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CAPREIT Reports Another Record Quarter in Q3 2012

Thursday, November 8, 2012 5:15 PM


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TORONTO, ONTARIO -- (Marketwire) -- 11/08/12 -- Canadian Apartment Properties Real Estate Investment Trust ("CAPREIT") (TSX:CAR.UN) announced today strong operating and financial results for the three and nine months ended September 30, 2012.

                             Three Months Ended           Nine Months Ended 
                                   September 30                September 30 
                             2012          2011          2012          2011 
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Operating Revenues                                                          
 (000s)              $    109,118  $     92,824  $    300,312  $    267,391 
Net Operating Income                                                        
 ("NOI") (000s) (1)  $     65,813  $     55,039  $    175,265  $    153,594 
NOI Margin (1)               60.3%         59.3%         58.4%         57.4%
Normalized Funds                                                            
 From Operations                                                            
 ("NFFO") (000s) (1) $     39,866  $     29,252  $     98,997  $     78,652 
NFFO Per Unit -                                                             
 Basic (1)           $      0.435  $      0.388  $      1.131  $      1.047 
Weighted Average                                                            
 Number of Units -                                                          
 Basic (000s)              91,667        75,397        87,538        75,130 
NFFO Payout Ratio                                                           
 (1)                         65.3%         72.0%         74.7%         80.0%
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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.                         
--  Average monthly rents for all residential properties up 1.8% as at
    September 30, 2012 compared to the same period last year with
    occupancies remaining strong at 98.2%.
    
    
--  Average monthly rents for stabilized residential properties up 2.7% as
    at September 30, 2012 compared to the same period last year with
    occupancies at nearly full levels at 98.5%.
    
    
--  Stabilized NOI up 4.5% in Q3 2012 resulting from 2.5% increase in
    stabilized operating revenues and lower operating costs. YTD 2012
    stabilized NOI up 4.3%.
    
    
--  Q3 and YTD 2012 NOI increased 19.6% and 14.1%, respectively compared to
    the same period last year with NOI margin rising to 60.3% and 58.4%,
    respectively.
    
    
--  Q3 2012 and YTD 2012 NFFO up 36.3% and 25.9%, respectively.
    
    
--  Strong accretive growth as Q3 2012 and YTD 2012 NFFO per Unit increased
    12.1% and 8.0%, respectively, despite 22% and 17% increase in the
    weighted average number of Units outstanding.
    
    
--  Closed or committed $387.4 million of mortgage refinancings to date at a
    weighted average interest rate and term to maturity of 2.91% and 8.9
    years, respectively, which is expected to produce significant future
    interest rate savings.
    
    
--  During Q3 2012, completed the acquisition of two apartment properties in
    Calgary, Alberta totaling 405 residential suites, for total acquisition
    costs of $69.5 million and the purchase of five MHC sites in Bowmanville
    and Grand Bend, Ontario, for total acquisition costs of $0.5 million.
    
    
--  On October 31, 2012, CAPREIT disposed of five apartment buildings
    containing 438 suites located in Mississauga, Oakville and Toronto,
    Ontario for a sale price of approximately $60.7 million. Mortgages of
    approximately $29.0 million were discharged and the balance applied to
    pay down the Bridge Loan.
    
    
--  On November 1, 2012, CAPREIT completed the acquisition of the landmark
    Olympic Village property in Montreal, Quebec, containing 980 residential
    suites and 237,000 square feet of commercial and retail space for a
    purchase price of approximately $176.5 million and the assumption of a
    first mortgage of approximately $82.0 million bearing a stated interest
    rate of 4.39% maturing in September 2013. The net acquisition amount was
    funded from CAPREIT's Bridge Loan.
    
    
--  With this recent acquisition, CAPREIT's total suites and sites acquired
    in 2012 is 6,984 with disposition of 773 suites, resulting in a net
    acquisition of 6,211 suites and sites. 

"Strong and accretive organic growth continued in all our key operating and financial metrics during the third quarter and we are confident 2012 will be another record year for CAPREIT," commented Thomas Schwartz, President and CEO. "In addition, our portfolio was expanded and strengthened with key acquisitions during and subsequent to the period that we are confident will contribute to further increases in cash flows over the long term."

