Q2 2024 Boardwalk Real Estate Investment Trust Earnings Call

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Operator: Good afternoon, ladies and gentlemen, and welcome to the Portwalk Real Estate Investment Trust's second quarter 2024 earnings call. At this time, all lines are in listen-only mode.

Speaker Change: Good afternoon, ladies and gentlemen, and welcome to the Boardwalk Real Estate Investment Trust's second quarter 2024 earnings call.

Operator: 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 July 31, 2024. I would now like to turn the conference over to Mr. Eric Bowers, VP of Finance and Investor Relations. Please go ahead.

Speaker Change: At this time, all lines are in listen-only mode.

Speaker Change: Following the presentation, we will conduct a question and answer session. If at any time during this call you require immediate assistance,

Speaker Change: Please press star zero for the operator.

Speaker Change: This call is being recorded on July 31, 2024.

Speaker Change: I would now like to turn the conference over to Mr. Eric Bowers, VP of Finance and Investor Relations. Please go ahead.

Eric Bowers: Thank you, Ina, and welcome to the Boardwalk REIT 2024 second quarter results conference call. With me here today are Sam Kolias, Chief Executive Officer; James Ha, President; Lisa Smandych, our current Chief Financial Officer; and Greg Tinley, our incoming Chief Financial Officer. Samantha Kolias-Gunn, Senior VP of Corporate Development and Governance, and Samantha Adams, Senior VP of Investment. We would like to acknowledge, on behalf of Boardwalk, the treaties and traditional territories across our operations and express gratitude and respect for the land we are gathered on today, and which we now know as Canada.

Speaker Change: Thank you, Ina, and welcome to the Boardwalk REIT 2024 second quarter results conference call.

Speaker Change: With me here today are Sam Kolias, Chief Executive Officer, James Ha, President, Lisa Smandych, our current Chief Financial Officer, Greg Tinley, our incoming Chief Financial Officer,

Speaker Change: Samantha Kolias-Gunn, Senior VP of Corporate Development and Governance and Samantha Adams, Senior VP of Investments

Speaker Change: We would like to acknowledge, on behalf of Boardwalk, the treaties and traditional territories across our operations, and express gratitude and respect for the land we are gathered on today and we now know as Canada.

Eric Bowers: We respect indigenous peoples and communities as the original stewards of this land. We come with respect for this land that we are on today, for all the people who have and continue to reside here, and for the rich diversity of First Nations, Inuit, and Métis peoples.

Speaker Change: We respect Indigenous peoples and communities as the original stewards of this land. We come with respect for this land that we are on today, for all the people who have and continue to reside here, and the rich diversity of First Nation, Inuit, and Métis peoples.

Eric Bowers: Before we get to our results, please note that this call is being broadly distributed by way of a webcast. If you have not already done so, please visit bwalk.com slash investors, where you will find a link to today's presentation as well as PDF files of the trust financial statements, MD&A, and quarterly reports. Starting on slide 2, we would like to remind our listeners that certain statements in this call and presentation may be considered forward looking.

Speaker Change: Before we get to our results, please note that this call is being broadly distributed by way of webcast.

Speaker Change: If you have not already done so, please visit bwalk.com slash investors where you will find a link to today's presentation, as well as PDF files of the trust financial statements, MD&A, and quarterly report.

Eric Bowers: Although the expectations set forth in such statements are based on reasonable assumptions, Boardwalk's future operation and its actual performance may differ materially from those in any forward-looking statements. Additional information that could cause actual results to defer materially from these statements is detailed in Boardwalk's publicly filed documents. I would like to now turn the call over to Sam Kolias.

Speaker Change: 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.

Speaker Change: Although the expectations set forth in such statements are based on reasonable assumptions, Boardwalk's future operation and its actual performance may differ materially from those in any forward-looking statements.

Speaker Change: Additional information that could cause actual results to defer materially from these statements are detailed in Boardwalk's publicly filed documents.

Sam Kolias: Thank you, Eric, and welcome everyone to our Q2 2024 conference call and, especially, a very warm welcome to Greg Tinling, our CFO as of August. Starting on slide four, our culture. From our humble beginnings 40 years ago in 1984, our resident members are at the top of our organization. Our leaders put our team first; our team puts our resident members first.

Sam Kolias: I would like to now turn the call over to Sam Kolias. Thank you, Eric, and welcome everyone to our Q2 2024 conference call, and especially a very warm welcome to Greg Tinling, our CFO , as of August 1st.

Speaker Change: Starting on slide four, our culture. From our humble beginnings 40 years ago, in 1984, our resident members are at the top of our organization.

Speaker Change: Our leaders put our team first. Our team puts our resident members first.

Sam Kolias: Guided by the Golden Rule, we have a peak performing customer service culture that creates exceptional results, as we can see on slide five. Our continued strong performance with GAAP and non-GAAP measures increasing from the same quarter last year; our same property net operating income growth increased 14.2% this quarter, as well as our funds from operation per unit of 16.9%, with the exception of profit, which decreased as a result of a fair value adjustment. I would now like to pass it over to Samantha Kolias-Gunn.

Speaker Change: Guided by the Golden Rule, we have a peak performing customer service culture that creates exceptional results, as we can see on slide 5.

Speaker Change: Our continued strong performance with GAAP and non-GAAP measures, increasing from the same quarter last year, our same property, net operating income growth has increased 14.2%.

Speaker Change: This quarter, as well as our funds from operation per unit of 16.9%, with the exception of profit, which has decreased as a result of fair value adjustments.

Samantha Kolias: Thank you so much, Sam, and congratulations to our team, our Boardwalk family, as we continue to deliver leading results. Macroeconomic conditions are robust in our core markets, as illustrated on slide six, demand remains strong. Alberta, our most significant market, continues to report record high interprovincial and international migration as a result of the Alberta Advantage. To quote our Premier, Danielle Smith.

Lisa Smandych: <unk> to report record high in our prevention and international migration as a result of the Alberta advantage to quote our Premier Danielle Smith, what makes the Alberta advantage are diversifying economy job opportunities World class educational programs that attract skilled talent and exceptional.

Samantha Kolias: What makes the Alberta advantage? Our diversifying economy, job opportunities, world-class educational programs that attract skilled talent, an exceptional quality of life, and affordability. Alberta has some of the most affordable rental rates in the country, which will continue to attract more prospective Albertans and Boardwalk resident members home. Please refer to our appendix for more data on the Alberta Advantage. Supply remains low relative to anticipated household formation as challenging development economics and labor shortages continue.

Speaker Change: Quality of life and affordability, all better had some of the most affordable rental rates in the country that will continue to attract more perspective, all Burton and boardwalk resident members' homes.

Please refer to our appendix for more data on the Alberta advantage.

Speaker Change: Supply remains low relative to anticipated household formation has challenging development economics and labor shortages continue we are working collaboratively with all levels of government and other stakeholders to encourage implementing proven public policy to help rebalance demand and supply over the longer term.

Greg Tinling: We are working collaboratively with all levels of government and other stakeholders to encourage the implementation of proven public policy to help rebalance demand and supply over the longer term. We would like to now pass the call on to Greg Tinling and Lisa Smandych, who will provide us with an overview of our quarter. Thank you, Samantha. Slide 7 shows our key operational metrics with high occupancy, lower incentives, and higher occupied rents, resulting in higher revenues for Q2 2024 compared to the same period a year ago.

Greg Lang: We would like to now pass the call onto Greg Lang and leases mandate, who will provide us with an overview of our quarter results strong balance sheet fair value and ESG Greg.

Greg Tinling: This is a reflection of key strategic decisions made to maximize free cash flow and diversify our product offering, yielding significant financial performance. Slide 8 highlights our FFO per unit and distribution growth. Boardwalk's minimum distribution policy, or maximum cash flow retention policy, resulted in an FFO payout ratio of 34.6% for Q2 2024.

Thank you Samantha slide seven shows our key operational metrics with high occupancy lower incentives and higher occupied rents, resulting in higher revenues for Q2 2024 compared to the same period a year ago. This is a reflection of our key strategic decisions made to maximize free cash flow and diversify our product offering.

Greg Lang: Yielding significant financial performance.

Speaker Change: Slide eight highlights our <unk> per unit in distribution growth boardwalks minimum distribution policy for maximum cash flow retention policy resulted in an <unk> payout ratio of 34, 6% for Q2 2024, our disciplined <unk> payout ratio continues to allow us to fund our organic growth opportunity.

Greg Tinling: Our disciplined FFO payout ratio continues to allow us to fund our organic growth opportunity and reinvest it in cash flow. Slide 9 illustrates our leverage reduction, highlighting our leverage metrics with respect to debt to total assets and debt to EBITDA. Boardwalk is naturally deleveraging, resulting in improved debt metrics, with debt to total assets at 40.8% at June 30, 2024, compared to 43.2% at December 31, 2023, and debt to EBITDA of 10.75% at June 30, 2024, compared to 11.02% at December 31, 2023.

Speaker Change: And reinvested with cash flow.

Speaker Change: Slide nine illustrates our leverage reduction highlighting our leverage metrics with respect to debt to total assets and debt to EBITDA boardwalk is naturally deleveraging, resulting in improved debt metrics with debt to total assets at 48% at June 32024, compared to 43, 2% at December 31, 2023 and debt to <unk>.

Speaker Change: EBITDA of $10 75 at June 32024, compared to 11.02 at December 31 2023.

Greg Tinling: Slide 10 shows strong, steady leasing spreads on new and renewed leases within our self-regulated, resident-friendly, centric model, keeping retention and referrals high and our turnover and expenses low. Year over year, we have seen a significant improvement. Existing leasing spreads on renewals are strategically moderated to keep providing resident-friendly affordable housing options in our core markets, while lowering our costs and steadying operational results. A win-win for all our stakeholders.

Speaker Change: Slide 10 shows strong steady leasing spreads on new and renewed leases within our self regulated resident friendly's centric model, keeping retention and referrals high and our turnover in expenses low.

Greg Tinling: Slide 11 shows continued strong and steady sequential rental revenue growth, including 2.3% growth in Q2 2024 compared to Q1 2024, a result of strong leasing spreads during a seasonally higher period from a leasing volume perspective. Slide 12 highlights Boardwalk's large presence in affordable and non-price-controlled markets, and with approximately 73% of our portfolio in Alberta and Saskatchewan, we are well positioned for sustainable organic growth. Boardwalk's current mark-to-market, which includes the reduction of incentives, averages $177 per suite and equates to an approximate $70.6 million revenue opportunity.

Speaker Change: Year over year, we have seen a significant improvement.

Speaker Change: Listing leasing spreads on renewals are strategically moderated to keep providing resident friendly affordable housing options in our core markets, while lowering our cost and steadying operational results a win win for all our stakeholders.

Speaker Change: Slide 11 shows continued strong and steady sequential rental revenue growth, including two 3% growth in Q2 2024 compared to Q1 2024, a result of strong leasing spreads during a seasonally higher period from a leasing volume perspective.

Speaker Change: Slide 12 highlights boardwalks large presence and affordable and non price control markets and was approximately 73% of our portfolio in Alberta, and Saskatchewan, we are well positioned for sustainable organic growth.

Speaker Change: <unk> current mark to market, which includes the reduction of incentives averages $177 per suite and equates to an approximate $70 6 million dollar revenue opportunity.

Greg Tinling: With the current supply-demand imbalance, we anticipate market rents will continue to increase, resulting in a continued mark-to-market revenue opportunity. Moving to slide 13, for Q2 2024, same property net operating income increased by 14.2% as compared to Q2 2023, with revenue growth of 9.5%. For the six months ended June 30th, 2024, same property net operating income increased by 13.9% with revenue growth of 9.4%. Alberta, the Trust's largest region, saw revenue growth of 10.8% in Q2 2024 and 11% for the six months ended June 30, 2024, as compared to Q2 2023 and the six months ended June 30, 2023, respectively.

