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CAP REIT Announces Strong Year End Results

Acquisitions and Enhanced Operating Performance Produce 53% Increase in Distributable Income

CAP REIT (ticker: CAR_u.TO, exchange: Toronto Stock Exchange) News Release - 23-Feb-2000


TORONTO, ONTARIO — Canadian Apartment Properties Real Estate Investment Trust ("CAP REIT") announced today results for the year ended December 31, 1999. Revenues for the year rose 41.5% to $60.2 million from $42.5 million in 1998, resulting in a 53.3% increase in distributable income to $15.5 million or $1.06 per Unit compared to $10.1 million or $0.91 per Unit in the previous year.

For the three-month period ended December 31, 1999, revenue grew 49.9% to $17.1 million from $11.4 million in last year's fourth quarter. Distributable income rose 42.6% to $4.2 million or $0.26 per Unit from $2.9 million or $0.24 per Unit in 1998.

The increase in revenues and distributable income are primarily the result of accretive acquisitions made during the year combined with improved operating efficiencies resulting in a 2% increase in net operating margins compared to the prior year. The book value of income producing properties grew to $412.8 million at December 31, 1999 from $294.6 million the prior year as the number of rental suites rose 33% to 7,509 from 5,637 in 1998.

Distributions per Unit rose 13.8% to $0.99 for the year compared to $0.87 per Unit in 1998 and were 100% tax deferred. In addition to increasing its cash distributions to Unitholders, CAP REIT retained close to $1.0 million in distributable income for reinvestment in its portfolio, resulting in a reduced pay-out ratio of 93.8% compared to 97.1% in 1998.

"Our growth in 1999 is the result of our focused acquisition program and the active management of our portfolio," commented Thomas Schwartz, President and CEO. "As we enter fiscal 2000, occupancy remains high, average rents are growing, and we have targeted a number of further acquisition opportunities that will enhance value and distributable income going forward."

"Our superior performance is indicative of the strong management team we have assembled at CAP REIT and the stability of the rental residential real estate market," continued Michael Stein, Executive Chairman. "We are very proud to have achieved our goals to increase distributions and the size of our portfolio in 1999, and are confident growth will continue in 2000."


Financial Highlights (complete financial statements are attached):

---------------------------------------------------------
Period Ended Dec 31,                Fiscal Year
                                  1999      1998  % Incr.
---------------------------------------------------------
Operating Revenues ($000)       60,187    42,540    41.5%

Net Operating Income($000)      31,307    21,696    44.3%
NOI Margin (%)                    52.0      51.0     2.0%

Distributable Income ($000)     15,502    10,111    53.3%
Distributable Income per Unit    $1.06     $0.91    16.5%
Distributions per Unit           $0.99     $0.87    13.8%

Payout Ratio (%)                  93.8      97.1 

Weighted Average Number of
 Units                          14,657    11,156
---------------------------------------------------------

CAP REIT is a growth-oriented investment trust owning freehold and co-ownership interests in 43 multi-unit residential complexes comprising 7,648 suites, including apartment buildings and townhouses located in major urban centres across the country. CAP REIT increased the size of its portfolio by 69% in 1998, and by 33% in 1999. Since its Initial Public Offering in May 1997, monthly cash distributions per Unit have grown 43%. For more information about CAP REIT, its business and its investment highlights, please refer to our web site at www.capreit.net.


CANADIAN APARTMENT PROPERTIES REAL ESTATE INVESTMENT TRUST

Balance Sheets as at December 31, 1999 and 1998 (Audited)

-----------------------------------------------------------------------
                                                    1999           1998
-----------------------------------------------------------------------
Assets  
  
Income properties (note 2)                  $412,786,655   $294,628,858
Deposits and sundry assets                     2,925,869      3,496,366
Deferred financing costs (note 2)              3,234,603      1,440,804
Cash and cash equivalents                        135,545      5,222,962
-----------------------------------------------------------------------
                                            $419,082,672   $304,788,990
-----------------------------------------------------------------------
-----------------------------------------------------------------------
  
