2 0 2 4 A N N U A L R E P O R T
Building Communities
with Love Always
P E R F O R M A N C E W I T H P U R P O S E :
Redwood Court, Edmonton.
Thoughtfully renovated, the lobby
balances contemporary aesthetics
with its original architectural
character.
03 PERFORMANCE WITH PURPOSE
05 CORPORATE PROFILE
07 2024 HIGHLIGHTS
09 LETTER TO UNITHOLDERS
16 ESG UPDATE
18 OUR PORTFOLIO
20 MULTI-FAMILY PROPERTY PORTFOLIO
27 FINANCIAL REVIEW CONTENTS
28 MANAGEMENT’S DISCUSSION AND ANALYSIS
91 INDEPENDENT AUDITOR’S REPORT
94 FINANCIAL STATEMENTS
98 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
146 CORPORATE INFORMATION
TABLE OF CONTENTS
Above:
Leewood Village, Edmonton.
The new bold community room.
On the cover:
Whitehall Square, Edmonton.
The newly transformed
entrance to the community
centre welcomes you in style.
BOARDWALK REIT | 2024 ANNUAL REPORT
01
Love Always
WESG
Investors
Boardwalk
Family
Forever
Resident
Members
Capital
Community
Associates
Partners
Transforming
intentions into impact:
The intersections of
what we love
02
Performance with Purpose—it’s more than
just a philosophy—it’s the driving force behind
everything we do. At the heart of our purpose
is the Boardwalk Family Forever. It comes to
life through our Communities in Motion mark.
Each roof represents more than just a home;
it is the connection, belonging, and shared
purpose that defines our Communities
By focusing on the intersection of what we love, our communities,
our strengths, and the values that sustain us, we transform
intention into meaningful impact. This unwavering commitment
forms our resilient foundation—one that continues to support our
collective strengths, progressive growth, and thriving future.
In a time of rapid change, Boardwalk remains disciplined,
navigating uncertainty with confidence and aligning our efforts
with the needs of our communities. We’ve embraced change and
transformed challenges into opportunities.
Momentum drives this annual report. Fueled by performance,
persistence, and progress—we continue to create meaningful
impact, championing our unwavering commitment to our
Boardwalk Family Forever.
Thriving Through Adversity:
Connection, Community, and Consistency.
Building Communities
with Love Always
P E R F O R M A N C E W I T H P U R P O S E :
03
Communities in
Motion Mark
Redwood Court, Edmonton.
A bold new look with
colourful artwork that
makes a statement.
Whitehall Square, Edmonton.
A fitness centre addition
designed to wow even the most
discerning fitness enthusiast.
04
CORPORATE PROFILE
Boardwalk REIT (“Boardwalk”, the “Trust”) aims to be Canada’s
friendliest community provider and the first choice in multi-
family communities to work, invest, and call home with our
Boardwalk Family Forever.
Providing homes in more than 200 communities, with
approximately 34,000 residential suites totaling over 29 million
net rentable square feet, Boardwalk has a proven long-term
track record of building better communities, Where Love
Always Lives™. Our three-tiered and distinct brands:
Boardwalk Living, Boardwalk Communities, and Boardwalk
Lifestyle, cater to a large diverse demographic and has evolved
to capture the life cycle of all Resident Members.
Boardwalk’s disciplined approach to capital allocation,
acquisition, development, purposeful re-positioning, and
management of apartment communities allows the Trust
to provide its brand of community across Canada creating
exceptional Resident Member experiences. Differentiated
by its peak performance culture, Boardwalk is committed to
delivering exceptional service, product quality and experience
to our Resident Members who reward us with high retention
and market leading operating results, which in turn, lead to
higher free cash flow and investment returns, stable monthly
distributions, and value creation for all our stakeholders.
Boardwalk REIT’s Trust Units are listed on the Toronto Stock
Exchange, trading under the symbol BEI.UN.
Additional information about Boardwalk REIT can be found on
the Trust’s website at bwalk.com/investors.
BOARDWALK REIT | 2024 ANNUAL REPORT
05
Leewood Village, Edmonton.
The newly created community
room was styled with a bold
and vibrant look.
06
$4.18(1)
FFO per Unit
$588.2 million
Profit
+16.1%
Growth in FFO per Unit
33.3%
FFO Payout Ratio
$4.8 billion
Unitholders’ Equity
$93.68(1)
Net Asset Value per Unit
10.1x(1)
Trailing 12 Months Debt to EBITDA
40.6%(1)
Debt to Total Assets
$368.2 million
Total Available Liquidity at the end of 2024
$133.4 million
Investment in Capital Assets
$109.0 million
Building Acquisitions
$1,524
Occupied Rent (December 2024)
>24.0%
Management Ownership
2024 HIGHLIGHTS
BOARDWALK REIT | 2024 ANNUAL REPORT
07
(1) Please refer to the section titled “Presentation of
Non-GAAP Measures” in the MD&A for more information.
Whitehall Square, Edmonton.
Bold, vibrant branding brings new
energy to our community centre!
Whitehall Square, Edmonton.
A family-friendly community
made even better with a new
dedicated Kids Zone.
08
Dear Boardwalk Family Forever,
Boardwalk performs with purpose, and
delivered exceptional results for Resident
Members and Unitholders in 2024 by focusing
on our commitment to building communities
with Love Always. Our resident-focused
approach, vertically-integrated operating
platform and investment in our communities
provides a strong starting point for 2025.
Demand for affordable housing remains high
across Canada. As the overall market adjusts
to immigration levels that are more balanced
from a historical perspective, our significant
presence in some of the most affordable self-
regulated markets in Canada and unique value
proposition positions the Trust for resilient
performance heading into 2025.
Our Unique Value Proposition
Resident Members are at the core of the
Trust’s success and building communities with
love always is critical to achieving sustainable
outcomes for Resident Members and
Unitholders. In 2024, our Resident Members
emphasized their positive experience with
us. Our NPS score of 83 is a reflection of our
team’s commitment to excellence. Throughout
2024, the Trust prioritized high retention rates
in its non-price controlled markets through
self-moderation of positive adjustments on its
lease renewals.
This positions the Trust favorably for resilient
operational and financial performance, as
overall supply and demand fundamentals
return to more sustainable levels, and creates a
win-win outcome for Resident Members
and Unitholders.
LETTER to UNITHOLDERS
Resident Members are at the
core of the Trust’s success
and building communities
with love always is critical
to achieving sustainable
outcomes for Resident
Members and Unitholders.
sam kolias
Chairman and Chief Executive Officer
BOARDWALK REIT | 2024 ANNUAL REPORT
09
The Trust has demonstrated over the last
number of years that the best and most
cost-effective source of capital for re-
investment in its communities is the cash
flow generated by its operations. The Trust
employs a maximum cash flow retention
policy, through our minimum distribution, in
order to further improve our communities for
Resident Members and compound returns for
Unitholders. As the Trust has grown its cash
flows over time, it has increased the capital
available for re-investment in its communities
to the benefit of Resident Members, while
consistently growing distributions to
Unitholders. This remains a focus for the Trust
moving into 2025.
Capital Allocation
The Trust continues to utilize its cheapest
source of capital, internally generated
cash flow, to further compound returns for
Unitholders while improving its communities
for Resident Members through re-investment
into its value-add capital program. In 2024, the
Trust’s FFO of $225.8 million grew significantly
year-over-year and more than covered its
investment in capital assets (value-add and
maintenance capital) of $133.4 million and
distributions of $75.1 million (includes B
units), which is a key differentiator for the
Trust within the Canadian multi-family REIT
environment. As re-iterated below with the
introduction of 2025 financial guidance, the
>> Rental Revenue of $603.3 million, +10.6 % from 2023
>> Net Operating Income of $382.3 million, +14.8% from 2023
>> Profit of $588.2 million
>> Operating Margin of 63.4%, compared to 61.0% in 2023
>> Same Property Rental Revenue of $591.5 million, +9.2 % from 2023
>> Same Property Net Operating Income of $380.4 million, +13.0% from 2023
>> Same Property Operating Margin of 64.3%, compared to 62.1% in 2023
>> Funds from Operations (“FFO”) per Unit of $4.18, +16.1% from 2023
>> Net Asset Value per Unit of $93.68, +11.0% from 2023
>> Unitholders’ Equity of $4.8 billion
>> Debt to EBITDA of 10.1x, down from 11.0x in 2023
>> Debt to Total Assets of 40.6%, compared to 43.2% in 2023
Key financial highlights for 2024 include:
10
Trust is confident that it will continue to grow
its cash flows in 2025.
Boardwalk remained prudent in its capital
deployment initiatives in 2024. Early in
the year, the Trust repaid its portion of the
construction line for 45 Railroad which had
an interest rate of approximately 6.6% at the
time. From an external growth perspective,
the Trust is capitalizing on its relationships and
disciplined approach to source opportunistic
acquisitions that are accretive to FFO per
unit and Net Asset Value per unit over the
short to medium term. During 2024, the Trust
completed the acquisition of the newly-built
The Circle community in Calgary, Alberta,
Dawson Landing in Chestermere, Alberta and
also removed conditions on the acquisition
of the Elbow 5 Eight community in Calgary,
Alberta, which is expected to close in Q1 2025.
The acquisitions strategically increase the
scale of the Trust’s portfolio in rapidly growing
regions where it has an existing presence,
improve the overall quality of its portfolio
while providing accretion to Unitholders. The
Trust also re-implemented its capital recycling
program to source additional capital through
the disposition of non-core communities.
Subsequently to the end of 2024, the Trust
closed on the disposition of three communities
in Edmonton, Alberta totaling 390 units for net
proceeds of approximately $58.3 million.
In November 2024, the Trust renewed its
Normal Course Issuer Bid (“NCIB”) to enable it
to tactically capitalize on significant disconnects
between its unit price and the value of its own
high-quality portfolio. In December 2024 and
January 2025, the Trust re-deployed $28.0
million into its NCIB at an average weighted
price of $64.02. Management viewed this as
an attractive entry point, repurchasing units at
an implied going-in cap rate in excess of 6% for
its own high-quality portfolio, which compares
very favorably to opportunities available in
the private market. In allocating capital to unit
repurchases, management takes into account
a number of considerations including implied
returns of repurchasing its own units, long-
term strategic vision, its current cash position,
impact on leverage, opportunity set available
for external re-deployment, and overall trading
liquidity implications.
As part of its long-term growth strategy,
the Trust maintains a selective development
pipeline in order to incrementally improve
the quality and breadth of its product offering
over time and scale up in supply-constrained
markets that are difficult to access. During
2024, the Trust progressed on the construction
of its Aspire development in View Royal,
British Columbia which is anticipated
to deliver in 2025. The Trust also
made progress in re-plenishing
its future development pipeline
in irreplaceable locations through
the acquisitions of its Marda Loop site,
The Brenda and two additional properties in
Calgary, Alberta for a total consideration of
approximately $17.0 million.
Balance Sheet Strength
The Trust continues to take significant strides
in improving the strength of its balance sheet.
In 2024, the Trust lowered its overall leverage
significantly. Debt to Total Assets was reduced
to 40.6% from 43.2% the prior year, while the
Debt to EBITDA improved to 10.1x from 11.0x
BOARDWALK REIT | 2024 ANNUAL REPORT
11
>> Rental revenue growth of 10.6%
>> Achieved same property NOI growth of 13.0%
>> Expansion of Operating Margin to 63.4%, compared
to 61.0% in the prior year
>> Leading performance culture, aNPS of 74 compared to target of 72
>> Resident satisfaction and retention, NPS of 83 compared to
target of 82 , maintained occupancy above 97.0%
>> Re-invested $99.9 million of value-add capital into
our communities
>> Repaid the Trust’s portion of construction facility for 45 Railroad
that was paying interest of 6.6%
>> Acquired 313 suites in Calgary, AB, and 63 suites in Chestermere, AB,
removed conditions on additional 255 suites in Calgary
>> Re-initiated capital recycling program; completed sale of
390 suites subsequent to year-end
>> Invested $10 million into Normal Course Issuer Bid
in December
>> 96% of mortgages are CMHC insured
>> Total Available Liquidity of $368.2 million as at December 2024
>> Reduced Debt to EBITDA(1) from 11.0x to 10.1x; reduced Debt to
Total Assets(1) from 43.2% to 40.6%
>> Cumulatively repositioned/renovated common areas representing
70% of our portfolio since 2017
>> Net Asset Value per Unit(1) growth of 11.0%
>> Average Occupied Rent of $1,524 as of December 2024
FFO(1) of $225.8 million; AFFO(1) of $192.3 million
FFO per Unit(1) of $4.18 (Initial 2024 Guidance range of $3.93 to $4.18)
AFFO per Unit(1) of $3.56 (Initial 2024 Guidance range of $3.30 to $3.55)
Profit of $588.2 million
OUR GOALS and 2024 RESULTS
(1) Please refer to the section titled “Presentation of
Non-GAAP Measures” in the MD&A for more information.
Organic Growth
Accretive
Capital Recycling
Solid Financial
Foundation
Compelling Value
Creating
Stakeholder Value
PURPOSE
2024 PERFORMANCE
12
Elbow 5 Eight, Calgary.
A stylish and inviting
community space in our
newest addition
BOARDWALK REIT | 2024 ANNUAL REPORT
13
on a trailing 12-month basis as a result of the
Trust’s growing cash flows.
The Trust’s strategy of maintaining a well-
laddered maturity curve on its mortgages
has proven effective in minimizing mortgage
renewal risk in any individual year. The Trust’s
presence in primarily non-price controlled
markets has also increased its ability to offset
higher interest costs over time. As of the end
of 2024, approximately 96% of the Trust’s
outstanding mortgage principal balance is
CMHC insured which provides the Trust with
low-cost financing and lowers the renewal risk
of its mortgage portfolio.
Overall improvement in our balance sheet
over the last number of years combined with
our maximum cash flow retention policy from
a distribution standpoint positions us well to
capitalize on opportunities to supplement the
Trust’s organic growth in both stable periods
and in periods of increased volatility in the
overall market.
2025 Outlook
As 2025 begins, our foundation for resilient
performance is strong. Demand for affordable
housing is omnipresent across our markets
and our growing cash flow provides a means
to further compound growth through re-
investment in our communities. We are pairing
this additional cash flow with our capital
recycling initiatives, through the disposition
of select non-core communities, to expand the
reach of our love always into new communities
that will further enhance value for Resident
Members and Unitholders.
Boardwalk’s position in our largest market
of Alberta remains a differentiator for the
Trust. Alberta continues to attract migration
from more expensive areas of Canada and
overseas while punching above its weight for
employment growth, creating approximately
22% of all Canadian jobs in 2024. The Alberta
government’s fiscal surplus uniquely positions
the province to invest in infrastructure and
invest to attract new areas of employment.
Our approach to sustainable self-moderation
of rent adjustments in our non-price controlled
markets has strengthened our reputation as
a community provider of choice, and helps
to provide stability across various market
conditions for all our stakeholders. We
have re-invested into the majority of our
communities since 2017, positioning the
Executive Group
14
Trust to hold occupancy above the level of the
overall market, while providing an affordable
and attractive alternative to newer supply and
across various market conditions.
Organic growth remains a primary driver
in 2025. While anticipated performance by
market varies, we are well-positioned to deliver
strong relative performance. Renewal spreads
in the Trust’s non-price controlled and Quebec
markets are expected to be primary drivers
for FFO per unit growth in 2025. The Trust will
look to supplement this organic growth with
accretive capital deployment of excess cash flow
and proceeds from select non-core dispositions.
As a result of this favorable outlook, the Trust
is introducing its 2025 financial guidance as
follows: As a result of improving cash flow and
higher taxable income, the Trust is increasing
its regular monthly distribution by 12.5%
to $0.1350 per Unit or $1.62 per Unit on an
annualized basis for the months of March, April
and May 2025.
At $64, Boardwalk’s Trust Units are currently
trading at an equivalent value of $189
thousand per suite, and at an approximate
5.9% cap rate on our most recent fiscal year
NOI. This compares to our estimated NAV of
approximately $237 thousand per suite which
represents a 4.7% cap rate on our last twelve
months of NOI. Our conviction is unwavering
that this represents exceptional value in
the multi-family space given the quality of
the Trust’s asset base, growth profile, and
transactions in the
private market.
Thank you to you, our Unitholders, for your
ongoing support and trust, as we pursue strong
and sustainable financial performance together.
Thank you to our lenders, CMHC, and
our various levels of government who are
invaluable partners in achieving our common
goal of providing affordable housing options
and best product quality, service and
experience to our Resident Members.
Thank you to our amazing Boardwalk team
who relentlessly drive our performance with
purpose: building communities with love always.
And lastly, thank you to our Family
Resident Members, who are the heart of our
communities and make Boardwalk the place
to call home.
With love always,
sam kolias
BOARDWALK REIT | 2024 ANNUAL REPORT
15
DRIVING CHANGE with
HEART AND PURPOSE
ESG UPDATE
Boardwalk is committed to integrating
environmental, social and governance
practices throughout our business, to
positively impact our Associates, Resident
Members and Stakeholders.
Management works closely with the Board
of Trustees to ensure that we are taking a
comprehensive ESG governance approach
that aligns with our overall business strategy.
Management evaluates, prioritizes and
manages ESG risks, while considering their
economic, environmental and social impacts.
Collaborative, cross-functional teams support
the various aspects of our ESG program.
In 2024 we published our fifth annual ESG
Report, highlighting our 2023 initiatives
and achievements, and setting out our 2024
objectives aimed at sustainable operations and
minimizing resource consumption, a happy and
healthy culture, building communities, and a
strong governance framework.
Whitehall Square, Edmonton.
The new community room is
the perfect setting for hosting,
connecting, and celebrating.
16
We are thankful for our Associates, Resident Members
and Stakeholders for supporting our ESG program and
enabling the progress we have seen so far. We will continue
to review and refine our ESG strategy to drive meaningful
improvements in our business and our communities. For
additional information, refer to Boardwalk’s 2023 ESG
report at bwalk.com/en-ca/investors/esg. Our 2024 ESG
report will be published in May 2025.
Key 2024 accomplishments include:
Environmental
Social
Governance
>> Created a water subcommittee to work towards our water use
intensity reduction target of 15% by 2030.
>> Over $23 million of investments in energy efficiency upgrades,
such as window and building envelope, building HVAC, LED lighting.
>> Completed energy audits at 6 of our AB communities to assist with
developing future decarbonization plans.
>> Expanded our submetering program by adding 331 suites for
electricity, 946 suites for water and 776 suites for thermal.
>> Four building certifications applications in progress.
>> Enhanced Resident Member engagement through partnerships with
Urban Microhabitat and Telus Environmental Solutions.
>> Launched mental health training and ambassador program to
offer support and resources to our Associates, in conjunction with
the Canadian Mental Health Association.
>> Achieved a Net Promoter Score of 83 and Associate Net Promoter
Score of 74, reflecting an improvement in Resident Member
satisfaction and associate engagement.
>> Recognized as one of Canada’s Most Responsible Companies 2025
by Newsweek, which is based on a comprehensive review of all
ESG pillars.
>> Continued to strengthen our privacy and information security
programs, maintaining an overall A rating on our Security Scorecard.
>> Launched a supplier ESG survey and received responses from
approximately 50% of our suppliers, providing additional insight into
diversity and sustainability practices within our supply chain.
BOARDWALK REIT | 2024 ANNUAL REPORT
17
OUR PORTFOLIO
Residential Suites
Comprised of approximately 34,000 apartment
suites across Canada, with three distinct brands,
Boardwalk aims to serve all rental demographics
Where Love Always Lives™.
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
25,889
29,326
31,239
32,159
33,298
34,207
36,487
36,785
36,419
35,277
35,277
35,277
35,386
34,626
32,947
33,773
33,187
33,417
33,263
33,396
33,264
33,810
33,029
34,405
Elbow 5 Eight, Calgary. The
experience centre comes to life
with Boardwalk’s signature art
and professional design.
18
Victoria
0.7%
Edmonton
37.4%
Calgary
19.3%
Other AB
5.6%
Saskatoon
4.5%
Kitchener/Waterloo
Cambridge
1.8%
Regina
5.7%
Brampton
1.0%
London
6.6%
Quebec
3.8%
Montreal
13.6%
BOARDWALK REIT | 2024 ANNUAL REPORT
19
T H E B OA R D WA L K P O RT F O L I O
Edmonton/St. Albert/Spruce Grove
12,882
37.4%
Calgary/Airdrie/Canmore/Banff/Chestermere
6,642
19.3%
Montreal
4,681
13.6%
London
2,256
6.6%
Regina
1,974
5.7%
Red Deer/Fort McMurray/Grande Prairie
1,936
5.6%
Saskatoon
1,531
4.5%
Quebec City
1,319
3.8%
Kitchener/Waterloo/Cambridge
611
1.8%
Brampton
335
1.0%
Victoria
238
0.7%
Under Development; Victoria – 234 units
Victoria, BC
Aurora
Lifestyle
Walk-Up
114
95,756
840
The Vue
Lifestyle
Highrise
124
122,815
990
Subtotal:
238
218,571
918
Edmonton, Spruce Grove, St. Albert, AB
West Edmonton Village
Living
2021
HR, WU & TH
1,176
1,138,368
968
Whitehall Square
Living
2019 & 2024
HR & WU
598
545,934
913
Boardwalk Centre
Living
2022 & 2023
Highrise
597
471,871
790
Fairmont Village
Living
2022 & 2024
Walk-Up
424
362,184
854
Meadowview Manor
Living
2023
Walk-Up
348
284,490
818
Sturgeon Point Villas
Living
2022
Walk-up
280
284,953
1,018
Boardwalk Villages
Living
Townhouse
255
258,150
1,012
Riverview Plaza
Living
2020
Walk-Up
252
203,740
808
Morningside Estates
Living
2015
Walk-Up
223
167,064
749
Sir William Place
Living
2022 & 2023
HR & WU
220
126,940
577
Pembroke Estates
Living
2015
Walk-Up
198
198,360
1,002
Greentree Village
Living
2021
Walk-Up
192
156,000
813
Maple Gardens
Living
2020
Walk-Up
181
163,840
905
Northridge Estates
Living
2020
Walk-Up
180
103,270
574
Briarwynd Court
Living
TH & WU
172
144,896
842
Westbrook Estates
Living
2022 & 2024
Walk-Up
172
148,616
864
Springwood Place Apartments
Living
2019
Lowrise
160
122,640
767
Lord Byron Towers
Living
2022 & 2023
Highrise
158
133,994
848
Corian Apartments
Living
2020
Garden
153
167,400
1,094
Primrose Lane Apartments
Living
2020
Walk-Up
153
151,310
989
Habitat Village
Living
2024
Townhouse
151
129,256
856
Meadowside Estates
Living
2016
Walk-Up
148
104,036
703
Multi-Family Property Portfolio
MULTI-FAMILY
PROPERTY PORTFOLIO
Property (1)
Brand
Year of
Renovation (2)
Building Type (3)
# Suites
Net Rentable
Sq. Ft.
Average
Suite Size
(1) Ordered by brand, followed by descending number of suites
(2) Year of renovation is provided for those properties participating in the Trust’s brand diversification initiative
(3) HR - Highrise; MR - Midrise; TH - Townhouse; WU - Walk-Up
20
Property (1)
Brand
Year of
Renovation (2)
Building Type (3)
# Suites
Net Rentable
Sq. Ft.
Average
Suite Size
Edmonton, Spruce Grove, St. Albert, AB (continued from previous page)
Lord Byron Townhouses
Living
Townhouse
147
172,369
1,173
Cedarville Apartments
Living
2020
Walk-Up
144
122,120
848
Leewood Village
Living
2024
Walk-Up
142
129,375
911
Pinetree Village
Living
2015 & 2020
Walk-Up
142
106,740
752
Imperial Tower
Living
2016
Highrise
138
112,050
812
The Westmount
Living
2022 & 2023
Highrise
133
124,825
939
Tamarack East & West
Living
Garden
132
212,486
1,610
Brookside Terrace
Living
TH & WU
131
196,779
1,502
Carmen
Living
2022
Walk-Up
128
109,250
854
Redwood Court
Living
2024
Lowrise
116
107,680
928
Terrace Garden Estates
Living
2015
Walk-Up
114
101,980
895
Castleridge Estates
Living
2015
Townhouse
108
124,524
1,153
Kew Place
Living
Walk-Up
108
105,776
979
Cambrian Place
Living
2020
Walk-Up
105
105,008
1,000
Monterey Pointe
Living
Walk-Up
104
83,548
803
Parkview Estates
Living
Townhouse
104
88,432
850
Victorian Arms
Living
Walk-Up
96
91,524
953
The Palisades
Living
2020
Highrise
94
77,200
821
Westridge Estates B
Living
2024
Lowrise
91
56,950
626
Westridge Estates C
Living
2024
Lowrise
90
56,950
633
Castle Court
Living
Walk-Up
89
93,950
1,056
West Edmonton Court
Living
Walk-Up
82
73,209
893
Sandstone Pointe
Living
Walk-Up
81
83,800
1,035
Aspen Court
Living
Walk-Up
80
68,680
859
Lorelei House
Living
2020
Walk-Up
78
65,870
844
Kingsway Tower
Living
2022
Highrise
74
41,550
561
Point West Townhouses
Living
Townhouse
69
72,810
1,055
Village Plaza
Living
2020
Townhouse
68
65,280
960
Breton Manor
Living
2024
Walk-Up
66
57,760
875
Westridge Manor
Living
Garden
64
69,038
1,079
Fontana Place
Living
Lowrise
62
40,820
658
Suncourt Place
Living
Walk-Up
62
55,144
889
Warwick Apartments
Living
Walk-Up
60
49,092
818
Westborough Court
Living
Walk-Up
60
50,250
838
Garden Oaks
Living
Garden
56
47,250
844
Marlborough Manor
Living
2020 & 2023
Walk-Up
56
49,582
885
Westmoreland Apartments
Living
Lowrise
56
45,865
819
Valley Ridge Tower
Living
2024
Highrise
49
30,546
623
Granville Square
Living
Townhouse
48
53,376
1,112
Westwinds of Summerlea
Living
Garden
48
53,872
1,122
Christopher Arms
Living
Lowrise
45
29,900
664
Summerlea Place
Living
Garden
39
43,297
1,110
(1) Ordered by brand, followed by descending number of suites
(2) Year of renovation is provided for those properties participating in the Trust’s brand diversification initiative
(3) HR - Highrise; MR - Midrise; TH - Townhouse; WU - Walk-Up
BOARDWALK REIT | 2024 ANNUAL REPORT
21
Edmonton, Spruce Grove, St. Albert, AB (continued from previous page)
Viking Arms
Communities
2018
Highrise
240
257,410
1,073
Ermineskin Place
Communities
2020
Highrise
226
181,788
804
Southgate Tower
Communities
2020
Highrise
170
153,385
902
Wimbledon
Communities
2019
Highrise
165
117,216
710
Capital View Tower
Communities
2019
Highrise
115
71,281
620
Tower On The Hill
Communities
2019
Highrise
100
85,008
850
Fort Garry House
Communities
2019
Highrise
93
70,950
763
Maureen Manor
Communities
Highrise
91
64,918
713
Prominence Place
Communities
2018
Highrise
91
73,310
806
Solano House
Communities
2018 & 2024
Highrise
91
79,325
872
Terrace Tower
Communities
2020
Highrise
84
66,000
786
Tower Hill
Communities
2020
Highrise
82
46,360
565
Riverview Manor
Communities
2020
Highrise
81
62,092
767
Deville Apartments
Communities
2020
Highrise
66
47,700
723
The Edge
Lifestyle
2020
Lowrise
182
163,103
896
Park Place Tower
Lifestyle
2019
Highrise
179
162,049
905
Vita Estates
Lifestyle
2020
Lowrise
162
135,454
836
Insignia Tower
Lifestyle
Highrise
124
112,864
910
Dispositions Subsequent to Year End
Axxess
Lowrise
165
149,565
906
Galbraith House
Highrise
163
110,400
677
Lansdowne Park
Midrise
62
48,473
782
Subtotal - December 31, 2024:
12,882
11,352,470
881
Subtotal - Excluding Dispositions Closed Subsequently to Year End
12,492
11,044,032
884
Calgary, Airdrie, Chestermere, Banff & Canmore, AB
Russet Court
Living
2018
Garden
206
213,264
1,035
Radisson Village I
Living
2019
TH & WU
124
108,269
873
Radisson Village II
Living
2019
TH & WU
124
108,015
871
Radisson Village III
Living
2019
Townhouse
118
124,379
1,054
Vista Gardens
Living
2020
Townhouse
100
121,040
1,210
Travois Apartments
Living
2021
Walk-Up
89
61,350
689
Hillside Estates
Living
2020
Walk-Up
76
58,900
775
Pineridge Apartments
Living
2019
Lowrise
76
52,275
688
Flintridge Place
Living
2018
Midrise
68
55,023
809
Willow Park Gardens
Living
2022
Walk-Up
66
44,563
675
McKinnon Manor Apartments
Living
Walk-Up
60
43,740
729
McKinnon Court Apartments
Living
2021
Walk-Up
48
36,540
761
Patrician Village
Communities
2018 & 2024
Walk-Up
392
295,600
754
Richmond Towers
Communities
2020
HR & MR
376
301,720
802
The Circle
Communities
2024
Walk-up/Elevatored
295
212,570
721
Spruce Ridge Estates
Communities
2020
Walk-Up
284
196,464
692
Property (1)
Brand
Year of
Renovation (2)
Building Type (3)
# Suites
Net Rentable
Sq. Ft.
Average
Suite Size
(1) Ordered by brand, followed by descending number of suites
(2) Year of renovation is provided for those properties participating in the Trust’s brand diversification initiative
(3) HR - Highrise; MR - Midrise; TH - Townhouse; WU - Walk-Up
22
Calgary, Airdrie, Chestermere, Banff & Canmore, AB (continued from previous page)
Oak Hill Estates
Communities
2020
Townhouse
240
236,040
984
Boardwalk Heights
Communities
2018 & 2024
Highrise
202
160,894
797
O’Neil Tower
Communities
2019
Highrise
187
131,281
702
Westwinds Village
Communities
2019
Walk-Up
180
137,815
766
Tower Lane Terrace Apts
Communities
2018
Walk-Up
163
130,920
803
Ridgeview Gardens
Communities
2020
Townhouse
160
151,080
944
The Level
Communities
2023
Walk-up/Elevatored
158
114,550
725
Northwest Pointe
Communities
2018 & 2024
Walk-Up
150
102,750
685
Skygate Tower
Communities
2018 & 2023
Highrise
142
113,350
798
Boardwalk
Retirement Community
Communities
2019
Highrise
124
43,760
353
Lakeview Apartments
Communities
2021
Walkup
120
107,680
897
Brentview Tower
Communities
2018
Highrise
115
69,310
603
Dorsett Square
Communities
2021
Highrise
109
98,948
908
Spruce Ridge Gardens
Communities
Walk-Up
109
86,351
792
Lakeside Estates
Communities
Walk-Up
89
77,732
873
Glamorgan Manor
Communities
2022
Walk-Up
86
63,510
738
Royal Park Plaza
Communities
2018
Highrise
86
66,137
769
Mountainview Estates
Communities
TH & WU
81
75,624
934
Elk Valley Estates
Communities
Walk-Up
76
53,340
702
Prominence Place Apartments
Communities
2021
Walk-Up
75
55,920
746
Randal House
Communities
2019
Highrise
70
56,600
809
Varsity Place Apartments
Communities
2018
Walk-up
70
47,090
673
Beddington Court
Communities
2020
Walk-Up
66
50,919
772
Dawson Landing
Communities
Townhouse
63
84,730
1,345
Village Vale
Communities
Townhouse
54
66,366
1,229
The Brenda Apartments
Communities
Lowrise
6
5,250
875
The Samantha
Communities
Lowrise
6
5,750
958
The Vanessa
Communities
Lowrise
6
5,150
858
Varsity Square Apartments
Lifestyle
2018
MR & LR
297
241,128
812
Auburn Landing
Lifestyle
2023
Lowrise
238
209,976
882
Peak Estates
Lifestyle
Walk-up/Elevatored
148
149,689
1,011
Chateau Apartments
Lifestyle
2017
Highrise
145
110,545
762
Centre Pointe West
Lifestyle
2017
Midrise
123
110,611
899
Broadway Centre
Lifestyle
2018
Highrise
115
80,424
699
BRIO
Lifestyle
Highrise
81
71,500
883
Subtotal:
6,642
5,406,432
814
Red Deer, Fort McMurrary & Grande Prairie, AB
Boardwalk Park Estates I
Living
TH & WU
369
306,850
832
Prairie Sunrise
Living
2022
HR & WU
244
201,992
828
Canyon Pointe Apartments
Living
2018
Walk-Up
163
114,039
700
Property (1)
Brand
Year of
Renovation (2)
Building Type (3)
# Suites
Net Rentable
Sq. Ft.
Average
Suite Size
(1) Ordered by brand, followed by descending number of suites
(2) Year of renovation is provided for those properties participating in the Trust’s brand diversification initiative
(3) HR - Highrise; MR - Midrise; TH - Townhouse; WU - Walk-Up
BOARDWALK REIT | 2024 ANNUAL REPORT
23
Red Deer, Fort McMurrary & Grande Prairie, AB (continued from previous page)
Riverbend Village Apartments
Living
Walk-Up
150
114,750
765
Taylor Heights Apartments
Living
2019
Walk-Up
140
103,512
739
Chanteclair Apartments
Living
2024
Walk-Up
79
68,138
863
Inglewood Terrace Apartments
Living
Lowrise
68
42,407
624
McMurray Manor
Living
Lowrise
44
30,350
690
The Granada
Living
Walk-Up
44
35,775
813
The Valencia
Living
Walk-Up
40
33,850
846
Mallard Arms
Living
Walk-Up
36
30,497
847
Edelweiss Terrace
Living
Walk-Up
32
27,226
851
Boardwalk Park Estates II
Living
Townhouse
32
30,210
944
Hillside Manor
Living
Walk-Up
30
21,248
708
Birchwood Manor
Living
Walk-Up
24
18,120
755
Heatherton Apartments
Living
Walk-Up
23
16,750
728
Cloverhill Terrace
Communities
2018
Midrise
120
102,225
852
Westridge Estates
Communities
Townhouse
112
113,664
1,015
Parke Avenue Square
Communities
2021
Walk-up
88
87,268
992
Watson Tower
Communities
2017
Midrise
50
43,988
880
Saratoga Tower
Communities
2019
Midrise
48
53,762
1,120
Subtotal:
1,936
1,596,621
825
Regina, SK
Wascana Park Estates
Living
Townhouse
316
303,360
960
Qu’appelle Village III
Living
Walk-Up
180
144,160
801
Centennial South
Living
Garden
170
129,080
759
Qu’appelle Village I & II
Living
TH & WU
154
133,200
865
Eastside Estates
Living
Townhouse
150
167,550
1,117
Evergreen Estates
Living
Walk-Up
150
125,660
838
Pines of Normanview
Living
2021
Garden
133
115,973
872
Lockwood Arms Apartments
Living
Walk-Up
96
69,000
719
Grace Manors
Living
Townhouse
72
69,120
960
Greenbriar Apartments
Living
2020
Walk-Up
72
57,600
800
Centennial West
Living
Garden
60
46,032
767
The Meadows
Living
Townhouse
52
57,824
1,112
Southpointe Plaza
Communities
2021
Midrise
140
117,560
840
Pines Edge
Communities
Garden
79
67,298
852
Pines Edge II
Lifestyle
Garden
79
67,298
852
Pines Edge III
Lifestyle
Garden
71
62,818
885
Subtotal:
1,974
1,733,533
878
Saskatoon, SK
Palace Gates
Living
Walk-Up
206
142,525
692
Meadow Park Estates
Living
2023
Townhouse
200
192,000
960
Stonebridge Apartments
Living
Walk-Up
162
131,864
814
Property (1)
Brand
Year of
Renovation (2)
Building Type (3)
# Suites
Net Rentable
Sq. Ft.
Average
Suite Size
(1) Ordered by brand, followed by descending number of suites
(2) Year of renovation is provided for those properties participating in the Trust’s brand diversification initiative
(3) HR - Highrise; MR - Midrise; TH - Townhouse; WU - Walk-Up
24
Saskatoon, SK (continued from previous page)
St. Charles Place
Living
Walk-Up
156
123,000
788
Heritage Townhomes
Living
Townhouse
104
99,840
960
Stonebridge Townhomes
Living
Townhouse
100
135,486
1,355
Lawson Village
Living
Walk-Up
96
75,441
786
Wildwood Ways B
Living
Walk-Up
54
43,961
814
Regal Towers
Communities
2020
Highrise
161
122,384
760
Carlton Tower
Communities
2019
Highrise
158
155,138
982
Penthouse Apartments
Communities
2021
Lowrise
82
61,550
751
Dorchester Tower
Communities
2020
Highrise
52
48,608
935
Subtotal:
1,531
1,331,797
870
London, ON
Noel Meadows
Living
Walk-Up
105
72,600
691
Heritage Square
Communities
2019
MR & WU
359
270,828
754
Forest City Estates
Communities
2019
Highrise
272
221,000
813
Maple Ridge On The Parc
Communities
2019
Highrise
257
247,166
962
Landmark Towers
Communities
2020
Highrise
213
173,400
814
Topping Lane Terrace
Communities
Midrise
189
177,880
941
Westmount Ridge
Communities
2019
Midrise
179
131,700
736
Meadowcrest Apartments
Communities
Walk-Up
162
110,835
684
Castlegrove Estates
Communities
Lowrise
144
126,420
878
The Bristol
Communities
Highrise
138
109,059
790
Sandford Apartments
Communities
2019
Walk-Up
96
77,594
808
Villages of Hyde Park
Communities
Townhouse
60
57,850
964
Abbey Estates
Communities
Townhouse
53
59,794
1,128
Ridgewood Estates
Communities
Townhouse
29
31,020
1,070
Subtotal:
2,256
1,867,146
828
Kitchener, Waterloo, Cambridge & Brampton, ON
Ardglen Place
Living
Townhouse
152
159,696
1,051
Kings Tower
Communities
2021
Highrise
226
171,100
757
Westheights Place
Communities
Midrise
103
91,920
892
Elmridge Heights
Communities
Walk-Up
70
71,420
1,020
Courtland Place
Communities
Walk-Up
60
61,152
1,019
Mayfieldview Court
Communities
Walk-Up
60
61,440
1,024
Cambridge Court
Communities
Townhouse
56
66,550
1,188
Wesley Park
Communities
Walk-Up
36
41,960
1,166
45 Railroad
Lifestyle
Highrise
183
162,703
889
Subtotal:
946
887,941
939
Montreal, QC
Le Bienville
Living
Walk-up
168
115,600
688
Jardins Viva
Living
Walk-up
112
91,000
813
Property (1)
Brand
Year of
Renovation (2)
Building Type (3)
# Suites
Net Rentable
Sq. Ft.
Average
Suite Size
(1) Ordered by brand, followed by descending number of suites
(2) Year of renovation is provided for those properties participating in the Trust’s brand diversification initiative
(3) HR - Highrise; MR - Midrise; TH - Townhouse; WU - Walk-Up
BOARDWALK REIT | 2024 ANNUAL REPORT
25
Montreal, QC (continued from previous page)
Nuns’ Island Portfolio
Communities
2021 & 2023
HR, WU & TH
3,100
3,106,110
1,002
Domaine d’Iberville
Apartments
Communities
Highrise
720
560,880
779
Complexe Deguire
Communities
Highrise
322
276,324
858
Le Quatre Cent
Communities
Highrise
259
153,500
593
Subtotal:
4,681
4,303,414
919
Quebec City, QC
Place Chamonix
Living
Townhouse
246
236,630
962
Les Jardins de Merici
Communities
2024
Highrise
346
300,000
867
Les Appartements Du Verdier
Communities
Walk-Up
195
152,645
783
L’Astre
Communities
2021
Midrise
183
134,480
735
Place Samuel de Champlain
Communities
Highrise
130
104,153
801
Place Charlesbourg
Communities
Midrise
108
82,624
765
Place du Parc
Communities
Midrise
111
81,746
736
Subtotal:
1,319
1,092,278
828
Total Portfolio - As at Dec. 31, 2024
34,405
29,790,203
866
Total Portfolio - Excluding Dispositions Closed Subsequently to Year End
34,015
29,481,765
867
Property (1)
Brand
Year of
Renovation (2)
Building Type (3)
# Suites
Net Rentable
Sq. Ft.
Average
Suite Size
(1) Ordered by brand, followed by descending number of suites
(2) Year of renovation is provided for those properties participating in the Trust’s brand diversification initiative
(3) HR - Highrise; MR - Midrise; TH - Townhouse; WU - Walk-Up
Whitehall Square, Edmonton.
Where cutting-edge design meets
the ultimate workout space.
26
Financial Review Contents
Management’s Discussion and Analysis
General and Forward-looking Statements Advisory
28
Executive Summary
30
Business Overview
30
Environmental, Social and Governance Overview
30
MD&A Overview
30
Outlook
30
Declaration of Trust
33
Presentation of Financial Information
34
Presentation of Non-GAAP Measures
34
Performance Review of 2024
37
Financial Performance Summary
40
Consolidated Operations and Earnings Review
40
Overall Review
40
Segmented Operational Reviews
42
Operational Sensitivities
45
Same Property Results
47
Financing Costs
50
Administration
51
Depreciation
51
Other Income and Expenses
52
Financial Condition
53
Review of Cash Flows
53
Capital Structure and Liquidity
60
Risks and Risk Management
66
General Risks
66
Specific Risks
70
Certain Tax Risks
74
Risks Associated with Disclosure Controls and
Procedures & Internal Control Over
Financial Reporting
75
Accounting and Control Matters
76
Critical Accounting Policies
76
Application of New and Revised IFRS Accounting
Standards and Future Accounting Policies
85
IFRS Accounting Standards
87
Disclosure Controls and Procedures (“DC&P”) &
Internal Control Over Financial Reporting
87
2025 Financial Outlook and Market Guidance
88
Selected Consolidated Financial Information
89
Financial Statements
Independent Auditor’s Report
91
Financial Statements
94
Notes to the Consolidated Financial Statements
98
Supplemental Information
Five Year Summary
141
2024 Quarterly Results
143
2023 Quarterly Results
144
Market & Unitholder Information
145
Corporate Information
146
27
BOARDWALK REIT | 2024 ANNUAL REPORT
27
Management’s Discussion
and Analysis
For the Years Ended, December 31, 2024 and 2023
GENERAL AND FORWARD-LOOKING STATEMENTS ADVISORY
General
The terms “Boardwalk”, “Boardwalk REIT”, the “REIT”, the “Trust”, “we”, “us” and “our” in the following Management’s Discussion and Analysis (“MD&A”)
refer to Boardwalk Real Estate Investment Trust. Financial data, including related historical comparatives, provided in this MD&A has been prepared in
accordance with IFRS® Accounting Standards, as issued by the International Accounting Standards Board (“IFRS Accounting Standards”). This MD&A is
current as of February 19, 2025 unless otherwise stated, and should be read in conjunction with Boardwalk’s audited annual consolidated financial
statements for the years ended December 31, 2024 and 2023, which have been prepared in accordance with IFRS Accounting Standards, together with this
MD&A, copies of which have been filed electronically with securities regulators in Canada through the System for Electronic Document Analysis and
Retrieval (“SEDAR+”) and may be accessed through the SEDAR+ website at www.sedarplus.ca. Historical results and percentage relationships contained in
the audited annual consolidated financial statements for the years ended December 31, 2024 and 2023 and this MD&A, including trends, should not be
read as indicative of future operations.
Provided all of the Trust’s income each year is paid or made payable to Unitholders (as defined below), then the Trust itself would generally not be subject
to income tax. Boardwalk intends to distribute or allocate all of its taxable income of the Trust to its Unitholders and to deduct these distributions for
income tax purposes. The Income Tax Act (Canada) (the “Tax Act”) contains legislation affecting the tax treatment of publicly traded trusts (the “SIFT
Legislation”), which if applicable, would tax the Trust in a manner similar to a corporation and tax certain distributions from such trusts as taxable
dividends from a taxable Canadian corporation. A trust which qualifies under the Tax Act as a real estate investment trust (the “REIT Exemption”) is not
subject to tax under SIFT Legislation. Boardwalk qualified for the REIT Exemption for the years ended December 31, 2024 and 2023 and intends to continue
to qualify for the REIT Exemption on an ongoing basis. Further discussion of this is contained in this MD&A.
Certain information contained in this MD&A , including information described under the heading "Risks and Risk Management," concerning the economy
generally and relating to the industry in which the Trust operates has been obtained from publicly and/or industry available information from third party
sources, including both the Bank of Canada’s January 2025 Monetary Policy Report and the Royal Bank of Canada’s December 2024 Provincial Report.
The Trust has not verified the accuracy or completeness of any information contained in such publicly available information. In addition, the Trust has
not determined if there has been any omission by any such third party to disclose any facts, information, or events which may have occurred prior to or
subsequent to the date as of which any such information contained in such publicly available information has been furnished or which may affect the
significance or accuracy of any information contained in any such information and summarized herein.
Unless otherwise indicated, all amounts are expressed in Canadian dollars.
Forward-looking Statements Advisory
Certain information included in this MD&A, including information described under the heading “Risks and Risk Management”, contains forward-looking
statements and information (collectively “forward-looking statements”) within the meaning of applicable securities laws. These forward-looking statements
include, but are not limited to, statements made concerning Boardwalk’s objectives, including, but not limited to, the REIT’s 2025 financial outlook and market
guidance, the expectation that Boardwalk will continue to qualify for the REIT Exemption, increasing and maintaining its occupancy rates, environmental,
social and governance ("ESG") initiatives and objectives, joint arrangement developments and future acquisition and development opportunities, including
its plans for land in Victoria, British Columbia and proposed purchase of Elbow 5 Eight and its long-term strategic plan of opportunistic acquisitions and
investments, its strategies to achieve objectives and business optimization expectations regarding Boardwalk’s vision and its strategies to achieve that vision,
expected value enhancements through Boardwalk’s branding initiative and suite renovation program, expected demand for housing and expected
occupancy rates, the Trust’s ability to provide the optimal return to Unitholders and payment of all of the REITs taxable income to Unitholders, the Trust's
intention to redeploy capital towards long-term value creation and maintain consistent and sustainable distributions while optimizing capital allocation,
Boardwalk’s goal of expanding geographically and diversifying its brand, expected increases in property taxes, utilities, and insurance costs, the anticipated
impact of inflation and higher interest rates and fluctuations related thereto, the possibility of economic contractions as a result of a potential recession,
Boardwalk’s goal to offer select incentives implemented to maintain occupancy levels, Boardwalk's operational sensitivities, Boardwalk's focus on optimizing
28
28
performance measures, the competitive nature of the real estate industry, Boardwalk's competitive status and strategies to remain competitive, the Trust's
plans with respect to adjustment of rental rates, real estate trends and the seasonality of the industry, depreciation adjustments, the Trust’s intention to
dispute the notices of reassessment with Canada Revenue Agency (“CRA”) Appeals Division, plans for capital improvement projects, maintenance, capital
expenditure, and investment properties, changes in Boardwalk's community classifications, financing costs, conversion of short-term mortgages to
long-term, use, review, and alteration of critical accounting policies and IFRS Accounting Standards (as defined herein), as well as statements with respect to
management of the Trust’s beliefs, plans, estimates, assumptions, intentions, and similar statements concerning anticipated future events, results,
circumstances, performance, or expectations that are not historical facts. Forward-looking statements generally can be identified by the use of forward-
looking terminology such as “outlook”, “objective”, “may”, “will”, “would”, “expect”, “intend”, “estimate”, “anticipate”, “believe”, “should”, “plan”, “continue”,
or similar expressions suggesting future outcomes or events. Such forward-looking statements reflect management of the Trust’s current beliefs and are
based on information currently available to management of the Trust at the time such statements are made. Management of the Trust’s estimates, beliefs,
and assumptions are inherently subject to significant business, economic, competitive and other uncertainties and contingencies regarding future events and
as such, are subject to change. All forward-looking statements in this MD&A are qualified by these cautionary statements.