Speaker Change: With the current supply demand imbalance, we anticipate market rents will continue to increase resulting in a continued mark to market revenue opportunity.

Speaker Change: Moving to slide 13 for Q2 2020 for same property net operating income increased by 14, 2% as compared to Q2 2023 with revenue growth of nine 5% for the six months ended June 32020 for same property net operating income increased by 13, 9%.

Speaker Change: With revenue growth of nine 4%.

Speaker Change: Alberta, The trust largest region saw revenue growth of 10, 8% in Q2, 2024 and 11% for the six months ended June 32024, as compared to Q2 2023, and six months ended June 32023, respectively opt.

Greg Tinling: Operating expenses increased by 1.6% in Q2 2024 and 2.6% for the six months ending June 30, 2024, primarily due to higher wages and salaries as a result of inflationary adjustments at the beginning of the calendar year and higher utilities from an increase in utility rates. The team remains committed to ensuring focus and discipline when managing controllable operating costs. On slide 14, administration costs increased just over $1.7 million as compared to Q2 2023 and increased $1.4 million compared to Q1 2024.

Speaker Change: Operating expenses increased by one 6% in Q2 2024, and two 6% for the six months ended June 32024, primarily due to higher wages and salaries as a result of inflationary adjustments at the beginning of the calendar year and higher utilities from an increase in utility rates.

Speaker Change: <unk> remains committed to ensuring focus and discipline when managing controllable operating expenses.

Speaker Change: On Slide 14 administration costs increased just over $1 $7 million as compared to Q2, 2023 and increased $1 $4 million compared to Q1 2024. The increase was driven by inflationary wage adjustments at the beginning of the year and increase in software costs, including cyber security and new software to <unk>.

Greg Tinling: The increase was driven by inflationary wage adjustments at the beginning of the year, an increase in software costs, including cyber security and new software to improve operating efficiencies, as well as increases in professional services such as legal, tax, and government relations.

Speaker Change: Prove operating efficiencies as well as increases in professional services, such as legal tax the government relations.

Greg Tinling: Specific to Q2 2024 is approximately $100,000 for our new customer service platform, while also incurring approximately $325,000 for the historic call center. Beginning September 2024, the trust expects to only incur approximately $100,000 per quarter. Also, there were increased travel costs specific to Boardwalk participating in the Homes of Hope program, a cost of approximately $200,000.

Speaker Change: Specific to Q2 2024 is approximately $100000 for a new customer service platform. While also incurring approximately $325000 for the historic call Center, beginning September 'twenty 'twenty four the trust expects to only incur approximately 100 to $100000 per quarter.

Speaker Change: Also there were increased travel cost specific to boardwalk participating in the homes of hope program a cost of approximately $200000.

Lisa Smandych: Deferred unit-based compensation increased due to an increase in the number of participants as well as the cost of the program, noting that historically the highest deferred unit-based compensation expense is in the second quarter. I would like to now pass the call on to Lisa Smandych to discuss the Trust's financial foundation and ESG.

Speaker Change: Deferred unit based compensation increased due to an increase in number of participants as well as the cost of the program, noting that historically the highest deferred unit based compensation expense is in the second quarter.

Lisa Smandych: I would like to now pass the call onto visa mandates to discuss the trust's financial foundations and ESG Lisa.

Lisa Smandych: Thank you, Greg. Slide 15 illustrates Boardwalk's mortgage maturity schedule. Our mortgages are well staggered, with approximately 96% of our mortgage balance carrying NHA 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's backing provides access to financing at rates lower than conventional mortgages, with a current estimated 5-year and 10-year CMHC rate of 3.85% and 4.15%, respectively. Though current interest rates are above the trust maturing rates, the trust maturity curve remains staggered, reducing the renewal amount in any particular year.

Thank you, Greg Slide 15 illustrates boardwalk mortgage maturity schedule, our mortgages are well staggered with approximately 96% of our mortgage balance Kieran and AJ insurance through the Canada mortgage and housing Corporation.

Lisa Smandych: Insurance remains in effect for the full amortization of the market and in addition to the government of Canada's backing provides access to financing rates.

Lisa Smandych: The financing at rates lower than conventional mortgages with a current estimated five year and 10 year CMA sea rate at 385% and $4, one 5% respectively.

Lisa Smandych: So current interest rates are above the trust maturing rates the trust maturity curve remains staggered reducing the renewal amount in any particular year Lastly, the trust has an interest coverage of 286 in the current quarter.

Lisa Smandych: Lastly, the trust has an interest coverage of 2.86% in the current quarter. Slide 16 highlights our 2024 mortgage program. To date, we have renewed or forward-locked $244.6 million at an average rate of 4.48% and an average term of... Current underwriting criteria in our most recent submissions to CMHC and our lenders has remained in line with our historically conservative estimates. Moving to the right of the slide, we provide a summary of Boardwalk's available liquidity. The Trust is well positioned with approximately $120 million in cash and subsequently funded financing, as well as an undrawn $196 million operating line.

Lisa Smandych: Slide 16 highlights our 2024 mortgage program.

Lisa Smandych: We have renewed our forward loss $244 6 million at an average rate of 4.48% and an average term of six years for an underwriting criteria in our most recent submission of the GMAC and our lenders has remained in line with our historically conservative estimates.

Lisa Smandych: Moving to the right of the slide we provide a summary of boardwalks available liquidity. The trust is well positioned with approximately $120 million in cash and subsequently funded financing as well as an undrawn $196 million operating line. This approximate 316 million in liquidity provides the trust with a flexible financial position.

Lisa Smandych: This approximate $316 million in liquidity provides the Trust with a flexible financial position. Furthermore, subsequent to June 30, 2024, Boardwalk added an additional $50 million demand facility to upsize our total capacity. Our credit facility had remained unchanged since 2007, and given the cost of inflation in recent years, Boardwalk felt it was prudent to keep in line with current asset values and position ourselves favorably for opportunistic, strategic, and accretive acquisitions that may present themselves in the future. Slide 17 illustrates the trust's estimated fair value of its investment property.

Lisa Smandych: Furthermore, subsequent to June 32020 for Boardwalk added an additional 50 million dollar demand facility to upsize, our total capacity our credit facility has remained unchanged since 2007 and given the cost of inflation in recent years Boardwalk felt it was prudent to keep in line with current asset values and position ourselves favorably.

Lisa Smandych: Opportunistic strategic and accretive acquisitions that may present themselves in the future.

Speaker Change: Slide 17 illustrates the trust estimated fair value of its investment properties, excluding adjustments for Ifr 16, which totaled $8 2 billion as at June 32024, as compared to $7 6 billion as of December 31 2023.

Lisa Smandych: Excluding adjustments for IFRS 16, which totals $8.2 billion as of June 30, 2024, as compared to $7.6 billion as of December 31, 2023. The increase in overall fair value is the result of increases in market rents at select sites and communities as market fundamentals improve, as well as the acquisitions of The Circle and the Brenda Apartments in Calgary, Alberta, and Dawson Landing in Chestermere, Alberta, while being slightly offset by an increase in capitalization rates. The current estimated fare value of approximately $236,000 per apartment door remains below replacement costs.

Speaker Change: The increase in overall fair value as a result of increases in market rents at select sites and communities as market fundamentals improve as well as the acquisitions of the circle and the Brentwood apartments in Calgary, Alberta, and Dawson landing Interestingly, our Alberta, while being slightly offset by an increase the capitalization rates current estimated fair value of approximately.

Speaker Change: 236000 per apartment door remains below replacement cost.

Lisa Smandych: In consultation with our external appraisers, the capitalization rates, or CAF rates, used in determining Q2 2024 fair value, were unchanged from Q1 2024 and increased from Q4 2023 from adjustments made to the Trust's Ontario assets in London and Kitchener-Waterloo-Cambridge Markets. As it does every quarter, the Trust will continue to review completed asset sales transactions and market reports to determine if adjustments to cap rates are necessary Most recent published cap rate reports suggest the cap rates being utilized by the Trust for calculating fair value are within their estimated range. Slide 18 highlights our ESG initiatives. Using a disciplined capital allocation approach, we are focused on reducing emissions through reduced utilities consumption and, therefore, reducing utilities costs, while also promoting social and governance initiatives.

Speaker Change: In consultation with our external appraisers, the capitalization rates or cap rate used in determining Q2 2020 for fair value were unchanged from Q1 2024, an increase from Q4 2023 from adjustments made to the trust, Ontario assets and lending in Kitchener, Waterloo, Cambridge markets as it does every corner.

Speaker Change: The Trust will continue to review completed asset sales transaction and market reports to determine if adjustments to cap rates are necessary. Most recent published caffrey reports suggest the cap rates being utilized by the trucks for calculating fair value are within our estimated ranges.

Speaker Change: <unk> highlights our ESG initiatives using a disciplined capital allocation approach, we are focused on reducing emissions through reduced utilities consumption and therefore, reducing utilities costs, while also promoting social and governance initiatives. We encourage our stakeholders to view our 2023 ESG report available on the trust website.

Samantha Kolias: We encourage our stakeholders to view our 2023 ESG report, available on the Trust website. I would now like to turn the call over to Samantha Adams to highlight our capital allocation and discuss the development pipeline.

Speaker Change: I would now like to turn the call to Samantha items to highlight our capital allocation and discuss your development pipeline Samantha.

Samantha Kolias: Thank you, Lisa. On slide 19, as previously mentioned by Greg, we continue to prudently deploy some of our free cash flow to repositioning and value-add capital improvements at our existing communities. We currently have 19 projects underway or planned in 2024, which include adding to or improving common area amenities, which will further enhance our revenue growth, as well as resident satisfaction. In addition to our common area projects, we are also continuing with our suite optimization program, which is the conversion of underutilized storage or administration spaces that can be converted to rental suites.

Samantha: Thank you Lisa on Slide 19, as previously mentioned by Greg We continue to prudently deploy some of our free cash flow to repositioning in value add capital improvements at our existing communities.

Samantha: We currently have 19 projects underway or planned in 2024, which include adding to or improving common area amenities, which will further enhance our revenue growth as well as resident satisfaction.

Samantha: In addition to our commentary of projects. We are also continuing with our suite optimization program, which is the conversion of underutilized storage or administration spaces that can be converted to rental suites.

Samantha Kolias: Each project we undertake is evaluated individually, and we target at least an 8% return on cost, providing an accretive return on our capital. On slide 20, we are pleased to confirm that we have strategically allocated the net proceeds from the December 2023 equity raise to further support our growth and enhance the overall quality of our portfolio. As disclosed in Q1, we repaid our $57.2 million construction loan on 45 Railroad, which bore an interest rate of 6.6%, and closed on The Circle, a $77.6 million, 295-suite community located in South Calgary.

Samantha: Each project, we undertake is evaluated individually and we target at least an 8% return on costs, providing an accretive return on our capital.

Samantha: On slide 20, we're pleased to confirm that we have strategically allocated the net proceeds from the December 2023 equity raise to further support our growth and enhance the overall quality of our portfolio.

Speaker Change: As disclosed in Q1, we repaid our $57 $2 million construction loan on 45 railroad, which foreign interest rate of six 6% and closed on the circle of $77 $6 million 295 suite community located in South Calgary.

Samantha Kolias: This acquisition, which was a forward purchase, represents a stabilized cap rate of 5.75%, or about $263,000 per suite. The circle is currently unencumbered, which provides us with some additional balance sheet flexibility going forward. Most recently, we announced that we have a purchase agreement in place to acquire Elbow 58, which, like the circle, is a forward purchase. Elbow 58 is in the final stages of construction, and we anticipate closing on it in Q1 of 2025, subject to closing conditions.

Speaker Change: This acquisition, which was a forward purchase represents a stabilized cap rate of 575% or about $263000 per suite.

Speaker Change: The circle is currently unencumbered, which provides us with some additional balance sheet flexibility going forward.

