Thomas Schwartz - President and CEO Scott Cryer – CFO David M. Williams - Independent Trustee

Frederic Blondeau – Dundee Capital Markets Mario Saric - Scotiabank Jason Kepecs – GMP Securities Matt Kornack - National Bank Financial Alex Avery – CIBC World Markets Mark Rothschild - Canaccord Genuity

Thanks Wayne. Before we begin, let me remind everyone that the following discussion may include comments that constitute forward-looking statements about expected future events and the financial and operating results of CAPREIT.

Our actual results may differ materially from these forward-looking statements, as such statements are subject to certain risks and uncertainties. Discussions concerning these risk factors, the forward-looking statements, and the factors and assumptions on which they are based can be found in CAPREIT’s regulatory filings, including our Annual Information Form and MD&A, which can be obtained at sedar.com.

I’ll now turn things over to Mr. Tom Schwartz, President and CEO.

Thanks, David. Good morning, everybody and thank you for joining us today.

With me this morning is Scott Cryer, our CFO. As you can see, it was another solid quarter for CAPREIT as our growth and strong operating performance continued, indicating it will be another record year in 2014.

As you see on Slide 3, our portfolio growth and the continuing success of our property management programs, generated a solid 7.2% increase in operating revenues through the first nine months of the year, resulting in a 9.3% increase in net operating income and a solid increase in our NOI margin. .Importantly, same property NOI was up a very strong 4.8% through the nine months ended September 30, 2014 and 3.7% in the third quarter.

Normalized funds from operations rose 11.1% and once again, our growth was accretive as NFFO per unit was up 2% to $1.25 per unit, despite the 9% increase in weighted average number of units outstanding. With this strong performance, our NFFO payout ratio remained very strong at 71.5%.

Our track record of strong same property growth has continued in 2014, as you can see on Slide 4. With the 3% increase in revenues for the nine months ended September 30, and only a 0.3% increase in operating cost, we generated a solid 4.8% increase in same property NOI.

For the third quarter of 2014, same property NOI growth was also strong at 3.7%. We believe same property NOI will continue to grow for the foreseeable future.

Slide 5 shows that we are continuing to capitalize on strong rental markets. Overall, average monthly rents for the residential portfolio were up 2.1% despite the very low rent guideline increases in Ontario and British Colombia, with occupancies remaining strong at 98.6% compared to last year.

As we have stated before, rents in our MHC portfolio were impacted by acquisitions made in lower rent markets during the fourth quarter of last year, but also continued to increase on a same-store basis. Looking ahead, demand remains strong in all of our markets.

We see occupancies remaining stable at these nearly full levels and we believe average monthly rents will continue to increase over time. Slide 6 details how average rents are performing on suite turnover and lease renewals.

As you can see, we continued to generate solid growth in average monthly rents, although at a slightly lower pace than last year, due to the lower 2014 rent guidelines in Ontario and British Columbia. Our strategy towards increased portfolio diversification, helped mitigate the lower guideline increase.

One of the key reasons for our rental rate growth is our ongoing successful application for above guideline increases in Ontario for properties where we have invested in capital improvements or are experiencing certain increased cost. Despite the low guideline in our largest markets, we still averaged over 2% rental growth.

Looking ahead, the 2015 rent guidelines have been increased substantially from 0.8% to 1.6% in Ontario and from 2.2 % to 2.5% in British Colombia. We believe these increases will drive an even stronger topline next year.

With our strong results and our highly positive outlook on the future, we were pleased to implement a 2.6% increase in monthly cash distributions in June to a $1.18 per unit on an annualized basis, our 11th increase over the last 17 years as a REIT. Slide eight shows that so far this year we have acquired a total of 341 residential suites in MHC sites for an aggregate acquisition cost of $49.2 million.

The new properties strengthened our presence in Prince Edward Island and Regina markets and we believe the acquisitions will generate further economies of scale and operating synergies in these regions and across the entire portfolio. Clearly, our portfolio growth this year is not as significant as the last three years, but as we have stated often in the past, we will simply not grow for growth’s sake.

Acquisitions must be accretive, and while we continue to evaluate a very solid deal flow, we won’t act unless the transaction makes sense for our unit holders. In addition, we’ve been very focused over the last few years on operational excellence and managing our cost.

