CAPREIT Reports Third Quarter 2024 Results

TORONTO, Nov. 07, 2024 (GLOBE NEWSWIRE) -- Canadian Apartment Properties Real Estate Investment Trust ("CAPREIT") (TSX: CAR.UN) announced today strong operating and financial results for the three and nine months ended September 30, 2024. Management will host a conference call to discuss the financial results on Friday, November 8, 2024 at 9:00 a.m. ET.

HIGHLIGHTS

⁽¹⁾  Excludes commercial suites and includes assets held for sale. As at September 30, 2024, includes 15,427 suites and sites classified as assets held for sale (December 31, 2023 – 272, September 30, 2023 – 284).
⁽²⁾  Investment properties exclude assets held for sale, as applicable.
⁽³⁾  Occupied average monthly rent ("Occupied AMR") is defined as actual residential rents divided by the total number of occupied suites or sites in the property, and does not include revenues from parking, laundry or other sources.
⁽⁴⁾  Excludes MHC sites.
⁽⁵⁾  Includes MHC sites.

⁽¹⁾  These measures are not defined by International Financial Reporting Standards ("IFRS"), do not have standard meanings and may not be comparable with other industries or companies. Please refer to the cautionary statements under the heading "Non-IFRS Measures" and the reconciliations provided in this press release.

⁽¹⁾  These measures are not defined by IFRS, do not have standard meanings and may not be comparable with other industries or companies. Please refer to the cautionary statements under the heading "Non-IFRS Measures" and the reconciliations provided in this press release.
⁽²⁾  Excludes liabilities related to assets held for sale, as applicable.
⁽³⁾  Based on the trailing four quarters.
⁽⁴⁾  Consists of $9,264 and $14,101 in Canada and Europe, respectively (December 31, 2023 – $17,616 and $11,912, respectively, September 30, 2023 – $31,015 and $17,251, respectively).
⁽⁵⁾  Includes $228,674 available on the Canadian Acquisition and Operating Facility (December 31, 2023 – $340,059, September 30, 2023 – $257,875) and $66,325 available on the unsecured non-revolving construction and term credit facility to reduce greenhouse gas ("GHG") emissions ("GHG Reduction Facility") (December 31, 2023 and September 30, 2023 – N/A).

"We're currently in one of the most transformational periods in CAPREIT's history, and we're pleased with the ground we've been covering on the execution of our strategy," commented Mark Kenney, President and Chief Executive Officer. "So far this year, we've completed over $1 billion worth of strategic transactions across Canada and Europe, and we've announced nearly $2 billion in additional non-core dispositions that are expected to close by early 2025. This activity is unprecedented for CAPREIT, but it speaks to our commitment to repositioning our diversified portfolio and our focus on high quality Canadian apartment properties. We're excited to be optimizing and evolving into an even better place to live, work and invest, and we're looking forward to CAPREIT's next chapter."

"Our Canadian apartment portfolio operationally performed well again this third quarter, with same property average monthly rent increasing by 6.4% versus the comparative period end, and our same property NOI margin expanding by 30 basis points to 66.1% for the current quarter," added Stephen Co, Chief Financial Officer. "This healthy organic growth was partly offset by higher interest costs, and our diluted FFO per Unit increased by 3.3% to $0.659 for the three months ended September 30, 2024. Our leverage remained low at 40.9% as of period end, and we continue to have ample access to capital, which puts us in a prime spot to execute quickly on strategic transactions. With the upcoming closing of announced ancillary dispositions, this competitive financial position is expected to further strengthen, thus supporting ongoing progress on our modernization strategy."

SUMMARY OF Q3 2024 RESULTS OF OPERATIONS

Strategic Initiatives Update

• CAPREIT continues to invest in strategic opportunities that are accretive. For the three months ended September 30, 2024, CAPREIT acquired four properties with 435 suites in Canada for a total gross purchase price of $278.7 million (excluding transaction costs and other adjustments). For the nine months ended September 30, 2024, CAPREIT acquired seven properties with 972 suites in Canada for a total gross purchase price of $517.5 million (excluding transaction costs and other adjustments).

