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CAPREIT Reports Record Growth and Record Performance in 2012

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TORONTO, ONTARIO -- (Marketwire) -- 02/26/13 -- Canadian Apartment Properties Real Estate Investment Trust ("CAPREIT") (TSX: CAR.UN) announced today strong operating and financial results for the year ended December 31, 2012.

Three Months Ended Year Ended December 31 December 31 2012 2011 2012 2011----------------------------------------------------------------------------Operating Revenues (000s) $ 112,109 $ 94,564 $ 412,421 $ 361,955Net Operating Income ("NOI") (000s) (1) $ 62,651 $ 52,563 $ 237,916 $ 206,157NOI Margin (1) 55.9% 55.6% 57.7% 57.0%Normalized Funds From Operations ("NFFO") (000s) (1) $ 33,556 $ 25,223 $ 132,553 $ 103,875NFFO Per Unit - Basic (1) $ 0.356 $ 0.312 $ 1.486 $ 1.357Weighted Average Number of Units - Basic (000s) 94,210 80,715 89,215 76,538NFFO Payout Ratio (1) 81.3% 91.7% 76.4% 82.8%--------------------------------------------------------------------------------------------------------------------------------------------------------(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.-- Record portfolio growth in 2012 with purchase of 6,984 residential suites and sites for total acquisition costs of $791.3 million-- To finance growth, CAPREIT issued 15.5 million Trust Units in two successful bought-deal equity offerings, including over-allotment options, raising aggregate gross proceeds of $361.2 million in 2012.-- Q4 2012 and year ended 2012 NFFO up 33.0% and 27.6%, respectively, primarily due to acquisitions, increased average monthly rents, high stable occupancies and strong organic growth.-- Strong accretive growth as Q4 2012 and year ended 2012 NFFO per Unit increased 14.1% and 9.5%, respectively, despite 17% increase in the weighted average number of Units outstanding.-- Stabilized NOI up 3.0% in Q4 2012, capping more than six years of stable and increasing year-over-year quarterly same property NOI growth. For the year ended December 31, 2012, stabilized NOI up 4.0%.-- Closed mortgage refinancings for $360.3 million, including $243.9 million for renewals of existing mortgages and $116.4 million for additional top up financing with a weighted average term to maturity of 8.8 years, and at a weighted average rate of 2.95%.-- Late in 2012, CAPREIT entered into third party external management agreements to perform certain asset management duties and property services with a third party real estate investment trust in the United States, which owns and operates 16 manufactured home communities in Colorado, Texas, Arizona, and Michigan.



"2012 was our most active year to date as we generated record growth and record operating and financial performance," commented Thomas Schwartz, President and CEO. "With the significant expansion and enhanced diversification of our property portfolio, the proven success of our asset and property management strategies, and the continuing strong fundamentals in the Canadian residential rental real estate sector, we expect this strong performance will continue."

PORTFOLIO OPERATING RESULTS

Three Months Ended Year Ended December 31 December 31 2012 2011 2012 2011----------------------------------------------------------------------------Overall Portfolio Occupancy (1) 97.9% 98.5%Overall Portfolio Average Monthly Rents (1),(2) $ 975 $ 991Operating Revenues (000s) $ 112,109 $ 94,564 $ 412,421 $ 361,955Net Rental Revenue Run-Rate (000s) (1),(3),(4) $ 429,822 $ 361,253Operating Expenses (000s) $ 49,458 $ 42,001 $ 174,505 $ 155,798NOI (000s) (4) $ 62,651 $ 52,563 $ 237,916 $ 206,157NOI Margin (4) 55.9% 55.6% 57.7% 57.0%Number of Suites and Sites Acquired 980 193 6,984 2,660Number of Suites Disposed 438 - 773 143--------------------------------------------------------------------------------------------------------------------------------------------------------(1) As at December 31.(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 December 31, 2012.(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 months and year ended December 31, 2012, total operating revenues increased by 18.6% and 13.9%, 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 months and year ended December 31, 2012, ancillary revenues, including parking, laundry and antenna income, rose by 13.8% and 8.2%, 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 December 31, 2012 increased to $429.8 million, up 19.0% from $361.3 million as of December 31, 2011 primarily due to acquisitions completed within the past twelve months and strong rental growth. Net rental revenue for the twelve months ended December 31, 2012 was $386.3 million (2011 - $343.1 million).

