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CAPREIT Announces Continued Strong Growth in Second Quarter of 2014

TORONTO, ONTARIO -- (Marketwired) -- 08/08/14 -- Canadian Apartment Properties Real Estate Investment Trust ("CAPREIT") (TSX:CAR.UN) announced today strong operating and financial results for the three and six months ended June 30, 2014.


                              Three Months Ended         Six Months Ended   
                                   June 30                   June 30        
                                 2014         2013         2014         2013
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Operating Revenues                                                          
 (000s)                   $   125,411  $   117,686  $   251,944  $   233,010
Net Operating Income                                                        
 ("NOI") (000s) (1)       $    78,089  $    71,475  $   149,464  $   134,966
NOI Margin (1)                  62.3%        60.7%        59.3%        57.9%
Normalized Funds From                                                       
 Operations ("NFFO")                                                        
 (000s) (1)               $    47,113  $    42,582  $    90,026  $    78,768
NFFO Per Unit - Basic                                                       
 (1)                      $     0.431  $     0.425  $     0.826  $     0.787
Weighted Average Number                                                     
 of Units - Basic (000s)      109,211      100,230      108,964      100,086
NFFO Payout Ratio (1)           68.9%        68.0%        71.7%        73.2%
                                                                            
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(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-IFRS Financial Measures" and the   
     reconciliations provided in this press release.                      

--  Strong occupancies and increased average monthly rents, combined with
    contributions from acquisitions, drive 6.6% and 8.1% increase in
    revenues in second quarter and first six months of June 30, 2014,
    respectively 
--  Average monthly rents for same residential properties up 2.7% in 2014
    compared to last year 
--  Portfolio occupancy remains strong at 98.3% 
--  NFFO up 10.6% in second quarter and 14.3% for six months ended June 30,
    2014 
--  Strong accretive growth as NFFO per Unit for six months ended June 30,
    2014 up 5.0% despite 9% increase in the weighted average number of Units
    outstanding. 
--  Same property NOI up 5.4% for the three and six months ended June 30,
    2014 
--  NOI margin increased to 62.3% and 59.3%, respectively, for the three and
    six months ended June 30, 2014 
--  Closed mortgage refinancings (excluding acquisitions) for $413.8 million
    in 2014, including $248.2 million for renewals of existing mortgages and
    $165.5 million for additional top up financing with a weighted average
    term to maturity of 10 years, and a weighted average interest rate of
    3.38%. 

"We generated yet another quarter of strong growth as same property NOI rose a significant 5.4% while our track record of making accretive acquisitions contributed to increased cash flows," commented Thomas Schwartz, President and CEO. "Looking ahead, we are confident our proven operational programs, energy management and purchasing systems will continue to enhance net operating income and NOI margins."


                              Three Months Ended         Six Months Ended   
                                   June 30                   June 30        
                                 2014         2013         2014         2013
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Overall Portfolio                                                           
 Occupancy (1)                                            98.3%        98.4%
Overall Portfolio                                                           
 Average Monthly Rents                                                      
 (1),(2)                                            $       958  $       989
Operating Revenues                                                          
 (000s)                   $   125,411  $   117,686  $   251,944  $   233,010
Net Rental Revenue Run-                                                     
 Rate (000s) (1),(3),(4)                            $   477,905  $   448,881
Operating Expenses                                                          
 (000s)                   $    47,322  $    46,211  $   102,480  $    98,044
NOI (000s) (4)            $    78,089  $    71,475  $   149,464  $   134,966
NOI Margin (4)                  62.3%        60.7%        59.3%        57.9%
Number of Suites and                                                        
 Sites Acquired                     -          510            -          773
Number of Suites                                                            
 Disposed                         338            -          338            -
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(1)  As at June 30.                                                       
(2)  Average monthly rents are 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)  For a description of net rental revenue run-rate, see the Results of 
     Operations section in the MD&A for the year ended June 30, 2014.     
(4)  Net rental revenue run-rate and NOI are measures used by Management  
     in evaluating operating performance. Please refer to the cautionary  
     statements under the heading "Non-IFRS Financial Measures" and the   
     reconciliations provided in this press release.                      

