Q1 2022 Boardwalk Real Estate Investment Trust Earnings Call
Good morning, ladies and gentlemen, and welcome to the Boardwalk Real estate investment Trust first quarter 2022 earnings Conference call.
At this time all lines are in listen only mode.
Following the presentation, we will conduct a question and answer session.
If at any time during this call you require immediate assistance. Please press star zero for the operator.
This call is being recorded on May 10, 2022.
I would now like to turn the conference over to Eric Powers. Please go ahead.
Thank you Miranda and welcome to the Boardwalk right 2020 to first quarter results conference call with.
With me here today are Sam Coleus, Chief Executive Officer, Lisa <unk>, Chief Financial Officer, James Hall, President and Rick and head of acquisitions.
Please note that this call is being broadly disseminated by way of webcast. If you have not already done. So please visit <unk> dot com slash investors, where you will find a link to today's presentation as well as PDF files of the Trust's financial statements MD&A and supplemental information package.
Starting on slide two we would like to remind our listeners that certain statements in this call and presentation may be considered forward looking statements. Although the expectations set forth in such statements are based on reasonable assumptions boardwalks future operations and its actual performance may differ materially.
From those in any forward looking statements additional.
All information that could cause actual results to differ materially from these statements are detailed in boardwalks publicly filed documents I would like to now turn the call over to Sam <unk>.
Thank you Eric and welcome everyone to our Q1 2022 conference call starting on slide four our strategy continues to deliver solid results with our GAAP and non-GAAP measures that both per unit profit per unit net asset value and unit holder equity and fair value of investment prop.
<unk> all seen an increase from the prior quarter last year.
And last quarter.
Five <unk>.
Our Q1 2022 <unk> per unit growth is at four 6% from the same quarter last year, despite inflationary pressures.
Six our strategy to create value for our stakeholders begins with our people.
We are positioned and are so grateful for our extraordinary team who continues to innovate and deliver our places homes for our residents members in turn this leads to leading earnings performance, which we believe will continue to result in strong total returns.
All our stakeholders.
Our strategic focus is our.
Significant organic growth from utilizing our proven platform that focuses on operational excellence to optimize NOI growth. When we pair this with the current improvement in apartment rental market fundamentals, we are well positioned to accelerate on our organic growth trend.
Accretive capital recycling focuses on opportunistic investment into acquisitions development and investment into our own high quality existing portfolio with tactical unit buyback. These.
These opportunistic investments combined with our operational optimization have positioned boardwalk for increasing asset values within boardwalks diversified and high quality multifamily portfolio.
Our solid financial foundation provide flexibility on our balance sheet with our growing free cash flow and with CMA Sea insurance on 95% of our financings, which provides access to low cost mortgage capital with reduced renewal risk.
Okay.
Slide seven we are in the right place at the right time with a positive outlook on value and multifamily fundamentals.
Boardwalks existing exposure to strong rental demand unregulated markets with increased immigration significant organic growth as Alberta, Saskatchewan up some of the most affordable rental rates in the country with limited new supply versus demand in both international.
In Interprovincial migration.
Our work has compelling value currently trading well below our intrinsic value of $68 per trust unit declining.
Declining inventories of homes.
<unk> home prices and rising construction costs are all widening the gap between our replacement cost of our assets and our current valuation.
Construction levels remain low relative to historical levels with a stronger demand for housing.
Positive leasing momentum in our core markets is increasing revenues and asset values with increasing operating income.
In our largest market Edmonton the factors that have led to lower occupancy in the past are reversing now and helping to contribute to our overall occupancy gains. These factors are.
Omnicom.
Omnicom wave restrictions have now been lifted the cold weather spring and summer is now here University students are now returning blue collar jobs, which can't work from home are now being filled again and international migration is now returning with travel restrictions ease.
<unk> and the oversupply in Edmonton is being absorbed by an increase in demand and a flattening of new supply as many builders have moved to BC to build where there is a need for more supply.
