TORONTO, March 7, 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 January 25,
Question 1: What are the development delays at Wabash and Springfield due to?
Answer: In both cases, we were off by one month. In Wabash, this was due to
altering some flooring, etc. at the tenant's request. This also led to
a small over-run in cost. However, we are comfortable with the
over-run because the quality of the facility is superior to what we
originally planned. In Springfield, it is related to timing of
Question 2: Where are you seeing acquisition opportunities - in Canada or in the
Answer: We are seeing significant volume in potential third-party deals in
both the U.S and Canada. Since our public launch, we have reviewed
more than $750 million in properties for sale. Out of this group, we
have identified several portfolios that seem to meet our desired
quality, age, and financial metrics. We are diligently considering
these opportunities and are prepared to grow through acquisitions if
the properties line up with our strategic objectives. Pursuit and due
diligence of potential acquisitions led us to ramp up our G&A expense
in preparation for growth.
Question 3: If HealthLease ends up being responsible for the payment of the roof
replacement at Glenmore, what would be the accounting treatment? Is it
expensed or capitalized?
Answer: We purchased the assets below fair market value, so any cost would
increase the value of the property and not expensed.
Question 4: Did Wabash and Springfield become rent paying at the beginning or
end of January 2013 and February 2013, respectively?
Answer: Wabash rent started on January 22, 2013. Springfield is beginning of
March 2013. Once again, this should not affect AFFO as Mainstreet, the
external manager, is compensating the REIT through a Development Lease.
Question 5: Revenue was down on a delay in recognition of rent (~$140K) but the
development lease payment was only ~$10K higher vs. the IPO forecast -
would have thought this would have been higher to partially offset the
revenue decline (even if it is net of financing costs)? What will the
Q1 2013 lease payment on the development lease be?
Answer: This is due to timing of actual development lease payments. You will
see the additional Development Lease payment for December in January
The following is what we are projecting for development lease payments.
Development lease payable in 2013:
MS Springfield - December 2013 (pay in Jan)
MS Wabash - December 2013 (pay in Jan)
MS Springfield - January 2013
MS Wabash - January 2013 (Partial month for 1/1/13-1/21/13)
MS Springfield - February 2013
Question 6: Is the Westfield property being developed by Mainstreet still on time
for potential acquisition in Q2 2013?
Answer: Yes, June 2013 is the targeted acquisition date.
Question 7: On the portfolio operations front, how is occupancy for the stabilized
properties and how is the EBITDAR coverage ratio on a portfolio basis?
Answer: Our operator's performance has continued to be consistent and in many
cases improved. We have a very positive outlook on our industry and
the operators we have partnered with.
Question 8: What was the capitalized interest amount in Q4 2012?
Question 9: How much do you expect to spend on the development projects in 2013?
Answer: $2.5 million. All $2.5 million has been spent in Q1 2013.
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. The REIT's
Fiscal Fourth Quarter and Year-end Financial Statements and
Management's Discussion and Analysis have been filed on SEDAR and 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
portfolio of seniors housing and care facilities located in the United
States and Canada. The facilities are leased to experienced tenant
operators who have significant operational experience in the U.S. and
Canada. 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