Operating Revenues

For the three and six months ended June 30, 2014, total operating revenues increased by 6.6% and 8.1%, respectively, compared to the same periods last year primarily due to the contribution from acquisitions, higher average monthly rents, and continuing strong occupancies. For the three and six months ended June 30, 2014, ancillary revenues, including parking, laundry and antenna income, rose by 7.6% and 10.7%, respectively, compared to the same periods last year, due to contributions from acquisitions and Management's continued focus on maximizing the revenue potential of its property portfolio.

CAPREIT's annualized net rental revenue run-rate as at June 30, 2014 increased to $477.9 million, up 6.5% from $448.9 million as at June 30, 2013 primarily due to acquisitions completed within the past twelve months and strong increases in average monthly rents. Net rental revenue run-rate net of dispositions for the twelve months ended June 30, 2014 was $468.9 million (2013 - $429.6 million).

Portfolio Average Monthly Rents ("AMR")


                                               Properties Owned Prior to  
                          Total Portfolio             June 30, 2013       
As at June 30,          2014          2013          2014         2013(1)  
                            Occ.          Occ.          Occ.          Occ.
                       AMR     %     AMR     %     AMR     %     AMR     %
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Average                                                                   
 Residential                                                              
 Suites            $ 1,069  98.4 $ 1,044  98.3 $ 1,072  98.4 $ 1,044  98.2
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Average MHC Land                                                          
 Lease Sites       $   350  97.7 $   446  99.4 $   458  99.4 $   446  99.4
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Overall Portfolio                                                         
 Average           $   958  98.3 $   989  98.4 $ 1,014  98.5 $   988  98.3
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     Prior period's comparable AMR and occupancy have been restated for   
(1)  properties disposed of since July 1, 2013.                           

Average monthly rents for residential suites increased by 2.4% to $1,069 and occupancy increased to 98.4% as at June 30, 2014 due to ongoing successful sales and marketing strategies and continued strength in the residential rental sector in the majority of CAPREIT's regional markets. For the MHC land lease portfolio, average monthly rents decreased to $350 as at June 30, 2014, compared to $446 as at June 30 2013, primarily due to the recent acquisitions in lower rent geographic regions. Occupancy for the MHC portfolio was 97.7% at June 30, 2014 compared to 99.4% the same period last year.

Average monthly rents for residential suites owned prior to June 30, 2013 increased as at June 30, 2014 to $1,072 from $1,044 as at June 30, 2013, an increase of 2.7% from the same period last year with occupancies rising to 98.4% from 98.2%.


Suite Turnovers and Lease Renewals                                        
For the Three                                                             
Months Ended June                                                         
30,                           2014                        2013            
                                             %                           %
                                     Turnovers                   Turnovers
                    Change in AMR            &  Change in AMR            &
                       $        %  Renewals(1)     $        %  Renewals(1)
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Suite Turnovers     34.4      3.2          7.2  25.8      2.4          7.4
Lease Renewals      17.2      1.6         20.5  28.7      2.7         19.4
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Weighted Average                                                          
of Turnovers and                                                          
Renewals            21.7      2.0               27.9      2.6             
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For the Six Months                                                        
Ended June 30,                            2014                        2013
                                 %                           %            
                                     Turnovers                   Turnovers
                    Change in AMR            &  Change in AMR            &
                       $        %  Renewals(1)     $        %  Renewals(1)
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Suite Turnovers     29.8      2.8         12.6  19.3      1.8         12.7
Lease Renewals      17.3      1.6         36.2  29.3      2.7         34.7
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Weighted Average                                                          
of Turnovers and                                                          
Renewals            20.5      1.9               26.6      2.5             
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(1)  Percentage of suites turned over or renewed during the period based  
     on the total number of residential suites (excluding co-ownerships)  
     held at the end of the period.                                       

The lower rate of growth in average monthly rents on lease renewals during 2014 compared to the prior year is primarily due to the lower mandated guideline increases for 2014 (Ontario - 0.8%, British Columbia - 2.2%), compared to the higher guideline increases in 2013 (Ontario - 2.5%, British Columbia - 3.8%), partially offset by increases due to above guideline increases ("AGI") achieved in Ontario. However, increased portfolio diversification helped mitigate the lower guideline increases. Management continues to pursue AGI applications where it believes increases are supported by market conditions above the annual guideline to raise average monthly rents on lease renewals. For 2015, the permitted guideline increase in Ontario has been increased to 1.6%.

