Afternoon, ladies and gentlemen, and welcome to the Boardwalk Real Estate Investment Trust Third Quarter 2025 Earnings Conference Call. At this time, all lines are in the 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 5th, 2025. I would now like to turn the conference over to Eric Bowers, Vice President of Investor Relations. Please go ahead.
Thank you, Joelle, and welcome to the Boardwalk Real Estate Investment Trust 2025 third quarter results conference call. With me here today are Sam Kolias, Chief Executive Officer; James Ha, President; Gregg Tinling, our Chief Financial Officer; Samantha Kolias-Gunn, Senior Vice President of Corporate Development and Governance; and Samantha Adams, Senior Vice President 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 Métis 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 boardwalk.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 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 is detailed in Boardwalk's publicly filed documents. I would like to now turn the call over to Sam Kolias.
Thank you, Eric. Starting on slide four, affordable multifamily communities have always been an essential product and service. Together with our resident members, our associates, investors, partners, capital, environment, and community are all essential and interconnected with our Boardwalk Family Forever at our core, with our true north where love always lives. A key word in community is unity, as reflected in our diagram. Together, we go far. Welcome, everyone, to our Boardwalk Family Forever and to our Q3 2025 results. Next slide, our culture. From our humble beginnings, 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, six.
Our continued impressive performance with GAAP and non-GAAP measures increasing from the same quarter last year, same property rental revenue increased 5.1%, and same property net operating income increased 8.6%. Our operating margin increased by 220 basis points, as well as our funds from operation per unit increasing by 10.8%. I would like to now pass it over to Samantha Kolias-Gunn.
Thank you so much, Sam. We are extremely grateful for our team's perseverance, performance, and continued commitment to our purpose, bringing our resident members home to love always. Continuing on to slide seven, our operational stability and commitment to affordable housing. Rental market fundamentals in our core markets are balanced. Demand continues for more affordable housing, despite supply deliveries focused on higher-end luxury product to justify high construction costs. We are well-positioned 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 from the CAD 1.5 billion invested since 2017 in rebrand and repositioning efforts, and dedication to our Boardwalk family as responsible community providers. CMHC and our federal government have emphasized the need for 430,000-480,000 more homes by 2035 to restore affordability in Canada.
Affordability continues to drive positive population and leading economic growth in our core markets, Alberta and Saskatchewan, reflected in our appendix. Québec has delivered exceptional results, further evidencing the strong demand for affordable housing. Ontario remains stable. We are strategically in all the right places at the right time. Please refer to our appendix for more data on the resilience of the Alberta economy. Our self-regulation provides us with continued steady results as we strategically moderate our rental rates within a resident-friendly renewal rate band, producing 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 on our foundation of strong family values, we remain in a position to deliver solid 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. Moving on to slide eight, our strategic rebranding enhances our resident member experience and exceptional quality at an affordable price, keeping our occupancy high at just below 98%. Per rentals.ca data, our average occupied rents of CAD 1,582 for a two-bedroom apartment are attractive, especially relative to the Canadian average of CAD 2,279. 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. Gregg?
Thank you, Samantha. Beginning on slide nine, occupancy remains strong, supported by continued growth in occupied rent. While vacancy loss increased slightly, the trust effectively reduced leasing incentives, which contributed to the higher rental revenue reported in Q3 2025 compared to the same period last year. These results reflect the success of our strategic initiatives aimed at maximizing free cash flow and diversifying our product offering, delivering meaningful financial performance. The decline in rental revenue from the previous quarter is due to property dispositions in Q3 that had previously been included in the same property portfolio, as reported last quarter. 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.
Increased supply in select portfolio markets, particularly at the higher price points, has led to greater competition and vacancy. In Alberta, renewal spreads reached 3.7% in September 2025. New lease spreads in Calgary were slightly negative as we strategically prioritized occupancy in the city's more competitive, higher-priced segments. Edmonton, by contrast, continues to deliver positive new lease spreads supported by sustained development for our high-quality, affordable housing offerings. Overall, Alberta's blended leasing spreads for September were 2.3%, with portfolio-wide spreads at 3.3%. We remain focused 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 our stakeholders. Slide 11 shows sequential quarterly rental revenue growth, including 1.5% growth in Q3 2025 compared to the previous quarter.
The change over each quarter is a reflection of Boardwalk's strategy, striving toward balancing the optimum level of market rents, rental incentives, and occupancy rates in order to achieve its NOI optimization strategy. During Q3, the trust closed on acquiring the other 50% interest in our Brio property located in Calgary. Calgary results include 100% of Brio effective August 6, 2025. Excluding Brio altogether, the same property rental revenue growth for Q3 2025 compared to the previous quarter would be 1.1% for Calgary and 1.4% on a total portfolio basis. Turning to slide 12, same property net operating income increased by 8.6% in Q3 2025 compared to the same quarter last year, supported by revenue growth of 5.1%. Alberta, the trust's largest region, contributed meaningfully to this performance, with a 5.1% increase in rental revenue driven by stronger in-place occupied rents and reduced leasing incentives.