We believe our strong track record of increased same property NOI is proof that our property management initiatives are working. I’ll now turn things over to Scott to review our financial results in more detail.

Thanks Tom. As you can see on slide 10, our third quarter results benefited once again from our portfolio growth and our continuing track record of increases in average monthly rents and consistently high occupancies.

Revenues were up 5.3% in the quarter, and as a result of our proven operating program, NOI rose an even higher 6.5% compared to last year. NFFO rose 5.5% in the quarter, primarily due to contributions from acquisitions, increased average monthly rents and high stable occupancy.

Slide 11 details our performance through the first nine months of 2014. Operating revenues were up 7.2% with NOI rising 9.3% compared to last year.

Our NOI margin also strengthened to 60.0% from 58.9% last year. As you can see, our growth was accretive as NFFO per unit was up 2% for the nine months ended September 30 2014, again despite the 9% increase in units outstanding.

The increase resulted from organic revenue growth driven by higher average monthly rent, maintaining high occupancies and cost management through our proven programs. Turning to our balance sheet on slide 12, you can see we continue to manage a strong and flexible financial position.

Coverage ratios remain very strong, with interest coverage continuing to exceed 2.5 times and improved debt service ratios well within our guideline. It’s important to note that we have approximately $213 million of our property not encumbered by mortgages and used only to secure our acquisition and operating facility.

Our weighted average interest rate declined further at the quarter end. We have continued to focus on extending our debt maturities using primary 10 year term mortgage debt.

Again with more recent attempting to balance our maturity profile with the use of both five and 15 year money, both at attractive rates. Looking ahead, we expect to complete the renewal of approximately $55 million in mortgages the remainder of this year.

As of today, we have completed or committed 318 – sorry, over 500 million of total mortgage renewals and re-financing of our target 600 million to 650 million for 2014. As you can see on slide 13, our mortgage maturity profile remains very conservative and well balanced as we continue to focus on extending our debt maturities in this low rate environment.

With maturity between 2015 and 2020 representing a smaller portion of the portfolio in the next 10 years, we believe we have a good balance between top up liquidity and reduced sensitivity to rising interest rates. In addition, with 96% of our mortgages being CMHC insured, we have a large and diverse group of lenders willing to work with us at rates below conventional financing.

On the liquidity front as detailed on slide 14, we remain very well positioned to continue our growth program. Our liquidity position stood at approximately $197 million at quarter end, providing continuing long term liquidity and the resources for future acquisition of approximately 655 million, while still maintaining our conservative debt ratio.

Strong top up potential, estimated at 250 million for 2014, has and will continue to provide sufficient liquidity and allow us to fund our CapEx program. As I mentioned earlier, we still have approximately 150 million in unencumbered properties after encumbering to our targeted level that could be tapped for future growth initiatives at the appropriate time.

Thanks for your time and I’ll now turn things back to Tom to wrap up.

Thanks Scott. Looking ahead, and given our strong performance through the first nine months of the year, we are confident 2014 will be yet another record year for CAPREIT.

First, the growth in our portfolio over the last few years is having a very positive impact on our performance and we will opportunistically acquire strategic properties if the price is right and if they are immediately accretive to our NFFO. Property revenues will also continue to benefit from our near full occupancy levels and consistent increases in our average monthly rents, driving very strong growth in our NOI.

Our NOI margins remain strong, particular as we realize the benefits of our state of the art purchasing, energy and property management programs at all of our properties. An important potential new avenue growth for CAPREIT is the development of new apartment properties.

We have been invited to partner with mixed use developers to combine our expertise to develop new mixed use properties. Many of you have been on our property tours where we have some commercial and retail space in our buildings and the combinations work very well.

In addition, a number of our assets have sufficient excess land on which we could develop new apartment buildings. This plan is at an early stage, but we are currently investigating zoning potential at a few of our properties to determine the feasibility of such projects.

We are also looking at joint ventures with well-established residential developers to create new rental buildings together. I am confident we will announce our first new rental building in the next couple of months.

In conclusion, we believe CAPREIT faces a very exciting future. We have proven our ability to capitalize on continuing strong fundamentals in the Canadian apartment business through all economic cycles.

We believe we have one of the strongest balance sheets in the business, and fiscal prudence will remain a key priority at CAPREIT. We are very confident in our team and we have the right people and the right positions to manage our growth for years to come.