PORTFOLIO OPERATING RESULTS                                                 
                                                                            
                             Three Months Ended           Nine Months Ended 
                                   September 30                September 30 
                             2012          2011          2012          2011 
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Overall Portfolio                                                           
 Occupancy (1)                                           98.2%         98.8%
Overall Portfolio                                                           
 Average Monthly                                                            
 Rents (1),(2)                                   $        972  $        991 
Operating Revenues                                                          
 (000s)              $    109,118  $     92,824  $    300,312  $    267,391 
Net Rental Revenue                                                          
 Run-Rate (000s)                                                            
 (1),(3),(4)                                     $    421,539  $    358,557 
Operating Expenses                                                          
 (000s)              $     43,305  $     37,785  $    125,047  $    113,797 
NOI (000s) (4)       $     65,813  $     55,039  $    175,265  $    153,594 
NOI Margin (4)               60.3%         59.3%         58.4%         57.4%
Number of Suites and                                                        
 Sites Acquired               410         1,040         6,004         2,467 
Number of Suites                                                            
 Disposed                       -             -           335           143 
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(1) As at September 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 three and nine months ended      
    September 30, 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 and nine months ended September 30, 2012, total operating revenues increased by 17.6% and 12.3%, respectively, compared to the same periods last year primarily due to the contribution from acquisitions, higher rent guideline increases, increased average monthly rents in the residential suite portfolio, and continuing strong occupancies. For the three and nine months ended September 30, 2012, ancillary revenues, including parking, laundry and antenna income, rose by 14.8% and 6.3%, 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 based on the average monthly rents in place on CAPREIT's share of residential suites and sites as at September 30, 2012 increased to $421.5 million, up 17.6% from $358.6 million as of September 30, 2011 primarily due to acquisitions completed within the past twelve months and strong rental growth. Net rental revenue for the twelve months ended September 30, 2012 was $372.7 million (2011 - $334.8 million).

Portfolio Average Monthly Rents ("AMR")

                                                                            
                                                             Total Portfolio
As at September 30,                               2012                  2011
                                         AMR    Occ. %         AMR    Occ. %
----------------------------------------------------------------------------
Average Residential Suites       $     1,026      98.2 $     1,008      98.7
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Average MHC Land Lease Sites     $       435      98.8 $       633     100.0
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Overall Portfolio Average        $       972      98.2 $       991      98.8
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                                                   Properties Owned Prior to
                                                          September 30, 2011
As at September 30,                               2012              2011 (1)
                                         AMR    Occ. %         AMR    Occ. %
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Average Residential Suites       $     1,034      98.5 $     1,007      98.7
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Average MHC Land Lease Sites     $       628      99.8 $       633     100.0
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Overall Portfolio Average        $     1,016      98.6 $       990      98.8
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(1) Prior period's comparable AMR and occupancy have been restated for      
    properties disposed of between October 1, 2011 and September 30, 2012.  

Average monthly rents decreased slightly by 1.9% as at September 30, 2012 compared to the same period last year due to the acquisition of MHC land lease sites in the second quarter of 2012 in certain lower rent geographic regions, while occupancy remained at nearly full levels at 98.2% due to ongoing successful sales and marketing strategies and continued strength in the residential rental sector in the majority of CAPREIT's regional markets.

Suite Turnovers and Lease Renewals                                          
                                                                            
For the Three                                                               
 Months Ended                                                               
 September 30,               2012                          2011             
                 Change in AMR     % Turnovers Change in AMR     % Turnovers
                      $      %  & Renewals (1)      $      %  & Renewals (1)
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Suite Turnovers    21.7    2.1             9.5   16.0    1.6            10.7
Lease Renewals     32.8    3.2            25.4   15.0    1.5            25.9
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Weighted Average                                                            
 of Turnovers                                                               
 and Renewals      29.8    2.9                   15.3    1.5                
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For the Nine                                                                
Months Ended                                                                
September 30,                2012                          2011             
                 Change in AMR     % Turnovers Change in AMR     % Turnovers
                      $      %  & Renewals (1)      $      %  & Renewals (1)
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Suite Turnovers    21.7    2.1            20.9   11.9    1.2            24.2
Lease Renewals     34.3    3.3            55.7   14.3    1.4            54.6
----------------------------------------------------------------------------
Weighted Average                                                            
 of Turnovers                                                               
 and Renewals      30.8    3.0                   13.5    1.3                
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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 higher rate of growth in average monthly rents on lease renewals during the periods 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%) and 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 has been set at 2.5% and 3.8%, respectively.

