The magic is really happening at our residences. People who work here support those who deliver services and care to our residents in these residences. We are very proud of this building, and I'm even prouder of the people who work here. I hope you will feel the vibe as you spend some time with us today. Tomorrow, Chartwell will turn 22 years old. The IPO was closed on November 14, 2003. I know 'cause I was there. We raised back then, or I guess they raised, 'cause I didn't work for them at that time, but they raised CAD 250 million. That was the size of the company at that time, and now we are CAD 6 billion market cap. Obviously, a lot has changed, a lot of time passed, and lots changed.
Here's the agenda for today. Today, you hear from several Chartwell leaders, those who shape and execute strategies in various core areas of our business. I hope these presentations will help you appreciate not only the strength and depth of our leadership team, but even more importantly, their dedication to our company and true love for what they do. We will not talk nonstop, I promise you that. We will have a short break somewhere halfway, and then we will have a Q&A session at the end. Then an informal reception after in our Bistro 77 over there, where you will have a chance to informally chat with all of us and some of our board members. We will talk about future in our presentation today and use non-GAAP measures.
Future's always difficult, and it's subject to risks, uncertainties, and assumptions that we made. Sometimes these do not pan out to be true. Details of these risks, uncertainties, assumptions, and non-GAAP measures you can find in our regulatory filings. In addition to the folks that you normally used to hearing from, which is myself, Karen, Jonathan, and Jeff, today you'll hear from Colleen Laing, who will talk to us about innovative work in customer experience that her team is doing. Gordon Chiu will talk about our technology and innovation efforts. Dave Pielas will talk about Chartwell people and culture. Shari Lafontaine will talk about financial management. Sharon Ranalli will talk about innovative, amazing marketing strategies. Stef Biasi and Amanda Richards will talk to you about how we will solidify our occupancy lead through continuous innovations in sales and business development.
Adam Moy will talk to you about our approach to property capital investments and risk management. Before we take you through our 2028 strategy, I'd like to reflect on our recent past and the current business environment, both of which influenced our strategic thinking. In 2018, we developed what we then thought was a five-year strategy, summarized in this strategy statement on the slide. We knew back then, in 2018, that the targets were ambitious, but then we got interrupted by, you know, that little pandemic that we had. that caused us to extend the shelf life of that strategy by another 2 years. The targets looked even more ambitious after the impact that the pandemic had on our business.
I'm tremendously proud of our teams who overcame this adversity and delivered on these aspirational targets that we set for ourselves back in 2018. Not many believed that we could achieve them, especially after the pandemic, and I have to admit, there were times we were not certain ourselves. Yet we delivered. Our employee engagement score increased from 49% in 2018 to 57% in 2025. Our resident satisfaction scores were 58% back in 2018. They are 67% now. I wanna remind everybody, when we talk about these scores, we only measure top box scores, so strongly agreed. If you include both strongly agreed and agreed statements, then the scores are in high eighties, low nineties realm, but we only focus on highly engaged employees who are very satisfied residents.
On the occupancy in 2018, we were at 90.1%. For those of you who followed us, you'd remember that during the pandemic, we dropped to 76% occupancy, and we are on our path to achieve 95% occupancy by the end of this year. The achievements of these targets, combined with a significant renewal and optimization of our portfolio executed in the last three years, resulted in Chartwell outperforming both the S&P/TSX Composite Index and S&P/TSX Capped REIT Index in each of 5-, 3-, and 1-year periods, and some of them by a large margin. The key ingredients of any company's success are culture and strategy, and it would be a mistake to talk about strategy without talking about culture.
For well over a decade in this company, we used to talk about our culture using this What's Your Why wheel. It's a pictorial that summarizes our vision, mission, values, and beliefs, and these concepts have taken a very strong hold with our employees across the country. We see it firsthand when we visit our residences. We hear it in our people's stories, and certainly it is reflected in the employee engagement surveys that we do every year. As part of developing our 2028 strategy, we considered whether a refresh of our, what we call cultural elements, is required.
As we thought about it, we drew our inspiration from Erin Meyer article in Harvard Business Review titled Building a Corporate Culture That Works. Erin Meyer is a professor at INSEAD Business School and an author of several books, including No Rules Rules: Netflix and the Culture of Reinvention, which she co-authored with Reed Hastings. One of the things discussed in the article were the errors that the companies usually make when they describe their culture or talk about their values. A common error is that people use often what Erin calls abstract absolute positives as company's values. These, while as inspirational, are not very helpful for people to make choices and make day-to-day decisions because they do not have plausible alternatives. For example, many companies use integrity as one of their values.
There is no plausible alternative to that because the alternative to that would be corruption. With the exception of some drug cartels, I don't know many companies that would use that as their corporate value. When we try to refresh our cultural elements, we try to make them actionable and vivid. Now, I will ask Karen to take us through those.
Thank you, Vlad, and good afternoon. Okay, our vision, making people's lives better, remains unchanged. These four simple but really powerful words have really resonated with our teams for over 15 years. We still feel that they're very relevant in terms of why we do what we do. First and foremost would be our residents. This also includes their families and their loved ones, as well as our corporate team, or our team members in our properties, as well as, of course, our unit holders. They're all really critical to the ability of us meeting that vision of making people's lives better. Our mission, we decided to leave the stakeholders the same, but really make these statements shorter, clearer, and more memorable.
We create happy, healthy, meaningful lives for residents, peace of mind for loved ones, rewarding careers for caring people, and growing returns for unit holders. At times, the interest of these four stakeholders can sometimes be in conflict. For example, residents might wanna pay less for the services that they receive, and employees might be advocating for higher wage rates and unit holders for higher financial returns. Our job is to keep the interests of all of these stakeholders in mind and the long-term benefits of that for the company. We also must be able to really explain our choices to them with both clarity and confidence.
The biggest change of our corporate culture, the components, was to combine the various elements in that wheel, how we stand out from the competition. Instead, we've put them into a set of guiding principles. Our goal in coming up with these guiding principles was to make them really short and punchy, where every word matters. I can tell you the 40 words that are up here were hotly debated by our team. We also want them to be actionable and really clear in what the desired behaviors are for people at Chartwell. Our guiding principles are residents first. We serve with kindness, respect, and empathy. We bring joy through wow moments. Own it. We take personal accountability, and we fix what is broken. Be curious. Ask questions, and seek feedback, and share knowledge.
We simplify and innovate. We actually fear inaction, not failure. We experiment, we learn, and repeat. Finally, we're stronger together because we team up, and we welcome differences. These five principles and the 10 bullet points that I just spoke about provide these clear, actionable guidance for how we at Chartwell behave. Not unlike the what's our why wheel that you saw, we created a graphic that we can use to express these along with our vision and our mission. We call this visual representation the horizon because it symbolizes a sun coming out of a skyline. I've had the pleasure over the last number of weeks to roll this out to over 1,000 general managers and management teams across the country. I can tell you that these are really resonating.
We were able to provide stories to support all of these various guiding principles. We're about to roll this out to our frontline staff members, in the next week or so, and we've created all kinds of collateral, not just to roll it out, but to really sustain it. I'm just showing you one piece. This is a mirror that will be in every one of our staff rooms, across the country in all 160 homes. Our staff members can, as they're getting ready for their shift, have a look at themselves and be reminded of those five guiding principles. The other thing we did is we created a video as part of the rollout.
The world is changing faster than ever. To succeed, we must change with it. Our evolution is built on the strong foundation of our 22-year history. As we enter the next chapter, we reflected on how we communicate our culture, our vision, mission, values, and beliefs.
Our guiding principles are the next step in Chartwell's evolution, built on the strong foundation of our respect values, which remain embedded in how we deliver on our vision. At the heart of our guiding principles is a constant truth, our residents come first. Putting residents first is at the core of everything we do. It's who we are.
Residents First is our first guiding principle, and it guides all of the decisions that we make on the investment side as well. We look at our investments through the lens of making people's lives better, and that applies across the spectrum of our investments, including how are we making the residents' lives better by acquiring or developing a new property? How are we making their families' lives better, and how are we making the staff's lives better in those properties?
Own It is all about stepping in and influencing outcomes. Own It means being empowered to move quickly, take initiative, and make smart decisions when our residents and families need you. Empowering our teams through our guiding principles really is the foundation for Chartwell's results. Our employees are the ones who continue to service our residents and deliver exceptional experiences, which drives our occupancy, drives our NOI, and ultimately drives a great FFO growth that we have been and expect to continue to deliver for our investors.
Curiosity opens the door to progress. When we ask questions, listen, and share ideas, we all grow. Curiosity helps you find new ways to provide support and spark joy in our residents and their families. It also helps you to build their confidence and trust. It's about building a stronger, more sustainable business. When we stay curious, we stay open to new ideas, and that makes us better.
For our people, Simplify and Innovate means looking at the ways things are done and asking themselves the question, and their peers, and their managers of why they're done a certain way. People should be asking these questions to make service delivery, care delivery better for our residents, more efficient, more effective, more personal. We experiment, learn, and repeat.
Stronger Together means none of us achieves great things alone. It's about leaning on each other, sharing knowledge, and celebrating as one team. I love that the people who work for Chartwell have a broader calling. Every day, I see collaboration, whether it's supporting a colleague, making life better for a resident, or working with families. When we combine our strengths, we create communities where everyone belongs and everyone thrives.
Being a publicly traded company, we know that good governance is critical to our ability to deliver on our promises to our stakeholders, to our operational and financial success. Our team, and me personally, are blessed to be guided by and challenged and supported by the great group of directors. Their success is evidenced in numerous recognitions that the company received for good governance. We have consistently been named one of the top real estate and healthcare companies in The Globe and Mail Board Games publication. We've been recognized consistently for women diversity in The Globe and Mail's Women Lead Here report. This year, our chair, Huw Thomas, and our board has been recognized as Top Gun Board by Brendan Wood International. Some of our directors are here today, and I'd like you to just wave to everybody, Huw, Gary, Alka, and Anne. They're here with us.
