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Canadian REITs exposed to Fort McMurray wildfires


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Essential IR Insights Newsletter - February 2023

Canadian REITs exposed to Fort McMurray wildfires

Wildfiresraging around Fort McMurray, Alberta, had affected nearly 900 square miles as oflate May 10, and fire conditions in the province remain extreme.

The Albertagovernment declared a provincial state of emergency a week ago, and 80,000 peoplewere ordered to evacuate as flames threatened the area. The government predictsthat a re-entry schedule will be ready in two weeks.

Morethan 1,500 firefighters are fighting the fires, along with 121 helicopters, 194heavy equipment pieces and 28 air tankers.

About2,400 buildings in the city have been damaged or destroyed, Premier Rachel Notleysaid, according to a May 9 reportin The Globe and Mail. Most critical infrastructureand the downtown are intact, she said, but "smoldering hot spots" presenthazards throughout the city.

BMO analystTom MacKinnon predicts insurance industry losses from the fires in the range ofC$2.6 billion to C$4.7 billion, according to a Bloomberg News report.That is roughly 4x the most expensive natural disaster in Canada's history.

NineSNL-covered REITs have at least one property in Fort McMurray, according to SNLdata. None had reported any damage as of May 11. Many have offered updates and supportfor residents and tenants affected by the disaster.

and have the highest exposure to the city by number of properties, at 14 and 13 assets,respectively, followed by BoardwalkReal Estate Investment Trust and Temple Hotels Inc., which each own nine propertiesthere.

As apercentage of income, Lanesborough has the greatest exposure to the affected area,having generated 67.0% of its 2015 NOI from its Fort McMurray apartments. Templegenerated 28.0% of its 2015 NOI from its Fort McMurrayhotels.

Northviewhas offered the 645 familiesin its Fort McMurray properties and its 30 employees there, all of whom were forcedto evacuate, free board in its other properties across Canada through the end ofMay.

Boardwalksaid it has a team readyto assess damage and facilitate the safe return of its residents once it is safeto do so. The company will also resettle residents in other Boardwalk communitiesif necessary.

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As ofits May 4 announcement, Boardwalk did not know if the fire had affected any of itscommunities.

owns eight properties in Fort McMurray, and President and CEO Armin Martens saidduring the company's quarterly call that those assets represent under 1% of Artis'NOI. He noted, according to a transcript,that each of its tenants and the company itself is well insured.

said May 11 that it wasnot aware of any damage to either of its two properties, one retail and one industrial,in Fort McMurray.

has 200 rent-free to evacuees for three months.

"Our Fort McMurray task force of over 300 Team Members hasbeen working around the clock to house families and will continue to do so as partof our responsibility to help fellow Albertans," Mainstreet CEO Bob Dhillonsaid in a release.

it will match employee donationsto the Canadian Red Cross up to C$25,000, and RioCan Real Estate Investment Trust donated C$25,000 to the Canadian Red Cross to support theFort McMurray community.


 Use SNL's Real Estate Property Locator template examine all SNL-covered properties within a selected geographic area (country/MSA/province/state). Other templates are available in SNL's Template Library.