Operating Expenses

Operating expenses as a percentage of revenues decreased for the three and nine months ended September 30, 2012 to 39.7% from 40.7% and 41.6% from 42.6% 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 third quarter of 2012, NOI improved by $10.8 million or 19.6%, and the NOI margin increased to 60.3% from 59.3% for the same period last year. For the first nine months of 2012, NOI increased by $21.7 million or 14.1%, and the NOI margin improved to 58.4% from 57.4% 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 and nine months ended September 30, 2012, operating revenues for stabilized suites and sites increased 2.5% and 2.2%, respectively, and operating expenses decreased 0.6% and 0.7%, respectively, compared to the same periods last year. For the three and nine months ended September 30 2012, stabilized NOI increased by a significant 4.5% and 4.3%, respectively, compared to the same periods last year.

NON-IFRS FINANCIAL MEASURES                                                 
                                                                            
                             Three Months Ended           Nine Months Ended 
                                  September 30,               September 30, 
                             2012          2011          2012          2011 
----------------------------------------------------------------------------
NFFO (000s)          $     39,866        29,252  $     98,997  $     78,652 
NFFO Per Unit -                                                             
 Basic               $      0.435  $      0.388  $      1.131  $      1.047 
Cash Distributions                                                          
 Per Unit            $      0.277  $      0.270  $      0.817  $      0.810 
NFFO Payout Ratio            65.3%         72.0%         74.7%         80.0%
NFFO Effective                                                              
 Payout Ratio                50.9%         56.6%         57.3%         62.4%
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Normalized Funds From Operations

NFFO is not a financial measure determined by IFRS, and is calculated by excluding from FFO the effects of certain non-recurring items, including changes in fair value of hedging instruments, amortization of losses on certain hedging instruments, and losses incurred on the amendment of natural gas contracts. NFFO, increased by 36.3% and 25.9% for the three and nine months ended September 30, 2012, respectively, compared to the same periods last year. The increase was primarily due to the contribution from acquisitions, and higher operating revenues, resulting from Management's sales and marketing programs.

For the nine months ended September 30, 2012, basic NFFO per Unit increased by 8.0% compared to the same period last year despite the approximate 17% increase in the weighted average number of Units outstanding. For the three months ended September 30, 2012, basic NFFO per Unit increased by 12.1% compared to the same period last year due primarily to the strong increase in NFFO, despite the approximate 22% increase in the weighted average number of Units outstanding. Management expects FFO and NFFO per Unit, and the related payout ratios, to improve in the medium term as a result of the full NOI contribution from recent acquisitions.

NFFO effective payout ratio for the three and nine months ended September 30, 2012 improved by 5.7% and 5.1%, respectively primarily due to higher NFFO during the current year and by higher participation in distributions reinvested. Management believes NFFO will be sufficient to fund CAPREIT's distributions on an annualized basis.

LIQUIDITY AND LEVERAGE                                                      
                                                                            
As at September 30,                                        2012        2011 
                                                                            
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Total Debt to Gross Book Value                            50.97%      55.35%
Total Debt to Gross Historical Cost (1)                   59.94%      62.22%
Total Debt to Total Capitalization                        50.24%      54.48%
                                                                            
Debt Service Coverage Ratio (times) (2)                    1.49        1.36 
Interest Coverage Ratio (times) (2)                        2.46        2.17 
                                                                            
Weighted Average Mortgage Interest Rate (3)                4.03%       4.63%
Weighted Average Mortgage Term to Maturity (years)          5.3         5.5 
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(1) Based on historical cost of investment properties.                      
(2) Based on the trailing four quarters ended September 30, 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 $24.0 million included in Accumulated Other Comprehensive 
    Loss ("AOCL"), the effective portfolio weighted average interest rate at
    September 30, 2012 would be 4.19% (September 30, 2011 - 4.71%).         

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 September 30, 2012
    improved to 50.97% compared to 55.35% for the same period last year;
    
    
--  Debt service and interest coverage ratios for the four quarters ended
    September 30, 2012 improved to 1.49 times and 2.46 times compared to
    1.36 times and 2.17 times, respectively, for the same period last year;
    
    
--  At September 30, 2012, 93.1% (September 30, 2011 - 96.4%) 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 has assumed
    conventional mortgages resulting in a decrease of CAPREIT's mortgage
    portfolio insured by CMHC compared to the same period last year. 
    
