Mr. Robert McKee reports

FIRM CAPITAL PROPERTY TRUST ANNOUNCES TRANSFORMATIONAL ACCRETIVE ACQUISITIONS OF 50% INTERESTS IN ELEVEN MANUFACTURED HOME COMMUNITIES FOR $227 MILLION

Firm Capital Property Trust has entered into binding agreements to purchase a 50-per-cent interest in a 10-property, 1,649-site manufactured housing community located in Alberta and Saskatchewan for a purchase price of $218-million (100-per-cent ownership), excluding transaction costs, plus a 50-per-cent interest in one additional MHC composed of 103 MHC sites located in Alberta for a purchase price of $8.5-million (100-per-cent ownership), excluding transaction costs. The total purchase for all 11 MHCs is $226.5-million (100-per-cent ownership), excluding transaction costs, and will consist of 1,752 MHC sites.

The trust is purchasing these properties through its existing joint venture arrangement with SunPark Communities LP, such that the trust will own 50 per cent of the properties and SunPark the remaining 50 per cent.

In addition to the properties, 151 park-owned homes and 192 chattel mortgages are being acquired that will provide additional cash flow streams to the trust. The anticipated plan is to sell all of the 151 park-owned homes, so that the trust is solely generating cash flows from site rent and the chattel mortgages.

The chattel mortgages are loans to owners of manufactured homes, have a weighted-average interest rate of 6.46 per cent and a weighted-average term of 5.4 years, and are fully amortizing. The properties also include an additional 79 vacant sites that will be rented out along with additional density and that allow for 92 expansion sites that over time could provide for additional cash flow streams.

Acquisition portfolio summary

A summary of the properties is outlined below.

The seven properties in Alberta are mainly located along the Highway 2 corridor between Calgary and Edmonton, as well as the Trans-Canada Highway. Calgary Village, the largest property in the portfolio with 336 MHC sites, sits adjacent to SunPark's Mountview MHC, offering meaningful operational economies of scale benefits.

Of the four properties in Saskatchewan, three are concentrated in and around Saskatoon and one in North Battleford to the northwest.

SunPark is partially affiliated with members of the board and senior management of the trust. This co-investment is consistent with the trust's objective of being aligned with strong real estate industry partners, and represents the fifth and sixth acquisition within the partnership.

Investment highlights:

1. Unique opportunity to acquire institutional quality, professionally managed Class A MHCs located across Alberta and Saskatchewan: The MHC market is largely fragmented and held in the hands of private owners. Acquiring a portfolio of 11 properties with 1,752 sites of this scale is rare and seldom available. Furthermore, the properties are institutionally owned and professionally managed, and consist of, in almost all cases, amenities including clubhouses, gyms and play areas making for an all-encompassing living experience and thus keeping occupancy strong.
2. Compelling 6.4-per-cent acquisition capitalization rate and a 94-per-cent occupancy rate, which generates two cents per unit of immediate adjusted funds from operations accretion: The portfolio is being acquired at a 6.4-per-cent acquisition capitalization rate that when financed generates a positive investing spread. Combined with a strong 94-per-cent weighted-average occupancy rate, the portfolio is forecasted to generate approximately two cents per unit of annual AFFO per unit accretion to the trust.
3. Consistent cash flows, year-round portfolio and no privately maintained utilities: The portfolio is year-round with public utilities that assures consistent cash flow streams and no continuing utility repair and/or capital expenditure costs.
4. Attractive exposure to non-rent controlled markets in two of Canada's strongest economies: Alberta and Saskatchewan are non-rent controlled markets. Furthermore, the locations where the portfolio is located consist of approximately 2.4 million residents and an annualized 5-per-cent population growth rate over the past few years, making for a robust rental market in a supply-constrained housing environment.
5. Embedded liquidity and immediate cash flow upside from the 151 park-owned homes and 192 chattel mortgages: The park-owned homes and chattel mortgages provide consistent cash flow streams that will immediately benefit the trust. Furthermore, both the park-owned homes and chattel mortgages will provide future liquidity to the trust as the park-owned homes are sold and chattel mortgages are repaid.
6. Significant organic growth potential from existing home vacancy, vacant sites and expansion sites: The properties include an additional 79 vacant sites that will be rented out and additional density that allow for 92 expansion sites that over time could provide for additional cash flow streams.

First mortgage and equity financing

The trust will finance 50 per cent of the required equity of approximately $38-million (excluding transaction costs) from existing cash resources including its credit facilities. The remaining equity will come from the remaining 50-per-cent joint venture partners involved in SunPark. The remaining $150.5-million cash requirement will be financed as follows: (i) $145-million, five-year first mortgage encumbering 10 of the MHCs and; (ii) $5.5-million, five-year first mortgage encumbering one MHC being provided by a Canadian chartered bank at an interest rate based on a spread over the five-year Canadian bond rate. Based on the current interest rate environment, the all-in rate would be approximately 4.5 per cent.

Pro forma metrics

Given the significance of the portfolio, the trust is forecasting the following pro forma metrics:

1. One of the largest MHC owners in Canada: The joint venture in which the trust is a 50-per-cent partner, SunPark, will become one of the largest owners of MHCs in Canada with a portfolio of 2,572 sites.
2. Significantly increased exposure to Western Canada creates more geographically diversified portfolio: Alberta and Saskatchewan collectively will represent approximately 29 per cent of the trust's pro forma net operating income. Ontario and Quebec will both move to 31 per cent of NOI.
3. Increased MHC exposure creates more diversified and defensive cash flow portfolio: MHC and apartments collectively will represent approximately 31 per cent of the trust's pro forma NOI. Grocery-anchored and industrial real estate will move to 41 per cent and 24 per cent of NOI, respectively.
4. Fifteen-per-cent increase in net operating income and adjusted funds from operations: There will be an expected increase in both annualized and aggregate NOI and AFFO of approximately 15 per cent or two-cent AFFO per unit for the trust.
5. Moderate increase in leverage: Debt/gross book value will be approximately 58 per cent, up from the 50 per cent reported by the trust on Dec. 31, 2025.

Closing

Closing of the portfolio is anticipated during the second quarter of 2026 and is conditional on a number of items, including, but not limited to, approval from the Competition Bureau and standard closing conditions.

About Firm Capital Property Trust

Firm Capital Property Trust is focused on creating long-term value for unitholders through capital preservation and disciplined investing to achieve stable distributable income in partnership with management and industry leaders. The trust's plan is to own as well as to co-own a diversified property portfolio of multiresidential, flex industrial and net lease convenience retail. In addition to stand-alone accretive acquisitions, the trust will make joint acquisitions with strong financial partners and acquisitions of partial interests from existing ownership groups in a manner that provides liquidity to those selling owners and professional management for those remaining as partners. Firm Capital Realty Partners Inc., through a structure focused on an alignment of interests with the trust, sources, syndicates, and property and asset manages investments on behalf of the trust.

About SunPark Communities LP

SunPark Communities is the manufactured home community land lease division of the Firm Capital Organization. SunPark Communities is focused on the ownership of a growing portfolio of manufactured home communities located across Canada. Subsequent to the acquisition of the portfolio, SunPark will own a portfolio of 2,572 MHC sites located in Ontario, Alberta and Saskatchewan.

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