David Mills - IR Tom Schwartz - CEO Scott Cryer - CFO

Mike Markidis - Desjardins Jonathan Kelcher - TD Securities Heather Kirk - BMO Capital Markets Jimmy Shan - GMP Securities Matt Kornack - National Bank Financial Neil Downey - RBC Capital Markets Dean Wilkinson - CIBC World Markets Mario Saric - Scotiabank

Thank you, Donna. 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 are 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. Thomas Schwartz, President and CEO.

Thanks, David. Once again, our time-tested and proven growth strategies have delivered another strong quarter for our unitholders.

Since our IPO in 1997, we have developed and executed a three-pronged approach to capitalize on the strength of the Canadian residential rental market, all aimed at delivering enhanced long-term value for our unitholders. First, we have expanded and diversified our presence in key markets from coast-to-coast in Canada, and with another solid year of portfolio growth so far in 2016.

Second, our proven property management and cost control programs continued to generate stable and sustainable organic growth, and our results so far this year are a testament to our success. And third, we constantly strive to be the landlord of choice in our markets, working very hard every day to meet the needs of our residents, and provide them with safe and comfortable homes.

Turning to slide 5, this year we have already added 1,981 apartment suites and MHC sites to our portfolio, achieving our annual target of acquiring between 1,500 and 2,000 units every year. Through the first nine months of 2016, we strengthened our presence in Toronto, London, Ottawa, as well as British Columbia, Prince Edward Island, and Halifax.

Total acquisition costs so far this year were CAD317 million. These acquisitions should make a strong, growing and highly accretive contribution to our FFO, and they were purchased well below replacement costs, a key criteria for CAPREIT.

Looking ahead, we continue to evaluate additional acquisition opportunities, both in our current, and in new markets, and anticipate portfolio growth in the quarters ahead. In addition to our portfolio growth, we also continue to deliver strong organic growth, as you can see on slide 6.

With over 84% of our portfolio consisting of stabilized properties, we generated a solid 2.5% increase in same-property NOI through the first nine months of 2016. Our third quarter same-property NOI growth was a very strong 3.6%.

Our track record of sustainable organic growth is being driven by keeping our buildings full with stable and steady increases in average rents, and a relentless focus on operating efficiency and reducing costs. With this focus, we're confident our organic growth will continue going forward.

With the increase in the size and scale of our property portfolio over the last few years, combined with our solid track record of organic growth, you can see on slide 7 that once again all of our key performance benchmarks strengthened through the first nine months of 2016. NFFO was up a very solid 17.5%, and our growth continues to be very accretive, and NFFO per unit was up 4.7%, despite the 12% increase in the weighted average number of units outstanding.

Our NFFO payout ratio also remained strong and highly conservative, at just over 70%. One reason for our success is our focus on utilizing the latest technology solutions in the property management business.

As you know, we have embarked on a multi-phase implementation of a new SAP enterprise resource planning system at CAPREIT, to streamline our procedures, and provide invaluable real-time information, to ensure that we are managing our properties efficiently and effectively. The latest stage in this development is the roll out of a suite turnover mobile app, a tablet based platform for our on-site property managers.

This solution streamlines and improves the suite turnover process by allowing staff to automatically record suite inspection results, create purchase requisitions and work orders, and receive goods and services. This is one of the many initiatives we are undertaking to streamline our procedures and manage our properties effectively.

The app enhances our ability to quickly move the vacant suite back into the market, while capturing increased economies of scale from our portfolio-wide procurement systems. It reduces our costs, increases our occupancy, and strengthens relationships with our residents.

We expect to see a significant return on this initiative as we roll out this leading-edge technology across our full property portfolio. I'm now going to turn things over to Scott to review our results.

Thanks, Tom. As Tom said, our track record of growth continued in the third quarter of 2016, as shown on slide 10.

Once again, we are benefiting from the increasing size and scale of our property portfolio, as well as our continuing strong organic growth. Revenues were up 15% compared to last year's third quarter.

And as a result of our proven operating programs, NOI increased by over 17%. Operating expenses improved to 36.6% of revenues from 37.7% last year.

