Issue 37 – Boardwalk is back on The Monopoly Board

Boardwalk Real Estate Investment Trust (TSX: BEI-U) is a real estate company. The company acquires and manages multi-family residential projects throughout Canada. Multi-family residential REITS have been one of the best performing asset classes on the TSX this year. The two main reasons for this outperformance are low interest rates and population growth via record immigration. With strong population growth, demand has been outpacing supply, especially in Vancouver, Ottawa, Toronto, and Montreal. This demand has driven high single digit net operating income. This trend has gotten investors very excited and has driven stock prices to new highs. For example, InterRent REIT (TSX: IIP-U), Canadian Apartment Properties REIT (TSX: CAR-U), and Minto Apartment REIT (TSX:MI-U), all reached new highs in the past few days. With such excitement, I believe some of them got ahead of themselves especially on Price to Net Asset Value (P/NAV). BEI-U is the only one to trade at a discount to NAV. There are many reasons why BEI-U is trading at a discount and has relatively underperformed its peers in the past few years. The main reason is that BEI-U has more exposure to Western Canada than its peers. As you may recall, Alberta and Saskatchewan have not experienced the same economic expansion as other larger provinces; this is due to the energy market slowdown that started in 2015.

Disclaimer: Palos Funds are shareholders of BEI-U.


By Charles Marleau, CIM & Joany Pagé, CFA

Continue Reading in PDF

By Charles Marleau, CIM & Joany Pagé, CFA


Click to Read Macro View

By Hubert Marleau


Click to Read Options Corner

By Robert Mendel


Click to Read Palos-Mitchell Report

By William Mitchell