Good morning, ladies and gentlemen, and welcome to the Boardwalk Real Estate Investment Trust First Quarter 2020 Earnings Conference Call. At this time, note that all lines are in a listen only mode. But following the presentation, we will conduct a question and answer session. Also note that this call is being recorded on May 15, 2020. At this time, I would like to turn the conference over to Mr.
James Please go ahead, sir.
Thank you, Sylvia, and welcome to the Boardwalk
REIT's 20 2Q1 results conference call. With me here today is Sam Kolias, Chief Executive Officer Lisa Smanyc, soon to be Chief Financial Officer Lisa Russell, Senior Vice President of Corporate Development and Leonore Davids, Vice President of Operations.
Note that this call is
being broadly disseminated by way of webcast. If you have not done so already, please visit vwalk.com/investors, where you will find a link to today's presentation as well as PDF files of the Trust's financial statements, MD and A and supplemental information package. Starting on Slide 2, we'd 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.
At the conclusion of today's presentation, we will be opening up the phone lines for questions. I would like to now turn the call over to Sam.
Thank you, James, and thank you everyone for joining us this morning. We'd like to open by sharing our deepest gratitude for our Boardwalk family. In this time where our world is adapting to a new way of living of increased uncertainty and change, our team, our family has continued to deliver on our promise and mission to serve and provide our resident members with quality rental communities. Our top priority remains the health and safety of both our resident members and our team of heroes and we cannot thank our team and Boardwalk family enough for their performance and resilience. Our purpose remains to bring you home to a safe and happy place where love always lives.
Our results reflect how we continue to gain market share and are a choice housing provider. We have upheld and created new and long lasting relationships with our residents who have rewarded us with even higher net promoter scores, higher retention and higher occupancy, which positions us well into the future as our governments begin to ease restrictions. Communication has been significantly enhanced, allowing us to connect while we maintain our safe physical distance. Together, we have launched bwalk. Info to provide both resident and team members with up to date information on COVID-nineteen supports and information to help our residents and team navigate through accessing essential needs, including a safe place to call home.
Slide 4 illustrates many of the initiatives underway helping us not only to get through the pandemic, but emerge as a stronger rental provider and community builder. For example, together with Yuhu, we have enhanced our virtual platform, enabling us to reach resident members digitally, while keeping our frontline associates safe. We have also accelerated our virtual leasing and showing capabilities. Other protocols such as more frequent cleaning and sanitizing as well as physical distancing measures have been implemented seamlessly to ensure our residents feel safe at home. During this time, we have also stayed true to our core value of Love Always by continuing to support our communities and residents in need, including our frontline workers who we are so honored to serve and bring home.
Continuing on to Slide 5, taking this opportunity to provide a high level overview of both our geographic and product diversification A Boardwalk's 33,344 Apartment Units, 63% are based in Alberta, 11% in Saskatchewan, 8% in Ontario and 18% in Quebec. With an average occupancy across our portfolio of 96.6% and an average occupied rent of $11.85 Boardwalk remains an affordable choice for many Canadians. To capture a more diverse rental audience, Boardwalk diversified our product base several years ago and introduced 3 different branded communities, Boardwalk Living, affordable value Boardwalk Communities, enhanced value and Boardwalk Lifestyle, affordable luxury. Currently, we have approximately 6% lifestyle, 44% communities and 50% living suites across our portfolio. Our results continue to reflect the success of the reengineering of our service, product quality, diversity and experience led by our design team and executed with all hands on deck approach with our entire team.
Moving on to Slide 6, which illustrates the fundamentals in the markets we operate in, Boardwalk strives to create value through all stages of the rental market cycle. With rising uncertainty from COVID-nineteen as well as the current global oil crisis, Boardwalk is focused in on retention and continues to offer short term incentives to its new and existing residents to increase and maintain overall occupancy. Together with our governments, we have applied rental rate freezes and suspended evictions for non payment of rent due to COVID 19 related hardships. Our government support at this time has been invaluable. The federal government has provided financial supports, helping decrease the financial burden for our resident members and continues to provide our resident members with an essential, safe and affordable place to call home.