NON-IFRS FINANCIAL MEASURES


Operating Expenses                                                          
                 Three Months Ended               Six Months Ended          
                      June 30                         June 30               
($ Thousands)    2014   %(1)     2013   %(1)     2014   %(1)     2013   %(1)
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Operating                                                                   
 Expenses                                                                   
 Realty Taxes$ 13,749   11.0 $ 13,357   11.4 $ 27,959   11.1 $ 27,482   11.8
 Utilities     10,832    8.6    9,983    8.5   28,812   11.4   25,599   11.0
 Other (2)     22,741   18.1   22,871   19.4   45,709   18.2   44,963   19.3
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Total                                                                       
 Operating   $                                                              
 Expenses      47,322   37.7 $ 46,211   39.3 $102,480   40.7 $ 98,044   42.1
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(1)  As a percentage of total operating revenues.                         
     Comprises R&M, wages, general and administrative, insurance,         
(2)  advertising, and legal costs.                                        

Operating Expenses

Overall operating expenses as a percentage of operating revenues improved to 37.7% and 40.7%, respectively, for the three and six months ended June 30, 2014 compared to 39.3% and 42.1% for the same period last year, due to lower realty taxes, R&M, and insurance costs partially offset by higher utility costs as a percentage of operating revenues.

Net Operating Income

In the three months ended June 30, 2014, NOI improved by $6.6 million or 9.3%, and the NOI margin increased to 62.3% from 60.7% for the same period last year. For the six months ended June 30, 2014, NOI increased by $14.5 million or 10.7%, and the NOI margin increased to 59.3% compared to 57.9% for the same period last year. The increase in NOI margin for the three and six months ended June 30, 2014 was primarily the result of higher operating revenues, lower realty taxes, R&M, and insurance costs partially offset by higher utility costs.

For the three and six months ended June 30, 2014, operating revenues for stabilized suites and sites increased 2.8% and 3.2% respectively, while operating expenses decreased 1.2% and increased 0.3%, respectively, compared to the same periods last year. As a result, for the three and six months ended June 30, 2014, stabilized NOI increased by a significant 5.4% and 5.4%, respectively, compared to the same periods last year.

NON-IFRS FINANCIAL MEASURES


                              Three Months Ended         Six Months Ended   
                                   June 30,                  June 30,       
                                 2014         2013         2014         2013
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NFFO (000s)               $    47,113       42,582  $    90,026  $    78,768
NFFO Per Unit - Basic     $     0.431  $     0.425  $     0.826  $     0.787
Cash Distributions Per                                                      
 Unit                     $     0.290  $     0.283  $     0.578  $     0.563
NFFO Payout Ratio               68.9%        68.0%        71.7%        73.2%
NFFO Effective Payout                                                       
 Ratio                          47.3%        52.4%        48.9%        56.1%
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LIQUIDITY AND LEVERAGE


As at June 30,                                             2014        2013
                                                                           
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Total Debt to Gross Book Value                           47.22%      48.42%
Total Debt to Gross Historical Cost (1)                  56.79%      58.17%
Total Debt to Total Capitalization                       51.23%      51.84%
                                                                           
Debt Service Coverage Ratio (times) (2)                    1.59        1.56
Interest Coverage Ratio (times) (2)                        2.71        2.61
                                                                           
Weighted Average Mortgage Interest Rate (3)               3.72%       3.81%
Weighted Average Mortgage Term to Maturity (years)          6.7         6.1
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(1)  Based on historical cost of investment properties.                   
(2)  Based on the trailing four quarters ended June 30, 2014.             
     Weighted average mortgage interest rate includes deferred financing  
(3)  costs and fair value adjustments on an effective interest basis.     
     Including the amortization of the realized component of the loss on  
     interest rate hedge settlement of $32.5 million included in          
     Accumulated Other Comprehensive Loss (''AOCL''), the effective       
     portfolio weighted average interest rate at June 30, 2014 would be   
     3.88% (June 30, 2013 - 4%).                                          

Financial Strength

Management believes CAPREIT's strong balance sheet and liquidity position will enable it to continue to take advantage of acquisition and property capital investment opportunities over the long term.