Total rental expenses declined by 1.8% year-over-year, primarily due to lower utility costs with the removal of the federal carbon tax earlier this year, alongside reductions in property taxes and insurance premiums. Slide 13 highlights that administration costs and deferred unit-based compensation remained relatively stable quarter over quarter. The year-over-year increase in administration expenses is primarily attributed to inflation-driven wage adjustments implemented at the beginning of the calendar year, along with higher profit sharing and bonus accruals, reflecting strong year-to-date performance across the portfolio. Slide 14 outlines Boardwalk's mortgage maturity profile. The trust's debt portfolio is well-staggered, with approximately 96% of the mortgage balance carrying NHA insurance through CMHC. This insurance remains in place for the full amortization period and, backed by the government in Canada, enables access to financing at rates below conventional mortgage levels, with a current estimated five-year and ten-year CMHC rate of 3.35% and 3.90%, respectively.
Although current interest rates are above the trust's maturing rates over the next few years, the trust's maturity curve remains staggered, reducing the renewal amount in any particular year. Lastly, the trust had an interest coverage of 3.10x in the current quarter. Slide 15 provides an overview of our 2025 mortgage program. To date, the trust has renewed or forward-locked CAD 294 million in financing at an average interest rate of 3.83% and with an average term of six years. 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 55 for additional details. Slide 16 illustrates the trust's estimated fair value of its investment properties, excluding adjustments for IFRS 16, which totaled CAD 8.8 billion as of September 30th, 2025, compared to CAD 8.2 billion as of December 31st, 2024.
The increase in overall fair value is the result of new acquisitions during the year and increases from rental rate growth, while being slightly offset by dispositions of non-core assets, along with an upward adjustment for vacancy assumptions in Calgary to reflect a more balanced market. Current estimated fair value of approximately CAD 242,000 per apartment door remains below replacement cost. In consultation with our external appraisers, the cap rates used in determining Q3 2025 fair value were unchanged from Q4 2024. 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. 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 17 highlights our ESG initiatives.
We'd like to highlight our 2025 GRESB score of 72, which represents a 7.5% increase compared to the prior year. 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 2024 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, Gregg. Throughout 2025, we have maintained a disciplined approach to capital allocation, focusing on value-add rebranding initiatives, targeted dispositions and acquisitions, and our NCIB. Slide 18 highlights our reinvestment of free cash flow back into our current communities, which enables us to drive market share and enhance the experience for our resident members. Our goal for 2025 is to complete the rebranding of 15 communities, and by the end of this year, 77% of our communities will have been renovated. These upgrades, including rebranding initiatives, common area improvements, and value-add amenities, deliver exceptional value to our resident members with minimal impact on per-suite rents. Slide 19 outlines the CAD 733 million of real estate transactions announced year-to-date. This includes CAD 221 million in dispositions of our non-core assets, with an average vintage of 1987 and average cap rates in the low 5% range.
We have also completed CAD 512 million in acquisitions comprised of townhomes, mid-rise, and high-rise assets in our target growth markets, acquired at cap rates ranging from the high 4s to the low 5s. From these sales, we have generated CAD 120 million in net proceeds. Slide 20 details how we have strategically redeployed this capital into new acquisitions and our tactical unit repurchase program. The strength of our balance sheet has provided us with the remaining equity required to complete the transactions. A quick update on the Aspire, our development in Victoria, British Columbia. We remain on track to welcome our first resident members December 1, with the remaining building scheduled for completion in early Q1 of 2026. For the balance of the year, our focus will remain on dispositions and executing our unit repurchase strategy, while other development opportunities remain paused.
Slide 21 demonstrates the ongoing disconnect between our unit price and the value of our portfolio. Our NCIB continues to be a key capital allocation tool. To date, in 2025, Boardwalk has invested CAD 37 million in unit buybacks, including a recent CAD 7 million repurchase of 102,000 units at an average price of CAD 66.74. This tactical investment represents approximately a 6.9% FFO yield, providing an accretive use of our capital. Slide 22 summarizes our Q3 dispositions. Six non-core properties located in Edmonton and Québec City, with a weighted average cap rate of 5.3% and an average vintage of 1987. These successful transactions at pricing in line with our fair value have allowed us to upcycle the equity into high-quality assets with strong cash flows and lower CapEx requirements, in addition to providing capital to support our unit repurchase plan.