Finally, we have demonstrated that our business strategy is working, and we will continue to build on the solid performance generated over the last 17 years. The main message once again today is that we are very, very confident in our future and we look forward to sharing our results with you in the coming quarters.

Thank you again and we will now be pleased to answer any questions.

Thank you. I just have a quick question.

What should we expect in 2015 in terms of acquisitions? What do you see out there?

What kind of cap rate environment you see and what would be your target markets as well? Thank you.

Thanks and congrats again on a great quarter.

Good morning. Tom, you have done a very good job in terms of managing costs and we’re seeing very minimal expense growth in your same property numbers.

I’m just curious as to how much longer you think you can continue that trend.

Every year we think we’ve peaked out and we always manage to find new sources of revenue and new ways to cut cost. We are always looking.

Our margin is unbelievable. When we started this REIT I never dreamt we’d have a margin with a six in front of it, but we continue to go on that way.

We also take advantage. We have a very large portfolio.

We are national and we take advantage of those economies of scale and they just -- the opportunities continue to come to us. We continue to look at new energy management opportunities.

We look at new revenue sources. We are confident this will continue.

Okay. And then maybe just switching gears to the development pipeline, and maybe it’s still too early, but can you give us any sense in terms of the number of suites that the excess land position may be able to deliver over the next five, 10 years?

Again I don’t have the number of suites. It’s going to be a long time before we can come up with that.

What I can tell you is we are seeing a lot of very, very good deals. I said a few minutes ago we hope to announce our first new development deal in the upcoming months.

You guys know me well enough to know that I wouldn’t say that unless I had a lot of confidence we had a deal in front of us that worked and it was very, very far down that downstream. I think it will be -- this will become more and more an important part of our program.

But again Mario, it’s early stages and we’ve got three sources. We certainly have our own excess land that we are looking at.

And again we have a couple of rezonings at a very, very early stage. We are seeing a lot of joint venture opportunities coming here, both with mixed use developers and also just some very high quality residential developments where people are considering doing rental rather than condominiums and they need a strong rental partner and we are the partner they are approaching.

That all makes sense. That first potential development, would that be on excess land, excess CAPREIT land or would that be elsewhere?

No, that’s a joint venture opportunity that was brought to us a little while back. And as I said it was good enough and the site is ready to go.

So we think we can announce it in the near future.

Okay. And then my last question, just on the – looks like your target payout ratio in your MD&A may have come down a little bit.

I don’t know if I'm reading too much into it or not, but it looks like it’s at70% to 80% now versus 80% to 85% previously. Has there been any change in thought process internally with respect to your ideal payout ratio and how will that influence …?

No, I think it’s just a natural progression as we move down to a lower payout ratio. We think the distribution increases we’ve been given are very sustainable and therefore we believe that that 70% to 80% is now a more realistic range of where we anticipate it to be.

And then it has been well below that for -- through probably about five years I guess.

So, more an indication of expected continued growth as opposed to anything else?

Correct.

Hi guys. I noticed that there was, in your IFRS value, 11 days points of compression in the GTA segment.

Was wondering if that reflects what you see as cap rates tightening in the GTA generally or was it on a particular segment such as the high end or the luxury segment?

No, I think it's reflecting what I said earlier. Cap rates are certainly compressing.

I mean there’s a time lag between our IFRS values and the actual marketplace. I think that’s what we are seeing.

I think you’ll see in future quarters IFRS values will continue to reflect lower cap rates.

Good morning guys. Quickly, as you go forward and the amount of addition incremental capital that you’ve put into properties becomes less because you have less to do, you are still going to be doing enough financing program on mortgages.

How do you see ultimately deploying that cash or ultimately should we see some of that financing activity trend downwards over times?

It all comes down to opportunities and we are opportunistic. We are always watching and I can’t predict where the opportunities are going to come, but it’s nice to have the capacity and that’s really what this does.

If the right acquisition comes, we would top up and use that as a way to make acquisitions. Conversely, if we don’t so we let our debt ratio go down a little bit.

Look at where we are today. I never imagined we’d have a debt to growth book value below 50%, but we are sitting here today.