Speaker Change: Most recently, we announced that we have a purchase agreement in place to acquire Allo, five eight which like the circle is a forward purchase allo five eight is in the final stages of construction and we anticipate closing in Q1 of 2025 subject to closing conditions.

Samantha Kolias: The property is a 255 suite, 6 story wood frame project, very well located, about 15 minutes south of downtown Calgary and a 2 minute walk to Chinook Centre Mall. With a purchase price of $93 million, this represents a stabilized cap rate of 5.75%. While we anticipate stabilization to occur in Q4 of 2025, we are initiating a pre-leasing program later this quarter. Dawson Landing is a 63-unit, 12-building, newly constructed townhouse development located in Chestermere, a rapidly growing community located approximately 30 minutes east of Calgary.

Speaker Change: The property is at 255 suite six storey wood frame project very well located about 15 minutes south of downtown Calgary and a two minute walk to Chinook Center mall.

Speaker Change: With a purchase price of $93 million. This represents a stabilized cap rate of 575%.

Speaker Change: While we anticipate stabilization to occur in Q4 of 2025, we are initiating a pre leasing program later this quarter.

Speaker Change: Dawson landing as a 63 units 12 felt a newly constructed townhouse developments located in Chester mirror, a rapidly growing community located approximately 30 minutes east of Calgary.

James Ha: Comprising of two and three bedroom townhomes, Dawson Landing is well located within walking distance of many key amenities, including schools and retail. Our acquisition price of $26.3 million represents a cap rate of 5% and increases our exposure to the townhome rental asset class. Slide 21 provides an update on our development pipeline. 45 Railroad is approaching the final stages of stabilization.

Speaker Change: Comprised of two and three bedroom townhomes.

Speaker Change: Often landing is well located within walking distance of many key amenities, including schools and retail our acquisition price of $26 $3 million represents a cap rate of 5% and increases our exposure to the townhome rental asset class.

Speaker Change: Slide 21 provides an update on our development pipeline 45 railroad is approaching the final stages of stabilization. The two rental towers are approximately 80% leased and we are currently marketing the commercial space. This project was delivered on time and on budget and we are projecting a stabilized yield within our forecasted range.

James Ha: The two rental towers are approximately 80% leased, and we are currently marketing the commercial space. This project was delivered on time and on budget, and we are projecting a stabilized yield within our forecasted range. Our three Victoria area development projects continue to move forward. Aspire has a target occupancy of December 31st, 2024 for Building 1. The framing for Building 2 is scheduled to commence this August, and the estimated timeline for completion is June 2025. Aspire is progressing on budget and is located adjacent to our existing Aurora community, which will allow for greater operational efficiencies once completed. The Marin and Island Highway projects are in the pre-construction phase.

Speaker Change: Our three Victoria area development projects continue to move forward aspire has a target to occupancy at December 31, 2024 for building one.

Speaker Change: The framing for building two is scheduled to commence this August and the estimated timeline for completion in June 2025.

Speaker Change: The aspire is progressing on budget and is located adjacent to our existing Aurora community, which will allow for greater operational efficiencies once completed.

Speaker Change: The Marin in island highway projects are in the Preconstruction phase, we've completed tender drawings for the Marin and the tender results expected in September will determine project timing on island Highway. We have just received official rezoning and we're working through next steps.

James Ha: We've completed tender drawings for the Marin, and the tender results expected in September will determine project timing. On Island Highway, we have just received official rezoning, and we are working through it next. Marta Loop is our one-acre land assembly in Calgary, located in the heart of one of the city's most desirable and amenity-rich neighborhoods.

Speaker Change: Marta loop is our one acre land assembly and Calgary located in the heart of one of the city's most desirable and amenity rich neighborhoods. While currently in the Preconstruction phase our concept plan will feature the cost benefit of wood frame construction versus concrete as well as larger suites that we believe will provide a differentiated product.

James Ha: While currently in the pre-construction phase, our concept plan will feature the cost benefit of wood frame construction versus concrete, as well as larger suites that we believe will provide a differentiated product in the MARTA loop node that will attract strong rental rates. I would now like to turn the call over to James. Starting on slide 22, we have had a solid start to 2024 and are well positioned in our strategy and approach to create value for all our stakeholders.

Speaker Change: <unk> in the Marder Loeb node that will attract strong rental rates.

Speaker Change: I would now like to turn I would now like to turn the call over to James Hart.

James Ha: Thank you Samantha.

James Ha: Starting on slide 22, we have had a solid start to 2024 and are well positioned and our strategy and approach to create value for all our stakeholders.

James Ha: Our resident-friendly approach to moderate and sustainable rent adjustments in our non-price-controlled markets is resulting in strong leasing spreads and high occupancy rates while also elongating our best-in-class organic growth. As our free cash flow continues to grow, our unique strategy of minimum distributions is maximizing our available capital for reinvestment back into housing and has improved our balance sheet, providing increased flexibility for future opportunities, including investment in our own value-add improvement program, as well as the acquisition and development of new communities to expand our portfolio on an accretive basis.

James Ha: Our resident friendly approach to moderate and sustainable rent adjustments and our own.

James Ha: Our non price controlled markets is resulting in strong leasing spreads and high occupancy while also elong gating, our best in class organic growth trajectory.

James Ha: As our free cash flow continues to grow our unique strategy of minimum distributions is maximizing our available capital for reinvestment back into housing and has improved our balance sheet, providing increased flexibility for future opportunities, including investment in our own value add improvement program as well as the acquisition and development of new.

James Ha: Communities to expand our portfolio on an accretive basis.

James Ha: We believe executing on this growth approach will continue to create value for all our stakeholders while our current valuation represents unique value in the public market and when compared to the private market. Slide 23 provides an update to our 2024 financial guide.

James Ha: We believe executing on this growth approach will continue to create value for all our stakeholders, while our current valuation represents unique value in the public market and when compare compared to private market transactions.

James Ha: Slide 23 provides an update to our 2024 financial guidance.

James Ha: With our strong performance in the first half of the year, continued strong leasing trends into the fall, and measured cost control to date, we are updating our guidance to tighten the overall range for the balance sheet. In 2024, we now anticipate same property NOI growth to range between 12.5% and 14.5%, and FFO per unit to range from $4.11. $4.20. As always, we will update our guidance on a quarterly basis and as market conditions change. On slide 24, we share an update on recent transactions that have occurred in our core. These transactions highlight the increasing investment activity and the value that Boardwalk's trust units represent relative to both transaction cap rates and Ona Perdora.

Speaker Change: With our strong performance in the first half of the year continued strong leasing trends into the fall and measured cost control to date, we are updating our guidance to tighten the overall range for the balance of the year for 2024, we now anticipate same property NOI growth to range between 12, and a half and 14, 5% in <unk>.

Speaker Change: <unk> per unit to range from $4.11.

Speaker Change: To $4 23.

Speaker Change: As always we will update our guidance on a quarterly basis and as market conditions may warrant.

Speaker Change: On slide 24, we share an update on recent transactions that have occurred in our core markets. These transactions highlight the increasing investment activity and the value that boardwalks trucks units represent relative to both the transaction cap rates and on a per door basis.

James Ha: Lastly, we know many of our team members are listening in to this call while preparing suites on a back-to-back basis with our monthly. I cannot thank our Boardwalk family and Team ENUF for the over 200 units we will turn over for our new resident members to move in. Thank you to our team for providing communities that our resident members are. Now I'd like to open up the line for questions. Thank you. Ladies and gentlemen, we will now begin the question and answer session.

Speaker Change: Lastly, we know many of our team are listening into this call while preparing suites on a back to back basis with our month entity, we cannot thank our boardwalk family and team enough for the over 200 units, we will turnover today for a new resident members to move into tomorrow. Thank you to our team for providing communities that are resident members are proud to call home, we would now like to own.

Speaker Change: And up the line for questions.

Speaker Change: Thank you ladies and gentlemen, we will now begin the question and answer session should you have a question. Please press star followed by one on your telephone keypad, you'll hear a prompt it hasn't seen a request questions will be taken into or do we see it should you wish to cancel your request. Please press star followed with it too.

James Ha: Should you have a question, please press star followed by the one on your telephone keypad. You will hear a three-tone prompt acknowledging your request. Questions will be taken in the order received. Should you wish to cancel your request, please press star followed by the two.

Operator: And if you are using a speakerphone, please lift the handset before pressing any keys. One moment, please, for your first question. Your first question comes from the line of Frank Liu from BMO Capital Markets. Please go ahead. Thanks, Operator, and good morning, everyone.

Speaker Change: And if you are you, saying your speaker phone please lift the handset before pressing any Keith one moment. Please for your first question.

Speaker Change: Yes.

Speaker Change: Your first question comes from the line of Frank Lee from BMO Capital markets. Please go ahead.

Frank Lee: Thanks, operator, and good morning, everyone.

Speaker Change: Hi, Frank good morning.

Frank Liu: So since the launch of your strategic moderation on rents, you have been able to hit the 7 to 9% target spread. Just wondering how long you think the current momentum will sustain and at what point you are likely to revisit the target. I mean, we see the MTM contract is slightly lower this quarter, like, you know, would you reconsider your target and the strategy once, let's say, by a single digit? I get Sam, and looking at slide 42 in our appendix, our overall average, rents in place for a typically a two bedroom, because that's our average size, is $1,460, versus the Canadian average of about, according to rentals.ca, asking prices of $2,260.

Speaker Change: Alright.

Speaker Change: So Samsung Longtop euros sure Jack moderation right you have been able to hit the <unk>.

Speaker Change: Starting to 9% targets Brad just.

Speaker Change: Wondering how long you think the current momentum walks through <unk> and at what point will likely cause a target.

Speaker Change: We're still the MTM contracted slightly this quarter or like.

Speaker Change: Would you reconsider your your target and this strategy, let's say it has to go to single digit.

Speaker Change: All right.

Speaker Change: Thank you Sam and <unk>.

Speaker Change: Looking at slide 42 in our appendix our overall average.

Speaker Change: Rents in place for typically a two bedroom because that's our average size is 1400 and $60.

Speaker Change: Versus the Canadian average.

Speaker Change: About.

Speaker Change: According to a rental start see a asking prices 2200, $60. So we've got exceptional affordability.

Frank Liu: So we've got exceptional affordability and value in our product and service. Of particular note is our largest region, Edmonton, which has an even lower average rent for an average two-bedroom of about $1,416. And Rentals.ca, on their June most recent report, shows an average asking rent in Edmonton of $1,708.

Speaker Change: And value and in our product and service.

Speaker Change: A particular note is our largest region Edmonton.

Speaker Change: Which it hasnt, even lower average rent for an average two bedroom up about 14, $116 and rentals dossier on their June most recent report.

Speaker Change: Jos and average asking rent in Edmonton of 1700, an $8. So we're really really happy to be able to provide exceptional value.

Sam Kolias: So we're really, really happy to be able to provide exceptional value, and the difference between our in-place rents and the rents on average in Canada is significant. And so the most important lesson we've learned is to continue to provide affordable housing. And there's always a demand for affordable housing, and with that gap that we're seeing, with inflation that we're seeing, and the cost of new construction that we're seeing, we see a great future for a win-win-win for our resident members, our unit holders, and our associates, and our community. So we are.

Speaker Change: And the difference between our in place rents and the rents on average in Canada are significant and so the most important.

Speaker Change: Lesson. We've learned is to continue to provide affordable housing and there is always a demand for affordable housing and with that gap that we're seeing with inflation that we're seeing in the cost of new construction that we're seeing we see a great future for a win win win for our resident member.

Speaker Change: Yes.

Speaker Change: Our unit holders and our associates.

Speaker Change: And our communities are felt.

Speaker Change: We are.

Sam Kolias: We've seen a very bright future continue because of the relative value that we continue to add, Goddess, and so you think this will be sustainable? and this will be sustainable into 2025. [inaudible] Yes, the number is free.