Thanks for coming. Appreciate it. Now onto our 2028 strategy. First, things that are no secret for those who follow us. The senior living sector in Canada currently enjoying exceptional fundamentals with growing demand and at least in the medium term, very much muted supply. It's been estimated that, over the next 10 years, 200,000 suites will be required to be built just to maintain the balance in the supply and demand. This compares to only 73,000 suites that were built 10 years prior. Just as important, today, we are at inflection point of generational transition of our customer. See, up until now, we served the Depression-era generation. People who have accumulated some wealth during their lifetime, but who never thought of themselves as wealthy.
Shaped by the Depression and wars, they are savers driven to pass on their savings to their kids. We are now beginning to serve the Boomer generation. Everything that we hear about it and research indicates that this generation is probably wealthier than the one before, and also willing to spend some of that wealth on the things that they need and want. This creates huge opportunities for senior living operators, but only if they deliver the services and environments that these people want. Today, you will hear from our leaders about the initiatives to deliver just that. The pillars of our strategies probably remain unchanged, if you think about it really hard. First and foremost, we will be continually focused on service excellence. That for us means exceptional resident experiences in all of our properties, that those could only be delivered by highly engaged employees.
That will continue to be our focus, and we will continue our investments in our management platform, making it even more agile and scalable so that we can integrate growth that we believe we will achieve over the next several years profitably and efficiently. We will continue to focus on optimizing our property portfolio, optimizing it for growth, efficiency, and diversification. We will continue to be prudent stewards of your capital. We will diversify capital sources, maintain prudent debt leverage, and continue returning some capital back to you in the form of growing distributions. Here's our 2028 strategy statement. We will continue delivering robust FFO per unit growth in 2026, 2028 through exceptional resident experiences, empowered teams, a well-established agile management platform, and prominent Chartwell brand, driving market-leading occupancies in a growing and renewing portfolio of community-tailored residences.
We very much hotly debated all the cultural elements that Karen spoke about. We very much hotly debated every word that you see on this slide. It will require some unpacking for all of you, and this is exactly what we're gonna do next. First, I'll ask Jeff to start talking about financial targets.
Great. Thank you, Vlad. Our 2028 strategy is anchored on robust FFO per unit growth, which we believe will continue to lead the real estate sector over the next 3 years. We will accomplish this with market-leading NOI growth and capital deployment, all while maintaining a prudent balance sheet. Our key same property operating levers include occupancy, where we expect to maintain average occupancy at or above 95%. Rent and services rates, where we will maintain our current approach for existing residents of increases tied to inflation, and we'll pursue faster market rate growth of mid-to-high single digit, and in some markets, double-digit rate increases. This will combine to a blended rent and service rate increase of above 4%. With our continued focus on costs, we expect direct operating expenses to grow below our revenue growth at a sub-4% level.
This will support further gains in our operating margins. On capital, we expect to continue the significant pace of activity on acquisitions and developments that we have achieved in the last 2 years and are targeting to deploy over CAD 2 billion between 2026 and 2028. This will in part be funded by CAD 1 billion of non-core asset sales during this period. We're also targeting to resume annual distribution increases at a moderate pace once we achieve an FFO payout ratio of below 60%. Our balance sheet targets of net debt to EBITDA of below 7.5 times and interest coverage of above 3 times will ensure we have the balance sheet strength to support our growth strategy and will position Chartwell to weather any storms should they arise in the future.
All combined, achieving these targets will ensure we can deliver on another three years of sector-leading and very robust FFO per unit growth. With that, I'll turn it back to Karen.
Thank you, Jeff. Okay, we will continue to remain focused on providing residents with exceptional resident experiences that are personalized, memorable, feel like home, where friends and family feel welcome and respected. We know that by doing that, residents will not hesitate to recommend their Chartwell home as a place to live to their friends. To assess our performance beginning in 2026, we're moving to a new, more widely used measurement known as the Net Promoter Score. We'll be asking our residents on a scale of 0 to 10 how likely they are to recommend Chartwell as a place to live. We're also going to continue to ask specific qualitative and quantitative questions of our residents about the services that they receive, so that we can continue to get feedback to make improvements.
In addition to the annual survey, we also get feedback from our residents on a regular basis, through comment cards. We have comment cards for dining services and housekeeping. We have input meetings, we have food for thought meetings on a regular basis and, resident town halls, and we also do post-move-in surveys for residents who move in, within the first 90 days. We're also really focused on ensuring that our general managers and their management teams, that they truly take ownership of the strategies and execution of those, while also benefiting from, the amazing support, and expertise that they get from our corporate subject matter experts. This is something I would say, you know, just isn't available in smaller retirement, companies or for independent operators.
We also, though, have an expectation that they build on these strong industry fundamentals, and they innovate, they experiment, and they lead highly engaged teams in their residences to exceed resident expectations and to achieve market-leading occupancies. We're also moving in 2026 to use the Employee Net Promoter Score as our measure, and we'll be asking our teams, team members, how likely they are to recommend their Chartwell home as a place to work. In addition to the annual survey, we also measure a whole host of employee KPIs, such as employee turnover rate, staffing agency and overtime utilization, as well as qualitative feedback that we get through. For example, we do stay interviews, not just exit interviews.
We do stay interviews with people who are working for us, as well as holding labor management meetings, employee town halls, and other ongoing opportunities to get continuous feedback from our employees. The next part of our strategy statement speaks to the two really complementary parts of our platform that I believe stand out from the competition. First, I would tell you, after 22 years, we have what I'm so proud of, which is a defined, well-established and sector-leading culture, as well as a wealth of expertise to support our homes. We also have really leading edge standards and processes that give us this really solid foundation, and they've taken us years to put in place. These help our teams drive results and manage risks so that our homes can truly run smoothly.
Research in our sector demonstrates that homes that run smoothly, that's what drives exceptional resident experience or satisfaction, and that drives referrals. The other thing I would tell you, though, that that's not enough. With that solid footing under them, we expect our management teams to be innovative, because every residence is unique, and we want them to always be open to learning and improving. We really believe that the combination of the solid foundation and a bent towards innovation is the key to scaling our growth in the future. I also know that a well-known and trusted brand is a competitive advantage.
We challenged ourselves to develop a brand promise, something we haven't had before, and we came up with this simple but powerful statement, Joy is Ageless, or in French, Le Bonheur n'a pas d'âge. We're confident that this will resonate with the boomer generation that is just beginning to take advantage of our services, and you're gonna see this promise incorporated into our marketing strategies going forward. Of course, our strategy is very much focused on driving market-leading occupancy levels in our homes, something that we've demonstrated this year, as we project our December occupancy to be 95%. Every Chartwell residence competes within its own local marketplace, and our GMs, our sales consultants, and our management teams have the best insights into and knowledge of their competition.
To that end, each of our homes has developed their own very specific, unique selling feature, which demonstrates how they stand out from their community. We also have really deep community connections, and we invite community partners to come into our properties, and we show off life in our homes through a purposeful social media strategy. You will also hear shortly from Amanda Richards, who will talk to you about our business development strategies, which are a unique differentiator at Chartwell. I'll now turn it back to Vlad.
Thanks, Karen. We'll continue to grow our portfolio. That's probably not a secret to anybody. We'll continue our focus on optimizing our portfolio, adding newer, more efficient, larger properties in attractive markets and reinvesting capital in our core properties. Adam Moy will speak to you very soon about some examples of what we've already accomplished and continue to do in this. We'll continue to grow our portfolio through acquisitions, but also we are looking to partner with reputable developers across the country to build our own pipeline of future acquisitions. Because we know that we've been very successful. For great efforts of our investment team, we're also somewhat lucky in that that over the last couple of years, we had access to very high-quality assets at very attractive prices.
That is probably not gonna last forever, so we're trying to create our own future by building this development pipeline, and Jonathan will speak a lot more about that in his part of the presentation. We will also execute disposition of non-core assets that do not fit that vision of Chartwell portfolio of the future. I think I said it many times before, all the hard work that we had to do, where we had to reposition properties for alternative use, we had to close some of the properties, shortly after the pandemic, all that hard work is done. What remains and what we call non-core properties in our portfolio, they're well-performing properties. They, in many cases, run at very high occupancies. They just do not fit that vision that we have for our portfolio.
They may be smaller properties, a little older, some tertiary and secondary markets, and that's why they are in this non-core bucket for us. Then the last part of the strategy is the focus on community-tailored residences. You know, if you've been to one Chartwell home, you've been to one Chartwell home. They're all different in the way they are built, in the way they operate. Although there is a common foundation in how they operate and the focus on resident experience everywhere is the same, they really are part of the communities where they are located. We wanna preserve that uniqueness of each one of these homes, and Karen talked about unique selling features of individual homes. They're all unique and all different for every one of the homes in the country because every community is different.
An interesting part that, you know, when I started, and probably for the first 15 years since I've been in this business or maybe even more, there was a lot of discussion about certain communities do not participate in the congregate living and retirement living. If you're of a certain ethnicity or a certain group, these people do not go to retirement homes. It was probably true only because there were no culturally appropriate, residences with services that are culturally appropriate for a certain group of people. Some of the not-for-profit organizations proven that to be not correct. We have very strong Chinese and Korean homes and all other ethnicities as well, and Chartwell started doing these things, on a private pay scale as well. We have some examples here on this screen.
