Canadian Apartment Properties REIT Q3 2025 Earnings Report

Canadian Apartment Properties REIT EPS Results

• Actual EPS: C$0.16
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A

Canadian Apartment Properties REIT Revenue Results

• Actual Revenue: $252.32 million
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Canadian Apartment Properties REIT Announcement Details

• Quarter: Q3 2025
• Date: 11/6/2025
• Time: Before Market Opens
• Conference Call Date: Friday, November 7, 2025
• Conference Call Time: 9:00AM ET

Canadian Apartment Properties Real Estate Investment Trust, or CAPREIT, is a real estate investment trust primarily engaged in the acquisition and leasing of multiunit residential rental properties located near major urban centers across Canada. The company's real estate portfolio is mainly composed of apartments and townhouses situated near public amenities. Most of CAPREIT's holdings are aimed towards the midtier and luxury markets in terms of demographic segments. The company derives nearly all of its income in the form of rental revenue from leasing its properties to tenants. The majority of this revenue comes from assets located in the Greater Toronto and Greater Montreal regions. The buildings in these areas also contain the majority of CAPREIT's total housing units.

Canadian Apartment Properties REIT Q3 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: CAPREIT sold non-core assets (C$411M in Canada, C$783M in Europe), reinvested C$366M into nine low‑CapEx Canadian properties and executed C$200M of NCIB repurchases at a weighted average of $43—below diluted NAV of $56, which management says is highly accretive.
• Positive Sentiment: Operationally the Canadian Same Property portfolio was strong with 97.8% occupancy, average monthly rent growth of 4.4% (occupied suites +5.7% YoY) and Same Property NOI margin expanding to 66.4%.
• Positive Sentiment: Management credits procurement, stricter scope controls and tech improvements for a 2.5% reduction in operating costs (ex taxes/utilities) and about C$2.3M in R&M savings, supporting sustained margins.
• Positive Sentiment: Balance sheet strengthened—leverage fell to 37.7%, debt-to-gross book value down 3.2% year-over-year, with $281M of available liquidity (C$84M cash + C$197M undrawn).
• Negative Sentiment: Near-term headwinds include elevated turnover from COVID-era above‑market leases (~20% of leases, ~6%% average differential) and higher vacancy in the Netherlands tied to ERES dispositions, which management expects could take 12–18 months to normalize.

Presentation

[Operator]

Hello everyone, and thank you for joining the Canadian Apartment Properties REIT Third Quarter 2025 Results Conference Call. My name is Claire, and I will be coordinating your call today. During the presentation, you can register a question by pressing star followed by one on your telephone keypad. If you change your mind, please press star followed by two on your telephone keypad. I will now hand over to Nicole Dolan, Investor Relations at Canadian Apartment Properties REIT, to begin. Please go ahead.

[Nicole Dolan, Director of Investor Relations at Canadian Apartment Properties REIT]

Thank you, Operator, and good morning, everyone. Before we begin, let me remind everyone that during our conference call this morning, we may include forward-looking statements about expected future events and the financial and operating results of CAPREIT, which are subject to certain risks and uncertainties. We direct your attention to slide two and our other regulatory filings for important information about these statements. I will now turn the call over to Mark Kenney, President and CEO.

[Mark Kenney, President and CEO at Canadian Apartment Properties REIT]

Thanks, Nicole, and good morning, everyone. Joining me this morning is Stephen Co, our Chief Financial Officer, and Julian Schonfeldt, our Chief Investment Officer. I'll start with a high-level update on our progress in 2025, as summarized on slide four. So far this year, we've sold $411 million in non-core, underperforming Canadian properties. On a consolidated basis, we've disposed of $783 million in European assets. With the sale proceeds, we've invested $366 million into the purchase of nine high-quality, low-CapEx properties located in some of Canada's most highly sought-after neighborhoods. We've also allocated $200 million to our NCIB program, repurchasing CAPREIT's Trust Units at a weighted average price of $43. With this being well below our diluted NAV per unit of $56 as of September 30th, 2025, it continues to represent a highly accretive use of capital.

