David Mills - Investor Relations Thomas Schwartz - President, Chief Executive Officer, Trustee Scott Cryer - Chief Financial Officer

Jonathan Kelcher - TD Securities Heather Kirk - BMO Capital Markets Alex Avery - CIBC Mario Saric - Scotia Bank Jimmy Shan - GMP Securities

Thank you, Paul. Before we begin, let me remind everyone that the following discussions 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 our website.

I will now turn things over to Mr. Thomas Schwartz, President and CEO.

Thanks, David. Our strong growth and operating performances continued in the second quarter and the first six months of 2015, following another year of recorded results in 2014.

Slide 4 shows that one again all of our key performances benchmarks were up compared to the second quarter of last year. Acquisitions continued to contribute to our growth, but the real catalyst driving our solid performances continues to be our ability to generate strong organic growth, with same property NOI, up a strong 2% in the quarter and 3.7% through the first six months of the year.

We were also very pleased with our growth in the quarter was accretive, with NFFO per unit up 2.3% and a very strong NFFO payout ratio of 69.8%. Our strong track recorded of organic growth is largely due to our programs and keeping our buildings full with stable and steady increases in average rents combined with a relentless focus on operating efficiency and reduced costs.

As of June 30, 2015, 97.5% of our portfolio consisted of stabilized properties generating a strong 3.7% same property NOI increased through the first six months of 2015. Looking ahead, we believe our proven track record of overall same property NOI growth will continue through the balance of the year.

It is also important to note that our Alberta portfolio continues to perform well despite the issues in that province's economy, with Alberta same property NOI up 4.7% in the quarter, and 10.1% through the first six months of the year. As you can see on Slide 6, we are also continuing to capitalize on strong rental markets across the country.

Overall, average monthly rents for the residential portfolio were up 1.8% with occupancies remaining very stable at 98%. Our MHC portfolio also continues to perform well, with near full occupancy and raising monthly rents.

Looking ahead, demand remained 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.

Slide 7 details how we are generating solid growth in average monthly rents, due primarily to our strong property management programs and higher rent guideline increases in Ontario and British Columbia this year. For 2015, rent increase guidelines in Ontario rose from 0.8% in 2014 to 1.6% this year and from 2.2% last year compared to 2.5% this year in British Columbia.

Looking ahead, we now know that the guideline increase for Ontario has risen further to 2% from 1.6% this year. Another factor in our rental rate growth is our ongoing successful application for above guideline increases in Ontario.

We have been very successful with these applications and we are confident we will be able to generate further above guideline increases going forward when necessary. Finally, as you can see on Slide 8, we were pleased to announce that our Annual Meeting in May, a 3.4% increase in annualized cash distributions, starting with our May distribution, our 12th since our IPO in 1997.

Annualized cash distributions are now a $1.22 per unit. We are proud of our track record of enhancing shareholder value and look for further increases in the years ahead.

I am now going to turn things over to Scott to provide detail on our second quarter financial results. Scott?

Thanks, Tom. Turning to our Q2 results on Slide 10, you can see we benefitted once again from the increase in size and scale of our property portfolio as well as our continued strong organic growth.

Revenues were up in the quarter, and as a result of our proven operating programs, NOI increased driven by lower R&M cost, realty taxes and utility costs as a percentage of our operating revenues. NFFO rose just under 10% in Q2, primarily due to the contribution from acquisitions and our strong operating performance.

NFFO per unit, despite being impacted by 7.2% increase in the weighted average number of units outstanding rose 2.3% in the quarter, demonstrating once again our ability to grow efficiently and effectively to deliver solid accretive of returns to our unitholders. Slide 11 details our results through the first six months of 2015.

Again, our operating performance was very strong, with the 2.9% increase in our revenues, NOI up 4.4% and NFFO rising 6%. You can see that our growth was accretive through the six months ended June 30, 2015, as NFFO per unit was up 1.2% despite the 4.8% increase in weighted average number of units outstanding in the period and some one-time items incurred are income items in Q1 of 2014.

We continue to maintain a strong and flexible financial position as shown on Slide 12. Our balance sheet has never been in a stronger position, with a very strong liquidity and debt to GBV down to 43.7%.

Coverage ratios remained strong with an interest coverage ratio at a solid 2.88 times and improved debt service ratio is well as in our guidelines. It is also important to note that we have approximately 252 million of our properties not encumbered by mortgages at quarter end and we continue to plan to finance a portion of these unencumbered properties through the balance of the year, with a goal to maintain these at a level of about 160 million over the long-term.