Overall, new supply in Edmonton remains flat as condo construction has declined sharply offsetting the sharp increase in rental construction.
With apartment rental fundamentals balancing market vacancy has dropped resulting in stabilized pricing. The current trend reflects demand will soon outpaced supply in Edmonton similar to our southern Alberta market by summer with upward inflationary pressure on prices.
Slide eight the economy and labor market in Alberta has significant significantly improved with our jobs administer expecting our economy to bounce back to 2014 levels real time statistics published by the Calgary Real estate Board reflect home sales in Calgary continue.
To be strong with total sales and average prices up so far in may reflecting continued strong demand for affordability.
In addition to the positive impact that higher commodity prices are providing for our western Canadian markets with Alberta is physical bout budget now balanced there has been a steady stream of investment and job, creating announcements from the emerging technology and clean energy sectors.
As at the most recent data over 88000 jobs are now vacant and available in Alberta, which is approximately 30% growth in job vacancies since April last year.
<unk> nine shows our large presence in affordable and self regulated markets with Alberta, and Saskatchewan, representing 62, 4% and 10, 4% of our portfolio boardwalks current mark to market, which includes the reduction of incentives averages $145 per month and <unk>.
<unk>, two a significant $55 million revenue opportunity.
<unk> Tan our market and portfolio provides some of the most affordable rents in Canada when comparing to average income. In addition average projected population growth in our markets are outpacing new supply leading to strong apartment rental housing market fundamentals.
Our available supply and affordability are a great opportunity for new and existing Canadians looking for a new affordable place to call home.
CTV National News on Sunday also reported that Alberta now has the most affordable gasoline prices at $1 61, the leader as of last Sunday.
Slide 11 shows our retention continues to increase with our lower move outs and stronger move ins leading to occupancy gains.
With decreasing turnovers and a rising occupancy of approximately 96, 6%.
As per our appendix slide 32.
We are seeing more move ins from out of town has more existing and new Canadians move to Alberta and Saskatchewan.
Slide 12 shows our key operational metrics with actual occupancy of approximately 96, 6% incentives continue to drop occupied rent continues to increase with vacancy loss increasing slightly in the slower winter season still resulting.
And an increase in revenue this quarter versus last year.
Slide 13 shows continual improvement and net rental rates new lease over lease rates are now positive our total portfolio, new and renewal leases are climbing higher year over year, we have seen a significant improvement with restrictions easing and favorable.
<unk> fundamentals, we are seeing growing strength in our apartment rental fundamentals positioning us to capture a significant mark to market opportunity.
We would like to now pass the call on to Lisa <unk>, who will provide us with an overview of our portfolio performance operating margins balance sheet and repositioning results Lisa.
Thank you Sam moving to slide 14, as compared to Q4 of 2021 revenue growth for Q1 2022 was flat.
Similar to Q4 Q1 is a historical slower season and in addition, Q1 2022 was impacted by a colder than usual winter and the omicron variance.
As compared to Q1 2021 same property revenue grew by two 1% looking at future quarters. The trust expect positive sequential revenue growth driven by increased occupancy and increasing net rental rates as previously highlighted by Sam.
For Q1 2022 same property net operating income increased by one 2% as compared to the same period in the prior year.
Positive revenue growth was offset by an increase in operating expenses largely the result of increased utility costs.
Using fixed price contracts to balanced commodity price volatility. However is not 100% hedged and also experienced increased utility consumption in Q1 2022 as compared to the prior year.
During Q1 2020 to the province of Saskatchewan received a large credit from favorable restructuring of its cable and Internet program with the Saskatchewan provider. This led to a decrease in operating expenses when compared to Q1 2021.
On slide 15, consistent with prior years. The trust remained disciplined and focused on managing controllable expenses. Despite increases in non controllable costs, resulting in margin improvement of 50 basis points in 2021.