Forward-looking statements are not guarantees of future events or performance and, by their nature, are based on Boardwalk’s current estimates and
assumptions, which are subject to risks and uncertainties, including those described in Boardwalk REIT’s Annual Information Form for the year ended
December 31, 2024 (“AIF”) dated February 19, 2025 under the heading “Challenges and Risks” and in this MD&A under the heading "Risks and Risk
Management”, which could cause actual events or results to differ materially from the forward-looking statements contained in this MD&A. Those risks and
uncertainties include, but are not limited to, those related to liquidity in the global marketplace associated with current economic conditions, the imposition
of any tariffs, surtaxes or other restrictive trade measures or countermeasures affecting trade between Canada and the United States, real estate industry
risks, changes in regulation and applicable law, including rent control regulations, tenant rental rate concessions, occupancy levels, access to debt and equity
capital, changes to Canada Mortgage and Housing Corporation (“CMHC”) rules regarding mortgage insurance, interest rates, joint arrangements/
partnerships, the relative illiquidity of real property, unexpected costs or liabilities related to acquisitions, construction, environmental matters, climate-
related risks, competition in the real estate industry, ground lease interruption, fluctuation in cash distributions, cyber incidents, availability of workforce,
credit risk respecting tenants, supply and demand fluctuations, utility and tax expenses, increased costs of materials used in construction including increased
costs as a result of increased or new tariffs imposed by local or foreign governments, uninsured perils, legal matters, reliance on key personnel, Unitholder
liability, income taxes, limitations on interest deductibility and changes to income tax rules that impair the ability of Boardwalk to qualify for the REIT
Exemption. This is not an exhaustive list of the factors that may affect Boardwalk’s forward-looking statements. Other risks and uncertainties not presently
known to Boardwalk could also cause actual results or events to differ materially from those expressed in its forward-looking statements. Material factors or
assumptions that were applied in drawing a conclusion or making an estimate set out in the forward-looking statements may include, but are not limited to,
the impact of economic conditions in Canada and globally, the REIT’s future growth potential, prospects and opportunities, interest costs, access to equity
and debt capital markets to fund (at acceptable costs), the future growth program to enable the Trust to refinance debts as they mature, the availability of
purchase opportunities for growth in Canada, the timing to deploy equity proceeds, the impact of accounting principles under IFRS Accounting Standards,
general industry conditions and trends, changes in laws and regulations including, without limitation, changes in tax laws, increased competition, the
availability of qualified personnel, fluctuations in foreign exchange or interest rates, and stock market volatility. Although the forward-looking statements
contained in this MD&A are based upon what management of the Trust believes are reasonable assumptions, there can be no assurance actual results will be
consistent with these forward-looking statements and no assurances can be given that any of the events anticipated by the forward-looking statements will
transpire or occur at all, or if any of them do so, what benefits that Boardwalk will derive from them. As such, undue reliance should not be placed on
forward-looking statements. Certain statements included in this MD&A may be considered “financial outlook” or “future oriented financial information
(“FOFI”) for purposes of applicable securities laws, all of which are subject to the same assumptions, risk factors, limitations and qualifications as set forth
above. The actual results of operations of the Trust and the resulting financial results will likely vary from the amounts set forth in this MD&A and such
variation may be material. Boardwalk REIT and its management believe that the FOFI contained in this MD&A has been prepared on a reasonable basis,
reflecting management of the Trust’s best estimates and judgements. However, because this information is subjective and subject to numerous risks, it should
not be relied on as necessarily indicative of future results. FOFI contained in this MD&A was made as of the date of this MD&A and was provided for the purpose
of providing further information about the Trust’s anticipated future business operations. Readers are cautioned that the FOFI contained in this MD&A should
not be used for purposes other than for which it is disclosed herein.
Except as required by applicable law, Boardwalk undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result
of new information, future events, or otherwise.
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Executive Summary
BUSINESS OVERVIEW
Boardwalk REIT is an unincorporated, open-ended real estate investment trust created pursuant to a Declaration of Trust, dated
January 9, 2004, as amended and restated on various dates between May 3, 2004, and May 6, 2024 (the “Declaration of Trust” or
“DOT”), under the laws of the Province of Alberta. Boardwalk REIT was created to invest in revenue producing multi-family residential
properties, or interests, initially through the acquisition of assets and operations of Boardwalk Equities Inc. (the “Corporation”).
Boardwalk REIT’s units (the “Trust Units”) trade on the Toronto Stock Exchange (“TSX”) under the trading symbol ‘BEI.UN’.
Additionally, the Trust has 4,415,000 special voting units issued to holders of “Class B Units” of Boardwalk REIT Limited Partnership
(“LP Class B Units” and, together with the Trust Units, the “Units”), each of which also has a special voting unit in the REIT. Boardwalk
REIT’s principal objectives are to provide Resident Members (as defined herein) with superior quality rental communities and the best
tenant/customer service, provide its holders (“Unitholders”) of Trust Units with stable monthly cash distributions, and to increase the
value of the Trust Units through the effective management of its residential multi-family revenue producing properties, renovations
and upgrades to its current portfolio, and the acquisition and/or development of additional, accretive properties or interests therein.
As at December 31, 2024, Boardwalk REIT owned and operated in excess of 200 properties, comprised of approximately 34,000
residential suites, and totaling over 29 million net rentable square feet. At the end of 2024, Boardwalk REIT’s property portfolio was
located in the provinces of British Columbia, Alberta, Saskatchewan, Ontario, and Quebec.
ENVIRONMENTAL, SOCIAL AND GOVERNANCE OVERVIEW
The Trust is committed to ESG objectives and initiatives, including working towards reducing greenhouse gas emissions as well as
electricity and natural gas consumption, water conservation, waste minimization, Resident Member satisfaction and a continued
focus on governance and oversight. As part of its 2024 annual reporting, the Trust will be publishing its ESG Report in May 2025 which
will be available on the Trust’s website at www.bwalk.com/en-ca/investors/esg. The ESG Report does not form a part of this MD&A.
MD&A OVERVIEW
This MD&A focuses on key areas from the audited annual consolidated financial statements for the years ended December 31, 2024
and 2023, and pertains to major known risks and uncertainties relating to the real estate industry, in general, and the Trust’s business,
in particular. This discussion should not be considered all-inclusive as it excludes changes that may occur in general economic,
political, and environmental conditions. Additionally, other elements may or may not occur, which could affect the organization in the
future. Please refer to the section titled “General and Forward-Looking Statements Advisory – Forward-Looking Statements Advisory”
in this MD&A. To ensure that the reader is obtaining the best overall perspective, this discussion should be read in conjunction with
material contained in Boardwalk REIT’s 2024 Annual Report, the audited annual consolidated financial statements for the years ended
December 31, 2024 and 2023, and the AIF, each of which are available under the REIT’s profile on www.sedarplus.ca.
OUTLOOK
In its January 2025 Monetary Policy Report, which was released on January 29, 2025, the Bank of Canada (“BoC”) noted that since
August 2024, inflation in Canada has stayed around 2%, though shelter prices remain elevated. Economic growth in Canada has been
slower than expected, but has gained momentum due to past interest rate cuts, despite a slowdown in population growth. The central
bank expects household spending to remain strong, with economic growth forecasted at 1.8% for 2025 and 2026. Despite the
projected growth, the BoC emphasized the uncertainty surrounding US trade policies, particularly with respect to potential tariffs on
imports, which could impact Canadian business confidence and the exchange rate. The BoC continues to monitor these
developments closely.
The Royal Bank of Canada (“RBC”) December 2024 Provincial Report continues to highlight both the challenges and opportunities the
Canadian economy faces. The country’s gross domestic product (“GDP”) has been underperforming, with per-capita GDP declining for
several quarters and unemployment rising. However, inflation is easing, with consumer price growth staying near the BoC’s target
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which has allowed the central bank to reduce interest rates more quickly than other nations, including the U.S. Per RBC, while
population growth has helped support the economy, new plans to reduce immigration could slow future growth and turn
demographics into a challenge. While per-capita GDP growth is expected to recover by mid-2025 as a result of the revised immigration
policy, RBC expects labor markets to soften further, with unemployment potentially peaking at 7%. Despite some signs in recovery in
certain sectors like housing, long-term growth concerns for Canada remain, particularly with low productivity, weak business
investment and potential trade disruptions.
For Alberta, RBC expects its economy to grow by approximately 2.8% in 2025, making it the expected top-performing province in
Canada for 2025. The energy sector, driven by the Trans Mountain pipeline expansion and weakening Canadian dollar will continue to
support growth by boosting oil production and exports and demand. Moving into 2025, RBC expects some of these tailwinds to slow
down, but the continued use of new infrastructure, lower interest rates and strong inter-provincial migration will help Alberta
maintain its momentum of growth at the forefront of Canadian provinces. For Saskatchewan, RBC remains optimistic and predicts its
growth to accelerate by 1.9%, an upward revision from the previous estimate of 1.5%. The favorable revision is largely attributable to
larger than anticipated interest rate cuts, alongside a modest pick-up in fertilizer prices and ongoing major construction projects that
bode well for businesses. For British Columbia, RBC believes the province is set to rebound with growth reaching 1.5% in 2025, an
upward revision from its original forecast of 0.9%. The stronger growth is attributed to falling interest rates that have helped the
housing market activity to rebound, combined with a more favorable natural gas outlook. For Ontario and Quebec, RBC has placed
both provinces near the bottom of its provincial growth ranking in 2025 at 1.2% growth for both. Although falling interest rates have
brought on renewed activity in the housing markets and are projected to ease financial pressures for some, stricter than anticipated
immigration targets and uncertainty from potential new or increased trade tariffs have limited provincial growth.
On October 24, 2024, the Government of Canada announced its 2025-2027 Immigration Levels Plan (“Immigration Levels Plan”) aimed
at pausing short-term growth to enable sustainable long-term development and growth. This plan introduces controlled targets for
both temporary residents, such as international students and foreign workers, and permanent residents. The Government of Canada
acknowledged the vital role that immigration has had in the post-pandemic economic recovery but seeks to reduce pressure on
housing, infrastructure, and social services. The Immigration Levels Plan is expected to result in a marginal population decline of
0.2% in both 2025 and 2026, before returning to a population growth of 0.8% in 2027. The Immigration Levels Plan outlines a reduction
to permanent resident targets from 500,000 permanent residents to 395,000 in 2025 and further down to 380,000 by 2026 and 365,000
in 2027, while temporary resident numbers are expected to drop significantly, in line with tightened eligibility criteria and caps. The
Government of Canada expects that decreasing immigration levels should alleviate some pressure in the housing market, with an
estimated reduction in the housing supply gap of approximately 670,000 units by the end of 2027. Management of the Trust is
currently evaluating the impact of this recent announcement, acknowledging that although it will affect demand in the Trust’s
markets, the impact is expected to be somewhat mitigated by the fact that the majority of the Trust’s portfolio is affordable housing
in regions where demand remains strong relative to other regions in Canada. Relative to other provinces, Alberta is expected to be
less impacted by the new Immigration Levels Plan due to its strong interprovincial migration and lower concentration of non-
permanent residents as a percentage of the population.
When considering rent as compared to median renter household income, the Trust’s core, non-price controlled markets remain
among the most affordable in the country, positioning the REIT for stable organic growth. Affordability remains integral to our rent
growth thesis that we are well positioned within our core markets. Calgary ranked as the fifth most liveable city in the world in the
2024 Economist Intelligence Unit's Global Liveability Index, taking Vancouver's spot who moved to number seven. In addition, Alberta
was the fastest growing province in 2024, according to U-Haul's Growth Index report, and Calgary was the fastest-growing city for the
second year in a row. We continue to be in the right place at the right time.
The real estate industry may also be negatively impacted by any tariffs, including those contemplated by the new United States
administration, surtaxes or other restrictive trade measures or countermeasures affecting trade between Canada and the United
States and specifically the goods and materials used in construction. While discussions regarding a potential economic arrangement
between the United States and Canada are ongoing, there remains significant uncertainty regarding whether any restrictive trade
measures or countermeasures will ultimately be implemented. Such measures could result in, among other things, a high degree of
both cost and price volatility and a relative weakening of the Canadian dollar. The Trust continues to monitor these developments
closely, however, the measures implemented, if any, as well as their scope, impact and duration remain uncertain at this time.
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Boardwalk’s Strategy
Community, Team, Performance. Boardwalk aims to be the first choice in multi-family apartment communities to work, invest and
call home with our Boardwalk Family Forever.
Driven by our dynamic culture and performance-focused team, Boardwalk is dedicated to creating the best multi-family communities
across diverse, affordable, growing housing markets. This is our purpose: to build better communities, where love always lives.
Boardwalk aims to deliver consistent, strong total unitholder return through operational excellence, innovation and strategic capital
allocation. Our initiatives include strategic acquisitions in targeted, high-growth markets with limited price-controls, high-return new
development, and dispositions of non-core assets and accretively redeploying capital. Our investment principles prioritize
sustainable, long-term growth in FFO and NAV per Unit. Please refer to the section titled “Presentation of Non-GAAP Measures” in this
MD&A for more information on FFO and NAV. Built into this strategic plan is Boardwalk’s brand diversification through common area
upgrades, building improvements, and suite renovations to ensure long-term value for Unitholders and stakeholders.
Strong rental apartment housing fundamentals in Boardwalk’s core markets, paired with the Trust’s proven platform, positions
Boardwalk for optimized cash flow growth. Management of the Trust believes that reinvesting maximum cash flow and maintaining a
strong balance sheet enables the Trust to pursue external growth opportunities, develop communities in undersupplied markets,
enhance value through capital investments, and, when appropriate, invest in our own portfolio through the purchase and
cancellation of Trust Units through the REIT’s normal course issuer bid (“NCIB”) implemented in both 2024 and 2023. Management of
the Trust continues to review all available options to provide the optimal return to Unitholders.
Brand Diversification
The medium to long-term goal of the Trust is to not only expand geographically, but also diversify its product offering through its
three distinct brands.
The spectrum of rental housing in Canada has expanded over the last few years, with rental demand seen across the price spectrum
from affordability to affordable high-end luxury. As a result, the ability to offer a more diverse product offering will allow Boardwalk to
attract a larger demographic to the Boardwalk brand. We believe that our success as a business is closely linked to the success of the
communities in which we operate. We are committed to providing a place where our Resident Members can feel at home through our
multi-brand strategy and our community renovation programs.
Our Multi-brand Strategy
Boardwalk Lifestyle: Our refined Lifestyle communities go above and beyond
to provide an elevated experience. Situated in central neighbourhoods, our
buildings offer the perfect blend of elegance and convenience, granting
Resident Members access to the best shopping, dining, and entertainment
options. Resident Members can immerse themselves in upscale amenities,
including fully equipped fitness centres, inviting BBQ patios, spacious Wi-Fi
lounges and multi-use community rooms.
Boardwalk Communities: Our vibrant Boardwalk Communities provide our
Resident Members with excitement and endless fun. These spacious and
affordable homes are the perfect backdrop for unforgettable adventures and
making lifelong memories. Resident Members are able to connect with
neighbours at community events and find a community where they truly belong.
Boardwalk Living: The perfect home for our Resident Members’ stories. With a focus on exceptional security, customer service, and
affordability, we aim to provide our Resident Members with a sense of belonging. At our Living communities, our Resident Members
are cherished members of our family.
45%
Communities
7%
Lifestyle
48%
Living
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Boardwalk’s Branding Initiative and Suite Renovation Program
In 2024, Boardwalk invested $133.4 million in capital assets (year ended December 31, 2023 – $126.0 million), including
$99.6 million in value-add capital ($93.4 million in 2023), focusing on building improvements, energy efficiency projects, upgrading
common areas, and suite renovations. Please refer to the section titled “Financial Condition – Review of Cash Flows – Investing
Activities – Maintenance of Productive Capacity” in this MD&A for further discussion on value-add capital. Each of the three brands
have different renovation specifications depending on needs and anticipated returns. Market rents are adjusted upward based on an
expected rate of return on the strategic investment. Management of the Trust believes these renovations and upgrades will continue
to achieve future upward excess market rent adjustments, increased occupancy, as well as cost savings on turnovers. Historic
investment in our assets and brands has resulted in a diversified product mix to match varying demand while allowing us to gain and
maintain market share with increasing choice for existing and new Resident Members.
Boardwalk’s most affordable brand, ‘Boardwalk Living’, receives suite enhancements on an as needed basis, with the focus being on
providing affordable suites to this demographic segment. ‘Boardwalk Communities’, the Trust’s core brand, conveys enhanced value
and receives major suite upgrades based on need as well as upgrades to existing common areas. ‘Boardwalk Lifestyle’, which
exemplifies upgraded, luxury suites, receives the highest level of overall renovations, including significant upgrades to suites and
common areas. Additional amenities such as upgraded fitness facilities, Wi-Fi lounges and concierge services may be added when
appropriate. In determining a brand that a particular rental community will represent, the Trust looks at a number of criteria,
including the building’s location, proximity to existing amenities, suite size, and suite layout. Once renovations are completed,
Boardwalk adjusts the rents on these individual suites with the goal of achieving an 8% return on investment. Overall, Boardwalk has
and continues to achieve more than its targeted rate of return.
While management of the Trust believes these investments will enhance long-term value, we also recognize the short-term effects of this
program, such as temporary higher vacancies and incentives, though with the increase in apartment demand, this impact has been
significantly reduced. Rebranding and repositioning communities will take time. Construction causes disruption to existing Resident
Members and, depending on the level of investment, may result in higher turnover. Boardwalk continues to reduce the vacancy loss
associated with suites being renovated by reducing the time to completion while still lowering the cost of the renovations.
DECLARATION OF TRUST
The investment guidelines and operating policies of the Trust are outlined in the DOT, a copy of which is available on request to all
Unitholders and is also available under the REIT’s profile on www.sedarplus.ca. A more detailed summary of the DOT can also be
located in the AIF. Some of the main financial guidelines and operating policies set out in the DOT are as follows:
Investment Guidelines
1.
Acquire, hold, develop, maintain, improve, lease, and manage multi-family residential properties and ancillary real estate
ventures; and
2.
No investment will be made that would disqualify Boardwalk REIT as a “mutual fund trust” or a “registered investment” as
defined in the Tax Act.
Operating Policies
1.
Interest Coverage Ratio of at least 1.5 to 1;
2.
No guaranteeing of third-party debt unless related to direct or indirect ownership or acquisition of real property, including
potential joint arrangement partner structures;
3.
Third-party surveys of structural and environmental conditions are required prior to the acquisition of a multi-family asset; and
4.
Commitment to expending at least 8.5% of its gross consolidated annual rental revenues generated from properties that have
been insured by CMHC on on-site maintenance compensation to the employees of the Trust (“Associates”), repairs and
maintenance, as well as capital upgrades.
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Distribution Policy
Boardwalk REIT may distribute to holders of Trust Units and LP Class B Units on or about each distribution date such percentage of FFO
for the calendar month then ended as the Trust's board of trustees (“Board of Trustees”) determines in its discretion. Distributions will
not be less than Boardwalk REIT’s taxable income, unless the Board of Trustees, in its absolute discretion, determines another amount.
The Board of Trustees reviews the distributions on a quarterly basis and takes into consideration distribution sustainability and whether
there are more attractive alternatives to the Trust’s current capital allocation strategy, such as its value-add capital renovation program,
brand diversification initiative, acquisitions and new construction of multi-family communities in supply-constrained markets.
Compliance with DOT
As at December 31, 2024, the Trust was in compliance with all investment guidelines and operating policies as stipulated in the DOT.
More details are provided later in this MD&A with respect to certain detailed calculations.
For the year ended December 31, 2024, Boardwalk REIT’s interest coverage ratio of consolidated EBITDA (i.e. Earnings Before Interest,
Taxes, Depreciation and Amortization) to consolidated interest expense was 2.95 (year ended December 31, 2023 – 2.83). Further
details of the Trust’s interest coverage ratio can be found in NOTE 22 to the audited annual consolidated financial statements for the
years ended December 31, 2024 and 2023, which are available under the Trust’s profile at www.sedarplus.ca.
PRESENTATION OF FINANCIAL INFORMATION
Financial results, including related historical comparatives, contained in this MD&A are based on the Trust’s audited annual
consolidated financial statements for the years ended December 31, 2024 and 2023, unless otherwise specified.
PRESENTATION OF NON-GAAP MEASURES
Non-GAAP Financial Measures
Boardwalk REIT prepares its consolidated financial statements in accordance with IFRS Accounting Standards and with the
recommendations of REALPAC, Canada’s senior national industry association for owners and managers of investment real estate.
REALPAC has adopted non-GAAP financial measures called FFO and Adjusted Funds From Operations (“AFFO”) to supplement
operating income and profits as measures of operating performance, as well as a cash flow metric called Adjusted Cash Flow From
Operations (“ACFO”). These non-GAAP financial measures are considered to be meaningful and useful measures of real estate
operating performance, however, are not measures defined by IFRS Accounting Standards. The discussion below outlines these
measurements and the other non-GAAP financial measures used by the Trust. Non-GAAP financial measures are not standardized
financial measures under IFRS Accounting Standards and might not be comparable to similar financial measures disclosed by other
entities. Non-GAAP financial measures should not be construed as alternatives to IFRS Accounting Standards defined measures.
Funds From Operations
The IFRS Accounting Standards measurement most comparable to FFO is profit. Boardwalk REIT considers FFO to be an appropriate
measurement of the performance of a publicly listed multi-family residential entity as it is the most widely used and reported
measure of real estate investment trust performance. Profit includes items such as fair value changes of investment property that are
subject to market conditions and capitalization rate fluctuations which are not representative of recurring operating performance.
Consistent with REALPAC, we define FFO as profit adjusted for fair value gains or losses, distributions on the LP Class B Units, gains or
losses on the sale of the Trust’s investment properties, depreciation, deferred income tax, and certain other non-cash adjustments, if
any, but after deducting the principal repayment on lease liabilities and adding the principal repayment on lease receivable.
Management of the Trust believes that such income is volatile and unpredictable and would significantly dilute the relevance of FFO as
a measure of performance. Excluding gains or losses in the calculation of FFO is consistent with the REALPAC definition of FFO. Under
IFRS Accounting Standards, the LP Class B Units are considered financial instruments in accordance with IFRS 9 – Financial
Instruments (“IFRS 9”). As a result of this classification, their corresponding distribution amounts are considered “financing costs”
under IFRS Accounting Standards. REALPAC recognizes this classification, however, adds the distributions that were treated as an
interest expense back when calculating FFO, which suggests these puttable instruments are similar to equity. Management of the
Trust agrees these distribution payments, are similar to equity, as these amounts are only payable if the Trust declares distributions,
and only for the amount of any distributions declared, both of which are at the discretion of the Board of Trustees as outlined in the
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DOT. Therefore, these distributions are excluded from the calculation of FFO, consistent with the treatment of distributions paid to all
other Unitholders. The reconciliation from profit under IFRS Accounting Standards to FFO can be found under the section titled
“Performance Review of 2024 – FFO and AFFO Reconciliations” in this MD&A. The Trust uses FFO to assess operating performance and
its distribution paying capacity, determine the level of Associate incentive-based compensation, and decisions related to investment
in capital assets. To facilitate a clear understanding of the combined historical operating results of Boardwalk REIT, management of
the Trust believes FFO should be considered in conjunction with profit as presented in the audited annual consolidated financial
statements for the years ended December 31, 2024 and 2023.
Adjusted Funds From Operations
Similar to FFO, the IFRS Accounting Standards measurement most comparable to AFFO is profit. Boardwalk REIT considers AFFO to be
an appropriate measurement of a publicly listed multi-family residential entity as it measures the economic performance after
deducting for maintenance capital expenditures to the existing portfolio of investment properties. AFFO is determined by taking the
amounts reported as FFO and deducting what is commonly referred to as “Maintenance Capital Expenditures”. Maintenance Capital
Expenditures are expenditures that, by standard accounting definition, are accounted for as capital in that the expenditure itself has a
useful life in excess of the current financial year and maintains the value of the related assets. The reconciliation of AFFO can be found
under the section titled “Performance Review of 2024 – FFO and AFFO Reconciliations” in this MD&A. The Trust uses AFFO to assess
operating performance and its distribution paying capacity, and decisions related to investment in capital assets. A more detailed
discussion is provided under the section titled “Financial Condition – Review of Cash Flows – Investing Activities – Maintenance of
Productive Capacity” in this MD&A.
Adjusted Cash Flow From Operations
The IFRS Accounting Standards measurement most comparable to ACFO is cash flow from operating activities. ACFO is a non-GAAP
financial measure of sustainable economic cash flow available for distributions. ACFO should not be construed as an alternative to
cash flow from operating activities as determined under IFRS Accounting Standards. A reconciliation of ACFO to cash flow from
operating activities as shown in the Trust’s Consolidated Statements of Cash Flows is also provided under the section titled “Financial
Condition – Review of Cash Flows – Operating Activities” in this MD&A, along with added commentary on the sustainability of Trust
Unit distributions. The Trust uses ACFO to assess its distribution paying capacity.
Boardwalk REIT’s presentation of FFO, AFFO, and ACFO are materially consistent with the definitions provided by REALPAC. These
measurements, however, are not necessarily indicative of cash that is available to fund cash needs and should not be considered
alternatives to cash flow as a measure of liquidity. FFO, AFFO, and ACFO do not represent earnings or cash flow from operating
activities as defined by IFRS Accounting Standards. FFO and AFFO should not be construed as an alternative to profit determined in
accordance with IFRS Accounting Standards as indicators of Boardwalk REIT’s performance. In addition, Boardwalk REIT’s calculation
methodology for FFO, AFFO, and ACFO may differ from that of other real estate companies and trusts.
Adjusted Real Estate Assets
The IFRS Accounting Standards measurement most comparable to Adjusted Real Estate Assets is investment properties. Adjusted
Real Estate Assets is comprised of investment properties, equity accounted investment, investment properties related to assets held
for sale, loan receivable, and cash and cash equivalents. Adjusted Real Estate Assets is useful in summarizing the real estate assets
owned by the Trust and it is used in the calculation of NAV, which management of the Trust believes is a useful measure in estimating
the entity’s value. The reconciliation from Investment Properties under IFRS Accounting Standards to Adjusted Real Estate Assets can
be found under the section titled “Capital Structure and Liquidity – Net Asset Value Per Unit” in this MD&A.
Adjusted Real Estate Debt
The IFRS Accounting Standards measurement most comparable to Adjusted Real Estate Debt is total mortgage principal outstanding.
Adjusted Real Estate Debt is comprised of total mortgage principal outstanding, mortgages payable related to assets held for sale, total
lease liabilities attributable to land leases, and construction loan payable. It is useful in summarizing the Trust’s debt which is
attributable to its real estate assets and is used in the calculation of NAV, which management of the Trust believes is a useful measure in
estimating the entity’s value. The reconciliation from total mortgage principal outstanding under IFRS Accounting Standards to Adjusted
Real Estate Debt can be found under the section titled “Capital Structure and Liquidity – Net Asset Value per Unit” in this MD&A.
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Adjusted Real Estate Debt, net of Cash
Adjusted Real Estate Debt, net of Cash, is most directly comparable to the IFRS Accounting Standards measure of total mortgage
principal outstanding. Adjusted Real Estate Debt, net of Cash is comprised of the sum of total mortgage principal outstanding,
mortgages payable related to assets held for sale, total lease liabilities attributable to land leases, and construction loan payable,
then reduced by cash and cash equivalents. It is useful in summarizing the Trust’s debt which is attributable to its real estate assets
and is used in the calculation of Debt to EBITDA.
Net Asset Value
The IFRS Accounting Standards measurement most comparable to NAV is Unitholders’ Equity. With real estate entities, NAV is the total
value of the entity’s investment properties, equity accounted investment, investment properties related to assets held for sale, loan
receivable, and cash and cash equivalents minus the total value of the entity’s debt. The Trust determines NAV by taking Adjusted Real
Estate Assets and subtracting Adjusted Real Estate Debt, which management of the Trust believes is a useful measure in estimating
the entity’s value. The reconciliation from Unitholders’ Equity under IFRS Accounting Standards to NAV can be found under the
section titled “Capital Structure and Liquidity – Net Asset Value per Unit” in this MD&A.
Non-GAAP Ratios
The discussion below outlines the non-GAAP ratios used by the Trust. Each non-GAAP ratio has a non-GAAP financial measure as one
or more of its components, and, as a result, does not have a standardized meaning prescribed by IFRS Accounting Standards and
therefore may not be comparable to similar financial measurements presented by other entities. Non-GAAP financial measures
should not be construed as alternatives to IFRS Accounting Standards defined measures.
FFO per Unit, AFFO per Unit, ACFO per Unit, and NAV per Unit
FFO per Unit includes the non-GAAP financial measure FFO as a component in the calculation. The Trust uses FFO per Unit to assess
operating performance on a per Unit basis, as well as determining the level of Associate incentive-based compensation.
AFFO per Unit includes the non-GAAP financial measure AFFO as a component in the calculation. The Trust uses AFFO per Unit to
assess operating performance on a per Unit basis and its distribution paying capacity.
ACFO per Unit includes the non-GAAP financial measure ACFO as a component in the calculation. The Trust uses ACFO per Unit to
assess its distribution paying capacity.
FFO per Unit, AFFO per Unit, and ACFO per Unit are calculated by taking the non-GAAP ratio’s corresponding non-GAAP financial
measure and dividing by the weighted average Trust Units outstanding for the period on a fully diluted basis, which assumes
conversion of the LP Class B Units and vested deferred units determined in the calculation of diluted per Trust Unit amounts in
accordance with IFRS Accounting Standards.
NAV per Unit includes the non-GAAP financial measure NAV as a component in the calculation. Management of the Trust believes it is a
useful measure in estimating the entity’s value on a per Unit basis, which an investor can compare to the entity’s Trust Unit price
which is publicly traded to help with investment decisions.
NAV per Unit is calculated as NAV divided by the Trust Units outstanding as at the reporting date on a fully diluted basis which
assumes conversion of the LP Class B Units and vested deferred units outstanding.
Debt to EBITDA
Debt to EBITDA is calculated by dividing Adjusted Real Estate Debt, net of Cash by consolidated EBITDA. The Trust uses Debt to EBITDA
to understand its capacity to pay off its debt.
Debt to Total Assets
Debt to Total Assets is calculated by dividing Adjusted Real Estate Debt by Total Assets. The Trust uses Debt to Total Assets to
determine the proportion of assets which are financed by debt.
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FFO per Unit Future Financial Guidance
FFO per Unit Future Financial Guidance is calculated as FFO Future Financial Guidance divided by the estimated weighted average
Trust Units and LP Class B Units outstanding throughout the year. Boardwalk REIT considers FFO per Unit Future Financial Guidance
to be an appropriate measurement of the estimated future financial performance based on information currently available to
management of the Trust at the date of this MD&A.
AFFO per Unit Future Financial Guidance
AFFO per Unit Future Financial Guidance is calculated as AFFO Future Financial Guidance divided by the estimated weighted average
Trust Units and LP Class B Units outstanding throughout the year. Boardwalk REIT considers AFFO per Unit Future Financial Guidance
to be an appropriate measurement of the estimated future profitability based on information currently available to management of
the Trust at the date of this MD&A.
FFO Payout Ratio, AFFO Payout Ratio, and ACFO Payout Ratio
FFO Payout Ratio, AFFO Payout Ratio, and ACFO Payout Ratio represent the REIT’s ability to pay distributions. These non-GAAP ratios
are computed by dividing regular distributions paid on the Trust Units and LP Class B Units by the non-GAAP financial measure of FFO,
AFFO, and ACFO, respectively. Management of the Trust use these non-GAAP ratios to assess its distribution paying capacity.
PERFORMANCE REVIEW OF 2024
Boardwalk REIT generates revenues, cash flows, and earnings from two separate sources: primarily rental operations and also the
sale of “non-core” real estate properties.
Boardwalk REIT’s most consistent and largest source of income comes from its rental operations. Income from this source is derived
from leasing individual suites to customers (referred to as “Resident Members”). Periodically, Boardwalk REIT has generated
additional income from the sale of selective non-core real estate properties and utilized the equity for the acquisition and/or
development of new rental properties and/or for the purchase for cancellation of Trust Units pursuant to its NCIB. The Trust, however,
will only proceed with the sale of non-core real estate properties if market conditions justify the dispositions and Boardwalk has an
alternative use for the net proceeds generated.
Performance Measures
The Trust intends to continue to pay out, at a minimum, all taxable income to Unitholders in the form of monthly distributions, unless
the Board of Trustees, in its absolute discretion, determines a different amount. For 2024, the Board of Trustees approved an increase
to the distribution to $0.1200 per Trust Unit on a monthly basis (or $1.44 on an annualized basis) beginning March 2024. This was an
increase of $0.0225 per Trust Unit from the monthly $0.0975 per Trust Unit distributed for January and February 2024. The Trust
intends to continue to redeploy its capital towards long-term value creation, including its suite renovation program, brand
diversification initiative, and acquisition and development of new multi-family suites in supply-constrained markets.
For the three months and year ended December 31, 2024 and 2023, the Trust declared regular distributions of $19.3 million and
$75.1 million (inclusive of distributions paid to holders of the LP Class B Units), respectively (three months and year ended December 31,
2023 – $15.0 million and $58.3 million, respectively), and recorded profit of $65.9 million and $588.2 million, respectively (three
months and year ended December 31, 2023 – $173.1 million and $666.1 million, respectively). The FFO Payout Ratio for the three
months ended December 31, 2024, was 33.1% (three months ended December 31, 2023 – 30.8%). For the year ended December 31,
2024, the FFO Payout Ratio was 33.3% (year ended December 31, 2023 –32.2%). Please refer to the section titled “Presentation of
Non-GAAP Measures” in this MD&A for more information on FFO Payout Ratio. The overall operating performance of the first and
fourth quarters tends to generate the highest payout ratio, mainly due to the high seasonality in total rental expenses. In particular,
these quarters tend to be the highest demand periods for natural gas, a major operational cost for the Trust. It is therefore, important
to not simply annualize the reported results of a particular quarter. On a quarterly basis, the Board of Trustees reviews the current
level of distributions and determines if any adjustments to the distributed amount is warranted. On an overall basis, the Trust aims to
maintain a consistent and sustainable payout ratio while optimizing its capital allocation strategy, and reviews this with its Board
of Trustees.
37
BOARDWALK REIT | 2024 ANNUAL REPORT
37
FFO per Unit Reconciliations from 2023 to 2024
The following tables show reconciliations of changes in FFO per Unit from December 31, 2023, to December 31, 2024. As previously
noted, we define the calculation of FFO as profit before fair value adjustments, distributions on the LP Class B Units, gains or losses on
the sale of the Trust’s investment properties, depreciation, deferred income taxes, and certain other non-cash items. A more detailed
disclosure of the calculation of FFO is included later in this MD&A.
FFO per Unit Reconciliation
3 Months
12 Months
FFO per Unit (1) – Dec. 31, 2023
$
0.96
$
3.60
Same Property Net Operating Income (“NOI”) (2)
0.19
0.85
Non-same Property NOI (2)
0.05
0.12
Administration
(0.04)
(0.13)
Financing Costs
(0.03)
(0.19)
Interest Income
0.02
0.18
Unit Issuance
(0.07)
(0.25)
FFO per Unit – Dec. 31, 2024
$
1.08
$
4.18
(1) Please refer to the section titled “Presentation of Non-GAAP Measures” in this MD&A for more information.
(2) The definition of same property and non-same property can be found in the section titled “Same Property Results” in this MD&A.
FFO and AFFO Reconciliations
In the following table, Boardwalk REIT provides a reconciliation of FFO to Profit, the most comparable related financial statement
measurement, for the three and 12 months ended December 31, 2024 and 2023. Adjustments are explained in the notes below,
as appropriate.
FFO Reconciliation
(In $000’s, except per Unit amounts)
3 Months
Dec. 31, 2024
3 Months
Dec. 31, 2023
% Change
12 Months
Dec. 31, 2024
12 Months
Dec. 31, 2023
% Change
Profit
$
65,924
$
173,130
$ 588,218
$
666,099
Adjustments
Other income (1)
-
(68)
-
(886)
Loss on sale of asset
-
928
-
928
Fair value losses (gains), net
3,357
(127,849)
(359,888)
(494,877)
Fair value gain from equity accounted investment
(13,830)
-
(13,830)
-
LP Class B Unit distributions
1,603
1,309
6,235
5,169
Deferred tax (recovery) expense
(12)
6
70
75
Depreciation
2,327
2,244
8,318
7,921
Principal repayments on lease liabilities
(826)
(803)
(3,275)
(3,397)
Principal repayments on lease receivable
-
-
-
321
FFO (2)(3)
$
58,543
$
48,897
19.7%
$ 225,848
$
181,353
24.5%
FFO per Unit (3)
$
1.08
$
0.96
12.5%
$
4.18
$
3.60
16.1%
(1) Other income is comprised of capital gains from investment income.
(2) This is a non-GAAP financial measure.
(3) Please refer to the section titled “Presentation of Non-GAAP Measures” in this MD&A for more information.
38
38
The following table is the calculation of the fully diluted weighted average Trust Units used to calculate the FFO per Unit, AFFO per
Unit, and ACFO per Unit amounts within this MD&A and includes all items that can be convertible into Trust Units.
Fully Diluted Trust Units
3 Months
Dec. 31, 2024
3 Months
Dec. 31, 2023
12 Months
Dec. 31, 2024
12 Months
Dec. 31, 2023
Weighted average Trust Units outstanding – basic
49,415,840
46,123,269
49,403,967
45,824,819
Conversion of LP Class B Units
4,469,130
4,475,000
4,473,525
4,475,000
Unexercised vested deferred units
109,467
78,829
107,068
65,330
Weighted average Trust Units outstanding – fully diluted
53,994,437
50,677,098
53,984,560
50,365,149
Profit for the fourth quarter of 2024 was $65.9 million compared to a profit of $173.1 million in the fourth quarter of 2023. Profit for the
year ended December 31, 2024, was $588.2 million, compared to profit of $666.1 million in the prior year. The decrease in profit for the
three months and year ended December 31, 2024, compared to the same periods in the prior year, is mainly attributable to the fair
value loss that was recognized on investment properties during the fourth quarter of 2024 compared to the fair value gain recognized
in the same period in the prior year. The fair value loss recognized in the fourth quarter of 2024 was a result of new supply entering
select markets within the portfolio that resulted in increased competition and vacancy, particularly for product at the higher price
point. Also contributing to the fair value loss was higher property operating costs as the Trust transitions into its upcoming year
budget, as is customary every fourth quarter, where the Trust incorporated its 2025 budgeted amounts for property operating costs
when determining the forecasted stabilized NOI for the Trust's internal valuation. Throughout 2024, the economy has shown modest
growth as well as continued immigration for most of the year, which has allowed market rents to increase and flatten towards the end
of the year. The weighted average capitalization rates for the Trust were 5.12% and 5.05% as at December 31, 2024 and 2023,
respectively. For more information on the Trust’s capitalization rates, please refer to the section titled “Financial Condition – Review
of Cash Flows – Investing Activities – Investment Properties” in this MD&A.
Overall, Boardwalk REIT earned FFO of $58.5 million for the fourth quarter of 2024 compared to $48.9 million for the same period in
2023. FFO, on a per Unit basis, for the quarter ended December 31, 2024, increased approximately 12.5% compared to the same
quarter in the prior year from $0.96 to $1.08. Additionally, the Trust earned FFO of $225.8 million for fiscal 2024 compared to
$181.4 million for fiscal 2023. FFO per Unit for the year ended December 31, 2024, increased approximately 16.1% compared to the
prior year from $3.60 to $4.18. The increase for the three and 12 months ended December 31, 2024, was primarily driven by higher
occupied rents, lower incentives, and higher interest income, partially offset by an increase in total rental expenses, financing costs,
administration, and deferred unit-based compensation.
The following table provides a reconciliation of FFO to AFFO:
(000’s)
3 Months
Dec. 31, 2024
3 Months
Dec. 31, 2023
12 Months
Dec. 31, 2024
12 Months
Dec. 31, 2023
FFO (1)(2)
$
58,543
$
48,897
$ 225,848
$
181,353
Maintenance Capital Expenditures (3)
7,732
8,651
33,575
32,255
AFFO (1)(2)
$
50,811
$
40,246
$ 192,273
$
149,098
FFO per Unit (2)
$
1.08
$
0.96
$
4.18
$
3.60
AFFO per Unit (2)
$
0.94
$
0.79
$
3.56
$
2.96
Regular Distributions
$
19,390
$
15,041
$
75,152
$
58,338
FFO Payout Ratio (2)
33.1%
30.8%
33.3%
32.2%
AFFO Payout Ratio (2)
38.2%
37.4%
39.1%
39.1%
Profit
$
65,924
$
173,130
$ 588,218
$
666,099
(1) This is a non-GAAP financial measure.
(2) Please refer to the section titled “Presentation of Non-GAAP Measures” in this MD&A for more information.
(3) Details of the calculation of Maintenance Capital Expenditures can be found in the section titled “Financial Condition – Review of Cash Flows – Investing Activities –
Value-add Capital and Maintenance Capital Expenditures” in this MD&A.
39
BOARDWALK REIT | 2024 ANNUAL REPORT
39
FINANCIAL PERFORMANCE SUMMARY
At a Glance
(In $000’s, except per Unit amounts)
2024
2023
% Change
Total assets
$
8,626,490
$
8,141,876
6.0%
Rental revenue
$
603,293
$
545,658
10.6%
NOI
$
382,334
$
332,989
14.8%
Profit
$
588,218
$
666,099
(11.7)%
FFO (1)(2)
$
225,848
$
181,353
24.5%
FFO per Unit (2)
$
4.18
$
3.60
16.1%
(1) This is a non-GAAP financial measure.
(2) Please refer to the section titled “Presentation of Non-GAAP Measures” in this MD&A for more information.
Total assets increased from the amounts reported in the prior year, mainly as a result of fair value gains and investment in capital
assets on the Trust’s investment properties, new investment property acquisitions that occurred in 2024, and the loan receivable to
the joint venture, partially offset by a decrease in cash and cash equivalents. Rental revenue increased by 10.6%, due to higher
in-place occupied rents across all regions and lower incentives in Alberta and Saskatchewan. The decrease in profit compared to the
prior year was due to the decrease in fair value gains recognized in the current year and higher expenses attributable to total rental
expenses, financing costs, administration, and deferred unit based compensation, partially offset by increases in rental revenue and
interest income.
Consolidated Operations
and Earnings Review
OVERALL REVIEW
Consolidated Statements of Comprehensive Income
Rental Operations
Boardwalk REIT’s NOI strategy includes a rental revenue strategy that focuses on enhancing overall rental revenues by balancing
market rents, rental incentives, turnovers, and occupancy gains. The application of this rental revenue strategy is ongoing, on a
market-by-market basis, with the focus on obtaining the optimal balance of these variables given existing market conditions. In
addition, the NOI strategy focuses on minimizing expenses.
(In $000’s, except number of suites)
3 Months
Dec. 31, 2024
3 Months
Dec. 31, 2023
% Change
12 Months
Dec. 31, 2024
12 Months
Dec. 31, 2023
% Change
Rental revenue
$ 155,565
$
141,907
9.6%
$ 603,293
$
545,658
10.6%
Expenses
Operating expenses
27,484
26,367
4.2%
109,617
106,190
3.2%
Utilities
14,916
13,872
7.5%
55,969
53,392
4.8%
Property taxes
14,130
13,720
3.0%
55,373
53,087
4.3%
Total rental expenses
$
56,530
$
53,959
4.8%
$ 220,959
$
212,669
3.9%
Net operating income
$
99,035
$
87,948
12.6%
$ 382,334
$
332,989
14.8%
Operating margin (1)
63.7%
62.0%
63.4%
61.0%
Number of suites at December 31 (2)
34,222
33,846
34,222
33,846
(1) Operating margin is calculated by dividing NOI by rental revenue allowing management to assess the percentage of rental revenue which generated profit.
(2) Excludes 183 suites related to the Trust’s joint venture in Brampton, Ontario.
40
40
(In $000’s, except number of suites)
3 Months
Dec. 31, 2024
3 Months
Dec. 31, 2023
% Change
12 Months
Dec. 31, 2024
12 Months
Dec. 31, 2023
% Change
Gross rental revenue (1)
$ 160,482
$
146,468
9.6%
$ 620,845
$
570,703
8.8%
Vacancy loss (2)
(2,929)
(1,320)
121.9%
(8,280)
(7,397)
11.9%
Incentives (3)
(1,988)
(3,241)
(38.7)%
(9,272)
(17,648)
(47.5)%
Rental revenue
$ 155,565
$
141,907
9.6%
$ 603,293
$
545,658
10.6%
(1) Gross rental revenue is a component of rental revenue and represents rental revenue based on 100% occupancy before adjustments for vacancy loss and incentives.
(2) Vacancy loss is a component of rental revenue and represents the estimated loss of gross rental revenue from unoccupied suites during the period.
(3) Incentives is a component of rental revenue and represents any suite specific rental discount offered or initial direct costs incurred in negotiating and arranging an
operating lease amortized over the term of the operating lease.
Boardwalk REIT’s rental operations for the three and 12 months ended December 31, 2024, reported higher results compared to the same
periods in the prior year, with rental revenue increasing 9.6% and 10.6%, respectively. For the three and 12 months ended December 31,
2024, the increase in rental revenue was due to higher in-place occupied rents, lower incentives, as well as the acquisitions in Alberta in
January, June, and November 2024. As outlined in the table above, although vacancy loss increased by 11.9%, the Trust was able to
reduce incentives by 47.5% year-over-year. The Trust intends to continue to offer selective incentives in certain communities to maintain
occupancy levels, with an overall goal of limiting incentives on new leases and decreasing incentives altogether.
For the three and 12 months ended December 31, 2024, total rental expenses increased by 4.8% and 3.9%, respectively, compared to
the same periods in 2023 due to higher operating expenses, utilities, and property taxes.
The Trust continues to track, in detail, the actual work performed by our onsite Associates to assist in the operating effectiveness of
its overall operations. This program results in overall lower costs while allowing the Trust greater control over the timing of its capital
improvement projects, compared to contracting these same projects out to third parties. The Trust has been able to utilize our
Associates to maintain quality customer services as well as to continue normal operations for both our repairs and maintenance as
well as capital improvement projects. As with other estimates used by the Trust, key assumptions used in estimating the salaries and
wages to be capitalized are reviewed on a regular basis and, based on this review, management of the Trust will adjust the amount
allocated to more accurately reflect how many internal resources were directed towards specific capital improvements.
For the three months ended December 31, 2024, operating expenses increased 4.2% compared to the same period in the prior year
due to higher wages and salaries and higher building repairs and maintenance, partially offset by lower insurance premiums upon
renewal in July 2024. For the year ended December 31, 2024 operating expenses increased 3.2% compared to the prior year due to
higher wages and salaries and building repairs and maintenance, partially offset by lower bad debts expense, advertising costs, and
insurance premiums upon renewal.
Utility costs increased by 7.5% and 4.8% for the three and 12 months ended December 31, 2024, respectively, compared to the same
periods in 2023. The increases were primarily due to higher water and sewer costs and higher carbon levy costs from the federal
increases being implemented. Fixed price physical commodity contracts have helped to partially or fully mitigate the Trust’s exposure
to fluctuating natural gas and electricity prices. Further details regarding the contracts on natural gas, as well as electricity prices in
Alberta, can be found in NOTE 21 to the audited annual consolidated financial statements for the years ended December 31, 2024
and 2023.
Property taxes increased 3.0% and 4.3% for the three and 12 months ended December 31, 2024, respectively, compared to the same
periods in the prior year mainly due to higher overall property tax assessments received and the acquisitions during 2024. The Trust is
constantly reviewing property tax assessments and related charges and, where management of the Trust believes appropriate, will
appeal all, or a portion, of the related assessment. It is not uncommon for the Trust to receive property tax refunds and adjustments;
however, due to the uncertainty of the amount and timing of the refunds and adjustments, these amounts are only reported when
they are received.
Overall, operating margin for the three months ended December 31, 2024, is 63.7%, compared to 62.0% for the same period in 2023,
an increase of 170 basis points (“bps”). Similarly, operating margin for the 12 months ended December 31, 2024 and 2023 is 63.4% and
61.0% respectively, an increase of 240 bps year-over-year.
Boardwalk REIT closely monitors and individually manages the performance of each of its rental properties. For the reader’s
convenience, we have provided the following summary of our operations on a province-by-province basis.
41
BOARDWALK REIT | 2024 ANNUAL REPORT
41
SEGMENTED OPERATIONAL REVIEWS
Alberta Rental Operations
(In $000’s, except number of suites)
3 Months
Dec. 31, 2024
3 Months
Dec. 31, 2023
% Change
12 Months
Dec. 31, 2024
12 Months
Dec. 31, 2023
% Change
Rental revenue
$ 100,438
$
90,261
11.3%
$ 389,038
$
346,368
12.3%
Expenses
Operating expenses
16,692
16,244
2.8%
67,140
65,520
2.5%
Utilities
10,058
8,918
12.8%
36,884
34,374
7.3%
Property taxes
9,132
8,780
4.0%
35,871
34,399
4.3%
Total rental expenses
$
35,882
$
33,942
5.7%
$ 139,895
$
134,293
4.2%
Net operating income
$
64,556
$
56,319
14.6%
$ 249,143
$
212,075
17.5%
Operating margin
64.3%
62.4%
64.0%
61.2%
Number of suites at December 31
21,460
21,084
21,460
21,084
Alberta is Boardwalk’s largest operating segment, representing 65.2% of total reported NOI for the year ended December 31, 2024.
In addition, Alberta represents 62.7% of total suites. Boardwalk REIT’s Alberta operations for three months and year ended
December 31, 2024, reported a 11.3% and 12.3% increase, respectively, in rental revenue compared to the same periods in the
prior year due to higher in-place occupied rents and lower incentives, as well as the new buildings that were acquired in the past
year, partially offset by higher vacancy loss. Increases were also driven, in part, by the high migrations into the province in 2023
and continuing into 2024.
For the three and 12 months ended December 31, 2024, total rental expenses increased by 5.7% and 4.2%, respectively, compared to
the same periods in the prior year due to higher operating expenses, utilities, and property taxes.
Operating expenses increased by 2.8% and 2.5% for the three months and year ended December 31, 2024, respectively, compared to
the same periods in the prior year. For the fourth quarter, the increase was due to higher wages and salaries and building repairs and
maintenance costs, partially offset by lower insurance premiums as well as lower bad debts expense. For the year ended December 31,
2024, the increase was largely due to higher wages and salaries and higher building repairs and maintenance, partially offset by lower
advertising costs, lower bad debts expense and lower insurance premiums upon renewal in July 2024.
Utilities for the three and 12 months ended December 31, 2024, increased by 12.8% and 7.3%, respectively, due to higher water and
sewer costs, natural gas costs, and carbon levies when compared to the same periods in the prior year. Currently, the Trust also has
three outstanding natural gas contracts to mitigate the price of its natural gas usage. The Trust also has two outstanding electricity
contracts with two utility retailers to supply the Trust with its electrical power needs. More details can be found in NOTE 21 to the
audited annual consolidated financial statements for the years ended December 31, 2024 and 2023.