CAPREIT is achieving its financing goals as demonstrated by the following key indicators:


--  Maintained a conservative ratio of total debt to gross book value of
    47.22% as at June 30, 2014; 
--  Debt service and interest coverage ratios for the quarter ended June 30,
    2014 improved to 1.59 times and 2.71 times, respectively, compared to
    1.56 times and 2.61 times, respectively, for the same period last year; 
--  As at June 30, 2014, 97.0% (June 30, 2013 - 94.0%) of CAPREIT's mortgage
    portfolio was insured by the Canada Mortgage and Housing Corporation
    ("CMHC"), excluding the mortgages on CAPREIT's MHC land lease sites,
    resulting in improved spreads on mortgages and overall lower interest
    costs than conventional mortgages. 
--  The effective portfolio weighted average interest rate on mortgages has
    steadily declined to 3.72% as at June 30, 2014 from 3.81% as at June 30,
    2013, resulting in significant potential interest rate savings in future
    years; 
--  Management expects to raise between $600 million and $650 million in
    total mortgage renewals and refinancings in 2014 of which $521.6 million
    has been completed or committed up to August 8, 2014; 
--  The weighted average term to maturity of the mortgage portfolio has
    improved from 6.1 years to 6.7 years as at June 30, 2014; 
--  As at June 30, 2014, CAPREIT has investment properties with a fair value
    of $218 million that are not encumbered by mortgages and secure only the
    Acquisition and Operating Facility. Unencumbered investment properties
    with a fair value over $68 million are expected to be financed reducing
    the total unencumbered investment properties to approximately $150
    million; 

Property Capital Investment Plan

During the six months ended June 30, 2014, CAPREIT made property capital investments (excluding disposed properties, head office assets, tenant improvements and signage) of $56.9 million as compared to $52.9 million the same period last year. For the full 2014 year, CAPREIT expects to complete property capital investments of approximately $165 million to $175 million, including approximately $87 million targeted at acquisitions completed since January 1, 2011 and approximately $22 million in high-efficiency boilers and other energy-saving initiatives.

Property capital investments include suite improvements, common areas and equipment, which generally tend to increase NOI more quickly. CAPREIT continues to invest in energy-saving initiatives, including boilers, energy-efficient lighting systems, and water-saving programs, which permit CAPREIT to mitigate potentially higher increases in utility and R&M costs and significantly improve overall portfolio NOI.

Subsequent Event

On July 4, 2014, CAPREIT announced that the Toronto Stock Exchange approved its notice of intention to make a normal course issuer bid for its Units as appropriate opportunities arise from time to time. CAPREIT's normal course issuer bid will be made in accordance with the policies of the TSX. CAPREIT may purchase its Units during the period from July 8, 2014 to July 7, 2015. Pursuant to the notice and subject to the market price of its Units and other considerations, CAPREIT may acquire over the next 12 months up to 10,659,524 Units, representing 10% of the public float. The average daily trading volume ("ADTV") for the six calendar months prior to the date hereof was 258,670 Units and CAPREIT will be permitted to re-purchase up to 25% of the ADTV on any trading day (25% being 64,668 Units).

On July 31, 2014, CAPREIT completed the acquisition of a 213-suite apartment portfolio in Charlottetown, Prince Edward Island. The purchase price for the portfolio was approximately $19.6 million, satisfied by the assumption of existing mortgages totaling approximately $14.8 million bearing an effective weighted average stated interest rate at 3.79% and weighted average term to maturity of 3.0 years, with the remaining funded from CAPREIT's Acquisition and Operating credit facility.

Additional Information

More detailed information and analysis is included in CAPREIT's unaudited condensed consolidated interim financial statements and MD&A for the three and six months ended June 30, 2014, 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.

Conference Call

A conference call hosted by Thomas Schwartz, President and CEO and the CAPREIT Management Team, will be held Monday, August 11, 2014 at 10:00 am EST. The telephone numbers for the conference call are: Local/International: (416) 340-2216, North American Toll Free: (866) 223-7781.

