Q3 2025 Boardwalk REIT Earnings Call
I would like to turn the conference over to Eric Powers, Vice President of Investor Relations. Please go ahead.
Thank you Joelle and welcome to the Boardwalk Creek 2025 third quarter results Conference call with me here today are Sam Coleus, Chief Executive Officer, James Hall, President, Greg <unk>, Our Chief Financial Officer, Samantha Coleus gun senior VP of corporate development and governance.
<unk> and Samantha Adams senior VP of investments.
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 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.
In May <unk> before we get to our results. Please note that this call is being broadly distributed by way of webcast.
If you have not already done so please visit <unk> dot com slash investors, where you will find the link to today's presentation as well as PDF files of the trust financial statements MD&A and quarterly report.
Starting on slide two we'd like to remind our listeners that certain statements in this call and presentation may be considered forward looking statements.
Although the expectations set forth in such statements are based on reasonable assumptions boardwalks future operation and its actual performance may differ materially from those in any forward looking statements additional information that could cause actual results to differ materially from these statements are detailed in boardwalks public.
<unk> filed documents I would like to now turn the call over to Sam Coleus. Thank you Eric starting on slide four.
Portable multifamily communities have always been an essential product and service together with our resident members our associates investors partners capital environment community are all essential and interconnected with our boardwalk family forever at all.
Our core with our true North we're love always Lynn.
Key word in community is unity as reflected in our diagram together, we go far welcome everyone to our Boardwalk family Forever and two our Q3 2025 results.
Next slide our culture from our humble beginnings our resident members remain at that top of our organization our leaders put our team first and our team puts a resident members first guided by the Golden rule, we have Pete performing customer.
Service culture that creates exceptional results as we can see on our next slide six.
Our continued impressive performance with GAAP and non-GAAP measures increasing from the same quarter last year same property rental revenue increased five 1% and same property net operating income increased eight 6% our.
<unk> margin increased by 220 basis points as well as our funds from operation per unit, increasing by 10, 8% I would like to now pass it over to Samantha Coleus got it.
So much Dan.
Streaming grateful for our team's perseverance.
Performance and continued commitment to our purpose, bringing our resident members home to love always.
Turning on to slide seven our operational stability and commitment to affordable housing rental market fundamentals in our core markets our balance.
Demand continues for more affordable housing.
Despite supply deliveries focused on higher end luxury product to justify high construction costs we.
We are well positioned to deliver on our commitment to provide much needed affordable housing and a more competitive environment with our experienced people.
Performing team exceptional product quality from the one $5 billion invested in 2017, and rebrand and repositioning effort and dedication to our boardwalk family has responsible community providers.
So you may see and our federal government have emphasized the need for 430 to 480000 more homes by 2035 to restore affordability in Canada have affordability continued to drive positive population and leading economic growth in our core markets Albert.
<unk> reflected in our appendix, Quebec has delivered exceptional results further evidenced in the strong demand for affordable housing, Ontario remained stable we are strategically in all the right places at the right time.
Please refer to our appendix for more data on the resiliency of the Alberta economy.
Our self regulation provides us with continued steady results as we strategically moderate our rental rate within our resident friendly renewal rate band producing greater stability in occupancy and reputation.
Paired with our strong financial foundation minimum distribution policy, resulting in maximum reinvestments and free cash flow.
Strategic repositioning unparalleled customer service and on our foundation of strong family values, we remain in a position to deliver solid performance.
This is what sets us apart, bringing you home to wed love always lift.
Boardwalk strive to be the first choice and multifamily apartment communities to work invest and call home with our Boardwalk family Forever moving on to slide eight our strategic rebranding enhances our resident member experience and exceptional quality at an affordable price keeping our occupancy high.
At just below 98% per rentals dossier data our average occupied rents of $15 82 for a two bedroom apartment are attractive, especially relative to the Canadian average of $22 79.
Wed like to now pass the call onto Greg Tingling, who will provide us with an overview of our quarter results strong balance sheet fair value and ESG Greg. Thank.
Thank you Samantha.
On slide nine occupancy remains strong supported by continued growth in occupied rooms.
Vacancy loss increased slightly the trust effectively reduced leasing incentives, which attributed to the higher rental revenue reported in Q3 2025 compared to the same period last year.
These results reflect the success of our strategic initiatives aimed at maximizing free cash flow and diversifying our product offerings delivering meaningful financial performance of.
The decline in rental revenue from the previous quarter is due to property dispositions in Q3 that had previously been included in the same property portfolio as reported last quarter.
Slide 10 provides an overview of leasing spreads for new and renewed leases under our self regulated resident friendly centric model. This approach continues to drive strong retention and referrals, while keeping turnover and operating expenses low.
On a year over year basis leasing spreads have moderated, reflecting a more balanced supply demand environment.
Increased supply in select portfolio markets, particularly at the higher price points has led to greater competition in vacancy.
And Alberta renewal spreads reached three 7% in September 2025.
New lease spreads in Calgary were slightly negative as we strategically prioritize occupancy in the cities more competitive higher price segments.
