Mr. Sandy Poklar reports

FIRM CAPITAL APARTMENT REIT REPORTS Q2/2023 RESULTS AND PROVIDES STRATEGIC REVIEW UPDATE

Firm Capital Apartment Real Estate Investment Trust has released its financial results for the three and six months ended June 30, 2023, as well as provided an update regarding the previously announced strategic review (all figures in U.S. dollars unless otherwise noted).

Earnings:

• For the three months ended June 30, 2023, net loss was approximately $1.9 million, in comparison to the $4.9 million net loss reported for the three months ended March 31, 2023 and the $10.3 million net loss reported for the three months ended June 30, 2022;
• Excluding non-cash fair value adjustments, net loss was $0.2 million for the three months ended June 30, 2023, in comparison to the $0.2 million net income reported for the three months ended March 31, 2023 and the $0.8 million net income reported for the three months ended June 30, 2022. Excluding non cash fair value adjustments, net loss was $0.06 million for the six months ended June 30, 2023 in comparison to the $1.3 million net income reported for the six months ended June 30, 2022;
• For the three months ended June 30, 2023, AFFO was negative $0.2 million, in comparison to the $0.2 million reported for the three months ended March 31, 2023 and the $0.7 million reported for the three months ended June 30, 2022. For the six months ended June 30, 2023, AFFO was negative $0.01 million in comparison to the $1.1 million reported for the six months ended June 30, 2022.

NAV AT $7.01 PER TRUST UNIT (CAD $9.28):

Including the face value of the convertible debentures, the Trust reported NAV of $7.01 per Trust Unit (CAD $9.28) in comparison to the $7.24 (CAD $9.80) per Trust Unit as at Q1/2023, also adjusted for the face value of the convertible debentures.

AVERAGE RENT INCREASES ACROSS INVESTMENT PORTFOLIO:

Wholly-Owned Real Estate Investments Portfolio: For the three months ended June 30, 2023, average rents saw an increase of 1.96% to $1,230 per unit from the $1,206 per unit reported for the three months ended March 31, 2023 and an increase of 8.25% from the $1,136 reported for the three months ended June 30, 2022.

Joint Venture Real Estate Investments Portfolio: For the three months ended June 30, 2023, average rents saw an increase of 1% to $1,590 per unit from the $1,576 per unit reported for the three months ended March 31, 2023 and an increase of 10.18% from the $1,443 reported for the three months ended June 30, 2022.

STRATEGIC REVIEW

On November 15, 2022, the Board of Trustees initiated a strategic review process to identify, evaluate and pursue a range of strategic alternatives with the goal of maximizing unitholder value (the "Strategic Review").

By way of update, the Board is pleased to report on the following:

• WHOLLY OWNED ASSET DISPOSITIONS: The Trust has listed for sale its entire Wholly Owned Real Estate Investments and is pleased to report on the following:
  • Texas: As previously announced, the Trust completed the sale of one of its properties located in Austin, Texas for $12.6 million. Net of associated mortgage debt and closing costs, the net sale proceeds of approximately $8.8 million were used to pay off additional debt including, but not limited to, the mortgage associated with the Trust's other property located in Austin, Texas; bank indebtedness and the vast majority of the $5.1 million (CAD$6.9 million) Bridge Loan. In addition, the Trust has an unencumbered property located in Austin, Texas under contract for sale. The net sale proceeds will be used to pay the remainder of the $0.9 million (CAD$1.2 million) Bridge Loan and for working capital purposes. This sale is expected to close during Q3/2023. Both properties have/had sales prices in line with their respective IFRS values. In addition, the Trust has two properties located in Houston, Texas that are actively being marketed;
  • New Jersey: The Trust has a sale in place for its sole property located in New Jersey. The expected closing of the sale is anticipated to be during Q3/2023. The property disposition has a sales price in line with its IFRS value; and
  • Florida: The Trust's property in Florida is under negotiations to be sold.
• JOINT VENTURE ASSET DISPOSITIONS: The Trust has listed for sale its Joint Venture Real Estate Investments located in Maryland as both the Trust and its partners have decided it was an appropriate time to exit the respective investments. As of today, one of the Maryland properties is under negotiations and one is being actively marketed. In terms of the remaining joint venture properties located in New York, Connecticut and Georgia, the Trust has decided with its partners to hold these investments until such time as the value of the respective investments can be maximized.
• PREFERRED CAPITAL INVESTMENTS: As at June 30, 2023, the Trust has two Preferred Capital Investments located in Texas and South Dakota that aggregate approximately $5.1 million. The Trust continues to hold these investments and earns income at 10% and 12%, respectively. Both investments are current in terms of their interest payments.

The Board will continue to assess matters on a quarterly basis and determine if the Trust should: (i) distribute excess income; (ii) distribute net proceeds from asset sales, after debt repayment; (iii) reinvest net proceeds into other investments; (iv) distribute proceeds as a return of capital or special distribution; and/or (v) use excess proceeds to repurchase Trust units in the marketplace. It is the Trust's current intention not to disclose developments with respect to the Strategic Review unless and until it is determined that disclosure is necessary or appropriate, or as required under applicable securities laws.

We seek Safe Harbor.