Liabilities and Unitholders' Equity  
  
Liabilities  
Mortgages payable (note 3)                  $236,983,265   $169,542,309
Loan payable                                   8,750,000     20,595,000
Accounts payable and other liabilities         7,620,191      5,562,962
Security deposits                              4,967,970      3,569,422
-----------------------------------------------------------------------
                                            $258,321,426   $199,269,693
  
  
Unitholders' Equity (notes 4 and 5)  
Issued and outstanding:  
Units 18,931,747 (1998 - 12,040,251)         160,761,246    105,519,297
-----------------------------------------------------------------------
                                            $419,082,672   $304,788,990
-----------------------------------------------------------------------
-----------------------------------------------------------------------
  
  
Statement of Unitholders' Equity (Audited)  
-----------------------------------------------------------------------
                                              Year Ended     Year Ended 
                                           Dec. 31, 1999  Dec. 31, 1998
-----------------------------------------------------------------------
  
Unitholders' equity, beginning of year      $105,519,297    $74,426,481
Proceeds of offerings of Units                65,081,000     35,000,140
Issue of Units on internalization (note 4)     5,400,000              -
Distribution Reinvestment and Unit
 Option Plans                                    652,789        151,675
Offering expenses                             (3,528,645)    (2,871,094)
Net income                                     2,172,529      8,631,471
Distributions to Unitholders (note 6 )       (14,535,724)    (9,819,376)
-----------------------------------------------------------------------
Unitholders' equity, end of year            $160,761,246   $105,519,297
-----------------------------------------------------------------------
-----------------------------------------------------------------------
  
             See accompanying notes to financial statements.


CANADIAN APARTMENT PROPERTIES REAL ESTATE INVESTMENT TRUST

Statements of Income and Distributable Income 

 


-----------------------------------------------------------------------
                           For the     For the    For the    For the 
                            period      period     period     period 
                     October 1 to October 1 to January 1 to January 1 to 
                     December 31, December 31, December 31, December 31,
                              1999        1998       1999       1998
                        (Unaudited) (Unaudited)  (Audited)  (Audited)
-----------------------------------------------------------------------
    
Operating Revenues    
 Revenue from income
  properties            $17,073,281 $11,389,463 $60,187,302 $42,539,588
-----------------------------------------------------------------------
     
Operating Expenses    
 Realty taxes             2,464,234   1,829,509   9,010,185   6,787,903
 Property operating costs 5,598,814   3,430,780  18,124,994  12,566,999
 Property management fees   236,302     398,632   1,745,293   1,488,886
-----------------------------------------------------------------------
 Total expenses           8,299,350   5,658,921  28,880,472  20,843,788
-----------------------------------------------------------------------
     
Net Operating Income      8,773,931   5,730,542  31,306,830  21,695,800
-----------------------------------------------------------------------
     
 Mortgage interest        3,518,520   2,292,497  12,075,765   8,704,551
 Depreciation               885,153     532,818   3,014,360   1,943,875
 Amortization of deferred
  financing costs            67,041      44,308     203,283     302,050
-----------------------------------------------------------------------
                          4,470,714   2,869,623  15,293,408  10,950,476
-----------------------------------------------------------------------
     
Income from properties    4,303,217   2,860,919  16,013,422  10,745,324
-----------------------------------------------------------------------
     
Trust expenses    
 Advisory fees              261,734     415,220   1,790,673   1,562,840
 General and Administration 441,809     128,759   1,041,085     548,973
-----------------------------------------------------------------------
                            703,543     543,979   2,831,758   2,111,813
-----------------------------------------------------------------------
Other    
 Loan Interest expense     (310,697)    (10,906)   (868,130)   (884,633)
 Instalment receipt interest
  income                          -           -           -     597,122
 Other interest income        5,429      91,979     173,668     285,471
-----------------------------------------------------------------------
                           (305,268)     81,073    (694,462)     (2,040)
-----------------------------------------------------------------------
     
