

Answer:  Our occupancy remains strong across our entire portfolio.  We have several newly constructed assets that are in lease-up from an operator perspective.  To be clear, the REIT has 100% occupancy but the property level occupancy varies.  Currently, the U.S. assets that are not in lease-up have a combined coverage ratio in excess of 1.50 to 1.00.

Supplemental Financial Information

This news release is not in any way a substitute for reading HealthLease's financial statements, including notes to the financial statements, and Management's Discussion and Analysis (MD&A), dated May 8, 2013.  The REIT's 2013 Fiscal First Quarter Financial Statements, and MD&A, have been filed on SEDAR. The First Quarter Financial Statements and MD&A can also be viewed in the Investor Information section of the HealthLease's website at www.hlpreit.com.

About HealthLease Properties Real Estate Investment Trust

HealthLease Properties Real Estate Investment Trust (TSX: HLP.UN) owns a premier portfolio of seniors housing and care facilities located in the United States and Canada. The properties are leased to experienced tenant operators who have significant operational experience. The leases are structured as long-term and triple-net, features that provide stability and dependability to the REIT's cash flow and distributions. The REIT's best-in-class portfolio of properties meets the needs of modern seniors by emphasizing features such as hotel-like design, private rooms and baths, and hospitality-inspired amenities. For more information, visit www.hlpreit.com.

Forward-Looking Information
This news release contains forward-looking statements which reflect the REIT's current expectations regarding future events. The forward-looking statements involve risks and uncertainties, including those set forth in the REIT's Annual Information Form dated March 6, 2013 under the section "Risk Factors," a copy of which can be obtained at www.sedar.com. Actual results could differ materially from those projected herein. The REIT disclaims any obligation to update these forward-looking statements.  

SOURCE: HealthLease Properties Real Estate Investment Trust

For further information:

Adlai Chester
Chief Financial Officer
HealthLease Properties REIT
(317) 420-0205 ext. 106

Salvador Diaz
Investor Relations
TMX Equicom
(416) 815-0700 ext. 242

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