    
--  The effective portfolio weighted average interest rate on mortgages has
    steadily declined from 4.63% as at September 30, 2011, to 4.03% as at
    September 30, 2012, which will result in significant interest rate
    savings in future years;
    
    
--  Closed or committed mortgage refinancings for $387.4 million, including
    $258.4 million for renewals of existing mortgages and $129 million for
    additional top up financing as at November 8, 2012 with a weighted
    average term to maturity of 8.9 years, and at a weighted average rate of
    2.91%. Management expects to raise between $400 million and $425 million
    in total mortgage renewals and refinancings in 2012.
    
    
--  CAPREIT renewed and amended it's Credit Facilities aggregating $420
    million effective June 30, 2012, which comprise a revolving three-year
    Acquisition and Operating Facility, and a Bridge Loan, subject to
    compliance with the various provisions of the Credit Facilities in order
    to fund operations, acquisitions, capital improvements, letters of
    credit and other uses. On renewal, the Credit Facilities agreement was
    amended, to combine the Acquisition and Operating Facility and the Land
    Lease Facility into one credit facility for a total of $280 million. In
    addition, CAPREIT secured a Bridge Loan aggregating to $140 million in
    conjunction to renewing CAPREIT's existing Credit Facilities, in order
    to fund specific acquisitions. The Bridge Loan is a term credit and any
    principal amount under the facility that is repaid may not be re-
    borrowed. Its maturity date is a year from the initial drawdown of the
    advance, which was August 31, 2012. 

Property Capital Investment Plan

During the nine months ended September 30, 2012 CAPREIT made property capital investments of $84.6 million as compared to $75.3 million for the same period last year. For the full 2012 year, CAPREIT expects to complete property capital investments of approximately $130 million to $140 million, including approximately $12.5 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 Events

On October 31, 2012, CAPREIT disposed of five apartment buildings containing 438 suites located in Mississauga, Oakville and Toronto, Ontario for a sale price of approximately $60.7 million. Mortgages of approximately $29.0 million were discharged and the balance applied to pay down the Bridge Loan.

On November 1, 2012, CAPREIT completed the acquisition of the landmark Olympic Village property in Montreal, Quebec, containing 980 residential suites and 237,000 square feet of commercial and retail space for a purchase price of approximately $176.5 million and the assumption of a first mortgage of approximately $82.0 million bearing a stated interest rate of 4.39% maturing in September 2013. The net acquisition amount will be funded from CAPREIT's Bridge Loan.

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 nine months ended September 30, 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 Friday, November 9, 2012 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 6451530#. The Instant Replay will be available until midnight, November 16, 2012. 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 September 30, 2012, CAPREIT had owning interests in 36,683 residential units, comprised of 33,313 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 November 8, 2012, 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 November 8, 2012. The information in this press release is based on information available to Management as of November 8, 2012. Subject to applicable law, CAPREIT does not undertake any obligation to publicly update or revise any forward-looking information.

SOURCE: Canadian Apartment Properties Real Estate Investment Trust

SELECTED FINANCIAL INFORMATION                                              
                                                                            
Condensed Balance Sheets                                                    
                                                                            
As at                                September 30, 2012    December 31, 2011
($ Thousands)                                                               
----------------------------------------------------------------------------
Investment Properties               $         4,522,253  $         3,713,737
Total Assets                                  4,628,317            3,804,650
Mortgages Payable                             2,105,160            1,848,190
Bank Indebtedness                               265,405               74,132
Total Liabilities                             2,518,890            2,063,987
Unitholders' Equity                           2,109,427            1,740,663
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Condensed Income Statements                                                 
                                                                            