Slide 23 showcases the previously announced acquisition of Central Parc in Laval, Québec, a 541-unit three-tower community delivered between 2019 and 2022. With condo-quality finishes, U.S.-style amenities, destination retail, and a strong suite mix, Central Park offers affordable luxury at approximately CAD 2.30/ sq. ft. The acquisition price of CAD 249 million, or CAD 460,000 per suite, is well below replacement cost, and the property benefits from attractive in-place financing at a blended sub-2% rate. Laval continues to be one of the stronger submarkets within the greater Montreal area, supported by its connectivity to transportation networks and relative affordability. Slide 24 introduces our latest acquisition, 639 Main Street, located in one of our strongest growth markets, Saskatoon.
The province of Saskatchewan has one of the lowest unemployment rates in the country, is one of the strongest markets globally for mining investments, and offers food, fuel, and fertilizer, all of which the world needs. 639 Main Street is well located and close to downtown, the university, and Saskatoon's main retail strip. Acquired for CAD 39 million from the developer at a cap rate of 5.5%, this fully stabilized community enhances our product offering in Saskatoon, will benefit operationally from being in close proximity to our other communities, and is expected to generate strong cash flows. I would now like to turn the call over to James to discuss our track record of creating value and our updated 2025 guidance.
Thank you, Samantha, and thank you to our entire Boardwalk team for your service and commitment to our resident members while continuing to deliver consistent and strong performance that our team is sharing. Slide 25 provides an update to our outlook for the remainder of the year. The strength of our platform and ability to outperform in a more balanced housing market continues to show through as the demand for affordable housing remains resilient, and as a result, our outlook for the year has further improved. Our team and platform continue to maintain high occupancy and strong blended leasing spreads. Expense optimization has been a priority, as demonstrated in our performance to date. As we move forward toward closing out 2025, we are anticipating a continued solid revenue profile paired with strong performance in our operating expense management.
These lower expenses will help to ensure that our high-quality, affordable housing remains the best value for our resident members. With the completion of the third quarter, our 2025 outlook has further improved toward the upper end of our estimates, with same property NOI growth guidance adjusted to 8.5%-10%. While also increasing our FFO per unit outlook to CAD 4.58-CAD 4.65. The increase in our FFO per unit outlook is a result of contributions from our strong NOI performance, as well as our accretive capital recycling in both acquisitions and our NCIB. This guidance is forward-looking in nature, and we look forward to providing our final results for 2025 and the introduction of our 2026 guidance in February with our year-end results. On Slide 26, we have confirmed the payment dates of our next three regular monthly distributions equating to CAD 1.62 per trust unit on an annualized basis.
This represents a 12.5% increase from our distribution a year ago. Since 2021, our distribution has increased at an annual average growth rate of over 12%, while still retaining an industry-high proportion of our cash flow to reinvest and compound growth. This formula and operating model has extended our FFO per unit track record, and we are positioned in 2025 to more than double our FFO in just eight years. Please note, as we near our year-end, our team is in the process of finalizing and conducting our tax review and will provide any special distribution update prior to the end of the year to reflect the taxable gains from our dispositions. Our regular distribution review is also conducted at year-end, and any increase to our regular distribution is expected to be announced with our year-end results in February.
On Slide 27, this FFO 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. In the quarter, we assumed an attractive, low-cost mortgage as part of our Central Park acquisition that Samantha highlighted earlier, and this has slightly increased our leverage for the period. As our platform optimizes the NOI from this community and we continue to deliver organic growth from our existing portfolio, we anticipate a continuation of our leverage improvement trend. This solid financial foundation, which includes our current significant liquidity position with over CAD 100 million of cash, provides us with the flexibility to take advantage of opportunities that arise. One of these opportunities is shown on Slides 28 and 29, which highlights the exceptional value that our trust units represent.
Our current trading price equates to less than CAD 190,000 per apartment door and a mid to high 6% 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 CAD 242,000 per door, or CAD 98 per trust unit. With this current attractive implied valuation, we anticipate in the near term our deployment of capital will be focused on investing in our own assets and platform through our normal course issuer bid. In closing, our team continues to be focused on delivering the best quality and value in housing to our resident members.
Our unique operating platform continues to demonstrate our ability to create value for our stakeholders as we consistently deliver leading organic and FFO per unit growth that is increasing our free cash flow. Thank you again to our resident members, our team, our partners, and all our stakeholders for making Boardwalk your first choice in providing the best quality homes and communities, and we are looking forward to continuing our track record of growth. We would now be happy to take questions from the floor.
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 one on your touch-tone 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 two. If you are using a speakerphone, please lift the handset before pressing any keys. One moment, please, for your first question. Your first question comes from Jonathan Kelcher with TD Cowen. Your line is now open.
Thanks. Good morning. First question, just James, you finished on capital allocation, so I figured I'd start there. You guys have been selling assets and upgrading through buying newer stuff. It sounds like the NCIB is going to be more of a focus. Are you going to consider, or are you going to continue rather to sell assets in order to fund that?
