KILLAM APARTMENT REIT ANNOUNCES Q4-2025 AND 2025 OPERATING PERFORMANCE AND FINANCIAL RESULTS

HALIFAX, NS, Feb. 11, 2026 /CNW/ - Killam Apartment REIT (TSX: KMP.UN) ("Killam") is pleased to report its results for the fourth quarter and year ended December 31, 2025.

"Killam delivered 6.1% total same property NOI [net operating income] growth in 2025, driven by our same property apartment portfolio, which achieved 5.4% revenue growth. Our 2025 FFO [funds from operations] per unit of $1.23 represents a 4.2% increase from $1.18 per unit earned in the prior year," noted Philip Fraser, President and CEO.

"The growth in FFO reflects the resilient performance of our same property portfolio, which has demonstrated the benefit of strategic geographic diversification. Our recently completed developments also contributed to FFO growth, and we expect to see additional growth in the coming year from The Carrick, which was completed in July 2025 and is currently 95% leased.

"Capital recycling remained a key focus in 2025, with the completion of $148.3 million in non-core asset sales. This capital was redeployed towards $168.8 million in property acquisitions across Ottawa and New Brunswick, as well as funding our ongoing developments located in Waterloo and Halifax, Brightwood and Eventide, which are both scheduled for completion in 2026.

"We are pleased with our results for 2025, and by focusing on factors within our control, we are confident that we are positioned for a strong future."

Q4-2025 Financial & Operating Highlights

• Generated NOI of $64.0 million, compared to $61.1 million in Q4-2024.
• Achieved a 4.1% increase in same property revenue and a 4.5% increase in same property NOI in Q4-2025, compared to Q4-2024.¹
• Achieved 96.9% same property apartment occupancy in Q4-2025.¹
• Earned FFO per unit (diluted) of $0.30, a 3.4% increase from Q4-2024, and adjusted funds from operations (AFFO) per unit (diluted) of $0.25, consistent with $0.25 earned in Q4-2024.²
• Reported a net loss of $147.5 million, compared to net income of $363.4 million in Q4-2024. The decrease in net income was primarily driven by the $319.9 million deferred tax recovery in Q4-2024 associated with the completion of Killam's corporate reorganization. Additionally, a higher fair value loss on investment properties contributed to the variance.

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^1 Same property revenue, same property NOI, and same property apartment occupancy are supplementary financial measures. An explanation of the composition of these measures can be found under "Supplementary Financial Measures." Occupancy represents actual residential rental revenue, net of vacancy, as a percentage of gross potential residential rent.
^2 FFO and AFFO, and applicable per unit amounts, are not defined by International Financial Reporting Standards (IFRS) and do not have a standardized meaning according to IFRS; therefore, they may not be comparable to similar measures presented by other companies. For information regarding non-IFRS measures, including reconciliations to the most comparable IFRS measure, see "Non-IFRS Measures."

2025 Financial & Operating Highlights 

• Generated NOI of $254.8 million, a 6.0% increase from $240.5 million in 2024.
• Achieved a 5.5% increase in same property revenue in 2025, driven by a 4.8% increase in the same property average rental rate.⁽²⁾
• Generated same property NOI growth of 6.1% during 2025.⁽²⁾
•  Increased FFO per unit (diluted) by 4.2% to $1.23, compared to $1.18 in 2024, and increased AFFO per unit (diluted) by 5.1% to $1.04, compared to $0.99 in 2024. The growth in FFO and AFFO reflects higher NOI from Killam's same property portfolio and contributions from recently completed developments.⁽¹⁾
• Reported net income of $29.4 million, compared to $667.8 million in 2024. The variance is due primarily to the recognition of $120.5 million in fair value losses on investment properties in 2025, compared to $252.4 million in fair value gains in 2024. The fair value losses recorded in 2025 reflect cap rate expansion in select regions, stabilizing market rents, and increased vacancy in certain markets. In addition, the year-over-year change is impacted by the $279.0 million deferred tax recovery in 2024 relating to Killam's corporate reorganization.
• Maintained a conservative and flexible balance sheet, ending the year with debt as a percentage of assets of 41.9%.