[Mark Kenney, President and CEO at Canadian Apartment Properties REIT]

Operationally, our Same Property Canadian portfolio was 97.8% occupied at period end, across which we achieved 4.4% growth in average monthly rent. Combined with disciplined cost management, we are pleased to report our Same Property NOI margin expanded to 66.4% in Q3. We've also strengthened CAPREIT's balance sheet with leverage decreasing to 37.7% as of September 30th, 2025. With that overview, I will now turn the call over to Julian to provide an update on our capital allocation progress.

[Julian Schonfeldt, CIO at Canadian Apartment Properties REIT]

Thanks, Mark. On slide six, you'll see the significant progress we've made on our portfolio repositioning program. We've been actively divesting underperforming assets and redeploying proceeds into strategically aligned mid-market apartments that come with low capital investment requirements and strong cash flow yields. This upgrading has strengthened the performance of our affordable, well-maintained portfolio and reduced our non-core exposure, which is now at only 11% in Canada and 2% in Europe. Looking ahead, we're committed to advancing this transformation, simplifying the business, and returning to our roots as a pure-play provider of Canadian apartment properties. Our NCIB is another important component of our capital allocation strategy. As shown on slide seven, we executed $200 million of accretive repurchases in 2025, bringing total activity since inception in 2022 to $866 million.

[Julian Schonfeldt, CIO at Canadian Apartment Properties REIT]

This mechanism has delivered meaningful value by allowing us to invest in our own high-quality portfolio at an implied cap rate well above market comparables without due diligence, with quick execution and minimal transaction costs. Subject to market conditions and other strategic priorities, we plan to continue leveraging this tool to maximize Unitholder returns. With that, I'll hand it over to Stephen to review our results.

[Stephen Co, CFO at Canadian Apartment Properties REIT]

Thanks, Julian. In today's operating environment, our seasoned and agile leasing and retention strategies are playing an increasingly crucial role in sustaining performance and driving value. On slide nine, while occupancy softened slightly given recent market dynamics, it remained healthy at 97.8% on September 30th for the total Canadian residential portfolio. Across occupied suites, our average monthly rent increased by 5.7% year-over-year to $1,709. Turning to slide ten, robust rent growth was supplemented by prudent cost control. You can see that the Same Property expenditures increased by 1.3% compared to Q3 last year. However, excluding realty taxes and utilities, operating costs were down by 2.5%, driven mainly by lower R&M costs. Several initiatives contributed to this, including more competitive quoting and closed bidding processes, stricter approval thresholds, enhancements to our procurement practices, and improved sourcing and tendering through software optimization.

[Stephen Co, CFO at Canadian Apartment Properties REIT]

These operational efforts drove a 0.8 percentage point increase in our Same Property NOI margin to 66.4% for the quarter. Diluted FFO per unit was up by 0.6% for the three months ended September 30th, 2025, primarily due to NCIB repurchases and, to a lesser extent, reduced interest expense on credit facilities and mortgages payable. These gains were partially offset by lower NOI from asset dispositions. However, with sale proceeds used in part to repay debt, CAPREIT successfully decreased its debt-to-gross book value ratio by 3.2% since September 30th, 2024. However, I mean, sorry, higher vacancy also weighed on performance versus prior year periods, including elevated vacancy in the Netherlands tied to ERES's disposition program, which intentionally holds more suites vacant each month in order to maximize sale value. Results for the nine months ended September 30th, 2025, are summarized on slide 11.

[Stephen Co, CFO at Canadian Apartment Properties REIT]

With heightened cost pressures in the beginning of the year, our nine-month Same Property NOI margin held approximately flat compared to the same period in 2024, while our total portfolio margin declined to 65.2%. This reflects those early headwinds despite strong performance in the second and third quarters. Slide 12 provides an overview of our balance sheet, which remains one of the most resilient in our peer group. At period end, we had $281 million in available liquidity, including CAD 84 million in Canadian cash and $197 million in unused capacity on our acquisition and operating facility. This flexible financial position enables us to continue acting swiftly and decisively on accretive market opportunities as they arise. On that note, I will turn the call back over to Mark to wrap up.

