Canadian Apartment Properties Real Estate Investment Trust ($CARUN)

Good afternoon, everyone, and welcome to the Annual Meeting of Unitholders of Canadian Apartment Properties Real Estate Investment Trust. My name is Dr. Gina Parvaneh Cody. I am the Chair of the Board of Trustees of CAPREIT, and I will act as Chair of today's meeting. Before I proceed, I would like to thank our unitholders who are able to join us virtually for today's meeting. Before we begin, please be aware that certain information to be presented or discussed today may be forward-looking. When you logged in to the webcast, I refer you to the cautionary note on the presentation slide. The cautionary note applies to our presentation and discussion this afternoon. I will begin by introducing Mark Kenney, a member of the Board of Trustees and President and Chief Executive Officer, who will be speaking today. As previously announced, Mark will be retiring as President and Chief Executive Officer, at which time he will also step down from the Board of Trustees, effective July 2, 2026. Brad Cutsey will succeed Mark as President and Chief Executive Officer, and it is intended that he will join the Board on the same date. Before proceeding further, on behalf of the Board, I want to recognize Mark for his many years of dedicated service, the stewardship and commitment to CAPREIT. Under Mark's leadership, CAPREIT has undergone significant growth and change and his contributions will have a lasting impact on the organization. We are very thankful for everything he has given to CAPREIT, and we wish him all the very best. The format for today's meeting will be divided into 2 parts. First, I will deal with the formal aspects of the meeting, following which there will be a management presentation by Mark Kenney. At the end of that presentation, we will address questions from registered unitholders and proxyholders. Such questions may be submitted through the question tab provided on the virtual meeting platform. And unitholders also had an opportunity to submit questions via e-mail in advance of today's meeting. Though we may not have time to answer every question, we will do our best to provide a response to as many as possible during the meeting. In the unlikely event that we do not address your question during the meeting, CAPREIT will communicate with you after the meeting if you have provided your contact information. I will now begin with the formal part of the meeting. I now call the meeting to order. With the consent of the meeting, Elise Lenser, CAPREIT's Secretary, will act as Secretary of the meeting; and Melissa Phillips of Computershare Trust Company of Canada will act as a scrutineer for today's meeting. The Secretary has advised me that we received the affidavit of mailing from Computershare confirming that the notice calling the meeting and related material were provided to unitholders of record on the record date for the meeting. With the consent of the meeting, I will dispense with the reading of the notice calling the meeting. The Secretary has advised me that a quorum is present for the meeting based on unitholders we know to be in attendance, including by proxy and documented in the preliminary report of the scrutineers. A final report will be prepared and filed as part of the record of the meeting. On this basis, I declare the meeting to be properly constituted for the transaction of business. On behalf of the Board, I thank those unitholders who have joined us today. Voting results for resolutions to be voted on today will be formally announced by press release following the meeting. For the purposes of today's meeting, voting on all matters will be conducted by a single electronic ballot. Registered unitholders and proxyholders of record can use the electronic ballot feature available on your screen. You are encouraged to complete your electronic ballot during the allotted time prior to the end of the formal portion of today's meeting. If you voted in advance of the meeting and you do not wish to revoke your previously submitted proxy, then you do not need to vote during the meeting. If during the course of the meeting, we encounter any technical difficulties with the webcast, please remain logged on, and we will resume as soon as practicable. Based on reporting by the scrutineers, the designated proxyholder for the meeting is holding proxies demonstrating voting in an abundance of favorability for all matters to be voted on. Accordingly, we will try to move through the formal meeting items quickly. To make the best use of our time, we have designated unitholders that will move and second each of the meeting matters. The polls are now formally open for electronic voting. Voting will close once all resolutions have been formally dealt with. Once voting closes, the scrutineers will tabulate the results of the vote for each matter. The first item of business is the presentation of the consolidated financial statements of CAPREIT for the year ended December 31, 2025, and the related auditor's report. A copy of the financial statements was provided to those unitholders who requested them and the financial statements are available electronically on CAPREIT's website and SEDAR+. Unitholders are not being asked to take any action regarding the financial statements. But if any unitholder has questions relating to the financial statements, they may be sent to CAPREIT's Investor Relations team by e-mail to [email protected]. Before proceeding with the election of trustees, I would like to recognize Mrs. Lori-Ann Beausoleil, who is retiring from the Board. We thank Mrs. Beausoleil for her contributions and service during her tenure, including her leadership of the Audit Committee, where her financial acumen supported strong oversight, discipline and accountability. This past November, we were excited to have welcomed Mrs. Francine Moore to CAPREIT's Board of Trustees. Mrs. Moore brings with her extensive real estate experience and financial expertise that will be an incredible benefit to CAPREIT moving forward. We will now proceed with the election of trustees. The management information circular sets out information for the 9 nominees for election to the Board. Since I am advised that no further nominations were received by CAPREIT prior to the advanced notice deadline in CAPREIT's advanced notice policy, the following are the 9 trustee nominees. Myself, Gina Parvaneh Cody, Mark Kenney, Gervais Levasseur, Francine Moore, Ken Silver, Jennifer Stoddart, Elaine Todres, René Tremblay, David Wesik. The Toronto Stock Exchange requires trustees to be voted on individually. Consistent with this requirement, unitholders have been provided with the opportunity to vote or withhold their vote for each nominee on an individual basis. In addition, and consistent with CAPREIT's commitment to good governance practices, the Board has adopted a majority voting policy. Under that policy, a trustee is required to tender his or her resignation if he or she is elected with more votes withheld than are cast in favor of his or her election. Based on the proxies received for the election of trustees, none of the nominees will have to tender their resignation under CAPREIT's majority voting policy. In light of this, I propose that we proceed with a motion to elect the nominees. May I have a motion for the election of trustees.

