Financial Data and Key Metrics Changes - The company reported a GAAP EPS loss of $0.05 per share compared to a loss of $0.43 per share in Q2 of the previous year [15] - Baseline EBITDA for Q2 was $117 million, a 12% increase year over year, bringing the trailing twelve-month baseline EBITDA to $425 million [15] - Adjusted EBITDA totaled $147 million, significantly up from $79 million in Q2 of the previous year [15] Business Line Data and Key Metrics Changes - Assets under management grew to a record $30 billion, increasing by 70% since the beginning of 2021 [6] - The rental housing sector, representing 65% of assets under management, comprises approximately 70,000 units [7] - The company originated $1.3 billion in new rental housing construction loans, marking the second-largest quarter in originations to date [7] Market Data and Key Metrics Changes - The U.S. apartment sector is experiencing strong rental demand due to a persistent housing shortage and declining new supply, setting the stage for rental growth [12][13] - In the Pacific Northwest, NOI growth was the strongest across the portfolio at 5.6%, driven by demand from companies like Amazon and Starbucks [22] - The Mountain West region, particularly Idaho, saw impressive NOI growth of 7.2% due to higher rents and lower real estate taxes [23] Company Strategy and Development Direction - The company is focused on increasing its exposure to rental housing, aiming for this sector to grow to over 80% of assets under management over the next two years [7] - The strategy includes expanding the multifamily and affordable housing sectors while disposing of non-core assets [20] - The company plans to continue recycling capital into higher return investment opportunities within its investment management platform [12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the real estate fundamentals strengthening and the compelling risk-adjusted opportunities in the rental housing sector [12] - The company anticipates a record level of new capital deployment in the remainder of 2025, supported by strong partnerships and a robust pipeline of activity [14] - Management highlighted the importance of maintaining a diversified investment management business to enhance shareholder value [14] Other Important Information - The company generated $275 million from asset sales for the year, keeping it on track to meet its goal of $400 million by year-end [11] - The company has $113 million of consolidated unrestricted cash and $450 million of undrawn availability on its credit facility [19] - The company began utilizing its share repurchase plan, repurchasing approximately 400,000 shares at an average price of $6.21 [19] Q&A Session Summary Question: Can you discuss the UK single-family rental business and its attractiveness? - The UK single-family rental market is in its early stages, with significant growth potential and a focus on a build-to-rent strategy [34][36] - Targeted returns are mid-teens at the asset level, potentially reaching the 20s with fees included [37] Question: How does the company view competition in the debt platform? - The company will continue to focus on residential construction lending, with potential expansion into bridge lending and permanent solutions [42] - The company has expertise in other property types but will primarily focus on housing [43] Question: What are the plans for non-core asset sales for the remainder of the year? - The company is on track to exceed its goal of $400 million in asset sales, having already generated $275 million [44] Question: What are the preferences between affordable versus market-rate multifamily investments? - The company is interested in expanding exposure to both affordable and market-rate sectors, with a focus on the U.S. market [47][48] - The company aims to increase the number of units it manages to between 90,000 and 100,000 over the next few years [51] Question: How is the company addressing upcoming debt maturities? - The company plans to continue disposing of non-core assets to free up capital for debt maturities and refinancing [63] - The average rate on maturing debt is close to 6%, which is above the current borrowing cost [65]

Core Insights - CAPREIT reported its operating and financial results for Q1 2025, highlighting a strategic focus on simplifying its platform and upgrading its Canadian apartment portfolio [1][8]. Financial Performance - Operating revenues for Q1 2025 were $253.3 million, down 8.2% from $275.8 million in Q1 2024 [4]. - Net operating income (NOI) decreased to $158.0 million, a 10.7% decline from $177.0 million in the previous year [4]. - The NOI margin fell to 62.4% from 64.2% year-over-year [4]. - Funds From Operations (FFO) per unit diluted was $0.585, down 3.9% from $0.609 in Q1 2024 [4][45]. - The FFO payout ratio increased to 65.4% from 59.5% [4]. Portfolio Performance - As of March 31, 2025, CAPREIT's total portfolio consisted of 47,197 suites, down from 48,696 suites as of December 31, 2024 [2]. - The fair value of investment properties was approximately $14.94 billion, a slight increase from $14.87 billion at the end of 2024 [2]. - Occupancy rates improved slightly in the Canadian residential portfolio to 97.9% from 97.5% in the previous quarter [2][8]. - The average monthly rent (AMR) for the Canadian residential portfolio increased by 5.7% year-over-year [8]. Strategic Initiatives - CAPREIT completed $400 million in strategic dispositions in Canada and Europe, with additional divestments of approximately $522 million expected from the Netherlands [8]. - The company reinvested $137 million of net proceeds into acquiring high-quality mid-market rental properties at prices below replacement cost [8]. - CAPREIT's normal course issuer bid (NCIB) program saw the purchase and cancellation of approximately 0.6 million Trust Units at an average price of $42.79 per unit [8][12]. Balance Sheet Highlights - Total debt to gross book value was 37.7%, down from 38.4% at the end of 2024 [5]. - Cash and cash equivalents stood at $119.0 million, with available borrowing capacity of $195.6 million [5][16]. - Unitholders' equity was approximately $8.99 billion, with a net asset value (NAV) per unit of $55.56, slightly up from $55.50 at the end of 2024 [5][16]. Subsequent Events - CAPREIT announced the sale of 1,446 residential suites in the Netherlands for approximately $522 million, expected to close between early August and mid-September 2025 [16]. - The company acquired an additional 102 suites in Montréal for $39.7 million in April 2025 [16].