[Mark Kenney, President and CEO at Canadian Apartment Properties REIT]

Thanks, Stephen. In summary, our third quarter 2025 performance underscores the enduring strength and stability of our affordable apartment portfolio in Canada, the value created through strategic capital recycling, the effectiveness of our rigorous property management, and the resilience of our conservative financial framework. Importantly, these elements all work together to support one primary objective: increase free cash flow generation. We view this as essential to sustaining earnings growth and enhancing long-term Unitholder value. On slide 14, as we approach year-end, we remain focused on driving continued progress across all areas of our business and reinforcing CAPREIT's long-standing position as a trusted choice for living, working, and investing. We would now be pleased to take any of your questions.

[Operator]

Thank you. To ask a question, please press star followed by one on your telephone keypad now. If you change your mind, please press star followed by two. When preparing to ask your question, please ensure your device is unmuted locally. Our first question comes from Jonathan Kelcher from TD Cowen. Your line is now open. Please go ahead.

[Jonathan Kelcher, Equity Analyst at TD Cowen]

Thanks. Good morning. First question, just on the capital allocation and the NCIB specifically with the stock below $40 here, can we expect you to sort of increase the pace or pick up the pace going into year-end in the beginning of next year?

[Mark Kenney, President and CEO at Canadian Apartment Properties REIT]

There is no question that at today's stock price level, there is extremely compelling value for anybody purchasing the unit. That is something that we have in our stack of capital allocation, and it remains in that stack.

[Jonathan Kelcher, Equity Analyst at TD Cowen]

Okay. I guess then shifting to operations, the uplifts on turnover, obviously being weighed down by above-market leases turning. How far do you think you're into that? How much longer do you think that's going to really weigh on the turnover stats?

[Stephen Co, CFO at Canadian Apartment Properties REIT]

Yeah, I think we're here, Jonathan. I think we're still probably 12-18 months away, but I would say as we see a lot of the turnover represented by those above-market leases, we're going to get through that over time.

[Jonathan Kelcher, Equity Analyst at TD Cowen]

Okay. Do you think the kind of 3%-4% where you are right now is kind of the bottom and maybe start to grow from there in the back half of next year?

[Stephen Co, CFO at Canadian Apartment Properties REIT]

Yeah, I think that's a pretty reasonable range.

[Jonathan Kelcher, Equity Analyst at TD Cowen]

Okay. Thanks. I'll turn it back.

[Operator]

Thank you. Our next question comes from Brad Sturges from Raymond James. Brad, your line is now open. Please go ahead.

[Brad Sturges, Managing Director and Equity Research Analyst at Raymond James]

Hey, good morning. Just to follow up on John's capital allocation question, just what would be holding you back on the NCIB here today? Are you seeing more opportunities on the acquisition side that might compete for that capital, or what would be the reason for the, I guess, the cautious tone there?

[Mark Kenney, President and CEO at Canadian Apartment Properties REIT]

What we have always said is that we've got the three pillars of use of capital, whether it be property acquisitions, NCIB, or paying down debt. We are very focused on our cash flow journey, and the opportunities to buy new construction assets at significantly below replacement cost is one that we had to balance with the other decisions. Okay? Obviously, how we're compelled to allocate capital is dependent on acquisition opportunities, the level that the stock is trading at, and the cost of debt. Going back to what I said in the first case, there is extremely compelling value in the stock price today.

[Brad Sturges, Managing Director and Equity Research Analyst at Raymond James]

Okay. Just maybe a question on the acquisition opportunity set today. How has that evolved or improved or not improved over the last few months? What are you seeing in the market today? I know you highlighted some opportunities in Vancouver when we were there a few weeks ago, but just maybe an update on the acquisition opportunity.

