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Boardwalk acquires 3 Calgary-area apartment buildings for $118.2M

Largest of 3 properties is Elbow 5 Eight, being developed by Cove Properties

A rendering of Elbow 5 Eight in Calgary. (Courtesy Cove Properties)
A rendering of Elbow 5 Eight in Calgary. (Courtesy Cove Properties)

Boardwalk REIT (BEI-UN-T) has announced a series of apartment building acquisitions in Calgary comprising 324 rental units for a combined price of $118.2 million.

The largest of the properties is Elbow 5 Eight, which is currently completing construction and being developed by Cove Properties. Boardwalk REIT has an agreement to acquire the 255-suite, low-rise complex in the Windsor Park neighbourhood for $93 million.

The price equates to approximately $365,000 per suite and a cap rate upon lease-up of 5.75 per cent. 

Elbow 5 Eight is within walking distance of Chinook Centre mall, a short drive from downtown Calgary, Sandy Beach Park, Rockyview General Hospital, Calgary Golf and Country Club and the nearby established communities of Britannia and Bel Aire. 

The announcement says it will feature condo-quality finishes, a residents’ lounge, gym and rooftop patio. 

Boardwalk anticipates closing on the acquisition in Q1 2025, subject to closing conditions. It anticipates lease-up will take approximately one year. 

Dawson Landing acquisition

The trust has now closed on the purchase of Dawson Landing, a new, fully occupied, 63-suite townhome community in the rapidly growing city of Chestermere, just east of Calgary. 

The $26.3-million price tag equates to approximately $417,000 per suite and an estimated going-in cap rate of five per cent. The property features two- and three-bedroom layouts with each townhome including a two-car garage, in-suite laundry and balconies. 

Chestermere is approximately 25 minutes from downtown Calgary and is considered one of the region’s more affluent communities. 

Boardwalk also closed on The Brenda, a six-unit walk-up community in the Britannia neighbourhood for approximately $1.9 million. The trust plans to manage The Brenda out of Elbow 5 Eight upon its completion. The building also provides interim holding income for a potential longer-term redevelopment opportunity.

“As we enter the summer leasing season, we continue to see strong apartment rental fundamentals across our portfolio,” Sam Kolias, chairman and chief executive officer of Boardwalk REIT, said in this week’s announcement. “Our approach to self-moderation of rental adjustments in our non-price-controlled markets continues to be supportive of resident member retention while extending our runway for future growth and lowering our turnover costs.

“Alberta remains a destination of choice for existing and new Canadians seeking an affordable place to call home, economic opportunities, and the favorable lifestyle the province has to offer. We are pleased to announce the addition of the three communities above into our Boardwalk family forever.”

Fully deploys $218M share issue

When the Elbow 5 Eight transaction closes, Kolias said that will be the final acquisition under Boardwalk’s fall issuance of new shares, which raised $218 million.

“Upon closing on Elbow 5 Eight, the trust will have fully deployed the remaining proceeds from its equity issuance in December 2023 toward newly built communities in phenomenal locations within the rapidly growing Calgary area, further supplementing our strong organic growth profile,” he said in the announcement.

“Overall, we are encouraged by the results we have seen to-date in 2024 and are confident that our net operating income and FFO-per-unit growth trajectory will provide us with additional funds to re-invest in our communities while continuing our track record of strong performance for our unitholders.”

The announcements were part of an update that also provided statistics for Boardwalk’s portfolio occupancy and rents as of May.

The trust reports same-property occupancy continued to be strong at 98.6 per cent, while rents year-over-year rose from an average of $1,316 to $1,444.

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