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/international (905) 694-9451 or North American toll free (800) 408-3053. The Passcode for the Instant Replay is 5855136#. The Instant Replay will be available until midnight, August 18, 2014. 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

CAPREIT owns interests in multi-unit residential rental properties, including apartments, townhomes and manufactured home communities primarily located in and near major urban centres across Canada. As at June 30, 2014, CAPREIT had owning interests in 41,216 residential units, comprised of 35,034 residential suites and 29 manufactured home communities ("MHC") comprising 6,182 land lease sites. 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-IFRS Financial Measures

CAPREIT prepares and releases unaudited quarterly and audited consolidated annual financial statements prepared 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 also discloses and discusses certain non-IFRS financial measures, including Net Rental Revenue Run-Rate, NOI, FFO, NFFO and applicable per Unit amounts and payout ratios. These non-IFRS measures are further defined and discussed in the MD&A released on August 8, 2014, which should be read in conjunction with this press release. Since Net Rental Revenue Run-Rate, NOI, FFO and NFFO are not determined by IFRS, they may not be comparable to similar measures reported by other issuers. CAPREIT has presented such non-IFRS measures as Management believes these non-IFRS 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 Income and such non-IFRS measures including Adjusted Funds From Operations ("AFFO") is included in this press release. These non-IFRS measures should not be construed as alternatives to net income (loss) or cash flow from operating activities determined in accordance with IFRS 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 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 and Ireland economies will generally experience growth, however, may be adversely impacted by the global economy; that inflation will remain low; that interest rates will remain low in the medium term; 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 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 they 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: reporting investment properties at fair value, real property ownership, leasehold interests, co-ownerships, investment restrictions, operating risk, energy costs and hedging, environmental matters, insurance, capital investments, indebtedness, interest rate hedging, foreign operation and currency risks, taxation, harmonization of federal goods and services tax and provincial sales tax, government regulations, controls over financial accounting, legal and regulatory concerns, the nature of units of CAPREIT ("Trust Units") and of CAPREIT's subsidiary, CAPREIT Limited Partnership ("Exchangeable 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 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 section of the MD&A released on August 8, 2014. The information in this press release is based on information available to Management as of August 8, 2014. Subject to applicable law, CAPREIT does not undertake any obligation to publicly update or revise any forward-looking information.


SELECTED FINANCIAL INFORMATION                                            
                                                                          
Condensed Balance Sheets                                                  
                                                                          
                                                   June 30,   December 31,
As at                                                  2014           2013
($ Thousands)                                                             
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Investment Properties                        $    5,497,243 $    5,459,218
Total Assets                                      5,673,542      5,558,934
Mortgages Payable                                 2,576,142      2,457,182
Bank Indebtedness                                   117,828        187,030
Total Liabilities                                 2,842,542      2,801,465
Unitholders' Equity                               2,831,000      2,757,469
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Condensed Income                                                            
 Statements                                                                 
                                                                            
                            Three Months Ended         Six Months Ended     
                                 June 30,                  June 30,         
($ Thousands)                   2014         2013         2014         2013 
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Net Operating Income          78,089       71,475      149,464      134,966 
 Trust Expenses               (6,640)      (5,306)     (11,369)      (9,681)
 Unrealized Gain on                                                         
  Remeasurement of                                                          
  Investment Properties       32,935       10,784       37,137       44,439 
 Remeasurement of                                                           
  Exchangeable Units            (249)         415         (260)         311 
 Unit-based Compensation                                                    
  Expenses                    (6,225)       5,385       (7,295)       3,675 
 Interest on Mortgages                                                      
  Payable and Other                                                         
  Financing Costs            (24,926)     (23,125)     (48,845)     (47,143)
 Interest on Bank                                                           
  Indebtedness                (1,486)      (1,490)      (3,378)      (2,984)
 Interest on                                                                
  Exchangeable Units             (47)         (46)         (93)        (105)
 Other Income                  1,355          780        3,414        3,265 
 Amortization                   (596)        (522)      (1,190)      (1,039)
 Unrealized and Realized                                                    
  Loss on Derivative                                                        
  Financial Instruments       (2,574)        (170)      (2,650)         (78)
 Gain (Loss) on Foreign                                                     
  Currency Translation         2,646           (6)       2,680           (6)
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Net Income                    72,282       58,174      117,615      125,620 
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Other Comprehensive                                                         
 Income (Loss)           $     2,323  $     1,593  $      (190) $         8 
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Comprehensive Income     $    74,605  $    59,767  $   117,425  $   125,628 
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Condensed Statements of Cash Flows                                         
                                                                           