Chartwell Rouge Valley serves Asian community in Markham now. Chartwell Valley Vista serves predominantly Italian community in Vaughan, and Chartwell Gibson Retirement Residence serves Jewish community in Thornhill. We are focused on doing more of that. When we talk about ethnically appropriate homes, we also wanna talk about homes that are inclusive. All walks of life are welcome in these homes. They're not exclusive to that particular community. It's just the services are culturally appropriate for the community as well. That's what we're meaning when we talk about community-tailored residences. Here's our strategy statement back on screen again. Hopefully, it makes a little bit more sense to you now. Next, our leaders will unpack the how, specific initiatives and strategies that they are developing to deliver on this 2028 strategy.
We will start with by far the most important part, which is customer experience. I'll ask Colleen Laing to take us through that.
Thank you, Vlad. I'm Colleen Laing, and I have been at Chartwell for 18 years, currently as a Senior Vice President of Customer Experience. The customer experience team's strategic focus is to create exceptional resident experiences at every touch point, leading to market-leading occupancies and growing revenue in innovative ways. In 2025, just over 30% of our new residents chose Chartwell because they had been referred by family, friends, or business partners. We know that very satisfied residents who provide a top box 5 out of 5 score, are four times more likely to refer their own contacts. Our resident experience, care, culinary, and learning and development teams work collaboratively with the operations teams to bring our brand promise, Joy is Ageless, to life for current, future, and near future residents.
More than ever, there's a tremendous interest in elevating health and wellness as people age, and our goal is to create a culture of well-being and thriving in every residence through our newly created Active Living program, community-tailored residences, or through supportive care and services that allow residents to focus on things that bring them joy, new friendships, vibrant experiences, and time well spent on things that truly matter. Our residents' lives are made better through experiencing the wonderful food, amenities, wellness program support, and ambiance that we offer. Our unique value proposition is the Chartwell experience, which is all about how we make them feel. Our goal is to provide a warm welcome at every touch point through our Welcome to Chartwell program, which begins during the sales process and continues throughout the resident's first 90 days.
We know that moving to a retirement residence is a pivotal life change for older adults. Club Chartwell, our resident family and staff referral program, provide opportunities to invite families and friends to share in these experiences. Our seasonal tasting experience is an example of an exclusive event for residents and their invited guests. Our chefs showcase their vibrant, delicious, made from scratch recipes, and guests enjoy a sampling of upcoming seasonal menus and a taste of life in our residences. We have a team of our chefs from our properties here today, and you too will have an opportunity to sample some of their delicious food later this afternoon. Life in our residences is about thriving and not aging in place. We know that today's older adults have high expectations. Retirement living has moved beyond providing services to creating upsized living experiences.
Picture a beach party with more than 400 Chartwell residents enjoying yoga, Latina dancing, and margaritas on the beach. Dinner in white, an elegant outdoor picnic where guests dress entirely in white. This beautiful dinner, which originated in Paris, has since spread to many cities around the world as a kind of pop-up social event, including at secret locations like our home at L'Unique last summer. Our residences do feel like home, providing curated and tailored experiences that reflect life in the broader community. 44% of residents choose to live in a residence due to location, and 30% are referred by family or friends. As an example, Rouge Valley in Markham provides a cultural experience where personalized support meets rich cultural traditions, authentic Asian cuisine, cultural celebrations, and activities.
At this residence, we recognize that the menus, staff, and amenities of yesterday did not resonate with the community. As a result, the operations team has created a cultural experience that has resulted in 100% occupancy. We also have Edgewater by Chartwell. Life begins at Chartwell at Edgewater, one of the latest additions to Chartwell, scheduled to open in December. Edgewater offers an all-exclusive, independent resort-inspired living with suites overlooking Long Lake. At Edgewater, our resident experience is rooted in the principles of West Coast wellness, holistic approach that embraces the natural beauty of the lakeside setting. Increasingly, residents will not choose retirement living simply because they've reached a milestone birthday. They are looking for both Active Living and an opportunity to access supportive care in the future.
We are excited to announce our new Active Living program with Dr. Greg Wells, a well-known human physiologist and best-selling author who translates the complex science of wellness into practical strategies that extend both health span and lifespan. The foundation of this program is sleep, eat, move, and think better. This is a picture of Carmen, who is a resident in Victoria Harbour. She came to us at a very difficult time in her life where she had fallen and fractured her pelvis, and she had such limited mobility after a fall. She was determined to regain her strength, and through her work with our kinesiologist there, she can now complete 20 consecutive push-ups. At 88 years old, she's a genuine advocate for strength training and an ambassador for our wellness programs.
Many current and future residents will continue to look for care and services that keep them feeling their best and enable them to stay at a residence longer. Care revenues continue to grow through our CareAssist program, which provides a comprehensive menu of care services behind the door in the resident suite. This is supported by the implementation of Yardi EHR Care Planning system, which was completed in all of our residences this past year. We continue to work on new packages, such as our Everyday Comfort package, to introduce new residents to a bundle of daily services designed to help them settle in smoothly and start living their best lives from the moment they arrive.
Our Peace of Mind package that provides a bundle of services for thoughtful support for a confident return home from hospital, which is also a pivotal time in the life of a senior. In addition, with approximately 25% of seniors over the age of 85 experiencing some form of dementia, our Memory Living program offers a person-centered approach with higher staff ratios, staff-to-resident ratios, and safe, secure, and thoughtfully designed environments to help residents navigate more confidently and independently. Our annual resident satisfaction survey results demonstrate that our customer experience strategy is netting results. 67% of residents are very satisfied providing that five out of five top box score. This score is based on three questions, satisfaction with the residence as a place to live, intent to stay, and if the resident would recommend Chartwell to family and friends.
Our total score is 90% with a very high 82% survey participation rate. A new McKinsey Health Institute survey of more than 21,000 older adults across 21 countries finds that respondents are focused on the importance of having purpose, mental wellness, and enjoying meaningful connections with others in addition to preserving independence. We will continue to focus on these priorities, making a meaningful difference in the lives of our residents. Now I'll pass the mic to Sharon Ranalli.
Thank you, Colleen. Hi there. Good afternoon. I'm Sharon Ranalli, Vice President of Marketing and Communications. I've been with the company now for 16 years, and that's been long enough to see the incredible change in how people think about senior living and how our brand continues to evolve right alongside them. Today, I'm gonna take you through how our marketing strategies are driving occupancy, revenue, and long-term growth, all through the lens of brand leadership. Chartwell's marketing organization has transformed from a traditional communications format and traditional media into data-informed and brand-led growth engine. Our 2026 strategic pillars are built to move us from stability to leadership. We're elevating the Chartwell brand, accelerating property performance, launching and positioning new market segments, sustaining high-quality lead generation, and modernizing attribution.
In short, we're combining creativity and analytics to drive measurable results while keeping our purpose at the center, and that is making people's lives better. As you may know, in senior living, trust drives decisions, often made with the support of family, and that's why brand leadership matters. A strong, trusted brand gives us top-of-mind awareness, social credibility, and loyal advocates who refer us. In successive brand awareness surveys conducted by Ipsos since 2015, Chartwell ranks number 1 in English Canada, and number 2 in Quebec for brand awareness. Proof that consistency and clarity in who we are pays off. Let's talk about this big shift that's redefining everything, the arrival of the boomers. As we've said earlier, this generation is unlike anyone before them. They're digital first. They're informed. They're independent. They expect, you know, opinions, transparency, and choice. They're also values-driven.
They were shaped by an era of activism, cultural revolution. For them, senior living isn't about slowing down. It's about living well, as Colleen said, and with purpose, and that's exactly what we're building towards. Unlike generations before who preserve their wealth for inheritances, as Vlad spoke to, research on boomers suggests that they have the money and are willing to spend it on the things they need and they want, and they are open to premium pricing. Our customers are more digital and self-directed than ever. By the time families contact us or residents directly, they've already done their research through Google, through reviews, and increasingly AI assistants like ChatGPT or Google Gemini. That means they come to us informed and with good questions. Every touchpoint has to reflect trust and transparency from our website directly to our sales teams.
What we're seeing is that lifestyle, well-being, and belonging now matter in decision-making just as much as care and support and transparent pricing. That's where differentiation happens at individual residences and where we can highlight, at each site unique and localized sales features and what really helps our home stand out on micro-moments. What's really exciting is. I was talking about these micro-moments when someone, you know, might download a guide or visit our website. If you are visiting one of our property websites, you can now link over to a property Facebook page. These are actually operated. Content is posted from our residences. These are the experiences that tell our future prospects or future residents what it's like to live in Chartwell. From there, and to follow and watch that content, they can then read a review and soon book a tour.
Families are expecting that frictionless, intuitive, personalized experience, and every moment and interaction with our brand matters. It matters to us. It matters to them. That's why our focus is really truly on optimizing for AI discovery. I'm sure we're all using it daily, so are our prospects and their families. This helps build visibility in emerging search tools, create seamless journeys, and in time, you know, make that connection with our future residents. Before I jump forward to our new exciting brand initiative, I just wanna talk about brand differentiation. Before I talk about brand differentiation, I want to talk about something important, and that is about senior living itself. It is a choice for people, typically over 80, but we know the truth is today's 80-year-olds aren't old the way we used to think of it.
They're active, connected, and vibrant, and they're redefining what aging looks like. A 2017 Harvard study found that the strongest predictor of health and happiness at age 80 isn't exercise or diet or sleep, it's relationships. People who maintain strong social connections live longer and happier lives. This insight really hits home for us because at Chartwell, we've always believed that senior living isn't just about care and services and convenience, it's about belonging. That belief has guided us as we've evolved our brand. Earlier this year, we worked on a foundational piece for Chartwell that's been referenced a couple of times, and that's our brand promise. It's not a tagline, it's not a campaign. It's about reflecting the emotional core of who we are. In working with our agency, we were very clear.