[Julian Schonfeldt, CIO at Canadian Apartment Properties REIT]

Thanks, Brad. There remains a lot of product out there to look at, but the bid-ask spread continues to be very wide with a lot of the product that's coming online now, born during the kind of COVID-elevated construction cost timeline. There's a divergence between what it costs folks to build the buildings and what they're actually worth now. We see a lot of opportunities, but I'd say very few of them are actually executable at prices that make sense for us. We underwrite hundreds of acquisitions a year. We're not seeing that slow down, and it's just you have to be very agile, nimble, and take advantage of opportunities when they are executable, which is generally when there's either vendor distress or the vendor's made an explicit statement or strategy to just get out of them and take whatever the market offers.

[Julian Schonfeldt, CIO at Canadian Apartment Properties REIT]

In short, lots of opportunities, but still wide bid-ask spread.

[Brad Sturges, Managing Director and Equity Research Analyst at Raymond James]

Are the better opportunities still more on a one-off basis, or are you seeing product come into the market on a larger portfolio size?

[Julian Schonfeldt, CIO at Canadian Apartment Properties REIT]

For the newer construction stuff, it's by and large on a one-off basis. To be honest, it's the right approach. The larger you get, the less of a bid you get. For the most part, I think folks are trying to sell into whatever liquidity there is, which tends to be on the smaller side. I haven't seen too many large portfolios. There's a few, but by and large, it's kind of one-offs.

[Brad Sturges, Managing Director and Equity Research Analyst at Raymond James]

Okay. Great. I'll turn it back. Thank you.

[Operator]

Thank you. Our next question comes from Kyle Stanley from Desjardins. Your line is now open. Please go ahead.

[Kyle Stanley, Director and Equity Research Analyst at Desjardins]

Thanks. Morning, guys. Maybe just kind of sticking with the capital allocation theme, what's your outlook for additional capital recycling within Canada in the year ahead? Given your leverage profile is in a pretty good spot, is it safer to assume that further success on the capital recycling maybe allows you to just be that much more aggressive on the buyback given the attractive value that you mentioned?

[Mark Kenney, President and CEO at Canadian Apartment Properties REIT]

Yeah, I think we're covering this. We're seeing acquisitions in the mid-4 cap sort of zone, and you're seeing CAPREIT stock trading in the mid-5. So I think there's not much more power we can say than that.

[Kyle Stanley, Director and Equity Research Analyst at Desjardins]

Okay. Just on the capital recycling front, I guess your expectations there for the year ahead?

[Mark Kenney, President and CEO at Canadian Apartment Properties REIT]

Yeah. We're not providing guidance on that at this point.

[Kyle Stanley, Director and Equity Research Analyst at Desjardins]

Okay. Moving over to the cost improvement this quarter, that was really encouraging to see on the R&M side. Can you just walk through maybe your ability to continue improving that cost profile and maybe what's your outlook for potential savings in the year ahead?

[Mark Kenney, President and CEO at Canadian Apartment Properties REIT]

As Stephen pointed out, we're encouraged by technology changes. We're encouraged by our approach, and we look forward to improvements going forward there.

[Kyle Stanley, Director and Equity Research Analyst at Desjardins]

Okay. Thanks. I will turn it back.

[Operator]

Thank you. Our next question is from Jimmy Shan from RBC Capital Markets. Your line is now open. Please go ahead.

[Jimmy Shan, Managing Director at RBC Capital Markets]

Thanks. Just to follow up on that $2.3 million R&M savings on the procurement side, can you—I guess I'm still a little confused as to exactly what it is that you've done that's different now that's allowing you to get those savings. When we think about the balance of the year, does the $2.3 million savings sort of sustain through the balance of the year or into next year? How do we think about that?

[Mark Kenney, President and CEO at Canadian Apartment Properties REIT]

Yeah. Where you've had a real dollar-to-dollar approach to scope in a changing environment like the one that we're seeing today, you've got to just do what is required in the assets. When you're not building into a high-velocity mark-to-market rent environment, you've got to be very cautious of the scope that you do. In terms of the sustainability, we are very confident in our ability to sustain the path that we're now on.

