2022

On December 15, 2022, Canadian Apartment Properties Real Estate Investment Trust (“CAPREIT”) declared a special non-cash distribution of $0.36 per Unit, paid in Units of CAPREIT (the “Additional Units”) on December 30, 2022 to Unitholders of record at the close of business on December 30, 2022 (the “Special Distribution”). The Special Distribution was principally made to distribute to Unitholders a portion of the capital gain realized by CAPREIT from transactions completed during the twelve-month period ended December 31, 2022, and was therefore in the form of a capital gain to Unitholders for Canadian income tax purposes.

Throughout 2022, as part of an active management strategy focused on refreshing capital and rejuvenating its portfolio, CAPREIT disposed of certain older, value-add properties, each for consideration at or above IFRS fair value. Combined with continued increases in Funds From Operations (“FFO”), this resulted in estimated total taxable income and capital gain for fiscal 2022 exceeding distributions paid. Canadian-resident Unitholders will generally be required to include their proportionate share of CAPREIT’s income and net taxable capital gain, as allocated and designated by CAPREIT, in computing their respective income for the 2022 tax year.

The non-cash Special Distribution was paid at the close of business on December 30, 2022 by the issuance of the Additional Units. The Additional Units had a fair market value equal to the dollar amount of the Special Distribution, which was based on the closing price of the Units on the Toronto Stock Exchange on December 30, 2022.

Immediately after the payment of the Special Distribution, the issued and outstanding Units of CAPREIT, including the Additional Units, were consolidated such that the aggregate number of issued and outstanding Units immediately following the Special Distribution was the same as the aggregate number of issued and outstanding Units of CAPREIT immediately before the Special Distribution (the “Consolidation”). Accordingly, each Unitholder immediately following the Consolidation held the same number of Units as such Unitholder held immediately before the Special Distribution. For Unitholders who are residents of Canada for federal income tax purposes, the amount of the Special Distribution increased the adjusted cost base of Unitholders’ consolidated Units. Unitholders who are not resident in Canada for Canadian federal income tax purposes may be subject to applicable withholding taxes in connection with the payment of the Special Distribution.

Please refer to CAPREIT’s press release here.

CANADIAN APARTMENT PROPERTIES REAL ESTATE INVESTMENT TRUST

Stephen Co, Chief Financial Officer