Portfolio Average Monthly Rents ("AMR") Properties Owned Prior to Total Portfolio December 31, 2011As at December 2012 2011 2012 2011 (1) 31, AMR Occ. % AMR Occ. % AMR Occ. % AMR Occ. %----------------------------------------------------------------------------Average Residential Suites $ 1,030 97.8 $ 1,009 98.5 $ 1,036 98.1 $ 1,008 98.5----------------------------------------------------------------------------Average MHC Land Lease Sites $ 439 99.2 $ 615 99.8 $ 632 99.8 $ 615 99.8----------------------------------------------------------------------------Overall Portfolio Average $ 975 97.9 $ 991 98.5 $ 1,018 98.2 $ 990 98.5--------------------------------------------------------------------------------------------------------------------------------------------------------(1) Prior year's comparable AMR and occupancy have been restated for properties disposed of between January 1, 2012 and December 31, 2012.



Average monthly rents for properties owned prior to December 31, 2011 increased as at December 31, 2012 to $ 1,018 from $990 as at December 31, 2011, an increase of 2.8% from last year. As at December 31, 2012, occupancy remained strong at 98.2%. Average monthly rents for total portfolio residential properties increased by 2.1% as at December 31, 2012 compared to the same period last year while occupancy remained strong at 97.8% due to ongoing successful sales and marketing strategies and continued strength in the residential rental sector in the majority of CAPREIT's regional markets. Average monthly rents for MHC land lease sites decreased compared to prior year due to the acquisitions in the second quarter of 2012 being in certain lower rent geographic regions. Occupancy remained stable at 99.2% as at December 31, 2012.

Suite Turnovers and Lease RenewalsFor the Three Months Ended December 31, 2012 2011 Change in AMR % Turnovers Change in AMR % Turnovers & Renewals & Renewals $ % (1) $ % (1)----------------------------------------------------------------------------Suite Turnovers 16.0 1.5 6.3 17.8 1.8 6.9Lease Renewals 33.7 3.3 15.3 14.4 1.4 15.6----------------------------------------------------------------------------Weighted Average of Turnovers and Renewals 28.6 2.8 15.5 1.5--------------------------------------------------------------------------------------------------------------------------------------------------------For the Year Ended December 31, 2012 2011 % Turnovers % Turnovers & Renewals & Renewals Change in AMR (1) Change in AMR (1) $ % $ %----------------------------------------------------------------------------Suite Turnovers 20.3 2.0 26.8 13.2 1.3 31.1Lease Renewals 34.2 3.3 70.0 14.3 1.4 70.3----------------------------------------------------------------------------Weighted Average of Turnovers and Renewals 30.3 2.9 14.0 1.4--------------------------------------------------------------------------------------------------------------------------------------------------------(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 higher rate of growth in average monthly rents on lease renewals during the year is primarily due to the higher guideline increases for 2012 (Ontario - 3.1%, British Columbia - 4.3%), which compares more favourably to the permitted guideline increases in 2011 (Ontario - 0.7%, British Columbia - 2.3%) as well as above guideline increases ("AGI") applied. Management continues to pursue applications for AGIs where it believes increases are supported by market conditions above the annual guideline to raise average monthly rents on lease renewals. For 2013, the permitted guideline increase in Ontario and British Columbia have been set at 2.5% and 3.8%, respectively.

Operating Expenses

Operating expenses as a percentage of revenues decreased for the three months and year ended December 31, 2012 to 44.1% from 44.4% and 42.3% from 43.0% respectively, for the same periods last year. The improvement is primarily due to: (i) the diversification of the portfolio into regions with lower taxation rates, (ii) lower utility costs, and (iii) successful energy-saving initiatives and enhanced procurement strategies.

Net Operating Income

In the fourth quarter of 2012, NOI improved by $10.1 million or 19.2%, and the NOI margin increased to 55.9% from 55.6% for last year. For the year ended December 31, 2012, NOI increased by $31.8 million or 15.4%, and the NOI margin improved to 57.7% from 57.0% for the same period last year. The significant improvements in NOI were primarily the result of acquisitions completed in the last 12 month period, and the combination of higher operating revenues and lower operating expenses.

For the three months and year ended December 31, 2012, operating revenues for stabilized suites and sites increased for both periods 2.2%, and operating expenses increased 1.2% and decreased 0.2%, respectively, compared to the same periods last year. For the three months and year ended December 31 2012, stabilized NOI increased by 3.0% and 4.0%, respectively, compared to the same periods last year.

