Boardwalk Real Estate Investment Trust

Good afternoon, ladies and gentlemen, and welcome to the Boardwalk Real Estate Investment Trust 4th Quarter 2024 Earnings Call. At this time, all lines are in a 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 0 for the operator. This call is being recorded on Friday, February 21, 2025. I would now like to turn the conference over to Eric Bowers. VP Finance and Investor Relations, please go ahead.

Thank you, John, and welcome to the BoardWalk REIT 2024 Fourth Quarter Results Conference Call. With me here today are Sam Collius, Chief Executive Officer, James Ha, President, Greg Tinling, our Chief Financial Officer, Samantha Collius-Gunn, Senior VP of Corporate Development and Governance, and Samantha Adams, our Senior VP of Investments. We would like to acknowledge on behalf of Boardwalk the treaties and traditional territories across our operations and express gratitude and respect for the land we are gathered on today and we now know as Canada. We respect Indigenous peoples and communities as the original stewards of this land. We come with respect for this land that we are on today for all the people who have and continue to reside here. and the rich diversity of First Nation, Inuit, and Metis peoples. 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 bwalk.com slash 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 annual report. Starting on slide two, 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 Collius. Thank you, Eric.

Starting on slide four, affordable multifamily communities are an essential product and service. A key word in community is unity, as reflected in our new diagram. The most important word in multifamily communities is family. The most important part of our home is our family. Our family is where our heart is. Our heart is where Love always lives, our true north. At the center of our being is redefining BFF, our BoardWalk family forever. Welcome, everyone, to our BoardWalk family forever and to our Q4 2024 results. Next slide. Our culture, from our humble beginnings over 40 years ago, our resident members remain at the top of our organization. Our leaders put our team first, and our team puts our resident members first. Guided by the golden rule, we have a peak-performing customer service culture that creates exceptional results, as we can see on our next slide 6. Our continued impressive performance with gap and non-gap measures increasing from the same quarter last year, same property rental revenue increased 8.2%, and same property net operating income increased 11%. Our operating margin increased by 160 basis points, as well as our same property funds from operations per unit by 12.5%. James will share how our FFO per unit over the last eight years is on course to double, showing how our maximum free cash flow retention strategy that allows us to reinvest in new and existing communities has resulted in outsized performance and growth. I would like to now pass it over to Samantha Coley-Gunn.

Thank you so much, Sam. We are extremely grateful for our team's exceptional performance and continued commitment to our purpose, bringing our resident members home to love always. Our 2024 annual report theme, Performance with Purpose, exemplifies this is more than just a philosophy. It is the driving force behind everything we do. Continuing on to slide seven, our operational stability and the resilience of affordable housing. Rental market fundamentals in our core market are balanced. Our occupancy, retention, and demand for affordable rental housing remains high. Average asking rents in Canada remain much higher than BoardWalk's occupied average rent. As a result of our self-regulation, we continue to provide Canadians with exceptional value. Our economy continues to diversify, provide job opportunities, host world-class educational programs that attract skilled talent, offer an exceptional quality of life and affordability. Recently, Calgary has been chosen as a location for a new $3 billion deal between WestJet and Lufthansa Technic for a new engine repair facility significantly increasing jobs in aviation. We continue to be in the right place at the right time. Please refer to our appendix for more data on the enduring Alberta advantage. Per Rentals.ca data, our average occupied rent of $1,524 for a two-bedroom apartment are attractive, especially relative to the Canadian average of $2,194.00. Affordability continues to be in demand, as evidenced by our strong portfolio occupancy of 98%, and is a leading factor in interprovincial migration. The fiscal strength of our Alberta and Saskatchewan jurisdictions will continue to attract employers, allow for innovation, and increase our productivity, contributing to a more stable economic environment. Our self-regulation has us well positioned in a competitive market, as we continue to strategically moderate our rental rates within a resident-friendly renewal rate band, resulting in greater stability in occupancy and reputation. Paired with our strong financial foundation, minimum distribution policy, resulting in maximum reinvestment and free cash flow, strategic repositioning, unparalleled customer service, and strong family values, we remain in a position to deliver stable performance. This is what sets us apart, bringing you home to where love always lives. Boardwalk strives to be the first choice in multifamily apartment communities to work, invest, and call home with our Boardwalk family forever. Slide 8 illustrates our amazing renovations and value, representing exceptional quality at an affordable price. BoardWalk has made significant investments in its communities to improve value proposition and leasing performance. Past investments in upgraded fitness facilities, amenity rooms, and outdoor spaces provide high-quality communities in the affordable housing market segment. We would like to now pass the call on to Greg Kinling, who will provide us with an overview of our quarter results, strong balance sheet, fair value, and ESG. Greg?