And NFFO rose 20%, primarily due to contributions from acquisitions, and our strong operating performance. We also generated solid accretive growth in the quarter, as NFFO per unit was up 6.8%, despite the continuing efforts to reduce our leverage, while debt to gross book value was way down to 44.3% at quarter end.

As you can see on slide 11, our organic growth is being driven by solid performance in our stabilized portfolio, with increased average monthly rents, and very strong occupancies across all of our demographics sectors and asset types. Looking ahead, demand remains strong in a majority 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. We also saw a return to positive increases in rents on both turnovers and renewals in the third quarter, with a 2.1% weighted average increase in monthly rents across the entire portfolio.

As we discussed last quarter, this year we made a conscious decision to reduce rents in the challenged Alberta and Saskatchewan markets, to keep our buildings full and reduce turnovers. Although the impact to the markets have weighted on our overall results, as you can see on slide 12, excluding these two regions, we're doing very well in all of our other markets, with solid increases in rents on both renewals and turnovers, particularly in Ontario and British Columbia.

Although Alberta and Saskatchewan represent only 7% of our total NOI, we continue to believe in the long-term prospects of these markets. Also, the benefits of our portfolio diversification continue to prove to be the right strategy.

Turning to our balance sheet, we continue to maintain a strong and flexible financial position, as shown on slide 13, with conservative leverage, improved coverage ratios, and the further reduction in our interest costs. It's also important to note that as of September 30, we had approximately CAD280 million of our properties not encumbered by mortgages, providing further flexibility to fund our growth and investment programs.

Looking ahead, you can see our mortgage portfolio remains well-balanced, as shown on slide 14, as we continue to focus on extending our debt maturities in this low rate environment. With maturities through the end of 2018 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 96.5% of our current mortgages being CMAC 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 programs, as shown on slide 15.

With the completion of our CAD165 million bought deal equity offering in August, our liquidity position now stands at approximately CAD280 million, providing the resources for future acquisitions of approximately CAD795 million, using 65% mortgage loan-to-value, all while maintaining our conservative debt ratios. Strong top up potential, including funding on new acquisitions, is estimated at CAD97.5 million for the remaining of 2016, and will continue to provide sufficient liquidity and allow us to fund our future CapEx programs.

As I mentioned earlier, our pool of unencumbered properties represents additional liquidity available for future growth. Most importantly, our growth and performance continues to generate strong free cash flow at CAPREIT.

As you can see on slide 16, over the last five years, our NFFO has more than covered the increasing monthly cash distributions we have delivered to our unitholders. NFFO over distributions declared, coupled with our mortgage top ups, we had excess cash of CAD247 million after paying for capital expenditures.

In addition, with the cash obtained through our DRIP program of CAD148 million, we were able to make acquisitions while reducing our leverage during those five years. In total, you can see that free cash flow available for our portfolio growth over the last five years has been significant, and we see this track record continuing in the years ahead.

I will now turn things back over to Tom to wrap up.

Thanks, Scott. Looking ahead, we will continue to execute our proven growth strategies to build value for our unitholders.

Demand remains strong in the majority of our markets, and new mortgage regulations in Canada can only increase demand for quality rental accommodations. We will further increase the size and scale of our property portfolio, both in our current and new markets, ensuring all acquisitions are immediately accretive to unitholders, and purchased at below replacement cost.

Combined with this portfolio growth, our property management programs and cost control initiatives are all aimed at generating solid and sustainable organic growth, while at the same time ensuring our residents' needs are answered, and they're provided with safe and secure homes. As you can see on slide 19, we have generated an enviable track record of accretive portfolio growth since our inception in 1997, and our growth will continue going forward.

Since our IPO, our growth has been successfully focused on expanding into new geographic regions, diversifying our portfolio to reduce risk, and strengthening our presence in all of Canada's strongest rental markets. We have also repositioned the portfolio with an increased emphasis on the higher margin luxury and mid-tier demographic segments of the business, while also maintaining a strong presence in the profitable affordable sector.