We wanted to put our residents at the center of our positioning as the protagonists of joy. We wanted to break out of the sea of sameness that is seen across our category, where people talk about functional services, and needs and decline. This is not the message we want to convey. From that came our new brand positioning: Joy is Ageless. It reflects our belief that joy and belonging are timeless across our lives, and that senior living should celebrate both. This is more, as I said, than a marketing message. It's a promise to our residents and their families that we see them, we understand them, and we deliver an experience that feels human, connected, and genuine. Let me give you a small sneak peek of what is coming. This is not even production. This is just done in-house as a glimpse.
What brings you joy? For some, it's morning coffee with friends, for others, painting a masterpiece or a happy accident, or playing piano, learning something new. Chartwell residents carry a lifetime of experiences and passions, and we make space for these everyday moments to spark happiness because Joy is Ageless.
We're very excited to put that into market in the coming year and see production take place in one of our homes, and it's super exciting. Along with this very important brand work, we're also modernizing every part of our marketing engine. Over the past 18 months, we've invested in foundational digital transformation, connecting the dots between insight, creativity, and performance. That includes a full CRM integration, giving us visibility across the entire lead journey from first click to signed lease. We've implemented marketing automation, tailoring message, and the digital journey based on where someone is in their decision-making process, from awareness to tour booking. We've rebuilt our website for mobile-first experiences, improved accessibility, and optimized for SEO to meet the expectations of today's digital-first seniors and their families.
We've also introduced our own in-house AI chatbot, which provides 24/7 support, answering inquiries, guiding families through community options, and capturing high intent leads even outside business hours. It's become an integral part of our lead generation ecosystem, ensuring that no moment of interest is missed. The results speak for themselves. You can see our growing database in this image with over 10,000 new qualified prospects added every year. That nurturing is very critical in the future ecosystem as well of Chartwell's marketing. Our digital leads are stronger, our conversion rates are up, and marketing now drives approximately 50% of all personal tours at Chartwell. Our strong brand translates into tangible results. As I said, higher occupancy, pricing power, efficient lead acquisition, and it's also being demonstrated with efficiency as our marketing spend is declining as a percentage of our revenue.
As we continue to align marketing with the next generation of residents, we're driving not only near-term results, but long-term enterprise value. With that, I'll pass over to Stef Biasi.
Thank you, Sharon. My name is Stef Biasi. I am the VP of Sales Strategy at Chartwell, and I've been in this role for almost 10 years. The sales strategy team is not only responsible for driving our sales strategies and programs, but we also do all of our own in-house sales training for our 200 salespeople, including developing all content and delivering that content. We also have a contact center I'm gonna mention just a few moments that we operate, a full business development team that supports the field, along with managing sales communications and structuring our sales compensation strategies. I can't start a conversation about sales without showing this wonderful graph on our performance over the last several years.
I think the graph kind of speaks for itself, and all I can say is that I'm very, very grateful to be working for this organization at this time. What I wanna share with you today. We've done a lot of strategies over the years to help support this growth. Today, I wanna share with you four of those strategies, two of which are very new to meet with changing market conditions, and two which have been with us for a long time, but they're core strategies that are true competitive differentiators for us. The first strategy is a new strategy, and it's called the Chartwell Insiders program, and this is our waitlist strategy.
You can imagine now we have a majority of our homes over 90% occupancy, and most of them have wait lists for some suites or if not all of their suites. We needed to devise a national strategy to create continuity so that, you know, with the main goal really to reduce those lost revenue days. Lost revenue days are those days that a suite sits vacant between the time a resident moves out and the next resident moves in. We came up with this program, and we launched this year, and it has three pillars. The first is, of course, around communication. You can see from some of these images, it's a branded program. We treat Chartwell Insiders like a VIP. We've got welcome packages.
We give them key chains that they can use when they move in to put their key on. All the collateral is branded around this program, and we keep in constant communication with people on the wait list to let them know what's going on at the property so they stay excited about the property. That leads into the next pillar, which is engagement. To keep them waiting and excited, we invite them to the property on a regular basis to attend events, VIP events, bus tours. We want them to be integrated into the community before they even move in. That's, again, a very important part of this strategy so that they don't begin to start looking elsewhere. The last part of the strategy, of course, is a defined priority system.
We actually migrated, you know, from paper-based priority lists to using our Yardi CRM . This is our customer relationship management software. We can manage all of our prospects there, and we can make the best decisions for who should be moving in when a suite becomes available. A subset of that strategy is that we encourage prospects that are joining the Chartwell Insiders program, joining the wait list, to move into an adjacent suite or maybe even a sister property with, of course, the promise that they'll be bumped up the priority list when their suite becomes available. This has become a really effective strategy.
Properties have really embraced this year. The best part of this strategy is that because these seniors are coming into the property on a regular basis. They're getting to know the property. They're participating in events. They get to know the staff, the cadence of the home. They make some friends. When they move in, the transition is so much smoother for them. That's one of the challenges for seniors moving from a longtime home into retirement residence. The Chartwell Insiders program. Attending these events makes that transition very easy for them. We're excited about this program and excited to see what it can continue to do in 2026. The next strategy, a small change in what we're doing, and that's around sales compensation.
We've had to adapt with the changing market times, and I just want to take a quick step back and explain how we got here with this new compensation structure we're gonna launch in early 2026. Prior to the pandemic, we were very focused on value-based selling. We rarely discounted. We offered discounts on occasion, but very rarely. Of course, the pandemic hit. All of our occupancies dropped. All operators' occupancies dropped. That was a challenging time. Coming out of COVID, as the prospect funnel started to fill again and people started to look at congregate living, you can imagine all of us operators were fighting for all those prospects, and the marketplace got incredibly aggressive. Where our salespeople were kind of used to value-based selling, they weren't big discounters.
We actually had to train our salespeople on how to offer incentives and to be aggressive in the marketplace. We successfully did that, and you can see from the chart that we showed just a few moments ago, we had great success growing our occupancy back up during those first few years after COVID. Now we're at a point where we're at stabilized occupancy, and now that we're at that point, we're really gonna be focusing on maintaining that market rent and really declining the use of those incentives. To help influence our salespeople's behaviors, we're introducing in January 2026 a new compensation structure where we're gonna reward our salespeople with a premium commission if they preserve those market rates that we've created in our budgets. When they do that, they'll receive a premium commission.
When they're forced to discount, their commissions will also be discounted. This is a perfect alignment with what we're trying to achieve. We're trying to protect our market rates and make a sustainable growth, and it's a win-win for the salespeople who can earn more when they preserve that rate. We're excited about the program. We also know it's going to be very successful in helping us to retain our best salespeople as well as attract salespeople that are looking at senior living. Third strategy I want to talk about is our contact center, and this is one of the core strategies that I spoke about at the beginning. This is a huge competitive differentiator for us, and we established the contact center about a little over 10 years ago.
The reason we did that was we saw that, most of the industry studies showed that speed to lead in senior living is absolutely critical. You can imagine, I mean, many of you might have gone through this. When, you know, when an adult child finally decides to reach out on behalf of their parent to make a call and explore retirement living, they don't want to leave a voicemail. They want to talk to someone live because they're in that state. We established the call center, back about 11 years ago. It's now grown to 15 people. We answer 60,000 calls per year, and most importantly, 90% of those calls are answered within 10 seconds. Speed to lead, again, being critical.
More than 50% of our leads originate through our call center, and they're trained very similarly to our salespeople. It's not just a transactional conversation they have with prospects on the phone. They're trained to build connection and trust with that prospect, to demonstrate empathy and provide a strong solution for their next steps. We improved that customer experience several years ago by establishing agents in the provinces that we operate. We've got agents in BC, Alberta, Quebec, and here in Mississauga. The reason we did that is 'cause we know that prospects wanna talk to someone local. You know, local agents understand the geography. They understand the healthcare system. They understand the buildings that they're talking about that much better. The customer experience was vastly improved when we did that.
On top of all that training, of course, we made great investments in our technology. We moved to Cisco Call Center a few years ago, which is an incredibly stable and flexible program. It's got a great quality management program that helps us to coach and train our agents. And we're now exploring the AI tools, of course. And one of the great AI tools has a full customer transcription process that transcribes and summarize all the conversations, which leaves our agents to focus their time on having those quality conversations and building that trust and connection with our prospects. The contact center, again, is a huge competitive advantage for us, but I just have to leave you with what the most rewarding thing about the contact center is, and that's that the people who work in the contact center absolutely love their jobs.
They truly feel like they are helping people to advance to that next stage in their life. The average tenure of our contact center agents is over five years. Many of them have worked with us seven, eight, nine years. I have to tell you more, most interestingly, the very first person we hired into the contact center 11 years ago is still working with us today. This gentleman never misses a shift. He's 74 years old and does not want to retire because he loves his job so much. He loves helping people. In fact, at the end of every single month, he scans through all the names of the people that moved in to identify the people he's helped to make that next transition in his life. The contact center, you know, I've been to conferences all over North America.
No one runs a call center in this industry the way we do. We have a unique call center experience, and it's a huge competitive advantage and differentiator for us. That's the third strategy we want to talk about. The fourth strategy is around business development, and I'd like to invite Amanda Richards up here who started this program from the ground up and has grown it to be incredibly successful in supporting our teams in the field. Amanda.
Thank you, Stef. Good afternoon, everyone. I'm Amanda Richards. I'm the Senior Director of Sales Strategy. I'm actually going to be celebrating 15 years with Chartwell in January. I'm really excited to talk to you a little bit this afternoon about our business development, our referral strategy. This is a purpose-built and differentiated approach that really sets the company apart in the senior living industry. We know that referrals that come from professionals such as doctors or financial advisors or real estate agents, they actually tend to convert at a higher ratio than traditional marketing leads. These people are in a senior prospect's inner circle of trust, and so when they make a recommendation to Chartwell, it goes a long way to instilling that trust in that prospect and that family.