Property taxes for the three and 12 months ended December 31, 2024, increased 4.0% and 4.3% respectively, compared to the same
periods in the prior year due to higher property tax assessments and the acquisitions that were completed during 2024.
NOI for Alberta increased $37.1 million, or 17.5%, for the 12 months ended December 31, 2024, compared to the same period in 2023.
Alberta’s operating margin for the year ended December 31, 2024 was 64.0%, which is 280 bps higher compared to the same period
in 2023.
42
42
British Columbia Rental Operations
(In $000’s, except number of suites)
3 Months
Dec. 31, 2024
3 Months
Dec. 31, 2023
% Change
12 Months
Dec. 31, 2024
12 Months
Dec. 31, 2023
% Change
Rental revenue
$
1,713
$
1,698
0.9%
$
6,774
$
5,487
23.5%
Expenses
Operating expenses
148
164
(9.8)%
685
488
40.4%
Utilities
62
59
5.1%
272
220
23.6%
Property taxes
113
97
16.5%
452
345
31.0%
Total rental expenses
$
323
$
320
0.9%
$
1,409
$
1,053
33.8%
Net operating income
$
1,390
$
1,378
0.9%
$
5,365
$
4,434
21.0%
Operating margin
81.1%
81.2%
79.2%
80.8%
Number of suites at December 31
238
238
238
238
British Columbia operations consist of two rental buildings in Victoria, with a total of 238 suites. For the three months ended
December 31, 2024, overall operating results were consistent with the same period in the prior year. For the 12 months ended
December 31, 2024, operating results were higher than the same period in the prior year due to the new acquisition in Victoria,
British Columbia completed in April 2023. Further details on this acquisition can be found in the section titled “Financial Condition –
Review of Cash Flows – Investing Activities – Property Acquisitions and Dispositions” in this MD&A.
Saskatchewan Rental Operations
(In $000’s, except number of suites)
3 Months
Dec. 31, 2024
3 Months
Dec. 31, 2023
% Change
12 Months
Dec. 31, 2024
12 Months
Dec. 31, 2023
% Change
Rental revenue
$
16,487
$
14,891
10.7%
$
63,461
$
57,508
10.4%
Expenses
Operating expenses
2,535
2,290
10.7%
9,822
9,764
0.6%
Utilities
1,789
1,685
6.2%
7,016
6,852
2.4%
Property taxes
1,248
1,156
8.0%
4,868
4,590
6.1%
Total rental expenses
$
5,572
$
5,131
8.6%
$
21,706
$
21,206
2.4%
Net operating income
$
10,915
$
9,760
11.8%
$
41,755
$
36,302
15.0%
Operating margin
66.2%
65.5%
65.8%
63.1%
Number of suites at December 31
3,505
3,505
3,505
3,505
For the three months and year ended December 31, 2024, Saskatchewan rental revenue increased by 10.7% and 10.4%, respectively,
compared to the same periods in the prior year due to higher in-place occupied rents coupled with lower incentives, partially offset by
higher vacancy loss. For the three and 12 months ended December 31, 2024, total rental expenses increased by 8.6% and 2.4%,
respectively, compared to the same periods in the prior year due to higher operating expenses, utilities, and property taxes.
Operating expenses for the three months ended December 31, 2024, increased by 10.7% compared to the same period in the prior
year due to higher wages and salaries and building repairs and maintenance, partially offset by lower insurance premiums upon
renewal in July 2024. For the year-to-date, the operating expenses were relatively flat.
Utilities increased by 6.2% and 2.4% for the three and 12 months ended December 31, 2024, respectively, compared to the same
periods in the prior year. The increases were primarily due to higher water and sewer costs and higher carbon levies, partially offset by
lower gas and electricity costs. The Trust has one outstanding fixed price contract to mitigate its natural gas price for its
Saskatchewan natural gas usage. Details of the contract can be found in NOTE 21 to the audited annual consolidated financial
statements for the years ended December 31, 2024 and 2023.
Property taxes increased by 8.0% and 6.1% for the three and 12 months ended December 31, 2024, respectively, compared to the
same periods in the prior year due to higher property tax assessments.
Reported operating margin for the year ended December 31, 2024 was 65.8% compared to 63.1% for the same period in 2023.
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BOARDWALK REIT | 2024 ANNUAL REPORT
43
Ontario Rental Operations
(In $000’s, except number of suites)
3 Months
Dec. 31, 2024
3 Months
Dec. 31, 2023
% Change
12 Months
Dec. 31, 2024
12 Months
Dec. 31, 2023
% Change
Rental revenue
$
12,202
$
11,525
5.9%
$
47,952
$
45,355
5.7%
Expenses
Operating expenses
2,176
2,175
0.0%
8,753
8,310
5.3%
Utilities
1,084
1,144
(5.2)%
4,633
4,676
(0.9)%
Property taxes
1,299
1,268
2.4%
4,914
4,593
7.0%
Total rental expenses
$
4,559
$
4,587
(0.6)%
$
18,300
$
17,579
4.1%
Net operating income
$
7,643
$
6,938
10.2%
$
29,652
$
27,776
6.8%
Operating margin
62.6%
60.2%
61.8%
61.2%
Number of suites at December 31 (1)
3,019
3,019
3,019
3,019
(1) Excludes 183 suites related to the Trust’s joint venture in Brampton, Ontario.
Boardwalk REIT’s Ontario operations for the three and 12 months ended December 31, 2024, reported a 5.9% and 5.7% increase,
respectively, in rental revenue compared to the same periods in the prior year due to higher in-place occupied rents. Total rental
expenses were relatively flat for the three months ended December 31, 2024, compared to the same period in the prior year due to
lower utilities costs that were largely offset by higher property taxes. For the year ended December 31, 2024, total rental expenses
increased by 4.1% compared to the same period in the prior year as a result of higher operating expenses and property taxes, partially
offset by lower utilities.
Operating expenses for the three months ended December 31, 2024, remained flat compared to the same period in the prior year. For
the year ended December 31, 2024, operating expenses increased 5.3% compared to the same period in the prior year due to higher
wages and salaries, building repairs and maintenance, and bad debts expense, partially offset by lower insurance premiums.
Utilities for the three months ended December 31, 2024, decreased by 5.2% compared to the same period in the prior year, primarily
due to lower natural gas and electricity costs. For the year ended December 31, 2024, utilities were relatively flat, as lower natural gas
costs were largely offset by higher electricity and water and sewer costs. The Trust had one outstanding fixed price natural gas
contract for approximately 69% of price risk for London natural gas usage. Details of the contract can be found in NOTE 21 to the
audited annual consolidated financial statements years ended December 31, 2024 and 2023.
Property taxes increased 2.4% and 7.0% for the three months and year ended December 31, 2024, respectively, compared to the same
periods in the prior year due to higher property tax assessments.
NOI increased by 6.8% for the year ended December 31, 2024, compared to the prior year. Reported operating margin for the year
ended December 31, 2024, was 61.8% compared to 61.2% for the prior year.
Quebec Rental Operations
(In $000’s, except number of suites)
3 Months
Dec. 31, 2024
3 Months
Dec. 31, 2023
% Change
12 Months
Dec. 31, 2024
12 Months
Dec. 31, 2023
% Change
Rental revenue
$
24,267
$
23,098
5.1%
$
94,884
$
89,873
5.6%
Expenses
Operating expenses
4,250
4,019
5.7%
16,207
15,632
3.7%
Utilities
1,812
1,970
(8.0)%
6,763
6,894
(1.9)%
Property taxes
2,291
2,370
(3.3)%
9,093
8,952
1.6%
Total rental expenses
$
8,353
$
8,359
(0.1)%
$
32,063
$
31,478
1.9%
Net operating income
$
15,914
$
14,739
8.0%
$
62,821
$
58,395
7.6%
Operating margin
65.6%
63.8%
66.2%
65.0%
Number of suites at December 31
6,000
6,000
6,000
6,000
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Boardwalk REIT’s Quebec operations reported rental revenue increases of 5.1% and 5.6% for the three and 12 months ended
December 31, 2024, respectively, compared to the same periods in the prior year primarily due to higher in-place occupied rents. Total
rental expenses for the three months ended December 31, 2024, were relatively flat compared to the same period in the prior year,
with an increase in operating expenses offset by decreases in utilities and property taxes. Total rental expenses increased 1.9% for the
12 months ended December 31, 2024, compared to the same period in 2023 due to higher operating expenses and property taxes,
partially offset by a decrease in utilities.
For the three months ended December 31, 2024, operating expenses increased 5.7% compared to the same period in the prior year
due to higher building repairs and maintenance and higher bad debts expense, partially offset by lower insurance premiums. For the
year ended December 31, 2024, operating expenses increased 3.7% compared to the same period in 2023 mainly due to higher wages
and salaries and building repairs and maintenance, partially offset by lower insurance premiums upon renewal in July 2024.
For the three months and year ended December 31, 2024, utilities decreased 8.0% and 1.9%, respectively, compared to the same
periods in the prior year due to a decrease in electricity costs and carbon levies. The Trust has one outstanding fixed price natural gas
contract to mitigate approximately 74% of price risk for Nun’s Island natural gas usage. The details of the natural gas contract is
reported in NOTE 21 to the audited annual consolidated financial statements for the years ended December 31, 2024 and 2023.
Property taxes decreased 3.3% for the three months ended December 31, 2024, due to a one-time property tax adjustment increase
received in the same period in prior year after the repositioning of the seniors’ community building to a conventional multi-family
residential asset was completed. For the year ended December 31, 2024, property taxes increased 1.6% compared to the same period
in the prior year due to higher property tax assessments.
Reported operating margin for the 12 months ended December 31, 2024, increased from 65.0% to 66.2%.
OPERATIONAL SENSITIVITIES
Net Operating Income Optimization
Boardwalk continues to focus on optimizing its NOI. This focus requires the Trust to manage not only revenues but also related
operating costs and takes both into consideration when determining a service and pricing model. Lowering overall turnover while
maintaining competitive lease rental rates and a focus on a high-quality level of service continues to be the model that has delivered
the most stable and long-term income source to date. This strategy is region specific and these variables are in constant flux.
In competitive markets, the Trust takes a more preventive approach of increasing its offering of suite-specific rental incentives as well
as, where warranted, adjusting reported market rents. The increased use of these incentives, particularly in Alberta, was an attempt
by the Trust to keep occupancy levels higher than the overall market. As the market has been undersupplied with housing over the
last several years, the Trust has been unwinding these incentives and increasing market rents. This is evidenced in the current quarter
with incentives decreasing 38.7% and 47.5% for the three and 12 months ended December 31, 2024, respectively, compared to the
same periods in the prior year. It has been our experience that this proactive approach has resulted in optimizing NOI.
In addition, in these competitive, non-price controlled markets, the Trust takes steps to renew leases prior to term maturity. In select
markets, the Trust may also forward-lock future rentals while not collecting revenues for certain months in the immediate future. This
means the Trust may decide to rent a suite in December with the Resident Member not moving in until the following year. Although the
suite is rented, it will not generate revenue until the Resident Member actually moves in, for example, in January, which corresponds
to the next fiscal period. The percentages reported as occupancy levels (see table on the following page) represent those occupied
suites generating revenue for the period noted. The Trust closely monitors ‘apartment availability’, which represents unoccupied
suites not generating revenue for the period, after taking into account forward-committed leases. Although occupancy rates provide a
good indication of current revenue, apartment availability provides the reader a more relevant indication of future potential revenue.
As a result of recent acquisitions or newer developments, portfolio occupancy is on a same property basis.
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BOARDWALK REIT | 2024 ANNUAL REPORT
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Management of the Trust believes that when the NOI optimization strategy is combined with our strategic investment program, the
outcome will be a more diverse product offering for our Resident Members and greater overall value creation for the Trust. The Trust
also understands that the implementation and completion of these strategies may have some short-term consequences, as the timing
of these enhancements may result in longer periods of time that suites are not available to be rented, leading to short-term increases
in vacancy losses. However, the renovation program has slowed in relation to the current higher occupancy rates and in turn, the Trust
will monitor various renovation opportunities as they arise. It is management’s belief that a focus on longer-term value creation is in
the best interest of all stakeholders.
Boardwalk constantly reviews its existing programs, measuring them against resident demand, viability and expected return, and
refines them where appropriate.
Boardwalk REIT’s Portfolio Occupancy (Same Property):
City
Q4 2024
Q4 2023
Brampton
98.90%
98.68%
Calgary
97.19%
99.38%
Cambridge
98.21%
97.13%
Edmonton
97.75%
98.42%
Fort McMurray
95.74%
97.91%
Grande Prairie
97.92%
98.13%
Kitchener
97.89%
98.26%
London
98.89%
98.69%
Montreal
99.31%
99.56%
Quebec City
99.39%
99.27%
Red Deer
99.39%
99.32%
Regina
96.81%
98.85%
Saskatoon
98.69%
99.39%
Verdun
99.32%
99.75%
Victoria
98.54%
99.71%
Waterloo
93.33%
99.44%
Portfolio
98.02%
98.91%
In Q4 2024, the Trust reported a decrease of 89 basis points in its overall same property occupancy rate compared to the same quarter
in the prior year, a decrease from 98.91% to 98.02%. Alberta is experiencing increased competitive market conditions from the new
supply of multi-family suites entering the market and a decrease in migration into the province during the last quarter of 2024, which
has resulted in the decrease in occupancy for Edmonton of 67 bps to 97.75%, and a decrease of 219 bps in Calgary to 97.19%, when
compared to the same period in the prior year. Fort McMurray occupancy decreased by 217 bps compared to the same period in the
prior year, from 97.91% to 95.74%, due to a lower number of international students at the local college, and recent wildfires in the area
reducing newcomers to the city. Overall, occupancy remains high in Alberta relative to historical levels due to high net migration into
the province in 2023 and 2024.
In Saskatchewan, occupancy in Q4 2024 decreased in both Regina and Saskatoon due to increased supply of multi-family suites
entering these markets. In Regina occupancy levels for Q4 2024 were 96.81% compared to 98.85% in the same quarter in prior year,
while in Saskatoon, occupancy levels were 98.69% in Q4 2024 compared to 99.39% in Q4 2023. Although occupancy decreased
compared to the same period in the prior year, occupancies remain high overall and are a result of a continuation of improved
economic conditions in the agricultural sector, which can be partly attributed to the war in Ukraine driving up grain prices and
drawing more immigration to the province, as well as increased developments in the natural resources sector.
In Ontario and Quebec, occupancy levels remained relatively high and were consistent with the same period in the prior year for
most cities. In Waterloo, occupancy decreased by 611 bps compared to the same period in the prior year mainly due to a decrease in
international students.
As overall markets stabilize, we expect some up and down movements in occupancy as the Trust aims to maintain occupancy near
current levels.
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Rentals, Move-Outs and Impact on Reported Occupancy (Same Property):
0
200
400
600
800
1,000
1,200
1,400
2023
2024
2022
Jan
Jan
Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Jan
Jan
Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Rentals, Move-outs & Occupancy
Turnover
Rentals
% Occupancy
2025
88%
90%
92%
94%
96%
98%
100%
Demand and supply, as with any industry, is an essential performance indicator for multi-family real estate. The above chart shows
the turnover or total move-outs (supply) compared to total rentals (demand) and the resulting impact on reported occupancy relating
to our portfolio. The cumulative impact of demand being greater than supply, or vice versa, is the primary driver in the reported
occupancy rate. In recent years, Boardwalk focused on maintaining high occupancy levels while optimizing turnover costs. Adjusting
market rental rates is an ongoing process for the Trust and is consistent with its overall strategy of optimizing overall NOI;
consequently, the Trust expects to adjust rents upward or downward when it is deemed necessary.
Occupancy Sensitivity
As with all real estate rental operators, Boardwalk REIT’s financial performance is sensitive to occupancy rates. Based on the current
reported market rents, a 1% annualized change in reported occupancy is estimated to impact overall rental revenue by approximately
$6.2 million, or $0.11 per Trust Unit on a fully diluted basis.
SAME PROPERTY RESULTS
Boardwalk defines same property as one that has been owned by the Trust for a period of 24 months or more from the reporting date.
Boardwalk REIT’s overall percentage of same properties was 98.5% of its total rental suite portfolio as at December 31, 2024, or a total
of 33,722 suites. The tables below provide a regional breakdown on these properties for the fourth quarter of 2024, compared to the
fourth quarter of 2023, and fiscal 2024 compared to fiscal 2023.
Same Property Dec. 31 2024 – 3 M
# of Suites
% Rental
Revenue Growth
% Total Rental
Expenses Growth
% Net Operating
Income Growth
% of NOI
Edmonton
12,882
9.3%
4.9%
12.4%
34.9%
Calgary
6,266
8.3%
2.0%
11.2%
24.5%
Other Alberta
1,936
9.4%
8.2%
10.2%
4.9%
Alberta
21,084
9.0%
4.2%
11.8%
64.3%
Quebec
6,000
5.1%
(0.1)%
8.0%
16.2%
Saskatchewan
3,505
10.7%
8.6%
11.8%
11.1%
Ontario
3,019
5.9%
(0.6)%
10.2%
7.8%
British Columbia
114
4.8%
10.8%
3.4%
0.6%
33,722
8.2%
3.6%
11.0%
100.0%
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BOARDWALK REIT | 2024 ANNUAL REPORT
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Same Property Dec. 31 2024 – 12 M
# of Suites
% Rental
Revenue Growth
% Total Rental
Expenses Growth
% Net Operating
Income Growth
% of NOI
Edmonton
12,882
10.3%
3.7%
15.2%
34.7%
Calgary
6,266
10.4%
2.0%
14.5%
24.5%
Other Alberta
1,936
10.5%
2.6%
16.1%
4.9%
Alberta
21,084
10.4%
3.1%
15.0%
64.1%
Quebec
6,000
5.6%
1.9%
7.6%
16.5%
Saskatchewan
3,505
10.4%
2.4%
15.0%
11.0%
Ontario
3,019
5.7%
4.1%
6.8%
7.8%
British Columbia
114
4.8%
(2.5)%
6.7%
0.6%
33,722
9.2%
2.9%
13.0%
100.0%
Same property rental revenue increased by 9.2% for the year ended December 31, 2024, compared to the same period in the prior
year. Total rental expenses reported for the year increased by 2.9% from 2023, resulting in a NOI increase of 13.0% compared to the
prior year. The increase in reported rental revenue was driven by the higher in-place occupied rents across all regions as well as
continued decreases in incentives in the Alberta and Saskatchewan markets. Same property total rental expenses increased for most
regions due to higher wages and salaries from inflation, as well as higher building repairs and maintenance, utilities, and property
taxes. In particular, Edmonton incurred increased wages and salaries due to higher maintenance, landscaper, and cleaner wages, as
well as an increase in utilities from increases in natural gas, water and sewer costs, and carbon levies. In Ontario, the increase in
operating expenses was attributable to higher salaries and wages, building repairs and maintenance, bad debts expenses, and
property taxes, partially offset by lower insurance premiums. In British Columbia, total rental expenses decreased due to lower
building repairs and maintenance costs, utilities, and wages and salaries. Overall, the Trust recognized same property NOI growth of
13.0% for 2024 when compared to the prior year.
Same Property Rental Revenue Growth
# of Suites
Q4 2024
vs Q3 2024
Q4 2024
vs Q2 2024
Q4 2024
vs Q1 2024
Q4 2024
vs Q4 2023
Edmonton
12,882
1.5%
4.4%
7.4%
9.3%
Calgary
6,266
0.8%
3.1%
5.8%
8.3%
Other Alberta
1,936
1.6%
4.0%
7.2%
9.4%
Quebec
6,000
1.3%
3.6%
4.4%
5.1%
Saskatchewan
3,505
2.0%
5.5%
8.6%
10.7%
Ontario
3,019
0.8%
2.7%
3.7%
5.9%
British Columbia
114
0.2%
2.1%
3.5%
4.8%
33,722
1.3%
3.9%
6.3%
8.2%
On a sequential basis, same property rental revenue reported in the fourth quarter of 2024 increased by 1.3% over Q3 2024, increased
by 3.9% compared to Q2 2024, increased by 6.3% compared to Q1 2024, and increased by 8.2% compared to Q4 2023. The change over
each quarter is a reflection of Boardwalk’s strategy, striving toward balancing the optimum level of market rents, rental incentives,
and occupancy rates in order to achieve its NOI optimization strategy. The significant increases over the same quarter in the prior year
also reflect market improvements and an influx in migration across provinces and international immigration, which has increased
demand and contributed to the increases seen across Alberta and Saskatchewan. The Trust remains focused on sustainable rental
rate increases with an emphasis on retention.
Estimated Mark-to-Market Revenue Gain Calculation
Boardwalk REIT’s projected mark-to-market revenue gain, representing the difference between estimated market rents and actual
occupied rents in December 2024, and adjusted for current occupancy levels, totaled approximately $42.4 million on an annualized
basis, representing $0.79 per Unit (Trust Units and LP Class B Units). For the most part, Boardwalk REIT’s rental lease agreements last
no longer than 12 months. By managing market rents and providing suite-specific incentives to our Resident Members, the Trust and
all its stakeholders continue to benefit from lower turnover, reduced expenses, and high occupancy. Estimated mark-to-market
revenue gain is measured at a point in time and is not intended to depict expected future financial performance. Reported market
48
48
rents can be very seasonal and, as such, will vary from quarter to quarter. The significance of this change could materially affect
Boardwalk REIT’s “estimated mark-to-market revenue gain” amount. The importance of this estimate, however, is that it can be an
indicator of future rental performance, assuming continuing economic conditions and trends. It would take significant time for these
market rents to be recognized by the Trust due to internal and external limitations on its ability to charge these new market-based
rents in the short term, particularly on renewals.
Same Property
Without Incentives
With Incentives
Weighted
Average
Apartment
Suites (5)
% of
Portfolio
Dec. 2024
Market
Rent (1)
Dec. 2024
Occupied
Rent (2)
Mark-to-
Market
Per
Month (3)
Annualized
Mark-to-
Market
Adjusted
for Current
Occupancy
Levels
($000’s)
Dec. 2024
Market Rent,
Including
Incentives (4)
Dec. 2024
Occupied
Rent (2)
Mark-to-
Market
Per
Month (3)
Annualized
Mark-to-
Market
Adjusted
for Current
Occupancy
Levels
($000’s)
Edmonton
$ 1,549 $
1,479 $
70 $ 10,561
$
1,514 $
1,479 $
35 $
4,993
12,882
38%
Calgary
1,934
1,851
83
6,152
1,920
1,851
69
5,032
6,347
19%
Other Alberta
1,412
1,344
68
1,557
1,374
1,344
30
670
1,936
6%
Alberta
$ 1,652 $
1,578 $
74 $ 18,270
$
1,623 $
1,578 $
45 $ 10,695
21,165
63%
Quebec
$ 1,509 $
1,355 $
154 $ 10,986
$
1,508 $
1,355 $
153 $ 10,973
6,000
18%
Saskatchewan (6)
1,631
1,594
37
1,520
1,622
1,594
28
1,061
3,505
10%
Ontario
1,903
1,371
532
18,969
1,902
1,371
531
19,207
3,019
9%
British Columbia
2,600
2,236
364
484
2,590
2,236
354
481
114
-%
Total Portfolio
$ 1,650 $
1,524 $
126 $ 50,229
$
1,631 $
1,524 $
107 $ 42,417
33,803
100%
(1) Market rent is a component of rental revenue and represents same properties only. It is calculated as of the first day of each month as the average rental revenue amount a
willing landlord might reasonably expect to receive, and a willing tenant might reasonably expect to pay, for a tenancy, before adjustments for other rental revenue items
such as, incentives, vacancy loss, fees, specific recoveries, and revenue from commercial tenants.
(2) Occupied rent is a component of rental revenue and represents same properties only. It is calculated for occupied suites as of the first day of each month as the average
rental revenue, adjusted for other rental revenue items such as fees, specific recoveries, and revenue from commercial tenants.
(3) Mark-to-market represents the difference between market rent and occupied rent, or market rent including incentives and occupied rent, where indicated.
(4) Market rent including incentives is market rent, as described, adjusted for incentives.
(5) Calgary includes the BRIO joint operation at 100% suite count.
(6) Saskatchewan market rent includes an increase for cable and internet service.
The decrease in the mark-to-market revenue gain for our portfolio, from $52.0 million at September 2024, to $42.4 million at December
2024, was due primarily to an increase in occupied rents in Alberta, and to a lesser extent, Ontario and Quebec. Excluded from the
mark-to-market revenue gain calculation of $42.4 million is approximately $19 per suite per month of incentives, representing the
difference of the mark-to-market calculated excluding incentives and the mark-to-market calculated including incentives, resulting in
potential additional revenue of approximately $8 million per annum or a total mark-to-market opportunity of $50.2 million.
In fiscal 2024, as with prior periods, Boardwalk REIT continued to focus on the optimization of all rental revenue, with attention to
appropriate levels of market rents and certain occupancy level targets, as well as suite-selective incentives when warranted.
Vacancy Loss and Incentives
Vacancy loss and rental incentives are strong indicators of current and future revenue performance. Depending on specific market
conditions, to best manage overall economic rental revenue, the correct balance between rental incentives and vacancy loss is
important. On a quarterly basis, the chart on the following page details rental incentives offered versus vacancy loss, on a same
property basis. Select incentives are continuing in the Alberta and Saskatchewan markets to maintain and increase occupancy levels.
However, incentives and vacancy loss in these markets are on a downward trend as noted previously under the section titled
“Segmented Operational Reviews” in this MD&A, with decreased incentives being used on the renewal of leases and minimal to no
incentives being offered on new leases. Boardwalk REIT continues to focus on maximizing overall revenues through the management
of three key revenue variables, notably, market rents, occupancy levels, and suite-selective incentives.
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BOARDWALK REIT | 2024 ANNUAL REPORT
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2018
2019
2020
2021
2022
2023
2024
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Rental Revenue, Incentives, Vacancy Loss ($000s)
$100,000
$110,000
$120,000
$130,000
$140,000
$150,000
$160,000
Rental Revenue
Vacancy Loss
Incentives
FINANCING COSTS
Financing costs, including interest expense on the Trust’s secured mortgages and lease obligations for the year ended December 31,
2024 increased from the same period in the prior year, from $111.2 million to $121.2 million. At December 31, 2024, the reported
weighted average interest rate for mortgages payable of 3.19% was up from the weighted average interest rate of 3.00% at
December 31, 2023. Boardwalk REIT has continued to refinance and renew certain mortgages with a focus on balancing the
renewing interest rate as well as staggering the mortgage maturity curve. The average term to maturity of the Trust’s mortgage
portfolio is approximately 3.6 years.
Boardwalk REIT concentrates on multi-family residential real estate which makes it eligible to obtain government-backed insurance
through the NHA (as defined herein) program, administered by CMHC. The benefits of purchasing this insurance are two-fold:
1.
CMHC insurance allows Boardwalk REIT to obtain mortgages with lower interest rate spreads on its property financing compared
to other financing alternatives in either the residential or any other real estate class, leading to lower overall cost of debt, after
including the cost of the NHA insurance; and,
2.
CMHC insurance lowers Boardwalk REIT’s overall renewal risk. Once insurance is obtained on the related mortgage, the insurance
is transferable and follows the mortgage for the complete amortization period, typically between 25 and 40 years, depending on
the type of asset being insured. With the insurance being transferable between approved lenders, it lowers the overall risk of
Boardwalk REIT not being able to refinance the asset on maturity.
This government-backed mortgage insurance program administered by CMHC provides significant benefits to the Trust, which in
turn allows for increased quality and affordability for the Trust’s Resident Members. Despite past volatility in the overall credit
markets, the Trust has been able to maintain a number of mortgage lenders willing to assume, or underwrite, additional mortgages
under this program.
At December 31, 2024, approximately 96% of Boardwalk REIT’s mortgages were backed by this NHA insurance, with a weighted
average amortization period of approximately 31 years.
As the LP Class B Units are classified as financial liabilities in accordance with IFRS Accounting Standards, the corresponding
distributions paid to the Unitholders are classified as financing costs under IFRS Accounting Standards. In its definition of FFO,
REALPAC notes that puttable instruments are classified as financial liabilities and distributions are therefore treated as interest
expense, however, adds the distributions that were treated as interest expense back when calculating FFO, which suggests those
puttable instruments are similar to equity. The total amount of distributions paid to the holders of LP Class B Units for the year ended
December 31, 2024, which have been recorded as financing costs, was $6.2 million (year ended December 31, 2023 – $5.2 million).
Based on this rationale, these amounts have been added back into the calculation of FFO.
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50
The total amount of interest income earned for the year ended December 31, 2024, was $12.5 million, compared to $3.1 million for the
prior year. Interest income will fluctuate depending on the cash on hand in the period and interest rates received on invested cash.
Amortization of Deferred Financing Costs
The amortization of deferred financing costs relates primarily to the amortization of CMHC premiums, which are paid as part of
mortgage financing. If Boardwalk REIT replaces an existing mortgage with a new mortgage, all costs associated with the original
mortgage, including the unamortized balance of the CMHC premium, are required to be charged to income in the period that this
occurs. As a result, and due to the variable timing and strategy of each mortgage at maturity, the amounts reported will vary. Rather
than refinance the entire mortgage on term maturity to a higher amount, Boardwalk REIT takes advantage of supplementing, rather
than extinguishing, the original mortgage to increase its leverage.
Boardwalk reviews its amortization estimates on an ongoing basis and, if warranted, will adjust these estimates prospectively.
The total amortization of deferred financing costs for the year ended December 31, 2024, was $7.3 million compared to $7.2 million
recorded for the prior year. Amortization of deferred financing costs is included in financing costs.
Interest Rate Sensitivity
Although Boardwalk REIT manages its financing risk in a variety of ways, significant interest rate changes could still impact the Trust
as a whole. Due to the size of Boardwalk’s overall mortgage portfolio, it has been prudent to spread out the maturity of these
mortgages over a number of years. In fiscal 2025, the Trust anticipates having approximately $565.5 million of secured mortgages
maturing with a weighted average rate of 2.44%. If we were to renew these mortgages today with a five-year term, the Trust estimates,
based upon interactions with possible lenders, the new rate would be approximately 3.70% (as of February 2025).
To date, the Trust has renewed, or forward locked the interest rate on $57.0 million or 10.1% of its total 2025 mortgage maturities at an
average interest rate of 3.78%, while extending the term of these mortgages by an average of 5.9 years.
ADMINISTRATION
Included in administration expenses are costs associated with Boardwalk REIT’s centralized administrative functions. The
amount reported for the year ended December 31, 2024, which relates to corporate administration from continuing operations,
was $44.8 million compared to $41.2 million in the prior year, an increase of approximately 8.7% for the year. The increase was
attributable to higher administrative wages, which was increased in part due to rising inflation coupled with bonus considerations,
as well as increased travel costs and information technology costs including cybersecurity and third-party software as a service fees.
DEPRECIATION
Depreciation recorded on the Consolidated Statements of Comprehensive Income is made up of the depreciation of property, plant
and equipment.
The Trust has elected to use the cost model under IAS 16 – Property, Plant and Equipment (“IAS 16”) to value its property, plant and
equipment, and, as a result of this method, depreciation expense is a charge taken against earnings to reflect the estimated
depreciation that has occurred to these assets as a result of their use during the reporting period in question.
Boardwalk reviews its key depreciation estimates on an ongoing basis and, if warranted, will adjust these estimates on a
prospective basis.
The total amount reported as depreciation for the year ended December 31, 2024 was $8.3 million, which was consistent with the
$7.9 million recorded for the same period in the prior year.
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BOARDWALK REIT | 2024 ANNUAL REPORT
51
OTHER INCOME AND EXPENSES
Income Tax Expense
Boardwalk REIT qualifies as a “mutual fund trust” as defined in the Tax Act. The Tax Act also contains legislation affecting the tax
treatment of publicly traded trusts and the criteria for qualifying for the REIT Exemption, which would exempt Boardwalk REIT from
income tax under the SIFT Legislation. For 2023 and 2024, the Trust qualified for the REIT Exemption.
Although Boardwalk REIT is exempted from income taxes provided it distributes all of its taxable income to its Unitholders, this
exemption does not apply to its corporate subsidiaries, which are subject to income taxes.
Boardwalk REIT has received notices of reassessment dated February 28, 2024 from the CRA increasing the Trust’s taxable income by
$5.6 million, $20.6 million, $14.1 million, and $0.06 million for its taxation years ended December 31, 2011, 2012, 2013, and 2014,
respectively, on the basis that the Trust did not report deemed taxable capital gains in each of those taxation years resulting from alleged
negative adjusted cost base in the Trust’s units of Top Hat Operating Trust, a trust 100% owned by Boardwalk REIT. Management of the
Trust assessed the implications of the CRA notices of reassessment and filed an objection on May 24, 2024 with the CRA Appeals Division
as it disagrees with the CRA’s proposed assessment. It is the opinion of the Trust that it will not be required to pay any amount to the CRA
in order to dispute this matter. Furthermore, it is the Trust’s opinion that should a payment be required to settle this matter, provided the
Trust is not a taxable entity, it will not be required to pay any income taxes payable as the Trust distributes all taxable income to its
Unitholders. It is difficult to estimate the amount of time it could take to resolve the dispute with the CRA Appeals Division and it is
possible that an appeal to the Tax Court of Canada could be required in order to resolve this dispute. Please refer to the section titled
“Risks and Risk Management – Certain Tax Risks – Change of Tax Laws” in this MD&A for more information.
LP Class B Units and the Deferred Unit Compensation Plan
The LP Class B Units are non-transferable, except under certain circumstances, but are exchangeable, on a one-for-one basis, into
Trust Units at any time at the option of the holder. The LP Class B Units and the deferred unit-based compensation plan are recorded
at their fair value at each reporting date. As at December 31, 2024, the Trust used a price of $64.25 based on the closing price of the
Trust Units on the TSX to determine the fair value of these liabilities at that date. The total fair value of the LP Class B Units recorded
on the Consolidated Statements of Financial Position at December 31, 2024, was $283.7 million (December 31, 2023 – $319.2 million),
and a corresponding fair value gain of $31.8 million (year ended December 31, 2023 – fair value loss of $98.0 million) was recorded on
the Consolidated Statements of Comprehensive Income for the year ended December 31, 2024.
The deferred unit-based compensation plan had a fair value of $18.0 million (December 31, 2023 – $15.8 million), and a corresponding
fair value loss of $0.5 million (year ended December 31, 2023 – fair value loss of $4.6 million) was recorded on the Consolidated
Statements of Comprehensive Income for the year ended December 31, 2024.
52
52
Financial Condition
REVIEW OF CASH FLOWS
Operating Activities
Cash flow from operating activities increased by 20.7% from $199.8 million for the year ended December 31, 2023 to $241.2 million
for the year ended December 31, 2024. For the year ended December 31, 2024, Boardwalk REIT reported ACFO of $192.3 million, or
$3.56 per Unit. This represented an increase of approximately 29.0%, compared to $149.1 million, or $2.96 per Unit, reported for the
same 12 months in 2023. The increase in cash flow from operating activities for 2024 was mainly the result of increased rental
revenues and interest income partially offset by higher operating and administrative costs incurred in the period and higher interest
expense as a result of higher interest rates. The increase in ACFO was primarily due to higher rental revenues from higher occupied
rent and lower incentives as well as higher interest income.
A reconciliation of ACFO to cash flow from operating activities as shown in the Consolidated Statements of Cash Flows prepared in
accordance with IFRS Accounting Standards is highlighted below.
ACFO Reconciliation
(In $000’s, except per Unit amounts)
3 Months
Dec. 31, 2024
3 Months
Dec. 31, 2023
% Change
12 Months
Dec. 31, 2024
12 Months
Dec. 31, 2023
% Change
Cash flow from operating activities
$
58,245
$
55,133
$ 241,200
$
199,796
Adjustments
Net change in operating working capital
3,041
(5,290)
(4,674)
(8,385)
Income (loss) from equity accounted investment
14,272
(572)
13,226
(1,113)
Fair value gain from equity accounted investment
(13,830)
-
(13,830)
-
Deferred unit-based compensation
(2,048)
(921)
(5,374)
(3,328)
LP Class B Unit distributions
1,603
1,309
6,235
5,169
Government grant amortization
94
94
378
378
Interest paid
28,929
28,852
113,123
103,084
Financing costs
(30,937)
(28,905)
(121,161)
(111,172)
Principal repayments on lease liabilities
(826)
(803)
(3,275)
(3,397)
Principal repayments on lease receivable
-
-
-
321
Maintenance Capital Expenditures (1)
(7,732)
(8,651)
(33,575)
(32,255)
ACFO (2)(3)
$
50,811
$
40,246
26.3%
$ 192,273
$
149,098
29.0%
ACFO per Unit (3)
$
0.94
$
0.79
19.0%
$
3.56
$
2.96
20.3%
(1) Details of the calculation of Maintenance Capital Expenditures can be found in the section titled, “Financial Condition – Review of Cash Flows – Investing Activities –
Value-add Capital and Maintenance Capital Expenditures” in this MD&A.
(2) This is a non-GAAP financial measure.
(3) Please refer to the section titled “Presentation of Non-GAAP Measures” in this MD&A for more information.
For the current quarter, FFO Payout Ratio and ACFO Payout Ratio were 33.1% and 38.2%, respectively, compared to 30.8% and 37.4%,
respectively, for the same period in the prior year. For the year ended December 31, 2024, FFO Payout Ratio and ACFO Payout Ratio
were 33.3% and 39.1%, respectively, compared to 32.2% and 39.1%, respectively, in the prior year.
ACFO, in the longer term, is indicative of the Trust’s ability to pay distributions to its Unitholders. ACFO Payout Ratio is a non-GAAP
ratio. Please refer to the section titled “Presentation of Non-GAAP Measures” in this MD&A for more information on ACFO Payout
Ratio. As regular distributions are funded by the Trust’s liquidity, cash flow from operating activities, and mortgage upfinancings tied
to investment property capital appreciation (when needed), these distributions are reviewed on a quarterly basis by the Board of
Trustees to assess whether they are sustainable. As a result of the review at the beginning of 2024, the Board of Trustees had approved
distributions of $1.44 per Trust Unit on an annualized basis effective March 2024. With the completion of 2024, the Board of Trustees
has approved distributions of $1.62 per Trust Unit on an annualized basis effective March 2025.
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BOARDWALK REIT | 2024 ANNUAL REPORT
53
Investing Activities
Capital Improvements
Boardwalk has a continuous capital improvement program with respect to its investment properties and brand diversification
strategy. The program is designed to extend the properties’ useful lives, improve operating efficiency, enhance appeal, enhance as
well as maintain earnings capacity, meet Resident Members’ expectations, and comply with health and safety regulations.
A few of the Trust’s communities will be selected to fall under the ‘Boardwalk Lifestyle’ brand, based on a number of criteria. In general,
these communities are located in extremely attractive locations and desirable neighbourhoods. Rebranding is the highest level of
investment the Trust will place in this community. Investment here will be holistic in nature and include significant enhancement to the
exterior. Common areas may not only be refreshed but may also be modernized to include community areas with Wi-Fi lounges,
barbeque areas, and other in-demand amenities. The suites in these buildings will be significantly modernized and may include the
removal of existing walls and substantial upgrades, including all new appliances, upgraded kitchens and extensive flooring, electrical
and plumbing upgrades. These communities will be targeted to renters commonly referred to as a ‘renter by choice’.
A number of the Trust’s communities will be selected to be repositioned to the ‘Boardwalk Communities’ category. These
communities will also be targeted based on location and will focus on a modernization program. These communities tend to be
located in mature areas near schools, parks, the downtown core, shopping and other desirable amenities. Investment in these
communities will enhance the already large suite size and will significantly upgrade most aspects of the suite, including new upgraded
flooring, all new appliances with modernized kitchens, modern electrical, plumbing and hardware fixtures. Modernization of existing
common areas such as hallways and lobbies will also be considered.
The majority of Boardwalk’s existing portfolio falls into the ‘Boardwalk Living’ category. Resident Members in this area are looking for
value but tend to be more price sensitive. Again, many of these Boardwalk communities are located in established communities with
extensive local amenities. Although Boardwalk’s investment in this area will be less significant than in its re-positioned and rebranded
communities, it is value-focused and thoughtfully targeted with those items that these price sensitive renters appreciate most, such
as upgraded flooring, and more modern electrical, plumbing and hardware fixtures.
In 2024, Boardwalk REIT invested approximately $133.4 million in capital assets (comprised of $124.4 million on its investment
properties and $9.0 million on property, plant and equipment) back into its properties in the form of equipment and project
enhancements to upgrade existing suites, common areas, and building exteriors and systems, compared to the $126.0 million
($119.0 million on its investment properties and $7.0 million on property, plant and equipment) invested in 2023.
A significant part of Boardwalk’s capital improvement program
relates to projects that are carried out by Boardwalk’s
Associates. This internal capital program was initiated in 1996 as
a way to create more value for the Trust. The Trust recognizes
that there are certain efficiencies and economies of scale
available from having Boardwalk Associates perform certain
capital projects themselves, or “in-house”. This results in the
faster execution and greater control of these projects while at the
same time eliminating the profit charged by third-party
contractors. The Trust focuses on specific projects where there is
the largest opportunity for value creation, like flooring and
painting. Over the last few years, the Trust has intensified this
focus of performing capital projects “in-house” rather than
contracting such services. Included in investment in capital
assets is approximately $33.3 million of on-site wages and
salaries that have been incurred towards these projects for 2024,
compared to $33.8 million for 2023.
4%
Appliances
10%
Elevators/Boilers/Mechanical
25%
Internal
Capital
Program
7%
Other
(incl. Equipment)
6%
Hallway
Improvements
2024 12 M Investment in Capital Assets
18%
Suite
Improvements
30%
Building
Improvements
54
54
Maintenance of Productive Capacity
The Trust has two separate areas in which capital is invested back into its residential buildings. These are referred to as Maintenance
Capital Expenditures or “Maintenance CAPEX” and value-add capital investments.
Maintenance CAPEX over the longer term is funded from cash flow from operating activities. These expenditures are deducted from
FFO in order to estimate a sustainable amount, AFFO, which can be distributed to Unitholders. Maintenance CAPEX include those
expenditures that, while capital in nature, are not considered betterments and relate more to maintaining the existing earnings
capacity of our property portfolio, though do extend the useful life of the asset. In contrast, value-add capital investments are more
discretionary in nature and focus on increasing the productivity of the property, with the goal of increasing NOI through revenue
growth and/or decreased operating expenses. Management of the Trust believes that significant judgement is required to determine
whether a capital expenditure is needed to maintain the earning capacity of an asset or to increase the earning capacity of an asset.
Lastly, the Trust invests funds in its portfolio in the form of ongoing repairs and maintenance as well as on-site maintenance
Associates. Both of these expenditures are designed to maintain the operating capacity of our assets.
Value-add Capital and Maintenance Capital Expenditures
As discussed above, value-add capital investments include building improvements, suite upgrades, technology initiatives, and other
investments which support NOI growth. Building improvements include investments which improve energy efficiency, enhance
building envelopes, increase curb appeal of the property, as well as renovations of common areas and amenity spaces. Suite upgrades
included in value-add capital result in revenue growth above market growth. In addition, internal capital required to complete
building improvements and suite upgrades is considered value-add capital.
Maintenance CAPEX are expenditures which relate to sustaining and maintaining the existing asset. Boardwalk’s determination of
Maintenance CAPEX is based on an estimated reserve amount per suite based on a three-year average of the capital invested to
maintain and sustain the existing properties. The allocations on the following page were the result of a detailed review of the Trust’s
historical capital investment. As previously discussed, significant judgement was required to allocate capital between value-add and
Maintenance CAPEX. Capital budget amounts for 2024, revised, if necessary, based on actual expenditures for the year, are initially
used to calculate Maintenance CAPEX for the three-year rolling average. For 2023, the three-year rolling average is based on actual
expenditures invested from 2021 to 2023.
The Trust’s calculation of standardized Maintenance CAPEX per suite is outlined in the following table:
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BOARDWALK REIT | 2024 ANNUAL REPORT
55
Category
2024 Capital
Expenditures ($000’s)
2023 Capital
Expenditures ($000’s)
2022 Capital
Expenditures ($000’s)
2021 Capital
Expenditures ($000’s)
Building Exterior, Grounds & Parking
$
40,077
$
36,136
$
40,794
$
26,151
Hallways & Lobbies
8,151
8,999
6,628
8,093
Elevators
3,273
3,605
2,160
2,826
Mechanical & Electrical
10,654
9,023
6,086
6,901
Other – Information Technology
4,906
3,978
3,707
4,428
Site Equipment & Vehicles
2,478
2,204
1,342
1,636
Total Common Area
$
69,539
$
63,945
$
60,717
$
50,035
Paint & General
$
8,140
$
6,575
$
8,891
$
13,072
Flooring
8,469
8,512
10,823
12,824
Cabinets & Counters
5,931
5,495
6,760
7,957
Appliances
4,704
4,419
4,799
5,145
Suite Mechanical
1,376
1,287
1,549
1,659
Furniture, Fixtures & Equipment
911
980
771
1,198
Total Suites
$
29,531
$
27,268
$
33,593
$
41,855
Internal Capital Program
$
33,329
$
33,810
$
34,435
$
34,237
Subtotal
$
132,399
$
125,023
$
128,745
$
126,127
Corporate Capital Expenditures
1,028
949
607
876
Investment in Capital Assets
$
133,427
$
125,972
$
129,352
$
127,003
Cash Flow used in Investing Activities
Improvements to Investment Properties
$
124,395
$
119,012
$
123,885
$
121,492
Additions to Property, Plant & Equipment
9,032
6,960
5,467
5,511
Investment in Capital Assets
$
133,427
$
125,972
$
129,352
$
127,003
Number of suites
34,222
33,846
33,722
33,264
Value-add Capital Investment
Building Improvements
$
41,002
$
34,786
$
34,443
$
25,194
Common Area Renovations
8,151
8,999
6,628
8,093
Suite Upgrades
22,054
20,749
25,999
33,493
Internal Capital
27,137
27,873
28,289
28,664
Other – Information Technology
1,227
996
927
1,107
$
99,571
$
93,403
$
96,286
$
96,551
Maintenance CAPEX
33,856
32,569
33,066
30,452
Investment in Capital Assets
$
133,427
$
125,972
$
129,352
$
127,003
Maintenance CAPEX per Suite
$
989
$
962
$
981
$
915
Three-year Rolling Average Reserve
2022
$
981
2023
$
962
2024
$
989
2024 Maintenance CAPEX Per Suite
$
977
Three-year Rolling Average Reserve
2021
$
915
2022
$
981
2023
$
962
2023 Maintenance CAPEX Per Suite
$
953
56
56
Using the three-year rolling average reserve, Boardwalk’s 2024 estimate of Maintenance CAPEX is $33.6 million, or $977 per suite, for
the year. For 2023, Boardwalk’s estimate of Maintenance CAPEX, using the three-year average reserve, was $32.3 million, or $953 per
suite, for the year. The increase in the three-year rolling average reserve of $953 per suite in 2023 to $977 per suite in 2024 is due to a
higher Maintenance CAPEX per suite in part due to rising costs from inflationary increases experienced over the past year.
The following table provides management of the Trust’s estimate of these expenditure categories for the three and 12 months ended
December 31, 2024 and 2023
(In $000’s, except for per suite amounts)
3 Months
Dec. 31, 2024
Per Suite
3 Months
Dec. 31, 2023
Per Suite
12 Months
Dec. 31, 2024
Per Suite
12 Months
Dec. 31, 2023
Per Suite
Maintenance CAPEX
$
7,732 $
225
$
8,651 $
255
$
33,575 $
977
$
32,255 $
953
Value-add capital
33,095
962
30,418
895
99,852
2,906
93,717
2,769
Investment in capital assets
$
40,827 $ 1,187
$
39,069 $ 1,150
$ 133,427 $ 3,883
$
125,972 $ 3,722
Management of the Trust has estimated that for the fourth quarter of fiscals 2024 and 2023, the amount allocated to maintenance
capital was approximately $7.7 million, or $225 per suite, and $8.7 million, or $255 per suite, respectively, with investment in
value-add capital expenditures to its investment properties totaling $33.1 million and $30.4 million, respectively, or $962 and
$895 per suite, respectively.
For the years ended December 31, 2024 and 2023, the amount allocated to maintenance capital was approximately $33.6 million, or
$977 per suite, and $32.3 million, or $953 per suite, respectively, with investment in value-add capital expenditures to its investment
properties totaling $99.9 million and $93.7 million, respectively, or $2,906 and $2,769 per suite, respectively.
Investment Properties
The Trust has elected to use the fair value model in accordance with IAS 40 – Investment Properties (“IAS 40”) to report the value of its
investment properties at each reporting date.
External valuations were obtained from third-party appraisers (the “Appraisers”) based on a cross section of properties from different
geographical locations and markets across the Trust’s rental portfolio, as determined by management, to corroborate the Trust’s
internal fair value calculation for its entire investment property portfolio. Appraisals were obtained as follows:
Date
Number
of Properties
Aggregate
Fair Value
Percentage of Portfolio
as of that Date
December 31, 2024
6
$
866,671
10.4%
September 30, 2024
5
$
203,269
2.4%
June 30, 2024
5
$
254,010
3.1%
March 31, 2024
4
$
180,971
2.2%
December 31, 2023
6
$
874,525
11.4%
September 30, 2023
6
$
196,708
2.6%
June 30, 2023
4
$
210,300
2.8%
March 31, 2023
4
$
100,235
1.4%
The fair value of the Trust’s investment property portfolio was determined internally by the Trust using the same assumptions and
valuation techniques used by the Appraisers. In addition to performing a valuation on a selection of the Trust’s properties (and not
performing a valuation on all of the Trust properties) to compare to the Trust’s internal valuation, the Appraisers provided the Trust
with a summary of the major assumptions and market data by city in order for the Trust to complete its internal valuations.
