Canadian Apartment Properties Real Estate Investment Trust

Hello, everyone, and a warm welcome to the Canadian Apartment Properties REIT third quarter 2021 results conference call. My name is Simona and I'll be coordinating your call today. If you would like to register a question during the presentation, you may do so by pressing star followed by one on your telephone keypad. With that, I have the pleasure of handing over to your host, David Mills. Please go ahead, Mr. Mills.

Thank you, Simona. I'm hardly the host, but thank you for this. Before we begin, let me remind everyone that the following discussion may include comments that constitute forward-looking statements about expected future events in the financial and operating results of Capri. Our actual results may differ materially from these forward-looking statements, but such statements are subject to certain risks and uncertainties. Discussions concerning these risk factors, the forward-looking statements, and the factors and assumptions on which they are based can be found in CAP REACH regulatory filings, including our annual information form at MD&A, which can be obtained at cdar.com. And I'll turn things over to Mark Kenney, President and Chief Executive Officer. Please go ahead.

Thanks, David. Good morning. And thank you for joining us. Scott Cryer, our Chief Financial Officer, is also with me this morning. get started. As you can see on slide four, we continue to generate solid quarterly performance this year and look for increased gains in our key metrics going forward as we work our way out of the COVID pandemic. Revenues were up, driven by the contribution from our acquisitions, increased monthly rents, and continuing high occupancies. Stabilized NOI increased again, as did our MFFO all while maintaining a very strong payout ratio of 58.8%. Our growth also remains accretive to unit holders, with NFFO per unit up 3.6% in the quarter. Turning to slide five, we look forward to another record year in 2021 as our performance through the first nine months shows solid gains. All of our key benchmarks were up over last year, including revenues, NOI, and NFFO. With NFFO per unit rising over 3%, we continue to generate solid and accretive growth for our unit holders. It is also important to note that we have experienced very few collection issues through the pandemic. To date, we have collected over 99% of our rents as we work with our residents to understand their issues, and to ensure that we collect on a timely basis. Looking ahead, we expect to see further increases in occupancies, accelerated growth, and much improved operating performance as we gradually return to more normal markets and operations. From an operating perspective, our ability to generate solid performance in both good and bad times is clearly demonstrated by the results of our stabilized portfolio, as you can see on slide six. Occupancies improved again in the third quarter, while net average monthly rents continue to increase. Our track record of organic growth also continues, with same property NOI up a solid 2.1%, while maintaining a strong NOI margin of over 66.1%. We believe we are turning a corner with the successful vaccine rollout and a return to more normal markets. Our leasing and marketing programs continue to generate increasing occupancies, as you can see on slide seven. After almost two years of operating under significant pandemic restrictions, our occupancy has remained highly stable rising to just under 98% at September 30th. You can also see that our bad debts as a percentage of total revenues have remained low throughout the pandemic at under 1%. We expect occupancies will steadily improve through the balance of this year and as the pandemic eases. We are already seeing an increased interest in in-person and online potential resident visits. with strong and accelerated demand for affordable, high quality and spacious suites. Another positive sign is the rent increase we're seeing on suite turnovers and increased churn that we've experienced over the last two quarters. As you can see on slide eight, rents were up 6% on turnover in the third quarter on higher churn rates, continuing the positive trend since we bottomed out at the height of the pandemic in Q1. Looking ahead, we are experiencing more in-person and online visits, and we expect we will start to see more higher mark-to-mark rent increases in the quarters ahead, moving us toward the higher levels of increases we generated prior to when the pandemic set in. As we've stated before, our renewal increases continue to be affected by rent freezes implemented last April to help our residents work through the pandemic. Looking ahead, however, rent guideline increases of 1.2% in Ontario and 1.5% in BC are good signs. Importantly, we will be implementing these increases in both markets effective January 1, 2022. capturing a full year of these guideline increases in both provinces. Currently represents about 55% of our total NOI. It's a positive sign. Turning to slide nine, we continue to increase the size and scale of our property portfolio. In 2020, we added 3,262 suites and sites for $820 million. So far this year, we have acquired 3,122 suites and sites, the majority in our key GTA and VC markets. Our acquisition pipeline remains strong and robust, and despite the cap rate compression that we expect to generate further accretive growth in the quarters ahead. In September, we also sold 87 non-core suites for $52.5 million. and we continue to evaluate our total portfolio to assess whether recycling certain capital will contribute to more accretive growth. I'll now turn things over to Scott for his financial review.