The demand for safe and affordable housing in all our markets remains high. Our portfolio provides some of the most affordable housing across Canada, while maintaining our focus on providing the best quality, product, service and experience to our resident members. Grande Prairie continues to remain in a strong rental market, almost fully occupied with a strong demand for rentals. Fort McMurray remains in a soft rental market and is 1% of our portfolio. Fort McMurray shows great resilience with a combination of oil price collapse, flood and pandemic altogether.
Our Fort McMurray strong team is seeing an increase in occupancy over this last month as our communities were not affected by the flooding and we are seeing an increase in demand for rental housing in Fort McMurray. Slightly higher incentives are being used and offset the net gains. Red Deer is seeing better quality credit applications due to the significant value add investments we have completed in this region. We have included utilities in some of our communities, which has increased the cost and decreased NOI. We are seeing occupancy increase in this and last month as a result of these changes, which are offsetting.
Edmonton and Calgary rental market fundamentals continue to improve and stabilized NOI growth remains strong as we complete our eye dropper approach to more selective value add upgrades and focus in on gaining occupancy. Our Saskatchewan region continues to remain in a softer rental market with green shoots of higher occupancy, revenue and recent quarter NOI increase. In this region, we continue to focus in on gaining market share with targeted value add capital improvements and increasing our operating efficiencies. Ontario and Quebec represent over 25% of Boardwalk's portfolio with both provinces showing continued strong performance. Our focus on a caring peak performance culture along with significant value add capital investment continues to deliver significant gains in market share and NOI.
Our value add lessons learned in our Calgary market are helping us better allocate value add investments with our eye dropper into all our other markets. Slide 7. In a period of uncertainty, we continue building on our commitment to deliver increased value. These charts demonstrate our key performance indicators continuing to track positively. Occupancy has increased.
Our incentives in this environment have remained relatively flat, which have led to increasing overall revenue levels. Our results reflect our focus on our peak performing team and culture is working to optimize staffing levels and keep delivering great service, product quality, experience and results. Slide 8 further demonstrates rental trends remain in line with expectations leading into mid March as well as the effect of self imposed rental increased limits from the COVID-nineteen pandemic. The months of January, February March reflects our increasing flexibility with incentives for some of our residents and focusing on increasing our occupancy to offset these incentives. Slide 9 illustrates our significant investment in value add improvements and repositioning to date.
This is a key driver that has resulted in increasing our market share relative to our competitors by providing more value throughout our portfolio for all our resident members. We continue to build on our strategy to reposition our assets and carefully deploy capital where it makes the greatest difference and realizes the best returns. Slide 10 shows the building of our track record with our 8th consecutive quarter of growth in FFO per unit, delivering 10.7% growth in FFO per trust unit for the Q1, 16.1% excluding retirement costs. Rental market fundamentals and demand for affordable housing in our core Alberta markets continue to improve and our team continues to deliver exceptional product quality, service and experience. Slide 11.
As previously mentioned, we are layering exciting new initiatives to further drive and improve on our service, product quality and experience we are providing to our resident members, while also delivering solid financial results for all our stakeholders. Boardwalk is proud to launch in partnership with YOOHU, a new online resident portal to all our resident members. This new portal will provide more self serve options to our residents, allowing for direct online payments, online maintenance requests and real time chat feature, amenity bookings and much more. By creating more optionality in the way of our residents experience their homes, the trust believes that further efficiency and 20 fourseven self-service can be gained while also creating new resident friendly forms of communication. Additionally, Boardwalk has had great success in Alberta partnering and selling Boardwalk exclusively priced Internet and TV services with our partner TELUS.