In addition, we have expanded into new asset classes, building a growing portfolio of manufactured housing communities that deliver strong and growing cash flows, with a reduced risk profile. All of these growth initiatives have transformed CAPREIT into Canada's largest publicly-traded residential landlord, with a high-quality and growing property portfolio, and a management team located in key centers from coast to coast.

We will continue to build on this dominant market presence in the years ahead. We are also very proud to have generated a strong track record of accretive growth for our unitholders, through both good times and bad, a testament to the strength of the apartment business, and our proven property management programs.

As you can see on slide 20, CAPREIT has delivered on its main goal to deliver solid sustainable and growing earnings and distributions to its unitholders, while at the same time, conservative operating performance ratios have been maintained. We look forward for this growth to continue going forward.

Looking at our progress over the last five years, as shown on slide 21, you can see the significant growth we have generated has resulted in significant benefits for our unitholders, while at the same time, maintaining a very strong and conservative financial position. Compared to the end of 2010, our debt ratio has strengthened considerably, and we have taken advantage of the low interest rate environment to extend our terms of maturity, and reduce our interest costs.

We have also collected a large pool of unencumbered assets, adding to the resources and flexibility we can draw on for our growth initiatives. And all of this has been accomplished with strong accretive growth in our NFFO per unit, a much more conservative operating performance payout ratio, and solid growth in our monthly cash distributions.

And the main reason for our success and accomplishments over the last 19 years is the experience and dedication of our people. We believe we have one of the best teams in the business, with the right people in the right places to manage our growth for years to come.

We also work hard to attract and retain the best through our education and training programs, and mentoring initiatives, to ensure succession plans for all key positions are in place. As you can see on slide 23, so far this year, our asset and property management fees from IRES totaled CAD3.8 million, up from CAD2.3 million last year.

This steady and stable stream of recurring income should continue to grow going forward, as IRES builds its presence in the vibrant Dublin market. We also believe our 15.7% retained interest in IRES will generate long-term capital appreciation for our unitholders over the long-term.

IRES is focused on growing its common share dividends, and to date, we have already received close to CAD3.5 million in dividends from IRES. We continue to be presented and consider select opportunities in other markets outside of Canada.

Finally, as you can see on slide 24, this growth and superior performance continues to generate strong returns for our unitholders. Unitholders who invested in our IPO in November of 1997 have received a total return of 1077% as of November 5, 2016, and this compares to only 607% for the Cap Real Estate Index and 260% for the overall TSX index.

We are very proud of everything we have accomplished for our unitholders, and truly believe this growth and success will continue going forward. In summary, we believe the future is extremely bright at CAPREIT.

We have proven 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.

And finally, we have demonstrated that our business strategy is succeeding and prospering, and we will continue to build on this solid performance generated over the last 19 years. Thank you again, and Scott and I will now be pleased to answer any questions you may have.

I just wanted to clarify, I really appreciate the CapEx guidance that you're giving for 2017. Good to see that, I guess you could call it the current income-producing properties, that run rate seem to be going down and developments going higher.

Just to confirm, was there any predevelopment spend of significance in the 2016 figures at all?

Not really. Really some fairly minor intensification.

Adding a house, an MHC the property or some permits and whatnot. Nothing of significance.

Obviously coming into 2017, those costs are becoming more significant. They're really a combination of intensification, space conversion, but the majority of it is really focused on the permitting, rezoning and actually some hard construction costs that we hope will start to build toward the end of the year of 2017.

We stripped that out specifically for that reason.

Okay. Given that it would seem that you are really starting to press ahead with the intensification initiatives that you revealed to us earlier this year.

Tom, at this juncture, are you able to give us some sense of where the first couple of projects are, and what that entails?

We're getting closer. When we gave you those targets, we thought very carefully, we took our time to give them to you.

I want to get a little further into our program. Certainly as we get into next year, I think we can tell you where we started our rezoning initiatives and where we are receiving successes.

Okay. Last question for me, just on the mobile app that you talked about during the presentation, it seems like you're maybe in the early stages of rolling that out.

Maybe you could let us know what percentage of the platform is using it today, and what the timing of that rollout would be throughout the remainder of this year and into next year?

