TOLEDO, OH and TORONTO—Health Care REIT is expanding its Canadian presence through an existing 75/25 joint venture with Revera Inc. The JV on Thursday said it had agreed to buy Toronto-based Regal Lifestyle Communities for approximately US$623 million, including the assumption of debt. The 3,600-unit, 23-property portfolio spans five Canadian provinces, with 83% of its NOI derived from facilities in the Toronto, Montreal and Vancouver markets.

“Revera and HCN have recognized the tremendous value that the Regal team has created since the company's IPO in October, 2012 through our focused efforts in building an exceptional portfolio of retirement homes and our dedication to fulfilling on our Vision and Values,” says Simon Nyilassy, Regal's president and CEO. “We look forward to working with Revera and HCN to obtain all necessary approvals and ensure a smooth transition for our residents and employees.”

For HCN, “The acquisition of Regal is a rare opportunity to add a large, high-quality private pay portfolio concentrated in Canada's largest metropolitan markets, where there is strong underlying demand,” says Tom DeRosa, the REIT's CEO. “We will continue pursuing strategic international investment opportunities through our teams on the ground in Toronto and London.”

Brookfield Financial and BMO Capital Markets are acting as financial advisors to HCN and Revera, while Goodmans LLP is acting as legal advisor to the two buyers. CIBC is acting as financial advisor to Regal; Stikeman Elliot LLP is acting as legal counsel.

HCN and Mississauga, Ontario-based Revera, Canada's second-largest seniors housing operator, established the JV in 2013, with the Toledo, OH-based REIT assuming a 75% interest in a $1.35-billion seniors housing portfolio of 47 properties and more than 5,000 units. The JV has grown significantly since that time; the Regal acquisition, which is expected to close in the second half of 2015, will bring it to 94 properties across Canada. Revera also owns 76% of Sunrise Senior Living in a JV with HCN.

Within its JV with Revera or on its own, HCN will own an interest in over 21,500 seniors housing units in Canada after the Regal deal closes. This represents approximately 10% of the Canadian seniors housing supply and 15% of the supply in the five largest Canadian markets.

Similar to their counterparts in the US, Canada's senior population is projected to more than double over the next 20 years, creating demand for new and improved supply. Additionally, HCN says the Canadian seniors housing sector is highly fragmented, thus leading to immediate growth opportunities.