I want to share just a little bit about the four pillars of our program. At the core of this strategy are our dedicated business development managers who focus exclusively on generating referrals across a defined portfolio of homes. This really helps us to ensure consistency in our execution and our accountability. At the community level, Chartwell deploys tailored strategies that span healthcare engagement, B2C outreach, and the Preferred Partners Program. This is really unique for us. We actually have a curated list of professionals who can help every senior in that local marketplace make the move into one of our residences.
They have a list of real estate agents or financial professionals, downsizers, movers, social workers, all people that our residences know, like, and trust, who are at the forefront to help people who are looking to transition into retirement living do so successfully. We're proactively addressing concerns families might not even know that they had. Nationally, Chartwell is now recognized as a leading educator in the senior living space, offering continuing education for professionals in finance, real estate, human resources, and healthcare sectors. We design and curate content to present at national conferences where attendees earn continuing education credits for listening to me talk for an hour. Year after year, we continue to grow our presence within these sectors and further differentiate Chartwell as a leader in senior living. These initiatives, combined with our strategic sponsorships, help position Chartwell as a trusted authority and extend its influence across Canada.
These pillars, these components, they really culminate in high-trust partnerships with respected brands that we've now created. Brands like Scotia Wealth Management or MD Financial, the Canadian Real Estate Association. We have a new partnership with the Alberta Retired Teachers' Association, further reinforcing our credibility and our ability to build confidence and instill that confidence amongst families and prospective residences. This integrated referral model, so combining that dedicated leadership, localized execution, national influence, and these grassroots initiatives in terms of our local communities, is very, very difficult for our competitors to replicate. They don't have a dedicated resource or a group of dedicated resources as we do, and so this is a real competitive differentiator for us and strengthens our market leadership while also ensuring sustainable growth. With that, I'm gonna turn things over to my friend, Dave Pielas.
Thanks, Amanda. Good afternoon, everyone. My name is Dave Pielas. I'm the VP of Human Resources and Labor Relations. I've been with Chartwell for just over seven years, and every day is a new and exciting day for us. I'm here to kind of share today how our HR strategies fuel resident satisfaction and care quality, operational excellence, as well as investor value. Our culture is more than a feel-good story. It's a measurable strategic asset driving our financial performance. At Chartwell, culture drives engagement drives satisfaction drives occupancy, and that leads directly to revenue growth. For you, this means you're investing in a people model that delivers both human and financial growth. Our people are at the core of delivering exceptional service and quality care every day. They are foundation of everything we do.
We're an organization of approximately 11,000 individuals serving 25,000 people across Canada. 500 of our people roughly make up our support teams, while 10,500 work directly with our residences. We're a highly unionized industry, and 80% of our frontline employees are unionized. We take a constructive and proactive approach with our unions, and that ensures fiscal responsibility and supports our operational continuity. Our strategy not only strengthens trust with our employees and our workforce, but it also safeguards our business. We demonstrate that by our record of no work stoppages and pragmatic collective bargaining outcomes across three provinces that have the right to strike and past years of significant inflationary pressures. By balancing our employees' needs with our organizational priorities, we're fostering a resilient, sustainable future for Chartwell and its investors.
Our size and structure give us both scale, agility, as well as stability, and that ensures consistent resident experiences while allowing us to manage our labor relations risks. Now, Vlad kind of stole a little bit of the thunder on this one, but we'll continue. One of the clearest indicators of operational excellence is employee engagement. Like Vlad mentioned, we only measure top box or five out of five, meaning we only count those employees who strongly agree that they are highly engaged. As you can see, we've maintained high engagement scores over time, surpassing our 2025 target with 57% of our employees being highly engaged. Overall, 85% of our employees either agree or strongly agree that they are highly engaged. We're proud to outperform our industry in employee engagement by 11 points. Why does this matter?
It matters because engagement reduces the cost of turnover. It improves resident satisfaction, which in turn protects our margins and our reputation. At Chartwell, we've continued to improve our engagement scores, and we're driving that through people strategies and programs and a strong focus on employee well-being. We call this the talent multiplier effect. It shows how great people are amplifying our success. Our data today shows steady improvement in turnover, tenure, as well as internal promotions. We aren't just hiring people at Chartwell, we're really building careers. Every additional year of tenure increases our service quality and reduces our replacement costs. That creates a measurable ROI from our human capital strategy. We continue to increase investment in employee learning as well as opportunity, and that goes across our whole organization, from enhanced frontline training to current and future leadership development.
This strengthens our performance and also ensures compliance, safety, and consistency across all of our close to 160 residences. That's essential in a highly regulated and a high-trust sector like senior living space. Finally, the number that I'm sure some of you are keen to see, which is our agency spend. Since the end of the pandemic, we've been focused on reducing our agency costs through a combination of both human resources strategies as well as new operational approaches. Overall, we're proud to have successfully reduced our agency spend by 79% from 2023 through 2025. We drive all that success through our culture, and we leverage recognition as a foundational element of that. We celebrate contributions, both large and small.
Many of the programs you see on the screen highlight these big and small contributions, but I want to talk about a couple. The first one, it's a big one for us, it's our leadership awards. These awards transform our business goals into measurable objectives that our residents and support teams strive to obtain. Once a year, we gather together to celebrate only the best of the best. As an added bonus, it helps us drive our performance. Everyone really wants to be up on that stage being celebrated by their peers. On the smaller end, we share our stories of how we make people's lives better, highlighting moments of how service and employee excellence is achieved every day through our meetings. We call these the wow moments. It allows us to highlight even those small things that make a big difference in our residents' lives and drive resident satisfaction.
All of these efforts help shape our culture and feed our leadership development programs and succession planning pipelines. That allows us to recognize our talent and help it grow. This slide also demonstrates some of the many programs that we have at Chartwell that help us attract and retain the best talent in the industry. We're operating in an industry where competition for talent is high and service excellence really depends on high morale as well as pride. One of the strengths at Chartwell is that our teams reflect the communities we serve. We foster inclusion not only as a social value, but as a business imperative, and the numbers on the screen speak for themselves. We're proud of our efforts in DEI and people both inside our organization as well as outside are noticing.
Internally, our employee sentiment regarding our commitment as an organization to DEI is up by 10 points year-over-year. Externally, as Vlad mentioned before, we're proud to be a Globe and Mail Women Lead Here five-year award winner for 2025. We know diverse teams innovate faster, communicate better with residents and families, and strengthen our ties with our communities. All these are important to our growth. As an employer, we understand that caring for others starts with caring for our people. As part of our wellness strategy, we're excited to launch a new expanded wellness platform in 2026. This platform will offer not just the standard EFAP, but a virtual EFAP, as well as a fullsome health and wellness program.
In partnership with Dialogue, we're gonna be adopting this holistic approach that provides 24/7 virtual care, including unlimited video-based same-day medical consultations and coordinated access to medical practitioners at convenient times and locations for all of our employees. Our EFAP being virtual and using an integrated platform will help our employees access mental health care when they need it. We know that about 70%-80% of non-urgent medical issues can be safely treated quickly with real-time access to multidisciplinary care teams. This program will save our people from having to wait at clinics in long lines or even have to travel to those clinics. Getting access to care quickly means a quicker start to the road to recovery, and it ultimately means less lost time away from work.
Our people care for our residents, and they really want to spend their time doing the work that they do every day and not the time at the clinic waiting for their doctors. Our culture, our people-first culture is our operating advantage. It's proven in our ability to deliver strong operational and financial results. Many of the stories you've been hearing today, you know, even the videos you've seen, they all show our people hard at work supporting our residences. Chartwell offers a sustainable high ROI model for long-term investors through a purpose-built environment where people feel valued, supported, and motivated to do their best work delivering on the promise of making people's lives better. To conclude, I want to share a brief story that illustrate just how our people live our promise every day.
In 2014, I was asked if I was interested in relocating my family to Chilliwack, as a GM position had become available. It was the best move ever, as I've spent many wonderful years working within the Chilliwack cluster of homes. The west underwent a reorganization in 2021, and a new region was formed, and my dream job of regional operations and sales was created. This promotion came during a time when I was battling breast cancer. I was undergoing radiation and chemotherapy, and I couldn't have felt more supported along the way. We are so blessed to be surrounded by leaders, colleagues, and employees that are so caring and supportive.
Thank you. I'll pass it to Vlad.
Thanks, Dave. Just another note, the person that you saw on the screen, Dick, she is today running a region with six homes that operate each one of them at 100% occupancy, and they have not one day of revenue loss now for almost six months, all six homes. So tremendous success for Heather. Well, we were supposed to take a short break right after this point, but I think we'll count our fire alarm as a break. If people need some breaks, they can maybe exit at the back and then come back, so we'll just keep going. I want to share something that's close to all of our hearts, which is Chartwell Wish of a Lifetime, our national charity that grants meaningful wishes to Canadian seniors, helping them rediscover joy, purpose, and connection.
This short video shows some of the successes that this organization has. If you want to learn more or make donation, you can use the QR code on the posters outside of the doors on the screen and around the bistro.
As kids, we were limitless. We boldly made wishes with the belief that they would come true. Then we grew up, and life introduced us to challenges and responsibilities, and those wishes would take up less room in our minds. But they never fade away. They remain a part of us. That's why Chartwell Wish of a Lifetime was created. We believe our dreams don't fade.
