BOARDWALK REAL ESTATE INVESTMENT ... - Boardwalk REIT

BOARDWALK REAL ESTATE INVESTMENT TRUSTRENEWAL ANNUAL INFORMATION FORMDATEFebruary 17, 2011

- 4 -BOARDWALK REAL ESTATE INVESTMENT TRUSTRENEWAL ANNUAL INFORMATION FORMNOTE REGARDING FORWARD LOOKING STATEMENTSCertain information included in this Annual Information Form (―AIF‖) of Boardwalk Real EstateInvestment Trust (―Boardwalk REIT‖. ―Boardwalk‖ or the ―Trust‖) contains forward-looking statementswithin the meaning of applicable securities laws. These statements include, but are not limited to, statementsmade in sections named ―Boardwalk REIT‘s Debt Maturity Chart‖, ―Portfolio Occupancy Rates‖, ―Business andProperties of Boardwalk REIT‖, ―New Apartment Development‖ and ―Challenges and Risks‖, as well as otherstatements concerning Boardwalk‘s 2011 objectives, its strategies to achieve those objectives, as well asstatements with respect to management‘s beliefs, plans, estimates, and intentions, and similar statementsconcerning anticipated future events, results, circumstances, performance or expectations that are not historicalfacts. Forward-looking statements generally can be identified by the use of forward-looking terminology such as―outlook‖, ―objective‖, ―may‖, ―will‖, ―expect‖, ―intend‖, ―estimate‖, ―anticipate‖, ―believe‖, ―should‖, ―plan‖,―continue‖, or similar expressions suggesting future outcomes or events. Such forward-looking statements reflectmanagement‘s current beliefs and are based on information currently available to management. All forwardlookingstatements in this AIF are qualified by these cautionary statements. These statements are not guaranteesof future events or performance and, by their nature, are based on Boardwalk‘s estimates and assumptions, whichare subject to risks and uncertainties, including those described under ―Challenges and Risks‖ in this AIF, whichcould cause events or results to differ materially from the forward-looking statements contained in this AIF.Those risks and uncertainties include, but are not limited to, those related to: liquidity in the global marketplaceassociated with current economic conditions, tenant allowances, occupancy levels, access to debt and equitycapital, interest rates, joint ventures/partnerships, the relative illiquidity of real property, unexpected costs orliabilities related to acquisitions, construction, environmental matters, legal matters, reliance on key personnel,unitholder liability and income taxes. Material factors or assumptions that were applied in drawing a conclusionor making an estimate set out in the forward-looking information may include: a less robust rental environmentthan has been seen for the last few years; relatively stable interest costs; and access to equity and debt capitalmarkets to fund, at acceptable costs, the future growth program and to enable the Trust to refinance debts as theymature and the availability of acquisition opportunities for growth in Canada. Although the forward-lookinginformation contained in this AIF is based upon what management believes are reasonable assumptions, there canbe no assurance that actual results will be consistent with these forward-looking statements. Certain statementsincluded in this AIF may be considered ―financial outlook‖ for purposes of applicable securities laws, and suchfinancial outlook may not be appropriate for purposes other than this AIF.The Income Tax Act (Canada) (the ―Tax Act‖) contains legislation affecting the tax treatment of publiclytraded trusts (the ―SIFT Legislation‖). The SIFT Legislation provided for a transition period until December 31,2010 for publicly traded trusts, such as Boardwalk, which existed prior to November 1, 2006. In addition, theSIFT Legislation generally will not impose tax on a trust which qualifies under such legislation as a real estateinvestment trust (the ―REIT Exemption‖) provided all of the Trust‘s income each year is paid or made payable tothe Unitholders. Boardwalk intends to qualify for the REIT Exemption on an ongoing basis after December 31,2010, which may require certain statements contained in this AIF to be modified.Except as required by applicable law, nether Boardwalk nor the Corporation (as defined herein) undertakeany obligation to publicly update or revise any forward-looking statement, whether as a result of new information,future events or otherwise.The following should also be read in conjunction with Boardwalk REIT's December 31, 2010 FinancialStatements and the Notes thereto, along with other posted information concerning the Corporation andBoardwalk REIT, including Management's Discussion and Analysis for the year ended December 31, 2010.

- 5 -All of these documents are available in written and electronic versions either from the Trust on request, or atwww.sedar.com or www.boardwalkreit.com.CORPORATE STRUCTUREIn this Annual Information Form, unless the context indicates otherwise, a reference to "BoardwalkREIT", ―Boardwalk‖ or the "Trust" means Boardwalk Real Estate Investment Trust. A reference to the"Corporation" means Boardwalk Equities Inc. (now called BPCL Holdings Inc.) Boardwalk REIT is anunincorporated, open ended real estate investment trust created by a declaration of trust, dated January 9, 2004, asamended and restated on May 3, 2004, May 10, 2006, May 10, 2007, May 13, 2008, May 12, 2009 and May 18,2010 (the "Declaration of Trust"), and governed by the laws of Alberta.The Trust's principal office is located at Suite 200, 1501 First Street S.W., Calgary, Alberta, T2R 0W1.Its registered office is located at 4300 Bankers Hall West, 888 – 3 rd Street S.W., Calgary, Alberta, T2P 5C5.All financial information presented in this AIF and in the documents incorporated by reference thereto,including the Trust‘s audited consolidated financial statements, has been prepared in accordance with Canadiangenerally accepted accounting principles ("GAAP"). Boardwalk REIT, following May 3, 2004, now owns all ofthe assets formerly owned by the Corporation. The business of Boardwalk REIT is a continuation of the businesspreviously operated by the Corporation.In this AIF, unless the context indicates otherwise, a reference to "business day" means a day, other thana Saturday or Sunday, on which Schedule 1 Canadian chartered banks are open for business in Calgary, Alberta,Toronto, Ontario and Vancouver, British Columbia; and a reference to "person" means an individual, partnership,limited partnership, corporation, unlimited liability company, trust, unincorporated organization, association,government or any department or agency thereof and the successors and assigns thereof or the heirs, executors,administrators or other legal representatives of an individual thereof, or any other entity recognized by law.OVERVIEW OF THE ACQUISITION AND THE ARRANGEMENT REPLACING THECORPORATION AS A PUBLIC ENTITY WITH BOARDWALK REITOn May 3, 2004, the effective date of the Acquisition and Arrangement (the "Effective Date") BoardwalkREIT acquired substantially all of the assets of the Corporation (the "Contributed Assets") pursuant to a plan ofarrangement under section 193 of the Business Corporations Act (Alberta) (the "Acquisition and theArrangement"). The Acquisition and the Arrangement were multi-step transactions that resulted in: (i) theindirect acquisition by Boardwalk REIT of all of the Contributed Assets; (ii) the indirect acquisition of theCorporation by Boardwalk Properties Company Limited ("BPCL"), a corporation incorporated in 1984 pursuantto the laws of Alberta and indirectly controlled by Sam Kolias and Van Kolias, itself a control block holder oftrust units of Boardwalk REIT ("REIT Units" or ―Units‖), by the acquisition of all of the outstanding commonshares of the Corporation ("Common Shares"); and (iii) after taking into account the preferred partnershipdistribution and other entitlements of the units of interest in Boardwalk REIT Limited Partnership (the"Partnership") designated as "LP Class C Units" held indirectly by BPCL through the Corporation, the indirectinterest of the public holders of Common Shares ("Public Shareholders") in approximately 73% of theContributed Assets through the ownership of the outstanding REIT Units and the indirect interest of BPCL inapproximately 27% of the Contributed Assets.After giving effect to the Acquisition and the Arrangement:(a) BPCL acquired the Corporation and the Corporation is now an indirect, wholly-owned subsidiary ofBPCL;

- 6 -(b) the former holders of Common Shares ("Shareholders") were the initial owners of all of theoutstanding REIT Units, which are listed for trading on the Toronto Stock Exchange (the ―TSX‖);(c) Boardwalk REIT indirectly holds, through its indirect interest in the units of the Partnershipdesignated as "LP Class A Units", an approximately 92% interest in the Partnership (after thepreferred partnership distribution and other entitlements of the LP Class C Units; see "InformationConcerning the Partnership — Distributions"), which holds, directly or indirectly, all of theContributed Assets previously comprising the business of the Corporation; and(d) the remaining approximately 8% interest in the Partnership (after the preferred partnershipdistribution and other entitlements of the LP Class C Units indirectly held by BPCL) is indirectly heldby BPCL through its indirect interest in units of the Partnership designated as "LP Class B Units."The LP Class B Units have equivalent voting and distribution entitlements to the REIT Units into whichthey are exchangeable.Pre-Arrangement ReorganizationImmediately prior to the effective time of the Acquisition and the Arrangement (the "Effective Time"),the Corporation and certain of its BEI Subsidiaries effected a series of transactions to facilitate the transfer of theContributed Assets to the Partnership. References in this AIF to "Common Shares" refer to the common sharesof the Corporation.Following the Amalgamation, but prior to the transfer of the Contributed Assets, the Corporationsubscribed for 4,475,000 LP Class B Units and 334,168,959 LP Class C Units, both for nominal consideration.Following this subscription and immediately prior to the commencement of the Plan of Arrangement 1 on theEffective Date, the Corporation caused the Contributed Assets to be transferred to the Partnership at fair marketvalue for an aggregate purchase price of approximately $2.3 billion, all pursuant to the Master Asset ContributionAgreement 2 .The consideration paid by the Partnership for the Contributed Assets consisted of the assumption ofapproximately $1.1 billion in mortgage financing and other indebtedness of the Corporation, the issuance by thePartnership of the LP Note in the principal amount of $777,375,470, and an addition to the capital accounts inrespect of the LP Class B Units and LP Class C Units of $71,376,250 and $334,168,959, respectively.Pursuant to the Master Asset Contribution Agreement, beneficial ownership of all of the ContributedAssets was transferred to the Partnership, including in respect of Contributed Assets to which the Retained Debt 3relates. The Retained Debt was not assumed by the Partnership and remains as indebtedness of the Corporationand the Corporation is obligated to make interest payments and principal repayments on a periodic basis in respectof the Retained Debt. Partnership distributions on the LP Class C Units held by the Corporation will, if paid, be1 ''Plan of Arrangement'' means the plan of arrangement under the provisions of Section 193 of the Business CorporationsAct (Alberta) (the "ABCA") in connection with the Acquisition and the Arrangement.2 ''Master Asset Contribution Agreement'' means the agreement made between the Corporation and the Partnership on theEffective Date setting out the terms and conditions upon which the Corporation caused to be transferred, assigned, conveyedand set over to the Partnership the Contributed Assets in consideration for the assumption of certain liabilities of theCorporation by the Partnership, the issuance by the Partnership to the Corporation of the "LP Note" and a credit by thePartnership to the capital account in respect of each of the Corporation's LP Class B Units and LP Class C Units. ''LP Note''means the interest bearing note issued by the Partnership to the Corporation under the Master Asset Contribution Agreement;3 ''Retained Debt'' means the indebtedness of the Corporation that relates to and is secured by a charge of certain realproperty of the Corporation beneficially transferred, assigned, conveyed and set over by the Corporation to the Partnershippursuant to the Master Asset Contribution Agreement, which indebtedness was not assumed by the Partnership on suchtransfer, assignment, conveyance and set over and remains indebtedness of the Corporation in respect of which theCorporation is and will remain the primary obligor to make principal, interest and other payments in respect of suchindebtedness as such amounts become due and payable, as set out more particularly therein.

- 7 -in amounts at least sufficient to make such payments. The Partnership has provided the Corporation's creditorswith a guarantee in respect of the Retained Debt to ensure the lenders are not prejudiced in their ability to collectfrom the Corporation in the event that payments in respect of the Retained Debt are not made by BPCL asexpected and Boardwalk REIT has provided a guarantee of the Partnership's obligations. The Corporation hasindemnified the Partnership for any losses suffered by the Partnership in the event payments on the Retained Debtare not made as required, provided such losses are not attributable to any action or failure to act on the part of thePartnership. Also, as the Partnership acquired the Contributed Assets, which comprise all of the historic businessof the Corporation, the Partnership indemnified the Corporation for all claims and losses relating to theContributed Assets except if the claim or loss is a result of gross negligence or wilful misconduct of theCorporation after the Effective Date. See "Overview of the Acquisition and the Arrangement Replacing theCorporation as a Public Entity with Boardwalk REIT— Ancillary Agreements in Connection with the Acquisitionand the Arrangement — Master Asset Contribution Agreement".Ancillary Agreements in Connection with the Acquisition and the ArrangementExchange and Support AgreementOn the Effective Date, Boardwalk REIT, Top Hat Operating Trust 4 (the "Operating Trust), thePartnership, the Corporation and 1103891 Alberta Ltd. 5 ("BEI Subco") entered into an exchange and supportagreement (the "Exchange and Support Agreement") to create certain support obligations with respect to the LPClass B Units.Under the Exchange and Support Agreement, Boardwalk REIT and/or Boardwalk Real EstateManagement Ltd. 6 (the "General Partner"), as applicable, agreed to take such actions as are reasonablynecessary to ensure that the distributions on the LP Class B Units will be of the same nature and amount, on a perunit basis, as the corresponding distributions on the REIT Units (except to the extent that the holder of the LPClass B Units has elected to receive distributions in the form of LP Class B Units and/or REIT Units pursuant tothe Limited Partnership Agreement 7 ).The Exchange and Support Agreement also provides that Boardwalk REIT will not, subject to certainexceptions, issue or distribute REIT Units (or securities exchangeable for or convertible into or carrying rights toacquire REIT Units) to the holders of all or substantially all of the then outstanding REIT Units; issue or distributerights, options or warrants to the holders of all or substantially all of the then outstanding REIT Units entitlingthem to subscribe for or to purchase REIT Units (or securities exchangeable for or convertible into or carryingrights to acquire REIT Units); or issue or distribute to the holders of all or substantially all of the then outstandingREIT Units evidences of indebtedness of Boardwalk REIT or assets of Boardwalk REIT except in accordancewith the provisions of the REIT Units; unless the economic equivalent on a per unit basis of such rights, options,securities, units, evidences of indebtedness or other assets is issued or distributed simultaneously to the holders ofLP Class B Units. In addition, Boardwalk REIT will not, subject to certain exceptions, subdivide, redivide orchange the then outstanding REIT Units into a greater number of REIT Units; reduce, combine, consolidate orchange the then outstanding REIT Units into a lesser number of REIT Units; or reclassify, amend the terms of, orotherwise change the REIT Units or effect an amalgamation, merger, reorganization or other transaction affectingthe REIT Units; unless the same or an economically equivalent change is made simultaneously to, or in the rightsof the holders of LP Class B Units.4 An open-ended unit trust formed under the laws of the Province of British Columbia, all of the units of which are owned byBoardwalk REIT.5 A corporation incorporated immediately prior to the Effective Date pursuant to the laws of Alberta as a wholly-ownedsubsidiary of the Corporation.6 A corporation incorporated pursuant to the laws of Alberta and the general partner of the Partnership.7 ''Limited Partnership Agreement'' means the limited partnership agreement dated January 9, 2004, as amended andrestated on May 3, 2004, creating the Partnership.

- 8 -Pursuant to the Exchange and Support Agreement, upon notice from the Partnership that a holder of LPClass B Units has (i) surrendered LP Class B Units for withdrawal in accordance with the terms of the LP Class BUnits, or (ii) elected pursuant to the Limited Partnership Agreement to receive REIT Units from the Partnership inlieu of cash distributions from the Partnership to which such holder is entitled, Boardwalk REIT will issue anddeliver or cause to be issued and delivered to the Partnership the requisite number of REIT Units to be receivedby, and issued to or to the order of, the holder of LP Class B Units.Master Asset Contribution AgreementOn the Effective Date, the Corporation and the Partnership entered into the Master Asset ContributionAgreement pursuant to which the Corporation caused the Contributed Assets to be transferred to the Partnership.The Contributed Assets included the revenue producing properties of the Corporation, some of which werepledged to lenders in connection with the Retained Debt. In the case of properties which secure the RetainedDebt, the entire beneficial interest was sold to the Partnership but legal title remained with the Corporation.Following the Effective Date, the Partnership registered a caveat against each of such properties disclosing itsbeneficial interest.In the case of other revenue producing properties, legal title to such properties was transferred into thename of a nominee holding company.Money received by the Corporation from the historic operation of its business was delivered to thePartnership in accordance with the Master Asset Contribution Agreement. Similarly, the Partnership, as part ofthe Master Asset Contribution Agreement, indemnified the Corporation for any losses, claims or demandsassociated with the Corporation's operation and transfer of the Contributed Assets. As of the date of this AIF,management of Boardwalk REIT is not aware of any material claims related to the Contributed Assets. See"Overview of the Acquisition and the Arrangement Replacing the Corporation as a Public Entity with BoardwalkREIT— Arrangements with BPCL".In order to effect the Acquisition and the Arrangement for the benefit of all Shareholders, the Corporationremains liable, as principal obligor, for the Retained Debt. The Partnership is, however, the beneficial owner ofthe Contributed Assets associated with the Retained Debt and accordingly could suffer impairment of these assetsif the Corporation fails to discharge its obligations pursuant to the Retained Debt. Accordingly, the Corporationhas indemnified the Partnership for losses caused by the Corporation's failure to discharge obligations pursuant tothe Retained Debt. Certain obligations under the Retained Debt such as adequate insurance and repairs andmaintenance are the responsibility of the Partnership and as a result, such indemnification does not extend todefaults outside the scope of responsibility of the Corporation.Arrangements with BPCLAs part of the Acquisition and the Arrangement, BPCL agreed to take certain steps in order to effect thetransactions. Specifically, BPCL: (i) acquired control of the Corporation; (ii) indirectly holds unlisted LP Class BUnits and LP Class C Units; (iii) indirectly retains the Retained Debt as its indebtedness; and (iv) entered intocertain agreements providing for ongoing arrangements with Boardwalk REIT and the Partnership in order tofacilitate the foregoing.These steps were, in part, intended to ensure that Boardwalk REIT be put in a commercially advantageousposition with respect to its peer group following completion of the Acquisition and the Arrangement. As aconsequence of these steps, however, various commercial arrangements between the Partnership, the Corporationand BPCL were necessary. Among these arrangements are the following:(a) pursuant to the Master Asset Contribution Agreement, although the Partnership acquired the beneficialinterest in the Contributed Assets associated with the Retained Debt, the Retained Debt was not assumedby the Partnership and remains indebtedness of the Corporation. As such, the Corporation continues to be

- 9 -liable as principal obligor to pay all principal, interest and other amounts under the Retained Debt as suchamounts become due and payable and the Corporation has indemnified the Partnership for any losses as aresult of the Corporation's failure to meet its obligations, provided such losses are not attributable to anyaction or failure to act on the part of the Partnership;(b) since the Master Asset Contribution Agreement represented a transfer of the existing business of theCorporation, the Partnership indemnified the Corporation for all claims and losses relating to theContributed Assets except if the claim or loss is a result of gross negligence or wilful misconduct of theCorporation after the Effective Date;(c) as the beneficial owner of the Contributed Assets associated with the Retained Debt, the Partnershipindemnified the Corporation for losses resulting from the Partnership's failure to manage suchContributed Assets in a safe and prudent manner where such failure results in a claim against theCorporation; and(d) since the legal title to the Contributed Assets associated with the Retained Debt remains with theCorporation but all beneficial interest in such Contributed Assets as well as all other Contributed Assetswas transferred to the Partnership, the Partnership has provided guarantees of the Corporation'sobligations under the Retained Debt in favour of the lenders of such indebtedness and Boardwalk REIThas provided a guarantee of the Partnership's obligations.These arrangements are designed to protect the respective interests of the Partnership, Boardwalk REIT,BPCL and the Corporation. These arrangements are, in the opinion of management of Boardwalk REIT,appropriate in light of the significant benefits realized by the Public Shareholders as a result of the Amalgamation,the Acquisition and the Arrangement and the transfer of the Contributed Assets pursuant to the Master AssetContribution Agreement (collectively, the "Transaction").See "Overview of the Acquisition and the Arrangement Replacing the Corporation as a Public Entity withBoardwalk REIT— Ancillary Agreements in Connection with the Acquisition and the Arrangement","Information Concerning the Corporation — Business of the Corporation Following the Acquisition and theArrangement" and "Rights Plan".SUBSIDIARIESThe following sets forth the principal subsidiaries of the Trust and their jurisdictions of incorporation orformation, as applicable. All of such subsidiaries are directly or indirectly owned by the Trust:

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- 12 -OVERVIEWBoardwalk REIT is a customer-oriented real estate investment trust focused exclusively on andspecializing in the acquisition, refurbishment, management and ownership of multi-family residentialcommunities within Canada. As of December 31, 2010, the Trust owned 35,277 (December 31, 2009 – 36,419)residential units within the Provinces of Alberta, British Columbia, Saskatchewan, Ontario and Quebec,representing approximately 30 million (December 31, 2009 – 31 million) net rentable square feet. During theyear ended December 31, 2010, Boardwalk REIT sold 1,111 units in the Provinces of Alberta, British Columbia,Saskatchewan and Quebec. In addition, Boardwalk REIT decided not to rebuild and settled with its insurers on a31-unit building located in Grande Prairie, Alberta, that was destroyed by a fire in late 2009. Boardwalk REITcurrently has in excess of 1,500 employees working in 17 different cities across Canada. Boardwalk REITfocuses on maximizing internal growth combined with an aggressive but disciplined acquisition program. TheTrust looks to acquire, own and manage quality rental communities concentrated in attractive marketscharacterized by high barriers to new supply. Due to Boardwalk REIT's size and relationship with variouscommercial lenders and Canada Mortgage and Housing Corporation ("CMHC"), financing for such acquisitionscan often be negotiated on favourable terms. The management of Boardwalk REIT has over 25 years experiencein the ownership and management of multi-family residential communities. This experience, coupled withmanagement‘s significant ownership of Trust Units and Boardwalk‘s advanced and unique information systemsplatform, allows Boardwalk REIT to be the industry leader in Canada's multi-family rental industry and hasallowed Boardwalk to grow its operations into a truly national platform.Boardwalk REIT only owns the beneficial interest in, and notes of, the Operating Trust, and the OperatingTrust owns LP Class A Units. As a result, the activities described below will be those of the Partnership and itssubsidiaries.OBJECTIVES OF BOARDWALK REITThe objectives of Boardwalk REIT are to: (i) provide Unitholders with stable and growing monthly cashdistributions, partially on a Canadian income tax-deferred basis, from investments in its assets (collectively, the"Contributed Assets") and any additional revenue producing multi-family residential properties or interestsacquired by Boardwalk REIT; and (ii) increase REIT Unit value through the effective management of itsresidential, multi-family revenue producing properties and the acquisition of additional, accretive properties orinterests therein. The REIT has increased its regular distribution from $0.103 per Trust Unit in June, 2004 to$0.15 per Unit as of December 31, 2010.MANAGEMENT OF BOARDWALK REITThe overall operations and affairs of Boardwalk REIT are subject to the control of the trustees ofBoardwalk REIT (the "Trustees"), while the day-to-day activities of Boardwalk REIT are under the direction ofBoardwalk REIT's senior management team.Board of TrusteesThe Declaration of Trust provides that the assets and operations of Boardwalk REIT are subject to thecontrol and authority of a board of a minimum of five (5) Trustees and a maximum of 12 Trustees, a majority ofwhom shall be "independent trustees", as such term is defined in National Policy 58-201, entitled "CorporateGovernance Guidelines" ("Independent Trustees"). Currently, there are five (5) Trustees. Pursuant to theDeclaration of Trust, BPCL is entitled to appoint one Trustee to serve on the board provided that BPCL and itsaffiliates continue to beneficially own, in the aggregate, a number of REIT Units and/or LP Class B Units that,upon surrender or exchange of the LP Class B Units would equal at least five percent (5%) of the outstandingREIT Units (on a fully-diluted basis). The remaining Trustees will be elected by holders of REIT Units

- 13 -("Unitholders") in the manner provided below. Any Trustee appointed by BPCL may be changed by BPCL atany time. BPCL has not exercised the right since the Effective Date. The number of Trustees may be changed bythe Unitholders or, if authorized by the Unitholders, by the Trustees, provided that the Trustees may not, betweenmeetings of Unitholders, unless otherwise approved by a majority of the Independent Trustees, appoint anadditional Trustee if, after such appointment, the total number of Trustees would increase by more than one-third(1/3) the number of Trustees in office immediately following the last annual meeting of Unitholders. A vacancyoccurring among the Trustees, other than the appointee of BPCL, may be filled by resolution of the remainingTrustees, so long as they constitute a quorum, or by the Unitholders at a meeting of the Unitholders. A vacancyoccurring among the Trustees resulting from the resignation or removal of the appointee of BPCL may be filledonly by an appointment by BPCL.The Trustees, other than the appointee of BPCL, hold office for a term expiring at the next annualmeeting of the Unitholders or until their respective successors are elected or appointed and are eligible for reelection.BPCL will, if it exercises its right to, appoint its Trustee at each annual meeting of Boardwalk REIT fora term expiring at the next annual meeting unless removed prior to such meeting at the direction of BPCL. ATrustee appointed by the Trustees between meetings of Unitholders or to fill a vacancy will be appointed for aterm expiring at the conclusion of the next annual meeting of Boardwalk REIT or until his or her successor iselected or appointed and will be eligible for election or re-election.The Declaration of Trust provides that a Trustee may resign at any time upon written notice delivered tothe Chair or, if there is no Chair, the President of Boardwalk REIT and a Trustee (other than an appointee ofBPCL) may be removed with or without cause by a majority of the votes cast at a meeting of Unitholders or withcause by two-thirds (2/3) of the remaining Trustees.Each Trustee is required to exercise the powers and discharge the duties of his or her office honestly andin good faith with a view to the best interests of Boardwalk REIT and the Unitholders and, in connectiontherewith, to exercise the care, diligence and skill that a reasonably prudent person would exercise in comparablecircumstances.The following table sets forth the name, province or state and country of residence, office held withBoardwalk REIT and principal occupation of each of the Trustees of Boardwalk REIT:Name, Position andMunicipality of Residence Position Held Principal OccupationJames R. Dewald (1)(2)Alberta, CanadaGary Goodman (1)Ontario, CanadaIndependent Trustee Associate Professor of Strategy and GlobalManagement and Associate Dean ofGraduate Studies, Haskayne School ofBusiness, University of Calgary (2006 topresent), and Managing Partner, Peters-Dewald Land Company Inc. (2001 topresent). Prior thereto, President,Stormpilots Inc. (2001 to 2006), President& CEO of Stonecreek Properties Inc.(2004), President, Director & COO,411HomeNet Group Inc. (1999 to 2001),and President & CEO of HopewellResidential Communities Inc. (1996 to2000)Independent Trustee Executive Vice-President of ReichmannInternational Development Corporation andInternational Property Corporation betweenDecember 2007 and June 2010. Previously,CFO (December 2001 to November 2006)Director ofCorporation orTrustee SinceMay 10, 2005May 13, 2009

- 14 -Name, Position andMunicipality of Residence Position Held Principal OccupationArthur L. Havener, Jr. (2)Missouri, USASam KoliasAlberta, CanadaAl W. Mawani (1)(2)Ontario, Canadaand President and CEO (from December2006 to December 2007) of IPC US REIT,a TSX listed Real Estate Investment Trustwhich was sold to Behringer Harvard inDecember 2007.Director ofCorporation orTrustee SinceIndependent Trustee Principal, Stampede Capital, LLC, from May 10, 2007April 2007 to the present. Prior thereto,Mr. Havener was a Vice President andHead of Real Estate research of A.G.Edwards and Sons Inc. from June, 1989until March, 2007Chairman of theBoard, ChiefExecutive Officerand TrusteeIndependent LeadTrusteeExecutive of the Trust since the EffectiveDate; prior thereto, from August 1993 untilthe Effective Date, President of theCorporationPresident, Exponent Capital Partners Inc.from February 2002 to the present; priorthereto, from June 2001 until January 2002,Vice President, IPS, an affiliate of AgaKhan Fund for Economic Development;and prior thereto, from 1995 until February2001, a Senior Executive and ChiefFinancial Officer of Oxford PropertiesGroup Inc.Notes:(1) Member of the Audit and Risk Management Committee.(2) Member of the Compensation, Governance and Nominations Committee.Incorporation(July 1993)April 30, 2002As of December 31, 2010, the Trustees and senior officers of Boardwalk REIT as a group beneficiallyown, directly or indirectly, or exercise control or direction over, REIT Units, representing approximately 18.12%of the outstanding REIT Units. BPCL, indirectly wholly-owned by Sam Kolias, Chairman, Chief ExecutiveOfficer and a Trustee of Boardwalk REIT, and Van Kolias, Senior Vice President, Quality Control of the GeneralPartner, owns a further 4,475,000 LP Class B Units, which, if exchanged into REIT Units, would give them anadditional 7.0% of the outstanding REIT Units.Conflict of Interest Restrictions and ProvisionsThe Declaration of Trust contains "conflict of interest" provisions similar to those applicable tocorporations under Section 120 of the ABCA, which serves to protect Unitholders without creating unduelimitations on Boardwalk REIT. Given that the Trustees and the officers of Boardwalk REIT are engaged in awide range of real estate and other business activities, the Declaration of Trust requires each Trustee or officer ofBoardwalk REIT to disclose to Boardwalk REIT if he or she is a party to a material contract or transaction orproposed material contract or transaction with Boardwalk REIT or its subsidiaries or the fact that such person is adirector or officer of or otherwise has a material interest in any person who is a party to a material contract ortransaction or proposed material contract or transaction with Boardwalk REIT or its subsidiaries. Such disclosureis required to be made by a Trustee at the first meeting at which a proposed contract or transaction is considered,at the first meeting after a Trustee becomes interested in a proposed or pending contract or transaction or at thefirst meeting after an interested party becomes a Trustee.

- 15 -Disclosure is required to be made by an officer of Boardwalk REIT as soon as the officer becomes awarethat a contract or transaction or proposed contract or transaction is to be, or has been, considered by the Trustees,as soon as the officer becomes aware of his or her interest in a contract or transaction or, if not currently an officerof Boardwalk REIT, as soon as such person becomes an officer of Boardwalk REIT. In the event that a materialcontract or transaction or proposed material contract or transaction is one that in the ordinary course would notrequire approval by the Trustees, a Trustee or officer of Boardwalk REIT is required to disclose in writing toBoardwalk REIT or request to have entered into the minutes of the meeting of the Trustees the nature and extentof his or her interest forthwith after the Trustee or officer of Boardwalk REIT becomes aware of the contract ortransaction or proposed contract or transaction. In any case, a Trustee who has made disclosure to the foregoingeffect is not entitled to vote on any resolution to approve the contract or transaction unless the contract ortransaction is one relating primarily to his or her remuneration as a Trustee, officer, employee or agent ofBoardwalk REIT or one for indemnity under the indemnity provisions of the Declaration of Trust or the purchaseof liability insurance.The Declaration of Trust contains provisions to address potential conflicts of interest arising betweenBoardwalk REIT and any "Related Party" (as such term is defined in Ontario Securities Commission Rule 61-101 - Protection of Minority Security Holders in Special Transactions).In particular, Boardwalk REIT will obtain a valuation in respect of any real property that the Partnershipintends to purchase from or sell to a Related Party prepared by a valuator engaged by, and prepared under thesupervision of, a committee of two or more Independent Trustees who have no interest in such transaction. Inaddition, Boardwalk REIT will not permit the Partnership to effect a transaction with a Related Party unless thetransaction is determined to be on commercially reasonable terms by, and is approved by, a majority ofBoardwalk REIT's Independent Trustees who have no interest in such transaction.Independent Trustee MattersIn addition to requiring the approval of a majority of the Trustees, the following matters require theapproval of at least a majority of disinterested Independent Trustees to become effective:(a) entering into any agreement or transaction in which any Related Party has a material interest ormaking a material change to any such agreement or transaction;(b) any matter relating to a claim by or against any Related Party;(c) any matter relating to a claim in which the interests of a Related Party differ from the interests ofBoardwalk REIT;(d) permitting the Partnership to acquire any real or other property in which a Related Party has aninterest or to sell any interest in any real or other property to a Related Party;(e) granting REIT Units under any unit incentive or unit compensation plan approved by the Trusteesand, if required, by the Unitholders or awarding any right to acquire or other right or interest in REITUnits or securities convertible into or exchangeable for REIT Units under any plan approved by theTrustees and, if required, by the Unitholders;(f) approving or enforcing any agreement entered into by Boardwalk REIT or its subsidiaries with aTrustee who is not an Independent Trustee or an associate thereof, with a Related Party;(g) recommending to the holders of REIT Units to increase the number of Trustees serving on the boardof Trustees or authorizing the Trustees to change the number of Trustees from time to time; and(h) changing the compensation of any officer of Boardwalk REIT.

