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Press release from Marketwire

CAPREIT Announces Record First Quarter 2010 Results

Tuesday, May 11, 2010

CAPREIT Announces Record First Quarter 2010 Results16:55 EDT Tuesday, May 11, 2010 TORONTO, ONTARIO--(Marketwire - May 11, 2010) - Canadian Apartment Properties Real Estate Investment Trust ("CAPREIT") (TSX:CAR.UN) announced today its operating and financial results for the three months ended March 31, 2010. Q1 2010 HIGHLIGHTS Three Months Ended March 31, 2010 2009 ---------------------------------------------------------------------------- Operating Revenues (000s) $ 83,515 $ 82,198 Net Operating Income ("NOI") (000s) (1) $ 43,632 $ 39,728 NOI Margin (1) 52.2% 48.3% Normalized Funds From Operations ("NFFO") Per Unit - Basic (1) $ 0.301 $ 0.250 NFFO Payout Ratio (1) 93.3% 111.3% ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- (1) NOI, NFFO and NFFO per Unit are measures used by management in evaluating operating performance. Please refer to the cautionary statements under the heading "Non-GAAP Financial Measures" and the reconciliations provided in this press release. Operating Performance -- First quarter NFFO increased significantly by 21.6% to $20.0 million or by 20.4% to $0.301 per Unit -- First quarter NFFO payout ratio improved greatly to 93.3% from 111.3% in the prior year comparable period Portfolio Performance -- First quarter operating revenues increased 1.6% due to higher average monthly rents and improved occupancies -- Average monthly rents increased by 1.8%, with steady increases in all markets except Alberta, combined with a slight increase in overall occupancy levels to 97.8% from 97.3% last year -- NOI improved by 9.8% to $43,632 compared to the same period last year -- NOI margin increased to 52.2% from 48.3% for the same period last year -- Generated seventeenth consecutive quarter of stable or improved year- over-year NOI growth for stabilized properties -- Acquired a luxury property in Vancouver, British Columbia subsequent to quarter-end to augment growth and increase the geographic and demographic diversification of the portfolio Liquidity and Leverage -- Total debt to gross book value remains conservative at 63.22%, well below the maximum of 70% permitted under CAPREIT's Declaration of Trust but slightly above fourth quarter 2009 ratio of 62.75% -- Expected to achieve debt refinancing and mortgage renewal targets for 2010, with $29.1 million of renewals and top up financings completed or committed up to May 11, 2010 -- Improved debt coverage and interest coverage ratios of 1.30x and 2.08x, respectively, for the four quarters ended March 31, 2010 PORTFOLIO OPERATING RESULTS Three Months Ended March 31, 2010 2009 ---------------------------------------------------------------------------- Overall Portfolio Occupancy (1) 97.8% 97.3% Overall Portfolio Average Monthly Rents (2) $ 943 $ 926 Operating Revenues (000s) $ 83,515 $ 82,198 Operating Expenses (000s) $ 39,883 $ 42,470 NOI (000s) (3) $ 43,632 $ 39,728 NOI Margin (3) 52.2% 48.3% Number of Suites and Sites Acquired 14 10 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- (1) As at March 31. (2) Average monthly rents is defined as actual rents, net of vacancies, divided by the total number of suites and sites in the portfolio and do not include revenues from parking, laundry or other sources. (3) NOI is a measure used by management in evaluating operating performance. Please refer to the cautionary statements under the heading "Non-GAAP Financial Measures" and the reconciliations provided in this press release. Operating RevenuesFor the three months ended March 31, 2010, total operating revenues increased by 1.6% compared to the same period last year due to increased average monthly rents and slightly higher occupancies in most regions. Average monthly rents increased in all sectors and geographic regions of the portfolio, with the exception of Alberta, resulting in a 1.8% increase in overall average monthly rents as at March 31, 2010 to $943, compared to $926 as at March 31, 2009. Overall occupancy at March 31, 2010 improved slightly to 97.8% from 97.3% in the prior year period. The increases in average monthly rents were due to successful sales and marketing strategies and, despite the restrained economic growth, continued strength in the residential rental sector in the majority of CAPREIT's regional markets. For the three months ended March 31, 2010, average rent increases of $21 or 2.1% per suite per month were achieved on lease renewals, which represent 12.9% of total suites, while marginal rent increases