A real estate company and a seniors’ residence operator have agreed to acquire a portfolio of eight seniors’ residences in Canada for more than $300 million under an ongoing joint venture agreement.
As part of the deal, JV partners Optima Living and Axium Infrastructure would acquire a portfolio consisting of eight communities totaling just under 1,100 units in the Canadian provinces of Alberta and British Columbia.
The communities operate under the brand name The Hamlets and offer a mix of independent living and assisted living units as well as funded long-term care, complex care and privately paid complex care beds.
Real estate company Newmark (Nasdaq: NMRK) represented the seller, family-run senior living operator H&H Total Care.
Vancouver, Canada-based Optima, which will manage the communities, plans to maintain the Hamlets brand and retain the operator’s current employees, according to co-founder and director Karim Kassam.
“Retaining the brand, for us, was just another step forward,” Kassam told Senior Housing News.
The addition of the Hamlets opens new sub-markets for Optima Living such as the Okanagan Valley, Lower Mainland, BC; and central Alberta
By acquiring the portfolio, Optima also has the opportunity to expand, as three of the communities involved in the deal already have the framework in place to develop an additional 360 units.
The addition of Communities brings the senior living operator’s portfolio to 26 communities, with more than 2,200 IL, AL, memory care and long-term care units in British Columbia or Alberta .
“Over the next 20 to 30 years there will be an insatiable downstream demand for older people housing both privately [and] publicly funded housing, especially in Canada,” Kassam said.
He added that Canada’s publicly funded healthcare system makes the environment in Canada different from that seen in the United States.
Optima’s holdings are gaining momentum in Western Canada, effectively doubling year-over-year since 2018, thanks in large part to its nearly two-year joint venture with the Montreal Axium Infrastructure. In addition to residences for the elderly, Axium’s projects include clean energy, transport infrastructure and social developments such as student housing.
Under the joint venture, Axium Infrastructure takes a 90% stake in the Continuing Care Communities while Optima takes the remaining 10% and also operates the communities.
The joint venture began in November 2020 with the acquisition of three continuing care communities in Alberta, and expanded five months later with the addition of four communities as part of an acquisition of Points West Living.
For Optima, there is always an appetite for growth and evaluating new opportunities is an ongoing process.
“Where there will be headwinds around interest rates and deal structure, we have to overcome that … find the right intersection between valuations and profitability so that we can continue to apply our principles around growth company,” Kassam said.