- 16 -CommitteesThe Board of Trustees has established two committees: the Audit and Risk Management Committee andthe Compensation, Governance and Nominations Committee.Audit and Risk Management CommitteeThe Trustees have appointed an Audit and Risk Management Committee (the "Audit Committee")consisting of three (3) Trustees, all of whom are Independent Trustees. The Chair of the Audit Committee, GaryGoodman, was selected from the group of Independent Trustees appointed to serve on such Committee. TheAudit Committee is required to: (i) review Boardwalk REIT's procedures for internal control with the Auditorsand Chief Financial Officer of Boardwalk REIT; (ii) review the engagement and approve the fees of the Auditorsand other professional advisors; (iii) review and recommend to the Trustees for their approval annual andquarterly financial statements, as well as management's discussion and analysis of financial condition and resultsof operation; (iv) assess Boardwalk REIT's financial and accounting personnel; (v) review and approve the publicdisclosure documents of Boardwalk REIT, including press releases; (vi) review the principal business risks of theREIT on behalf of the Board; and (vii) review any significant transactions outside Boardwalk REIT's ordinaryactivities and all pending litigation involving Boardwalk REIT.The Audit Committee meets a minimum of four (4) times per year and with each of the external auditorsand management in separate sessions. Each member of the Audit Committee is required to be financially literate,meaning that the member has the ability to read and understand a set of financial statements that present a breadthand level of complexity of the issues that can be expected to be raised by the Trust's financial statements, and atleast one member of the committee is required to have accounting or related financial experience, meaning thatsuch member has the ability to analyze and interpret a full set of financial statements, including the notes attachedthereto, in accordance with Canadian generally accepted accounting principles.The Audit Committee currently has three (3) members, James R. Dewald, Gary Goodman and Al W.Mawani, none of whom has a direct or indirect material relationship with the Trust and each of whom isfinancially literate (as defined above). The following is a brief summary of the education and experience of eachmember of the Audit Committee that is relevant to the performance of his responsibilities as a member of theAudit Committee, including any education or experience that has provided the member with an understanding ofthe accounting principles used by the Trust to prepare its annual and interim financial statements:Name of AuditCommittee MemberJames R. DewaldRelevant Education and ExperienceDr. Dewald has been a Trustee since May 10, 2005. He is currently an AssociateProfessor of Strategy and Global Management at the University of Calgary‘s HaskayneSchool of Business, and Managing Partner of Peters-Dewald Land Company Inc.,positions he has held since 2006 and 2001, respectively. Dr. Dewald was President ofStormpilots Inc. from 2001 to 2006. Prior thereto, Dr. Dewald was a President,Director and Chief Operating Officer of 411 HomeNet Group Inc. (1999 to 2001) andPresident & CEO of Hopewell Residential Communities Inc. (1996 to 2000). Dr.Dewald has been a professional engineer since 1981, and obtained his Ph.D. inManagement (specializing in strategy and global management) from the University ofCalgary in 2006. Dr. Dewald obtained a Masters of Business Administration from theUniversity of Alberta in 1984, and a Bachelor of Sciences degree in Engineering fromthe University of Alberta in 1979.

- 17 -Gary GoodmanAl W. MawaniAuditors' FeesMr. Goodman has been a Trustee since May 13, 2009. He was formerly ExecutiveVic-President of Reichmann International Development Corporation and InternationalProperty Corporation, positions held between December 2007 and June 2010.Previously, he was the CFO (December 2001 to November 2006) and President andCEO (from December 2006 to December 2007) of IPC US REIT, a TSX listed RealEstate Investment Trust which was sold to Behringer Harvard in December 2007 for anaggregate value of US$1.4 billion. Prior thereto, Mr. Goodman also served as aDirector and Senior Vice-President of Olympia & York Developments Limited, aDirector of Campeau Corporation, Trilon Financial Corporation, Catellus Corporationand Brinco Mining. Mr. Goodman is a Director of Gazit America Inc.; Chairman anda Trustee of Huntingdon Real Estate Investment Trust; and a member of the AdvisoryBoard of Vision Opportunity Fund, a limited partnership which invests in real estatesecurities. Mr. Goodman is a Chartered Accountant (Gold Medalist) and has aBachelor of Commerce degree from the University of Toronto.Mr. Mawani has been a director of the Corporation and (following the Effective Date)a Trustee since April 30, 2002. Mr. Mawani is currently President of Exponent CapitalPartners Inc., a private equity firm. Prior to January 31, 2004, Mr. Mawani was a VicePresident of IPS Industrial Promotion Services Ltd., a private equity firm. Priorthereto, Mr. Mawani was Executive Vice President of Business Development for oneyear and Senior Vice President and Chief Financial Officer at Oxford Properties GroupInc., one of Canada's largest real estate companies, for 10 years. Mr. Mawani is achartered accountant and has an MBA from the University of Toronto and an LLMfrom York University. He is a board member of two other TSX listed entities.A text of the Audit Committee's charter is attached to this AIF as Schedule "A".The table below provides disclosure of the services provided by the Trust's external auditors in fiscal2010 and fiscal 2009, dividing the services into the categories of work performed.Type of Work 2010 - Fees 2010 – Percentage 2009 - Fees 2009 – PercentageAudit Fees (1) $345,030 65% $328,335 71.18%Audit Related Fees $155,610 29% $104,572 22.67%Review of interim financialstatements and MD&A $65,100 12% $61,772 13.38%Adoption of InternationalFinancial Reporting Standards $83,475 16% $42,850 9.29%CPAB Fee 2010 $7,035 1% - -Tax Fees (1) $31,290 6% $28,297 6.13%Tax compliance services forthe Trust and partnerships, $4,620 1% $28,297 6.13%REIT exemption and SIFTstatus $26,670 5% - -Other (1) $Nil - $Nil -Other $Nil - $Nil -Total (1) $531,930 100% $461,254 100%Notes:(1) Includes GST.

- 18 -Compensation, Governance & Nominations CommitteeThe Trustees have appointed a compensation, governance and nominations committee (the"Compensation Committee") consisting of three Trustees, all of whom are Independent Trustees. The Chair ofthe Compensation Committee, Mr. Arthur L. Havener, Jr., was selected from the group of Independent Trusteesappointed to serve on such Committee. Mr. Al Mawani and Mr. Jim Dewald are also members of theCompensation Committee. The duties of the Compensation Committee are to review the compensation of theTrustees and the officers of Boardwalk REIT. The Compensation Committee is generally responsible forBoardwalk REIT's human resources, compensation and governance policies and has primary responsibility for: (i)administering Boardwalk REIT's unit incentive plans; (ii) assessing the performance of the Chief ExecutiveOfficer; (iii) reviewing and approving the compensation of senior management and consultants of BoardwalkREIT; (iv) reviewing and making recommendations to the Trustees concerning the level and nature ofcompensation payable to the Trustees; and (v) reviewing the governance policies of Boardwalk REIT, includingbeing responsible for: (a) assessing the effectiveness of the Board of Trustees and each of its committees;(b) assessing the performance of the chair and/or lead Trustee of the Board of Trustees; (c) considering questionsof management succession; (d) the recruitment and selection of candidates for Trustees; and (e) considering andapproving proposals by the Trustees to engage outside advisors on behalf of the Board of Trustees as a whole oron behalf of the Independent Trustees.Senior ManagementThe executive officers of Boardwalk REIT consist of Sam Kolias, Chairman and Chief Executive Officer;Roberto A. Geremia, President; William Wong, Chief Financial Officer and Dean Burns, Vice President, GeneralCounsel & Secretary. These individuals also serve as officers of the General Partner. The senior officers haveextensive experience in acquiring, refurbishing and profitably managing multi-family residential properties.Additional officers or personnel may be employed by Boardwalk REIT to support management in fulfilling itsduties. Boardwalk REIT may also outsource other services necessary to its operations to third parties, subject toapproval of the Trustees as necessary. See "Information Concerning the Partnership — Management" for furtherinformation on such officers.Boardwalk REIT Administrative Services AgreementManagement and General Administrative ServicesBoardwalk REIT, the General Partner and the Operating Trust have entered into an administrativeservices agreement, dated the Effective Date (the "Boardwalk REIT Administrative Services Agreement").The Boardwalk REIT Administrative Services Agreement sets out the terms and conditions pursuant towhich the General Partner or its subsidiaries provide certain management and general administrative services toBoardwalk REIT and the Operating Trust, including: (i) undertaking any matters required to be performed by theTrustees and the Operating Trust not otherwise delegated under the respective declarations of trust or theBoardwalk REIT Administrative Services Agreement; (ii) keeping and maintaining books and records; (iii)preparing returns, filings and documents and making determinations necessary for the discharge of the obligationsof the trustees of Boardwalk REIT and the Operating Trust; (iv) providing Unitholders with annual audited andinterim financial statements and relevant tax information; (v) preparing and filing income tax returns and filings;(vi) ensuring compliance by Boardwalk REIT with all applicable securities legislation and stock exchangerequirements including, without limitation, continuous disclosure obligations; (vii) preparing and approving onbehalf of Boardwalk REIT any circular or other disclosure document required under applicable securitieslegislation in response to an offer to purchase REIT Units; (viii) providing investor relations services toBoardwalk REIT; (ix) calling and holding annual and/or special meetings in respect of Boardwalk REIT and theOperating Trust and preparing, approving and arranging for the distribution of meeting materials; (x) preparingand providing to Unitholders information such as monthly and annual reports, notices, financial reports and tax

- 19 -information relating to Boardwalk REIT; (xi) attending to administrative and other matters arising in connectionwith redemptions of REIT Units; (xii) ensuring that Boardwalk REIT elects to be a "mutual fund trust" from thedate it is established and a "registered investment" within the meaning of the Income Tax Act (Canada) (the"Tax Act") and monitoring Boardwalk REIT's status as such; (xiii) determining the amount of the Trust‘s income,including net realized capital gains and net realized income (―Distributions‖) of Boardwalk REIT and theOperating Trust and arranging for Distributions to be paid to Unitholders; (xiv) promptly notifying BoardwalkREIT and the Operating Trust of any event that might reasonably be expected to have a material adverse effect ontheir respective affairs; and (xvi) generally providing all other services as may be necessary or requested byBoardwalk REIT and the Operating Trust.Administrative and Support ServicesPursuant to the Boardwalk REIT Administrative Services Agreement, the General Partner has also agreedto provide or cause its subsidiaries to provide certain administrative and support services to Boardwalk REIT andthe Operating Trust. The administrative and support services provided by the General Partner will includeproviding office space, office equipment, communications services, computer systems, providing secretarialsupport personnel, reception, telephone answering services, installing and maintaining signage, promotionalmaterials and providing such other administrative and secretarial support services as may be reasonably requiredfrom time to time.The Boardwalk REIT Administrative Services Agreement provides for the payment to the GeneralPartner or its subsidiaries by the Operating Trust or its subsidiaries of an amount sufficient to reimburse theGeneral Partner or its subsidiaries for the expenses incurred by it in providing services under the Boardwalk REITAdministrative Services Agreement as long as the expenses are identified in the current annual budget forBoardwalk REIT or are otherwise approved in writing by Boardwalk REIT and the Operating Trust prior to beingincurred by the General Partner. The General Partner and its subsidiaries are only reimbursed for expensesincurred by them in providing services under the Boardwalk REIT Administrative Services Agreement and arenot paid a separate management fee or any other compensation under such agreement. Each of Boardwalk REITand the Operating Trust will fund its payments to the General Partner or its subsidiaries through their direct orindirect receipt of the "LP Class A Preferred Distribution" on the LP Class A Units owned by the OperatingTrust. See "Information Concerning the Partnership — Distributions".BUSINESS AND PROPERTIES OF BOARDWALK REITBoardwalk REIT indirectly owns, through the Partnership, an interest in the Contributed Assets. As atDecember 31, 2010, the Contributed Assets consisted of direct and indirect interests in 35,277 residential units inAlberta, British Columbia, Saskatchewan, Ontario and Quebec, representing approximately 30 million netrentable square feet of revenue producing multi-family residential apartment units. During the year endedDecember 31, 2010, Boardwalk REIT sold 1,111 units in the Provinces of British Columbia, Quebec,Saskatchewan and Alberta. In addition, Boardwalk REIT decided not to rebuild and settled with its insurers on a31-unit building located in Grande Prairie, Alberta, that was destroyed by a fire in late 2009. The ContributedAssets represent a well-balanced portfolio of residential real estate, both from the standpoint of geographicdiversification and mix of asset type, which consists of mid-sized suburban and downtown apartment buildings,and regional, mid-sized community and neighbourhood residential centres located in urban markets. TheContributed Assets represent a diversified portfolio of multi-family rental properties. As at December 31, 2010,the Contributed Assets had an average occupancy rate of approximately 97%.Boardwalk REIT has a 100% undivided interest in the Contributed Assets. All of the residentialproperties in the portfolio are located in Canada. The residential properties in the portfolio are currently locatedin Montreal and Quebec City, Quebec; London, Kitchener and Windsor, Ontario; Saskatoon and Regina,Saskatchewan; Victoria and Vancouver, British Columbia; and Edmonton, Fort McMurray, Grande Prairie, Banff,Red Deer and Calgary, Alberta.

- 20 -The following tables detail the city and property summaries of Boardwalk REIT's residential portfolio atDecember 31, 2010. As stated above, attention should be drawn to the fact that the Trust has a 100% undividedinterest in all of the noted properties:By CityNet RentableSquareFootage% ofSquareFootageCore citiesNumber ofUnits% ofUnitsAverageUnit SizeCalgary, AB 5,071 14.4% 4,074,849 13.6% 804Edmonton, AB 12,057 34.2% 10,598,614 35.4% 879Spruce Grove, AB 160 0.5% 122,640 0.4% 767Fort McMurray, AB 352 1.0% 281,954 0.9% 801Grande Prairie, AB 645 1.8% 539,052 1.8% 836Red Deer, AB 939 2.7% 775,615 2.6% 826other-AB 519 1.5% 469,213 1.6% 904Vancouver, BC 472 1.3% 301,531 1.0% 639Victoria, BC 161 0.5% 155,405 0.5% 965Regina, SK 2,648 7.5% 2,149,113 7.2% 812Saskatoon, SK 1,988 5.6% 1,692,643 5.7% 851Montreal, QC 4,681 13.3% 4,272,444 14.3% 913Quebec City, QC 1,319 3.7% 1,092,278 3.6% 828Kitchener, ON 329 0.9% 263,020 0.9% 799London, ON 2,256 6.4% 1,867,146 6.2% 828Windsor, ON 1,680 4.7% 1,280,485 4.3% 762Total (as at Feb 17, 2011) 35,277 100.0% 29,936,001 100.0% 849

- 21 -Boardwalk PortfolioCity/Province Property Name Building Type# ofUnitsNet RentableSquareFootageAverageUnit SizeCalgary, ABBeltline Towers Highrise 115 80,424 699Boardwalk Heights Highrise 202 160,894 797Brentview Towers Highrise 239 151,440 634Centre Pointe West Highrise 123 110,611 899Chateau Apartments Highrise 145 110,545 762Elbow Towers Highrise 158 108,280 685Flintridge Place Highrise 68 55,023 809Glamorgan Manor Garden 86 63,510 738Hillside Estates Garden 76 58,900 775Lakeside Estates Garden 89 77,732 873Lakeview Apartments Walkup 120 107,680 897McKinnon Court Apartments Garden 48 36,540 761McKinnon Manor Apartments Garden 60 43,740 729Northwest Pointe Garden 150 102,750 685Oakhill Estates Townhouse 240 236,040 984O'Neil Towers Highrise 187 131,281 702Patrician Village Garden 392 295,600 754Pineridge Apartments Garden 76 52,275 688Prominence Place Apartments Garden 75 55,920 746Radisson I Townhouse 124 108,269 873Radisson II Townhouse 124 108,015 871Radisson III Townhouse 118 124,379 1,054Ridgeview Gardens Townhouse 160 151,080 944Royal Park Plaza Highrise 86 66,137 769Russet Court Townhouse 206 213,264 1,035Sarcee Trail Place Highrise/Midrise 376 301,720 802Skygate Tower Highrise 142 113,350 798Spruce Ridge Estates Garden 284 196,464 692Travois Apartments Garden 89 61,350 689Varsity Place Apartments Walk-up 70 47,090 673Varsity Square Apartments Midrise/Lowrise 297 241,128 812Vista Gardens Garden 100 121,040 1,210Westwinds Village Garden 180 137,815 766Willow Park Gardens Garden 66 44,563 6755,071 4,074,849 804Edmonton, ABAlexander Plaza Garden 252 203,740 808Aspen Court Garden 80 68,680 859Boardwalk Arms A & B Garden 78 64,340 825Boardwalk Centre Highrise 597 471,871 790Boardwalk Village I II & III Townhouse 255 258,150 1,012Breton Manor Garden 66 57,760 875Briarwynd Court Townhouse 172 144,896 842Brookside Terrace Garden 131 196,779 1,502Cambrian Place Garden 105 105,008 1,000Camelot Garden 64 54,625 854Capital View Towers Highrise 115 71,281 620Carmen Garden 64 54,625 854Castle Court Garden 89 93,950 1,056Castleridge Estates Townhouse 108 124,524 1,153Cedarville Apartments Garden 144 122,120 848

- 23 -City/Province Property Name Building Type# ofUnitsNet RentableSquareFootageAverageUnit SizeViking Arms Highrise 240 257,410 1,073Village Plaza Townhouse 68 65,280 960Warwick Apartments Garden 60 49,092 818West Edmonton Court Garden 82 73,209 893West Edmonton Village Various 1,176 1,138,368 968Westborough Court Garden 60 50,250 838Westbrook Estates Garden 172 148,616 864Westmoreland Apartments Garden 56 45,865 819Westpark Ridge Garden 102 99,280 973Westridge Estates B Garden 91 56,950 626Westridge Estates C Garden 90 56,950 633Westridge Manor Townhouse 64 69,038 1,079Westwinds of Summerlea Garden 48 53,872 1,122Whitehall Square Highrise/Walkup 598 545,934 913Wimbledon Highrise 165 117,216 71012,057 10,598,614 879Fort McMurray, ABBirchwood Manor Garden 24 18,120 755Chanteclair Apartments Garden 79 68,138 863Edelweiss Terrace Garden 32 27,226 851Heatherton Apartments Garden 23 16,750 728Hillside Manor Garden 30 21,248 708Mallard Arms Garden 36 30,497 847McMurray Manor Garden 44 30,350 690The Granada Garden 44 35,775 813The Valencia Garden 40 33,850 846352 281,954 801London, ONAbbey Estates Townhouse 53 59,794 1,128Castlegrove Estates Highrise 144 126,420 878Forest City Estates Highrise 272 221,000 813Heritage Square Garden/Highrise 359 270,828 754Landmark Towers Highrise 213 173,400 814Maple Ridge On The Parc Highrise 257 247,166 962Meadow Crest Apartments Garden 162 110,835 684Noel Meadows Garden 105 72,600 691Ridgewood Estates Townhouse 29 31,020 1,070Sandford Apartments Highrise 96 77,594 808The Bristol Highrise 138 109,059 790Topping Lane Terrace Highrise 189 177,880 941Villages of Hyde Park Townhouse 60 57,850 964Westmount Ridge Highrise 179 131,700 7362,256 1,867,146 828Montreal, QCDomaine d‘Iberville Apartments(Longueuil, QC) Highrise 720 560,880 779Le Bienville (Brossard, QC) Walk-up 168 115,600 688Les Jardins Viva (Longueuil, QC) Walk-up 112 91,000 813Garden/Highrise/Townhouse 3,100 3,075,140 992Nuns' Island PortfolioComplexe Deguire (St. Laurent, QC) Highrise 322 276,324 858Residence le Quatre Cent (Laval, QC) Highrise 259 153,500 593

- 24 -City/Province Property Name Building Type# ofUnitsNet RentableSquareFootageAverageUnit Size4,681 4,272,444 913Quebec City, QCComplexe Laudance (Sainte-Foy, QC) Midrise 183 134,480 735Les Appartements Du Verdier(Sainte-Foy, QC) Garden 195 152,645 783Les Jardins de Merici Highrise 346 300,000 867Place Charlesbourg Midrise 108 82,624 765Place du Parc Highrise 111 81,746 736Place Samuel de Champlain Highrise 130 104,153 801Place Chamonix Townhouse 246 236,630 9621,319 1,092,278 828Red Deer, ABCanyon Pointe Apartments Garden 163 114,039 700Cloverhill Terrace Highrise 120 102,225 852Inglewood Terrace Apartments Garden 68 42,407 624Parke Avenue Square Walk-up 88 87,268 992Riverbend Village Apartments Garden 150 114,750 765Saratoga Tower Highrise 48 53,762 1,120Taylor Heights Apartments Garden 140 103,512 739Watson Tower Highrise 50 43,988 880Westridge Estates Townhouse 112 113,664 1,015939 775,615 826Regina, SKAshok Portfolio Garden 140 81,098 579Boardwalk Estates Garden 687 467,696 681Boardwalk Manor Garden 72 60,360 838Centennial South Townhouse 170 129,080 759Centennial West Garden 60 46,032 767Eastside Estates Townhouse 150 167,550 1,117Evergreen Estates Garden 150 125,660 838Grace Manor Townhouse 72 69,120 960Greenbriar Apts Garden 72 57,600 800Lockwood Arms Apartments Garden 96 69,000 719Pines of Normanview Townhouse 133 115,973 872Qu'appelle Village I & II Garden 154 133,200 865Qu'appelle Village III Garden 180 144,160 801Southpointe Plaza Highrise 140 117,560 840The Meadows Townhouse 52 57,824 1,112Wascana Park Estates Townhouse 320 307,200 9602,648 2,149,113 812Saskatoon, SKCarleton Tower Highrise 158 155,138 982Chancellor Gate Garden 138 126,396 916Dorchester Towers Highrise 52 48,608 935Heritage Pointe Estates Townhouse 104 99,840 960Lawson Village Garden 96 75,441 786Meadow Park Estates Townhouse 200 192,000 960Palace Gates Garden 206 142,525 692Penthouse Apartments Highrise 82 61,550 751Regal Tower I & II Highrise 161 122,384 760Reid Park Estates Garden 179 128,700 719St. Charles Place Garden 156 123,000 788St. James Place Garden 140 105,750 755

- 25 -City/Province Property Name Building Type# ofUnitsNet RentableSquareFootageAverageUnit SizeStonebridge Apartments Garden 162 131,864 814Stonebridge Townhomes I & II Townhouse 100 135,486 1,355Wildwood Ways B Garden 54 43,961 8141,988 1,692,643 851Vancouver, BCHorizon Towers (Burnaby, BC) Highrise 206 139,160 676Surrey Village (Surrey, BC) Highrise 266 162,371 610472 301,531 639Windsor, ONAnchorage Apartments Highrise 135 110,245 817Anchorage on the Park Townhouse 31 38,750 1,250Askin Tower Highrise 60 39,675 661Buckingham Tower Highrise 34 30,805 906Caron Tower Highrise 47 36,947 786Empress Court Apartments Garden 40 8,250 706Frances Tower Highrise 53 43,906 828Glenwood Apartments Highrise 33 25,619 776Janisse Tower Highrise 75 45,000 600Karita Tower Highrise 41 28,950 706Lauzon Towers Highrise 178 137,784 774Marine Court Highrise 68 49,206 724Randal Court Garden 47 38,775 825Regency Colonade Highrise 133 113,205 851Riverdale Manor Townhouse 97 77,850 803Rivershore Tower Apts Highrise 96 63,300 659Sandilands Tower Highrise 47 38,775 825Sandwich Tower Highrise 66 40,650 616Seaway Tower Highrise 152 112,037 737Sun Crest Tower Highrise 58 43,100 743Sun Ray Manor Highrise 41 29,950 730Tecumseh Eastview Apts. (Tecumseh, ON) Highrise 98 71,606 731University Tower Highrise 50 36,100 7221,680 1,280,485 762OtherBoardwalk Park Estates 2(Grande Prairie, AB) Townhouse 32 30,210 944Parkview Portfolio (Grande Prairie, AB) Garden 369 306,850 832Prairie Sunrise Portfolio(Grande Prairie, AB) (1)Walk-up/Highrise 244 201,992 828Elk Valley Estates (Banff, AB) Garden 76 53,340 702Tower Lane I & II (Airdrie, AB) Garden 163 130,920 803Springwood Place Apartments(Spruce Grove, AB) Low Rise 160 122,640 767Sturgeon Point Villas (St. Albert, AB) Walk-up 280 284,953 1,018Townhouse/Walk-up 161 155,405 965Christie Point Apartments (Victoria, BC)Kings Tower (Kitchener, ON) Highrise 226 171,100 757Westheights Place (Kitchener, ON) Highrise 103 91,920 8921,814 1,549,330 854Total - As at Dec 31, 2010 35,277 29,936,001 849

- 26 -City/Province Property Name Building Type# ofUnitsNet RentableSquareFootageAverageUnit SizeNote1. One building in the Prairie Sunrise Portfolio, consisting of 31 units and 26,600 net rentable square feet, wascompletely destroyed in a November 28, 2009 fire. Boardwalk settled with the insurers and abandoned any plans torebuild the building.1 Highrise – A multi-storey (usually ten or more) residential building, typically with an elevator2 Midrise – A multi-storey (usually six to nine) residential building, typically with an elevator3 Townhouse – One of several single family homes (sometimes called rowhouses) joined by common walls4 Garden – A walk-up or lowrise (usually between three and 5 storey) apartment building, typically without an elevatorNone of the residential properties in the Contributed Assets' portfolio accounts for 10 percent or more of thecombined reportable revenue of Boardwalk REIT.STRATEGY FOR GROWTHThe strategy of Boardwalk REIT is to provide Unitholders with a stable and growing return on theirinvestment through participation in distributions of cash flow from a revenue producing real property portfoliothat is diversified by geographic location. Boardwalk REIT can best achieve its goal by strategically:1. Maximizing customer satisfaction by providing an above-average level of service and product;2. Acquiring selected multi-family residential properties;3. Selling properties with lower future growth prospects or condominium converting properties and thereinvesting of these funds back into other accretive opportunities or Trust Units on the open market;4. Purchasing Trust Units on the open market;5. Enhancing property values, operating returns and cash flows through pro-active management,stabilization and capital improvements;6. Review and consideration of the development of new selective multi-family projects, if theeconomics warrant;7. Managing capital prudently while maintaining a conservative financial structure;8. Pursuing opportunities to form selective partnerships or joint ventures; and9. Reinvestment of released equity from asset sales back into the Trust's portfolio to create additionalvalue added opportunities.Maximizing Customer SatisfactionBoardwalk REIT feels the best way to increase long-term Unitholder value is to provide its customerswith an above average level of service and a high quality product and, in return, to receive a competitive marketrent. Boardwalk REIT offers its tenants 24 hour on call maintenance service as well as on-site managers, inaddition to a 24-hour, seven day a week toll-free call centre. Boardwalk REIT's properties are of high quality and,in most cases, recently renovated. During the 12 months ended December 31, 2010, Boardwalk REIT spent anaggregate of approximately $71.6 million (during the fiscal year ended December 31, 2009 - $70.4 million) forrenovations to its existing building portfolio. Boardwalk REIT continues to review its existing portfolio and,where appropriate, reviews and budgets the required funds for selective value added upgrades. Boardwalk REIThas also begun the process of developing strategic partnerships with key vendors designed to provide additionalvalue added services to Boardwalk REIT customers.

- 27 -Acquiring Selected Multi-Family Residential PropertiesBoardwalk REIT seeks to expand its property portfolio by continuing to acquire multi-family residentialproperties within Canada. Future real property acquisitions will be subject to specific investment guidelines andthe operation of Boardwalk REIT and its subsidiaries is subject to specific operating policies, as describedelsewhere in this AIF. The Trustees are responsible for the general control, direction and management ofBoardwalk REIT and have determined that in evaluating a potential acquisition the Trust‘s investment prioritiesshould be based on the following;.1. the target asset must be located in Canada;2. the target asset must be an Apartment;3. the overall all anticipated return from the target asset must be Risk Adjusted;4. the target asset must be located in a Major Market;5. the Apartment must be Well Located; and6. the Apartment must be of a Better Quality.To further assist in the interpretation of the above noted investment criteria the following enhancedinterpretations are provided.Apartment - a structure that has a roof and walls that stands permanently in one place;Risk Adjusted – a focus on investments where anticipated returns are justified given the risk associatedwith the investment... The Risk Adjusted rate is adjusted internally on an ongoing basis.Major Centres – Markets that have a solid growth economy and have sufficient apartment stock todevelop economies of scale of a minimum of 1000 apartment units.Well Located – in areas of Major Centres that command higher than average rents.Better Quality Assets – The asset has no functional obsolescence, (i.e. a good unit mix, good commonareas, strong construction specifications).In reviewing potential apartment acquisitions, Management always keeps in mind the short and long termaccretiveness of the transaction under review. As a bench mark, the Trust will look to the underlyingcapitalization rate that its Trust units are being valued at on the Toronto Stock Exchange. On occasion, anapartment building may come up for sale that potentially may transact at a capitalization rate that is lower than theTrust‘s implied cap rate. However, further examination may find underlying economics, such as current rentalrates are well below market rates and, once these are stabilized, the asset itself will be accretive.In a competitive acquisition market like the one the Trust currently finds itself, the focus of managementis on growing the value, quality and service of our existing portfolio through our most valuable asset, our team ofAssociates. The Trusts‘s most significant returns come from growing the expertise of our Associates. By way ofexample, Boardwalk‘s program over the last three (3) years to reduce the contracting out of repairs andmaintenance and to increase the internalization of those functions has led to higher productivity among the Trust‘sAssociates. Acquisitions in a competitive market can be dilutive because of high deferred capital expendituresand vacancy. Accordingly, in the current competitive acquisition market, the Trust has and will continue to focuson improving the quality, value and service of its existing portfolio, which, management is confident, will lead tohigher revenues and funds from operations (―FFO‖).During the 12 months ended December 31, 2010, the Trust disposed of 1,142 units in the Provinces ofAlberta, British Columbia, Saskatchewan and Quebec.

- 28 -Sale of PropertiesA part of the Trust's operations consists of the sale of selective properties. The number and type ofproperty sales will be driven by a number of sale criteria that include but are not limited to:The property or a market is determined to be ―mature‖ with continued limited upside as comparedto other investment opportunities.Market forces, in some economic environments, which create an opportunity to sell assets atvalues in excess of the existing value of the Trusts overall implied market valueOn a selective basis, the Trust may determine that, rather than the outright sale of a selectiveproperty, it may be in its best interest to convert an existing property, subject to the requirementsof applicable law, including applicable tax law governing income trusts, to individualcondominium units and, subsequently, sell these units on an individual basis.Joint Venture opportunities where the Trust contributes management services and selected assetsin exchange for cash and a reduced ownership.As part of this strategy, equity released by these sales would be channelled to more accretiveopportunities such as, but not limited to, the acquisition of other apartment units, the continued capital upgrade ofthe remaining property portfolio or the acquisition of the Trust‘s REIT Units or other securities trading in thepublic market. As of December 31, 2010, the Trust disposed of 1,142 units for total gross proceeds of $111.3million.Investment PhilosophyThroughout Boardwalk‘s history, the Trust has constantly looked for opportunities to continue to createvalue for its Trust Unitholders. This is achieved by investing managerial resources and capital in activities thatincrease funds from operations and adjusted funds from operations (―AFFO‖) per Trust Unit on a sustained basisand/or increase net asset value (―NAV‖) per Trust Unit. Prior to 2008, the Trust focused a large part of thisopportunity on investment opportunities, both in capital improvements to the Trust‘s existing portfolio and in theacquisition of additional properties. However, the Trust‘s investment strategy is not simply one by which it isconstantly looking to expand its existing footprint, but rather one by which it is constantly looking to create valuefor Unitholders. Starting in 2008, but more pronounced during 2009 and 2010, it was evident that the Trust‘sinvestment opportunity was not in the acquisition of additional apartment units, but rather in the deployment ofcapital to acquire additional Trust Units on the public market through its published Normal Course Issuer Bid(―NCIB‖), the details of which will be further discussed later in this AIF under the heading ―Normal CourseIssuer Bid‖. During 2010, the Trust bought back and cancelled a total of 423,400 Trust Units for a totalinvestment of $17.0 million. In 2009, the Trust bought back and cancelled a total of 790,000 Trust Units for atotal investment of $22.8 million. To fund these acquisitions, the Trust used a combination of the net proceedsfrom the sale of non-core properties (which were sold at prices well in excess of the current trading value of itsremaining real estate assets based on the trading price of the Trust Units on the TSX), as well as National HousingAct (Canada) (―NHA‖) insured debt capital issued at historically low interest rates.The non-core properties referred to above, consisting of 1,142 apartment units, were disposed for a totalselling price of $111.3 million. The implied capitalization rate on these sales was 5.95%, a valuation well-abovethe implied value of the Trust Units, which, in management‘s opinion, demonstrates a continued arbitragebetween ―Main Street‖ and ―Bay Street‖ apartment pricing. Boardwalk REIT, therefore, believes the focusedsale of these non-core properties continues to be the best investment of its capital at this time.As previously noted under the heading ―Sale of Properties‖, the Trust has an on-going program of sellingnon-core properties in its portfolio and re-deploying the released capital to acquiring additional properties and/orinvesting it back in its existing properties to achieve superior returns.