[Jimmy Shan, Managing Director at RBC Capital Markets]

Okay. On the turnover, the cohort of tenants that have above-market rents, do you have a rough percentage of what that represents as a percentage of the portfolio?

[Stephen Co, CFO at Canadian Apartment Properties REIT]

Yeah. Looking at the stats, it's about 20% is representative of the total leases that are above market. Or sorry, below market. Above market, yeah.

[Jimmy Shan, Managing Director at RBC Capital Markets]

Above market. What's the average differential between?

[Stephen Co, CFO at Canadian Apartment Properties REIT]

It's about, when we look at it, it's about -6%.

[Jimmy Shan, Managing Director at RBC Capital Markets]

Okay. Thanks for that. Thank you.

[Operator]

Thank you. Our next question is from Mike Markidis from BMO. Your line is now open. Please go ahead.

[Mike Markidis, Managing Director at BMO]

Good morning, guys. Just with the—if we look at the—if I look at it anyway, the Canadian portfolio, it looked like your—I think if we look at turnover in the last several quarters, it was accelerating, and it was still up year-over-year, but it was only up by 20 basis points in Q3. Is that just an anomaly, or are you starting to see that the increase in turnover is starting to taper off here?

[Mark Kenney, President and CEO at Canadian Apartment Properties REIT]

A couple of factors. The people with COVID leases are definitely moving into the market and churning. That'll have some impact. The new construction portfolio will churn at a higher percentage rate than the legacy portfolio. We are seeing just a generally more affordable rent market so that the legacy leaseholders are more inclined now to look at options than they would have previously. It's really those three factors.

[Mike Markidis, Managing Director at BMO]

No, I understand why turnover would be higher relative to where we were sort of 12-18 months ago. It just looked like the increase in Q3 is starting to taper off. I was just wondering if I'm looking into it too strongly or if you guys have noticed anything where the acceleration in turnover is starting to slow off a bit.

[Stephen Co, CFO at Canadian Apartment Properties REIT]

No, I think, Mike, I think that's based on what we see, that's a pretty normal pace that we're going to see throughout the rest of the year. Again, you do see a lot more in the leasing season of the fall. It does turn over quite a bit, same as the summer season, but there will be probably a little bit of taper off into going into Q4.

[Mike Markidis, Managing Director at BMO]

Okay. As you guys think about sort of Q4 and Q1, just with the seasonally slower period, I think you had made it—you had noted last call that you guys had adjusted rents to sort of become more in tune with market reality. Do you think as traffic slows here into the winter months that further rent adjustments will be required, or do you see market rents right now being stable?

[Mark Kenney, President and CEO at Canadian Apartment Properties REIT]

We saw a seasonal effect last year, and we were having difficulty reading the environment. We will no doubt have another seasonal effect this year, but we're quite confident that the general marketplace is in stable territory. It's just the seasonal effects do tend to show up in Q4 and Q1.

[Mike Markidis, Managing Director at BMO]

Okay. No, that's fine. Then last one for me, just before I turn it back. On ERES, see the elevated vacancy that you guys have there as you maximize value in the wind-down process. I guess my question would be, is there further vacancy loss that you would expect as that process continues, or should we expect the existing vacancy level for ERES to sort of hold until further notice?

[Mark Kenney, President and CEO at Canadian Apartment Properties REIT]

Yeah. It will continue to elevate until there's a completion process there.

[Mike Markidis, Managing Director at BMO]

Okay. That's great. Thanks so much, guys.

[Operator]

Thank you. Our next question comes from Matt Kornack from Bank Capital Markets. Your line is now open. Please go ahead.

[Matt Kornack, Real Estate Equity Research Analyst at Bank Capital Markets]

Good morning, guys. Stephen, just I guess last quarter, about 24% of your portfolio was -6% MTM and sub-2-year leases. Is that a rounded figure, or was the bulk of kind of your turnover this quarter impacted, or at least 50% impacted by kind of sub-2-year leases turning?