Our weighted average interest rate declined further at the end of the quarter and we have continued to focus on maintaining an extend debt maturity at attractive rates. As you can see on Slide 13, the rebalancing we have done over the last few months has resulted in very conservative maturity profile.

We will continue to focus on expanding our debt maturities in this low rate environment while selling in the maturity profile. With maturity between 2015 and 2020, representing a relatively small apportionment portfolio in the next 10 years, we believe, we have a good balance between top up liquidity and reduced sensitivity to any rising interest rates, while still taking advantage of low interest rates today.

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, we remain well-positioned to continue our growth plans.

With the completion of our 2015 equity financing, our liquidity position stood at approximate $232 million on June 30th, providing continued long-term liquidity and the resources for future acquisitions at approximately $770 million all while maintaining our conservative debt ratios. Strong top-up potential estimated at $106 million for the balance of 2015 will continue to provide sufficient liquidity and allow us to fund our feature programs.

Finally, Slide 15 shows the success we are having in reducing our interest cost this year. As you can see, we expect to refinance a total of over $209 million to mortgages this year with an original interest rate of 3.89% and replace them with a much lower rate.

As at October 10th, on August 10th, we had closing committed mortgage financing, including acquisitions of $277.8 million, including $119.9 million for renewals of existing mortgages and $157.9 million for additional top up in acquisition financing, with a weighted average term to maturity of 10.2 years and weighted average interest rate of 2.66%, these savings will contribute to the stability of our cash flows and our cash distributions in the years ahead. Thanks for your time.

I will now turn things back on Tom to wrap-up.

Thanks Scott. Before we take your questions, let me first touch on some of the innovative ways we are growing our business for the benefit of our unitholders.

The cap rate the CAPREIT IRES transactions is great example as you can see on Slide 17. We sold our Dublin assets in an initial public offering on the Irish stock exchange in April last year generating a $717,000 gain on the sale.

We are now receiving a stable and growing stream of recurring asset and property management fees amounting to $1.2 million for the last eight months of 2014. In 2015, we expect these fees will be over $3 million for the full-year.

We also entered into a pipeline agreement with IRES to help finance and support their growth and received a 1% underwriters' fee on assets we bought on their behalf and then transferred to them. The recent rock portfolio sale generated an approximately $1 million fee net of taxes for CAPREIT.

Finally, we believe, our ongoing retained interest in IRES currently at 15.7% will generate long-term capital appreciation for our unitholders. To-date, we hold the beneficial interest of $65.5 million ordinary shares of IRES at an average acquisition price of one €1 euro per share.

IRES shares are not trading at price of well above equity offering price, closing at €1.14 per share as at August 7th, indicating solid gains for CAPREIT unitholders. We also continue to expand and diversify our property portfolio with the acquisition of 609 apartment suites to-date, not including the 270 apartments in the Rockbrook portfolio, we have purchased on behalf of IRES and recently sold to them.

We also have a strong 900-plus suite portfolio under contract, which we will be announcing shortly and we are in serious negotiation on a number of other high-quality properties and large portfolios. Our target remains to acquire between 1,500 and 2,000 apartment suites in MHC sites each year and we are working very hard to achieve this goal once again in 2015.

Secondly, we are pursuing an important new avenue of growth for CAPREIT, the development of new apartment properties as discussed on Slide 19. We own a number of properties where there are sufficient excess land on which we can develop new apartment buildings.

We are now in the process of compiling a land inventory and investigating zoning potential to determine the feasibility of our projects. We are also looking at opportunities to partner with other real estate companies to capitalize on our proven track record of residential rental property operations and we are pleased to have announced at the end of July our first joint venture development deal with First Capital Realty and its existing partner to acquire a one0third interest in the residential component of the King High Line project in downtown Toronto.

We will pay $60.3 million for interest and in addition to being granted the property management contracted at the market feet for the three residential towers we responsible for the leadership of the 506 apartment suites in the property. Closings will occur as floors are completed expected to occur in 2018.

This is an exciting and very accretive opportunity for CAPREIT and will set the stage for further similar partnerships in future. In conclusion, we believe the future is extremely bright at CAPREIT.

We have grown our ability to capitalize on continuing strong fundamentals in the Canadian apartment business through all economic cycles. We have one of the strongest balance sheets in the business and fiscal prudence will remain a key priority at CAPREIT.

We are very proud of our team. We have the right people in the right positions to manage our growth for years to come.

Finally, we have demonstrated that our business strategy is succeeding and prospering and we will continue to build on the solid performance generated over the last 18 years. The main take away from today is that we are all very excited and confident about our future.