of $4 or 0.4% per suite per month were experienced on suite turnovers, which represent 5.7% of total suites. The overall increase in average monthly rents was adversely impacted by the continued effect of aggressive rent discounting of approximately 6.3% or $70 per suite in the Alberta market and, to a lesser extent, by the sub-metering of hydro consumption, which results in reductions in rent. Excluding the impact of the Alberta portfolio and the effects of sub-metering, residential suite turnovers would have resulted in average monthly rent increases of $11 or 1.1%. Management believes that as occupancies stabilize throughout the portfolio and the markets for rental accommodation continue to improve, CAPREIT will generate additional rent increases on both turnover and lease renewals over the long term. Operating Expenses For the three months ended March 31, 2010, operating expenses as a percentage of operating revenues were down to 47.8% compared to 51.7% for the same period in 2009. The significant decrease in operating expenses through the first quarter of 2010 was primarily due to the decrease in utility costs and in repairs and maintenance ("R&M") costs. The decrease in utility costs was primarily a result of CAPREIT's energy savings initiatives and revised natural gas supply strategy combined with a milder winter in 2010 compared to 2009. Lower R&M costs for the first quarter of 2010 were the result of Management's continued steady progress in mitigating the impact of a garbage levy introduced by the City of Toronto in late 2008 through improved resident education and the implementation of waste recycling programs. Net Operating Income Overall NOI improved in the current quarter by $3.9 million or 9.8% and the NOI margin improved to 52.2% as compared to 48.3% in the prior year period due to the combination of higher revenues and significantly lower operating costs.For the first quarter of 2010, stabilized portfolio performance is comparable to overall portfolio performance as there were no significant property acquisitions in 2009 and in the first three months of 2010. As of March 31, 2010, CAPREIT has generated 17 consecutive quarters of stable or improved year-over-year NOI growth for stabilized properties. For the three months ended March 31, 2010, operating revenues for stabilized suites and sites increased 1.6% while operating costs decreased 6.2%. As a result, NOI increased by 9.8% for the first quarter of 2010. "We generated record operating and financial results in the first quarter of 2010, a testament to the effectiveness of our proven growth and capital investment strategies," commented Thomas Schwartz, President and Chief Executive Officer. "Looking ahead, we are confident this organic growth will continue through the balance of the year, augmented by our portfolio growth and diversification initiatives as we expect to acquire between 1,500 and 2,000 suites in 2010 and to execute certain strategic dispositions during the year as well." NON-GAAP FINANCIAL MEASURES Three Months Ended March 31, 2010 2009 ---------------------------------------------------------------------------- NFFO (000s) (1) $ 20,022 $ 16,468 NFFO Per Unit - Basic (1) $ 0.301 $ 0.250 Cash Distributions Per Unit $ 0.270 $ 0.270 NFFO Payout Ratio 93.3% 111.3% NFFO Effective Payout Ratio 83.7% 97.8% ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- (1) NFFO and NFFO per Unit are measures used by management in evaluating operating performance. Please refer to the cautionary statements under the heading "Non-GAAP Financial Measures" and the reconciliations provided in this press release. Normalized Funds From Operations NFFO is not a financial measure determined by Canadian generally accepted accounting principles ("GAAP"), however, it is used by CAPREIT to assess overall operating performance. NFFO, which excludes from Funds From Operations ("FFO") the effect of changes in the fair value of derivative financial instruments and certain other non-recurring expenses, increased by 21.6% for the three months ended March 31, 2010, compared to the same period last year. The increase was primarily due to the strong progress in managing operating costs including utility and R&M costs, higher average monthly rents and improved occupancy levels resulting from Management's sales and marketing programs. NFFO per Unit increased by 20.4% for the three months ended March 31, 2010 compared to the prior year period. The payout ratio of distributions declared to NFFO improved for the three months ended March 31, 2010 to 93.3% compared to 111.3% for the same period last year. The