Accessibility Statement Skip Navigation
  • Resources
  • Blog
  • Journalists
  • Webcasts
  • Data Privacy
  • Français
  • my CNW 
    • Login
    • Register
  • Client Login 
    • Online Member Centre
    • Next Gen Communications Cloud
    • Cision Communications Cloud®
  • Sign Up
  • Send a Release
Return to PR Newswire homepage
  • News
  • Products
  • Contact
When typing in this field, a list of search results will appear and be automatically updated as you type.

Searching for your content...

No results found. Please change your search terms and try again.
Advanced Search
  • News in Focus
      • Browse News Releases

      • All News Releases
      • All Public Company
      • News Releases Overview

      • Multimedia Gallery

      • All Multimedia
      • All Photos
      • All Videos
      • Multimedia Gallery Overview

      • Trending Topics

      • All Trending Topics
  • Business
      • Auto & Transportation

      • All Automotive & Transportation
      • Aerospace, Defense
      • Air Freight
      • Airlines & Aviation
      • Automotive
      • Maritime & Shipbuilding
      • Railroads and Intermodal Transportation
      • Supply Chain/Logistics
      • Transportation, Trucking & Railroad
      • Travel
      • Trucking and Road Transportation
      • Auto & Transportation Overview

      • View All Auto & Transportation

      • Business Technology

      • All Business Technology
      • Blockchain
      • Broadcast Tech
      • Computer & Electronics
      • Computer Hardware
      • Computer Software
      • Data Analytics
      • Electronic Commerce
      • Electronic Components
      • Electronic Design Automation
      • Financial Technology
      • High Tech Security
      • Internet Technology
      • Nanotechnology
      • Networks
      • Peripherals
      • Semiconductors
      • Business Technology Overview

      • View All Business Technology

      • Entertain­ment & Media

      • All Entertain­ment & Media
      • Advertising
      • Art
      • Books
      • Entertainment
      • Film and Motion Picture
      • Magazines
      • Music
      • Publishing & Information Services
      • Radio & Podcast
      • Television
      • Entertain­ment & Media Overview

      • View All Entertain­ment & Media

      • Financial Services & Investing

      • All Financial Services & Investing
      • Accounting News & Issues
      • Acquisitions, Mergers and Takeovers
      • Banking & Financial Services
      • Bankruptcy
      • Bond & Stock Ratings
      • Conference Call Announcements
      • Contracts
      • Cryptocurrency
      • Dividends
      • Earnings
      • Earnings Forecasts & Projections
      • Financing Agreements
      • Insurance
      • Investments Opinions
      • Joint Ventures
      • Mutual Funds
      • Private Placement
      • Real Estate
      • Restructuring & Recapitalization
      • Sales Reports
      • Shareholder Activism
      • Shareholder Meetings
      • Stock Offering
      • Stock Split
      • Venture Capital
      • Financial Services & Investing Overview

      • View All Financial Services & Investing

      • General Business

      • All General Business
      • Awards
      • Commercial Real Estate
      • Corporate Expansion
      • Earnings
      • Environmental, Social and Governance (ESG)
      • Human Resource & Workforce Management
      • Licensing
      • New Products & Services
      • Obituaries
      • Outsourcing Businesses
      • Personnel Announcements
      • Real Estate Transactions
      • Residential Real Estate
      • Small Business Services
      • Socially Responsible Investing
      • Surveys, Polls and Research
      • Trade Show News
      • General Business Overview

      • View All General Business

  • Science & Tech
      • Consumer Technology

      • All Consumer Technology
      • Artificial Intelligence
      • Blockchain
      • Cloud Computing/Internet of Things
      • Computer Electronics
      • Computer Hardware
      • Computer Software
      • Consumer Electronics
      • Cryptocurrency
      • Data Analytics
      • Electronic Commerce
      • Electronic Gaming
      • Financial Technology
      • Mobile Entertainment
      • Multimedia & Internet
      • Peripherals
      • Social Media
      • STEM (Science, Tech, Engineering, Math)
      • Supply Chain/Logistics
      • Wireless Communications
      • Consumer Technology Overview

      • View All Consumer Technology

      • Energy & Natural Resources

      • All Energy
      • Alternative Energies
      • Chemical
      • Electrical Utilities
      • Gas
      • General Manufacturing
      • Mining
      • Mining & Metals
      • Oil & Energy
      • Oil and Gas Discoveries
      • Utilities
      • Water Utilities
      • Energy & Natural Resources Overview