Speaker Change: <unk> seen a very bright future and continue to because of the relative value that we continue to provide right.

Speaker Change: Got it. So you think this will be sustained.

Speaker Change: And this will be sustainable into the 'twenty one five.

Speaker Change: You know what.

Sam Kolias: And given the relative rents that we have in place versus our competitors in the marketplace, that shows we've got quite a gap still, and we're going to continue to be flexible with our residents, continue to be self-regulated, because we agree regulation is good as long as it's self-regulated. That's the best form of regulation.

Speaker Change: Yes, the numbers that's free and.

Speaker Change: Given the relative rents that we have in place versus our competitors in the marketplace.

Speaker Change: That that show if we've got.

Speaker Change: Quite a gap still and we're going to continue to be flexible with our residents continue to be self regulated because we agree regulation is good as long as it's self regulation. That's the best form of regulation. So, yes, we because of the gap.

Sam Kolias: So yes, we, because of the gap, see a number of years ahead of us that will continue to self-regulate, provide the best value, and growth as well. That's the win-win-win that we are in a very great position. [inaudible] Thank you.

Speaker Change: We see a number of years ahead of us.

Speaker Change: That will.

Speaker Change: We will continue to self regulate provide the best value and growth as well that's that win win win.

Speaker Change: That we are in a in a very great position.

Speaker Change: To provide.

Lisa Smandych: That's encouraging to hear, and I just want to switch gears to the operating expense side. The muted operating expense growth has contributed to a decent margin, especially in this quarter. Do you have a sense of how property tax and insurance are trending for the second half of this year and into 2025? Yes, hi Frank. For insurance, we just recently went through our renewal, and it went very well. It's going to be lower than we expected and lower than last year.

Speaker Change: Thank you that's encouraging to take air.

Speaker Change: Switching gears to the operating expense side and muted operating expense growth at Concho. Good. It too you said margin expansion this quarter.

Speaker Change: Do you have a sense on how property tax and insurance are trending for the second half of this year and into 2025.

Frank Lee: Yes, Hi, Frank.

Speaker Change: For insurance, we just recently went through our renewal and and it went very well, we it's going to be.

Lisa Smandych: And as for property taxes, we have received all of our final bills. So property taxes, we're looking at around three and a half percent for the year. And overall, total rental expenses, we're looking at $1,000,000. Got it. And then insurance, do you think it's like 3%?

Speaker Change: Lower than what we expected and lower than last year and as for property taxes. We have received all of our final bills. So property taxes, we're looking at around three 5% for the year.

Lisa Smandych: In that 3% range or not? It's just going to be lower than last year, I think we're looking at, also 10%. Oh, okay. Got it.

Speaker Change:

Speaker Change: And overall total rental expenses, we're looking at one 3% growth.

Speaker Change: Got it and then.

Speaker Change: Insurance, you think it's like 3% industry percent range are.

Speaker Change: Yeah.

Speaker Change: It's just going to be lower than last year I think we're looking at.

Speaker Change: Perhaps a 10% savings there.

Speaker Change: Okay got it.

Lisa Smandych: So, lastly, I want to catch up on the CAPEX data. Your maintenance CAPEX is tracking closely to your budget. But the year-to-date value at CAPEX seems relatively lower to your budget. Is this just a function of lower turnover, and do you expect this to catch up in the second half of this year? Yeah, hi Frank, it's Lisa.

Speaker Change: So lastly, I want to talk to catch up on our Capex side.

Speaker Change: Maintenance Capex was tracking tracking closely to your budget.

Speaker Change: Year to date Capex seems rapidly malware to your budget is this just a function of lower turnover and do you expect this to catch up in the second half of this year.

Lisa Smandych: You have it bang on. So it's a little bit driven by turnover, but more than anything, it's driven a bit by seasonality. We do find that the first six months of the year from a CapEx spend tends to be a little bit lower than the second half. Q3 is the prime CapEx spend period, especially for exterior projects in Canada. We have seen, yes, we have seen a decline in suite turnover, and our suite CapEx would be slightly down, but not the same as what we saw last year. As you recall, last year, we were quite below our suite CapEx budget.

Lisa Smandych: Yeah, Hi, Frank It's Lisa you you haven't Bang on so it's a little bit driven by turnover, but more than anything it's driven a bit by seasonality. We do find that the first six months of the year from a capex spend tends to be a little bit lower than that second half Q3 is that prime capex spend period, especially for exterior projects in Canada. We have seen yes, we have seen.

The decline in sweetener turnover and our suite capex would be slightly down but not the same as what we saw last year as you recall last year, we were quite below our capex budget. This year, we're trending a little bit behind them again trying to make sure to pivot those dollar savings to other capital projects where possible.

Lisa Smandych: This year, we're trending a little bit behind again, trying to make sure to pivot those dollar savings to other capital projects where possible. Thank you, Lisa. That's a great color.

Speaker Change: Thank you that's great color.

And so the intention is we should come close to that capital budget for 2024.

Lisa Smandych: Yeah, and so the intention is we should come close to that capital budget for 2024. Got it. Thank you. I think that's all for me. Congratulations on another strong quarter. I'll turn it back. Thank you.

Speaker Change: Got it thank you.

Speaker Change: For me congrats on another strong quarter I'll turn it back thank you.

Thanks, Frank and it's James here, well, while you brought up the topic of insurance, we really cannot bank, our insurance team and our entire team enough for the great work that we're doing in ensuring that our residents have insurance policies and reducing all of our claims that resulted in that strong.

James Ha: Well, while you brought up the topic of insurance, we really cannot thank our insurance team and our entire team enough for the great work that we're doing in ensuring that our residents have insurance policies and reducing all of our claims that resulted in that strong insurance decline that Greg was speaking about. So thank you. Thank you. Thank you. Thank you. And your next question comes from the line of Jonathan Kelcher from TD Cowen. Please go ahead.

Speaker Change: <unk> decline that grade was speaking to so thank you. Thank you. Thank you our whole team.

Jonathan Kelcher: Thanks. First, first, just stick with the insurance for one second. What sort of percent of revenue is insurance costs usually? Jonathan, I'm just, insurance is roughly, let's just call it roughly $10 million to $11 million in expenses. Okay. Okay, that is helpful, that is helpful, and then just. Just switching gears a little bit here and Samantha answering some questions. On acquisitions, where are you guys seeing the most opportunities right now? Hi there.

Speaker Change: Thank you and your next question comes from the line of Jonathan <unk> from TD Cowen. Please go ahead.

Speaker Change: Thanks.

Speaker Change: First.

Jonathan: Just sticking with the insurance for one second what sort of what percent of revenue as insurance costs usually.

Jonathan: Jonathan I'm just insurance is roughly lets just call it roughly 10.

Speaker Change: 10 million to $11 million of expense.

Jonathan: Okay.

Speaker Change: So that has helped.

Speaker Change: That is helpful.

Speaker Change: And then just.

Speaker Change: Just switching gears, a little bit here and.

Matt: So Matt.

Matt: Answering some questions on acquisitions, where where are you guys seeing the most opportunities right now.

Matt: Yes.

Samantha Kolias: Yeah, we still see an incredible number of opportunities in our core markets. So Calgary specifically, I would say where we're still seeing really strong rent growth. We're not exclusively focused on Calgary, obviously; we're keen to buy the best property in the best community and the best location that will continue to drive our amazing rent growth. And we're also looking at, you know, recycling out some of our non-core assets.

Matt: Hi, there yeah, we still see an incredible number of opportunities in our core market. So Calgary, specifically I would say, where we're still seeing really strong rent growth.

Speaker Change: We're we're not exclusively focused on Calgary, obviously, we're keen to buy.

Speaker Change: You know the best property at the best community and the best location that will continue to drive our amazing rank growth.

Samantha Kolias: So that's all part of the plan. But I would say, you know, today, some of the best value is still in. Okay, and then any other like, if you were looking at Ontario, would that just be brand new stuff? Staying away from rent-controlled assets. Yeah, I think that's fair to say that it really needs to be 2018 and newer.

Speaker Change: And we're also looking at recycling out of some of our noncore assets. So that's all part of the plan, but I would say today some of the best value was still in Calgary.

Speaker Change: Okay.

Speaker Change: Then any other like if you were looking at Ontario would that just be brand new stuff.

Speaker Change: Staying away from rent controlled assets.

Speaker Change: Yeah.

Speaker Change: I think that's fair to say that it really needs to be 2018 and newer.

Samantha Kolias: I mean, I would never say never, but I think for us, moving into sort of a non-rent-controlled environment in Ontario is the goal. Okay. And then just on development, do you think you guys will get in the ground on one of the three developments that you haven't started on in 2025? It is, yes, it is very likely. Which one? Which one's most likely?

Speaker Change: I would never say never but I think for us moving into sort of the non rent controlled environment in Ontario is is the goal.

Speaker Change: Okay, and then just on on development.

Speaker Change: What do you do you think your you guys will get in the ground.

Speaker Change: One of the three developments that you haven't started on in 2025.

Speaker Change: Okay.

Speaker Change: It is yes, it is very likely.

Samantha Kolias: I think, and I can get back to you with more specifics, but I think the Marin is the most likely. That's the furthest along of the three. Okay, that's helpful. I'll turn it back. Thanks. Thank you. And your next question comes from the line of Kyle Stanley from Desjardins. Please go ahead. Thanks. Good morning, everyone.

Speaker Change: Which which one which one is most likely.

Speaker Change: I think and I.

I can get back to you with more specifics, but I think the Marin is the most likely that's the furthest along of the three.

Speaker Change: Okay.

Speaker Change: That's helpful I'll turn it back thanks.

Kyle Stanley: I'm probably, you know, a bit less impactful for Boardwalk relative to some of the peers. We're just curious about your thoughts for your outlook for third quarter leasing and the beginning of the school year. Obviously, this will be the first year of the foreign student visa cap. So just curious how that plays out. Hey Kyle, it's James.

Speaker Change: Thank you and your next question comes from the line of Kyle Stanley from Day Chardan. Please go ahead.

Kyle Stanley: Thanks, Good morning, everyone.

Kyle Stanley: Probably a bit less impactful for boardwalk relative to some of the peers. So just curious on your thoughts for your outlook for third quarter leasing and the beginning of the school year. Obviously this will be the first year of the foreign student would be the cap. So just curious on how that plays out.

James Ha: You know, so far, as you know, we're leasing into August and even into September at this juncture, and we're continuing to see strength across our portfolio, as you can see in the leasing spread. We're anticipating to continue to be in that range, but when we look at availability, there really is limited availability across our portfolio. Our university areas in Edmonton and Calgary both are experiencing limited availability at this juncture, and so you know from a foreign student or the non-permanent resident cap, we're not seeing much impact today on the ground, but I'll remind everybody that for Alberta specifically, because there is a proportionate adjustment for those As we look into fall, a good position to continue on, elongated.

James: What do you call it James So far as you know we're leasing into August and even into September at this juncture and we're continuing to see strength across our portfolio.

Speaker Change: You can see in the leasing spreads or continuing to we're anticipating to continue to be in that range, but when we look at availability. There really is limited availability across our portfolio when we look at our.

Speaker Change: Our university areas in Edmonton and Calgary, both are experiencing limited availability at this juncture and so you know.

Speaker Change: From a foreign student or the Nonpermanent resident cap, we're not seeing much impact today on the ground.

Speaker Change: But I'll remind everybody that.

Speaker Change: For Alberta, specifically, because there is a proportionate adjustment for those student visas, we actually anticipate Alberta.

Speaker Change: To come out ahead with that adjustment and so good news.

Speaker Change: As we look into fall we're in good position to continue on this elongated and moderated path that we've been speaking to.