Oh, hey, Jonathan. It's Samantha Adams speaking. I can take that question if you don't mind. Yeah, the plan is to continue our disposition program into 2026. Today, where our cost of capital is, obviously, those net proceeds would be used to buy our stock back. We will remain active through 2026.
Yeah, Jonathan, it's James. Just to add to Samantha's comments, we're seeing a lot of interest in bid and value-add acquisitions. CMHC financing is a big part of that as well. Our team has done a fantastic job in 2025 meeting the market there, as well as finding and unearthing opportunities for us to recycle that capital. We've made some great acquisitions that have provided very additive results to our overall performance. In addition to that, taking what the market's giving us, we're seeing huge opportunity in buying back our stock, and we've done that through September and October, and as discussed, expect to continue to do that through the balance of the year.
Okay. Given that you are going to be selling some or looking to sell some assets in the next year, would you take your leverage up near-term to fund the NCIB?
I do not think we need to right now, Jonathan. We have over CAD 100 million of cash on the balance sheet. Our liquidity is as strong as it has been in a long time. That provides us the opportunity and optionality to deploy that capital. As we said, buyback is that best place right now. We are having a tough time finding a better place than 6.5% plus cap rates today for our portfolio.
Okay. Fair enough. Just secondly, I know it's a little bit early for 2026 guidance, but how should we think about revenue growth in the next year and expense growth, at least on a high-level basis?
I can start with the expense side, Jonathan. And you're right, it is still too early. Normally, we do not give formal guidance until February when we release our year-end results. I can say that through our preliminary legwork and discussions we have had, we are expecting property taxes to be higher next year.
Yeah, just to add, Jonathan, to Gregg's comments, it is James. We are seeing very consistent results. Multifamily, especially affordable residential housing, is quite consistent in terms of the demand for our product. You are seeing that through our leasing spreads as an example. Pretty well throughout the year, we have seen consistency. I would expect that from our team. Our team is always striving for that. We will keep occupancy high. We will continue to provide affordable adjustments when we are negotiating our rent adjustments.
From what we're seeing so far, we expect consistent results from what we're seeing here today.
Okay. Thanks. I'll turn it back.
Your next question comes from Mike Markidis with BMO. Your line is now open.
Thanks, everybody. Just with respect to the Gregg's property tax comment being higher next year, I guess what are the drivers? And can you remind us? I think there's been a phase-out of the premium on multifamily, and I think it's Edmonton, maybe the rest of Alberta, but just sort of the dynamics at play.
Yeah, Mike, we're very supportive and thankful to our municipal leaders and provincial leaders. We saw very reasonable property tax increases this year. In fact, we saw declines in certain municipalities in Western Canada, and that's a testament to the strong financial position that our provinces have. As we look forward to next year, and as we know, property taxes are a product of assessment and tax rates. What we're seeing here is increased assessments in multifamily apartments. As a result of that, there is some potential we're going to see some property tax increases. Our team is working really hard right now in engaging with municipalities and negotiating assessments so that we all have sustainable increases for next year so that we can continue to provide and deliver sustainable and affordable rents to our residents.
Okay. Are you concerned at all that it—sorry, go ahead.
Mike, it's Sam. We work really hard with our policymakers, and we're very vocal about supporting more government or less taxation. That's a proven public policy because we ask everybody who can spend our super hard-earned after-tax dollars better than we can. We haven't found anybody yet that says somebody else can. Less taxation is a proven public policy that works for everybody. We're super happy with a big change in our municipal leadership that believes the same because it helps everybody to keep more of our money in our pockets. We're super happy with the results. We've seen positive support and signals from our newly elected policymakers in our municipal governments, both in Calgary and Edmonton, because we, the people, have spoken. We all believe less taxes is better for all of us. We're cautiously optimistic, quote-unquote, as per our newly.
Elected mayor in Calgary says about our budget too.
I just want to go back and add to Gregg's comments on. As we're thinking about next year, another place where we've had a great track record is delivering below-inflation expenses. Last year was not the only year of that. We can go back many years and thank our team for finding innovative ways to reduce that expense growth. Next year is not going to be any different. We're in the midst of working through our budgets now for 2026, and we are striving and pushing our team to look for continued efficiencies so that we can continue to deliver these great results into next.
Okay.
That is all expense line item. Thank you. Sorry.
Yeah. No, no, that's great. Thanks for that. Just, I guess, a couple of things before I turn it back. Number one, just on Railroad, it looks like there's a recap there. You pulled a little bit of money out, refinanced the construction loan. I think you had effectively negated the construction loan by extending a loan to the JV on your books. Is there any material change in the FFO contribution from that asset moving forward based on the recap?