Thank you, Samantha. Slide 9 shows our key operational metrics with high occupancy and higher occupied rent. Although vacancy loss increased, the Trust was able to reduce incentives that helped contribute to the higher revenues reported for Q4 2024 compared to the same period a year ago. This is a reflection of our key strategic decisions made to maximize free cash flow and diversify our product offering, yielding significant financial performance. Slide 10 shows leasing spreads on new and renewed leases within our self-regulated, resident-friendly centric model, keeping retention and referrals high and our turnover and expenses low. Year over year, leasing spreads on new and renewed leases have decreased, reflecting a return to a more balanced supply and demand picture, with new supply entering select markets within the portfolio that increased competition and vacancy, particularly for product at the higher price point. Our renewal spreads while moderated over 6.6% in January 2025 for Alberta. New lease spreads have decreased as we prioritize high occupancy and respond to the return of seasonality. We continue to prioritize maintaining occupancy and maximizing retention. This will continue to provide resident-friendly affordable housing options in our core markets while lowering our costs and steadying operational results, a win-win for all our stakeholders. Slide 11 shows sequential quarterly rental revenue growth, including 1.3% growth in Q4 2024 compared to Q3 2024. The change over each quarter is a reflection of BoardWalk's strategy, striving towards balancing the optimum level of market rents, rental incentives, and occupancy rates in order to achieve its NOI optimization strategy. Moving to slide 12, For Q4 2024, same property net operating income increased by 11% compared to Q4 2023 and with revenue growth of 8.2%. For the year ended December 31st, 2024, same property net operating income increased by 13% with revenue growth of 9.2%. Alberta, the trust's largest region, saw revenue growth of 9% in Q4 2024 and 10.4% for the year ended December 31st, 2024. as compared to Q4 2023 and the year ended December 31st, 2023, respectively. Total rental expenses increased 3.6% for Q4 2024 and 2.9% for the year ended December 31st, 2024, compared to the same periods in the prior year, due to higher operating expenses, higher utilities, and higher property taxes. On slide 13, revenue growth was the main driver of our margin expansion of 240 basis points. from 61% in 2023 to 63.4% in 2024. Global expenses increased 3.5% in 2024 compared to 2023 due to higher wages and salaries as a result of inflationary adjustments at the beginning of the calendar year, as well as higher building repairs and maintenance, partially offset by decreases in advertising and bad debts expense. The team remains committed to ensuring focus and discipline when managing controllable operating expenses. Slide 14, administration costs decreased $0.6 million as compared to Q3 2024. However, increased by $0.7 million in Q4 2024 as compared to Q4 2023. The year-over-year increase was driven by inflationary wage adjustments at the beginning of the year and an increase in software costs, including cybersecurity and new software to improve operating efficiencies. Deferred unit-based compensation increased $0.8 million compared to Q3 2024 due to an $850,000 one-time true-up adjustment to recognize unvested deferred units that would automatically vest if the participants who are eligible were to depart from BoardWalk due to retirement or resignation, for example. Deferred unit-based compensation increased $1.1 million as compared to Q4 2023 due due to an increase in the number of participants in the program, as well as the one-time true-up adjustment in the current quarter, as previously mentioned. Slide 15 illustrates BoardWalk's mortgage maturity schedule. Our mortgages are well staggered, with approximately 96% of our mortgage balance carrying NHA insurance through the Canada Mortgage and Housing Corporation. This insurance remains in effect for the full amortization of the mortgage, and in addition to carrying the Government of Canada's backing, provides access to financing at rates lower than conventional mortgages, with a current estimated 5-year and 10-year CMHC rate of 3.7% and 4.05%, respectively. Though current interest rates are above the Trust's maturing rates, the Trust's maturity curve remains staggered, reducing the renewal amount in any particular year. Lastly, the Trust has an interest coverage of 2.95% in the current quarter. Slide 16 summarizes our 2024 mortgage program. Overall, we renewed $431 million at an average rate of 4.24% and an average term of six years. In addition, the Trust obtained $60.3 million of CMHC financing at 4.08% and a 10-year term for its acquisition of The Circle in Calgary, Alberta. Current underwriting criteria in our most recent submissions to CMHC and our lenders has remained in line with our historically conservative estimates. Slide 17 highlights our 2025 mortgage program. To date, we have renewed or forward locked $57 million at an average rate of 3.78% and an average term of six years. Slide 18 illustrates the trust's estimated fair value of its investment properties, excluding adjustments for IFRS 16, which totaled $8.2 billion as of December 31st, 2024, compared to $7.6 billion as of December 31st, 2023. The increase in overall fair value compared to December 31st, 2023 is the result of increases from rental rate growth and the acquisitions in 2024 in Calgary, Alberta, including the previously announced acquisition of the Circle, as well as the acquisition of Dawson Landing in Chestermere, Alberta, while being slightly offset by an increase to capitalization rates. The decrease in the trust fair value of investment properties from Q3 2024, excluding assets held for sale, is due to higher property operating costs as we roll into our upcoming budget, as is customary every fourth quarter, where we incorporated our 2025 budgeted amounts for property operating costs when determining the forecasted stabilized NOI into our internal valuation, as well as an upward adjustment for vacancy and assumptions to a more balanced market. Current estimated fair value of approximately $237,000 per apartment door remains below replacement costs. called in consultation with our external appraisers the capitalization rates, or cap rates, used in determining Q4 2024 fair value for unchanged from Q3 2024, an increase from Q4 2023 from adjustments made to the Trust's Ontario assets in London and Kitchener-Waterloo-Cambridge markets. As it does every quarter, the Trust will continue to review the completed asset sales transactions and market reports to determine if adjustments to cap rates are necessary. 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. Slide 19 highlights our ESG initiatives. Using a disciplined capital allocation approach, we are focused on reducing emissions through reduced utilities consumption and therefore reducing utilities costs while always promoting social and governance initiatives. We encourage our stakeholders to view our 2023 ESG report available on the Trust's website. I would like to now turn the call over to Samantha Adams to highlight our capital allocation and discuss our development pipeline.