• For the three months ended September 30, 2024, CAPREIT disposed of 764 suites which were comprised of four non-core properties located in Canada; land adjacent to an existing residential building owned by CAPREIT; multiple residential properties in the Netherlands with 464 suites; three single residential suites located in the Netherlands; one office building in the Netherlands and one commercial building in Germany, for a total gross sale price of $382.4 million (excluding transaction costs and other adjustments). For the nine months ended September 30, 2024, CAPREIT disposed of 1,877 suites for a total gross sale price of $570.3 million (excluding transaction costs and other adjustments) of non-core property dispositions. Subsequent to quarter-end, CAPREIT disposed of an additional 110 suites in Canada for a total gross sale price of $33.5 million (excluding transaction costs and other adjustments).

• On July 15, 2024, CAPREIT announced that it has entered into an agreement to sell its MHC portfolio for a gross sale price of $740 million (excluding transaction costs and other adjustments). The gross sale price will be satisfied in part through an interest-only vendor takeback ("VTB") mortgage of $140 million, bearing interest at a rate of 3.0% per annum for a five-year term, with the remaining $600 million to be satisfied in cash. The transaction is subject to compliance with the Competition Act (Canada) and other closing conditions customary in transactions of this nature. Subject to the receipt of all regulatory approvals and satisfaction of customary closing conditions, closing is anticipated in the fourth quarter of 2024.

• On September 16, 2024, CAPREIT announced that certain subsidiaries of ERES have entered into two separate agreements to sell a total of 3,179 residential suites in the Netherlands for gross proceeds (net of estimated adjustments) totalling approximately $1.1 billion. The gross sale price is expected to be settled in cash, with net proceeds expected to be used in part to repay approximately $635 million in associated mortgages outstanding. Remaining net proceeds are intended to be used for the repayment of amounts on the ERES Credit Facility, the prepayment of certain mortgages maturing in the near term and the payment of a special cash distribution by ERES. Subject to the satisfaction of closing conditions, closings are anticipated by early Q1 2025.

• During the three months ended September 30, 2024, no Trust Units were purchased for cancellation under the Normal Course Issuer Bid ("NCIB") program. During the nine months ended September 30, 2024, CAPREIT purchased and cancelled approximately 0.6 million Trust Units, under the NCIB program, at a weighted average purchase price of $48.19 per Trust Unit, for a total cost of $27.1 million.

• CAPREIT's strategy to upgrade the quality and diversification of the property portfolio through repositioning and capital recycling initiatives to grow earnings and cash flow potential continues for 2024. In light of dispositions that closed to date and the announced dispositions expected to close later this year, CAPREIT is on track to meet or exceed the disposition target of over $400 million of non-core Canadian properties during 2024 and will continue to look for opportunities to recycle non-core Canadian properties during the remainder of the year.

• On August 7, 2024, the Board of Trustees approved an increase in monthly distributions from $0.1208 to $0.125 per Trust Unit, or from $1.45 to $1.50 per Trust Unit on an annualized basis. The increase was effective with the August 2024 distribution paid on September 16, 2024 to Unitholders of record as at August 30, 2024.

Operating Results

• On turnovers and renewals, monthly residential rents for the three and nine months ended September 30, 2024 increased by 7.4% and 5.7%, respectively, for the Canadian residential portfolio, compared to 7.4% and 5.3%, respectively, for the three and nine months ended September 30, 2023.

• Same property Occupied AMR for the Canadian residential portfolio as at September 30, 2024 increased by 6.4% compared to September 30, 2023, while same property occupancy for the Canadian residential portfolio decreased to 98.1% (September 30, 2023 - 98.9%).

• NOI for the same property portfolio increased by 6.0% and 6.8%, respectively, for the three and nine months ended September 30, 2024, compared to the same periods last year. Additionally, NOI margin for the same property portfolio increased to 66.1%, up 0.3%, for the three months ended September 30, 2024, and increased to 65.1%, up 0.5%, for the nine months ended September 30, 2024, compared to the same periods last year.

• Diluted FFO per unit was up 3.3% and 6.5%, respectively, for the three and nine months ended September 30, 2024, compared to the same period last year, primarily due to contributions from acquisitions and higher same property NOI, partially offset by dispositions, lower other income and higher interest expense on credit facilities payable and mortgages payable.

Balance Sheet Highlights

• CAPREIT's financial position remains strong, with approximately $304.3 million of available Canadian liquidity, comprising $9.3 million of Canadian cash and cash equivalents, $228.7 million of available capacity on its Canadian Acquisition and Operating Facility and $66.3 million on its GHG Reduction Facility.