effective NFFO payout ratio, which compares net distributions paid to Unitholders to NFFO, improved to 83.7% for the three months ended March 31, 2010, down from 97.8% in the same period last year, primarily due to significant operating cost reductions, partly offset by the slight reduction of reinvestments of distributions under the Distribution Reinvestment Plan ("DRIP"). The average DRIP participation rate decreased for the three months ended March 31, 2010 to 10.3% as compared to 12.1% in the prior year period. LIQUIDITY AND LEVERAGE As at March 31, 2010 2009 ---------------------------------------------------------------------------- Mortgage Debt to Gross Book Value 56.63% 57.00% Total Debt to Gross Book Value 63.22% 61.84% Total Debt to Total Capitalization 63.33% 65.27% Debt Coverage Ratio (times) (1) 1.30 1.29 Interest Coverage Ratio (times) (1) 2.08 2.07 Weighted Average Mortgage Interest Rate (2) 5.06% 5.27% Weighted Average Mortgage Term to Maturity (years) 4.8 4.9 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- (1) For the four quarters ended March 31. (2) Effective weighted average interest rate including deferred financing costs and fair value adjustments but excluding CMHC premiums. Additionally, including the amortization of the realized component of the loss on settlement of $9.9 million included in Accumulated Other Comprehensive Loss, the effective portfolio weighted average interest rate at March 31, 2010 would be 0.09% higher (March 31, 2009 - nil%). Financial Strength CAPREIT's strong balance sheet and financial position will enable Management to take advantage of the current low interest rate environment through the combination of refinancings as well as modest increases in overall leverage.CAPREIT is achieving its financing plan goals as demonstrated by the following key indicators: -- The ratio of total debt to gross book value as at March 31, 2010 remains conservative and increased modestly to 63.22% as compared to 61.84% last year -- Debt and interest coverage ratios have improved for the four quarters ended March 31, 2010, compared to last year despite the impact of additional mortgage financing obtained in the last 12 months on principal and interest payments -- At March 31, 2010, 96.2% (March 31, 2009 - 95.1%) of CAPREIT's mortgage portfolio is insured by the Canada Mortgage and Housing Corporation ("CMHC") (excluding the mortgages on CAPREIT's manufactured home community land lease sites) -- The effective portfolio weighted average interest rate on mortgages has steadily declined from 5.27% as at March 31, 2009, to 5.06% as at March 31, 2010, which will result in significant interest rate savings in future years -- The available borrowing capacity under the Acquisition and Operating Facility as at March 31, 2010 was $63.5 million in addition to the Land Lease Facility capacity of $7.7 million Management does not anticipate any material difficulties in renewing maturing mortgages approximately $161.8 million and refinancing approximately $46.3 million of principal repayments through 2010, which combined have a weighted average effective interest rate of approximately 4.89%, and despite the recent increases in interest rates, with new mortgages at lower interest rates than those currently in place. Based on current interest rates for CMHC-insured mortgages, Management expects to realize interest rate savings for mortgages maturing in 2010 that will benefit CAPREIT over the long term. Although the progress in refinancings in the first quarter was slower than expected, Management believes it will be in a position to achieve its overall 2010 mortgage renewal and refinancing plan of approximately $285 million to $300 million, of which $29.1 million ($17.2 million for renewals and $11.9 million for top ups) has been closed or committed up to May 11, 2010.Property Capital Investment Plan During the first quarter of 2010, CAPREIT invested $8.4 million in its properties as compared to $9.2 million for the same period in 2009. Property capital investments were lower compared to the prior year period primarily due to the timing of building improvement programs in the quarter, partly offset by higher investments in suite improvements and high-efficiency boilers. In addition, CAPREIT continues to invest in environment-friendly and energy saving initiatives, including the above-mentioned boilers, energy-efficient lighting systems, water saving and waste recycling programs, which have permitted CAPREIT to mitigate potentially higher increases in utility costs and have improved overall portfolio NOI significantly. Management expects