[Stephen Co, CFO at Canadian Apartment Properties REIT]

Yeah. I would say those are the post or more recent leases that are currently above market. Yeah. I think it will take a bit of time to go through. I kind of said it, 12-18 months. Again, a lot of the turnover that's occurring in the quarters are related to those tenures. So that is turning approximately representing 50% of the turnover currently. It will take some time, but 12-18 months is what we're expecting.

[Matt Kornack, Real Estate Equity Research Analyst at Bank Capital Markets]

Okay. I guess broadly, we've seen you guys and your peers kind of hold occupancy at a pretty high level, albeit again taking a bit of a hit on the rent side. We've also seen broader market vacancy increase. Is there a flight to quality here, or are your portfolios relatively well-positioned, or is it that just your peers are holding rents and not trying to drive occupancy at this point, just trying to square that variance?

[Stephen Co, CFO at Canadian Apartment Properties REIT]

Yeah. We're being agile. We're looking at all our pricing. It's all about holding vacancy—sorry, occupancy—high. It's a combination of using incentives and then within targeted buildings. We know which buildings they are, but it's a strategy that our operations and marketing team are deploying. Yeah, we're trying to keep occupancy up.

[Matt Kornack, Real Estate Equity Research Analyst at Bank Capital Markets]

Okay. On the incentives front, I know it was about 1% of the portfolio and seems to be holding, if not maybe ticking down a little bit this quarter. Is your view still that you've set rents at an appropriate price and incentives are less of a driver at this point?

[Stephen Co, CFO at Canadian Apartment Properties REIT]

Yeah. Correct. I think based on what we've been seeing for the last couple of months, Q3 is a pretty good run rate going forward.

[Matt Kornack, Real Estate Equity Research Analyst at Bank Capital Markets]

And then.

[Mark Kenney, President and CEO at Canadian Apartment Properties REIT]

Winter months, Matt, are definitely the more challenging months. When we get good velocity in the spring and the summer, incentives do tend to ease a little bit. There is a mild adjustment for quarters when you think about the run rate.

[Matt Kornack, Real Estate Equity Research Analyst at Bank Capital Markets]

I know we focused on R&M when we think of cost constraints, but you also saw this quarter exceed some of the one-time expenses on the processes you're updating. Lower G&A and your CapEx still remained very low on a relative historic basis. Is that all procurement? And on the Trust expense side, is that kind of sustainable at this point? I know you guys have gone through some rationalization of costs, but just how should we think about that going forward?

[Mark Kenney, President and CEO at Canadian Apartment Properties REIT]

Yeah. We did. We were quite aggressive, I'll say, with our NCIB program, with our debt repayment. Certainly, the high grading of assets has resulted in lower unit count. The heavy lifting there is, in our view, done. I think you could rely on G&A at a far more stable level. On the CapEx front, we continue to look at scope. We've got a tilt towards energy investments where they make sense. We would want to give thought to the cost of those investments as really being accretive investments. In terms of repairs and maintenance, it's all about scope and rigorous market testing.

[Matt Kornack, Real Estate Equity Research Analyst at Bank Capital Markets]

Okay. Appreciate the color in it. It seems to be working. Thanks, guys.

[Mark Kenney, President and CEO at Canadian Apartment Properties REIT]

Thanks.

[Operator]

Thank you. Our next question comes from Anish Thapar from Scotiabank. Your line is now open. Please go ahead.

[Anish Thapar, Equity Research Associate at Scotiabank]

Hi. Good morning. My first question is on incentives. Do you still believe incentives trend at 1% of revenue in 2026? What are your thoughts on bad debt expenses trends as well?

[Mark Kenney, President and CEO at Canadian Apartment Properties REIT]

I think on the incentives front, we wouldn't give guidance for the year, but what we're seeing is stability. That's really all that I can say. Looking out is a little bit more, we don't do that. On the bad debt expense, we've seen encouraging things happen in Ontario with respect to attempts by government to make things more efficient at the tribunal. A lot of our portfolio is in Ontario. That would be a net positive. Not your question, but just the general regulatory environment, what we're talking about, changes to the tribunal, it's quite positive coast to coast right now. Provinces are really tilting their minds to how to get more supply and how to engage with housing providers. We're encouraged by just the general regulatory front.