      • View All Energy & Natural Resources

      • Environ­ment

      • All Environ­ment
      • Conservation & Recycling
      • Environmental Issues
      • Environmental Policy
      • Environmental Products & Services
      • Green Technology
      • Natural Disasters
      • Environ­ment Overview

      • View All Environ­ment

      • Heavy Industry & Manufacturing

      • All Heavy Industry & Manufacturing
      • Aerospace & Defense
      • Agriculture
      • Chemical
      • Construction & Building
      • General Manufacturing
      • HVAC (Heating, Ventilation and Air-Conditioning)
      • Machinery
      • Machine Tools, Metalworking and Metallurgy
      • Mining
      • Mining & Metals
      • Paper, Forest Products & Containers
      • Precious Metals
      • Textiles
      • Tobacco
      • Heavy Industry & Manufacturing Overview

      • View All Heavy Industry & Manufacturing

      • Telecomm­unications

      • All Telecomm­unications
      • Carriers and Services
      • Mobile Entertainment
      • Networks
      • Peripherals
      • Telecommunications Equipment
      • Telecommunications Industry
      • VoIP (Voice over Internet Protocol)
      • Wireless Communications
      • Telecomm­unications Overview

      • View All Telecomm­unications

  • Lifestyle & Health
      • Consumer Products & Retail

      • All Consumer Products & Retail
      • Animals & Pets
      • Beers, Wines and Spirits
      • Beverages
      • Bridal Services
      • Cannabis
      • Cosmetics and Personal Care
      • Fashion
      • Food & Beverages
      • Furniture and Furnishings
      • Home Improvement
      • Household, Consumer & Cosmetics
      • Household Products
      • Jewelry
      • Non-Alcoholic Beverages
      • Office Products
      • Organic Food
      • Product Recalls
      • Restaurants
      • Retail
      • Supermarkets
      • Toys
      • Consumer Products & Retail Overview

      • View All Consumer Products & Retail

      • Entertain­ment & Media

      • All Entertain­ment & Media
      • Advertising
      • Art
      • Books
      • Entertainment
      • Film and Motion Picture
      • Magazines
      • Music
      • Publishing & Information Services
      • Radio & Podcast
      • Television
      • Entertain­ment & Media Overview

      • View All Entertain­ment & Media

      • Health

      • All Health
      • Biometrics
      • Biotechnology
      • Clinical Trials & Medical Discoveries
      • Dentistry
      • FDA Approval
      • Fitness/Wellness
      • Health Care & Hospitals
      • Health Insurance
      • Infection Control
      • International Medical Approval
      • Medical Equipment
      • Medical Pharmaceuticals
      • Mental Health
      • Pharmaceuticals
      • Supplementary Medicine
      • Health Overview

      • View All Health

      • Sports

      • All Sports
      • General Sports
      • Outdoors, Camping & Hiking
      • Sporting Events
      • Sports Equipment & Accessories
      • Sports Overview

      • View All Sports

      • Travel

      • All Travel
      • Amusement Parks and Tourist Attractions
      • Gambling & Casinos
      • Hotels and Resorts
      • Leisure & Tourism
      • Outdoors, Camping & Hiking
      • Passenger Aviation
      • Travel Industry
      • Travel Overview

      • View All Travel

  • Policy & Public Interest
      • Policy & Public Interest

      • All Policy & Public Interest
      • Advocacy Group Opinion
      • Animal Welfare
      • Canadian Federal Government
      • Canadian Municipal Government
      • Canadian Provincial Government
      • Corporate Social Responsibility
      • Domestic Policy
      • Economic News, Trends, Analysis
      • Education
      • Environmental
      • European Government
      • FDA Approval
      • Federal and State Legislation
      • Federal Executive Branch & Agency
      • Foreign Policy & International Affairs
      • Homeland Security
      • Labor & Union
      • Legal Issues
      • Natural Disasters
      • Not For Profit
      • Patent Law
      • Public Safety
      • Trade Policy
      • Policy & Public Interest Overview

      • View All Policy & Public Interest

  • People & Culture
      • People & Culture

      • All People & Culture
      • Aboriginal, First Nations & Native American
      • African American
      • Asian American
      • Children
      • Diversity, Equity & Inclusion
      • Hispanic
      • Lesbian, Gay & Bisexual
      • Men's Interest
      • People with Disabilities
      • Religion
      • Senior Citizens
      • Veterans
      • Women
      • People & Culture Overview