Thank you, Greg. Throughout 2024, BoardWalk remained prudent in its accretive capital deployment initiatives, focusing on our successful repositioning and value-add strategy, acquisitions and dispositions, as well as the renewal of our normal course issuer bid, or NCIB. In 2024, we invested approximately $100 million into our value-add projects to upgrade our communities. Slide 20 illustrates the investment of our free cash flow into repositioning and value-add capital improvements, including suite optimization. Our suite optimization program is the conversion of underutilized storage or administration spaces that can be converted to rental suites. We are currently assessing the feasibility of converting 37 such spaces. And as a reminder, each project we undertake is evaluated individually, and we target at least an 8% return on cost, providing an accretive return on our capital. During the year, BoardWalk completed or announced $294 million of real estate transactions, as illustrated on slide 21. Within these transactions, we acquired 631 units, representing an average vintage of 2022, at an average stabilized cap rate of 5.6%. Now that 45 Railroad has reached stabilization, we began to replenish the development pipeline by adding a new location, Martaloop in Calgary, for a total consideration of $12 million. Boardwalk also reinitiated its capital recycling program, and in January of this year, we announced the successful sale of three non-core assets in Edmonton, with an average vintage of $19.92 for a total sale price of $79.95 million. This price represents $205,000 per door and a cap rate of 4.8%. A portion of the net proceeds from the sale were used to support the renewal of the NCIB and to strategically benefit from the disconnect between our unit price and the value of our portfolio. Slide 22 shows our prudent use of the NCIB, which was renewed in November of last year. Through February, BoardWalk has invested $39 million in unit buybacks at an average price of $64.11. This represents a cap rate of over 6%, which far exceeds other opportunities that were available during that time. Boardwalk Selective Development Pipeline has been designed to support the Trust's long-term growth strategy to improve the quality and variety of our product offering over time. Slide 23 provides an update on our pipeline. Our three Victoria area development projects continue to progress. As far as a slightly revised targeted occupancy of Q2 2025, it was previously this quarter, for Building 1, and we have initiated our pre-leasing program. The structure for Building 2 is nearing completion and is projected to meet our estimated completion date of mid-2025. The Aspire is progressing on budget and is located adjacent to our existing Aurora community, which will allow for greater operational efficiencies once completed. The site for the Marin has received its development permit, and we have submitted our building permit and continue to review tender pricing. Our island highway project has been officially rezoned, and we are working through next steps as well. Marteloup, the one-acre land assembly in Calgary, is still in the pre-construction phase, and we continue to finalize our project concept design. We are confident that our development will feature the cost benefit of wood frame construction versus concrete, as well as larger suites, that we believe will provide a differentiated product in the MARTA Loop node. I would now like to turn the call over to James Haw to discuss our track record of creating value and our 2025 guidance.