<unk> remains focused on managing controllable expenses and when coupled with our revenue growth potential will allow margins to continue to improve.
Slide 16 illustrates boardwalks mortgage maturity schedule, our mortgages are well staggered with approximately 95% of our mortgage balance carrying any insurance through the Canada mortgage and housing Corporation.
This insurance remains in effect for the full amortization of the mortgage and in addition to carrying the government of Canada backing provides access to financing at rates lower than conventional mortgages with the current estimated five year CMA sea rates of three 7%.
During the months of March and April and continuing to today bond yields have increased resulting in current interest rates above the trust maturing rates. However, the trust maturity curve remains staggered reducing the renewal amount in any particular year. Despite increases in interest rates mortgage financing continues to be a low cost of capital available to the trial.
Yeah.
Slide 17 summarizes our 2022 mortgage maturities to date, we have renewed or forward locked approximately 16% over 2022 mortgage maturities as well as secured $147 9 million in new financing, which included converting our construction loan on breo to assume you'd see insured mortgage as well.
As new financing related to our acquisitions.
Our underwriting criteria and our most recent submissions to see and we see and our lenders has remained in line with our historically conservative estimates.
Moving to the right of the slide we provide a summary of boardwalks available liquidity.
<unk> is well positioned with approximately $56 million in cash and subsequently funded financing as well as an undrawn $199 million operating lines.
This approximate $256 million in liquidity provides the trust with a flexible financial position.
Slide 18, the trust debt metrics continued to improve with an interest coverage of $2 99 in the current quarter. This continuous improvement is the result of strong financial performance led by cash flow growth.
Slide 19 illustrates the trusts estimated fair value of its investment properties, excluding adjustments for <unk> 16, which totaled $6 6 billion as at March 31, 2022, as compared to $6 4 billion as at December 31, 2021.
The slight increase in overall fair value is the result of increases in market rents at select sites and communities as market fundamentals improve current estimated fair value of approximately 193000 per door remains well below replacement cost.
Slide 20 provides a summary of the recycling of cash flow towards value add improvements to date, we have completed approximately 28% of total suite improvements, while aiming to complete 53% of our total portfolio common areas and amenity spaces by the end of fiscal 2022.
Our focus is to continue to deliver the best products optimizing our capital allocation for our value add program to our targeted resident member demographic. So we can continue to provide the most exceptional elevated experience at an affordable price.
<unk> increased market demands exceptional value and appealing returns with sustainable market rent adjustments.
Slide 21 illustrates our stabilized renovation return for Beddington court located in Calgary, Alberta, with a return of 13%, which exceeded our internal hurdle rate of 8%. In addition, this asset was awarded the 2021 building of the year for under 100 units, but the Calgary residential rental Association.
Our renovations continue to garner positive resident member testimonials, driving referrals and higher occupancy I would now like to turn the call to <unk> to discuss our acquisitions and development Rick.
Thank you Lisa year to date Boardwalk has opportunistically invested $117 5 million to acquire two communities highlighted on slide 22.
Both the peak of states and can more an art Glenn place in Brampton were acquired in Q1 2022 and are performing in line with our expectations Kenmore located in Alberta is a very tight rental market and is unregulated similar to our nearby bounce properties Argon places.
Located near our forty-five railroad property and will help us improve our operating efficiencies in advance of the lease up of our new property user.
These acquisitions were financed with $79 4 million in debt at 3% interest rate.
The trust continue continues to be active in sourcing accretive and opportunistic opportunities to expand.
Slide 23 provides a brief update on our active development pipeline.
Our Brampton development continues to progress on time and on budget with anticipated delivery of the first hour of the 365 unit Marquis community in Q4 2022.
Our aspire development.
Is directly adjacent to our Aurora acquisition in Victoria, and now has an approved development permit we continue to progress on entitlements at our second development in the Victoria area named the Marin our expected expectations for yield and cap rate remained unchanged.