to invest between $92.5 million to $97.5 million in its properties during 2010. Acquisition On April 12, 2010, CAPREIT completed the acquisition of a property comprising 162 suites located in Vancouver, British Columbia. The purchase price of $37.5 million, excluding closing and transaction costs, was funded by the assumption of an existing CMHC-insured first mortgage of $22.7 million at 4.59%, maturing on April 5, 2017, with the balance from the Acquisition and Operating Facility.Additional Information More detailed information and analysis is included in CAPREIT's consolidated financial statements and Management's Discussion and Analysis ("MD&A") for the three months ended March 31, 2010, which have been filed on SEDAR and can be viewed at www.sedar.com under CAPREIT's profile or on CAPREIT's website on the investor relations page at www.capreit.net. Additionally, supplemental information can be viewed at www.sedar.com under CAPREIT's profile and at www.capreit.net.Conference Call A conference call hosted by Thomas Schwartz, President and Chief Executive Officer and Richard J. Smith, Chief Financial Officer, will be held Wednesday, May 12, 2010 at 10.00 am ET. The telephone numbers for the conference call are: Local: (416) 340-8018, North American Toll Free: (800) 769-8320.A slide presentation to accompany Management's comments during the conference call will be available one hour and a half prior to the conference call. To view the slides, access the CAPREIT website at www.capreit.net, click on "Investor Relations" and follow the link at the top of the page. Please log on at least 15 minutes before the call commences. The telephone numbers to listen to the call after it is completed (Instant Replay) are local (416) 695-5800 or toll free (800) 408-3053. The Passcode for the Instant Replay is 3807645#. The Instant Replay will be available until midnight, May 19, 2010. The call and accompanying slides will also be archived on the CAPREIT website at www.capreit.net. For more information about CAPREIT, its business and its investment highlights, please refer to our website at www.capreit.net. About CAPREIT As one of Canada's largest residential landlords, CAPREIT (TSX:CAR.UN) is a growth-oriented investment trust owning interests in 27,776 residential suites and two manufactured home communities comprising 1,316 land lease sites located in or near major urban centres from coast to coast. For more information about CAPREIT, its business and its investment highlights, please refer to our website at www.capreit.net and our public disclosure which can be found under our profile at www.sedar.com. Non-GAAP Financial Measures CAPREIT prepares and releases unaudited quarterly and audited consolidated annual financial statements prepared in accordance with Canadian generally accepted accounting principles ("GAAP"). In this and other earnings releases and investor conference calls, as a complement to results provided in accordance with GAAP, CAPREIT also discloses and discusses certain non-GAAP financial measures, including NOI, FFO, NFFO and applicable per Unit amounts and payout ratios. These non-GAAP measures are further defined and discussed in the May 11, 2010 MD&A, which should be read in conjunction with this news release. Since NOI, FFO and NFFO are not determined by GAAP, they may not be comparable to similar measures reported by other issuers. CAPREIT has presented such non-GAAP measures as Management believes these non-GAAP measures are relevant measures of the ability of CAPREIT to earn and distribute cash returns to Unitholders and to evaluate CAPREIT's performance. A reconciliation of Net Loss and such non-GAAP measures and Adjusted Funds From Operations ("AFFO") is included in this press release. These non-GAAP measures should not be construed as alternatives to net income (loss) or cash flow from operating activities determined in accordance with GAAP as an indicator of CAPREIT's performance. Cautionary Statements Regarding Forward-Looking Statements Certain statements contained, or contained in documents incorporated by reference, in this press release constitute forward-looking information within the meaning of 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, projected costs, capital investments, 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 capital investments, acquisition and capital investment strategy 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", "should", "expect", "plan", "anticipate", "believe", "intend", "estimate", "predict", "potential", "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 economy will generally