We look forward to sharing our results with you in the coming quarters. Thanks again and Scott and I will now be pleased to answer any questions you may have.

Thanks. Good morning.

Good morning, Jonathan.

Good morning, Jonathan.

Just on the portfolio that you have under contract, could you give us a little bit more color on that? Where it is located, how much, when you would expect it to close?

I have got to be careful, because we are still in due diligence. It is a high quality portfolio in one of the tightest markets in Canada and we expect it to close September 30th and it will be very, very compatible with our existing portfolio.

Again, as I have been saying, everything we are buying now is very strategic. We have capacity in a lot of our regional offices.

This is in one of our strong regional areas with a strong regional office with capacity. Again, we hope to announce it by September 30th.

Could you give us a ballpark in terms of cost?

Under $200 million.

Okay. Then just a quick question on the operations front, the Southwestern Ontario portfolio had a pretty big jump in operating expenses in Q2.

Was there any one-time items in there?

Nothing specific to highlight, it is obviously just some of the fluctuations quarter-to-quarter.

Okay. Thanks.

I will turn it back.

Thank you.

In terms of your outlook for the upticks on turnover it was a little lower last quarter and has trended up. Do you expect to be returning to sort of the 3% level that you had historically or should we a lower stabilized level?

I think what we saw is definitely in Nova Scotia and Alberta the impact in the first quarter that has reversed a little bit in Q2, so that is kind has stabilized it. Outside of that, Québec improved a little bit as well.

I think, we are trending in the right direction. I do not know if 3% is the number specifically.

It really depends on some of those peripheral markets as well.

Would there be any tie-in as well with CapEx and I am just wondering sort of increasing your CapEx budgets sort of tie into that number as well.

The CapEx budgets are independent, Heather, I mean those are budgets, they have a lot of components even they are planned very, very carefully. Again, we like to think most of it enhances revenue.

Okay. Yes.

I was just trying to get a sense on whether if this was like suite upgrade driven sort of falling off, but it sounds like it is more market dynamics?

Yes. That is a good analysis.

In terms of you are working on acquisitions and you have some targets for a number of things you want you want to add. Given some of the announcements recently in CAPREIT, the properties are going at, have you given any thought to selling additional assets in certain markets and what markets would you be targeting?

Yes. I mean, we are going to have an incredible acquisition year this year.

Our pipeline is very, very strong now. I think next quarter you are going to hear some very interesting things.

When we make major acquisitions, we always look inside the portfolio and say okay what do we have that is maxed and out does not fit. Yes, we will be considering some dispositions at that point.

In terms which markets that really depends on which acquisitions we are successful with, so we are very close on a couple of things. I do not think it is appropriate to give you actual locations, but what I can tell you that by next quarter we will certainly have more color on this.

Okay. Do you have sort of a ballpark quantum of what you might look at?

We will significantly exceed our target this year target. Our target is 1,500 to 2,000.

Again, I think, we will probably buy many thousands of units this year. Some of the deals we are working on today come together, so I am optimistic.

This could be our best acquisition year in many years.

In terms of the disposition target, do you have a target for that?

No, because it depends what the acquisitions. Once we know what our acquisitions are what are and once we are successful on that will determine what we will be disclosing out.

Got it.

What I will tell you is the acquisition, the disposition will be a significant smaller number than the acquisitions. Just finally on the Alberta performance, which has been holding up quite nicely, can you give us a sense of just the dynamics in the market, I know it is not a big part of your portfolio, but do you attribute that strength to?

Again, we have been watching the very, very closely and nothing has gone wrong. People seem to be staying in place.

When units come up, we turn them over and we continue to look at big rent increases, but we hold rates and get a little bit. We definitely have been seen the stronger renewal rates than on turnover, but the renewal rates continue to be pretty good.

Thanks so much.

Thanks Heather.

Thank you. Just on the Quebec, I guess specifically the Montreal portfolio.

I think you saw expense growth. That was I think high for your portfolio.

Was there anything in particular that was in the quarter or was that more recurring versus one-time?

I think it was again just general volatility quarter-to-quarter on how R&M another type of expenditures get done in the quarter, nothing one specific item that would be attributed to it so.

Okay. Just back to the Alberta portfolio, again, it is not a big part of your portfolio, but you did see I mean Edmonton posted 16.2%, same property NOI growth, but also saw 230-basis point occupancy erosion.

Any color there as to how you are achieving the pretty spectacular NOI growth?