They grow with us, inspire, and connect us at every age. Chartwell Wish of a Lifetime inspires Canadian seniors to experience joy, connection, and purpose by making lifelong dreams come true, one wish at a time. When we grant a wish, we remind the recipient that not only are their dreams and aspirations worthwhile, but a life of adventure and wonder is possible at any age. Visit our website to learn more about how you can play a part in making a senior's wish come true.
Hi, my name is Gordon Chiu. I am the Senior Vice President of Information Technology Services. I've been with Chartwell for almost 10 years, and I'm going to talk a little bit about technology and AI. First of all, I want to talk about my team. My ITS team is consisted of 4 key areas. One is information systems that take care of our 75+ systems that we have, ranging from dining systems within our homes, the electronic health records that Colleen talked about also in our homes, all to the financial systems that we operate in our corporate environment. In addition to that, this team is responsible for all the hundreds of terabytes of data that we have that are collected amongst all these systems, the ability to analyze these, create dashboards, and report on them as well.
In addition, I also have a technology operations team that takes care of all the networks, the hardware, all the endpoint devices within our systems in order for us to connect everything together and operate in an effective manner. This group also responsible for the electronic, all the electronic systems that are in the homes, including our nurse call systems that are there as well. All these systems that we have, the networks that we have connected together, have to be done in a secure way. The information security team takes care of that.
They ensure a safe environment for our systems to be able to operate effectively, and in addition to that, educate all of our staff around the different threats that are currently out there today. The solution delivery team takes all these different projects that we have to implement on an annual basis as a group of project managers that implement these projects on time and on budget on an annual basis. This is the team that puts it together. However, we couldn't operate effectively without our key partners that we deal with. Some of the ones that you've already heard about.
Yardi is one of our key partners that takes care of some of our financial systems, but in addition to that, they take care of our electronic health record systems in our home, our customer relationship management system that Stef talked about that takes care of our prospects. We continue to grow that particular environment as we see different opportunities with this software, and we'll see more to come in years ahead. Oracle is our key employee system. It takes care of our HCM or our human capital management system that actually takes care of our benefits, the key HR functions on their own, along with our recruiting platform and our benefits, and our payroll. This environment is our key environment for our employees.
In addition to that, Microsoft is our key productivity tool, and that's, of course, Excel, Word, PowerPoint, our email systems. This system is across our board that also allows us to share files with our SharePoint system as well. Through that, as new innovations continue to occur, like Copilot that takes care of AI and generative AI, we're continuing to grow that environment. OneStream is our new system that we have. It's being implemented as we speak today. It's gonna soon replace our Hyperion system for financial consolidation. This system is gonna be implemented next year, so more to come on that. Cisco is our key hardware provider for all of our network systems and all our.
That connects all the different devices that are in our homes, in our data centers, within our corporate environment as well, that allows us to connect the entire world together, not only to our cloud systems, but all our different residences as well. Then we need to protect all these systems. CrowdStrike is our key vendor that actually secures our endpoint devices to ensure that those points are safe. So our team ensures that the operational success of our overall strategy, and these are our vendors and our partners to help us do that. What about the future? What does that look like? Something that we've tried to do is to create a continuous culture of innovation. I think you've heard the concepts of innovation through the previous presentations.
Before I go forward, I have to kinda go backwards in time to 2019. When we talk about innovation, it's a really interesting thing. You can't just, you know, go forth and innovate. That doesn't really mean much, and it's very difficult to do. You have to create an area, you have to create the environment in order for you to be successful at innovation, in order for you to be able to be curious and look at problems in a slightly different way. It's one of our principles that we have. Back in 2019, I created something called ITS Innovation Challenge, and it was largely for my team, where I divided up the group into smaller teams to tackle actual problems.
What this did was it allowed people to understand the problem, come up with a solution, come up with how to go about solving that problem, and then actually present that. That overall exercise created a great collaboration opportunity for the team and also the ability to tackle these types of problems. Fast-forward to 2025, we expanded this out to be more of a corporate-wide event where we had actually six different operational, real operational problems, and we assigned different teams to try to solve these particular challenges that we had. What was incredible that came out of it was not only did we come up with some incredible solutions that we will leverage as we go forward, but the overwhelming feedback I got was it was incredible how much work we were able to get done in such a short period of time.
What that allowed is for me to understand that if you are focused on a particular problem, getting a dedicated team to be able to focus on just that problem, it's incredible how much work you're able to get done. Hopefully, what we've done with this event is that people will go back to their different departments and take that to heart. The ability to solve problems with dedicated teams, it's incredible how much we can get done. But that being said, I don't think I'm allowed to talk about innovation, and I think this is probably an actual rule, without actually talking about AI as well. I'm gonna talk about this overall hype that we have, and I think a lot of people may know about this in some degree, going forward.
You know, back in 2022, ChatGPT 3.5 came out, and everybody kinda lost their minds. It was an incredible thing. Me included when I saw this thing, it was amazing in terms of some of the things that it could do. The hype kept on growing. In 2023, Microsoft released Copilot. There were billions of CAD being invested in AI. There was continuous amounts of new companies being sprouted, entrepreneurs going towards this. It was an amazing type of hype. Come down to 2024, I started hearing a lot of other things. Is AI real? Is this a bubble?
I think I have to pause and say that the hype that was happening in 2023 at its peak, I don't think it was even possible for you to be able to meet that expectation. It was insane in terms of the things that they were talking about, the capabilities of the particular product. Now we're in 2025, and I truly see real value coming out of AI and the different software. We are actually implementing some of these ourselves, as you heard in the past. In order for us to do that, we have to have an AI strategy. This strategy aligns perfectly with our overall business strategy, and that is key.
With any new emerging technology, we have to ensure that we have a proper governance process and policy to be able to support that, so we can implement these types of solutions in a safe and responsible way. In order to do that, we have to ensure we educate not only our senior leadership but our staff around the different benefits, but also the different challenges around AI. We leverage something called the FASTER principles, and these are principles that we leverage in order for us to evaluate not only the output that comes out of AI but also the different tools and solutions that we use. We have started to implement solutions with this, not only the ones that you've already heard about, but we implemented something, PredictAP. This solution is largely an automation solution but also leverages AI.
To set the stage, currently right now, we process about 26,000 different invoices on a monthly basis. What this solution will do is the invoice comes in through email. We have optical character recognition, OCR, that will read that particular invoice, take that information, and put it into our system, eliminating a lot of the manual activity that currently occurs. Some of you are probably thinking, "Gord, that is so 2010. Like this is not brand-new technology. I've implemented these types of technologies in the past." The biggest challenge around any of these types of solutions, it takes months and months, and sometimes even longer, for you to be able to understand each one of the different invoices, because every invoice is different.
In order for you to do that in the traditional way, you would have to automate yourself to how to go about doing this in order to take the information that's currently on an invoice and just put it into a financial system. What's unique about this solution is the AI portion of it. We are providing it two years of data so that it can learn. The engine can learn about all the different invoices that we have in order for us to be able to start off right out of the gate with two years of learned data into their systems. Instead of months and months, and potentially years, of a solution being put in place, we implemented this literally a couple of weeks ago. The whole process took about 10 weeks. This is the value proposition around it.
It's not so much the solution itself, but it's more so the speed of which we can get to value, and that's what AI does provide. All the solutions that we talk about with AI emerging technologies, we have to ensure we do things in a safe and responsible way. We have a cybersecurity program that we have that is based on six different pillars, but I'm gonna focus on one of them. One of the key ones is around risk. One of the metrics that we measure on a monthly, quarterly basis is we have six different buckets of area that we focus on and we continuously monitor. These dials change depending on the risk in terms of understanding the threat levels that are currently out in the marketplace today.
In addition to that, as we add new defenses, programs and software continuously improve. These dials will also adjust. It allows us to understand where we need to invest, where we need to not invest, and understand where our risk lies. That being said, unfortunately, the softest part of any cybersecurity program is us, the human element of it. We have to continually educate our staff about all the different challenges and threats that are out there. Cybersecurity Month, October is Cybersecurity Month. If you didn't know, October is the Cybersecurity Month. We released a bunch of educational, fun videos that we had to in order for cybersecurity to be front and center, so people can continuously learn and be reminded of the different challenges that are out there.
Just to conclude, we have a great, talented, focused team that we leverage multiple partners in order for us to be successful and deliver our overall strategic objectives. We have been driving a culture of innovation as best we can in order for us to leverage those particular skills so that we can deal with new emerging technologies such as AI. All of that we have with the systems, the networks, the emerging technology, all has to be done in a safe and secure way. Thank you. I will hand it over to Adam Moy.
Thanks, Gord. Thanks everyone for coming out here and spending a little bit of time with Chartwell to learn a little bit about our business. My name's Adam Moy. I'm the VP of Property Management here at Chartwell. I've been in the industry since about 2009 in various roles, so both on operational side as well as the capital management and asset management side. I first wanna take you through a little bit about my team. What we do a little bit unique here at Chartwell is I oversee not only the operational side of preventative maintenance, risk and insurance, and emergency management, but I also support the project management team.
Really, when we think of project management, on the property management level, we're thinking about offensive investment at the property level as well as defensive capital investment, and then the very important suite renovation program that we run here at Chartwell. When we think about offensive capital investment, for better context, you know, that these are kind of numbers from our 2025 budget. But really what that equates to on an offensive investment side is we run anywhere between 8-12 creative or growth or refresh projects within our properties on an annual basis. Some of these projects will be multi-year, and some of them we're able to wrap up within a 12-month period.
From a defensive capital investment side, we run anywhere from 300-400 strategic defensive projects on an annual basis. Really important. These are things like roofs, mechanical system investments, and these sorts of things. Very, very important to make sure that we're maintaining a clean, safe environment for our residents. When we think about suites, it's a big number, right? There's lots of investment that has occurred over the last 3-4 years within that space, and that really has been designed to support the occupancy growth here at Chartwell. As we come out of 2025 and transition into 2026, we're anticipating about a 20% decrease in investment in our suites with a shift into common area offensive projects.