Net Income before
 internalization (note 7) 3,294,406   2,398,013  12,487,202   8,631,471

Internalization (note 4)(10,314,673)          - (10,314,673)          -
-----------------------------------------------------------------------
Net Income (note 7)      (7,020,267)  2,398,013   2,172,529   8,631,471
-----------------------------------------------------------------------
Add    
 Internalization(note 4) 10,314,673           -  10,314,673           -
 Depreciation               885,153     532,818   3,014,360   1,943,875
 Amortization of REIT loan deferred 
   Financing costs               -            -           -     132,523
 Instalment receipt interest
  income                         -            -           -    (597,122)
-----------------------------------------------------------------------
Distributable Income for
 the Period (note 6)    $4,179,559   $2,930,831 $15,501,562 $10,110,747
-----------------------------------------------------------------------
-----------------------------------------------------------------------
     
Distributable Income
 per Unit (note 7)          $  .26       $  .24     $  1.06      $  .91
-----------------------------------------------------------------------
-----------------------------------------------------------------------
    
Weighted Average Number
 of Units Outstanding
 (note 7)               16,063,104   12,040,162  14,656,708  11,155,826
-----------------------------------------------------------------------
-----------------------------------------------------------------------

               See accompanying notes to financial statements.

CANADIAN APARTMENT PROPERTIES REAL ESTATE INVESTMENT TRUST

Statements of Cash Flows (Audited)
             
-----------------------------------------------------------------------
                                                Years Ended December 31
                                                    1999           1998
-----------------------------------------------------------------------

Cash Provided by (Used in):

Operating Activities
  Net income                                $  2,172,529   $  8,631,471
  Items not affecting cash:
    Depreciation                               3,014,360      1,943,875
    Amortization of deferred financing costs     203,283        302,050
    Issue of units on internalization (note 4) 5,400,000              -
-----------------------------------------------------------------------
Cash flow from operations                     10,790,172     10,877,396

  Changes in non-cash operating assets and
   liabilities                                 2,029,192      2,999,745
-----------------------------------------------------------------------
Cash flow from operating activities           12,819,364     13,877,141
-----------------------------------------------------------------------

Financing Activities
  Mortgage financing                          76,372,213      3,344,117
  Mortgage principal repayments               (3,918,086)    (2,526,784)
  Mortgage discharges                        (21,492,072)             -
  Loan payable                               (11,845,000)   (18,667,680)        
  Proceeds of offerings of units (net)
   (note 5)                                   62,205,144     32,280,721
  Distributions to Unitholders (note 6)      (14,535,724)    (9,819,376)
  Instalment receipt receivable                        -     32,385,558
-----------------------------------------------------------------------
                                              86,786,475     36,996,556
-----------------------------------------------------------------------

Investing Activities
  Acquisition of income properties           (98,281,457)   (42,602,804)
  Capital improvements                        (6,411,799)    (6,271,880)
-----------------------------------------------------------------------
                                            (104,693,256)   (48,874,684)
-----------------------------------------------------------------------

Change in Cash and Cash Equivalents During
 the Year                                     (5,087,417)     1,999,013

Cash and Cash Equivalents, Beginning of Year   5,222,962      3,223,949  
-----------------------------------------------------------------------

Cash and Cash Equivalents, End of Year           135,545      5,222,962   
-----------------------------------------------------------------------

Supplemental Cash Flow Disclosure
During 1999, CAP REIT acquired properties for total acquisition costs
of $114,760,358 (1998 - $94,644,891) and assumed mortgages of
$16,478,901 (1998 - $52,042,087).

        The notes form an integral part of the financial statements.