We have removed conditions on another development site in Victoria, which will provide an opportunity to develop another estimated 250 units.
I would like to now turn the call over to James Hall.
Thank you Rick.
Slide 24 provides our stakeholders with our current and relative view on sources and uses of capital from a source standpoint, we believe that our growing internally generated cash flow property mortgage financing as well as equity from noncore asset dispositions currently represent the most attractive sources of capital for opportunities that arise.
These capital sources can be used to fund accretive opportunities such as our continued focus on platform innovation, our value add capital improvement program, New development opportunistic acquisitions and the investment in our own high quality portfolio at a discount to intrinsic value through our normal course issuer bid.
In the first quarter Boardwalk purchased and canceled 137500 trust units at a volume weighted average price of $55 25.
Since the reintroduction of our N CIB in November of 2021, Boardwalk has invested $31 $6 million in buybacks and view this investment as an attractive use of proceeds from recent noncore asset sales.
Our team will continue to update our view of capital sources and uses on a regular basis and as market conditions change.
Slide 25 provides detail on the exceptional value that boardwalks current trust units represent.
Our current trading price implies a value of approximately 164000 per apartment door and compares favorably to recent apartment market transactions.
Our <unk> of over $68 per trust unit equating to 193000 per apartment door represents an exceptional opportunity relative to market pricing and it remains well below the increasing cost of replacement.
Utilizing trailing 12 month property NOI on slide 26, boardwalks current trading price equates to an attractive five 1% cap rate on trailing NOI and is a significant spread to the current cost of available mortgage capitals as well as recent capitalization rates seen in transactions in our markets.
With a strong outlook to our leasing trends into the spring and summer months and NOI growth in our portfolio through inflationary expenses. This cap rate represents an attractive option and the potential for the trust to continue to invest in our own high quality portfolio.
Slide 27 provides a review of our 2022 expectations and guidance.
Since the introduction of our 2022 guidance in February we have seen a significant increase in both interest costs and utility prices and have adjusted our estimates for the balance of the year to reflect these increased non controllable costs.
Summarize the trust is anticipating same property NOI growth of between two and 5% in <unk> per unit performance of between $2 95, and $3 15 per Trust unit.
This tweak an increased range and our estimate for <unk> growth is being utilized given the volatility we have seen in interest rates.
Our boardwalk team is committed to leading in transparency and we will continue to update our stakeholders in the event of any change in conditions that may materially impact our forecast.
On slide 28, and following our previously announced 8% increase in our distribution our monthly cash distribution of $1 eight per trust unit on an annualized basis has been declared for the next three months as shown on this slide.
The trust continues to have an industry low payout ratio, providing significant cash flow reinvestment positioning boardwalk with ample capital for growth.
As we continue to grow our free cash flow our distributions will continue continue to grow alongside.
Lastly on slide 29, we have published our third annual ESG report that highlights and celebrates our team our residents and our community contributions to our collective environmental sustainable and govern in schools.
Our ESG report along with all our financial reports can be found on our website at <unk> Dot com slash investors.
This concludes the formal portion of our presentation and would now like to open up the phone line for questions Miranda.
Yes.
Thank you.
Ladies and gentlemen, we will now.
We begin the question and answer session should you have a question. Please press star followed by one on your Touchtone phone you will hear a three time acknowledging your request and questions will be in the order they are received.
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If you're using a speaker phone please lift the handset before pressing.
One moment for your first question.
Your first question is going to be coming from Jonathan culture with TD Securities. Please go ahead.
Thanks, Good morning.
First first question just on Edmonton, Sam you spend a little bit of time in your prepared remarks talking about it.
What how can we sort of think about the sort of progression of occupancy in that market over the next couple of quarters.
So Jonathan last month, our vacancy started out at seven ended up at five dropped 2%. This month, our rentals over move outs are on track to drop another 2%.
And June is just as strong as a month as may so that will get us to one or 2% vacancy by the end of June on availability.
