2012 annual - Boardwalk REIT

Investment Philosophy
Throughout Boardwalk REIT’s history, the Trust has constantly looked for opportunities to create value for the Trust Unitholders. This
is achieved by investing managerial resources and capital in activities that increase FFO per unit and AFFO per unit on a sustaining
basis and/or increase Net Asset Value (“NAV”) per unit. Prior to 2008, a large part of this opportunity was focused on investment
opportunities, both in capital improvements of our existing portfolio and in acquisition of additional properties. However, our investment
strategy is not simply one by which we are constantly looking to expand our existing footprint, but rather one by which we are
constantly looking to create value. Starting in 2008, but more pronounced during 2009 and 2010, it was evident to us that the Trust’s
investment opportunities were not in the acquisition of additional apartment units, but rather in the sale of Non-Core properties
and the deployment of capital to acquire additional Boardwalk REIT Trust Units in the public markets through our published Normal
Course Issuer Bids (“NCIBs”).
As part of its capital allocation program, there have been times in the past where Management and the Board determined, based
on the trading price of our Trust Units, that an allocation was warranted to the purchase of these Trust Units in the public market for
cancellation. The following table reports our investment in this area from fiscal 2007 to the present:
Year Ended December 31,
Cumulative Number of
Trust Units Purchased
and Cancelled
Cumulative
Purchase Cost
Average Cost
per Trust Unit
2007 856,447 $ 38,577 $ 45.04
2008 2,312,000 85,412 $ 36.94
2009 790,000 22,756 $ 28.80
2010 423,400 17,024 $ 40.21
2011 160,900 6,740 $ 41.89
2012 – – –
4,542,747 $ 170,509 $ 37.53
Cumulatively, since 2007, Boardwalk REIT purchased and cancelled approximately 4.5 million Trust Units for a total purchase price of
$170.5 million, or an average cost of $37.53 per Trust Unit.
As previously highlighted, the Trust has an on-going program of selling Non-Core properties in its portfolio and re-deploying the
released capital to acquiring additional properties, reinvesting in its existing properties to achieve superior returns and/or purchasing
its Trust Units for cancellation. The Trust continues to review all available options that management believes will provide the
greatest return to our Unitholders.
In fiscal 2011 and 2012, Boardwalk REIT adopted a cautious approach to the disposition of Non-Core properties as a result of the
ambiguity of the income tax treatment of gains on the disposition of real or immovable properties. On October 24, 2012, legislation to
amend the SIFT Legislation previously announced in December 2010 were released clarifying the treatment of income generated on
the sale of real estate assets. Once the legislation is passed by the Canadian government, the Trust will, if it wishes, be able to continue
its strategy of selling Non-Core assets without the risk of losing its REIT Exemption status. Additional information regarding the SIFT
Legislation and the Trust’s qualification as a REIT under this legislation can be found in the section titled, “Income Tax Expense” later
in this report.
42 / MANAGEMENT’s DISCUSSION and analySIS Boardwalk REIT / ar 2012