Thank you, Samantha, and thank you to our entire BoardWalk team for your service and commitment to our resident members, which resulted in the strong 2024 results our team is sharing today. Our focus on investing in and 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 introduces our 2025 outlook as we build off our base of exceptional affordability, product quality, and self-moderated rental rates over the past two years. Each of these are key inputs into the confidence into our platform and ability to navigate recent geopolitical challenges and a more balanced housing market. We have and continue to see that the demand for affordable housing remains resilient, and our outlook for the upcoming year is positive. For 2025, we are anticipating same-property NOI growth of between 4% and 8%, and FFO per unit of between $4.25 and and $4.55. We look forward to regularly updating and refining our outlook in the quarters to come. On slide 25, we are pleased to announce a 12.5% increase to our monthly distribution, equating to $1.62 per trust unit on an annualized basis, beginning in March. Since 2021, our distribution has increased at a compounded annual growth rate of over 12%, while still retaining an industry-high proportion of our cash flow to reinvest and compound growth. Our formula has extended our FFO per unit track record, and as Sam mentioned earlier, now positions BoardWalk in 2025 to more than double our FFO per unit in just eight years. On slide 26, this growth, along with our approach to maximum cash flow retention, has improved our leverage metrics to provide BoardWalk with one of the strongest, and most flexible balance sheets. Our disciplined and solid financial foundation provides us with flexibility to take advantage of further growth opportunities that may arise. As Samantha shared, one of the biggest opportunities we are seeing is in our own platform, which on slides 27 and 28 shows the exceptional value that our trust units represent. Our current trading price equates to approximately $190,000 per apartment door and a 6.25% cap rate on a forward basis. Both metrics are exceptional when considering our product quality, locations, spread to financing costs, and cash flow growth as shared in our outlook. Recent private market transactions continue to be supportive of our estimated net asset value of $237,000 per door, We're just under $94 per trust unit, and our investment in our buyback has been an accretive use of proceeds from our most recent non-core asset sales. In closing, we would like to thank again our resident members, our team, our partners, and all our stakeholders for an exceptional 2024. We are looking forward to continuing our track record of growth into 2025 by providing communities that our resident members are proud to call home. We would now like to open up the line for questions. John?

Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star followed by the number 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 star followed by the number two. If you are using a speakerphone, please lift the handset before pressing any keys. Their first question comes from the line of Frank Liu from BMO Capital Markets. Their line is now open.

Thank you, operator, and good morning, guys.

Hi, Frank. Good morning.

On the leasing side for Alberta, I wonder if the reason dip to 1.3% for new leasing is more temporary phenomenon, and what's your view on the new leasing spread throughout 2025?

Frank, it's James here. As we talked about in the fall, our approach this winter was really to ensure that we maintain high occupancy. So as such, we took a more conservative approach to market rents. You're seeing that now. We're quite happy with the occupancy that we have heading into the busier spring rental season. Sitting at 98% plus positions us really well going into busier spring rental season, and so Coming up with March or into March, we do anticipate adjusting our market rents upwards, pulling back discounts that we offer, and so we would anticipate those new lease spreads to start to increase. I will highlight, most importantly, that our renewal spreads continue to be strong. That's a benefit of our strategic moderation that we've undertaken over the past many years. And so seeing those renewal spreads, which represent about 75% of our lease velocity, maintaining those within this mid-single-digit range is going to be of utmost importance for us.

Thanks, James. That makes sense. And you literally just touched on the question I have next on the renewal side. Just switching to SPNY guidance of 4% to 8% growth, is this more front-end loaded or back-end loaded? And then what's kind of the embedded growth assumption for revenue and all techs? I guess you guys have a colder than normal winter, and we'll expect some pickup on utility side.

