Mr. Brent Binions reports

CHARTWELL ANNOUNCES SECOND QUARTER 2017 RESULTS

Chartwell Retirement Residences Real Estate Investment Trust has released its results for the three and six months ended June 30, 2017.

Second-quarter 2017 highlights:

• Same-property net operating income (NOI) up $700,000 or 1.1 per cent;
• Same-property occupancy at 92.5 per cent;
• Development program on track to deliver important portfolio growth.

"Our team delivered solid operating results in the second quarter of 2017, despite some competitive pressures and the impact of timing of certain expenses. So far in 2017, we completed a number of important developments, acquisitions and financings, including our inaugural unsecured debenture offering," commented Brent Binions, president and chief executive officer. "I am confident that these transactions will contribute to Chartwell's future growth and continuing creation of long-term sustainable value for our investors."

                                 FINANCIAL HIGHLIGHTS
                          ($000s, except per-unit amounts) 

                                   Three months ended June 30 Six months ended June 31 
                                           2017          2016         2017        2016

Net income/(loss) from
continuing operations                $    6,309     $   3,589   $    2,142   $ (15,961)
Total comprehensive income/(loss)    $    6,309     $   7,185   $    2,142   $ (12,687)
FFO (1)                              $   41,856     $  42,304   $   83,962   $  82,648
FFO per unit diluted (1) (2)         $     0.21     $    0.22   $     0.43   $    0.44
Distributions declared               $   28,028     $  26,684   $   55,549   $  51,702
Distributions declared per unit      $     0.14     $    0.14   $     0.29   $    0.28

(1) Funds from operations and FFO per unit diluted are measures used by management in
    evaluating operating performance. They are non-generally accepted accounting
    principles measures.
(2) Includes dilutive effect of convertible debentures. 

For the second quarter of 2017, net income from continuing operations was $6.3-million compared with $3.6-million in the same period of 2016. For the six-month period ended June 30, 2017, net income from continuing operations was $2.1-million compared with net loss of $16-million in the same period of 2016. Total comprehensive income in the second quarter of 2017 was $6.3-million compared with $7.2-million in the same period of 2016. For the six-month period ended June 30, 2017, total comprehensive income was $2.1-million compared with total comprehensive loss of $12.7-million in the same period of 2016. The changes in net income from continuing operations was primarily a result of higher revenues, positive changes in fair values of financial instruments and lower transaction costs, partially offset by higher direct property operating and general, administrative and trust (G&A) expenses, and lower other income. The changes in total comprehensive income were also impacted by tax recoveries related to the sale of the U.S. operations.

FFO in the second quarter of 2017 was $41.9-million (21 cents per unit diluted) compared with $42.3-million (22 cents per unit diluted) in the second quarter of 2016. For the six-month period ended June 30, 2017, FFO was $84-million (43 cents per unit diluted) compared with $82.6-million (44 cents per unit diluted) in the same period of 2016. The changes in FFO were primarily due to higher G&A expenses incurred to support the company's growing property portfolio, including developments, higher lease-up losses from development projects and higher amortization of financing costs as a result of the acceleration of amortization of costs related to previous credit facilities that were replaced with new credit facilities in the second quarter of 2017. These costs increases were partially offset by higher net operating income from the company's property portfolio, higher management fee income and lower interest costs.

                                  OPERATING PERFORMANCE 
                 ($000s, except occupancy rates and percentage of revenue)

                                   Three months ended June 30      Six months ended June 30   
                                      2017     2016    Change      2017      2016    Change

Same-property occupancy (1)           92.5%    93.2%  (0.7 pp)     92.8%     93.3%  (0.5 pp)
Same-property NOI (2)              $63,289  $62,598   $   691  $126,461  $123,603   $ 2,858
G&A expenses                       $10,121  $ 9,126   $   995  $ 20,526  $ 17,347   $ 3,179
G&A expenses as a
percentage of revenue (1) (2)          4.7%     4.3%   0.4 pp       4.8%      4.2%   0.6 pp

(1) PP means percentage points                           
(2) NOI and G&A expenses as a percentage of revenue are measures used by management in
    evaluating operating performance. They are non-GAAP measures.

