TSX:BEI
Analysis
Boardwalk REIT (TSX:BEI) reported third-quarter financial results on Wednesday. The transcript from the company’s third-quarter earnings call has been provided below.
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SummaryBoardwalk REIT reported a slight decrease in same-property net operating income by 1.1%, despite a 0.9% increase in rental revenue, due to higher property taxes.
The company emphasized its strategic initiatives in providing affordable housing and maintaining high occupancy rates, reporting a 97% occupancy rate supported by strong demand in Alberta and Saskatchewan.
Boardwalk REIT’s future outlook includes tightened guidance with anticipated same-property NOI growth of 1% to 2% and FFO per unit between $4.65 and $4.75 for 2026, reflecting stable performance amid competitive markets.
Management highlighted ongoing capital allocation efforts, including a focus on unit buybacks due to undervaluation and strategic asset sales, contributing to liquidity and financial stability.
The company noted challenges from increased non-permanent resident turnover due to immigration issues but remains optimistic about the impact of potential immigration policy changes on housing demand.
Full TranscriptOPERATOR
Good afternoon, ladies and gentlemen, and welcome to the Boardwalk REIT third quarter 2026 earnings call. At this time, all lines are in listen-only mode. Following the presentation, we will conduct a question-and-answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on Wednesday, November 4, 2026. I will now turn the conference over to Eric Bowers, VP of Financial and Investor Relations.
Eric Bowers (Vice President, Financial and Investor Relations)
Thank you, Vanessa, and welcome to the Boardwalk REIT 2026 third quarter results conference call. With me here today are Sam Kolias, Chief Executive Officer; James Ha, President; Gregg Tinling, Chief Financial Officer; Samantha Kolias-Gunn, Senior Vice President of Corporate Development and Governance; and Samantha Adams, Senior Vice President of Investments. We acknowledge the traditional lands on which we live and work and our shared commitment to respect, stewardship and community. Before we get to our results, please note that this call is being broadly distributed by way of webcast. If you have not already done so, please visit bwoc.com investors where you will find a link to today’s presentation as well as PDF files of the Trust’s financial statements, MD&A and quarterly report.
Starting on slide 2, we would like to remind our listeners that certain statements in this call and presentation may be considered forward-looking statements. Although the expectations set forth in such statements are based on reasonable assumptions, Boardwalk’s future operation and its actual performance may differ materially from those in any forward-looking statements. Additional information that could cause actual results to differ materially from these statements are detailed in Boardwalk’s publicly filed documents.
I would like to now turn the call over to Sam Kolias.
Sam Kolias (Chairman / Chief Executive Officer)
Thank you, Eric. Starting on slide 4. Welcome everyone to our Boardwalk Family Forever and to our Q3 2026 results. Redefining BFF’s—Boardwalk Family Forever—is at the top of our organizational chart. Family is everything. Community, team performance guides us to be the first choice in multifamily apartment communities. Work, invest and call home together with our residents, associates, investors, partners, capital, environment, community. We are all essential and interconnected family members with our true north where love always lives, creating a win-win-win.
Together we go far. Our leaders put our team first and our team puts our resident family members first. Guided by the Golden Rule, we have a peak-performing customer service culture that creates resilient results. As we can see on our next slide, continued resilient performance with GAAP and non-GAAP measures from the same quarter last year: same-property rental revenue increased 0.9% and same-property net operating income decreased 1.1%. Our operating margin reduced by 140 basis points to 67%, mostly a result of increased property taxes in the second half of the year. Our funds from operations decreased, mostly a result of asset sales. Our asset sales provide capital for our normal course issuer bid program, which has helped to mitigate our FFO per unit decrease of 1.6%, demonstrating the impact of strategic capital allocation to maximize free cash flow.
Profit is down as a result of a non-cash reduction in our IFRS net asset value. I would like to now pass it over to Samantha Kolias-Gunn.
Samantha Kolias-Gunn (Senior Vice President, Corporate Development and Governance)
Thank you so much, Sam. We are extremely grateful for our team, our Boardwalk families, perseverance, performance and continued commitment to our purpose—bringing our resident family members home to love always. Continuing on to slide 6, our operational stability and commitment to affordable housing: rental market fundamentals in our core markets are competitive. Demand remains for more affordable housing despite supply deliveries focused on higher-end luxury product to justify high construction costs.
We are grateful for our partnership with CMHC and our federal government that have implemented effective public policy to build more supply that has resulted in a balancing of the rental markets across Canada, providing more affordability to all Canadians. We continue to deliver on our commitment to provide much needed affordable housing in a more competitive environment with our experienced peak-performing team, exceptional product quality with over $1 billion invested since 2017 in rebrand and repositioning efforts, and dedication to our Boardwalk family as responsible community providers.
Our self-regulation provides us with resilient results across various market cycles as we remain flexible with our new and renewing rental rates, maintaining stability in occupancy, margin, NOI and reputation, paired with our strong financial foundation, minimum distribution policy resulting in maximum reinvestment and free cash flow growth, strategic repositioning, unparalleled customer service and, on our foundation of strong family values, we remain in a position to deliver stable performance.