Edmonton by contrast continues to deliver positive new lease spreads supported by sustained development for our high quality affordable housing offerings.
Overall, Alberta is blended leasing spreads for September were two 3% with portfolio wide spreads at three 3%.
We remain focused on maintaining high occupancy and maximizing resident retention.
This strategy reinforces our commitment to providing affordable resident friendly housing in our core markets, while also reducing cost and steadying operational performance delivering long term value for all our stakeholders.
Slide 11 shows sequential quarterly rental revenue growth, including one 5% growth in Q3 2025 compared to the previous quarter.
Changeover each quarter is a reflection of boardwalk strategy striving towards balancing the optimum level of market rents rental incentives and occupancy rates in order to achieve its NOI optimization strategy.
During Q3, the trust closed on acquiring the other 50% interest in our Brio property located in Calgary Calgary.
Calgary results include 100% of Breo effective August six 2025.
<unk> Breo altogether, the same property rental revenue growth for Q3 2025 compared to the previous quarter would be one 1% for Calgary and one 4% on a total portfolio basis.
Turning to slide 12 same property net operating income increased by eight 6% in Q3 2025 compared to the same quarter last year supported by revenue growth of five 1%.
Alberta, the trusts largest region contributed meaningfully to this performance with a five 1% increase in rental revenue driven by stronger in place occupied rents and reduced leasing incentives.
Total rental expenses declined by one 8% year over year, primarily due to lower utility costs with the removal of the federal carbon tax earlier this year.
Alongside reductions in property taxes and insurance premiums.
Slide 13 highlights that administration costs and deferred unit based compensation remained relatively stable quarter over quarter.
The year over year increase in administration expenses is primarily attributed to inflation driven wage adjustments implemented at the beginning of the calendar year, along with higher profit sharing and bonus accruals, reflecting strong year to date performance across the portfolio.
Slide 14 outlines boardwalks mortgage maturity profile the trust debt portfolio is well staggered with approximately 96% of the mortgage balance carrying NHK insurance through CME HC.
This insurance remains in place for the full amortization period and backed by the governments in Canada enables access to financing at rates below conventional mortgage levels with our current estimated five year and 10 year <unk> rate of 335% and 390% respectively.
Although current interest rates are above the trusts maturing rates over the next few years. The trust maturity curve remains staggered, reducing the renewal amount in any particular year.
Lastly, the trust had an interest coverage of 310 in the current quarter.
Slide 15 provides an overview of our 2025 mortgage program to date. The trust has renewed or forward locked $294 million in financing at an average interest rate of 383% and with an average term of six years.
Current underwriting criteria in our most recent submissions to CMS and our lenders has remained in line with our historically conservative estimates.
Please refer to slide 55 for additional details.
Slide 16 illustrates the trust estimated fair value of its investment properties, excluding adjustments for <unk> 16, which totaled $8 8 billion as at September 32025, compared to $8 2 billion as of December 31, 2024.
The increase in overall fair value is the result of new acquisitions during the year and increases from rental rate growth, while being slightly offset by dispositions of non core assets, along with an upward adjustment for vacancy assumptions in Calgary to reflect a more balanced market.
Current estimated fair value of approximately $242000 per apartment door remains below replacement cost.
And in consultation with our external appraisers the cap rates used in determining Q3 2025 fair value were unchanged from Q4 2024.
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.
Recent published cap rate reports suggest that the cap rates being utilized by the trust for calculating fair value are within their estimated ranges.
Slide 17 highlights our ESG initiatives, we'd like to highlight our 2025 <unk> score of 72, which represents a seven 5% increase compared to the prior year.
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 2020 for ESG report available on the Trust's website.
I would like to now turn the call over to Samantha Adams to highlight our capital allocation and discuss our development pipeline.
Thank you Greg throughout 2025, we have maintained a disciplined approach to capital allocation focusing on value add rebranding initiatives targeted dispositions and acquisitions and our and CIB.
Slide 18 highlights our reinvestment of free cash flow back into our current communities, which enables us to drive market share and enhance the experience for our resident members.
Our goal for 2025 is to complete the rebranding of 15 communities and by the end of this year, 77% of our communities will have been renovated.
Upgrades, including rebranding initiatives common area improvements and value add amenities deliver exceptional value to our resident members with minimal impact on per suite rent.
Slide 19 outlines the $733 million of real estate transactions announced year to date.
This includes $221 million and disposition of our noncore assets with an average vintage of 1980, 7% and average cap rates in the low 5% range.
We have also completed $512 million in acquisitions comprised of Townhomes mid rise and high rise assets in our target growth markets acquired a cap rates cap rates ranging from the high fours to low fives.
From these sales we have generated $120 million in net proceeds.
Mid 'twenty details, how we are strategically redeploy this capital into new acquisitions, and our tactical unit repurchase program.
The strength of our balance sheet has provided us with the remaining equity required to complete the transactions.
And just a quick update on the aspire our development in Victoria BC, we remain on track to welcome. Our first resident members December one with the remaining buildings scheduled for completion in early Q1 of 2026.