Nope. No, we're not expecting that. Any material change. Basically, even our profit this quarter was CAD 900,000 from that asset, and we're projecting for the year-to-date to be around CAD 1.5 million. Huge. I know some from our team in Ontario are listening in on this call, and so huge shout-out to them. Our 45 Railroad project in Brampton is full. Great work to that team for leasing that up over the last couple of months.
Okay. Wonderful. And just last one for me, CAD 100 million of cash. You have great liquidity. You did push leverage up. This was a consequence of the net investment activity. I guess with the special, is there anything that precludes you from doing it in kind, or are you going to anticipate you'll have to give some cash back to unit holders would be question one. And then question two, you marked for the NCIB, but I guess is there any appetite to bring leverage back down, or are you just happy to run at a higher leverage on a go-forward basis?
Hi, Mike. I'll answer question one for you. You're right. Given the dispositions we've had in 2025, there will be tax implications of capital gains and recapture. We know we're going to have to do a special distribution by the end of the year. Right now, it's still premature. The team is still working through assessing the full impact, and we'll be planning to get a special distribution before the end of December. We're right now just going through the analysis required.
On the leverage front, Mike, as we said in our prepared remarks, we do anticipate our leverage to continue to follow the similar trend we saw previously in terms of that downward trajectory. In this case, we did see leverage tick up this quarter with that Central Park acquisition, but it was extremely attractive financing.
I think as we continue to bring in our platform into Central Park and continue to see the growth in our own existing portfolio, we do expect that leverage to continue to tick downwards.
Thank you.
Thanks, Mike.
Your next question comes from Kyle Stanley with Desjardins. Your line is now open.
Thanks. Hi, everyone. Just looking at your incentives for a second, it looks like there was a more significant decline in incentives this quarter. Just given the broader market softness we're seeing, how have you been successful on the leasing front while rolling those incentives back? Is it just adjusting rental rates where needed instead of extending further incentives, or what maybe is it that you're doing to keep occupancy high?
Hey, Kyle. It's James. Yeah, again, really proud of our team for reducing those incentives over the past several years. We're on the cusp of having that almost an immaterial number, which has always been our goal. The incentive declines are primarily coming from our renewals and retention and just eliminating those past discounts that were given. On the new leasing front, where you are seeing some incentives in the market across the country really is just at the upper end of the market, more expensive rents. Our approach and our leasing team's approach has really been more so just to reduce market rents if we are seeing more competitive environments. And so we're not using incentives as much in our leasing activity, really just focused in on that net rent.
Just a reminder for everybody, all of our disclosures, all of our leasing spreads, all of our occupied rents are all always net rents.
Mike, it's Sam.
Kyle, sorry. It is Sam, and there are 1,582 reasons why our incentives are so low, and that is the average occupied-in-place rents. It is always in demand. Larger two-bedroom unit on average at that low price is always in strong demand. That is why it is so important for us to continue our self-regulated approach, keep our rents as low as possible, our value proposition as high as possible, our locations, our renovations, our schools that are nearby, hospitals, employer and employee-sourced locations. That is what keeps us occupied. Our rents being adjusted close to and around inflation is how we continue to do that.
Okay. Thanks for that. Maybe just on that self-regulation, we've seen your renewal spreads trend slowly lower, but it seems like we're kind of nearing a trough here. I just love your thoughts on where do you see those renewal spreads trending in the year ahead?
I think very similar to what we're seeing here today, Kyle. On average, our renewal spreads across the portfolio were in the fours. That's kind of the inflation plus that we've talked about in the past. It's very sustainable, both from us as a community provider and covering our expense growth, as well as from a resident standpoint. First and foremost, we're always going to be flexible. Every resident's case is unique. Of course, we're going to be flexible with any residents who aren't able to afford that. We're not seeing that in the various slides that we have in our appendix and all the macro slides that we've gone through in the past. Affordability is not the issue here in our core markets of Alberta and Saskatchewan. We remain some of the most affordable.
Okay. That makes sense. Just last one, you mentioned strong interest for value-add assets in the market today and looking to continue in the disposition program in the year ahead. Would you say, is it still primarily the smaller mom-and-pop type buyers that are active in the space today, or are you seeing signs that institutions are beginning to step back in?
Hi, Kyle. It's Samantha Adams, and I'll take that question. Yeah, we're receiving a lot of inbound calls. Some days we're almost inundated with inbound calls with interest in our value-add community, some of our non-core assets. To date, it's been mostly the private buyers, I would suggest, and family offices. We are starting to hear that perhaps some of the institutions are going to come back into the space. Whether they're interested in some of our sort of non-core properties will remain to be seen. We are starting to see, I would say, a slightly elevated interest from what we're being told. To date, the buyers of our communities have been the private buyers, and that interest is still very strong.
Okay. Thank you for that. I will turn it back.
Your next question comes from Brad Sturges with Raymond James. Your line is now open.