Moving on to slide 7. Our strategic rebranding enhances our resident member experience and exceptional quality at an affordable price, keeping our occupancy high at 97% per Rentals.ca data. Our average occupied rents of $1,609 for a two-bedroom apartment are attractive, especially relative to the Canadian average of $2,221. Moving on to slide 8. Affordability continues to drive positive population and leading economic growth in our core markets of Alberta and Saskatchewan. Alberta currently has the strongest population growth on an absolute basis due to interprovincial migration, resilient net non-permanent resident numbers compared to other provinces and a higher natural component. Quebec has delivered strong results, further evidencing the strong demand for affordable housing.
Ontario remains stable. Please refer to our appendix for more data on the resilience of our core markets—housing, Alberta and Saskatchewan—and the important role these provinces play as strategic engines for Canada’s long-term prosperity. With the referendum now behind us, Alberta enters its next chapter with greater certainty and a constructive backdrop for continued investment. As our Premier, the Hon. Danielle Smith, highlighted in her address on October 20, there is renewed recognition across Canada of the importance of Alberta’s energy, agriculture, technology and natural resources to our national economy and long-term prosperity.
Alberta continues to attract significant capital investment across energy pipelines, power generation, technology and AI infrastructure and housing, and aircraft assembly, such as the most recent federal financing of $2.5 billion awarded to De Havilland, who manufactures essential firefighting aircraft, while Saskatchewan’s strength in agriculture, potash, uranium and energy continue to support investment and economic resilience. A combination of energy security, economic competitiveness, relative affordability and infrastructure investment provides a strong foundation for job creation, population growth and sustained economic activity across our core prairie markets.
We would like to now pass the call on to Gregg Tinling, who will provide us with an overview of our quarter results. Strong balance sheet, fair value and ESG. Greg.
Gregg Tinling (Chief Financial Officer)
Thank you, Samantha. Slide 9 shows our key operational metrics. The Trust retained high occupancy during Q3 2026 by focusing on retention and by leveraging its vertically integrated operating platform to limit the time to complete suite turnovers. The Trust’s approach to strategically moderate its lease renewal rates over the last number of years while markets were heavily undersupplied also contributed to maintaining higher occupancy in a more balanced market.
Overall demand remains strong for affordable housing. Average occupied rent increased sequentially and when compared to the same quarter a year ago. Although vacancy loss increased, the Trust was able to reduce incentives that helped contribute to the higher revenues reported for Q3 2026 compared to the same period a year ago. These results reflect the success of our strategic initiatives aimed at maximizing free cash flow and diversifying our product offering, delivering meaningful financial performance.
Slide 10 provides an overview of leasing spreads for new and renewed leases under our self-regulated, resident-friendly, centric model. This approach continues to drive strong retention and referrals while keeping turnover and operating expenses low on a year-over-year basis. Leasing spreads have moderated reflecting a more balanced supply-demand environment. Positive market rent adjustments were implemented in some communities where rental fundamentals were strong.
In other communities, market rents were adjusted downwards in pockets that have experienced higher deliveries of new supply and where rents were on the higher end of the price spectrum on a blended basis. Leasing spreads trended slightly negative during the quarter, a reflection of our focus on retention in a more competitive market. Our strategic flexibility with new rental rates combined with positive renewal spreads enabled us to preserve high occupancy while maintaining solid operating margins and net operating income.
We will continue to focus on maintaining high occupancy and maximizing resident retention. This strategy reinforces our commitment to providing affordable resident-friendly housing in our core markets while also reducing costs and steadying operational performance, delivering long-term value for all stakeholders. Slide 11 shows sequential quarterly rental revenue growth. Rental revenue growth has increased gradually through the first 3/4 of 2026 and is consistent compared to Q4 2025. With increased competition, Boardwalk REIT focused on maintaining high occupancy while balancing market rents and rental incentives in order to achieve its NOI optimization strategy.
Turning to Slide 12, for Q3 2026, same property net operating income decreased by 1.1% compared to the same quarter last year as increased total rental expenses of 5.3% more than offset slightly higher same property revenue growth of 0.9%. The increase in total rental expenses was primarily due to the significantly higher education property tax expense in Alberta for 2026. I would like to remind everyone that same property is defined as one that has been wholly owned by the Trust for a period of 24 months or more from the reporting date.
Slide 13 outlines Boardwalk REIT’s mortgage maturity schedule. The Trust debt portfolio is well staggered with approximately 99% of the mortgage balance carrying NHA insurance through CMHC. This insurance remains in place for the full amortization period and, backed by the Government of Canada, enables access to financing at rates below conventional mortgage levels with a current estimated 5-year and 10-year CMHC rate of 4.05% and 4.45%, respectively.
Although current interest rates are above the Trust’s maturing rates over the next couple of years, the Trust’s maturity curve remains staggered, reducing the renewal amount in any particular year. Lastly, the Trust has an interest coverage of 2.83% in the current quarter. To date in 2026, of the approximately $815 million of 2026 mortgages maturing, we have renewed or forward locked $579 million at an average rate of 3.89% and an average term of approximately 7 years.