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BOARDWALK REIT | 2024 ANNUAL REPORT
57
The key valuation metrics for the Trust’s investment properties using the stabilized approach are set out in the following table:
As at
Dec. 31, 2024
Dec. 31, 2023
Capitalization Rate
Weighted Average
Forecasted Total
Stabilized Net
Operating Income
Capitalization Rate
Weighted Average
Forecasted Total
Stabilized Net
Operating Income
Alberta
5.14%
$
261,691
5.13%
$
247,297
British Columbia
4.38%
5,703
4.30%
5,518
Saskatchewan
5.68%
43,757
5.67%
39,326
Ontario
4.52%
32,604
4.27%
30,922
Quebec
4.95%
21,172
4.94%
18,944
5.11%
364,927
5.06%
342,007
Land Leases
5.22%
41,160
4.96%
39,807
Total
5.12%
$
406,087
5.05%
$
381,814
Overall portfolio weighted average stabilized capitalization rate (“Cap Rate”) was 5.12% as at December 31, 2024 and 5.05% as at
December 31, 2023, using a forecasted stabilized NOI.
The “Overall Capitalization Rate” method requires a forecasted stabilized NOI be divided by a Cap Rate to determine a fair value. As
such, fluctuations in both NOI and Cap Rates could significantly alter the fair value. Generally, an increase in NOI will result in an
increase to the fair value of an investment property. An increase in Cap Rate will result in a decrease to the fair value of an investment
property. When the Cap Rate is applied to NOI to calculate fair value, there is a significant impact whereby the lower the Cap Rate, the
larger the impact. The tables below summarize the sensitivity impact of changes in both Cap Rates and forecasted stabilized NOI on
the Trust’s fair value of its investment properties (excluding building acquisitions valued at Level 2 inputs, developments, and the
right-of-use assets related to lease liabilities) as at December 31, 2024, and December 31, 2023:
As at December 31, 2024
Stabilized Net Operating Income
-3%
-1%
As Forecasted
+1%
+3%
Cap Rate
$
393,904
$
402,026
$
406,087
$
410,148
$
418,270
-0.25%
4.87%
$
157,056
$
323,844
$
407,238
$
490,632
$
657,421
Cap Rate As Reported
5.12%
(237,965)
(79,322)
7,932,173
79,322
237,965
+0.25%
5.37%
(596,202)
(444,945)
(369,317)
(293,688)
(142,431)
As at December 31, 2023
Stabilized Net Operating Income
-3%
-1%
As Forecasted
+1%
+3%
Cap Rate
$
370,360
$
377,996
$
381,814
$
385,632
$
393,268
-0.25%
4.80%
$
154,907
$
313,923
$
393,431
$
472,939
$
631,955
Cap Rate As Reported
5.05%
(226,721)
(75,574)
7,557,359
75,574
226,721
+0.25%
5.30%
(572,361)
(428,341)
(356,330)
(284,320)
(140,299)
Investment properties with a fair value of $788.5 million as at December 31, 2024 (December 31, 2023 – $802.0 million), are situated on
land held under ground (or land) leases.
Investment properties with a fair value of $1.1 billion as at December 31, 2024 (December 31, 2023 – $1.0 billion), are pledged as
security against the Trust’s credit facility, which includes a committed revolving credit facility and demand revolving credit facility
(collectively, the “Credit Facility”). In addition, investment properties with a fair value of $7.9 billion as at December 31, 2024
(December 31, 2023 – $7.4 billion), are pledged as security against the Trust’s mortgages payable.
For the year ended December 31, 2024, the Trust capitalized $124.4 million in improvements to investment properties (and $53.7 million
in development of investment properties) and recorded a fair value gain of $328.7 million on its financial statements as a result of
changes in the fair value of investment properties. For the year ended December 31, 2023, the Trust capitalized $119.0 million in
improvements to investment properties (and $23.3 million in development of investment properties) and recorded a fair value gain of
$598.8 million. Capitalized building improvements represent expenditures that provide future benefits to the Trust for a period
greater than 12 months, some of which may not be immediately reflected in the fair value of the investment properties, under IFRS
Accounting Standards, for the current reporting period.
58
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Joint Arrangements
Boardwalk and RioCan Real Estate Investment Trust (“RioCan”) completed their first joint operation development project known as
BRIO, located in Calgary, Alberta, in February 2020. The joint operation is an equal 50% interest between the parties, with RioCan
managing the retail component and Boardwalk managing the residential component, each on a cost basis.
Boardwalk has a 50:50 joint venture partnership, with a private partner, to develop a 365-suite multi-residential, purpose-built rental
complex, located near downtown Brampton, Ontario. It is estimated that total development costs for the project are approximately
$200 to $215 million, which the Trust anticipates completing near the low end of the range. The project is a rental complex with
approximately 10,700 square feet of retail space, above and underground parking, and 380,000 square feet of residential space over
two concrete high-rise towers. For the year ended December 31, 2024 and 2023, the Trust invested $nil in capital contributions in
equity accounted investment to this limited partnership. The project is substantially tracking on time and on budget. During the
fourth quarter of 2022, one of the high-rise towers, which includes 176 residential suites, was substantially completed and as of
December 31, 2024, the tower was fully leased. During the fourth quarter of 2023, the second high-rise tower, which includes
189 residential suites, was substantially completed and as of December 31, 2024, the tower was 88.5% leased. The joint venture
has committed to a construction facility loan for 60% of the budgeted costs to construct. As at December 31, 2024, $58.2 million
has been drawn on this loan. The decrease in the balance outstanding on the construction facility loan from December 2023 is due
to the Trust providing a loan to the joint venture for $57.2 million with the proceeds used by the joint venture to repay 50% of the
revolving construction facility loan payable. The loan made by the Trust to the joint venture was made on the same terms as the
revolving construction facility loan. For the 12 months ended December 31, 2024, a further $1.0 million was advanced to the joint
venture with respect to this loan to mirror what was drawn on the construction facility. As at December 31, 2024 the loan receivable
owing by the joint venture to the Trust totaled $58.2 million.
Development
Boardwalk’s development opportunities include additional projects to be built on the Trust’s excess land density, as well as new land
that was acquired in Victoria, British Columbia. These developments are in various stages of market analysis, planning and approval,
and will further add newly constructed assets to the Trust’s portfolio.
For the year ended December 31, 2024, the Trust expended $53.7 million on development of investment properties compared to
$23.3 million for the prior year. Interest costs of $2.3 million were capitalized to properties under development for the year ended
December 31, 2024 (December 31, 2023 – $1.5 million).
During the second quarter of 2024, the Trust purchased a parcel of land in Calgary, Alberta, for a purchase price of $12.0 million
(excluding transaction costs). The acquisition was funded with cash on hand and is planned for a development project of new rental
suites. The site is located in one of central Calgary’s most desirable and amenity-rich neighbourhoods and is a short drive from
downtown, 17th Avenue, University of Calgary, and Mount Royal University. The Trust estimates that the site allows for approximately
135 residential suites and supporting ground-level retail. The Trust will continue to progress with Development Permit approvals in
2024. With its joint venture project described above nearing stabilization, the Trust views this as an opportunity to augment and
replenish its future development pipeline on a small scale in an irreplaceable location.
It is our intention to continue to investigate further development opportunities, however, each future opportunity will require a
separate analysis and, depending on the analysis and economic conditions, Boardwalk REIT will determine if additional development
projects are warranted. Historically, one of the biggest risks to real estate valuations is the building of oversupply in a particular
market, which results in significant corrections of property values market-wide.
Property Acquisitions and Dispositions
On November 18, 2024, the Trust acquired two adjacent properties in Calgary, Alberta. The properties, totaling 12 suites, were
purchased using cash on hand for $3.1 million.
On June 24, 2024, the Trust acquired a property in Chestermere, Alberta and a property in Calgary, Alberta. The Chestermere property
is comprised of 63 townhome suites and was purchased for $26.4 million (including transaction costs). The Calgary property is
comprised of 6 suites and was purchased for $1.9 million (including transaction costs). Both properties were purchased using cash
on hand.
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On January 24, 2024, the Trust acquired The Circle, a property in Calgary, Alberta. The property is comprised of 295 suites and had a
purchase price of $77.6 million (including transaction costs and net of a deficiency credit received).
On April 25, 2023, the Trust acquired a property in Victoria, British Columbia. The property is comprised of 124 suites and had a
purchase price of $60.3 million (including transaction costs).
The Trust has a purchase agreement in place for Elbow 5 Eight, a 255 suite, newly built wood frame community in central Calgary’s
Windsor Park neighbourhood for a purchase price of $93.0 million. Elbow 5 Eight is well-located within walking distance of Chinook
Centre mall, and is a short drive from downtown Calgary, Sandy Beach Park, Rockyview General Hospital, Calgary Golf & Country Club
and the nearby established communities of Britannia and Bel Aire. The community will feature condo-quality finishes, a residents’
lounge, gym and rooftop patio. Subsequent to December 31, 2024, the remaining conditions on this purchase have been satisfied and
the Trust has committed to this purchase, with the transaction expected to close in March 2025. The Trust anticipates lease-up will
take approximately one year.
On January 21, 2025, the Trust sold three non-core assets, Axxess, Galbraith House, and Lansdowne Park (comprised of 390 suites), in
Edmonton, Alberta, for total proceeds (excluding selling costs) of $80.0 million. These assets have been classified as assets held for
sale. Details of the assets held for sale can be found in NOTE 5 to the audited annual consolidated financial statements years ended
December 31, 2024 and 2023.
Financing Activities
Distributions
Boardwalk distributes payments monthly to its Unitholders and holders of LP Class B Units. These payments are referred to as regular
distributions. The distinct nature and classification of these payments are unique to each real estate investment trust and the
components of these distributions may have differing tax treatments. For the year ended December 31, 2024, the Trust declared
regular distributions of $75.1 million, an increase from the $58.3 million declared in 2023. The increase is due to the increased
distribution rate to $1.44 per Trust Unit as previously noted. Regular distributions declared for both the 12 months ended December
31, 2024 and 2023, represent an FFO payout ratio of 33.3% and 32.2%, respectively. For the year ended December 31, 2024, the Trust
recorded profit of $588.2 million (year ended December 31, 2023 – profit of $666.1 million).
Financing of Revenue Producing Properties
During the 12 months ended December 31, 2024, proceeds from mortgage financings, excluding mortgages assumed on new
acquisitions, totaled $60.3 million (year ended December 31, 2023 – $236.6 million). During the financing and refinancing process, the
weighted average interest rate on its mortgage portfolio increased from 3.00% at December 31, 2023, to 3.19% at December 31, 2024.
CAPITAL STRUCTURE AND LIQUIDITY
Liquidity refers to the Trust’s ability to generate, and have available, sufficient cash to fund its ongoing operations and capital
commitments as well as its distributions to Unitholders. Generally, distributions are funded from ACFO, a non-GAAP financial measure
cash flow metric as previously defined. In addition to ACFO, the Trust relies on a combination of debt capital, and equity to fund a
portion of its capital expenditures, acquisitions, development, and other uses of capital. As previously mentioned, the DOT outlines
the investment and operating policies of the Trust, however, the Trust has no specific working capital requirements. Over the past
number of years, Boardwalk has observed a significant increase in borrowing standards of many of our key lending partners as a result
of heightened sensitivity to possible weaknesses in the economy. To mitigate the risk of renewal, the Trust utilizes NHA mortgage
insurance, the benefits of which are discussed in detail in this MD&A. Approximately 96% of Boardwalk REIT’s secured mortgages
carry NHA insurance. In volatile times, the ability to access this product is very beneficial to the Trust as a whole.
Access to liquidity is an important element of the Trust as it allows the Trust to implement its overall strategy. The previous low
interest rate environment had allowed Boardwalk to renew its existing maturing mortgages at favourable interest rates. In addition,
Boardwalk has been able to access additional capital from its properties through the continued use of the current NHA insurance
program, which provides mortgage financing at attractive rates. During the early part of the COVID-19 pandemic we had seen
declining interest rates, however, as a result of inflation, global conflicts, and various other economic factors, interest rates have
increased significantly from where they previously were during 2021 and at the beginning of 2022. As such, financing costs over the
near to medium term are expected to increase, as compared to maturing rates. In 2024 and to-date in 2025, the BoC has cut interest
rates six times, however, interest rates still remain high relative to the levels during the COVID-19 pandemic.
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Boardwalk defines total available liquidity to include cash and cash equivalents on hand and any unused committed revolving credit
facility, plus any subsequent committed/funded financing. The Trust’s cash and cash equivalents was $122.4 million at December 31,
2024, compared to $331.2 million reported on December 31, 2023. As at December 31, 2024, the Trust also had $245.8 million of
unused committed revolving credit facilities (December 31, 2023 – $195.8 million), bringing total available liquidity to $368.2 million
(December 31, 2023 – $527.0 million).
The Trust’s liquidity position as at December 31, 2024, remains stable as the following table highlights:
($000)
Cash and cash equivalents
$
122,408
Unused credit facilities
245,800
Total available liquidity
$
368,208
In addition to this, the Trust currently has 977 rental suites of unencumbered assets. It is estimated that, under current CMHC
underwriting criteria, the Trust could obtain an additional $145.0 million of new proceeds from the financing of its currently
unencumbered assets.
Of the $565.5 million of secured mortgages coming due in 2025 (as shown in the table included under “Mortgage Schedule”),
approximately 100% have NHA insurance, and represent in aggregate approximately 36% of current estimated “underwriting” values
on those individual secured assets. Interest rates on five and 10-year NHA-insured mortgages as of February 2025 are estimated to be
approximately 3.70% and 4.05%, respectively. These rates do fluctuate and, by the time these maturing mortgages are set for
renewal, with or without additional financing, interest rates may have changed materially. Even with the NHA insurance program
attached to its secured mortgages, the Trust is still susceptible to changes in market interest rates. To address a portion of this risk,
the Trust has forward locked or renewed $57.0 million, or 10.1%, of its $565.5 million of 2025 mortgage maturities. The weighted
average contracted interest rate on these renewals is 3.78%, for an average term of 5.9 years.
In July 2024, the Trust extended its committed revolving credit facility for another year with a maturity date of July 25, 2029. In
addition, at the time of extending the committed revolving credit facility, the Trust added an additional $50 million demand facility to
the credit facility agreement.
Mortgage Schedule
Boardwalk REIT’s long-term debt consists entirely of low-rate, fixed-term secured mortgage financing. The maturity dates on the
secured mortgages have been staggered to lower the overall interest rate risk on renewal.
Mortgages payable as at December 31, 2024, were $3.3 billion, compared to $3.3 billion as at December 31, 2023.
Boardwalk REIT’s overall weighted average interest rate on its long-term debt has decreased from the prior year. The weighted
average interest rate as at December 31, 2024, was 3.19% compared to 3.00% as at December 31, 2023. To better maintain cost
effectiveness and flexibility of capital, Boardwalk REIT continuously monitors short and long-term interest rates. If the environment
warrants, the Trust will convert short-term, floating rate debt, if any, to longer term, fixed rate mortgages to reduce interest rate
renewal risk.
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Year of Maturity
Principal
Outstanding as
at Dec. 31, 2024 (1)
Weighted Average
Interest Rate
By Maturity
% of Total
2025
$
565,458
2.44%
16.6%
2026
604,716
2.33%
17.7%
2027
611,487
3.16%
17.9%
2028
413,748
3.73%
12.1%
2029
496,626
3.62%
14.6%
2030
170,745
2.67%
5.1%
2031
22,740
2.71%
0.7%
2032
79,670
4.13%
2.3%
2033
75,325
4.09%
2.2%
2034
338,736
4.52%
9.9%
2035
30,922
4.18%
0.9%
Total mortgage principal outstanding
$
3,410,173
3.19%
100.0%
Unamortized deferred financing costs
(123,634)
Unamortized market debt adjustments
(458)
Mortgages payable
$
3,286,081
(1) Excludes mortgages related to assets held for sale.
Other contractual obligations of the Trust include lease obligations (see NOTE 24(c) to the audited annual consolidated financial
statements for the years ended December 31, 2024 and 2023).
Interest Coverage
Boardwalk’s liquidity and access to capital resources is constrained by certain tests that have been adopted in both its DOT, as well as
in its Credit Facility. The DOT stipulates an interest coverage ratio limit of 1.5 to 1. For the purpose of the interest coverage ratio
calculation, gains or losses on the sale or disposition of investment properties are excluded from earnings. Additionally, distributions
on the LP Class B Units are excluded from interest expense, despite the LP Class B Units being classified as a financial liability under
IFRS Accounting Standards.
The following table sets out the Trust’s interest coverage ratio calculation as at December 31, 2024, and December 31, 2023, based on
the most recently completed four fiscal quarters.
As at
Dec. 31, 2024
Dec. 31, 2023
Net operating income
$
382,334
$
332,989
Administration
(44,791)
(41,172)
Deferred unit-based compensation
(5,374)
(3,328)
EBITDA (1) from equity accounted investment
3,357
929
Consolidated EBITDA (12 months ended)
$
335,526
$
289,418
Interest expense
$
109,945
$
100,354
Interest expense from equity accounted investment
3,956
2,033
Consolidated interest expense (12 months ended)
$
113,901
$
102,387
Interest coverage ratio
2.95
2.83
Minimum threshold
1.50
1.50
(1) Earnings before interest, taxes, depreciation and amortization.
For the year ended December 31, 2024, Boardwalk REIT’s overall interest coverage ratio of consolidated EBITDA to consolidated
interest expense, excluding distributions on LP Class B Units and fair value adjustments, was 2.95, compared to 2.83 for the year
ended December 31, 2023. Under IFRS Accounting Standards, the distributions made to the holders of LP Class B Units are considered
financing costs and are the result of the reclassification of the LP Class B Units as financial liabilities. The calculation of the interest
coverage ratio above does not include these distribution payments in the calculation of consolidated interest expense.
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Debt to EBITDA
For the year ended December 31, 2024, Boardwalk REIT’s Debt to EBITDA was 10.08, compared to 11.02 for the year ended
December 31, 2023. The improving Debt to EBITDA is a result of the Trust’s increasing NOI largely driven by increased rental revenue,
and a reduction in the total mortgage principal outstanding from scheduled mortgage principal repayments. The following table sets
out the Trust’s Debt to EBITDA calculation as at December 31, 2024, and December 31, 2023, based on the most recently completed
four fiscal quarters.
As at
Dec. 31, 2024
Dec. 31, 2023
Total mortgage principal outstanding
$
3,410,173
$
3,446,801
Mortgages payable related to assets held for sale
21,645
-
Total lease liabilities attributable to land leases (1)
71,181
72,860
Construction loan payable
1,478
-
Adjusted Real Estate Debt (2)(3)
$
3,504,477
$
3,519,661
Cash and cash equivalents
(122,408)
(331,204)
Adjusted Real Estate Debt, net of Cash (2)(3)
$
3,382,069
$
3,188,457
Consolidated EBITDA (12 months ended)
$
335,526
$
289,418
Debt to EBITDA (3)
10.08
11.02
(1) Total lease liabilities attributable to land leases is a component of lease liabilities as calculated in accordance with IFRS Accounting Standards.
(2) This is a non-GAAP financial measure.
(3) Please refer to the section titled “Presentation of Non-GAAP Measures” in this MD&A for more information.
Debt to Total Assets
The Trust’s Debt to Total Assets as at December 31, 2024 and December 31, 2023 is presented in the table below. The improvement in
the Trust’s Debt to Total Assets is a result of an increase in Total Assets largely from an increase in investment properties, coupled
with a decrease in Adjusted Real Estate Debt.
As at
Dec. 31, 2024
Dec. 31, 2023
Adjusted Real Estate Debt (1)(2)
$
3,504,477
$
3,519,661
Total Assets
8,626,490
8,141,876
Debt to Total Assets (2)
40.6%
43.2%
(1) This is a non-GAAP financial measure.
(2) Please refer to the section titled “Presentation of Non-GAAP Measures” in this MD&A for more information.
Unitholders’ Equity
The following table discloses the changes in Trust Units issued and outstanding:
Summary of Unitholders’ Capital Contributions
Trust Units
December 31, 2022
45,722,922
Trust Units issued under equity offering
3,662,750
Trust Units issued for vested deferred units
2,502
December 31, 2023
49,388,174
Trust Units issued for vested deferred units
47,033
Trust Units purchased and cancelled
(149,096)
Trust Units issued on exchange of LP Class B Units
60,000
December 31, 2024
49,346,111
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Boardwalk REIT has one class of publicly traded voting securities, being the Trust Units. As at December 31, 2024, there were
49,346,111 Trust Units issued and outstanding. In addition, there were 4,415,000 LP Class B Units, each of which also has a special
voting unit in the REIT. Each LP Class B Unit is exchangeable for a Trust Unit on a one-for-one basis at the option of the holder. Each
LP Class B Unit, through the special voting unit, entitles the holder to one vote at any meeting of Unitholders. Accordingly, if all of the
LP Class B Units were exchanged for Trust Units, the total issued and outstanding Trust Units would be 53,761,111. These LP Class B
Units are classified as “FVTPL” financial liabilities under IFRS Accounting Standards and are recorded at their fair value as liabilities
on the Consolidated Statements of Financial Position as at December 31, 2024 and 2023.
On November 20, 2024, the Trust received TSX approval for the renewal of its NCIB to purchase and cancel up to 4,068,000 Trust Units,
representing 10% of the public float at the time of the TSX approval. The NCIB commenced on November 22, 2024, and will terminate
on the earlier of November 21, 2025, or when the maximum number of Trust Units have been purchased. The Trust’s daily purchases
under this NCIB are limited to 29,791 Trust Units.
Previously, the Trust's NCIB commenced on November 22, 2023 and terminated on November 21, 2024.
During 2024, the Trust purchased and cancelled 149,096 Trust Units at an average purchase cost of $67.08 per Trust Unit under its NCIB
(includes commissions but excludes 2% tax on Trust Units repurchased, which became effective on January 1, 2024). During 2023, the
Trust did not purchase any Trust Units under its NCIB.
On December 23, 2024, 60,000 LP Class B Units were exchanged for Trust Units on a one-for-one basis pursuant to their terms.
Following completion of the exchange, 4,415,000 LP Class B Units remain outstanding.
On December 14, 2023, the Trust entered into an agreement to issue 2,190,000 Trust Units on a bought-deal basis at a price of $68.50
per Trust Unit for aggregate gross proceeds of $150.0 million to a syndicate of underwriters (the “Offering”). On December 15, 2023,
the Trust agreed to increase the total size of the Offering to 3,185,000 Trust Units. The Trust also granted the underwriters an over-
allotment option to purchase up to an additional 477,750 Trust Units which was exercised in full. On December 22, 2023, the Offering
closed and the Trust issued 3,662,750 Trust Units at a price of $68.50 per Trust Unit for total gross proceeds of $250.9 million.
Transaction costs for the Offering totaled $10.9 million resulting in net proceeds to the Trust of $240.0 million.
In January 2024, the Trust used a portion of the net proceeds to: (i) finance the purchase price for The Circle, a 295 suite newly built
construction apartment complex in Calgary, Alberta; and (ii) to repay its portion of a floating rate construction loan facility in respect
of a joint venture partnership in Brampton, Ontario. Throughout 2024, the Trust made additional acquisitions with the use of the
proceeds from the Offering, including the purchase of Dawson Landing in Chestermere, Alberta and The Brenda Apartments, and two
adjacent properties located in Calgary, Alberta. The Trust intends to use the remainder of the net proceeds to fund Elbow 5 Eight, with
anticipated closing in Q1 2025, as well as other future acquisition and development opportunities in its existing pipeline.
Equity
Boardwalk has an equity market capitalization of $3.5 billion based on the Trust Unit closing price of $64.25 on the TSX on
December 31, 2024.
With an enterprise value of approximately $6.9 billion (comprised of total mortgage principal outstanding, excluding mortgages
payable related to assets held for sale, of $3.4 billion and equity market capitalization of $3.5 billion) as at December 31, 2024,
Boardwalk’s total mortgage principal outstanding is approximately 49% enterprise value.
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Net Asset Value per Unit
The Trust’s NAV per Unit is calculated below:
As at
Dec. 31, 2024
Dec. 31, 2023
Investment properties
$
8,238,024
$
7,702,214
Equity accounted investment
52,984
39,758
Investment properties related to assets held for sale
79,920
-
Loan receivable
58,170
-
Cash and cash equivalents
122,408
331,204
Adjusted Real Estate Assets (1)(2)
$
8,551,506
$
8,073,176
Total mortgage principal outstanding
$
(3,410,173)
$
(3,446,801)
Mortgages payable related to assets held for sale
(21,645)
-
Total lease liabilities attributable to land leases (3)
(71,181)
(72,860)
Construction loan payable
(1,478)
-
Adjusted Real Estate Debt (1)(2)
$
(3,504,477)
$
(3,519,661)
Net Asset Value (1)(2)
$
5,047,029
$
4,553,515
Net Asset Value per Unit (2)
$
93.68
$
84.41
Reconciliation of Unitholders’ Equity to Net Asset Value
Dec. 31, 2024
Dec. 31, 2023
Unitholders’ equity
$
4,836,809
$
4,320,072
Total Assets
(8,626,490)
(8,141,876)
Investment properties
8,238,024
7,702,214
Equity accounted investment
52,984
39,758
Investment properties related to assets held for sale
79,920
-
Loan receivable
58,170
-
Cash and cash equivalents
122,408
331,204
Total Liabilities
3,789,681
3,821,804
Total mortgage principal outstanding
(3,410,173)
(3,446,801)
Mortgages payable related to assets held for sale
(21,645)
-
Total lease liabilities attributable to land leases (3)
(71,181)
(72,860)
Construction loan payable
(1,478)
-
Net Asset Value (1)(2)
$
5,047,029
$
4,553,515
(1) This is a non-GAAP financial measure.
(2) Please refer to the section titled “Presentation of Non-GAAP Measures” in this MD&A for more information.
(3) Total lease liabilities attributable to land leases is a component of lease liabilities as calculated in accordance with IFRS Accounting Standards.
Overall NAV per Unit has increased 11.0% to $93.68 as at December 31, 2024, compared to $84.41 as at December 31, 2023,
primarily attributable to an increase in investment properties. NAV is a key metric used by real estate entities to measure the value
of an organization.
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Risks and Risk Management
Boardwalk REIT, like most other real estate rental entities, is exposed to a variety of risk areas. These areas are categorized between
general and specific risks. General risks are the risks associated with general conditions in the real estate sector and consist mainly of
commonly exposed risks that affect the real estate industry. Specific risks focus more on risks uniquely identified with the Trust, such as
credit, market, liquidity, and operational risks. The following will address each of these risks. In addition, this section should be read in
conjunction with risks and uncertainties included in the Trust's AIF under the heading “Challenges and Risks”, which is available under
the Trust’s profile at www.sedarplus.ca, where additional risks are discussed.
GENERAL RISKS
Real Estate Industry Risk: Real estate investments are generally subject to varying degrees of risk depending on the nature of the
property. These risks include changes in general economic conditions (such as the availability and cost of mortgage funds), local
conditions (such as an oversupply of space or a reduction in demand for real estate in the area), government regulations (such as new
or revised residential tenant legislation or change to immigration policies), the attractiveness of the properties to tenants,
competition from others with available space, and the ability of the owner to provide adequate maintenance at an economic cost.
Because real estate, like many other types of long-term investment, experiences significant fluctuations and cycles in value, specific
market conditions may result in occasional or permanent reductions in value of Boardwalk REIT’s portfolio. Furthermore, the Trust
may buy and/or sell properties at less than optimal times. As interest rates fluctuate in the lending market, in general, so do
capitalization rates, which affect the underlying value of real estate. As such, when interest rates rise, generally capitalization rates
should be expected to rise. Over the period of investment, capital gains and losses at the time of disposition can occur due to the
increase or decrease of these capitalization rates.
Currently, we operate in Canada, in the provinces of British Columbia, Alberta, Saskatchewan, Ontario, and Quebec. Neither of Alberta
nor Saskatchewan is subject to rent control legislation; however, under Alberta legislation, a landlord is only entitled to increase rents
once every 12 months. Please refer to the section titled “Risks and Risk Management – Specific Risks – Rent Control Risk” in this MD&A
for a more detailed discussion on rent controls. Boardwalk REIT is not widely diversified either by asset class or geographic location.
By focusing on the multi-residential sector and having a majority of its apartments located in Western Canada, Boardwalk is exposed
to adverse effects on that segment of the real estate market and/or for that geographic region and does not benefit from a
diversification of its portfolio by property type and, to a lesser extent, geographic location. The marketability and value of the Trust’s
portfolio as well as the REIT’s revenues will depend on many factors beyond the control of Boardwalk REIT.
Certain significant expenditures, including property taxes, utilities, maintenance costs, mortgage payments, insurance costs and
related charges, must be made regardless of whether or not a property is producing sufficient income to service these expenses.
Boardwalk REIT’s properties are subject to mortgages, which require significant debt service payments. If the Trust were unable to
meet mortgage payments on any property, losses could be sustained as a result of the mortgagee’s exercise of its rights of foreclosure
or of sale. Real estate is relatively illiquid. Such illiquidity will tend to limit our ability to vary our portfolio promptly in response to
changing economic or investment conditions. In addition, financial difficulties of other property owners resulting in distress sales may
depress real estate values in the markets in which the Trust operates.
Multi-Family Residential Sector Risk: Income producing properties generate income through rent payments made by tenants of the
properties. Upon the expiry of any lease, there can be no assurance that the lease will be renewed or the tenant replaced. The terms of
any subsequent lease may be less favourable than the existing lease. To mitigate this risk, the Trust does not have any one or small
group of significant tenants. The majority of operating leases signed are for a period of 12 months or less. The Trust is dependent on
leasing markets to ensure vacant residential space is leased, expiring leases are renewed and new tenants are found to fill vacancies.
More recently, the markets in which the Trust operates have had job growth in various industries, however, a disruption in the
economy could still have an impact on how much space tenants will lease, and the rental rates paid by tenants. This would affect the
income produced by our properties as a result of downward pressure on rents.
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Regulation and Changes in Applicable Laws: Boardwalk REIT is subject to laws and regulations governing the ownership and leasing
of real property, zoning, building standards, landlord/tenant relationships, employment standards, environmental matters, taxes and
other matters. It is possible that future changes in applicable federal, provincial, municipal or common laws or regulations or changes
in their enforcement or regulatory interpretation could result in changes in the legal requirements affecting Boardwalk (including with
retroactive effect). Any changes in the laws to which Boardwalk REIT is subject could materially adversely affect the Trust’s rights and
title to its assets. It is not possible to predict whether there will be any further changes in the regulatory regimes to which Boardwalk
REIT is subject or the effect of any such changes on its investments. Lower revenue growth or significant unanticipated expenditures
may result from Boardwalk’s need to comply with changes in applicable laws or the enactment of new laws, including: (i) laws
imposing environmental remedial requirements and the potential liability for environmental conditions existing on properties or the
restrictions on discharges or other conditions; (ii) rent control or rent stabilization laws or other residential landlord/tenant laws; or
(iii) other governmental rules and regulations or enforcement policies affecting the development, use and operation of the REIT’s
properties, including changes to building codes and fire and life-safety codes. Further, residential landlord/tenant laws in certain
provinces may provide tenants with the right to bring certain claims to the applicable judicial or administrative body seeking an order
to, among other things, compel landlords to comply with health, safety, housing and maintenance standards. As a result, Boardwalk
may, in the future, incur capital expenditures, which may not be fully recoverable from tenants, which could further have a material
adverse effect on our business, financial condition, or results of operations.
Development Risk: Development risk arises from the possibility that completed developments will not be leased on a timely basis or
that costs of development will exceed original estimates, resulting in an uneconomic return from the leasing of such space.
Boardwalk’s construction commitments are subject to those risks usually attributable to construction projects, which include:
(i) construction or other unforeseen delays including municipal approvals; (ii) cost overruns; (iii) increases in the costs of materials,
goods and labour; and (iv) the failure of tenants to occupy and pay rent in accordance with existing lease agreements. Construction
risks are minimized by utilizing established construction managers and knowledgeable third-party consultants.
Environmental Risks: As an owner and manager of real property, Boardwalk REIT is subject to various Canadian federal, provincial,
and municipal laws relating to environmental matters. These laws could encumber us with liability for the costs of removal and
remediation of certain hazardous substances or wastes released or deposited on or in its properties or disposed of at other locations.
The failure to remove or remediate such substances, if any, could adversely affect Boardwalk’s ability to sell its real estate, or to
borrow using real estate as collateral, and could also result in claims or other proceedings against Boardwalk REIT. Current or future
environmental laws may result in significant liability to the Trust in the future or otherwise have a material adverse effect on the
business, financial condition and results of operations of the Trust and its ability to make Distributions.
The Trust is not aware of any pending or threatened investigations or actions by environmental regulatory authorities in connection
with any of its properties or any material pending or threatened claims relating to environmental conditions at its properties.
Boardwalk REIT has formal policies and procedures to review and monitor environmental exposure. The Trust has made, and will
continue to make, the necessary capital expenditures for compliance with environmental laws and regulations. Environmental laws
and regulations can change rapidly and may become more stringent in the future. Compliance with more stringent environmental
laws and regulations could have a material adverse effect on our business, financial condition, or results of operations.
Climate-related Risks: The Trust’s properties may be impacted by both physical and climate-related events and the transition to a
lower-carbon economy. Among the most significant of the physical risks is the risk of wildfires and flash flooding. Based on the Trust’s
current understanding, the potential physical risks resulting from climate change are long-term in nature and associated with a high
degree of uncertainty regarding timing, scope, and severity of potential impacts. These risks may be event driven (acute) or longer-
term shifts (chronic) in climate patterns. Physical risks may have financial implications such as direct damage to assets or indirect
impacts. Climate-related events also may negatively impact certain costs of operation of the REIT’s properties, including the cost of
utility consumption due to abnormally hot or cold temperatures. More generally, the increase in catastrophic losses worldwide from
climate-related events has resulted in significant payouts by property insurers. There is a risk of insurers being required to make
payments on account of future climate-related catastrophic losses, which may result in increases in the property insurance premiums
payable by the Trust.
Given the evolving nature of climate change policy and the control of greenhouse gas emissions and resulting requirements, including
carbon taxes and carbon pricing schemes implemented by varying levels of government, it is expected that current and future climate
change regulations may give rise to expenses that cannot be passed on to the Resident Members. The Trust focuses on implementing
policies which promote the adaptation to climate-change, including ways to reduce greenhouse gas emissions, adopting energy
efficient solutions, and encouraging greater water efficiency, etc.; however, each of these policies has a financial impact.
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Lenders, investors, investment advisors, credit rating agencies and regulators are increasingly viewing climate change as an
important issue that requires greater consideration due to the perceived elevated long-term risks associated with policy
development, regulatory changes, public and private legal challenges or other market developments related to climate change. A lack
of investment strategy and operational management plan concerning climate change may have an adverse effect on the Trust's ability
to raise funds via debt and/or equity, as well as related investment returns and sentiment.
Ground Lease Risk: Four of our properties, two located in Banff, Alberta, and two in Montreal, Quebec, are subject to long-term
ground (or land) leases and similar arrangements; in each instance, the underlying land is owned by a third party and leased to the
Trust. Under the terms of a typical ground lease, the lessee must pay rent for the use of the land and is generally responsible for all
costs and expenses associated with the building and improvements, including taxes, utilities, insurance, maintenance, repairs and
replacements. Unless the lease term is extended, the land together with all improvements made will revert to the owner of the land
upon the expiration of the lease term. These leases are set to expire between 2029 and 2064. Approximately 12% of the Trust’s FFO is
derived from these properties in its portfolio that are held as long-term ground leases. The Trust intends to actively seek to either
renew the terms of such leases or purchase the freehold interest in the lands forming the subject matter of such leases prior to the
expiry of their terms. However, if the Trust cannot or chooses not to renew such leases, or buy the land of which they form the subject
matter, as the case may be, the NOI and cash flow associated with such properties would no longer contribute to Boardwalk’s results
of operations and could adversely impact its ability to make distributions to Unitholders. The ground lease for the largest Montreal
property, known as the Nuns’ Island portfolio, was also subject to a rent revision clause which commenced on December 1, 2008
(based on a valuation date of March 16, 2008). The rent increases were phased in on a property-by-property basis through to 2018 and
were based on 75% of the land value in its current use. After that revision, the land rent remains constant through to 2064. An event of
default by us, under the terms of a ground lease, could also result in a loss of the property, subject to such ground lease, should the
default not be rectified in a reasonable period of time. The Trust is not aware of any default under the terms of the ground leases.
Competition Risk: Each segment of the real estate business is competitive. Numerous other residential developers and apartment
owners compete in seeking tenants. Although it is our strategy to own multi-family properties in premier locations in each market in
which we operate, some of the apartments of our competitors may be newer, better located or better capitalized. The existence of
alternative housing could have a material adverse effect on our ability to lease space in our properties and on the rents charged or
concessions granted and could adversely affect Boardwalk REIT’s revenues and its ability to meet its obligations, which could have a
material adverse effect on our business, financial condition, or results of operations and its ability to make Distributions.
General Uninsured Losses or Catastrophic Loss: Boardwalk REIT carries comprehensive general liability, fire, flood, extended
coverage and rental loss insurance with policy specifications, limits and deductibles customarily carried for similar properties. There
are, however, certain types of risks (generally of a catastrophic nature such as war or environmental contamination), which are either
uninsurable or not economically insurable. Boardwalk REIT currently has insurance for earthquake risks, subject to certain policy
limits, deductibles and self-insurance arrangements, and will continue to carry such insurance if it is economical to do so. Should an
uninsured or underinsured loss occur, Boardwalk REIT could lose its investment in, and anticipated profits and cash flows from, one or
more of its properties, and would continue to be obligated to repay any recourse mortgage indebtedness on such properties.
Fluctuations of Cash Distributions: Although Boardwalk REIT intends to continue to make distributions on the Trust Units, the actual
amount of distributions in respect of the Trust Units will depend upon numerous factors, including, but not limited to, the amount of
principal repayments, tenant allowances, leasing commissions, capital expenditures and Trust Unit redemptions and other factors
that may be beyond the control of Boardwalk REIT. The distribution policy of Boardwalk REIT was established by the Board of Trustees
and is subject to change at the discretion of the Board of Trustees. The recourse of Unitholders who disagree with any change in policy
is limited and could require such Unitholders to seek to replace the Board of Trustees. Distributions may exceed cash available to
Boardwalk REIT from time to time because of items such as principal repayments, tenant allowances, leasing commissions, capital
expenditures, and redemption of Trust Units, if any. Boardwalk REIT may be required to use part of its debt capacity or to reduce
distributions in order to accommodate such items. Boardwalk REIT may temporarily fund such items, if necessary, through an
operating line of credit in expectation of refinancing long-term debt on its maturity.
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Liquidity Risk: An investment in real estate is relatively illiquid, with the degree of liquidity generally fluctuating in relation to demand
for and the perceived desirability of such investments. Such illiquidity will tend to limit Boardwalk’s ability to vary its portfolio of
properties promptly in response to changing economic, investment or other conditions. If Boardwalk were required to quickly
liquidate its real property investments, the proceeds to the Trust might be significantly less than the aggregate carrying or net asset
value of its properties or less than what would be expected to be received under normal circumstances, which could have an adverse
effect on Boardwalk’s financial condition and financial performance and decrease the amount of cash available for distribution.
Illiquidity may result from the absence of an established market for real property investments, as well as from legal or contractual
restrictions on their resale. In addition, in recessionary times, it may be difficult to dispose of certain types of real estate. The costs of
holding real estate are considerable and, during an economic recession, Boardwalk REIT may be faced with ongoing expenditures
with a declining prospect of incoming receipts. In such circumstances, it may be necessary for Boardwalk REIT to dispose of
properties at lower prices in order to generate sufficient cash for operations and making distributions. There can be no assurance that
the fair market value of any properties held by the REIT will not decrease in the future.
Access to Capital Risk: The real estate industry is highly capital intensive. Boardwalk REIT will require access to capital to maintain its
properties, as well as to fund its growth strategy and certain capital expenditures from time to time. There can be no assurances that
Boardwalk REIT will have access to sufficient capital or access to capital on terms favourable to the Trust for future property acquisitions,
development, financing or refinancing of properties, funding operating expenses or other purposes. Furthermore, in certain
circumstances, Boardwalk REIT may not be able to borrow funds due to the limitations set forth in its DOT and/or other loan agreements.
Market conditions and unexpected volatility or illiquidity in financial markets may inhibit Boardwalk REIT’s access to long-term financing
in the capital markets. As a result, it is possible that financing, which the Trust may require in order to grow and expand its operations,
upon the expiry of the term of financing, upon refinancing any particular property owned by Boardwalk REIT or otherwise, may not be
available or, if it is available, may not be available on favourable terms to the Trust. Failure by Boardwalk to access required capital could
have a material adverse effect on our business, financial condition, or results of operations.
Cybersecurity Risk: A cyber incident is considered to be any adverse event that threatens the confidentiality, integrity or availability
of Boardwalk REIT’s information resources. More specifically, a cyber incident is an intentional attack or an unintentional event that
can include gaining unauthorized access to information systems to disrupt operations, corrupt data or steal confidential information.
As Boardwalk REIT’s reliance on technology has increased, so have the risks posed to its systems. Boardwalk REIT’s primary risks that
could directly result from the occurrence of a cyber incident include operational interruption, damage to its reputation, damage to
Boardwalk’s business relationships with its Resident Members and disclosure of confidential information regarding its Resident
Members and Associates. Boardwalk REIT has implemented processes, procedures and controls to help mitigate these risks, but these
measures, as well as its increased awareness of a risk of a cyber incident, do not guarantee that its financial results will not be
negatively impacted by such an incident.
The increasing prevalence of artificial intelligence (“AI”) tools may also increase the risk of cyberattacks or data breaches as a result of
the use of AI to launch more automated, targeted, and coordinated attacks to the Trust’s technology infrastructure. In addition, the
rapid emergence and continuous evolution of generative AI tools, including the adoption of emerging technologies, such as cloud
computing, AI and process automatization could lead to both new and complex risks that require continued focus and investment to
manage effectively. The Trust may incorporate AI solutions into its information technology infrastructure, and these applications may
become important to the Trust’s business and operations over time. If the content, analyses, search results or recommendations that
AI applications assist in producing are, or are alleged to be, deficient, inaccurate, or biased, the Trust’s business, financial condition,
results of operations and prospects and its ability to make Distributions. The rapid evolution of AI, including potential government
regulation of AI, may require significant resources to develop, test and maintain the Trust’s information technology infrastructure and
systems to ensure the Trust implements AI ethically and minimizes any unintended and harmful impacts.
Workforce Availability and Talent Management: Boardwalk’s ability to provide services to its existing Resident Members is
somewhat dependent on the availability of well-trained Associates and contractors to service our Resident Members as well as
complete required maintenance and capital upgrades on our buildings. The Trust must also balance requirements to maintain
adequate staffing levels while balancing the overall cost to the Trust.
Within Boardwalk, our most experienced Associates are employed full-time; this full-time force is supplemented by additional part-time
Associates as well as specific contract services needed by the Trust. We are constantly reviewing existing overall market factors to ensure
that our existing compensation program is in-line with existing levels of responsibility and, if warranted, we adjust the program
accordingly. We also encourage Associate feedback in these areas to ensure the existing programs are meeting their personal needs.
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SPECIFIC RISKS
Credit Risk is the risk of loss due to failure of a contracted customer to fulfill the obligation of required payments.
One of the key credit risks involves the possibility that our Resident Members will be unable or unwilling to fulfill their lease term
commitments. Due to the very nature of the multi-family business, credit risk is not deemed to be very high. The Trust currently has
34,405 rental suites. As a result, we are not unduly reliant on any one Resident Member or lease. To further mitigate this risk,
Boardwalk REIT continues to diversify its portfolio to various major centers across Canada. Further, each of our rental suites has its
own individual lease agreement, thus Boardwalk REIT has no material financial exposure to any particular Resident Member or group
of Resident Members. The Trust continues to utilize extensive screening processes for all potential Resident Members including, but
not limited to, detailed credit checks.
Market Risk is the risk that the Trust could be adversely affected due to market changes in product supply, interest rates, and
regional rent controls.
Our principal exposures to market risk are in the areas of new multi-family housing supply, changes to rent controls, supply chain
price increases, utility price increases, property tax increases, higher interest rates, and mortgage renewal risk. The BoC increased
interest rates in 2022 and 2023 and lowered rates in 2024. Another increase in rates may affect the Trust's ability to finance mortgages
at rates and on terms acceptable to the Trust or at all, which could have a material adverse effect on the business, financial condition
and results of operations of the Trust and its ability to make Distributions.
Supply Risk is the risk that the Trust would be negatively affected by the new supply of, and demand for, multi-family residential
suites in its major market areas.
Key drivers of demand include employment levels, population growth, demographic trends and consumer confidence. Any significant
amount of new construction will typically result in an imbalance in supply and cause downward price pressure on rents. While there
has been some new rental construction in our existing markets, total housing completions are expected to fall short of household
formation over the medium term. Past studies have shown that in order to economically justify new rental construction in Boardwalk
REIT’s major markets, an increase in existing rental rates of hundreds of dollars will be necessary. In recent years, however, there has
been a change in the multi-family apartment environment in Canada. During this period, we have witnessed a significant increase in
the market value of rental apartments. This increase, although somewhat helped by a steady increase in reported market rental rates,
has been mainly driven by a significant compression in market capitalization rates, which in turn has been the result of a prolonged
low interest rate environment here in Canada. With this increase in the market value of apartments, there has been a significant
decrease in the expected returns from the acquisition of existing multi-family rental properties to a level that warrants a measured
allocation of capital to the area of new apartment development, particularly on excess land Boardwalk REIT currently owns.
Accordingly, the Trust has pursued new apartment development on some of its excess density or newly acquired land. Despite a rise in
interest rates, market value of apartments has remained consistent as the increased demand for rental housing has led to NOI growth.
The balance of housing supply relative to demand is a risk factor for operating and financial performance. In addition, housing supply
may be impacted by changes to government policy, immigration, and potential tariffs, which affects the demand for product and
costs for resources for housing. The potential for reduced rental revenue exists in the event that Boardwalk REIT is not able to
competitively optimize occupancy levels or rental rates in an increased competitive housing environment. Boardwalk REIT attempts
to minimize these risks by, among other things, focusing on Resident Member satisfaction, diversifying and upgrading its portfolio,
and self-regulating rental adjustments.
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Interest Risk is the combined risk that the Trust would experience a loss as a result of its exposure to a higher interest rate
environment (Interest Rate Risk) and the possibility that at the term end of a mortgage the Trust would be unable to renew the
maturing debt with either the existing or an additional lender (Renewal Risk).
The Trust continues to manage interest risk by maintaining a balanced maturing portfolio with no significant amount coming due in
any one particular period. In addition, the majority of Boardwalk REIT’s debt is insured with NHA insurance. This insurance allows us
to increase the overall credit quality of the mortgage and, as such, enables the Trust to obtain preferential interest rates as well as
facilitating easier renewal on its due dates.
The use of NHA insurance also assists Boardwalk REIT in managing its renewal risk. Given the increased credit quality of such debt, the
probability of the Trust being unable to renew the maturing debt or transfer this debt to another accredited lending institution is
significantly reduced.
To date, the Trust has had no problem obtaining mortgage renewals on term maturing loans, and additional funds, if needed,
continue to be available on its investment properties. The previous low interest rate environment had allowed the Trust to renew its
existing maturing mortgages at favourable interest rates, however, as a result of inflation, interest rates have dramatically increased
from where they previously were during 2021 and at the beginning of 2022. As such, financing costs over the near to medium term are
expected to increase.
Currently, the Canadian government has capped the total amount of insurance that CMHC can have in force at $600 billion. This
primarily affects the amount of portfolio or bulk insurance CMHC offers to banks, and, to date, has had a minimal impact on the
renewal of Boardwalk’s mortgages, or the cost of secured debt capital. However, there is no assurance the cap on the amount of
CMHC insurance will not affect mortgages for multi-family residential properties in future periods.
If any changes are made by the Government of Canada on the NHA insurance product, such changes could have a negative impact on
the Trust. However, it is management of the Trust’s understanding that any change to the cap would not affect any pre-existing
insurance agreements. Over 96% of Boardwalk’s secured debt has this insurance on it with an average of 31 years of amortization
remaining. The larger risk to the Trust may be the ability to issue new secured debt under this program at a much lower cost due to the
use of this insurance, the proceeds of which the Trust uses to assist in the execution of its overall strategy.
Property Redevelopment, Repositioning and Renovations
Property redevelopment, re-positioning and major renovation work are subject to a number of risks, including:
(a) the potential that Boardwalk REIT may fail to recover expenses already incurred if it abandons redevelopment/re-positioning/
renovation opportunities after commencing to explore them;
(b) the potential that Boardwalk REIT may expend funds on and devote management time to projects, which it does not complete;
(c) construction or redevelopment costs of a project may exceed original estimates, possibly making the project less profitable than
originally estimated, or unprofitable, including as a result of increased costs of goods and materials as a result of any tariffs,
surtaxes or other restrictive trade measures or countermeasures affecting trade between Canada and the United States;
(d) the time required to complete the construction, redevelopment or renovation of a project or to lease up the completed project
may be greater than originally anticipated, thereby adversely affecting Boardwalk REIT’s cash flow and liquidity;
(e) the cost and timely completion of construction or renovations (including risks beyond Boardwalk REIT’s control, such as weather,
labour conditions or material shortages);
(f)
contractor and subcontractor disputes, strikes, labour disputes or supply disruptions;
(g) the failure to achieve expected occupancy and/or rent levels within the projected time frame, if at all;
(h) delays with respect to obtaining, or the inability to obtain, necessary zoning, occupancy, land use and other governmental
permits, and changes in zoning and land use laws;
(i)
occupancy rates and rents of a completed project or renovation may not be sufficient to make the project or initiative profitable;
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(j)
Boardwalk REIT’s ability to dispose of properties redeveloped or renovated with the intent to sell could be impacted by the ability
of prospective buyers to obtain financing given the current state of the credit markets; and
(k) the availability and pricing of financing to fund Boardwalk REIT’s development or renovation activities on favourable terms or
at all.