      • View All People & Culture

  • Advanced Search
  • Overview
  • Multichannel Amplification
  • Monitoring
  • Distribution
  • Multimedia
  • Guaranteed Paid Placement
  • AI Tools
  • IR
  • Become a Client
  • Request a Demo
  • Editorial Bureaus
  • Partnerships
  • General Enquiries
  • Media
  • Worldwide Offices
  • Hamburger menu
  • Cision Canada
  • Send a Release
  • FR
    • Phone

    • 877-269-7890 from 8 AM - 10 PM ET

    • ALL CONTACT INFO
    • Contact Cision

      877-269-7890
      from 8 AM - 10 PM ET

  • Send a Release
  • Sign Up
  • Resources
  • Blog
  • Journalists
  • Webcasts
  • GDPR
  • News in Focus
    • Browse All News
    • Multimedia Gallery
    • Trending Topics
  • Business
    • Auto & Transportation
    • Business Technology
    • Entertain­ment & Media
    • Financial Services & Investing
    • General Business
  • Science & Tech
    • Consumer Technology
    • Energy & Natural Resources
    • Environ­ment
    • Heavy Industry & Manufacturing
    • Telecomm­unications
  • Lifestyle & Health
    • Consumer Products & Retail
    • Entertain­ment & Media
    • Health
    • Sports
    • Travel
  • Policy & Public Interest
    • Policy & Public Interest
  • People & Culture
    • People & Culture
  • Send a Release
  • Sign Up
  • Resources
  • Blog
  • Journalists
  • Webcasts
  • GDPR
  • Overview
  • Multichannel Amplification
  • Monitoring
  • Distribution
  • Multimedia
  • Guaranteed Paid Placement
  • AI Tools
  • IR
  • Send a Release
  • Sign Up
  • Resources
  • Blog
  • Journalists
  • Webcasts
  • GDPR
  • Become a Client
  • Request a Demo
  • Editorial Bureaus
  • Partnerships
  • General Enquiries
  • Media
  • Worldwide Offices
  • Send a Release
  • Sign Up
  • Resources
  • Blog
  • Journalists
  • Webcasts
  • GDPR

HealthLease Properties Real Estate Investment Trust Provides Q&A Update for December 2012


News provided by

HealthLease Properties Real Estate Investment Trust

Dec 28, 2012, 06:00 ET

Share this article

Share toX

Share this article

Share toX

TORONTO, Dec. 28, 2012 /CNW/ - HealthLease Properties Real Estate Investment Trust (TSX: HLP.UN) ("HealthLease" or "the REIT") provides below answers to questions received since our last Q&A Update published on November 9, 2012.

Question: What portion of Zeke Turner's personal wealth is tied up in HLP.UN?

Answer: While we do not publicly disclose our principals' financials, we can tell you the majority of Zeke Turner's personal wealth is related to his ownership of HLP.UN.

Question: What is your correct NOI - before or after management fees?

Answer: NOI is after management fees.

Question: Why do you divide corporate expenses into management fees and trust expenses?

Answer: Management fees are the fees paid to Mainstreet for overseeing the properties.  We deem this an operating expense.

Question: How is your U.S. debt held? According to your IPO prospectus, you had $51 million of US$ mortgages. I am trying to understand how the two notes (US$12 million and US14.5 million) are placed.

Answer: We have the following debt at the U.S. level:
Construction Loans for the Mishawaka, IN and Springfield, IL properties of $15.2 million (once fully drawn these two loans will total $20.8 million); MS Wabash and ML Marion- Bonds of $27.4 million.

Question: How does the REIT make sure that it does not run afoul of the thin capitalization rules?

Answer: We work with our attorneys (Goodmans) and tax professionals (KPMG) on a regular basis to ensure we are in compliance.

Question: Can you provide more color on development bonds?

Answer: Development bonds are debt that has the respective project city's credit backing it.  These bonds allow the REIT to achieve lower interest rates.  This debt is just like a mortgage on a property.

Question: The three properties under development are currently contributing $595K per quarter (not in revenue, but added directly to AFFO). In 2013, the contribution increases to $4 million, why? Will the $4 million amount be included in revenue?

Answer: The three properties will generate approximately $4 million in revenue.  The AFFO on these three properties should be materially close to what they are achieving now via the development lease.

Question: What are the management fees related to the acquisition?

Answer: For the third quarter, management fees related to the Western Canadian Properties were $93,870 (3% of cash rent for the quarter).  Management fees are always 3% of revenues.

