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,
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
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
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
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.
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
SOURCE: HealthLease Properties Real Estate Investment Trust
For further information:
Chief Financial Officer
HealthLease Properties REIT
(317) 420-0205 ext. 106
(416) 815-0700 ext. 242