                             Three Months Ended           Nine Months Ended 
                                  September 30,               September 30, 
($ Thousands)                2012          2011          2012          2011 
----------------------------------------------------------------------------
Net Operating Income       65,813        55,039       175,265       153,594 
  Trust Expenses           (2,699)       (2,851)       (9,505)      (10,150)
  Unrealized Gain on                                                        
   Remeasurement of                                                         
   Investment                                                               
   Properties              61,458         1,726       165,090        27,057 
  Realized Loss on                                                          
   Disposition of                                                           
   Investment                                                               
   Properties                   -             -          (528)          (95)
  Remeasurement of                                                          
   Exchangeable Units        (264)         (724)         (896)       (1,629)
  Unit-based                                                                
   Compensation                                                             
   Expenses                (4,139)       (6,433)      (11,493)      (12,373)
  Interest on                                                               
   Mortgages Payable                                                        
   and Other                                                                
   Financing Costs        (21,486)      (21,546)      (63,157)      (61,571)
  Interest on Bank                                                          
   Indebtedness            (2,219)       (1,896)       (4,212)       (4,447)
  Interest on                                                               
   Exchangeable Units         (77)         (111)         (281)         (333)
  Other Income              1,416           465         2,631         1,395 
  Amortization               (565)         (396)       (1,631)       (1,193)
  Severance and Other                                                       
   Employee Costs               -             -             -        (1,352)
  Unrealized and                                                            
   Realized (Loss)                                                          
   Gain on Derivative                                                       
   Financial                                                                
   Instruments               (535)         (293)       (2,002)          913 
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Net Income                 96,703        22,980       249,281        89,816 
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Other Comprehensive                                                         
 (Loss) Income       $       (705) $    (17,191) $      1,536  $    (13,882)
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Comprehensive Income $     95,998  $      5,789  $    250,817  $     75,934 
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Condensed Statements of Cash Flows                                          
                                                                            
                             Three Months Ended           Nine Months Ended 
                                  September 30,               September 30, 
                             2012          2011          2012          2011 
($ Thousands)                                                               
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Cash Provided By                                                            
 Operating                                                                  
 Activities:                                                                
  Net Income         $     96,703  $     22,980  $    249,281  $     89,816 
  Items in Net                                                              
   Income Not                                                               
   Affecting Cash:                                                          
    Changes in Non-                                                         
     cash Operating                                                         
     Assets and                                                             
     Liabilities             (676)        5,298       (13,117)       (3,024)
    Realized and                                                            
     Unrealized Gain                                                        
     on                                                                     
     Remeasurements       (60,659)         (709)     (161,664)      (26,256)
    Gain on Sale of                                                         
     Investments             (975)            -        (1,165)            - 
    Unit-based                                                              
     Compensation                                                           
     Expenses               4,139         6,433        11,493        12,373 
    Items Related to                                                        
     Financing and                                                          
     Investing                                                              
     Activities            22,420        21,127        62,199        60,486 
    Other                     949         1,972         4,344         5,383 
----------------------------------------------------------------------------
Cash Provided By                                                            
 Operating                                                                  
 Activities                61,901        57,101       151,371       138,778 
----------------------------------------------------------------------------
Cash Used In                                                                
 Investing                                                                  
 Activities                                                                 
  Acquisitions            (38,020)      (40,642)     (345,906)     (237,554)
  Capital                                                                   
   Investments            (51,018)      (35,966)      (97,025)      (80,712)
  Disposition of                                                            
   Investments              4,428             -         5,531             - 
  Dispositions                  -             -        25,700         3,609 
  Other                     1,185           181         2,226         1,051 
----------------------------------------------------------------------------
Cash Used In                                                                
 Investing                                                                  
 Activities               (83,425)      (76,427)     (409,474)     (313,606)
----------------------------------------------------------------------------
Cash Provided By                                                            
 Financing                                                                  
 Activities                                                                 
  Mortgages, Net of                                                         
   Financing Costs         32,308         2,888        17,182       118,940 
  Bank Indebtedness,                                                        
   Net                     32,257        53,822       191,273       159,474 
  Interest Paid           (23,836)      (21,592)      (64,830)      (61,881)
  Proceeds on                                                               
   Issuance of Units          683           476       170,032         2,610 
  Distributions, Net                                                        
   of DRIP and Other      (19,888)      (16,268)      (55,554)      (48,665)
----------------------------------------------------------------------------
Cash Provided By                                                            
 Financing                                                                  
 Activities                21,524        19,326       258,103       170,478 
----------------------------------------------------------------------------
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 MEASURES                                        
                                                                            
