TORONTO, June 3, 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 May 9, 2013.
Question 1: As holders of units in a trust, are holders of units of Healthlease Properties Real Estate Investment Trust liable for any damages the REIT occurs?
While the REIT is a trust and not a corporation, trusts that are governed by the laws of Ontario and are "reporting issuers", such as the REIT, are subject to a statute that limits the liability of unitholders (i.e. the beneficiaries of the trust). Further, the REIT's declaration of trust includes a limitation of liability for unitholders and the requirement that any material agreement include a clause that no recourse may be had to the private property of the unitholders and that the only property of the Trust or a specific portion thereof is bound. As a result, the prospect of a unitholder being found liable for a liability of the REIT is remote.
Question 2: What is the minimum number of shares that one must have in order to participate in the drip program?
The minimum number of shares, or units, to participate in the Dividend Reinvestment Plan (DRIP) is one (1). In addition, you have to be the registered holder of the units and must be resident in Canada. A document detailing the DRIP can be found on our website at: http://www.hlpreit.com/Investors/distribution-reinvestment-plan-drip/default.aspx
Question 3: What is the lease coverage ratio for HLP's portfolio?
Post-IPO, this is not a metric we have reported publicly, but may still elect to do so at some point in the future. (The REIT has to manage certain confidentiality arrangements it has with its operating tenants via the lease agreements.) However, management will note the lease coverage ratio for the portfolio as a whole is north of two times (2.0x) This means the portfolio's operational profitability is more than double the amount paid in rent. To management, this indicates stability and predictability of the REIT's incoming stream of rent revenues.
Question 4: Where do you see the bulk of your growth, in the US or in Canada? What can we expect in terms of the percentage breakdown of holdings between the two countries?
Demographics ultimately drive growth in the seniors housing and care industry. As the US has a much larger population base than that of Canada, there should be more absolute growth opportunities in the US. However, the triple net lease structure is not one that has been widely used in Canada and is something that can benefit industry operators. There is real opportunity to acquire real estate in Canada. As we educate operators on the benefits of partnering with a REIT, management believes there will be ample opportunity for Canadian acquisitions.
The honest answer is, it is too soon to tell what the percentage breakdown of holdings will be between the US and Canada. At IPO, the HLP portfolio was approximately 58% Canada and 42% US. With the most recent acquisition activity factored in, that ratio is now 64% US and 36% Canada. Management is quite comfortable somewhere around the 60/40 split between the two countries.
Question 5: What is the current make-up of the seniors housing and care products in the REIT's portfolio?
Answer: The current product mix of the portfolio is as follows: 62% skilled nursing/long term care (SNF/LTC), 34% assisted living/memory care (ALF/ALZ), and 4% independent living/retirement home (ILF). This compares to a product mix at IPO of 69% SNF/LTC, 24% ALF/ALZ, and 7% ILF. In line with its announced strategy, the REIT's focus going forward will continue to be on need-driven care, or the SNF/LTC and ALF/ALZ segments of the industry, as the primary driver of its growth.
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 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 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 statements.
SOURCE: HealthLease Properties Real Estate Investment Trust
For further information:
Executive Vice President - Finance
HealthLease Properties REIT
(416) 815-0700 ext. 258