Is Boardwalk REIT (BEI.UN) Now a Compelling Buy at a Discount to NAV Amid Strong Operational Momentum?

Boardwalk REIT (BEI.UN) has long been a focal point for income-oriented investors seeking exposure to Canada's real estate market. As of December 2025, the trust trades at CAD 63.93 per unit, a price that appears to trade at a significant discount to its most recently disclosed net asset value (NAV) of $97.72 per unit as of Q3 2025. This valuation dislocation, coupled with a robust capital allocation strategy and operational momentum, raises the question: Is Boardwalk REIT now a compelling buy?

Valuation Dislocation: A Significant Discount to NAV

The discount between Boardwalk's market price and its NAV is striking. While the Q4 2025 NAV remains undisclosed (scheduled for release on February 19, 2026), the Q3 2025 figure of $97.72 per unit suggests a potential discount of over 35% as of December 2025. This gap is exacerbated by the trust's consistent focus on value creation through its Normal Course Issuer Bid (NCIB). In 2025 alone, Boardwalk invested $57.3 million in its NCIB at a weighted average price of $63.80 per unit, effectively repurchasing shares at a steep discount to NAV. Such activity not only reduces the cost of capital but also signals management's confidence in the trust's intrinsic value.

The discount is further supported by the trust's fair value capitalization rate of 5.12%, unchanged from Q4 2024. This stability in cap rates, despite a challenging macroeconomic environment, underscores the resilience of Boardwalk's asset base and its ability to maintain asset valuations. For investors, this creates an attractive scenario: a trust trading at a material discount to its net assets while generating consistent cash flows.

Capital Allocation Strategy: Strategic Buybacks and Dispositions

Boardwalk's capital allocation strategy in Q4 2025 has been both disciplined and opportunistic. The trust invested $20.5 million in November and December 2025 through its NCIB at a weighted average price of $63.81 per unit, leveraging its liquidity to repurchase shares at a price well below NAV. This approach aligns with the trust's long-term objective of optimizing shareholder value while maintaining a strong balance sheet.

Simultaneously, Boardwalk executed strategic property dispositions, selling three communities-Terrace Garden Estates, Tower Hill, and The Palisades-for combined gross proceeds of $56.5 million. These sales, timed to align with private market valuations, provided additional liquidity for reinvestment into its own units via the NCIB. CEO Sam Kolias emphasized the importance of flexibility in rental rates to sustain occupancy and margins amid a competitive leasing environment, a strategy that has contributed to the trust's operational resilience.

The dual focus on buybacks and dispositions reflects a balanced approach to capital allocation. By redeploying capital into value-add initiatives while maintaining high occupancy rates, Boardwalk is positioning itself to enhance returns for unitholders. This strategy is particularly compelling in a low-yield environment, where the trust's 5.12% cap rate offers a clear edge over alternatives.

Operational Momentum: A Foundation for GrowthBoardwalk's operational performance in Q3 2025 laid the groundwork for its current momentum. The trust reported strong results driven by higher rental rates in its more affordable markets, a segment that remains resilient despite broader economic headwinds. This internal growth, combined with asset revaluations, contributed to the Q3 NAV increase to $97.72 per unit.

Looking ahead, the trust's focus on value creation through its NCIB and strategic dispositions is expected to continue. With $57.3 million already invested in 2025 and further liquidity generated from property sales, Boardwalk has the flexibility to accelerate its buyback program or pursue accretive reinvestments. The upcoming Q4 2025 financial results, set for release on February 19, 2026, will provide critical insights into the trust's ability to sustain this momentum.

Conclusion: A Compelling Case for Value Investors

Boardwalk REIT's current valuation presents a compelling opportunity for investors willing to look beyond short-term volatility. The trust's market price of $63.93 per unit trades at a significant discount to its Q3 2025 NAV of $97.72, creating a margin of safety for unitholders. Meanwhile, its capital allocation strategy-highlighted by aggressive NCIB participation and strategic dispositions-demonstrates a clear commitment to unlocking value.

For those who can tolerate the uncertainty of the pending Q4 2025 NAV disclosure, Boardwalk REIT offers a rare combination of a wide valuation gap, disciplined capital management, and operational resilience. As the trust prepares to unveil its full-year results in February 2026, the stage is set for a potential re-rating of its shares. In a market where yield and value creation are increasingly hard to find, Boardwalk REIT stands out as a compelling buy.