- 29 -Cost of CapitalIn understanding Boardwalk REIT‘s investment strategy, it is also necessary to review its cost of capital.The Trust‘s cost of capital is generally defined as the weighted average cost to the Trust of raising incrementalcapital and, accordingly, its hurdle rate for evaluating incremental investments. It can also be thought of as therate of return that the Trust would otherwise be able to earn at the same level of risk. As with most real estateentities, the Trust‘s cost of capital is the combination of its cost of debt and the cost of equity. As will bediscussed in later sections of this AIF entitled ―Managing Capital‖ and ―Liquidity‖, the Trust currently has accessto a low cost of debt through its access to the NHA-insured market. But even this market has different levels ofrisk that are mainly priced through the term selected on the related mortgage. That is, the longer the mortgagefinance term, the longer the borrower is removing the interest rate risk from the investment. It is management‘sview that with respect to those investments where one does not have the benefit of hindsight, for example, withthe actual purchase, ownership and management of a particular building there is an increased level of performancerisk. To moderate this risk, it is necessary to hedge the interest rate risk, by taking a longer-term mortgage toallow for time to better understand the performance risk of the specific property investment. The other majorcomponent in the cost of capital relates to the cost of equity required for the investment. The determination ofthis amount has a number of different models and definitions. However, for simplicity purposes, Boardwalkdetermines its current cost of equity as the amount of FFO reported compared to its current market capitalization.For 2010, the Trust reported FFO per Trust Unit of $2.47. When compared to the simple average Trust Unitmarket price of $40.69 for the month of December 2010, this equates to a cost of equity of approximately sixpercent (6%).Once the Trust has determined its cost of capital, management then analyzes and evaluates theopportunities available to the Trust against a base case scenario. The base case will be determined by answeringtwo distinct questions: 1) is the investment accretive to the Trust‘s implied capitalization rate (―Cap Rate‖)adjusting for related risk, and 2) given the existing leverage of the Trust, is the investment accretive on an FFObasis given its existing portfolio‘s internal growth profile? The investment is also evaluated on a stabilized basis,that is, after considering the impact of funding deferred capital expenditures and leasing up the property. The basecase of the Cap Rate test focuses on the implied Cap Rate of the Trust‘s underlying portfolio as the Trust bestunderstands the operations and risk profile of its own apartment units, and its ability to purchase its own realestate through the use of its current NCIB really does set the base. For an investment to be accretive, it not onlyhas to trade at or above this level, it must also be of equivalent (or better) quality and location. The amount ofexpectation above this base rate is the anticipated risk adjustment rate. Each investment is looked at in isolationand evaluated accordingly. In response to the second question, it is necessary to understand that, historically,multi-family rental real estate has been an investment based on leverage. As such, it is necessary for managementto analyze the underlying ability to obtain debt and the cost of that debt. Boardwalk currently does have access toNHA insurance from the Government of Canada, the details of which are discussed later in this AIF under theheading ―Managing Capital‖ and ―Liquidity‖. As with other debt in most instances, the longer the proposed termmaturity, the higher the price for the debt. This difference is the adjustment the market puts on the risk that theinterest rates will be higher during the term of the loan. Accordingly, the investment consideration for the Trustalso adjusts for this risk by building into its current cost of debt a term at the longer end of the curve, usuallyterms ranging between seven (7) and ten (10) years.It is management‘s belief that the Trust‘s investment strategy addresses the key components indetermining whether an investment is accretive for the Trust as a whole. When comparing the externalinvestment opportunity to the Trust‘s internal opportunity of acquiring its own Trust Units for 2010, managementfelt that, on a risk adjusted basis, the better investment was in the Trust‘s own real estate through purchases ofTrust Units on the open market.

- 30 -LiquidityIn late 2008, with all the economic uncertainty that the market was experiencing, particularly in the areaof availability of debt capital, management felt that the Trust‘s mortgage program (which focused on the use ofNHA insurance on virtually all of its mortgages) presented an opportunity to access more credit than needed forthe short term. In the past, the Trust accessed credit as and when necessary; however, given the economicuncertainty and the potential for accretive acquisitions, management felt that increasing the Trust‘s overall cashliquidity position was prudent in order to capitalize swiftly on any opportunities that would be in the best interestsof the Trust. Even though the credit spreads had increased dramatically from more recent levels, when combinedwith the unprecedented decrease in the underlying Government of Canada bond rates, total overall interest rateswere at historic lows.As of December 31, 2010, the Trust has increased its cash position to $228.09 million from the $190.03million reported as of December 31, 2009. However, there is a cost to having this much liquidity on the balancesheet, which earned, and is continuing to earn, a very conservative but safe investment return. The Trustcontinues to look into opportunities to acquire a portion of its existing outstanding NHA-insured mortgages as analternative investment for its excess liquidity.Enhancing Property ValuesBoardwalk REIT enhances the value of its properties through effective leasing and property managementand by strictly controlling operating expenses and capital expenditures. This combination of factors results inlower vacancy levels and the maximization of effective rental rates as expiring leases are renewed or new leasesare signed. Average occupancy rate for the year ended December 31, 2010 of the Trust's existing rentableproperties was 97.11% (December 31, 2009 – 95.43%). Boardwalk REIT's strategic innovations are designed tomaximize cash flow and include portfolio-wide centralization of purchasing of materials and services to takeadvantage of economies of scale as well as a retail specialization leasing program.Portfolio Occupancy RatesAnnual ComparativeCalgaryEdmontonOther AlbertaReginaSaskatoonKitchenerLondonWindsorMontrealQuebec CityGatineauVerdunVancouverVictoriaTotalJan Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q12011 2010 2010 2010 2010 TOTAL 2009 2009 2009 2009 TOTAL96.28% 97.20% 97.57% 98.59% 98.41% 97.94% 96.87% 95.78% 95.31% 94.31% 95.57%95.74% 96.71% 96.93% 97.09% 96.28% 96.75% 96.35% 94.91% 93.51% 94.41% 94.80%94.91% 94.54% 92.53% 93.02% 92.88% 93.24% 92.22% 91.39% 92.63% 93.28% 92.38%98.35% 98.35% 96.83% 97.77% 96.83% 97.44% 97.86% 96.87% 97.33% 96.19% 97.06%98.42% 98.42% 97.98% 97.85% 97.58% 97.96% 98.22% 98.12% 96.77% 93.53% 96.66%99.39% 98.48% 96.76% 96.96% 98.58% 97.69% 98.68% 97.76% 98.98% 97.57% 98.25%97.83% 97.43% 97.32% 97.57% 97.27% 97.40% 97.35% 96.33% 95.95% 95.49% 96.28%98.46% 98.34% 96.38% 96.34% 96.34% 96.85% 96.08% 92.48% 90.83% 89.14% 92.13%96.65% 96.33% 96.37% 97.23% 97.29% 96.81% 96.66% 96.97% 96.35% 96.19% 96.54%98.25% 98.33% 97.82% 97.47% 98.13% 97.94% 97.90% 97.53% 98.50% 98.61% 98.13%na na na na 98.91% 98.91% 98.13% 96.46% 98.44% 97.81% 97.71%99.26% 99.21% 98.71% 97.96% 96.87% 98.19% 96.91% 96.90% 96.29% 96.00% 96.53%95.34% 96.24% 97.22% 97.99% 98.47% 97.48% 97.27% 93.21% 93.89% 95.22% 94.90%97.52% 98.37% 98.57% 97.02% 97.92% 97.97% 97.67% 98.57% 97.02% 95.07% 97.08%96.71% 97.29% 97.01% 97.29% 96.85% 97.11% 96.65% 95.54% 94.91% 94.71% 95.45%

- 31 -Boardwalk REIT strives to acquire, develop or retain assets in those markets that demonstrate positiveeconomic prospects. Boardwalk REIT continues to focus on markets that are typified by strong economic outlookand relatively low vacancy rates.In the multi-family residential sector, the markets in which Boardwalk REIT operates have experiencedlittle new construction in recent years. With aggressive leasing efforts and a diversified portfolio, managementbelieves that Boardwalk REIT is well-positioned to continue to expand to other Canadian regions in the future. Asignificant portion of the Trust's rentable portfolio is located in the Province of Alberta, with 56% of its total unitsas at December 31, 2010. Alberta has led Canada's economic and job growth over the past five years, andeconomists are projecting that Alberta, along with British Columbia and Saskatchewan, will continue to show oneof the highest GDP and population growth rates over the next several years. The Conference Board of Canada isprojecting that Calgary and Edmonton, Boardwalk REIT's two largest markets, along with Saskatoon and Regina,other important markets for Boardwalk REIT, will continue to rank among the top cities for economic growth inthe country through 2010. These positive developments bode well for the Western Canadian economy and, as aresult, Boardwalk REIT views these and other markets as providing long-term strategic opportunities.New Apartment DevelopmentBoardwalk REIT continues to explore the possibility of developing new multi-family product in selectmarkets.. At this time, the Trust is focusing on selected properties that feature excess density in Calgary andEdmonton. Boardwalk REIT continues to explore this opportunity. . The Trust continues on a selective basis toexplore density intensification and financial feasibility, as well as design and permitting.Though Boardwalk REIT is optimistic about this potential, it is important to note that to obtain theestimated maximum density, it will be necessary to demolish existing rental units. It is the Trust's belief that thekey to this development is to find the optimal trade-off between maximizing density and retaining as much of theexisting rental stock as possible.Normal Course Issuer BidIn the third quarter of fiscal 2010, Boardwalk REIT filed an application to renew its Normal Course IssuerBid (the "Bid"), which received regulatory approval from the Toronto Stock Exchange on August 20, 2010. TheBid allows Boardwalk REIT to purchase and cancel up to 3,918,286 REIT Units, representing 10% of the publicfloat of its REIT Units at the time of the TSX approval. The Bid will terminate on the earlier of one year from thedate of renewal of the Bid on August 23, 2011, or at such time as purchases under the Bid are complete.BidNumberNumber ofTrust UnitsPurchased andCancelledFor the Year Ended December 31, 2010 For the Year Ended December 31, 2009Purchase Cost($000)Cost per Trust UnitNumber of TrustUnits Purchasedand CancelledPurchase Cost($000)AverageCost PerTrust Unit1 - - - - - -2 - - - 790,000 $22,756 $28.813 208,400 $8,221 $39.45 - - -4 215,000 $8,803 $40.95 - - -423,400 $17,024 $40.21 790,000 $22,756 $28.81BidNumberApproval Date Termination Date Maximum TrustUnits Allowed to bePurchased andCancelledCumulativeNumber of TrustUnits Purchasedand CancelledCumulativePurchase Cost($000)AverageCost perTrust Unit1 August 10, 2007 August 17, 2008 4,267,048 2,522,447 $103,865 $41.182 August 18, 2008 August 19, 2009 4,040,192 1,436,000 42,880 $29.863 August 24, 2009 August 23, 2010 3,932,211 208,400 8,221 $39.454 August 20, 2010 August 23, 2011 3,918,286 215,000 8,803 $40.95Total 4,381,847 163,769 $37.37

- 32 -Boardwalk REIT continues to believe that one of the best investments it can make is to purchase its REITUnits at current levels.Managing CapitalBoardwalk REIT finances its real properties and activities with a combination of long-term fixed rate debtfinancing, both secured and unsecured, cash flow generated from continuing operations, and the selective sale ofproperties and drawings under lines of credit.Boardwalk REIT's operating strategy must be complemented by a capital strategy designed to maximizereturn on Unitholder's equity. Boardwalk REIT's objective is to ensure in advance that there are ample capitalresources to allow it to exploit opportunities quickly, rather than securing funding for each specific investment ona case-by-case basis. Boardwalk REIT believes that this approach provides it with a competitive advantage innegotiations for acquisitions and developments. Boardwalk REIT's capital strategy is:(a)(b)(c)(d)to establish a working capital and acquisition line of capital to ensure liquidity to fund growth;to employ an appropriate degree of leverage during the broad based recovery in the real estateindustry;to actively manage its exposure to interest rate volatility through the use of fixed long-term ratedebt the majority of which is insured with NHA insurance managed by CMHC; andto the extent that the Trustees determine to seek additional capital, to raise such capital throughpublic offerings of equity or debt.To facilitate acquisitions, the Corporation arranged a demand facility with a major financial institution inMay of 1998. This Committed revolving credit facility was in the form of an operating and acquisition line up toa maximum of $100 million. Effective January 26, 2007, Boardwalk REIT completed negotiations to set up anew committed revolving credit facility with the same financial institution on substantially similar terms to theone arranged by the Corporation as described above, with the exception that such facility is an operating andacquisition line for up to a maximum of $200 million. Under such facility, the Trust has pledged assets sufficientto obtain an existing facility of $200 million. Security for this facility consists of first and second charges on apool of property assets. The facility carries two levels of interest ranging from the lending institution's prime rateof interest ("Prime"), to prime plus 1.0% and all outstanding operating line amounts will have to be repaid on orwithin two (2) years of the contractual term maturity date, which is July 29, 2012.To assist in the managing of the Trust's exposure to interest rate volatility, Boardwalk REIT'smanagement is constantly reviewing its existing mortgage debt portfolio. The purpose of this review is to ensurethat Boardwalk REIT has varying maturity dates for its debts so as to lower the Trust's exposure to the interestrate fluctuations in any particular period. In addition, the Trust is constantly monitoring existing market facilitiesin order to determine whether existing demand facilities should be converted to longer-term fixed rate mortgages.Since 2007, the Trust has been successful in taking advantage of the lower interest rate environment.Since August 2007, the subprime crisis in the United States resulted in an extremely volatile borrowingenvironment, with bond yields fluctuating dramatically, and interest spreads increasing due to the lack ofliquidity. For the most part, however, the Trust's cost of borrowing remained accretive during this period whencompared to the existing maturing interest rates. Due to the size and diversity of its existing debt portfolio, theCorporation had elected, prior to the Acquisition and the Arrangement, to typically refinance maturing loans forterms of one (1) to five (5) years. These terms balance well with the maturity dates of the other mortgages, and assuch lower Boardwalk REIT's overall interest rate risk during any one particular year.2008 marked the first year the Trust entered into forward hedging strategies with respect to its upcomingmortgage interest obligations. The strategy consisted of hedging, or locking in, the interest rates on the

- 33 -underlying bonds used to set mortgage interest rates while layering an interest rate swap on top of this to reduceoverall interest rates and variability in cash flows from fluctuating interest rates.In the beginning of 2008, the Trust entered into a forward bond transaction (the ―Transaction‖) with amajor Canadian financial institution. In total, the Transaction, which is comprised of bond forward contracts onspecific mortgages set to mature and to be renewed in 2008, was for a total nominal amount of $101.6 millionwith a weighted average term and interest rate of 7.2 years and 3.63%, respectively. Subsequent to entering intothis Transaction, the Trust initiated changes to the terms of one of the contracts, with a nominal amount ofapproximately $21.8 million, and negotiated a settlement loss of $100 thousand related to these changes.Boardwalk REIT assessed this one particular bond forward contract as no longer being an effective hedge andpayment of this $100 thousand settlement loss was included as part of the financing costs in the quarter endedMarch 31, 2008.During the second quarter ended June 30, 2008, the remaining bond forward contracts in the transactionwere settled. Except for one of the contracts, all remaining contracts were assessed to be ineffective hedges andthe net settlement loss of $168 thousand was included in financing costs for the quarter. The bond forwardcontract assessed to be an effective hedge was settled for a loss of $284 thousand, which will be amortized overthe term of the new financing. As of December 31, 2010, the unamortized amount of this effective hedge was$201 thousand.During the first quarter of 2008, Boardwalk REIT entered into an interest rate swap agreement on themortgages of specific properties within its portfolio in an effort to hedge the variability in cash flows attributed tofluctuating interest rates. These interest rate swap agreements were designated as cash flow hedges on March 11,2008. The effective date of the hedges was May 1, 2008, and will continue to be designated as such until the dateof maturity on May 1, 2015. Hedge accounting has been applied to these agreements in accordance with CISAHandbook section 3865.Boardwalk REIT has determined that there is no ineffectiveness in the hedging of its interest rateexposure. The effectiveness of the hedging relationship will be reviewed on a quarterly basis and measured at fairvalue. Any gains or losses which arise as a result of the ―effectiveness‖ of the hedge will be recognized in OtherComprehensive Income (―OCI‖). The ineffective portion of the hedging gain or loss on the swap transaction willbe recognized immediately in net earnings. On recognition of the financial liability of the hedged item on thebalance sheet, the associated gains or losses that were recognized in OCI will be reclassified into net earnings inthe same period or periods during which the interest payments of the hedged item affect net earnings. However, ifall or a portion of the net loss recognized in OCI will not be recovered in one or more future periods, this amountwill be immediately reclassified into net earnings.As at December 31, 2010, the interest rate swap agreement was assessed to be an effective hedge and,consistent with the previous quarter, any gains or losses on the interest rate swap agreement were recognized inearnings in the periods during which the interest payments on the hedged items were recognized.Boardwalk REIT's Debt Maturity ChartYear of Term MaturityPrincipal Outstanding as atDec 31, 2010Weighted AverageInterest Rate By Maturity% of Total2011 257,110,363 4.56% 10.91%2012 570,908,589 4.89% 24.22%2013 291,347,366 4.51% 12.36%2014 433,039,477 3.51% 18.37%2015 432,952,185 3.73% 18.37%2016 130,931,235 4.59% 5.55%2017 108,508,612 3.69% 4.60%2018 9,799,141 5.11% 0.42%2019 77,332,338 5.09% 3.28%2020 40,186,570 4.44% 1.70%2021 5,047,951 4.06% 0.22%Total Principal Outstanding 2,357,163,827 4.27% 100.00%

- 34 -Pursuing Partnerships or Joint VenturesAs part of the Trust's overall growth strategy, Boardwalk REIT is reviewing the possibility of formingjoint venture partnerships with a select group of investors, whereby Boardwalk REIT would manage the assets aswell as have an equity interest in any opportunity. Any joint venture partnerships of Boardwalk REIT are limitedby the investment guidelines in the Declaration of Trust. See "Investment Guidelines and Operating Policies ofBoardwalk REIT – Investment Guidelines" below.INVESTMENT GUIDELINES AND OPERATING POLICIES OF BOARDWALK REITInvestment GuidelinesPursuant to the Declaration of Trust, and notwithstanding anything contained in the Declaration of Trustto the contrary, the assets of Boardwalk REIT may be invested only, and Boardwalk REIT shall not permit theassets of any subsidiary to be invested otherwise than in accordance with the following investment guidelines (the"Investment Guidelines"):(a) Boardwalk REIT will focus its activities primarily on the acquisition, holding, maintaining,improving, leasing or managing of multi-unit residential revenue producing properties, and ancillaryreal estate ventures, including, but not limited to, condominium conversions and sales of properties inwhich the Trust has (or will have) an interest, as well as, subject to subparagraph (l) below, thedevelopment of raw land (including the financing thereof) for the purpose of carrying out the abovenoted activities ("focus activities");(b) notwithstanding anything contained in the Declaration of Trust to the contrary, no investment will bemade that would result in:(i) REIT Units being disqualified for investment by registered retirement savings plans, registeredretirement income funds, registered education savings plans or deferred profit-sharing plans;(ii) Boardwalk REIT ceasing to qualify as a "mutual fund trust" or a "registered investment" forpurposes of the Tax Act; or(iii) the Trust not qualifying as a "real estate investment trust", as defined in subsection 122.1(1) ofthe Tax Act, if as a consequence of the trust not so qualifying, the trust would be subject to tax onits ―taxable SIFT trust distributions‖.(c) the Trust may, directly or indirectly, invest in a joint venture arrangement for the purposes of owninginterests or investments otherwise permitted to be held by the Trust, provided that such joint venturearrangement contains terms and conditions which, in the opinion of the Trustees, are commerciallyreasonable, including without limitation such terms and conditions relating to restrictions on transferand the acquisition and sale of the Trust's and any joint venturer's interest in the joint venturearrangement, provisions to provide liquidity to the Trust, such as buy-sell mechanisms, provisionsthat limit the liability of the Trust to third parties, and provisions that provide for the participation ofthe Trust in the management of the joint venture arrangement. For purposes of this provision, a jointventure arrangement is an arrangement between the Trust and one or more other persons ("jointventurers") pursuant to which the Trust, directly or indirectly, conducts an undertaking for one ormore of the purposes set out above and in respect of which the Trust may hold its interest jointly or incommon or in another manner with others either directly or through the ownership of securities of acorporation or other entity (a "joint venture entity"), including without limitation a generalpartnership, limited partnership or limited liability company;(d) unless otherwise permitted in the provisions of the Declaration of Trust setting out Boardwalk REIT'sInvestment Guidelines and except for temporary investments held in cash, deposits with a Canadian

- 35 -or U.S. chartered bank or trust company registered under the laws of a province of Canada, short-termgovernment debt securities or in money market instruments of, or guaranteed by, a Schedule ICanadian chartered bank maturing prior to one year from the date of issue, Boardwalk REIT, directlyor indirectly, may not hold securities other than (i) currency or interest rate futures contracts forhedging purposes to the extent that such hedging activity complies with the Canadian SecuritiesAdministrator's National Instrument 81-102 or any successor instrument or rule; (ii) securities of ajoint venture entity, or any entity formed and operated solely for the purpose of carrying on ancillaryactivities to any real estate owned (or to be owned) or developed (or to be developed), directly orindirectly, by Boardwalk REIT, or an entity wholly-owned (or to be wholly-owned), directly orindirectly, by Boardwalk REIT formed and operated solely for the purpose of holding and/ordeveloping a particular real property or real properties; and (iii) securities of another issuer, including,but not limited to, a real estate investment trust, provided either (A) such securities derive their value,directly or indirectly, principally from real property, or (B) the principal business of the issuer of thesecurities is the ownership, development or operation, directly or indirectly, of real property, andprovided in either case the entity whose securities are being acquired are engaged in a focus activity;(e) no investment will be made in a real property located in the United States unless Boardwalk REIT hasobtained an opinion from legal counsel to the effect that the making of the investment should notresult in interest paid by any U.S. entity in which Boardwalk REIT, directly or indirectly, owns aninterest to any affiliate of Boardwalk REIT ceasing to be deductible for U.S. federal income taxpurposes or becoming subject to U.S. withholding tax; (f) no investment will be made, directly orindirectly, in operating businesses unless such investment is through a corporation, limitedpartnership or trust;(g) notwithstanding any other provisions of the Declaration of Trust setting out Boardwalk REIT'sInvestment Guidelines, the securities of a reporting issuer in Canada may be acquired provided that:(i) the activities of the issuer are focused on focus activities; and(ii) in the case of any proposed investment or acquisition which would result in the beneficialownership of more than 10% of the outstanding units of the securities issuer (the "acquiredissuer"), the investment is made for the purpose of subsequently effecting the merger orcombination of the business and assets of Boardwalk REIT and the acquired issuer or forotherwise ensuring that Boardwalk REIT will control the business and operations of the acquiredissuer;(h) no investments will be made in rights to or interests in mineral or other natural resources, includingoil or gas, except as incidental to an investment in real property;(i) the Trust may not invest in mortgages, mortgage bonds, Notes 8 (other than Operating Trust Notes 9 ) ordebentures ("Debt Instruments") (including participating or convertible) unless the real propertywhich is security therefore is real property which otherwise meets the Investment Guidelines,including, but not limited to, subparagraph (b) above, provided that, notwithstanding the foregoing,an investment may be made in Debt Instruments if the primary intention is to use such investment asa method of acquiring control of a revenue producing real property which would otherwise be apermitted investment pursuant to the Investment Guidelines, including, but not limited to, subsectionsubparagraph (b) above;8 "Notes" means the promissory notes, bonds, debentures, debt securities or similar evidence of indebtedness issued by aperson.9 ''Operating Trust Notes'' means the Series 1 Notes and the Series 2 Notes. ''Series 1 Notes'' means the Series 1 Notesissued by the Operating Trust exclusively to Boardwalk REIT on May 3, 2004 in the principal amount of $640 million''Series 2 Notes'' means the Series 2 Notes to be issued by the Operating Trust exclusively as full or partial payment of theSeries 1 Notes and Operating Trust Units.

- 36 -(j) notwithstanding paragraph (i) above, Boardwalk REIT may also invest in mortgages where:(i) the mortgage is a "vendor take-back" mortgage granted to Boardwalk REIT in connection withthe sale by it of existing real property and as a means of financing the purchaser's acquisition ofsuch property from Boardwalk REIT;(ii) the mortgage is interest bearing;(iii) the mortgage is registered on title to the real property which is security therefore;(iv) the mortgage has a maturity not exceeding five years;(v) the amount of the mortgage loan is not in excess of 85% of the selling price of the propertysecuring the mortgage; and(vi) the aggregate value of these mortgages (including mortgages and mortgage bonds in whichBoardwalk REIT is permitted to invest by virtue of paragraph (i) above, (after giving effect to theproposed investment, will not exceed 15% of Gross Book 10 Value) calculated at the time of suchinvestment);(k) subject to subparagraph (b) above, the Trust may invest directly in raw land for developmentprovided such investment is through a corporation, limited partnership or trust established for thepurpose of (i) the renovation or expansion of existing facilities that are capital property of the Trust,or (ii) the development of new facilities which will be capital property of the Trust; and(l) notwithstanding any other provisions of the Declaration of Trust, investments may be made which donot comply with the investment policy provisions of the Declaration of Trust provided (i) theaggregate cost thereof (which, in the case of an amount invested to acquire real property, is thepurchase price less the amount of any indebtedness assumed or incurred in connection with theacquisition and secured by a mortgage on such property) does not exceed 15% of the AdjustedUnitholders' Equity 11 and (ii) the making of such investment would not contravene subparagraph (b)above.Pursuant to the Declaration of Trust, the investment guidelines set forth above may only be amended withthe approval of at least 66 2/3% of the votes cast at a meeting of Unitholders called for that purpose.Operating PoliciesThe Declaration of Trust provides that the operations and affairs of Boardwalk REIT will be conducted inaccordance with the following policies and that Boardwalk REIT will not permit any subsidiary to conduct itsoperations and affairs other than in accordance with the following policies:10 ''Gross Book Value'' means, at any time, (A)(i) the book value of the assets of Boardwalk REIT and its subsidiaries, shownon its then most recent publicly-issued consolidated balance sheet, plus the amount of accumulated depreciation andamortization shown thereon or the notes thereto; plus (ii) an additional amount of $410 million; plus (iii) if Boardwalk REITis required to record the value of the Contributed Assets at their carrying values, instead of their exchange values, on itsconsolidated balance sheet, then Gross Book Value shall be calculated as in (i) above together with a one-time addition equalto the difference between the Entity Value and the net book value of the assets of the Corporation and its subsidiaries, asshown on its then most recent publicly-issued consolidated balance sheet as of the Effective Date (which is equal to $231million), plus the amount of deferred taxes shown thereon or in the notes thereto, plus an additional amount of $410 million;or (B) if approved by a majority of the Trustees, the appraised value of the assets of Boardwalk REIT and its subsidiaries.''Entity Value'' means the amount determined by multiplying the total number of REIT Units issued and outstanding (on afully-diluted basis, including without limitation REIT Units issuable on the exchange of LP Class B Units) by the 10 dayweighted average trading price of the REIT Units on the TSX for the 10 trading days immediately following the EffectiveDate, which amount was $15.95 per Unit for a total of $849 million.11 For a definition of "Adjusted Unitholder's Equity", please see the definition under the heading "Description of OtherSecurities and Ratings –Senior Unsecured Debentures – Definitions – "Adjusted Unitholder's Equity".

- 37 -(a) the construction and/or development of real property (including the financing thereof) may beengaged in order to maintain its real properties in good repair or to enhance the revenue-producingpotential of real properties in which it has, or will have, an interest;(b) except for properties encumbered by the Retained Debt, title to each real property shall be held byand registered in the name of the Partnership, the General Partner or a corporation or other entitywholly-owned indirectly by Boardwalk REIT or jointly owned indirectly by Boardwalk REIT withjoint venturers; provided, that where land tenure will not provide fee simple title, the Partnership, theGeneral Partner or a corporation or other entity wholly-owned, directly or indirectly by thePartnership or jointly owned, directly or indirectly, by Boardwalk REIT with joint venturers shallhold a land lease as appropriate under the land tenure system in the relevant jurisdiction;(c) no indebtedness shall be incurred or assumed if, after giving effect to the incurring or assumptionthereof of the indebtedness, the total indebtedness as a percentage of Gross Book Value would bemore than 70% for indebtedness, including amounts drawn under the acquisition facility;(d) the Trust may, directly or indirectly, guarantee indebtedness or liabilities of a third party, providedthat such guarantee is related to the direct or indirect ownership or acquisition by the Trust of realproperty that would otherwise comply with the investment restrictions and operating guidelines setout in the Declaration of Trust;(e) except for the Contributed Assets acquired pursuant to the Master Asset Contribution Agreement, anengineering survey or physical review by an experienced third party consultant will be obtained foreach real property intended to be acquired with respect to the physical condition thereof;(f) at all times insurance coverage will be obtained and maintained in respect of potential liabilities ofBoardwalk REIT and the accidental loss of value of the assets of Boardwalk REIT from risks, inamounts and with such insurers, in each case as the Trustees consider appropriate, taking into accountall relevant factors including the practices of owners of comparable properties;(g) except for the Contributed Assets acquired pursuant to the Master Asset Contribution Agreement, aPhase I environmental audit shall be conducted for each real property to be acquired and, if thePhase I environmental audit report recommends that further environmental audits be conducted, suchfurther environmental audits shall be conducted, in each case by an independent and experiencedenvironmental consultant; and(h) at least 8.5% of gross consolidated annual rental revenues generated from properties where theassociated mortgage financing is insured by CMHC ("insured properties") as determined pursuant toGAAP shall be expended annually on sustaining capital expenditures, repairs and maintenance, alldetermined on a portfolio basis for all insured properties. For this purpose, capital expenditures andrepairs and maintenance include all onsite labour costs and other expenses and items associated withsuch capital expenditures, repairs and maintenance.Pursuant to the Declaration of Trust, the operating policies set forth above may only be amended with theapproval of a majority of the votes cast at a meeting of Unitholders called for that purpose.DECLARATION OF TRUST AND DESCRIPTION OF REIT UNITSBoardwalk REIT has been established under the Declaration of Trust for an indeterminate term. Thefollowing is a summary, which does not purport to be complete, of certain terms of the Declaration of Trust andthe REIT Units. A copy of the Declaration of Trust may be accessed on SEDAR (www.sedar.com).The Declaration of Trust authorizes the issuance of an unlimited number of two classes of units ofBoardwalk REIT: REIT Units and Special Voting Units. The Special Voting Units may only be issued to holdersof, and are not transferable separately from, the LP Class B Units to which they relate.

- 38 -REIT UnitsEach REIT Unit represents an undivided beneficial interest in Boardwalk REIT and in distributions madeby Boardwalk REIT, whether of net income, net realized capital gains or other amounts and, in the event ofliquidation, winding-up or other termination of Boardwalk REIT, in the net assets of Boardwalk REIT remainingafter the satisfaction of all liabilities. No REIT Unit has preference or priority over any other.The REIT Units are issued as fully paid and non-assessable and are freely transferable, subject toapplicable securities regulatory requirements. Each REIT Unit entitles the holder thereof to one vote for eachwhole REIT Unit held at all meetings of Unitholders.Except as set out under the sub-headings "Issuance of REIT Units" and "REIT Unit Redemption Right"below, the REIT Units have no conversion, retraction, redemption or pre-emptive rights. Issued and outstandingREIT Units may be subdivided or consolidated from time to time by the Trustees with the approval of a majorityof the Unitholders. Unitholder approval will not be required for an automatic consolidation as described in thesection entitled "Distribution Policy" below.No certificates will be issued for fractional REIT Units and fractional REIT Units will not entitle theholders thereof to vote at, receive notice of or attend meetings of Unitholders, except to the extent such fractionalREIT Units represent in the aggregate one or more whole REIT Units. The REIT Units are not "deposits" withinthe meaning of the Deposit Insurance Corporation Act (Canada) and are not insured under the provisions of suchAct or any other legislation. Furthermore, Boardwalk REIT is not a trust company and, accordingly, is notregistered under any trust and loan company legislation as it does not carry on nor intend to carry on the businessof a trust company.Special Voting Units 12The Declaration of Trust provides for the issuance of an unlimited number of Special Voting Units thatwill be used to provide voting rights with respect to Boardwalk REIT to persons holding LP Class B Units orother securities that are, directly or indirectly, exchangeable for REIT Units. BEI Subco is currently the owner,through its direct ownership of all of the issued and outstanding LP Class B Units, of all of the issued andoutstanding Special Voting Units.The Special Voting Units are not transferable separately from the LP Class B Units to which they relate.The Special Voting Units will automatically be transferred upon a transfer of the corresponding LPClass B Units. In addition, as LP Class B Units are surrendered for REIT Units and are no longer outstanding, thecorresponding Special Voting Units will be automatically redeemed by Boardwalk REIT for $0.0000001 per eachSpecial Voting Unit cancelled and shall no longer be outstanding.Each Special Voting Unit entitles the registered holder thereof to the number of votes at any meeting ofUnitholders or in respect of any written resolution of Unitholders which is equal to the number of REIT Unitswhich may be obtained upon the surrender of the LP Class B Unit to which the Special Voting Unit relates. TheSpecial Voting Units do not entitle or give any rights to the holders thereof to receive distributions or any amountupon liquidation, dissolution or winding-up of Boardwalk REIT. Holders of Special Voting Units are not entitledto receive a certificate or other written instrument evidencing ownership of such units.Issuance of REIT UnitsThe Trustees may allot and issue REIT Units at such time or times and in such manner (includingpursuant to any distribution reinvestment plan of Boardwalk REIT) and to such person, persons or class of12 ''Special Voting Unit'' means a unit of interest in Boardwalk REIT to be issued to the holders of LP Class B Unitsproviding rights to vote as a Unitholder.