Yeah, Frank, James, again, maybe I can start. Again, when we build our guidance, we effectively take the run rates that we have and the environment that we're seeing here today. You know, from a revenue standpoint, generally our guidance range is about 4.5% to 6.5% on the revenue front. Again, that's on the same property basis, but I'll pass it to Greg to speak on the expenses.

Yeah, hi, Frank. For the expenses on a same property basis, the guidance – We're looking at total rental expense increase about 3% to 6% higher than 2024. The team is very focused on expense management. And that's, in fact, it's ingrained in our teams and we'll be looking to manage our controllable costs.

Got it. And just the 3% to 6% on the same probability basis, right? That's correct. Got it. And lastly, just switching gears to the CapEx budget for 2025. things up by roughly 10% over the 2024 actual level. And I believe most of this are due to the increasing value add initiatives. I wonder if this is a function of, you know, how our suite operates from our total expectation or it's more on building improvements and common area rentals.

A combination of it all, Frank. Our budget increase that was approved by our board back in November was based on our anticipated spend at that time. And so relative to our 2024 CapEx budget, it really is just an inflationary increase. There are some carry forward projects that we have going into 2025 that weren't completed in fiscal 2024. And so don't read too much into that, the increase relative to the actual. There really is just a carry forward, and our intention was just for inflationary increases. I'll do that.

All right. Thank you. I'll turn the call back. Thanks, Frank.

Your next question comes from the line of Jonathan Kelcher from D.D. Cowan. Your line is now open.

Thanks. Just going back to Frank's first question there, or I guess related, but you guys have about a 7% mark-to-market right now, and I guess that's a point-in-time calculation. How do you see market rents evolving as you start to get into a hopefully stronger spring leasing season?

Hey, Jonathan, it's James. Again, in March here, as we get into the spring, our intention is to start to adjust those market rents upwards. Most of our communities are full. You know, with our 98% occupancy, that 2% vacancy is really just in specific pockets that are more competitive. As we've seen in the past, I mean, over the long run, we are still seeing inflation in the marketplace, and so that will give us the opportunity to adjust those rents up. What we are seeing and have always seen, though, is continued strong demand for affordable housing. And that is the market that we serve. Our average rents in Edmonton are $1,500. We can't find that in any other major city in Canada. And so that affordability that we have, I think it's in the appendix of our conference call, affordability continues to remain high. And so that will position us, again, because we have this high occupancy through the winter months,

Okay.

Then I guess just sort of switching gears, you did sell some assets in Q4 and redeployed that into the NCIB. Do you see yourself continuing to sort of trim non-core assets? How should we think about that going forward?

Hey, it's Samantha Adams speaking. I can answer that for you. Yeah, we're targeting somewhere between $100 to $200 million in dispositions in 2025.

Okay. And I guess, well, this is perfect because I guess it's tough to do much outside the NCAA when you're trading above a six cap. But Samantha, what sort of opportunities are you seeing come across your desk from an acquisition point of view?

Yeah, no, and it's a fair question. We've seen quite a few interesting opportunities. We're always looking. But, yeah, it is a bit of a challenge right now where our stock is currently trading, but we remain opportunistic, and if the right opportunity fits, then we will be able to move on it.

Okay, thanks. I'll turn it back.

Your next question comes from the line of Brad Sturgis from Raymond James. Your line is now open.

Hey there. I guess sticking along the lines on the NOI guidance, so is it fair to say, I guess, given that you've been prioritizing occupancy around 98%, is that sort of what's baked into the guidance this year, that you would continue to trend around that level?

Hey, Brad, it's James. That's correct. You know, when we build that guidance, the starting point is where we start the year. We'd like to see that number higher. To be frank, I think that's going to be upside for us. But our starting point would be our current occupancy level.

Yeah. And in terms of turnover rates, like no material change in thinking in terms of what you would experience across the portfolio when you blend it out?

No, we're still seeing generally the same levels that we would have seen in 23 and 24, which were lower than past periods. But, again, that's another example of the exceptional affordability and quality that we offer.

And last question, just on the discounting you alluded to, I guess it's going to be very select to certain circumstances, but would that be just more short-term in Q4 and maybe in the early Q1, and then that paper's off as you – get into the stronger spring season?