Hey there. Just following up on that line of questions around the disposition program. Now, I guess it could go through to the end of 2026. I guess how much is left to do in terms of either dollar amount or percentage of the portfolio that you would deem to be non-core that could be considered for divestiture?
We're resuming today. I mean, we've had a very successful 2025 on the disposition front, and I think you could expect us to be as active through 2026. A lot will depend on the market and where interest rates go through the next, call it, 12 months. I think it'd be fair to say you can expect us to be as active as we've been in 2025.
It really depends on our stock price too, Brad. It is very opportunistic right now to continue selling our non-core assets at really the equivalent of a 90-plus unit price and reinvest that at today's unit price in the 60s. That is an incredible window of opportunity. That gap is something that we can continue to sell with the high demand of our value-add and non-core apartments and redeploy back into our repositioned and portfolio overall at a big discount. What a great opportunity.
Okay. That makes sense. Maybe just high-level, the budget came out last night. Obviously, had some different elements between immigration and on the housing side. Just any general thoughts in terms of the implications for demand and supply for the Canadian apartment sector, and particularly in your core rental markets?
High-level, we really need to increase our productivity. The more we invest in increasing our productivity, the more jobs we're going to have, the more economic growth we're going to have, and prosperity and affordability. One really positive is the skilled migration. We need more skilled migrants to build more infrastructure, more affordable housing, more schools, hospitals, and energy corridors. We really need to continue to provide, as Samantha Adams noted, fuel, fertilizer, and food. Really core products. We have all of that in Canada. The more we invest to provide more Canadian energy infrastructure to more Canadian energy and more fertilizer and food, the more productivity, and not just Canadian energy for more Canadians, but Canadian energy for our entire world. We need more affordable energy that will drive our economic growth.
That's a proven public policy and investment that's always done very well for all of us. That's, on a big high level, what we continue to advocate for.
Okay. Thanks. I'll turn it back.
Your next question comes from Saran Sreenivasan with Cormark Securities. Your line is now open.
Thank you, operator . Sorry, guys, I know it's kind of turning out to be a long call, but just one question from me. When you look at the opportunity in 2026 in terms of acquisitions and dispositions, and when you think about your preferences across geographies, can you marry the two and kind of just comment on where do you see more non-core disposition opportunities versus markets where you'd like to expand there?
Hi there. It's Samantha Adams. In terms of the opportunities we're seeing from an acquisition perspective, we've been fairly, I think, transparent in terms of where our target markets are. Obviously, our home markets and Saskatoon and Calgary being top there. We've announced a beautiful acquisition in Laval as well, and the Québec economy continues to grow, positive population growth and job growth. I suspect it'll all depend on the opportunities, but from that perspective, you will probably see some growth there. In terms of the dispositions, it really depends on what the market is doing. Given our size in Edmonton, you'll probably see a few more non-core assets sold out of the Edmonton market. We're working through our disposition strategy now for 2026. I think we'll be able to be in a much better position to comment on that next year.
Yeah. Hi, it's James. Just to add, it's going to remain opportunistic as well. It's just Samantha's point. I think we've got great platforms in each of those markets. There are markets that we like, and we've shown which of those markets are this year with our great upcycling that has been done. We can't reiterate this enough. As of right now, there is no better opportunity than buying back our stock today.
The dispositions, just a little bit more color with respect to the size and the location. Typically very small. Off the beaten path. More difficult to attend to for just that smaller community size. That is really what we are doing here, increasing our efficiencies and scale and making our whole communities and our team way more efficient to be able to spend way more time with our resident members and our communities than driving from site to site to service small community sizes. By the way, small providers are awesome at hands-on operating small communities. That is where we grew up and came from, with small communities. It works great. It is a win-win for us. It is a win-win for the smaller operators that are buying our communities.
It's really a great way to create value, especially when we can buy our apartments all back at a big discount.
That's amazing, brother. Thank you, Samantha, James, and Sam. I'll turn it back.
Thank you, Sai.
Your next question comes from Mario Saric with Scotiabank. Your line is now open.
Hi. Good morning. I wanted to circle back just on the spreads. On the renewal spreads, the kind of 3-4% or so. I think going into September, October, the range was closer to 3-7%. I just wanted to confirm whether that's indeed the case where you've seen kind of the top end of the expected renewal spreads come down a little bit. If so, is that simply due to seasonality, or are you seeing maybe a little bit more pressure in select markets?
Hey, Mario. It's James. It's very market dependent. We're seeing in our most affordable markets continued ability to deliver the upper ends of perhaps not that range, but above our average. In other markets where we have more expensive products where it is more competitive, we have to also compete on those spreads. You're seeing the lower end or below our average range. It's very market dependent, Mario. At this juncture, though, as you can see over the past several months, we're seeing fairly consistent results. With renewals, as you know, as we do them two, three, four months in advance, we expect it to be fairly consistent at this.