For the balance of the year, our focus will remain on dispositions and executing our unit repurchase strategy, while other development opportunities remain paused.
Slide 21 demonstrates the ongoing disconnect between our unit price and the value of our portfolio.
Our NCI continues to be a key capital allocation tool and to date in 2025 Boardwalk has invested $37 million in unit buybacks, including a recent 7 million repurchase of 102000 units at an average price of $66 74.
This tactical investment represents approximately at six 9% <unk> yield providing an accretive use of our capital.
Slide 22 summarizes our Q3 dispositions.
Six noncore properties located in Edmonton in Quebec City, with a weighted average cap rate of five 3% and an average vintage of 1987.
These successful transactions at pricing in line with our fair value have allowed us to up cycle the equity into high quality assets with strong cash flows and lower Capex requirement and then in addition to providing capital to support our unit repurchase plan.
Slide 23 showcases the previously announced acquisition of Central Park in Laval, Quebec at <unk>.
541 unit three tower community delivered between 2019 and 2022.
With condo quality finishes U S style amenities destination retail and a strong suite mix Central Park offers affordable luxury at approximately $2 $2 30 per square foot.
The acquisition price of $249 million or 460000 per suite is well below replacement cost and the property that benefits from attractive NK financing at a blended sub 2% rate.
Lasalle continues to be one of the strongest submarkets within the greater Montreal area supported by its connectivity to transportation network and relative affordability.
Slide 24 introduces our latest acquisition <unk> hundred nine main street located in one of our strongest growth market Saskatoon.
The province of Saskatchewan has one of the lowest unemployment rates in the country is one of the strongest markets globally for mining investment and offers food fuel and fertilizer all of which the world needs.
<unk> hundred nine mainstream is well located and close to downtown the University and Saskatoon as main retail strip.
Acquired for $39 million from the developer at a cap rate of five 5%. This fully stabilized community enhances our product offering in Saskatoon will benefit operationally from being in close proximity to our other communities and is expected to generate strong cash flows.
I would now like to turn the call over to James to discuss our track record of creating value and our updated 2025 guidance.
Samantha and thank you to our entire boardwalk team for your service and commitment to our resident members, while continuing to deliver consistent and strong performance that our team is sharing.
Slide 25 provides an update to our outlook for the remainder of the year.
The strength of our platform and ability to outperform in a more balanced housing market continues to show through as the demand for affordable housing remains resilient and as a result, our outlook for the year has further improved.
Our team and platform continues to maintain high occupancy and strong blended leasing spreads.
Expense optimization has been a priority as demonstrated in our performance to date.
As we move forward towards closing out 2025, we are anticipating a continued solid revenue profile paired with strong performance in our operating expense management.
These lower expenses will help to ensure that our high quality affordable housing remains the best value for our resident members.
With the completion of the third quarter. Our 2025 outlook has further improved towards the upper end of our estimates with same property NOI growth guidance adjusted to eight 5% to 10%.
While also increasing our <unk> per unit outlook to $4 58.
To $4 65.
The increase in our <unk> per unit outlook as a result of contributions from our strong NOI performance as well as our accretive capital recycling and both acquisitions and our NCIC.
Guidance is forward looking in nature, and we look forward to providing our final results for 2025 and the introduction of our 2026 guidance in February with our year end results.
On slide 26, we have confirmed the payment dates of our next three regular monthly distributions equating to $1 62 per trust unit on an annualized basis.
This represents a 12, 5% increase from our distribution a year ago.
Since 2021, our distribution has increased at an annual average growth rate of over 12%, while still retaining an industry high proportion of our cash flow to reinvest and compound growth.
This formula and operating model has extended our <unk> per unit track record and we are positioned in 2025 to more than double our <unk> and just eight years.
Please note as we near our year and our team is in the process of finalizing and conducting our tax review and.
We will provide any special distribution update prior to the end of the year to reflect the taxable gains from our dispositions.
Our regular distribution review has also conducted at year end and any increase to our regular distribution is expected to be announced with our year end results in February.
On slide 27, this <unk> 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.
In the quarter, we assumed an attractive low cost mortgage as part of our Central Park acquisition that Samantha highlighted earlier.
And this is slightly increased our leverage for the period.
As our platform Optimizes the NOI from this community and we continued to deliver organic growth from our existing portfolio, we anticipate a continuation of our leverage improvement trend.
The solid financial Foundation, which includes our current significant liquidity position with over $100 million of cash provides us with the flexibility to take advantage of opportunities that arise.
One of these opportunities as shown on slides 28, and 29, which highlights the exceptional value that our trust units represent.
Our current trading price equates to less than 190000 per apartment door and a mid to high 6% cap rate on a forward basis.
Both metrics are exceptional when considering our product quality locations spread to financing cost and cash flow growth as shared in our outlook.
Recent private market transactions continue to be supportive of our estimated net asset value of 242000 per door or $98 per trust unit.
With this current attractive implied valuation we anticipate in the near term our deployment of capital will be focused on investing in our own assets and platform through our normal course issuer bid.
