Q4 2024 Boardwalk Real Estate Investment Trust Earnings Call
Speaker Change: Good afternoon, ladies and gentlemen, and welcome to the BoardWalk Real Estate Investment Trust 4th Quarter 2024 Earnings Call. At this time, all lines are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. If at any time during this call, you require immediate assistance, please press star zero for the operator.
Speaker Change: This call is being recorded on Friday, February 21, 2025. I would now like to turn the conference over to Eric Bowers, VP Finance and Investor Relations. Please go ahead.
Eric Bowers: Thank you, John, and welcome to the BoardWalk REIT 2024 fourth quarter results conference call.
Speaker Change: With me here today are Sam Kolias, Chief Executive Officer, James Ha, President, Gregg Tinling, our Chief Financial Officer, Samantha Kolias-Gunn, Senior VP of Corporate Development and Governance, and Samantha Adams, our 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. We respect Indigenous peoples and communities as the original stewards of this land.
Speaker Change: 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.
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's financial statements, MD&A, and annual report.
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.
Eric Bowers: I would like to now turn the call over to Sam Kolias. Thank you, Eric. Starting on slide four, affordable multifamily communities are an essential product and service.
Eric Bowers: A key word in community is unity, as reflected in our new diagram.
Eric Bowers: The most important word in multifamily communities is family. The most important part of our home is our family. Our family is where our heart is. Our heart is where love always lives, our true north.
Eric Bowers: At the center of our being is redefining BFF, our BoardWalk family forever. Welcome everyone to our BoardWalk family forever and to our Q4 2024 results.
Eric Bowers: Next slide, our culture from our humble beginnings over 40 years ago, our resident members remain at the top of our organization.
Eric Bowers: Our leaders put our team first, and our team puts our resident members first. Guided by the Golden Rule, we have a peak-performing customer service culture that creates exceptional results, as we can see on our next slide, six.
Eric Bowers: Our continued impressive performance with GAP and non-GAP measures increasing from the same quarter last year, same property rental revenue increased 8.2%, and same property net operating income increased 11%.
Eric Bowers: Our operating margin increased by 160 basis points, as well as our same property funds from operations per unit by 12.5%.
Eric Bowers: James will share how our FFO per unit over the last 10 years
Eight years is on course.
to double.
Eric Bowers: I would like to now pass it over to Samantha Kolias-Gunn. Thank you so much, Sam.
Eric Bowers: We are extremely grateful for our team's exceptional performance and continued commitment to our purpose, bringing our resident members' homes to love always.
Eric Bowers: Our 2024 Annual Report theme, Performance with Purpose, exemplifies this is more than just a philosophy, it is the driving force behind everything we do.
Our economy continues to diversify, provide job opportunities.
Eric Bowers: host world class educational programs that attract skilled talent, offer an exceptional quality of life and affordability.
Eric Bowers: Recently, Calgary has been chosen as a location for a new $3 billion deal between WestJet and Lufthansa Technik for a new engine repair facility, significantly increasing jobs in aviation.
Eric Bowers: We continue to be in the right place at the right time.
Eric Bowers: Please refer to our appendix for more data on the enduring Alberta Advantage.
Eric Bowers: For Rentals.ca data, our average occupied rent of $1,524 for a two-bedroom apartment are attractive, especially relative to the Canadian average of $2,194.
Eric Bowers: Affordability continues to be in demand, as evidenced by our strong portfolio occupancy of 98%, and is a leading factor in interprovincial migration.
Eric Bowers: The fiscal strength of our Alberta and Saskatchewan jurisdictions will continue to attract employers, allow for innovation, and increase our productivity, contributing to a more stable economic environment.
Eric Bowers: Our self-regulation has us well positioned in a competitive market as we continue to strategically moderate our rental rates within a resident-friendly renewal rate band, resulting in greater stability in occupancy and reputation.
Eric Bowers: Paired with our strong financial foundation, minimum distribution policy, resulting in maximum reinvestment and free cash flow, strategic repositioning on parallel customer service and strong family values, we remain in a position to deliver stable performance.
Eric Bowers: This is what sets us apart. Bringing you home to where love always lives.
Eric Bowers: BoardWalk strives to be the first choice in multifamily apartment communities to work, invest, and call home with our BoardWalk family forever.