	Three months ended December 31,			Year ended December 31,
(000's)	2025	2024	Change	2025	2024	Change
Property revenue	$96,258	$92,581	4.0 %	$383,401	$364,650	5.1 %
Net operating income	$63,973	$61,119	4.7 %	$254,828	$240,481	6.0 %
Net (loss) income	($147,494)	$363,419	N/A	$29,412	$667,844	N/A
FFO ^(1)	$37,258	$36,393	2.4 %	$152,776	$144,914	5.4 %
FFO per unit (diluted) ^(1)	$0.30	$0.29	3.4 %	$1.23	$1.18	4.2 %
AFFO per unit (diluted)^(1)	$0.25	$0.25	-- %	$1.04	$0.99	5.1 %
AFFO payout ratio (diluted) ^(1)	71 %	72 %	(100) bps	69 %	71 %	(200) bps
Same property apartment occupancy ^(2)	96.9 %	97.5 %	(60) bps	97.3 %	97.6 %	(30) bps
Same property revenue growth ^(2)	4.1 %			5.5 %
Same property NOI ^(2)	4.5 %			6.1 %

(1) FFO and AFFO, and applicable per unit amounts, are defined in "Non-IFRS Measures." A reconciliation between net income and FFO and a reconciliation from FFO to AFFO are included under the heading "Non-IFRS Measures."

(2) Same property revenue, same property NOI, same property average rent, and same property apartment occupancy are supplementary financial measures. An explanation of the composition of these measures can be found under "Supplementary Financial Measures." Occupancy represents actual residential rental revenue, net of vacancy, as a percentage of gross potential residential rent.

Debt Metrics As At	December 31, 2025	December 31, 2024	Change
Total debt as a percentage of total assets ^(3)	41.9 %	40.4 %	150 bps
Weighted average mortgage interest rate	3.58 %	3.45 %	13 bps
Weighted average years to debt maturity	3.6	4.0	(0.4) years
Debt to normalized EBITDA ^(3)	9.66x	9.69x	(0.3) %
Interest coverage ratio ^(3)	2.93x	2.94x	(0.3) %

(3) Interest coverage ratio and debt to normalized earnings before interest, tax, depreciation and amortization (EBITDA) ratio are non-IFRS ratios. An explanation of the composition of these measures can be found under the heading "Non-IFRS Ratios." Total debt as a percentage of total assets is a capital management financial measure; for more details, see "Non-IFRS Measures".

Summary of 2025 Results and Operations

Generated FFO per Unit Growth of 4.2% and AFFO per Unit Growth of 5.1%
Killam generated FFO per unit of $1.23 in 2025, a 4.2% increase from $1.18 in 2024. AFFO per unit rose 5.1% to $1.04, compared to $0.99 in the prior year. The growth in FFO and AFFO reflects higher NOI from Killam's same property portfolio and contributions from recently completed developments. These gains were partially offset by higher interest costs, increased administrative expenses, and 30 basis-points (bps) increase in vacancy. Killam's AFFO payout ratio improved 200 bps year-over-year to 69%.

Achieved Same Property NOI Growth of 6.1%
Killam achieved same property NOI growth of 6.1% in 2025, supported by increases of 6.1% from the apartment portfolio, 9.6% from the MHC portfolio and 2.9% from the commercial portfolio. Same property revenue increased 5.5%, driven by rental rate growth across all three business segments and increased ancillary revenue, partially offset by a 30 bps decrease in same property apartment occupancy. Turnover levels increased to 21.6% in 2025, compared to 18.3% in 2024, reflecting a shift upward after several years of declining turnover. The weighted average rental rate increase on units that renewed and turned during 2025 was 5.0%, including 10.9% growth on units that turned and 3.5% on units that renewed. 

Total same property operating expenses increased by 4.3% in the year. This was primarily driven by a 5.5% rise in property tax expense, reflecting higher assessments and mill rates across the portfolio. Same property general operating expenses were up 4.3%, driven by higher wage costs, increased repairs and maintenance activity, and elevated contract services, partially offset by lower insurance premiums. Utility and fuel expenses increased 2.6%, primarily due to higher natural gas costs in the first half of the year, partially offset by savings following the removal of consumer carbon tax pricing effective April 1, 2025, and lower electricity costs.