In closing our team continues to be focused on delivering the best quality and value in housing to our resident members. Our unique operating platform continues to demonstrate our ability to create value for our stakeholders as we consistently deliver leading organic and <unk> per unit growth that is increasing our free cash flow.
Thank you again to our resident members our team our partners and all our stakeholders for making Boardwalk your first choice and providing the best quality homes and communities and we are looking forward to continuing our track record of growth.
We would now be happy to take questions.
Sure.
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 one on your Touchtone phone you will hear from that Johan has been raised should you wish to decline from the polling process. Please press star followed by the <unk>.
If you are using a speaker phone please lift the handset before pressing the keys one moment. Please for your first question.
Your first question comes from Jonathan Culture with TD Cowen. Your line is now open.
Thanks, Good morning.
First question just David you finished on capital allocation, so I figured I'd start there.
You guys have been selling assets and upgrading through buying newer stuff, but it sounds like the NCI is going to be more of a focus will you are you going to consider or are you going to continue rather too.
To sell to sell assets in order to fund that.
Hey, Jonathan It's math, Adam speaking I can take that question. If you don't mind, yes. The plan is to continue our disposition program into 2026 and today, where our cost of capital is obviously those net proceeds would be used to.
Buy our stock back but.
But we will remain active through 2026.
Yes, Jonathan it's James just to add to <unk> comments, we're seeing a lot of interest in bid and value add acquisitions.
<unk> financing is a big part of that as well and so our team has done a fantastic job in 2025 meeting the market there.
As well as finding and unearthing opportunities for us to recycle that capital. We've made some great acquisitions that have provided very additive results to our overall performance in addition to that.
<unk> taken what the market's giving us we're seeing huge opportunity in buying back our stock and we've done that through.
Through September and October and as discussed.
To continue to do that through the balance of the year.
Okay would you given that you are going to be selling so we're looking.
We're looking to sell some assets into next year would you would you take your leverage up near term to fund me in CIB.
I don't think we need to right now Jonathan we've got over $100 million of cash on the balance sheet. Our liquidity is as strong as it's been in a long time and so that provides us the opportunity and optionality to deploy that capital and as we said buyback is that best place right now, we're having a tough time, finding a better place than six five.
Plus cap rates today for our portfolio.
Okay Fair enough and then just secondly on.
I know, it's a little bit early for 2026 guidance, but how should we think about.
Revenue growth into next year in expense growth.
On a high level basis.
I can start with the expense side Jonathan.
And Youre right. It is still too early normally we don't give formal guidance until February when we release our year end results, but can say that through our preliminary leg work and discussions. We've had we are expecting property taxes to be higher next year.
Yes, just add Jonathan to Greg's comments as James.
We're seeing very consistent results multifamily, especially affordable residential housing is quite consistent in terms of the demand.
For our product.
Being that through our leasing spreads as an examples pretty well throughout the year, we've seen consistency and so I would expect that from our team. Our team is always striving for that will keep occupancy high.
We will continue to provide.
Portable adjustments.
When we're negotiating our rent adjustments and from what we're seeing so far we expect consistent results from what we're seeing here.
Okay.
Okay. Thanks, I'll turn it back.
Your next question comes from Mike Mork.
With BMO your line is now open.
Thanks, everybody.
Just with respect to.
The great news property tax comment.
Higher next year I guess, what are the drivers and can you remind us I think there's been a phase out of the premium on multifamily and I think equipment and maybe the rest of the Alberta, but sort of the dynamics at play.
Yes, Mike.
<unk>.
We're very supportive and thankful to our municipal leaders in provincial leaders we saw.
Very reasonable property tax increases this year in fact, we saw declines in certain municipalities in Western Canada, and Thats, a testament to the strong financial position that our provinces have.
As we look forward to next year and as we know property taxes are a product of assessment in tax rates.
What we're seeing here is increased assessments.
And multifamily apartments, so as a result of that.
There is some potential we're going to see some property tax increases our team is working real.
Hard right now in <unk>.
Engaging with municipalities and negotiating assessments. So that we all have sustainable increases for next year. So that we can continue to provide and deliver sustainable.
And affordable rents to our residents.
Okay and are you concerned at all that sorry go ahead.
Might get Sam and we work really hard with our policymakers and were very.
Local about supporting more government or less taxation and thats a proven public policy.
Cause we ask everybody who can spend are super hard earned after tax dollars better than we can and we havent found anybody yet that says somebody else can so less taxation is a proven public policy that works for everybody and we're super happy with a big change in our municipal.
<unk> leadership that believes the same because it helps everybody to keep more of our money in our pockets and so we're super happy with the results.
We've seen positive.
On a positive support and signals from our newly elected.
Policymakers in our municipal governments, both in Calgary and Edmonton, because we the people have spoken.
We all believe less taxes is better for all of US. So we're cautiously optimistic quote unquote as per our newly.
Elected mayor in Calgary.
Note about our budget too I just wanted to go back and add to Greg's comments on.
As we're thinking about next year, another place, where we've had a great track record is delivering below inflation expenses.
Last year was not the only year that we can look back many years.
And thank our team for finding innovative ways to reduce that expense growth next year is not going to be any different.