• To date, CAPREIT completed or committed mortgage financings totalling $539.9 million, with a weighted average term to maturity of 7.4 years and a weighted average interest rate of 4.33%.

• For the nine months ended September 30, 2024, $2.1 billion of investment properties from ERES and the MHC portfolio have been transferred to assets held for sale. The impact of the transfer on the carrying value of investment property was partially offset by net acquisitions of $255.4 million; property capital investments of $164.4 million; fair value gains of $156.7 million; and foreign exchange translation and other for $71.7 million. The overall carrying value of investment properties (excluding assets held for sale) as at September 30, 2024 was $15.1 billion compared to $16.5 billion as at December 31, 2023.

• Diluted NAV per unit as at September 30, 2024 increased to $55.78 from $55.05 as at June 30, 2024, and from $54.23 as at December 31, 2023, primarily reflecting an increase in investment property values in CAPREIT's Canadian and European portfolio.

OPERATIONAL AND FINANCIAL RESULTS

Portfolio Occupied Average Monthly Rents

⁽¹⁾  Same property Occupied AMR and occupancy include all properties held as at September 30, 2023, but exclude properties disposed of or held for sale as at September 30, 2024.

The rate of growth in total portfolio Occupied AMR has been primarily driven by (i) new acquisitions completed over the past 12 months; and (ii) same property operational growth. The rate of growth in same property Occupied AMR has been primarily due to (i) rental increases on turnover in the rental markets of most provinces across the Canadian portfolio; and (ii) rental increases on renewals.

Occupancy for the total portfolio as at September 30, 2024 decreased by 1.1% to 97.3% compared to September 30, 2023. Occupancy for the total Canadian residential portfolio as at September 30, 2024 decreased by 0.9% to 98.0% compared to September 30, 2023. CAPREIT views this as a transitory vacancy trend influenced by market conditions. As part of CAPREIT's strategic approach, CAPREIT aims to manage vacancies in high-demand and high velocity markets in order to grow Occupied AMR to align with prevailing market conditions. Occupancy for the Netherlands portfolio as at September 30, 2024 decreased by 3.6% to 95.1% compared to September 30, 2023, primarily due to suites intentionally held vacant to maximize value and for property and unit dispositions.

The weighted average gross rent per square foot for total Canadian residential suites was approximately $1.94 as at September 30, 2024, increased from $1.81 as at September 30, 2023.

Canadian Portfolio

⁽¹⁾  Percentage of suites turned over or renewed during the period based on the total weighted average number of residential suites (excluding MHC sites) held during the period.

⁽¹⁾  Percentage of suites turned over or renewed during the period is based on the total weighted average number of residential suites (excluding MHC sites) held during the period.

The Netherlands Portfolio

⁽¹⁾  Percentage of suites turned over during the period based on the total weighted average number of Dutch residential suites held during the period. Percentage of suites renewed during the period is based on number of Dutch residential suites on July 1, as lease renewals due to indexation occur only once a year.
⁽²⁾  On turnover, rents increased by 14.7% on 2.5% of the Netherlands same property residential portfolio for the three months ended September 30, 2024 compared to an increase of 21.7% on 4.2% of the Netherlands same property residential portfolio for the three months ended September 30, 2023. Same property residential portfolio for turnover purposes includes all properties continuously owned since December 31, 2022, and excludes properties disposed of or held for sale as at September 30, 2024.

⁽¹⁾  Percentage of suites turned over during the period is based on the total weighted average number of Dutch residential suites held during the period. Percentage of suites renewed during the period is based on number of Dutch residential suites on July 1, as lease renewals due to indexation occur only once a year.
⁽²⁾  On turnover, rents increased by 16.4% on 9.2% of the Netherlands same property residential portfolio for the nine months ended September 30, 2024 compared to an increase of 21.1% on 11.9% of the Netherlands same property residential portfolio for the nine months ended September 30, 2023.

Net Operating Income

Same properties for the three and nine months ended September 30, 2024 are defined as all properties owned by CAPREIT continuously since December 31, 2022, and therefore do not take into account the impact on performance of acquisitions or dispositions completed during 2024 and 2023, or properties that are classified as held for sale as at September 30, 2024.

