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, 2013 .
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 obtaining licensure.
Question 2: Where are you seeing acquisition opportunities - in Canada or in the U.S.?
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 2013 .
The following is what we are projecting for development lease payments.
|Development lease payable in 2013:|
|MS Springfield - December 2013 (pay in Jan)||$67,808|
|MS Wabash - December 2013 (pay in Jan)||52,443|
|MS Springfield - January 2013||67,808|
|MS Wabash - January 2013 (Partial month for 1/1/13-1/21/13)||35,526|
|MS Springfield - February 2013||67,808|
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?
Answer: $412,497 .
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 (HLP-UN.TO) 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
- Investment & Company Information
Chief Financial Officer
HealthLease Properties REIT
(317) 420-0205 ext. 106
(416) 815-0700 ext. 242