It is going to rollout pretty quickly. I visited sites that have this, it's very effective, it's working.

I would say by -- as we get into next year, it will be rolled out more. It's something we worked on for a long time.

It's a great timesaver. More importantly, it's a great money saver.

And a great control initiative, so it has a lot of aspects to it. But it will roll out pretty quickly.

So safe to say that the majority of the benefits haven't been realized yet?

No, we are in the final stages of live testing on sites across Canada. We don't test in one region, we test in a number of regions.

Got you. That's very helpful.

Thanks, I'll turn it back.

Just following up on Mike's question on the development. That CAD37 million, are you starting -- would it be work on all 1,600 units that you identified as your first wave?

Yeah.

It is?

In some form or another, obviously that's permit or rezoning, or whatnot or hard cost, but in some fashion or another, we are moving forward on the majority of them.

Okay. I guess my question goes more to the hard costs.

Would you be starting, would you expect or hope to start on all 1,600 next year?

No.

So will it be one or two.

We are not going to have a construction start next year. We will certainly have -- we will be well into the rezoning process.

Okay. Just flipping over to acquisitions, Tom, a couple times in your prepared remarks, you talked about new markets.

Are you speaking Canada new markets, or?

Really, I prefer both. In terms of Canada, for example, this year, we've re-entered the Ottawa market.

As you know, we've always had a joint venture in Ottawa that's been there for a long time, but we bought 825 townhouses, we like that Ottawa market. We've done well with those townhouses.

We'll continue to grow there. In BC, if you've noticed, we've moved just a little bit further outside of the greater Vancouver area.

We're in Maple Ridge, we're in Surrey, we will continue to do that. Because of our Irish initiative, and the success we've had, we certainly see other opportunities beyond Canada.

We're in process with those opportunities. If the right thing comes in front of us, we will take advantage of it.

Okay. Just on that note, I think you've spoken in the past of looking for opportunistic situations, similar to what you found in Ireland.

What countries, or are there any countries where you see may be not as good as Ireland, but something similar to that?

Certainly with the changes that are going on in Western Europe, we all know about Brexit, and we all know what's going on at some of these other countries. Every time there's turmoil and dislocation, that can sometimes create opportunities.

That's what we look for.

So you're not going to name any countries?

I'm not going to name any countries until we know we are going to go forward. At this point, we are looking at things but we certainly don't have any firm deals in front of us.

Frankly, I'll tell you, we don't even have anything under contract at this point.

Okay. Thanks.

I'll turn it back.

Following up on Western Europe, so would the intention be to do another vehicle similar to what you did in Ireland? Or would it be to combine that into your Ireland strategy?

It would depend on the opportunity. It's unlikely we would do it in the Irish vehicle, Heather.

With the way legislation works, that vehicle is very much tied to Ireland. It would be something we would do within CAPREIT.

How we would approach it, it would depend on the deal. We're certainly not there yet.

We know the success we have with IRES, we like that formula, and if the right opportunity came up, I would be very pleased to be able to repeat it. It's making lots of money for us.

It's been a great experience.

So the idea would be to have the ownership be a direct ownership?

It would certainly be within CAPREIT, whether we would do the same thing and create a vehicle and ultimately spin it out as an independent REIT, that all depends.

Okay. In terms of the margin improvement, it seems that a lot of it was really on sort of other OpEx lines.

Can you comment, I missed the early part of the call, so I apologize if this has already been covered. Can you comment on precisely what has been driving that, and what you see going forward?

I think the margin story -- the top line stability increases are definitely a positive. There is some seasonally, I would say, positive changes in our R&M type expenditures.

So probably historically a little bit lower than normal. That are offsetting some of the utility increases and realty taxes.

We wouldn't expect any further cost reductions on that side. I think it was a fairly good quarter from that point of view.

But the top line is encouraging.

On a percentage basis if we look at this margin on other OpEx, is that sustainable at that 17 to 25 level?

I would say it's fairly sustainable there. There may be a little bit a positive upside on it that would take this quarter.