Completed $148.3 Million in Property Dispositions and $168.8 Million in Property Acquisitions
Killam's capital recycling program is focused on the disposition of non-core and lower-growth properties, or those that are more capital intensive. During 2025, Killam completed the disposition of 23 properties (1,139 units) for gross proceeds of $148.3 million, achieving the upper range of its disposition target of $100–$150 million in 2025. Proceeds from these sales were used to acquire $168.8 million in property acquisitions (416 units) and fund ongoing developments. This activity aligns with Killam's strategy to optimize value from its portfolio and to increase geographical diversification outside Atlantic Canada. These transactions have supported Killam's diversification strategy, with the percentage of NOI generated outside of Atlantic Canada totalling 40.3% in 2025, up 140 bps from 38.9% in 2024.

Continued Advancement of Development Program
Killam continued to advance its development program in 2025. The Carrick, Killam's 139-unit development in Waterloo, ON, was completed during the year. Leasing activity has been very strong, with 132 units (95%) leased to date. Management expects the property to achieve stabilized occupancy in the near term, contributing positively to FFO growth in 2026. Killam also advanced the development of Brightwood (150 Wissler), a 128-unit building in Waterloo, ON, and Eventide, a 55-unit building in Halifax, NS. Both projects are scheduled for completion in 2026 and are expected to contribute to FFO per unit growth in 2027.

Net Income of $29.4 Million Impacted by $120.5 Million Fair Value Losses
Killam earned net income of $29.4 million in 2025, compared to $667.8 million in 2024. The decrease is primarily attributable to the absence of the prior year's $279.0 million deferred tax recovery, related to Killam's corporate reorganization. In addition, Killam recognized $120.5 million in fair value losses on investment properties in 2025, compared to $252.4 million in fair value gains in 2024. The fair value losses recorded in 2025 reflect cap rate expansion in select regions, the result of stabilizing market rents and potential for increased vacancy in certain markets.

Progress on Killam's ESG Initiatives 
Killam continued to advance its ESG initiatives in 2025, investing $6.8 million in energy‑efficiency projects aimed at reducing operating expenses. The most significant component of this investment was the installation of solar photovoltaic (PV) panels. During 2025, Killam invested $3.3 million in the construction of 13 rooftop solar PV projects, with an expected yield of approximately 6.5%. In addition, Killam completed window, building envelope and insulation upgrades, as well as the installation of new boilers and heat pumps at various properties. Killam achieved a Global Real Estate Sustainability Benchmark (GRESB) score of 82 out of 100 in 2025, a three‑point improvement from 2024, reflecting ongoing commitment to ESG‑related initiatives and continued progress toward Killam's sustainability targets.

Financial Statements

Killam's Annual Consolidated Financial Statements, including the notes thereto, and its Annual Management's Discussion and Analysis (the "MD&A") for the year ended December 31, 2025, are posted under Financial Reports in the Investor Relations section of Killam's website at www.killamreit.com and are each filed on SEDAR+ at www.sedarplus.ca. Readers are directed to these documents for financial details and a discussion of Killam's results.

Results Conference Call

Management will host a webcast and conference call to discuss these results and current business initiatives on Thursday, February 12, 2026, at 9:00 AM Eastern Standard Time. The webcast will be accessible on Killam's website at the following link: http://www.killamreit.com/investor-relations/events-and-presentations. A replay of the webcast will be available for one year after the event at the same link.

The dial-in numbers for the conference call are as follows:
North America (toll-free): 1-888-699-1199
Overseas or local (Toronto): 1-416-945-7677

Profile

Killam Apartment REIT, based in Halifax, Nova Scotia, is one of Canada's largest residential real estate investment trusts, owning, operating, managing and developing a $5.4 billion portfolio of apartments and manufactured home communities. Killam's strategy to enhance value and profitability focuses on three priorities: 1) increase earnings from existing operations; 2) expand the portfolio and diversify geographically through accretive acquisitions that target newer properties, and through the dispositions of non-core assets; and 3) develop high-quality properties in its core markets.