NON-IFRS FINANCIAL MEASURES Three Months Ended Year Ended December 31, December 31, 2012 2011 2012 2011----------------------------------------------------------------------------NFFO (000s) $ 33,556 25,223 $ 132,553 $ 103,875NFFO Per Unit - Basic $ 0.356 $ 0.312 $ 1.486 $ 1.357Cash Distributions Per Unit $ 0.280 $ 0.270 $ 1.097 $ 1.080NFFO Payout Ratio 81.3% 91.7% 76.4% 82.8%NFFO Effective Payout Ratio 62.8% 71.3% 58.7% 64.5%--------------------------------------------------------------------------------------------------------------------------------------------------------LIQUIDITY AND LEVERAGEAs at December 31, 2012 2011----------------------------------------------------------------------------Total Debt to Gross Book Value 47.25% 50.27%Total Debt to Gross Historical Cost (1) 56.71% 58.55%Total Debt to Total Capitalization 47.82% 50.11%Debt Service Coverage Ratio (times) (2) 1.52 1.38Interest Coverage Ratio (times) (2) 2.51 2.20Weighted Average Mortgage Interest Rate (3) 3.87% 4.48%Weighted Average Mortgage Term to Maturity (years) 5.4 5.7--------------------------------------------------------------------------------------------------------------------------------------------------------(1) Based on historical cost of investment properties.(2) Based on the trailing four quarters ended December 31, 2012.(3) Weighted average mortgage interest rate includes deferred financing costs and fair value adjustments on an effective interest basis. Including the amortization of the realized component of the loss on settlement of $29.4 million included in Accumulated Other Comprehensive Loss ("AOCL"), the effective portfolio weighted average interest rate at December 31, 2012 would be 4.05% (December 31, 2011 - 4.57%).



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:

-- The ratio of total debt to gross book value as at December 31, 2012 improved to 47.25% compared to 50.27% for last year;-- Debt service and interest coverage ratios for the four quarters ended December 31, 2012 improved to 1.52 times and 2.51 times compared to 1.38 times and 2.20 times, respectively, for last year;-- At December 31, 2012, 92.9% (December 31, 2011 - 96.5%) of CAPREIT's mortgage portfolio was insured by the Canada Mortgage and Housing Corporation ("CMHC"), excluding the mortgages on CAPREIT's manufactured home communities land lease sites, resulting in improved spreads on mortgages and overall lower interest costs than conventional mortgages. During the current year, on certain acquisitions CAPREIT assumed conventional mortgages, resulting in a decrease of CAPREIT's mortgage portfolio insured by CMHC compared to last year. Management expects to convert these mortgages to CMHC-insured mortgages in due course;-- The effective portfolio weighted average interest rate on mortgages has steadily declined from 4.48% as at December 31, 2011, to 3.87% as at December 31, 2012, which will result in significant interest rate savings in future years;-- Management expects to raise between $575 million and $625 million in total mortgage renewals and refinancings in 2013;-- As at December 31, 2012, the Bridge Loan was fully repaid from the net proceeds of the equity offering completed on December 4, 2012.



Property Capital Investment Plan

During the year ended December 31, 2012, CAPREIT made property capital investments (excluding disposed properties, head office assets, tenant improvements and signage) of $129.8 million as compared to $116.6 million for last year. For the full 2013 year, CAPREIT expects to complete property capital investments of approximately $160 million to $170 million, including approximately $67 million targeted at acquisitions completed over the past 2 years and approximately $13 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 January 31, 2013, CAPREIT completed the acquisition of a mid-tier apartment complex in Calgary, Alberta consisting of six three-storey buildings totalling 263 residential suites. The purchase price of $47.3 million was satisfied by the assumption of an existing $7.2 million mortgage bearing interest at 6.95% maturing in October 2017, with the remaining balance funded from CAPREIT's Acquisition and Operating Facility.

Additional Information

More detailed information and analysis is included in CAPREIT's audited consolidated annual financial statements and MD&A for the year ended December 31, 2012, 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 Scott Cryer, Chief Financial Officer, will be held Wednesday, February 27, 2013 at 10.00 am EST. The telephone numbers for the conference call are: Local/International: (416) 340-2218, North American Toll Free: (877) 240-9772.

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 6385495#. The Instant Replay will be available until midnight, March 6, 2013. 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 located in and near major urban centres across Canada. At December 31, 2012, CAPREIT had owning interests in 37,225 residential units, comprised of 33,855 residential suites and 14 manufactured home communities ("MHC") comprising 3,370 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 February 26, 2013, 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 economy 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 conditions within the real estate market, including competition for acquisitions, will become more favourable; that the Canadian capital markets will continue to provide CAPREIT with access to equity and/or debt at reasonable rates; that vacancy rates for CAPREIT properties will be consistent with historical norms; that rental rates will grow at levels similar to the rate of inflation on renewal; that rental rates on turnovers will remain stable; that CAPREIT will effectively manage price pressures relating to its energy usage; and, with respect to CAPREIT's financial outlook regarding capital investments, assumptions respecting projected costs of construction and materials, availability of trades, the cost and availability of financing, CAPREIT's investment priorities, the properties in which investments will be made, the composition of the property portfolio and the projected return on investment in respect of specific capital investments.

