Boardwalk Real Estate Investment Trust (TSE:BEI.UN) reported lower third-quarter same-property net operating income as higher expenses, particularly Alberta education property taxes, outweighed modest rental revenue growth. The apartment landlord also tightened its full-year outlook while emphasizing occupancy and unit buybacks in a more competitive rental market.
Same-property rental revenue rose 0.9% from a year earlier, while same-property net operating income (NOI) fell 1.1%. Total rental expenses increased 5.3%, and the operating margin declined 140 basis points to 67%, executives said on the Nov. 4 earnings call.
CEO Sam Kolias said funds from operations (FFO) declined largely because of asset sales, although unit repurchases helped limit the decrease in FFO per unit to 1.6%.
Occupancy holds as leasing spreads moderate
Boardwalk maintained occupancy at 97% during the quarter, with executives crediting resident retention and a focus on affordable housing. Samantha Kolias-Gunn, senior vice president of corporate development and governance, said the trust’s average occupied rent for a two-bedroom apartment was CAD 1,609, compared with a Canadian average of CAD 2,221 based on Rentals.ca data.
Chief Financial Officer Gregg Tinling said blended leasing spreads were slightly negative during the quarter as the trust adjusted rents in response to local conditions. Positive renewal spreads helped preserve occupancy, while rents were lowered in some communities facing greater new supply or higher-priced competition.
President James Ha told analysts that post-quarter leasing trends remained fairly consistent and agreed that renewal spreads around 2% were consistent with what the trust was seeing over the next couple of months. Boardwalk continues to use incentives on new leases, which generally come off on renewal, he said.
Competition is most pronounced at higher price points, Ha said, including in Calgary, where Boardwalk has upgraded its portfolio in recent years. He added that the trust would like to increase occupancy further heading into 2027.
Guidance narrowed as property taxes rise
Boardwalk narrowed its 2026 forecast to same-property NOI growth of 1% to 2% and FFO per unit of CAD 4.65 to CAD 4.75. Ha said sequential revenue growth in the third quarter was helping offset higher property taxes in the second half of the year.
Utilities are the biggest variable in the remaining range, depending on winter weather, Ha said. Tinling also cited unexpected third-quarter repair and maintenance costs from mandated inspections in Quebec and record rainfall in Edmonton and Grande Prairie, Alberta.
Tinling said Alberta’s education property tax increase took effect in July and that fourth-quarter property taxes should be similar to the third quarter. Although it is too early to make a firm forecast, he said the trust does not expect a similar education tax increase next year. Boardwalk plans to provide 2027 guidance with its fourth-quarter results.
Asset sales fund buybacks
Senior Vice President of Investments Samantha Adams said Boardwalk had completed or announced CAD 629 million in asset sales year to date at an average capitalization rate of 5.2%. Once the remaining deals close, the sales are expected to generate CAD 342 million in net proceeds and reduce near-term capital spending by approximately CAD 33 million.
The total includes CAD 177 million of third-quarter sales in London, Grande Prairie and Edmonton. Adams said the properties were sold because of high deferred capital needs, operational challenges or overexposure to certain markets.
Boardwalk has repurchased CAD 245 million of units in 2026 at an average price of CAD 65.37, Adams said. She described the normal course issuer bid as the trust’s top capital allocation priority, citing a gap between its unit price and private-market valuations. The current buyback program was completed during the quarter and is eligible for renewal in late November, said Eric Bowers, vice president of financial and investor relations.
Adams said Boardwalk continues to review acquisition opportunities but remains highly selective. The trust is also reviewing its 2027 disposition strategy and expects to provide an update alongside its broader guidance.
Balance sheet and distributions
Boardwalk ended the quarter with approximately CAD 403 million in liquidity. Its debt-to-EBITDA ratio improved to 9 times from approximately 10 times at the end of 2025, while debt represented just under 43% of total assets, Bowers said.
Of approximately CAD 815 million in mortgages maturing in 2026, Boardwalk had renewed or forward-locked CAD 579 million at an average rate of 3.89% and an average term of about seven years, Tinling said. The fair value of investment properties was CAD 8 billion at Sept. 30, down from CAD 8.6 billion at the end of 2025 because of asset sales and a fair-value loss adjustment.
The trust confirmed monthly distributions of CAD 0.15 per unit for December 2026 and January and February 2027. Bowers said Boardwalk expects to provide an update in December on any special distribution related to taxable gains from its sales program.
About Boardwalk Real Estate Investment Trust (TSE:BEI.UN)
Boardwalk Real Estate Investment Trust, or Boardwalk REIT, is a real estate investment trust engaged in the acquisition, development, and management of residential multifamily communities throughout Canada. Although the company’s cumulative residential property portfolio includes holdings in the provinces of Alberta, Saskatchewan, Ontario, and Quebec, the majority of its total units are located in Alberta. The submarkets around the cities of Calgary and Edmonton, specifically, account for the majority of Boardwalk REIT’s total residential suites.