You’ll notice our profile, our margin maturity profile over the next five years, there’s definitely not the level of top up that we’ve had in the last three to four years coming forward. That aligns a little bit from a cash flow point of view in our CapEx strategy.

Just on the CapEx strategy, you are pretty sure that it's winding down at this point for the properties that you purchased since 2012. Looking forward, I guess ultimately you could purchase more at this point, but you’ve done what you’ve wanted to do on the CAPEX side?

Yeah. There is again a five year lag.

We do five and 10 year CapEx estimates when we buy these proprieties and certainly the acquisition we made a few years we are well into the CapEx, but it can move very quickly. I mean we can go out tomorrow and buy 2000 units and need a lot of CapEx and all of a sudden the CapEx budget changes.

And as I've always said, when we are look at an acquisition, we look very, very closely at the CapEx needs and we assume it has to be a accretive after the CapEx money has been spent. That CapEx money will dribble in over the next couple of years when we make significant acquisitions.

The structural side has come down as a percentage of the portfolio and it’s definitely been more focused on some of the value added aspects of the portfolio as well. There has been a dynamic change to some degree in where that money is being spent.

Great. Thanks.

Then the last thing, just looking at the MHC land lease sites, the costs on the same property or expense on the same property portfolio look to be pretty interesting with regards to Ontario and British-Colombia. Is there anything to that or?

No, I think it's a combination of -- obviously we’ve grown in those portfolios and there has been some reallocation to some degree. And just the size of the MHC, small movements in prices have a more dramatic impact on the margins, but nothing specific to point out.

Thank you. Tom, you mentioned the aggressive cap rates that you are seeing in the market.

Can you give us a sense of what type of development yields you are targeting or what a spread over market pricing you might be looking for?

We wouldn’t look at anything we didn’t have a very solid five in front of it and that’s really the challenge. And not a five pro forma very tightly.

That’s a five pro forma with proper contingencies because as we all know with development we are going to get surprises. And in terms of interest rates, that’s very much driving the program because we can still get good 10 year money around 3%.

Okay. And then I appreciate that it’s still early days, but can you give us just I guess a more qualitative sense of what kind of profile we should be expecting in these developments?

Like are they primarily going to be mixed use, a lot of urban or suburban? I can imagine that buying just a vacant site in downtown Toronto for instance you’d be competing with pretty aggressive condo development buyers.

I think you have to assume, Alex that this works best at the high end. I certainly can’t make a mid-tier affordable building work with new construction today.

So it will be luxury high end. I don’t like to say only urban, but it’s more likely to be urban.

And the point you were making before is exactly that. There’s lots of good land out there.

There are certain developers who have been active in the condo market, who are making decisions they want to look at rental. As I said, we are probably the first call they make when they’re looking for a partner in rental.

So I think you can assume that the lands that we are looking at that we can develop for luxury rental housing, they could also have been used for condos, but a decision was made to use it for luxury rental housing. We are looking at both mixed use and just straight rentals.

In terms of joint ventures with I guess some potentially condo developers that want to continue to own, what kind of a profile would you be looking for? Would you be looking for like a 50% equity partnership or would you consider just doing third party management?

We won’t do third party management. We only invest for ourselves.

The profile of the perfect partner for us is somebody that’s very strong financially, somebody who’s got a very good track record for development and building and somebody that’s prepared to stay in for the long-term and is well aligned with this. That alignment is really important.

So that’s what we would be looking for and frankly we are seeing enough proposals in front of us we can achieve that.

You’d presumably want at least 50% ownership?

Yeah. 50-50 is always a perfect partnership.

That works and that creates perfect alignment.

Good morning. Tom, following your discussion about possibly partnering with others, in the past you had mentioned that you thought there might be some [indiscernible] locations in the condo market with all the developments and this might create some opportunities.

Obviously at this point doesn’t seem too much of that, but do you think that long-term there still is risk there or has your view changed at all?

No, I think there’s always risk in the condominium market. The Canadian markets, Toronto, Vancouver and a little bit of Montreal continue to be very strong.

Condo sales have continued to set new records. So we are not seeing any distress there yet.

What we are seeing as I said earlier, are developers that are making a conscious decision that they want to do some rental properties and they’re choosing us to approach as a partnership.

Okay. I want to thank everybody very much for your continued interest in CAPREIT.

And as always if you have any further questions, give Scott or myself a call.