BOARDWALK REIT ANNOUNCES SALE OF NON-CORE ASSET AND SPECIAL NON-CASH DISTRIBUTION

CALGARY, AB, Dec. 21, 2021  /CNW/ - 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.

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.  The IFRS measurement most comparable to FFO is profit (loss). We define FFO as income before fair value adjustments, 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 portion of lease liabilities and adding the principal portion of lease receivables. The reconciliation from profit (loss) under IFRS to FFO can be found in the REIT's management's discussion and analysis for the three and nine months ended September 30, 2021 (the "MD&A") under the section titled "Performance Review – FFO and AFFO Reconciliations". Boardwalk considers FFO to be an appropriate measurement of the performance of a publicly listed multi-family residential entity. In order to facilitate a clear understanding of the combined historical operating results of Boardwalk, management feels FFO should be considered in conjunction with profit (loss) as presented in the condensed consolidated interim financial statements for the three and nine months ended September 30, 2021.

FORWARD-LOOKING STATEMENTS

This press release contains certain forward-looking statements. The use of any of the words "expect", "anticipate", "may", "will", "should", "believe", "intends", and similar expressions are intended to identify forward-looking statements. Forward-looking statements contained in this press release include our continued FFO growth, that estimated fiscal 2021 total taxable income will exceed distributions paid, as well as the anticipated Special Distribution including the timing of payment thereof and tax treatment thereof.

With respect to forward-looking statements contained in this press release, we have made several assumptions including expected 2021 total taxable income, continued FFO growth and those described in detail in our MD&A and the Annual Information Form for the period ended December 31, 2020. Readers and investors are cautioned that the assumptions used in the preparation of such forward-looking statements, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements. Our actual results, performance, or achievements could differ materially from those expressed in, or implied by, these forward-looking statements. We can give no assurance that any of the events anticipated will transpire or occur, or if any of them do, what benefits we will derive from them.

By their nature, forward-looking statements are subject to numerous risks and uncertainties, some of which are beyond our control, including the impact of general economic conditions, industry conditions, volatility of commodity prices and stock market volatility. The foregoing and other risks are described in more detail in the REIT's MD&A, and the Annual Information Form for the period ended December 31, 2020, each of which is available at www.sedar.com.

Further, any forward-looking statement is made only as of the date of this press release, and the REIT undertakes no obligation to update or revise any forward-looking statement or statements to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events, except as required by applicable securities laws. New factors emerge from time to time, and it is not possible for the REIT to predict all of these factors or to assess in advance the impact of each such factor on the REIT's business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

The forward-looking statements contained in this press release are expressly qualified by this cautionary statement.

CORPORATE PROFILE

Boardwalk REIT strives to be Canada's friendliest multi-family 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 units totaling over 28 million net rentable square feet, Boardwalk has a proven long-term track record of building better communities, where love always lives^tm.  Our three-tiered and distinct brands: Boardwalk Living, Boardwalk Communities and Boardwalk Lifestyle, cater to a large and 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.

Boardwalk REIT's Trust units are listed on the Toronto Stock Exchange, trading under the symbol BEI.UN.  Additional information about Boardwalk REIT can be found on the Trust's website at www.bwalk.com/investors.

SOURCE Boardwalk Real Estate Investment Trust

Boardwalk REIT: Investor Relations, [phone], [email protected]