Chartwell CEO Sees Occupancy Gains Driving Margin Recovery

Cost inflation remains a headwind. Labor expenses rose 6.2% in the first quarter, driven by wage competition in Ontario and Quebec. Thomas said the company is offsetting some of that through a shift to agency staffing, which costs more per hour but reduces overtime and turnover-related expenses. Food and utility costs also ticked up, though at a slower pace than in 2023.

Chartwell's balance sheet carries roughly $2.1 billion in debt, mostly fixed-rate mortgages with a weighted average term of 4.8 years. Thomas said the company has no major refinancing needs until 2027, insulating it from near-term rate volatility. The company's $250 million revolving credit facility remains undrawn.

The stock has gained 14% this year, roughly in line with the S&P/TSX Capped REIT Index. The shares trade at 1.1 times net asset value, a discount to the 1.3 times average for Canadian senior housing REITs, according to company filings.

Thomas did not provide formal guidance for the full year but said the company expects same-property net operating income growth of 8% to 10% in 2026, driven entirely by occupancy gains. Rent increases, which averaged 4.5% on renewals in the first quarter, are expected to moderate to 3% to 4% as new supply comes online in select Ontario markets.

"We are not counting on rate cuts to save us," Thomas said. "The math works at current occupancy and current cost levels. Every point of occupancy above 88% is pure margin expansion."