Although the forward-looking statements contained in this press release are based on assumptions, Management believes 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, 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 February 26, 2013. The information in this press release is based on information available to Management as of February 26, 2013. Subject to applicable law, CAPREIT does not undertake any obligation to publicly update or revise any forward-looking information.

SELECTED FINANCIAL INFORMATIONCondensed Balance SheetsAs at December 31, 2012 December 31, 2011($ Thousands)----------------------------------------------------------------------------Investment Properties $ 4,826,355 $ 3,713,737Total Assets 4,921,546 3,804,650Mortgages Payable 2,189,556 1,848,190Bank Indebtedness 147,316 74,132Total Liabilities 2,492,332 2,063,987Unitholders' Equity 2,429,214 1,740,663--------------------------------------------------------------------------------------------------------------------------------------------------------Condensed Income Statements Three Months Ended Year Ended December 31, December 31,($ Thousands) 2012 2011 2012 2011----------------------------------------------------------------------------Net Operating Income 62,651 52,563 237,916 206,157 Trust Expenses (4,399) (4,647) (13,904) (14,797) Unrealized Gain on Remeasurement of Investment Properties 133,138 204,281 298,228 231,338 Realized Loss on Disposition of Investment Properties (1,085) - (1,613) (95) Remeasurement of Exchangeable Units (8) (497) (904) (2,126) Unit-based Compensation Expenses (1,840) (1,563) (13,333) (13,936) Interest on Mortgages Payable and Other Financing Costs (22,116) (21,262) (85,273) (82,833) Interest on Bank Indebtedness (2,742) (1,346) (6,954) (5,793) Interest on Exchangeable Units (73) (111) (354) (444) Other Income 872 504 3,503 1,899 Amortization (564) (420) (2,195) (1,613) Severance and Other Employee Costs - - - (1,352) Unrealized and Realized (Loss) Gain on Derivative Financial Instruments (852) (1,146) (2,854) (233)----------------------------------------------------------------------------Net Income 162,982 226,356 412,263 316,172----------------------------------------------------------------------------Other Comprehensive (Loss) Income $ (37) $ 957 $ 1,499 $ (12,925)----------------------------------------------------------------------------Comprehensive Income $ 162,945 $ 227,313 $ 413,762 $ 303,247--------------------------------------------------------------------------------------------------------------------------------------------------------Condensed Statements of Cash Flows Three Months Ended Year Ended December 31, December 31, 2012 2011 2012 2011($ Thousands)----------------------------------------------------------------------------Cash Provided By Operating Activities: Net Income $ 162,982 $ 226,356 $ 412,263 $ 316,172 Items in Net Income Not Affecting Cash: Changes in Non-cash Operating Assets and Liabilities 1,122 2,601 (11,995) (423) Realized and Unrealized Gain on Remeasurements (131,193) (202,638) (292,857) (228,894) Gain on Sale of Investments (290) - (1,455) - Unit-based Compensation Expenses 1,840 1,563 13,333 13,936 Items Related to Financing and Investing Activities 23,189 20,747 85,388 81,233 Other 1,196 1,603 5,540 6,986----------------------------------------------------------------------------Cash Provided By Operating Activities 58,846 50,232 210,217 189,010----------------------------------------------------------------------------Cash Used In Investing Activities Acquisitions (99,776) (32,982) (445,682) (270,536) Capital Investments (34,255) (36,624) (131,280) (117,336) Disposition of Investments 1,299 - 6,830 - Dispositions 29,944 - 55,644 3,609 Other 605 498 2,831 1,549----------------------------------------------------------------------------Cash Used In Investing Activities (102,183) (69,108) (511,657) (382,714)----------------------------------------------------------------------------Cash Provided By Financing Activities Mortgages, Net of Financing Costs 28,176 37,373 45,358 156,313 Bank Indebtedness (118,089) (124,700) 73,184 34,774 Interest Paid (23,892) (21,251) (88,722) (83,132) Proceeds on Issuance of Units 177,538 144,927 347,570 147,537 Distributions, Net of DRIP and Other (20,396) (17,473) (75,950) (66,138)----------------------------------------------------------------------------Cash Provided By Financing Activities 43,337 18,876 301,440 189,354----------------------------------------------------------------------------Changes