Just due to seasonality. What we're doing in the building, but we don't think it's too far off from where it will be.

And just lastly, in terms of the acquisition outlook, you're now at 40,000-plus units in Canada. What's the thought in terms of continuing to gain scale and how does that tie into your next couple of years of outlook with respect to the CapEx plans?

We're seeing a good deal flow, as I said a few minutes earlier, we bought almost 2,000 units this year. We are not finished.

You will hear a couple other announcements hopefully in the fourth quarter. We will have exceeded our target again this year.

Deal flow is good, interest rates are obviously very favorable. I think next year, we'll start with the same target, 1,500 to 2,000 units.

We've overachieved in the past two years, and we hope to do the same thing next year.

That number, is that a net number, or would you be offsetting that?

At the net number. We talked about disposals.

Earlier we made disposals of Montreal, I guess it will depend what we buy. We're opportunistic, I can't tell you exactly what we will buy.

We went overweight in Montreal that's why we sold some assets. It will depend on where the next group of acquisitions come from.

What I can tell you is if we buy in BC, it's highly unlikely we would make any disposals. If we bought more in Quebec, we probably would.

In terms of the development CapEx that you outlined, what would the impact, if any, be in terms of capitalization of interest?

We're still looking at the exact inflection point of when that would happen. We wouldn't see any significant capitalization, most likely, just given the dollar value.

I don't think it's material enough to really discuss.

Great. Thanks a lot.

Just a couple of markets for me this quarter, when I look at the MHC portfolio in Alberta, I know it's a small part, it looked like the same-store NOI growth was very strong. I was curious about what's driving that, in the context of what's going on in Alberta?

The other one was just the BC market I know is strong, the expenses have gone down quite tremendously, I don't know if that was what you were referring to there, Scott?

Let me address your first question, Jimmy. In terms of Alberta, you're absolutely right.

The apartment market is weak there. It's our weakest market in Canada.

Remember, MHCs are a different kind of business. They are really stable.

We have a couple of really very strong affordable communities in Alberta. They haven't been dramatically affected by what's happened there.

It's been good news for us.

I think we've also been approaching MHCs a little bit differently. We have been adding a little bit more, changing over housing stock or adding new.

There's commissions involved. There is some ancillary side that's probably boosting the revenue.

Because of a repositioning type initiatives. Other ancillary type income in there.

It's a combination of growth of the underlying residential, and some of those new initiatives.

In terms of BC, BC is the strongest rental market in Canada. The cost of homeownership is way beyond the cost of most renters.

We are operating at virtually 100% occupancy there, and raising rents as much as we can.

A lot of the growth also came on the expense side, which is down quite dramatically.

That's the efficiency we get from our platform.

Okay. If the investment in the path that's being off today.

Then, on the GTA market, when I look at the monthly rent of CAD1,258, do you know what would that translate to on a rent per square foot basis? Would it be in the CAD1.70 range?

We don't really think per square foot in the existing buildings. I will just do in my head right now.

CAD1.70 or CAD1.80 range. Yes.

I keep hearing it's condo rentals getting multiple bids and certainly your occupancy stat would suggest that GTA is incredibly strong. How much runaway do you think there is on that CAD1,258 if a CAD1.70 is the number?

You're looking at a lot of buildings averaged together. If you look at our well-located buildings, we're doing condo quality renovations.

We're getting condo style rents. You look at our affordable buildings, they're still very affordable, and we're not doing condo quality renovations.

You've got a lot of stuff averaged in there.

Okay.

One of the things I said in the earlier call, that I would repeat, we are learning from that condo market. Were doing better renovations in our Class A locations than we've ever done.

We're getting those CAD2 plus square foot rents.

Lastly, speaking of investing in the technology. I don't think, I could be wrong, but I don't think you're using any revenue management software like the U.S.

guys do.

We certainly don't have a yield management system that we bought in the US, but we have a proprietary system that we have created here that we use. This is old news, we control the rent from head office, they're not controlled on-site.

Not through that system.

The systems they use in the US, is that something that would make sense for your portfolio?

We've looked, and it doesn't work. No, our legislation is very different.