We're in the midst of working through our budgets now for 2026 and <unk>.
We are driving and pushing our team to look for continued efficiencies that we can continue to deliver these great results.
Okay, and Thats all expense line items.
Alright.
Yes, no no.
That's great thanks for that.
Just I guess, a couple of things before I turn it back so number one just on railroad it looks like Theres, a recap there for a little bit of money and refinance the construction loan and I think you had effectively indicated that construction loan by extending a loan to the JV on your books.
Is there any material change in the <unk> contribution from that asset moving forward based on the recap.
No no we're not expecting that.
Any material change.
Basically even our profit this quarter was 900000 from that asset.
We're projecting for the year to date to be around $1 5 million.
They are huge I know some from that from our team in Ontario are listening in on this call and so a huge shadow to them are 45 Railroad project in Brampton is full and so great work to that team for leasing that up over the last couple of months.
Okay.
And then just last one for me $100 million of cash.
Great liquidity, you did push leverage up.
The consequence of the net investment activity.
I guess with the special.
Is there anything that.
<unk> Zhu from doing an in kind or are you going to anticipate youll have to give some cash back to unit holders would be question, one and then.
Question two.
Earmarked for the NCI would be but I guess is there any appetite to bring leverage back down or are you just happy to run at a higher leverage on a go forward basis.
Hey, Mike.
I'll answer question, one for you like Youre right given given the dispositions. We've had in 2025, there will be tax implications of capital gains and recapture we know we're going to have to do a special distribution by the end of the year right now it's still premature.
The team is still working through assessing the full impact and we will be planning to get assess the special distribution before the end of December but we're right now just going through the analysis required.
Sure.
And on the leverage front, Mike as we said in our prepared remarks, we do anticipate our leverage to continue to follow the similar trend. We saw previously in terms of that downward trajectory.
In this case, we did see leverage tick up this quarter with <unk>.
<unk> acquisition, but it was extremely attractive financing.
I think as we continue to bring in our platform into Central Park and you continue to see the growth in our own existing portfolio. We do expect leverage continue to tick downwards.
Thank you.
Thanks, Mike.
Your next question comes from Karl Stanley with Deutsche Bank. Your line is now open.
Hi, everyone.
Just looking at your incentives for a second it looks like there was a more significant decline in incentives this quarter.
Given the broader market softness we're seeing how have you been successful on the leasing front, while rolling those incentives back is it just adjusting rental rates where needed incentive extending further incentives or what maybe is it that you're doing to keep occupancy high.
Hey, Kyle it's James.
Again really proud of our team for reducing those incentives over the past several years, we're on the cusp of having that almost an immaterial number.
Which has always been our goal.
The incentive declines are primarily coming from our renewals and retention and just eliminating those past discounts that were given on the new leasing front, where you are seeing some incentives in the market across the country really is just at the upper end.
Okay markets.
More expensive rents.
Our approach and our leasing teams approach has really been more so just to reduce market rents. If we are seeing.
More competitive environments.
So we're not using incentives as much.
Our in our leasing activity really just focusing on that net rent and just a reminder for everybody all of our disclosures all of our leasing spreads Oliver occupied rents are all always net threats.
Mike its Sam.
Kyle sorry, it's.
Sam and there is one 582 reasons why our incentives are so low and thats the average occupied in place rents.
And it's always in demand.
Larger two bedroom unit on average at that low price is always in strong demand and that's why it's so important for us to continue our self regulated approach keep our rents as low as possible and our value proposition as high as possible our locations our renovations.
Our schools that were nearby hospitals employee employer.
And employee.
Source locations.
What keeps us occupied and rents.
Being adjusted close to and around inflation is how we continue to do that.
Okay. Thanks for that and maybe just on that self regulation.
We've seen your renewal spreads trend slowly lower but it seems like we're kind of nearing a trough here. So I'd just love your thoughts on.
Where do you see those renewal spreads trending in the year ahead.
I think very similar to what we're seeing here today call.
On average our renewal spreads across the portfolio were in the fours.
No that's kind of the inflation or inflation plus so we've talked about in the past.
<unk> sustainable growth from us as a community provider and covering our expense growth as well as from a resident standpoint, but first.
First and foremost we're always going to be flexible every resident cases unique and of course, we're going to be flexible with any residents who aren't able to afford that.
We're not seeing that in us.
The various slides that we have in our appendix and all the macro slides that we've gone through in the past affordability is not the issue here in our core markets of Alberta, and Saskatchewan remain some of the most affordable.
Okay that makes sense and then just last one you mentioned strong interest for value add assets in the market today and looking to continue on the disposition program in the year ahead would you say is it still primarily the smaller mom and pop and mom and pop type buyers that are active in the space today or are you seeing.
Any signs that institutions are beginning to step back in.
Hi, Kyle it's Samantha Adam I'll take that question, yes, we are receiving a lot of inbound calls.
Some days, we're on with inundated with inbound calls with interest in our value add communities. Some of our noncore assets to date has been mostly the private buyers I would suggest some family offices.
