First National Financial LP

Borrower Perspectives: Jonathan Wen, Chartwell Retirement Residences

  • First National Financial LP
Jonathan Wen is the VP Real Estate Finance and Investments at Chartwell Retirement Residences, the largest owner/operator of seniors housing in Canada. Chartwell has 190 properties across Ontario, Quebec, Alberta and British Columbia, and offers a full continuum of care from independent living and independent supported living to assisted living and long-term care.

Jonathan shares his perspectives on the evolving opportunities in the seniors housing market in Canada, Chartwell’s vision for growth and how he works with First National to drive that vision forward.

Q: Where do you see the seniors housing market in Canada going?
JW: It’s an interesting time to be in seniors housing in this country. Demographically, the balance is tipping towards seniors, with the population growing exponentially. So the question becomes: how do you house and care for this growing segment of people? They expect a certain standard of living and require a diverse spectrum of care.

In my role, I focus on seniors housing from a commercial real estate perspective. So the evolution in the space is really exciting to me. Typically, seniors housing wasn’t always included as a part of the “four food groups.” But now the asset class is getting a lot of attention. The more attention grows, the more people want to get in the game. And that’s great from a lending perspective because it used to be somewhat challenging to get the attention of lenders. Now, there is demand and competition, which makes the industry that much more dynamic.

Q: Where do you see the opportunities?
JW: For us, we’re concentrating on both development and acquisition. There are definitely opportunities for additional models of care. And our philosophy is: if it doesn’t exist already, you need to build it. For example, we are currently developing The Sumach by Chartwell in Regent Park in Toronto, which is one of the first of its kind outside of Quebec. It offers seniors apartments, with a primary focus on independent living, which is different from the more common model of independent supported living. 

Q: What is your vision for growth?
JW: Even though we are considered the biggest seniors housing owner/operator in Canada, we are still looking to grow. Our strategic considerations include geographic diversification. But we are also looking to grow in markets where we already have a strong presence by focusing on newer-built, larger, modern facilities.

Q: How is First National supporting you in your vision for growth?
JW: First National is our largest provider of financing. With acquisitions, you can’t buy if you can’t finance. But more than that, First National’s expertise is a huge value add. Brian Kimmel knows the assets, the market and the financing structures. We use CMHC a lot, and First National is an expert in CMHC-insured financing. As a publicly traded company, we have to request multiple quotes. When First National gives us an estimated loan amount, it’s very close to what CMHC comes back with. That knowledge of the CMHC process and mindset is really important in helping us manage expectations internally.

Q: From your experience, how does First National deliver on the concept of being “more than lender?”
JW: Brian and his team really are subject matter experts. They know the history of a deal, property and company. They have perspective on how things have evolved, which allows them to provide really solid context as to why we might be interested in buying something or why we should factor certain considerations into an acquisition decision. Seniors housing is a small industry. Brian and his team have connections with people that we want to meet who want to buy and sell. So overall, we get great information and essential networking. 

Q: How does First National find opportunities in the alternatives? Can you provide an example?
JW: Brian and his team often come up with solutions that we aren’t always aware of or would consider. For example, we have a construction partner in Montreal. They build, and we manage. We had a situation where we were assuming CMHC loans, which often come with rental achievement targets. It didn’t look like we were going to meet the designated dates, which meant foregoing additional funds. Brian and his team went back to CMHC and got us a six-month extension. Buying us that extra time was an alternative that we didn’t know was even possible, and it could result in an additional 20 per cent of the loan amount.

Q: What stands out most for you about First National?
JW: Definitely the asset class expertise and relationships that we can leverage with CMHC, buyers and sellers. Brian has seen it all. Nothing flusters him. Regardless of the situation, Brian and his team always find a solution and they always remain calm. When First National is the lender on a deal, I have peace of mind and the confidence of knowing that things will be taken care of expeditiously and accurately.