                              Three Months Ended        Six Months Ended   
                                   June 30,                 June 30,       
                                 2014        2013         2014        2013 
($ Thousands)                                                              
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Cash Provided By                                                           
 Operating Activities:                                                     
 Net Income                $   72,282  $   58,174   $  117,615  $  125,620 
 Items in Net Income Not                                                   
  Affecting Cash:                                                          
  Changes in Non-cash                                                      
   Operating Assets and                                                    
   Liabilities                 (8,991)    (13,032)      (8,492)    (14,390)
  Realized and Unrealized                                                  
   Gain on                                                                 
   Remeasurements             (30,112)    (11,029)     (34,227)    (44,672)
  Gain on Sale of                                                          
   Investments                   (717)          -         (717)     (1,737)
  Unit-based Compensation                                                  
   Expenses                     6,225      (5,385)       7,295      (3,675)
  Items Related to                                                         
   Financing and                                                           
   Investing                                                               
   Activities                  23,897      23,187       47,666      46,125 
  Other                         1,902       2,707        3,790       2,347 
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Cash Provided By                                                           
 Operating Activities          64,486      54,622      132,930     109,618 
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Cash Used In Investing                                                     
 Activities                                                                
 Acquisitions                    (141)    (72,423)     (11,497)   (113,145)
 Capital Investments          (32,476)    (28,689)     (76,009)    (61,871)
 Disposition of                                                            
  Investments                   7,599           -        7,599       7,815 
 Other                            (50)       (291)         348         (92)
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Cash Used In Investing                                                     
 Activities                   (25,068)   (101,403)     (79,559)   (167,293)
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Cash Provided By                                                           
 Financing Activities                                                      
 Mortgages, Net of                                                         
  Financing Costs              91,548      19,311      110,722     106,773 
 Bank Indebtedness            (85,348)     74,492      (72,051)     44,405 
 Interest Paid                (24,122)    (23,504)     (48,638)    (46,787)
 Hedge Settlement                   -      (2,171)           -      (3,492)
 Proceeds on Issuance of                                                   
  Units                           235         682          384         785 
 Distributions, Net of                                                     
  DRIP and Other              (21,731)    (22,029)     (43,788)    (44,009)
-------------------------------------------------------------------------- 
Cash Provided By                                                           
 Financing Activities         (39,418)     46,781      (53,371)     57,675 
-------------------------------------------------------------------------- 
Changes in Cash and Cash                                                   
 Equivalents During the                                                    
 Period                             -           -            -           - 
Cash and Cash                                                              
 Equivalents, Beginning                                                    
 of Period                          -           -            -           - 
-------------------------------------------------------------------------- 
Cash and Cash                                                              
 Equivalents, End of                                                       
 Period                    $        -  $        -   $        -  $        - 
-------------------------------------------------------------------------- 
-------------------------------------------------------------------------- 
                                                                          
SELECTED NON-IFRS FINANCIAL MEASURES                                      
                                                                          
Reconciliation of Net Income to FFO and to NFFO                           
                                                                          
                             Three Months Ended        Six Months Ended   
                                  June 30,                 June 30,       
                                2014        2013         2014        2013 
($ Thousands, except per                                                  
 Unit amounts)                                                            
------------------------------------------------------------------------- 
Net Income                $   72,282  $   58,174   $  117,615  $  125,620 
Adjustments:                                                              
  Unrealized Gain on                                                      
   Remeasurement of                                                       
   Investment Properties     (32,935)    (10,784)     (37,137)    (44,439)
  Remeasurement of                                                        
   Exchangeable Units            249        (415)         260        (311)
  Remeasurement of Unit-                                                  
   based Compensation                                                     
   Liabilities                 4,681      (6,076)       4,935      (4,831)
  Interest on                                                             
   Exchangeable Units             47          46           93         105 
  Corporate taxes                                                         
   expense                     1,405           -        1,405           - 
  Amortization of                                                         
   Property, Plant and                                                    
   Equipment                     596         522        1,190       1,039 
------------------------------------------------------------------------- 
FFO                       $   46,325  $   41,467   $   88,361  $   77,183 
Adjustments:                                                              
  Unrealized and                                                          
   Realized Loss on                                                       
   Derivative Financial                                                   
   Instruments                 2,574         170        2,650          78 
  Amortization of Loss                                                    
   from AOCL to Interest                                                  
   and Other Financing                                                    
   Costs                         828         845        1,649       1,597 
  Net Mortgage                                                            
   Prepayment Cost               749          94          763       1,641 
  Realized Gain on Sale                                                   
   of Investments               (717)          -         (717)     (1,737)
  (Gain) Expense on                                                       
   Foreign Currency                                                       
   Translation                (2,646)          6       (2,680)          6 
------------------------------------------------------------------------- 
NFFO                      $   47,113  $   42,582   $   90,026  $   78,768 
  NFFO per Unit - Basic   $    0.431  $    0.425   $    0.826  $    0.787 
  NFFO per Unit -                                                         
   Diluted                $    0.425  $    0.419   $    0.815  $    0.775 
------------------------------------------------------------------------- 
  Total Distributions                                                     
   Declared (1)           $   32,484      28,976   $   64,522  $   57,678 
------------------------------------------------------------------------- 
  NFFO Payout Ratio (2)        68.9%       68.0%        71.7%       73.2% 
------------------------------------------------------------------------- 
                                                                          
