More Top Pick DetailsFirst stock in the clip. GLTA
https://www.bnnbloomberg.ca/video/andrew-moffs-top-picks~2431215
Boardwalk REIT (BEI.UN - TSX) Boardwalk REIT, the second largest publicly-traded apartment REIT in Canada, owns over 33,000 suites across 200 properties. With a focus on Alberta and Saskatchewan, the REIT owns assets ranging from Class A high-rise to garden-style Class B apartments concentrated in Edmonton (37 per cent of suites), Calgary (17 per cent) and Montreal (14 per cent).
With the price of oil rebounding and several new technology firms announcing expansions into the REIT’s core markets of Calgary and Edmonton, a significant five per cent reduction in tenant concessions has been reported by management quarter-over-quarter. This is expected to further accelerate in the second and third quarters of 2022, in line with the typical seasonal increase in apartment demand and leasing activity.
Operationally, the REIT continues to recover from the pandemic as new leasing spreads turned positive in the majority of its core markets in the fourth quarter 2021, while renewal leasing spreads increased from 2.5 per cent in September 2021 to 3.4 per cent in January 2022.
Finally, recent private market transactions indicate a significant mispricing of the REIT’s units, which may lead to cap rate compression in future appraisals. In March 2022, a $138 million acquisition of three multi-family properties in Calgary transacted at an estimated cap rate slightly above 4.0 per cent on in-place NOI, comparing to Boardwalk’s higher quality portfolio that trades at an implied cap rate approximately 50 bps higher. Combining all three catalysts have the potential to increase the near-term NAV per unit of BEI to almost $68.