Combined with our cash on hand as well as our unused credit facilities, we are well positioned with strong liquidity available. Current underwriting criteria in our most recent submissions to CMHC and our lenders has remained in line with our historically conservative estimates. Please refer to Slide 48, which summarizes our 2026 mortgage program completed. Slide 14 illustrates the Trust’s estimated fair value of its investment properties, excluding adjustments for IFRS 16. As of September 30, 2026, the fair value of investment properties totaled $8 billion compared to $8.6 billion as at December 31, 2025. The decrease in overall fair value is the result of asset sales completed as well as an overall fair value loss adjustment recognized in the period. Current estimated fair value of approximately $248,000 per apartment door remains below replacement cost as it does every quarter.
The Trust will continue to review completed asset sales transactions and market reports to determine if adjustments to cap rates are necessary, as well as consult with our external appraisers. Most recent published cap rate reports suggest that the cap rates being utilized by the Trust for calculating fair value are within their estimated ranges. I would like to now turn the call over to Samantha Adams to highlight our capital allocation initiatives.
Samantha Kolias-Gunn (Senior Vice President, Corporate Development and Governance)
Thank you, Greg. As we enter the final quarter of 2026, our capital allocation approach is unchanged: stay disciplined, be patient, and invest where we see the best risk-adjusted returns, and our focus remains on growing free cash flow. Our value-add and repositioning program remains a key capital allocation priority. As highlighted on Slide 15, seven of the 16 projects planned for 2026 are complete and the rest are on track to finish by year-end.
These are cost-effective common area and amenity upgrades that improve the overall resident experience, preserve affordability, and support retention and long-term asset quality. Demand for high-quality affordable apartments remains strong, and these upgrades keep our properties competitive. Slides 16 and 17 summarize our 2026 transactions. Year to date we have completed or announced $629 million of sales at an average cap rate of 5.2%. Once the remaining deals close, these sales will generate $342 million in net proceeds and reduce near-term capital spending by about $33 million. This includes $177 million of third quarter sales in London, Grande Prairie and Edmonton. They were sold at an average cap rate of 5.4%. These properties were sold because of high deferred capital needs, operational challenges, or overexposure to certain markets.
And on September 1 we also closed Project Casa, our joint venture with Desjardins Global Asset Management. Our sales continue to close in line with our fair values and we have used most of the proceeds to buy back units as shown on Slide 18. The NCIB remains our top priority because our unit price does not reflect the value of our portfolio. So far in 2026 we have repurchased $245 million of units at an average price of $65.37. Private buyers in our core markets are paying cap rates of 4.75% to 5.25% while our units trade at an implied cap rate well above 6%, and that makes buying back our units the best use of our capital to date.
I would now like to turn the call over to Eric Bowers to discuss our track record of creating value.
Eric Bowers (Vice President, Financial and Investor Relations)
Thank you, Samantha. Slide 19 highlights our track record of compounding FFO per unit and distribution growth over the last many years as a result of the Trust Maximum Cash Flow Retention Policy. This has enabled the Trust to reinvest its cheapest source of capital, internally generated cash flow, into its communities to more than double FFO per unit since 2018 and compound growth on our regular distribution at an annual rate of approximately 12% since 2021.
We are pleased to confirm our regular monthly distribution equating to $0.15 per trust unit, or $1.80 on an annualized basis, for the months of December 2026 and January and February 2027. Please note, as we approach our year-end, our team is in the process of finalizing and conducting our tax review and will provide any special distribution update in December to reflect the taxable gains from our active sales program throughout the year. Our regular distribution review is also conducted at year-end and is expected to be updated with our year-end results.
On slide 20, we highlight the strength of the Trust balance sheet and the continued progress we are making on decreasing our financial leverage over time. In Q3, the Trust’s debt to EBITDA ratio improved to nine times, down from approximately 10 times in Q4 2025. While debt to total assets remained steady compared to the prior quarter at just under 43%, the Trust liquidity remains strong at approximately $403 million at the end of Q3. Slides 21 and 22 illustrate the exceptional value that the trust units continue to represent relative to private market valuations and the Trust NAV per unit.
At the current unit price of approximately $63, the Trust implied value of $195,000 per suite and implied cap rate of 6.5% provides the Trust with an ongoing opportunity to invest into its own high-quality, lower-risk portfolio at historically rare and discounted levels through its NCIB program. During the quarter, the Trust completed its NCIB for the current period, which is eligible for renewal in late November. I would like to now turn the call over to James Ha to discuss the Trust’s latest financial guidance and provide closing remarks on the Trust’s proven platform and exceptional value.
James Ha (President)
Thank you, Eric, and thank you to our entire Boardwalk team for your service and commitment to our resident members as we look forward to closing on another successful year. Slide 23 provides a final review of our 2026 outlook as we continue to demonstrate the strength of our platform and the resilience of affordable housing across the country. We continue to see strong demand for affordably priced homes while more expensive housing options remain competitive.