If we could have bought something off the shelf we would have. It wouldn't work here.

We have created our own.

Okay great. Okay.

Thank you.

Just wanted to quickly touch on the mortgage side. It seems like you took out a bit of a shorter-term mortgage this quarter.

And the rate was a bit higher, is that a non-CMHC loan? Or what was the rationale behind that?

I believe that was a non-CMHC, generally on a very infrequent basis, just go short-term if it's one where we have another mortgage. Like if it's a second mortgage, we will try and match them up.

Or specifically, you may see that in cases where we have mortgages coming due on things that we believe have development potential. We may put a shorter mortgage in on those, as well.

I believe this one was a combination of the two, actually.

Fair enough. With regards to the CapEx, it's good that you have segmented it.

Can you speak to, I don't know if you have these numbers, whether on a stabilized basis, the CapEx per suite has been fairly consistent over the last several years? I know you have included some of the acquisition properties in there, and obviously there's a higher spend on those.

But historically speaking, has the CapEx on the stabilized portfolio been fairly consistent?

Yes. I would say in 2009 we started to invest our -- or 2010 we started to invest much more heavily in that portfolio.

We've done a lot of heavy lifting. Where it's been more elevated coming through 2015, and even into 2016.

The 2017 numbers are definitely much below the 2016, 2015, and prior numbers. Also the balance of where the capital is going has changed.

Where we would have had a higher percentage of our total capital budget on those existing portfolio, going towards structural. Some of the less discretionary stuff.

We see more of it going into suite improvement, common area, energy efficiency initiatives. So there's been a change in where the CapEx has gone as well.

We're trying to provide some better visibility to that. We will keep pushing on that front.

It's good color. In terms of Alberta, sequentially from Q2 to Q3, I know Q3 is a high turnover quarter, but has the market in your view stabilized at this point, or are you seeing further downside pressure?

We saw actually a high percentage of turnover in the first quarter and second quarter. The Alberta impact was greater than normal in the first two quarters, and the level of rent reductions on turnover were definitely higher than we're seeing today.

We have seen that come back in line. On the renewal side we're probably giving a little bit more away though Q2, just to maintain that occupancy.

But we're also seeing that come in. Both the renewal and turnovers have a positive trend from what reductions we are giving, as well as a high percentage of the overall Alberta market had turned as of Q1 and Q2.

So both we see as at least positive trends as of today, without a crystal ball looking forward.

Last question on my front, with regards to the other income in the IRES portfolio. The equity pick up on investment, is that a good proxy for your FFO contribution from 15% in IRES, or is there something else in there as well?

We revalue in Ireland every half year, December 31 year end, and as of June 30. So as long as you're adding back that fair value gain which we add back to FFO, then that should get you close.

When it comes to quarterly results, I guess in Q2 and Q4, we will have to take those numbers out of FFO, but otherwise it's a pretty good.

Exactly.

Perfect. Thank you.

Just a follow-up to Matt's question on Alberta. I guess what we see is that the average monthly rents as of September of this year versus September of last year are a little over CAD100 per month lower.

9% or 10% lower. Can you maybe give us a bit of an indication as to what that actually means, in terms of how much lower rents are rolling over today, versus what they were maybe three months, six months, nine months ago?

Are rents rolling down CAD200 a month on average, or how do we think about that number?

I think you should look at it at about CAD150, there may be the odd CAD100 or CAD200, but with our incentives and rent reductions coming off the peak it's about CAD150 a month.

Okay. How much greater might that have been back in Q1?

It would have been slightly higher in Q1 for sure. The trend is coming down.

You are going to have the rollover effect of what happened in the first Q2. It will continue to hit AMR.

The positive side is obviously that trend is slowing first of all, and overall that our portfolio revenue line is seeming to shore up.

Our occupancy is a little higher. It's going in the right direction.

No question, your occupancy is very good under the circumstances. If I might be so forward as to make one suggestion, just heading into 2017, given that the nature of your capital deployment is going to change to some degree.

Your cash flow statement currently has, I'll call to line items for capital deployment, one is acquisitions and one is capital investments, I would be hopeful you're going to add third line entitled something like development expenditures.