  Net Distributions Paid                                                  
   (1)                    $   22,306  $   22,310   $   43,999  $   44,224 
  Excess NFFO Over Net                                                    
   Distributions Paid     $   24,807  $   20,272   $   46,027  $   34,544 
------------------------------------------------------------------------- 
  Effective NFFO Payout                                                   
   Ratio (3)                   47.3%       52.4%        48.9%       56.1% 
------------------------------------------------------------------------- 
------------------------------------------------------------------------- 
(1)  For a description of distributions declared and net distributions    
     paid, see the Non-IFRS Financial Measures section in the MD&A for the
     three and six months ended June 30, 2014.                            
(2)  The payout ratio compares distributions declared to NFFO.            
(3)  The effective payout ratio compares net distributions paid to NFFO.  
                                                                          
Reconciliation of NFFO to AFFO                                            
                                                                          
                             Three Months Ended        Six Months Ended   
                                  June 30                  June 30        
                              2014        2013         2014        2013   
($ Thousands, except per                                                  
 Unit amounts)                                                            
------------------------------------------------------------------------- 
NFFO                      $   47,113  $   42,582   $   90,026  $   78,768 
Adjustments:                                                              
  Provision for                                                           
   Maintenance Property                                                   
   Capital Investments                                                    
   (1)                        (3,849)     (3,727)      (7,699)     (7,455)
  Amortization of Fair                                                    
   Value on Grant Date                                                    
   of Unit-based                                                          
   Compensation                1,544         691        2,360       1,156 
------------------------------------------------------------------------- 
AFFO                      $   44,808  $   39,546   $   84,687  $   72,469 
  AFFO per Unit - Basic   $    0.410  $    0.395   $    0.777  $    0.724 
  AFFO per Unit -                                                         
   Diluted                $    0.405  $    0.389   $    0.767  $    0.713 
------------------------------------------------------------------------- 
  Distributions Declared                                                  
   (2)                    $   32,484  $   28,976   $   64,522  $   57,678 
------------------------------------------------------------------------- 
  AFFO Payout Ratio (3)        72.5%       73.3%        76.2%       79.6% 
------------------------------------------------------------------------- 
                                                                          
  Net Distributions Paid                                                  
   (2)                    $   22,306  $   22,310   $   43,999  $   44,224 
  Excess AFFO over Net                                                    
   Distributions Paid     $   22,502  $   17,236   $   40,688  $   28,245 
------------------------------------------------------------------------- 
  Effective AFFO Payout                                                   
   Ratio (4)                   49.8%       56.4%        52.0%       61.0% 
------------------------------------------------------------------------- 
------------------------------------------------------------------------- 
(1)  An industry based estimate (see the Non-IFRS Measures section in the 
     MD&A for the three and six months ended June 30, 2014).              
(2)  For a description of distributions declared and net distributions    
     paid, see the Non-IFRS Financial Measures section in the MD&A for the
     three and six months ended June 30, 2014.                            
(3)  The payout ratio compares distributions declared to AFFO.            
(4)  The effective payout ratio compares net distributions paid to AFFO.  

Contacts:
CAPREIT
Mr. Michael Stein
Chairman
(416) 861-5788

CAPREIT
Mr. Thomas Schwartz
President & CEO
(416) 861-9404

CAPREIT
Mr. Scott Cryer
Chief Financial Officer
(416) 861-5771

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