CALGARY, AB, Dec. 21, 2021 /PRNewswire/ - Boardwalk Real Estate Investment Trust (TSX: BEI.UN)
Boardwalk Real Estate Investment Trust ("Boardwalk", the "REIT" or the "Trust") announces that on December 15, 2021, the Trust closed on the sale of a non-core, 180-unit asset in Saskatoon, SK. Reid Park is a 3-storey wood frame walk-up community located in southwest Saskatoon. The sale price of $25.0 million, or $138,800 per apartment door, was inline with the Trust's IFRS fair value of the asset.
Throughout fiscal 2021, the Trust has sold non-core assets at or above the Trust's IFRS fair value while continuing to increase its funds from operations (FFO). This continued FFO growth in combination with Boardwalk's minimum distribution policy, has resulted in estimated fiscal 2021 total taxable income (representing capital gains and other income) exceeding distributions paid.
Boardwalk further announces that it has declared a special non-cash distribution of $0.325 per Trust Unit, payable on December 31, 2021 to Unitholders of record at the close of business on December 31, 2021 (the "Special Distribution"). The non-cash Special Distribution is principally being made to distribute to Unitholders a portion of the capital gain realized by the Trust from transactions completed in the twelve-month period ended December 31, 2021. Accordingly, the Special Distribution will be in the form of a capital gain for Canadian income tax purposes.
Canadian resident Unitholders will generally be required to include their proportionate share of the Trust's income and net taxable capital gain for the 2021 tax year as allocated and designated by the Trust in computing their respective income for the 2021 tax year. Subject to finalization, the Trust anticipates that after the non-cash Special Distribution, Unitholder tax payable on distributions in 2021 should be comparable to the tax paid on distributions in 2020.
The non-cash Special Distribution will be paid at the close of business on December 31, 2021 by the issuance of additional Trust Units that will have a fair market value equal to the dollar amount of the Special Distribution and which will be based on the closing price of the Trust Units on the Toronto Stock Exchange on December 31, 2021. Immediately after the payment of the Special Distribution, the issued and outstanding Trust Units will be consolidated such that the aggregate number of issued and outstanding Trust Units immediately after the Special Distribution will be the same as immediately before the Special Distribution. The amount of the Special Distribution will increase the adjusted cost base of Unitholders' consolidated Trust Units. Unitholders that are not a resident in Canada for Canadian federal income tax purposes may be subject to applicable withholding taxes in connection with the payment of the Special Distribution.
The Trust cautions that the foregoing comments are not intended to be, and should not be construed as, legal or tax advice to any Unitholder. The Trust recommends that the Unitholders consult their own tax advisors regarding the income tax consequences to them of this anticipated Special Distribution and related unit consolidation.