A locally based developer and owner of senior health care centers has filed to go public as a real estate investment trust in Canada.
Mainstreet Property Group LLC hopes to roll nine of its properties—along with six more it plans to acquire in Canada—into a company called HealthLease Properties Real Estate Investment Trust, which would trade on the Toronto Stock Exchange.
The Cicero-based company is seeking to raise $110 million, according to a preliminary prospectus filed in Canada on Tuesday. The shares would begin trading in June.
Mainstreet CEO Paul Ezekiel "Zeke" Turner declined to comment on the plans, citing Canadian securities rules. Turner, 34, was named this year to IBJ's Forty Under 40.
Going public in Canada can be cheaper for small and mid-size companies because of fewer regulations.
Initial public offerings by REITs have been particularly well received, though the last company to attempt to go public in the senior-care sector did not wind up offering shares, Canada's Globe and Mail newspaper noted in an online report. Renaissance Lifestyle Communities shelved its IPO last year because of rocky market conditions and questions from regulators.
If successful, HealthLease Properties plans to use the proceeds of its offering to acquire a portfolio of 15 properties, including nine from Mainstreet and six that the company intends to purchase from a subsidiary of Northern Property Real Estate Investment Trust, a Canadian firm focused on multifamily properties, according to offering materials.
The Mainstreet properties are in Indiana and Illinois, and the ones from Northern Property are in British Columbia and Alberta. The deal includes facilities in Indianapolis, Alexandria, Marion, Valparaiso, Mishawaka and Wabash.
HealthLease plans to lease its senior-care centers to long-term operators who are responsible for all services to residents and maintenance of the buildings, which theoretically minimizes risk to investors.
Both HealthLease and privately held Mainstreet, which will own 20 percent of the new company, will remain headquartered in central Indiana.
Turner founded Mainstreet in 2002. The company has been ranked among the fastest-growing companies in the Indianapolis area by IBJ the past three years. It had revenue of $9.6 million in 2010, up from $6.3 million in 2008.
In the video below for IBJ's Forty Under 40 profile, Turner discusses Mainstreet's plans for expanding its senior-housing offerings into more states.