Question: How are the operating margins of the 52-bed facility in the U.S. different than the 200-bed facility? Also, what are the monthly revenue per bed and breakeven occupancy? Please talk about U.S. and Canadian properties in terms of occupancy rates, monthly revenue per suite, operating margins and staff per patient.

Answer: First, the REIT's operating margins do not materially change based on property size.  The REITs margins are based on the spread between the rent collected and the total weighted average cost of capital for that particular property or the REIT overall.  This being said, smaller properties operationally do not have the same operating efficiencies experienced in larger properties, but the law of diminishing returns also applies.  Management believes the ideal size of a new development property is approximately 100 to 200 units, depending on local market demand.  We do not disclose individual property information at this time.

Question: What are some main differences between the support provided by the Canadian and U.S. government to LTC/SNF facilities?

Answer: Generally, the U.S. properties tend to run higher operating margins, whereas the Canadian properties tend to be more stable and exhibit higher overall occupancy rates.  The U.S. properties are also able to provide a significant amount of short-term rehabilitation and therapy services, which is a high-margin business for operators.  This service is not common in the Canadian marketplace, at least not in the sub-acute market.  Both markets face supply constraints and stagnant reimbursement environments.  This is offset by exponentially increasing demand drivers and the emergence of new, efficient niche services, such as rehab and therapy, memory care, etc.

Question: Highland Manor lease - the REIT is looking for a new operator to replace Mainstreet Senior I - what is the progress on that front?

Answer: We are still in discussions with several operators.

Question: Are the U.S. leases materially different than the Canadian leases?

Answer: No.

Question: Can you send us an example of a typical lease between a Seniors Living operator and a landlord?

Answer: Our typical leases are 9-10% of cost and will be for an initial term of 10 or 15 years.  The tenant will then have a couple five-year extensions.  The typical lease will include 2-3% annual escalators.  In addition, the tenant will have a mandatory capital expenditure per bed and financial reporting requirements.

Question: Avalon Springs - I am not clear on the rent escalators of this lease. - "3 times CPI Increase, annually on May 1."

Answer: If CPI is .9%, then the annual increase would be 3 x .9%, or 2.7%.  The increase cannot exceed 3%, so if the CPI was 1.2% then it would cap out at 3%.

Question: What was the cap rate on their IPO appraisals?

Answer: The implied cap rate on the portfolio was 8.5%.  The blended appraisal cap rate on all of the assets was approximately 8%.

Question: Note 9 to financial statements - Future minimum rentals - are those rents including straight line rents? Also are there tax recovery amounts in those figures?

Answer: These do not include straight line rent amounts.  This note includes only future cash rent amounts.

Question:  Fin P26 - Rental revenue forecast for Q4/12 - Why is the revenue number going down to $4.2 million in Q4/12, even though you had revenues of $4.5 million (i.e., tax recoveries) in Q3/12?

Answer: This financial statement note is only the future cash rent payments (i.e., does not include straight line amounts).  In addition, it does not include the property tax recovery that we book each quarter.

Question: Will there be any seasonality in your revenues? I know that there should not be any but want to make sure.

Answer: All rents are contractual and do not fluctuate.

Question: Interest expenses were $1.38 million in Q3. Was there anything one-time in that figure? The number seems a bit low. If I assume that your average debt outstanding during the quarter was $130 million and apply your weighted average interest rate of 5.1%, I get $1.66 million.

Answer: The interest expense associated with the assets under construction is capitalized into the asset and not expensed.  Interest is expensed once a facility is up and operational.  When we capitalize a new project we include an interest reserve fund that pays the interest during construction.

Question: Q3/12 average revenue per bed for Canada - I tried to calculate this number using $3404K of revenue (provided in segmented operations). I got $1133/month, which is much higher than the average of $1012 I got from the forecast revenue for 2013. What am I missing? Tax recoveries?

Answer: Tax recoveries are included in this number.

Question: Q3/12 management fees are not equal to 3% of gross revenue. Why? Also does gross revenue include tax recoveries?

Answer: The fee is 3% of cash rent.  The gross revenue does include tax recoveries.  The total annual tax recoveries are approximately $360,000.

Question: Construction payables on the balance sheet - how is this figure calculated?

Answer: These represent amounts owed to general contractors for the construction of the Wabash, Mishawaka and Springfield properties that are currently under construction.

Question: Tax recoveries - are these accounting entries or actual cash flows? I think they are actual cash flows but just want to confirm.