But we're starting to hear that perhaps some of the institutions are going to come back into the space with us are interested in some of our sort of non core properties.
And to be seen but we are starting to see I would say, it's slightly elevated interest from what we're being told but to date. The buyers of our communities have been need private buyers and that interest is still very strong.
Okay. Thank you for that I will turn it back.
Okay.
Okay.
Your next question comes from Brad Sturges with Raymond James Your line is now open.
Hey, there.
Following up on that line of questioning is around the disposition program now.
Yes, it could go through to the end of 2006, I guess how much.
Is left to do in terms of.
Either dollar amount or percentage of the portfolio that you would deem to be noncore that could be considered for <unk>.
Divestiture.
Well, where we're sitting today I mean, we've had a very successful 2025 on the disposition front and I think you can expect us to be as active through 2026, a lot will depend on the market and where interest rates go go through the next call. It 12 months, but I think it would be fair to say you can expect it to be as active as we've been in.
2025.
And it really depends on our stock price to.
Brad it's very opportunistic right now to continue selling our noncore assets.
Really the equivalent of a 90 plus unit price and reinvest that at today's unit price in the sixties, that's an incredible window of opportunity and so that gap is is something that we can continue to sell with a high.
<unk> of our value add and noncore apartments, and redeploy back into our repositioned and.
Portfolio overall at a big discount so what a great opportunity.
Okay that makes sense.
Maybe just high level.
<unk>.
Came out last night, obviously you had some.
Different elements between immigration.
The housing side, just any general thoughts in terms of implications for demand and supply for the Canadian apartment sector, and particularly in your core rental markets.
High level, we really need to increase our productivity and the more we invest in increasing our productivity. The more jobs, we're going to have the more economic growth, we're going to have and prosperity and affordability and the one really positive is the skilled migration.
We need more skilled migrants to build more infrastructure more affordable housing more schools hospitals.
And energy core doors, we really need to continue to provide as Samantha items noted fuel fertilizer and food really core products and we have all of that in Canada and the more we invest to provide more.
More Canadian energy infrastructure to more Canadian energy and more fertilizer and food the more productivity and not just Canadian energy for more Canadians, but Canadian energy for our entire world we need more.
Affordable energy that will drive our economic growth.
That is a proven public policy and an investment that's always done very well for all of us and so that's on a big high level, what we continue to advocate for.
Okay. Thanks, I'll turn it back.
Your next question comes from ceramic Srinivasan with <unk> Securities. Your line is now open.
Thank you operator.
Hey, guys I know, it's kind of getting it to be a long call.
Just one question from me.
Then you look at the opportunity of that in 2006 in terms of acquisitions and dispositions.
And when you think about your good afternoon, CEO close geographies can you marry the two and can you just comment on do you see more of non core disposition opportunities versus market expander.
Hi, there, it's Samantha Adams.
In terms of the opportunities we're seeing from an acquisition perspective, we've been fairly I think transparent in terms of where our target markets are.
Obviously, our home markets in Saskatoon in Calgary being top there.
We announced the beautiful acquisition in Laval as well in the Quebec economy continues to grow positive population growth and job growth.
I suspect it will all depend on the opportunities but from that perspective.
While we see some growth there and then in terms of the dispositions it really depends on what the market is doing but given our size and Edmonton Youll, probably see a few more noncore assets sold out of the Edmonton market and we're working through our disposition strategy now through 2000 and for 2026, So I think it will.
We'll be able to be in a much better position to comment on that next year.
Yes, Hi, it's James just to add it's going to remain opportunistic as well.
So at this point I think we've got great platforms in each of those markets. There are markets that we like.
We've shown which of those markets are this year with our grades up cycling that has been done but we can't reiterate this enough as of right now there is no better opportunity than buying back our stock.
And then the dispositions just a little bit more color with respect to the size and the location typically very small off the beaten path.
More difficult to attend to for just that smaller community size. So.
That's really what we're doing here is increasing our efficiencies and scale and making our our whole communities and her team way more efficient to be able to spend way more time with our resident members and our communities then driving from site to site.
To service small community sizes and by the way small providers are awesome at hands on operating small communities and Thats, where we grew up and came from is with small community. So it works great win win for US. It's a win win for the smaller operators that are buying.
Our communities and so it's really a great way to create value, especially when we combine our apartments all back at a big discount.
That's amazing Thank you Samantha James and Sam.
Morning, Bob.
Thank you Sai.
Your next question comes from Mario <unk> with Scotiabank. Your line is now open.
Hi, good morning.
I wanted to circle back to some of the spreads.
On the renewal spreads the kind of 3% to 4% or so I think going into September October range was closer to 3% to 7%. So I just want to confirm.
Whether that's indeed, the case, where you've seen the kind of the top end of the expected.
Renewal spreads come down a little bit.
So is that simply due to seasonality or are you seeing maybe a little bit more.
Pressure in select markets.
Hey, Mario it's James it's very market dependent.
We're seeing in our most affordable markets continued ability to.
Deliver the upper ends of perhaps not that range, but.
Above our average and then other markets, where we have more expensive product where it is more competitive and we have to also compete on those spreads and youre seeing the.
