Boardwalk Real Estate Investment Trust (TSX:
BEI.UN)
Boardwalk Real Estate Investment Trust
("Boardwalk", the "Trust" or "we") is pleased to announce that it
has entered into an agreement to issue 2,190,000 units of
the Trust (“Units”) from treasury on a bought deal basis at a price
of $68.50 per Unit (the “Offering Price”) to a syndicate of
underwriters bookrun by TD Securities Inc. and RBC Capital Markets
(collectively, the “Underwriters”) for total gross proceeds of
approximately $150 million (the “Offering”). In addition, the Trust
has granted the Underwriters an over-allotment option to purchase
up to an additional 328,500 Units at the Offering Price,
exercisable in whole or in part, for a period of 30 days following
closing of the Offering. If the over-allotment option is exercised
in full, the gross proceeds of the Offering will total
approximately $172.5 million.
The Trust also announced today that it has
agreed to acquire The Circle, a 295-suite newly built apartment
complex in Calgary, Alberta for approximately $77.8 million.
Boardwalk intends to use the net proceeds of the
Offering, including over-allotment proceeds, if any, to finance the
purchase price for The Circle, repay its portion of a floating rate
construction facility on the 45 Railroad community in Brampton,
Ontario and to fund future acquisition and development
opportunities in its existing pipeline.
The Units will be offered in each of the
provinces and territories of Canada pursuant to a prospectus
supplement to the Trust’s short form base shelf prospectus dated
December 14, 2023. The Offering is expected to close on or about
December 22, 2023 and is subject to certain conditions, including
the approval of the Toronto Stock Exchange.
The Units have not been, nor will they be,
registered under the United States Securities Act of 1933, as
amended (the "1933 Act"), and may not be offered or sold in the
United States (as defined in Regulation S under the 1933 Act),
except pursuant to an exemption from the registration requirements
of the 1933 Act. This press release does not constitute an offer to
sell or a solicitation of an offer to buy any Units in the United
States.
Sam Kolias, Chairman and Chief Executive Officer
of Boardwalk, commented:
"The capital raised through this offering
enables us to continue to invest in much needed new supply of
multifamily communities accretively, and proactively strengthens
our balance sheet for future growth opportunities. Alberta
continues to attract strong migration with high affordability
levels, ample job opportunities, and rents relative to income
levels remaining amongst the most affordable in Canada. Strong
housing fundamentals in Boardwalk's target markets paired with the
Trust's proven operating platform provide attractive opportunities
for both organic and external growth. Our acquisition pipeline
includes similar modern, high-quality assets at attractive pricing
that enhance portfolio quality and generate strong Funds from
Operations (“FFO”) per Unit growth to our unitholders, while
providing residents the best product quality, service and
experience. This equity issue, which is the first by Boardwalk in
approximately 17 years, is part of Boardwalk’s continued
disciplined capital allocation program and demonstrates our ability
to invest accretively."
THE CIRCLE ACQUISITION
The Circle, a 295-suite newly built community in
Calgary, Alberta, will be acquired for a purchase price of
approximately $77.8 million, which represents a stabilized cap rate
of approximately 5.75% and at a significant discount to current
construction cost. The Trust entered the conditional purchase
agreement for The Circle in May 2022 and has approximately $69.8
million remaining to close the transaction. The new community is
located within the master-planned Seton neighbourhood, providing
modern and desirable neighbourhood amenities to residents. The
property is strategically located near two of Boardwalk’s existing
communities, The Level and Auburn Landing, providing operational
efficiencies for the portfolio in the region and strengthening the
Trust's presence in the rapidly growing Seton neighbourhood. The
Circle is an A-class community that was completed in 2023,
featuring modern finishes, stainless steel appliances and in-suite
washers and dryers. The community is approximately 85% leased as of
December 4, 2023.
The acquisition, which is expected to close by
February 2024, is being acquired free and clear of any debt and is
expected to be funded via net proceeds from the Offering.