James Ha: Okay, great. That makes sense. Maybe just kind of building on Frank's earlier line of questioning, but you know, as we start to really focus in more on 2025 and the girls' story there, and you know, likely beginning to really see the merits of your strategic moderation, I think Sam gave some good color on expectations for leasing spread, but kind of when you dial it all back, do we still see this opportunity for kind of mid to high single-digit revenue growth into 2025 given maybe Yo Kyle, it's James here again.

Speaker Change: Okay, great and that makes sense, maybe you can just kind of building on Frank's earlier line of questioning but as we start to really focus in more on 2025 and the growth story there.

Speaker Change: And.

Speaker Change: Likely beginning to really see the merits of your strategic moderation I think Sam gave some good color on expectations for leasing spreads but.

Speaker Change: Kind of when you dial it back.

Speaker Change: Do we still see this opportunity for kind of mid to high single digit revenue growth into 2025, given maybe the demand dynamics youre seeing in the market today.

Speaker Change: Yoko it's James here again.

James Ha: Our whole strategy that started in 2023 with this strategic moderation was to develop and build very consistent and strong results. And so you've seen that so far this year, where our results are very much mirroring how we performed in 2023. And we're aiming to build the exact same for 2025. And so, as Sam talked about in terms of affordability, in terms of our own strategic moderation, we are set up well to continue to deliver.

Speaker Change: Our whole strategy that started in 2023 on this strategic moderation was too.

Sam Kolias: To develop and build very consistent and strong results and so you've seen that so far this year, where our results are very much mirroring how we performed in 2023 and we're aiming to build the exact same for 2025 and so as Sam talked about in terms of affordability in terms of our own strategic moderation, we are set up well.

Sam Kolias: To continue to deliver those similar results.

James Ha: You know, when we look at development and we look at demand relative to supply or under construction, that continues to remain favorable. And so, from a macro standpoint, we do think we are set up to deliver very similar results for 2025. But, of course, you know, we'll provide that for you. Any provider of a product and service that provides exceptional value, exceptional experience, and the best product quality and focuses on customers, which are resident members in our case,

Speaker Change: When we look at development and we look at demand relative to supply or under construction that continues to remain favorable and so from a macro standpoint. We do think we are set up to deliver very similar results for 2025, but of course, you know well.

Sam Kolias: We'll provide that formal guidance later in the year.

Speaker Change: L a famine.

Speaker Change: Any any provider of our product and service that provides exceptional value exceptional experience.

Speaker Change: And the best.

Speaker Change: Quality and focus is on customers, which is resident members in our case any provider of anything that focuses in on that is going to be successful and that's what we have to stress always when we get any inbound calls.

Sam Kolias: Any provider of anything that focuses on that is going to be successful. And that's what we have to stress every time we get any inbound calls, especially from media that asks us what our focus is, and that's why we're always going to focus in on and refer everyone to slide four, our resident members. Happy residents make happy investors, happy associates make happy residents, and so that's really the formula.

Speaker Change: Especially from the from a media that asked US what our focus is and that's why we're always going to focus in on and refer everyone to slide four our resident members happy residents make happy investors happy Associates make happy residents and so that that's really the former.

Speaker Change: Hello.

Sam Kolias: And that creates a virtuous cycle of low turnovers and high referrals. And we've discussed this a lot before, and with great results. So we really start with our residents first. Thank you. Okay, thank you for that, Sam. Just one last one.

Speaker Change: And that creates a virtuous cycle of low turnover is high referrals and we've discussed this a lot before and great results. So we really start with our residents first always thank you.

Kyle Stanley: You know, looking at where the CMHC insured rate is today, especially in the five-year, it looks like positive leverage on a going in basis is a lot more achievable, maybe than it's been for a little while. You know, what kind of impact do you think this has on the transaction market, maybe in your core markets, but just broadly across the country, any hangover from deals that got pulled forward because of the capital gains inclusion? Just a broad question, I guess, on the transaction environment.

Speaker Change: Okay. Thank you for that Tim just last one.

Speaker Change: Looking at where the seam HC ensured rate is today, especially on the five year.

Speaker Change: Leverage on a going in basis is a lot more achievable maybe than it has been for a little while now what kind of impact do you think this has on the transaction market maybe in your core markets, but just broadly across the country any hangover from deals that got pulled forward because of the capital gains inclusion just a broad question I guess on the transaction environment.

Speaker Change: Okay.

James Ha: You know Kyle, maybe I can start here, certainly in this more stable interest rate environment, as you've seen in our, 24, there has been incrementally more transaction activity, even ourselves, getting in front of the capital gains change with the closing. We certainly are expecting more activity out there. Samantha mentioned earlier, I think it was in response to Jonathan.

Speaker Change: Okay, maybe I can start here.

Certainly more of this more stable interest rate environment as you've seen in our go to slide 'twenty 'twenty four there there has been incrementally more transact transaction activity, even ourselves getting in front of the capital gains change with the closing of some of the acquisitions that we had previously announced and so we certainly.

Speaker Change: We are expecting.

Samantha: More activity out there Samantha mentioned earlier I think it was in response to Jonathan we certainly are looking at opportunities to become more transactional and look at even our noncore assets.

James Ha: Transcription by https://otter.ai, As an opportunity to recycle capital. And so, you know, it's early days, you know, summer is certainly going to be telling for this opportunity to see what happens out there, but where else in Canada right now can we see the Strong Rental Growth that we're currently seeing? We're talking double-digit NOI growth. And per our slide, you're seeing transactions, generally with a four-handle or, to your point, with positive leverage.

Samantha: As an opportunity to recycle capital and so it's early days.

Samantha: Summer has certainly.

Speaker Change: Can it be telling for for this opportunity to see what's what occurs out there, but where else in Canada right now can we see you know.

Speaker Change: Strong rental growth that we're currently seeing where we're talking double digit NOI growth.

Speaker Change: And per our slide you're seeing transactions generally with a four handle or to your point with positive leverage but as we know as NOI grows by 10 or 15% you know these four and a half cats quickly turned into fives, which can turn into five in house, which you could turn into six and.

James Ha: But as we know, as NOI grows by 10 or 15%, four and a half caps quickly turn into fives, which can turn into five and a half, which can turn into six, you know, really the place that we're seeing that is an, Fair enough. Okay. Thank you very much for that. I'll turn it back. Thank you. And your next question comes from the line of Sairam Srinivas from Cormark. Please go ahead.

Speaker Change: Really the place that we're seeing that is in Alberta and Saskatchewan.

Speaker Change: Fair enough. Okay. Thank you very much for that I will turn it back.

Speaker Change: Thank you and your next question comes from the line of Sharon I'm, sorry, Nevada from Cormac. Please go ahead.

Sairam Srinivas: Thank you, operator. Good afternoon, Boardwalk team. I'm just focusing on SaskVeg, and it's a market that, you know, we haven't spoken about a lot, but it's a market that has seen a significant amount of rent growth in the last couple of quarters. Can you probably give a bit of color in terms of what you're seeing in that market and, if you know, if this is a market that could probably see some amount Looking at rental.ca and our discussions, and all the credit goes to our Saskatchewan team because we really, every month we review results in Saskatchewan. Wow. Just month over month over month and years.

Speaker Change: Thank you operator, good afternoon Boardwalk Dean.

Speaker Change: Just focusing on SaaS question, and it's a market which.

Nevada: Now whether or not a lot, but it's a market that has seen a cyclical and I wonder if rent growth in the last couple of quarters.

Speaker Change:

Speaker Change: Can you probably give a bit of color in terms of what you're seeing in that market and if you know this is a market that could probably see some amount of capital location right.

Speaker Change #100: Looking at our rental the dossier in our discussions and all the credit goes to our Saskatchewan team because we really every month, we review results catch one or later.

Sam Kolias: And when we look at relative rents, where are there even more affordable rents than Edmonton? That's Regina and Saskatoon. So the relative affordability is a huge factor, also the leadership, public policies, the diverse economy, agriculture, and resources, where Real Entrepreneur, Growth Mindset, Premier. Again, it's really a great, great province, and Saskatchewan's got what everybody in the world needs, like Alberta, and so we're really in a great spot being in both these amazing, Sam, so is that market something you guys would be keen on growing in looking ahead in the Hi, it's Samantha.

Jeff: Wow, Jeff.

Speaker Change #102: Over a month over month in years and when we look at relative rent where is there even more affordable rents in Edmonton.

Speaker Change #102: It's Regina and SaaS Katuni and so the relative affordability is a huge factor.

Speaker Change #103: Also the leadership public policies.

Speaker Change #103: The diverse economy agriculture resources wearers.

Speaker Change #104: Real entrepreneur.

Speaker Change #105: Growth mindset.

Speaker Change #105: Premier.

Speaker Change #105: Again, it's it's really great.

Speaker Change #105: Great Great Province in and.

Scott: Saskatchewan, Scott what everybody in the world needs like Alberta, and so we're really in a great spot being both these amazing provinces.

Speaker Change #107: So that market is something that would be keen on growing and looking ahead in the next 12 months.

Scott: Yeah.

Samantha Kolias: Yes, absolutely. And I would say specifically in Saskatoon, we have looked at a few opportunities the investment team has. And now we continue to be strong believers in both Regina and Saskatoon.

Scott: Hi, It's Matthew yes, absolutely and I would say specifically in Saskatoon, we have looked at a few opportunities.

Speaker Change #108: The investment team hasn't yet we continue to be strong believers in both Regina and Saskatoon.

Samantha Kolias: Thanks, Samantha. And just probably, you know, going back on your comment on non-core assets that you could probably see divested over the next 12 months, are there specific markets which you feel you have kind of reached your potential and, probably, you want to kind of get out of? Well, we're not looking to exit this market, but we are looking at trading out of some of our non-core assets in that market, but we're certainly not exiting the Edmonton market. Okay, enough for that. All right, I'll turn it back.

Speaker Change #108: Thanks, Amanda and this study.

Speaker Change #109: Going back on your comment on the non core assets that you could probably see.

Speaker Change #110: I've assumed over the next 12 months are there specific markets, which you feel you kind of beat your potential probably you want to kind of cut out.

Speaker Change #111: Well, we're not looking to exit this market, but we are looking at trading out of some of our noncore assets in Edmonton.

Speaker Change #111: But we're certainly not exiting the Edmonton market.

Speaker Change #111: Yes.

Speaker Change #113: Alright, I'll turn it back thank you guys.

Speaker Change #112: Thank you.

Speaker Change #112: <unk>.

Sairam Srinivas: Thank you, guys. Thank you. Thank you, and your next question comes from the line of Mario Saric from Scotiabank. Please go ahead. Hi, good morning.

Speaker Change #112: Thank you and your next question comes from the line of Mario <unk> from Scotiabank. Please go ahead.

Mario: Hi, good morning.

Mario Saric: Just the first question, just on your 100 base point hires and property online guidance booth this quarter for 24. Specifically, was it higher than previously expected revenue or lower operating? Uh, Mario would be a combination of both, I would say.

Mario: Just a quick question just on your 100 basis point hardest property NOI guidance group.

Speaker Change #115: This quarter of 24.

Speaker Change #116: Critically was it on higher than expected revenue or lower operating costs.

Lisa Smandych: So yes, revenue is certainly coming in at the higher end of our range. And that's sort of what we're forecasting when we look ahead to the year. And then expenses, yes, we are the team in that discipline focused on savings, savings in bad debt, advertising, insurance, repairs, and maintenance. So it would be a combination of both. And on the revenue side, is it more occupancy holding up quite well or new or renewal spreads where you're doing a bit better than you thought? Hey Mario, it's James.

Speaker Change #117: Mario that would be a combination of both I would say so yes revenue is certainly coming in at the higher end of our range and if that's sort of what we're forecasting for the year and an expected. Yes, we are as a team and that disciplined focused on savings.

Speaker Change #117: And bad debt advertising insurance repairs and maintenance so it would be a combination of development.

Speaker Change #118: And on the revenue side is it more.