in Cash and Cash Equivalents During the Period - - - (4,350)Cash and Cash Equivalents, Beginning of Period - - - 4,350----------------------------------------------------------------------------Cash and Cash Equivalents, End of Period $ - $ - $ - $ ---------------------------------------------------------------------------------------------------------------------------------------------------------SELECTED NON-IFRS FINANCIAL MEASURESReconciliation of Net Income to FFO and to NFFO Three Months Ended Year Ended December 31, December 31, 2012 2011 2012 2011($ Thousands, except per Unit amounts)----------------------------------------------------------------------------Net Income $ 162,982 $ 226,356 $ 412,263 $ 316,172Adjustments: Unrealized Gain on Remeasurement of Investment Properties (133,138) (204,281) (298,228) (231,338) Realized Loss on Disposition of Investment Properties 1,085 - 1,613 95 Remeasurement of Exchangeable Units 8 497 904 2,126 Remeasurement of Unit- based Compensation Liabilities 669 699 10,053 12,165 Interest on Exchangeable Units 73 111 354 444 Amortization of Property, Plant and Equipment 564 392 2,195 1,522----------------------------------------------------------------------------FFO $ 32,243 $ 23,774 $ 129,154 $ 101,186Adjustments: Unrealized Loss on Derivative Financial Instruments 852 1,146 2,854 233 Amortization of Loss on Derivative Financial Instruments Included in Mortgage Interest 754 303 2,000 1,104 Realized Gain on Sale of Investment (293) - (1,455) - Severance and Other Employee Costs - - - 1,352----------------------------------------------------------------------------NFFO $ 33,556 $ 25,223 $ 132,553 $ 103,875 NFFO per Unit - Basic $ 0.356 $ 0.312 $ 1.486 $ 1.357 NFFO per Unit - Diluted $ 0.351 $ 0.308 $ 1.463 $ 1.341---------------------------------------------------------------------------- Total Distributions Declared (1) $ 27,272 23,139 $ 101,210 $ 86,054---------------------------------------------------------------------------- NFFO Payout Ratio (2) 81.3% 91.7% 76.4% 82.8%---------------------------------------------------------------------------- Net Distributions Paid (1) $ 21,069 $ 17,973 $ 77,836 $ 67,045 Excess NFFO Over Net Distributions Paid $ 12,487 $ 7,250 $ 54,717 $ 36,830---------------------------------------------------------------------------- Effective NFFO Payout Ratio (3) 62.8% 71.3% 58.7% 64.5%--------------------------------------------------------------------------------------------------------------------------------------------------------(1) For a description of distributions declared and net distributions paid, see the Non-IFRS Financial Measures section in the MD&A for the year ended December 31, 2012.(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 Year Ended December 31 December 31 2012 2011 2012 2011($ Thousands, except per Unit amounts)----------------------------------------------------------------------------NFFO $ 33,556 $ 25,223 $ 132,553 $ 103,875Adjustments: Provision for Maintenance Property Capital Investments (1) (3,440) (3,085) (13,758) (12,341) Amortization of Fair Value on Grant Date of Unit-based Compensation 1,171 856 3,280 1,741----------------------------------------------------------------------------AFFO $ 31,287 $ 22,994 $ 122,075 $ 93,275 AFFO per Unit - Basic $ 0.332 $ 0.285 $ 1.368 $ 1.219 AFFO per Unit - Diluted $ 0.327 $ 0.281 $ 1.348 $ 1.204---------------------------------------------------------------------------- Distributions Declared (2) $ 27,272 $ 23,139 $ 101,210 $ 86,054---------------------------------------------------------------------------- AFFO Payout Ratio (3) 87.2% 100.6% 82.9% 92.3%---------------------------------------------------------------------------- Net Distributions Paid (2) $ 21,069 $ 17,973 $ 77,836 $ 67,045 Excess AFFO over Net Distributions Paid $ 10,218 $ 5,021 $ 44,239 $ 26,230---------------------------------------------------------------------------- Effective AFFO Payout Ratio (4) 67.3% 78.2% 63.8% 71.9%--------------------------------------------------------------------------------------------------------------------------------------------------------(1) An industry based estimate (see the Non-IFRS Measures section in the MD&A for the year ended December 31, 2012).(2) For a description of distributions declared and net distributions paid, see the Non-IFRS Financial Measures section in the MD&A for the year ended December 31, 2012.(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
www.capreit.net