Our improving occupancy is a reflection of our high affordability and the exceptional quality of our communities and has positioned us well as we head into the winter season. Since our last report, we are seeing our overall results in line with our expectations. Our positive sequential revenue growth in this third quarter is offsetting the large increase in property taxes we are seeing in the second half this year. With this, we are pleased to tighten our outlook for the year with anticipated same-property NOI growth of 1% to 2% and FFO per unit of between $4.65 and $4.75 for the year.
Please note that this is forward-looking guidance and we will provide an update if there are any changes to this outlook as we finish the year. As customary, we will introduce our 2027 outlook and guidance with our upcoming fourth quarter results. In closing, our focus on delivering the best quality and affordable communities is why our residents make Boardwalk their first choice as the place to call home and reward our team with continued high occupancy and high retention rates. Slide 24 highlights a few key benchmarks that our team has and continues to work toward improving. As shared earlier, Boardwalk offers the best value in housing with some of the most affordable rents in the country at just over $1,600 a month.
Our operating margins have improved significantly as we continue to find new ways to optimize our NOI despite higher non-controllable expenses such as property taxes. Our unique business model retains and compounds cash flow, allowing us to organically improve our balance sheet with one of the lowest debt to EBITDA ratios amongst our peer group. Our unique platform, disciplined approach to capital allocation, and experienced team continues to demonstrate our ability to create value for all our stakeholders, and we would like to thank again our resident members, our team, our partners, and all our stakeholders for making us your first choice in housing. Thank you, and we would now like to open up the line for questions. Vanessa.
OPERATOR
Thank you, ladies and gentlemen. We will now begin the question-and-answer session. Should you have a question, please press the star followed by the one on your touchtone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press the star followed by the two. And if you’re using a speakerphone, please lift the handset first before pressing any keys. And we have our first question from Jonathan Kelcher with TD Cowen.
Jonathan Kelcher (Analyst at TD Cowen)
Thanks. Good afternoon. First question, and I know this is early and you give formal guidance in February, but just from a high level, how are you thinking about revenue growth and expense growth for next year?
James Ha (President)
Hey, Jonathan, it’s James. As you pointed out, we’re going to provide our formal guidance with our fourth quarter results. You know, what we’re focused in on is maintaining and growing occupancy. We just cannot thank our team enough for all the hustle, all the work that we’re doing to keep our 97% occupancy because it is competitive out there. You know, as we said in our prepared remarks, we’re seeing really strong resilience in the affordable segment of the housing market.
The more expensive, where there is a lot more supply, remains very competitive, and our team is doing a great job of winning market share and maintaining that occupancy at 97%.
Jonathan Kelcher (Analyst at TD Cowen)
Okay. And then on the expense side, are there any sort of big things like the property, like you had the property tax this year? Is there anything you see out there beyond sort of normal-course growth?
Gregg Tinling (Chief Financial Officer)
Hi, Jonathan, it’s Gregg again. It’s too early to say. We did get hit with the Alberta education property tax increase this year, so you’ll see that that’s hitting Q3 and will hit Q4. Although it’s too early to tell, we don’t expect a similar increase in that regard next year, but we’ll give you more update in February.
Jonathan Kelcher (Analyst at TD Cowen)
Okay, fair enough. And then just secondly, looks like you are building liquidity. You’re through the NCIB, and I get the NCIB is best use of any sort of cash you bring in right now. But are you guys starting to look at any acquisitions?
Samantha Kolias-Gunn (Senior Vice President, Corporate Development and Governance)
Yeah, hey, it’s Samantha Kolias-Gunn speaking. We are. We remain, though, highly selective, but we continue to review opportunities that come our way to find the very best acquisition. But I think, as you highlighted, it has been a challenge this year given the wide gap between our unit price and private market valuations, which is why we’ve allocated the majority of our net proceeds to the NCIB. But we are seeing some opportunities. Yep.
Jonathan Kelcher (Analyst at TD Cowen)
Okay, that’s helpful. I’ll turn it back. Thanks.
OPERATOR
We have our next question from Tom Callahan with BMO Capital Markets.
Tom Callahan (Analyst at BMO Capital Markets)
Thanks. Good afternoon. Maybe just to follow up there on the acquisition opportunities and more broadly the private market, perhaps a little bit early, but have you started to see any movement with respect to pricing or expectations just given the movement in yields?
Samantha Kolias-Gunn (Senior Vice President, Corporate Development and Governance)
Hi, it’s Samantha Kolias-Gunn again. I think it’s too early at this stage, as the rate changes are fairly recent. But it’s something we’re certainly going to monitor as we move into 2027. But no, as of yet, we haven’t seen a significant impact.
Tom Callahan (Analyst at BMO Capital Markets)
Okay, got it. And then maybe switching gears just with respect to spreads and on a blended basis. Did see a bit of sequential slowing there in Q3. Can you just give us a bit of sense for what you’ve seen kind of post-quarter on the spread side of things?