Speaker Change: Slide 8 illustrates our amazing renovations and value representing exceptional quality at an affordable price. BoardWalk has made significant investments in its communities to improve value proposition and leasing performance.
Speaker Change: Past investments in upgraded fitness facilities, amenity rooms, and outdoor spaces provide high-quality communities in the affordable housing market segment.
Speaker Change: We would like to now pass the call on to Gregg Tinling, who will provide us with an overview of our quarter results, strong balance sheet, fair value, and ESG. Gregg.
Gregg Tinling: Thank you, Samantha. Slide 9 shows our key operational metrics with high occupancy and higher occupied rent.
Gregg Tinling: Although vacancy loss increased, the Trust was able to reduce incentives that helped contribute to the higher revenues reported for Q4 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 offerings.
Yielding significant financial performance.
Gregg Tinling: Slide 10 shows 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.
Gregg Tinling: Year over year, leasing spreads on new and renewed leases have decreased, reflecting a return to a more balanced supply and demand picture, with new supply entering select markets within the portfolio that increased competition and vacancy, particularly for product at the higher price point.
Gregg Tinling: Our renewal spreads, while moderated, were 6.6% in January 2025 for Alberta. New lease spreads have decreased as we prioritize high occupancy and respond to the return of seasonality.
Gregg Tinling: We continue to prioritize maintaining occupancy and maximizing retention. This will continue to provide resident-friendly affordable housing options in our core markets while lowering our costs and steadying operational results. A win-win for all our stakeholders.
Gregg Tinling: Slide 11 shows sequential quarterly rental revenue growth, including 1.3% growth in Q4 2024 compared to Q3 2024.
Gregg Tinling: The change over each quarter is a reflection of BoardWalk's strategy, striving towards balancing the optimum level of market rents, rental incentives, and occupancy rates in order to achieve its NOI optimization strategy.
Moving to slide 12.
Gregg Tinling: Slide 14 administration costs decrease zero point $6 million as compared to Q3, 2024, However increased zero can increase by zero point $7 million in Q4, 2024 as compared to Q4 2023.
Gregg Tinling: The year over year increase was driven by inflationary wage adjustments at the beginning of the year and an increase in software costs, including cyber security, a new software to improve operating efficiencies.
Gregg Tinling: Third unit based compensation increased zero point $8 million compared to Q3 2024 due to an $850000. One time true up adjustment to recognize unvested deferred units that would automatically vest if the participants who are eligible where to depart from boardwalk due to retirement or resignation for it.
Speaker Change: Apple differ.
Speaker Change: Deferred unit based compensation increased $1 $1 million as compared to Q4 2023 due to an increase in the number of participants in the program as well as the one time true up adjustment in the current quarter as previously mentioned.
Speaker Change: Slide 15 illustrates boardwalks mortgage maturity schedule, our mortgages are well staggered with approximately 96% of our mortgage balance carrying NHI insurance through the Canada mortgage and housing Corporation. This.
Speaker Change: 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 five year and 10 year MHC rate of three 7% and 4.05% respectively.
Speaker Change: Current interest rates are above the trust maturing rates the trust maturity curve remains staggered using the renewal amount in any particular year.
Speaker Change: Lastly, the trust has an interest coverage of $2 95 in the current quarter.
Speaker Change: Slide 16 summarizes our 2020 for our mortgage program overall, we renewed $431 million at an average rate of four 2% and an average term of six years. In addition, the trust obtained $63 million of CRH C financing at 4.08% and a 10 year term for its acquisition of the <unk>.
Speaker Change: Circle in Calgary, Alberta.
Speaker Change: Current underwriting criteria and our most recent submissions to CMS CNR lenders has remained in line with our historically conservative estimates.
Speaker Change: Slide 17 highlights our 2025 mortgage program to date, we have renewed or forward locked $57 million at an average rate of 378% and an average term of six years.
Speaker Change: Slide 18 illustrates the trust estimated fair value of its investment properties, excluding adjustments for Ifr 16, which totaled $82 billion as of December 31, 2024, compared to $7 $6 billion as at December 31, 2023.
