Chartwell Retirement Residences : Q1 2024 MD&A

About this Management's Discussion and Analysis

Chartwell Retirement Residences ("Chartwell" or the "Trust") has prepared the following management's discussion and analysis (the "MD&A") to provide information to assist its current and prospective investors' understanding of the financial results of Chartwell for the three months ended March 31, 2024. This MD&A should be read in conjunction with Chartwell's unaudited, condensed consolidated interim financial statements for the three months ended March 31, 2024, and the notes thereto (the "Financial Statements"), the audited consolidated financial statements for the years ended December 31, 2023 and 2022, and the notes thereto (the "2022 Financial Statements"), and the annual MD&A for the year ended December 31, 2023 (the "2023 MD&A"). This material is available on Chartwell's website at www.investors.chartwell.com. Additional information about Chartwell, including our Annual Information Form for the year ended December 31, 2023, dated March 7, 2024 (the "AIF"), can be found on SEDAR+ atwww.sedarplus.com.

The discussion and analysis in this MD&A is based on information available to management as of May 9, 2024.

All references to "Chartwell," "we," "our," "us," or the "Trust" refer to Chartwell Retirement Residences and its subsidiaries, unless the context indicates otherwise. For ease of reference, "Chartwell" and the "Trust" are used in reference to the ownership and the operation of retirement and long term care residences and the third-party management business of Chartwell. The direct ownership of such residences and operation of such business is conducted by subsidiaries of the Trust.

In this document we refer to joint ventures as defined by IFRS Accounting Standards in 'IFRS 11 - Joint Arrangements' and that are accounted for using the equity method as "Equity-Accounted JVs".

In this document, "Q1" refers to the three-month period ended March 31; "Q2" refers to the three-month period ended June 30; "Q3" refers to the three-month period ended September 30; "Q4" refers to the three- month period ended December 31; "2024" refers to the calendar year 2024; "2023" refers to the calendar year 2023, "2022" refers to the calendar year 2022; "2021" refers to the calendar year 2021.

Unless otherwise indicated, all comparisons of results for Q1 2024 are in comparison to results from Q1 2023.

All dollar references, unless otherwise stated, are in Canadian dollars.

In this document we use a number of performance measures that are not defined in generally accepted accounting principles ("GAAP") which follow the disclosure requirements established by National Instrument 52-112Non-GAAP and Other Financial Measures Disclosures (effectively, the "Non-GAAP Measures"), to measure, compare and explain the operating results and financial performance of the Trust.

These Non-GAAP Measures do not have standardized meanings prescribed by GAAP and, therefore, may not be comparable to similar measures used by other issuers. The Real Property Association of Canada ("REALPAC") issued white papers with recommendations for calculations of Funds from Operations ("FFO"), and Adjusted Funds from Operations ("AFFO"), the "REALPAC Guidance". Our FFO definition is substantially consistent with the definition adopted by REALPAC. Refer to the "Additional Information on Non-GAAP Measures" section of this MD&A for details. As part of our financial covenants reporting, we present AFFO in accordance with the definitions used in our credit agreements. This definition differs from the definition in the REALPAC Guidance.

In this document we use various financial metrics and ratios in our disclosure of financial covenants. These metrics are calculated in accordance with the definitions contained in our credit agreements and the trust indenture governing our outstanding debentures and may be described using terms which differ from standardized meanings prescribed by GAAP. These metrics may not be comparable to similar metrics used by other issuers.

1

Specified financial measures are categorized as non-GAAP financial measures, non-GAAP ratios, supplementary financial measures and capital management measures as follows:

Non-GAAP Financial Measures

FFO, FFO for continuing operations, Total FFO, FFO from LTC Discontinued Operations, FFO for Equity- Accounted JVs, and Internal Funds from Operations, ("IFFO"), IFFO for continuing operations, Total IFFO, IFFO from LTC Discontinued Operations, Adjusted Funds from operations ("AFFO") including per unit amounts ("PU"), Earnings before interest, tax, depreciation and amortization ("consolidated EBITDA" or "EBITDA"), Adjusted Resident Revenue, Adjusted Direct Property Operating Expense, Adjusted Operating Margin, Consolidated Interest Expense, Adjusted Consolidated Gross Book Value of Assets, Book value of assets, Gross book value adjustment on IFRS transition, Adjustment for accumulated depreciation and amortization, Aggregate Adjusted Assets, Payment of cash distributions and Amortization of finance costs and fair value adjustments on assumed mortgages, Finance cost reserve, Proforma adjustments, and Total Units Outstanding.