This program began in our Alberta portfolio in Q2 of 2019 has seen strong penetration to date. Slide 12, Boardwalk continues to offer an unprecedented combination of growth and value. Boardwalk's focus on delivering strong NOI growth has resulted in strong growth in FFO per unit. The Trust's current IFRS net asset value of $62.24 is significantly higher than our current unit trading price, representing an exceptional opportunity for our investors. Boardwalk's high quality overall portfolio equates to approximately $124,000 per apartment door at our current unit price.
Recent transactions in Calgary and Edmonton have averaged over $200,000 a door. Furthermore, replacement costs are significantly higher than these apartment trading prices. Our exceptional value provides for a very unique opportunity for our partners and stakeholders as we continue to focus in on delivering solid growth. I will now introduce Lisa Smandich, our incoming Chief Financial Officer to discuss our financial results. Lisa?
Thank you, Sam. On Slide 13, the Trust delivered strong FFO and AFFO growth with FFO increasing by 11.4% from $28,200,000 to $31,500,000 AFFO increased by 18.5% from $22,300,000 to $26,400,000 using an annualized maintenance CapEx estimate of $613 per apartment unit. As Sam previously mentioned, included in our Q1 2020 FFO and AFFO per unit results is $0.03 from retirement costs. It's expected that in Q2, 2020, the trust will incur an additional $0.04 per unit for severance costs associated with executive retirements. Moving to Slide 14, Boardwalk same property results highlighted NOI growth of 8.1% driven by revenue growth of 3.8% and coupled with operating expense savings of 1.5%.
The Q1 of 2020 was highlighted by strong performance. Alberta posted NOI growth of 7.9% largely a result of revenue growth of 3.9%. Our Eastern markets which represent 25 percent of Boardwalk's total NOI also delivered year over year growth. Ontario posted revenue growth of 6.9 percent which led to NOI growth of 10.5%, while Quebec achieved operating expense savings resulting in NOI growth of 11.4%. Slide 15 shows Boardwalk's quarterly sequential revenue growth with sequential revenue growth of 0.5% for the Q1 of 2020.
With Boardwalk self imposing along with most provincial governments having imposed rental increased freezes during the pandemic, sequential revenue growth will be driven by occupancy and turnover in the coming months. Slide 16 summarizes the Trust revenue collection from its resident members for the month of April. 97.5 percent of April revenue was collected in April as compared to a historic monthly run rate slightly above 98%. Each province exceeded revenue collection of 96.5% for the month of April, with some regions almost reaching 99% collected. Where required, the trust has offered a rental deferral program to its resident members with the current participation rate of approximately 0.5% of revenue.
To date in May, collections are tracking slightly above April 2020. Slide 17 focuses on the payment types used by resident members to pay rent. As the Trust continues to promote social distancing along with the ease of use of its resident member portal through YooHoo, we have seen an increase in online payments to 30%, coupled with a decrease of in office payments to 31%. I would now like to turn the call to Lisa Russell, who will provide an update on our development projects.
Thank you, Lisa. On Slide 18, we are proud to announce the completion of Brio, our 162 unit premium mixed use development in Calgary. Boardwalk is a 50% partner in this asset and is the property manager for the residential component of this community. We received the occupancy permit on February 21st and our 1st resident members moved in on April 1, 2020. As of early May, we have leased 17 units at rental rates at or above our original pro form a.
We anticipate lease up to continue to progress over the next 12 months. Total construction costs for Brio are subject to final adjustments. However, we anticipate that final project cost be towards the lower end of our $75,000,000 to $80,000,000 range. Our estimated stabilized yield for the project ranges from 4% to 5% with net rental rates of $2.45 to $2.75 per square foot. Slide 19 provides a brief update on our other active development projects.