James Ha (President)
Hey Tom, it’s James. Fairly consistent again. It remains quite competitive out there. We’re moving into typically a slower winter season, but that also means a little less turnover as well. And so we’re seeing some consistency. I think renewals are very similar to what you’re seeing or what we’ve seen over the last few months.
Tom Callahan (Analyst at BMO Capital Markets)
Okay, so in that kind of 2% range on the renewal side of things is kind of reasonable to what you’re seeing.
James Ha (President)
Yeah, for what we’re seeing over the next couple of months, I think, as we said, we’re seeing it quite consistent.
Tom Callahan (Analyst at BMO Capital Markets)
Okay, thanks, James. I’ll pass it back.
OPERATOR
We have our next question from Brad Sturges with Raymond James.
Brad Sturges (Analyst at Raymond James)
Hey there. Just following along Tom’s question there. How do you think incentive usage would trend, I guess, heading into Q4, Q1 kind of slower leasing season, generally speaking?
James Ha (President)
Hey Brad, it’s James. You know, incentive usage again, fairly consistent with what we’re seeing. Again, our priority and focus is going to be to maintain that high occupancy on the renewal front. And keep in mind over the winter season, because there is less turnover, a larger proportion of our lease activity is going to be renewals, and so on new leasing, you know, we’re going to remain flexible with prospective new residents. As we know, there is a lot of competition out there—I know I’ve said that a few times now—and again, I can’t thank our team enough for the amount of work and effort that we’re putting in to continue to win market share.
But overall incentive usage, you know, we’re applying them on new leases and, for the most part, they’re coming off on renewals as well.
Brad Sturges (Analyst at Raymond James)
Okay. And maybe just going back to the private market discussion there, you’ve had a really good year selling non-core assets into kind of a strong demand backdrop. Have you seen any changes in the buyer pool in terms of depth or composition and is there still a window available to continue to sell, maybe opportunistically sell more non-core assets?
Samantha Kolias-Gunn (Senior Vice President, Corporate Development and Governance)
Hey Brad, it’s Samantha Kolias-Gunn speaking. We haven’t seen a shift in the buyer pool specifically. What we are noticing is more and more interest from Quebec, Ontario, and B.C. for some of our non-core communities. And in terms of what we can expect, or what we’re looking for, you know, as we move into 2027 again, I think it’s a bit early to tell what the private market is going to do, and we’re sort of currently reviewing our disposition strategy for 2027 this quarter and we’ll be able to provide a better update alongside our broader 2027 guidance in February.
Brad Sturges (Analyst at Raymond James)
Okay, thanks. I’ll turn it back.
OPERATOR
We have our next question from Jimmy Shan with RBC Capital Markets.
Jimmy Shan (Analyst at RBC Capital Markets)
Thanks. So James, I know you did mention competitive out there a few times. I’m assuming you’re referring to the Calgary market in particular. And I guess on that market, the rental under construction seems to be edging up still, I guess. When do you see that market turning?
James Ha (President)
Hey Jimmy, it’s James. Just I’ll start on this. We’re actually seeing it competitive across the country, and again it’s more price-point focused. You know, in Edmonton our average rents are very affordable. In Regina and Saskatoon our average rents are very affordable. You know, in Calgary we’ve really high graded our portfolio over the past several years, and so, you know, relatively are seeing more competition in Calgary. But across the country, depending on price point, you know, if we are competing in the more expensive segment of the market, that’s where you are seeing a lot of choice for residents.
But in terms of supply, I’ll pass it over to Eric.
Eric Bowers (Vice President, Financial and Investor Relations)
Hey Jimmy, it’s Eric. So from a supply standpoint, we still do have quite a bit under construction in Calgary year to date. What we’ve seen in general for starts is they’re down about 15% compared to the same time last year. Cumulatively through September, supply is always relative to demand. As we know, we’re going to get a new immigration levels plan here in the next couple of days. I would say good news is from an employment perspective and, as Samantha alluded to in her opening remarks, there’s some really good drivers that we’re confident we’ll continue to see migration into the province.
Jimmy Shan (Analyst at RBC Capital Markets)
Are you guys hearing anything on the immigration front?
Sam Kolias (Chairman / Chief Executive Officer)
Hello, Jimmy, it’s Sam. We’re just reading the same news everybody else. We are big advocates, as we’ve said over many other calls, of economic migration that in the past with a past administration proved very well with our Prime Minister Harper and proved to be very, very prosperous for all of us in Canada. So, you know, we continue to advocate, be an advocate for economic migration. And we are waiting to see the budget announcement in the next couple days to see how that’s covered.
Jimmy Shan (Analyst at RBC Capital Markets)
Okay, thank you.
OPERATOR
We have our next question from Kyle Stanley with Desjardins.
Kyle Stanley (Analyst at Desjardins)
Thanks. Afternoon, everyone. Maybe just sticking on the kind of immigration conversation here for a second. Looking at your top 10 reasons for moving out, I’m just trying to figure out where in those top 10 would you classify maybe some of the non-permanent residents who have been either forced to leave the country or uncertain about their status, and where would those people not renewing fall? How impactful has that been to your portfolio? Obviously, knowing that maybe there’s fewer non-permanent residents in Alberta relative to the rest of the country.