The above risks could result in substantial unanticipated delays or expenses and, under certain circumstances, could prevent the
initiation of redevelopment or renovation activities or the completion of redevelopment or renovation activities once undertaken. In
addition, redevelopment and renovation projects entail risks that investments may not perform in accordance with expectations and
can carry an increased risk of litigation (and its attendant risks) with contractors, subcontractors, suppliers, partners, and others. Any
of these risks could have an adverse effect on Boardwalk REIT’s financial condition, financial performance, cash flow, per unit trading
price of its Trust Units, distributions to Unitholders and ability to satisfy Boardwalk REIT’s principal and interest obligations. Also, it is
anticipated that the Trust would be required to execute a guarantee in connection with construction financing for redevelopments,
which would subject Boardwalk REIT to recourse for construction completion risks and repayment of the construction indebtedness.
Joint Arrangements and Co-ownerships
Boardwalk participates in joint arrangements and partnerships that may involve risks and uncertainties associated with third-party
involvement, including, but not limited to, Boardwalk’s dependency on partners, co-tenants or co-venturers that are not under our
control and that might compete with Boardwalk for opportunities, become bankrupt or otherwise fail to fund their share of required
capital contributions, or suffer reputational damage that could have an adverse impact on the Trust. Additionally, our partners might
at any time have economic or other business interests or goals that are different than or inconsistent with those of the Trust and may
require Boardwalk to take actions that are in the interest of the partners collectively, but not in Boardwalk’s sole best interests.
Accordingly, Boardwalk may not be able to favourably resolve issues with respect to such decisions, or the Trust could become
engaged in a dispute with any of them that might affect its ability to operate the business or assets in question.
Structural Subordination
Liabilities of a parent entity with assets held by various subsidiaries may result in the structural subordination of the lenders of the
parent entity. The parent entity is entitled only to the residual equity of its subsidiaries after all debt obligations of its subsidiaries are
discharged. In the event of bankruptcy, liquidation or reorganization of the Trust, holders of indebtedness of the Trust may become
subordinate to lenders to the subsidiaries of the Trust.
Certain subsidiaries of the Trust provide a form of guarantee pursuant to which a trustee will, subject to the documentation governing
the guarantee, be entitled to seek redress from such subsidiaries for the guaranteed indebtedness. These guarantees are intended to
eliminate structural subordination, which arises as a consequence of the Trust’s assets being held in various subsidiaries. Although all
subsidiaries, which own material assets, have provided a guarantee, not all subsidiaries of the Trust provide such a guarantee. In
addition, there can be no assurance such a trustee will, or will be able to, effectively enforce the guarantee.
Rent Control Risk is the risk of the implementation or amendment of new or existing legislative rent controls in the markets
Boardwalk REIT operates, which may have an adverse impact on the Trust’s operations.
Under Ontario’s rent control legislation, commonly known as “rent de-control”, a landlord is entitled to increase the rent for existing
tenants once every 12 months by no more than the “guideline amount” established by regulation. For the calendar years 2023 and
2024, the guideline amounts were established at 2.5% for both years, and for 2025 the guideline amount remains set at 2.5%. Further
details on Ontario’s Annual Rental Increase Guidelines can be found at https://www.ontario.ca/page/residential-rent-increases. This
adjustment is meant to take into account the income of the building, the municipal and school taxes, the insurance bills, the energy
costs, maintenance, and service costs. Landlords can apply to the Landlord and Tenant Board for an above guideline increase where,
among other things, there has been a significant increase in the cost of taxes and charges, or the landlord has incurred significant
capital expenditures. When a unit is vacated, the landlord is entitled to lease the unit to a new Resident Member at any rental amount,
after which annual increases are limited to the applicable guideline amount. The cap does not apply to rental units first occupied after
November 15, 2018.
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Under Quebec’s rent control legislation, a landlord is entitled to increase the rent for existing tenants once a year for the rent period
starting after April 1st of the year but before April 1st of the following year. There is no fixed rate increase specified by the regulation.
Rent increases also take into account a return on capital expenditures (for 2024 this return is 4.8% compared to 3.8% for 2023 and
compared to 2.0% for 2022), if such expenditures were incurred, and an indexing of the net income of the building. For multi-family
residential buildings, average rent increase estimates for the period starting after April 1, 2024, and before April 2, 2025, before any
consideration for increases to municipal and school taxes as well as capital expenditures, are: 2.8% for electricity heated dwellings,
-7.3% for gas heated dwellings, and -10.0% for oil heated dwellings, plus 7.5%, 5.3%, and 5.6% to cover the cost of maintenance,
service, and management contracts, respectively. Tools to calculate the Quebec rent increase can be found at https://www.tal.gouv.
qc.ca/en/calculation-for-rent-increase.
Under British Columbia's rent control legislation, a landlord is entitled to increase the rent for existing tenants once per year with the
2025 rate being 3.0% (2024 rate was 3.5%).
Currently, Alberta and Saskatchewan do not have rent control legislation, nor is such legislation planned to management of the Trust’s
knowledge. In Alberta, rent increases are limited to once per year, but there is no limit on the amount of the increase. Similarly, in
Saskatchewan, prescribed landlords like the Trust can increase rent every six months after the first 12 months of the tenancy start date.
To manage this risk prior to entering a market where rent controls are in place, an extensive amount of time is spent researching the
existing rules, and, where possible, the Trust will ensure it employs Associates who are experienced in working in these controlled
environments. In addition, the Trust adjusts forecast assumptions on new acquisitions to ensure they are reasonable given the rent
control environment.
Utility and Property Tax Risk relates to the potential loss the Trust may experience as a result of higher resource prices as well as
its exposure to significant increases in property taxes.
Over the past few years, property taxes have increased as a result of re-valuations of municipal properties and their adherent tax
rates. For Boardwalk, these re-valuations have resulted in significant increases in some property assessments due to enhancements,
which are not represented on our balance sheet (as such representations are contrary to existing IFRS Accounting Standards). To
address this risk, Boardwalk REIT has compiled a specialized team of property reviewers who, with the assistance of outside
authorities, constantly review property tax assessments and, where warranted, appeal them.
Utility expenses, mainly consisting of water, natural gas and electricity charges, have been subject to considerable price fluctuations over
the past several years. In recent years, water and sewer costs have increased significantly as another form of “taxes” imposed by various
municipalities. In addition, the Alberta Carbon Tax increased the costs associated with natural gas usage. Beginning in 2020, Alberta
began to participate in the federal carbon levy, which currently is at a price of $4.10/gigajoule and expected to increase to $4.78/gigajoule
on April 1, 2025. Any significant increase in these resource costs that Boardwalk REIT cannot pass on to the Resident Member may have a
negative material impact on the Trust. To mitigate this risk, the Trust has begun to play a more active role in controlling the fluctuation
and predictability of this risk. Through the combined use of financial instruments and resource contracts with varying maturity dates,
exposure to these fluctuations has been reduced. In addition to this, the following steps have been implemented:
• Where, possible, economical sub-metering devices or a ratio utility billing system are being implemented, passing on the
responsibility for utility charges to the end Resident Member; and
• In other cases, rents have been, or will be, adjusted upward to cover these increased costs.
Operational Risk is the risk that a direct or indirect loss may result from an inadequate or failed technology, from a
human process, or from external events. The impact of this loss may be financial loss, loss of reputation, or legal and
regulatory proceedings.
The Trust endeavors to minimize losses in this area by ensuring that effective infrastructure and controls exist. These controls are
constantly reviewed and improvements are implemented, if deemed necessary.
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Aging Portfolio Risk relates to the decrease in demand for Boardwalk’s asset portfolio due to the age of the asset.
Boardwalk’s primary exposure to aging portfolio risk relates to an increase in demand for new product. This risk is mitigated partially
due to the fact that older assets tend to be in more desired locations and tend to have larger suite sizes. In addition, Boardwalk
mitigates this risk through its value-added capital upgrades and property re-positioning.
CERTAIN TAX RISKS
SIFT Legislation
Management of the Trust believe the Trust currently qualifies as a “mutual fund trust” and a “real estate investment trust” for
Canadian income tax purposes. If the Trust were not to qualify the consequences could be material and adverse. The Tax Act contains
the SIFT Legislation, which tax certain publicly traded or listed trusts in a manner similar to corporations and tax certain distributions
from such trusts as taxable dividends from a taxable Canadian corporation. The SIFT Legislation applies to a trust that is a “SIFT trust”
and a partnership that is a “SIFT partnership”, each as defined in the Tax Act. Distributions paid by a specified investment flow-
through (“SIFT“) trust as return of capital will generally not be subject to the tax. The SIFT Legislation is not applicable to a real estate
investment trust that meets the REIT Exemption conditions relating to the nature of its assets and revenue. Unless the Trust qualifies
for exclusion from the definition of “SIFT trust” in the Tax Act (i.e., REIT Exemption), the SIFT Legislation could impact the level of cash
distributions which would otherwise be made by the Trust and the taxation of such distributions to Unitholders. If the Trust were to no
longer qualify for the REIT Exemption, it would not be able to flow through its taxable income to Unitholders and the Trust would
therefore be subject to tax. The REIT Exemption is applied on an annual basis. As such, it will not be possible to determine if the Trust
will satisfy the conditions of the REIT Exemption for 2025 or any subsequent year until the end of the particular year.
Management of the Trust believes that each direct or indirect subsidiary of the Trust that is a partnership or trust currently qualifies as
an excluded subsidiary entity (as defined in the Tax Act) for Canadian income tax purposes. If any subsidiary were to not so qualify, the
SIFT Legislation could apply to such entities. The SIFT Legislation (if such rules were to apply) may have an adverse impact on the
Trust, on the Unitholders, on the value of the Trust Units and on the ability of the Trust to undertake financings and acquisitions, and if
the SIFT Legislation were to apply, the distributable cash of the Trust may be materially reduced. The effect of the SIFT Legislation, if
such rules were to apply, on the market for the Trust Units is uncertain. The DOT provides that a sufficient amount of Boardwalk REIT’s
net income and net realized capital gains will be distributed each year to Unitholders, in cash or otherwise, in order to eliminate
Boardwalk REIT’s liability for tax under Part I of the Tax Act. Where such amount of net income and net realized capital gains of
Boardwalk REIT in a taxation year exceeds the cash available for distribution in the year, such excess net income and net realized
capital gains will be distributed to Unitholders in the form of additional Trust Units. Unitholders will generally be required to include
an amount equal to the fair market value of those Trust Units in their taxable income, in circumstances where they do not directly
receive a cash distribution.
Limits on Interest Deductibility
Under the Tax Act, the excessive interest and financing expenses limitation rules (the “EIFEL Rules”), where applicable, limit the
deductibility of certain interest and financing expenses. Under the EIFEL Rules, for taxation years beginning on or after October 1,
2023, the amount of net interest and financing expenses incurred by a Canadian resident corporation or trust that is not an “excluded
entity” (as defined in the Tax Act), whether incurred directly or through a partnership, that may be deducted in computing its income
for Canadian income tax purposes will generally be limited to no more than a fixed ratio of its adjusted taxable income, which is
intended to reflect the taxable income generated by its activities in Canada. If the EIFEL Rules apply to the REIT, the income of the REIT
for Canadian income tax purposes may be increased which could change the taxable component of Distributions to Unitholders and
have an adverse impact on the after tax return of a Unitholder and on the value of Trust Units in the REIT. The EIFEL Rules may also
apply to a corporation or trust held directly or indirectly by the REIT. Management of the REIT intends to monitor the EIFEL Rules and
assess their potential impact, if any, on the REIT. Unitholders who make a leveraged investment in Trust Units of the REIT should
consult their own tax advisors on this matter.
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Change of Tax Laws
There can be no assurance that Canadian tax laws, the judicial interpretation thereof, the terms of any income tax treaty applicable to
the Trust or its affiliates or the administrative policies and assessing practices of the CRA will not change in a manner that adversely
affects the Trust, its affiliates or Unitholders. Any such change could affect the Trust’s eligibility for the REIT Exemption, increase the
amount of tax payable by the Trust or its affiliates, or otherwise adversely affect Unitholders by reducing the amount available to pay
distributions or changing the tax treatment applicable to Unitholders in respect of such distributions.
In addition, tax authorities having jurisdiction over the Trust, its affiliates or Unitholders may disagree with the manner in which the Trust
calculates its income for tax purposes or could change their administrative practices to the Trust’s detriment or the detriment of
Unitholders. Boardwalk files all required income tax returns and believes that it is in full compliance with the applicable tax legislation.
However, such returns are subject to audit and reassessment by the applicable taxation authority. Any such reassessment may have an
impact on current and future taxes payable and incur penalties and interest on such amounts payable which could be material.
Boardwalk REIT has received notices of reassessment dated February 28, 2024, from the CRA increasing the Trust’s taxable income for
its taxation years ended December 31, 2011, 2012, 2013, and 2014, respectively, on the basis that the Trust did not report deemed
taxable capital gains in each of those taxation years resulting from alleged negative adjusted cost base in the Trust’s units of Top Hat
Operating Trust, a trust 100% owned by Boardwalk REIT. Management of the Trust assessed the implications of the CRA notices of
reassessment and filed an objection on May 24, 2024, with the CRA Appeals Division as it disagrees with the CRA’s proposed
assessment. It is the opinion of the Trust that it will not be required to pay any amount to the CRA in order to dispute this matter.
Furthermore, it is the Trust’s opinion that should a payment be required to settle this matter, provided the Trust continues to remain
eligible for the REIT Exemption, it will not be required to pay any income taxes payable as the Trust distributes all taxable income to its
Unitholders. It is difficult to estimate the amount of time it could take to resolve the dispute with the CRA Appeals Division and it is
possible that an appeal to the Tax Court of Canada could be required in order to resolve this dispute. Further, the position adopted by
the CRA in its reassessment may have implications for other taxation years resulting in additional taxes, penalties and interest
payable which, in aggregate, could be material. Any reassessment that cannot be successfully challenged could increase the amount
of tax payable by the Trust, its affiliates or any Unitholders during the applicable taxation years of the Trust, adversely affect
Unitholders by reducing the amount available to pay distributions, or otherwise adversely affect the Trust or the Unitholders. Please
refer to the section titled “Other Income and Expenses – Income Tax Expense” in this MD&A for more information.
RISKS ASSOCIATED WITH DISCLOSURE CONTROLS AND PROCEDURES &
INTERNAL CONTROL OVER FINANCIAL REPORTING
Our business could be adversely impacted if we have deficiencies in our disclosure controls and procedures (“DC&P”) or internal
control over financial reporting (“ICFR”).
The design and effectiveness of our DC&P and ICFR may not prevent all errors, misstatements, or misrepresentations. While
management continues to review the design and effectiveness of our DC&P and ICFR, we cannot assure you that our DC&P or ICFR will
be effective in accomplishing all control objectives all of the time. Deficiencies, particularly material weaknesses, in ICFR which may
occur in the future could result in misstatements of our results of operations, restatements of our financial statements, a decline in
our Trust Unit price, or otherwise materially adversely affect our business, reputation, results of operations, financial condition, or
liquidity. Additionally, controls may be circumvented by unauthorized acts of individuals, by collusion of two or more people, or by
management override. The design of any control system is also based in part upon certain assumptions about the likelihood of future
events and there can be no assurance that any design will succeed in achieving its stated goals under all potential conditions.
Projections of any evaluations of effectiveness to future periods are subject to the risk that controls may become inadequate because
of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
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Accounting and Control Matters
CRITICAL ACCOUNTING POLICIES
The Trust adopted IFRS Accounting Standards as its basis of financial reporting, effective January 1, 2011. The material accounting
policies adopted by the Trust are included in NOTE 2 to the audited annual consolidated financial statements for the years ended
December 31, 2024 and 2023.
The preparation of the audited annual consolidated financial statements requires management to make estimates and judgements
that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expenses during the reporting period. Actual results may differ from those
estimates under different assumptions and conditions. In determining estimates, management uses the information available to the
Trust at the time. Management reviews key estimates on a quarterly basis to determine their appropriateness. Any change to these
estimates is applied prospectively in compliance with IFRS Accounting Standards. We believe that the application of judgements and
assessments is consistently applied and produces financial information that fairly depicts the results of operations for all periods
presented. Boardwalk REIT considers the following policies to be critical in determining the judgements that are involved in the
preparation of the audited annual consolidated financial statements and the uncertainties that could affect the reported results.
(a)
Investment Properties
Investment properties consist of multi-family residential properties held to earn rental income and properties being constructed or
developed for future use to earn rental income, and include interests held under long-term operating land leases. Investment
properties are measured initially at cost (which is equivalent to fair value). Cost includes all amounts relating to the acquisition
(excluding transaction costs related to a business combination) and improvement of the properties. All costs associated with
upgrading and extending the economic life of the existing facilities, other than ordinary repairs and maintenance, are capitalized to
investment property. Included in these costs are internal amounts that are directly attributable to a specific investment property,
which are capitalized to the extent that they upgrade or extend the economic life of the asset.
Subsequent to initial recognition, investment properties are recorded at fair value, in accordance with IAS 40. Fair value is determined
based on a combination of internal and external processes and valuation techniques. Gains or losses arising from differences between
current period fair value and the sum of previously measured fair value and capitalized costs as described above are recorded in profit
or loss in the period in which they arise. The fair value of an investment property held by a lessee as a right-of-use asset reflects
expected cash flows (including variable lease payments) that are expected to become payable. Accordingly, if the valuation obtained
for an investment property is net of all payments expected to be made, it will be necessary to add back any recognized lease liability,
to arrive at the carrying amount of the investment property using the fair value model.
Properties owned by the Trust where a significant portion of the property is used for administrative purposes by the Trust are
considered “Property, Plant and Equipment” and, therefore, fall within the scope of IAS 16 and are recorded in accordance with that
standard. Where part of a building is used for administrative purposes by the Trust, but this portion is considered insignificant, this
space is included as part of Investment Property under IAS 40.
Investment properties are reclassified to “Assets Held for Sale” when the criteria set out in IFRS 5 – Non-Current Assets Held for Sale
and Discontinued Operations (“IFRS 5”) are met (see NOTE 2(i)) to the audited annual consolidated financial statements for the years
ended December 31, 2024 and 2023).
An investment property is derecognized upon disposal or when the investment property is permanently withdrawn from use and no
future economic benefits are expected from the disposal. Prior to its disposal, the carrying value of the investment property is
adjusted to reflect its fair value as outlined in the purchase and sale agreement (as the purchase and sale agreement is the best
evidence of fair value). This adjustment shall be recorded as a fair value gain or loss. Any remaining gain or loss arising on
derecognition of the property (calculated as the difference between the net disposal proceeds and the carrying amount of the asset)
is included in profit or loss in the period in which the property is derecognized.
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Excess land represents land owned by the Trust located contiguous to land included as investment property. For some of the Trust’s
excess land, the Trust has the ability to develop additional multi-family residential buildings on this land or sell it separately from the
investment property at a later date. Excess land is held for capital appreciation and, therefore, is treated as Investment Property and
recorded in accordance with IAS 40 as outlined above. When determining the fair value of a project with excess land, the capitalization
rate used in determining the value is adjusted accordingly.
(b)
Properties Under Development
Properties under development include new development on excess land density or acquired land, redevelopment or repositioning of
buildings the Trust currently owns that require substantial renovations, and incomplete apartment suites acquired from third parties
that will take 12 months or longer to complete. The cost of land, if applicable, and buildings under development or redevelopment
(consisting of development sites, density or intensification rights and related infrastructure) are specifically identifiable costs incurred in
the period before construction is complete. Capitalized costs include pre-construction costs essential to the development or
redevelopment of the property, construction costs, borrowing costs directly attributable to the development, real estate taxes, and
other costs incurred during the period of development or redevelopment. Additions to investment properties consist of costs of a capital
nature and, in the case of properties under development and/or redevelopment, capitalized interest. Directly attributable borrowing
costs are also capitalized on land or properties acquired specifically for development or redevelopment when activities necessary to
prepare the asset for development or redevelopment are in progress in accordance with IAS 23 – Borrowing Costs. Where borrowings are
associated with specific developments, the amount capitalized is the total cost incurred on those borrowings.
The capitalization of borrowing costs commences when the activities necessary to prepare an asset for development or
redevelopment begins, and continues until the date that substantially all of the construction is complete and all necessary occupancy
and related permits have been received, whether or not the space is leased. If the Trust is required, as a condition of a lease, to
construct tenant improvements that enhance the value of the property, then capitalization of costs continues until such
improvements are completed. Capitalization ceases if there is a prolonged period where development activity is interrupted.
Properties under active development are generally valued at market land values, if applicable, plus costs invested to date. Where
significant leasing and construction is in place and the future income stream is reasonably determinable, the valuation methodology
used is similar to that of revenue-producing properties, less estimates of future capital outlays, construction and development costs,
to determine a net “as-is” market value. Development risks such as planning, zoning, licenses, and building permits are considered in
the valuation process. Properties not under active development, such as land parcels held for future development, are valued based
on comparable sales of land. Significant increases (decreases) in construction costs, cost escalation rates, and estimated time to
complete construction in isolation would result in a significantly lower (higher) fair value for properties under development.
(c)
Property, Plant and Equipment
Tangible assets that are held for use in the production or supply of goods and services, or for administrative purposes, and are
expected to be used during more than one period, except when another accounting standard requires or permits a different
accounting treatment, are recorded in accordance with IAS 16 using the cost model. IAS 16, therefore, excludes tangible assets that
are accounted for in accordance with IFRS 5 and IAS 40 (see NOTE 2(f) to the audited annual consolidated financial statements for the
years ended December 31, 2024 and 2023).
In accordance with IAS 16, the cost model, after initial recognition of the property, plant and equipment, requires the tangible asset to
be carried at its cost less accumulated depreciation and any accumulated impairment losses. Depreciation is recognized in a manner
that reflects the pattern in which the future economic benefits of the tangible asset are expected to be consumed and realized by the
Trust. The amount of depreciation will be charged systematically to the consolidated statement of comprehensive income and is the
cost less residual value of the asset over its useful economic life. IAS 16 also requires that the cost and useful economic life of each
significant component of a tangible asset be determined based on the circumstances of each tangible asset. The method of
depreciation, residual values, and estimates of the useful economic life of a tangible asset, or other property, plant and equipment,
are reviewed at each financial year-end and any changes are accounted for as a change in accounting estimate in accordance with
IAS 8 – Accounting Policies, Changes in Accounting Estimates and Errors (“IAS 8”).
Property, Plant and Equipment (“PP&E”) is valued using the cost model under IAS 16. PP&E is categorized into the following classes
and their respective useful economic life is used to calculate the amount of depreciation or amortization for each period. Categories
of PP&E with the same or similar useful lives are included in the same class.
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PP&E Class
PP&E Category
Useful Life/Depreciation Rate
Depreciation Method Used
Administrative building
Administrative building
40 years
Straight-line
Site equipment
Site equipment and other assets
15%
Declining balance
Automobiles
Site equipment and other assets
20%
Declining balance
Warehouse and corporate assets
Site equipment and other assets
10% to 20%
Declining balance
Computer hardware
Corporate technology assets
35%
Declining balance
Computer software (1)
Corporate technology assets
35%
Declining balance
(1) In addition to the purchase of software from external sources, the Trust capitalizes certain programmers’ salaries related to internally developed software applications
used in the normal course of operations of Boardwalk REIT. The programmers’ work is directly attributable to software development.
(d)
Assets Held for Sale
Non-current assets are classified as assets held for sale in accordance with IFRS 5 when the Trust has committed to a plan to sell the
asset, the properties are available for immediate sale in present condition, and the asset is actively marketed for sale at a price that is
reasonable in relation to its estimated fair value. Investment properties transferred to assets held for sale will have carrying amounts
that will be recovered principally through a sale, and continue to be held at fair value, in accordance with IAS 40. The Trust presents
non-current assets held for sale and their related liabilities separately from other assets and liabilities on the consolidated statements
of financial position and in the notes to the consolidated financial statements beginning from the period in which they were first
classified as held for sale.
(e)
Leases
The Trust as a Lessee
The Trust assesses whether a contract is, or contains, a lease at inception of the contract. The Trust recognizes a right-of-use asset
and a corresponding lease liability with respect to all lease arrangements in which it is the lessee, except for short-term leases
(defined as leases with a lease term of 12 months or less) and leases of low value assets. For these leases, the Trust recognizes the
lease payments as an operating expense on a straight-line basis over the term of the lease unless another systematic basis is more
representative of the time pattern in which economic benefits from the leased assets are consumed.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date,
discounted by using the rate implicit in the lease. If this rate cannot be readily determined, the Trust uses its incremental borrowing rate.
The incremental borrowing rate is defined as the rate of interest that the lessee would have to pay to borrow over a similar term and with
a similar security, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic environment.
Lease payments included in the measurement of the lease liability comprise:
• Fixed payments (including in-substance fixed payments), less any lease incentives;
• Variable lease payments that depend on an index or rate, initially measured using the index or rate at the commencement date;
• The amount expected to be payable by the lessee under residual value guarantees;
• The exercise price of purchase options, if the lessee is reasonably certain to exercise the options; and
• Payments of penalties for terminating the lease, if the lease term reflects the exercise of an option to terminate the lease.
The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the
effective interest method) and by reducing the carrying amount to reflect the lease payments made (see NOTE 2(o) to the audited
annual consolidated financial statements for the years ended December 31, 2024 and 2023 for definition of effective interest method).
The Trust remeasures the lease liability (and makes a corresponding adjustment to the related right-of-use asset) whenever:
• The lease term has changed or there is a change in the assessment of exercise of a purchase option, in which case the lease liability
is remeasured by discounting the revised lease payments using a revised discount rate;
• The lease payments change due to changes in an index or rate or a change in expected payment under a guaranteed residual value,
in which cases the lease liability is remeasured by discounting the revised lease payments using the initial discount rate; or
• A lease contract is modified and the lease modification is not accounted for as a separate lease, in which case the lease liability is
remeasured by discounting the revised lease payments using a revised discount rate.
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The right-of-use assets comprise the initial measurement of the corresponding lease liability, lease payments made at or before the
commencement day and any initial direct costs. They are subsequently measured either at fair value (in the case of right-of-use assets
which are considered part of investment properties) or at cost less accumulated depreciation and impairment losses (for right-of-use
assets which are considered property, plant and equipment). Right-of-use assets are depreciated over the shorter period of the lease
term and the useful life of the underlying asset. The depreciation starts at the commencement date of the lease. The Trust applied
IAS 36 – Impairment of Assets to determine whether a right-of-use asset is impaired.
Variable rents that do not depend on an index or rate are not included in the measurement of the lease liability and the right-of-use
asset. The related payments are recognized as an expense in the period in which the event or condition that triggers those payments
and are included in operating expenses in the consolidated statement of comprehensive income.
As a practical expedient, IFRS 16 – Leases (“IFRS 16”) permits a lessee not to separate non-lease components, and instead account for
any lease and associated non-lease components as a single arrangement. The Trust has used this practical expedient on those
contracts (warehouse space and office space) which contain both lease and non-lease components.
The Trust as a Lessor
The Trust enters into lease agreements as a lessor with respect to its investment properties. Leases for which the Trust is a lessor are
classified as finance or operating leases. Whenever the terms of the lease transfer substantially all the risks and rewards of ownership
to the lessee, the contract is classified as a finance lease. All other leases are classified as operating leases. As the Trust has retained
substantially all of the risks and benefits of ownership of its investment properties, it accounts for leases with its tenants as operating
leases. As operating leases, lease payments are recognized as revenue when the tenant has a right to use the leased asset. The leased
asset is recognized in the consolidated statements of financial position according to the nature of the underlying asset.
(f)
Taxation
For fiscal 2024 and 2023, Boardwalk REIT qualified as a “mutual fund trust” as defined under the Tax Act and as a real estate investment
trust eligible for the REIT Exemption in accordance with the rules affecting the tax treatment of publicly traded trusts. Accordingly, the
Trust is not taxable on its income provided that all of its taxable income is distributed to Unitholders. This exemption, however, does not
extend to the corporate subsidiaries of Boardwalk REIT that are subject to income tax. The Trust establishes provisions for taxes when,
despite the belief that its tax positions are fully supportable, it is probable that its positions may be challenged and disallowed by the
relevant tax authorities. The consolidated tax expense (recovery) and related accruals include the impact of such reasonably estimated
disallowances as deemed appropriate. To the extent that the probable tax outcome of these matters changes, such changes in estimates
will impact the income tax expense (recovery) in the period in which such determination is made.
Current Tax
The tax currently payable, if any, is based on taxable profit for the year for certain corporate subsidiaries of the Trust. Taxable profit
differs from profit as reported in the consolidated statements of comprehensive income because of items of income or expense that
are taxable or deductible in other years and items that are never taxable or deductible. The Trust’s liability for current tax is calculated
using tax rates that have been enacted or substantively enacted by the end of the reporting period.
Deferred Tax
Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the audited annual
consolidated financial statements and the corresponding tax bases used in the computation of taxable profit.
Deferred income tax liabilities are generally recognized for all taxable temporary differences. Deferred income tax assets are
recognized for all deductible temporary differences, carry forward of unused tax credits, and unused tax losses, to the extent that it is
probable that deductions, tax credits, and tax losses can be utilized. The carrying amounts of deferred income tax assets are reviewed
at each reporting date and reduced to the extent it is no longer probable that the income tax assets will be recovered. Deferred
income tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realized or the
liability settled, based on tax rates and laws that have been enacted or substantively enacted at the reporting date. In addition,
deferred income tax assets and liabilities are measured using the rate that is consistent with the expected manner of recovery (i.e.
using the asset versus selling the asset). Where applicable, current and deferred income taxes relating to items recognized directly in
equity or comprehensive income are also recognized directly in equity or comprehensive income, respectively.
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(g)
Provisions
In accordance with IAS 37 – Provisions, contingent liabilities and contingent assets, a provision is a liability of uncertain timing or
amount. Provisions are recognized when the entity has a present legal or constructive obligation as a result of past events and when it
is probable that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated. Provisions
are not recognized for future operating losses. Provisions are measured at the present value of the expenditures expected to be
required to settle the obligation using a discounted rate that reflects current market assessment of the time value of money and the
risks and uncertainties specific to the obligation. Provisions are remeasured at each reporting date using the current discount rate.
The increase in the provision due to the passage of time is recognized as a financing cost.
(h)
Unit-based Payments
Deferred unit-based payments to employees and Board of Trustees are measured at the fair value of the deferred unit at the grant
date and is expensed over the vesting period based on the Trust's estimate of the deferred units that will actually vest unless earlier
recognition is triggered in certain events. At the end of each reporting period, the Trust revises its estimate of the number of equity
instruments expected to vest. The impact of the revision of the original estimates, if any, is recognized in profit or loss prospectively
such that the cumulative expense reflects the revised estimate. In accordance with IFRS 2 – Share-based payments (“IFRS 2”), the
deferred units are presented as a liability on the Consolidated Statements of Financial Position as the Trust is obliged to provide the
holder with Trust Units once the deferred units vest. Under IFRS 2, the deferred units are measured at each reporting period at fair
value with changes in fair value recognized in the consolidated statements of comprehensive income. Fair value of the deferred units
is calculated based on the observable market price of Boardwalk REIT’s Trust Units.
(i)
Revenue Recognition
(i) Rental Revenue
The Trust has retained substantially all of the risks and benefits of ownership of its investment properties, and, therefore,
accounts for leases with its tenants as operating leases. Revenue recognition under a lease commences when the tenant has
a right to use the leased asset. Generally, this occurs on lease inception date when the tenant occupies their leased space.
Rental revenue is recognized systematically over the term of the lease, which is generally not more than 12 months. Any
suite specific incentives offered or initial direct costs incurred in negotiating and arranging an operating lease are also
amortized over the term of the operating lease. Rental revenue is recorded based on the amount received or to be received
in accordance with the operating lease.
Lease revenue earned directly from leasing the asset is recognized and measured in accordance with IFRS 16. In addition to
revenue generated directly from the operating lease, rental revenue includes non-lease revenue earned from the tenant,
which is recognized and measured under IFRS 15 – Revenue from Contracts with Customers (“IFRS 15”). Non-lease revenue
includes parking revenue, other service revenue and fees, and recovery of certain operating costs, including retirement
services and cable (internet and television). These revenues are recognized when earned.
IFRS 15 requires revenue recognized from customer contracts (non-lease components) to be disclosed separately from its
other sources of revenue (NOTE 18 and NOTE 28 to the audited annual consolidated financial statements for the years ended
December 31, 2024 and 2023).
(ii) Building Sales
The gain or loss from the sale of an investment property is recognized when title passes to the purchaser (control is
transferred) upon closing at which time all or substantially all of the funds are receivable, or have been received, and the
conditions of the sale have been completed.
(iii) Interest Income
Interest income from a financial asset is recognized when it is probable that the economic benefits will flow to the Trust and
the amount of income can be measured reliably. Interest income is accrued on a time basis when earned, by reference to the
principal outstanding and at the effective interest rate applicable.
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(j)
Financial Instruments and Derivatives
Financial instruments and derivatives are accounted for, presented, and disclosed in accordance with IFRS 7 – Financial Instruments:
Disclosures (“IFRS 7”), IFRS 9 and IAS 32 – Financial Instruments: Presentation. Financial assets and financial liabilities are initially
measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial
liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair
value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the
acquisition of financial assets or financial liabilities at fair value through profit or loss are recognized immediately in profit or loss.
Financial Assets
Financial assets are classified and measured on the basis of the Trust’s business model for managing the financial assets and the
contractual cash flow characteristics of the financial assets. As such, after initial recognition, financial assets are classified and
measured based on three categories: (i) amortized cost, (ii) fair value through other comprehensive income (“FVTOCI”), or (iii) fair
value through profit and loss (“FVTPL”). The classification depends on the nature and purpose of the financial asset and is determined
at the time of initial recognition. Financial assets are classified as at FVTPL when the financial asset either is held for trading or is
designated as at FVTPL. Financial assets categories are defined and measured as follows:
Classification
Definition
Measurement
Amortized cost
Debt instrument is held within a business model whose objective
is to hold financial assets in order to collect contractual cash flows;
and the contractual terms of the financial asset give rise on specified
dates to cash flows that are solely payments of principal and interest
on the principal amount outstanding.
Measured at amortized cost using
the effective interest rate method
less any expected credit loss. (1)(2)
FVTOCI
Debt instrument is held within a business model whose objective is
achieved by both collecting contractual cash flows and selling the
financial assets; and the contractual terms of the financial asset
give rise on specified dates to cash flows that are solely payments of
principal and interest on the principal amount outstanding.
Stated at fair value, with
gains or losses arising on
measurement recognized in
other comprehensive income.
FVTPL
Financial assets that do not meet the criteria for being measured
at amortized cost or FVTOCI are measured at FVTPL. Specifically,
investments in equity instruments or debt instruments which do not
meet the amortized cost or FVTOCI definitions.
Measured at fair value, with
gains or losses recognized in
profit or loss.
(1) The effective interest method is a method of calculating the amortized cost of a debt instrument and of allocating interest income over the relevant period. The effective
interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the debt instrument or where appropriate, a shorter period, to the
net carrying amount on initial recognition.
(2) Financial assets, other than those at FVTPL, are required to use an expected credit loss impairment model. The expected credit loss model requires the Trust to account for
expected credit losses and changes in those expected credit losses at each reporting date to reflect changes in the credit risk since initial recognition of the financial asset.
It results in an allowance for estimated credit losses being recorded on financial assets regardless of whether there has been an actual loss event.
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Boardwalk REIT’s financial assets are as follows:
Financial Asset
Classification and Measurement
Loan receivable
FVTPL
Trade and other receivables
Amortized cost
Segregated tenants’ security deposits
Amortized cost
Cash and cash equivalents
Amortized cost
The Trust derecognizes a financial asset only when the contractual rights to the cash flows from the asset expire, or when it transfers
the financial asset and substantially all the risks and rewards of ownership of the asset to another entity.
Financial Liabilities and Equity
Debt and equity instruments issued are classified either as financial liabilities or as equity in accordance with the substance of the
contractual arrangements and the definitions of a financial liability and an equity instrument. An equity instrument is any contract
that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Trust
are recognized at the proceeds received, net of direct issue costs. Repurchase of Boardwalk REIT’s own equity instruments is
recognized and deducted directly in equity. No gain or loss is recognized in profit or loss on the purchase, sale, issue, or cancellation
of the Trust’s own equity instruments. Distributions paid on the Trust’s equity instruments subsequent to, declared prior to, and with
a record date at or prior to, the reporting date, are recorded as a liability.
Financial liabilities are classified and measured as either amortized cost or FVTPL. Financial liabilities categories are defined and
measured as follows:
Classification
Definition
Measurement
FVTPL
Classified as FVTPL when the financial liability is either held for
trading or it is designated as at FVTPL as discussed below:
Classified as held for trading if: it has been acquired principally for the
purpose of repurchasing it in the near term; or, on initial recognition,
it is part of a portfolio of identified financial instruments that the
Trust manages together and has a recent actual pattern of short-term
profit taking; or, it is a derivative that is not designated and effective
as a hedging instrument.
Stated at fair value, with gains or
losses arising on measurement
recognized in profit or loss.
Classified as FVTPL upon initial recognition if: such designation
eliminates or significantly reduces a measurement or recognition
inconsistency that would otherwise arise; or the financial liability
forms part of a group which is managed and its performance
is evaluated on a fair value basis; or it forms part of a contract
containing one or more embedded derivatives.
Stated at fair value, with gains or
losses arising on measurement
recognized in profit or loss.
Amortized cost
All other liabilities.
Measured at amortized cost using
the effective interest method. (1)
(1) The effective interest method is a method of calculating the amortized cost of a financial liability and of allocating interest expense over the relevant period. The effective
interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the financial liability or where appropriate, a shorter period, to
the net carrying amount on initial recognition.
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Boardwalk REIT’s financial liabilities are as follows:
Financial Liability
Classification and Measurement
Mortgages payable
Amortized cost
LP Class B Units
FVTPL
Construction loan payable
Amortized cost
Refundable tenants’ security deposits
Amortized cost
Trade and other payables
Amortized cost
The Trust derecognizes a financial liability when, and only when, the Trust’s obligations are discharged, cancelled or they expire. The
difference between the carrying amount of the financial liability derecognized and the consideration paid and payable is recognized
in profit or loss.
Derivatives
The Trust may enter into a variety of derivative financial instruments to manage its exposure to interest rate risks, including interest
rate swaps and bond forward contracts. Derivatives are initially recognized at fair value at the date the derivative contracts are
entered into and are subsequently measured at their fair value at the end of each reporting period. The resulting gain or loss is
recognized in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which case the
timing of the recognition in profit or loss depends on the nature of the hedge relationship. Derivatives embedded in host contracts are
treated as separate derivatives when their risks and characteristics are not closely related to the host contracts and the host
contracts are not measured at FVTPL. For the years ended December 31, 2024 and 2023, the Trust had no embedded derivatives
requiring separate recognition.
(k)
Cash and Cash Equivalents
Cash is comprised of bank balances, interest-earning bank accounts, and term deposits with maturities of 90 days or less.
(l)
Critical Judgment in Applying Accounting Policies
The following are the critical judgements, apart from those involving estimations (see NOTE 2(r) to the audited annual consolidated
financial statements for the years ended December 31, 2024 and 2023), that have been made in applying the Trust’s accounting
policies and that have the most significant effect on the reported amounts in the audited annual consolidated financial statements:
(i) Investment Property and Internal Capital Program
The Trust’s accounting policy relating to investment property is described in NOTE 2(f) to the audited annual consolidated
financial statements for the years ended December 31, 2024 and 2023. In applying this policy, judgment is applied in
determining the appropriate classes of investment properties in order to measure fair value. The Trust also undertakes
internal capital improvements and upgrades. Such work is specifically identified, and the Trust applies judgment in the
estimated amount of directly attributable on-site wages to be allocated to capital improvements and upgrades of its real
estate assets.
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(ii) Interest in Joint Operations, Associates and Joint Ventures
When determining the appropriate basis of accounting for the Trust’s investees, the Trust makes judgement about the
degree of influence that Boardwalk REIT exerts directly or through an arrangement over the investee’s relevant activities.
This may include the ability to elect investee directors, appoint management, or influence key decisions. Judgement is also
required in determining whether or not an arrangement is a joint operation or joint venture.
(iii) Taxation Provisions
The Trust’s accounting policy relating to provisions is described in (g) above. In applying this policy, judgement is applied in
determining if the Trust has a present legal or constructive obligation as a result of past events and if it is probable that an
outflow of resources will be required to settle the obligation and if the amount can be reliably estimated. For uncertain tax
items no provision has been recorded based on the interpretation of tax legislation. Due to the uncertainty associated with
such tax items, there is a possibility that, on conclusion of open matters at a future date, the final outcome may differ
significantly from the Trust’s judgements or estimates. Please refer to NOTE 21 for additional details.
(m)
Material Accounting Estimates and Assumptions
Below are the key assumptions concerning the future, and other key sources of estimation uncertainty at the end of the reporting
period, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next
financial year. Actual results could differ from estimates.
(i) Investment Properties
The choice of valuation method for fair valuing and the critical estimates and assumptions underlying the fair value
determination of investment properties are set out in NOTE 4 to the audited annual consolidated financial statements for
the years ended December 31, 2024 and 2023. Significant estimates used in determining the fair value of the Trust’s
investment properties includes capitalization rates and NOI (which is influenced by market rents, vacancy rates, and
standard costs) used in the overall capitalization rate valuation method as well as discount rates and forecasted cash flows
used in the discounted cash flow valuation method. A change to any one of these inputs could materially alter the fair value
of an investment property. Please refer to NOTE 4 to the audited annual consolidated financial statements for the years
ended December 31, 2024 and 2023 for sensitivity analysis.
(ii) Internal Capital Program
The Trust’s internal capital program is based on internal allocations, including parts, supplies, and on-site wages identified
as part of a specific upgrade or capital improvement. Elements included under the internal capital program are capitalized
to investment properties.
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APPLICATION OF NEW AND REVISED IFRS ACCOUNTING STANDARDS
AND FUTURE ACCOUNTING POLICIES
Boardwalk REIT monitors new IFRS Accounting Standards pronouncements to assess the applicability and impact, if any, these new
pronouncements may have on the audited annual consolidated financial statements and note disclosures.
(a)
Application of New and Revised IFRS Accounting Standards
For the year ended December 31, 2024, the Trust has applied a number of revised IFRS Accountant Standards and incorporated in the
Chartered Professional Accountants of Canada Handbook. The following highlights these changes and the effect, if any, on the Trust’s
consolidated financial statements.
New or Amended Standards
Summary of Requirements
Impact on Consolidated
Financial Statements
IAS 1 – Presentation of Financial
Statements
The amendment deals with the presentation of liabilities,
not the amount or timing of recognition, or disclosure.
Specifically, the amendment clarifies the classification of
liabilities as current or non-current should be based on
rights that are in existence at the end of the reporting period
and that classification is unaffected by expectations about
whether an entity will exercise its right to defer settlement of
a liability.
In addition, a second amendment deals with non-current
liabilities with covenants. Specifically, the amendment
clarifies how conditions with which an entity must comply
within 12 months after the reporting period affect the
classification of a liability.
This amendment was applied
retrospectively effective January 1, 2024.
The Trust has evaluated the impact of
this amendment and has appropriately
reclassified the LP Class B Units from non-
current liabilities to current liabilities due
to the fact that the LP Class B Units are
convertible at any time at the option of
the holder. In addition, the deferred unit-
based compensation is now presented
entirely as a current liability due to
the fact that the deferred unit-based
compensation outstanding has either:
(i) vested, or
(ii) will vest automatically in the event
of termination of employment of the
participant and which the entity does not
have the right to defer payment for more
than 12 months.
The second amendment was applied
retrospectively effective January, 1, 2024
and there was no material impact on the
consolidated financial statements.
IAS 7 – Statement of Cash Flows
and IFRS 7
The amendments deal with the disclosure requirements to
enhance the transparency of supplier finance arrangements
and their effects on a company’s liabilities, cash flows and
exposure to liquidity risk.
This amendment was applied
prospectively on January 1, 2024 and
there was no impact on the consolidated
financial statements.
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(b)
Future Accounting Policies
The following accounting standards under IFRS Accounting Standards have been issued or revised; however, they were not yet
effective for the years ended, December 31, 2024 and 2023 and, as such, have not been applied to the audited annual consolidated
financial statements:
New or Amended Standards
Summary of Requirements
Possible Impact on Consolidated
Financial Statements
Amendments to IFRS 9 and IFRS 7 –
Classification and Measurement of
Financial Instruments
Multiple amendments were made to these IFRS Accounting
Standards. The amendments deal with the derecognition of
a financial liability at the settlement date and when settled
through electronic transfer. It also provides additional
guidance regarding the classification of financial assets, as well
as additional disclosure requirements for financial instruments
with contingent features and equity instruments classified at
FVTOCI.
The effective date of the amendments is for annual reporting
periods beginning or after January 1, 2026, however, earlier
application is permitted.
The Trust is assessing the potential
impact but does not expect any
material impact on the consolidated
financial statements.
IFRS 18 – Presentation and
Disclosures in Financial Statements
The new standard replaces IAS 1 regarding requirements for
the presentation and disclosure of information in the general
purpose financial statements to help ensure they provide
relevant information that faithfully represents an entity’s
assets, liabilities, equity income and expenses. Specifically, it
introduces requirements to classify income and expenses into
categories and to include specified subtotals in the Statement
of Profit or Loss, along with other enhanced guidance on the
aggregation of information and mandatory disclosures about
management-defined performance measures.
The effective date of the amendments is for annual reporting
periods beginning on or after January 1, 2027, and are to be
applied retrospectively with earlier application permitted.
The Trust is currently evaluating the
impact of the new standard. In addition,
the Trust expects to include increased
disclosures on management-defined
performance measures in the
financial statements.
Amendments to IFRS 10 and IAS 28 –
Sale or Contribution of Assets
between an Investor and its
Associate or Joint Venture
The amendments deal with situations where there is a sale or
contribution of assets between an investor and its associate
or joint venture. Specifically, the amendments state that gains
or losses resulting from the loss of control of a subsidiary that
does not contain a business in a transaction with an associate
or a joint venture that is accounted for using the equity
method, are recognized in the parent’s profit or loss only to
the extent of the unrelated investor’s interest in that associate
or joint venture. The effective date of the amendments has yet
to be set, however, earlier application is permitted.
The Trust is assessing the potential
impact but does not expect any
material impact on the consolidated
financial statements.
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In addition to those referenced, the following amendments are not expected to have any impact on the Trust’s annual audited
consolidated financial statements:
• IFRS 19 – Subsidiaries without Public Accountability
• IAS 21 – The Effects of Changes in Foreign Exchange Rates
IFRS ACCOUNTING STANDARDS
The Trust’s audited annual consolidated financial statements have been prepared in accordance with IFRS Accounting Standards.
DISCLOSURE CONTROLS AND PROCEDURES (“DC&P”) & INTERNAL
CONTROL OVER FINANCIAL REPORTING
DC&P are designed to provide reasonable assurance that all relevant information is gathered and reported to senior management,
including the Chief Executive Officer and Chief Financial Officer, as applicable, on a timely basis so appropriate decisions can be made
regarding public disclosure.
The preparation of this information is supported by a set of DC&P implemented by management. In fiscal 2024, these controls and
procedures were reviewed and the effectiveness of their design and operation was evaluated. This evaluation confirmed the
effectiveness of both the design and the operation of DC&P as at December 31, 2024. The evaluation was performed in accordance
with the Committee of Sponsoring Organizations of the Treadway Commission control framework adopted by the Trust and the
requirements of National Instrument 52-109 of the Canadian Securities Administrators titled, Certification of Disclosure in Issuers’
Annual and Interim Filings (“NI 52-109”).
There were no changes made to our DC&P during the year ended December 31, 2024. Boardwalk REIT continues to review the design
of DC&P to provide reasonable assurance that material information relating to Boardwalk REIT is properly communicated to certifying
officers responsible for establishing and maintaining DC&P, as those terms are defined in NI 52-109.
As at December 31, 2024, Boardwalk REIT can confirm the effectiveness of both the design and the operation of its ICFR to provide
reasonable assurance regarding the reliability of financial statements and information. Boardwalk REIT may, from time to time, make
changes aimed at enhancing their effectiveness and ensuring that our systems evolve with our business. There were no changes made
in our ICFR during the year ended December 31, 2024, that have materially affected, or are reasonably likely to materially affect, our
ICFR, which have been designed using the Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring
Organizations of the Treadway Commission (“COSO”).
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2025 Financial Outlook
and Market Guidance
As is customary, the Trust is providing its outlook and financial guidance for the upcoming 2025 fiscal year as part of its year end
results. The Trust’s 2025 objectives are as follows:
Description
2025 Guidance
2024 Actual
Same Property NOI Growth
4.0% to 8.0%
13.0%
Profit
N/A
$588,218
FFO (1)(2)
N/A
$225,848
AFFO (1)(2)
N/A
$192,273
FFO per Unit (2)
$4.25 to $4.55
$4.18
AFFO per Unit (2)
$3.62 to $3.92 utilizing a Maintenance
CAPEX of $998/suite/year
$3.56 utilizing a Maintenance CAPEX of
$977/suite/year
(1) This is a non-GAAP financial measure.