⁽¹⁾  Certain 2023 comparative figures have been reclassified to conform with current period presentation.
⁽²⁾  Represents the year-over-year percentage change.
⁽³⁾  Comprises parking and other ancillary income such as laundry and antenna revenue.
⁽⁴⁾  Comprises repairs and maintenance ("R&M"), wages, insurance, advertising, legal costs and expected credit losses.
⁽⁵⁾  Total operating expenses, on a constant currency basis, increased by approximately 3.1% and 4.4%, respectively, for the total and same property portfolio compared to the same periods last year.

⁽¹⁾  Certain 2023 comparative figures have been reclassified to conform with current period presentation.
⁽²⁾  Represents the year-over-year percentage change.
⁽³⁾  Comprises parking and other ancillary income such as laundry and antenna revenue.
⁽⁴⁾  Comprises R&M, wages, insurance, advertising, legal costs and expected credit losses.
⁽⁵⁾  Total operating expenses, on a constant currency basis, increased by approximately 2.2% and 4.7%, respectively, for the total and same property portfolio compared to the same period last year.

The following table reconciles same property NOI and NOI from acquisitions, dispositions and assets held for sale to total NOI, for the three and nine months ended September 30, 2024 and September 30, 2023:

Operating Revenues

For the three months ended September 30, 2024, same property operating revenues increased by $12.4 million, primarily driven by increases in monthly rents on turnovers and renewals, partially offset by decrease in occupancy. Total operating revenues increased by $14.1 million during the same period, due to $13.8 million of operational growth, primarily on the same property operating portfolio and to a lesser extent on assets held for sale as at September 30, 2024 and a $7.7 million increase from acquisitions, partially offset by $7.4 million lower revenues due to dispositions.

For the nine months ended September 30, 2024, same property operating revenues increased by $40.5 million, primarily driven by increases in monthly rents on turnovers and renewals, partially offset by decrease in occupancy. Total operating revenues increased by $43.3 million during the same period, due to $45.3 million of operational growth, primarily on the same property operating portfolio and to a lesser extent on assets held for sale as at September 30, 2024 and a $16.9 million increase from acquisitions, partially offset by $18.9 million lower revenues due to dispositions.

Operating Expenses

For the three months ended September 30, 2024, other operating expenses for the total and same property portfolio increased compared to the same period last year, primarily due to higher R&M costs and to a lesser extent higher expected credit losses. For the nine months ended September 30, 2024, other operating expenses for total and same property portfolio increased compared to the same period last year, primarily due to higher R&M costs, and to a lesser extent higher insurance costs and expected credit losses. Higher R&M costs are due to higher maintenance costs that correspond with a reduction in suite and common area capital improvements, reflecting CAPREIT's strategic reallocation of capital in response to the tight rental market in Canada.

SUBSEQUENT EVENTS

The table below summarizes the disposition of an investment property completed subsequent to September 30, 2024:

⁽¹⁾  Gross sale price excludes transaction costs and other adjustments.

ADDITIONAL INFORMATION

More detailed information and analysis is included in CAPREIT's condensed consolidated interim financial statements and MD&A for the three and nine months ended September 30, 2024, which have been filed on SEDAR+ and can be viewed at www.sedarplus.ca under CAPREIT's profile or on CAPREIT's website on the investor relations page at www.capreit.ca.

Conference Call

A conference call, hosted by CAPREIT's senior management team, will be held on Friday, November 8, 2024 at 9:00 am ET. The telephone numbers for the conference call are: Canadian Toll Free: +1 (833) 950-0062, International: +1 (929) 526-1599. The conference call access code is 250284.

The call will also be webcast live and accessible through the CAPREIT website at www.capreit.ca – click on "For Investors" and follow the link at the top of the page. A replay of the webcast will be available for one year after the webcast at the same link.

The slide presentation to accompany management's comments during the conference call will be available on the CAPREIT website an hour and a half prior to the conference call.

About CAPREIT

CAPREIT is Canada's largest publicly traded provider of quality rental housing. As at September 30, 2024, CAPREIT owns approximately 63,400 residential apartment suites, townhomes and manufactured home community sites, including approximately 15,400 suites and sites classified as assets held for sale, that are well-located across Canada and the Netherlands, with a total fair value of approximately $16.9 billion, including approximately $1.9 billion of assets held for sale. For more information about CAPREIT, its business and its investment highlights, please visit our website at www.capreit.ca and our public disclosures which can be found under our profile at www.sedarplus.ca.