- 39 -persons as the Trustees in their sole discretion shall determine. The price or the value of the consideration forwhich REIT Units may be issued and the terms and conditions of issuance of the REIT Units shall be determinedby the Trustees in their sole discretion, generally (but not necessarily) in consultation with investment dealers orbrokers who may act as underwriters in connection with offerings of REIT Units. In the event that REIT Unitsare issued in whole or in part for a consideration other than money, the resolution of the Trustees allotting andissuing such REIT Units shall express the fair equivalent in money of the other consideration received.Boardwalk REIT may create and issue rights, warrants or options to subscribe for fully-paid REIT Unitswhich rights, warrants or options may be exercisable at such subscription price or prices and at such time or timesas the Trustees may determine. The rights, warrants or options so created may be issued for such consideration orfor no consideration, all as the Trustees may determine. A right, warrant or option shall not be a REIT Unit and aholder thereof shall not be a Unitholder.Purchase of REIT UnitsBoardwalk REIT may at any time or from time to time purchase for cancellation all or part of theoutstanding REIT Units at a price per REIT Unit and on a basis determined by the Trustees in accordance withapplicable securities legislation and the applicable rules of the stock exchange(s) on which the REIT Units arelisted.REIT Unit Redemption RightREIT Units are redeemable at any time, in whole or in part, on demand by the holders thereof by sendinga notice to Boardwalk REIT at its head office in a form approved by the Trustees and completed and executed in amanner satisfactory to the Trustees, who may require supporting documentation as to identity, capacity orauthority. A Unitholder not otherwise holding a fully registered REIT Unit certificate who wishes to exercise theredemption right will be required to obtain a redemption notice from his or her investment dealer or otherintermediary who will be required to deliver the completed redemption form to Boardwalk REIT. Upon receiptby Boardwalk REIT of a written redemption notice and other documents that may be required, all in a mannersatisfactory to the Trustees, a holder of REIT Units shall cease to have any rights with respect to the tenderedREIT Units (other than to receive the redemption payment therefor), including any right to receive anydistributions thereon which are declared payable to the Unitholders of record on a date which is subsequent to theday of receipt of the redemption notice by Boardwalk REIT and the holder thereof shall be entitled to receive aprice per REIT Unit (the "Redemption Price") equal to the lesser of:(a) 90% of the "market price" of the REIT Units on the principal market on which the REIT Units arequoted for trading on the trading day prior to the day on which the REIT Units were surrendered toBoardwalk REIT for redemption (the "Redemption Date"); and(b) 100% of the "closing market price" of the REIT Units on the principal market on which the REITUnits are quoted for trading on the Redemption Date.For the purposes of this calculation, "market price" in respect of REIT Units will be an amount equal tothe 20-day daily volume weighted average of the closing price of the REIT Units for each of the trading days onwhich there was a closing price; provided that if the applicable exchange or market does not provide a closingprice, but only provides the highest and lowest prices of the REIT Units traded on a particular day, the "marketprice" shall be an amount equal to the average of the highest and lowest prices for each of the trading days onwhich there was a trade; and provided further that if there was trading on the applicable exchange or market forfewer than five of the 20 trading days, the "market price" shall be the average of the following prices establishedfor each of the 20 trading days: (i) the average of the last bid and last asking prices of the REIT Units for each dayon which there was no trading; (ii) the closing price of the REIT Units for each day on which there was trading ifthe exchange or market provides a closing price; and (iii) the average of the highest and lowest prices of the REIT

- 40 -Units for each day that there was trading if the exchange or market does not provide a closing price but providesonly the highest and lowest prices of the REIT Units traded on a particular day.The "closing market price" in respect of REIT Units shall be (i) an amount equal to the closing price ofthe REIT Units if there was a trade on the date and the exchange or market provides a closing price; (ii) anamount equal to the average of the highest and lowest prices of the REIT Units if there was trading and theexchange or other market does not provide a closing price but provides only the highest and lowest trading pricesof the REIT Units traded on a particular day; or (iii) the average of the last bid and last asking prices of the REITUnits if there was no trading on that date.If a Unitholder is not entitled to receive cash upon redemption of REIT Units as a result of the limitationsin sub-paragraphs (b) and (c) below, the Redemption Price will be equal to the fair market value of the REITUnits as determined by the Trustees.The aggregate Redemption Price payable by Boardwalk REIT in respect of any REIT Units tendered forredemption during any calendar month shall be satisfied by way of a cheque drawn on a Canadian chartered bankor a trust company in Canadian funds, payable no later than the last day of the calendar month following themonth in which the REIT Units were tendered for redemption, provided that the entitlement of Unitholders toreceive cash upon the redemption of their REIT Units is subject to the limitations that:(a) the total amount payable by Boardwalk REIT in respect of such REIT Units and all other REIT Unitstendered for redemption in the same calendar month shall not exceed $50,000, provided that theTrustees may, in their sole discretion, waive such limitation in respect of all REIT Units tendered forredemption in any particular calendar month;(b) at the time such REIT Units are tendered for redemption, the outstanding REIT Units shall be listedfor trading or quoted on a stock exchange or market which the Trustees consider, in their solediscretion, provides representative fair market value prices for the REIT Units; and(c) the normal trading of outstanding REIT Units is not suspended or halted on any stock exchange onwhich the REIT Units are listed for trading or, if not so listed, on any market on which the REITUnits are quoted for trading, on the Redemption Date for the REIT Units or for more than five tradingdays during the ten day trading period commencing immediately after the Redemption Date for theREIT Units.If a Unitholder is not entitled to receive cash upon the redemption of REIT Units as a result of theforegoing limitations in sub-paragraphs (b) and (c) above, then each REIT Unit tendered for redemption shall,subject to obtaining all applicable regulatory approvals, be redeemed by way of a distribution in specie of Series 2Notes.The aggregate principal amount of such Series 2 Notes would be equal to the product of (i) theRedemption Price per unit of the REIT Units tendered for redemption; and (ii) the number of REIT Units tenderedby such Unitholder for redemption. No Series 2 Notes in a principal amount of less than $100 will be transferredand, where the principal amount of Series 2 Notes to be received by the former Unitholder upon redemption, inspecie, would otherwise include a principal amount of less than a multiple of $100, such principal amount will berounded down to the next lowest multiple of $100 and the excess shall be paid in cash. The term of such noteswill be 10 years, less a day, subject to earlier repayment at the option of Boardwalk REIT, and they would bearinterest at a market rate determined by the trustees of the Operating Trust at the time of issuance thereof, payableon the 30 th day of each calendar month that such Series 2 Notes are outstanding. In such circumstances, Series 1Notes and Operating Trust Units will be redeemed. The Series 2 Notes issued by the Operating Trust will then bedistributed in satisfaction of the Redemption Price of REIT Units.

- 41 -If a Unitholder is not entitled to receive cash upon the redemption of REIT Units as a result of thelimitation in sub-paragraph (a) above, the holder will receive a combination of cash and subject to obtaining allapplicable regulatory approvals, Series 2 Notes, determined in accordance with the Declaration of Trust.It is anticipated that the redemption right described above will not be the primary mechanism for holdersof REIT Units to dispose of their REIT Units. Operating Trust Notes which may be distributed to Unitholders inspecie in connection with a redemption will not be listed on any stock exchange, no market is expected to developand such securities may be subject to an indefinite "hold period" or other resale restrictions under applicablesecurities laws. The Operating Trust Notes so distributed may not be qualified investments for registeredretirement savings plans ("RRSPs"), registered retirement income funds ("RRIFs"), registered education savingsplans ("RESPs"), deferred profit sharing plans ("DPSPs"), registered disability savings plans (―RDSPs‖) or taxfreesavings accounts (―TFSAs‖)depending upon the circumstances at the time.Special Voting Units will be cancelled for nominal consideration in the event of the surrender, exchangeor sale to Boardwalk REIT of the related LP Class B Units.Meetings of UnitholdersThe Declaration of Trust provides that annual meetings of Unitholders shall be called and held at anyplace in Canada determined by the Trustees for the election of Trustees (other than the BPCL appointee), theappointment or changing of the auditors of Boardwalk REIT, the Operating Trust and the Partnership, andtransacting such other business as the Trustees may determine or as may properly be brought before the meeting.The Trustees shall call and hold special meetings for the approval of amendments to the Declaration ofTrust (except as described below under "Declaration of Trust and Description of REIT Units — Amendments tothe Declaration of Trust and other Documents"), the sale of the assets of Boardwalk REIT as an entirety orsubstantially as an entirety (other than as part of an internal reorganization of the assets of Boardwalk REIT asapproved by the Trustees) or the termination of Boardwalk REIT. The Trustees may submit to a vote ofUnitholders any matter which they deem appropriate. Except with respect to the above-noted matters, or a vote toterminate Boardwalk REIT or such other matters submitted to a vote of Unitholders by the Trustees, no vote ofthe Unitholders will bind Boardwalk REIT or the Trustees in any way. Meetings of Unitholders will be calledand held annually within 180 days after the end of the fiscal year of Boardwalk REIT for the election of theTrustees (except for the BPCL appointee) and appointment of auditors of Boardwalk REIT, the Operating Trustand the Partnership. The first annual meeting of Unitholders was held on May 10, 2005. The last annual meetingof Unitholders was on May 18, 2010.The Trustees have the power at any time to call special meetings of Unitholders at such time and place inCanada as the Trustees determine. Unitholders holding in the aggregate not less than five percent (5%) of thevotes attaching to all outstanding REIT Units (on a fully diluted basis) may requisition the Trustees in writing tocall a special meeting of Unitholders and the Trustees shall, subject to certain limitations, call a meeting ofUnitholders for the purposes stated in the Unitholder requisition. A requisition must state in reasonable detail thebusiness proposed to be transacted at the meeting. Unitholders have the right to obtain a list of Unitholders to thesame extent and upon the same conditions as those which apply to shareholders of a corporation governed by theABCA.Unitholders may attend and vote at all meetings of the Unitholders either in person or by proxy and aproxy holder need not be a Unitholder. Two persons present in person or represented by proxy and representingin the aggregate at least 10% of the votes attaching to all outstanding REIT Units (on a fully diluted basis) shallconstitute a quorum for the transaction of business at all such meetings, provided that if Boardwalk REIT has onlyone Unitholder, such Unitholder present in person or by proxy constitutes a meeting and a quorum for suchmeeting. If no quorum is present at any meeting of Unitholders within 30 minutes after the time fixed for holdingthe meeting, the meeting, if convened on the requisition of Unitholders, will be dissolved and otherwise will be

- 42 -adjourned for not less than ten (10) days, and at the adjourned meeting, the Unitholders then present in person orrepresented by proxy will form the necessary quorum.The Declaration of Trust contains provisions as to the notice required and other procedures with respect tothe calling and holding of meetings of Unitholders.Limitation on Non-Resident OwnershipIn order for Boardwalk REIT to maintain its status as a mutual fund trust under the Tax Act, BoardwalkREIT must not be established or maintained primarily for the benefit of non-residents of Canada within themeaning of the Tax Act ("Non-Residents"). Accordingly, the Declaration of Trust provides that, notwithstandingany provision of the Declaration of Trust to the contrary, at no time may Non-Residents be the beneficial ownersof more than 49% of the REIT Units or the Special Voting Units then outstanding. The Trustees may requiredeclarations as to the jurisdictions in which beneficial owners of REIT Units are resident or declarations fromUnitholders or holders of Special Voting Units as to whether such REIT Units or Special Voting Units, as the casemay be, are held for the benefit of Non-Residents.If the Trustees become aware that the beneficial owners of more than 49% of the REIT Units or theSpecial Voting Units then outstanding are, or may be, Non-Residents or that such a situation is imminent, theTrustees may make a public announcement thereof and shall not accept a subscription for REIT Units or SpecialVoting Units, as the case may be, from or issue or register a transfer of REIT Units or Special Voting Units, as thecase may be, to a person unless the person provides a declaration that he or she is not a Non-Resident and doesnot hold his or her REIT Units or Special Voting Units, as the case may be, for the benefit of a Non-Resident. If,notwithstanding the foregoing, the Trustees determine that more than 49% of the REIT Units or Special VotingUnits then outstanding are beneficially owned by Non-Residents, the Trustees may send a notice to Non-Residentregistered and beneficial holders of REIT Units or Special Voting Units, as the case may be, chosen in inverseorder to the order of acquisition or registration or in such other manner as the Trustees may consider equitable andpracticable, requiring them to sell or redeem their REIT Units or Special Voting Units, as the case may be, or aportion thereof within a specified period of not more than 60 days (unless the Canada Revenue Agency (the"CRA") has confirmed in writing that a longer period is acceptable). If the holders of REIT Units or SpecialVoting Units, as the case may be, receiving such notice have not sold or redeemed the specified number of REITUnits or Special Voting Units, as the case may be, or provided the Trustees with satisfactory evidence that theyare not Non-Residents and do not hold their REIT Units or Special Voting Units, as the case may be, for thebenefit of a Non-Resident within such period, the Trustees may sell or redeem such REIT Units or Special VotingUnits, as the case may be, on behalf of such Non-Resident holder of REIT Units or Special Voting Units, as thecase may be, (and the Trustees shall have the power of attorney of such holders to do so) and, in the interim, thevoting and distribution rights, if any, attached to such REIT Units or Special Voting Units, if any, as the case maybe shall be suspended. Upon such sale, the affected holders shall cease to be holders of the REIT Units or SpecialVoting Units, as the case may be, and their rights shall be limited to receiving the net proceeds of sale uponsurrender of such REIT Units or Special Voting Units, as the case may be.Amendments to the Declaration of Trust and Other DocumentsThe Declaration of Trust may be amended or altered from time to time. Certain amendments (includingthe termination of Boardwalk REIT, an exchange, reclassification or cancellation of all or part of the REIT Unitsor Special Voting Units and the creation of new rights or privileges attaching to the REIT Units and SpecialVoting Units) require approval by at least 66 2/3% of the votes cast at a meeting of Unitholders called for suchpurpose.Other amendments to the Declaration of Trust require approval by a majority of the votes cast at ameeting of the Unitholders called for such purpose.

- 43 -The following amendments require the approval of at least 66 2/3% of the votes cast by all Unitholdersentitled to vote thereon at a meeting called for that purpose:(a) an exchange, reclassification or cancellation of all or part of the REIT Units;(b) the addition, change or removal of the rights, privileges, restrictions or conditions attached to theREIT Units, including, without limiting the generality of the foregoing,(i) the removal or change of rights to distributions; or(ii) the addition or removal of or change to conversion privileges, redemption privileges, voting,transfer or pre-emptive rights;(c) the creation of new rights or privileges attaching to certain of the REIT Units and Special VotingUnits; and(d) any change to the existing constraints on the issue, transfer or ownership of the REIT Units andSpecial Voting Units.In addition, the Declaration of Trust provides that Boardwalk REIT will not agree to or approve anymaterial change to the Limited Partnership Agreement, the Operating Trust Declaration of Trust 13 or the Exchangeand Support Agreement without the approval of at least 66 2/3% of the votes cast at a meeting of Unitholderscalled for such purpose. However, no Unitholder approval is required to approve any change to the LimitedPartnership Agreement for the purposes of providing a distribution reinvestment entitlement to holders of LPClass B Units that is substantially equivalent to that provided by the distribution reinvestment plan thatBoardwalk REIT has adopted (but suspended) pursuant to which holders of REIT Units will be entitled to elect tohave cash Distributions in respect of such units automatically reinvested in additional REIT Units (the"Distribution Reinvestment Plan" or "DRIP") to holders of REIT Units. For more information on the DRIP,including, but not limited to, its suspension, please see the information under the sub-heading ―DistributionPolicy – Distribution Reinvestment Plan‖.Furthermore, Boardwalk REIT may not agree to or approve any change to the provisions of theDeclaration of Trust governing distributions on the REIT Units or Special Voting Units, or the rights andattributes of the LP Class A Units, LP Class B Units or LP Class C Units without the approval of at least 66 2/3%of the votes cast at any meeting of holders of REIT Units or Special Voting Units, as the case may be, called forthat purpose.A majority of all Trustees, including a majority of the Independent Trustees, may, without the approval ofthe Unitholders, make certain amendments to the Declaration of Trust, including amendments:(a) for the purpose of ensuring continuing compliance with applicable laws (including the Tax Act),regulations, requirements or policies of any governmental authority having jurisdiction over (i) theTrustees or Boardwalk REIT; (ii) the status of Boardwalk REIT as a "mutual fund trust", "unit trust"and a "registered investment" under the Tax Act; or (iii) the distribution of REIT Units;(b) which, in the opinion of the Trustees, acting reasonably, are necessary to maintain the rights of theUnitholders set out in the Declaration of Trust;(c) to remove any conflicts or inconsistencies in the Declaration of Trust or to make minor correctionswhich are, in the opinion of the Trustees, necessary or desirable and not prejudicial to theUnitholders;(d) which, in the opinion of the Trustees, are necessary or desirable as a result of changes in taxation orother laws, or accounting standards, or the administration or enforcement thereof;13 ''Operating Trust Declaration of Trust'' means the declaration of trust dated January 9, 2004, as amended and restated onMay 3, 2004, establishing the Operating Trust.

- 44 -(e) for any purpose (except one in respect of which a Unitholder vote is specifically otherwise required)which, in the opinion of the Trustees, is not prejudicial to Unitholders and is necessary or desirable;(f) deemed necessary or desirable to ensure that Boardwalk REIT has not been established normaintained primarily for the benefit of persons who are not resident Canadians; and(g) to implement a distribution reinvestment plan or any amendments to such plan.In no event may the Trustees amend the Declaration of Trust if such amendment would (i) amend theprovisions of the Declaration of Trust governing amendments to same; (ii) amend the Unitholders' voting rights;or (iii) cause Boardwalk REIT to fail or cease to qualify as a "mutual fund trust" or "registered investment" underthe Tax Act.Stock Exchange Listings, Price Range and Trading Volume of REIT UnitsAs at December 31, 2010, there were 47,891,133 REIT Units outstanding and 4,475,000 LP Class BUnits issued and outstanding for a fully diluted REIT Unit capital of 52,366,133 REIT Units.The principal market for the REIT Units is the TSX. The REIT Units are listed on the TSX under thesymbol "BEI.UN." The REIT Units are not listed on the NYSE or elsewhere in the United States and are notregistered under the United States Securities Exchange Act of 1934, as amended.The market price range and trading volume of the REIT Units on the TSX for the periods indicated are setforth in the following table:Price PerREIT UnitYear ending December 31, 2010 High Low VolumeJanuary $37.90 $36.15 1,636,351February $39.78 $36.60 1,807,202March $41.96 $39.27 2,962,177April $43.36 $39.84 1,694,608May $42.26 $37.6 2,228,398June $41.69 $38.02 1,435,337July $42.48 $39.95 1,192,434August $44.90 $40.53 1,352,393September $47.00 $42.35 1,826,560October $47.49 $42.76 1,259,117November $44.69 $40.17 2,177,029December $41.47 $39.75 1,822,728Year ending December 31, 2011January $44.44 $41.02 1,709,324February (through February 16) $45.18 $42.98 630,412The closing price of the REIT Units on the TSX on February 16, 2011 was Cdn. $44.85.TSXSenior Unsecured DebenturesDESCRIPTION OF OTHER SECURITIES AND RATINGSOn January 21, 2005, Boardwalk REIT completed an issuance of senior unsecured debentures (the"Debentures") in the principal amount of $120 million (the "Debenture Offering"). The Debentures were issuedunder, and qualified for resale by, Boardwalk REIT's short form prospectus dated January 14, 2005 (the

- 45 -"Prospectus"). The Debentures are rated "BBB" with a stable trend by Dominion Bond Rating Services and,since July 30, 2008, carry a coupon rate of 5.61%. The Debentures will mature on January 23, 2012. The interestrate on the Debentures was increased effective July 30, 2008 as part of a series of amendments to the terms andconditions governing the Debentures effective the same date. For more information on the above notedamendments to the terms and conditions governing the Debentures, please see the information in BoardwalkREIT‘s Information and Proxy Circular, dated July 7, 2008 and mailed to Debentureholders in connection withthe meeting of held on July 30, 2008 to approve the above noted amendments. All of these documents areavailable in written and electronic versions either from the Trust on request, or at www.sedar.com or the Trust‘sinvestor website at www.boardwalkreit.com. See ―Additional Information‖.Debenture BuybackIn accordance with the board approval obtained in February 2009, the Trust bought back $7.595million face value of Debentures for a cost of $7.187 million in Q1 2009. No Debenture buy backs haveoccurred since March 31, 2009.The following is a summary of the material attributes and characteristics of the Debentures after givingeffect to the above noted amendments of July 30, 2008. The Debentures have been issued pursuant to theprovisions of an indenture dated as of January 21, 2005, as amended and restated by a supplemental trustindenture dated as of July 30, 2008 between the Trust and Computershare Trust Company of Canada (the―Indenture Trustee‖), as trustee (collectively, the "Debenture Indenture"). The following summary does notpurport to be complete and is qualified in its entirety by reference to the provisions in the Debenture Indenture.DefinitionsFor the purpose of the following discussion of certain provisions of the Debenture Indenture, thefollowing terms have the meanings set out below:"Adjusted Consolidated Indebtedness" as at any date means the consolidated Indebtedness of Boardwalk REITas at such date determined, except as otherwise expressly provided in the Debenture Indenture, in accordance withGAAP, plus a one-time adjustment calculated to adjust for the difference between the carrying value ofBoardwalk REIT's debt and the unamortized portion of the fair market value adjustment of Boardwalk REIT'sdebt at the time of the Acquisition and the Arrangement (on the Effective Date this adjustment was $48 million)."Adjusted Gross Book Value" means, at any time, until the Trust elects or is required to report the fair marketvalue of its and its Subsidiaries‘ (defined below) assets on its publicly issued consolidated balance sheet inaccordance with generally accepted accounting principles: (a) the book value of the assets of Boardwalk REITand its Subsidiaries, shown on Boardwalk REIT's then most recent publicly-issued consolidated balance sheet,plus; (b) the amount of accumulated depreciation and amortization in respect of its properties, includingaccumulated amortization of the fair value of tangible and intangible assets recorded on the acquisition ofproperties, shown thereon or in the notes thereto, plus; (c) a one-time adjustment to the carrying value ofBoardwalk REIT's assets of $641 million (consisting of an adjustment of $410 million, plus the originaladjustment of $231 million to the carrying value of the Trust‘s assets determined at the time of the Acquisitionand the Arrangement (this adjustment was based on the difference between the Entity Value and the net bookvalue of Boardwalk REIT and its Subsidiaries and is equal to $231 million))."Adjusted Unitholders' Equity" of Boardwalk REIT, at any time, means the aggregate of: (i) the amount ofunitholders' equity of Boardwalk REIT; and (ii) the amount of accumulated depreciation and amortizationrecorded on the books and records of each of Boardwalk REIT and its Subsidiaries in respect of its properties,including accumulated amortization of the fair value of tangible and intangible assets recorded on the acquisitionof properties, in each case calculated in accordance with GAAP, plus a one-time adjustment calculated to adjustfor the difference between the carrying value of Boardwalk REIT's net assets and the Entity Value at the time of

- 46 -the Acquisition and the Arrangement (this adjustment was based on the difference between the Entity Value andthe net book value of Boardwalk REIT and its Subsidiaries and is equal to $183 million)."Capital Lease Obligation" of any person means the obligation of such person, as lessee, to pay rent or otherpayment amounts under a lease of real or personal property which is required to be classified and accounted for asa capital lease or a liability on a consolidated balance sheet of such person in accordance with GAAP."Change of Control" means the acquisition by a person, or group of persons acting jointly or in concert, of Units(and/or securities convertible into Units) representing (on a diluted basis, but only giving effect to the conversionor exercise of convertible securities held by such person or group of persons) greater than 50% of the Units."Consolidated EBITDA" of Boardwalk REIT for any period means Consolidated Net Income increased by thesum of (i) Consolidated Interest Expense, excluding interest that has been capitalized on projects that are underdevelopment or held for future development, for such period, (ii) tax expense of Boardwalk REIT for such period(including both income tax and large corporations tax other than income taxes, either positive or negative,attributable to extraordinary or non-recurring gains or losses) determined on a consolidated basis in accordancewith GAAP, (iii) amortization of income properties (including provisions for diminution of income properties) forsuch period, determined on a consolidated basis in accordance with GAAP, (iv) amortization of deferred expensesof Boardwalk REIT for such period, determined on a consolidated basis in accordance with GAAP, and (v) othernon-cash items reducing Consolidated Net Income resulting from a change in accounting principles indetermining Consolidated Net Income for such period."Consolidated Interest Expense" of Boardwalk REIT for any period means the aggregate amount of interestexpense of Boardwalk REIT in respect of Indebtedness, Capital Lease Obligations, the original issue discount ofany Indebtedness issued at a price less than the face amount thereof paid, accrued or scheduled to be paid oraccrued by Boardwalk REIT during such period and, to the extent interest has been capitalized on projects that areunder development or held for future development during the period, the amount of interest so capitalized, all asdetermined on a consolidated basis in accordance with GAAP (provided that, notwithstanding its presentationunder GAAP, all interest expense of Boardwalk REIT in respect of convertible debt Indebtedness will be included(without duplication) and all amortized deferred financing charges will be excluded in determining ConsolidatedInterest Expense)."Consolidated Net Income" of Boardwalk REIT for any period means the net income (loss) of Boardwalk REITfor such period determined on a consolidated basis in accordance with GAAP, excluding (i) any gain or loss (netof any tax impact) attributable to the sale or other disposition of any asset of Boardwalk REIT, other than the saleor disposition of income properties held for resale, (ii) any extraordinary gains and losses of Boardwalk REIT,determined on a consolidated basis in accordance with GAAP and (iii) other nonrecurring items."Debt Securities" means unsecured debt securities of Boardwalk REIT issued from time to time pursuant to theDebenture Indenture."Entity Value" means the amount determined by multiplying the total number of Units issued and outstanding(on a fully diluted basis, including, without limitation, Units issuable on the exchange of units of interest in thePartnership designated as "LP Class B Units") by the 10 day weighted average trading price of the Units on theTSX for the 10 trading days immediately following the effective date of the Acquisition and Arrangement, whichwas $15.95 per Unit for a total of $849 million;"Extraordinary Resolution" means, for any series of Debt Securities, instruments in writing signed by theholders of not less than 66 2/3% (or 75% in certain events as described under "Modification and Waiver") of theaggregate outstanding principal amount of such series of Debt Securities or a resolution passed as anExtraordinary Resolution by the affirmative vote of the holders of not less than 66 2/3% (or 75% in certain eventsas described under "Modification and Waiver") of the aggregate outstanding principal amount of such series ofDebt Securities represented and voting at a meeting of holders of such series of Debt Securities duly convened

- 47 -and held in accordance with the Debenture Indenture, all upon compliance with the procedures specified in theDebenture Indenture.―GAAP‖ means, as at any date of determination, generally accepted accounting principles in effect in Canada asof January 21, 2005."Indebtedness" of any person means (without duplication), on a consolidated basis, (i) any obligation of suchperson for borrowed money (including, for greater certainty, the full principal amount of convertible debt,notwithstanding its presentation under GAAP), (ii) any obligation of such person incurred in connection with theacquisition of property, assets or businesses, (iii) any obligation of such person issued or assumed as the deferredpurchase price of property, (iv) any Capital Lease Obligation of such person, and (v) any obligations of the typereferred to in clauses (i) through (iv) of another person, the payment of which such person has guaranteed or forwhich such person is responsible or liable; provided that, for the purpose of clauses (i) through (v) (except inrespect of convertible debt, as described above), an obligation will constitute Indebtedness only to the extent thatit would appear as a liability on the consolidated balance sheet of such person in accordance with GAAP.Obligations referred to in clauses (i) through (iii) exclude (i) trade accounts payable, (ii) distributions payable toUnitholders, (iii) accrued liabilities arising in the ordinary course of business which are not overdue or which arebeing contested in good faith, (iv) indebtedness with respect to the unpaid balance of instalment receipts, wheresuch indebtedness has a term not in excess of 12 months, (v) intangible liabilities and (vi) deferred revenues, all ofwhich will be deemed not to be Indebtedness for the purposes of this definition."Material Subsidiary" means, at any date, any Subsidiary which constitutes more than 5% of the AdjustedUnitholders' Equity calculated as at such date."Non-Recourse Indebtedness" means any Indebtedness of a Subsidiary of Boardwalk REIT which is a singlepurpose entity or whose principal assets and business are constituted by a particular project and pursuant to theterms of which Indebtedness payment is to be made from the revenues arising out of such project with recoursefor such payment being available only to the revenues or the assets of such single purpose entity or the project."Subsidiary" means, with respect to any person (other than an individual), any other person (other than anindividual) the financial results of which would be required to be consolidated with those of the first person's inthe preparation of the first person's consolidated financial statements if prepared in accordance with GAAP."Units" means units of the REIT outstanding from time to time, including both REIT Units and special votingunits.GuaranteeAll current and future subsidiaries of the Trust which own material assets have provided a guarantee ofthe Debentures. In the case of default by Boardwalk REIT, the Indenture Trustee will, subject to the DebentureIndenture, seek redress from such subsidiaries for the guaranteed indebtedness. These guarantees are intended toeliminate structural subordination which arises as a consequence of Boardwalk REIT's assets being held invarious subsidiaries. See "Risk Factors – Structural Subordination of Debentures".RankThe Debentures are direct senior unsecured obligations of Boardwalk REIT and rank equally and rateablywith one another and with all other unsecured and unsubordinated Indebtedness of Boardwalk REIT except forsinking fund provisions (if any) applicable to different series of Debt Securities or other obligations of BoardwalkREIT, except to the extent prescribed by law.Redemption by Boardwalk REITAt its option, Boardwalk REIT may redeem the Debentures, in whole or in part, at any time and from timeto time, on payment of a redemption price equal to the greater of (i) the Canada Yield Price and (ii) par, together

- 48 -in each case with accrued and unpaid interest to the date fixed for redemption. Boardwalk REIT will give noticeof redemption at least 30 days but not more than 60 days before the date fixed for redemption. Where less than allof the Debentures are to be redeemed pursuant to their terms, the Debentures to be so redeemed will be redeemedon a pro rata basis according to the principal amount of Debentures registered in the respective name of eachholder of Debentures or in such other manner as the Indenture Trustee may consider equitable.For the purposes of the foregoing provisions, the following terms are defined in the Debenture Indenturesubstantially as follows:"Canada Yield Price" means a price equal to the price of the Debentures calculated to provide a yield tomaturity, compounded semi-annually and calculated in accordance with generally accepted financial practice,equal to the Government of Canada Yield on the business day preceding the date on which Boardwalk REIT givesnotice of redemption of the Debentures pursuant to the Debenture Indenture plus 0.32%."Government of Canada Yield" on any date means the yield to maturity on such date, compounded semiannuallyand calculated in accordance with generally accepted financial practice, which a non-callableGovernment of Canada bond would carry if issued, in Canadian dollars in Canada, at 100% of its principalamount on such date with a term to maturity equal to the remaining term to maturity of the Debentures, calculatedas of the redemption date of the Debentures, such yield to maturity being the average of the yields provided bytwo major Canadian investment dealers selected by Boardwalk REIT.Purchase of Debt SecuritiesProvided no Event of Default (as defined below) has occurred and is continuing, Boardwalk REIT may atany time and from time to time purchase Debentures in the market (which includes purchases from or through aninvestment dealer or a firm holding membership on a recognized stock exchange) or by tender or private contractat any price. Debentures that are so purchased will be cancelled and will not be reissued or resold.Certain Debenture Indenture CovenantsThe Debenture Indenture contains covenants substantially to the following effect in favour of holders ofthe Debentures:Maintenance of PropertiesBoardwalk REIT will maintain and keep or cause to be maintained and kept in good condition, repair andworking order all of the properties owned by it or any of its Subsidiaries used in its business or in the business ofany of its Subsidiaries. Boardwalk REIT will make or cause to be made all necessary repairs and renewals to andreplacements and improvements of these properties as in its sole discretion may be necessary to carry on itsbusiness properly and prudently. Notwithstanding the foregoing, Boardwalk REIT and its Subsidiaries will not beprohibited from selling or transferring their properties in the ordinary course of business:InsuranceBoardwalk REIT will maintain and will cause its Subsidiaries to maintain such property and liabilityinsurance as would be maintained by a prudent owner;Restrictions on Consolidations and MergersBoardwalk REIT may not consolidate with, amalgamate or merge with or into or sell, assign, transfer orlease all or substantially all of its properties and assets unless:(a) the entity formed by such consolidation or amalgamation or into which Boardwalk REIT is merged orthe entity which acquires by operation of law or by conveyance or by transfer the assets of Boardwalk

- 49 -REIT substantially as an entirety is a corporation or unincorporated organization organized or existingunder the laws of Canada or any province or territory thereof and (except where such assumption isdeemed to have occurred solely by the operation of law) such entity assumes under a supplementalindenture all the obligations of Boardwalk REIT under the Debenture Indenture, any supplementalindenture and the Debt Securities and such transaction to the satisfaction of the Indenture Trustee andin the opinion of counsel will be on such terms to preserve and not impair any of the rights andpowers of the Indenture Trustee and the holders of Debt Securities;(b) immediately before and immediately after giving effect to such transaction, no Event of Default hasoccurred and is continuing; and(c) immediately after giving effect to such transaction, the surviving entity could incur at least $1.00 ofadditional Indebtedness.Consolidated EBITDA to Consolidated Interest Expense RatioFrom and as of July 30, 2008, Boardwalk REIT will maintain a ratio of Consolidated EBITDA toConsolidated Interest Expense of not less than 1.75 to 1;Restrictions on Additional IndebtednessBoardwalk REIT will not incur or assume, or permit any Subsidiary to incur or assume, any Indebtedness(other than the renewal or refinancing of Indebtedness outstanding from time to time) unless the quotient(expressed as a percentage) obtained by dividing the Adjusted Consolidated Indebtedness by Adjusted GrossBook Value, calculated on a pro forma basis as described below (the "Indebtedness Percentage"), would be:(a) prior to the date when the Trust elects or is required to report the fair value of its and its Subsidiaries‘assets on its publicly issued consolidated balance sheet in accordance with IFRS, less than or equal to70%; or(b) on or following the date on which the Trust elects or is required to report the fair value of its and itsSubsidiaries‘ assets on its publicly issued consolidated balance sheet in accordance with IFRS, lessthan or equal to 60%.The Debenture Indenture provides that the Indebtedness Percentage be calculated on a pro forma basis asat the date of Boardwalk REIT's most recently published balance sheet (the "Balance Sheet Date") giving effectto the incurrence of the Indebtedness to be incurred or assumed and the application of the proceeds therefrom andto any other event that has increased or decreased Adjusted Consolidated Indebtedness or Adjusted Gross BookValue since the Balance Sheet Date to the date of calculation; andEquity MaintenanceBoardwalk REIT will maintain at all times, an Adjusted Unitholders' Equity of at least $300 million.Events of DefaultThe Debenture Indenture provides that each of the following events will constitute an event of default(each, an "Event of Default") in respect of the Debentures:(a) default in payment of principal when due;(b) default in payment of amounts owing pursuant to a Change of Control when due;(c) default in payment of any interest when due where such default continues for a period of threebusiness days after the relevant interest payment date;