Reconciliation of Net Income to FFO and to NFFO                             
                                                                            
                             Three Months Ended           Nine Months Ended 
                                  September 30,               September 30, 
                             2012          2011          2012          2011 
($ Thousands, except                                                        
 per Unit amounts)                                                          
----------------------------------------------------------------------------
Net Income           $     96,703  $     22,980  $    249,281  $     89,816 
Adjustments:                                                                
 Unrealized Gain on                                                         
  Remeasurement of                                                          
  Investment                                                                
  Properties              (61,458)       (1,726)     (165,090)      (27,057)
 Realized Loss on                                                           
  Disposition of                                                            
  Investment                                                                
  Properties                    -             -           528            95 
 Remeasurement of                                                           
  Exchangeable Units          264           724           896         1,629 
 Remeasurement of                                                           
  Unit-based                                                                
  Compensation                                                              
  Liabilities               3,591         6,225         9,384        11,466 
 Interest on                                                                
  Exchangeable Units           77           111           281           333 
 Amortization of                                                            
  Property, Plant                                                           
  and Equipment               565           375         1,631         1,130 
----------------------------------------------------------------------------
FFO                  $     39,742  $     28,689  $     96,911  $     77,412 
Adjustments:                                                                
 Unrealized Loss on                                                         
  Derivative                                                                
  Financial                                                                 
  Instruments                 535           293         2,002          (913)
 Amortization of                                                            
  Loss on Derivative                                                        
  Financial                                                                 
  Instruments                                                               
  Included in                                                               
  Mortgage Interest           574           270         1,246           801 
 Gain on Investment          (985)            -        (1,162)            - 
 Severance and Other                                                        
  Employee Costs                -             -             -         1,352 
----------------------------------------------------------------------------
NFFO                 $     39,866  $     29,252  $     98,997  $     78,652 
 NFFO per Unit -                                                            
  Basic              $      0.435  $      0.388  $      1.131  $      1.047 
 NFFO per Unit -                                                            
  Diluted            $      0.428  $      0.383  $      1.114  $      1.035 
----------------------------------------------------------------------------
 Total Distributions                                                        
  Declared (1)       $     26,029        21,052  $     73,937  $     62,915 
----------------------------------------------------------------------------
 NFFO Payout Ratio                                                          
  (2)                        65.3%         72.0%         74.7%         80.0%
----------------------------------------------------------------------------
                                                                            
 Net Distributions                                                          
  Paid (1)           $     20,281  $     16,543  $     56,768  $     49,072 
 Excess NFFO Over                                                           
  Net Distributions                                                         
  Paid               $     19,585  $     12,709  $     42,229  $     29,580 
----------------------------------------------------------------------------
 Effective NFFO                                                             
  Payout Ratio (3)           50.9%         56.6%         57.3%         62.4%
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(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 nine months ended September 30, 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           Nine Months Ended 
                                   September 30                September 30 
                             2012          2011          2012          2011 
($ Thousands, except                                                        
 per Unit amounts)                                                          
----------------------------------------------------------------------------
NFFO                 $     39,866  $     29,252  $     98,997  $     78,652 
Adjustments:                                                                
 Provision for                                                              
  Maintenance                                                               
  Property Capital                                                          
  Investments (1)          (3,372)       (3,048)      (10,115)       (9,145)
 Amortization of                                                            
  Fair Value on                                                             
  Grant Date of                                                             
  Unit-based                                                                
  Compensation                548           200         2,109           885 
----------------------------------------------------------------------------
AFFO                 $     37,042  $     26,404  $     90,991  $     70,392 
 AFFO per Unit -                                                            
  Basic              $      0.404  $      0.350  $      1.039  $      0.937 
 AFFO per Unit -                                                            
  Diluted            $      0.398  $      0.346  $      1.024  $      0.926 
----------------------------------------------------------------------------
 Distributions                                                              
  Declared (2)       $     26,029  $     21,052  $     73,937  $     62,915 
----------------------------------------------------------------------------
 AFFO Payout Ratio                                                          
  (3)                        70.3%         79.7%         81.3%         89.4%
----------------------------------------------------------------------------
                                                                            
 Net Distributions                                                          
  Paid (2)           $     20,281  $     16,543  $     56,768  $     49,072 
 Excess AFFO over                                                           
  Net Distributions                                                         
  Paid               $     16,761  $      9,861  $     34,223  $     21,320 
----------------------------------------------------------------------------
 Effective AFFO                                                             
  Payout Ratio (4)           54.8%         62.7%         62.4%         69.7%
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(1) An industry based estimate (see the Non-IFRS Measures section in the    
    MD&A for the three and nine months ended September 30, 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 three   
    and nine months ended September 30, 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

(Source: Market Wire )
(Source: Quotemedia)

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