Okay, we can track that for you.

I think everyone would find that to be useful.

Most of my questions have been answered. I can make it pretty quick.

Any conversations around changes that could, or you think you be happening to the LBA as a result of CMHC changes?

No, they've assured us that everything is on target and stable. We check that very carefully.

Okay, so there's nothing we can expect there. On the top=up financing, if I read that right, you're about halfway through, we'll call it just shy of CAD100 million that you think you can extract out of Q4?

Yes, over halfway through, yes.

And the other half, would you be looking at doing something a 9 or 10 year term in around the same cost?

Yes we are focusing on a 10-year plus just because when you look at our maturity profile, 10-year plus continues to make sense from a balance, and not having any one year be really in excess of 10% of our total portfolio. We will continue to focus beyond that.

We're obviously seeing the bond move around a little bit, with the Fed and the U.S. elections going on.

We're still in the 2.3% to 2.5% range on 10-year. Obviously, we'll have to see where the bond goes over the next three to six months, but that's where we're at today.

Lastly, is it fair to say that the majority of the increase in bad debt expenses is emanating of the Alberta markets?

I would say a higher percentage of it, for sure. Is out of that market.

We've seen a little bit in Halifax, and a little in Quebec, but a high percentage would be Alberta.

Maybe just a couple follow-up questions. One on the GTA and one on the margins.

Firstly on the GTA, I think it's often underappreciated how important immigration is to the GTA rental market. The Federal Government seems supportive of increasing immigration going forward.

Are you seeing anything on the ground that is showing increased immigration levels? Secondly, is there anything that you are doing today that is different than historically in terms of attracting market share within that segment?

We are over 99% occupied. We're doing everything we've always done, and will continue to do, because it's working.

Immigration is an important part of our business. We cater to those markets, we've talked about that for years.

We still do. I think the only notable difference is Syrian immigration that are government is encouraging.

Frankly we been an active participant in that program. We've gotten some very good candidates and the odd bad candidate.

Okay. Maybe just on the discussion on the rent per square foot, I think Tom mentioned CAD1.70 to CAD1.80 in the GTA.

Any sense of what that would be for your luxury portfolio in GTA?

Over CAD2. Well over.

We are achieving in some of our buildings. You know some of our super luxury buildings.

Virtually the same number as you are getting in the condos.

Okay. Any change in thought with respect to some of the potential added supply, whether it's on the condo side or the rental?

We are certainly watching very closely. It is going to impact the market.

The condos have been hitting the market. None of the purpose-built rentals have come yet.

There could be some excess supply. As I said, we are watching it.

Okay. Then maybe shifting to the margins just on slide 20, sorry, page 20 of the MD&A, you highlight your stabilized portfolio performance.

At a very high level, Scott, in terms of your commentary on the seasonality and the R&M and so on, your overall expenses were down 1.4% for the quarter year over year on the resi side. Is the majority of that seasonal, or maybe asked differently, your margin was substantially better year over year, can we expect flatter margins going forward, or what's the balance between the two?

Again I think the top line is the encouraging side. I think probably the run rate on our cost reductions, it was a good quarter from that point of view.

We're -- my biggest caution is really on the utility sides going into 2017. We are seeing some pressure on utility side, water costs, some carbon tax impacts.

I'd say probably mostly the utility side that I'd be most worried about going into 2017, that's what we're being cautious on. Mostly.

Got it. That negative 1.4% for 2017 could be a slight positive, all else equal, as opposed to being meaningful?

Right. As you take in the utility, we have a strong natural gas pricing, which we're actually benefiting from.

That's the good side. We have some carbon tax challenges.

And then I will say the first half of the year was definitely good from a seasonal point of view. I think that's probably an overall Canadian market issue, not a CAPREIT issue specifically.

It's something we're keeping an eye on, given the forecast for a tough winter.

Okay, thank you. I want to thank everybody again for joining us today.

As you can see, we're very excited about our future and we look forward to keeping you updated on our progress going forward. Thank you very much and goodbye.