It takes a month for residents to move in so rentals that we are making right now typically move in at the end of the month and next month and so we will have a very high.
<unk> see.
That we haven't seen in a while.
In our entire portfolio because the only real vacancy we have left is in Edmonton and that will that will get us up above the 97 to the 98%.
Total occupancy.
Okay.
That sounds good and then I guess the sort of related question is what is that once you do get up there.
You can start to push a little bit on on renewals and you are getting good traction now.
But how how high.
Do you think they can go do you think you can get six 7% and in Alberta.
We are getting data already in southern Alberta, we're getting higher actually on new leases in southern Alberta, and Saskatchewan, where getting inflationary increases.
Between 7% to 9% on new leases on our existing renewals.
We are seeing a slight move up from 4% to 6% to five 7% and so we're yes, we're seeing.
More inflationary reflected increases of about.
7% seven 8%.
Okay.
That's helpful I'll turn it back thanks.
Thank you.
Your next question will be coming from JD mall with BMO. Please go ahead.
Okay.
Wondering if you could talk a little bit about that.
Migration to Alberta.
What's driving improved rental demand, if we're running different natures pool and Cabo versus Edwin.
A lot of.
People from Ontario, and BC moving into Alberta offer a lower cost of living.
How much of it is from international integration, how much of it is sort of natural increases in demand at the local market.
Thank you Jenny.
Seeing.
A lot of folks from Toronto as published by our local Calgary Herald newspaper that is in discussion with Realtors and builders.
Or that are seeing more folks move.
From Toronto to Calgary, and Edmonton, and so we continue to see strong.
<unk>.
Sales in the multiple listing that's current and daily in Calgary and monthly in Edmonton in Edmonton very similar to Calgary.
And we're also now seeing a lot more international migraine migrants.
We are receiving our Ukrainian refugees.
And.
It's starting to increase in pickup because of the international travel restrictions and the.
The application process is improving it still still needs to be improved.
And the speed.
Processing international migrants.
It's still challenging on.
On the slower side and so if that picks up and improves we will see a continued increase throughout the summer of international migrants as well.
And words out Edmonton is the only real.
Significant city with vacant apartment units.
B for long next couple of months vacancy will essentially disappear and we will start renting turnover apartments like we are in the rest of our markets.
So I had mentioned basically the new Calgary.
It is and there's a reason Edmonton is the blue collar.
City and and.
Hiring and activities starts in the head office and then spending then flows into the field and the workforce and so there's a lot of hiring in the workforce.
Discussions with with our friends and family that are in the energy sector.
Our hiring like Crazy unquote, but the problem is it's really really difficult to find.
Find people because there is.
A shortage of workers in.
And so that's really the difficulty it's not jobs everybody.
Is creating jobs now and we're seeing that in our energy.
Producers as well.
So there's a lot of jobs.
There is some apartments still left in Edmonton not that this is a sales call or anything but.
Okay.
<unk> that's for sure it's not lost I'll just add their journey. It's James in addition in Edmonton Edmonton has as we know significant postsecondary institutions as well right. So you have universe yield from Alberta, Ian Mcewan University, we've got needs we've.
We've got three cohorts of students that should be coming back this summer as well and to Sam's point, we are anticipating a busy summer leasing season for all the students and these migrant workers and the new immigrants that are coming into the city. We all saw and welcomed a new unicorn Neo financial broke.
The billion dollar Mark here in Calgary, and and the province of Alberta adjust released a study recommending an increase of education.
Institute and expansion into the empty office, which would increase the supply of educated and smart workers.
Is desperately needed by all companies, we've got a big shortage of tech workers and that really will.
Further accelerate.
The growth in tech that we are seeing in Alberta, and so this empty office is becoming a great opportunity to.
To increase the.
The supply of educated folks that that will naturally increase the demand of companies coming here to higher educated workers a higher supply of educated workers. So.
Yes, we're seeing we're firing on all cylinders.