Construction at 45 Railroad continues amid COVID-nineteen with our site team taking extra precautions including lowering staffing levels which allows for adequate physical distancing. The site is still expected to be at grade in Q3 of 2020. Estimated completion of this 2 tower 365 unit development remains planned for 20222023 respectively. Sandalwood Square in Mississauga, Ontario is our 2nd joint venture partnership with RioCan. Our initial zoning application for a 16 and 25 storey mixed use development was received positively and our subsequent zoning resubmission was submitted in early March.
We anticipate construction to begin in 2021. The timing of Boardwalk's current development projects are well staggered to best balance our resources. Our planned developments in the Peel region provide I would now like to turn the call over to James Hoss. James? Thank you, Lisa.
I would now like to turn the call over to James Hoss. James?
Thank you, Lisa. Slide 20 provides
a summary of Gordwalks available liquidity. GoodTrust is well positioned with over $100,000,000 in cash and recently committed financings as well as an undrawn $200,000,000 operating line. This $300,000,000 in liquidity provides Boardwalk with a flexible financial position to weather the current environment as well as take advantage of opportunities as visibility improves. Slide 21 shares Boardwalk's mortgage maturity schedule. Our mortgages are well staggered with approximately 99% of our mortgages carrying NHG Insurance through Canada Mortgage and Housing Corporation.
This insurance remains in full force for the full amortization of the mortgage and in addition to carrying the Government of Canada's backing provides access to low cost financing with current estimated 5 10 year CMHC mortgage rates of 1.5% and 2% respectively. Trust debt metrics have seen a steady improvement highlighted by our interest coverage reaching 2.78x this quarter. Our progress on our 2020 mortgage maturities are presented on Slide 22. Our government in partnership with CMHC were quick to respond to the COVID situation in March by injecting and investing liquidity into the market creating strong availability of funds
for CMHC
and shared loans.
Boardwalk has been actively taking advantage of this current low interest rate environment to renew, forward lock as well as secure additional from our mortgage portfolio. To date, we have renewed or forward locked approximately 40% of our 2020 mortgage maturities, as well as secured an additional $98,700,000 in new financings with our most recent commitments completed at record low interest rates. Current underwriting criteria in our most recent submissions to CMHC and our lenders have remained in line with our historically conservative estimates. We continue to work towards further forward locking of upcoming mortgage renewals in the coming weeks months. On Slide 23, the trust has confirmed its regular monthly distribution of $0.083 per trust unit for the next 3 months.
Boardwalk's distribution of $1 per trust unit on an annualized basis provides sustainable monthly cash flow to our unitholders at an attractive yield while also maintaining a low payout ratio consistent with our distribution policy of maximum reinvestment of cash flow. And finally, on Slide 24, we detail a summary of Boardwalk's ESG initiatives. Boardwalk's golden foundation in which we have always operated aligns well with modern day ESG. We look forward to participating in our 1st GRESP assessment later this year and are proud to have published our 1st ESG report, which is now available on our website. This now concludes the formal portion of our call, and we would like to open up the phone lines for questions.
Sylvie?
Thank And your first question will be from Jonathan Kelcher at TD Securities. Please go ahead.
Thanks. Good morning. First question, just on the renewals, I guess, we can expect them to be flat for Q2. But just but coming out of that, how will the mechanics work on that if you decide in July to sort of give increases on renewals?
Jonathan, it's Sam. Coming out, we're going to continue as the economy recovers and gets back to a new normal on reducing discounts. And that really is the focus that we were pre COVID and getting back to rental levels gradually and sustainably to where we were several years ago. And so that will remain the same. We've got significant amount of discounts that our residents continue to enjoy and benefit from.
And thank God they do. And we're very happy about it. Investors aren't as happy about that obviously, and we've got lots of masters to serve and we try to balance the different interests of all our stakeholder groups, but our residents and our team, as everybody can agree, remain our most important focus.
Okay. But what I'm I guess what I'm trying to get at that, all the people where you don't give renewals to April, May June, will July sort of be a really assuming you start in July, will July be a really big sort of renewal month everybody for the last 3 months will get sort of notices?