My name is Stephen Co. I am the Chief Financial Officer and a beneficial unitholder and proxyholder of CAPREIT. Chair, I move for the election of the 9 nominees as trustees.

My name is Jenny Chou. I am the Senior Vice President, Asset Management and a beneficial unitholder and proxyholder of CAPREIT. Chair, I second the motion.

Thank you. We will now vote for the election of trustees. Any registered unitholder or duly appointed proxyholder who has not yet voted or who wishes to change their vote with respect to the election of trustees may do so now by clicking on the "Vote Here" button on the virtual meeting platform and following instructions. We will now proceed with the appointment of auditors and the authorization of the Board to fix their remuneration. The trustees on the recommendation of the Audit Committee propose that Ernst & Young LLP be appointed as the auditors of CAPREIT and that the trustees be authorized to fix their remuneration. May I have a motion for such appointment and authorization.

I so move.

I second the motion.

Thank you. We will now vote for appointment of auditors. Any registered unitholder or duly appointed proxyholder who has not yet voted or who wishes to change their vote with respect to the appointment of the auditor may do so now by clicking on the "Vote Here" button on the virtual meeting platform and following the instructions. The next item of business is to hold a nonbinding advisory vote on CAPREIT's approach to executive compensation. The full text of the advisory resolution is set forth in the management information circular. Since the vote is advisory, it will not be binding on the Board, but the Board will take into account the results of the vote when considering future compensation policies and decisions. I will now ask for a motion to be made to approve the resolution to hold a nonbinding advisory vote on the approach to executive compensation as set out in the management information circular.

I so move.

I second the motion.

Thank you. We will now vote on the nonbinding advisory vote on CAPREIT's approach to executive compensation. Any registered unitholder or duly appointed proxyholder who has not yet voted or who wishes to change their vote with respect to the resolution to hold a nonbinding advisory vote on the approach to executive compensation may do so now by clicking on the "Vote Here" button on the virtual meeting platform and following the instructions. Now that everyone has had the opportunity to vote, I now declare the polls closed. Based on the preliminary voting results received from the scrutineers, the voting results for each item of business show an abundance of favorability. Accordingly, each of the motions are carried. Therefore, I declare myself, Gina Parvaneh Cody, Mark Kenney, Gervais Levasseur, Francine Moore, Ken Silver, Jennifer Stoddart, Elaine Todres, René Tremblay and David Wesik duly elected as trustees of CAPREIT to hold office until the next Annual Meeting of unitholders or until successors are duly elected or appointed. I declare that Ernst & Young LLP are appointed as the auditors of CAPREIT and that the trustees are authorized to fix their remuneration. And I declare that the nonbinding advisory resolution on the approach to executive compensation as set out in the management information circular is approved. Thank you, everyone. We have now completed the formal part of the meeting. If there's no further business, I will ask for a motion to terminate the meeting.

I so move.

I second the motion.

I declare the motion carried and the Annual Meeting of Unitholders of CAPREIT terminated. On behalf of management and the Board, I would like to thank you all for attending today. This concludes the formal part of the meeting. With that, I will now ask Mark to provide his remarks.