And how would you look at maybe a higher immigration target? How would that help?
James Ha (President)
Kyle, it’s James. We actually talked about this with our team in terms of creating a category for it, but then we had some privacy concerns and so we’ve opted not to do that. So it really varies, but I would say most are actually going to be in that moving out of town bucket for the non-permanent residents, non-renewals. And you can see there is a modest increase in that. When we speak with our teams, we hear a lot of unfortunate stories of folks who are here, have been here for many years, working multiple jobs with kids, with family who are going to school here, who are paying their rent on time every single month, you know, being asked to leave the country because their permit wasn’t renewed. And so, you know, our team has done a really good job of backfilling and re-renting those units. But at the same time, you know, certainly, you know, those are the type of stories where maybe are not quite what our immigration policy adjustment was intending to do.
And so, you know, certainly, as Sam said, we’re watching the budget for tomorrow in the next couple days to see what comes out with that. Obviously, as Samantha talked about in her prepared remarks, we have a lot of work to do here in Canada. We have projects to build. We have an economy to build and grow, and that’s going to take people. And so a little more immigration would create more household formation, which obviously is a positive driver in terms of absorption for this available housing that we have here.
And again, we’re watching the news along with everybody else.
Kyle Stanley (Analyst at Desjardins)
Okay, that makes sense. As you’ve mentioned, obviously, the elevated competition a number of times and the focus on occupancy, there’s been a lot of conversation about preserving the 97%. Is that the main goal, or do you see upside getting above that 97% in the next little while?
James Ha (President)
Yeah, our team wants to. We’re pushing again, I think, our more affordable communities, you know, where we have lower average rents and amazing value. We continue to be full in those. It’s really just the higher priced, more expensive communities where, again, I’m confident we are winning market share and we are ahead of the market there. But that’s also where we’re seeing more turnover because there is more choice for residents. So certainly, Kyle, we’d love to build more occupancy as we head into 2027, but also want to recognize our team here because we are also very happy that we were able to build some occupancy through the summer leasing season.
Kyle Stanley (Analyst at Desjardins)
Fair enough. Just the last one for me. Your same property revenue growth in Quebec looked quite strong this quarter. Just wondering if you could talk about the drivers there and maybe the sustainability of that growth.
James Ha (President)
Yeah, in Quebec, one of the biggest—I don’t want to say nuances—but is lease volume in the summer months. And so with heavier lease volume in the months of July, that obviously flows through into the quarter. And that actually offsets some increases in expenses that we also saw in Quebec, specifically related to R&M and the need to complete inspections that were mandated by the province during the quarter. And so, yeah, our Quebec portfolio continues to perform well.
Our team in Quebec is working hard. Similarly, though, as we said across the country, there is competition in Quebec, and so we all have to be on our games. Our team is on their game, and that’s allowing us to continue to perform well.
Kyle Stanley (Analyst at Desjardins)
Okay, thanks for that. I’ll turn it back.
OPERATOR
Our next question comes from Mario Sarek with Scotiabank.
Mario Sarek (Analyst at Scotiabank)
Hi. Thank you and good morning. Just coming back to the immigration topic, I think there is this general kind of enthusiasm or expectation that the updated immigration numbers could be positive for the sector. But if we just focus on Alberta and kind of the, you know, setting aside the sovereignty question that was on the referendum, there were kind of several immigration-related questions on that that received greater than 50% support. Do you think there’s any implications from that for rental demand going forward and kind of Alberta’s leading population growth that we’ve seen in the last three, four years?
Sam Kolias (Chairman / Chief Executive Officer)
Mario, it’s Sam. And what we heard is questions one to nine are very ambiguous. You can almost on the immigration question say yes and no mean the same thing. And what does that mean? Well, we can all agree that we need more teachers. That’s one thing we ask our policymakers and people all the time—our public. And we can all agree we need more healthcare and doctors, certainly, because it’s hard for everybody to see a doctor when everybody needs one.
And so there’s obvious wins in immigration, economic immigration, that we can all agree on. And what we try to do as advocates of tried, tested, proven public policy is to find common ground on policy that we can all agree on. And those are immigration discussions that we all agree on and continue to be hard to disagree with. The needs of our people—and we the people, for the people, by the people, of the people—is always a tried, tested, proven way to govern.
Mario Sarek (Analyst at Scotiabank)
Okay, thanks for that, Sam. And then just my next question coming back to the blended lease spreads—they have gone from about 10% in ’24 down to essentially flat now. And I appreciate that most of the competition that you’re seeing is at the higher rent level or the new construct level, but does that kind of explain all of it? For example, do you have any stats where you have the blended lease spread by rent amount, for example? I’m just trying to get a sense for how broad-based kind of the blended lease spread erosion has been across the portfolio by rent type.