Yeah, we've seen some of it in January and February as well. Again, very community-specific. And again, for us, those incentives and those discounts are really just a tool for our leasing teams to close rentals, to bring in great resident members into our communities. Going into March, though, again, with increased velocity, we are anticipating the reduction of the need to use those discounts going forward.

Okay. Thanks. I'll turn it back.

Your next question comes from the line of Kyle Stanley from Day Jardin. Your line is now open.

Thanks. Morning, everyone. Just going back to guidance, I've touched it a few times, but I just want to confirm that your SPNY guidance does not include the potential removal of carbon tax in the year ahead, and And if it doesn't, can you just remind us of what that impact could be?

Hi, Kyle. It's Greg. The carbon tax is included in our guidance, so it hasn't been removed. Our carbon tax expense for 2024 was about $7 million.

And Kyle, it's James. I'll just add that our guidance includes actually the increase in carbon tax that is supposed to occur here in April here. We would anticipate from an expense standpoint that our carbon tax in 2020 is higher than the $7 million that Greg had spoken to for last year.

Okay, fair enough. So I guess to take a look at the range to get towards the top end of your growth. You know, in the event that we do have carbon tax removed, that would be obviously quite helpful. What else do you think would need to happen in the market to see us get towards that top end of the range?

You know, Kyle, on the revenue front, the great thing about affordable multifamily housing is that it's quite consistent. And so as we talked about, our renewals are about 75% of our rental velocity, and our team is already negotiating lease renewals into March, April, May at this juncture, and we're seeing good consistency there. I think if we can continue to grow our occupancy levels, if we can increase our occupancy levels even further, as we talked about just earlier, that would be upside-down. From a new leasing spread standpoint, if we were able to grow that significantly, that would be upside. But really, for us, it's managing the expenses as well. If we can have a warmer winter and see those utility costs come down, if our team can do an exceptional job in terms of our controllable expenses. And, of course, one of the biggest ones is interest rates. If we can see interest rates come off, there's definitely upside on each and every one of those line items. And our team will do the best that we can, as we have each year over the last eight years, to try to optimize and do something.

Okay. Thank you for that. And just last one, just on ELBO 5.8, just curious if, you know, there's any changes in your view of how that lease-up might progress through the year.

Hi Kyle, it's Sam and I'm very happy to report a great open house and traffic and rentals at Elbow 5A. Reflecting the exceptional location, we're asking where all our new residents are coming from. There's about 30 new residents, very busy during snowstorm open houses. Our granddaughter Grace was helping us with the leasing. as well. And so happy to hear about our new residents been waiting for years while it's been under construction. They're in and around the existing community that's got old stock there in downtown that want a better, more quiet location and then they're further away deeper south that want a better location as well. So our choice of new in exceptional locations and exceptional layout and design is proof that there's always demand for exceptional product quality, service, and value. Considering the average home price across the street from Elbow 5-8 is in the millions of dollars, it's a real rarity to provide amazing housing affordability in that prime location of Calgary, Britannia, Bel Air, Mayfair, so close to downtown. and a block away from Chinook Shopping Center, one of the most successful shopping centers in the country. I'll leave it at that because you can sense the excitement we have on our new community.

Yes, no, fair enough. It sounds like, you know, your initial kind of guidance of maybe a year for stabilization seems very, very much intact. Okay, thank you for that. I will turn it back. Thank you, Kyle.

Your next question comes from the line of Jimmy Shan from RBC Capital Markets. Your line is now open.

Thanks. Maybe just a big picture question. There seems to be still a fair amount of concerns around the impact of lack of population growth, and it doesn't sound like you're factoring much by way of a hit on occupancy in your guidance. So I just wondered if you could just provide your general thoughts as to why you don't think occupancy will be meaningfully impacted as we work through the year.

Hey Jimmy, it's James. I think what we're missing here is the platform that we have and the team that we have and the product quality that we have. Again, if we look at our average rents, we have some of the most affordable rents in the country. Alberta continues to be an attractive place and within Alberta, boardwalk communities are some of the best communities in value that you can find there. And so what we've seen through this winter month is our team, when we are bringing in leads, when we are bringing leads in for showings, we're getting rentals. And so our team is going to continue to focus on that. We'll obviously adjust as the market evolves or as the market changes, but from what we're seeing right now, we're happy with the position.