Sorry, I never understood your question. So what we're doing is we're offering our residents much more flexibility in the renewals. So because of the uncertainty, some residents only want to renew 3 months and we're going ahead with the 3 months and doing what we call lease over lease. We're prorating the same incentive even for a short 3 month period with our residents that need more flexibility and a lesser lease term. For residents that continue to want to live with us and have more certainty, we're renewing lease over lease 12 month leases for the existing residents and we're happy to do so because our focus is retention and keeping everybody in the safe and affordable home.
And so we're going to have regular renewals in July August except for the 3 month terms that we're accepting right now that we can revisit in 3 months.
Okay. That's helpful. And then just secondly, the your associate count was down about 100 people in April versus January. Is that's sort of 15.50, 15.80 level, the one you're aiming for? And how much savings in operations will that be in Q2?
That is yet to be determined because there was an increased focus in on cleaning over this period as everybody can understand. And cleaning is an expense obviously. And so the savings will be offset with the extra cleaning attention that our landscapers are doing. And to be quite honest, all hands on deck, we're all pitching in on that because of the current situation. And so we are though constantly looking at every single line item in our expense statement and that we're always asking how do we do what we're doing better with fewer and less expenses.
And we're constantly reviewing that. And we're finding because of the current situation ways to do things as we have always learned that necessity is the mother of invention. And so this current situation is really accelerating the ways we are doing things that are much more efficient because of the necessity to do things with less people that had to stay home because of daycare closures and school closures. So necessity has essentially accelerated our efficiencies and forced us to become more efficient. And so we do see savings and we'll continue to going forward as a result of this situation and the innovation and new ways we're doing things that cost us less.
Okay, thanks. That's helpful. I'll turn it back.
Thanks, Johnny. Just an add, technology is really helping and our partnership with technology partners like Yuhu and SmartRent, our investment in real estate technology ventures with King Seth is the only other Canadian investor in it and about 1,000,000 apartment units in the United States and the apartment reach like Essex and UDR. We're seeing some really exciting efficiencies on self showing and automated locks, security and super affordable prices. And Amazon has partnered up with RentSmart to help co develop this apartment smart suite solution. So we're very excited about that too.
And your next question will be from Howard Lyon at Veritas. Please go ahead.
Thanks and good morning. I wanted to kind of touch on the pre authorized payment rate. So I think last month the update was 51% of tenants have paid and assuming the rest of the month that in April there was no pre authorized payments, then overall for the month, I guess since you collected 97.5%, 46% of tenants would have been on pre authorized payment. And then I think from this update, you mentioned that the overall rate for pre authorized was 40% for both April May so far. So it just sounds like there were some tenants maybe who paid had been in advance in April weren't doing so in May.
What was the what's the reasoning behind that? Are you seeing like checks bouncing or sometimes withdrawing their pre authorized payment rates?
Hi, Howard. It's Lisa Smandish. Thank you for the question. Important to note that so that 51% calculation, that was based on revenue collected not even midway through the month. So as you highlighted, as the month would have gone on, the only means that they could use to pay would be other forms than PAP because the PAP is only drawn on the 1st of the month.
So consistent with previous rates, our PAP as a percentage of revenue has stayed approximately the same. And note, we did not see a large opt out of people paying by PAP in May. If anything, the percentage stayed the same. So that change in percentage is largely just a function of how people paid their rent over the course of the month.
Okay. That makes sense. Thanks for the clarification. And then just on the same sort of topic, I guess, any idea of how many tenants or what percentage of your tenants are accessing government assistance? I know it's it may be a bit of a touchy subject and maybe something you don't have, but just wondering if you had any rough idea of that.
We don't ask after our residents are approved and their applications approved, we don't ask for income verification. And that is a big debate that we continue to ask whether we should ask for that similar to mortgage renewals, I guess, are similar. Rent is a form of credit extension. And so that is a discussion we're having. What we are seeing, Howard, is an increased demand in more affordable units.
