Invest in Boardwalk REIT for Long-Term Growth

Investors looking for the benefits of holding a residential-focused REIT will not be disappointed with Boardwalk REIT (TSX:BEI.UN).

| More on:
The Motley Fool

Real estate is one of the all-time best investments that investors can make, and this is especially true in the hot real estate market that major urban areas are in.

For those investors looking to invest in real estate, REITs can be the next best thing. One REIT with great potential is Boardwalk REIT (TSX:BEI.UN), the largest residential landlord in the country.

Meet Boardwalk

Boardwalk owns approximately 33,000 apartments across Canada. A good chunk of those locations are in Alberta, but the company also has locations in Saskatchewan, Ontario, and Quebec. Boardwalk’s properties mainly consist of mid to large apartment buildings and community residential centres focused near major urban areas.

Like many other REITs, Boardwalk pays out a distribution monthly to investors. That distribution is currently set to $0.19 per share, giving the stock an impressive yield of 4.06%.

Year-to-date, the stock is up by 16.73%, and there’s still more room for the stock to grow, contrary to concerns regarding the concentration of units in Alberta. The oil-rich province is still dealing with the fallout from the crash in oil prices and a weakened economy.

With the bulk of Boardwalk’s properties in Alberta, naturally there is some concern from investors as to whether or not the occupancy rates in Boardwalk’s properties will drop. Some of that concern stems from the weakened market in Alberta, Boardwalk’s exposure to that market, and the overheating real estate market in other areas of country, specifically Toronto and Vancouver.

During the first quarter, rents dropped by 3.3% in the province over the same quarter last year, but not all investors are convinced that the stock will drop.

Boardwalk hopes to offset further drops by introducing a number of incentives to tenants.

Boardwalk expands and offers specials to tenants

Boardwalk has negotiated favourable packages and discounts to residents on internet and phone services. The strategy has worked well in the past, and now Boardwalk is stepping up its efforts to keep tenants by offering free renovations.

The company is also taking advantage of the weakened market in Alberta to expand its footprint. Boardwalk recently acquired a Calgary-based 238-unit community called Auburn Landing. The community is a combination of one- and two-bedroom units that will add more than 205,000 square feet of space to Boardwalk’s portfolio.

Boardwalk currently trades at $55.15, up by 16% year-to-date. Despite this increase, the stock is down by 5% over the course of the past 12 months.

In my opinion, Boardwalk represents a unique opportunity for investors looking to invest in a REIT for the long term. The company continues to maintain high occupancy and rates and expand the total number of properties in its portfolio.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Demetris Afxentiou has no position in any stocks mentioned.

More on Investing

A data center engineer works on a laptop at a server farm.
Tech Stocks

3 No-Brainer Data Centre Stocks to Buy With $500 Right Now

Data centres are going to be a huge growth opportunity in the next decade. And these are the top buys.

Read more »

Paper Canadian currency of various denominations
Bank Stocks

1 Magnificent Canadian Dividend Stock Down 28% to Buy and Hold for Decades

This top Canadian dividend stock is underperforming its large peers this year, but a turnaround could be on the horizon.

Read more »

TFSA (Tax-Free Savings Account) on wooden blocks and Canadian one hundred dollar bills.
Dividend Stocks

Where to Invest Your $7,000 TFSA Contribution

The TFSA is attractive for investors who want to generate tax-free passive income.

Read more »

The TFSA is a powerful savings vehicle for Canadians who are saving for retirement.
Dividend Stocks

TFSA Investors: 3 Dividend Stocks Worth Holding Forever

These TSX stocks have the potential to grow their dividends over the next decade, making them top investments for TFSA…

Read more »

hand stacks coins
Investing

Secure a Wealthy Future With These 3 Canadian Stocks

These Canadian stocks have the potential to appreciate substantially over time and may also enhance returns through dividend payments.

Read more »

Tractor spraying a field of wheat
Dividend Stocks

Is Nutrien Stock a Buy for its Dividend Yield?

Nutrien is down more than 50% form the 2022 highs. Is NTR stock now oversold?

Read more »

analyze data
Investing

3 Blue-Chip Stocks Every Canadian Should Own

These blue-chip stocks are backed by large-cap companies with well-established businesses, solid fundamentals, and a growing earnings base.

Read more »

dividends grow over time
Stocks for Beginners

The Smartest Growth Stock to Buy With $2,000 Right Now

Do you have $2,000 to invest for the long term? These three TSX stocks have and will continue to deliver…

Read more »