(2) Please refer to the section titled “Presentation of Non-GAAP Measures” in this MD&A for more information.
In deriving these forecasts, the Trust has adjusted for the treatment of the LP Class B Units to be treated as equity (versus debt
under IFRS Accounting Standards) and their related treatment of the distributions paid (which are classified as financing costs
under IFRS Accounting Standards).
This information is forward-looking and actual results may vary materially from those reported. One of the key estimates is the
performance of the Trust’s same properties. Any significant change in assumptions deriving “Same property NOI performance” would
have a material effect on the final reported amount. The Trust reviews these key assumptions quarterly and, based on this review,
may change its outlook on a going-forward basis. Please refer to the section titled “General and Forward-Looking Statements
Advisory – Forward-Looking Statements Advisory” in this MD&A.
In addition to the above financial guidance for 2025, the Board of Trustees approved the 2025 Capital Budget as follows:
Capital Budget ($000’s)
2025 Budget
Per Suite
2024 Actual
Per Suite
Maintenance Capital Expenditures
$
34,333
$
998
$
33,575
$
977
Value-add Capital
112,417
3,267
99,852
2,906
Investment in capital assets
$
146,750
$
4,265
$
133,427
$
3,883
Development of investment properties
$
80,632
$
53,719
In total, the Trust expects to invest $146.8 million (or $4,265 per suite) in capital assets in 2025, compared to $133.4 million
(or $3,883 per suite) actually spent in 2024. The Trust has estimated its Maintenance Capital Expenditures for 2025 at $998 per suite
per year, compared to $977 per suite per year in 2024, using a three-year rolling average. Additionally, for 2025, Boardwalk is
estimating $80.6 million will be spent on development of investment properties.
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SELECTED CONSOLIDATED FINANCIAL INFORMATION
The following selected financial information should be read in conjunction with this MD&A and the audited annual consolidated
financial statements for the years ended December 31, 2024 and 2023, and the applicable unaudited condensed consolidated
interim financial statements of the Trust for the various quarterly interim periods, which are available under the Trust’s profile
at www.sedarplus.ca.
The consolidated statements of comprehensive income and consolidated statements of financial position information set forth in the
following tables has been derived from the audited annual consolidated financial statements referred to above and the unaudited
condensed consolidated interim financial statements of the Trust for various quarterly interim periods.
Annual Comparative
(Cdn$ Thousands, except per Unit amount)
Twelve Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Rental revenue
$
603,293
$
545,658
$
496,360
Profit
588,218
666,099
283,096
FFO (1)(2)
225,848
181,353
157,444
Profit per Trust Unit
– Basic
$
11.91
$
14.54
$
6.17
– Diluted
$
10.41
$
14.54
$
5.23
FFO per Unit (2)
– Basic
$
4.57
$
3.96
$
3.43
– Diluted
$
4.18
$
3.60
$
3.13
Mortgages payable (3)
3,286,081
3,318,417
3,214,554
Total assets
8,626,490
8,141,876
7,067,275
Number of suites (4)
34,405
34,029
33,722
Rentable square feet (000’s)
29,829
29,515
29,310
(1) This is a non-GAAP financial measure.
(2) Please refer to the section titled “Presentation of Non-GAAP Measures” in this MD&A for more information.
(3) December 31, 2024, excludes mortgages related to assets held for sale.
(4) Includes 183 suites related to the Trust’s joint venture in Brampton, Ontario.
Variations on an annual basis are primarily attributable to reported fair value gains/losses. Please refer to the section titled “Executive
Summary – Financial Performance Summary” for additional details.
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Quarterly Comparative
(Cdn$ Thousands, except per Unit amount)
Three Months Ended
Dec. 31,
2024
Sep. 30,
2024
Jun. 30,
2024
Mar. 31,
2024
Dec 31,
2023
Sep. 30,
2023
Jun. 30,
2023
Mar. 31,
2023
Rental revenue
$ 155,565 $ 153,413 $ 149,067 $ 145,248 $ 141,907 $ 138,268 $ 134,553 $ 130,931
Profit
65,924
55,419
159,154
307,721
173,130
39,417
232,163
221,389
FFO (1)(2)
58,543
60,185
56,085
51,035
48,897
48,266
44,595
39,595
Profit per Trust Unit
– Basic
$
1.33 $
1.12 $
3.22 $
6.23 $
3.75 $
0.86 $
5.08 $
4.84
– Diluted
$
(0.57) $
1.12 $
2.33 $
6.23 $
3.75 $
0.86 $
5.08 $
4.84
FFO per Unit (2)
$
1.08 $
1.11 $
1.04 $
0.95 $
0.96 $
0.96 $
0.89 $
0.79
(1) This is a non-GAAP financial measure.
(2) Please refer to the section titled “Presentation of Non-GAAP Measures” in this MD&A for more information.
Variations in the quarterly comparative results presented above are primarily attributable to reported fair value gains/losses and from
seasonality in total rental expenses in the first and fourth quarters when demand for natural gas is at the highest. Please refer to the
section titled “Executive Summary – Financial Performance Summary” for additional details.
Additional Information
Additional information relating to Boardwalk Equities Inc. and Boardwalk REIT, including the AIF, is available under the Trust’s profile
on SEDAR+ at www.sedarplus.ca.
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Independent Auditor's Report
To the Unitholders and Board of Trustees of Boardwalk Real Estate Investment Trust
OPINION
We have audited the consolidated financial statements of Boardwalk Real Estate Investment Trust (the “Trust"), which comprise the
consolidated statements of financial position as at December 31, 2024 and 2023, and the consolidated statements of comprehensive
income, changes in unitholders’ equity and cash flows for the years then ended, and notes to the consolidated financial statements,
including material accounting policy information (collectively referred to as the “financial statements").
In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Trust as at
December 31, 2024 and 2023, and its financial performance and its cash flows for the years then ended in accordance with IFRS
Accounting Standards as issued by the International Accounting Standards Board (“IASB”).
BASIS FOR OPINION
We conducted our audit in accordance with Canadian generally accepted auditing standards (“Canadian GAAS"). Our responsibilities
under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our
report. We are independent of the Trust in accordance with the ethical requirements that are relevant to our audit of the financial
statements in Canada, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that
the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
KEY AUDIT MATTER
A key audit matter is a matter that, in our professional judgment, was of most significance in our audit of the consolidated financial
statements for the year ended December 31, 2024. This matter was addressed in the context of our audit of the consolidated financial
statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on this matter.
Fair Value of Investment Properties – Refer to Notes 2(f) and 4 of the
Financial Statements
Key Audit Matter Description
The Trust has elected the fair value model for all investment properties and accordingly measures all investment properties at fair
value subsequent to initial recognition on the statement of financial position. The Trust uses a combination of internal and external
processes and valuation techniques to estimate fair value based on a number of inputs.
While several inputs are required to determine the fair value of the investment properties, the assumptions with the highest degree of
subjectivity and impact on fair values are the forecast of rental income and capitalization rates. Auditing these assumptions required
a high degree of auditor judgment as the estimations made by management are subject to a high degree of estimation uncertainty.
This resulted in an increased extent of audit effort, including the need to involve fair value specialists.
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How the Key Audit Matter Was Addressed in the Audit
Our audit procedures related to the forecast of rental income and capitalization rates used to determine the fair value of the
investment properties included the following, among others:
• Evaluated the effectiveness of controls over determination of investment properties’ fair value, including those over the
determination of the forecast of rental income and capitalization rates.
• Evaluated the reasonableness of management’s forecast of rental income by comparing management’s forecast with historical
results, internal communications to management and the Board of Trustees, contractual information and market rents at the
valuation date, where applicable.
• With the assistance of fair value specialists, evaluated the reasonableness of capitalization rates by developing a range of estimates
based on recent market transactions and industry surveys and comparing them to the capitalization rates selected by management.
OTHER INFORMATION
Management is responsible for the other information. The other information comprises:
• Management’s Discussion and Analysis
• The information, other than the financial statements and our auditor’s report thereon, in the Annual Report.
Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion
thereon. In connection with our audit of the financial statements, our responsibility is to read the other information identified above
and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge
obtained in the audit, or otherwise appears to be materially misstated.
We obtained Management’s Discussion and Analysis and the Annual Report prior to the date of this auditor’s report. If, based on the
work we have performed on this other information, we conclude that there is a material misstatement of this other information, we
are required to report that fact in this auditor’s report. We have nothing to report in this regard.
RESPONSIBILITIES OF MANAGEMENT AND THOSE CHARGED
WITH GOVERNANCE FOR THE FINANCIAL STATEMENTS
Management is responsible for the preparation and fair presentation of the financial statements in accordance with IFRS Accounting
Standards as issued by the IASB, and for such internal control as management determines is necessary to enable the preparation of
financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Trust’s ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either
intends to liquidate the Trust or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Trust's financial reporting process.
AUDITOR'S RESPONSIBILITIES FOR THE AUDIT OF THE
FINANCIAL STATEMENTS
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian GAAS will always detect
a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or
in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these
financial statements.
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As part of an audit in accordance with Canadian GAAS, we exercise professional judgment and maintain professional skepticism
throughout the audit. We also:
• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and
perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis
for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as
fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Trust's internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures
made by management.
• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence
obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Trust's ability
to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s
report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions
may cause the Trust to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the
financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
• Plan and perform the group audit to obtain sufficient appropriate audit evidence regarding the financial information of the
entities or business units within the Trust as a basis for forming an opinion on the financial statements. We are responsible for the
direction, supervision and review of the audit work performed for purposes of the group audit. We remain solely responsible for
our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and
significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding
independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our
independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in
the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these
matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare
circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so
would reasonably be expected to outweigh the public interest benefits of such communication.
The engagement partner on the audit resulting in this independent auditor’s report is Andrew Coutts.
/s/ Deloitte LLP
Chartered Professional Accountants
Calgary, Alberta
February 19, 2025
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Consolidated Statements of
Financial Position
(CDN $ THOUSANDS)
As at
Note
Dec. 31, 2024
Dec. 31, 2023
ASSETS
Non-current assets
Investment properties
4
$
8,238,024
$
7,702,214
Equity accounted investment
6
52,984
39,758
Other
7
34,291
31,367
8,325,299
7,773,339
Current assets
Loan receivable
8
58,170
-
Assets held for sale
5
80,000
-
Other
7
40,613
37,333
Cash and cash equivalents
10
122,408
331,204
301,191
368,537
Total Assets
$
8,626,490
$
8,141,876
LIABILITIES
Non-current liabilities
Mortgages payable
11
$
2,661,345
$
2,818,045
Lease liabilities
12
72,671
73,818
Deferred government grant
2,994
3,372
2,737,010
2,895,235
Current liabilities
Mortgages payable
11
624,736
500,372
Lease liabilities
12
3,210
2,978
LP Class B Units
13
283,664
319,247
Liabilities related to assets held for sale
5
21,817
-
Other
14
119,244
103,972
1,052,671
926,569
Total Liabilities
3,789,681
3,821,804
Equity
Unitholders’ equity
17
4,836,809
4,320,072
Total Equity
4,836,809
4,320,072
Total Liabilities and Equity
$
8,626,490
$
8,141,876
See accompanying notes to these consolidated financial statements.
On behalf of the Trust:
[signed]
[signed]
SAM KOLIAS
Trustee
GARY GOODMAN
Trustee
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Consolidated Statements of
Comprehensive Income
(CDN $ THOUSANDS)
Note
Year Ended Dec. 31, 2024
Year Ended Dec. 31, 2023
Rental revenue
18
$
603,293
$
545,658
Rental expenses
Operating expenses
109,617
106,190
Utilities
55,969
53,392
Property taxes
55,373
53,087
Total rental expenses
220,959
212,669
Net operating income
382,334
332,989
Financing costs
19
121,161
111,172
Administration
44,791
41,172
Deferred unit-based compensation
15
5,374
3,328
Depreciation
9
8,318
7,921
Profit before the undernoted
202,690
169,396
Income (loss) from equity accounted investment
6
13,226
(1,113)
Loss on sale of asset
-
(928)
Fair value gains, net
20
359,888
494,877
Interest income
12,498
3,059
Other income
-
886
Profit before income tax
588,302
666,177
Income tax expense
16
(84)
(78)
Profit
588,218
666,099
Other comprehensive income
-
-
Total comprehensive income
$
588,218
$
666,099
See accompanying notes to these consolidated financial statements.
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Consolidated Statements of
Changes in Unitholders’ Equity
(CDN $ THOUSANDS)
Trust Units
Cumulative
Profit (Loss)
Cumulative
Distributions
to Unitholders
Retained
Earnings
Total
Unitholders’
Equity
Balance, December 31, 2022
$
211,899
$ 4,847,088
$ (1,591,989)
$ 3,255,099
$ 3,466,998
Trust Units issued under equity offering, net of issue costs
239,992
-
-
-
239,992
Trust Units issued for vested deferred units
152
-
-
-
152
Profit
-
666,099
-
666,099
666,099
Total comprehensive income
-
666,099
-
666,099
666,099
Distributions
-
-
(53,169)
(53,169)
(53,169)
Balance, December 31, 2023
$
452,043
$ 5,513,187
$ (1,645,158)
$ 3,868,029
$ 4,320,072
Trust Units issued for vested deferred units
3,754
-
-
-
3,754
Trust Units purchased and cancelled
(2,058)
(8,069)
-
(8,069)
(10,127)
Trust Units issued on exchange of LP Class B Units
3,809
-
-
-
3,809
Profit
-
588,218
-
588,218
588,218
Total comprehensive income
-
588,218
-
588,218
588,218
Distributions
-
-
(68,917)
(68,917)
(68,917)
Balance, December 31, 2024
$
457,548
$ 6,093,336
$ (1,714,075)
$ 4,379,261
$ 4,836,809
See accompanying notes to these consolidated financial statements.
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96
Consolidated Statements
of Cash Flows
(CDN $ THOUSANDS)
Note
Year Ended Dec. 31, 2024
Year Ended Dec. 31, 2023
Operating activities
Profit
$
588,218
$
666,099
Loss on sale of asset
-
928
Other income
-
(886)
Financing costs
19
121,161
111,172
Interest paid
(113,123)
(103,084)
Deferred unit-based compensation
15
5,374
3,328
(Income) loss from equity accounted investment
6
(13,226)
1,113
Fair value gains, net
20
(359,888)
(494,877)
Income tax expense
16
84
78
Income tax paid
(14)
(3)
Government grant amortization
(378)
(378)
Depreciation
9
8,318
7,921
236,526
191,411
Net change in operating working capital
27
4,674
8,385
Cash flow from operating activities
241,200
199,796
Investing activities
Purchase of investment properties, net of financing
4
(108,956)
(13,782)
Investment in capital assets
27
(133,427)
(125,972)
Development of investment properties
4
(53,719)
(23,325)
Issuance of loan receivable
8
(58,170)
-
Proceeds from sale of investment in private technology
venture fund
-
929
Distributions from investment in private technology
venture fund, net of capital contribution
-
990
Principal repayments on lease receivable
-
321
Net change in investing working capital
27
2,644
6,005
Cash flow used in investing activities
(351,628)
(154,834)
Financing activities
Issuance of Trust Units, net of issue costs
17
-
239,992
Distributions paid
27
(67,810)
(52,469)
Unit repurchase program
17
(10,127)
-
Proceeds from mortgage financings
60,300
236,627
Mortgage payments upon refinancing
-
(97,912)
Scheduled mortgage principal repayments
(75,282)
(74,448)
Proceeds from construction loan financing
14
1,478
-
Deferred financing costs incurred
(3,173)
(14,234)
Principal repayments on lease liabilities
(3,275)
(3,397)
Net change in financing working capital
27
(479)
(733)
Cash flow (used in) from financing activities
(98,368)
233,426
Net (decrease) increase in cash
(208,796)
278,388
Cash and cash equivalents, beginning of year
331,204
52,816
Cash and cash equivalents, end of year
10
$
122,408
$
331,204
See accompanying notes to these consolidated financial statements.
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Notes to the Consolidated
Financial Statements
For the Years Ended, December 31, 2024 and 2023
(Tabular amounts in Cdn $ thousands, except number of units and per unit amounts UNLESS OTHERWISE STATED)
NOTE 1: ORGANIZATION OF THE TRUST
Boardwalk Real Estate Investment Trust (“Boardwalk REIT” or the “Trust”) is an unincorporated, open-ended real estate investment
trust created pursuant to the Declaration of Trust (“DOT”), dated January 9, 2004, and as amended and restated on various dates
between May 3, 2004 and May 6, 2024, under the laws of the Province of Alberta. Boardwalk REIT was created to invest in multi-family
residential investment properties or similar interests, initially through the acquisition of the assets and operations of Boardwalk
Equities Inc. (the “Corporation”), which was acquired on May 3, 2004. Boardwalk REIT Trust Units (or “Trust Units”) are listed on the
Toronto Stock Exchange under the symbol ‘BEI.UN’. The registered office of the Trust and its head office operations are located at
First West Place, Suite 200, 1501 1st Street SW, Calgary, Alberta, T2R 0W1.
NOTE 2: MATERIAL ACCOUNTING POLICIES
(a)
Statement of Compliance
These consolidated financial statements have been prepared in accordance with IFRS® Accounting Standards, as issued by the
International Accounting Standards Board (“IFRS Accounting Standards”).
(b)
Basis of Presentation
The Trust’s consolidated financial statements have been prepared on the historical cost basis, except for investment properties,
assets held for sale, and certain financial instruments that are measured at fair value, as explained in the accounting policies below.
Historical cost is generally based on the fair value of the consideration given in exchange for assets. These consolidated financial
statements were prepared on a going concern basis and have been presented in Canadian dollars rounded to the nearest thousand.
The accounting policies set out below have been applied consistently in all material respects. Standards and guidelines not effective
for the current accounting period are described in NOTE 3(b).
Certain comparative figures have been restated to conform to the presentation of the current year. Specifically, the property, plant
and equipment balances presented in NOTE 9 have been updated to appropriately derecognize the cost and accumulated
depreciation of historical additions that have been fully amortized and no longer in use.
(c)
Basis of Consolidation
These consolidated financial statements include the accounts of the Trust and its consolidated subsidiaries which are the entities over
which Boardwalk REIT has control. Control is achieved when the entity has power over the investee; is exposed, or has rights, to
variable returns from its involvement with the investee; and has the ability to use its power to affect its returns. The Trust reassesses
whether or not it controls an investee if facts, circumstances, and events indicate that there are changes to one or more of the three
elements of control listed above.
In accordance with IFRS 10 – Consolidated Financial Statements (“IFRS 10”), an entity can exercise control on a basis other than
ownership of voting interests. When the Trust has less than a majority of the voting rights of an investee, it has power over the
investee when the voting rights are sufficient to give it the practical ability to direct the relevant activities of the investee unilaterally.
The Trust considers all relevant facts and circumstances in assessing whether or not the Trust’s voting rights in an investee are
sufficient to give it power. These facts and circumstances can include: the size of the Trust’s holding of voting rights relative to the size
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and dispersion of holdings of the other vote holders; potential voting rights held by the Trust, other vote holders or other parties;
rights arising from contractual arrangements; and any other additional facts or circumstances.
Currently, the Trust has control over all of the subsidiaries reported in the consolidated financial statements (either directly or
indirectly) and non-controlling interests either do not exist or are immaterial for the Trust at this time. All intra-group transactions,
balances, revenues and expenses eliminate on consolidation.
(d)
Interest in Joint Operations
In accordance with IFRS 11 – Joint Arrangements (“IFRS 11”), a joint operation is a joint arrangement whereby the parties that have
joint control of the arrangement have rights to the assets, and obligations for the liabilities, relating to the arrangement. Joint control
is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities
require unanimous consent of the parties sharing control. The Trust records only its share of the assets, liabilities, and share of the
revenue and expenses of the joint operation. The assets, liabilities, revenue and expenses of joint operations are included within the
respective line items of the consolidated statements of financial position and consolidated statements of comprehensive income.
(e)
Interest in Associates and Joint Ventures
In accordance with IAS 28 – Investments in associates and joint ventures (“IAS 28”), an associate is defined as an entity over which the
investor has significant influence, however the investor does not have control or joint control. Significant influence generally arises when
an entity holds, directly or indirectly, 20% or more of the voting power of the investee. Significant influence is usually evidenced by
representation on the board of directors or equivalent of the investee, participation in policy-making processes, material transactions
between the entity and its investee, interchange of managerial personnel, or provision of essential technical information.
In accordance with IFRS 11, a joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have
rights to the net assets of the joint venture.
Investments in associates and joint ventures are accounted for using the equity method. Under the equity method, the investment is
initially recorded at cost, and the carrying amount is increased or decreased to recognize the investor’s share of profit or loss of the
investee after the date of acquisition. The Trust’s share of the investee’s profit or loss is recognized in the Trust’s profit or loss.
Distributions received from an investee reduce the carrying amount of the investment.
(f)
Investment Properties
Investment properties consist of multi-family residential properties held to earn rental income and properties being constructed or
developed for future use to earn rental income, and include interests held under long-term operating land leases. Investment
properties are measured initially at cost (which is equivalent to fair value). Cost includes all amounts relating to the acquisition
(excluding transaction costs related to a business combination) and improvement of the properties. All costs associated with
upgrading and extending the economic life of the existing facilities, other than ordinary repairs and maintenance, are capitalized to
investment property. Included in these costs are internal amounts that are directly attributable to a specific investment property,
which are capitalized to the extent that they upgrade or extend the economic life of the asset.
Subsequent to initial recognition, investment properties are recorded at fair value, in accordance with IAS 40 – Investment Property
(“IAS 40”). Fair value is determined based on a combination of internal and external processes and valuation techniques. Gains or
losses arising from differences between current period fair value and the sum of previously measured fair value and capitalized costs
as described above are recorded in profit or loss in the period in which they arise. The fair value of an investment property held by a
lessee as a right-of-use asset reflects expected cash flows (including variable lease payments) that are expected to become payable.
Accordingly, if the valuation obtained for an investment property is net of all payments expected to be made, it will be necessary to
add back any recognized lease liability, to arrive at the carrying amount of the investment property using the fair value model.
Properties owned by the Trust where a significant portion of the property is used for administrative purposes by the Trust are
considered “Property, Plant and Equipment” and, therefore, fall within the scope of IAS 16 – Property, Plant and Equipment (“IAS 16”)
and are recorded in accordance with that standard. Where part of a building is used for administrative purposes by the Trust, but this
portion is considered insignificant, this space is included as part of Investment Property under IAS 40.
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Investment properties are reclassified to “Assets Held for Sale” when the criteria set out in IFRS 5 – Non-Current Assets Held for Sale
and Discontinued Operations (“IFRS 5”) are met (see NOTE 2(i)).
An investment property is derecognized upon disposal or when the investment property is permanently withdrawn from use and no
future economic benefits are expected from the disposal. Prior to its disposal, the carrying value of the investment property is
adjusted to reflect its fair value as outlined in the purchase and sale agreement (as the purchase and sale agreement is the best
evidence of fair value). This adjustment shall be recorded as a fair value gain or loss. Any remaining gain or loss arising on
derecognition of the property (calculated as the difference between the net disposal proceeds and the carrying amount of the asset)
is included in profit or loss in the period in which the property is derecognized.
Excess land represents land owned by the Trust located contiguous to land included as investment property. For some of the Trust’s
excess land, the Trust has the ability to develop additional multi-family residential buildings on this land or sell it separately from the
investment property at a later date. Excess land is held for capital appreciation and, therefore, is treated as investment property and
recorded in accordance with IAS 40 as outlined above. When determining the fair value of a project with excess land, the capitalization
rate used in determining the value is adjusted accordingly.
(g)
Properties Under Development
Properties under development include new development on excess land density or acquired land, redevelopment or repositioning of
buildings the Trust currently owns that require substantial renovations, and incomplete apartment suites acquired from third parties
that will take 12 months or longer to complete. The cost of land, if applicable, and buildings under development or redevelopment
(consisting of development sites, density or intensification rights and related infrastructure) are specifically identifiable costs
incurred in the period before construction is complete. Capitalized costs include pre-construction costs essential to the development
or redevelopment of the property, construction costs, borrowing costs directly attributable to the development, real estate taxes,
and other costs incurred during the period of development or redevelopment. Additions to investment properties consist of costs of a
capital nature and, in the case of properties under development and/or redevelopment, capitalized interest. Directly attributable
borrowing costs are also capitalized on land or properties acquired specifically for development or redevelopment when activities
necessary to prepare the asset for development or redevelopment are in progress in accordance with IAS 23 – Borrowing Costs. Where
borrowings are associated with specific developments, the amount capitalized is the total cost incurred on those borrowings.
The capitalization of borrowing costs commences when the activities necessary to prepare an asset for development or
redevelopment begins, and continues until the date that substantially all of the construction is complete and all necessary occupancy
and related permits have been received, whether or not the space is leased. If the Trust is required, as a condition of a lease, to
construct tenant improvements that enhance the value of the property, then capitalization of costs continues until such
improvements are completed. Capitalization ceases if there is a prolonged period where development activity is interrupted.
Properties under active development are generally valued at market land values, if applicable, plus costs invested to date. Where
significant leasing and construction is in place and the future income stream is reasonably determinable, the valuation methodology
used is similar to that of revenue-producing properties, less estimates of future capital outlays, construction and development costs,
to determine a net “as-is” market value. Development risks such as planning, zoning, licenses, and building permits are considered in
the valuation process. Properties not under active development, such as land parcels held for future development, are valued based
on comparable sales of land. Significant increases (decreases) in construction costs, cost escalation rates, and estimated time to
complete construction in isolation would result in a significantly lower (higher) fair value for properties under development.
(h)
Property, Plant and Equipment
Tangible assets that are held for use in the production or supply of goods and services, or for administrative purposes, and are
expected to be used during more than one period, except when another accounting standard requires or permits a different
accounting treatment, are recorded in accordance with IAS 16 using the cost model. IAS 16, therefore, excludes tangible assets that
are accounted for in accordance with IFRS 5 (see NOTE 2(i)) and IAS 40 (see NOTE 2(f)).
In accordance with IAS 16, the cost model, after initial recognition of the property, plant and equipment, requires the tangible asset to
be carried at its cost less accumulated depreciation and any accumulated impairment losses. Depreciation is recognized in a manner
that reflects the pattern in which the future economic benefits of the tangible asset are expected to be consumed and realized by the
Trust. The amount of depreciation will be charged systematically to the consolidated statement of comprehensive income and is the
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100
cost less residual value of the asset over its useful economic life. IAS 16 also requires that the cost and useful economic life of each
significant component of a tangible asset be determined based on the circumstances of each tangible asset. The method of
depreciation, residual values, and estimates of the useful economic life of a tangible asset, or other property, plant and equipment,
are reviewed at each financial year-end and any changes are accounted for as a change in accounting estimate in accordance with
IAS 8 – Accounting Policies, Changes in Accounting Estimates and Errors.
Property, Plant and Equipment (“PP&E”) is valued using the cost model under IAS 16. PP&E is categorized into the following classes
and their respective useful economic life is used to calculate the amount of depreciation or amortization for each period. Categories
of PP&E with the same or similar useful lives are included in the same class.
PP&E Class
PP&E Category (NOTE 9)
Useful Life / Depreciation Rate
Depreciation Method Used
Administrative building
Administrative building
40 years
Straight-line
Site equipment
Site equipment and other assets
15%
Declining balance
Automobiles
Site equipment and other assets
20%
Declining balance
Warehouse and corporate assets
Site equipment and other assets
10% to 20%
Declining balance
Computer hardware
Corporate technology assets
35%
Declining balance
Computer software (1)
Corporate technology assets
35%
Declining balance
(1) In addition to the purchase of software from external sources, the Trust capitalizes certain programmers’ salaries related to internally developed software applications
used in the normal course of operations of Boardwalk REIT. The programmers’ work is directly attributable to software development.
(i)
Assets Held for Sale
Non-current assets are classified as assets held for sale in accordance with IFRS 5 when the Trust has committed to a plan to sell the
asset, the properties are available for immediate sale in present condition, and the asset is actively marketed for sale at a price that is
reasonable in relation to its estimated fair value. Investment properties transferred to assets held for sale will have carrying amounts
that will be recovered principally through a sale, and continue to be held at fair value, in accordance with IAS 40. The Trust presents
non-current assets held for sale and their related liabilities separately from other assets and liabilities on the consolidated statements
of financial position and in the notes to the consolidated financial statements beginning from the period in which they were first
classified as held for sale.
(j)
Leases
The Trust as a Lessee
The Trust assesses whether a contract is, or contains, a lease at inception of the contract. The Trust recognizes a right-of-use asset
and a corresponding lease liability with respect to all lease arrangements in which it is the lessee, except for short-term leases
(defined as leases with a lease term of 12 months or less) and leases of low value assets. For these leases, the Trust recognizes the
lease payments as an operating expense on a straight-line basis over the term of the lease unless another systematic basis is more
representative of the time pattern in which economic benefits from the leased assets are consumed.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date,
discounted by using the rate implicit in the lease. If this rate cannot be readily determined, the Trust uses its incremental borrowing
rate. The incremental borrowing rate is defined as the rate of interest that the lessee would have to pay to borrow over a similar
term and with a similar security, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar
economic environment.
Lease payments included in the measurement of the lease liability comprise:
• Fixed payments (including in-substance fixed payments), less any lease incentives;
• Variable lease payments that depend on an index or rate, initially measured using the index or rate at the commencement date;
• The amount expected to be payable by the lessee under residual value guarantees;
• The exercise price of purchase options, if the lessee is reasonably certain to exercise the options; and
• Payments of penalties for terminating the lease, if the lease term reflects the exercise of an option to terminate the lease.
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The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the
effective interest method) and by reducing the carrying amount to reflect the lease payments made (see NOTE 2(o)) for definition of
effective interest method).
The Trust remeasures the lease liability (and makes a corresponding adjustment to the related right-of-use asset) whenever:
• The lease term has changed or there is a change in the assessment of exercise of a purchase option, in which case the lease liability
is remeasured by discounting the revised lease payments using a revised discount rate;
• The lease payments change due to changes in an index or rate or a change in expected payment under a guaranteed residual value,
in which cases the lease liability is remeasured by discounting the revised lease payments using the initial discount rate; or
• A lease contract is modified and the lease modification is not accounted for as a separate lease, in which case the lease liability is
remeasured by discounting the revised lease payments using a revised discount rate.
The right-of-use assets comprise the initial measurement of the corresponding lease liability, lease payments made at or before the
commencement day and any initial direct costs. They are subsequently measured either at fair value (in the case of right-of-use assets
which are considered part of investment properties) or at cost less accumulated depreciation and impairment losses (for right-of-use
assets which are considered property, plant and equipment). Right-of-use assets are depreciated over the shorter period of the lease
term and the useful life of the underlying asset. The depreciation starts at the commencement date of the lease. The Trust applied
IAS 36 – Impairment of Assets to determine whether a right-of-use asset is impaired.
Variable rents that do not depend on an index or rate are not included in the measurement of the lease liability and the right-of-use
asset. The related payments are recognized as an expense in the period in which the event or condition that triggers those payments
and are included in operating expenses in the consolidated statement of comprehensive income.
As a practical expedient, IFRS 16 – Leases (“IFRS 16”) permits a lessee not to separate non-lease components, and instead account for
any lease and associated non-lease components as a single arrangement. The Trust has used this practical expedient on those
contracts (warehouse space and office space) which contain both lease and non-lease components.
The Trust as a Lessor
The Trust enters into lease agreements as a lessor with respect to its investment properties. Leases for which the Trust is a lessor are
classified as finance or operating leases. Whenever the terms of the lease transfer substantially all the risks and rewards of ownership
to the lessee, the contract is classified as a finance lease. All other leases are classified as operating leases. As the Trust has retained
substantially all of the risks and benefits of ownership of its investment properties, it accounts for leases with its tenants as operating
leases. As operating leases, lease payments are recognized as revenue when the tenant has a right to use the leased asset. The leased
asset is recognized in the consolidated statements of financial position according to the nature of the underlying asset.
(k)
Taxation
For fiscal 2024 and 2023, Boardwalk REIT qualified as a “mutual fund trust” as defined under the Income Tax Act (Canada) (the “Tax
Act”) and as a Real Estate Investment Trust (“REIT”) eligible for the ‘REIT Exemption’ in accordance with the rules affecting the tax
treatment of publicly traded trusts. Accordingly, the Trust is not taxable on its income provided that all of its taxable income is
distributed to Unitholders. This exemption, however, does not extend to the corporate subsidiaries of Boardwalk REIT that are subject
to income tax. The Trust establishes provisions for taxes when, despite the belief that its tax positions are fully supportable, it is
probable that its positions may be challenged and disallowed by the relevant tax authorities. The consolidated tax expense (recovery)
and related accruals include the impact of such reasonably estimated disallowances as deemed appropriate. To the extent that the
probable tax outcome of these matters changes, such changes in estimates will impact the income tax expense (recovery) in the
period in which such determination is made.
Current Tax
The tax currently payable, if any, is based on taxable profit for the year for certain corporate subsidiaries of the Trust. Taxable profit
differs from profit as reported in the consolidated statements of comprehensive income because of items of income or expense that
are taxable or deductible in other years and items that are never taxable or deductible. The Trust’s liability for current tax is calculated
using tax rates that have been enacted or substantively enacted by the end of the reporting period.
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Deferred Tax
Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the consolidated
financial statements and the corresponding tax bases used in the computation of taxable profit.
Deferred income tax liabilities are generally recognized for all taxable temporary differences. Deferred income tax assets are
recognized for all deductible temporary differences, carry forward of unused tax credits, and unused tax losses, to the extent that it is
probable that deductions, tax credits, and tax losses can be utilized. The carrying amounts of deferred income tax assets are reviewed
at each reporting date and reduced to the extent it is no longer probable that the income tax assets will be recovered. Deferred
income tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realized or the
liability settled, based on tax rates and laws that have been enacted or substantively enacted at the reporting date. In addition,
deferred income tax assets and liabilities are measured using the rate that is consistent with the expected manner of recovery
(i.e. using the asset versus selling the asset). Where applicable, current and deferred income taxes relating to items recognized
directly in equity or comprehensive income are also recognized directly in equity or comprehensive income, respectively.
(l)
Provisions
In accordance with IAS 37 – Provisions, contingent liabilities and contingent assets (“IAS 37”), a provision is a liability of uncertain
timing or amount. Provisions are recognized when the entity has a present legal or constructive obligation as a result of past events
and when it is probable that an outflow of resources will be required to settle the obligation and the amount can be reliably
estimated. Provisions are not recognized for future operating losses. Provisions are measured at the present value of the expenditures
expected to be required to settle the obligation using a discounted rate that reflects current market assessment of the time value of
money and the risks and uncertainties specific to the obligation. Provisions are remeasured at each reporting date using the current
discount rate. The increase in the provision due to the passage of time is recognized as a financing cost.
(m)
Unit-based Payments
Deferred unit-based payments to employees and Board of Trustees are measured at the fair value of the deferred unit at the grant
date and expensed over the vesting period based on the Trust’s estimate of the deferred units that will actually vest, unless earlier
recognition is triggered in certain events. At the end of each reporting period, the Trust revises its estimate of the number of equity
instruments expected to vest. The impact of the revision of the original estimates, if any, is recognized in profit or loss prospectively
such that the cumulative expense reflects the revised estimate. In accordance with IFRS 2 – Share-based payments (“IFRS 2”), the
deferred units are presented as a liability on the Consolidated Statements of Financial Position as the Trust is obliged to provide the
holder with Trust Units once the deferred units vest. Under IFRS 2, the deferred units are measured at each reporting period at fair
value with changes in fair value recognized in the consolidated statements of comprehensive income. Fair value of the deferred units
is calculated based on the observable market price of Boardwalk REIT’s Trust Units.
(n)
Revenue Recognition
(i) Rental Revenue
The Trust has retained substantially all of the risks and benefits of ownership of its investment properties, and, therefore,
accounts for leases with its tenants as operating leases. Revenue recognition under a lease commences when the tenant has
a right to use the leased asset. Generally, this occurs on lease inception date when the tenant occupies their leased space.
Rental revenue is recognized systematically over the term of the lease, which is generally not more than 12 months. Any
suite specific incentives offered or initial direct costs incurred in negotiating and arranging an operating lease are also
amortized over the term of the operating lease. Rental revenue is recorded based on the amount received or to be received
in accordance with the operating lease.
Lease revenue earned directly from leasing the asset is recognized and measured in accordance with IFRS 16. In addition to
revenue generated directly from the operating lease, rental revenue includes non-lease revenue earned from the tenant,
which is recognized and measured under IFRS 15 – Revenue from Contracts with Customers (“IFRS 15”). Non-lease revenue
includes parking revenue, other service revenue and fees, and recovery of certain operating costs, including retirement
services and cable (internet and television). These revenues are recognized when earned.
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IFRS 15 requires revenue recognized from customer contracts (non-lease components) to be disclosed separately from its other
sources of revenue (NOTE 18 and NOTE 28).
(ii) Building Sales
The gain or loss from the sale of an investment property is recognized when title passes to the purchaser (control is
transferred) upon closing at which time all or substantially all of the funds are receivable, or have been received, and the
conditions of the sale have been completed.
(iii) Interest Income
Interest income from a financial asset is recognized when it is probable that the economic benefits will flow to the Trust and
the amount of income can be measured reliably. Interest income is accrued on a time basis when earned, by reference to the
principal outstanding and at the effective interest rate applicable.
(o)
Financial Instruments and Derivatives
Financial instruments and derivatives are accounted for, presented, and disclosed in accordance with IFRS 7 – Financial Instruments:
Disclosures (“IFRS 7”), IFRS 9 – Financial Instruments (“IFRS 9”) and IAS 32 – Financial Instruments: Presentation (“IAS 32”). Financial
assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or
issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss)
are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition.
Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are
recognized immediately in profit or loss.
Financial Assets
Financial assets are classified and measured on the basis of the Trust’s business model for managing the financial assets and the
contractual cash flow characteristics of the financial assets. As such, after initial recognition, financial assets are classified and
measured based on three categories: (i) amortized cost, (ii) fair value through other comprehensive income (FVTOCI), or (iii) fair value
through profit and loss (FVTPL). The classification depends on the nature and purpose of the financial asset and is determined at the
time of initial recognition. Financial assets are classified as at FVTPL when the financial asset either is held for trading or is designated
as at FVTPL. Financial assets categories are defined and measured as follows:
Classification
Definition
Measurement
Amortized cost
Debt instrument is held within a business model whose objective is to
hold financial assets in order to collect contractual cash flows and the
contractual terms of the financial asset give rise on specified dates to
cash flows that are solely payments of principal and interest on the
principal amount outstanding.
Measured at amortized cost using
the effective interest rate method
less any expected credit loss. (1) (2)
FVTOCI
Debt instrument is held within a business model whose objective is
achieved by both collecting contractual cash flows and selling the
financial assets; and the contractual terms of the financial asset
give rise on specified dates to cash flows that are solely payments of
principal and interest on the principal amount outstanding.
Stated at fair value, with
gains or losses arising on
measurement recognized in
other comprehensive income.
FVTPL
Financial assets that do not meet the criteria for being measured
at amortized cost or FVTOCI are measured at FVTPL. Specifically,
investments in equity instruments or debt instruments which do not
meet the amortized cost or FVTOCI definitions.
Measured at fair value, with
gains or losses recognized in
profit or loss.
(1) The effective interest method is a method of calculating the amortized cost of a debt instrument and of allocating interest income over the relevant period. The effective
interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the debt instrument or where appropriate, a shorter period, to the
net carrying amount on initial recognition.
(2) Financial assets, other than those at FVTPL, are required to use an expected credit loss impairment model. The expected credit loss model requires the Trust to account for
expected credit losses and changes in those expected credit losses at each reporting date to reflect changes in the credit risk since initial recognition of the financial asset.
It results in an allowance for estimated credit losses being recorded on financial assets regardless of whether there has been an actual loss event.
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Boardwalk REIT’s financial assets are as follows:
Financial Asset
Classification and Measurement
Loan receivable
FVTPL
Trade and other receivables
Amortized cost
Segregated tenants’ security deposits
Amortized cost
Cash and cash equivalents
Amortized cost
The Trust derecognizes a financial asset only when the contractual rights to the cash flows from the asset expire, or when it transfers
the financial asset and substantially all the risks and rewards of ownership of the asset to another entity.
Financial Liabilities and Equity
Debt and equity instruments issued are classified either as financial liabilities or as equity in accordance with the substance of the
contractual arrangements and the definitions of a financial liability and an equity instrument. An equity instrument is any contract
that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Trust
are recognized at the proceeds received, net of direct issue costs. Repurchase of Boardwalk REIT’s own equity instruments is
recognized and deducted directly in equity. No gain or loss is recognized in profit or loss on the purchase, sale, issue, or cancellation
of the Trust’s own equity instruments. Distributions paid on the Trust’s equity instruments subsequent to, declared prior to, and with
a record date at or prior to, the reporting date, are recorded as a liability.
Financial liabilities are classified and measured as either amortized cost or FVTPL. Financial liabilities categories are defined and
measured as follows:
Classification
Definition
Measurement
FVTPL
Classified as FVTPL when the financial liability is either held for
trading or it is designated as at FVTPL as discussed below:
Classified as held for trading if: it has been acquired principally for the
purpose of repurchasing it in the near term; or, on initial recognition,
it is part of a portfolio of identified financial instruments that the
Trust manages together and has a recent actual pattern of short-term
profit taking; or, it is a derivative that is not designated and effective
as a hedging instrument.
Stated at fair value, with gains or
losses arising on measurement
recognized in profit or loss.
Classified as FVTPL upon initial recognition if: such designation
eliminates or significantly reduces a measurement or recognition
inconsistency that would otherwise arise; or the financial liability
forms part of a group which is managed and its performance
is evaluated on a fair value basis; or it forms part of a contract
containing one or more embedded derivatives.
Stated at fair value, with gains or
losses arising on measurement
recognized in profit or loss.
Amortized cost
All other liabilities.
Measured at amortized cost using
the effective interest method. (1)
(1) The effective interest method is a method of calculating the amortized cost of a financial liability and of allocating interest expense over the relevant period. The effective
interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the financial liability or where appropriate, a shorter period, to
the net carrying amount on initial recognition.
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Boardwalk REIT’s financial liabilities are as follows:
Financial Liability
Classification and Measurement
Mortgages payable
Amortized cost
LP Class B Units
FVTPL
Construction loan payable
Amortized cost
Refundable tenants’ security deposits
Amortized cost
Trade and other payables
Amortized cost
The Trust derecognizes a financial liability when, and only when, the Trust’s obligations are discharged, cancelled or they expire. The
difference between the carrying amount of the financial liability derecognized and the consideration paid and payable is recognized
in profit or loss.
Derivatives
The Trust may enter into a variety of derivative financial instruments to manage its exposure to interest rate risks, including interest
rate swaps and bond forward contracts. Derivatives are initially recognized at fair value at the date the derivative contracts are
entered into and are subsequently measured at their fair value at the end of each reporting period. The resulting gain or loss is
recognized in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which case the
timing of the recognition in profit or loss depends on the nature of the hedge relationship. Derivatives embedded in host contracts are
treated as separate derivatives when their risks and characteristics are not closely related to the host contracts and the host
contracts are not measured at FVTPL. For the years ended December 31, 2024 and 2023, the Trust had no embedded derivatives
requiring separate recognition.
(p)
Cash and Cash Equivalents
Cash is comprised of bank balances, interest-earning bank accounts, and term deposits with maturities of 90 days or less.
(q)
Critical Judgement in Applying Accounting Policies
The following are the critical judgements, apart from those involving estimations (see NOTE 2(r) below), that have been made in
applying the Trust’s accounting policies and that have the most significant effect on the reported amounts in the consolidated
financial statements:
(i) Investment Property and Internal Capital Program
The Trust’s accounting policy relating to investment property is described in NOTE 2(f) above. In applying this policy,
judgement is applied in determining the appropriate classes of investment properties in order to measure fair value. The
Trust also undertakes internal capital improvements and upgrades. Such work is specifically identified, and the Trust
applies judgement in the estimated amount of directly attributable on-site wages to be allocated to capital improvements
and upgrades of its real estate assets.
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(ii) Interest in Joint Operations, Associates, and Joint Ventures
When determining the appropriate basis of accounting for the Trust’s investees, the Trust makes judgement about the
degree of influence that Boardwalk REIT exerts directly or through an arrangement over the investee’s relevant activities.
This may include the ability to elect investee directors, appoint management, or influence key decisions. Judgement is also
required in determining whether or not an arrangement is a joint operation or joint venture.
(iii) Taxation Provisions
The Trust’s accounting policy relating to provisions is described in NOTE 2(l) above. In applying this policy, judgement is
applied in determining if the Trust has a present legal or constructive obligation as a result of past events and if it is probable
that an outflow of resources will be required to settle the obligation and if the amount can be reliably estimated. As outlined
in NOTE 21, no provision has been recorded for the Trust's dispute with the CRA for uncertain tax items based on the
interpretation of tax legislation. Due to the uncertainty associated with such tax items, there is a possibility that, on conclusion
of open matters at a future date, the final outcome may differ significantly from the Trust’s judgements or estimates.
(r)
Material Accounting Estimates and Assumptions
Below are the key assumptions concerning the future, and other key sources of estimation uncertainty at the end of the reporting
period, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next
financial year. Actual results could differ from estimates.
(i) Investment Properties
The choice of valuation method for fair valuing and the critical estimates and assumptions underlying the fair value
determination of investment properties are set out in NOTE 4. Significant estimates used in determining the fair value of the
Trust’s investment properties includes capitalization rates and net operating income (which is influenced by market rents,
vacancy rates, and standard costs) used in the overall capitalization rate valuation method as well as discount rates and
forecasted cash flows used in the discounted cash flow valuation method. A change to any one of these inputs could
materially alter the fair value of an investment property. Please refer to NOTE 4 for sensitivity analysis.
(ii) Internal Capital Program
The Trust’s internal capital program is based on internal allocations, including parts, supplies, and on-site wages identified
as part of a specific upgrade or capital improvement. Elements included under the internal capital program are capitalized
to investment properties.
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NOTE 3: APPLICATION OF NEW AND REVISED IFRS ACCOUNTING
STANDARDS AND FUTURE ACCOUNTING POLICIES
(a)
Application of New and Revised IFRS Accounting Standards
In the current year, the Trust has applied a number of revised IFRS Accounting Standards and incorporated in the Chartered
Professional Accountants of Canada Handbook. The following highlights these changes and the effect, if any, on the Trust’s
consolidated financial statements.
New or Amended Standards
Summary of Requirements
Impact on Consolidated Financial
Statements
IAS 1 – Presentation of Financial
Statements (“IAS 1”)
The amendment deals with the presentation of liabilities,
not the amount or timing of recognition, or disclosure.
Specifically, the amendment clarifies the classification of
liabilities as current or non-current should be based on
rights that are in existence at the end of the reporting period
and that classification is unaffected by expectations about
whether an entity will exercise its right to defer settlement of
a liability.
In addition, a second amendment deals with non-current
liabilities with covenants. Specifically, the amendment
clarifies how conditions with which an entity must comply
within 12 months after the reporting period affect the
classification of a liability.
This amendment was applied
retrospectively effective January 1, 2024.
The Trust has evaluated the impact of
this amendment and has appropriately
reclassified the LP Class B Units from non-
current liabilities to current liabilities due
to the fact that the LP Class B Units are
convertible at any time at the option of
the holder. In addition, the deferred unit-
based compensation is now presented
entirely as a current liability due to
the fact that the deferred unit-based
compensation outstanding has either:
(i) vested, or
(ii) will vest automatically in the event
of termination of employment of the
participant and which the entity does not
have the right to defer payment for more
than 12 months.
The second amendment was applied
retrospectively effective January, 1, 2024
and there was no material impact on the
consolidated financial statements.
IAS 7 – Statement of Cash Flows
and IFRS 7
The amendments deal with the disclosure requirements to
enhance the transparency of supplier finance arrangements
and their effects on a company’s liabilities, cash flows and
exposure to liquidity risk.
This amendment was applied
prospectively on January 1, 2024 and
there was no impact on the consolidated
financial statements.
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(b)
Future Accounting Policies
The following accounting standards under IFRS Accounting Standards have been issued or revised; however, they are not yet effective,
and, as such, have not been applied to these consolidated financial statements:
New or Amended Standards
Summary of Requirements
Possible Impact on Consolidated
Financial Statements
Amendments to IFRS 9 and IFRS 7 –
Classification and Measurement of
Financial Instruments
Multiple amendments were made to these IFRS Accounting
Standards. The amendments deal with the derecognition of
a financial liability at the settlement date and when settled
through electronic transfer. It also provides additional
guidance regarding the classification of financial assets, as
well as additional disclosure requirements for financial
instruments with contingent features and equity instruments
classified at FVTOCI.
The effective date of the amendments is for annual reporting
periods beginning or after January 1, 2026, however, earlier
application is permitted.
The Trust is assessing the potential
impact but does not expect any
material impact on the consolidated
financial statements.
IFRS 18 – Presentation and
Disclosures in Financial Statements
The new standard replaces IAS 1 regarding requirements for
the presentation and disclosure of information in the general
purpose financial statements to help ensure they provide
relevant information that faithfully represents an entity’s
assets, liabilities, equity income and expenses. Specifically, it
introduces requirements to classify income and expenses into
categories and to include specified subtotals in the Statement
of Profit or Loss, along with other enhanced guidance on the
aggregation of information and mandatory disclosures about
management-defined performance measures.