And so more of our classic units and our living units are in higher demand. We're hardly renovating any full government supports. Historically, we didn't always accept all applicants that were on some kind of government support unless we partnered up with not for profit agencies. And so now we are accepting residents on UI and COVID payments to help house Canadians in this really exceptional situation we find ourselves in. And it's building more goodwill.
And it really is a big reason why our occupancy is rising. Our rentals for May are remarkable. It's really heartwarming to see the demand pick up. And when we ask our sites where our new residents coming from, a lot are coming from other communities. A lot are coming from other communities with the comments where they looked at Boardwalk a year ago and they are sorry they never rented at Boardwalk and now they are coming home.
And that really warms our hearts and confirms we're doing the right things and bringing everybody home to a happy place where love always lives. And what's more important than a great place to call home where we're family and love always lives, really, it's real testament of our team doing such a remarkable job. We can't thank our team enough for the extraordinary service that and the above and beyond. We get so many compliments from our residents and we can't thank our residents who are so supportive and we're getting inundated with customer satisfaction surveys, Google results. It's so heartwarming to see the gratitude and the love always.
It's awesome, right?
Right. Yes. No, that's from what you're talking about, that seems really important to do at this time is to kind of provide housing options for people in trouble. And so for the new leases in April May, would you say a significant portion of them are when you did the income check at that point that they were on government programs?
Not the new applicants. We're seeing new applicants and we're asking our family members living in more expensive cities like Toronto, hey, what's going on in Toronto? Well, people are moving out to more affordable places and moving back home. And we're seeing folks from Vancouver, for example, a healthcare practitioner moved into Brio And Brio is our brand new community and our rents are over $2,000 there and she's a health worker and we are extending discounts to our health workers straight across the board. And so that's one example.
A lot of folks that are still working are out there. The unemployment rate is still over 80% or 90% approximately. So most people are still employed.
Great. That's important to keep in mind. I guess my final question has to do with the CapEx budget. It looks like I think earlier in the last quarter update, the guidance was kind of between think, dollars 100,000,000 to $134,000,000 Now that the budget is out, it's at the high end, dollars 134,000,000 And I think the bulk of this a big part of the spending is kind of in the exterior of the buildings. What's I guess, I was a little surprised that it's the higher end.
Is there any kind of, I guess, crucial CapEx that you felt that you had to do this year and couldn't put off?
So Howard, we continue to use our eyedropper to apply our CapEx. And as our investor tour last year, we have realized huge success with the reengineering and redesign of our experience centers. It's been a huge win for us, led again by our design team and design matters. A good example is the design focus of Apple versus Blackberry that Apple really focuses in on design. And with the full time since our Chief Design Officer came back 5 years ago full time and became an empty nester and with our hands on deck and our entire team really coming together in a brand new engineered design and experience for our residents.
It really is remarkable because our experience centers create an experience of going to a brand new developed community. And every detail is designed and carefully selected and it really is helping occupancy. For example, Regal Towers in Saskatoon. For the longest time in Saskatoon, Regal had chronic high vacancy, close to double digit or 10%. And it hardly has 1% vacancy anymore.
So the investment in the experience center and that community, everybody loves bling, crystal chandeliers and loves to live in a really beautiful place. And now more than ever, that's our places are really important. Our size is really important because we have older communities that are repositioned. We have large unit sizes. That's a really big plus too.
And space is really important and getting more important as we're all learning. And so those investments are continuing. The full renovations were cutting back significantly because everybody's more comfortable with a classic what we call classic apartment with traditional colors like the classic Coca Cola, I guess. We believe we're more the real thing than Coke is and we bought sugar water, but having a great clean safe place to live is essential. And being able to provide that in affordable way is too.
And so that is reducing our capital spend in our suite capital is what we're seeing. And again, we're looking at every single penny. We can't emphasize that enough. Responsible with every single penny of capital we have. We fully understand how essential it is to be disciplined and conservative with our capital.