That's great no I just wanted to dig a little bit deeper because Sam you mentioned that Calgary and Edmonton are similar and certainly similar in size. But then you also alluded to Edmonton being more of a blue collar market. So would you say that for some of the I guess I would've province demand are our people.
Choosing Edmonton over Calgary, because of a widening cost differential like they're kind of cutting to Alberta, a bit agnostic on where they go or would you say that the typical migrants to what Calgary and Edmonton are somewhat different in that Edmonton had unique drivers or is it really spillover from Calgary getting fuller and more expensive.
Debbie the demographic and the workforce in Edmonton, absolutely attracts more trades.
And labor.
Labor force workforce population demographic, where Calgary with the head office.
Okay.
The more white collar demographic.
Attracts.
That demographic.
And yet that.
That is a result of that and also the student population is is much bigger.
Educational.
Facilities and Edmonton are much bigger you obey is bigger than the UFC and grant Macewan College Nate.
The secondary education in Edmonton is a larger.
Population than it is in Calgary as well joining.
It's James here, just to add to Sams comments affordability is exceptional alright, and Edmonton bolt ons coming home side on the rental rate side and again for those looking for that affordability looking for a little more purchasing power for that incremental dollar Edmonton and Calgary are quite attractive cities amongst other cities in Canada.
Okay, and then looking at your debt back I know boardwalks traditionally kept a lower weighted average term on the mortgages, but we've seen rates move obviously with the spread narrowing between five year and 10 years P. M H C and giving given the outlook for interest rates are you.
More inclined to be longer term focused on mortgage renewals or are you like to kind of stick to your five year renewal.
Sort of like a mid to low to mid single digit weighted average term.
Hey, Jamie it's James is always priority number one is going to be to try to ladder that maturity curve that we have you all of that said with the volatility that we've experienced in the market over the last seven weeks five years seems to be the bread and butter in terms of where volumes are and where the most attractive credit spreads are you all of that said.
To your point with the flatness of the current yield curve, there is attractive pricing a little bit longer whether that's 6789 10, I think youll find us balance balance that depending on what's available in that market. As you know we're in the market every single month.
But given this current maturity curve, you'll you'll likely see us do something fairly diverse for the for the balance of the year somewhere between five and 10, depending on attractiveness any given in any given month.
Okay, Great. That's it for me then I'll turn it back thanks.
Thanks.
Your next question will come from Matt <unk> with National Bank. Please go ahead.
Hi, guys.
Just wanted to follow up on Sam's commentary about the southern Alberta markets and just in the context of I guess, it's slide 13, the difference between renewal and new leasing spreads in Alberta.
What would those comments with regards to southern Alberta be indicative of April trends or is that what you're expecting.
Into further into the spring and then I guess at what point given those comments should we expect kind of <unk>.
Market rents to catch up with the incentive reductions youre getting on renewals.
Hey, Matt it's James here in southern Alberta, as yet to Sam's point.
New leasing spreads are quite positive in southern Alberta, and in fact, they've exceeded our renewal spreads in the month of April .
So we're talking kind of mid to high single digits on actually high single digits on new leasing spreads and on renewal spreads as you see reflected on slide 13 that as the Alberta average.
Alberta average is very very close to 5% right. So southern Alberta at Northern Alberta are actually very similar on renewal what we're seeing in southern Alberta is really strong pricing on the new leasing front.
And then I guess with regards to Edmonton given given the occupancy gains that you've noted I mean, obviously, there's a lag in terms of rental should we expect the new leasing environment, there I guess.
Maybe that's a 2023 item in terms of.
Getting there and are you using incentives at this point and new leases in and Edmonton.
It's James Yeah on new leasing spreads again, we're very close to seeing that inflection in fact on new leasing spreads.
In our most recent month, we were very close to flat.
To Sam's earlier point, we're picking up occupancy every single day in northern Alberta, and this is in advance of a really busy summer leasing season in advance of those three cohorts of students that are coming back in advance of a huge population growth from.
