Boardwalk Real Estate Investment Trust (TSE:BEI.UN) reported improved fourth-quarter and full-year 2025 operating results, pointing to continued strength in demand for affordable rental housing even as supply and demand dynamics across Canada become more balanced.
Fourth-quarter performance and operating trends
CEO Sam Kolias said the trust delivered “impressive performance” across GAAP and non-GAAP measures in the quarter. Management highlighted several year-over-year changes for Q4 2025, including:
- Same-property rental revenue growth of 5.8%
- Same-property net operating income (NOI) growth of 9%
- Operating margin up 190 basis points to 66.4%
- Funds from operations (FFO) per unit up 11.2%
Leasing, incentives, and seasonality
CFO Gregg Tinling said occupancy remained strong and that higher vacancy loss was offset by reduced leasing incentives, which supported higher Q4 2025 rental revenue versus the prior-year period. He added that leasing spreads have moderated year over year, reflecting a “more balanced supply-demand environment,” with increased competition at higher price points in certain markets.
During the Q&A, management repeatedly pointed to a return to “typical seasonality” and softer traffic in December and January, which led the trust to prioritize sustaining high occupancy. President James Ha said the trust used flexibility on rents and incentives over the winter to preserve occupancy and expects new leasing spreads to improve as the spring rental season progresses.
Ha told analysts that in the first 19 days of February, guest-card traffic was roughly in line with the same period last year, a notable improvement from December and January when traffic was down about 20% year over year. He also said that in the first 19 days of February the trust was “almost 90% covered” on turnover, which management framed as an early positive sign heading into spring.
NOI drivers, expense items, and balance sheet discussion
Tinling said same-property NOI increased 7.3% in Q4 2025 compared to the same quarter last year, supported by revenue growth of 4.5%. He said Alberta, the trust’s largest region, posted 4.4% rental revenue growth driven by stronger in-place rents and reduced leasing incentives.
On the cost side, Tinling said total rental expenses declined 0.6% year over year, driven primarily by lower utility costs that he attributed to the removal of the federal carbon tax, along with reductions in property taxes and insurance premiums.
Management also reviewed debt and liquidity. Tinling said the mortgage maturity schedule is well staggered and that approximately 96% of the mortgage balance carries NHA insurance through CMHC, which supports access to financing at rates below conventional mortgages. He said the trust’s interest coverage was 3.08 in the quarter. In 2025, the trust renewed CAD 403 million of mortgages at an average interest rate of 3.72% with an average term of 6 years, and made CAD 79 million of mortgage principal repayments. Of the CAD 832 million of 2026 maturities, Tinling said the trust has renewed or forward-blocked CAD 228 million at an average rate of 3.72% with an average term of about eight years.
Portfolio valuation, ESG, and capital allocation
Tinling said the estimated fair value of investment properties (excluding IFRS 16 adjustments) was CAD 8.7 billion at Dec. 31, 2025, up from CAD 8.2 billion a year earlier. He attributed the increase to acquisitions and rental rate growth, partially offset by dispositions of non-core assets, increased cap rates in select markets, and an upward adjustment to vacancy assumptions in Calgary. He said fair value equated to approximately CAD 247,000 per apartment door, which management described as below replacement cost, and noted cap rates used in valuations increased in Ontario, Victoria, and secondary Alberta markets due to rent pressure or “slightly higher risk fundamentals.”
On ESG, Tinling highlighted a 2025 GRESB score of 72, up 7.5% from the prior year, and said the trust is focused on reducing emissions through lower utility consumption while also promoting social and governance initiatives.
Senior VP Samantha Adams said 2025 was a year of “tactical, disciplined capital recycling,” and that the trust plans to maintain that approach in 2026, emphasizing value-add repositioning, targeted dispositions of non-core communities, and unit repurchases under its normal course issuer bid (NCIB). She said Boardwalk completed repositioning of 20 communities in 2025 and has 16 projects planned for 2026.
Adams said the trust repurchased CAD 57.3 million of units over the past year at an average price of CAD 63.81, and has deployed CAD 18 million in 2026 to date at a weighted average price of CAD 67.63. She characterized the buyback as the most accretive use of capital “today,” citing implied yields exceeding 6%. In acquisitions and dispositions, she said Boardwalk bought CAD 551 million of properties in 2025 across Montreal, Calgary, Regina, and Saskatoon at an average cap rate of 5%, and sold CAD 241 million of non-core properties in Quebec City and Edmonton. She added that after year-end the trust completed or announced an additional CAD 84 million of non-core sales.
2026 outlook and distribution increase
Ha provided updated 2026 guidance, saying Boardwalk expects same-property NOI growth of 1.5% to 4.5% and FFO per unit of CAD 4.65 to CAD 4.90. He said the guidance does not include potential asset dispositions.
The trust also announced an 11% increase to its regular monthly distribution, equating to CAD 1.80 per unit on an annualized basis beginning in March. Ha said distribution growth since 2021 has exceeded a 10% compounded annual growth rate while still retaining a high proportion of cash flow for reinvestment.
In discussing valuation and capital priorities, Ha said the trust is prioritizing repurchases through the NCIB, with a planned minimum investment of CAD 100 million. Management said it sees trust units trading at less than CAD 200,000 per apartment door at a mid-6% cap rate on a forward basis, while citing an estimated net asset value of CAD 96 per unit (or CAD 247,000 per door) supported by private market transactions.
About Boardwalk Real Estate Investment Trust (TSE:BEI.UN)
Boardwalk Real Estate Investment Trust, or Boardwalk REIT, is a real estate investment trust engaged in the acquisition, development, and management of residential multifamily communities throughout Canada. Although the company’s cumulative residential property portfolio includes holdings in the provinces of Alberta, Saskatchewan, Ontario, and Quebec, the majority of its total units are located in Alberta. The submarkets around the cities of Calgary and Edmonton, specifically, account for the majority of Boardwalk REIT’s total residential suites.
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