James Ha (President)
Yeah, we can look at producing that, Mario, and maybe add it to our investor deck in the coming months. I think you can look at our occupied rents over that exact same period. As you know, our portfolio is certainly tilted more towards the high value, high affordability. And you’ve seen our occupied rents—and, sorry, contrast that with maybe Rentals.ca data which is listings-based, which is going to be at the higher end because, as we’ve talked about in the past, that’s where most of the vacancy is.
And so if you track that trend on the Rentals.ca average rents in those municipalities, we’ve seen those list rents come down, at the same time our occupied rent, albeit to your point, Mario, at a lower growth rate, that has continued to trend upwards. And so, you know, I think that gives you a bit of an indication. But a great idea—we’ll look to maybe track our average rents by brand and see if we can add that to our investor presentation over the next month or so.
Mario Sarek (Analyst at Scotiabank)
Great. Yeah, that’ll be interesting. And maybe, James, just sticking with you, the 10 cent guidance range for Q4—it’s about 9% of your implied 1.16 at the midpoint. Can you maybe walk through some of the assumptions that get you to the 4.65 versus the 4.75 for the year?
James Ha (President)
Yeah, really it’s going to be utilities is the big swing factor at this juncture, Mario. You know, it really depends on how warm or how cold a winter we face over the next couple of months. Revenue again, especially with the update that we provided here and the update we provided in October with our operational update, you can track kind of where revenue is headed. On the expense side, I don’t know if there’s anything else to add here, Greg.
Gregg Tinling (Chief Financial Officer)
Yeah, I can give some more color. When it comes to repairs and maintenance, definitely increased during the quarter, and there were a couple of big items there that we just didn’t anticipate. One was in Quebec—James touched on it earlier. Basically, the Quebec equivalent Workplace Safety and Insurance Board, they mandated some inspections and testings that we need to get done under new regulations that involved testing about 2,500 suites. Also in Alberta, we had record rainfalls in Edmonton and grand area in Q3 that also resulted in higher R&M. That was not anticipated.
James Ha (President)
Yeah. And so the $0.05 on either side of that midpoint, Mario, that’s two and a half million bucks. Right? I mean it’s really, you know, utilities is going to be our biggest driver for low to high there.
Mario Sarek (Analyst at Scotiabank)
That makes sense. And so my last question—just, you know, we’ve talked about supply and how competitive it is out there. But Samantha did kind of highlight the have land project—$2.5 billion. There’s several kind of federal initiatives over the next couple years that can mean big projects and big job growth for the prairies, in Alberta in particular. Without getting into kind of the detail about each project, when do you think roughly we’ll start to see the job impact associated with all of these larger-scale initiated or projects that are on the drawing board?
James Ha (President)
You know, you said it bang on, Mario, and that’s why we’re all excited. But the big question is when? And so again, we’ve got a budget coming out tomorrow. We’re looking to read that and see when this investment can get started. But that big question is the same as you add is one.
Mario Sarek (Analyst at Scotiabank)
Okay, that’s it for me. Thank you.
OPERATOR
Thank you. We have our next question from Matt Kornack with National Bank of Canada. Pardon me, not Chicago.
Matt Kornack (Analyst at National Bank of Canada)
Yeah, just quickly, it’s T-shirt weather out here in Toronto. If you could give us a sense—we’re halfway through the quarter. I’ve seen some snow on some webcams for the ski resorts out west, but is it trend kind of normal or colder than normal out west at this point?
James Ha (President)
You know, Matt, this week it’s warm. We’ve got a high 10 degrees Celsius here in Alberta. And so it’s warm right now. It was cold last week. We’re supposed to have a super El Niño, but, you know, again, that’s why we have a range for the balance of the year. If you have a better indicator for weather, please let me know. I do not.
Matt Kornack (Analyst at National Bank of Canada)
On the property tax side, it was a pretty steep increase. I think you had mentioned it, but it all seemed to have come in this quarter. So I know part of it is also related to school taxes. Is that a seasonal thing? I know you also will probably try to get some refunds or, or contest some of these. But how should we think about this quarter as a representation for the property tax expense across the portfolio?
Gregg Tinling (Chief Financial Officer)
Hi, Matt, it’s Greg. Property taxes for Q4 should be similar to Q3. The increases in Alberta that we referred to earlier, those took effect in July, so at the beginning of Q3, and it’s for the second half of the year. So it’s a timing issue. But yeah, Q4 will be consistent with Q3. And then looking—sorry, go ahead, Jim.
James Ha (President)
Sorry, Matt. I was just going to add the good news on those property taxes is we actually received some good news from our premier and finance minister here in Alberta just last week, slightly bringing down that education tax, but more importantly providing the market with certainty on that over the next three years. And so, you know, that education tax represents about a third of our total property tax. And so we were happy with that announcement that came out last week.
Now that said, there are a couple of other inputs into property taxes, including assessment and municipal portion. And so, you know, our team is working with our various municipalities over the next couple of months to try to pin down a number for our upcoming guidance. But we are happy to hear that that education tax at least has been made more consistent for the next few years.