- 50 -(d) a breach of or default in the performance of any other covenant of Boardwalk REIT under theDebenture Indenture, the Debentures or a supplemental indenture in connection with that series ofDebt Securities where such default or breach continues for a period of 30 days after the IndentureTrustee has given notice in writing to Boardwalk REIT specifying the nature of such breach ordefault, and requiring that it be remedied unless the Indenture Trustee (having regard to the subjectmatter of such breach or default) agrees to a longer period, and in such event within the period agreedto by the Indenture Trustee;(e) certain events of bankruptcy, insolvency, winding up or dissolution related to Boardwalk REIT or aMaterial Subsidiary as set out in the Debenture Indenture;(f) the rendering of a final judgment or judgments (not subject to appeal) against Boardwalk REIT or anyMaterial Subsidiary in an aggregate amount in excess of $25 million by a court or courts of competentjurisdiction, which remains or remain undischarged and unstayed for a period of 60 days after the dateon which the right to appeal has expired; and(g) default by Boardwalk REIT or any Material Subsidiary under the terms of any Indebtedness (otherthan any Non-Recourse Indebtedness) where that default results in the acceleration of thatIndebtedness (after expiration of any applicable grace period) unless such acceleration is waived orrescinded; provided that the aggregate of all such Indebtedness which is accelerated exceeds $25million.If an Event of Default (other than an Event of Default described in paragraph (d) above) occurs and iscontinuing, either the Indenture Trustee or the holders of at least 25% in aggregate principal amount of theoutstanding Debentures may accelerate the maturity of all Debentures; provided that, notwithstanding any otherprovisions of the Debenture Indenture, any supplemental indenture or any Debt Securities, after such acceleration,but before a judgment or decree based on acceleration, the holders of a majority in aggregate principal amount ofoutstanding Debentures may rescind and annul such acceleration in certain circumstances described in theDebenture Indenture. See "Modification and Waiver" below. If an Event of Default specified in paragraph (d)above occurs, the outstanding Debentures will become immediately due and payable without any declaration orother act on the part of the Indenture Trustee or any holder of Debentures. If the maturity of the Debentures hasbeen accelerated, legal action against Boardwalk REIT may be authorized by an Extraordinary Resolution of theholders of the Debentures.Change of ControlIn the event of a Change of Control, the holders of Debentures will have the right to require BoardwalkREIT to repurchase their Debentures, in whole or in part, at a price of (i) 101% of the principal amount of suchDebentures plus; and (ii) all accrued interest to the date of repurchase.DefeasanceThe Debenture Indenture contains provisions requiring the Indenture Trustee to release Boardwalk REITfrom its obligations under the Debenture Indenture provided that, among other things, Boardwalk REIT satisfiesthe Indenture Trustee that it has deposited funds or made due provision for the payment of (i) the expenses of theIndenture Trustee and (ii) all principal, premium (if any), interest and other amounts due or to become due inrespect of the Debentures.Modification and WaiverThe rights of the holders of Debentures may be modified if authorized by Extraordinary Resolution.The approval threshold for an Extraordinary Resolution will generally be 66 2/3 % but will be 75% for thefollowing: (a) to change the stated maturity of the principal or redemption price of or any premium or instalment

- 51 -of interest on, the Debentures, (b) to reduce the principal amount of, or interest or premium (if any) on, theDebentures, (c) to change the place or currency of payment of the principal of, premium (if any) on redemptionprice of or interest on, the Debentures or (d) to amend the percentage of Debentures necessary to approve anExtraordinary Resolution.Subject to certain rights of the Indenture Trustee as provided in the Debenture Indenture, the holders of amajority of the outstanding principal amount of the Debentures, on behalf of all holders of Debentures, may waivecertain Events of Default under the Debenture Indenture with respect to the Debentures.Financial InformationBoardwalk has covenanted in the Debenture Indenture to deliver to the Indenture Trustee its auditedannual financial statements and unaudited interim financial statements at such time as such statements aredelivered to Canadian securities regulators.Credit RatingDBRS provides credit ratings of debt securities for commercial entities. A credit rating generally providesan indication of the risk that the borrower will not fulfill its full obligations in a timely manner with respect toboth interest and principal commitments. Rating categories range from highest credit quality (generally AAA) tovery highly speculative (generally C). DBRS has provided Boardwalk REIT with a credit rating of BBB with astable trend relating to the Debentures. A credit rating in the BBB category is generally an indication of adequatecredit and investment quality as defined by DBRS. A rating outlook, expressed as a positive, stable or negativetrend, provides an opinion regarding the likely direction of any medium term rating actions. The credit ratingaccorded to the Debentures is not a recommendation to purchase, hold or sell the Debentures. There can be noassurance that any rating will remain in effect for any given period of time or that any rating will not bewithdrawn or revised by DBRS at any time. Accordingly, the reader should not place undue reliance on the creditrating and should not rely on the credit rating as of any date other than as noted on the cover page of this AIF.Stability RatingDBRS provides stability ratings for real estate investment trusts. DBRS has assigned a stability rating ofSTA-3 (high) to the Trust. This stability rating is based on a rating scale developed by DBRS that provides anindication of both the stability and sustainability of a real estate investment trust's distributions per unit. Ratingcategories range from STA-1 to STA-7, with STA-1 being the highest. DBRS further separates the ratings intohigh, middle and low to indicate where within the ratings category they fall. Ratings take into considerationseven main factors of (i) operating and industry characteristics; (ii) asset quality; (iii) financial flexibility; (iv)diversification; (v) size and market position; (vi) sponsorship/governance; and (vii) growth. In addition,consideration is given to specific structural or contractual elements that may eliminate or mitigate risks or otherpotential negative factors. Income funds rated STA-3 (high) are considered by DBRS to be investment qualityand have good stability and sustainability of distributions per unit. A stability rating is not a recommendation tobuy, sell or hold securities and is subject to revision or withdrawal by DBRS at any time. Accordingly, the readershould not place undue reliance on a stability rating and should not rely on the Trust's stability rating as of anydate other than as noted on the cover page of this AIF.CHALLENGES AND RISKSThis section includes an analysis of Boardwalk REIT's financial liquidity and identifies the risk factorsand the management of such risks relating to Boardwalk REIT and its business. There are other risk factors to aninvestment in REIT Units not associated with investments in Common Shares that include, but are not limited tothe following:

- 52 -Boardwalk REIT, like most real estate rental entities, is exposed to a variety of risk areas. These areas arecategorized between general and specific risks. General risks are the risks associated with general conditions inthe real estate sector, and consist mainly of commonly exposed risks that affect the real estate industry. Specificrisks focus more on risks uniquely identified with the Trust, such as credit, market, liquidity and operational risks.The following will address each of these risks. In addition, this section should be read in conjunction with theTrust's management discussion and analysis of financial condition and results of operations for the year endedDecember 31, 2010. See "Additional Information".Risks Due to Investment in Real EstateReal property investments are subject to varying degrees of risk depending on the nature of the Property.The yields available from investments in real estate depend upon the amount of revenues generated and expensesincurred. These risks include changes in general economic conditions (such as the availability and cost ofmortgage funds), local conditions (such as an oversupply of space or a reduction in demand for real estate in thearea), government regulations (such as new or revised residential tenancy legislation), the attractiveness of theproperties to tenants, competition from others with available space and the ability of the owner to provideadequate maintenance at an economic cost. If properties do not generate revenues sufficient to meet operatingexpenses, including debt service and capital expenditures, Boardwalk REIT's results from operations and abilityto make distributions to its Unitholders will be adversely affected. The performance of the economy in each ofthe areas in which the properties are located affects occupancy, market rental rates and expenses. These factorsconsequently can have an impact on revenues from the properties and their underlying values. The financialresults and labour decisions of major local employers may also have an impact on the revenues from and value ofcertain properties.Other factors may further adversely affect revenues from and values of our properties. These factorsinclude the general economic climate, local conditions in the areas in which properties are located, such as anoversupply of apartment units or a reduction in the demand for apartment units, the attractiveness of the propertiesto residents, competition from other multifamily communities and our ability to provide adequate facilitiesmaintenance, services and amenities. Our revenues would also be adversely affected if residents were unable topay rent or we were unable to rent apartments on favourable terms. If we were unable to promptly relet or renewthe leases for a significant number of apartment units, or if the rental rates upon renewal or reletting weresignificantly lower than expected rates, then our funds from operations would, and our ability to make expecteddistributions to our Unitholders and to pay amounts due on our debt may, be adversely affected. There is also arisk that as leases on the properties expire, residents will vacate or enter into new leases on terms that are lessfavourable to us. Operating costs, including real estate taxes, insurance and maintenance costs, and mortgagepayments, if any, do not, in general, decline when circumstances cause a reduction in income from a property. Wecould sustain a loss as a result of foreclosure on the property, if a property is mortgaged to secure payment ofindebtedness and we were unable to meet our mortgage payments. In addition, applicable laws, including taxlaws, interest rate levels and the availability of financing also affect revenues from properties and real estatevalues.Currently, we operate in Canada, in the provinces of British Columbia, Alberta, Saskatchewan, Ontarioand Quebec. Neither of Alberta and Saskatchewan is subject to rent control legislation; however, under Albertalegislation a landlord is only entitled to increase rents once every year. See "Challenges and Risks – Rent ControlRisks".Certain significant expenditures, including property taxes, maintenance costs, mortgage payments,insurance costs and related charges, must be made regardless of whether or not a property is producing sufficientincome to service these expenses.The Trust's properties are subject to mortgages, which require significant debt service payments. If theTrust were unable or unwilling to meet mortgage payments on any property, losses could be sustained as a resultof the mortgagee's exercise of its rights of foreclosure or of sale. Real estate is relatively illiquid. Such illiquidity

- 53 -will tend to limit the Trust's ability to vary its portfolio promptly in response to changing economic or investmentconditions. In addition, financial difficulties of other property owners resulting in distress sales may depress realestate values in the markets in which the Trust operates.Illiquidity of Real Estate and Reinvestment Risk may Reduce Economic Returns to Investors.Real estate investments are relatively illiquid and, therefore, tend to limit our ability to adjust ourportfolio in response to changes in economic or other conditions. To affect our current operating strategy, we havein the past raised, and will seek to continue to raise additional funds, both through outside financing and throughthe orderly disposition of assets that no longer meet our investment criteria. Depending upon interest rates, currentdevelopment and acquisition opportunities and other factors, generally we will reinvest the proceeds in additionalmultifamily properties, although such funds may be employed in other uses. In the markets we have targeted forfuture acquisition of multifamily properties, there is considerable buying competition from other real estatecompanies, some of which may have greater resources, experience or expertise than we. In many cases, thiscompetition for acquisition properties has resulted in an increase in property prices and a decrease in propertyyields.Adverse Changes in Laws may Affect our Potential Liability Relating to our Properties and our Operations.Increases in real estate taxes and income, service and transfer taxes cannot always be passed through toresidents or users in the form of higher rents, and may adversely affect our cash available for distribution and ourability to make distributions to our Unitholders and to pay amounts due on our debt. Similarly, changes orinterpretations of existing laws increasing the potential liability for environmental conditions existing onproperties or increasing the restrictions on discharges or other conditions, as well as changes in laws affectingdevelopment, construction and safety requirements, may result in significant unanticipated expenditures, whichcould have a material adverse effect on us and our ability to make distributions to our shareholders and payamounts due on our debt. In addition, future enactment of rent control or rent stabilization laws or other lawsregulating multifamily housing may reduce rental revenues or increase operating costs.Multi-Family Residential Sector RiskIncome producing properties generate income through rent payments made by tenants of the properties.Upon the expiry of any lease, there can be no assurance that the lease will be renewed or the tenant replaced. Theterms of any subsequent lease may be less favourable to the Trust than the existing lease. To mitigate this risk, theTrust does not have any one or small group of significant tenants. Each operating lease signed is for a period of 12months or less. The Trust is dependent on leasing markets to ensure vacant residential space is leased, expiringleases are renewed and new tenants are found to fill vacancies.While it is not expected that markets will significantly change in the near future, a disruption in theeconomy could have a significant impact on how much space tenants will lease and the rental rates paid bytenants. This would affect the income produced by the Trust's properties as a result of downward pressure onrents.Environmental RisksAs an owner and manager of real property, the Trust is subject to various Canadian federal, provincial,and municipal laws relating to environmental matters.These laws could encumber the Trust with liability for the costs of removal and remediation of certainhazardous substances or wastes released or deposited on or in its properties or disposed of at other locations. Thefailure to remove or remediate such substances, if any, could adversely affect the Trust's ability to sell its realestate, or to borrow using real estate as collateral, and could potentially also result in claims or other proceedingsagainst the Trust. Although the Trust is not aware of any material non-compliance with environmental laws at

- 54 -any of its properties nor is it aware of any pending or threatened investigations or actions by environmentalregulatory authorities in connection with any of its properties or any material pending or threatened claimsrelating to environmental conditions at its properties, no assurance can be given that environmental laws will notresult in significant liability to the Trust in the future or otherwise adversely affect the Trust's business, financialcondition or results of operations.The Trust has formal policies and procedures to review and monitor environmental exposure. The Trusthas made, and will continue to make, the necessary capital expenditures for compliance with environmental lawsand regulations.Environmental laws and regulations can change rapidly and may become subject to more stringentenvironmental laws and regulations in the future. Compliance with more stringent environmental laws andregulations could have a material adverse effect on the Trust's business, financial condition or results of operation.Ground Lease RiskFive (5)of the Trust's properties located in Calgary (1), Banff (1), Edmonton (1) and Montreal (2) aresubject to long-term ground leases and similar arrangements in which the underlying land is owned by a thirdparty and leased to the Trust. Under the terms of a typical ground lease, the lessee must pay rent for the use of theland and is generally responsible for all costs and expenses associated with the building and improvements.Unless the lease term is extended, the land together with all improvements made will revert to the owner of theland upon the expiration of the lease term. These leases are set to expire between 2028 and 2096.The ground lease for the largest Montreal property, the Nun's Island portfolio, is also subject to a rentrevision clause, which commenced in 2008 (with a valuation date of March 16, 2008). It is phased in on aproperty-by-property basis through to December 19, 2014, and is based on 75% of the land value in its currentuse. After that revision, the land rent will remain constant thereafter through to 2064. An event of default by theTrust under the terms of a ground lease could also result in a loss of the property subject to such ground leaseshould the default not be rectified in a reasonable period of time. The Trust is not aware of any default under theterms of its ground leases.Competition RiskEach segment of the real estate business is competitive. Numerous other residential developers andapartment owners compete in seeking tenants. Although the Trust's strategy is to own multi-family properties inpremier locations in each market in which it operates, some of the apartments of the Trust's competitors may benewer, better located or better capitalized. The existence of alternative housing could have a material adverseeffect on the Trust's ability to lease space in its properties and on the rents charged or concessions granted, andcould adversely affect The Trust's revenues and its ability to meet its obligations.General Uninsured LossesThe Trust carries comprehensive general liability, fire, flood, extended coverage and rental loss insurancewith policy specifications, limits and deductibles customarily carried for similar properties. There are, however,certain types of risks (generally of a catastrophic nature such as war or environmental contamination), which areeither uninsurable or not economically insurable.The Trust currently has insurance for earthquake risks, subject to certain policy limits, deductibles andself-insurance arrangements, and will continue to carry such insurance if it is economical to do so. Should anuninsured or underinsured loss occur, the Trust could lose its investment in, and anticipated profits and cash flowsfrom, one or more of its properties, and would continue to be obligated to repay any recourse mortgageindebtedness on such properties.

- 55 -Credit RiskCredit risk is the risk of loss due to failure of a contracted customer to fulfill the obligation of requiredpayments. The key credit risk to the Trust is the possibility that its customers will be unable or unwilling to fulfilltheir lease term commitments. Due to the very nature of the business of renting multi – family residentialapartment units, credit risk is not deemed to be very high. The Trust currently has approximately 35,365 rentalapartment units each of which has a separate lease. To further mitigate this risk, the Trust continues to diversifyits portfolio to various major centers across Canada. Further, each of the Trust's rental units has its own individuallease agreement, thus the Trust has no material financial exposure to any particular customer or group ofcustomers.The Trust continues to utilize extensive screening processes for all potential customers including, but notlimited to, detailed credit checks.Market RiskMarket Risk is the risk that the Trust could be adversely affected due to market changes in productsupply, interest rates and regional rent controls. The Trust's principal exposures to market risk are in the areas ofnew multi-family housing supply, changes to rent controls, utility price increases, property tax increases, higherinterest rates and mortgage renewal risk.Supply RiskSupply Risk is the risk that the Trust would be negatively affected by the new supply of, and demand for,multi-family residential units in its major market areas. Key drivers of demand include employment levels,population growth, demographic trends and consumer confidence. Any significant amount of new constructionwill typically result in an imbalance in supply and cause downward price pressure on rents.There are currently no signs of significant new rental construction in any of the Trust's existing markets.Studies have shown that in order to economically justify new rental construction in Boardwalk REIT's majormarkets, an increase in existing rental rates of hundreds of dollars will be necessary. However, in certain marketareas such as Calgary, Alberta there has been a significant increase in the number of new condominiumsconstructed over the past few years. While these normally are earmarked as owner-occupied properties, asignificant number of these condominium units have been, or may be, converted to rental stock.Our performance will always be affected by the supply and demand for multi-family rental real estate inCanada. The potential for reduced rental revenue exists in the event that Boardwalk REIT is not able to maintainits properties at a high level of occupancy, or in the event of a downturn in the economy, which could result inlower rents or higher vacancy rates. Boardwalk REIT has minimized these risks by:• Increasing customer satisfaction;• Diversifying its portfolio across Canada, particularly with the expansion into the eastern market and, morerecently, British Columbia, thus lowering its exposure to regional economic swings;• Acquiring properties only in desirable locations, where vacancy rates for properties are higher than citywideaverages but can be reduced by repositioning the properties through better management andselective upgrades;• Holding a balanced portfolio which includes a variety of multi-family building types including high-rise,townhouse, garden and walk-ups, each with its own market niche;• Maintaining a wide variety of suite mix, including bachelor suites, one, two, three and four-bedroomunits;• Building a broad and varied customer base, thereby avoiding economic dependence on larger-scaletenants;• Focusing on affordable multi-family housing, which is considered a stable commodity;

- 56 -• Developing a specific rental program characterized by rental adjustments that are the result of enhancedservice and superior product; and• Developing regional management teams with significant experience in the local marketplace, andcombining this experience with our existing operations and management expertise.Interest RiskInterest risk is the combined risk that the Trust would experience a loss as a result of its exposure to ahigher interest rate environment (interest rate risk) and the possibility that at the term end of a mortgage the Trustwould be unable to renew the maturing debt either with the existing or an additional lender (renewal risk)Interest risk is the one area where, over the 2010 fiscal year, Boardwalk has seen the highest increase inexposure. With the current world economic and financial crisis, there is a heightened risk that not only willexisting maturing mortgages be subject to increased interest rate charges, but the distinct possibility also existsthat maturing mortgages will themselves not be able to be renewed or, if they are, at significantly lower loan tovalue ratios.The Trust manages its interest rate risk by maintaining a balanced maturing portfolio with no significantamount coming due in any one particular period. In addition, the majority of the Trust's debt is insured with NHAinsurance. This insurance allows the Trust to increase the overall credit quality of the mortgage and, as such,enable the Trust to obtain preferential interest rates. The majority of the Trust's mortgage debt is financed forperiods ranging between three (3) and seven (7) years.The use of NHA insurance also assists the Trust in managing its renewal risk. Given the increased creditquality of such debt, the probability of the Trust being unable to renew the maturing debt or transfer this debt toanother accredited lending institution is significantly reduced. However, there can be no assurance that therenewal of debt will be on as favourable terms as the Trust's existing debt.To date, the Trust has had no problem obtaining renewals on maturing mortgages and, in addition, whererequested, additional funds continue to be available to the Trust on these properties. Although the Trust has seena significant increase in the quoted interest spread over the corresponding bench mark bonds, the all in quotedrates, due to the significant decrease in the benchmark bonds, continue to be at levels well below the existinginterest rates and, as such, are accretive to the Trust as a whole.The Trust continues to monitor this situation on a daily basis and may adjust its strategy given the marketconditions.The Trust also manages its interest rate risk by, on a selective basis, forward contracting with a majorfinancial institution to hedge the Trust's exposure to Canadian bond yield fluctuations. When the Trust financesits secured mortgage portfolio, the new interest rate is based on the market yield of the correspondingGovernment of Canada Bond plus what is referred to as a "spread". Although the market spread on thesetransactions will vary, the one constant is the specific bond that the Trust will be using as the underlying basis. Intotal, the transaction, which was comprised of bond forward contracts on specific mortgages set to mature and tobe renewed in 2008, was for a total nominal amount of $101.6 million with a weighted average term and interestrate of 7.2 years and 3.63%, respectively. Subsequent to entering into this transaction, the Trust initiated changesto the terms of one of the contracts, with a nominal amount of approximately $21.8 million, and negotiated asettlement loss of $100 thousand related to these changes. Boardwalk REIT assessed this one particular bondforward contract as no longer being an effective hedge and payment of this $100 thousand settlement loss wasincluded as part of the financing costs in the quarter ended March 31, 2008.During the second quarter ended June 30, 2008, the remaining bond forward contracts in the transactionwere settled. Except for one of the contracts, all remaining contracts were assessed to be ineffective hedges andthe net settlement loss of $168 thousand was included in financing costs for the quarter. The bond forwardcontract assessed to be an effective hedge was settled for a loss of $284 thousand, which will be amortized over

- 57 -the term of the new financing. As of December 31, 2010, the unamortized amount of this effective hedge was$201 thousand.During the first quarter of 2009, Boardwalk REIT entered into an interest rate swap agreement on themortgages of specific properties within its portfolio in an effort to hedge the variability in cash flows attributed tofluctuating interest rates. These interest rate swap agreements were designated as cash flow hedges on March 11,2008. The effective date of the hedges was May 1, 2008, and will continue to be designated as such until the dateof maturity on May 1, 2015. Hedge accounting has been applied to these agreements in accordance with CICAHandbook section 3865.Boardwalk REIT has determined that there is no ineffectiveness in the hedging of its interest rateexposure. The effectiveness of the hedging relationship will be reviewed on a quarterly basis and measured at fairvalue. Any gains or losses which arise as a result of the ―effectiveness‖ of the hedge will be recognized in OtherComprehensive Income (―OCI‖). The ineffective portion of the hedging gain or loss on the swap transaction willbe recognized immediately in net earnings. On recognition of the financial liability of the hedged item on thebalance sheet, the associated gains or losses that were recognized in OCI will be reclassified into net earnings inthe same period or periods during which the interest payments of the hedged item affect net earnings. However, ifall or a portion of the net loss recognized in OCI will not be recovered in one or more future periods, this amountwill be immediately reclassified into net earnings.As at December 31, 2010, the interest rate swap agreement was assessed to be an effective hedge and,consistent with the previous quarter, any gains or losses on the interest rate swap agreement were recognized inearnings in the periods during which the interest payments on the hedged items were recognizedIn addition, the Trust also maintains a reasonable level of liquidity to assist in the implementation of itsstrategy, as well as to provide a contingency for any unforeseen circumstances. At December 31, 2010 the Trust‘sLiquidity position, defined as ―Cash Available‖, coupled with any unused revolving credit facilities, totaled over$425.2 million.Development RiskAs previously noted under the heading "Strategy for Growth", the Trust is reviewing and consideringdevelopment of new selective multi-family or condominium projects on its excess density. Although this reviewand consideration is in a very preliminary stage, any development commitments made by the Trust will be subjectto those risks usually attributable to development projects, which include:(i)(ii)(iii)(iv)construction or other unforeseeable delays;cost overruns;poor market for sales; and/orthe failure of tenants to occupy and pay rent.Such risks are minimized through the provisions of the Declaration of Trust, which have the effect oflimiting direct and indirect investments (net of related mortgage debt) in non-income producing properties to nomore than 15% of the Adjusted Unitholders' Equity. Such developments will also likely be undertaken withestablished developers either on a co-ownership basis or, less likely, by providing them with mezzanine financing.With some exceptions, from time to time, especially in high growth markets, generally we will not acquire or fundsignificant expenditures for undeveloped land unless it is zoned and an acceptable level of space has been presold.An advantage of new format multi-family or condominiums is that they lend themselves to phasedconstruction keyed to vacancy rates and/or sales levels, respectively, which avoids the creation of meaningfulamounts of vacant space.

- 58 -Rent Control RiskRent Control Risk is the risk of the implementation or amendment of new or existing legislative rentcontrols in the markets the Trust operates, which may have an adverse impact on the Trust's operations. Ontario,British Columbia and Quebec, all of which currently have rent control legislation, are three markets in which theTrust operates.Under Ontario's rent control legislation, commonly known as "rent de-control", a landlord is entitled toincrease the rent for existing tenants once every 12 months by no more than the "guideline amount" establishedby regulation. For the calendar year 2011, the guideline amount has been established at 0.7% (2.1% for 2010).This adjustment is meant to take into account the income of the building and the municipal and school taxes, theinsurance bills, the energy costs, maintenance and service costs. Landlords may apply to the Ontario RentalHousing Tribunal for an increase above the guideline amounts if annual costs for heat, hydro, water or municipaltaxes have increased significantly or if building security costs have increased. When a unit is vacated, however,the landlord is entitled to lease the unit to a new tenant at any rental amount, after which annual increases arelimited to the applicable guideline amount. The landlord may also be entitled to a greater increase in rent for aunit under certain circumstances, including, for example, where extra expenses have been incurred as a result of arenovation of that unit.British Columbia has a similar rent control regime to Ontario's, with the exception that the guidelineamount established there is two percent (2%) over annual inflation, which amounted to an aggregate of 3.288%2010 and 2.3% for 2011.Under Quebec's rent control legislation, a landlord is entitled to increase the rent for existing tenants oncea year for the rent period starting after April 1st of the current year but before April 2nd of the following year.There is no fixed rate increase specified by regulation. Rent increases also take into account a return on capitalexpenditures (for 2011 this return is 3.0% compared to 2.9% for 2010), if such expenditures were incurred, and anindexing of the net income of the building. Average rent increase estimates for the period starting after April 1,2011 and before April 2, 2012, before any consideration for increases to municipal and school taxes and capitalexpenditures, are: 0.6% for electricity heated dwellings, 0.6% for gas heated dwellings, 2.7% for oil heateddwellings and 0.5% for non-heated dwellings.To manage this risk, prior to entering a market where rent controls are in place, an extensive amount oftime is spent researching the existing rules and, where possible, the Trust will ensure it employs people who areexperienced in working in these controlled environments. In addition, the Trust adjusts forecast assumption onnew acquisitions to ensure they are reasonable given the rent control environment.Effective April 24, 2007, the Government of Alberta amended its residential tenancies legislation. Themost significant changes to the legislation focused on two key areas, the first being the number of rental increasesthat an owner could issue to a renter on an annual basis and the second being the notice period required if anowner is contemplating a significant renovation or condominium conversion.Rental increases limited to once per year – the legislation stipulates that an owner may increase existingtenant rents not more than one time per year; previously, owners were able to increase rents once everysix months, or twice per year. It should be noted that in this legislation, there is no limitation placed onthe amount rents can increase.Notice for extensive renovations or condominium conversion - the legislation introduced limitations on anowner that wishes to convert an existing rental property to a condominium. Under the legislation, anowner is required to give the existing tenants a notice of one year and, during that one year notice period,the owner will not be able to increase rents at any time. Previous legislation required only a notice periodof six months and there was no limitation on the number of rental increases other than the twice per yearlimit referred to in the immediately preceding paragraph.

- 59 -It should be emphasized that there have been no changes or limitations as to the market rents charged inAlberta. Accordingly, there are no new limitations placed on the amount which can be charged to new renters byBoardwalk REIT.Impact on Boardwalk REIT - Boardwalk REIT currently has over 50% of its rental portfolio in Albertaand, as such, any change to existing legislation needs to be reviewed, and any potential impact needs to beconsidered, carefully. It is currently Boardwalk REIT's internal policy to increase the rents of existingcustomers by no more than $150 over a one-year period; as noted above, the same limitation does notapply to new customers, who will be charged market rents. The Trust's previous policy was to split the$150 annual maximum into two equal instalments of $75 every six months. The legislation now limitsBoardwalk REIT to one increase per year and, accordingly, the Trust has amended its previous practiceby increasing the in-place rents by a maximum of $150 once per year. The Trust also now offers existingcustomers a fixed 12-month lease with the $150 rental increase in place.Presently, rent control legislation does not exist in, and, to the best of Management‘s knowledge, is notplanned for Saskatchewan.Utility and Property Tax RiskUtility and Property Tax Risk relates to the potential loss the Trust may experience as a result of higherresource prices and well as its exposure to signify cant increases in property taxes. Over the past few years,property taxes have increased as a result of re-valuations of municipal properties and their adherent tax rates. Forthe Trust, these re-valuations have resulted in significant increases in some property assessments due toenhancements, which are not represented on the Trust's balance sheet (as such representations are contrary toexisting GAAP reporting standards). In 2005 and 2009, property taxes for Calgary and Edmonton increasedsignificantly due to higher tax rates imposed. To address this risk, Boardwalk REIT has compiled a specializedteam of property reviewers who, with the assistance of outside authorities, constantly review property taxassessments and, where warranted, appeal them.Utility expenses, mainly consisting of natural gas and electricity service charges, have been subject toconsiderable price fluctuations over the past several years. Any significant increase in these resource costs that theTrust cannot pass on to the customer may have a negative material impact on the Trust. To mitigate this risk, theTrust (and its predecessor in interest, the Corporation) has played a more active role in controlling the fluctuationand predictability of this risk. Through the combined use of financial instruments and resource contracts withvarying maturity dates, exposure to these fluctuations has reduced. In addition, the Trust has implemented thefollowing steps:(a) where possible, economical electrical sub-metering devices are being installed, passing on theresponsibility for electricity charges to the end customer, and(b) in other cases, rents have been, or will be, adjusted upward to cover these increased costs.Risks Due to Real Estate FinancingWe anticipate that future acquisitions will be financed, in whole or in part, under various lines of credit,and other forms of secured or unsecured financing or through the issuance of additional debt or equity by us. Weexpect periodically to review our financing options regarding the appropriate mix of debt and equity financing.Equity, rather than debt, financing of future developments or acquisitions could have a dilutive effect on theinterests of our existing Unitholders. Similarly, there are certain risks involved with financing futuredevelopments and acquisitions with debt, including those described below. In addition, if new developments arefinanced through construction loans, there is a risk that, upon completion of construction, permanent financing forsuch properties may not be available or may be available only on disadvantageous terms, or that the cash flowfrom new properties will be insufficient to cover debt service. If a newly developed or acquired property is

- 60 -unsuccessful, our losses may exceed our investment in the property. Any of the foregoing could have a materialadverse effect on us and our ability to make distributions to our Unitholders and to pay amounts due on our debt.We may be Unable to Renew, Repay or Refinance our Outstanding Debt.We are subject to the normal risks associated with debt financing, including the risk that our cash flowwill be insufficient to meet required payments of principal and interest, the risk that indebtedness on ourproperties, or unsecured indebtedness, will not be able to be renewed, repaid or refinanced when due or that theterms of any renewal or refinancing will not be as favourable as the existing terms of such indebtedness. If wewere unable to refinance our indebtedness on acceptable terms, or at all, we might be forced to dispose of one ormore of the properties on disadvantageous terms, which might result in losses to us. Such losses could have amaterial adverse effect on us and our ability to make distributions to our Unitholders and pay amounts due on ourdebt. Furthermore, if a property is mortgaged to secure payment of indebtedness and we are unable to meetmortgage payments, the mortgagee could foreclose upon the property, appoint a receiver and receive anassignment of rents and leases or pursue other remedies, all with a consequent loss of our revenues and assetvalue. Foreclosures could also create taxable income without accompanying cash proceeds, thereby hindering ourability to meet the REIT distribution requirements of applicable tax legislation.Our Degree of Leverage Could Limit Our Ability to Obtain Additional FinancingOur consolidated debt-to-Gross Book Value was 61% as of December 31, 2010. Our degree of leveragecould have important consequences to Unitholders. For example, the degree of leverage could affect our abilityto obtain additional financing in the future for working capital, capital expenditures, acquisitions, development orother general corporate purposes, making us more vulnerable to a downturn in business or the economy ingeneral. Under our current Declaration of Trust, the maximum the Trust can leverage is 70% of its reported GrossBook Value.Insurance Policy Deductibles and ExclusionsIn order to partially mitigate the substantial increase in insurance costs in recent years, management hasdetermined to gradually increase deductible and self-insured retention amounts. As of December 31, 2010, theTrust's property insurance policy provides for a per occurrence deductible of $100,000 with any excess lossesbeing covered by insurance. As a result of the terrorist attacks of September 11, 2001, property insurance carriershave created exclusions for losses from terrorism from the Trust‘s "all risk" property insurance policies. Whileseparate terrorism insurance coverage is available in certain instances, premiums for such coverage are generallyvery expensive and deductibles are very high and, in many cases, unavailable. Additionally, the terrorisminsurance coverage that is available typically excludes coverage for losses from nuclear, biological and chemicalattacks. At the present time, the Trust has determined that it is not economically prudent to obtain propertyterrorism insurance for its entire portfolio to the extent otherwise available, especially given the significant risksthat are not covered by such insurance. As of December 31, 2010, the Trust carried a total liability insurancepolicy of $95 million per occurrence.Outstanding IndebtednessThe ability of Boardwalk REIT to make cash distributions to Unitholders or to make other payments aresubject to applicable law and contractual restrictions contained in instruments governing Boardwalk REIT'sindebtedness. Although Boardwalk REIT is not currently in default under any existing loan agreements orguarantee agreements, any future default could have significant consequences for Unitholders. Further, theamount of Boardwalk REIT's indebtedness could have significant consequences to holders of Units, including thatthe ability of Boardwalk REIT to obtain additional financing for working capital, capital expenditures or futureacquisitions may be limited; and that a significant portion of Boardwalk REIT's cash flow from operations may bededicated to the payment of principal and interest on its indebtedness, thereby reducing funds available for future

- 61 -operations and distributions. Additionally, some of Boardwalk REIT's debt may be at variable rates of interest ormay be renewed at higher rates of interest, which may affect cash flow from operations available for distributions.Also, in the event of a significant economic downturn, there can be no assurance that Boardwalk REIT willgenerate sufficient cash flow from operations to meet required interest and principal payments. Boardwalk REITis subject to the risk that it may not be able to refinance existing indebtedness upon maturity or that the terms ofsuch refinancing may be onerous. These factors may adversely affect Boardwalk REIT's cash distributions.In addition to mortgages associated with the majority of the properties owned by Boardwalk REIT,Boardwalk REIT, through the Partnership, has an outstanding credit facility of $200 million (the "Facility"). See"Strategy for Growth – Managing Capital". Certain properties have a first or second charge registered againstthem as security for the Facility. The interest rate charged under the Facility varies depending on the chargedproperties but will be a blend of the prime rate established by the lender for Canadian dollar loans made inCanada (the "Prime Rate") and Prime Rate plus 1%. The Facility also has various other fees including anarrangement fee, a commitment fee, an administration fee and a renewal fee which in the aggregate are notmaterial to Boardwalk REIT.In addition to the charge on specific properties (the "Secured Properties"), the Facility provides for anassignment of rents, an assignment of insurance proceeds in the event of loss of any of the Secured Properties andguarantees from various subsidiary entities.The Partnership and other entities which have guaranteed the Facility are prohibited from payingdistributions in the event that any mortgage on real property owned by or for the benefit of the REIT is in defaultin payment, unless a specific reserve in respect of such mortgage is retained.In the event that Boardwalk REIT defaults in payment of any mortgage and is unable or unwilling toestablish an appropriate reserve, distributions to Unitholders would be prohibited.In addition, the Facility has certain operational covenants, including that the debt service coverage ratio isto be maintained at not less than 1.20:1, the debt service coverage ratio specific to the Secured Properties is to bemaintained at not less than 115% and the total indebtedness of Boardwalk REIT will not exceed 70% of the GrossBook Value of the properties owned by Boardwalk REIT calculated in accordance with the Declaration of Trust.Boardwalk has outstanding an aggregate of $112,405,000 worth of Series A Senior UnsecuredDebentures (the "Debentures"), which, as of July 30, 2008, bear an interest rate of 5.61% and which are moreparticularly described in this AIF under the heading "Description of Other Securities and Ratings - SeniorUnsecured Debentures". Although the trust indenture governing the Debentures does not directly limit BoardwalkREIT's ability to pay distributions on the Units, the Debenture trust indenture does contain certain financialcovenants which, if breached, entitle the holders of Debentures to accelerate the debt and demand payment. Insuch circumstances, Boardwalk REIT's ability to continue to pay cash distributions on the Units could be affected.Boardwalk has entered into a large borrower agreement which was amended and restated on January 19,2005 and April 25, 2006 (the "LBA") with CMHC. CMHC, under a program generally available to Canadianhomeowners, guarantees mortgage debt. Approximately 99% of Boardwalk REIT's mortgage debt is insured byCMHC and, in accordance with CMHC's normal practice for large borrowers, Boardwalk REIT was required toenter into the LBA. CMHC is not a lender to Boardwalk REIT but, under the LBA, Boardwalk REIT is requiredto provide periodic operating and performance information to CMHC. The LBA also contains various financialperformance covenants. If Boardwalk REIT fails to meet such performance covenants for four consecutive fiscalquarters and is unable or unwilling to pay into a reserve account an amount sufficient to remedy such performancecovenants or to pay out the offending mortgages, then CMHC can prohibit Boardwalk REIT from making cashdistributions on the Units.