While we see, you know, approximately a 20% decrease in suite renovation, we're actually seeing about a 50% increase in that common area in creative investments. Really important to think about those things. When we think about that project management side, also important to note, we have our own internal interior design team, so we're not outsourcing to different design firms. We have our own group within Chartwell that drives some of these renovations, so pretty exciting stuff to be sure. When we think about preventative maintenance supporting some of the investments we make on the property management side, it really fits hand in glove. We think about best practices at the site level, so maintenance routines, those sorts of things for our frontline staff.
We also think about standard terms and conditions and scopes for our third-party service providers. Very, very important focus there. From a risk and insurance perspective, some great work happening there as well. You can see about CAD 5 million-CAD 6 million per year in claims. That equates to about 950 incidents that our team manages on an annual basis. Emergency management. We know by this afternoon, these things come up, and it's important that we train our teams both at the regional level and the site level to be ready and able to respond in an emergency.
I wanna spend a little bit of time taking you through how we invest in our properties from a renewal perspective. When we think about investing into a property, it typically starts about 12 months before we actually get boots on the ground and start investing. We work with our operational partners, so some of the work that Colleen does. Do we have the right food programs? Do we have the right technology in place? Do we have the right programs? How can we structure the renovation to support the living environment? Think about ambiance of the space. That's where our design team comes in. Then think about strategic investment in building systems that supports the resident experience.
Why that's so important is when we finish a renovation, we're investing CAD millions into properties. We want to be able to step away from that property for 3-5 years to let it operate, increase revenue, and increase NOI. Really important, and this has served us extremely well in the last 3-5 years. The approach is truly collaborative, as I spoke before. We take that interdisciplinary approach and really think about how do we build collateral within that community to get people excited about the renovation. We talked about food programs. We did talk about resident experience as well, but also marketing comes in here as well to build that excitement as we're starting to renovate a property.
The really important component of this is we do this while we're occupied. We do not decant our properties as we renovate them. We work to maintain occupancy throughout the renovation, which allows us to continue to generate revenue as we move forward. You know, that top-down approach, roof can't have that leaking, envelope, systems and aesthetics, and we just work our way down from there. Very important, and it served us well in the previous years. I want to take you guys through, spend a little bit of time talking about investment philosophy here at Chartwell. We think of capital investment at the property level through two lenses. The first lens is a bit of a longer view.
We operate off of a 15-year capital strategy, and what that allows us to do is look at not only building components like roofs, chillers, other components, from a lifecycle perspective and be able to map cash flow out, but it also allows us to go into renovations, as you see on this, top box here, and inject the right amount of capital at the right times to make sure that we're keeping that renovation fresh. We strive to get anywhere, depending on market conditions, anywhere from 10 to 15 years out of our renovation. You can imagine, if you walk away from that renovation and don't go back within a period of time and refresh decor, provide paint, and do these types of upgrades, you start to lose that aesthetic.
Really important that we're managing that and forecasting that capital. More in the short term view of capital investment. This lower section here, it's a simple risk matrix, we apply to our five-year outlook. We simply look at probability of something occurring or failing, and then we map that back to impact. We focus on things that are gonna have or that are likely to fail, as well as have a significant negative effect on operations. This is really how we select that 300-400 projects on an annual basis. It really drives consistent investment, risk managed, a risk-adjusted approach across the country.
Again, serving us very well and really making sure that defensive capital is going to the right places on an annual basis. This is the exciting part for me. This is some of the results that we see during our renovations. Oak Ridges here is a great little property that we have here in Richmond Hill, six-story, about 130 suites, built in 2012. As you can see, it's not in bad shape, you know, pretty good condition. Doesn't require a huge uplift, but it was just time to give it a bit of a facelift and clean it up.
You can see by the results, these are some of the results of the internal design team just going there and injecting the right amount of capital into the right places. Again, not tearing down walls and reinventing the wheel, but focusing on areas like the entranceway, lounges, elevator lobbies to really create that new, fresh environment. The results, pre- and post-renovation really speak for themselves. Going from 75%-91% occupied, with an increase in NOI of 17%, post-renovation. Great results on this renovation. This one, Valley Vista, actually is interesting. I think Vlad spoke about it as one of our special communities, from a culture perspective.
Again, 6-story property located in Vaughan, built in 2009, about 140 suites. A little more vintage. I think we can agree on the carpet and the café. It definitely was time to do some modernization work here. The unique thing here is we executed on defensive capital at the same time. We invested about CAD 650,000 in a roof project, HVAC replacements and upgrades, as well as a full kitchen renovation to make sure that we were supporting the food program. Where that landed us post-renovation, again, 81%-97%, and a significant growth in NOI post-renovation.
Happy to share, at the end of this year, we're just about at 99% stabilized occupancy here, with a NOI or an anticipated NOI at about 30% lift by the end of the year. Really great results at this property. The next thing I wanna take you through, I spoke a little bit about risk management and how we manage our insurance claims and how we try to target investment strategies around reducing that insurance spend year over year. We use live data to be able to track that. We look at month over month, quarter over quarter where we're having losses within the organization, both from a sites perspective, but a geography perspective.
We tailor our strategies around those losses so that we can anticipate capital investment in those areas to reduce risks in specific areas, as well as target training programs and preventative maintenance programs across the portfolio to support that. How we maintain something in say Northern Alberta or in a cooler market is different than what we do in Windsor. Important to kinda think through those things. This approach allows us to do that. Last but definitely not least is around sustainability and environmental responsibility. This is a core value for Chartwell. Very, very important to what we do. We're really happy to announce that in 2026 we've engaged in a new strategy when it comes to environmental responsibility.
There's really three core components of the strategy. The first is really a continuation, you know, capital investment at the site level. We look to improve efficiency over time, so buying the right HVAC equipment, putting in the right roofs and envelope systems to increase efficiency of the properties, while leveraging local and national rebate programs. The second pillar around energy management focuses around benchmarking not only within our own properties, so against similar archetypes, but industries as well. This leading into 2026, we're really excited. We're gonna be able to benchmark against other retirement operators and start to understand how we're performing in the market and start to target strategies to reduce energy on a per suite basis. Some great work happening there.
Last but not least in this strategy is waste management. Something that has a bit of an ick factor, but is really, really important. There is no away in waste management. All of this goes somewhere. Our waste management strategy focuses on reducing diversion as well as processes and the way that we move waste to our properties. Again, looking forward to seeing some of the results as we cycle through 2026 on that. With that, I'll pass it over to Jonathan.
Hi, everyone. I'm Jonathan Boulakia. I'm Chief Investment Officer and Chief Legal Officer here at Chartwell, and I've been here for 18 fabulous years. You know, when I started, I was a very young general counsel hired here, and the title sounds way more impressive than it actually was at the time because I was a department of one. But I am here now to talk about our growth strategy. Let's talk about it. Our growth strategy here at Chartwell is centered on three pillars. The first pillar is acquisitions. We've traded on the buy side and sell side, we've traded approximately CAD 3 billion of assets in the last two years. We focused on the growth side. We focused our growth on our core markets and on urban markets within that core.
We've acquired newer, larger, more efficient properties, and we generally like when we're buying or developing properties, we generally like continuum of care properties. A continuum residence would be a residence that has options for fully independent seniors and for seniors who require light or heavier care. As Karen mentioned earlier, our vision is making people's lives better, and we really believe that giving our residences, our residents options is important for them. For the past two years, we've been buying many properties. We've been very acquisitive, and we've generally been buying newer properties well below replacement cost. Our second pillar is development. Although we've been buying, we know that we're at a point in the real estate cycle where we have many acquisition opportunities, but those conditions won't last forever.
We're laying foundations for an important pipeline of new properties so that our portfolio remains current and relevant for many years to come. Certain developments are penciling out now, and we've actually commenced construction on those, and they're generally on properties for which we have excess land. At the same time, we're entering into strategic partnerships across the country for off-balance sheet development. We have case-specific variations of that off-balance sheet development, and of those development partnerships. For some, we will put in a little equity, and for others, we won't. For some, we might be a mezz lender, and others we won't. They will vary from deal to deal, but the one common element is that they're there to provide us with a pipeline of new state-of-the-art assets. That's the goal.
These partnerships are generally with vertically integrated developers and who have some skin in the game. What we've learned is that it's pretty important for us to be perfectly aligned with those developers. We like to have equity partners on these development projects. Our third pillar is optimization, which we've talked a little bit about. We're equally focused on future protecting our portfolio. Non-core assets have been and will continue to be repositioned or sold. Adam just spoke about some of our successful repositionings, and those are gonna continue. We're continuously reviewing our portfolio. Non-core assets have been identified for a variety of factors, including local market conditions, location, local competition, inbound development, their size, future CapEx requirements, and general efficiency. As I mentioned, in the past two years, we've grown in all of our core markets.
We've acquired 38 properties or announced the acquisition of 38 properties representing over 9,000 suites. As I mentioned, we have close to CAD 3 billion of acquisitions, dispositions, and announced developments. The average cost per suite acquired is just under CAD 300,000. This map also includes 4 development projects already in construction. One in Alberta, funded by a mezzanine loan, and 3 in the Greater Montreal area. We expect our acquisitive trend to continue. Let's contrast our existing portfolio with our recent acquisitions. We're making a concerted effort to refresh our portfolio with newer, larger, and more efficient properties. The average age of our 2020, 2024, and 2025 acquisitions is 7 years. As I mentioned, we also have 4 developments that have commenced construction and that will come online in the next 2 years.
