Mr. Sandy Poklar reports

FIRM CAPITAL APARTMENT REIT REPORTS Q4/2023 AND 2023 RESULTS AND PROVIDES STRATEGIC REVIEW UPDATE

Firm Capital Apartment Real Estate Investment Trust has released its financial results for the year ended Dec. 31, 2023, as well as provided an update regarding the previously announced strategic review. All figures are in U.S. dollars unless otherwise noted.

EARNINGS

• For the three months ended December 31, 2023, net loss was approximately $0.5 million, in comparison to the $1.5 million net loss reported for the three months ended September 30, 2023 and the $2.0 million net loss reported for the three months ended December 31, 2022. For the year ended December 31, 2023, net loss was $8.7 million in comparison to the $14.1 million for the year ended December 31, 2022;
• Excluding non-cash fair value adjustments, net loss was $0.3 million for the three months ended December 31, 2023, in comparison to the $0.4 million net loss reported for the three months ended September 30, 2023 and the $0.3 million net income reported for the three months ended December 31, 2022. Excluding non cash fair value adjustments, net loss was $0.8 million for the year ended December 31, 2023 in comparison to the $2.0 million net income reported for the year ended December 31, 2022;
• For the three months ended December 31, 2023, AFFO was negative $0.3 million, in comparison to the negative $0.3 million reported for the three months ended September 30, 2023 and the $0.1 million reported for the three months ended December 31, 2022. For the year ended December 31, 2023, AFFO was negative $0.7 million in comparison to the $2.0 million reported for the year ended December 31, 2022.

NET ASSET VALUE (" NAV ") AT $6.7 6 PER TRUST UNIT (CAD $8.9 4 ):

• Including disposition costs and the principal amount of the convertible debenture, the Trust reported NAV of $6.76 per Trust Unit (CAD $8.94).

AVERAGE RENT INCREASES ACROSS INVESTMENT PORTFOLIO:

• Wholly-Owned Real Estate Investments Portfolio: For the three months ended December 31, 2023, average rents increased 2.7% to $1,283 per unit from the $1,249 per unit reported for the three months ended September 30, 2023 and 7.88% from the $1,189 reported for the three months ended December 31, 2022;
• Joint Venture Real Estate Investments Portfolio: For the three months ended December 31, 2023, average rents increased 0.37% to $1,598 per unit from the $1,593 per unit reported for the three months ended September 30, 2023 and 0.59% from the $1,589 reported for the three months ended December 31, 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 Trust is pleased to report on the following:

WHOLLY OWNED ASSET DISPOSITIONS: The Trust had listed for sale its entire portfolio of Wholly Owned Real Estate Investments and is pleased to report on the following:

• Texas: On June 22, 2023, the Trust announced 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. The property sold had a sales price in line with its fair value.

On October 2, 2023, the Trust completed the sale of its unencumbered property located in Austin, Texas for $9.9 million. Net of closing costs, the net sale proceeds of approximately $9.6 million were used to pay off loans as they came due and for working capital purposes. The property had a sales price in line with its fair value.

In addition, the Trust has two properties located in Houston, Texas that are actively being marketed.

• New Jersey: On August 30, 2023, the Trust completed the previously announced sale of its property located in New Jersey for $19.5 million. Net of associated mortgage debt and closing costs, the net sale proceeds of approximately $5.4 million were used to pay off the remainder of the Bridge Loan, other loans as they came due and for working capital purposes. The property sold had a sales price in line with its fair value.
• 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 and Connecticut as both the Trust and its partners have decided it is an appropriate time to exit the respective investments. As of today, one of the Maryland properties was sold, as described below, and the other one is being actively marketed, while the Connecticut property is under negotiations with a third party.

On January 31, 2024 the Trust completed the sale of one of its joint venture properties located in Maryland for $15.9 million (100% of the property). Net of associated mortgage debt and closing costs, the net sale proceeds were approximately $4.1 million, of which the Trust received approximately $1.1 million given its 25% ownership in the property. The property had a sales price in line with its fair value.

PREFERRED CAPITAL INVESTMENTS: As at December 31, 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.

NORMAL COURSE ISSUER BID: As a result of the Trust's cash position, on September 20, 2023, the Trust announced that it received approval from the TSXV to commence a Normal Course Issuer Bid (the " Bid ") to purchase up to $1.9 million (the "Allotment") of the CAD$19.4 million, 6.25% convertible unsecured subordinated debentures due June 30, 2026 ("Debentures") (TSXV:FCA.DB). The Bid commenced on September 25, 2023 and will end no later than September 24, 2024. The Board of Trustees is of the opinion that it is in the best interest of the Trust and its security holders to purchase the Debentures at a discount to Par, through the Bid, while providing liquidity for the security holders. It is the intent of the Trust to acquire as much of the Debentures as possible up to the maximum allowable under the rules of the Exchange in the context of market pricing, thus providing liquidity for existing holders of the Debentures.

During the year ended December 31, 2023, the Trust repurchased $0.29 million (CAD $0.38 million) of the Convertible Debenture. Subsequent to year end, the Trust acquired $0.12 million (CAD $0.16 million) of the Convertible Debenture. The average price of all Convertible Debentures repurchased is $94.99 for an affective buy-back yield of 6.6%. Note that the Trust is limited to acquiring up to 2% of the Debentures on a monthly basis.

The Board of Trustees 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.