- 62 -Acquisition Performance RiskBoardwalk REIT's strategy includes, in part, the ability of the Trust to acquire additional rental properties.The acquisitions of these properties are based on predetermined financial operational and financing strategies that,once fully implemented, will result in an acceptable return for the Trust as a whole. It is possible that the actualperformance of these acquisitions may be materially different from the assumptions made in purchasing same,resulting in a negative outcome for the Trust as a whole.Operational RiskOperational Risk is the risk that a direct or indirect loss may result from an inadequate or failedtechnology, from a human process or from external events. The impact of this loss may be financial loss, loss ofreputation or legal and regulatory proceedings. The Trust endeavours to minimize losses in this area by ensuringthat effective infrastructure and controls exist. These controls are constantly reviewed and improvements areimplemented, if deemed necessary.Dependence on the Operating Trust and the PartnershipBoardwalk REIT is entirely dependent on the business of the Partnership through its ownership of theOperating Trust and, indirectly, LP Class A Units. The cash distributions to Unitholders are dependent on theability of the Operating Trust to pay distributions in respect of the Operating Trust Units and interest on theOperating Trust Notes and the ability of the Partnership to pay distributions on the LP Class A Units, LP Class BUnits and LP Class C Units. The ability of the Partnership to pay distributions or make other payments oradvances to the Operating Trust may be subject to contractual restrictions contained in any instruments governingthe indebtedness of the Partnership. The ability of the Partnership to pay distributions or make other payments oradvances will also be dependent on the ability of the Partnership's subsidiaries to pay distributions or make otherpayments or advances to the Partnership.Fluctuations of Cash DistributionsAlthough Boardwalk REIT intends to make Distributions, the actual amount of Trust income distributedin respect of the REIT Units will depend upon numerous factors, including, but not limited to, the amount ofprincipal repayments, tenant allowances, leasing commissions, capital expenditures and REIT Unit redemptionsand other factors that may be beyond the control of Boardwalk REIT.The distribution policy of Boardwalk REIT is established by the Trustees and is subject to change at thediscretion of the Trustees. The recourse of Unitholders who disagree with any change in policy is limited andcould require such Unitholders to seek to replace the Trustees.Distributions may exceed actual cash available to Boardwalk REIT from time to time because of itemssuch as principal repayments, tenant allowances, leasing commissions, capital expenditures and redemption ofREIT Units, if any. Boardwalk REIT may be required to use part of its debt capacity or to reduce Distributions inorder to accommodate such items. Boardwalk REIT may temporarily fund such items, if necessary, through anoperating line of credit in expectation of refinancing long-term debt on its maturity.Workforce AvailabilityBoardwalk's ability to provide services to its existing customers is somewhat dependant on theavailability of well-trained associates and contractors to service our customers as well as to complete requiredmaintenance and capital upgrades on our buildings. The Trust must also balance requirements to maintainingadequate staffing levels while balancing the overall cost to the Trust.Within Boardwalk, our most experienced associates are employed full-time while supplementing thesewith additional part time employees as well as contracting out specific services. The Trust is constantly

- 63 -reviewing existing overall market factors to ensure that our existing compensation program is in-line with existinglevels of responsibilities and if warranted adjusting the program accordingly. The Trust also encourages associatefeedback in these areas to ensure the existing programs are meeting their personal needs.Market Price of REIT UnitsOne of the factors that may influence the market price of the REIT Units is the annual yield thereon.Accordingly, an increase in market interest rates may lead purchasers of REIT Units to expect a higherannual yield which could adversely affect the market price of the REIT Units. In addition, the market price forthe REIT Units may be affected by changes in general market conditions, fluctuations in the markets for equitysecurities, short-term supply and demand factors for real estate investment trusts and numerous other factorsbeyond the control of Boardwalk REIT.The Trust has no obligation to distribute to Unitholders any fixed amount, and reductions in, orsuspensions of, cash distributions may occur that would reduce yield based on the offering price.Legal Rights Normally Associated with the Ownership of Shares of a CorporationAs holders of REIT Units, Unitholders do not have all of the statutory rights normally associated withownership of shares of a company including, for example, the right to bring "oppression" or "derivative" actionsagainst Boardwalk REIT. The REIT Units are not "deposits" within the meaning of the Canada DepositInsurance Corporation Act (Canada) and are not insured under the provisions of that Act or any other legislation.Furthermore, Boardwalk REIT is not a trust company and, accordingly, is not registered under any trustand loan company legislation as it does not carry on or intend to carry on the business of a trust company.Ability of Unitholders to Redeem REIT UnitsIt is anticipated that the redemption right attached to the REIT Units will not be the primary mechanismby which holders of such REIT Units liquidate their investments. The entitlement of holders of REIT Units toreceive cash upon the redemption of their REIT Units is subject to the limitations that: (i) the total amountpayable by Boardwalk REIT in respect of such REIT Units and all other REIT Units, other than Special VotingUnits, tendered for redemption in the same calendar month shall not exceed $50,000 (provided that suchlimitation may be waived at the discretion of the Trustees); (ii) at the time such REIT Units are tendered forredemption, the outstanding REIT Units shall be listed for trading on a stock exchange or traded or quoted onanother market which the Trustees consider, in their sole discretion, provides representative fair market valueprices for such REIT Units; and (iii) the normal trading of the REIT Units is not suspended or halted on any stockexchange on which such REIT Units are listed (or, if not listed on a stock exchange, on any market on which suchREIT Units are quoted for trading) on the redemption date or for more than five trading days during the 20-daytrading period commencing immediately after the redemption date.Regulatory Approvals May be Required in Connection with a Distribution of Securitieson a Redemption of REIT Units or the Termination of Boardwalk REITUpon redemption of REIT Units or termination of Boardwalk REIT, the Trustees may distribute securitiesdirectly to the Unitholders, subject to obtaining any required regulatory approvals. No established market mayexist for the securities so distributed at the time of the distribution and no market may ever develop.In addition, the securities so distributed may not be qualified investments for RRSPs, RRIFs, DPSPs orRESPs, depending upon the circumstances at the time.

- 64 -An Investment in REIT Units is Subject to Certain Tax RisksThere can be no assurance that Canadian federal income tax laws respecting the treatment of mutual fundtrusts will not be changed in a manner which adversely affects the holders of REIT Units.Boardwalk REIT currently qualifies as a "mutual fund trust" for income tax purposes. Boardwalk REITis required by its Declaration of Trust to annually distribute all of its taxable income to REIT Unitholders and thusis generally not subject to tax on such amount. In order to maintain its current mutual fund trust status,Boardwalk REIT is required to comply with specific restrictions regarding its activities and the investments heldby it. If Boardwalk REIT were to cease to qualify as a mutual fund trust, the consequences could be adverse.If Boardwalk REIT were to cease to qualify as a "mutual fund trust" and as a "registered investment"under the Tax Act and the REIT Units were to cease to be listed on a ―designated stock exchange‖ (whichincludes the TSX), the REIT Units would cease to be qualified investments for trusts governed by registeredretirement savings plans, registered retirement income funds, registered education savings plans, deferred profitsharing plans and registered disability savings plans, and for tax-free savings accounts (collectively, "Plans").The Tax Act imposes penalties for the acquisition or holding by Plans of non-qualified investments. BoardwalkREIT will endeavour to ensure that the REIT Units continue to be qualified investments for Plans; however, therecan be no assurance that this will be so. Other consequences of Boardwalk REIT ceasing to be a mutual fundtrust would be as follows:(a) REIT Units held by non-resident Unitholders would immediately become taxable Canadian property.Non-resident Unitholders would be subject to Canadian income tax and reporting requirements onany gains realized on a disposition of REIT Units held by them;(b) Boardwalk REIT would, aside from the SIFT Rules (as defined below), be taxed on certain types ofincome distributed to Unitholders. Payment of this tax may have adverse consequences for someUnitholders, particularly Unitholders that are not residents of Canada and residents of Canada that areotherwise exempt from Canadian income tax;(c) Boardwalk REIT would cease to be eligible for the capital gains refund mechanism available underCanadian tax laws to mutual fund trusts; and(d) Boardwalk REIT would no longer be exempt from the application of the alternative minimum taxprovisions of the Tax Act.On June 22, 2007, amendments to the Tax Act relating to the federal income taxation of publicly tradedtrusts and partnerships, and their unitholders, received royal assent. Under those rules (hereinafter the ―SIFTRules‖, and which, for greater certainty, include all proposed amendments to said rules publicly announced by oron behalf of the Minister of Finance (Canada) prior to the date hereof on the assumption such proposedamendments will be enacted substantially in the form proposed) a trust that is a "SIFT trust" will be subject totax at the prevailing federal corporate income tax rate, plus an additional provincial tax factor, on certain incomethat is distributed to its unitholders, and such distributions will be treated as taxable dividends paid by a taxableCanadian corporation.The definition of a "SIFT trust" specifically excludes a trust that is a "real estate investment trust" forthe taxation year, which is currently defined under the SIFT Rules as a trust that is resident in Canada and thatsatisfies all of the following criteria:(a) the trust at no time in the taxation year holds any non-portfolio property other than qualified REITproperties;(b) not less than 95% of the trust's revenues for the taxation year are derived from one or more of thefollowing:(i) rent from real or immovable properties;

- 65 -(ii) interest;(iii) capital gains from dispositions of real or immovable properties;(iv) dividends; and(v) royalties;(c) not less than 75% of the trust's revenues for the taxation year are derived from one or more of thefollowing:(i) rent from real or immovable properties;(ii) interest from mortgages, or hypothecs, on real or immovable properties; and(iii) capital gains from dispositions of real or immovable properties; and(d) at each time in the taxation year an amount, that is equal to 75% or more of the equity value of thetrust at that time, is the amount that is the total fair market value of all properties held by the trust,each of which is real or immovable property, indebtedness of a Canadian corporation represented by abankers‘ acceptance, a deposit with a credit union, money, bank deposits, and debt of or guaranteedby the Government of Canada or a province or other political subdivision.For this purpose:―Qualified REIT property‖ of the trust includes (i) real or immovable property, (ii) a security of anotherentity (corporation, trust or partnership) resident in Canada if that other entity derives all or substantially all of itsrevenues from maintaining, improving, leasing or managing real or immovable properties that are capitalproperties of the trust or of an entity of which the trust holds a share or an interest (including real or immovableproperties that the Trust or such other entity holds together with one or more other persons or partnerships), or ifthat other entity holds no property other than (A) legal title to real or immovable property of the trust or of anotherentity all of the securities of which are held by the trust (including real or immovable properties that the Trust orsuch other entity holds together with one or more other persons or partnerships) or (B) property ancillary to theearning by the trust of rent from real or immovable properties or capital gains from dispositions of real orimmovable properties, and (iii) property that is ancillary to the earning by the trust of rent from real or immovableproperties or capital gains from dispositions of real or immovable properties;―Real or immovable property‖ includes a security of any trust, corporation or partnership that itselfsatisfies the criteria to be a ―real estate investment trust‖ (or that would satisfy them if it were a trust), but doesnot include any depreciable property other than property included in Classes 1, 3 or 31 (or property ancillarythereto); and―Rent from real or immovable property‖ includes payments for services ancillary to, and customarilyprovided in connection with, the rental of real or immovable properties, and income from a trust that was derivedfrom rent from real or immovable properties.If Boardwalk REIT, or any other trust, does not qualify under these new rules as a real estate investmenttrust commencing January 1, 2011, it will no longer be able to deduct for tax purposes its taxable distributionsand, as such, will be required to pay tax on this amount prior to distribution. Any amount distributed that isdetermined to be a return of capital would not be subject to this tax.On March 4, 2009, Bill C-10 passed Third Reading in the House of Commons and on March 12, 2009received royal assent, and is therefore considered substantively enacted under Canadian generally acceptedaccounting principles (―GAAP‖). This Bill clarifies the definition of and criteria for being a ―real estateinvestment trust‖ within the meaning of the Tax Act, including the definition of what is considered ‗rent fromreal or immoveable properties‘. However, despite clarifying the definition of and criteria for qualifying as a―real estate investment trust‖, further clarification is still needed within these definitions, particularly as it

- 66 -relates to gains on the dispositions of real or immovable properties and whether such gains retain theircharacteristics as they flow from one trust entity to another trust. As a result, the Trust continues to report a futureincome tax liability of $100 million as of December 31, 2010 until further clarity for qualifying as a ―real estateinvestment trust‖ becomes availableOn December 16, 2010, the Department of Finance announced proposed amendments to the real estateinvestment rules and released for consultation draft legislation to implement such amendments. The proposalswould, among other things:Allow REIT subsidiaries to hold certain non-capital property in respect of their real estate investmentactivities;Allow REITs to hold up to 10% of their non-portfolio property as non-qualifying REIT propertywithout losing REIT status (with an associated clarification of the circumstances under whichproperty can be considered to be ancillary REIT property);Allow REITs to derive up to 10% of their revenues from sources that are not qualifying sources(currently, a REIT must derive 95% of its revenues from qualifying sources);Clarify that a trust‘s revenue for purposes of the two revenue tests in the definition ―real estateinvestment trust‖ is to be computed on a gross, rather than net, basis and that it will include capitalgains, but will not include recapture or other amounts that are on account of capital;Allow REITs to earn, as qualifying REIT revenue, gains realized by virtue of foreign currencyfluctuations in respect of revenues derived from foreign real or immovable property including certainfinancing and hedging arrangements in respect of such property;Ensure that amounts distributed to a REIT, by an entity in which the REIT has a significant interest,will retain their character for purposes of the revenue tests; andAllow an entity to hold investments in a REIT without those investments being treated as Canadianreal, immovable or resource property in determining whether the entity itself is a SIFTThe deadline to submit comments on the proposed amendments was January 31, 2011. Furthermore,these changes had not been substantively enacted as at December 31, 2010 in accordance with Canadian GAAP.It is the intention of the Trust to qualify as a REIT effective January 1, 2011, and, therefore, the Trust has takensteps to adjust its current strategy to address the perceived limitations on the income that can be generated fromthe sale of non-core assets. If the noted December 16, 2010 amendments are substantially enacted as published,they will address the question of the treatment of such income and the Trust will once again alter its strategy ifwarranted to increase its sale of non core assets.The Declaration of Trust of Boardwalk REIT provides that a sufficient amount of Boardwalk REIT's netincome and net realized capital gains will be distributed each year to Unitholders, in cash or otherwise, in order toeliminate Boardwalk REIT's liability for tax under Part I of the Tax Act. Where such amount of net income andnet realized capital gains of Boardwalk REIT in a taxation year exceeds the cash available for distribution in theyear, such excess net income and net realized capital gains will be distributed to Unitholders in the form ofadditional REIT Units. Unitholders will generally be required to include an amount equal to the fair market valueof those REIT Units in their taxable income, in circumstances where they do not directly receive a cashdistribution.Although Boardwalk REIT is of the view that all expenses to be claimed by Boardwalk REIT, theOperating Trust and the Partnership will be reasonable and deductible, that the cost amount and capital costallowance claims of entities indirectly owned by Boardwalk REIT will have been correctly determined and thatthe allocation of the Partnership's income for purposes of the Tax Act among its partners is reasonable, there canbe no assurance that the Tax Act or the interpretation of the Tax Act will not change, or that the CRA will agree.If the CRA successfully challenges the deductibility of such expenses or the allocation of such income, the

- 67 -Partnership's allocation of income to the Operating Trust, and indirectly the taxable income of Boardwalk REITand the Unitholders, may be adversely affected. The extent to which distributions will be tax-deferred in thefuture will depend in part on the extent to which entities indirectly owned by Boardwalk REIT are able to deductcapital cost allowance relating to the Contributed Assets held by them.Since the Partnership acquired the relevant properties on a tax-deferred basis, its tax cost in certainproperties may be less than their fair market value. Accordingly, if one or more properties are disposed of, thegain recognized by the Partnership may be in excess of that which it would have realized if it had acquired theproperties at their fair market values.Immediately prior to the Plan of Arrangement becoming effective, the Corporation transferred theContributed Assets to the Partnership and received, as consideration therefor, (i) an assumption of all of theindebtedness of the Corporation associated with the Contributed Assets (other than the Retained Debt), (ii) the LPNote, and (iii) a credit to the capital accounts in respect of each of the LP Class B Units and the LP Class C Units,all of which were owned at that time by the Corporation. See "Overview of the Acquisition and the ArrangementReplacing the Corporation as a Public Entity with Boardwalk REIT — Pre-Arrangement Reorganization." Thetransfer and contribution were effected as a "rollover" under subsection 97(2) of the Tax Act, and the Corporation,based on the advice of legal counsel, is of the view that there is no income tax payable in connection therewith.There can be no assurance that the CRA will not take a contrary view; however, the Corporation has been advisedby counsel that, in such event, the CRA would not be successful. If, contrary to this, the CRA successfullychallenges the rollover, income tax may be payable by the Corporation in connection with the transfer andcontribution of the Contributed Assets at the applicable tax rate on the value of the capital contribution in respectof the LP Class C Units. The Partnership has agreed to indemnify the Corporation for all liabilities incurred by itin connection with the Acquisition and the Arrangement, including the transfer and contribution of theContributed Assets to the Partnership and any associated tax that might be payable by the Corporation in respectthereof. See "Overview of the Acquisition and the Arrangement replacing the Corporation as a Public Entity withBoardwalk REIT — Ancillary Agreements in Connection with the Arrangement". The amount of suchindemnification would be significant and have a material adverse effect on the amount of distributable cash of thePartnership and, consequently, on the Distributable Income of Boardwalk REIT.Risks Associated with Disclosure Controls and Procedures on Internal Control Over Financial ReportingOur business could be adversely impacted if we have deficiencies in our disclosure controls andprocedures or internal control over financial reporting. The Trust has updated its internal controls toaccommodate Boardwalk REIT‘s transition to IFRS effective January 1, 2011.The design and effectiveness of our disclosure controls and procedures and internal control over financialreporting may not prevent all errors, misstatements or misrepresentations. While management continues to reviewthe effectiveness of our disclosure controls and procedures and internal control over financial reporting, we cannot assure you that our disclosure controls and procedures or internal control over financial reporting will beeffective in accomplishing all control objectives all of the time. Deficiencies, particularly material weaknesses, ininternal control over financial reporting which may occur in the future could result in misstatements of our resultsof operations, restatements of our financial statements, a decline in our trust unit price, or otherwise materiallyadversely affect our business, reputation, results of operation, financial condition or liquidity.The design of our disclosure controls and procedures and internal control over financial reporting hasbeen limited to exclude controls, policies and procedures of: (i) a proportionately consolidated entity which wehave an interest; (ii) a variable interest entity in which we have an interest; or (iii) a business that we haveacquired note more than 365 days before our financial year end.

- 68 -Unitholders Limited LiabilityRecourse for any liability of Boardwalk REIT is intended to be limited to the assets of Boardwalk REIT.The Declaration of Trust provides that no Unitholder or annuitant under a plan of which a Unitholder acts astrustee or carrier (an "annuitant") will be held to have any personal liability as such, and that no resort shall behad to the private property of any Unitholder or annuitant for satisfaction of any obligation or claim arising out ofor in connection with any contract or obligation of Boardwalk REIT or of the Trustees.Because of uncertainties in the law relating to investment trusts, there is a risk (which is considered bycounsel to be remote in the circumstances) that a Unitholder or annuitant could be held personally liable forobligations of Boardwalk REIT (to the extent that claims are not satisfied by Boardwalk REIT) in respect ofcontracts which Boardwalk REIT enters into and for certain liabilities arising other than out of contract includingclaims in tort, claims for taxes and possibly certain other statutory liabilities.Boardwalk REIT will seek to limit recourse under all of its material contracts to the assets of BoardwalkREIT. However, in conducting its affairs, Boardwalk REIT has and will indirectly acquire real propertyinvestments, including its interest in the Contributed Assets, subject to existing contractual obligations, includingobligations under mortgages and leases. The Trustees have and will use all reasonable efforts to have any suchobligations under mortgages on the Contributed Assets and material contracts, other than leases, modified so asnot to have such obligations binding upon any of the Unitholders or annuitants personally. However, BoardwalkREIT may not be able to obtain such modification in all cases. To the extent that claims are not satisfied byBoardwalk REIT, there is a risk that a Unitholder or annuitant will be held personally liable for obligations ofBoardwalk REIT where the liability is not disavowed as described above. In the opinion of Stikeman Elliott LLP,counsel to the Corporation, the likelihood of any personal liability attaching to Unitholders or annuitants under thelaws of Alberta for contract claims where the liability is not so disavowed is remote.On July 1, 2004, Bill 34, the Income Trusts Liability Act (Alberta), came into force. Such legislationlimits the liability of unitholders of income trusts governed by the laws of the Province of Alberta, includingUnitholders, for any acts, defaults, obligations or liabilities of the trustees of an income trust committed after theAct came into force. A trust is considered governed by the laws of Alberta if its declaration of trust or otherconstating instrument contains the customary provision to that effect. The Declaration of Trust contains such aprovision. Accordingly, Boardwalk REIT is governed by the laws of Alberta and its Unitholders are governed bythe Income Trusts Liability Act.Ontario has enacted similar legislation intended to remove uncertainty about the liability of unitholders ofpublicly traded trusts. The Trust Beneficiaries' Liability Act, 2004, implemented on January 1, 2005, is a clearlegislative statement that the unitholders of a trust that is a reporting issuer and governed by the laws of Ontariowill not be personally liable for the obligations and liabilities of the trust or any of its trustees that arise after theAct came into force, which the Act states was December 16, 2004. As in Alberta, a trust will be considered to begoverned by the laws of Ontario if its declaration of trust or other constating instrument contains the customaryprovision to that effect. Unitholders of income trusts, including REIT's, organized as trusts pursuant to the lawsof Ontario, are all be able to gain the protection that this Act provides. Since Boardwalk REIT is governed by thelaws of Alberta, Alberta's Income Trust Liability Act is the legislation that applies to Unitholders. Theselegislative initiatives are significant for all investors, both retail and institutional, as well as for publicly tradedtrusts and those who sponsor, manage or distribute them.Boardwalk REIT will seek to obtain prudent levels of insurance, where available and appropriate.However, the amounts and types of insurance obtained may not be sufficient to provide full coverage.Credit RatingsCredit ratings are intended to provide investors with an independent measure of credit quality of an issueof securities on a specific date. The credit ratings accorded to the Debentures are not a recommendation to

- 69 -purchase, hold or sell the Debentures inasmuch as such ratings do not comment as to market price or suitabilityfor a particular investor and, accordingly, undue reliance should not be placed on them. There is no assurance thatthese ratings will remain in effect for any given period of time or that these ratings will not be revised orwithdrawn entirely by DBRS in the future if in its judgment circumstances are so warranted. Accordingly, theseratings should not be relied on as of any date other than the date on the cover page of this AIF. Real oranticipated changes in credit ratings on the Debentures may affect the market value of the Debentures. In addition,real or anticipated changes in credit ratings can affect the cost at which Boardwalk can access the debenturemarket.Structural Subordination of DebenturesLiabilities of a parent entity with assets held by various subsidiaries may result in the structuralsubordination of the lenders to the parent entity. The parent entity is entitled only to the residual equity of itssubsidiaries after all debt obligations of its subsidiaries are discharged. In the event of a bankruptcy, liquidationor reorganization of Boardwalk REIT, holders of indebtedness of Boardwalk REIT (including holders ofDebentures) may become subordinate to lenders to the subsidiaries of Boardwalk REIT.Certain of the subsidiaries of Boardwalk REIT have provided a form of guarantee pursuant to which theIndenture Trustee is, subject to the Debenture Indenture, entitled to seek redress from such subsidiaries for theguaranteed indebtedness. These guarantees are intended to eliminate structural subordination which arises as aconsequence of Boardwalk REIT's assets being held in various subsidiaries. Although all subsidiaries which ownmaterial assets have provided a guarantee, not all subsidiaries of Boardwalk REIT have provided such aguarantee. In addition, there can be no assurance that the Indenture Trustee will, or will be able to, effectivelyenforce the guarantee.Market Value FluctuationPrevailing interest rates will affect the market value of the Debentures, as they carry a fixed interest rate.Assuming all other factors remain unchanged, the market value of the Debentures, which carry a fixed interestrate, will decline as prevailing interest rates for comparable debt instruments rise, and increase as prevailinginterest rates for comparable debt instruments decline.Statutory RemediesBoardwalk REIT is not a legally recognized entity within the relevant definitions of the Bankruptcy andInsolvency Act, the Companies' Creditors Arrangement Act and in some cases, the Winding Up and RestructuringAct. As a result, in the event a restructuring of Boardwalk REIT were necessary, Boardwalk REIT would not beable to access the remedies available thereunder. In the event of a restructuring, a holder of Debentures may be ina different position than a holder of secured indebtedness of a corporation.New Alberta Royalty FrameworkThe Alberta Government‘s new policy with respect to the royalties on oil and gas production in theProvince of Alberta became effective January 1, 2011. The new policy clarifies the royalties charged on oil andgas using a sliding scale based on the price of the related commodity. The new scale will now decrease toapproximately 40%, from 50%, on conventional oil wells, and to 36% for conventional and unconventionalnatural gas wells which were producing prior to April 1, 2009, with additional royalties charged on productionfrom the Alberta Oil Sands. Conventional oil and gas wells drilled between April 1, 2009 and March 31, 2011 aresubject to a maximum royalty of five percent (5%) during their first year of production. For more details on thispolicy, we refer you to the following link http://www.energy.gov.ab.ca/About_Us/Royalty.asp.Impact on Boardwalk REIT - Although Boardwalk REIT is not a direct investor in the oil and gas market,it has been a delayed and indirect beneficiary of the continued investment in the Oil and Gas Industry in Alberta.

- 70 -Investment in this area has spearheaded continued economic growth for the province and is a major contributor tothe increased net migration the province has experienced over the past few years. The increased migration hashelped Boardwalk REIT, as it has resulted in increased demand for rental apartments. Although it is still too earlyto predict the longer term impact of this new policy and potential increase in the amount of direct investment inthe Province of Alberta, the Trust will be monitoring the situation on an ongoing basis and will alter existingpolicies to maximize the financial impact.DISTRIBUTION POLICYThe following outlines the distribution policy of Boardwalk REIT as contained in the Declaration ofTrust. The distribution policy may be amended only with the approval of a majority of the votes cast at a meetingof Unitholders.GeneralBoardwalk REIT may distribute to holders of REIT Units on or about each Distribution Date 14respectively such percentage of the income of the Trust for the calendar month then ended as the Trusteesdetermine in their discretion (each a ―Distribution‖), but, in no event, will Distributions for the year be less thanBoardwalk REIT's taxable income, unless the Trustees, in their absolute discretion, determine otherwise.Holders of LP Class B Units may surrender such units in exchange for REIT Units in accordance with theLimited Partnership Agreement. Prior to such surrender, holders of LP Class B Units will be entitled to receiveDistributions from the Partnership pro rata with Distributions made by Boardwalk REIT on REIT Units.Boardwalk REIT cannot pay Distributions on REIT Units unless an equivalent Distribution per REITUnit is paid on the LP Class B Units. Distributions in respect of a month will be paid on or about eachDistribution Date to such Unitholders of record as at the close of business on each Distribution Record Date 15 . Inaddition, the Trustees may declare to be payable and make Distributions, from time to time, out of income ofBoardwalk REIT, net realized capital gains of Boardwalk REIT, the net recapture income of Boardwalk REIT, thecapital of Boardwalk REIT or otherwise, in any year, in such amount or amounts, and on such dates on or beforethe last business day of that year as the Trustees may determine, to the extent such income, capital gains andcapital has not already been paid, allocated or distributed to the holders of REIT Units that are Unitholders at therecord date for such Distribution payable and make Distributions, from time to time, out of income of BoardwalkREIT. The payment of such amounts shall be made on or before the following January 15 th . There will be noDistributions in respect of the Special Voting Units.Where the Trustees determine that Boardwalk REIT does not have available cash in an amount sufficientto make payment of the full amount of any Distribution which has been declared to be payable pursuant to theprovisions of the Declaration of Trust on the due date for such payment, the payment may, at the option of theTrustees, include the issuance of additional REIT Units, or fractions of such REIT Units, if necessary, having afair market value as determined by the Trustees equal to the difference between the amount of such Distributionand the amount of cash which has been determined by the Trustees to be available for the payment of suchDistribution in the case of REIT Units.Unless the Trustees determine otherwise, immediately after any pro rata Distribution of additional REITUnits to all holders of REIT Units in the circumstances described in the immediately preceding paragraph, thenumber of the outstanding REIT Units will automatically be consolidated such that each of such holders will hold14 ''Distribution Date'' means with respect to a distribution by Boardwalk REIT, a business day determined by the Trusteesfor any calendar month to be on or about the 15th day of the following month.15 ''Distribution Record Date'' means, until otherwise determined by the Trustees, the last business day of each month ofeach year, except for the month of December where the Distribution Record Date shall be December 31.