Speaker Change: The increase in overall fair value compared to December 31, 2023, as the result of increases from rental rate growth and the acquisitions in 2024, and Calgary, Alberta, including the previously announced acquisition of the circle as well as the acquisition of Dawson landing in Chester Me Alberto.
Speaker Change: Being slightly offset by an increase the capitalization rates.
Speaker Change: The decrease in the trusts fair value of investment properties from Q3 2024, excluding assets held for sale is due to higher property operating costs as we roll into our upcoming budget as is customary every fourth quarter, where we incorporated our 2025 budgeted amounts for property operating costs when determining the forecasted stabilized.
Speaker Change: NOI into our internal valuation as well as an upward adjustment for vacancy in some assumptions for balanced market.
Speaker Change: Current estimated fair value of approximately $237000 per apartment door remains below replacement cost.
Speaker Change: In consultation with our external appraisers, the capitalization rates or cap rates used in determining Q4 2020 for fair value were unchanged from Q3 2024, an increase from Q4 2023 from adjustments made to the trust, Ontario assets in London, and Kitchener, Waterloo, Cambridge markets as it does every quarter.
Speaker Change: Trust will continue to review the completed asset sales transactions and market reports to determine if adjustments to cap rates are necessary.
Speaker Change: Most recent published cap REIT reports suggest that the cap rates being utilized by the trusts for calculating fair value are within their estimated ranges.
Speaker Change: Slide 19 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 always promoting social and governance initiatives. We encourage our stakeholders to view our 2023 ESG report available on the Trust's website.
Speaker Change: I would like to now turn the call over to Samantha Adams to highlight our capital allocation and discuss our development pipeline.
Speaker Change: Thank you Greg throughout 2020 for Boardwalk remain prudent and it's accretive capital deployment initiatives, focusing on our successful repositioning and value add strategy acquisitions and dispositions as well as the renewal of our normal course issuer bid or N CIB.
Speaker Change: In 2024, we invested approximately $100 million into our value add projects to upgrade our communities slide 20 illustrates the investment of our free cash flow into repositioning in value add capital improvements, including sweet optimization.
Speaker Change: Our suite optimization program is the conversion of underutilized storage or administration spaces that can be converted to rental suite.
We are currently assessing the feasibility of converting thirty-seven such spaces.
Speaker Change: And as a reminder, each project we undertake is evaluated individually and we target at least an 8% return on costs, providing an accretive return on our capital.
Speaker Change: During the year boardwalk completed or announced $294 million of real estate transactions as illustrated on slide 21.
Speaker Change: Within these transactions, we acquired 631 units, representing an average vintage of 2022.
Speaker Change: At an average stabilized cap rate of five 6%.
Speaker Change: Now that 45 railroad has reached stabilization, we began to replenish the development pipeline by adding a new location Martin Luther in Calgary for a total consideration of $12 million.
Speaker Change: Boardwalk also re initiated its capital recycling program and in January of this year, we announced the successful sale of three non core assets in Edmonton.
Speaker Change: With an average vintage of 1992 for a total sales price of $79 $95 million.
Speaker Change: This price represents $205000 per door and a cap rate of four 8%.
Yeah.
Speaker Change: A portion of the net proceeds from the sale were used to support the renewal of the M. CIB interest to Tejas, we benefit from the disconnect between our unit price and the value of our portfolio.
Speaker Change: Slide 22 shows our prudent use at the N CIB, which was renewed in November of last year.
Speaker Change: Through February Boardwalk has invested $39 million in unit buybacks at an average price of $64.11.
Speaker Change: This represents a cap rate of over 6%, which far exceeds other opportunities that were available during that time.
Speaker Change: Boardwalk selective development pipeline has been designed to support the trusts long term growth strategy to improve the quality and variety of our product offering over time.
Speaker Change: Slide 23 provides an update on our pipeline.
Speaker Change: Our three Victoria area development projects continue to progress fire has a slightly revised targeted occupancy of Q2 2025. It was previously this quarter for building one and we have initiated our pre leasing program.
Speaker Change: The structure for building she was nearing completion and is projected to meet our estimated completion date of mid 2025 inspire.
Speaker Change: Inspire 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 same for the Marin has received its development permit we've submitted our building permit and continue to review tender pricing.