Lower end or below our average range and so it is very market dependent.
Leo.
At this juncture, though.
As you can see over the past several months, we're seeing fairly consistent results and with renewals as you know as we do them two to three four months in advance we expect it to be fairly consistent.
Okay.
And then maybe just on the on the new lease spreads.
We're close to 2% this quarter.
You highlighted affordability is not necessarily an issue.
Within the portfolio.
The portfolio was in markets, where rents are some of the lowest in the country as you point out.
What do you think.
Is going to be required to see the 2%.
<unk>.
Over the next six to 12 months.
On the supply deliveries coming online and if so what's the inflection point from a timing perspective, there just curious to hear what could be the catalyst to get that number up a little bit.
I think continuing to deliver strong results as you know into this into the fall.
There is a return to seasonality in the market. We have noticed that we see that in terms of traffic flow.
So is that going to inch up here. This winter likely not we're going to focus in on occupancy we're going to focus sooner.
Portability come this spring, though as we start to see more traffic.
We will come to the market and see if there is potential to bring that up but our focus is on retention Mariam retention and renewals represents 70% to 80% of our deal flow and so that's really going to continue to be where we own and focus.
Okay. Okay.
Question is more of a technical question just during the quarter.
There was a nice sequential revenue bump up to one 4% for the portfolio.
Relative to prior quarters, which were closer to 1% growth.
Much of that Delta would have been driven by good luck this quarter.
Okay.
Hi, Mario its James Gray.
Great point in Quebec, exactly the reason why Samantha and team and we're all very excited about Quebec and.
Huge opportunity from a value standpoint, we estimate that in July if you strip out Quebec. It represented about a <unk>, 7% sequential revenue growth.
And just for context about a third of our deal flow in Quebec occurs in the month of July.
Perfect. Okay, I hope that helps.
Okay.
Okay.
Your next question comes from Jimmy <unk> with RBC capital markets. Your line is now open.
Just one question.
To calibrate.
You're expecting in terms of new supply with current order.
Thanks to a record level over the next 12 months.
Where we are relative to peak to agree.
Yeah, Hi, Jimmy it's Eric I can speak to that.
<unk>.
We have at the moment about $11.
Rental units under construction.
I would say over the next 12 months.
Pretty close to that range in general.
Calgary, specifically, we haven't seen a little bit of an increase on the condo supply side.
Bear in mind that only call it 40% of that would go to.
So to the rental market.
But generally I would say that's fairly consistent with what we have under construction today.
Okay and the 911.
In our rental units.
Okay.
A year ago.
I'd say, you're probably up about 10% to 15% year over year on an absolute basis.
What I would say, though is in terms of location of deliveries Jimmy I would say a year ago a lot of those deliveries would have been in the beltline central core area and I would say now there is more product being delivered in the more suburban locations of the city.
That would be outside of our ring road in Calgary.
Okay.
Okay, how does that Jimmy it's James.
Had the CAGR real estate forum here in town.
Last week or the week prior.
And it was busy there was record attendance, but I'll save that.
The general consensus was that.
Development Economics are challenged and this is no different than any other place across the country right. Now if you run that math hitting performance is going to be tougher the yields the already very small yields for developer.
Developments.
Has compressed even further and so we think we're hitting peak development economics right now for multifamily construction.
Everybody, we talk to seems to be pens down on development and so we would anticipate at some point that the.
Under construction numbers are going to start to tail off.
Purely just on economics and again, that's just a little bit of color from what we're hearing from development community in Calgary.
Okay.
That's useful thank you.
Thank you.
Ladies and gentlemen, as a reminder, should you have a question. Please press star one.
Next question comes from Matt <unk> with National Bank. Your line is now open.
Hey, guys. This call has been pretty thorough so I don't have much turnover did seem to come down sequentially and it seems like skips and evictions or down but maybe there is an increase in kind of people, leaving for transfers and assignments at this point.
Is it population growth thats driving demand or is it employment growth.
How are your markets faring on the employment side and just given the reduction in turnover sequentially.
By design essentially going into the.
Airport.
Yes, Matt, it's Sam and it's really important to come and see us and feel our energy and our economic vibrancy.
We have a lot of jobs here.
And we're.
I've seen a lot of employment a lot of tech investment in Calgary a lot of.
A lot of.
Distribution.
Lot of.
Moving.
Move.
It moves from Ontario BC.
Portable housing.
And everybody seems really busy our restaurants.
Our stores it just it just is.
As a as a good good economy.
And that is is really what we see and feel and affordability continues to be a big driver and so yes, we are.
We're doing well relatively.
Speaking on our economy, and especially Saskatchewan that.
Is a real.
We attended the Saskatchewan.
Estate form and as Samantha Adams shared with everybody.
Fertilizer and food.
Just don't have enough of it for our planet.
And we do have a lot of it in Saskatchewan, and Alberta, and so our regional economies here continued to be very strong then if you look on.
Slide 53 in the appendix way back in the <unk>.
And the back section average rents of Quebec $1416.
Pets.
So.