- 71 -after the consolidation the same number of REIT Units as such holder held before the Distribution of additionalREIT Units. In this case, each REIT Unit certificate representing the number of units prior to the Distribution ofadditional REIT Units will be deemed to represent the same number of REIT Units after the non-cash Distributionof additional REIT Units and the consolidation.Notwithstanding the foregoing, where tax is required to be withheld from a Unitholder's share of theDistribution, the consolidation will result in such Unitholder holding that number of REIT Units equal to (i) thenumber of REIT Units held by such Unitholder prior to the Distribution plus the number of REIT Units receivedby such Unitholder in connection with the Distribution (net of the number of whole and part REIT Units withheldon account of withholding taxes) multiplied by (ii) the fraction obtained by dividing the aggregate number ofREIT Units outstanding prior to the Distribution by the aggregate number of REIT Units that would beoutstanding following the Distribution and before the consolidation if no withholding were required in respect ofany part of the Distribution payable to any Unitholder. Such Unitholder will be required to surrender the REITUnit certificates, if any, representing such Unitholder's original REIT Units, in exchange for a unit certificaterepresenting such Unitholder's post-consolidation Units.Boardwalk REIT commenced monthly Distributions on June 15, 2004 to holders of REIT Units on May31, 2004. The amount of the Distribution on that date was $0.103 for each REIT Unit and LP Class B Unit held,or $1.24 per REIT Unit and LP Class B Unit on an annualized basis. The amount of the Distribution for eachREIT Unit and LP Class B Unit held was increased to $0.105 per month, or $1.26 per REIT Unit and LP Class BUnit on an annualized basis, in December 2004, and was further increased to $0.1233 per month, or $1.48 perREIT Unit and LP Class B Unit on an annualized basis, in November 2006; $0.1333 per month, or $1.60 perREIT Unit on an annualized basis, in June 2007; and $0.15 per month, or $1.80 per REIT Unit on an annualizedbasis, in December 2007. On September 15, 2010, Boardwalk REIT paid a special Distribution of $0.50 perREIT Unit to Unitholders of record on August 31, 2010. This special Distribution was in addition to the regularmonthly Distribution of $0.15 per REIT Unit paid on September 15, 2010 to Unitholders of record on August 31,2010. Since the year ended December 31, 2009, Boardwalk REIT has paid the following monthly distributions onits REIT Units:Amount Record Date Payment Date$0.15 January 29, 2010 February 15, 2010$0.15 February 26, 2010 March 15, 2010$0.15 March 31, 2010 April 15, 2010$0.15 April 30, 2010 May 15, 2010$0.15 May 31, 2010 June 15, 2010$0.15 June 30, 2010 July 15, 2010$0.15 July 30, 2010 August 16, 2010$0.65 August 31, 2010 September 15, 2010$0.15 September 30, 2010 October 15, 2010$0.15 October 29, 2010 November 15, 2010$0.15 November 30, 2010 December 15, 2010$0.15 December 31, 2010 January 17, 2011LP Class B Units are entitled to an equivalent distribution as REIT Units.Distribution Reinvestment PlanEffective June 1, 2004, Boardwalk REIT adopted the Distribution Reinvestment Plan pursuant to whichholders of REIT Units are entitled to elect to have all cash Distributions of Boardwalk REIT automaticallyreinvested in additional REIT Units at a price per REIT Unit calculated by reference to a weighted average tradingprice for REIT Units on the TSX preceding the relevant Distribution Date. No brokerage commissions arepayable in connection with the purchase of REIT Units under the Distribution Reinvestment Plan and alladministrative costs are borne by Boardwalk REIT. Proceeds received by Boardwalk REIT upon the issuance ofadditional REIT Units under the Distribution Reinvestment Plan will be used by Boardwalk REIT for futureproperty acquisitions, capital improvements and working capital. The Distribution Reinvestment Plan prohibits

- 72 -residents of the United States from participating in such plan. Residents of any other jurisdiction outside ofCanada may participate in the Distribution Reinvestment Plan if permitted by the laws of the jurisdiction in whichthey reside, subject to certain restrictions. The terms of such plan are as follows:(a) Following enrolment in the DRIP by a Unitholder or holder of LP Class B Units (a "Class BUnitholder" and, collectively with a Unitholder, each a "DRIP Participant"), Distributions due toDRIP Participants will be automatically paid to Computershare Trust Company of Canada in itscapacity as agent under the DRIP (in such capacity, the "DRIP Agent") and applied to the purchaseof additional REIT Units ("DRIP Units") directly from Boardwalk REIT, or in the case of Class BUnitholders, to the purchase of additional LP Class B Units ("DRIP B Units", the DRIP Units andDRIP B Units collectively referred to as the "Plan Units") directly from the Partnership.(b) Distributions due to DRIP Participants are automatically reinvested in Plan Units at a price per PlanUnit to be determined by Boardwalk REIT calculated by reference to the weighted average closingprice of REIT Units on the TSX preceding the relevant Distribution Date.(c) No commissions, service charges or brokerage fees will be payable by DRIP Participants inconnection with the DRIP. The DRIP Agent's fees for administering the DRIP are paid by BoardwalkREIT out of its assets.(d) DRIP Participants may terminate their participation in the DRIP by providing written notice to theDRIP Agent no later than the business day immediately preceding the applicable record date. Suchnotice, if actually received no later than the business day immediately preceding the applicable recorddate, will have effect for the Distribution associated with that record date, and if not so received willhave effect for the next following Distribution. After such termination is processed, Distributions byBoardwalk REIT or the Partnership, as the case may be, are thereafter payable to such Unitholder orClass B Unitholder, as the case may be, in cash or otherwise in the form declared by Boardwalk REITor the Partnership, as the case may be.(e) Boardwalk REIT reserves the right to amend, suspend or terminate the DRIP at any time in its solediscretion, in which case DRIP Participants and the DRIP Agent will be sent written notice thereof inaccordance with the DRIP.Details and enrolment documents regarding the Distribution Reinvestment Plan were forwarded toregistered holders of REIT Units on June 24, 2004. The issue of REIT Units under the Distribution ReinvestmentPlan is exempt from the registration and prospectus requirements of relevant securities legislation in certainprovinces of Canada. In addition, the REIT Units issued under the Distribution Reinvestment Plan are freelytradable under the provisions of such legislation. Boardwalk REIT made applications for discretionary relief fromthe applicable securities regulatory authorities in order to permit such REIT Units to be issued and to be freelytradable and received an order to that effect from such securities regulatory authorities on July 14, 2004.The Partnership has adopted a similar plan such that holders of LP Class B Units are entitled to elect tohave all cash Distributions on the LP Class B Units automatically reinvested in additional LP Class B Units on thesame basis as a Unitholder pursuant to the Distribution Reinvestment Plan.Income of the Trust as computed by Boardwalk REIT may differ from similar computations as reportedby other similar organizations and, accordingly, may not be comparable to distributable income as reported bysuch organizations. Income of the Trust is calculated by reference to net income of Boardwalk REIT on aconsolidated basis, as determined in accordance with GAAP, subject to certain adjustments as set out in theDeclaration of Trust.Suspension of Distribution Reinvestment PlanThe Trust suspended its DRIP effective February 29, 2008. Notification to that effect was mailed toDRIP participants on February 22, 2008.

- 73 -The DRIP provided efficient and cost-effective equity to support the Trust's financing strategy. However,with its current liquidity and Normal Course Issuer Bid, the Trust no longer requires this source of funding. TheTrust may reinstate the DRIP in the future if required to fund new investing activities. For more information onthe Normal Course Issuer Bid, please see the information under the heading "Strategy for Growth-Normal CourseIssuer Bid".The suspension of the DRIP does not affect regular Distributions and Unitholders will continue to receivethe regular Distribution as declared.Canadian Federal Tax considerations for DRIP participantsElecting distribution reinvestment optionUnitholders must consider the tax consequences of their past participation in the DRIP. Generally, whereParticipants elected to accumulate additional Units under the distribution reinvestment plan, the Participantsreinvested their Distributions in additional Units at approximately 97% of the Average Market Price. (A copy ofthe DRIP can be found on the Trust's website at http://boardwalkreit.com/BoardwalkDRIP-June2004.pdffor a description of the Plan.)The Canada Revenue Agency (the "CRA") generally takes the position that under a DRIP where the fairmarket value of the Units acquired exceeds the purchase price, the difference is a benefit and must be included inthe Participant's income for tax purposes. The cost of the Units acquired under the DRIP is the amount reinvestedplus the amount of the benefit. The cost of the Units acquired under the DRIP must be averaged with the cost ofall other Units the Participant holds for the purpose of determining the adjusted cost base of each of theParticipant's Units. Capital gains or losses arising on a disposition of the Participant's Units will be measured byreference to the adjusted cost base of the Participant's Units that are disposed of, which will be calculated usingthis averaging method. (A copy of the Unit cost of the DRIP can be found on the Trust‘s website athttp://boardwalkreit.com/DRIP/).INFORMATION CONCERNING THE OPERATING TRUSTThe Operating Trust has been established under the Operating Trust Declaration of Trust for anindeterminate term. The following is a summary, which does not purport to be complete, of certain terms of theOperating Trust Declaration of Trust.GeneralThe Operating Trust is an unincorporated open-ended trust established under the laws of the Province ofBritish Columbia pursuant to the Operating Trust Declaration of Trust. The Operating Trust qualifies as a "unittrust" pursuant to the Tax Act on the basis that its units are redeemable on demand by the holder thereof.The Operating Trust is a limited purpose trust and its activities are restricted to, among other things, (i)investing in units and notes or other indebtedness of Boardwalk REIT and/or the Partnership and shares of theGeneral Partner, amounts receivable in respect of such units, notes and other indebtedness and shares and in cashand similar deposits in a Canadian chartered bank or trust company; (ii) issuing Operating Trust Units; (iii)issuing debt securities, including the Series 1 Notes and Series 2 Notes; (iv) redeeming Operating Trust Units; (v)guaranteeing the obligations of any of its subsidiaries (for greater certainty the Operating Trust will not guaranteethe obligations of Boardwalk REIT) pursuant to any good faith debt for borrowed money incurred by suchsubsidiary and pledging securities held by the Operating Trust as security for such guarantee; (vi) satisfying theobligations, liabilities or other indebtedness of the Operating Trust; and (vii) fulfilling its obligations under theExchange and Support Agreement. The Operating Trust may also carry on such other activities as may bereasonably incidental to the foregoing or necessary in connection with the performance by the trustees of theOperating Trust of their obligations under any agreement to which they are or may become a party for such

- 74 -purposes or in connection with such activities. It is the intention of the foregoing that the Operating Trust carryon its business and activities only indirectly through the Partnership. The Operating Trust cannot engage, directlyor indirectly, in any activity other than those described above.The registered office of the Operating Trust is located at Suite 1700, Park Place, 666 Burrard Street,Vancouver, British Columbia V6C 2X8 and the principal office and centre of administration of the OperatingTrust is at Suite 200, 1501 First Street S.W., Calgary, Alberta T2R 0W1.Trustees and OfficersThe Operating Trust Declaration of Trust provides that there shall be no fewer than one and no more thanseven trustees of the Operating Trust. The Operating Trust has two trustees, Sam Kolias and Roberto Geremia. Avacancy occurring among the trustees of the Operating Trust shall be filled by appointment by the unitholder ofthe Operating Trust, Boardwalk REIT.The trustees of the Operating Trust shall hold term until such time as removed by the unitholder of theOperating Trust, Boardwalk REIT, or a trustee of the Operating Trust resigns in accordance with the OperatingTrust Declaration of Trust.Operating Trust UnitsThe Operating Trust may issue an unlimited number of Operating Trust Units. The issued andoutstanding units of the Operating Trust may be subdivided or consolidated from time to time by the trustees ofthe Operating Trust without unitholder approval. Boardwalk REIT is and will be the sole unitholder of theOperating Trust at all times.Each Operating Trust Unit represents an equal undivided beneficial interest in the Operating Trust and inany distributions by the Operating Trust, whether of net income, net realized capital gains or other amounts, and,in the event of termination or winding up of the Operating Trust, in the net assets of the Operating Trustremaining after satisfaction of all liabilities, and no Operating Trust Unit shall have preference or priority overany other.Each Operating Trust Unit entitles the holder of record thereof to one vote at all meetings of unitholdersof the Operating Trust or in respect of any written resolution of unitholders of the Operating Trust.Amendments to Operating Trust Declaration of TrustPursuant to the Operating Trust Declaration of Trust, the trustees of the Operating Trust may, from timeto time, amend or alter the provisions of the Operating Trust Declaration of Trust as follows:(a) to the extent deemed by the trustees of the Operating Trust in good faith to be necessary to removeany conflicts or other inconsistencies which may exist between any of the terms of the OperatingTrust Declaration of Trust and the provisions of any applicable law;(b) to the extent deemed by the trustees of the Operating Trust in good faith to be necessary to make anychange or correction in the Operating Trust Declaration of Trust which is a typographical change orcorrection or which the trustees of the Operating Trust have been advised by legal counsel is requiredfor the purpose of curing any ambiguity or defect or inconsistent provision or clerical omission ormistake or manifest error contained in the Operating Trust Declaration of Trust;(c) to ensure continuing compliance with applicable laws (including the Tax Act), regulations,requirements or policies of any governmental authority having jurisdiction over:(i) the trustees of the Operating Trust or the Operating Trust itself; or(ii) the distribution of Operating Trust Units;

- 75 -(d) to ensure that the Operating Trust continues to qualify as a "unit trust" pursuant to paragraph108(2)(a) of the Tax Act;(e) which, in the opinion of the trustees of the Operating Trust, are necessary or desirable as a result ofchanges, in taxation or other laws or the administration or enforcement thereof; and(f) as otherwise deemed by the trustees of the Operating Trust in good faith to be necessary or desirable.Other than as set forth above, the trustees of the Operating Trust may not amend the Operating TrustDeclaration of Trust without the approval of at least 66 and 2/3% of the unitholders of the Operating Trust.Redemption RightThe Operating Trust Declaration of Trust provides that the Operating Trust Units are redeemable, inwhole or in part, at any time on demand by the holder thereof upon delivery to Operating Trust of a dulycompleted and properly executed notice requiring the Operating Trust to redeem the Operating Trust Units, inform, manner of completion or execution reasonably acceptable to the trustees of the Operating Trust, togetherwith the certificates representing the Operating Trust Units to be redeemed and written instructions as to thenumber of Operating Trust Units to be redeemed, as well as any further evidence the trustees of the OperatingTrust may reasonably require with respect to the identity, capacity or authority of the Person giving such notice.Upon tender of the Operating Trust Units by a holder thereof for redemption, the holder of the OperatingTrust Units tendered for redemption will no longer have any rights with respect to such tendered Operating TrustUnits (other than the right to receive the redemption price for such Operating Trust Units) including the right toreceive distributions thereon which are declared payable to unitholders of record on a date which is subsequent tothe day of receipt by the Operating Trust of the redemption notice. The redemption price for each of theOperating Trust Units tendered for redemption will be equal to:Where:(A x B) – CDA = the redemption price per REIT Unit calculated as of the close of business on the date the OperatingTrust Units were so tendered for redemption by the holder thereof;B = the aggregate number of REIT Units outstanding as of the close of business on the date the OperatingTrust Units were so tendered for redemption by the holder thereof;C = (i) the aggregate unpaid principal amount and accrued interest thereon of the Operating Trust Notesheld by or owed to Boardwalk REIT and the fair market value of any other assets or investments heldby Boardwalk REIT (other than Operating Trust Units) as of the close of business on the date theOperating Trust Units were so tendered for redemption by a holder thereof minus (ii) the aggregateunpaid principal of any indebtedness and any accrued liabilities owed by Boardwalk REIT; andD = the aggregate number of Operating Trust Units outstanding held by Boardwalk REIT as of the closeof business on the date the Operating Trust Units were so tendered for redemption by the holderthereof.The trustees of the Operating Trust are also entitled to call for redemption, at any time, all or part of theoutstanding Operating Trust Units registered in the name of Boardwalk REIT or any other holder of OperatingTrust Units at the same redemption price as described above for each Operating Trust Unit called for redemption,calculated with reference to the date the trustees of the Operating Trust approved the redemption of the OperatingTrust Units.Subject to certain exemptions contained in the Operating Trust Declaration of Trust, the aggregateredemption price payable by the Operating Trust in respect of any Operating Trust Units tendered for redemption

- 76 -by the holders thereof during any month will be satisfied, at the option of the trustees of the Operating Trust, inimmediately available funds by cheque or by such other manner of payment approved by the trustees of theOperating Trust from time to time.In certain circumstances, the Operating Trust may satisfy the redemption price in respect of the OperatingTrust Units by issuing Series 2 Notes with an aggregate value equal (as determined by the trustees of theOperating Trust) to the aggregate redemption price of Operating Trust Units to be redeemed.Cash DistributionsThe Operating Trust will distribute to Boardwalk REIT, to the extent possible, and Boardwalk REIT willhave the right to receive, all of the distributable income of the Operating Trust. Such distributions will be madeon or about the tenth business day following each calendar month end and are intended to be received byBoardwalk REIT prior to its related cash distribution to Unitholders. If the trustees of the Operating Trustdetermine that it would be in the best interests of the Operating Trust, they may reduce for any period thepercentage of distributable income to be distributed to Boardwalk REIT and may choose to repay principal on theSeries 1 Notes in lieu of making distributions. In addition, on December 31 of each year, the Operating Trust willmake payable to its unitholder, and its unitholder will have an enforceable right to payment on such date of, adistribution of sufficient net realized capital gains, net income, and net recapture income for the taxation yearending on that date, net of any capital losses or non capital losses recognized on or before the end of such yearsuch that the Operating Trust will not be liable for ordinary income taxes for such year, net of tax refunds. Thepayment of such amounts shall be made on or before the following January 10 th .Notwithstanding the foregoing, if the trustees of the Operating Trust determine that the Operating Trustdoes not have cash in an amount sufficient to make payment of the full amount of any distribution, the paymentmay include the issuance of additional Operating Trust Units and/or Series 1 Notes if necessary, having a valueequal to the difference between the amount of such distribution and the amount of cash which has beendetermined by the trustees of the Operating Trust to be available for the payment of such distribution. The valueof each Operating Trust Unit so issued will be the redemption price thereof such that the issuance will not resultin Boardwalk REIT being liable under the Tax Act to pay a tax imposed under Part XI of the Tax Act.Any Operating Trust Units transferred to Unitholders pursuant to a distribution in specie may be subjectto resale and transfer restrictions under applicable securities laws.Operating Trust NotesThe Operating Trust Notes issuable by the Operating Trust are issuable in series in Canadian currency.The Operating Trust Notes are issuable in denominations of $100.00 and integral multiples of $100.00.No fractional Operating Trust Notes will be issued and where the number of Operating Trust Notes to bereceived by a noteholder includes a fraction, such number shall be rounded to the next lowest $100.00denomination.Series 1 Notes are issued to Boardwalk REIT in the principal amount of $640 million. Series 2 Notes arereserved by the Operating Trust to be issued exclusively as full or partial payment of the redemption price of theSeries 1 Notes and the Operating Trust Units in the event of a redemption of REIT Units.Interest and MaturitySeries 1 Notes were issued at the Effective Date in the aggregate amount of $640 million to BoardwalkREIT and are payable on demand, but have a maximum term of ten years, less a day. Such notes are non-interestbearing prior to demand, and bear interest after demand at a rate of 6% per annum. Each Series 2 Note will havea term not to exceed 25 years from the date of its issue and will bear interest at a market rate to be determined by

- 77 -the Operating Trust, at the time of issuance thereof, payable on the 30 th day of each calendar month that eachSeries 2 Note is outstanding.Payment on MaturityOn maturity, the Operating Trust will repay its Series 2 Notes by paying to Computershare TrustCompany of Canada, as trustee of the Operating Trust Notes (the "Operating Trust Note Trustee") under thetrust indenture dated May 3, 2004 providing for the issuance of the Operating Trust Notes made between theOperating Trust and Operating Trust Note Trustee (the "Operating Trust Note Indenture"), in cash, an amountequal to the principal amount of the outstanding Series 2 Notes which have then matured, together with accruedand unpaid interest thereon.RedemptionThe Operating Trust Notes are redeemable at the option of the Operating Trust prior to maturity.Subordination / SecurityPayment of the principal amount and interest on the Operating Trust Notes is subordinated in right ofpayment to the prior payment in full of the principal of, and accrued and unpaid interest on, all other amountsowing in respect of all senior indebtedness, which is defined as all indebtedness, liabilities and obligations of theOperating Trust which, by the terms of the instrument creating or evidencing the same, will be expressed to rankin right of payment in priority to the indebtedness evidenced by the Operating Trust Note Indenture. TheOperating Trust Note Indenture provides that upon any distribution of the assets of the Operating Trust in theevent of any dissolution, liquidation, reorganization or other similar proceedings relative to the Operating Trust,the holders of all such senior indebtedness will be entitled to receive payment in full before the holders of theOperating Trust Notes are entitled to receive any payment.DefaultThe Operating Trust Note Indenture provides that any of the following shall constitute an event of default:(a) default in payment of the principal of the Operating Trust Notes when the same becomes due and thecontinuation of such default for a period of ten business days;(b) default in payment of any interest due on any Operating Trust Notes and continuation of such defaultfor a period of ten business days;(c) default in the observance or performance of any other covenant or condition of the Operating TrustNote Indenture and continuance of such default for a period of 30 days after notice in writing hasbeen given by the Operating Trust Note Trustee specifying such default and requiring the OperatingTrust to rectify the same; and(d) certain events of dissolution, liquidation, reorganization or other similar proceedings relative to theOperating Trust. The provisions governing an event of default under the Operating Trust NoteIndenture and remedies available thereunder do not provide protection to the holders of OperatingTrust Notes which would be comparable to the provisions generally found in debt securities issued tothe public.Subordination AgreementsPursuant to the terms of the Operating Trust Note Indenture, the Operating Trust Note Trustee may enterinto subordination agreements with the holders of certain senior indebtedness under which the Operating TrustNote Trustee, on behalf of the holders of Operating Trust Notes, may agree directly with a holder of seniorindebtedness in implementation of and/or in addition to the subordination terms described under the sub-heading

- 78 -"Subordination/Security" above. The Operating Trust Note Trustee may give a holder of senior indebtedness apower of attorney to be exercised in any creditor proceedings to enforce the terms thereof. The Operating TrustNote Trustee may also agree to ensure any transferee of Operating Trust Notes (or other securities of theOperating Trust) agrees to be bound by the provisions of the subordination agreements.Registration and Transfers of Operating Trust UnitsAs the Operating Trust Units are not likely to be issued to or held by any person other than BoardwalkREIT, registration of interests in, and transfers of, the Operating Trust Units will not be made through the bookentry only system administered by Canadian Depository for Securities Limited. Rather, holders of the OperatingTrust Units will be entitled to receive certificates therefor.GeneralINFORMATION CONCERNING THE PARTNERSHIPThe Partnership is a limited partnership formed under the laws of the Province of British Columbia.As a result of the Acquisition and the Arrangement, the Partnership holds all of the direct and indirectinterests in the Contributed Assets.The registered office of the Partnership is located at Suite 1700, Park Place, 666 Burrard Street,Vancouver, British Columbia V6C 2X8 and the principal place of business of the Partnership is located at Suite200-1501 First Street S.W., Calgary, Alberta T2R 0W1.The General PartnerBoardwalk Real Estate Management Ltd. (the "General Partner") is the general partner of thePartnership. The General Partner is a wholly owned subsidiary of Boardwalk REIT.LP UnitsThe Partnership is authorized to issue an unlimited number of LP Class A Units, an unlimited number ofLP Class B Units and an unlimited number of LP Class C Units (collectively, "LP Units"), and, subject to certainrestrictions, such other classes of partnership interests as the General Partner may decide from time to time. Allof the LP Class A Units are held by the Operating Trust, the LP Class C Units are held by the Corporation and theLP Class B Units are held by BEI Subco.The LP Class B Units, together with the accompanying Special Voting Units, except as otherwise noted,have economic and voting rights equivalent in all material respects to the REIT Units. In particular, subject tocertain limitations contained in the Limited Partnership Agreement and the Exchange and Support Agreement,each LP Class B Unit entitles the holder thereof to receive and, subject to applicable law, the Partnership willdeclare, a Distribution on each LP Class B Unit equal to the amount of a Distribution declared by BoardwalkREIT on each REIT Unit on the date of such Distribution's declaration. Additional principal terms of the LPClass B Units are as follows: (i) the LP Class B Units may be surrendered, on a one-for-one basis (subject tocustomary anti-dilution provisions) for REIT Units at the option of the holder, at any time unless this wouldjeopardize Boardwalk REIT's status as a "unit trust", "mutual fund trust" or "registered investment" under the TaxAct; (ii) each LP Class B Unit is accompanied by a Special Voting Unit which will entitle the holder thereof toreceive notice of, to attend and to vote at all meetings of Unitholders (except in respect of LP Class B Unitspreviously surrendered); and (iii) except as required by law and in certain specified circumstances where therights of a holder of LP Class B Units are affected, holders of the LP Class B Units are not entitled to vote at anymeeting of the limited partners of the Partnership.

- 79 -The Partnership, the Operating Trust, Boardwalk REIT, the Corporation, BEI Subco and the holders ofLP Class B Units have and will enter into any agreements necessary to give effect to the foregoing terms of theLP Class B Units, including the Exchange and Support Agreement.Pursuant to a letter agreement, dated effective January 6, 2005, Messrs. Sam and Van Kolias, the soleowners, indirectly through their 100 % ownership interest in the Corporation (following the Effective Date) andits wholly-owned subsidiary, BEI Subco, of all of the issued and outstanding LP Class B Units, have agreed that,as long as they control BEI Subco, they will ensure that the LP Class B Units are not sold to a third party withoutthe consent of Boardwalk REIT. Such agreement does not limit the right of the Koliases or any related orcontrolled entity to use the LP Class B Units as collateral for any liability or obligation, corporate or otherwise.The agreement also allows the Koliases the freedom to deal with the LP Class B Units in response to a businesscombination proposal involving Boardwalk REIT without the consent of the Trust, whether in connection with alock-up agreement, voting agreement or commitment to tender, to sell or any other obligation. In addition, theagreement provides that the Koliases are able, at any time during the course of the agreement, to exchange all or aportion of the LP Class B Units for REIT Units, as well as sell any and/or all of the issued and outstandingsecurities of the Corporation and/or BEI Subco, without restriction.Pursuant to the Declaration of Trust and the Exchange and Support Agreement, if an offer, issuer bid(other than an exempt issuer bid), take-over bid (other than an exempt take-over bid) or similar transaction withrespect to the REIT Units is proposed by Boardwalk REIT or is proposed to Boardwalk REIT or holders of REITUnits, and is recommended by the Board of Trustees, or is otherwise effected or to be effected with or without theconsent or approval of the Trustees, and the LP Class B Units are not withdrawn in accordance with their terms orsurrendered for REIT Units in accordance with the Exchange and Support Agreement, Boardwalk REIT will, tothe extent possible in the circumstances, expeditiously and in good faith, take all such actions and do all suchthings as are necessary or desirable to enable and permit holders of those LP Class B Units to participate in suchoffer to the same extent and on an economically equivalent basis as the holders of REIT Units, withoutdiscrimination. Without limiting the generality of the foregoing, Boardwalk REIT will, to the extent possible inthe circumstances, expeditiously and in good faith, use commercially reasonable efforts to ensure that holders ofLP Class B Units may participate in all such offers without being required to surrender such units for withdrawalor exercise their right to exchange such units (or, if so required, to ensure that any such surrender or exchange willbe effective only upon, and will be conditional upon, the successful closing of the offer and only to the extentnecessary to tender to or deposit under the offer). In the event of the liquidation, dissolution or winding-up of thePartnership or any other distribution of the assets of the Partnership among the holders of the units of thePartnership for the purpose of winding up its affairs, a holder of LP Class B Units will be entitled, subject toapplicable law, to receive in respect of each LP Class B Unit held by such holder on the effective date of suchliquidation, dissolution or winding-up, one REIT Unit for each LP Class B Unit.As long as any of the LP Class B Units are outstanding, the Partnership will not at any time without, butmay at any time with, the approval of the holders of the LP Class B Units: (a) pay any distribution on the LPClass A Units unless Distributions payable on the LP Class B Units have been paid; (b) offer to redeem orpurchase or make any capital distribution in respect of the LP Class A Units, unless the Partnership makes acontemporaneous offer to redeem or purchase a proportionate number of LP Class B Units on the same terms andconditions and for identical consideration per unit of the Partnership or makes an equivalent capital distributionper unit of the Partnership in respect of the LP Class B Units; or (c) issue any additional LP Class A Units unlessBoardwalk REIT has issued the same number of REIT Units.The LP Class B Units may be issued in respect of other transactions involving the Partnership from timeto time.The LP Class A Units, all of which are owned by the Operating Trust, have terms similar to thoseattached to the LP Class B Units, except that the holders of LP Class A Units (i) are not entitled to receive REITUnits in the event of a full or partial surrender of the LP Class A Units or upon the liquidation, dissolution orwinding up of the Partnership; (ii) are entitled to receive a distribution on the LP Class A Units in an amount

- 80 -sufficient to allow Boardwalk REIT and the Operating Trust to pay their expenses but will not be entitled toreceive a distribution equal to the Distribution on REIT Units; and (iii) are entitled to receive notice of, to attendand vote at all meetings of the partners of the Partnership, but will not be entitled to receive notice of, to attend orvote at meetings of the Unitholders.The LP Class C Units are entitled to preferred partnership distributions in amounts at least sufficient topermit the Corporation, as the holder of such units, to meets its obligations to make all payments due and payableby the Corporation on the Retained Debt. See "Information Concerning the Partnership — Distributions".As long as any of the LP Class C Units are outstanding, the Partnership will not at any time without, butmay at any time with, the approval of the holders of the LP Class C Units: (a) pay any distribution on the LPClass A Units or LP Class B Units unless distributions payable on the LP Class C Units have been paid; (b) offerto accept the withdrawal of the LP Class A Units or LP Class B Units; or (c) issue any additional LP Class CUnits.In the event of the liquidation, dissolution or winding-up of the Partnership or any other distribution ofthe assets of the Partnership among the holders of the LP Units for the purpose of winding up its affairs, a holderof LP Class C Units will be entitled, subject to applicable law, and in priority to any distribution to the holders ofLP Class A Units or LP Class B Units, to receive in respect of each LP Class C Unit held by such holder on theeffective date of such liquidation, dissolution or winding-up, an amount equal to the LP Class C PreferredLiquidation Entitlement (defined below) divided by the outstanding LP Class C Units. For purposes hereof, the"LP Class C Preferred Liquidation Entitlement" means the aggregate of each amount that is (i) the principalamount of the Retained Debt that is outstanding on the liquidation date, all accrued and unpaid interest on suchprincipal amount up to and including the liquidation date and any other amount outstanding in respect of theRetained Debt on the liquidation date, (ii) an amount of either tax that is due and payable under Part I.3 of the TaxAct or capital tax that is due and payable under any relevant provincial or territorial legislation that is reasonablyattributable to the Retained Debt, and any interest or penalties thereon, and (iii) in respect of the amount of taxthat is due and payable under the Tax Act or any similar provincial or territorial statute that is reasonablyattributable to the foregoing distributions and any disposition whether by redemption or otherwise of any LPClass C Unit, and any interest or penalties thereon, and for greater certainty each amount under (i), (ii) and (iii)above shall be determined without duplication.The holders of LP Class C Units are entitled to receive notice of, to attend and to vote (on the basis of onevote for every 1,000 LP Class C Units held) at all meetings of holders of LP Units.Investment Guidelines and Operating PoliciesThe operations and affairs of the Partnership are and will be conducted in accordance with the investmentguidelines and operating policies contained in the Declaration of Trust. See "Investment Guidelines andOperating Policies of Boardwalk REIT."Amendments to Limited Partnership AgreementPursuant to the Limited Partnership Agreement, the General Partner may amend the Limited PartnershipAgreement without notice to or consent of any other partners, to reflect the admission, resignation or withdrawalof any partner, or the assignment by any partner of the whole or any part of such partner's interest in accordancewith the Limited Partnership Agreement. The General Partner will also be entitled to make any reasonabledecisions, designations or determinations not inconsistent with law or with the Limited Partnership Agreementwhich it may determine are necessary or desirable in interpreting, applying or administering the LimitedPartnership Agreement or in administering, managing or operating the Partnership.The Limited Partnership Agreement may also be amended by the General Partner with the approval of thelimited partners holding more than 66 2/3% of the limited partnership units provided that: (i) except as

- 81 -contemplated in Article 11 and Article 12 of the Limited Partnership Agreement, any material change whichaffects the rights or interests of the General Partner must be approved by the General Partner; (ii) any materialchange which affects the rights or interests of the holders of the LP Class A Units, LP Class B Units or LP ClassC Units must have special approval of the holders of such partnership units, as applicable; and (iii) any materialchange which affects any limited partner in a manner that is different from the effects on other limited partnersshall be valid only with the consent of such limited partner.The Limited Partnership Agreement may not be amended if such amendment would change theamendment section of the Limited Partnership Agreement or cause Boardwalk REIT to fail or cease to qualify asa "mutual fund trust" or "registered investment" under the Tax Act.Further, notwithstanding any other provision to the contrary in the Limited Partnership Agreement, noamendments may be made which in any manner would allow any limited partner to take part in the managementor the administration of the business of the Partnership, reduce the interest in the Partnership of any limitedpartner, allow any limited partner to exercise control over the business of the Partnership, change the right of alimited partner to vote at any meeting or change the Partnership from a limited partnership to a generalpartnership.DistributionsThe Partnership will distribute to the General Partner and to the limited partners holding LP Class AUnits, LP Class B Units and LP Class C Units their respective portions of distributable cash as set out below.Distributions will be made forthwith after the General Partner determines the distributable cash of thePartnership and determines the amount of all expenses incurred by it for acting as general partner (the"Reimbursement Distribution Amount"), which shall take place no later than the 10 th day of each month.Distributable cash will represent, in general, all of the Partnership's cash on hand that is derived from anysource (other than amounts received in connection with the subscription for additional interests in the Partnership)and that is determined by the General Partner not to be required in connection with the business of thePartnership. Such amount will be determined by the General Partner in a manner analogous to the manner inwhich Boardwalk REIT calculates its Distributions (without reference to the "LP Class A PreferredDistribution", defined below, or the "LP Class C Preferred Distribution", defined below). Following suchdetermination, the distributable cash will be distributed to the limited partners of the Partnership as follows: (a) tothe Corporation, as holder of LP Class C Units of the amount of distributable cash of the Partnership that is equalto the aggregate of (A) 0.5% of distributable cash, to a maximum of $100,000 in each fiscal year, and (B) eachamount due and payable by the Corporation (i) in respect of principal, interest or any other amount under theRetained Debt; (ii) in respect of the amount of either tax that is due and payable under Part I.3 of the Tax Act orcapital tax that is due and payable under any provincial or territorial statute all of which is reasonably attributableto the Retained Debt, and any interest or penalties thereon; and (iii) in respect of the amount of tax that is due andpayable under either the Tax Act or any similar provincial or territorial statute that is reasonably attributable toany distributions on the LP Class C Units, including any disposition whether by redemption or otherwise of anyLP Class C Unit, and any interest or penalties thereon, and for greater certainty each amount under (i), (ii) and(iii) above shall be determined without duplication; excluding, in each case, any amount arising from the defaultby the holder of the LP Class C Units to satisfy its obligation under or in connection with the Retained Debt,unless such default can reasonably be attributed to the conduct of the Partnership (the "LP Class C PreferredDistribution"); (b) the Reimbursement Distribution Amount to the General Partner; (c) an amount to the holdersof LP Class A Units sufficient to allow Boardwalk REIT and the Operating Trust to pay their expenses (including,without limitation, any fees or commissions payable to agents or underwriters in connection with the sale ofsecurities by Boardwalk REIT or the Operating Trust) on a timely basis (the "LP Class A PreferredDistribution"); (d) an amount to the General Partner equal to 0.001% of the balance of the distributable cash ofthe Partnership; and (e) an amount equal to the remaining balance of the distributable cash of the Partnership tothe holders of LP Class A Units and LP Class B Units in accordance with their entitlements as holders of LP Class

- 82 -A Units and LP Class B Units, as the case may be. However, holders of LP Class B Units are entitled to receivedistributions on each such unit equal to the amount of the Distribution declared on each REIT Unit. The recorddate and the payment date for any Distribution declared on the LP Class B Units will be the same as those for theREIT Units.The holder of any LP Unit will be entitled to elect to:(a) reinvest all or any portion (the "Elected Amount") of any distribution declared by the Partnership tobe payable to such holder of such LP Unit provided that the election is in writing, specifies theElected Amount and whether such distribution shall be made by the issuance of further LP Units ofthe same class, or in the case of LP Class B Units, REIT Units and is received by the Partnershipbefore the payment date for such distribution. Where the election is duly made by the holder, theElected Amount will be deemed for all purposes of the Limited Partnership Agreement (i) to be paidto and received by such holder on the payment date for such distribution, and (ii) to be reinvested bysuch holder as the subscription price of that number of LP units of the particular class calculated bythe formula:ABWhere:A = the Elected Amount, andB = the 20-day daily-volume weighted average trading price of REIT Units determined as of thepayment date for such distribution; or(b) in lieu of receiving all or a portion (the "Selected Amount") of the distribution declared by thePartnership, choose to be loaned an amount from the Partnership equal to the Selected Amount, andto have the distribution of the Selected Amount made to it on the first business day following the endof the fiscal year in which such distribution would otherwise have been made. Each such loan madein a fiscal year will not bear interest and will be due and payable in full on the first business dayfollowing the end of the fiscal year during which the loan was made.Allocation of Partnership Income and Partnership LossesThe aggregate Partnership Income or Partnership Loss 16 for a fiscal year will be allocated as follows at theend of each fiscal year:(a) the limited partners who held LP Class A or LP Class B Units will be allocated all PartnershipIncome or Partnership Loss remaining after giving effect to the amounts of Partnership Income orPartnership Loss allocated pursuant to sub-paragraphs (b), (c) and (d) below, and, subject to theelections described above, such remaining Partnership Income or Partnership Loss allocated to thelimited partners will be allocated to each person who was a limited partner at any time in such fiscalyear in an amount calculated by the formula:Where:A x CBA = the aggregate amount of the distributions of distributable cash paid or payable to such limitedpartner with respect to such fiscal year as set forth above in sub-paragraph (e) under the subheadingentitled "Distributions";16 ''Partnership Income'' or ''Partnership Loss'' mean the net income or loss of the Partnership for a fiscal year determinedin accordance with the provisions of the Tax Act, subject to any adjustments in respect of such fiscal year that the GeneralPartner determines appropriate.