experience growth, however, with specific geographic areas of weakness including Alberta and parts of Ontario; that inflation will remain at historically low rates; that interest rates will rise in 2010; 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 conditions within the real estate market, including competition for acquisitions, will become favourable; 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 will grow at levels similar to the rate of inflation on renewal; that rental rates on turnovers will remain stable; 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 Management believes are reasonable as of the date hereof, there can be no assurance actual results will be consistent with these forward-looking statements; 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 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: real property ownership, leasehold interests, co-ownerships, investment restrictions, operating risk, energy costs, environmental matters, insurance, capital investments, indebtedness, interest rate hedging, taxation, harmonization of federal goods and services tax and provincial sales tax, government regulations, controls over financial accounting, International Financial Accounting Standards, legal and regulatory concerns, the nature of units of CAPREIT ("Trust Units") and of CAPREIT's subsidiary, CAPREIT Limited Partnership ("CAPLP Units") (collectively, the "Units"), Unitholder liability, liquidity and price fluctuation of Units, dilution, distributions, participation in CAPREIT's distribution reinvestment plan, potential conflicts of interest, dependence on key personnel, general economic conditions, competition for residents, competition for real property investments, continued growth and risks related to acquisitions. 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.sedar.com, under CAPREIT's profile, as well as under Risks and Uncertainties in Section VII of CAPREIT's MD&A for the three months ended March 31, 2010 and other SEDAR filings made by CAPREIT. The information in this press release is based on information available to Management as of May 11, 2010. 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 UNAUDITED FINANCIAL INFORMATION Condensed Balance Sheets March 31, December 31, As at 2010 2009 ($ Thousands) ---------------------------------------------------------------------------- Income properties $ 2,196,543 $ 2,207,806 Total assets 2,269,655 2,279,779 Mortgages payable 1,533,515 1,545,315 Bank indebtedness 178,528 146,891 Total liabilities 1,833,757 1,822,595 Unitholders' Equity 435,898 457,184 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Condensed Statements of Operations Three Months Ended March 31, 2010 2009 ($ Thousands, except per Unit amounts) ---------------------------------------------------------------------------- Net Operating Income $ 43,632 $ 39,728 Less: Trust Expenses 2,948 3,572 Mortgage Interest 19,239 18,874 Interest on Bank Indebtedness 1,479 801 Net Loss on Natural Gas Contracts 4,497 - Other Income (462) (465) Depreciation 20,571 18,975 Amortization 896 822 ---------------------------------------------------------------------------- Loss Before Other Costs, Losses and Income Taxes (5,536) (2,851) Restructuring Costs (150) - Unrealized Loss on Derivative Financial Instruments (54) (845) Recovery of (Provision for) Future Income Taxes 950 (803) ---------------------------------------------------------------------------- Net Loss $ (4,790) $ (4,499) ---------------------------------------------------------------------------- Basic Net Loss per Unit $ (0.072) $ (0.068) Diluted Net Loss per Unit $ (0.072) $ (0.068) ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Weighted Average Number of Units (000s) - Basic 66,423 65,770 Weighted Average Number of Units (000s) - Diluted 66,665 65,854 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Condensed Statements of Cash Flows Three Months Ended March 31, 2010 2009 ($ Thousands) ---------------------------------------------------------------------------- Cash Provided By Operating Activities: Net Loss $ (4,790) $ (4,499) Items in Net Loss Not Affecting Cash: Depreciation and Amortization 21,739 19,736 (Recovery of) Provision for Future Income Taxes (950) 803 Other 4,844 1,550 Changes in Non-cash Operating Assets and Liabilities (9,224) (1,644) ---------------------------------------------------------------------------- Cash Provided By Operating Activities 11,619 15,946 ---------------------------------------------------------------------------- Cash Used In Investing Activities (15,132) (10,337) ---------------------------------------------------------------------------- Cash Provided By (Used In) Financing Activities Mortgages and Other Liabilities 19,549 9,134 Distributions, Net of DRIP and Other Equity Issuances (16,036) (14,743) ---------------------------------------------------------------------------- Cash Provided By (Used In) Financing Activities 3,513 (5,609) ---------------------------------------------------------------------------- Changes in Cash and Cash Equivalents During the Period - - Cash and Cash Equivalents, Beginning of Period - - ---------------------------------------------------------------------------- Cash and Cash Equivalents, End of Period $ - $ - ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Reconciliation of Net Loss to FFO and to NFFO Three Months Ended March 31, 2010 2009 ($ Thousands, except per Unit amounts) ---------------------------------------------------------------------------- Net Loss $ (4,790) $ (4,499) Adjustments: (Recovery of) Provision for Future Income Taxes (950) 803 Depreciation 20,571 18,975 Amortization of Tenant Improvements 69 70 Amortization of Intangible Assets 149 335 Amortization of Above and Below Market Leases (2) (61) ---------------------------------------------------------------------------- FFO $ 15,047 $ 15,623 Adjustments: Restructuring Costs 150 - Unrealized Loss on Derivative Financial Instruments 54 845 Loss on Natural Gas Contracts 4,497 - Amortization of Loss on Derivative Financial Instruments included in Mortgage Interest 274 - ---------------------------------------------------------------------------- NFFO $ 20,022 $ 16,468 NFFO per Unit - Basic $ 0.301 $ 0.250 NFFO per Unit - Diluted $ 0.300 $ 0.250 ---------------------------------------------------------------------------- Distributions Declared (1) $ 18,675 $ 18,331 ---------------------------------------------------------------------------- NFFO Payout Ratio (2) 93.3% 111.3% ---------------------------------------------------------------------------- Net Distributions Paid (3) $ 16,750 $ 16,107 Excess NFFO over Net Distributions Paid $ 3,272 $ 361 ---------------------------------------------------------------------------- Effective NFFO Payout Ratio (4) 83.7% 97.8% ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- (1) For a description of distributions declared, see the Non-GAAP Financial Measures section in the MD&A for the three months ended March 31, 2010. (2) The payout ratio compares distributions declared to NFFO. (3) Distributions declared less cash reinvested through the DRIP, and non- cash distributions related to the Deferred Unit Plan ("DUP") and Restricted Unit Rights ("RUR") plan. (4) The effective payout ratio compares net distributions paid to NFFO. Reconciliation of NFFO to AFFO Three Months Ended March 31, 2010 2009 ($ Thousands, except per Unit amounts) ---------------------------------------------------------------------------- NFFO $ 20,022 $ 16,468 Adjustments: Maintenance Capital Investment Provision (1) (2,977) (2,977) Non-Cash Compensation for LTIP, SELTIP, DUP and RUR Plan 320 608 ---------------------------------------------------------------------------- AFFO $ 17,365 $ 14,099 AFFO per Unit - Basic $ 0.261 $ 0.214 AFFO per Unit - Diluted $ 0.260 $ 0.214 ---------------------------------------------------------------------------- Distributions Declared (2) $ 18,675 $ 18,331 ---------------------------------------------------------------------------- AFFO Payout Ratio (3) 107.5% 130.0% ---------------------------------------------------------------------------- Net Distributions Paid (4) $ 16,750 $ 16,107 Excess (Shortfall) AFFO over Net Distributions Paid $ 615 $ (2,008) ---------------------------------------------------------------------------- Effective AFFO Payout Ratio (5) 96.5% 114.2% ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- (1) An industry based estimate (see the Non-GAAP Measures section in the MD&A for the three months ended March 31, 2010). (2) For a description of distributions declared, see the Non-GAAP Financial Measures section in the MD&A for the three months ended March 31, 2010. (3) The payout ratio compares distributions declared to AFFO. (4) Distributions declared less cash reinvested through the DRIP, and non- cash distributions related to the DUP and RUR plan. (5) The effective payout ratio compares net distributions paid to AFFO. FOR FURTHER INFORMATION PLEASE CONTACT: CAPREIT Mr. Michael Stein Chairman (416) 861-5788 or CAPREIT Mr. Thomas Schwartz President & CEO (416) 861-9404 or CAPREIT Mr. Richard J. Smith Chief Financial Officer (416) 861-5771