Speaker Change: Our Island Highway project has been officially Rezoned and we are working through next steps as well.
Speaker Change: Marta loop the one acre land assembly in Calgary is still in the construction phase and we continue to finalize our project concept design.
Speaker Change: We are confident that our development will feature the benefit of wood frame construction versus concrete as well as larger suites that we believe will provide a differentiated product in the Marta lymph node.
I would now like to turn the call over to James <unk> to discuss our track record of creating value at our 2025 guidance.
Speaker Change: Thank you Samantha and thank you to our entire boardwalk team for your service and commitment to our resident members, which resulted in the strong 2024 results. Our team is sharing today.
Speaker Change: Our focus on investing in and delivering the best quality and affordable communities is why our residents make boardwalk their first choice as the place to call home and reward our team with continued high occupancy and high retention rates.
Speaker Change: Slide 24 introduces our 2025 outlook as we build off our base of exceptional affordability product quality and self operated rental rates over the past two years.
Speaker Change: Each of these are key inputs into the confidence into our platform and ability to navigate recent geopolitical challenges.
And a more balanced housing market.
Speaker Change: We have and continue to see that the demand for affordable housing remains resilient.
Speaker Change: And our outlook for the upcoming year is positive for 2025, we are anticipating same property NOI growth of between four and 8% in <unk> per unit of between $4 25.
Speaker Change: $4.55.
Speaker Change: We look forward to regularly updating and refining our outlook in the quarters to come.
Speaker Change: On slide 25, we are pleased to announce a 12, 5% increase to our monthly distribution equating to $1 62 per trust unit on an annualized basis beginning in March.
Speaker Change: Since 2021, our distribution has increased at a compounded annual growth rate of over 12%, while still retaining an industry high proportion of our cash flow to reinvest and compound growth.
Speaker Change: Our formula has extended our <unk> per unit track record and as I mentioned earlier now positions boardwalk in 2025 to more than double our <unk> per unit in just eight years.
Speaker Change: On slide 26, this growth along with our approach to maximum cash flow retention has improved our leverage metrics to provide boardwalk with one of the strongest and most flexible balance sheets.
Speaker Change: Our discipline and solid financial Foundation provides us with flexibility to take advantage of further growth opportunities that may arise.
Speaker Change: As Samantha shared one of the biggest opportunities. We are currently seeing is in our own platform.
Speaker Change: Which on slides 27, and 28 shows the exceptional value better trust units represent.
Speaker Change: Our current trading price equates to approximately $190000 per apartment door and a six 5% cap rate on a forward basis.
Speaker Change: Both metrics are exceptional when considering our product quality locations spread to financing cost and cash flow growth as shared in our outlook.
Speaker Change: Recent private market transactions continue to seem to be supportive of our estimated net asset value of 237000 per door. We're just under $94 per trust unit and our investment in our buyback has been an accretive use of proceeds from our most recent noncore asset sales.
Speaker Change: In closing, we would like to thank again, our resident members our team our partners and all our stakeholders for an exceptional 2024.
Speaker Change: We are looking forward to continuing our track record of growth into 2025 by providing communities that are resident members are proud to call home.
Speaker Change: We would now like to open up the line for questions John.
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 the number one on your Touchtone phone you wouldn't hear a prompt that your hand, that's been raised should.
Speaker Change: So we should decline in the polling process. Please press star followed by the number too.
Speaker Change: If you're using a speaker phone please lift the handset before pressing any keys.
Speaker Change: Your first question comes from the line of Frac to you from BMO capital markets. Your line is now open.
Speaker Change: Thank you operator, and good morning, guys.
Speaker Change: Hi, Frank.
Speaker Change: So on the leasing side for Alberta, I Wonder if the reason get a one 3% or more.
Speaker Change: For the new do you think is more temporary.
Speaker Change: What's your view on.
Speaker Change: The annuity spreads throughout 2025.
James Ha: Hi, Frank It's James here as we talked about in the in the fall.
Our approach this winter was really to ensure that we maintained high occupancy.
James Ha: So as such we took a more conservative conservative approach to market rents youre seeing that now and we're quite happy with the occupancy that we have heading into the busier spring rental season, sitting at 98% plus positions us really well going into a busier spring rental season and so.
