Recent Transactions
The team at Suske Capital has extensive experience in real estate development, acquisitions and investment banking transactions. Below are some of our most recent value-creating transactions.
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Harwood Place Seniors Community
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Transaction Highlights*
Property: Harwood Place, Ajax, Ontario Investment: $4 million Created Value: $22.72 million Simple Annual Return: 227% IRR: 101% Investment Period: 30 Months Suske Capital has been a partner in MTCO since 2013 when development on Harwood Place began. Prior to becoming a partner, Suske Capital provided asset management and advisory services to the developer. Suske Capital has an 18% ownership in Harwood Place and was instrumental in its success having arranged for the equity investment in addition to providing strategic oversight and accountability throughout the development process. Suske Capital was heavily engaged in the investment banking, financial modeling and marketing of Harwood Place. On September 11, 2015, Suske Capital and MTCO Holdings Inc. closed on the sale of Harwood Place in Ajax, ON; Montgomery Village in Orangeville, ON; and Oxford Gardens in Woodstock, ON to Chartwell Retirement Residences. Harwood Place was acquired in its fourth month of operations, at which time it had 70 suites booked or occupied (56% occupancy). This lightning-quick lease-up is highly atypical in the seniors housing market and speaks to the competency MTCO and Suske Capital has in picking deep markets and bringing a strong value proposition to residents and their families. Read the Chartwell press release |
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Points West Living Limited Partnership LP Unit Offering
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Transaction Highlights*
Forecasted Gross Return: 117% Simple Annual Return: 23.45% IRR: 19% Investment Period: 60 Months In June 2015, Suske Capital spearheaded the management buy-out of Points West Living and Connecting Care, an Alberta portfolio of seven seniors housing communities and their associated management company, valued at $100 million. Suske Capital assumed the role of Asset Manager with the mandate to grow the portfolio to $500 million in five years through the acquisition of stabilized properties. Together with First National Financial LP, Suske Capital arranged for approximately $68 million in financing and facilitated the placement of $32 million in equity raised from the vendors, management, a partnering private equity company, a pharmacy and the balance was raised through Cranson Capital, a Canadian Exempt Market Dealer. The Partnership intends to grow the business through internal growth projects, acquisitions and development. In addition to the role of Asset Manager, Suske Capital representatives participate in the Executive Steering Committee, an acquisitions working committee, and Steve Suske is Chair of the Board of Directors. A Devco will be set up to develop brand new communities, which will be sold to the Partnership on stabilization. Suske Capital will own 33.3% of Devco, which already has several projects in various stages of development. Download the news release (PDF, 2 pp., 485 KB) |
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Regal Lifestyle Communities Inc.
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Transaction Highlights*
Gross Return: 52% Simple Annual Return: 17% IRR: 15% Seed Capital Return: 100% Investment Period: 36 Months In 2012, Suske Capital orchestrated the formation of Regal Lifestyle Communities Inc. (“Regal”), at a time when the marketplace was experiencing record-high capitalization rates coupled in a low interest rate environment. Through an initial public offering, Regal raised $153.8 million on the Toronto Stock Exchange to purchase 10 retirement residences from four independent businesses. The company filed its final prospectus with the Ontario Securities Commission in October 2012. Suske Capital’s vision was to take advantage of capitalization rate compression and demographic trends, recruiting the management team and overseeing all aspects of the IPO, including the creation of a syndicate of investment banks including CIBC World Markets and BMO Capital Markets as co-leads for the transaction, securing seed capital funding, structuring and negotiating purchase and sale agreements with all vendors, arranging first mortgage financing, and coordinating the due diligence, financial, legal and audit teams involved in the transaction. On June 18, 2015, Regal announced that it had entered into an arrangement to be acquired by Revera Inc. and Welltower Inc. (formerly known as Health Care REIT, Inc.) at $12 per common share. The arrangement was completed on October 26, 2015. Regal has generated a 52% gross return on investment, or an IRR of 15% per annum, in just under three years since its IPO in October 2012. Adjusted Close provides the closing price adjusted for all applicable splits and dividend distributions. Data is adjusted using appropriate split and dividend multipliers, adhering to Center for Research in Security Prices (CRSP) standards. Investment period between October 2012 to September 2015. |
Past Transactions
Chartwell Retirement Residences
Transaction Highlights*
Gross Return: 110%
Simple Annual Return: 9.33%
IRR: 7%
Seed Capital Return: 100%
Investment Period: 36 Months
In 2003, Steve Suske revolutionized the Canadian seniors housing market by spearheading Chartwell’s IPO. Chartwell was the first REIT of its kind in the country, pioneering the way for other publicly traded seniors housing companies. The firm’s initial market capitalization was $210 million.