Non-GAAP Ratios

Debt Service Coverage Ratio, Interest Coverage Ratio, Total Leverage Ratio, Adjusted Consolidated Unitholders' Equity Ratio, Secured Indebtedness Ratio, Unencumbered Property Asset Ratio, Consolidated EBITDA to Consolidated Interest Expense Ratio, Indebtedness Percentage, Net Debt to Adjusted EBITDA Ratio, Payment of Cash Distributions, Expected Unlevered Yield, and Coverage Ratio.

Supplementary Financial Measures

Net Operating Income ("NOI"), Adjusted NOI, Adjusted Development Costs, Lease-up-Losses, Estimated Stabilized NOI, Unencumbered Property Asset Value and Unencumbered Aggregate Adjusted Assets.

Capital Management Measures

Liquidity, Imputed Cost of Debt, Regularly Scheduled Debt Principal Payments, Consolidated Indebtedness, Secured Indebtedness, Unsecured Indebtedness, and Investment Restrictions.

Refer to the "Additional Information on Non-GAAP Measures", "Results of Operations - FFO", "Significant Events - Development - Expected Unlevered Yield, Development Lease-up-Losses and Imputed Cost of Debt", "Results of Operations - Adjusted Resident Revenue, Adjusted Property Operating Expense, Adjusted Operating Margin, and Adjusted NOI" and "Liquidity and Capital Resources - Financial Covenants" sections of this MD&A for details on these measures.

Risks and Uncertainties

Refer to the "Risks and Uncertainties" section of our 2023 MD&A, as well as our AIF dated March 7, 2024, for detailed discussions of risk factors and uncertainties facing Chartwell.

Forward-Looking Information

This document contains forward-looking information that reflects management's current expectations, estimates, forecasts and projections about the future results, performance, achievements, prospects or opportunities for Chartwell and the seniors housing industry as of the date of this MD&A. Refer to the "Forward-Looking Information" section on page 49 of this MD&A.

2

Property Portfolio Groupings

We use groupings of our properties to evaluate and monitor our financial and operating performance. Our portfolio groupings are: same property, growth, and repositioning.

The supplemental disclosures of these portfolio groupings are Non-GAAP Measures that do not have standardized meanings prescribed by GAAP and, therefore, may not be comparable to similar measures used by other issuers. In addition to the definition for these portfolio groupings, the following includes the composition of each portfolio for the current reporting period.

Same Property Portfolio

Our same property portfolio includes properties that have been owned continuously since the beginning of the previous fiscal year. To improve comparability, our same property portfolio excludes development properties that have not yet achieved 90% occupancy by January 1 of the preceding fiscal year, properties that are expected to be sold in the current or next fiscal year, and properties that are undergoing a significant redevelopment or repositioning.

The following table summarizes the composition of our same property portfolio as at March 31, 2024:

1. We own an 85% interest in three properties and a 50% interest in four properties.

Growth Portfolio

Our growth portfolio includes properties that were acquired subsequent to January 1 of the preceding fiscal year and development properties that have not yet achieved 90% occupancy by January 1 of the preceding fiscal year. Consequently, the previous fiscal year's results are not fully comparable for these properties. Additionally, our growth portfolio includes properties for which we will acquire incremental ownership interest in the current or next fiscal year.

The following table summarizes the composition of our growth portfolio as at March 31, 2024:

1. We own a 60% interest in one property, a 50% interest in 15 properties, and a 45% interest in one property.

5

Repositioning Portfolio

Our repositioning portfolio includes properties that we expect to sell in the current or next fiscal year, and properties that are undergoing a significant redevelopment or repositioning, including in some cases changes in capacity or use.

The following table summarizes the composition of our repositioning portfolio as at March 31, 2024:

1. Includes three long term care homes (358 beds) which were previously reported in our Long Term Care Operations segment and are now monitored and reported with our Retirement Operations.
2. We own a 50% interest in 22 properties and a 42.5% interest in three properties.