Thank you, Gina, and a warm welcome to everyone. Let's start by taking a look back at some highlights from 2025. Last year, we completed $2 billion in gross transaction volume and included the disposition of $411 million of noncore assets in Canada and another $784 million of ancillary interest in Europe. On the investment side, we used part of the net proceeds to purchase $659 million worth of high-quality, strategically aligned properties, which offer low capital investment requirements, high cash returns in excess of our portfolio average and attractive locations in key markets. We also continue to capitalize on the public-private market disconnect by deploying $294 million into our NCIB program to enhance earnings for unitholders. And since we started leveraging this program in 2022, this brought our total NCIB spend to $960 million by the end of 2025. Operationally, we are extremely focused on advancing our leasing and retention initiatives, lowering controllable expenditures and reinforcing procurement governance. As a result, compared to 2024, we expanded our same-property NOI margin by 50 basis points to 64.7% for the year ended December 31, 2025. Further supported by disciplined capital allocation, earnings per unit also improved. Diluted FFO per unit was $2.541 for the year ended December 31, 2025, up by 0.3% compared to 2024. This was mainly driven by lower interest costs as well as accretive impact of our NCIB program. Moving on to an update for 2026. So far this year, we've completed $46 million worth of asset repositioning in Canada. We've also sold $143 million of properties in the Netherlands through to April 2026. Following that, on May 1, CAPREIT closed on the privatization of European Residential REIT, acquiring all publicly held units not already owned by CAPREIT for $99 million. In addition, we continue to invest in our NCIB with $50 million in trust unit buybacks in 2026 to date. This puts our cumulative NCIB spend since 2022 at over $1 billion. From an operational standpoint, results in the first quarter were sound amid current pressures in the sector. Occupancy on same-property Canadian residential portfolio was 97.1%, comparing favorably to industry benchmarks. Supported by renewals and the positive mark-to-market opportunity embedded in our longer-duration leases, same-property Canadian residential occupied AMR was up by 2.9% to $1,726 on March 31, 2026. We also further improved operating efficiency with our same-property Canadian NOI margin expanding to 62.2% in Q1 of 2026, up from 61.6% in the first quarter of 2025. At the same time, our balance sheet has remained strong with $124 million of available liquidity in Canada and a conservative debt to gross book value ratio of 40.3% as of March 31, 2026. With the significant volume of repositioning activity completed over the past couple of years, our portfolio composition is now better than ever. Today, the majority of our portfolio is concentrated in core assets, complemented by a meaningful allocation to recently constructed properties, which helps reduce capital requirements and improve operating efficiency. In addition, given the high quality and exceptional locations of these buildings, they offer strong upside potential once supply and demand dynamics normalize. We also maintain flexibility through a smaller allocation of noncore assets, which supports ongoing capital recycling. This balanced mix enhances the resilience of our platform and drives more stable performance through varying market conditions. Finally, I'd like to highlight our recently released 2025 ESG report. We've made solid progress across our ESG priorities in 2025, with these efforts supporting our ability to deliver long-term value for investors while also contributing positively to the communities we serve. I'd encourage all stakeholders to review the report for more detail on our achievements and ongoing commitments. With that, I would like to thank you for your time this afternoon, and we would now be pleased to take any questions that you may have. Elise, could you please read any comments or questions?

We will now move to the question-and-answer session. If you have not yet submitted a question, wish to do so, please do so now by submitting your questions through the question tab provided on the virtual meeting platform. As a reminder, only registered unitholders or duly appointed proxyholders in attendance at the meeting will be able to ask questions at this time related to the business of the meeting. Okay. We have a question, Mark, for yourself. Despite a challenging operating environment, CAPREIT's performance has remained relatively resilient. What do you attribute that to?

Well, the resilience starts with the quality and positioning of our portfolio. As many of you know, across the country, we have highly experienced teams that have been responding proactively to current market pressures while remaining focused on long-term value creation. For instance, I briefly mentioned during the presentation, we've intensified our focus on leasing and resident retention initiatives, which has become a major driver of stability in this current environment.

Okay. We have another question. CAPREIT owns what can be described as durable hard assets with relatively low obsolescence risk. Why do you think the public market valuation does not seem to fully reflect that value?

It's our view that the current disconnect is being driven primarily by market sentiment around near-term fundamentals, particularly expectations for market rent growth, interest rate conditions and the broader macroeconomic environment. That said, the underlying fundamentals supporting multifamily housing are very compelling in the long term. We do regular reviews of value in the portfolio and are very confident in the valuations that we have. While the public REIT valuations have been pressured in the current environment, our focus will remain firmly on long-term value creation.

Another question, how important is our reputation in the marketplace?

You really can't be resilient without a great reputation. So CAPREIT takes its reputation extremely seriously, and we're dedicated to unitholders to maintain that reputation going forward.

Okay. There are no more comments or questions related to the meeting to be addressed. So I will now turn the meeting back to Mr. Kenney.

I'd like to thank everyone for attending the meeting and voting. But before I conclude, I want to sincerely thank the Board for its support and partnership throughout my tenure. It's been an absolute honor to serve this great organization alongside all of you. I am deeply appreciative of the opportunity to have been part of CAPREIT's journey and to work with what I believe to be one of Canada's finest multifamily teams, and I look forward to watching CAPREIT continue to succeed in the years ahead. Thank you very much, and goodbye.