Okay. And when I look at the lease spreads, you know, in December, January, how does the spread differ between Calgary and Edmonton? Like, is Calgary now at a new spread that's negative? And then I guess the other follow-up question to that would be, what is the dynamic between the fundamentals of those two markets now?

Yeah, look, on a spread basis, Calgary, we would have seen through the winter months anywhere from negative low single digits to plus 1 or 2% in that range. And Edmonton, we've seen anywhere from plus 1 to plus 4. Both markets, pardon me, from an occupancy standpoint, are about the same, kind of right around that 98% mark. Again, Edmonton, we've talked about this before, we continue to be very bullish on Edmonton on that base of affordability and I would say that's where we're likely to see the strongest new lease spreads in our Western Canadian markets.

Okay. Thank you. Thanks, Jimmy.

As a reminder, if you have a question, please press star 1 on your telephone keypad. Your next question comes from the line of Matt Kornack from National Bank Financial. Your line is now open.

Hi, guys. Sam, I appreciate your enthusiasm on Elbow 5A, but just wondering if we could drill down a little bit more into the details there. Do you expect kind of a bigger upfront leasing and then stabilization over a few quarters thereafter, or is it kind of each quarter we'll get the same kind of lease up for that property?

Hey Matt, it's James. Our ideal is actually to have a smooth lease up, and there's The reason for that is, you know, ideally we'd like to have a nicely balanced and staggered lease maturities, number one. Number two, we want to ensure that our resident experience is always positive. And so ensuring that we're not overstacking any move-ins on any given day. And so our approach and our plan will be to have a smooth lease up over the next 12 months.

Okay. And then similarly for Aspire, is that the same thought process for that one? Exactly the same, yes. And then lastly, on Brampton, it's a joint venture. I think up until this point it's actually been a negative contributor to FFO. You did provide trailing 12-month revenue and cost figures. But could you give us a sense as to what the SFO contribution will be from that property in the next 12 months? Presumably now you're fully leased on one tower and 89%, I think, on the other. So just wondering how it will contribute.

Hi, Matt. It's Greg. Yeah, the joint venture there, actually, it was profitable in Q4 and earned us about $400,000. For 2025, we're expecting income from that to be close to $2 million. Okay, perfect. Thanks, guys.

Your next question comes from the line of Sairam Srinivas from Cormark Securities. Your line is now open.

Thank you, Opeta. Good morning and good afternoon, everybody. Just kind of looking at your comments on the leaving side, Can you give some color on how the leasing times have changed from now or a year ago in terms of the amount of time it's taken to lease up a unit? Has there been a substantial movement in that?

Hi, it's James. If I understood your question, it's on time to lease units?

Yes, that's right.

Yeah, time to lease units has actually been, I mean, incrementally up. We were doing a lot of back-to-backs a year ago. you know, back-to-backs again means, you know, we're turning over units in 24 hours. We're still doing some back-to-backs, but in terms of days vacant, you can measure that in our economic vacancy, and hence the 98% that we have. So, not materially hire our team. As we had said earlier, you know, as long as we're getting these suites ready, we're following up on our leads, we're getting showings, we're getting rentals. And so, the velocity continues to be strong just You may see incrementally just a little bit more time to rent only because we're doing fewer back-to-backs.

That's awesome. Thanks, James. That's all from me. I'll turn it back. Thank you. Thanks, Ty.

There are no further questions at this time. I will now turn the call back to Mr. Sam Collius. Please continue.

Thank you, John. As always, if there are any further questions, or comments, please do not hesitate to contact us. With gratitude, we'd like to thank our extraordinary team, loyal residents, CMHC, our lenders, and of course, our unit holders from far and wide and local. It really is all about our BFF, our BoardWalk family forever, whose huge shoulders we stand, and as leaders, we continue to do everything we can to support continued growth in extraordinary ways. We really can't thank our extraordinary team and great leaders enough. We are pleased with our improving results. On a foundation of exceptional value, service, and experience, we continue to provide our family resident members, our investors, and all our stakeholders. Special congratulations to Team Canada for the Four Nations win last night and to USA for such an inspirational series and especially final game. So exciting. We conclude. Home is where our heart is, our heart is where our family is, and our family is where love always lives. Welcome home to love always. Our future is family. What can be more important when choosing where to call home? God bless us, and now more than ever, grant us all peace.

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.