Just market dynamics, Edmonton was a market, where we only had one building for about 10 years. We bought the second building last year and when we coming into new building, we change management, we spent some money and that creates some turnover and allows us to make some more money.

The size of the portfolio, obviously, the change quarter-over-quarter can also look a little bit more extreme than some of the bigger areas, where you have a smoothing effect of the bigger portfolio, so.

Okay. That is helpful.

Just on King High Line, the deal does not close for three or four more years. The way that you have structure it, it looks like it is a price per square foot versus something often on forward purchases other REITs will enter into more of a development yield type of a purchase price that is variable until stabilization.

Can you tell us a little bit about your thinking on that front as to purchasing on price per square foot basis versus the targeted development yield and perhaps how you got to that decision?

It was not so much of price per square foot as I call it for a share of the dealer or price per unit. Remember, because it is a residential rental component, we are driving the pro forma, we are driving the income statement, we are in control of the leasing, so we are very comfortable with the pro forma numbers that are created here.

We are treating this therefore as a development we are doing ourselves and that is why we would do it.

Have you talked about what you expect in terms of the development yield?

We certainly have running models in-house and we are comfortable. It is accretive to us.

Again, on a price per unit basis, it is a very good deal. The way we would analyze any business deal whether it is an acquisition or development deal.

Okay. That is great.

Thank you.

Thanks.

Hi, good morning. Maybe just sticking to the operational theme, the portfolio continued to deliver very stable results.

One area where I did see a bit of slippage in occupancy would be affordable segment. Year-over-year on a same property NOI basis it is not a huge part of the portfolio.

You have done a great job of kind of diversifying on a relative away from it, but can you may be shed them color in terms of what is happening within that segment and what is maybe driving the occupancy bit lower?

Yes. It is a very, very slow portion of our portfolio.

It is not that we have sold our affordable buildings Mario, except we have converted them to mid-tier buildings by spending capital and basically changing the nature of the tenancy. We still have one building in the East Coast.

It is just a little bit challenged that is affecting us. I would say that is the most London is a little weaker.

We have some affordable building there, but it is nothing specific. Again, if you look overall and that is the beauty of the diversified portfolio, our metrics are spectacular.

Understood. Okay.

Then on the margin it was fairly flat year-over-year, perhaps because of some of the expense growth we have talked about Montreal as well as Southwestern Ontario, looking forward what type of margin expansion should we think about for the remainder of the year and heading into 2016?

I mean, I think 2016 we will start to see some guideline, because it is really going to be a little bit top-line oriented as well. We do not see any significant wage growth issues.

Utilities seem to continue to be in line, but we have already recognized some of that in our margin. Same with R&M, we have kind of started to realize some of those reductions, so I would say more in line.

That is going to be probably a little bit more top-line driven, which looking into 2016 could improve with the guideline, but outside of that it is tough to say.

Okay. Maybe one last question on the development side, can you give us any sense in terms of when you think you may come up with some numbers in terms of the overall potential intensification within your existing portfolio?

I hope within six months we have added to our planning stuff. We are looking very carefully.

I do not want to give numbers unless they are real, Mari, so I am going to take my time and do this properly, because I think this is a very important hidden asset on our balance sheet and I think it is probably even greater than I expected to be. We are very pleased with what we are finding, so I want to dig in when we do an analysis I want to make it sure it is something we truly going to deliver on.

That is great. Looking forward to it.

Thank you.

Okay. Thanks.

Hi. Thank you.

Just one question, Tom, I was just curious in terms of the portfolio, what would be the premium in terms of cap rate? Would you say, you would pay it today between a portfolio of purchase versus individual assets?

Individual asset it is very, very tight, Jimmy, as you probably know, I think there has been a lot of stuff in the paper today. Our apartment assets are trading at very, very low cap rates.

We do a little bit better on large portfolios just because there is more rational, there is fewer bids. I would say a single asset or one or two assets tends to go at maybe 20, 25 basis points lower than a large portfolio.

We have recently seeing some transaction in Toronto that mystified me there has been a recent transaction and the mid-3s, so

Well, Okay. You are saying that, the portfolio that you have got, you would actually get a better cap rate than you would be buying any individual?

Yes. On the large portfolios we do a little bit better, because, again, it is a more rational group of buyers and again less people can spend $200 million.

They can spend $10 million.

Right. Okay.

That is great. Thanks.

Thanks.

Okay. Thank you very much.

Again, I thank everybody for their continued interest in CAPREIT. As always, Scott and I are available for any additional questions you may have.

Thank you very much.