And so I'll pass it on to Lisa Russell to talk about our capital with new developments.
Okay. Thanks, Sam. So as Sam just said, we are super focused on our capital allocation and watching every penny. We have the ability on the development side to reduce our 2020 development spend by about $30,000,000 and defer those costs into 2021 or future years. So again, just to reiterate, we continue to monitor all our projects and ensure that we're maintaining a strong balance sheet.
Sorry, Howard, just to add, our retention has increased significantly. And our renos have reduced in cost significantly. We brought the cost of our renovations down by approximately 50% because of the accessing to much more cost effective materials. The other big benefit we're realizing is the flooring that we're replacing carpets with. The laminate is a lifetime guaranteed product.
So, the turnovers with our laminate are much quicker and way less cost as well. So the extra upfront investment we're making and the extra cost for our flooring and our materials like our cabinetry are having a long term benefit and will in the long term reduce our CapEx spend.
Right, right. Thanks for all that. That was really helpful. I'll turn it back.
Thank you. Your next question will be from Yash Sankpal at Laurentian Bank. Please go ahead.
Good morning. Good morning.
Good morning, Yash.
How much was the utility rebate in Quebec?
Hey, Ash. It was a fairly
small number. It was $160,000 I believe for the Q1 and it's one time non recurring.
Okay. I thought it was a bigger number. So okay, that's good to know. That's due
to that bill, 33 rebates 34 rebate, pardon me, in Quebec. Yes. So that was about $160,000 Okay.
How is the new leasing going right now? And are you seeing any of your competitors offering incentives?
Our new leasing is going better than it was last year in May. And so it's a reflection that we're gaining market share. And the overall market statistics are flat, just slightly negative in some areas like 2 bedrooms, for example, in Calgary are slightly down and and PadMapper provides current information of asking rents. What we find is when we offer for new residents, less incentives and better value proposition and renovations, we get better rentals, better qualifying residents and we use less incentives as a result. And so the value proposition is really, really important.
And what really is making the difference is the product diversification. We essentially can serve every need of every resident that comes in our door and essentially what tech companies call ecosystem. When a lead comes into the Boardwalk family, we have a home for everyone. If you're looking for a brand new home, we've got that. If you're looking for an affordable home, we've got that.
If you're looking for a newly renovated home across the street from elementary or junior high school that your kids are going to, we've got that too. The cross selling we're benefiting from is really exceptional and we're working more than ever as one. And so any rental in any one of our communities is a win for everybody. And we have really come together like we've never come together. And we just again, we just can't thank everybody enough.
We send out thank yous to our team and we're on the sites and we're seeing a benefit because we're still there. We're showing up to work. And our team of heroes, we've got 300 associates that haven't missed a day of work since COVID. That's remarkable, not one day off, not one vacation day. And our associates are there given the current situation.
And words out, if there's a place that's safe, that's supportive and there is people there that are cleaning and caring about keeping a phenomenal community safe and clean, we're the place to go.
That's great. So Sam, a more broad question. When you compare the current situation with the 2015 crash, how do you see the rental market behave this time as compared to the last time?
The rental market is still a far ways off from where the rental levels were in 2015, providing incredible value for residents and a big barrier to new development. It's getting really, really hard to build new and justify it because the demand for higher rentals, priced rentals is different and much less than affordable rentals. Affordability price is an essential factor in the law of supply and demand. So the position we have in lower rents with a much higher value proposition has positioned us much, much better than 2015. Going into 2015, we had no incentives.
We had no real significant investment in value add. We had no focus in on design experience. There was very little discussion about culture and building brand, very little if any discussion and focus in on that because we were delivering exceptional results without reinventing, redesigning our entire company. And so necessity is the mother of invention. And because of the downturn in oil, we've been in a really, really tough, tough economy for 5 years.