Since 2003, Chartwell has grown its market capitalization tenfold, and is now worth in excess of $2 billion. The number of communities it owns has increased from 104 to 270 and Chartwell continues to be the largest owner/operator of seniors housing in Canada.
Under Steve Suske’s leadership, Chartwell was able to grow the average NOI at each residence by 5% - 7%, increased the number of suites managed or developed from 11,000 to in excess of 38,000, and tripled the number of employees from 5,000 to over 16,000. He was particularly instrumental in creating the “Chartwell” brand.
Gross Return: 110%
Simple Annual Return: 9.33%
IRR: 7%
Seed Capital Return: 100%
Investment Period: 36 Months
In 2003, Steve Suske revolutionized the Canadian seniors housing market by spearheading Chartwell’s IPO. Chartwell was the first REIT of its kind in the country, pioneering the way for other publicly traded seniors housing companies. The firm’s initial market capitalization was $210 million.
Since 2003, Chartwell has grown its market capitalization tenfold, and is now worth in excess of $2 billion. The number of communities it owns has increased from 104 to 270 and Chartwell continues to be the largest owner/operator of seniors housing in Canada.
Under Steve Suske’s leadership, Chartwell was able to grow the average NOI at each residence by 5% - 7%, increased the number of suites managed or developed from 11,000 to in excess of 38,000, and tripled the number of employees from 5,000 to over 16,000. He was particularly instrumental in creating the “Chartwell” brand.
Erin Mills Lodge
Transaction Highlights*
Property: Erin Mills Lodge, Mississauga, Ontario
Created Value on Closing: $7.25 million
Initial Investment: $0
Suske Capital’s introduction to the seniors housing industry was the acquisition of Erin Mills Lodge, in which it was able to create almost $9 million in value without any initial equity investment.
At the time of acquisition, Erin Mills Lodge consisted of 87 Long Term Care (“LTC”) beds and 143 seniors housing suites. The LTC beds and seniors housing units were located in a single residence, but each unit was independently owned and operated. A lawsuit emerged regarding cost-sharing practices between the two operators. Suske Capital was able to settle the lawsuit and obtain releases from all parties.
The total consideration for the purchase was $10.75 million and Suske Capital was able to secure a CMHC-insured mortgage for $11.75 million based on CMHC’s value of $18 million. The residence immediately generated over $1.2 million in after-debt service cash flow and became Suske Capital’s first entry into the seniors housing sector.
*All quoted returns are given on a pre-tax basis.
Property: Erin Mills Lodge, Mississauga, Ontario
Created Value on Closing: $7.25 million
Initial Investment: $0
Suske Capital’s introduction to the seniors housing industry was the acquisition of Erin Mills Lodge, in which it was able to create almost $9 million in value without any initial equity investment.
At the time of acquisition, Erin Mills Lodge consisted of 87 Long Term Care (“LTC”) beds and 143 seniors housing suites. The LTC beds and seniors housing units were located in a single residence, but each unit was independently owned and operated. A lawsuit emerged regarding cost-sharing practices between the two operators. Suske Capital was able to settle the lawsuit and obtain releases from all parties.
The total consideration for the purchase was $10.75 million and Suske Capital was able to secure a CMHC-insured mortgage for $11.75 million based on CMHC’s value of $18 million. The residence immediately generated over $1.2 million in after-debt service cash flow and became Suske Capital’s first entry into the seniors housing sector.
*All quoted returns are given on a pre-tax basis.