Our federal immigration policies, and so we would actually anticipate new leasing spreads in Edmonton to turn positive as we continue to build the occupancy that is a 2022 summer 2022 event.
Okay.
And then bringing all of that together, there's still a bit of a.
A wide range in same property NOI growth outlook.
Is that mostly costs related or is that just a question around just how strong.
Spring and summer leasing is going to be in these markets.
Hi, Matt It's Lisa why don't we why don't we dig down a little bit into our expense expectations I guess as we're looking at that same store guidance range just to provide more color and then and then we can elaborate on the revenue side. So overall from an operating expense bucket, which would include wages and salaries repairs and maintenance advertising insurance those costs, we were anticipating.
3% to 4% growth in those operating expense lines the.
The utilities as evidenced by what we saw in Q1 with the higher gas prices that we're seeing on that curve, we have forecasted those utilities to increase with a year over year growth of call. It 7% to 9% and then property taxes, we're forecasting around 3%. So overall I mean, we are expecting some cost pressures most definitely but do you anticipate especially.
In this world of inflation, where we are.
Doing as much as we can in a pretty good job, we think still managing those controllable expenses and then on the revenue side, maybe James can add some color, yes. So matti I can just add to <unk> points are.
Our same property NOI guidance range, we've actually tightened from what we had originally had I mean, there's the remains.
Some some gap for that more volatile expense environment at least I was referring to but.
We look at on the revenue side, you can see it in this trajectory and we disclosed that in our press release, you can see what's happening with leasing spreads you can see what's happening with occupancy there was a significant pickup in my radar preliminary occupancy for me is very close to 97% and again as Sam pointed out the trajectory on that occupancy continues to be very positive.
Okay, and I guess, one one more on guidance and then one more after that but.
In terms of the adjustment to guidance was that mostly a Q1 item in your outlook for the remainder of the year is pretty much as it was.
Or is there anything else.
It kind of gave you a caution other than the expenses that you've noted.
At this point.
On same property NOI, it's really just the utility expenses, we have Q1 reflected again, if we look at the leasing momentum that we have it's.
Quite strong on the F. A full front I mean, it's those interest costs right interest cost have moved 100 basis points on us since we reported our results in February I was a significant impact.
Frankly for for the entire industry in the entire sector and were not excluded from that yet.
No fair enough, we've captured that in our numbers and then.
Just on the buyback I think it was tied to asset sales.
But given where the share price has gone and what you think the value of your units or is there the potential now to do more on that front and maybe diving into that just investor.
Sentiment around Alberta, given that it is a.
The market you can capture inflation.
As we said Matt in our prepared remarks, I think R R and CIB or an investment in our own.
Our own portfolio at a five 1% cap rate.
We just can't find departments at those at those price levels, it's a $160000 a door I mean again transactions that we're seeing are well above that.
We will continue to evaluate our allocation opportunities each and every single day, but.
Reiterate that that we believe that especially at these price levels and investment in our own portfolio was a great use of our capital.
We all think.
Matt We also planned more dispositions towards the end of the year.
To recharge the.
Capital the equity capital.
Purchase.
Less.
Less expensive.
Equity.
Capital.
Our more expensive equity capital.
We still are seeing.
Pretty steady cap rate.
And.
The private markets so.
So we believe there is.
Opportunity to continue selling some of our non core assets and using that equity to purchase our <unk>.
That's expensive.
Equity capital.
Fair enough makes sense and I appreciate all the color.
Alright.
Yeah.
As a reminder, should you have a question. Please press star then the number one.
Your next question will be coming from Mike Mark.
With <unk>. Please go ahead.
Hi, there thanks, everybody.
Hello.
Pretty bullish comments that you guys had I mean.
Rent spreads pardon me catching up in northern Alberta to where they are in southern Alberta, and I guess.