- 83 -B = the aggregate amount of the distributions of distributable cash paid or payable to all such limitedpartners with respect to such fiscal year as set forth above in sub-paragraph (e) under the subheadingentitled "Distributions"; andC = such remaining Partnership Income or Partnership Loss allocated to all such limited partners withrespect to such fiscal year; and(b) the General Partner will be allocated Partnership Income equal to the aggregate of (i) allReimbursement Distribution Amounts that are paid to it (whether in such fiscal year or within 30 daysthereafter) in respect of expenses incurred by it in the fiscal year; and (ii) all amounts distributed to itin such period as set forth above in sub-paragraph (d) under the heading entitled "Distributions" to theextent not taken into account in the determination of the allocation of Partnership Income;(c) the holder of LP Class C Units will be allocated, in respect of such LP Class C Units, PartnershipIncome or Partnership Loss (which Partnership Loss is not to exceed $1,000), as applicable, equal tothe amount that the General Partner determines is reasonable in respect of such fiscal year;(d) the holder of LP Class A Units will be allocated Partnership Income equal to the aggregate amount ofLP Class A Preferred Distributions paid or payable to such holder with respect to such fiscal year;(e) in respect of each fiscal year of the Partnership, the General Partner will credit (or debit) the currentaccount of each class of LP Units held by a partner by the amount of the Partnership Income (orPartnership Loss) of such fiscal year that is allocated to the partner under any of the foregoing subparagraphsor the following sub-paragraph in respect of such class of LP Units; and(f) in respect of each distribution that is made by the Partnership to a limited partner in respect of a classof LP Units, whether a distribution of distributable cash or otherwise the General Partner will (i)determine the portion of such distribution, if any, that is a distribution of the Partnership Income forsuch fiscal year and will debit the current account of the limited partner in respect of such class of LPUnits by an amount equal to the amount of such portion, and (ii) determine the portion of suchdistribution, if any, that is a distribution or return of the capital of the Partnership and will debit thecapital account of the limited partner in respect of such class of LP Units by an amount equal to theamount of such portion.If, with respect to a given fiscal year, no distribution of distributable cash is made to the partners, thePartnership Income or Partnership Loss for such fiscal year (after deducting the amounts, if any, of the LP Class CPreferred Distribution, the Reimbursement Distribution Amount and the LP Class A Preferred Distribution forsuch fiscal year) will be allocated to each person who was a limited partner at any time in such fiscal year in theproportion determined by the General Partner in its sole discretion.Allocation of Partnership Tax Income and Partnership Tax LossThe Partnership Tax Income or Partnership Tax Loss 17 for a fiscal year will be allocated to the GeneralPartner and to each person who was a limited partner of the Partnership in that year in the manner providedbelow. At the end of each fiscal year, the General Partner will be allocated Partnership Tax Income in an amountequal to the aggregate of (i) all Reimbursement Distribution Amounts that are paid to the General Partner; and (ii)all amounts distributed to the General Partner in accordance with subparagraph (d) under the subheading entitled―Distributions‖. The holder of the LP Class A Units will be allocated Partnership Tax Income for a fiscal yearequal to its LP Class A Preferred Distributions for such fiscal year. The holder of LP Class C Units, and inrespect of such LP Class C Units, will be allocated Partnership Tax Income or Partnership Tax Loss (which17 ''Partnership Tax Income'' or ''Partnership Tax Loss'' mean, in respect of any fiscal year, income or loss of thePartnership for that fiscal year, including any taxable capital gain or allowable capital loss, determined in accordance with theprovisions of the Tax Act.

- 84 -Partnership Tax Loss is not to exceed $1,000), as applicable, equal to the amount that the General Partnerdetermines is reasonable for such fiscal year. After giving effect to such allocations to the General Partner, theholder of LP Class C Units and the holder of LP Class A Units, each person who was a holder of LP Class AUnits or LP Class B Units of the Partnership at any point during that year will be allocated all Partnership TaxIncome or Partnership Tax Loss, as determined, calculated by the formula:Where:A x CBA = the aggregate amount of the cash distributions paid or payable to such limited partner with respect tosuch fiscal year as set forth above in sub-paragraph (e) under the sub-heading entitled "Distributions";B = the aggregate amount of the cash distributions paid or payable to all such limited partners withrespect to such fiscal year as set forth above in sub-paragraph (e) under the sub-heading entitled"Distributions"; andC = such Partnership Tax Income or Partnership Tax Loss allocated to all such limited partners withrespect to such fiscal year.If, with respect to a given fiscal year, no cash distribution is made by the Partnership to its partners, thePartnership Tax Income or Partnership Tax Loss, as the case may be, for that fiscal year, reduced by the amounts,if any, of the LP Class C Preferred Distribution, the Reimbursement Distribution Amount and the LP Class APreferred Distribution for such fiscal year, will be allocated to each person who was a limited partner at any timein such fiscal year in the proportion determined by the General Partner, in its sole discretion.Functions and Powers of the General PartnerSubject to the provisions of the Limited Partnership Agreement, the General Partner has all theobligations, rights or authority granted by applicable law. The Limited Partnership Agreement provides that theGeneral Partner is authorized to carry out the business of the Partnership with the full power and exclusiveauthority to administer, manage, control and operate the operations and affairs of the Partnership and the businessof the Partnership and to bind the Partnership. In addition, the General Partner has, except as otherwise providedin the Limited Partnership Agreement, all of the power and authority for and on behalf of, and in the name of, thePartnership to do or cause to be done any act, take any proceeding, make any decision and execute and deliver orcause to be delivered any instrument, deed, agreement or document on behalf of the Partnership permitted by theLimited Partnership Agreement and involving matters or transactions which are necessary for or incidental tocarrying on the business of the Partnership. The General Partner is required to exercise its powers and dischargeits duties honestly, in good faith and in the best interests of the Partnership and to exercise the degree of care,diligence and skill that a reasonably prudent person would exercise in comparable circumstances and as would thedirector of a corporation in comparable circumstances. The General Partner is not entitled to dissolve thePartnership, wind up its affairs or effect a sale of all or substantially all of the Partnership's assets except inaccordance with the provisions of the Limited Partnership Agreement.The Limited Partnership Agreement provides that all material transactions and agreements involving thePartnership must be approved by the General Partner's board of directors.Restrictions on the Authority of the General PartnerThe authority of the General Partner is limited in certain respects by the Limited Partnership Agreement.For example, the General Partner is prohibited, without the prior approval of the limited partners given byspecial resolution, from selling or otherwise disposing of all or substantially all of the assets of the Partnership.

- 85 -Reimbursement of the General PartnerThe Partnership will reimburse the General Partner for all expenses incurred by the General Partner in theperformance of its duties as general partner under the Limited Partnership Agreement on behalf of thePartnership.Limited LiabilityThe General Partner will operate and carry on the business of the Partnership and conduct the affairs ofthe Partnership in a manner so as to ensure to the greatest extent possible the limited liability of its limitedpartners.However, limited partners may lose their limited liability in certain circumstances. If a limited partnerloses its limited liability as a result of the negligence of the General Partner in performing its duties under theLimited Partnership Agreement, such limited partner will be indemnified by the General Partner for any costs,expenses, damages or liabilities incurred or suffered as a result of losing such limited liability.ManagementThe executive officers of the General Partner consist of Sam Kolias, Chairman and Chief ExecutiveOfficer; Van Kolias, Senior Vice President, Quality Control; Roberto A. Geremia, President; William Chidley,Senior Vice President, Corporate Development; Jean Denis, Vice President, Acquisitions, Eastern Canada;Michael Guyette, Vice President Operations, Southern Alberta and British Columbia and Chief InformationOfficer ; Helen Mix, Vice President, Human Resources; Ian Dingle, Vice President, Purchasing; Lisa Russell,Vice President, Acquisitions, Western Canada; Kelly Mahajan, Vice President, Customer Service and ProcessDesign; Dean Burns, Vice President, General Counsel & Secretary; Bill Zigomanis, Vice President, Investments;Jonathan Brimmell, Vice President, Operations – Ontario and Quebec; and William Wong, Chief FinancialOfficer. The executive officers have extensive experience in acquiring, refurbishing and profitably managingmulti-family residential properties.Additional officers or personnel may be employed by Boardwalk REIT or provided under the BoardwalkREIT Administrative Services Agreement to support management in fulfilling its duties. In addition to theservices it obtains under the Boardwalk REIT Administrative Services Agreement, Boardwalk REIT may alsooutsource other services necessary to its operations to third parties, subject to approval of the Trustees asnecessary.The following table sets forth the name, province and country of residence, current office held with theGeneral Partner and the principal occupation during the last five years of each of the executive officers of theGeneral Partner:Name and Municipality ofResidence Position Held Principal OccupationSam Kolias (1)Alberta, CanadaVan KoliasAlberta, CanadaRoberto A. GeremiaAlberta, CanadaChief Executive OfficerSenior Vice President,Quality ControlPresidentExecutive of General Partner since May 3, 2004 and,prior thereto, Executive of the Corporation.Executive of General Partner since May 3, 2004 and,prior thereto, Executive of the Corporation.Executive of General Partner since May 3, 2004 and,prior thereto, Executive of the Corporation.

- 86 -Name and Municipality ofResidence Position Held Principal OccupationWilliam ChidleyAlberta, CanadaJean DenisQuebec, CanadaMichael GuyetteAlberta, CanadaHelen MixAlberta, CanadaIan DingleAlberta, CanadaLisa RussellAlberta, CanadaKelly MahajanAlberta, CanadaWilliam WongAlberta, CanadaDean BurnsAlberta, CanadaJonathan BrimmellOntario, CanadaWilliam ZigomanisOntario, CanadaSenior Vice President,Corporate DevelopmentVice President, Acquisitions,Eastern CanadaChief Information Officerand Vice President,Operations – SouthernAlberta & British ColumbiaVice President, HumanResourcesVice President, Purchasing &ContractsVice President, Acquisitions,Western CanadaVice President, CustomerService and Process DesignExecutive of General Partner since May 3, 2004 and,prior thereto, Executive of the Corporation.Executive of General Partner since May 3, 2004 and,prior thereto, Executive of the Corporation sinceDecember 2002.Executive of General Partner since May 3, 2004 and,prior thereto, Executive of the Corporation sinceOctober 2000.Executive of General Partner since May 3, 2004 and,prior thereto, Executive of the Corporation since January2003. Prior thereto, Ms. Mix held various humanresources and payroll positions with the Corporationbetween July 1999 and December 2002.Executive of General Partner since June 1, 2006 and,prior thereto, Director of Purchasing and Contracts since1999.Executive of General Partner since May 3, 2004 and,prior thereto, Executive of the Corporation since March2003. Prior thereto, Ms. Russell held various operationsand acquisitions positions with the Corporation betweenSeptember 1995 and February 2003.Executive of General Partner since May 3, 2004 and,prior thereto, Executive of the Corporation sinceDecember 2002.Chief Financial Officer Executive of General Partner since December 15, 2004and prior thereto, Director of Taxation and FinancialReporting of the Corporation since October 2002.Vice President, GeneralCounsel and SecretaryVice President, Operations –Ontario & QuebecExecutive of the General Partner since November 1,2004 and, prior thereto, Director of Legal Affairs of theGeneral Partner since May 25, 2004. Prior thereto, Mr.Burns was a barrister and solicitor, and prior thereto, astudent-at-law, with the law firm of Stikeman ElliottLLP in Calgary, Alberta, from August 1999 to May 15,2004.Executive of the General Partner since March 1, 2006and, prior thereto, Regional Director, Operations,Ontario, since March, 2001.Vice President, Investments Executive of the General Partner since October 1, 2009.Prior thereto, Mr. Zigomanis was Associate VicePresident and head of Multi-Unit Residential MortgageLending at Toronto Dominion Bank from April 2002until May 2009.Note: (1) Also a director of the General Partner. The directors of the General Partner are the Trustees.INFORMATION CONCERNING THE CORPORATIONHistoryThe Corporation was incorporated under the ABCA on July 14, 1993. On August 15, 1994, theCorporation filed Articles of Amendment under the ABCA to effect a two for one common share split. On

- 87 -September 28, 1998, the Articles of the Corporation were amended and restated to create preferred shares("Preferred Shares"), Series I and on March 2, 1999, the Articles of the Corporation were further amended andrestated to increase the number of Series I Preferred Shares from 4,624,997 to 5,604,956. On March 7, 2001, theArticles of the Corporation were amended and restated to create Preferred Shares, Series II and to authorize theissuance of up to 3,399,810 Series II Preferred Shares of the Corporation. The Preferred Shares of theCorporation, Series I and II, were created in connection with certain property acquisitions made by theCorporation in the fiscal years ended May 31, 1999 and December 31, 2001 respectively. Such Preferred Shareswere non-voting, not entitled to a dividend and redeemable at the option of the Corporation for a redemption priceof $1.00 per share. All of the issued and outstanding Preferred Shares were redeemed by the Corporation onMarch 25, 2004. The Articles of the Corporation were further amended and restated on November 11, 2003 toallow the Corporation to hold shareholder meetings outside of the Province of Alberta. Effective August 15,1994, the Common Shares of the Corporation were split on a two for one basis. Effective December 1, 1997, theCorporation paid a stock dividend of one common share for each common share held. Effective December 30,2004, the Corporation was amalgamated pursuant to the provisions of the ABCA with Newco to form acorporation also known as "BPCL Holdings Inc." Such amalgamation was effected to increase the adjusted costbase of the LP Class C Units by an amount equal to the principal amount of the Retained Debt. Referenceshereinafter to the "Corporation" include, where appropriate and required, the amalgamated successor to theCorporation and Newco.The Corporation's principal office is located at Suite 200, 1501 First Street S.W., Calgary, Alberta,T2R 0W1. Its registered office is located at 908 Riverdale Avenue SW, Calgary, Alberta, T2S 0Y6.The Corporation was incorporated in 1993 for the purpose of making a public offering pursuant to thejunior capital program on the Alberta Stock Exchange. The Corporation's major transaction pursuant to therequirements of that program was the acquisition of seven (7) multi-family residential projects located in Calgaryand Edmonton from BPCL. The transaction closed effective April 15, 1994, although pursuant to a managementagreement, BPCL continued to manage the properties. The Corporation, since completing its major transactionand prior to the Effective Date, continued to acquire new properties and sold selected properties. Themanagement agreement with BPCL was terminated effective May 31, 1996, at which time the Corporation tookover management of all its properties, until the transfer of such properties to the Partnership on the Effective Date.Business of the Corporation Following the Acquisition and the ArrangementOn successful completion of the Acquisition and the Arrangement, the Corporation became owned byBPCL and the Corporation retains an interest in the Partnership as a limited partner. The Corporation retains anapproximate 8% equity interest (after the preferred distribution and other entitlements of the LP Class C Units,which it also holds) in the Partnership and thereby in the Contributed Assets transferred to the Partnership throughits indirect interest in the LP Class B Units.In order to effect the Acquisition and the Arrangement for the benefit of all Shareholders, the Corporationretained legal title to certain real properties that were beneficially transferred to the Partnership pursuant to theMaster Asset Contribution Agreement and the Corporation remains liable for the associated Retained Debt. TheLP Class C Units held by the Corporation will provide preferred distributions to the Corporation that, if paid, areexpected to be sufficient to permit the Corporation to meet its obligations under the Retained Debt as suchobligations become due and payable. In addition, the Corporation has and will enter into certain and necessaryarrangements with the Partnership in connection with the Corporation's continuing obligations with respect tothese properties and the associated Retained Debt.The Corporation has two directors, Messrs. Sam Kolias and Van Kolias and two officers, Mr. Sam Koliasas President and Mr. Van Kolias as Secretary.See "Overview of the Acquisition and the Arrangement Replacing the Corporation as a Public Entity withBoardwalk REIT - Arrangements with BPCL".

- 88 -LEGAL PROCEEDINGSNeither the Corporation nor Boardwalk REIT are currently parties to any material legal proceedings, norare any legal proceedings currently being contemplated by the Corporation or the Trust which are material to theirbusiness. Management of the Corporation and Boardwalk REIT are currently not aware of any legal proceedingscontemplated against the Corporation or the Trust, respectively.AUDITORS, TRANSFER AGENT AND REGISTRARThe auditors of the Trust are Deloitte & Touche LLP, chartered accountants, at its offices in Calgary,Alberta.The transfer agent and registrar of the Trust Units is Computershare Trust Company of Canada at itsprincipal offices in Calgary, Alberta and Toronto, Ontario.INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONSExcept as otherwise disclosed in this AIF, no transaction has been entered into since January 1, 2002 or isproposed to be entered into by the Trust or Corporation involving a senior officer or director of the Corporation, asenior officer or trustee of Boardwalk REIT, the principal shareholder of the Corporation, the principal Unitholderof the Trust, or any associate or affiliates of any of such persons or companies which has materially affected orwould materially affect the Corporation, Boardwalk REIT or any affiliates thereof.INTERESTS OF EXPERTSDeloitte & Touche LLP is the auditor of the Trust and is independent within the meaning of the Rules ofProfessional Conduct of the Institute of Chartered Accountants of Alberta.MATERIAL CONTRACTSThe Corporation, Boardwalk REIT, the Partnership, the Operating Trust and the General Partner, asapplicable, have entered into the following Material Contracts within the three most recently completed financialyears or which contract is still in effect:(a) the Acquisition and Arrangement Agreement. See "Overview of the Acquisition and theArrangement Replacing the Corporation as a Public Entity with Boardwalk REIT — The Acquisitionand Arrangement Agreement".(b) the Limited Partnership Agreement. See "Information Concerning the Partnership";(c) the Declaration of Trust. See "Declaration of Trust and Description of REIT Units";(d) the Operating Trust Declaration of Trust. See "Information Concerning Operating Trust";(e) the Exchange and Support Agreement. See "Overview of the Acquisition and the ArrangementReplacing the Corporation as a Public Entity with Boardwalk REIT — Ancillary Agreements inConnection with the Acquisition and the Arrangement —Exchange and Support Agreement" and"Information Concerning Operating Trust";(f) the Master Asset Contribution Agreement and ancillary contracts entered into in connectiontherewith. See "Overview of the Acquisition and the Arrangement Replacing the Corporation as aPublic Entity with Boardwalk REIT — Arrangements with BPCL" and "— Ancillary Agreements inConnection with the Acquisition and the Arrangement";

- 89 -(g) the Boardwalk REIT Administrative Services Agreement. See "Management of Boardwalk REIT —Boardwalk REIT Administrative Services Agreement";(h) the LBA. See "Challenges and Risks – Outstanding Indebtedness";(i) the Underwriting Agreement dated January 14, 2005 between the Trust and the National BankFinancial Inc. and RBC Dominion Securities Inc. relating to the issuance of the Debentures. See"Description of other Securities and Ratings – 5.31% Senior Unsecured Debentures;(j) the agreement between Toronto Dominion Bank and the Partnership establishing the Facility, datedNovember 12, 2008, as amended on July 28, 2009 and July 28, 2010. See "Strategy for Growth –Managing Capital" and "Challenges and Risks – Outstanding Indebtedness";(k) the Debenture Indenture. See "Description of Other Securities and Ratings - Senior UnsecuredDebentures"; and(l) forward interest rate lock agreements between Boardwalk REIT, the Corporation (for Retained Debtproperties only) and National Bank Financial Inc., dated January 23, 2008. See "Strategy for Growth– Managing Capital".A copy of these agreements is available on SEDAR (www.sedar.com).ADDITIONAL INFORMATIONAdditional information relating to Boardwalk REIT, including information as to directors' and officers'remuneration and indebtedness, principal holders of Boardwalk REIT's securities and securities authorized forissuance under equity compensation plans, where applicable, is set out in the Trust's Management Information andProxy Circular dated March 31, 2010 mailed to Unitholders in connection with the annual meeting of suchUnitholders (the "Annual Meeting"), held on May 18, 2010 (the "Management Information Circular").Additional financial information is provided in Boardwalk REIT's financial statements and management'sdiscussion and analysis of financial condition and results of operations for the year ended December 31, 2010.Additional information relating to the Debentures is provided in Boardwalk REIT‘s information andproxy circular, dated July 7, 2008, mailed in connection with the meeting of Debentureholders held on July 30,2008.Additional information relating to Boardwalk REIT may also be found on SEDAR at www.sedar.com.

- 90 -Policy StatementSCHEDULE "A"AUDIT AND RISK MANAGEMENT COMMITTEE CHARTERIt is the policy of Boardwalk Real Estate Investment Trust and its subsidiary entities (the "REIT") toestablish and maintain an audit and risk management committee (the "Audit Committee"), composed entirely ofindependent trustees, to assist the Board of Trustees (the "Board") in carrying out its oversight responsibility forthe REIT's internal controls, financial reporting and risk management processes. The Audit Committee will beprovided with resources commensurate with the duties and responsibilities assigned to it by the Board includingadministrative support. If determined necessary by the Audit Committee, it will have the discretion to instituteinvestigations of improprieties, or suspected improprieties within the scope of its responsibilities, including theauthority to retain independent advisors.Composition of the Committee1. The Audit Committee shall consist of at least three trustees. The Board shall appoint the members of theAudit Committee and the Chair of the Audit Committee.2. Each trustee appointed to the Audit Committee by the Board shall be an independent trustee who isunrelated. An unrelated trustee is a trustee who is independent of management and is free from anyinterest, any business or other relationship which, in the view of the Board, could, or could reasonably beperceived, to materially interfere with the trustee's ability to act with a view to the best interests of theREIT. Although unitholding may be a factor in such determination, unitholding alone will not lead to aconclusion that there is a lack of independence. In determining whether a trustee is independent ofmanagement, the Board shall make reference to the then current legislation, rules, policies andinstruments of applicable regulatory authorities.3. Each member of the Audit Committee shall be "financially literate". In order to be financially literate, atrustee must be, at a minimum, able to read and understand financial statements of the complexity ofthose of the REIT and the accounting principles used in their preparation, as well as an understanding ofinternal controls and procedures for financial reporting.4. A trustee appointed by the Board to the Audit Committee shall be a member of the Audit Committee untilreplaced by the Board or until his or her resignation.Meetings of the Committee1. The Audit Committee shall convene a minimum of five (5) times each year at such times and places asmay be designated by the Chair of the Audit Committee and whenever a meeting is requested by theBoard, a member of the Audit Committee, the auditors, or a senior officer of the REIT. Meetings of theAudit Committee shall correspond with the review of the quarterly and annual financial statements andmanagement discussion and analysis.2. Notice of each meeting of the Audit Committee shall be given to each member of the Audit Committee.3. Notice of a meeting of the Audit Committee shall:(a) be in writing;(b) state the nature of the business to be transacted at the meeting in reasonable detail;

- 91 -(c) to the extent practicable, be accompanied by copies of documentation to be considered at themeeting; and(d) be given at least five (5) business days prior to the time stipulated for the meeting or such shorterperiod as the members of the Audit Committee may permit.4. A quorum for the transaction of business at a meeting of the Audit Committee shall consist of at least half( 1 / 2 ) of the members of the Audit Committee.5. A member or members of the Audit Committee may participate in a meeting of the Audit Committee bymeans of such telephonic, electronic or other communication facilities, as permits all personsparticipating in the meeting to communicate adequately with each other. A member participating in sucha meeting by any such means is deemed to be present at the meeting.6. In the absence of the Chair of the Audit Committee, the members of the Audit Committee shall chooseone of the members present to be Chair of the meeting. In addition, the members of the Audit Committeemay invite the Secretary of the REIT or such other person, who need not be a member of the Committee,as they may choose to be Secretary of the meeting.7. Senior management of the REIT and other parties may attend meetings of the Audit Committee at theAudit Committee's invitation; however, the Audit Committee: (i) shall meet with the external auditorsindependent of management; and (ii) may meet separately with management.8. Minutes shall be kept of all meetings of the Audit Committee and shall be signed by the Chair and theSecretary of the meeting.Duties and Responsibilities of the Committee1. The Audit Committee's primary duties and responsibilities are to:(a) identify and monitor the management of the principal risks that could impact the financialreporting and business of the REIT;(b) monitor the integrity of the REIT's financial reporting process and system of internal controlsregarding financial reporting and accounting compliance;(c) monitor the independence and performance of the REIT's external auditors;(d) deal directly with the external auditors to approve external audit plans, other services (if any) andfees;(e) directly oversee the external audit process and results (in addition to items described in Section 4below);(f) provide an avenue of communication among the external auditors, management and the Board;and(g) ensure that an effective anonymous "whistle blowing" procedure exists to permit stakeholders toexpress concerns regarding accounting or financial matters to an appropriately independentindividual.2. The Audit Committee shall have the authority to:(a) inspect any and all of the books and records of the REIT, its subsidiaries and affiliates;

- 92 -(b) discuss with the management of the REIT, its subsidiaries and affiliates and senior staff of theREIT, any affected party and the external auditors, such accounts, records and other matters asany member of the Audit Committee considers necessary and appropriate;(c) engage independent counsel and other advisors as it determines necessary to carry out its duties;and(d) set and pay the compensation for any advisors employed by the Audit Committee.3. The Audit Committee shall, at the earliest opportunity after each meeting, report to the Board the resultsof its activities and any reviews undertaken and make recommendations to the Board as deemedappropriate.4. The Audit Committee shall:(a) review the audit plan with the REIT's external auditors and with management;(b) discuss with management and the external auditors any proposed changes in major accountingpolicies or principles, the presentation and impact of significant risks and uncertainties and keyestimates and judgments of management that may be material to financial reporting;(c) review with management and with the external auditors significant financial reporting issuesarising during the most recent fiscal period and the resolution or proposed resolution of suchissues;(d) review any problems experienced or concerns expressed by the external auditors in performing anaudit, including any restrictions imposed by management or significant accounting issues onwhich there was a disagreement with management;(e) review with senior management the process of identifying, monitoring and reporting the principalrisks affecting financial reporting and business of the REIT;(f) review audited annual financial statements and related documents in conjunction with the reportof the external auditors and obtain an explanation from management of all significant variancesbetween comparative reporting periods;(g) consider and review with management, the internal control memorandum or management lettercontaining the recommendations of the external auditors and management's response, if any,including an evaluation of the adequacy and effectiveness of the internal financial controls of theREIT and subsequent follow-up to any identified weaknesses;(h) review with financial management and the external auditors the quarterly unaudited financialstatements and management discussion and analysis before release to the public; and(i) before release, review and if appropriate, recommend for approval by the Board, all publicdisclosure documents containing audited or unaudited financial information, including anyprospectuses, annual reports, annual information forms, management discussion and analysis andpress releases.5. The Audit Committee shall:(a) evaluate the independence and performance of the external auditors and annually recommend tothe Board the appointment of the external auditor or the discharge of the external auditor whencircumstances are warranted and the compensation of the external auditor;(b) pre-approve all non-audit services to be provided to the REIT or its subsidiary entities by theREIT's external auditors;

- 93 -(c) approve the engagement letter for non-audit services to be provided by the external auditors oraffiliates, together with estimated fees, considering the potential impact of such services on theindependence of the external auditors;(d) when there is to be a change of external auditors, review all issues and provide documentationrelated to the change, including the information to be included in the Notice of Change ofAuditors and documentation required pursuant to National Instrument 51-102 (or any successorlegislation) of the Canadian Securities Administrators and the planned steps for an orderlytransition period; and(e) review all reportable events as determined on the advice of counsel, including disagreements,unresolved issues and consultations, as defined by applicable securities policies, on a routinebasis, whether or not there is to be a change of external auditors.6. The Audit Committee shall:(a) evaluate the REIT's policies with respect to ensuring compliance with environmental regulationsapplicable to the REIT's assets and shall periodically obtain assurance from management thatsuch policies have been applied;(b) evaluate the REIT's policies with respect to derivative trading and hedge transactions andperiodically obtain assurance from management that such policies have been adhered to;(c) evaluate the REIT's policies with respect to disaster recovery, including policies and programs forcomputer systems and buildings;(d) annually review the amount and terms of any insurance to be obtained or maintained by the REITwith respect to risks inherent in its operations and potential liabilities incurred by the trustees orofficers in the discharge of their duties and responsibilities; and(e) evaluate risks related to fraud in financial reporting and provide recommendations to managementof procedures to manage such risks.7. The Audit Committee shall provide advice to the board regarding the appointments of the Chief FinancialOfficer.8. The Audit Committee shall enquire into and determine the appropriate resolution of any conflict ofinterest in respect of audit or financial matters, which are directed to the Audit Committee by any memberof the Board, a unitholder of the REIT, the external auditors, or senior management.9. The Audit Committee shall annually review with management the need for an internal audit function.10. The Audit Committee shall establish and maintain procedures for:(a) the receipt, retention and treatment of complaints received by the REIT regarding accountingcontrols, or auditing matters; and(b) the confidential, anonymous submission by employees of the REIT on concerns regardingquestionable accounting or auditing matters.11. The Audit Committee shall review and approve the REIT's hiring policies regarding employees andformer employees of the present and former external auditors or auditing matters.12. The Audit Committee shall review with the Trust's internal legal counsel as required but at least annually,any legal or taxation matter that could have a significant impact on the REIT's business or financialstatements, and any enquiries received from regulators, or government agencies.

- 94 -13. The Audit Committee shall assess, on an annual basis, the adequacy of this Charter and the performanceof the Audit Committee.14. In contributing to the Audit Committee's discharging of its duties under this Charter, each Member shallbe entitled to rely in good faith upon:(a) accounting information of the Trust represented to him by an officer of the Trust or in a writtenreport of the auditors; and(b) any report of a lawyer, accountant, engineer, appraiser or other person whose profession lendscredibility to a statement made by any such person.15. In contributing to the Audit Committee's discharging of its duties under this Charter, each Member shallbe obliged only to exercise the care, diligence and skill that a reasonably prudent person would exercise incomparable circumstances. Nothing in this Charter is intended, or may be construed, to impose on anyMember a standard of care or diligence that is in any way more onerous or extensive than the standard towhich all Board Members are subject. The essence of the Audit Committee's duties is the monitoring andreviewing to gain reasonable assurance (but not to ensure) that the Trust's business activities are beingconducted effectively and that the financial reporting objectives are being met and to enable the AuditCommittee to report thereon to the Board.