FINANCIAL IMPACT
The Trust intends to use approximately $50
million of net proceeds towards the full repayment of its portion
of the outstanding construction facility at its 45 Railroad
community in Brampton, Ontario. The current interest rate on the
floating rate construction facility is 6.63%. The acquisition of
The Circle, paired with the repayment of the construction facility,
is expected to provide unitholders of the Trust with immediate
accretion to FFO per Unit and Adjusted Funds from Operations
(“AFFO”) per Unit. The Offering is also expected to provide balance
sheet flexibility to capitalize on future accretive acquisition
opportunities in the Trust’s pipeline.
The Trust continues to evaluate attractive
opportunities in its target markets, and has a pipeline of future
acquisition and development opportunities. The Trust remains
committed to its capital allocation strategy of investing in
opportunities that are accretive to FFO per Unit and enhance Net
Asset Value (“NAV”) per Unit over the intermediate term.
CORPORATE PROFILE
Boardwalk REIT strives to be Canada’s
friendliest community provider and is a leading owner/operator of
multi-family rental communities. Providing homes in more than 200
communities, with over 33,000 residential suites totaling over 29
million net rentable square feet, Boardwalk has a proven long-term
track record of building better communities, where love always
lives™. Our three-tiered and distinct brands: Boardwalk Living,
Boardwalk Communities, and Boardwalk Lifestyle, cater to a large
diverse demographic and has evolved to capture the life cycle of
all Resident Members. Boardwalk's disciplined approach to capital
allocation, acquisition, development, purposeful re-positioning,
and management of apartment communities allows the Trust to provide
its brand of community across Canada creating exceptional Resident
Member experiences. Differentiated by its peak performance culture,
Boardwalk is committed to delivering exceptional service, product
quality and experience to our Resident Members who reward us with
high retention and market leading operating results, which in turn,
lead to higher free cash flow and investment returns, stable
monthly distributions, and value creation for all our stakeholders.
Additional information about Boardwalk REIT can be found on the
Trust’s website at www.bwalk.com/investors.
For further information, please
contact:
Boardwalk REIT, Investor Relations |
403.531.9255 | investor@bwalk.com
PRESENTATION OF NON-GAAP
MEASURES
Non-GAAP Financial Measures
Boardwalk believes non-GAAP financial measures
are meaningful and useful measures of real estate organizations
operating performance, however, are not measures defined by IFRS.
As they do not have standardized meanings prescribed by IFRS, they
therefore may not be comparable to similar measurements presented
by other entities and should not be construed as an alternative to
IFRS defined measures. Below are the non-GAAP financial measures
referred to in this news release.
Funds From Operations
The IFRS measurement most comparable to FFO is
profit. Boardwalk REIT considers FFO to be an appropriate
measurement of the performance of a publicly listed multi-family
residential entity as it is the most widely used and reported
measure of real estate investment trust performance. Profit
includes items such as fair value changes of investment property
that are subject to market conditions and capitalization rate
fluctuations which are not representative of recurring operating
performance. Consistent with REALPAC, we define FFO as adjustments
to profit for fair value gains or losses, distributions on the LP
Class B Units, gains or losses on the sale of the Trust's
investment properties, depreciation, deferred income tax, and
certain other non-cash adjustments, if any, but after deducting the
principal repayment on lease liabilities and adding the principal
repayment on lease receivable.
Adjusted Funds From Operations
Similar to FFO, the IFRS measurement most
comparable to AFFO is profit. Boardwalk REIT considers AFFO to be
an appropriate measurement of a publicly listed multi-family
residential entity as it measures the economic performance after
deducting for maintenance capital expenditures to the existing
portfolio of investment properties. AFFO is determined by taking
the amounts reported as FFO and deducting what is commonly referred
to as “Maintenance Capital Expenditures”. Maintenance Capital
Expenditures are referred to as expenditures that, by standard
accounting definition, are accounted for as capital in that the
expenditure itself has a useful life in excess of the current
financial year and maintains the value of the related assets.
Net Asset Value
The IFRS measurement most comparable to NAV is
Unitholders’ equity. With real estate entities, NAV is the total
value of the entity’s investment properties, equity accounted
investment, and cash minus the total value of the entity’s debt.
The Trust determines NAV by taking Adjusted Real Estate Assets and
subtracting Adjusted Real Estate Debt, which management of the
Trust believes is a useful measure in estimating the entity’s
value.