James Ha: Coming up with March or into March we do anticipate adjusting our market rents upwards.
James Ha: Pulling back discounts that we offer.
James Ha: And so we would anticipate those new lease spreads to start to start to increase I will highlight most importantly that our renewal spreads continue to be strong.
James Ha: The fit of our strategic moderation that we've undertaken over the past many years.
James Ha: And so seeing those renewals spreads, which represent about 75% of our lease velocity maintain.
James Ha: Maintaining those within this mid mid single digit range is going to be about most importance for us.
James Ha: Thanks, James So that makes sense and you literally just touch on the caution I have next on the renewal side.
Speaker Change: Just switching to S. P Y guidance off for two 8% girls.
Speaker Change: Is this more front end loaded or back end loaded and then what's kind of embedded girls essentially for revenue and Opex I guess, you guys have a colder than normal winter.
Speaker Change: We expect some pick up on utility side.
Frank James: Yeah, Frank James again, maybe I can start.
Greg: Again, when we build our guidance, we effectively take the run rates that we have in the environment that we're seeing here today from a revenue standpoint generally our guidance range of about four five to six 5% on the revenue front again thats on a same property basis, but I'll pass it to Greg to speak on the expenses.
Greg: Yeah, Hi, Frank for your expenses on a same property basis. The guidance. We're looking at total rental expense increase of about 3% to 6% higher than 2024.
Greg: Team is very focused on expense management.
Greg: In fact, it's ingrained in our teams and we'll be looking to manage our controllable costs.
Speaker Change: Got it and just the 3% to 6% on a same property basis right.
Greg: That's correct.
Greg: Got it and lastly, just switching gears to a capex budget for 'twenty five a same stop by a roughly 10% over the 2024 actual level and I believe most of this are due to the increasing value add initiatives.
Speaker Change: I Wonder if that's a function of higher suite upgrades from our tone, we're expectation or its more on building improvements and common area rentals.
Frank James: A combination of it'll Frank our budget increase that was approved by our board back in November was based on our anticipated spend at that time, and so relative to our 2020 for Capex budget.
Frank James: It really is just an inflationary increase there are some carryforward projects that we have going into 2025 that werent completed in fiscal 2024 and so.
Frank James: Don't read too much into that increase relative to the actual there really is a carryforward and our intention was just for inflationary increases.
Frank James: Alright, Thank you I'll turn the call back.
Barry: Thanks Barry.
Speaker Change: Your next question comes from the line of Jonathan <unk> from D. D. Cohen. Your line is now open.
Barry: Thanks.
Speaker Change: Just going back to <unk> first question, there or I guess related but.
Barry: You guys have about a 7% mark to market.
Barry: Right now and I guess, that's a point in time calculation, how how do you see market rents evolving as you start to get into a hopefully stronger spring leasing season.
James Ha: Hey, Jonathan its James.
Barry: Again.
Speaker Change: In March here as we get into the spring and our intention is to start to adjust those market rents upwards. Most of our communities are full.
Barry: With our 98% occupancy at 2% vacancy is really just an.
Speaker Change: Specific pockets that are that are more competitive.
Barry: As we've seen in the past I mean over the long run we are still seeing inflation in the marketplace and so.
That'll give us the opportunity to adjust those rents up.
Barry: Seeing and have always seen though is continued strong demand for affordable housing and that's and that is the market that we serve our average trends of.
$500, if we can't find that in any other major cities.
Barry: Affordability that we have I think it's in the appendix of our conference call affordability continues to remain high and so that will position us.
Barry: Again, because we have this high occupancy through the winter months.
Barry: Okay.
Barry:
Barry: Then I guess just sort of switching gears here you did sell some assets in Q4 and redeploy that into the CIB.
Barry: Do you see yourself continuing to sort of trim noncore assets.
Barry: How should we think about that going forward.
Speaker Change: Hey, its estimate the atom speaking I can answer that for you were targeting somewhere between $100 million to $200 million.
Barry: In dispositions in 2025.
Barry: Okay, and I guess well.
Barry: Perfect because I guess, it's tough to do much Oh, sorry, I'd say it'd be when you're trading above a six cap but.
Barry: Smith.
Speaker Change: Sort of opportunities are you seeing come across your desk from acquisition point of view.