[Anish Thapar, Equity Research Associate at Scotiabank]

Good. Thanks for the color. My second question is, how did the asking rents in your portfolio move quarter over quarter? Does the primary focus right now remain occupancy stabilization?

[Stephen Co, CFO at Canadian Apartment Properties REIT]

Yeah. So the asking rents, I guess you're kind of talking about the mark-to-market on our portfolio. It has come down slightly, but it's nowhere near what we saw, you could say, kind of in Q4 of last year or in Q1 of this year. It is pretty much stabilizing based on what we see in the market.

[Anish Thapar, Equity Research Associate at Scotiabank]

Does the focus right now remain occupancy stabilization?

[Stephen Co, CFO at Canadian Apartment Properties REIT]

Yeah. I mean, yeah. Occupancy is our key priority.

[Anish Thapar, Equity Research Associate at Scotiabank]

Okay. Sounds good. That's it for me. Thank you.

[Operator]

Thank you. Our next question is from Mike Markidis from BMO. Your line's now open, Mike. Please go ahead.

[Mike Markidis, Managing Director at BMO]

Thanks, Claire. Just to follow up, Mike, I know obviously a big focus for you guys is your cash flow journey. I wonder if you could somehow give us—I know it's improving, but where do you see your retained cash flow now annually for the business, and how that would have compared to, say, maybe a couple of years ago?

[Stephen Co, CFO at Canadian Apartment Properties REIT]

Yeah. Just in terms of our journey to get to, you could say, self-sustaining, we were in a couple of years ago, we were growing, we spent a lot of CapEx, and we had a lot of legacy assets. Today, we have now transformed the portfolio into a much newer CAPREIT, a younger CAPREIT, which results in a much stronger economic cash flow. Therefore, I think if we're looking out, it would be a couple of years or till we get to a self-sustaining model.

[Mark Kenney, President and CEO at Canadian Apartment Properties REIT]

I think the timing, Mike, what we've said is highly dependent on our acquisition disposition program. If we do newer quality, low CapEx acquisitions and at the same time sell dispositions that have higher CapEx burden, we get to the end result much faster. We're trying to balance those two things together.At the same time, be relentless on seeking out efficiency within the existing portfolio to help move things along as well. If we do the combination of those things well together, the timeline shrinks, we think, quite quickly.

[Mike Markidis, Managing Director at BMO]

Okay. I'll have to look back at the quality of numbers. You guys don't think you're at a self-sustaining point in time yet?

[Mark Kenney, President and CEO at Canadian Apartment Properties REIT]

Not at this point. No. To a certain extent, we've really focused on deleverage as the primary focus. We did a lot of that in 2025. The ability to raise cash is absolutely not a problem. The balance sheet is fortified, and our focus will stay there.

[Mike Markidis, Managing Director at BMO]

Okay. Thanks for the clarification. Hoping, Matt.

[Operator]

Thank you. We currently have no further questions, and I would like to hand back to Mark Kenney for closing remarks.

[Mark Kenney, President and CEO at Canadian Apartment Properties REIT]

I'd like to thank everybody for your time today. If you have any further questions, please do not hesitate to contact us at any time. Thank you again, and have a great day.

[Operator]

This concludes today's call. Thank you for joining. You may now disconnect your line.

Participants

Executives

• Mark Kenney, President and CEO
• Nicole Dolan, Director of Investor Relations
• Stephen Co, CFO
• Julian Schonfeldt, CIO

Analysts

• Jonathan Kelcher, Equity Analyst at TD Cowen
• Brad Sturges, Managing Director and Equity Research Analyst at Raymond James
• Jimmy Shan, Managing Director at RBC Capital Markets
• Mike Markidis, Managing Director at BMO
• Kyle Stanley, Director and Equity Research Analyst at Desjardins
• Anish Thapar, Equity Research Associate at Scotiabank
• Matt Kornack, Real Estate Equity Research Analyst at Bank Capital Markets