Same-property occupancy in the second quarter of 2017 declined by 0.7 percentage point compared with the second quarter of 2016, primarily due to higher-than-normal resident turnover in the winter months of 2017, and short-term competitive pressures from new developments in some Ontario and Quebec markets.

Same-property NOI increased by $700,000 or 1.1 per cent in the second quarter of 2017 and by $2.9-million or 2.3 per cent in the six-month period ended June 30, 2017, compared with the same periods of 2016, driven primarily by rental rate increases in line with competitive market conditions, partially offset by lower occupancies, lower ancillary revenues, inflationary staffing cost increases and timing of certain other expenses, including higher lease-up losses related to the company's properties in development which reduced same-property NOI by $600,000 and $2-million in the three and six months ended June 30, 2017, respectively.

G&A expenses increased by $1-million in the second quarter of 2017 and by $3.2-million in the six-month period ended June 30, 2017, compared with the same periods of 2016, primarily due to higher staffing costs. These investments were primarily required to support Chartwell's growing development activities, including management of projects owned by Batimo Inc. as well as properties acquired in 2015, 2016 and in the six-month period ended June 30, 2017. In addition, the increase in the six-month period ended June 30, 2017, was partly driven by higher severance and recruitment costs as well as the reversal of an accrual of certain employee benefit costs on settlement of a related claim in the first quarter of 2016.

Financial position

At June 30, 2017, liquidity amounted to $107.3-million, which included $39.2-million of cash and cash equivalents, $6-million of cash of equity-accounted investments and $62.1-million of available borrowing capacity on credit facilities.

The interest coverage ratio on the rolling 12-month basis was 3.36 at June 30, 2017, compared with 3.66 at Dec. 31, 2016. The net-debt-to-adjusted-EBITDA (earnings before interest, taxes, depreciation and amortization) ratio at June 30, 2017, was 7.9 compared with 7.3 at June 30, 2016.

Recent developments

On July 4, 2017, Chartwell acquired a 100-per-cent interest in a portfolio of three retirement residences in Ontario totalling 522 suites (rebranded as Chartwell Lakeshore Retirement Residence, Chartwell Stillwater Creek Retirement Residence and Chartwell Riverpark Retirement Residence postacquisition). The purchase price before closing costs was $121-million and was settled in cash.

On July 20, 2017, Chartwell acquired an 85-per-cent interest in Chartwell Le Teasdale I in Terrebonne, Que., from Batimo for a purchase price of $60.8-million. Batimo retained the remaining 15-per-cent interest in the project. The purchase price was settled by the assumption of a $37.1-million construction loan, settlement of Chartwell's mezzanine loan of $5.9-million and the remaining balance settled in cash.

Chartwell's financial statements, including its management's discussion and analysis (MD&A), are available on its website. A detailed list of Chartwell's property portfolio can also be obtained under supplementary information in the investor relations section of the website.

Investor conference call

A conference call hosted by Chartwell's senior management team will be held Friday, Aug. 11, 2017, at 10 a.m. ET. The telephone numbers for the conference call are 416-340-2217 (local) or 866-696-5910 (toll-free). The passcode for the conference call is 8333334 followed by the pound key. The conference call can also be heard over the Internet by accessing the Chartwell website, clicking on investor relations and following the link at the top of the page. A slide presentation to accompany management's comments during the conference call will be available on the website. Please log on at least 15 minutes before the call commences.

The telephone numbers to listen to the call after it is completed (instant replay) are 905-694-9451 (local) or 800-408-3053 (toll-free). The passcode for the instant replay is 9527013 followed by the pound key. The call, along with the accompanying slides, will also be archived on the Chartwell website.

About Chartwell Retirement Residences Real Estate Investment Trust

Chartwell is an unincorporated, open-ended trust which indirectly owns and operates a complete range of senior housing communities from independent, supported living through assisted living to long-term care. It is the largest owner and operator of seniors' residences in Canada. Chartwell's aim is to capitalize on the strong demographic trends present in its markets to maximize the value of its existing portfolio of retirement residences, and prudently avail itself of opportunities to grow internally and through accretive acquisitions.

We seek Safe Harbor.