The effective date of the amendments is for annual reporting
periods beginning on or after January 1, 2027, and are to be
applied retrospectively with earlier application permitted.
The Trust is currently evaluating
the impact of the new standard.
In addition, the Trust expects to
include increased disclosures on
management-defined performance
measures in the financial statements.
Amendments to IFRS 10 and
IAS 28 – Sale or Contribution of
Assets between an Investor and
its Associate or Joint Venture
The amendments deal with situations where there is a sale or
contribution of assets between an investor and its associate
or joint venture. Specifically, the amendments state that gains
or losses resulting from the loss of control of a subsidiary that
does not contain a business in a transaction with an associate
or a joint venture that is accounted for using the equity
method, are recognized in the parent’s profit or loss only to
the extent of the unrelated investor’s interest in that associate
or joint venture. The effective date of the amendments has yet
to be set, however, earlier application
is permitted.
The Trust is assessing the potential
impact but does not expect any
material impact on the consolidated
financial statements.
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In addition to those referenced, the following amendments are not expected to have any impact on the Trust’s consolidated
financial statements:
• IFRS 19 – Subsidiaries without Public Accountability
• IAS 21 – The Effects of Changes in Foreign Exchange Rates
NOTE 4: INVESTMENT PROPERTIES
Year Ended
Dec. 31, 2024
Year Ended
Dec. 31, 2023
Balance, beginning of year
$
7,702,214
$
6,900,745
Additions
Building acquisitions
108,956
60,290
Building improvements (incl. internal capital program)
124,395
119,012
Development of investment properties (1)
53,719
23,325
Fair value gains, net (unrealized)
328,660
598,842
Transferred to assets held for sale (NOTE 5)
(79,920)
-
Balance, end of year
$
8,238,024
$
7,702,214
As at
Dec. 31, 2024
Dec. 31, 2023
Fair value of investment properties, before buildings valued at Level 2 inputs,
right-of-use assets, and developments
$
7,932,173
$
7,557,359
Buildings valued at Level 2 inputs
108,956
-
Fair value, right-of-use assets (IFRS 16 – Leases)
71,181
72,860
Revenue producing properties
8,112,310
7,630,219
Properties under development
125,714
71,995
Total
$
8,238,024
$
7,702,214
(1) On June 13, 2024, the Trust purchased a parcel of land in Calgary, Alberta for a purchase price of $12.0 million. The acquisition was funded with cash on hand for planned
development of new rental suites.
On November 18, 2024, the Trust acquired two adjacent properties in Calgary, Alberta. The properties, totaling 12 suites, were
purchased using cash on hand for $3.1 million.
On June 24, 2024, the Trust acquired a property in Chestermere, Alberta and a property in Calgary, Alberta. The Chestermere property
is comprised of 63 townhome suites and was purchased for $26.3 million. The Calgary property is comprised of six suites and was
purchased for $1.9 million. Both properties were purchased using cash on hand.
On January 24, 2024, the Trust acquired a property in Calgary, Alberta. The property is comprised of 295 suites and was purchased
using cash on hand for $77.6 million.
On April 25, 2023, the Trust acquired a property in Victoria, British Columbia. The property is comprised of 124 suites and was
purchased for $60.3 million. The acquisition was funded with mortgage financing of $46.5 million and cash on hand of $13.8 million.
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110
Building Acquisitions
Year Ended
Dec. 31, 2024
Year Ended
Dec. 31, 2023
Purchase price
$
108,988
$
60,000
Transaction costs
427
290
Deficiency credit
(459)
-
Total
$
108,956
$
60,290
Multi-family suites acquired
376
124
Purchase price
$
108,988
$
60,000
Transaction costs
427
290
Deficiency credit
(459)
-
Proceeds from mortgage financing
-
(46,508)
Net cash paid
$
108,956
$
13,782
Subsequent to initial recognition at cost, investment properties are recorded at fair value in accordance with IAS 40. Fair value is
determined based on a combination of internal and external processes and valuation techniques. Fair value under IFRS Accounting
Standards is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between
market participants at the measurement date. Investment properties are valued on a highest and best use basis. For all of the Trust’s
investment properties, the current use is considered to be the highest and best use. For the year ended December 31, 2024, there has
been no change to the valuation techniques.
In determining the appropriate classes of investment properties in order to determine the fair value measurement, the Trust has
considered the nature, characteristics, and risk of its properties. The classification of investment properties is based primarily on the
geographical location of the asset, with the exception of properties situated on land leases. Below is a continuity schedule based on
investment property classes:
Year Ended December 31, 2024
Balance,
Beginning
of Year
Building
Acquisitions
Improvements
to Investment
Properties
Development
of Investment
Properties
Transferred
to Assets
Held for Sale
(NOTE 5)
Fair Value
Gains
(Losses)
Balance,
End of Year
Recurring measurements
Investment properties
Alberta
$ 4,827,914
$ 108,956
$
72,302
$
12,160
$
(79,920)
$ 245,462
$ 5,186,874
British Columbia
198,497
-
442
41,554
-
1,525
242,018
Saskatchewan
693,353
-
19,192
5
-
57,694
770,244
Ontario
723,770
-
11,584
-
-
(14,680)
720,674
Quebec
383,810
-
8,700
-
-
35,026
427,536
Land leases
874,870
-
12,175
-
-
3,633
890,678
Total
$ 7,702,214
$ 108,956
$
124,395
$
53,719
$
(79,920)
$ 328,660
$ 8,238,024
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Year Ended December 31, 2023
Balance,
Beginning
of Year
Building
Acquisitions
Improvements
to Investment
Properties
Development
of Investment
Properties
Fair Value
Gains
(Losses)
Balance,
End of Year
Recurring measurements
Investment properties
Alberta
$ 4,217,249
$
-
$
73,964
$
23
$
536,678
$ 4,827,914
British Columbia
102,685
60,290
213
22,887
12,422
198,497
Saskatchewan
618,172
-
14,944
5
60,232
693,353
Ontario
742,267
-
9,606
410
(28,513)
723,770
Quebec
373,367
-
5,320
-
5,123
383,810
Land leases
847,005
-
14,965
-
12,900
874,870
Total
$ 6,900,745
$
60,290
$
119,012
$
23,325
$
598,842
$ 7,702,214
Investment properties measured at fair value in the consolidated statements of financial position are categorized by level according
to the significance of the inputs used in making the measurements. The levels of inputs are defined as follows:
Level 1 inputs: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the
measurement date.
Level 2 inputs: Inputs other than quoted prices included within Level 1 that are observable for the asset or the liability, either directly
or indirectly.
Level 3 inputs: Unobservable inputs for the asset or liability.
The Trust’s policy is to recognize transfers out of fair value hierarchy levels as of the date of the event or change in circumstances that
caused the transfer. As at December 31, 2024, all of the Trust’s investment properties were Level 3 inputs, except the buildings
acquired in 2024 and assets held for sale (NOTE 5) which were valued at Level 2 inputs as they are valued based on unconditional
purchase and sale agreements between two willing market participants. For investment properties measured at fair value as at
December 31, 2024, and December 31, 2023, transfers into and out of Level 3 fair value measurements include the following:
(i) There were three investment properties transferred during the year ended December 31, 2024, from Level 3 into Level 2 fair
value measurements and are included in assets held for sale. The fair value of these three investment properties as at
December 31, 2024, using Level 2 inputs totalled $79.9 million (December 31, 2023 – $76.4 million valued using Level 3 inputs).
(ii) There were three investment properties transferred during the year ended December 31, 2023, from Level 2 into Level 3 fair
value measurements. The fair value of these three investment properties as at December 31, 2023, using Level 3 inputs
totalled $189.9 million (December 31, 2022 – $159.7 million valued using Level 2 inputs).
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External valuations were obtained from third-party external valuation professionals (the “Appraisers”) based on a cross section of
properties from different geographical locations and markets across the Trust’s rental portfolio as determined by the Trust’s
management and approved by the Trust’s Board of Trustees. The Appraisers are an independent valuation firm not related to the
Trust and employ valuation professionals who are members of the Appraisal Institute of Canada and the Ordre des Evaluateurs Agrees
du Quebec who have appropriate qualifications and recent experience in the valuation of properties in the relevant locations.
External appraisals were obtained as follows:
Date
Number
of Properties
Aggregate
Fair Value
Percentage of Portfolio
as of that Date
December 31, 2024
6
$
866,671
10.4%
September 30, 2024
5
$
203,269
2.4%
June 30, 2024
5
$
254,010
3.1%
March 31, 2024
4
$
180,971
2.2%
December 31, 2023
6
$
874,525
11.4%
September 30, 2023
6
$
196,708
2.6%
June 30, 2023
4
$
210,300
2.8%
March 31, 2023
4
$
100,235
1.4%
The fair value of the remainder of the Trust’s investment property portfolio was determined internally by the Trust using the same
assumptions and valuation techniques used by the Appraisers. In addition to performing a valuation on a selection of the Trust’s
properties (and not performing a valuation on all of the Trust’s properties) to corroborate the Trust’s internal valuation, the
Appraisers provided the Trust with a summary of the major assumptions and market data by city in order for the Trust to complete its
internal valuations. This summary includes the Appraisers’ estimates of Capitalization Rates (“Cap Rate”) for each region (city) as well
as confirmation of the reasonableness of the assumptions used in determining stabilized net operating income (“NOI”) used in
calculating fair values.
The third-party valuation technique of the Trust’s investment property portfolio primarily utilizes the “Overall Capitalization Rate”
method. This method requires that a forecasted stabilized NOI for each individual property be divided by a Cap Rate to determine a
property’s fair value. NOI is calculated as a one-year income forecast based on rental income from current leases and key assumptions
about rental income, vacancies and inflation rates, among other factors, less property operating costs. Fair value also considers any
forecasted capital expenditures within the year to maintain the property in good condition. Given the short-term nature of residential
leases (typically one year), revenue and costs are not discounted. A Cap Rate was also determined for each property based on market
information related to the external sale of similar buildings within a similar geographic location. These factors were used to determine
the fair value of investment properties at each reporting date.
Four of the Trust’s properties: two in Banff, Alberta, and two in Montreal, Quebec, are subject to long-term land leases and similar
arrangements in which the underlying land is owned by a third party and leased to the Trust. Under the terms of a typical land lease,
the lessee must pay rent for the use of the land and is generally responsible for all costs and expenses associated with the building
and improvements, including taxes, utilities, insurance, maintenance, repairs and replacements in respect of all the leased premises.
Unless the lease term is extended, the land together with all improvements made will revert to the owner of the land upon the
expiration of the lease term. Due to the relatively short-term remaining on one of the land leases in Montreal (with an expiry date of
2029), this property utilized the Discounted Cash Flow (“DCF”) approach to derive the fair value. The DCF Method calculates the
present value of the future cash flows over a specified time period to determine the fair value for each property at each reporting
date. The most significant assumption using the DCF method is the discount rate applied over the term of the lease. The discount rate
reflects the uncertainty regarding the renegotiation of the land lease payments and the ability to extend the land lease at the expiry
date. Forecasted cash flows are reduced for contractual land lease payments during the term of the leases. For the other land lease in
Montreal, which has an expiry date of 2064, a DCF approach was prepared to substantiate the income approach that was used to
derive fair value, with no significant differences between the two methods.
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The key valuation metrics (and significant unobservable inputs in Level 3) for the Trust’s investment properties are set out in the
following table:
As at
Dec. 31, 2024
Dec. 31, 2023
Capitalization Rate
Weighted Average
Forecasted Total
Stabilized Net
Operating Income
Capitalization Rate
Weighted Average
Forecasted Total
Stabilized Net
Operating Income
Alberta
5.14%
$
261,691
5.13%
$
247,297
British Columbia
4.38%
5,703
4.30%
5,518
Saskatchewan
5.68%
43,757
5.67%
39,326
Ontario
4.52%
32,604
4.27%
30,922
Quebec
4.95%
21,172
4.94%
18,944
5.11%
364,927
5.06%
342,007
Land Leases
5.22%
41,160
4.96%
39,807
Total
5.12%
$
406,087
5.05%
$
381,814
The overall weighted average stabilized Cap Rates for measuring the Trust’s investment properties at fair value using a forecasted
stabilized NOI as at December 31, 2024 and 2023, was 5.12% and 5.05%, respectively.
The Overall Capitalization Rate method requires inputs of both stabilized NOI and Cap Rate to determine a fair value. As such,
fluctuations in both NOI and Cap Rates could materially alter the fair value. Generally, an increase in stabilized NOI will result in an
increase to the fair value of an investment property. An increase in Cap Rate will result in a decrease to the fair value of an investment
property. When the Cap Rate is applied to NOI to calculate fair value, there is a significant impact as the lower the Cap Rate, the larger
the impact. The following tables summarize the impact of changes in both the Cap Rates and forecasted stabilized NOI on the Trust’s
fair value of investment properties (excluding building acquisitions valued at Level 2 inputs, right-of-use assets, and developments):
As at December 31, 2024
Stabilized Net Operating Income
-3%
-1%
As Forecasted
+1%
+3%
Cap Rate
$
393,904
$
402,026
$
406,087
$
410,148
$
418,270
-0.25%
4.87%
$
157,056
$
323,844
$
407,238
$
490,632
$
657,421
Cap Rate As Reported
5.12%
(237,965)
(79,322)
7,932,173
79,322
237,965
+0.25%
5.37%
(596,202)
(444,945)
(369,317)
(293,688)
(142,431)
As at December 31, 2023
Stabilized Net Operating Income
-3%
-1%
As Forecasted
+1%
+3%
Cap Rate
$
370,360
$
377,996
$
381,814
$
385,632
$
393,268
-0.25%
4.80%
$
154,907
$
313,923
$
393,431
$
472,939
$
631,955
Cap Rate As Reported
5.05%
(226,721)
(75,574)
7,557,359
75,574
226,721
+0.25%
5.30%
(572,361)
(428,341)
(356,330)
(284,320)
(140,299)
Investment properties with a fair value of $788.5 million as at December 31, 2024 (December 31, 2023 – $802.0 million) are situated on
land held under land leases.
Investment properties with a fair value of $1.1 billion as at December 31, 2024 (December 31, 2023 – $1.0 billion) are pledged as
security against the Trust’s credit facility, which includes a committed revolving credit facility and demand revolving credit facility
(collectively, the “Credit Facility”). In addition, investment properties with a fair value of $7.9 billion as at December 31, 2024
(December 31, 2023 – $7.4 billion) are pledged as security against the Trust’s mortgages payable. As at December 31, 2024, there are
no contractual obligations to purchase, construct, or develop investment properties, or for repairs, maintenance, and enhancements,
except for the fixed-price contract in place related to the construction of the new development project in Victoria, British Columbia.
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114
For the years ended December 31, 2024 and 2023, investment properties earned rental revenue (including ancillary rental income) of
$603.3 million and $545.7 million, respectively. Total rental expenses in relation to investment properties were $221.0 million and
$212.7 million for the years ended December 31, 2024 and 2023, respectively.
NOTE 5: ASSETS HELD FOR SALE
As at December 31, 2024, the Trust classified three properties as assets held for sale, totalling $80.0 million, along with the liabilities
related to assets held for sale totalling $21.8 million. The Trust had committed to a plan to sell these properties, and the sales were
considered highly probable as at December 31, 2024. All three properties were disposed of on January 21, 2025, please refer to
NOTE 29 for additional details.
The following table summarizes the assets held for sale and liabilities related to assets held for sale:
As at
Note
Dec. 31, 2024
Investment properties
4
$
79,920
Property, plant and equipment
9
80
Assets held for sale
$
80,000
Mortgages payable
$
21,645
Refundable tenants’ security deposits
172
Liabilities related to assets held for sale
$
21,817
NOTE 6: EQUITY ACCOUNTED INVESTMENT
The Trust is a participant in a joint venture with the principal activity to develop and operate a mixed-use property in Brampton,
Ontario. The mixed-use property includes residential space over two concrete high-rise towers. As at December 31, 2024, one tower is
fully leased-up and the other tower, having completed development in November 2023, 88.5% leased up.
The following table shows the changes in the carrying value of the investment in the partnership:
Year Ended
Dec. 31, 2024
Year Ended
Dec. 31, 2023
Balance, beginning of year
$
39,758
$
40,871
Share of income (loss)
13,226
(1,113)
Balance, end of year
$
52,984
$
39,758
The following tables present the Trust’s share of the summarized financial information of the partnership:
As at
Dec. 31, 2024
Dec. 31, 2023
Non-current assets
$
224,857
$
194,521
Current assets
2,112
970
Non-current liabilities
(116,340)
(112,655)
Current liabilities
(4,661)
(3,321)
Net assets
$
105,968
$
79,515
Trust’s share
$
52,984
$
39,758
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BOARDWALK REIT | 2024 ANNUAL REPORT
115
Year Ended
Dec. 31, 2024
Year Ended
Dec. 31, 2023
Revenue
$
9,852
$
4,519
Expenses
11,058
6,745
Net operating loss
(1,206)
(2,226)
Fair value gain
27,660
-
Income (loss)
$
26,454
$
(2,226)
Trust’s share
$
13,226
$
(1,113)
During 2021, the Trust, in conjunction with its joint venture partner, entered into a $122 million revolving construction facility loan
with a third-party financial institution. The facility is interest payable only and has a maturity date of June 30, 2025 (NOTE 29). On
May 24, 2024, the facility was amended to replace Bankers’ Acceptance fee with the Canadian Overnight Repo Rate Average (“CORRA”).
The loan bears interest at prime plus 0.25%, or Daily Compounded CORRA Loans with advances bearing an interest rate of Daily
Compounded CORRA plus 1.525% per annum, or Term CORRA Loans with advances bearing an interest rate of 1 Month Term CORRA
plus 1.525% per annum or 3 Month Term CORRA plus 1.551% per annum.
On January 12, 2024, the Trust made a loan to the joint venture for $57.2 million, of which the proceeds were used by the joint venture
to repay 50% of the revolving construction facility loan payable. The loan receivable is recorded on the consolidated statements of
financial position and details of the loan receivable can be found in NOTE 8.
As at December 31, 2024, $58.2 million has been drawn on the revolving construction facility loan (December 31, 2023 – $112.6 million), of
which Boardwalk’s portion is $29.1 million (December 31, 2023 – $56.3 million).
The revolving construction facility loan contains three financial covenants. These covenants are consistent with those found in the
Credit Facility outlined in NOTE 24(d). As at December 31, 2024, the Trust was in compliance with these covenants.
NOTE 7: OTHER ASSETS
As at
Note
Dec. 31, 2024
Dec. 31, 2023
Other non-current assets
Property, plant and equipment
9
$
33,579
$
30,585
Deferred tax assets
16
712
782
$
34,291
$
31,367
As at
Dec. 31, 2024
Dec. 31, 2023
Other current assets
Inventories
$
5,995
$
6,875
Prepaid expenses and other
13,065
15,697
Trade and other receivables
9,387
4,940
Segregated tenants’ security deposits
12,166
9,821
$
40,613
$
37,333
Prepaid Expenses and Other
The major components of prepaid expenses and other relate to property taxes, land leases, prepaid expenses, and deposits.
Trade and Other Receivables
Trade and other receivables consist mainly of mortgage holdbacks, refundable mortgage fees, and amounts owed to Boardwalk REIT
by tenants, insurers, and revenue-sharing business partners. Refer to NOTE 24(b) for the Trust’s exposure to credit risk in relation to
its trade and other receivables and how the Trust accounts for past due balances.
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116
Segregated Tenants’ Security Deposits
Segregated tenants’ security deposits are considered restricted cash as they are held in trust bank accounts and subject to the
contingent rights of third parties.
NOTE 8: LOAN RECEIVABLE
With respect to its equity accounted investment, on January 12, 2024, the Trust made a loan to the joint venture for $57.2 million.
The loan receivable is a financial asset classified as fair value through profit and loss and is measured at fair value, with gains or losses
recognized in profit or loss.
The proceeds were used by the joint venture to repay 50% of the revolving construction facility loan payable. The loan receivable has
the same terms as the revolving construction facility loan, which is interest payable only and has a maturity date of June 30, 2025
(NOTE 29). Please refer to the terms of the construction facility loan in NOTE 6 for further details.
NOTE 9: PROPERTY, PLANT AND EQUIPMENT
The carrying amounts of PP&E were as follows:
As at
Dec. 31, 2024
Dec. 31, 2023
Cost
Accumulated
Depreciation
Transferred to
Assets Held for
Sale (NOTE 5)
Carrying
Amount
Cost
Accumulated
Depreciation
Carrying
Amount
Administration building
$
7,668
$
(4,923)
$
-
$
2,745 $
7,163
$
(4,694)
$
2,469
Site equipment and other
67,771
(46,770)
(80)
20,921
69,564
(50,108)
19,456
Corporate technology assets
35,513
(25,601)
-
9,913
32,229
(23,569)
8,660
Total
$ 110,952
$
(77,294)
$
(80)
$
33,579 $ 108,956
$
(78,371)
$
30,585
The following table outlines a reconciliation of the carrying amount of PP&E as at December 31, 2024:
Balance,
Beginning of Year
Additions
to PP&E
Transferred to
Assets Held
for Sale
Depreciation
Balance
End of Year
Administration building
$
2,469
$
505
$
-
$
(229)
$
2,745
Site equipment and other
19,456
5,688
(80)
(4,143)
20,921
Corporate technology assets (1)
8,660
5,199
-
(3,946)
9,913
Total
$
30,585
$
11,392
$
(80)
$
(8,318)
$
33,579
(1) Included in corporate technology assets for the year ended December 31, 2024, was $1.6 million of capitalized programmers’ salaries related to the internally developed
software applications used by the Trust in the normal course of its operations.
The following table outlines a reconciliation of the carrying amount of PP&E as at December 31, 2023:
Balance,
Beginning of Year
Additions
to PP&E
Depreciation
Balance
End of Year
Administration building
$
2,510
$
172
$
(213)
$
2,469
Site equipment and other
20,761
2,846
(4,151)
19,456
Corporate technology assets (1)
8,081
4,136
(3,557)
8,660
Total
$
31,352
$
7,154
$
(7,921)
$
30,585
(1) Included in corporate technology assets for the year ended December 31, 2023, was $1.4 million of capitalized programmers’ salaries related to the internally developed
software applications used by the Trust in the normal course of its operations.
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NOTE 10: CASH AND CASH EQUIVALENTS
Cash and cash equivalents include cash of $52.2 million and term deposits with maturities of 90 days or less of $70.2 million
(December 31, 2023 – cash of $100.8 million and term deposits of $230.4 million).
NOTE 11: MORTGAGES PAYABLE
As at
Dec. 31, 2024 (1)
Dec. 31, 2023
Weighted
Average Interest
Debt Balance
Weighted
Average Interest
Debt Balance
Mortgages payable
Fixed rate
3.19%
$
3,286,081
3.00%
$
3,318,417
Total
$
3,286,081
$
3,318,417
Current
$
624,736
$
500,372
Non-current
2,661,345
2,818,045
$
3,286,081
$
3,318,417
(1) Excludes mortgages related to assets held for sale.
Estimated future principal payments required to meet mortgage obligations as at December 31, 2024, excluding mortgages related to
assets held for sale, are as follows:
Secured By
Investment Properties
12 months ending December 31, 2025
$
624,736
12 months ending December 31, 2026
633,355
12 months ending December 31, 2027
619,174
12 months ending December 31, 2028
413,233
12 months ending December 31, 2029
466,230
Subsequent
653,445
Total mortgage principal outstanding
3,410,173
Unamortized deferred financing costs
(123,634)
Unamortized market debt adjustments
(458)
$
3,286,081
During the years ended December 31, 2024 and 2023, the Trust had a Credit Facility with a major financial institution with a committed
revolving credit facility and demand revolving credit facility. This Credit Facility is secured by a first or second mortgage charge on
specific real estate assets. The maximum amount available varies with the value of the pledged assets and amounts drawn, with a
maximum limit not to exceed $250.0 million (committed revolving credit facility of $200.0 million and demand revolving credit facility
of $50.0 million), and an available limit of $250.0 million as at December 31, 2024 (December 31, 2023 – $200.0 million). The Credit
Facility requires monthly interest payments, is for a five-year term maturing on July 25, 2029 (or upon demand with respect to the
demand revolving credit facility), and can be extended annually thereafter, subject to the mutual consent of the lender and the Trust.
Unless otherwise extended, all principal and accrued interest is due and payable upon maturity of the Credit Facility.
There was no amount outstanding at December 31, 2024 (December 31, 2023 – $nil) under this Credit Facility, except for Letters of
Credit (“LCs”) issued and outstanding. The LCs totalled $4.2 million as at December 31, 2024 (December 31, 2023 – $4.2 million). As
such, approximately $245.8 million was unused and available from this Credit Facility on December 31, 2024 (December 31, 2023 –
$195.8 million). The Credit Facility carries interest rates ranging from prime to prime plus 1.0% per annum, or Daily Compounded
CORRA plus 1.95% per annum, or Term CORRA plus 1.95% per annum, and has no fixed terms of repayment. The covenants in relation
to the Credit Facility are discussed in NOTE 24(d).
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118
NOTE 12: LEASE LIABILITIES
As lessee, the Trust leases several assets which are secured by the lessor’s title to the leased assets for such leases. The following
represents the major type of leases the Trust maintains as lessee:
(i) Land Leases
Excluding assets held for sale, the Trust has entered into non-cancellable land leases for land related to four of its
properties, which sit on land that is not owned by the Trust. Approximate remaining terms of the Trust’s land leases range
from four to 40 years as at December 31, 2024. Two of the land leases provide for annual rent.
(ii) Warehouse and Office Space Leases
The Trust has entered into lease agreements for warehouse and some office and data centre space it utilizes but does not
own. Approximate remaining terms of all of the leasing arrangements related to warehouse space are for one to four years.
As at
Dec. 31, 2024
Dec. 31, 2023
Weighted
Average Interest
Lease Balance
Weighted
Average Interest
Lease Balance
Lease liabilities
Fixed rate
3.34%
$
75,881
3.30%
$
76,796
Total
$
75,881
$
76,796
Current
$
3,210
$
2,978
Non-current
72,671
73,818
$
75,881
$
76,796
Estimated future principal payments required to meet lease liabilities as at December 31, 2024 are as follows:
Amount
12 months ending December 31, 2025
$
3,210
12 months ending December 31, 2026
3,159
12 months ending December 31, 2027
3,130
12 months ending December 31, 2028
2,380
12 months ending December 31, 2029
1,083
Subsequent
62,919
Total lease liabilities
$
75,881
The Trust has short-term leases (defined as leases with a lease term of 12 months or less) and leases of low value assets. For these
leases, the Trust recognizes the lease payments as an operating expense or applied against ancillary revenue. For the year ended
December 31, 2024, lease payments on short-term leases or leases of low value assets totalled $2.0 million (year ended December 31,
2023 – $1.9 million).
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BOARDWALK REIT | 2024 ANNUAL REPORT
119
NOTE 13: LP CLASS B UNITS
The Class B Limited Partnership Units (“LP Class B Units”), as defined in NOTE 17, representing an aggregate fair value of $283.7 million at
December 31, 2024 (December 31, 2023 – $319.2 million), are non-transferable, except under certain circumstances, but are
exchangeable, on a one-for-one basis, into Trust Units at any time at the option of the holder. Prior to such exchange, distributions will
be made on these exchangeable units in an amount equivalent to the distributions which would have been made had the units been
exchanged for Trust Units. Each LP Class B Unit is accompanied by a Special Voting Unit, which entitles the holder to receive notice of,
attend, and vote at all meetings of Unitholders. There is no value assigned to the Special Voting Units. The LP Class B Units have been
classified as “FVTPL” financial liabilities in accordance with IFRS 9. Gains or losses resulting from changes in the fair value at each
reporting date are recorded in the consolidated statement of comprehensive income and are included in NOTE 20.
On December 23, 2024, 60,000 LP Class B Units were exchanged for Trust Units on a one-for-one basis. As at December 31, 2024,
4,415,000 LP Class B Units remain issued and outstanding (December 31, 2023 – 4,475,000 LP Class B Units).
As at
Dec. 31, 2024
Dec. 31, 2023
Number of LP
Class B Units
Value
Number of LP
Class B Units
Value
Balance, beginning of year
4,475,000
$
319,247
4,475,000
$
221,199
LP Class B Units exchanged for Trust Units
(60,000)
(3,809)
-
-
Fair value adjustment
-
(31,774)
-
98,048
Balance, end of year
4,415,000
$
283,664
4,475,000
$
319,247
NOTE 14: OTHER LIABILITIES
As at
Note
Dec. 31, 2024 (1)
Dec. 31, 2023
Other current liabilities
Deferred unit-based compensation
15
$
17,973
$
15,808
Construction loan payable
1,478
-
Deferred government grant
378
378
Refundable tenants’ security deposits
16,376
13,732
Trade and other payables
83,039
74,054
$
119,244
$
103,972
(1) Excludes refundable tenants’ security deposits related to assets held for sale.
Trade and Other Payables
Trade and other payables are comprised of trade payables, accrued liabilities, distribution payable, and provisions. As at
December 31, 2024, the Trust’s most significant provision relates to vacation payable to its employees within each employee’s
individual employment agreement totalled $6.5 million (December 31, 2023 – $6.2 million).
Construction Loan Payable
During the three months ended March 31, 2024, the Trust entered into a $94.0 million non-revolving construction facility loan with a
third-party financial institution in conjunction with one of the Trust’s development projects in Victoria, British Columbia. As at
December 31, 2024, $1.5 million has been drawn on this loan. The facility is interest payable only and has a maturity date of
September 30, 2025. The facility bears interest at prime, or a CORRA plus 1.40%. The construction loan payable is a financial liability
classified as amortized cost and is measured at amortized cost using the effective interest method.
NOTE 15: DEFERRED UNIT-BASED COMPENSATION
The total of $18.0 million represents the fair value of the underlying deferred units at December 31, 2024 (December 31, 2023 –
$15.8 million). Gains or losses resulting from changes in the fair value at each reporting date are recorded in the consolidated
statement of comprehensive income and are included in NOTE 20.
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120
Details of the Deferred Unit-based Compensation Plan
During 2006, the Trust implemented a deferred unit-based compensation plan. The plan entitles executives, leaders, and the Board of
Trustees at the participant’s option, to receive deferred units in consideration for trustee fees or a portion of executive cash bonuses,
respectively, with the Trust matching the number of units received. The deferred units in consideration for trustee fees or a portion of
executive cash bonuses vest immediately while the matching number of units received vest 50% on the third anniversary and 25% on
each of the fourth and fifth anniversaries, subject to provisions for earlier vesting in certain events. The deferred units earn additional
deferred units for the distributions that would otherwise have been paid on the deferred units (i.e. had they instead been issued as
Trust Units on the date of grant). Once vested, participants are entitled to receive an equivalent number of Trust Units representing
the vesting deferred units and the corresponding additional deferred units. Cash is granted for any fractional units. The deferred unit
plan was approved by Unitholders on May 10, 2006 and was most recently amended on June 9, 2021.
As at December 31, 2024 and 2023, the deferred units outstanding, in whole or in part, were granted as follows:
Deferred Units
Granted in
Number
Grant Date
Fair Value at
Grant Date
Vesting Date
Deferred Units
Outstanding
2015
55,236
February, June & December 2015
$
3,094
February, June & December 2020
1,345
2016
63,697
February, June & December 2016
3,065
February, June & December 2021
3,252
2017
34,858
June & December 2017
1,614
June & December 2022
6,620
2018
41,238
June & December 2018
1,771
June & December 2023
12,430
2019
51,692
March, June & December 2019
2,188
March, June & December 2024
19,279
2020
99,357
March, June & December 2020
3,710
March, June & December 2025
54,915
2021
65,270
March, June & December 2021
2,676
March, June & December 2026
44,990
2022
77,908
March, June & December 2022
3,966
March, June & December 2027
66,152
2023
75,940
March, June & December 2023
4,627
March, June & December 2028
67,246
2024
81,749
March, June & December 2024
5,959
March, June & December 2029
76,440
$
32,670
352,669
Additional deferred
units earned on units
22,420
375,089
The initial cost of the deferred unit-based transactions is determined, in accordance with IFRS 2, as the fair value of the units on the
grant date. The fair value of each unit granted is determined based on the weighted average observable closing market prices of
Boardwalk REIT’s Trusts Units ten trading days preceding the grant date. This initial cost of deferred units in consideration for trustee
fees or a portion of executive cash bonuses is expensed immediately while the cost of the matching deferred units is generally
expensed over the vesting period, unless earlier recognition is triggered in certain events.
The status of the outstanding deferred units was as follows:
# of Units Outstanding
# of Units Vested
Balance, December 31, 2022
265,972
35,151
Deferred units granted
75,940
44,651
Additional deferred units earned on units
5,686
7,257
Deferred units forfeited
(7,011)
-
Deferred units converted to Trust Units
(2,502)
(2,502)
Balance, December 31, 2023
338,085
84,557
Deferred units granted
81,749
65,548
Additional deferred units earned on units
6,817
11,602
Deferred units forfeited
(4,529)
-
Deferred units converted to Trust Units
(47,033)
(47,033)
Balance, December 31, 2024
375,089
114,674
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121
For the year ended December 31, 2024, total costs of $5.4 million (year ended December 31, 2023 – $3.3 million) were recorded in
expenses related to executive bonuses, leader bonuses, and trustee fees under the deferred unit plan.
NOTE 16: INCOME TAXES
Current Income Tax
For the year ended December 31, 2024, one of the Trust’s corporate entities had $14,000 in current tax expense (year ended
December 31, 2023 – $3,000). All other corporate entities either have sufficient tax deductions to offset any taxable income or
have operating losses from previous years to apply against any taxable income.
Deferred Income Tax
For fiscal 2024 and 2023, Boardwalk REIT is a “mutual fund trust” as defined under the Tax Act and as a REIT is eligible for the “REIT
Exemption” in accordance with the rules affecting the tax treatment of publicly traded trusts. Accordingly, the Trust is not taxable on
its income provided all of its taxable income is distributed to Unitholders. This exemption, however, does not extend to the corporate
subsidiaries of Boardwalk REIT that are subject to income tax.
The sources of deferred tax balances and movements were as follows:
As at
Dec. 31, 2023
Recognized
in Profit
Dec. 31, 2024
Deferred tax assets (liabilities) related to:
Operating losses
$
782
$
(70)
$
712
Other
-
-
-
Net deferred tax assets
$
782
$
(70)
$
712
Deferred tax assets
$
782
$
(70)
$
712
Deferred tax liabilities
-
-
-
Net deferred tax assets
$
782
$
(70)
$
712
As at
Dec. 31, 2022
Recognized
in Profit
Dec. 31, 2023
Deferred tax assets (liabilities) related to:
Operating losses
$
859
$
(77)
$
782
Other
(2)
2
-
Net deferred tax assets
$
857
$
(75)
$
782
Deferred tax assets
$
859
$
(77)
$
782
Deferred tax liabilities
(2)
2
-
Net deferred tax assets
$
857
$
(75)
$
782
No current income taxes or deferred income taxes were recognized in equity, other than through profit or other comprehensive
income, for the years ended December 31, 2024 and 2023.
As at December 31, 2024, wholly-owned Canadian corporate subsidiaries have deferred tax assets of $0.7 million (December 31, 2023 –
$0.8 million) related to operating losses, which expire over the next seven to 19 years. The Trust believes that the future income of
these entities will be sufficient to utilize these deferred tax assets prior to their expiration.
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122
The major components of income tax expense include the following:
Year Ended
Dec. 31, 2024
Year Ended
Dec. 31, 2023
Current tax expense
$
14
$
3
Deferred tax expense
70
75
Total income tax expense
$
84
$
78
The income tax expense for the year can be reconciled to the accounting profit as follows:
Year Ended
Dec. 31, 2024
Year Ended
Dec. 31, 2023
Profit before income tax
$
588,302
$
666,177
Remove (profit) from non-taxable entities
(529,650)
(611,654)
Accounting profit subject to tax
58,652
54,523
Deduct management fee charged to corporate entities
(58,601)
(54,468)
Taxable profit
51
55
Weighted average substantively enacted tax rate
26.51%
26.50%
Calculated income tax expense
14
15
Changes to other deferred tax balances
70
63
Total income tax expense
$
84
$
78
NOTE 17: UNITHOLDERS’ EQUITY
The Plan of Arrangement (the “Arrangement”) converting the Corporation to a real estate investment trust was completed on May 3,
2004. Under the Arrangement, the former shareholders of the Corporation received Boardwalk REIT Trust Units or LP Class B Units of a
controlled limited partnership of the Trust, Boardwalk REIT Limited Partnership. The interests in Boardwalk REIT are represented by
two classes of units: a class described and designated as “Trust Units” and a class described and designated as “Special Voting Units”.
The LP Class B Units are classified as a financial liability and are discussed in NOTE 13.
(a)
Trust Units
Trust Units represent an undivided beneficial interest in Boardwalk REIT and in distributions made by Boardwalk REIT. The Trust Units
are freely transferable, subject to applicable securities regulatory requirements. Each Trust Unit entitles the holder to one vote at all
meetings of Unitholders. Except as set out under the redemption rights below, the Trust Units have no conversion, retraction,
redemption or pre-emptive rights.
Trust Units are redeemable at any time, in whole or in part, on demand by the holders. Upon receipt by Boardwalk REIT of a written
redemption notice and other documents that may be required, all rights to and under the Trust Units tendered for redemption shall
be surrendered and the holder shall be entitled to receive a price per Trust Unit equal to the lesser of:
(i) 90% of the “market price” of the Trust Units on the principal market on which the Trust Units are quoted for trading during
the 20-day period ending on the trading day prior to the day on which the Trust Units were surrendered to Boardwalk REIT
for redemption; and,
(ii) 100% of the “closing market price” of the Trust Units on the principal market on which the Trust Units are quoted for trading
on the redemption date.
By virtue of Boardwalk REIT being an open-ended mutual fund trust, Unitholders of Trust Units are entitled to redeem their Trust
Units at any time at prices determined and payable in accordance with the conditions specified in the DOT. As a result, under IFRS
Accounting Standards, Trust Units are defined as financial liabilities; however, the Trust Units meet the limited exemption conditions
set out in IAS 32 and are therefore presented as equity in the consolidated statements of financial position.
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The DOT authorizes Boardwalk REIT to issue an unlimited number of Trust Units for the consideration and on terms and conditions
established by the Board of Trustees without the approval of any Unitholders.
The Trust has the following capital securities outstanding:
As at
Dec. 31, 2024
Dec. 31, 2023
Trust Units
Amount
Trust Units
Amount
Trust Units outstanding, beginning of year
49,388,174
$
452,043
45,722,922
$
211,899
Trust Units issued under equity offering, net of issue costs
-
-
3,662,750
239,992
Trust Units issued for vested deferred units
47,033
3,754
2,502
152
Trust Units purchased and cancelled
(149,096)
(2,058)
-
-
Trust Units issued on exchange of LP Class B Units
60,000
3,809
-
-
Trust Units outstanding, end of year
49,346,111
$
457,548
49,388,174
$
452,043
On December 22, 2023, Boardwalk REIT issued 3,662,750 Trust Units under a bought-deal equity offering at a price of $68.50 per Trust
Unit for total gross proceeds of $250.9 million. Transaction costs for this equity offering totalled $10.9 million resulting in net proceeds
to the Trust of $240.0 million.
On a periodic basis, Boardwalk REIT will apply to the Toronto Stock Exchange (“TSX”) for approval of a Normal Course Issuer Bid
(“NCIB”). Pursuant to regulations of the NCIB, Boardwalk REIT will receive approval to purchase and cancel a specified number of
Trust Units, representing 10% of the public float of its Trust Units at the time of the TSX approval. The NCIB will terminate on the
earlier of the termination date or at such time as the purchases under the NCIB are completed.
On November 20, 2024, Boardwalk REIT requested and received regulatory approval for an NCIB, which commenced on November 22,
2024, and terminates on November 21, 2025. The NCIB allows Boardwalk REIT to purchase and cancel up to 4,068,000 Trust Units.
On November 14, 2023, Boardwalk REIT requested and received regulatory approval for an NCIB, which commenced on November 22,
2023, and terminated on November 21, 2024. The NCIB allowed Boardwalk REIT to purchase and cancel up to 3,696,997 Trust Units.
For the year ended December 31, 2024, Boardwalk REIT purchased and cancelled the following Trust Units:
Year Ended December 31, 2024
Number of Trust Units Purchased and Cancelled
Purchase Cost (1)
Cost per Trust Unit (1)
149,096
$
10,001
$
67.08
(1) The purchase cost presented and the cost per Trust Unit include commissions but exclude an aggregate amount of $126 thousand relating to the 2% tax on Trust Units
repurchased, which became effective on January 1, 2024.
For the year ended December 31, 2023, Boardwalk REIT did not purchase and cancel any Trust Units.
(b)
Special Voting Units
The Declaration of Trust provides for the issuance of an unlimited number of Special Voting Units that will be used to provide voting
rights to holders of LP Class B Units or other securities that are, directly or indirectly, exchangeable for Trust Units. Each Special Voting
Unit entitles the holder to the number of votes at any meeting of Unitholders, which is equal to the number of Trust Units that may be
obtained upon surrender of the LP Class B Units or other securities to which the Special Voting Unit relates. The Special Voting Units
do not entitle or give any rights to the holders to receive distributions or any amount upon liquidation, dissolution or winding-up of
Boardwalk REIT.
On December 23, 2024, 60,000 LP Class B Units were exchanged for Trust Units on a one-for-one basis.
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In summary, the Trust has the following capital securities outstanding:
Units Outstanding
Dec. 31, 2024
Monthly
Distribution
Units Outstanding
Dec. 31, 2023
Monthly
Distribution
Boardwalk REIT Trust Units
49,346,111
$0.1200/unit
49,388,174
$0.0975/unit
Special Voting Units
4,415,000
N/A
4,475,000
N/A
Distributions
Monthly distributions and special distributions are determined at the discretion of the Board of Trustees, however the total income
distributed will not be less than the amount necessary to ensure the Trust will not be liable to pay income taxes under the Tax Act.
The taxable income allocated to the Unitholders and holders of LP Class B Units may vary in certain taxation years. Over time, such
differences, in aggregate, are expected to be minimal.
The Trust increased cash distributions from $0.0975 per Trust Unit on a monthly basis ($1.17 on an annualized basis) in January and
February 2024, to $0.1200 per Trust Unit on a monthly basis ($1.44 on an annualized basis) beginning March 2024, for total declared
cash distributions for the year ended December 31, 2024 of $68.9 million (year ended December 31, 2023 – $1.17 per Unit or
$53.2 million). The Board of Trustees declares distributions to be paid on, or about, the 15th of the month following the record
date. Distributions to be paid on the Boardwalk REIT Trust Units with a record date of January 31, 2025 (to be paid on February 17,
2025) totalled $5.9 million ($0.12 per unit) and have not been included as a liability in the consolidated statements of financial
position as at December 31, 2024.
(c)
Profit per Trust Unit
Year Ended
Dec. 31, 2024
Year Ended
Dec. 31, 2023
Numerator
Profit – basic
$
588,218
$
666,099
Distribution declared on LP Class B Units
6,235
-
Gain on fair value adjustments on LP Class B Units
(31,774)
-
Gain on fair value adjustment to unexercised deferred units
(813)
-
Profit – diluted
$
561,866
$
666,099
Denominator
Weighted average Trust Units outstanding – basic
49,403,967
45,824,819
Conversion of LP Class B Units
4,473,525
-
Unexercised vested deferred units
107,068
-
Weighted average Trust Units outstanding – diluted
53,984,560
45,824,819
Profit per Trust Unit
– basic
$
11.91
$
14.54
– diluted
$
10.41
$
14.54
All dilutive elements were included in the calculation of diluted per Trust Unit amounts. For the year ended December 31, 2024, both
the conversion of the LP Class B Units and the exercise of deferred units were dilutive and were included in the calculation of diluted
profit per Trust Unit. For the year ended December 31, 2023, all items were anti-dilutive as the conversion of the LP Class B Units and
the exercise of deferred units would have increased profit per Trust Unit. As such, they were excluded in the calculation of diluted
profit per Trust Unit.
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NOTE 18: RENTAL REVENUE
As lessor, the Trust leases residential rental properties under operating leases generally with a term of not more than 12 months and
in many cases tenants lease rental space on a month-to-month basis. Rental incentives may be offered as part of a rental agreement
and the costs associated with these incentives are amortized over the term of the lease and netted against residential rental revenue.
Rental revenue represents all revenue earned from the Trust’s operating leases, as well as ancillary rental income earned from
revenue share service agreements with third parties, and totalled $603.3 million for the year ended December 31, 2024 (year ended
December 31, 2023 – $545.7 million).
Rental revenue is comprised of the following:
Year Ended
Dec. 31, 2024
Year Ended
Dec. 31, 2023
Lease revenue
$
576,471
$
520,918
Parking revenue
10,943
9,601
Recoveries (cable, retirement) and revenue from telephone and cable providers
7,314
7,327
Revenue from coin laundry machines
4,342
4,613
Other
4,223
3,199
Total
$
603,293
$
545,658
As at December 31, 2024, under its non-cancellable operating leases, Boardwalk REIT was entitled to the following minimum
future payments:
Within 12 months
2 to 5 years
Over 5 years
Operating leases
$
320,042
$
22,364
$
1,758
NOTE 19: FINANCING COSTS
Financing costs are comprised of interest on mortgages payable, distributions paid to the holders of LP Class B Units, other interest
charges, interest on lease liabilities under IFRS 16, and the amortization of deferred financing costs. Financing costs total $121.2 million
for the year ended December 31, 2024 (year ended December 31, 2023 – $111.2 million) and can be summarized as follows:
Year Ended
Dec. 31, 2024
Year Ended
Dec. 31, 2023
Interest on secured debt (mortgages payable)
$
105,204
$
95,928
Interest capitalized to properties under development
(2,332)
(1,549)
LP Class B Unit distributions
6,235
5,169
Other interest charges
2,164
1,831
Interest on lease liabilities
2,577
2,594
Amortization of deferred financing costs
7,313
7,199
Total
$
121,161
$
111,172
For the year ended December 31, 2024, interest was capitalized to properties under development at a weighted average effective
interest rate of 4.46% (year ended December, 31, 2023 – 4.02%).
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NOTE 20: FAIR VALUE GAINS (LOSSES)
Year Ended
Dec. 31, 2024
Year Ended
Dec. 31, 2023
Investment properties (NOTE 4)
$
328,660
$
598,842
Financial asset designated as FVTPL
Investment in private technology venture fund
-
(1,344)
Financial liability designated as FVTPL
LP Class B Units
31,774
(98,048)
Deferred unit-based compensation
(546)
(4,573)
Total fair value gains, net
$
359,888
$
494,877
NOTE 21: GUARANTEES, CONTINGENCIES, COMMITMENTS
AND OTHER
As discussed in NOTE 12, the Trust has four properties that are situated on land leases. One of the land leases situated in Montreal,
Quebec is set to expire in 2029. The Trust is seeking to either renew the term of this lease or purchase the freehold interest in the land
prior to the expiry of the lease term. However, if the Trust cannot or chooses not to renew the lease, or buy the land, as the case may be,
the net operating income and cash flow associated with the property would no longer contribute to Boardwalk’s results of operations.
From time to time, the Trust enters into various physical supply contracts for energy commodities to hedge its own usage, which is
summarized below:
Natural Gas:
Area
Estimated Usage Coverage
Term
Cost
Alberta
25%
November 1, 2018 to October 31, 2023
$2.08/Gigajoule (“GJ”)
Alberta
25%
November 1, 2019 to October 31, 2024
$2.21/GJ
Alberta
25%
November 1, 2020 to October 31, 2025
$2.78/GJ
Alberta
23%
November 1, 2023 to October 31, 2026
$3.83/GJ
Alberta
22%
November 1, 2024 to October 31, 2027
$3.25/GJ
Saskatchewan
40%
November 1, 2020 to October 31, 2025
$2.99/GJ
Verdun, Quebec
74%
November 1, 2021 to October 31, 2025
$4.29/GJ
London, Ontario
69%
November 1, 2021 to October 31, 2024
$4.52/GJ
London, Ontario
69%
November 1, 2024 to October 31, 2026
$4.00/GJ
Electrical:
Area
Estimated Usage Coverage
Term
Cost
Alberta
45%
November 1, 2020 to October 31, 2024
$0.06/Kilowatt-hour (“kWh”)
Alberta
53%
October 1, 2022 to September 30, 2027
$0.10/kWh
Alberta
45%
November 1, 2024 to October 31, 2029
$0.06/kWh
Boardwalk REIT, in the normal course of operations, will become subject to a variety of legal and other claims against the Trust, most
of which are minor in nature. Management and the Trust’s legal counsel evaluate all claims on their apparent merits and accrue
management’s best estimate of the estimated costs to satisfy such claims. Management believes the outcome of claims of this nature
at December 31, 2024, will not have a material impact on the Trust.
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Boardwalk REIT has received notices of reassessment dated February 28, 2024, from the CRA increasing the Trust’s taxable income by
$5.6 million, $20.6 million, $14.1 million, and $0.06 million for its taxation years ended December 31, 2011, 2012, 2013, and 2014,
respectively, on the basis that the Trust did not report deemed taxable capital gains in each of those taxation years resulting from
alleged negative adjusted cost base in the Trust’s units of Top Hat Operating Trust, a trust 100% owned by Boardwalk REIT.
Management of the Trust assessed the implications of the notices of reassessment and filed an objection on May 24, 2024, with the
CRA Appeals Division as it disagrees with the CRA’s proposed assessment. It is the opinion of the Trust that it will not be required to
pay any amount to the CRA in order to dispute this matter. Furthermore, it is the Trust’s opinion that should a payment be required to
settle this matter, provided the Trust continues to remain eligible for the REIT Exemption, it will not be required to pay any income
taxes payable as the Trust distributes all taxable income to its Unitholders. It is difficult to estimate the amount of time it could take to
resolve the dispute with the CRA Appeals Division and it is possible that an appeal to the Tax Court of Canada could be required in
order to resolve this dispute.