Non-IFRS Measures

CAPREIT prepares and releases unaudited condensed consolidated interim financial statements and audited consolidated annual financial statements in accordance with IFRS. In this and other earnings releases and investor conference calls, as a complement to results provided in accordance with IFRS, CAPREIT discloses measures not recognized under IFRS which do not have standard meanings prescribed by IFRS. These include FFO, NAV, Total Debt, Gross Book Value, and Adjusted Earnings Before Interest, Tax, Depreciation, Amortization and Fair Value ("Adjusted EBITDAFV") (the "Non-IFRS Financial Measures"), as well as diluted FFO per unit, diluted NAV per unit, FFO payout ratio, Total Debt to Gross Book Value, Debt Service Coverage Ratio and Interest Coverage Ratio (the "Non-IFRS Ratios" and together with the Non-IFRS Financial Measures, the "Non-IFRS Measures"). These Non-IFRS Measures are further defined and discussed in the MD&A released on November 7, 2024, which should be read in conjunction with this press release. Since these measures and related per unit amounts are not recognized under IFRS, they may not be comparable to similar measures reported by other issuers. CAPREIT presents Non-IFRS Measures because management believes Non-IFRS Measures are relevant measures of the ability of CAPREIT to earn revenue and to evaluate its performance, financial condition and cash flows. These Non-IFRS Measures have been assessed for compliance with National Instrument 52-112 and a reconciliation of these Non-IFRS Measures is included in this press release below. The Non-IFRS Measures should not be construed as alternatives to net income (loss) or cash flows from operating activities determined in accordance with IFRS as indicators of CAPREIT's performance or the sustainability of CAPREIT's distributions.

Cautionary Statements Regarding Forward-Looking Statements

Certain statements contained in this press release constitute forward-looking information within the meaning of applicable securities laws. Forward-looking information may relate to CAPREIT's future outlook and anticipated events or results and may include statements regarding the future financial position, business strategy, budgets, litigation, occupancy rates, rental rates, productivity, projected costs, capital investments, development and development opportunities, financial results, taxes, plans and objectives of, or involving, CAPREIT. Particularly, statements regarding CAPREIT's future results, performance, achievements, prospects, costs, opportunities and financial outlook, including those relating to acquisition, disposition and capital investment strategies and the real estate industry generally, are forward-looking statements. In some cases, forward-looking information can be identified by terms such as "may", "will", "would", "should", "could", "likely", "expect", "plan", "anticipate", "believe", "intend", "estimate", "forecast", "predict", "potential", "project", "budget", "continue" or the negative thereof, or other similar expressions concerning matters that are not historical facts. Forward-looking statements are based on certain factors and assumptions regarding expected growth, results of operations, performance, and business prospects and opportunities. In addition, certain specific assumptions were made in preparing forward-looking information, including: that the Canadian and Dutch economies will generally experience growth, which, however, may be adversely impacted by the global economy, inflation and high interest rates, potential health crises and their direct or indirect impacts on the business of CAPREIT, including CAPREIT's ability to enforce leases, perform capital expenditure work, increase rents and apply for above guideline increases ("AGIs"), obtain financings at favourable interest rates; that Canada Mortgage and Housing Corporation ("CMHC") mortgage insurance will continue to be available and that a sufficient number of lenders will participate in the CMHC-insured mortgage program to ensure competitive rates; that the Canadian capital markets will continue to provide CAPREIT with access to equity and/or debt at reasonable rates; that vacancy rates for CAPREIT properties will be consistent with historical norms; that rental rates on renewals will grow; that rental rates on turnovers will grow; that the difference between in-place and market-based rents will be reduced upon such turnovers and renewals; that CAPREIT will effectively manage price pressures relating to its energy usage; and, with respect to CAPREIT's financial outlook regarding capital investments, assumptions respecting projected costs of construction and materials, availability of trades, the cost and availability of financing, CAPREIT's investment priorities, the properties in which investments will be made, the composition of the property portfolio and the projected return on investment in respect of specific capital investments. Although the forward-looking statements contained in this press release are based on assumptions and information that is currently available to management, which are subject to change, management believes these statements have been prepared on a reasonable basis, reflecting CAPREIT's best estimates and judgements. However, there can be no assurance actual results, terms or timing will be consistent with these forward-looking statements, and they may prove to be incorrect. Forward-looking statements necessarily involve known and unknown risks and uncertainties, many of which are beyond CAPREIT's control, that may cause CAPREIT's or the industry's actual results, performance, achievements, prospects and opportunities in future periods to differ materially from those expressed or implied by such forward-looking statements. These risks and uncertainties include, among other things, risks related to: rent control and residential tenancy regulations, general economic conditions, privacy, cyber security and data governance risks, availability and cost of debt, acquisitions, dispositions and property development, valuation risk, liquidity and price volatility of units of CAPREIT ("Trust Units"), catastrophic events, climate change, taxation-related risks, energy costs, environmental matters, vendor management and third-party service providers, operating risk, talent management and human resources shortages, public health crises, other regulatory compliance risks, litigation risk, CAPREIT's investment in European Residential Real Estate Investment Trust ("ERES"), potential conflicts of interest, investment restrictions, lack of diversification of investment assets, geographic concentration, illiquidity of real property, capital investments, leasing risk, dependence on key personnel, adequacy of insurance and captive insurance, competition for residents, controls over disclosures and financial reporting, the nature of Trust Units, dilution, distributions and foreign operation and currency risks. There can be no assurance that the expectations of CAPREIT's management will prove to be correct. These risks and uncertainties are more fully described in regulatory filings, including CAPREIT's Annual Information Form, which can be obtained on SEDAR+ at www.sedarplus.ca, under CAPREIT's profile, as well as under the "Risks and Uncertainties" section of CAPREIT's 2023 Annual MD&A dated February 22, 2024. The information in this press release is based on information available to management as of November 7, 2024. Subject to applicable law, CAPREIT does not undertake any obligation to publicly update or revise any forward-looking information.