Matt Kornack (Analyst at National Bank of Canada)
Just I know you’re not there yet, but for ’27, because we’re forecasting, it should—so it’s going to be 15 million or so for the next two quarters, but will it step down on average into ’27 to something more like what you would have had for the entire year for ’26?
Gregg Tinling (Chief Financial Officer)
You know, we always recommend with property taxes to look at it on a full-year basis. You know, the payments amongst the two halves of the year are a result of our tax installment payment plans that we have with each municipality. And, you know, over the long run, Matt, when we look at any given year, for the most part property taxes portfolio-wide generally increase at an inflationary factor, right? Somewhere between, call it, the 2% to 4% range.
This year was obviously an exception to that. But again, we’ll look to gather more information on that. But, you know, for estimates purposes, over the long run we’ve seen that fairly consistent.
Matt Kornack (Analyst at National Bank of Canada)
Okay, no, that’s—appreciate the color there. And then just on expenses more broadly, looking at kind of R&M, you’ve done relatively well there on keeping that growth low. And also G&A is trending pretty well. Can you give us a sense as to whether there’s—I think we’ve talked about this a few times in the past—but whether there’s more to go in terms of the ability to keep expenses below inflationary growth outside of the non-controllable costs?
Gregg Tinling (Chief Financial Officer)
I mean, the team continues to work hard at managing our controllable costs. Even more so, the emphasis is on that given the challenging times. So, you know, we’re working hard, they’re cognizant of it. You know, admin, they’ve done a great job there, and we think that admin, you know, will come in around—probably close to around 11 million per quarter for the year.
Matt Kornack (Analyst at National Bank of Canada)
Okay, thanks guys, appreciate it.
OPERATOR
We have our next question from Dean Wilkinson with CIBC.
Dean Wilkinson (Analyst at CIBC)
Thank you, and hello to my BFFs. Just like to circle back on the rate conversation. When you reported Q1 back in May, the Canadian 10-year was 3.70. When you reported Q2 in August, the Canadian 10-year was 3.70. And looking at it today, it’s 3.70. And I look at our CIBC house forecast for where it is in 2028, it’s 3.70. You’ve seen a trend there. Maybe the question for Samantha and James is, is this rate conversation actually happening with the purchasers and sellers of real real estate out there and your lenders, or is this more a conversation you’re having with, say, people like me that are trying to read too much into week-to-week movements on rates?
Samantha Kolias-Gunn (Senior Vice President, Corporate Development and Governance)
That’s a self-deprecating question. But, yeah, love it. No, we are not having that conversation. From the investments team perspective, it really hasn’t factored in to date in our discussions with purchasers of our non-core communities. Will it have an impact through 2027? Again, I think as I said earlier on the call, it’s too early to tell, but so far it hasn’t really been a factor.
James Ha (President)
Yeah, I think just to add to that, Dean, and you hear Eric talk about this all the time in terms of the importance of laddering our—this is exactly why. Because you’re right, you know, we were right around 3.7 in those periods that you talked about, but it was just two months ago that we were close to four. And so if we’re kind of in the market every single month, it just provides us with a bit of that timing hedge. And so at the end of the day, as Samantha had said, we continue to see really attractive investment opportunities at interesting cap rates and we’ll look to take advantage of that both on the sale and on the acquisition side.
Dean Wilkinson (Analyst at CIBC)
And have you seen any material change in financing spreads? I mean, it seems to me on the surface they may have come in, but are you seeing anything different there?
Eric Bowers (Vice President, Financial and Investor Relations)
I mean, hey Dean, it’s Eric. I think compared to a year ago they’ve come in a little bit. But generally they’ve been fairly consistent over the last little while. But if I’m comparing it to a year ago, yeah, I would say they’ve come in a little bit.
Dean Wilkinson (Analyst at CIBC)
Rates up a little, spreads in a little; net-net, you’re borrowing at the same rate. Appreciate it. Thanks, guys.
OPERATOR
There are no further questions at this time. I will now turn the call over to Sam Kolias for closing remarks.
Sam Kolias (Chairman / Chief Executive Officer)
Thank you, Vanessa. As always, if there are any further questions or comments, please do not hesitate to contact us. Gratitude. We would like to thank our entire team that puts the extra in ordinary day in and day out. Our team is truly extraordinary. Thank you loyal residents, CMHC, our lenders, partners and of course our unitholders from far and wide and local. It really is all about our business BFF, our Boardwalk REIT family forever whose huge shoulders we stand.
And as leaders we continue to do everything we can to support continued growth and extraordinary. We really can’t thank our extraordinary team and great leaders enough. We are pleased with our resilient results on a foundation of exceptional value, service and experience. We continue to provide our resident family members, our investors and all our stakeholders. We conclude home is where our heart is. Our heart is where our family is and our family is where love always lives. There are many choices today on where we choose to live. There is only one place to call home.
Home to love always. Our future is Boardwalk REIT. Family forever. What can be more important than choosing where to call home? God bless us. And now more than ever, grant us all peace. Our greatest prize of all.
OPERATOR
Ladies and gentlemen, this concludes today’s conference call. Thank you for your participation. You may now disconnect.