March 14, 2022
Sienna Senior Living Inc. (“Sienna” or the “Company“) (TSX:SIA) has entered into an agreement to acquire a 50% ownership interest in a retirement residence consisting of 186 high-quality, private-pay suites in Saskatoon, Saskatchewan (“The Village at Stonebridge” or “Stonebridge”). Sienna will acquire the asset in partnership with Sabra Health Care REIT, Inc. (“Sabra”), who is acquiring the other 50% interest of the asset, with Sienna acting as the manager of the property.
“Over the past month, we have assembled an impressive portfolio which will expand Sienna’s asset base in new and growing markets,” said Nitin Jain, President and CEO of Sienna Senior Living. “With the acquisition of one of the most desirable retirement residences in Saskatoon, we will have a sizeable presence in this market and a substantial platform in the Province of Saskatchewan. We believe that with this transaction we will further increase the scale and depth of our operating platform, providing more opportunities to add shareholder value.”
Built in 2016 with luxury amenities and a contemporary design, The Village at Stonebridge is one of the most coveted retirement residences in Saskatoon, consisting of 159 independent living (“IL”) suites and 27 assisted living (“AL”) suites. This property will be complementary to Sienna’s previously announced acquisition of four other retirement residences in Saskatchewan as part of its joint venture with Sabra, and enhances Sienna’s scale and leadership in the province.
Sienna’s share of the purchase price for Stonebridge is approximately $36 million, and the Company expects the acquisition to generate an approximate 6% unlevered yield in the first twelve months following closing of the transaction. The Company also expects the contributions of the acquisition to be accretive to Sienna’s Operating Funds From Operations (“OFFO”) and Adjusted Funds From Operations (“AFFO”) per common share on a leverage neutral basis. Completion of the acquisition is subject to customary closing conditions and regulatory approvals, with closing of the transaction expected to occur in late Q2 2022.
The purchase price for Stonebridge and related transaction costs are being financed through a combination of: (i) net proceeds of the Company’s recently announced equity offering; (ii) proceeds from the previously announced dispositions of Rideau Retirement Residence and Camilla Care Community; and (iii) draws on the Company’s existing credit facilities.