Mario: Occupancy holding up quite well or new or renewal spreads, where you're doing better than you thought.

James Ha: A combination of both, and you know, in addition to Lisa's point on our team doing an exceptional job in controlling, we had a great first half of the year on the utilities front as well, and so when you put all of that together, that, and in addition to the property tax finalization that Greg was speaking to earlier, all of that has given us that, Okay, just on the expense side, the growth was 1.6%. This quarter was three and a half percent year over year in Q1.

Mario: Hey, Mario it's James the combination of both and in addition to Lisa's point on our team doing an exceptional job in controlling costs. We had a great first half of the year on the utilities front as well and so when you put all that together that.

Mario: And in addition to the property tax.

Mario: Finalization that Greg was speaking to earlier all.

Speaker Change #119: All of that has provided us the confidence and conviction to tighten that guidance going forward.

Speaker Change #119: Okay, just on the expense side.

Speaker Change #120: The growth was one 6% this quarter it was three 5% year over year.

In Q1.

James Ha: I think you talked about it being kind of 1% to 3% this year. I know 25% is a ways out, but if you're able to maintain occupancy where it stands today, and I'm not talking about property taxes or utilities, to some extent, those are less controllable.

Speaker Change #121: But I think you talked about it being kind of 1% to 3%. This year I know 25 is a ways out but.

Speaker Change #122: If you are able to maintain occupancy where it stands today and I'm not talking about property taxes or utilities to some extent or less controllable, but when you think about your opex in.

James Ha: When we think about your op-ec, In 25, is there a roadmap there where you can see similar types of growth in 25, relative to 25? Yeah, I think Mario, I mean, we've always articulated that Boardwalk's goal when it comes to managing expenses is to stay below inflation. So to your point, I think when we're looking at those controllable expenses in those tight markets, we would look for our expenses to be below inflation.

Speaker Change #123: In 2005 was there a roadmap there where you can see similar type just modest inflationary growth in 'twenty five Walter.

Speaker Change #122: Yes.

James Ha: So I guess yeah, looking 2025, if you take inflation and Boardwalk would likely be a little bit below that, that would be the goal. Okay, and then just last question: on the 10 to 15% new lease spread, 7 to 9 on renewal, when you mystery shop your competitors in your primary markets, would you say that competitors are trying to push a similar range in terms of rental growth, or is it slightly different? Mario, for the most part, we're seeing pretty similar ranges from most of our competition, you know, there are obviously exceptions to that on both sides.

Mario: Yeah, I think Mario I mean, we've always articulated that Boardwalk school when it comes to managing the expenses is to stay below inflation to your point I think when we're looking at those controllable expenses in those tight markets. We would we would look for our expenses to be below inflation. So I guess, yes. In 2025, if you take inflation and boardwalk would likely be a little.

Mario: Below that would be the goal.

Speaker Change #124: Okay, and then just last question on the 10% to 15% new lease spreads seventy-nine on renewal when your mystery shop. Your competitors in your primary markets would you say that.

Speaker Change #126: What it is you're trying to push a similar range in terms of rental growth or is it slightly different.

Mario: Yes.

James Ha: And those exceptions we generally find coming from smaller owner operators, who may have various mortgage or other cost impacts. But for the most part, we're seeing most of our competition and our peers take a very, Okay, thank you. Thank you, Mario. Thank you. And your next question comes from the line of Jimmy Shen from RBC Capital Markets. Please go ahead. Thanks. So it's two quick ones for me. Um, when I look, Calgary and Saskatchewan sort of stand out in terms of year-over-year decline. Remind me what the drivers were.

Mario: Hey, Mario for the most part we're seeing pretty well a similar ranges from most of our competition. There are all obviously.

Mario: Exceptions to that on both sides.

Mario: And those exceptions, we generally find.

Mario: Coming from smaller owner operators, who may have.

Mario: Various mortgage or other cost impacts.

Mario: But for the most part we're seeing most of our competition and our peers take a very similar approach in our core markets.

Speaker Change #125: Okay. Thank you.

Mario: Thank you Mario.

Jimmy Shen: And then secondly, on this new customer service platform you've implemented versus the call center. Yeah, I'll start with the from an expense perspective, certainly, Jimmy, when we're looking at Calgary and Edmonton, the savings come from similar areas, and it's largely being driven by that insurance year over year. So, reminding ourselves that the first half of the year would have been the old insurance plan that came in.

Speaker Change #127: Thank you and your next question comes from the line of Jimmy <unk> from RBC capital markets. Please go ahead.

Jimmy: Oh, Thanks, So two quick ones from me.

Speaker Change #129: When I look at the Q2 expense growth by region.

Jimmy: Calgary in Saskatchewan sort of stand out in terms of year over year decline can you remind me what the drivers were for those declines and then secondly on this new customer service platform. You then you've implemented versus call center can you explain that a little bit further.

Lisa Smandych: So we've now had two consecutive years of insurance decline. In addition to that, we're seeing savings from bad debts, advertising, and a bit of repairs and maintenance. The areas where we're seeing cost pressure, I mean, actual results would be a little bit on the wages and salary side, and utilities, but more or less being driven by advertising bad debts, insurance, and repairs and maintenance being lower. [inaudible] I'm sorry, just to follow up on that, is there any...

Speaker Change #130: Yes, I'll start with you from an expense perspective, certainly Jimmy when we're looking at Calgary and Edmonton.

Speaker Change #131: The savings come from similar areas, it's largely being driven by that insurance year over year. So reminding ourselves that the first half of the year would have been the old insurance plan that came so now had two consecutive years I guess if insurance decline. In addition to that we're seeing savings from bad debts advertising and a bit of repairs and maintenance the areas, where we're seeing cost pressure actual.

Speaker Change #131: Results will be a little bit on the wages and salaries site and utilities.

Speaker Change #131: More or less being driven by advertising bad debt insurance and repairs and maintenance being lower.

Speaker Change #131: In both in both Alberta and Saskatchewan.

Speaker Change #132: Sorry, just to follow up on that is there anything specifically or unique about those two markets that would result in.

Speaker Change #133: And those savings being higher than the rest of the other regions.

Lisa Smandych: I would just say the premise right now is when there's limited availability for people to move. So advertising goes down when your turnover is going down and there's less availability. Bad debts, you know; people are good at paying their rent.

Speaker Change #134: I would just say the premise right now is when there is limited availability for people to move so advertising goes down your turnover is going down and theres lots of availability a bad debts. You are people are going to paying the rents the affordability of our products enables people to be able to afford that rent. So that's part of the bad debt decline, our repairs and maintenance again, that's going to that's going to fluctuate through all market.

Lisa Smandych: The affordability of our products enables people to be able to afford that rent. So that's part of the bad debt decline. Repairs and maintenance, again, that's going to fluctuate across all markets. Some markets will have a good repair and maintenance quarter versus others. So that one's a little bit less market specific.

Speaker Change #134: Some markets will have a good repairs and maintenance quarter versus others, so that one's a little bit less.

Speaker Change #134: Market specific but overall I think it's being driven largely just by that but that'll all availability and people being on top of it. So that we can spend less on advertising and people pay their rent.

Speaker Change #134: Okay.

Lisa Smandych: But overall, I think it's being driven largely just by that, that little low availability, and people being on top of it so that we can spend less on advertising, and people pay their rent. Your second question, if you could, I think it was the customer service one, but can you just ask it again? So I make sure to answer correctly. Yeah, you know, the customer service platform.

Speaker Change #135: Your second question, if you could I think it was the customer service on the can you just ask it again signature and answer correctly. Yeah. You noted you need the customer service platform is going to result in some savings going forward and I just wanted to know what the what that's about.

Jimmy Shen: Results and some savings going forward, and I just wanted to know what that was. Yeah, maybe I'll start it off, and then James can elaborate on this initiative a little bit. So currently, Boardwalk operates; we're moving basically to an AI-driven customer service center, so that those common questions as part of our 24-7 service program can be answered by a computer rather than an actual physical agent. And so that's largely where those savings are coming from.

James: Yeah, maybe I'll start it off and then James can elaborate on this initiative a little bit. So currently boardwalk operates we're moving basically to an AI driven customer service center. So that those common questions as part of our 24 seven service programs can be answered by computer rather than a cause actual physical agents and so that's largely where those savings are coming from.

James: The quarter itself, we have out there as we transition we basically have both up and running right now to make sure that there is no transition hiccups, but maybe James if you want to elaborate on that program.

Jimmy Shen: The corridor itself, we have, as we transition, we basically have both up and running right now to make sure that there are no transition hiccups. But maybe James, if you want to elaborate on that program. Yeah, you know, we're really excited about this, Jimmy. This is the first real use of virtual reality.

We're really excited about this Jimmy this is the first real use of virtual assistant or an AI platform where.

Lisa Smandych: You know, when we speak to our team and our leadership team, who our customer service leadership team is really excited about it as well, think of the type of calls that we might get. You know, many of them. We would love to provide a platform for our resident members to..., virtually through our online platform. Many of them still like to call. And so if we can, we can serve that without that call being, Transcripts provided by Transcription Outsourcing, LLC, a person while maintaining, if not even.

Speaker Change #136: When we speak to our team and our leadership team who are customer service leadership team is really excited about it as well because if you think of the type of calls that we might get many of them as much as we would love and provide a platform for our resident members to input it virtually through our online platform many of them still like to.

Speaker Change #136: Call. It. So if we can if we can serve that without that call being transferred to an agent and it's gated virtually and taken care of virtually we believe we can reduce call volumes that are actually handled by by a person while maintaining if not even exceeding our current service levels and so.

Lisa Smandych: Service Levels. And so, as you can see, there is a good savings that we are anticipating on a run rate basis with this new platform. We've seen this AI really, Gaurav Mathur, Khing Shan, Matt Kornack, Michael Markidis, Sam Kolias, Sam Kornack, Michael where this AI can go going forward, can we can extend it past our into our communities. And so we're just at the leading edge of where Great, thank you.

Speaker Change #136: As you can see there is a good savings that we're anticipating on a run rate basis with this with this new platform.

Speaker Change #137: We've seen this AI really grow as we've kind of felt it information over the last several months and it's only going to get better and so we're really excited I know you asked about the op costs for other areas, we're really excited to see.

Speaker Change #137: Where this AI can go going forward can we can be extended past our call center can be extended into.

Speaker Change #137: Cause that go into our residents into our communities and so we're just at the.

Speaker Change #137: The leading edge of where this can go.

Speaker Change #138: Great. Thank you.

Speaker Change #139: Excuse me.

Gaurav Mathur: Thank you. And your next question comes from the line of Gaurav Mathur from Green Street. Please go ahead.

Gaurav Mathur: Thank you and your next question comes from the line of corrupt Mathur from Green Street. Please go ahead.

Gaurav Mathur: Thank you and good afternoon, everyone. Now, given the pace of acquisitions so far in the first half of the year and, you know, where your cost of capital is currently, are you thinking about dispositions in any form in the second half of the year, given that there is a strong appetite for multifamily assets, particularly in Alberta and across Canada? Hi, it's Samantha speaking.

Vamshi Mohan: Thank you and good afternoon, everyone.

Vamshi Mohan: Now.

Gaurav Mathur: Given the pace of acquisitions, so far in first half.

Speaker Change #142: Our cost of capital is currently.

Gaurav Mathur: Are you thinking about dispositions and any problem in the second half of <unk> given that that is a strong appetite for multifamily assets, particularly in Alberta and across Canada.

Samantha Kolias: Yeah, we are currently contemplating some dispositions of some of our non-core assets, and that will be capital for us to redeploy into newer, newer assets in some of our core markets. That's great. And we can expect that in the second half of the year. I believe so. Yeah.

Gaurav Mathur: Hi, It's Matt speaking, yes, we are currently contemplating some disposition of some of our noncore assets in Edmonton.

Gaurav Mathur: And that will be capital for us to redeploy.

