Boardwalk Real Estate Investment Trust Q2 Earnings Call Highlights

Boardwalk Real Estate Investment Trust (BEI.UN) reported second-quarter operating results that reflected stable demand for affordable rental housing, with same-property rental revenue and net operating income each rising 1.7% from a year earlier. Chief Executive Officer Sam Kolias said the trust maintained a 67.6% operating margin during the quarter. Funds from operations declined slightly following recent asset sales, but FFO per unit increased 2.6%, which management attributed in part to the use of sale proceeds for unit repurchases under its normal course issuer bid program. Profit declined because of a non-cash reduction in IFRS net asset value, he said.

Boardwalk reported occupancy of 97% and average occupied rent of C$1,612 for a two-bedroom apartment, compared with a Canadian average of C$2,159 cited from Rentals.ca data. Samantha Kolias-Gunn, senior vice president of corporate development and governance, said the company’s affordability position and more than C$1 billion of rebranding and repositioning investments since 2017 have supported resident retention and property competitiveness. Management said rental markets in its core regions have become more balanced as new housing supply has been delivered, particularly in higher-end product categories. Boardwalk said it has responded by adjusting rents and incentives by community while prioritizing occupancy, retention and net operating income. Chief Financial Officer Gregg Tinling said average occupied rent increased both sequentially and year over year. While vacancy loss rose, the trust reduced incentives, helping to support higher rental revenue versus the second quarter of 2025. Leasing spreads moderated year over year amid the more balanced supply-demand environment. Boardwalk raised market rents in communities with stronger fundamentals, while reducing rents in certain areas with higher new-supply deliveries or higher price points. Tinling said the blended leasing spread remained positive. Same-property NOI in Alberta, Boardwalk’s largest region, rose 1% on revenue growth of 1.1%. Total rental expenses increased 1.9% from a year earlier, driven primarily by repairs and maintenance, bad debt expense and property taxes. Lower insurance premiums and utility expenses partly offset those increases.

During the question-and-answer session, President James Ha said July leasing activity was strong by volume and that August is typically a strong leasing month. The trust is seeking to raise occupancy toward a range of 97.5% to 98%, he said. Ha also said July new and renewal leasing spreads were generally consistent with trends seen in May and June.

Boardwalk completed or announced C$492 million of asset sales during the first half of 2026. Management said those transactions are expected to generate about C$272 million in net proceeds once closed and reduce near-term capital spending by approximately C$26 million. The trust recently announced the sale of a two-property London, Ontario, portfolio for C$40 million, representing a 4.5% exit capitalization rate based on trailing 12-month NOI. Samantha Adams, senior vice president of investments, said the transaction was completed at a slight premium to IFRS value. Management said most disposition proceeds have been directed toward unit repurchases. Boardwalk invested C$204 million year to date under its NCIB at a weighted average price of C$65.51 per unit. Adams said private-market transactions in Boardwalk’s core markets have occurred at capitalization rates of roughly 4.75% to 5.25%, while the trust’s units implied a cap rate above 6%, making repurchases its most accretive capital deployment option at present.