Answer: No these are not actual cash flows.  It is a journal entry that grosses up revenue and operating expenses.

Question: How should we forecast recovered realty taxes? Are they included in both revenues and operating costs?

Answer: Yes.

Question: What is the average rent per suite of your portfolio?

Answer: We do not view our business in this manner.  With that said, we have 1,931 beds in our current portfolio.

Question: What is a good run rate for G&A expenses?

Answer: Based on our forecast, a 4-5% run rate would be reasonable at this time.

Question: For 2013, how should we model Rent from development projects shown in AFFO calc?

Answer: The development lease was done only for the purpose of the three initial projects under construction.  In 2013, there should not be any development lease payments.  The assets that are currently under construction will be complete and will begin generating rent income and interest expense.

Question: For straight line expenses, is $277K a good run rate?

Answer: After the three assets currently under development are live, the run rate for straight line rent will be approximately $439,000 per quarter.

Question: How much do you spend in maintenance Capex on a per suite basis? For example, Chartwell spends about $700 per suite per year.

Answer: We believe that this is the major difference between our business model and that of an operator, such as the company you mentioned.  The triple net lease structure places all responsibility for capital expenditures on the tenant.  We require reporting of these expenditures and monitor such accordingly.  In addition, our portfolio is very young compared to the market.  As such, even for our tenant operators, the capital expenditures required to maintain the properties are lower than older portfolios.  Our tenants are required to cover all capital expenditures except for the roofs on the Canadian properties.  As a result, we are not required to spend any capital expenditures per suite.  We further mandate under our leases that our tenants spend a certain minimum amount in capital expenditures.

Question: In the attached Excel file I have highlighted some cells in yellow. I couldn't find this info in your prospectus or financial statements. Can you please fill up the empty cells?

Answer: The purchase price of the U.S. assets was based on the final pricing (8.5% cap rate/yield).  You should be able to derive the purchase price by taking the annual rent at IPO and dividing by the IPO yield.
The U.S. assets without occupancy numbers were left blank due to the properties being under construction or just recently opened.  The Valparaiso and Marion properties' lease have commenced and are now open and working toward stabilization.  Both are making great progress in occupancy and are on schedule for stabilization.  Remember, that for the REIT, stabilization occurs at lease commencement and we begin collecting 100% of rent.  The operator assumes the operational risk of stabilization.

We assumed existing leases on the Western Canada Properties.  These leases do not allow us to disclose property performance and occupancy.  With that said, we feel very comfortable with the performance of the properties.

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 Third Quarter Interim Financial Statements are available 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.

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 final prospectus dated June 8, 2012 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

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

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

Modal title

Organization Profile

HealthLease Properties Real Estate Investment Trust

Contact Cision

  • 866-245-2317
    from 8 AM - 10 PM ET
  • Become a Client
  • Request a Demo
  • Editorial Bureaus
  • Partnerships
  • General Enquiries
  • Media

Products

  • Cision Communications Cloud®
  • Media Monitoring
  • Content Distribution
  • Multimedia Distribution
  • Measurement & Analytics
  • Investor Relations

About

  • About Cision Canada
  • About Cision
  • Media Partners
  • Careers
  • Accessibility Statement
  • APAC
  • APAC - Simplified Chinese
  • APAC - Traditional Chinese
  • Brazil
  • Canada
  • Czech
  • Denmark
  • Finland
  • France
  • Germany
  • India
  • Indonesia
  • Israel
  • Japan
  • Korea
  • Mexico
  • Middle East
  • Middle East - Arabic
  • Netherlands
  • Norway
  • Poland
  • Portugal
  • Russia
  • Slovakia
  • Spain
  • Sweden
  • United States
  • Vietnam

My Services

  • All News Releases
  • Online Member Centre
  • Next Gen Communications Cloud
  • Cision Communications Cloud®
  • my CNW

Do not sell or share my personal information:

  • Submit via [email protected] 
  • Call Privacy toll-free: 877-297-8921

Contact Cision

Products

About

My Services
  • All News Releases
  • Online Member Centre
  • Next Gen Communications Cloud
  • Cision Communications Cloud
  • my CNW
877-269-7890
from 8 AM - 10 PM ET
  • Terms of Use
  • Information Security Policy
  • Site Map
  • Cookie Settings
  • Accessibility Statement
Copyright © 2025 CNW Group Ltd. All Rights Reserved. A Cision company.