Chartwell Retirement Residences (TSE:CSH.UN) reported second-quarter funds from operations growth of 17% per unit from a year earlier, extending what Chief Executive Officer Vlad Volodarski said was the company’s 12th consecutive quarter of double-digit FFO-per-unit growth.
FFO rose 34% year over year to $90.5 million, while FFO per unit increased by $0.04 to $0.28. Chief Financial Officer Jeffrey Brown said reported FFO excluded $2.8 million, or $0.01 per unit, in income guarantees associated with recently acquired properties. Net loss narrowed to $1.3 million in the quarter from $5.7 million a year earlier.
Occupancy and operating performance
Same-property occupancy increased 320 basis points from the prior-year quarter to 94.3%, while same-property adjusted NOI increased $9.2 million, or 11.9%. NOI per occupied suite rose 8.1%.
- Western Canada same-property adjusted NOI increased $4.4 million, or 19.5%.
- Ontario same-property adjusted NOI increased $3 million, or 7.4%.
- Quebec same-property adjusted NOI increased $1.8 million, or 12.3%.
Brown said all operating platforms were above 90% occupancy. During the question-and-answer session, he characterized slight sequential occupancy softness in Ontario and flat occupancy in Western Canada and Quebec as seasonal. The company expects same-property occupancy to reach 95% in September, supported by leasing activity and what Volodarski described as the historically stronger fall leasing season.
For its three-year strategy, Brown said Chartwell expects to deliver rate growth above 4% and direct operating expense growth below 4%. The company also sees further occupancy potential in its growth portfolio, which is currently about 90% occupied.
President and Chief Operating Officer Karen Sullivan said net permanent move-ins exceeded permanent move-outs by 80 units during the quarter. Personalized tours from marketing sources rose 11% quarter over quarter, while the conversion rate from initial marketing contacts to personalized tours improved to 50% from 44% in the second quarter of 2025.
Chartwell launched its “Joy is Ageless” brand campaign across television, radio, out-of-home advertising, Facebook and YouTube. Sullivan said the campaign generated more than five million combined YouTube and Facebook video views, and that 81% of respondents in a La Presse study agreed it projected a positive image of Chartwell.
The company also reduced staffing-agency costs by 43% year to date compared with 2025, Sullivan said. At Chartwell Churchill House in North Vancouver, a repositioning that returned 31 government-funded assisted-living suites to private pay and included $3 million in common-area upgrades lifted occupancy to 92% in July from 78% in January. Operating margin increased to 53% from approximately 48% before the change.
Acquisitions, sales and development pipeline
Chartwell continued to expand and reshape its portfolio during and after the quarter. Volodarski said the company had completed and announced more than $1 billion in acquisitions year to date and had invested more than $3.2 billion in acquisitions over the past two years.
On June 2, Chartwell acquired a 30% interest in the Seasons Retirement Communities portfolio through a joint arrangement with Fengate Asset Management. The 23-community portfolio includes 2,943 suites across Ontario, British Columbia and Alberta. Chartwell’s purchase price was $382.5 million, including its proportionate assumption of approximately $208.8 million of mortgages. The agreement could allow Chartwell to acquire an additional 20% interest upon achieving specified milestones.
The company also completed the $43 million cash acquisition of the 116-suite Palermo Village Retirement Residence in Oakville, Ontario, and acquired a 50% stake in the 283-suite Chartwell Le Montcalm residence in Candiac, Quebec, for $43.3 million before closing costs and working-capital adjustments.
In July, Chartwell announced four development projects in Quebec, Alberta and British Columbia totaling 828 suites. The projects include seniors’ apartments, independent living and Memory Living offerings. Jonathan Boulakia, chief investment officer and chief legal officer, said the arrangements generally follow a model in which development partners carry construction risk while Chartwell provides operating, leasing and design oversight and acquires an interest at completion, stabilization or a combination of the two.
Volodarski said the company has identified potential opportunities for nearly 6,400 suites across its portfolio over a longer-term period, including opportunities on excess land and through developer discussions. He added that Chartwell has guidelines intended to keep future purchase commitments from placing excessive strain on its balance sheet.
Capital recycling and financial position
Chartwell completed the sale of nine non-core Ontario properties for $117.9 million on July 2. Net proceeds were $82.3 million after transaction costs and repayment of $33.6 million in mortgages. The company said it had completed $167 million of non-core asset sales in 2026 and had agreements to sell two additional properties for $132.8 million.
The company also entered an agreement on Aug. 4 to acquire full ownership of a Greater Toronto Area retirement residence for $136 million, with closing expected in the third quarter. Volodarski said the property was underwritten at a cap rate in the high-5% to low-6% range and at a discount to replacement cost, though he said the gap to replacement cost has narrowed.
As of Aug. 7, Chartwell had approximately $614 million of liquidity, including $219 million of cash and cash equivalents and $395 million of borrowing capacity. Its interest coverage ratio was 3.5 times and net debt to adjusted EBITDA was 7.0 times. The company raised $72.7 million of gross proceeds through its at-the-market equity program during the quarter at an average price of $21.74 per unit.
Volodarski said Canadian retirement-living demand continues to grow while new supply is expected to remain limited. He said Chartwell intends to pursue further strategic acquisitions, development partnerships and non-core asset sales while retaining meaningful ownership stakes in the properties it manages.
About Chartwell Retirement Residences (TSE:CSH.UN)
Chartwell is in the business of serving and caring for Canada’s seniors, committed to its vision of Making People’s Lives BETTER and to providing a happier, healthier, and more fulfilling life experience for its residents. Chartwell is an unincorporated, open-ended real estate trust which indirectly owns and operates a complete range of seniors housing communities, from independent living through to assisted living and long-term care. Chartwell is one of the largest operators in Canada, serving approximately 25,000 residents in four provinces across the country.