Barry: Yes, no it's and it's a fair question now we've seen quite a few interesting opportunities.
Barry: We remain very active we're always looking but yes. It is a bit of a challenge right now where our stock is currently trading, but we remain opportunistic and if the right opportunity fits then then we will be able to move on it.
Speaker Change: Okay. Thanks, I'll turn it back.
Speaker Change: Your next question comes from the line of Brad Sturges from Raymond James Your line is now open.
Brad Sturges: Hey, there.
Speaker Change: I guess sticking along the lines of a on the NOI guidance.
Brad Sturges: So is it fair to say I guess given that.
Brad Sturges: Even prioritizing occupancy around 98% is that sort of what's baked into the guidance. This year that you would you.
Brad Sturges: You continue to trend around that level.
James Ha: Hey, Brad it's James Thats correct.
James Ha: When we built that guidance the starting point is where we start the year, we'd like to see that number higher to be Frank I think thats going to be upside for us.
James Ha: But our starting point would be our current occupancy.
James Ha: Okay.
James Ha: In terms of turnover rates like no material change in thinking in terms of what you would experience across the portfolio when you blend it out.
James Ha: No. We're still seeing generally the same levels that we would've seen in 'twenty, three 'twenty, four which were lower than past periods, but again thats a.
James Ha: That's another example of the exceptional affordability and quality that we offer.
James Ha: And a lot longer than just on the discounting you you alluded to it I guess, it's going to be very select certain circumstances, but would that be.
James Ha: It's more short term in Q4, and maybe into early Q1, and then it tapers off as you.
James Ha: Get into the stronger spring season.
Speaker Change: Yeah, we've seen some of it in January and February as well again very community specific.
James Ha: And again for us.
James Ha: Those incentives are those discounts are really just a tool for our leasing team.
James Ha: To close rentals to bringing great resident members into our communities.
James Ha: Going into March though again.
James Ha: Increased velocity, we are anticipating.
James Ha: Reduction of the need to use those discounts going forward.
Speaker Change: Okay. Thanks, I'll turn it back.
James Ha: Right.
Speaker Change: Your next question comes from the line of Kyle Stanley from D. Jordan. Your line is now open.
Kyle Stanley: Thanks, Good morning, everyone.
Kyle Stanley: Just going back to guidance I think you've touched on a few times, but I just want to confirm that.
Kyle Stanley: Your <unk> guidance does not include the potential removal of carbon tax in the year ahead.
Kyle Stanley: If it doesn't can you just remind us what that impact could be.
Gregg Tinling: Kyle it's Greg the carbon tax is included in our guidance so it hasnt been removed.
Gregg Tinling: Our carbon tax expense for 2024 was about $7 million.
Speaker Change: And colleagues James I'll, just add that our guidance includes actually the increasing carbon tax that is supposed to occur here.
Gregg Tinling: Sure in April here so.
Gregg Tinling: We would anticipate from.
Gregg Tinling: Expense standpoint that our carbon tax in 2000.
Speaker Change: Higher than the $7 million that Greg had spoken to for last year.
Speaker Change: Okay fair enough.
Speaker Change: I guess to take a look at the the range to get towards the top end of your growth.
Speaker Change: In the event that we do have carbon tax or move that would be obviously quite helpful. What else do you think would need to happen in the market to see us get towards that top end of the range.
Speaker Change: Okay.
Speaker Change: Colin on the revenue front, the great thing about.
Speaker Change: Affordable multifamily housing is that it's quite consistent.
Speaker Change: And so as we talked about our renewals are about 75% of our rental velocity and our.
Speaker Change: Our team is already negotiating lease renewals into March April may at this juncture, we are seeing good consistency there.
Speaker Change: I think if we can continue to grow our occupancy levels. If we can increase our occupancy levels, even further as we talked about.
Speaker Change: Earlier that would be upside.
Speaker Change: From a new leasing spreads standpoint, if we were able to grow that significantly that would be upside.
Speaker Change: But really for us it's managing the expenses as well if we can have a warmer warmer winter and see those utility costs come down if our team can do an exceptional job.
Speaker Change: In terms of our controllable expenses.
Speaker Change: And of course, one of the biggest ones is interest rates. If we can see interest rates come off there's definitely upsides.
