TORONTO, Jan. 31, 2014 /CNW/ - HealthLease Properties Real Estate Investment Trust (HLP.UN) ("HealthLease" or "the REIT") provides answers to questions received since our last Q&A Update on January 2, 2014.
Question 1: Healthcare REITs, especially the top 3, have been losing deals to higher-bidding private operators which may result in slower external growth in coming years. How could this impact HealthLease?
Answer: HealthLease has a unique advantage due to our exclusive arrangement with Mainstreet Property Group. This arrangement allows for a consistent pipeline of high quality properties coming into the REIT. In addition to our arrangement with Mainstreet we continue to target smaller portfolios. These smaller portfolios are not typically the target of the top 3.
Question 2: Cap rates have moved up 25-50 bps for lower quality assets, what is the impact on your portfolio?
Answer: The majority of our portfolio is class A property and in this asset class we have seen little to no movement. We have also seen a 30 bps increase on older assets, however this is not the asset class that HealthLease targets.
Question 3: There are some concerns surrounding supply, as the assisted living supply growth could exceed 3% in 2014 (vs. a 1.8% historical average)
Answer: At HealthLease it is our intention to continue to focus on class A skilled nursing facilities in the short and medium term, which currently make up 57% of our portfolio. While assisted living is the preferred development for some because the lower level of care creates a low barrier to entry, our preference continues to be focused on skilled nursing with only supplemental assisted living. That being said, a growth of 3% in ALS beds would still not keep with the increasing demand.
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, dated November 7, 2013. The REIT's 2013 Fiscal Third Quarter Financial Statements, and MD&A, have been filed on SEDAR. The Third 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 one of the youngest and highest quality portfolios of seniors housing and care facilities with 12 properties located in two provinces of Canada and 33 properties located in seven states of the United States for a total of 4,435 beds. 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 premier properties meets the growing demands 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 statements.
SOURCE: HealthLease Properties Real Estate Investment Trust
For further information:
Executive Vice President - Finance
HealthLease Properties REIT
(416) 815-0700 ext. 258