Gaurav Mathur: Into newer newer assets in some of our core markets.

Gaurav Mathur: That's great and we can expect that in the second half.

Gaurav Mathur: I believe so yes.

Gaurav Mathur: Okay.

Gaurav Mathur: Okay. And just one last question. You've also highlighted the strength of the market on the call. Now, as we look ahead, are there any pockets of weakness in the portfolio, either now or in the future, that you're keeping an eye on? You know, at this time, Chirko Rav, we're seeing pretty, pretty good strength across the portfolio. But again, I think a lot of that we have to give credit to our team and the moderation that we're taking.

Speaker Change #143: And just last question.

Speaker Change #144: Also highlights the strength of the market on the call now as we look ahead are there any pockets of weakness in the portfolio either dollar in the future, but we're keeping an eye on.

Gaurav Mathur: And as a result of that, you know, it's resulting in many Canadians and others who are moving to Canada, as Samantha Kolias Gunn talked about in her prepared statement. That's a huge part of the Alberta Advantage, and I think we should probably at the Saskatchewan. So, so far, Gaurav, we're continuing to see really strong fundamentals in Canada, especially for, Okay, thank you for the color. I'll Thank you, and your next question comes from the line of Matt Kornack from National Bank Financial. Please go ahead. Hey guys, Sam, you've mentioned rentals.ca a few times and the rents relative to your portfolio, but you also provide market rent disclosure in your MD&A.

Speaker Change #144: At this juncture go Rob, we're seeing pretty pretty good strength across the portfolio, but again I think a lot of that we have to give credit to our team and the moderation that we're taking and as a result of that.

Rob: It's resulting in very consistent growth and results I think if we look at the affordability side, especially in our core markets.

Samantha: It's attracting Canadians and others were moving to Canada as Samantha call as Ken talked about it in her prepared remarks.

Speaker Change #146: That's a huge part of the Alberta advantage and I think we should probably at the Saskatchewan advantage to that to that as well. So so far <unk>, we're continuing to see really strong fundamentals.

Speaker Change #146: In the multifamily sector in Canada, especially for affordable.

Speaker Change #147: Okay. Thank you for the color I'll turn it back to the operator.

Matt Kornack: Thank you and your next question comes from the line of Matt <unk> from National Bank Financial. Please go ahead.

Matt Kornack: But it sounds like those rentals.ca figures are probably closer to what the true market rent is. Is that a fair assessment that maybe there's a 35% mark to market opportunity in your Alberta markets, the main ones at this point? The difference between asking rents for a renter and a resident that's looking for a new home today is, yes, that's the market, that's the average, and that's the differential in percentage, and it is significant.

Matt: Hey, guys.

Sam Kolias: Sam you you've mentioned rental got CA, a few times in the rents.

Matt Kornack: Relative to your portfolio, but you also provide market rent disclosure in your MD&A, but it sounds like those rental that the figures are probably closer to what the true market rent is that.

Speaker Change #149: Is that a fair assessment that maybe there is 35% mark to market opportunity and your Alberta market mainland.

Matt Kornack: <unk>.

Matt Kornack: The difference between asking rents for our.

Speaker Change #150: Renter and resident that's looking for a new home today is yes. That's that's the market. That's the average and that's the differential in percentage and it is significant and that really drives our renewals are satisfaction and lower cost as well because when we go through a renewal.

Sam Kolias: And that really drives our renewals, our satisfaction, and lower costs as well, because when we go through a renewal and we look at the market and show the huge relative value we continue to provide, even with the adjustments that we are making, and again, the one chart we have to go back to and look at is slide 39, our discounts in the second quarter of 2018, we're $11.575 million for the quarter, this quarter our discounts are $2.35 million, so we have to remind everybody that most of these adjustments that we're seeing are really the elimination of discounts, and when we go back to 2015 to now, we're simply not even catching up to consumer price index, so we're just catching up to consumer price index, and we're still behind. And so, yes, we've got a long ways to go, but we're doing really well.

Matt Kornack: And we look at the market.

Matt Kornack: Show the huge relative value, we continued to provide even with the adjustments that we are making and again.

Speaker Change #151: The one chart, we have to go back to and look at slide 39, our discounts in the second quarter of 2018 were $11 $5 $75 million for the quarter. This quarter. Our discounts are 235 million. So we have to remind everybody.

Speaker Change #152: He is that most of these adjustments that we're seeing are really the elimination of discounts and when we go back to 2015 to now we're simply not even catching up to consumer price index.

Speaker Change #152: We're just catching up to consumer price index, and we are still behind and so yes, we've got a long ways to go but we're doing really well we have as we discussed happy residents make happy results happy Associates make happy residents.

Sam Kolias: We have, as we discussed, happy residents make happy results, happy associates make happy residents, and it's a virtuous circle that we've seen for many years going forward in being able to provide exceptional affordability and results. Both can go hand in hand.

Speaker Change #152: And it's a virtuous circle that that we've seen for many years going forward.

Speaker Change #152: Being able to provide exceptional affordability and results both can go hand in hand.

Matt Kornack: We've seen nationally that rent has been well outstripping CPI. Presumably, in Alberta, where you're just playing catch-up, you've also got a step change on top of that in terms of the supply-demand imbalance that has established itself given the population growth dynamics in Calgary and Edmonton. How should we think of your internal regulatory process over time with regard to where inflation is? In time, obviously, it has to come down to something closer to inflation.

Speaker Change #153: That's fair and I mean, we've seen nationally that are <unk>.

Speaker Change #154: Brent has been well out stripping CPI, so presumably in Alberta, where youre playing catch up.

Speaker Change #156: You've also got a step change on top of that in terms of the supply demand imbalance that has established itself given the population growth dynamics.

Algar: Algar in Edmonton So.

Speaker Change #157: I mean, I guess, how should we think of that.

Algar: Your.

Speaker Change #159: Internal kind of regulation process over time with regards to where inflation is and time, obviously, that's come down to something closer to inflation, but yeah.

Speaker Change #158: What's the thought there.

Sam Kolias: What's the thought there? Yes, that is what our average in-place rents reflect... The correlation between the consumer price index and our average in price grants is very, absolutely why we can't look at year over year in isolation and look at CPI last year versus rent growth last year.

Speaker Change #158: Yes that is what our.

Speaker Change #160: Average in place rents reflect is the correlation between consumer price index, and our average and price brands are very correlated and that absolutely is why we cant look at year over year.

Speaker Change #161: Isolation and look at CPI last year versus rent growth last year, we've got to use that eight nine year time period, Matt because what the current year over year does not taken place are the discounts and the reduction in rents that took place several.

Sam Kolias: We've got to use that eight, nine year time period, Matt, because what the current year-over-year does not take into account are the discounts and the reduction in rents that took place several years ago that many on our call will remember, and we certainly do, that we have to keep on reminding everybody that's new to the call or residents that are listening in that we have to keep in mind the reductions in the discounts that were used that we're But relativity is everything, and especially the longer time horizon gives a more accurate picture of rent adjustment. And that's why we always refer to the longer x-axis, 2015 to where we are now, but we're still behind.

Speaker Change #162: Years ago that many on our call will remember and we certainly do that we have to keep on reminding everybody. That's new to the call are or our residents that are listening in.

Speaker Change #162: We have to keep in mind, the reductions and the discounts that were used that we're making up over.

Speaker Change #162: This period as well so.

Speaker Change #162: The relativity is everything and especially the longer time horizon gives a more accurate picture of rent adjustments and that's why we always refer to the longer ex access 2015 to where we are now.

Speaker Change #162: Bill behind.

Matt Kornack: And maybe a last question. We've talked about REITs being part of the solution on the new supply front, you've purchased some newer assets, and it sounds like they're on waiting lists already, essentially for those properties. Do you see being part of more transactions like that within your core markets? And how do you think of just pricing those in the context of pro forma rents relative to the cost of construction?

And maybe a last question I mean, we've talked about the.

Brian: Being part of the solution on the new supply Brian you purchased some newer assets it sounds like Theyre waiting lists already essentially for those properties.

Speaker Change #164: How do you see being part of more transactions like that.

Speaker Change #164: Within your core markets.

Speaker Change #164: And how do you think of just pricing those in the context of.

Speaker Change #164: Pro forma rents relative to the cost of construction.

Samantha Kolias: Yeah, Matt, we certainly are looking for more opportunities like that, as you've seen. Most of our acquisitions over the last few years have been that type of acquisition where it is a newer product where and Boardwalk Incoming. We provide our value by leasing up, and enhancing the NOI in those assets. And so those are definitely the type of assets that our team is looking for. Samantha, feel free to elaborate here, but on the development front, we'll remain consistent as well, and as Samantha talked about earlier.

Brian: Yeah, Matt we certainly are looking for more opportunities like that as you've seen.

Brian: Most of our acquisitions over the last few years have been.

Speaker Change #165: That type of acquisition, where it is newer product where boardwalk can come in and we can provide our value by leasing up or.

Cement: Enhancing the NOI in those assets and so those are definitely the type of assets that our team is looking for cement to feel free to elaborate here, but on the development front, we will remain consistent as well and as Matt talked about earlier.

Samantha Kolias: We have a project coming up in our pipeline, and if I could just add, in terms of the pro formas and the underwriting for development, we're very mindful of our approach to rents and where we want to be. And that all gets factored into our initial pro forma underwriting. So you don't want to come out at the top end of the market, because that is really not the space. And are you finding, I know we toured NASA, that you purchased on lease up, you think there's material upside to the price that you've paid because you're taking a bit of the lease up risk. But is CMHC ultimately giving credit for that because it's more on an income threshold in terms of the lending you can get so you can actually extract more equity on financing that eventually?

Matt Kornack: We have a projects.

Matt Kornack: Coming up.

Matt Kornack: Our pipeline that we will look to progress within contribute to adding more housing into markets that needed. The most in Canada.

Matt Kornack: And if I could just add in terms of the pro forma is in the underwriting for development, we're very mindful of our approach to rents and where we want to be and that all gets factored into our initial pro forma underwriting.

Matt Kornack: So you don't want to come out at the top end of the market because that is really not the space we want to plan.

Speaker Change #167: And are you finding I know we toured in asset you purchased on.

Speaker Change #168: On lease up do you think there is material upside to the price that you've paid because you are taking a bit of the lease up risk.

Speaker Change #168: It's the MH, the ultimately giving credit for that because it's more on <unk>.

Speaker Change #168: Come thresholds in terms of the lending you can get so you can actually extract more equity.

Speaker Change #168: On financing that eventually or how.

Speaker Change #169: How should we think about that.

Matt Kornack: Or how should we think about that? You know what we've seen Matt and what's presented this opportunity for us to, Require newer builds and newer assets, you know, for the most part, and CMHC Wolf. So for groups such as ourselves, where should we fund Elbow 5A with cash or equity?

Speaker Change #169: What we've seen that in what's presented this opportunity for us to.

Speaker Change #169: Acquire newer builds and newer assets is that.

For the most parts.

Speaker Change #170: C C will finance based on current incomes is what we're finding.

Speaker Change #170: And so for groups such as ourselves, where we can we can fund five eight with cash or equity and.

James Ha: Take on that risk; we're being rewarded. What we're estimating is a stabilized cap rate, where as you see in that transaction, the cap rates for that type of product certainly have a forehandle on them. Even if you want to call it 475 or four and a half, I mean, that's 125, and we'll pick up. Those are the type of TOs that we love.

Speaker Change #170: And take on that risk or being rewarded with what.

Speaker Change #171: What we're estimating is a stabilized cap rate of 575 at a time, where as you see in that transaction summary cap rates for that type of products certainly have a four handle on it so.

Speaker Change #171: Even if you want to call it 475, or four and a half I mean that is the 125 to 150 basis points.

Speaker Change #171: That will pick up.

James Ha: If we could find more and lots of those, we would give them all. And I know the team is hard at work. Fair enough. Appreciate the color of the eyes.