Okay. Maybe just on the newly spreads, I think they're close to 2% this quarter. You've highlighted affordability is not necessarily an issue within the portfolio. Most of the portfolio is in markets where rents are some of the lowest in the country, as you point out. What do you think is going to be required to see that 2% inch up over the next 6-12 months? Is it supply deliveries coming online? If so, what's the inflection point from a timing perspective there? Just curious to hear what could be the catalyst to get that number up a little bit.
I think continuing to deliver strong results, as you know, into the fall here, there is a return to seasonality in the market. We've noticed that. We see that in terms of traffic flow. Is that going to inch up here this winter? Likely not. We're going to focus in on occupancy. We're going to focus in on affordability. Come this spring, though, as we start to see more traffic. We'll come to the market and see if there's potential to bring that up. Our focus is on retention, Mario. Retention and renewals represent 70-80% of our deal flow. That is really going to continue to be where we hone in and focus.
Okay. My last question is more of a technical question. Just during the quarter, there was a nice sequential revenue bump up to 1.4% for the portfolio. Relative to prior quarters, which were closer to 1% growth. How much of that delta would have been driven by Québec this quarter?
Hey, Mario. It's James. Great point. In Québec, exactly the reason why Samantha and team and we are all very excited about Québec and. Huge opportunity from that value standpoint. We estimate that in July, if you strip out Québec, it represented about, was it 0.7% of that sequential revenue growth? And just for context, about a third of our deal flow in Québec occurs in the month of July.
Perfect. Okay. All set.
Your next question comes from Jimmy Shan with RBC Capital Markets. Your line is now open.
Hi. Just one question with respect to Calgary. What are you expecting in terms of new supply, whether it's condo or purpose-built rental over the next 12 months? I'm just trying to get a sense of where we are relative to peak delivery.
Yeah. Hi, Jimmy. It's Eric. I can speak to that. Calgary specifically, I think we have at the moment about 11,000 rental units under construction. I would see the deliveries over the next 12 months being pretty close to that range in general. Calgary specifically, we have seen a little bit of an increase on the condo supply side. Bear in mind that only, call it, 30% of that would go to the rental market. Generally, I would say that's fairly consistent with what we have under construction today.
Okay. That 11,000 of rental units, how would that compare to a year ago? Roughly?
I'd say you're probably up about 10-15% year over year on an absolute basis. What I would say, though, is in terms of location of deliveries, Jimmy, I would say a year ago, a lot of those deliveries would have been in the Beltline Central Core area. I would say now there's more product being delivered in the more suburban locations of the city. That would be outside of our Ring Road in Calgary.
Okay.
Okay. I'll just add, Jimmy, it's James. We had the Calgary Real Estate Forum here in town last week or the week prior, and it was busy. There was record attendance. I'll say that the general consensus was that development economics are challenged. This is no different than any other place across the country right now. If we run that math, hitting performance is going to be tougher. The yields, the already very small yields for development, have compressed even further. We think we're hitting peak development economics right now for multifamily construction. Everybody we talk to seems to be pins down on development. We would anticipate at some point that the under construction numbers are going to start to tail off, purely just on economics.
That's just a little bit of color from what we're hearing from the development community in Calgary.
Okay. That's useful. Thank you.
Thank you.
Ladies and gentlemen, as a reminder, should you have a question, please press star one. Your next question comes from Matt Kornak with National Bank. Your line is now open.
Hey, guys. This call has been pretty thorough, so I do not have much. Turnover did seem to come down sequentially, and it seems like skips and evictions are down. Maybe there is an increase in kind of people leaving for transfers and assignments. At this point, is it population growth that is driving demand, or is it employment growth? How are your markets faring on the employment side? Just given the reduction in turnover sequentially, is that by design, essentially going into the winter months on your part?
Yeah. Matt, it's Sam. It's really important to come and see us and feel our energy and our economic vibrancy. We have a lot of jobs here, and we're seeing a lot of employment, a lot of tech investment in Calgary, a lot of distribution, a lot of moves from Ontario, BC, affordable housing. Everybody seems really busy. Our restaurants, our stores, it just is a good economy. That is really what we see and feel. Affordability continues to be a big driver. Yeah, we're doing well, relatively speaking, on our economy, and especially Saskatchewan. That is a real— We attended the Saskatchewan Real Estate Forum. As Samantha Adams shared with everybody, fuel, fertilizer, and food, we just don't have enough of it for our planet. We do have a lot of it in Saskatchewan and Alberta.