Business Strategy

Our Strategy Statement

"In 2025, we will achieve in our retirement residences, Employee Engagement of 55% (highly engaged), Resident Satisfaction of 67% (very satisfied) and Same Property Occupancy of 95% to drive strong IFFOPU growth by providing exceptional resident experiences through personalized services in our upscale and mid-market residences in urban and suburban locations."

A detailed discussion of our business strategy can be found in our 2023 MD&A.

6

2024 Outlook

Our 2023 MD&A contains a detailed discussion of our 2024 Outlook; the following provides an update.

Operations

The following chart provides an update in respect of our same property occupancy:

1. Forecast includes leases and notices as at April 30, 2024 and an estimate of mid-monthmove-ins of 20 basis points ("bps") for May and 40 bps for June, based on the preceding 12-month average of such activity.

We continue to experience strong demand fundamentals having achieved occupancy growth through the historically weaker winter season. Our same property portfolio occupancy increased from December to March by 50 bps compared to a 50 bps decline for the same period last year. We expect to reach 87.3% occupancy in our same property portfolio in June 2024, representing 640 bps growth over the prior year. Initial contacts and personalized tour activity remains robust, and we are experiencing strong conversion rates to permanent move-ins. We expect this positive momentum to continue throughout 2024. The growth in same property occupancy combined with our blended rental and service rate growth of 4.8%, resulted in a 12.1% increase in same property adjusted resident revenue in Q1 2024 compared to Q1 2023.

For our combined same property and growth portfolios, the annual revenue impact of a one percent change in rate and service fees is estimated at approximately $6.7 million and a one percentage point change in occupied suites is estimated at $8.3 million.

NOI in Q1 2024 grew to $62.5 million from $48.0 million in Q1 2023, an increase of $14.5 million. Adjusted operating margin in Q1 2024 grew to 35% from 32% in Q1 2023 as growth in revenue exceeded inflationary and occupancy driven direct property operating expense increases. Adjusted operating margin is adjusted NOI divided by adjusted resident revenue.

7

Liquidity and Financing

As at May 9, 2024, liquidity amounted to $279.5 million, which included $37.5 million of cash and cash equivalents and $242.0 million of available borrowing capacity on our Credit Facilities.

We finance our operations primarily through long-termfixed-rate mortgage debt and generally have access to low-cost mortgage financing insured by Canada Mortgage and Housing Corporation ("CMHC"). We intend to continue financing our properties through this program including accessing CMHC's mortgage financing top-up programs and, for those properties operating at high occupancy levels, converting conventional mortgages to CMHC debt and placing mortgages on certain currently unencumbered properties. As of the date of this MD&A, for the remainder of 2024, we have $141.1 million of mortgage debt maturing at the weighted average interest rate of 3.32%. As at May 9, 2024, 10-yearCMHC-insured mortgage rates are estimated at approximately 4.57% and five-year conventional mortgage financing is available at approximately 5.75%.

We also have a $125.0 million term loan maturing in May 2024. We expect to refinance or repay this loan with proceeds from CMHC financings on our unencumbered properties.

Significant Events

In addition to the items discussed in the "2024 Outlook" section of this MD&A, the following events have had a significant effect on our financial results in Q1 2024 and/or may be expected to affect our results in the future:

Development

Expected Unlevered Yield, Development Lease-up-Losses, and Imputed Cost of Debt

In addition to monitoring development costs measured on a GAAP basis which includes land, hard and soft development costs, furniture, fixtures and equipment, we assess our return on investment in development activities using the non-GAAP measure 'Expected Unlevered Yield'. Expected Unlevered Yield should not be construed as an alternative to other GAAP metrics and may not be comparable to measures used by other entities.

Expected Unlevered Yield is defined as the ratio of:

• the estimated annual NOI of a development property in the first year it achieves an expected stabilized occupancy level ("Estimated Stabilized NOI") which varies from project to project,
• divided by the estimated adjusted development costs (the "Adjusted Development Costs") which is the sum of:
• • development costs on a GAAP basis, plus
  • operating results generated by the development property, including pre-opening costs (the "Lease- up-Losses"), plus
  • an imputed cost of debt calculated by applying our estimated weighted average cost of debt to our GAAP development costs plus Lease-up-Losses, compounded during the development of the property (the "Imputed Cost of Debt").

We believe this is a useful measure as we believe it reflects our financial returns on the total economic cost of developing a new property.

8