Mr. Mark Kenney of Canadian Apartment reports

CAPREIT ANNOUNCES THAT ERES HAS AGREED TO SELL OVER $1 BILLION OF EUROPEAN PROPERTIES

Certain subsidiaries of European Residential Real Estate Investment Trust have entered into agreements to sell 3,179 residential suites in the Netherlands and have closed on the disposition of one commercial building in Germany for aggregate proceeds, net of certain adjustments, of approximately $1.1-billion, for which Canadian Apartment Properties REIT will receive a special distribution. Amounts disclosed herein exclude transaction costs and other customary adjustments, and are presented in Canadian dollars based on a euro foreign exchange rate of 1.51 on Sept. 13, 2024.

In connection with the residential dispositions, European Residential announced that a portion of the net proceeds from the sales are expected to be used to finance the payment of a special cash distribution of an estimated $1.13 per European Residential unit and ERES Limited Partnership's exchangeable Class B LP unit, payable to holders of the European Residential units of record at a date to be determined. Based on Canadian Apartment's effective interest in European Residential of approximately 65 per cent, Canadian Apartment expects to receive approximately $172-million from the special distribution following the closing of the residential dispositions.

In connection with and following completion of the residential dispositions, European Residential also announced that it intends to reduce its monthly rate of distribution by approximately 50 per cent.

The residential dispositions are in part subject to compliance with the Dutch Competition Act, as well as other closing conditions. Subject to the receipt of all regulatory approvals and satisfaction of closing conditions for each of the residential dispositions, European Residential announced that closings are anticipated by, or before, early first quarter 2025. There can be no assurance that all conditions of closing will be obtained, satisfied or waived. Further details of the transactions have been provided by European Residential in its press release dated Sept. 16, 2024.

Canadian Apartment intends to utilize the proceeds from the special distribution: (1) to repay certain amounts drawn on its revolving credit facility; (2) to finance future acquisitions of on-strategy rental properties in Canada; and (3) for general business purposes, which may include capital expenditures, debt repayment and the repurchase of Canadian Apartment's trust units under its normal course issuer bid.

"The sale of approximately half of ERES's residential suites is not only generating liquidity, which ERES can use to reduce its leverage and solidify its balance sheet, but it also returns meaningful capital to its unitholders to reallocate as they see fit," commented Mark Kenney, president and chief executive officer of Canadian Apartment. "This will afford CAPREIT the ability to redeploy the proceeds of the special distribution into highest-value alternatives that are aligned with our strategy. Ultimately, these dispositions by ERES will substantially reduce CAPREIT's non-core investment segment and surface capital that can be put towards the continued upgrading of its Canadian apartment portfolio."

"The transactions achieve a multitude of strategic objectives for both ERES and CAPREIT, and unlock significant value for all unitholders," added Dr. Gina Parvaneh Cody, chair of the board of trustees of Canadian Apartment. "The board is excited about the strong progress that CAPREIT has made so far this year on its portfolio repositioning and capital reallocation initiatives, and we continue to support this strategy."

About Canadian Apartment Properties REIT

Canadian Apartment is Canada's largest publicly traded provider of quality rental housing. As at June 30, 2024, Canadian Apartment owns approximately 64,200 residential apartment suites, townhouses and manufactured home community sites well located across Canada and the Netherlands, with approximately $16.6-billion of investment properties in Canada and Europe.

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