It is so affordable and when we visited our team in our communities in Quebec kits.
Same vary by brand restaurants are are busy and our economy in Quebec seems to be doing really really well too.
So.
There are a lot of increased.
Hiring and teachers nurses.
That's what we need more up too.
And so we're seeing a lot of jobs.
Our important jobs that are being created.
Ontario.
<unk> held our rents really low in London.
And Kitchener, Waterloo, where all full in Brampton.
There is a shortage of really big low price departments. That's what there is big demand for and Thats, what we got that's what we've been focusing in on for 40 years.
Yes.
Sorry, Matt just.
Expand on that as well, Alberta has experienced record high immigration.
For the past few years, so there's simply not enough.
All of these.
People to live and the continued economic sat and affordability.
<unk> increased the amount of people being attracted to our province, and Alberta, diversifying and you can see and as Sam pointed out the slides in our appendix.
The jobs and health care professional scientific.
And.
There are diverse sectors and we talk to you in past conference calls like the Lufthansa Technik and West Jets at partnership.
Turning to bring jobs in aviation and engineering, we have the skilled labor force.
To provide.
To provide those really exceptional and while paying.
John and transform and be the NRG had superpower.
Canada and hopefully the world.
Yeah. The second part of your question, Matt It's James on the skips and evictions awesome observation that is by design on our teams part as well a big reason for it is the affordability that Sam and Samantha was talking about and the exceptional value that we offer but we have to give credit to our team and our screening processes and.
Always being flexible with residents and so we're happy to see that number decline.
<unk> turnover has decreased as well we've seen that trend happen over the past several years again that's by design.
It costs a lot of money to turnover suites cost a lot of money to acquire new residents why are we strategically our strategy. There is just to keep residents within our boardwalk portfolio for their entire rental lifespan and our team is doing a good job of that.
Perfect on those good news note I will turn it back thanks, guys. Thanks Pam.
Your next.
Question comes from Dean Wilkinson with CIBC. Your line is now open.
Hopefully I can make this quick.
On topic of affordability, how are you guys looking at the sale of the older assets, which I believe would probably have a more affordable and lower rent versus replacing those with the newer more and monetize higher rents that is that affordability metric the same across the assets or does it shift over time as you.
Sort of new grade the portfolio.
Dean at Sam in.
Just seeing and we're really looking forward to sharing our central Park community in la valid with everybody.
Really big units at really low price per square foot.
And so theres affordability everywhere, and especially affordable luxury that's our nice community now.
And.
Again, we're big fans of the four seasons is a Canadian brand.
And what I'd like to say is if the four seasons was ever going to develop an apartment it would be central park and so inspired by.
Our partners that we purchased from and the value proposition and the insight to build such big apartments and to rent them at such a low and affordable price. So.
Main street.
SaaS Katuni same very affordable brand new product and so we're all about affordability in every single category.
And so it's.
It's building upon on that the smaller communities that we are selling they are older.
We would invest a lot more value add than some of our competitors would and smaller operators and so we have a different.
Expectation with respect to our older communities.
And invest a lot more than most of our competitors and our older communities and so we think the smaller older communities are our best and smaller providers and our competitors that take a different approach and provide a product that we call and are proud of.
Classic product.
And it's just like classic Coca Cola always in demand and so affordable classic portable linoleum carpet older product has a purpose in our marketplace and provides that choice and it's all about maximum choices. So.
It's all about affordability Dean and it comes back David James just to add that this comes back to what we were talking about with Matt and trying to retain residents within our import portfolio for their entire rental cycle and part of that is having that diversified product offering. We continue to have most of our portfolio remains.
Lehman's in Central Park, which we're referring to here.
However, the trend of 230 foot.
Four seasons.
Okay.
Fort Smith Jonathan.
Okay.
<unk>.
When you look at the acquisitions, we've announced this quarter and then the most recent one obviously being six years.
Our average rent per square foot range from just over $2 a square foot.
248 square foot, so I think when you.
He'll put Canada.
While rents per square foot, even our new product is still very affordable.
No that's great everyone loves a classic Sam I think we're all looking forward to the trip to Laval. Thanks.
Thanks, everybody.
Thank you <unk>.
There are no further questions at this time I will now turn the call over to Sam <unk> for closing remarks.
Thank you joelle as always if there any further questions or comments, please do not hesitate to contact us with gratitude wed like to thank our entire team that puts that extra in ordinary.
Dan and day out our team is truly extraordinary.
Thank you loyal residents CMA sea, our lenders partners and of course, our unit holders.
Far and wide and local it really is all about our BFS are boardwalk family forever, 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 bank or <unk>.
Jordan Aerie team and great leaders enough, we're 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 our share shareholders and stakeholders.
We conclude home is where our heart is our heart is where our family is and our family is were always live are occupied rent average $1582.
Our love always priceless welcome home to Love always our future is boardwalk family forever, what can be more important when choosing where to call home God bless us and now more than ever Grant us all piece our greatest prize.
Yeah.
Ladies and gentlemen, this concludes your conference call for today, we thank you for participating and ask that you. Please disconnect your lines.