Speaker Change #171: Through lease up and so those are the type of deals that we love if we could find more in lots of those we think we would do them all.

Speaker Change #171: The teams hard at work patterns payment looking for those type of opportunities.

Speaker Change #172: Fair enough I appreciate the color guys. Thanks.

Matt Kornack: Thanks. Thank you, and your next question comes from the line of Dean Wilkinson from CIBC. Please go ahead. Thanks. Morning, everybody.

Speaker Change #172: Thank you and your next question comes from the line of Dean Wilkinson from CIBC. Please go ahead.

Dean Mark Wilkinson: Last but best. Just following on Matt's question there, how do you balance the acquisition metrics around looking at a newer asset that, say, has less capex versus buying, say, an older asset that you could bring up to a boardwalk standard and maybe have a little more of the near-term growth trajectory given the market-to-market differential?

Dean Mark Wilkinson: Thanks, Good morning, everybody last two best.

Dean Mark Wilkinson: Just following on Mats Matt's question, there how do you balance the acquisition metrics around looking at a newer asset.

Speaker Change #174: Let's say has less capex.

Speaker Change #174: Versus buying say an older asset that you could bring up to a boardwalk standard and maybe have a little more of a near term growth trajectory given the mark to market differential does how do you think about that difference.

Sam Kolias: Dean, it's Sam, and good to hear from you. You know, we're all in agreement that we focus on the best acquisition value. And we are only looking for one acquisition, wherever it is. It's got to be the best acquisition.

Speaker Change #174: Dean at Fam and good to hear from you.

Speaker Change #174: Yeah.

We're all in agreement that.

Speaker Change #175: We focused in on the best acquisition value and we are only looking for one acquisition wherever it is it's got to be the.

Speaker Change #176: Best acquisition and there's always in the entire marketplace. One best acquisition are won best development and we focus one at a time and and.

Sam Kolias: And there's always, in the entire marketplace, one best acquisition or one best development. We should focus on one at a time. Prioritize the maximum total return and value creation on whichever acquisition we make or development, by the way, that we make. So it's always about buying the best or building the best value community that we can see the most value creation that we can sell down the road for more and realize the maximum total return and free cash flow in our transactions, like some of the assets that we purchased that were newly developed in Edmonton, for example, that we're looking at pairing with some of our value add that we created exceptional value on.

Speaker Change #176: Prioritize the maximum total return and value creation on whichever acquisition, we make or development by the way that we make so it's always about buying the best or building the best value community.

Speaker Change #176: That we can see the most value creation that we can sell down the road for more.

Speaker Change #176: And realize the maximum total return and free cash flow and our transactions like some of the.

Speaker Change #176: Assets that we purchased that were newly development developed in Edmonton for example that we're looking at pairing with some of our value add that we created exceptional value on on value add pairing. These are communities has great appeal to buyers and at <unk>.

Sam Kolias: Pairing these communities has great appeal for buyers, and it has a great total return and free cash flow that we've released as a result of these non-core dispositions that we're looking at. And of course, Dean, we're going to be looking at value add in Edmonton or anywhere that we can create with our value add, vertical design, and in-house capital teams that have demonstrated exceptional capability in improving our communities from before and after pictures that, in our appendix again, show an extreme makeover.

Speaker Change #176: Has great.

Speaker Change #176: Total return and free cash flow that we've released as a result.

Speaker Change #176: These these noncore dispositions that we're looking at and of course, Deane, we're going to be looking at value add and had been 10 or anywhere that we can create with our value add.

Speaker Change #176: Vertical.

Speaker Change #176: Design and in house capital teams that have demonstrated exceptional capability in <unk>.

Speaker Change #176: Improving our communities.

Deane: From a before and after pictures that she and our appendix again shows extreme makeover. So we've got exceptional.

Sam Kolias: So we've got exceptional opportunities to look at older assets, in our core markets, and in any market where we can create exceptional value through repositioning, especially repositioning exceptional locations. That's really what we've learned from our Canmore and Banff acquisitions, our university repositions, and our university new development in Brio. Those are locations that have been approved for decades. They're the least cyclical locations, and there's always demand. We never really saw discounts at BAM, for example.

Deane: Opportunities in looking at older assets.

Deane: In our core markets in any market, where we can create exceptional value in repositioning, especially repositioning exceptional location, that's really what we've learned.

Speaker Change #178: Like our can more in balance.

Speaker Change #178: Acquisitions are university.

Speaker Change #179: Ah Repositions enter University, new development in Brazil, those are locations that decades approve they're the least cyclical locations and there is always demand we never really saw discounting bounce.

Dean Mark Wilkinson: And that's a perfect example of what we're looking for in exceptional locations when we are looking for, or buying anything, a really special community. That's great, Sam. Forty years on, and we're still learning. It's all about location, location, location.

Speaker Change #178: For example.

Speaker Change #178: And that's a perfect example of what we're looking for is exceptional locations. When we are looking at development or buying anything brand new real special communities.

Speaker Change #178: And in value.

Sam Kolias: Great Sam.

Sam Kolias: 40 years on and we're still learning, it's all about location location location.

Brad Sturges: Thanks, everyone. I appreciate the color. Thanks, everyone. Thank you. And your last question comes from the line of Brad Sturges from Raymond James. Please go ahead.

Speaker Change #180: Thanks, Thanks, everyone I appreciate the color.

Speaker Change #180: Right right.

Speaker Change #180: Right Yeah.

Speaker Change #180: Thanks, everyone.

Christine: Thank you Christine.

Speaker Change #182: Thank you and your last question comes from the line of Brad Sturges from Raymond James. Please go ahead.

Brad Sturges: Hey there. I'll keep it quick. Just one quick follow-up question. As you've identified, I guess, some potential asset sales in Edmonton, how do you think about the transaction activity going forward? Are you looking to tie acquisition opportunities with dispositions going forward? Or do you necessarily need a line of sight on either buy side or sell side to transact at this point?

Brad Sturges: Hi, there I'll keep it quick just one quick follow up.

Speaker Change #182: Question.

Brad Sturges: As you've identified I guess, some potential asset sales I mean, how do you think about the transaction activity going forward or are you looking to sell.

Speaker Change #184: To tie.

Speaker Change #185: Acquisition opportunities with dispositions going forward or do you necessarily need line of sight on either buys of it ourselves.

Speaker Change #186: Transact at this point is it just more about the right opportunity and the right pricing.

Speaker Change #201: Going forward.

Samantha Kolias: Is it just more about the right opportunity and the right price going forward? Hi Brad. I think the answer is yes, to be honest with you.

Speaker Change #186: Hi, Brad I think the answer is yes to be honest with you when the right opportunity comes along to sell out of our noncore assets.

Speaker Change #186: And the prices right back to Sam's comment.

Speaker Change #187: We would take it and but ideally we line that up with an accretive strategic acquisitions as well. So the cash has been sitting on the balance sheet for longer than absolutely necessary.

James Ha: When the right opportunity comes along to sell out of a non-core asset, and the price is right, back to Sam's comment, we would take it. But, ideally, we line that up with an accretive strategic acquisition as well, so the cash isn't sitting on the balance sheet for longer than absolutely necessary.

Speaker Change #187: As one of our Differentiators as well Brad is having a super flexible balance sheet right, we're retaining the most cash flow out there.

Brad Sturges: You know, this is one of our differentiators as well, Brad, is having a super flexible balance sheet, right? We're retaining the most cash flow, growing that cash flow rapidly, and to Samantha's point, we also have access to equity in the form of dispositions of non-core assets. So it's all of the above. They'll depend on the opportunities that exist, but that should be no surprise either. We've been quite consistent. This is the last year of the last several years, you know, save for.

Brad Sturges: We're growing that cash flow for reinvestment we have.

Brad Sturges: Rapidly improving balance sheet and to some at this point. We also have access to equity in the form of dispositions of non core assets and so it's all of the above Brad it'll be it'll depend on the opportunities that exist but.

Brad Sturges: That should be no surprise, either we've been quite consistent in terms of paring noncore assets and redeploying that into new acquisitions each year over the last several years you've saved for the last couple of we've had some interest rate volatility.

Brad Sturges: I assume that the disposition program will be more of an ongoing program going forward. You know, is there anything beyond the Edmonton assets at this point? Or is that sort of the near-term sort of focus of that sort of recycling program?

Brad Sturges: I assume the disposition program will be more of an ongoing program going forward.

Speaker Change #189: Is there anything beyond yet Thats analysis at this point or is that sort of the near term focus.

Speaker Change #188: Recycling program.

Samantha Kolias: I would say that it's a near-term focus, for sure, of the recital. Okay, sounds good. I'll turn it back. More asset-specific than it is market-specific. Yes, not market-specific, but asset-specific.

Speaker Change #190: I would say that it's a near term focus for sure of the recycling program.

Speaker Change #191: Okay, good I'll come back.

Kennedy: Yes, more asset specific Kennedy.

Speaker Change #194: Market specific but asset specific and they happen to be in Edmonton at this time yet.

Brad Sturges: And they happen to be in Edmonton. It is more of an opportunistic program, I guess, is the way to think about it. Yeah. Okay. Thanks. I'll turn it back.

Speaker Change #194: More of an opportunistic program I guess this is the way to think about it.

Correct, yes.

Kennedy: Okay. Thanks, I'll turn it back.

Speaker Change #193: Thank you. Thank you.

Speaker Change #193: Yes.

Sam Kolias: Thank you. Thank you. Thank you. That concludes our question and answer session. I will now hand the call back to Mr. Sam Kolias for any closing remarks.

Speaker Change #195: Thank you that concludes our question and answer session I will now hand, the call back to Mr. Tim <unk> for any closing remarks.

Sam Kolias: Thank you, Ina. As always, if there are any further questions or comments, please do not hesitate to contact us. A big, huge thank you to Lisa Smandych for her 16 years of service, inspiration, and leadership. We are so blessed to have her in our Boardwalk family forever and wish her well in her future. With gratitude, we would like to thank our extraordinary team, loyal residents, CMHC, our lenders, and, of course, our unit holders.

Tim: Hi, Thank you Eni as always there are any further questions or comments, please do not hesitate to contact us.

Speaker Change #197: I beg huge thank you to lease this manned itch for her 16 years of service inspiration and leadership. We are so blessed to have her in our boardwalk family forever and wish her well in our future with gratitude, we would like to thank our extraordinary team loyal residents female C. Our lenders and of course, our <unk>.

Speaker Change #197: Right holders. It really is all about RB app are boardwalk family forever.

Sam Kolias: It really is all about our BFF, our Boardwalk family forever, on 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 of great leaders enough. We are pleased with our improving results on a foundation of exceptional value, service, and experience we continue to provide our resident members, investors, and all stakeholders.

Speaker Change #197: Huge shoulders, we stand and as leaders we continue to do everything we can to support continued growth and extraordinary really can't thank our extraordinary team great leaders and we are pleased with our improving results on a foundation of exceptional value service and experience. We continue to provide our resident members.

Speaker Change #198: Investors and all stakeholders home is where our heart is our heart is where our family is and our family is where love always lift welcome home to love always.

Home is where our heart is, our heart is where our family is, and our family is where love always lives. Welcome home to love always. Our future is family. What can be more important when choosing where to call home?

Speaker Change #199: Our future is family what can be more important when choosing where to call home. Thank you again, everyone for joining us This morning, God bless us and now more than ever Grant us all Pes piece is the price.

Thank you again, everyone, for joining us this morning. God bless us. And now, more than ever, grant us all peace. Peace is the prize. Thank you. This concludes today's call. Thank you for participating. You may all disconnect.

Speaker Change #198: Okay.

Speaker Change #200: Thank you. This concludes today's call. Thank you for participating you may all disconnect.

Speaker Change #200: [music].

Speaker Change #200: Okay.

Speaker Change #200: Okay.

Speaker Change #200: [music].