Non-GAAP Ratios
The discussion below outlines the non-GAAP
ratios used by the Trust. Each non-GAAP ratio has a non-GAAP
financial measure as one or more of its components, and, as a
result, do not have standardized meanings prescribed by IFRS and
therefore may not be comparable to similar financial measurements
presented by other entities. Non-GAAP financial measures should not
be construed as alternatives to IFRS defined measures.
FFO per Unit includes the non-GAAP financial
measure FFO as a component in the calculation. The Trust uses FFO
per Unit to assess operating performance on a per Unit basis, as
well as determining the level of Associate incentive-based
compensation. FFO per Unit is calculated by taking the non-GAAP
ratio’s corresponding non-GAAP financial measure and dividing by
the weighted average Units outstanding for the period on a fully
diluted basis, which assumes conversion of the LP Class B Units and
vested deferred units determined in the calculation of diluted per
Unit amounts in accordance with IFRS.
AFFO per Unit includes the non-GAAP financial
measure AFFO as a component in the calculation. The Trust uses AFFO
per Unit to assess operating performance on a per Unit basis and
its distribution paying capacity.
NAV per Unit includes the non-GAAP financial
measure NAV as a component in the calculation. Management of the
Trust believes it is a useful measure in estimating the entity’s
value on a per Unit basis, which an investor can compare to the
entity’s Unit price which is publicly traded to help with
investment decisions. NAV per Unit is calculated as NAV divided by
the Units outstanding as at the reporting date on a fully diluted
basis which assumes conversion of the LP Class B Units and vested
deferred units outstanding.
More information regarding non-GAAP measures and
ratios and a reconciliation of each to the nearest IFRS financial
measure or ratio, as applicable, is available in Boardwalk’s most
recent management's discussion and analysis filed on SEDAR+ at
www.sedarplus.com.
CAUTIONARY STATEMENTS REGARDING
FORWARD-LOOKING STATEMENTS
Information in this news release that is not
current or historical factual information may constitute
forward-looking statements and information (collectively,
"forward-looking statements") within the meaning applicable of
securities laws, including statements with respect to: the
Offering, the terms and timing for closing thereof, and the use of
proceed therefrom; the acquisition of The Circle and the terms and
timing for closing thereof; the impacts of the foregoing on the
Trust's financial performance; the remaining amount to close the
acquisition of The Circle; the intention to accretively apply a
portion of the net proceeds towards the Trust’s portion of the
outstanding construction facility; and the potential for future
acquisitions by the Trust;. The use of any of the words “expect”,
“anticipate”, “may”, “will”, “should”, “believe”, “intend” and
similar expressions are intended to identify forward-looking
statements. Implicit in these forward-looking statements,
particularly in respect of Boardwalk’s objectives for its current
and future periods, Boardwalk’s strategies to achieve those
objectives, as well as statements with respect to management’s
beliefs, plans, estimates, assumptions, intentions, and similar
statements concerning anticipated future events, results,
circumstances, performance or expectations are estimates and
assumptions subject to risks and uncertainties which could cause
Boardwalk’s actual results to differ materially from the
forward-looking statements contained in this news release.
Specifically, Boardwalk has made assumptions surrounding the impact
of economic conditions in Canada and globally, Boardwalk's future
growth potential, prospects and opportunities, the rental
environment compared to several years ago, interest costs, access
to equity and debt capital markets to fund (at acceptable costs)
the future growth program to enable the Trust to refinance debts as
they mature, the availability of purchase opportunities for growth
in Canada, general industry conditions and trends, changes in laws
and regulations including, without limitation, changes in tax laws,
mortgage rules and other legislative changes, increased
competition, the availability of qualified personnel, fluctuations
in foreign exchange or interest rates, and stock market volatility.
These assumptions, although considered reasonable by the Trust at
the time of preparation, may prove to be incorrect.
Boardwalk Real Estate In... (TSX:BEI.UN)
Graphique Historique de l'Action
De Avr 2024 à Mai 2024
Boardwalk Real Estate In... (TSX:BEI.UN)
Graphique Historique de l'Action
De Mai 2023 à Mai 2024