Speaker Change: On each and every one of those line items and our team will do the best thing the best that we can as we have each year over the last eight years.
Speaker Change: To try to optimize and do better.
Speaker Change: Okay. Thank you for that and just last one just on elbow five eight.
Speaker Change: Curious if there's any changes in your view of how that lease up might progress through the year.
Sam Kolias: Hey, Kyle it's Sam and Im very happy to report, Great Open house and traffic and rentals at Allo five eight.
Sam Kolias: Reflecting the exceptional location, we're asking where all our new residents are coming from there is about 30 new residents.
Sam Kolias: Very busy during snow storm open houses our granddaughter Grace was helping us with the leasing as.
Sam Kolias: As well and so happy to hear about our new residents been waiting for years, while it's been under construction there in and around the existing community. That's got old stock there in downtown that want a better more quiet location and then there are further away deeper south that want a better located.
Sam Kolias: <unk> as well so our choice of new in exceptional locations and exceptional layout and design is proof that there's always demand for exceptional.
Sam Kolias: Quality service and value.
Sam Kolias: <unk> the average home price across the street from Alberta, 585, Adas in the millions of dollars.
Sam Kolias: It's a real rarity to provide amazing housing affordability in that prime location of Calgary Britannia Bel Air May fare, so close to downtown and a block away from shopping center one of the most successful shopping centers in the country.
Sam Kolias: I'll leave it at that because you can you can sense the excitement we have on our new community.
Speaker Change: Yes, no fair enough it sounds like your initial kind of guidance or maybe a year for stabilization teams very very much intact.
Sam Kolias: Okay. Thank you for that I will turn it back.
Sam Kolias: Thank you.
Sam Kolias: Your next question comes from the line of Jamie Shen from RBC capital markets. Your line is now open.
Speaker Change: Thanks, maybe just a big picture question there.
Sam Kolias: There seems to be still.
Speaker Change: Fair amount of concerns around the impact of.
Speaker Change: Lack of population growth and it doesn't sound like you're factoring much by way of an event of a hit on occupancy and your guidance. So I. Just wondering if you could just provide your general thoughts as to.
Speaker Change: Why you don't think occupancy will be.
Speaker Change: Meaningfully impacted.
Speaker Change: As we look through the year.
Speaker Change: Hey, Jamie it's James I think.
Speaker Change: What we're missing here is the platform that we have in the team that we have in the product quality that we have.
Speaker Change: Again, if you look at our average rents we have some of the most affordable rents in the country.
Speaker Change: Alberta continues to be an attractive place and within Alberta.
Speaker Change: Boardwalk communities are some of the best communities in value that you can find there and so what we've seen through this winter months is our team. When we are bringing in leads when we are bringing leads in for showings were getting rentals and so our team is going to continue to focus on that we'll obviously adjust.
Speaker Change: As the market evolves or as the market changes, but from what we're seeing right now we're happy with the position.
Speaker Change: Okay.
Speaker Change: And when I look at the lease spreads.
Speaker Change: You know in December January.
Speaker Change: The spread.
Speaker Change: Deferred between Calgary, and Edmonton Calgary now it didn't spread that's negative or and then I guess the other follow up question to that would be what is the dynamic between the fundamentals of those two markets now.
Speaker Change: Yeah, well, we're going to spread basis, Calgary, we would've seen through the winter months anywhere from negative low single digits to plus 1% or 2% in that range and I mentioned, we've seen anywhere from plus one to plus four.
Speaker Change: Both markets from a pardon me from an occupancy standpoint are about the same kind of that right around that 98% Mark.
Speaker Change: Again, Edmonton, we've talked about this before we continue to be very bullish on I mentioned.
Speaker Change: On that base of affordability and I would say, that's where we're likely to see the strongest new lease spreads in our western Canadian markets.
Speaker Change: Okay.
Speaker Change: Okay. Thank you.
Speaker Change: Thanks, Jeremy.
Speaker Change: As a reminder, if you have a question. Please press star one on your telephone keypad.
Speaker Change: Your next question comes from the line of Matt Carnac from National Bank Financial Your line is now open.
Speaker Change: Hey, guys.