NOTE 22: CAPITAL MANAGEMENT AND LIQUIDITY
The Trust defines capital resources as the aggregate of Unitholders’ equity at market value, debt (both secured and unsecured), cash
flows from operations, and amounts available under credit facilities net of cash on hand. The Trust’s capital management framework
is designed to maintain a level of capital that allows it to implement its business strategy while complying with investment and debt
restrictions pursuant to Boardwalk REIT’s DOT as well as existing debt covenants and continue building long-term Unitholder value
while maintaining sufficient capital contingency. The main components of the Trust’s capital allocation are reviewed on a regular
basis by its Board of Trustees (the “Board”) through its annual review of the Trust’s strategic plan and budget, supplemented by
periodic Board and Board Committee meetings. Capital adequacy is monitored by the Trust by assessing performance against the
approved annual plan throughout the year, which is updated accordingly, and by monitoring adherence to investment and debt
restrictions contained in the DOT and debt covenants. Boardwalk REIT’s DOT, as amended, provides for a minimum interest coverage
ratio of 1.5 to 1 calculated on the most recently completed four fiscal quarters. The DOT also defines interest expense to exclude
distributions on the LP Class B Units, which under IFRS Accounting Standards are considered financing costs.
The following table highlights Boardwalk REIT’s interest coverage ratio in accordance with the DOT:
As at
Dec. 31, 2024
Dec. 31, 2023
Net operating income
$
382,334
$
332,989
Administration
(44,791)
(41,172)
Deferred unit-based compensation
(5,374)
(3,328)
EBITDA (1) from equity accounted investment
3,357
929
Consolidated EBITDA (12 months ended)
335,526
289,418
Interest expense
109,945
100,354
Interest expense from equity accounted investment
3,956
2,033
Consolidated interest expense (12 months ended)
113,901
102,387
Interest coverage ratio
2.95
2.83
Minimum threshold
1.50
1.50
(1) Earnings Before Interest, Taxes, Depreciation and Amortization.
The Trust employs a broad range of financing strategies to facilitate growth and manage financial risk. The Trust’s objective is to
reduce its weighted average cost of capital and improve Unitholder distributions through value enhancement initiatives and
consistent monitoring of the balance between debt and equity financing. As at December 31, 2024, the Trust’s weighted average cost
of capital was calculated to be 4.41%.
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The following schedule details the components of the Trust’s capital and the related costs thereof:
As at
Dec. 31, 2024 (1)
Dec. 31, 2023
Cost of Capital (2)
Underlying Value (3)
Cost of Capital (2)
Underlying Value (3)
Liabilities
Mortgages payable
3.19%
$
3,241,736
3.00%
$
3,200,899
LP Class B Units
5.54%
283,664
4.15%
319,247
Deferred unit-based compensation
5.54%
17,973
4.15%
15,808
Unitholders’ equity
Boardwalk REIT Trust Units
5.54%
3,170,488
4.15%
3,523,352
Total
4.41%
$
6,713,861
3.63%
$
7,059,306
(1) Excludes mortgages related to assets held for sale.
(2) As a percentage of average carrying value unless otherwise noted.
(3) Underlying value of liabilities represents market value or the cost to retire on maturity. Underlying value of equity is based on the closing stock price of the Trust Units.
Mortgages payable – The debt is primarily fixed rate debt and approximately 96% of this debt at December 31, 2024 is insured under
the National Housing Act (“NHA”) and administered by CMHC (December 31, 2023 – approximately 96%). These financings can be
structured on a loan to CMHC appraised value basis of between 75-80%. The Trust currently has a level of indebtedness of
approximately 40% of the fair value of the Trust’s investment properties (December 31, 2023 – approximately 43%). This level of
indebtedness is considered by the Trust to be within its target.
LP Class B Units – These units are non-transferable, except under certain circumstances, but are exchangeable, on a one-for-one
basis, into Boardwalk REIT Trust Units at any time at the option of the holder. Prior to such exchange, distributions will be made on the
exchangeable units in an amount equivalent to the distributions which would have been made had the Trust Units of Boardwalk REIT
been issued. Each LP Class B Unit was accompanied by a Special Voting Unit, which entitles the holder to receive notice of, attend, and
vote at all meetings of Unitholders. There is no value assigned to the Special Voting Units. The LP Class B Units have been classified as
FVTPL financial liabilities in accordance with IFRS 9. Gains or losses resulting from changes in the fair value at each reporting date are
recorded in the consolidated statement of comprehensive income.
As outlined in NOTE 24(d), Boardwalk REIT’s Credit Facility agreement, which includes a committed revolving credit facility and
demand revolving credit facility, contains financial covenants.
The Trust had $368.2 million in total available liquidity as at December 31, 2024 (December 31, 2023 – $527.0 million), consisting of
cash and cash equivalents on hand of $122.4 million (December 31, 2023 – $331.2 million), as well as unused credit facilities of
$245.8 million (December 31, 2023 – $195.8 million). The Trust monitors its ratios and as at December 31, 2024, and December 31,
2023, the Trust was in compliance with all covenants in both its DOT and all existing debt facilities.
NOTE 23: FAIR VALUE MEASUREMENT
(a)
Fair Value of Financial Instruments
Fair value is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market
participants at the measurement date. The fair value of interest bearing financial assets and liabilities is determined by discounting
the contractual principal and interest payments at estimated current market interest rates for the instrument. Current market rates
are determined by reference to current benchmark rates for similar term and current credit spreads for debt with similar terms and
risk. The fair values of the Trust’s financial instruments were determined as follows:
(i) the carrying amounts of loan receivable, trade and other receivables, segregated tenants’ security deposits, cash and cash
equivalents, construction loan payable, refundable tenants’ security deposits, and trade and other payables approximate
their fair values due to their short-term nature.
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(ii) t he fair value of the Trust’s mortgages payable is an estimate made at a specific point in time, based on relevant market
information. The estimate is based on quoted market prices for the same or similar issues or on the current rates offered to
the Trust for similar financial instruments subject to similar risks and maturities.
(iii) the fair value of the LP Class B Units are estimates at a specific point in time, based on the closing market price of the Trust
Units listed on the Toronto Stock Exchange.
These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore, cannot be
determined with precision. Changes in estimates could materially affect fair values. The significant financial instruments of Boardwalk
REIT and their carrying values as at December 31, 2024, and December 31, 2023, are as follows:
As at
Dec. 31, 2024 (1)
Dec. 31, 2023
Carrying Value
Fair Value
Carrying Value
Fair Value
Financial asset carried at FVTPL
Loan receivable
$
58,170
$
58,170
$
-
$
-
Financial liabilities carried at amortized cost
Mortgages payable
3,286,081
3,241,736
3,318,417
3,200,899
Construction loan payable
1,478
1,478
-
-
Financial liability carried at FVTPL
LP Class B Units
283,664
283,664
319,247
319,247
(1) Excludes mortgages related to assets held for sale.
The fair value of the Trust’s mortgages payable was lower than the recorded value by approximately $44.3 million at December 31,
2024 (December 31, 2023 – lower by $117.5 million), due to changes in interest rates since the dates on which the individual mortgages
were last contracted. The fair values of the mortgages payable have been estimated based on the current market rates for mortgages
with similar terms and conditions. The fair value of the Trust’s mortgages payable is an amount computed based on the interest rate
environment prevailing at December 31, 2024, and December 31, 2023, respectively; the amount is subject to change and the future
amounts will converge. There are no additional costs or penalties to Boardwalk REIT if the mortgages are held to maturity.
As at December 31, 2024, and December 31, 2023, the Trust had no embedded derivatives requiring separate recognition.
The nature of these financial instruments and the Trust’s operations expose the Trust to certain principal financial risks. The main
objective of the Trust’s risk management process is to properly identify financial risks and minimize the exposure to potential losses
arising from those risks. The principal financial risks to which the Trust is exposed are described in NOTE 24.
(b)
Assets and Liabilities Measured at Fair Value
The fair value hierarchy of assets and liabilities measured at fair value on a recurring basis in the consolidated statements of financial
position is as follows:
As at
Dec. 31, 2024
Dec. 31, 2023
Level 1
Level 2
Level 3
Level 1
Level 2
Level 3
Assets
Investment properties
$
-
$
108,956
$ 8,129,068
$
-
$
-
$ 7,702,214
Assets held for sale
-
80,000
-
-
-
-
Loan receivable
-
-
58,170
-
-
-
Liabilities
LP Class B Units
283,664
-
-
319,247
-
-
Deferred unit-based compensation
17,973
-
-
15,808
-
-
The three levels of the fair value hierarchy are described in NOTE 4.
Transfers between levels in the fair value hierarchy are recognized on the date of the event or change in circumstances that caused the
transfer. For assets and liabilities measured at fair value as at December 31, 2024, and December 31, 2023, there were no other
transfers between Level 1, Level 2, and Level 3 assets and liabilities.
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NOTE 24: RISK MANAGEMENT
(a)
Interest Rate Risk
The Trust is exposed to interest rate risk as a result of its mortgages payable and credit facilities; however, this risk is minimized
through the Trust’s current strategy of having the majority of its mortgages payable in fixed-term arrangements. As such, the Trust’s
cash flows are not significantly impacted by a change in market interest rates. In addition, the Trust structures its financings so as to
stagger the maturities of its debt, thereby minimizing the Trust’s exposure to interest rates in any one year. The majority of the Trust’s
mortgages are also insured by the CMHC under the NHA mortgage program. This added level of insurance offered to lenders allows
the Trust to receive advantageous interest rates while minimizing the risk of mortgage renewals or extensions, and significantly
reduces the potential for a lender to call a loan prematurely. In addition, management is constantly reviewing its Credit Facility
(floating-rate debt) and, if market conditions warrant, the Trust has the ability to convert its existing floating-rate debt to fixed
rate debt.
As at December 31, 2024, the Trust had no amount outstanding on its Credit Facility and its mortgages payable are fixed-rate debt.
However, the Trust has a non-revolving construction facility loan which is carried at variable-rate interest with $1.5 million
outstanding (NOTE 14). As such, for the year ended December 31, 2024, all else being equal, the increase or decrease in net earnings
for each 1% change in market interest rates would be nominal. In addition, while the Trust has a construction facility in its equity
accounted investment which is carried at variable-rate interest, this interest rate exposure is offset by the interest earned on the loan
receivable (NOTE 8). For the year ended December 31, 2024, the Trust’s equity accounted investment had a revolving construction
facility loan which was carried at variable-rate interest with $58.2 million outstanding, of which Boardwalk’s portion was $29.1 million,
that was exposed to interest rate risk (NOTE 6). As such, for the year ended December 31, 2024, all else being equal, the increase
or decrease in net earnings for each 1% change in market interest rates would be $0.4 million (year ended December 31, 2023 –
$0.5 million). For the mortgages payable that have fixed-rate debt, the Trust is exposed to interest rate risk on renewals. Please refer
to NOTE 24(c) for details on the Trust’s remaining contractual maturity for its mortgages payable listed by year of maturity date.
(b)
Credit Risk
The Trust is exposed to credit risk as a result of its trade and other receivables. The trade and other receivables balance is comprised
of mortgage holdbacks and refundable mortgage fees, accounts receivable from significant customers and insurers, and tenant
receivables. As at December 31, 2024, and December 31, 2023, no balance relating to mortgage holdbacks, refundable mortgage fees,
or accounts receivable from significant customers and insurers was past due.
In relation to mortgage holdbacks and refundable mortgage fees, the Trust’s exposure to credit risk is low given the nature of
these balances. These funds will be advanced when the Trust has met the conditions pursuant to the mortgage agreement (in the
case of the mortgage holdback) or when financing is completed (in the case of refundable mortgage fees), both of which are expected
to occur.
Similar to mortgage holdbacks and refundable mortgage fees, the Trust assesses the credit risk on accounts receivable to be low due
to the assured collection of these balances. The majority of the balance relates to money owing from the Trust’s revenue sharing
initiatives. Given the Trust’s collection history and the nature of these customers, credit risk is assessed as low. Additionally, an
amount is owed by insurance companies in relation to current outstanding claims (NOTE 7). In all circumstances, the insurance
deductible has been paid and amounts incurred and owing for reimbursement are due to an insurable event. Recoverability may
differ from the amount owing solely due to discrepancies between the Trust and the insurance provider regarding the value of
replacement costs.
With tenant receivables, credit risk arises from the possibility tenants may experience financial difficulty and be unable to fulfill their
lease term commitments. The maximum exposure to credit risk is equal to the carrying value of the financial assets. Rent payments
from tenants are due on the first of the month and tenants generally pay a security deposit – both of these actions mitigate against
bad debts.
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As stated above, the carrying amount of tenant receivables reflects management’s assessment of the credit risk associated with its
tenants; however, the Trust mitigates this risk of credit loss by geographically diversifying its existing portfolio, by limiting its
exposure to any one tenant and by conducting thorough credit checks with respect to all new rental-leasing arrangements. In
addition, where legislation allows, the Trust obtains a security deposit from a tenant to assist in the recovery of monies owed to
the Trust.
Past due receivables (receivables which are greater than 30 days) are reviewed by management on a monthly basis and tenant
receivables are considered for impairment on a case-by-case basis. The Trust takes into consideration the tenant’s payment history,
their credit worthiness, and the current economic environment; however, tenant receivable balances exceeding 60 days are typically
written off to bad debt expense as the Trust does not utilize an allowance for estimated credit losses. The amount of the loss is
recognized in the consolidated statement of comprehensive income as part of operating expenses. Subsequent recoveries of amounts
previously written off are credited against operating expenses during the period of settlement. As tenant receivables are typically
written off after 60 days, none of the balance is considered to be past due by the Trust. For the year ended December 31, 2024, bad
debt expense totalled $2.8 million (year ended December 31, 2023 – $3.5 million).
The credit risk of both Boardwalk REIT and the counter party have been taken into account in determining the fair value of Boardwalk
REIT’s trade and other receivables.
(c)
Liquidity Risk
Liquidity risk is the risk that the Trust will not be able to meet its financial obligations as they become due. The Trust maintains what it
believes to be conservatively leveraged assets and can finance any future growth through one or a combination of internally
generated cash flows, borrowing under an existing Credit Facility, the issuance of debt, or the issuance of equity, according to its
capital management objectives. In addition, the Trust structures its financings so as to stagger the maturities of its debt, thereby
minimizing the Trust’s exposure to liquidity risk in any one year. In addition, cash flow projections are completed and reviewed on a
regular basis to ensure the Trust has sufficient cash flows to make its monthly distributions to Unitholders. Finally, financial assets,
such as cash and trade and other receivables, will be realized within the next 12 months and can be utilized to satisfy the Trust’s
financial liabilities. Given the Trust’s currently available liquid resources (from both financial assets and on-going operations) as
compared to its contractual obligations, Management assesses the Trust’s liquidity risk to be low.
The following table details the Trust’s remaining contractual maturity for its financial liabilities listed by year of maturity date:
Year of Maturity
Weighted
Average
Interest
Rate (1)
Mortgage
Principal
Outstanding (1)
Mortgage
Interest (1)(2)
Lease
Liabilities
Principal
Outstanding
Construction
Loan Payable
Tenants’
Security
Deposits (1)
Distribution
Payable (3)
Trades
and Other
Payables
Total
2025
2.44%
$
565,458 $ 100,770
$
185
$
1,478 $ 16,376
$
6,451 $ 76,588 $ 767,306
2026
2.33%
604,716
85,126
-
-
-
-
-
689,842
2027
3.16%
611,487
69,381
2,613
-
-
-
-
683,481
2028
3.73%
413,748
49,729
-
-
-
-
-
463,477
2029
3.62%
496,626
32,218
5,504
-
-
-
-
534,348
Subsequent
2.67%
718,138
83,461
67,579
-
-
-
-
869,178
3.19%
3,410,173
420,685
75,881
1,478
16,376
6,451
76,588
4,007,632
Unamortized
deferred
financing costs
(123,634)
-
-
-
-
-
-
(123,634)
Unamortized
market debt
adjustments
(458)
-
-
-
-
-
-
(458)
$ 3,286,081 $ 420,685
$
75,881
$
1,478 $ 16,376
$
6,451 $ 76,588 $ 3,883,540
(1) Excludes liabilities related to assets held for sale.
(2) Based on current in-place interest rates for the remaining term to maturity.
(3) Distribution payable includes distributions owed on the Boardwalk REIT Trust Units and the LP Class B Units.
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(d)
Debt Covenants
As outlined in its mortgages payable agreements, the Trust is required to make equal monthly payments of principal and interest
based on the respective amortization period. Additionally, the Trust must ensure that all property taxes have been paid in full when
they become due and that no arrears exist.
The Trust has a Credit Facility with a major financial institution with a committed revolving credit facility and demand revolving credit
facility. This Credit Facility is secured by a pledge of a group of specific real estate assets with a fair value at December 31, 2024 of
approximately $1.1 billion (December 31, 2023 – $1.0 billion). Assets pledged as security for the Credit Facility may also be pledged as
security on mortgages. The amount available through the Credit Facility varies with the value of the pledged assets and amounts
drawn, with a maximum limit not to exceed $250.0 million (committed revolving credit facility of $200.0 million and demand revolving
credit facility of $50.0 million), and an available limit of $245.8 million as at December 31, 2024 (December 31, 2023 – $195.8 million).
The Credit Facility requires monthly interest payments, is for a five-year term maturing on July 25, 2029 (or upon demand with respect
to the demand revolving credit facility), and can be extended annually thereafter, subject to the mutual consent of the lender and the
Trust. Unless otherwise extended, all principal and accrued interest is due and payable upon maturity of the Credit Facility.
Unless otherwise extended, the drawn-down principal and accrued interest would be due on the maturity date of the Credit Facility.
The Credit Facility contains three financial covenants as follows:
(i) The Trust will maintain an overall Debt Service Coverage Ratio of at least 1.20, calculated on the most recent completed
trailing four fiscal quarter basis. As at December 31, 2024, this ratio was 1.85 (December 31, 2023 – 1.62).
(ii) The Trust will maintain a Debt Service Coverage Ratio, specific to the Security Portfolio of at least 1.15, calculated on the
most recent completed trailing four fiscal quarter basis. As at December 31, 2024, this ratio was 2.48 (December 31,
2023 – 2.35).
(iii) Total indebtedness of the Trust will not exceed 75% of the Gross Book Value of all assets for the two most recent quarters as
defined in the credit agreement. As at December 31, 2024, this ratio was 38.9% (December 31, 2023 – 42.4%).
As at December 31, 2024, and December 31, 2023, the Trust was in compliance with all financial covenants.
(e)
Market Risk
The Trust is exposed to market risk related to utilities as a result of fluctuations in the prices of natural gas and electricity. As
outlined in NOTE 21, the Trust has commitments to certain utility contracts to reduce the risk of exposure to adverse changes in
commodity prices.
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NOTE 25: SUBSIDIARIES
The entities included in the Trust’s consolidated financial statements are as follows:
Entity
Type
Relationship
Boardwalk Real Estate Investment Trust (“BREIT”)
Trust
Parent
Boardwalk Real Estate Management Ltd.
Corporation
100% owned by BREIT
Top Hat Operating Trust (“TOT”)
Trust
100% owned by BREIT
BPCL Holdings Inc. (“BPCL”)
Corporation
Meets the principle of control
Boardwalk REIT Limited Partnership (“BLP”)
Partnership
A Units are 100% owned by TOT
B Units and C Units are 100% owned by BPCL
Boardwalk REIT Properties Holdings (Alberta) Ltd.
Corporation
100% owned by BLP
Boardwalk REIT Quebec Inc.
Corporation
100% owned by BLP
Boardwalk Quebec Trust
Trust
100% owned by BLP
Boardwalk St. Laurent Limited Partnership
Partnership
99.99% owned by Boardwalk Quebec Trust
0.01% owned by 9165-5795 Quebec Inc.
9108-4749 Quebec Inc.
Corporation
100% owned by BLP
9165-5795 Quebec Inc.
Corporation
100% owned by 9108-4749 Quebec Inc.
Nun’s Island Trust 1
Trust
100% owned by BLP
Nun’s Island Trust 2
Trust
100% owned by BLP
Metropolitan Structures (MSI) Inc.
Corporation
100% owned by BLP
Boardwalk GP Holding Trust
Trust
100% owned by BLP
6222285 Canada Inc.
Corporation
100% owned by BLP
Boardwalk GP Operating Trust
Trust
100% owned by 6222285 Canada Inc.
Boardwalk General Partnership (“BGP”)
Partnership
99.99% owned by Boardwalk GP Holding Trust
0.01% owned by Boardwalk GP Operating Trust
Boardwalk REIT Properties Holdings Ltd.
Corporation
100% owned by BGP
Helmcken Rd. Development B.C Ltd.
Corporation
100% owned by BGP
Carlisle Ave Development B.C. Ltd.
Corporation
100% owned by BGP
Island Highway Development (B.C.) Ltd.
Corporation
100% owned by BGP
Watkiss Eagle Creek Property Ltd.
Corporation
100% owned by BGP
BRIO Holdings Ltd.
Corporation
50% Owned by BGP
Redwalk Brampton Limited Partnership
Partnership
49.99% owned by BGP
0.01% owned by Redwalk Brampton Inc.
Redwalk Brampton Inc.
Corporation
50% owned by Boardwalk REIT Properties Holdings Ltd.
1082116 B.C. Ltd.
Corporation
100% owned by BGP
BPCL represents the only entity which is included in the Trust’s consolidated financial statements by meeting the principle of control
and not based on the Trust’s ownership percentage. BPCL (formerly called Boardwalk Equities Inc.) was created to accomplish a
narrow and well-defined objective, which was to transfer the beneficial interest in the Corporation’s assets (the “Assets”) pursuant to
the Master Asset Contribution Agreement. The Trust does not have any voting interest in BPCL; however, the Trust controls BPCL
because the Trust has the decision-making powers to obtain the majority of the benefits of the activities of BPCL and the Trust retains
the majority of the residual or ownership risks related to BPCL. Specifically, BLP controls all of the Assets previously held by BPCL and
is responsible for BPCL’s debt by guaranteeing the principal and interest owed to the lenders. BLP must make distributions to the
LP Class C Units equivalent to the principal and interest owed on BPCL’s debt. As beneficial owner of the Assets, BLP has power over
BPCL as it can direct their relevant activities (i.e. impose and collect rental income, manage and pay operating costs, etc.) in order to
generate cash flows and make distributions on the LP Class C Units. It has exposure, or rights, to variable returns based on its
beneficial ownership of the Assets. The Trust controls BPCL, because the Trust has the decision making power to obtain the majority
of the benefits from the activities of BPCL. Due to the above, BPCL is part of the Trust’s consolidated group.
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NOTE 26: RELATED PARTY DISCLOSURES
IAS 24 – Related Party Disclosures requires entities to disclose in their financial statements information about transactions with
related parties. Generally, two parties are related to each other if one party controls, or significantly influences, the other party.
Balances and transactions between the Trust and its subsidiaries, which are related parties of the Trust, have been eliminated on
consolidation and are not disclosed in this note disclosure.
The individuals considered key management personnel of the Trust as at December 31, 2024, were as follows:
Chief Executive Officer
President
Chief Financial Officer
CIO, VP, Technology
VP, People
Members of the Board of Trustees
The remuneration of the Trust’s key management personnel was as follows:
Year Ended
Dec. 31, 2024
Year Ended
Dec. 31, 2023
Short-term benefits
$
3,316
$
2,753
Post-employment benefits
70
50
Other long-term benefits
4
4
$
3,390
$
2,807
In addition, the LP Class B Units are held by Mr. Sam Kolias (Chairman of the Board, Chief Executive Officer and Trustee) and
Mr. Van Kolias (Senior Vice President, Quality Control). Under IAS 32, the LP Class B Units issued by a wholly-owned subsidiary of the
Trust are considered financial liabilities and are reclassified from equity to liabilities on the consolidated financial statements.
Additionally, as the LP Class B Units are liabilities, all distributions paid (both regular and special) are recorded as financing costs
under IFRS Accounting Standards. For the year ended December 31, 2024, distributions on the LP Class B Units totalled $6.2 million
(year ended December 31, 2023 – $5.2 million). Distributions on the LP Class B Units are made on terms equal to distributions made on
Boardwalk REIT Trust Units.
As at December 31, 2024, there was $0.5 million owed to related parties (December 31, 2023 – $0.4 million) based on the LP Class B
Units distribution outlined above.
On January 12, 2024, with respect to the equity accounted investment in the joint venture, the Trust made a loan to the joint venture
for $57.2 million with the proceeds used by the joint venture to repay 50% of the revolving construction facility loan payable.
Additional details on the loan receivable are described in NOTE 8.
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BOARDWALK REIT | 2024 ANNUAL REPORT
135
NOTE 27: OTHER INFORMATION
(a)
Supplemental Cash Flow Information
Note
Year Ended
Dec. 31, 2024
Year Ended
Dec. 31, 2023
Net change in operating working capital
Net change in inventories
$
880
$
890
Net change in prepaid assets
2,632
282
Net change in trade and other receivables
(4,447)
(299)
Net change in segregated and refundable tenants’ security deposits
470
171
Net change in trade and other payables
5,139
7,341
$
4,674
$
8,385
Net change in investing working capital
Net change in trade and other payables
$
2,644
$
6,005
Net change in financing working capital
Net change in trade and other payables
$
(479)
$
(733)
Investment in capital assets
Improvements to investment properties
4
$
(124,395)
$
(119,012)
Additions to property, plant and equipment
(9,032)
(6,960)
$
(133,427)
$
(125,972)
Distributions paid
Distributions declared
$
(68,917)
$
(53,169)
Distributions declared in prior year paid in current year
(4,815)
(4,115)
Distributions declared in current year paid in next year
5,922
4,815
$
(67,810)
$
(52,469)
(b)
Included in administration costs was $4.2 million relating to Registered Retirement Savings Plan matching for the year
ended December 31, 2024 (year ended December 31, 2023 – $3.7 million).
(c)
The Trust declared regular distributions of $75.1 million for the year ended December 31, 2024, which includes $68.9 million
of distributions on the Trust Units and $6.2 million of distributions on the LP Class B Units, which under IFRS Accounting
Standards are considered financing costs (year ended December 31, 2023 – $58.4 million, which includes $53.2 million of
distributions on the Trust Units and $5.2 million of distributions on the LP Class B Units).
NOTE 28: SEGMENTED INFORMATION
Boardwalk REIT specializes in multi-family residential housing and operates within one business segment in five provinces located
wholly in Canada along with a corporate segment. Each provincial segment operates with a high degree of autonomy. Management
monitors the operating results on a province-by-province basis. Segment performance is evaluated on a number of measures,
including profit. Financial information reported is on the same basis as used for internal evaluation and allocation of resources.
Boardwalk REIT does not have any one major tenant or a significant group of tenants. Either expiring leases are renewed or new
tenants are found.
Net debt, interest income and expenses, and income taxes are managed on a group basis. Transfer prices between locations are set
on an arm’s-length basis in a manner similar to transactions with third parties and are eliminated upon inter-company consolidation.
Corporate represents corporate functions, technology assets, activities incidental to operations, development of investment
properties, and certain comparative data for divested assets.
136
136
Details of segmented information are as follows:
As at
December 31, 2024
Alberta
British Columbia
Saskatchewan
Ontario
Quebec
Corporate
Total
Assets
$ 5,353,427
$
130,226
$
771,112
$
819,882
$ 1,235,657
$
316,186
$ 8,626,490
Liabilities
2,221,228
75,139
305,713
271,521
556,063
360,017
3,789,681
As at
December 31, 2023
Alberta
British Columbia
Saskatchewan
Ontario
Quebec
Corporate
Total
Assets
$ 4,922,321
$
128,253
$
694,290
$
764,466
$ 1,180,899
$
451,647
$ 8,141,876
Liabilities
2,205,582
75,836
311,060
275,313
569,275
384,738
3,821,804
Year Ended December 31, 2024
Alberta
British
Columbia Saskatchewan
Ontario
Quebec
Corporate
Total
Rental revenue (a)
$ 389,038
$
6,774
$
63,461 $ 47,952 $ 94,884
$
1,184 $ 603,293
Rental expenses
Operating expenses
67,140
685
9,822
8,753
16,207
7,010
109,617
Utilities
36,884
272
7,016
4,633
6,763
401
55,969
Property taxes
35,871
452
4,868
4,914
9,093
175
55,373
Total rental expenses
139,895
1,409
21,706
18,300
32,063
7,586
220,959
Net operating income (loss)
249,143
5,365
41,755
29,652
62,821
(6,402)
382,334
Financing costs (b)
74,201
3,114
9,135
9,189
18,987
6,535
121,161
Administration
3,119
5
497
257
499
40,414
44,791
Deferred unit-based compensation
-
-
-
-
-
5,374
5,374
Depreciation (c)
836
4
145
81
154
7,098
8,318
Profit (loss) before the undernoted
170,987
2,242
31,978
20,125
43,181
(65,823)
202,690
Income from equity accounted investment
-
-
-
13,226
-
-
13,226
Fair value gains (losses)
249,349
1,525
57,695
(14,681)
34,773
31,227
359,888
Interest income
16
-
-
3,870
-
8,612
12,498
Profit (loss) before income tax
420,352
3,767
89,673
22,540
77,954
(25,984)
588,302
Income tax expense (d)
-
-
-
-
-
(84)
(84)
Profit (loss)
420,352
3,767
89,673
22,540
77,954
(26,068)
588,218
Other comprehensive income
-
-
-
-
-
-
-
Total comprehensive income (loss)
$ 420,352
$
3,767
$
89,673 $ 22,540 $ 77,954
$
(26,068) $ 588,218
Additions to non-current assets (e)
$ 183,962
$
425
$
19,448 $ 11,833 $ 19,097
$
63,696 $ 298,461
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BOARDWALK REIT | 2024 ANNUAL REPORT
137
Year Ended December 31, 2023
Alberta
British
Columbia
Saskatchewan
Ontario
Quebec
Corporate
Total
Rental revenue (a)
$ 346,368
$
5,487
$
57,508 $ 45,355 $ 89,873
$
1,067 $ 545,658
Rental expenses
Operating expenses
65,520
488
9,764
8,310
15,632
6,476
106,190
Utilities
34,374
220
6,852
4,676
6,894
376
53,392
Property taxes
34,399
345
4,590
4,593
8,952
208
53,087
Total rental expenses
134,293
1,053
21,206
17,579
31,478
7,060
212,669
Net operating income (loss)
212,075
4,434
36,302
27,776
58,395
(5,993)
332,989
Financing costs (b)
67,357
2,482
8,650
7,503
19,254
5,926
111,172
Administration
2,644
6
460
125
466
37,471
41,172
Deferred unit-based compensation
-
-
-
-
-
3,328
3,328
Depreciation (c)
788
2
151
69
145
6,766
7,921
Profit (loss) before the undernoted
141,286
1,944
27,041
20,079
38,530
(59,484)
169,396
Loss from equity accounted investment
-
-
-
(1,113)
-
-
(1,113)
Loss on sale of asset
-
-
-
-
-
(928)
(928)
Fair value gains (losses)
544,686
12,422
60,232
(28,513)
10,015
(103,965)
494,877
Interest income
28
-
-
-
-
3,031
3,059
Other income
-
-
-
-
-
886
886
Profit (loss) before income tax
686,000
14,366
87,273
(9,547)
48,545
(160,460)
666,177
Income tax expense (d)
-
-
-
-
-
(78)
(78)
Profit (loss)
686,000
14,366
87,273
(9,547)
48,545
(160,538)
666,099
Other comprehensive income
-
-
-
-
-
-
-
Total comprehensive income (loss)
$ 686,000
$
14,366
$
87,273 $
(9,547) $ 48,545
$ (160,538) $ 666,099
Additions to non-current assets (e)
$ 75,594
$
60,513
$
15,047 $
9,694 $ 18,547
$
30,387 $ 209,782
(a)
Rental Revenue
Year Ended December 31, 2024
Alberta
British
Columbia
Saskatchewan
Ontario
Quebec
Corporate
Total
Lease revenue
$ 371,197
$
6,679
$
60,782 $ 46,976 $ 90,241 $
596 $ 576,471
Parking revenue
7,047
110
728
501
2,557
-
10,943
Recoveries (cable, retirement) and revenue
from telephone and cable providers
4,985
8
1,135
133
968
85
7,314
Revenue from coin laundry machines
2,879
-
278
512
673
-
4,342
Other
2,930
(23)
538
(170)
445
503
4,223
Total
$ 389,038
$
6,774
$
63,461 $ 47,952 $ 94,884 $
1,184 $ 603,293
Year Ended December 31, 2023
Alberta
British
Columbia
Saskatchewan
Ontario
Quebec
Corporate
Total
Lease revenue
$ 329,833
$
5,395
$
55,202 $ 44,346 $ 85,476 $
666 $ 520,918
Parking revenue
5,989
109
640
424
2,439
-
9,601
Recoveries (cable, retirement) and revenue
from telephone and cable providers
5,326
9
1,039
125
737
91
7,327
Revenue from coin laundry machines
3,038
-
279
547
747
2
4,613
Other
2,182
(26)
348
(87)
474
308
3,199
Total
$ 346,368
$
5,487
$
57,508 $ 45,355 $ 89,873 $
1,067 $ 545,658
138
138
(b)
Financing Costs
Year Ended December 31, 2024
Alberta
British
Columbia
Saskatchewan
Ontario
Quebec
Corporate
Total
Interest on secured debt (mortgages payable)
$ 69,546
$
3,023
$
8,459 $
8,578 $ 15,601 $
(3) $ 105,204
Interest capitalized to properties
under development
-
-
-
-
-
(2,332)
(2,332)
LP Class B Unit distributions
-
-
-
-
-
6,235
6,235
Other interest charges
(160)
3
(81)
51
(20)
2,371
2,164
Interest on lease liabilities
-
-
-
-
2,314
263
2,577
Amortization of deferred financing costs
4,815
88
757
560
1,092
1
7,313
Total
$ 74,201
$
3,114
$
9,135 $
9,189 $ 18,987 $
6,535 $ 121,161
Year Ended December 31, 2023
Alberta
British
Columbia
Saskatchewan
Ontario
Quebec
Corporate
Total
Interest on secured debt (mortgages payable)
$ 62,863
$
2,420
$
7,961 $
6,868 $ 15,816 $
- $ 95,928
Interest capitalized to properties
under development
-
-
-
-
-
(1,549)
(1,549)
LP Class B Unit distributions
-
-
-
-
-
5,169
5,169
Other interest charges
(213)
2
(64)
55
(14)
2,065
1,831
Interest on lease liabilities
-
-
-
-
2,353
241
2,594
Amortization of deferred financing costs
4,707
60
753
580
1,099
-
7,199
Total
$ 67,357
$
2,482
$
8,650 $
7,503 $ 19,254 $
5,926 $ 111,172
(c)
Depreciation
This represents depreciation on items carried at cost and primarily includes corporate assets, technology assets, site equipment and
other assets. These figures exclude any impairment charges.
(d)
Income Tax Expense
This relates to any current and deferred taxes.
(e)
Additions to Non-current Assets (Other Than Financial Instruments and
Deferred Tax Assets)
This represents the total cost incurred during the year to acquire non-current assets (other than financial instruments and deferred
tax assets), measured on an accrual basis.
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BOARDWALK REIT | 2024 ANNUAL REPORT
139
NOTE 29: SUBSEQUENT EVENTS
On January 21, 2025, the Trust sold three non-core assets that were included in assets held for sale (NOTE 5), totaling 390 suites, in
Edmonton, Alberta, which forms part of the Alberta geographical segment, for the combined sale price of $80.0 million.
Subsequent to December 31, 2024, the Trust committed to the purchase of one property located in Calgary, Alberta. The purchase
price of the property, totalling 255 suites and known as Elbow 5 Eight, is $93.0 million and will be funded with cash on hand.
The transaction is expected to close in March 2025.
Subsequent to December 31, 2024, pursuant to the Trust’s current Bid, the Trust purchased for cancellation 460,386 Trust Units
totaling $29.1 million.
Subsequent to December 31, 2024, with respect to the equity accounted investment in the joint venture, the joint venture extended
the revolving construction facility loan with a maturity date of June 30, 2025. In return, the Trust extended the maturity date on the
loan receivable from the joint venture to June 30, 2025, to maintain the same terms as the revolving construction facility loan.
NOTE 30: APPROVAL OF CONSOLIDATED FINANCIAL STATEMENTS
The consolidated financial statements were approved by the Board of Trustees and authorized on February 19, 2025.
140
140
Five Year Summary
($000’s except per unit and per square foot)
2020
2021
2022
2023
2024
Assets
Total Assets
$ 6,107,744
$ 6,660,653
$ 7,067,275
$ 8,141,876
$ 8,626,490
Liabilities
Total Liabilities
$ 3,231,295
$ 3,407,475
$ 3,600,277
$ 3,821,804
$ 3,789,681
Equity
Unitholders’ equity
2,876,449
3,253,178
3,466,998
4,320,072
4,836,809
Total Liabilities and Equity
$ 6,107,744
$ 6,660,653
$ 7,067,275
$ 8,141,876
$ 8,626,490
Trust unit outstanding (000) (including LP B Units)
51,024
50,612
50,198
53,863
53,761
Trust unit price at year-end ($)
$
33.74
$
54.83
$
49.43
$
71.34
$
64.25
Market capitalization ($MM)
1,721.5
2,775.1
2,481.3
3,842.6
3,454.2
Number of rental suites
33,396
33,264
33,810
34,029
34,405
Total Assets per suite ($000)
183
200
209
239
251
Total Liabilities per suite ($000)
97
102
106
112
110
Net rentable square feet (000)
28,879
28,888
29,390
29,515
29,829
Total Assets per square foot ($)
211
231
240
276
289
Total Liabilities per square foot ($)
112
118
123
129
127
Average net rentable SF per unit
865
868
869
867
867
L/T debt weighted average interest rate
2.58%
2.46%
2.72%
3.00%
3.19%
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BOARDWALK REIT | 2024 ANNUAL REPORT
141
Five Year Summary
($000’s except per unit)
2020
2021
2022
2023
2024
Rental revenue
$
467,583
$
472,312
$
496,360
$
545,658
$
603,293
Rental expenses
Operating expenses
98,349
98,626
104,081
106,190
109,617
Utilities
48,938
49,751
52,572
53,392
55,969
Property taxes
51,152
49,595
51,047
53,087
55,373
Total rental expenses
198,439
197,972
207,700
212,669
220,959
Net operating income
269,144
274,340
288,660
332,989
382,334
Operating margin
58%
58%
58%
61%
63%
Financing costs
92,385
90,080
97,021
111,172
121,161
Administration
36,069
33,282
33,859
41,172
44,791
Deferred unit-based compensation
3,255
2,392
2,556
3,328
5,374
Depreciation
8,195
7,809
7,782
7,921
8,318
Profit from continuing operations before
the undernoted
129,240
140,777
147,442
169,396
202,690
(Loss) income from equity accounted investment
-
-
(247)
(1,113)
13,226
Loss on sale of assets
(1,136)
(1,953)
-
(928)
-
Adjustment to right-of-use asset related to
lease receivable
(159)
-
-
-
-
Fair value (losses) gains
(326,134)
307,002
132,256
494,877
359,888
Interest Income
763
331
935
3,059
12,498
Other income
75
-
2,788
886
-
(Loss) profit before income taxes
(197,351)
446,157
283,174
666,177
588,302
Income tax recovery (expense)
72
110
(78)
(78)
(84)
(Loss) profit
(197,279)
446,267
283,096
666,099
588,218
Other comprehensive income
-
-
-
-
-
Total comprehensive (loss) income
$
(197,279)
$
446,267
$
283,096
$
666,099
$
588,218
(Loss) profit per Trust Unit – diluted
$
(4.85)
$
9.59
$
5.23
$
14.54
$
10.41
Funds from operations (1)(2)
$
139,736
$
150,207
$
157,444
$
181,353
$
225,848
Funds from operations per Unit – fully diluted (2)
$
2.74
$
2.94
$
3.13
$
3.60
$
4.18
Interest Coverage Ratio
2.77
2.96
2.90
2.83
2.95
(1) This is a non-GAAP financial measure.
(2) Please refer to the section titled “Presentation of Non-GAAP Measures” in the MD&A for more information.
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142
2024 Quarterly Results
Q1
Q2
Q3
Q4
Dec. 31, 2024
Rental revenue
$
145,248
$
149,067
$
153,413
$
155,565
$
603,293
Rental expenses
Operating expenses
27,082
27,082
27,969
27,484
109,617
Utilities
17,116
12,777
11,160
14,916
55,969
Property taxes
13,503
13,640
14,100
14,130
55,373
Total rental expenses
57,701
53,499
53,229
56,530
220,959
Net operating income
87,547
95,568
100,184
99,035
382,334
Financing costs
29,704
30,255
30,265
30,937
121,161
Administration
10,293
11,708
11,710
11,080
44,791
Deferred unit-based compensation
671
1,418
1,237
2,048
5,374
Depreciation and amortization
1,865
2,002
2,124
2,327
8,318
Profit before the undernoted
45,014
50,185
54,848
52,643
202,690
(Loss) income from equity accounted investment
(596)
(302)
(148)
14,272
13,226
Fair value gains (losses)
259,205
105,878
(1,838)
(3,357)
359,888
Interest Income
4,180
3,392
2,572
2,354
12,498
Profit before income tax
307,803
159,153
55,434
65,912
588,302
Income tax (expense) recovery
(82)
1
(15)
12
(84)
Profit for the period
307,721
159,154
55,419
65,924
588,218
Other comprehensive income
-
-
-
-
-
Total comprehensive income
$
307,721
$
159,154
$
55,419
$
65,924
$
588,218
Profit (loss) per unit – diluted
$
6.23
$
2.33
$
1.12
$
(0.57)
$
10.41
Funds from operations (1)(2)
$
51,035
$
56,085
$
60,185
$
58,543
$
225,848
Funds from operations per unit – fully diluted (2)
$
0.95
$
1.04
$
1.11
$
1.08
$
4.18
(1) This is a non-GAAP financial measure.
(2) Please refer to the section titled "Presentation of Non-GAAP Measures" in the MD&A for more information."
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BOARDWALK REIT | 2024 ANNUAL REPORT
143
2023 Quarterly Results
Q1
Q2
Q3
Q4
Dec. 31, 2023
Rental revenue
$
130,931
$
134,553
$
138,267
$
141,907
$
545,658
Rental expenses
Operating expenses
25,867
26,720
27,236
26,367
106,190
Utilities
16,428
12,235
10,857
13,872
53,392
Property taxes
12,844
12,992
13,531
13,720
53,087
Total rental expenses
55,139
51,947
51,624
53,959
212,669
Net operating income
75,792
82,606
86,643
87,948
332,989
Financing costs
26,638
27,501
28,128
28,905
111,172
Administration
9,847
10,054
10,922
10,349
41,172
Deferred unit-based compensation
575
1,242
590
921
3,328
Depreciation and amortization
1,800
1,893
1,984
2,244
7,921
Profit before the undernoted
36,932
41,916
45,019
45,529
169,396
(Loss) income from equity accounted investment
(315)
(309)
83
(572)
(1,113)
Loss on sale of assets
-
-
-
(928)
(928)
Fair value gains (losses)
183,362
189,981
(6,315)
127,849
494,877
Interest Income
649
560
660
1,190
3,059
Other income
818
-
-
68
886
Profit before income tax
221,446
232,148
39,447
173,136
666,177
Income tax (expense) recovery
(57)
15
(30)
(6)
(78)
Profit for the period
221,389
232,163
39,417
173,130
666,099
Other comprehensive income
-
-
-
-
-
Total comprehensive income
$
221,389
$
232,163
$
39,417
$
173,130
$
666,099
Profit per unit - diluted
$
4.84
$
5.08
$
0.86
$
3.75
$
14.54
Funds from operations (1)(2)
$
39,595
$
44,595
$
48,266
$
48,897
$
181,353
Funds from operations per unit – fully diluted (2)
$
0.79
$
0.89
$
0.96
$
0.96
$
3.60
(1) This is a non-GAAP financial measure.
(2) Please refer to the section titled “Presentation of Non-GAAP Measures” in the MD&A for more information.
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144
Market & Unitholder Information
SOLICITORS
Gowling WLG (Canada) LLP
1600, 421 – 7th Avenue SW
Calgary, Alberta T2P 4K9
First West Law LLP
100, 1501 – 1st Street SW
Calgary, Alberta T2R 0W1
BANKERS
TD Commercial Banking
1100, 421 – 7th Avenue SW
Calgary, Alberta T2P 4K9
AUDITORS
Deloitte LLP
700, 850 – 2nd Street SW
Calgary, Alberta T2P 0R8
REGISTRAR AND
TRANSFER AGENT
Computershare Trust Company of Canada
Our Transfer Agent can help you with a variety of unitholder
related services, including change of address, tax forms,
accounts consolidation and transfer of stock.
800, 324 – 8th Avenue SW
Calgary AB T2P 2Z2
Telephone: 403-267-6800
INVESTOR RELATIONS
Unitholders seeking financial and operating
information may contact:
Eric Bowers
Vice President, Finance & Investor Relations
Telephone: 403-531-9255
Web: www.bwalk.com/investors
Email: investor@bwalk.com
ONLINE INFORMATION
For an online version of the current and past annual reports,
quarterly reports, press releases and other Trust information,
please visit our investor website at www.bwalk.com/investors.
ANNUAL GENERAL MEETING
The Annual General and Special Meeting of the Unitholders
of Boardwalk REIT will be held at the Calgary Petroleum Club:
319 – 5th Avenue SW, Calgary, Alberta at 4:00 PM (MT) on
Monday, May 5, 2025.
Unitholders are encouraged to attend. Those unable to do
so are requested to complete the Form of Proxy and forward
it at their earliest convenience. Information available on
www.bwalk.com/investors.
EXCHANGE LISTINGS
The Toronto Stock Exchange
Symbol: BEI.UN
TRADING PROFILE
TSX: January 1, 2024 to December 31, 2024
High: $91.81
Low: $62.35
Year-end Closing Price: $64.25
MONTHLY DISTRIBUTIONS
Month
Per Unit
Annualized
Record Date
Distribution Date
Jan-24
$0.0975
$1.17
31-Jan-24
15-Feb-24
Feb-24
$0.0975
$1.17
29-Feb-24
15-Mar-24
Mar-24
$0.1200
$1.44
29-Mar-24
15-Apr-24
Apr-24
$0.1200
$1.44
30-Apr-24
15-May-24
May-24
$0.1200
$1.44
31-May-24
17-Jun-24
Jun-24
$0.1200
$1.44
28-Jun-24
15-Jul-24
Jul-24
$0.1200
$1.44
31-Jul-24
15-Aug-24
Aug-24
$0.1200
$1.44
30-Aug-24
16-Sep-24
Sep-24
$0.1200
$1.44
30-Sep-24
15-Oct-24
Oct-24
$0.1200
$1.44
31-Oct-24
15-Nov-24
Nov-24
$0.1200
$1.44
29-Nov-24
16-Dec-24
Dec-24
$0.1200
$1.44
31-Dec-24
15-Jan-25
Jan-25
$0.1200
$1.44
31-Jan-25
17-Feb-25
Feb-25
$0.1200
$1.44
28-Feb-25
17-Mar-25
Mar-25
$0.1350
$1.62
31-Mar-25
15-Apr-25
Apr-25
$0.1350
$1.62
30-Apr-25
15-May-25
May-25
$0.1350
$1.62
30-May-25
16-Jun-25
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BOARDWALK REIT | 2024 ANNUAL REPORT
145
Corporate Information
EXECUTIVE OFFICE
First West Professional Building
200, 1501 – 1st Street SW
Calgary, Alberta T2R 0W1
Phone: 403-531-9255
BOARD OF TRUSTEES
Sam Kolias
Chairman of the Board
Calgary, Alberta
Mandy Abramsohn (2)(3)
Toronto, Ontario
Andrea Goertz (2)(3)
Calgary, Alberta
Gary Goodman (2)
Toronto, Ontario
Samantha Kolias-Gunn
Calgary, Alberta
Scott Morrison (2)
Toronto, Ontario
Brian Robinson (1)(3)
Calgary, Alberta
(1) Lead Trustee
(2) Member of the Audit & Risk Management Committee
(3) Compensation, Governance, Nominations
& Sustainability Committee
SENIOR MANAGEMENT
Samantha Adams
Senior Vice President,
Investments
Boyd Belisle
Vice President,
Community & Culture
Eric Bowers
Vice President,
Finance & Investor Relations
Razvan Costin
Vice President,
Operations,
Northern Alberta and Saskatchewan
Arvinder Dhol
Vice President, Special Projects,
Engineering & Design
James Ha
President
Bhavnesh Jairam
CIO, Vice President,
Technology
Haroon Khan
Vice President,
Operations, British Columbia,
Southern Alberta, Ontario and Quebec
Jeff Klaus
Vice President,
Asset Management & Development
Sam Kolias
Chief Executive Officer
Samantha Kolias
Senior Vice President,
Corporate Development & Governance
Marie Ma
Vice President,
Recovery & Tribunal Affairs
Helen Mix
Vice President,
People
Nandini Somayaji
General Counsel & Corporate Secretary
Gregg Tinling
Chief Financial Officer
146
146
BOARDWALK REIT | 2024 ANNUAL REPORT
147
NOTES
200–1501 1 St. SW
Calgary, Alberta T2R 0W1
T 403-531-9255
F 403-531-9565