Continuation of our development pipeline and strategic acquisitions, coupled with our optimization efforts, will continue to bring the average age of our portfolio down, average size of our residence is up, and it will help maintain our high occupancy levels and ensure relevance for our portfolio for the mid and long term. As I mentioned, we have an important pipeline of off-balance sheet development with over 6,000 suites currently contemplated and at various stages of negotiation and readiness. This map highlights our purposeful approach to building this pipeline. Some of these projects on the map are ready to go or actually in construction. Some are still being negotiated, and some of these represent excess land with identified potential.
All of these projects, though, are real, meaning the land is there, the partners are lined up or are being lined up, and the plans are in place or in the works. We expect 2026 to be a pivotal year for commencing a meaningful number of development projects. On screen, you'll see some pictures of some of the fabulous properties we acquired in 2024, and I'll just highlight just a few of them. Chartwell Le Prescott, which is in the top row, was acquired from our partner, Batimo, in Quebec. We were involved in the site selection, design, and oversight of the build. We've now commenced construction of phase two, which includes more retirement suites and seniors apartments. Chartwell Le Jules-Verne in the third row on the left.
We own this property 50/50 with the vendors, but we expect to buy them out of this and 4 other properties in the next 3 or 4 years. This new complex also includes seniors apartments. Chartwell Edgewater, which we expect to open in the next couple of weeks. You can see on the bottom row. This was a forward purchase, and is adjacent to a memory care building, which we acquired at the same time, creating a campus of care. This high-end independent living residence is waterfront and boasts incredible views of Long Lake in Nanaimo. Chartwell Edgewater and Chartwell Vista, which also boasts incredible views of the harbor in Esquimalt, are our first entry into Vancouver Island after a multi-year absence. Here are our 2025 acquisitions.
Some of these will likely close in 2026, and there are a few more that I'd like to highlight. Chartwell Rosemont in the top left corner is a large complex with various amenity and service levels located center ice in Montréal. Chartwell Angrignon in the top right corner is a large, older complex, also in Montréal, that we believe has maintained its shine, and with some CapEx dollars will be very well positioned for growth well into the future. Chartwell Victoria Harbour represents further expansion on Vancouver Island in a center ice location, just steps from the Fairmont Empress Hotel. Riverstone in London, which we expect to close in 2026, is a cutting-edge, sustainable complex that features solar panels to create a mini grid for the surrounding community. This is a really great ESG initiative for Chartwell.
Finally, Chartwell Panorama and L'Azalée in the bottom right corner, which we just announced, are also located in the Greater Montreal Area, and these are the tallest buildings in our portfolio at 31 and 30 stories respectively. We clearly see a unique opportunity for growth in our markets. We're buying at attractive pricing. Debt and equity markets have been available to fuel that growth, and the cost of construction and interest rates are more conducive to development. Market rate growth also helps, but we wanna ensure that this growth is done responsibly and without straying from our strategy. We introduced parameters for that growth. These aren't rules. There might be some exceptions for the right deal, but these are the guidelines we're going to live by.
We won't dilute our FFO by more than 5% in any given year for the aggregate of our acquisitions of non-stabilized properties and on-balance-sheet development. We won't commit more than CAD 200 million in any given year to the on-balance-sheet development. Our maximum annual exposure to forward purchases of assets is CAD 500 million. Our maximum total aggregate exposure to forward purchases of assets is CAD 1.5 billion. We won't expose more than 10% of our balance sheet to a single partner. Our maximum mezzanine loan volume as a lender is CAD 75 million, with half of that as a single borrower limit. We will not pursue more than CAD 500 million of development with a single developer at any given time.
We think that these parameters will allow for our continued fueled growth, but at a responsible pace. Thank you. I'll turn it over to Sheri, I think, to wrap it up.
Potentially. Yes. Thank you, Jonathan. Good afternoon. I'm Shari Lafontaine, SVP of Finance. I've been with Chartwell for 18 years now, holding various responsibilities within the finance team, but the majority of my time has been focused on financial planning and analysis. Today, I'll be sharing details on how we think about capital at Chartwell, including how we evaluate our capital requirements and how we assess various capital sources to meet those requirements. The last couple of years have been extremely active for Chartwell, the busiest in the company's history, both on the capital market side and on the acquisition and development side. Over this period, we've increased our exposure in the debenture market by CAD 550 million. We now have CAD 800 million outstanding, which represents 27% of our debt stack.
We've also been leveraging the ATM tool to support property acquisitions and have raised CAD 500 million through this program. In 2024, we did the largest bought deal for any real estate company, and this capital supported two portfolio acquisitions. In addition, we have increased our mortgage financing by CAD 1.2 billion. Overall, we've raised CAD 2.6 billion of capital over the last two years. We've used this capital to purchase CAD 2.4 billion of properties, and that's at our share, including both completed and announced transactions. We have funded our development pipeline to the tune of CAD 190 million and have supported the sustainment of our portfolio through CapEx investment of CAD 180 million. How do we think about deploying capital, and how do we evaluate capital allocation choices?
What guidelines are we assessing when we evaluate projects? Jonathan discussed the guidelines for growth on external capital deployment. In addition to those guidelines, what is really important to us from a financial perspective when we're making decisions about deploying capital at individual projects is number one, is it accretive to FFO per unit on a stabilized basis? Number two, does the unlevered IRR of the investment exceed our weighted average cost of capital? We believe that if we can meet these two critical financial measures, we will continue to be able to invest capital externally to support our robust FFO growth targets. Okay, how do we think about capital deployment for internal growth? We spend over CAD 100 million of total CapEx annually.
It's not always easy to distinguish what is maintenance CapEx that sustains our portfolio and what is accretive CapEx that enhances the property's ability to generate NOI. When we're looking at suite upgrade programs or accretive projects in our properties and evaluating which properties will get the capital, we look at business cases and compare the ROI. Generally, we're looking at whether the forecasted rent differential generated by the investment is higher than the net present value of the investment. The final pillar of capital deployment is our unit holders. After our cash flow from operations covers our capital needs for internal growth and sustainment, what we have left over is available for distribution. For many years, pre-pandemic, we sustained a distribution growth program with steady annual increases, and that is something we strive to return to.
We have pegged 60% payout ratio as the distribution level that will yield sufficient cash flow to support our ongoing growth while covering both our CapEx requirements and distributions to our unit holders. What capital sources do we have access to, and what criteria do we use to assess which ones to utilize? We have several different levers we can pull to access capital. We have equity, cash flow generated from operations, cash proceeds from non-core property sales, and equity capital markets. There's debt. We've got term loans, credit facilities, mortgages, and the debenture market. We also consider other sources of capital, including our development and joint venture partnerships. As we forecast and model out our capital requirements, the decision criteria we're looking at when marrying up the sources with our needs are cost, and this includes both issuance costs and dilution. Leverage.
While we don't typically look at leverage on a deal-by-deal basis, how we finance each acquisition or capital requirement does impact how we're trending towards our 7.5 times debt-to-EBITDA ratio target. There's flexibility, and when we say flexibility, we're really thinking about how restrictive the form of capital is. For example, it could be on covenants or, terms or future amendments. Lastly, we're looking at availability. Current and future availability of capital is a big consideration. As we know, our ability to access different capital markets can open and close, often with little notice. When it comes to our debt alternatives, there are benefits and drawbacks of each. Term loans for us are mainly used for short-term, bridge financing.
Conventional mortgages are only typically used where properties are not stable enough to have CMHC financing or when there's a partnership or a strata in place. CMHC financing and debentures, these are Chartwell's main sources of debt financing, and where CMHC financing is favorable on cost and availability, debenture financing is favorable on timing and flexibility. It's a matter of balancing these criteria, based on the environment we find ourselves in. Cost, we know it's a big determinant in our choice of debt alternatives, and it does vary considerably. For example, with debentures, our pricing has come down significantly over the last two years. Our spreads have reduced by over 100 basis points, and given they don't amortize, it can be a very cost-attractive option on a net present value basis.
Historically, CMHC financing is our lowest cost, debt financing, even after you include the added cost of the insurance premium. We look at flexibility, and debentures are our most flexible source of debt financing, as they're not secured by a specific property. This gives Chartwell flexibility when it comes to supporting our portfolio optimization strategy. Timing, that is also a consideration. When the debenture market is available to Chartwell, the time to fund this capital is relatively quick, whereas CMHC financing can take 3-6 months, depending on the underwriting process and the request backlogs. Finally, we're looking at availability, and through all the cycles that Chartwell has been through, including the pandemic, CMHC financing has always been open to us, whereas access to other forms of debt can change with market conditions.
We continually evaluate these four criteria as markets change but do expect that CMHC financing will continue to be the most favorable debt financing source for Chartwell and will continue to make up the majority of our debt stack. Last but not least, I think we've all said that on our slides. Equity alternatives. Firstly, we're utilizing free cash flow. We have it on hand. There's no need to fund it from anywhere. There's no incremental cost associated with it. The more we can generate free cash flow, the more profitably we can generate growth. After free cash flow, we'll look to fund growth through our portfolio optimization strategy, where we're selling non-core properties and reinvesting those proceeds in newer, larger, more efficient properties in core markets. Our third and fourth options are the ATM program and bought deals.
We would always love to use the ATM program over a bought deal, just given the differential in the cost between the two. That decision is actually probably more of a function of the size of our capital need. ATMs are great for individual property acquisitions, and a bought deal is more appropriate for larger portfolio acquisitions, and that's precisely how we've been using the equity markets over the last two years. With that, I will hand things over to Vlad.
Thank you, Shari Lafontaine. Well, that concludes our prepared remarks. I wanna thank all our presenters today. Great job, guys. Really appreciate it. Thank you.