CANADIAN APARTMENT PROPERTIES REAL ESTATE INVESTMENT TRUST

Notes to Financial Statements
For the years ended December 31, 1999 and 1998

1. Organization of the Trust

   Canadian Apartment Properties Real Estate Investment Trust ("CAP
   REIT") is a closed-end real estate investment trust created for the
   benefit of the Unitholders.  CAP REIT commenced active operations on
   February 4, 1997 when it acquired an initial portfolio of properties
   and became a reporting issuer on May 21, 1997 pursuant to an initial
   public offering prospectus dated May 12, 1997.

2. Significant Accounting Policies

   These financial statements have been prepared in accordance with
   Canadian generally accepted accounting principles consistent with
   those disclosed in CAP REIT's annual report for the year ended
   December 31, 1998. 

3. Mortgages Payable

   Mortgages payable bear interest at rates ranging between 5.20% and
   8.25% with a year-end weighted average rate of 6.28% (1998 - 6.23%)
   and mature between 2000 and 2019.  The income properties have been
   pledged as security.  Future principal repayments over the next five
   years ending December 31, are as follows:

                                                % of Total
   Year Ending       Principal Amount            Principal
   -----------       ----------------           ----------
   2000                   $39,916,471                16.84   
   2001                    39,281,136                16.57   
   2002                    22,032,941                 9.30   
   2003                    15,701,681                 6.63   
   2004                    21,044,849                 8.88   
   Subsequent to 2004      99,006,187                41.78     
   -----------------------------------------------------------
                         $236,983,265               100.00    

4. Internalization

   On September 30, 1999, Unitholders approved a resolution to
   terminate the advisory and property management agreements with
   Canadian Apartment Communities Inc. and Canadian Apartment Management
   Inc., respectively.  The termination was effective November 11, 1999.
   The transaction price was $9.0 million for termination of both
   agreements.  Of the total transaction price, $5.4 million was paid by
   way of the issuance of 483,568 CAP REIT Units (based on an issue price
   of $11.167 per Unit) on November 11, 1999 and $3.6 million was paid in
   cash on November 30, 1999. Subject to certain exceptions, all Units
   issued in connection with the internalization will be held in escrow
   for a period of three years.  The expenses related to the transaction
   aggregated to $1,314,673, comprising goods and services tax of
   $630,000 and other costs of $684,673.
 
5. Unitholders' Equity

   On March 24, 1999 CAP REIT issued 3,050,000 Units at $9.85 per Unit
   for net proceeds of $28,390,588. 

   On December 14, 1999 CAP REIT issued 3,290,000 Units at $10.65 per
   Unit for net proceeds of $33,161,767.
  
   On January 13, 2000, the underwriters of CAP REIT exercised the over-
   allotment option pursuant to the offering on December 14, 1999 and
   purchased an additional 350,000 Units at $10.65 for net proceeds of 
   $3,559,762.

6. Distributable Income and Distributions

   The distributable income is calculated in accordance with CAP REIT's
   Declaration of Trust.  CAP REIT distributes to Unitholders monthly,
   on or about the 15th day of each month (other than January 15th) and
   December 31st in each calendar year (a "Distribution Date"), not less
   than 85% of the distributable income of CAP REIT for the preceeding
   calendar month and, in the case of distributions made on December
   31st, for the calendar month then ended.

7. Per Unit Amounts and Payout Ratio

   Per Unit or per instalment receipt calculations are based on the
   weighted average number of Units outstanding during the year.

   -----------------------------------------------------------
                                      Years Ended December 31
                                         1999         1998
   -----------------------------------------------------------

   Net income                            $0.15        $0.79
   Net income before internalization      0.85         0.79
   Cash flow from operations              0.74         0.98
   Cash flow before internalization       1.07         0.98
   Distributable income                   1.06         0.91
   Cash distributions                     0.99         0.87

   Payout ratio                          93.8%        97.1%
   -----------------------------------------------------------


FOR FURTHER INFORMATION PLEASE CONTACT : Michael Stein Executive Chairman (416) 861-5788 or Thomas Schwartz President & CEO (416) 861-9404 or Yazdi Bharucha CFO & Secretary (416) 861-5771


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