Seized three residences for elderly people located in Quebec

The Ontarian Chartwell Real-Estate Income Fund has seized three residences for elderly people located in Quebec. The properties were operated by the Groupe Melior and by business partners.

Melior, which has nearly ten residences throughout Quebec, was constrained to yield control of the three real-estate complexes because it was not able to honour its payments on a mezzanine loan of 13,8 M$ contracted at Chartwell. “We were a privileged lender and we exerted our right of recovery”, explained Caroline Crête, spokesperson of Chartwell in Quebec, to Argent. Argent has contacted the Groupe Melior but management did not return our call.

The three residences which changed hands are: the apartments of the Château de Bordeaux, a complex of 149 units located in Quebec, as well as the Seigneuries du Carrefour, a complex which counts 275 units in Sherbrooke, and the fourth phase of the project Cité Jardin, a property gathering 173 units in Gatineau.

The properties are estimated at 87,6 M$, a sum that Chartwell will pay by taking over the mortgages which amount to 67,1 M$ and by taking into account the mezzanine loan of 13,8 M$ which bound the Ontarian Fund to the Groupe Melior. Other sums of approximately 6 M$ are also taken into account in this transaction.

The change of property of the complexes for elderly people was announced last November but the transactions were to be finished at the beginning of 2010. The Quebec Superior Court in particular transferred the property of the apartments of the Château de Bordeaux to Chartwell on last February 2. A debt of 8 M$ bound the Groupe Melior to the Ontarian Fund for this property.

Chartwell is an important operator of residences for elderly people in Canada. It owns 55 properties in the country including 25 on Quebec territory. According to our sources, these upheavals would not have had an impact on the quality of the care offered to the residents.