Speaker Change: Sam I appreciate your enthusiasm on an elbow Friday, but just wondering if we could drill down a little bit more into the details. There do you expect kind of a big.
Speaker Change: Bigger upfront leasing and then stabilization over the few quarters thereafter or is it kind of.
Speaker Change: Each quarter, we will get the same kind of lease up.
Speaker Change: For that property.
James: Hey, Matt its James.
Speaker Change: Our ideal is actually to have a smooth lease up and there is the reason for that is.
James: We'd like to have a nicely balanced and steak or.
Speaker Change: Lease maturities number one.
Speaker Change: Number two we want to ensure that our resident experience is always positive and so.
Speaker Change: Ensuring that we're not.
Speaker Change: Overstocking any move ins on any given day.
Speaker Change: And so our approach and our plan will be to have a smooth lease up over the next 12 months.
Speaker Change: Okay, and then similarly for aspire same thought process for that one.
Speaker Change: Exactly the same yes.
Speaker Change: And then lastly on the Brampton.
Speaker Change: It's a joint venture.
Speaker Change: I think up until this point has actually been a negative contributor to <unk>.
Speaker Change: You did provide trailing 12 months revenue and cost figures, but could you give us a sense as to what the <unk> contribution will be from that property in the next 12 months, presumably now you're you're fully leased on one tower and 89% I think on the other so.
Speaker Change: Just wondering how it will contribute.
Greg: Hi, Matt its Greg.
Speaker Change: The joint venture there actually.
Greg: It was profitable in Q4 and earned us about.
Greg: 400000 for 2025, we're expecting income from that to be close to $2 million.
Speaker Change: Okay perfect. Thanks, guys.
Speaker Change: Your next question comes from the line of Sarah I'm certain divest from car Mart Securities. Your line is now open.
Speaker Change: Thank you operator, good morning, and good afternoon everybody.
Speaker Change: Hum.
Speaker Change: Looking at your comments on the leasing side.
Can you give some color on how the leasing times have changed from now on a year ago.
Speaker Change: In terms of the amount of time, it's taken them to use up a unit I wasn't any substantial movement in pack.
Speaker Change: Yeah.
Speaker Change: Hi, it's James if I understood. Your question, it's on time to lease units.
Speaker Change: Yes, that's right.
Speaker Change: Yes time to lease units has actually been.
Speaker Change: I mean incrementally up we were doing a lot of back to backs a.
Speaker Change: A year ago.
Speaker Change: Back to backs again means we're turning over units in 24 hours.
Speaker Change: We're still doing some back to backs.
Speaker Change: But in terms of days vacant and you can measure that in our economic vacancy.
Speaker Change: And.
Hence the 98% that we have so not materially higher our team as we had said earlier.
Speaker Change: Long as we're as we're getting these suites ready we're following up on our leads were getting showings were getting rentals and so its philosophy continues to be strong because you may see incrementally just a little bit more time to rent only because we're doing fewer back to backs.
Speaker Change: That's awesome. Thank you that's all from me I'll turn it back thank you.
Speaker Change: Thanks, Brian.
Sam Kolias: There are no further questions at this time I will now turn the call back to Mr. Sam <unk>. Please continue.
Speaker Change: Thank you John as always if there are any further questions or comments. Please do not hesitate to contact us with gratitude, we'd like to thank our extraordinary team loyal residents CME C. Our lenders and of course, our unit holders from far and wide and local he really is all about our <unk>.
Sam Kolias: Our boardwalk family Forever.
Sam Kolias: It was huge shoulders, we stand and as leaders we continue to do everything we can to support continued growth and extraordinary we really cant. Thank our extraordinary team and great leaders and we're.
Sam Kolias: We are pleased with our improving results on a foundation of exceptional value service and experience. We continue to provide our family resident members, our investors and all of our stakeholders.
Speaker Change: Special Congratulations to team Canada for the foreign Nations win last night and to USA for such an inspirational series and especially final game. So exciting we conclude homes, where our heart is our hardest where our families and our families where love always lifts welcome home.
Speaker Change: To love always our future family, what can be more important when choosing where to call home God bless us and now more than ever granted all piece.
Speaker Change: Ladies and gentlemen, this concludes today's conference call. Thank you for your participation you may now disconnect.
Okay.