So this has really stressed the truth. What doesn't kill us makes us stronger. And we are a lot stronger because of the last 5 years. And as a result, we're so much better positioned. Fort McMurray, God bless our Fort McMurray team.
Oil crisis added to the pandemic and add to that a flood, like all three disasters in And we reached out to our Fort Mac team and our Fort Mac, hey, Sam, we're Fort McMurray strong, like we're on this, we're handling this. And our Fort McMurray team, we can't thank enough and is a really, really inspiring example of resiliency and we can do anything. We interviewed 1 of our landscapers in Edmonton Elliot McGloin. And he battled with his family in white cancer. And we asked like Elliott is the happiest guy in the planet.
And we asked Elliott, you're going through cancer. This is a big disaster. He said, Sam, cancer, it looks like a mountain, but it's a speed bump. We're just getting through it. And you know what?
We're getting through it. We're fine now and we beat it. And mountains are illusions. They're speed bumps. And that's our landscaper in Edmonton, the happiest associate in our team.
How inspiring is that, right? Like our attitude, our culture eats strategy for breakfast is really Peter Drucker, a great, great, great business leader as well. So sorry, I'm too excited. Maybe I'm getting too far off.
All right. Just one last question. Sam, given what you see in the market and what your competitors are doing and your experience, do you think your year end occupancy would be higher or lower than what it is right now?
It is higher already. In God, we trust everybody else bring data. Our occupancy is rising as we speak in the middle of a pandemic.
I'm talking about 2020 year end.
We will continue. We believe that there's inalienable truth in that our ability to adapt better than ever will continue to position us better than ever going forward as well. And that's what we're going to continue to focus in on, our principles that carry us through every single situation of change. And our continued focus in our culture, our brand and our value proposition will continue to serve all of us well. And we started reengineering 5 years ago and readapting 5 years ago, and we've delivered some phenomenal results through already some really tough situations.
So we are better positioned than we've ever been.
That's it from me. Thank you.
Thanks, Ash.
Thank you. Next question will be from Mike Markidis at Desjardins. Please go ahead.
Thanks. Hi, everybody. Just a quick one
for me. The move to do the 3 month renewals, if you
can give us a little bit
of color in terms of how what the uptake
has been on that in terms of percentage of the renewals that you've seen so far? I know it's a short time period. And then secondly, are you doing the same thing on new leases or is that strictly on renewals? Thank you.
Mike, it's James. On renewals, the 3
month renewals is really part of our maximum flexibility that we're offering our residents, right? It's part of our retention strategy. And really for our lease renewals, we're it's generally a small percentage of the renewals that we're doing. The majority of our leases are still on 12 month lease renewals. In terms of new leases, we are primarily doing 12 month new leases.
There are some shorter term leases nowhere near the 3 months. So on occasion, we'll do 6 month, 8 month leases. But it's all about flexibility so that we can continue to gain occupancy and win market share, as Sam was suggesting. And as Sam was mentioning to Yash, really our revenue strategy, I mean, occupancy is one part of it. The second part of it is
market rent. The 3rd
part of it is incentives. And balancing that with turnovers and costs and rest and orders, I think we're looking at our revenue strategy holistically. And so for us again providing maximum flexibility to our residents today is helping us gain market share and increase our occupancy today.
Thank you.
Thank you. And at this time, I would like to turn the call back over to Mr. Koulias. Please go ahead, sir.
Thank you, Sylvie. We'd like to end this call by thanking our amazing team of heroes, loyal residents and all our stakeholders. We are pleased with the improving rental market fundamentals, the exceptional value we continue to provide our residents, our investors and for the continued great service from our team. Thank you again everyone for joining us this morning With our love always, God bless.
Thank you, sir. Ladies and gentlemen, this does indeed conclude your conference call for today. Once again, thank you for attending. And at this time, we do ask that you please disconnect your lines. Have a good weekend.