Review of Chartwell Retirement Residences

JAN 14, 2025 - CSH.UN has been one of the best performing REITs over the past two years amidst broad sector weakness. The Trust has managed to navigate the high-rate environment and execute its acquisitive growth strategy with 2024 being a record year. Unit prices have thus appreciated significantly to where it is quite expensive from a valuation standpoint. However, there are plenty of positive fundamental trends, with increasing occupancy rates, fund flows, and margins. Leverage is high, but we like the recent momentum, and the distribution is well-covered by cash flows. We think future growth from acquisitions and growing occupancy will be positive over the long-term, but we would not expect similar appreciation as seen in 2024. We are maintaining our rating of a B.