If things continue on the track with their pet there.
Cause that Theyre on currently would it be safe to say that barring unexpected.
Yes.
Stabilized annual revenue growth for Alberta in excess of 5% is realistic to think about for 2020.
Well, that's what the rentals and occupancy gains and net lease over lease on new leases and existing leases are reflecting actually higher than that right now and are a market with.
Around one or 2% vacancy the only market that that's higher as Edmonton and we are seeing as we discussed rentals about move outs that will get us to that one or 2% vacancy market in admin and by the end of June So we'll have one or 2% vacancy in all.
Our core markets.
At this current.
Rate of rentals and at that point in time, what we're seeing in our other markets Southern Alberta, Saskatchewan.
Our.
New lease.
Of about 8% as of April a little bit higher.
A little bit higher this month currently.
And so we are yes.
Yeah.
That that is about it's a high single digit reflecting more inflationary.
Inflationary amounts current inflationary models.
Okay. Thanks.
Quick one for Lisa your G&A expense here administration expense.
I look at year over year, or just average or.
Quarterly numbers for 2021, it was down pretty substantially what should we be was there anything delayed.
Delayed and there are I guess.
Differently, where should we be thinking about in terms of a run rate for the rest of this year.
Yes that Q1 run rate, it's probably likely.
That you could use going forward for the remainder of the year. We do we are really managing those administrative cost as much as we can and so we do anticipate that G&A will be a little bit lower this year.
Okay, perfect and last one for me before I turn it back just on the topic you guys highlighted.
Favorable benefit of the.
Restructuring can be stable.
Cable and Internet provider in Saskatchewan can you remind me is that is that something that is included in the leases or has that recovered from your tenants.
Hey, Mike in Saskatchewan, we have we have different programs across our various provinces in Saskatchewan. It is something that we have provided our residents were working with our partner there to.
To move towards something similar to what we have in Alberta, which is one where we're not.
As a community provider.
Abiding that on behalf of our residents, but in the meantime in between time, we did have a very favorable.
Restructuring of our contractor that saw a significant decline in the cost of that service for our residents.
Alright, and my memory is a little foggy.
It was initiated I think from a couple of years ago, you remember what the change was in terms of what you Didnt, Alberta, and how that might be rolled over in Saskatchewan.
Yes, so in Alberta are really we have a partnership with our telco providers.
With which we provide very unique pricing to our residents here in Alberta, and we benefit from that.
Again from a revenue share with our partner there in Saskatchewan you know it is a structure where we are.
Procuring.
Internet services, and providing that to our residents and again the price of that or the cost of that has changed with this most recent contract.
And do you think there is an opportunity to transition Saskatchewan onto our model similar to Alberta.
The future or is it still further.
Further further away yes.
Likely in the next two to three years again, we're working with our with our partner there in Saskatchewan to move towards that but again in the meantime between time Theres a significant savings versus what we had previously.
Got it okay. Thanks very much.
Thanks, Mike.
There are no further questions at this time you can please go ahead.
Thank you operator as always if there are any questions or comments. Please do not hesitate to contact us we would like to say a very special. Thank you to our retiring trustee of 15 years, Mr Art, <unk> and a warm welcome to our new trustee Mandy Abramson.
Gratitude, we would like to thank our extraordinary team loyal residents CMA <unk> lenders, our unit holders and all our stakeholders. It really is all about our people.
Whose huge shoulders, we stand and as leaders we continue to do everything we can to support continued growth and extraordinary we really can't thank our extraordinary team and great leaders enough. We are pleased with our improving results on a foundation of exceptional value. We continue to provide a resident members our investors.
And all our stakeholders our home, it's much more than a place or location or future family, where love always lifts.
I couldn't be more important when choosing where to call home. Thank you again, everyone for joining us This morning, God bless us granted all piece.
Ladies and gentlemen, this concludes your conference call for today.
Thank you for participating and ask that you. Please disconnect your lines.