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Apartment REITs see higher revenues amid tight rental market. Will this spur new supply?

Boardwalk CEO says building new is too expensive, top priority is to reinvest in existing units

The Calgary-based Boardwalk Real Estate Investment Trust (REIT) is among the REITs posting higher year-over-year revenues amid a stubbornly tight rental market.

In the first half of the year, the trust — which owns more than 33,000 apartment units, most of them in Alberta — saw its same-property net operating income (NOI) grow by 13 per cent compared to the same period last year.

Same-property NOI is a popular measure of profitability in the real estate sector that looks at revenues from properties, minus operating expenses, and controls for events like acquisitions and dispositions that might skew the numbers.

Boardwalk says its growth was driven in part by the surge of people who have moved to Alberta in the last year, leading to higher occupancy rates and the ability to phase out discounts used in tougher times to coax renters into signing leases.

“When demand increases and supply does not increase proportionately, we’re seeing no discounts [are] needed to keep our occupancy at high levels,” said Sam Kolias, the trust’s chairman and CEO. …[Continue Reading]