Our regional economies here continue to be very strong. If you look on slide 53 in the appendix, way back in the back section, average rents of Québec are CAD 1,416. It is so affordable. When we visited our team and our communities in Québec, it is the same. Very vibrant. Restaurants are busy. Our economy in Québec seems to be doing really, really well, too. A lot of increased hiring in teachers, nurses. That is what we need more of, too. We are seeing a lot of jobs that are important jobs that are being created. Ontario, we have held our rents really low in London. Kitchener and Waterloo, we are all full in Brampton. You know what there is a shortage of? Really big, low-priced apartments. That is what there is big demand for. That is what we got. That is what we have been focusing in on for 40 years.
Yeah. Oh, sorry, Matt. Just to expand on that as well. Alberta has experienced a record high immigration for the past few years. There is simply not enough homes for all of these people to live. The continued economics of affordability will increase the amount of people being attracted to our province. Alberta is diversifying, as you can see. As Sam pointed out to the slides in our appendix, the jobs in healthcare, professional, scientific, and other diverse sectors. We have talked to in past conference calls, like the Lufthansa Technik and WestJet partnership, continuing to bring jobs in aviation and engineering. We have the skilled labor force to provide those really exceptional, well-paying jobs and transform and be the energy superpower in Canada and hopefully the world.
Yeah. The second part of your question, Matt, it's James on the skips and evictions. Awesome observation. That is by design on our team's part as well. A big reason for it is the affordability that Sam and Samantha were talking about and the exceptional value that we offer. We have to give credit to our team and our screening processes and always being flexible with residents. We are happy to see that number decline. Overall turnover has decreased as well. We have seen that trend happen over the past several years. Again, that is by design. It costs a lot of money to turn over suites. It costs a lot of money to acquire new residents. Strategically, our strategy there is just to keep residents within our Boardwalk portfolio for their entire rental lifespan. Our team is doing a good job of that.
Perfect. On those good news notes, I will turn it back. Thanks, guys.
Thanks, Matt.
Your next question comes from Dean Wilkinson with CIBC. Your line is now open.
Thanks. Hopefully, I can make this quick. On the topic of affordability, how are you guys looking at the sale of the older assets, which I believe would probably have a more affordable and lower rent versus replacing those with the newer, more amenitized, higher rents? Is that affordability metric the same across the assets, or does it shift over time as you sort of new grade the portfolio?
Dean, it's Sam. We are really looking forward to sharing our Central Park community in Laval with everybody. Really big units at really low price per sq. ft. There is affordability everywhere, and especially affordable luxury. That is our nicest community now. We are big fans of the Four Seasons. It is a Canadian brand. What I would like to say is if the Four Seasons was ever going to develop an apartment, it would be Central Park. Inspired by our partners that we purchased from and the value proposition and the insight to build such big apartments and to rent them at such a low and affordable price. Main Street in Saskatoon, same. Very affordable, brand new product. We are all about affordability in every single category. It is building upon that. The smaller communities that we are selling, they are older.
We would invest a lot more in value-add than some of our competitors would and smaller operators. We have a different expectation with respect to our older communities and invest a lot more than most of our competitors in our older communities. We think the smaller, older communities are best in smaller providers and in our competitors that take a different approach and provide a product that we call and are proud of, classic product. It is just like classic Coca-Cola, always in demand. Affordable, classic, affordable linoleum carpet, older product has a purpose in our marketplace and provides that choice. It is all about maximum choices. It is all about affordability, Dean.
It comes back, Dean, it is James. Just to add, this comes back to what we were talking about with Matt, trying to retain residents within our Boardwalk portfolio for their entire rental cycle. Part of that is having that diversified product offering. We continue to have most of our portfolio remain affordable. Even Central Park, which we are referring to here, has average rents of CAD 230 a sq. ft. for Four Seasons-like products. That is highly affordable. Samantha wants to jump in.
Sorry, James. No, I was just going to say I think that. When you look at the acquisitions we have announced this quarter, and then the most recent one obviously being 639 Main Street, our average rents per sq. ft. range from just over CAD 2.0/ sq. ft. up to sort of CAD 2.40/ sq. ft. I think when you put the Canada-wide lens on rents per sq. ft., even our new product is still very affordable.
That's great. Everyone loves a classic Sam. I think we're all looking forward to the trip to Laval. Thanks, everybody.
Thank you. Looking forward to it, Dean.
Turner for the questions at this time. I will now turn the call over to Sam Kolias for closing remarks.
Thank you, Joelle. 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 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 unit holders from far and wide and local. It really is all about our BFF, our Boardwalk Family Forever, whose huge shoulders we stand. 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're 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 shareholders and stakeholders.
We conclude, home is where our heart is, our heart is where our family is, and our family is where love always lives. Our occupied rent average, CAD 1,582. Our love always priceless. Welcome Home to Love Always. Our future is Boardwalk Family Forever. What can be more important when choosing where to call home? God bless us. Now more than ever, grant us all peace, our greatest prize of all.
Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.