SOURCE: Canadian Apartment Properties Real Estate Investment Trust

SELECTED NON-IFRS MEASURES

A reconciliation of net income (loss) to FFO is as follows:

⁽¹⁾  The adjustment is based on applying the 35% weighted average ownership held by ERES non-controlling unitholders (September 30, 2023 – 35%).
⁽²⁾  Primarily includes transaction costs and other adjustments on dispositions and amortization of property, plant and equipment ("PP&E"), right-of-use asset and enterprise resource planning ("ERP") implementation costs. For the three and nine months ended September 30, 2024, includes $140 and $2,062, respectively, of current income taxes on the dispositions of ERES properties and single residential suites.
⁽³⁾  For the three and nine months ended September 30, 2023, includes $679 and $765, respectively, of accelerated vesting of previously granted unit-based compensation.
⁽⁴⁾  During the three and nine months ended September 30, 2024, nil and three million ERES unit options were forfeited, respectively, upon senior management termination totalling $nil and $2,284, respectively (three and nine months ended September 30, 2023 ‑ $nil).
⁽⁵⁾  FFO per unit – diluted is calculated using FFO during the period divided by weighted average number of units – diluted.
⁽⁶⁾  FFO payout ratio is calculated using total distributions declared during the period divided by FFO.

Reconciliation of Total Debt and Total Debt Ratios:

⁽¹⁾  Gross Book Value ("GBV") is defined by CAPREIT's Declaration of Trust.
⁽²⁾  Total Debt to Gross Book Value is calculated using total debt divided by gross book value.
⁽³⁾  Total Mortgages Payable to Gross Book Value is calculated using total mortgages payable divided by gross book value.

Reconciliation of Net Income (Loss) to Adjusted EBITDAFV:

Debt Service Coverage Ratio

⁽¹⁾  Includes mortgages payable related to assets held for sale, as applicable.
⁽²⁾  Includes net cross-currency interest rate ("CCIR") and interest rate ("IR") swap interest, offsetting contractual interest.

Interest Coverage Ratio

⁽¹⁾  Includes mortgages payable related to assets held for sale, as applicable.
⁽²⁾  Includes net CCIR and IR swap interest, offsetting contractual interest.

Reconciliation of Unitholders' Equity to NAV:

⁽¹⁾  Includes deferred income tax liability classified as liabilities related to assets held for sale.
⁽²⁾  CAPREIT accounts for the non-controlling interest in ERES as a liability, measured at the redemption amount, as defined by the ERES DOT, of ERES's units not owned by CAPREIT. The adjustment is made so that the non-controlling interest in ERES is measured at ERES's disclosed NAV, rather than the redemption amount. The table below summarizes the calculation of adjustment to ERES non-controlling interest as at September 30, 2024, December 31, 2023 and September 30, 2023.

⁽³⁾  NAV per unit – diluted is calculated using NAV as at period end divided by diluted number of units.