Non-IFRS Measures

Management believes the following non-IFRS financial measures, ratios and supplementary information are relevant measures of the ability of Killam to earn revenue and to evaluate Killam's financial performance. Non-IFRS measures should not be construed as alternatives to net income or cash flow from operating activities determined in accordance with IFRS, or as indicators of Killam's performance or the sustainability of Killam's distributions. These measures do not have standardized meanings under IFRS and, therefore, may not be comparable to similarly titled measures presented by other publicly traded organizations.

• FFO is a non-IFRS financial measure of operating performance widely used by the Canadian real estate industry based on the definition set forth by REALPAC. FFO and applicable per unit amounts are calculated by Killam as net income adjusted for fair value gains (losses), interest expense on Exchangeable Units, gains (losses) on disposition, deferred tax expense (recovery), internal commercial leasing costs, depreciation on an owner-occupied building, restructuring costs, and land lease adjustments. Restructuring costs is a new FFO adjustment related to the internal reorganization that was accomplished by way of a plan of arrangement (the "Arrangement"). FFO is calculated in accordance with the REALPAC definition. A reconciliation between net income and FFO is included below.
• AFFO is a non-IFRS financial measure of operating performance widely used by the Canadian real estate industry based on the definition set forth by REALPAC. AFFO and applicable per unit amounts and payout ratios are calculated by Killam as FFO less an allowance for maintenance capital expenditures (capex) (a three-year rolling historical average capital investment to maintain and sustain Killam's properties), internal and external commercial leasing costs and commercial straight-line rents. AFFO is calculated in accordance with the REALPAC definition. Management considers AFFO an earnings metric. A reconciliation from FFO to AFFO is included below.
• Adjusted earnings before interest, tax, depreciation and amortization (adjusted EBITDA) is a non-IFRS financial measure calculated by Killam as net income before fair value adjustments, gains (losses) on disposition, deferred tax (recovery) expenses, financing costs, restructuring costs, and depreciation. A reconciliation between net income and adjusted EBITDA is included below.
• Normalized adjusted EBITDA is a non-IFRS financial measure calculated by Killam as adjusted EBITDA that has been normalized for a full year of stabilized earnings from recently completed acquisitions, dispositions and developments, on a forward-looking basis. Transaction costs associated with the Arrangement are excluded from adjusted EBITDA. In addition, adjustments have been made to eliminate earnings associated with properties sold in the last twelve months. A reconciliation between adjusted EBITDA and normalized adjusted EBITDA is included below.
• Net debt is a non-IFRS measure used by Management in the computation of debt to normalized adjusted EBITDA. Net debt is calculated as the sum of all interest bearing debt, being mortgages and loans payable, credit facilities and construction loans, reduced by the cash balances at the end of the period. The most directly comparable IFRS measure to net debt is debt. A reconciliation is included below.

Supplementary Financial Measures

• Same property NOI is a supplementary financial measure defined as NOI for stabilized properties that Killam has owned for equivalent periods in 2025 and 2024. Similarly, same property revenue is a supplementary financial measure defined as revenue for stabilized properties that Killam has owned for equivalent periods in 2025 and 2024. Same property apartment occupancy is a supplemental financial measure defined as actual residential rental revenue, net of vacancy, as a percentage of gross potential residential rent for stabilized properties that Killam has owned for equivalent periods in 2025 and 2024. Same property results represent 95.3% of the fair value of Killam's investment property portfolio as at December 31, 2025. Excluded from same property results in 2025 are acquisitions, dispositions and developments completed in 2024 and 2025, as well as non-stabilized commercial properties linked to development projects.
• Same property average rent is calculated by taking a weighted average of the total residential rent for the last month of the reporting period, divided by the relevant number of the units per region for stabilized properties that Killam has owned for equivalent periods in 2025 and 2024. For total residential rents, rents for occupied units are based on contracted rent, and rents for vacant units are based on estimated market rents if the units were occupied.

Non-IFRS Ratios

• Interest coverage is calculated by dividing normalized adjusted EBITDA by mortgage, loan and construction loan interest and interest on credit facilities.
• Per unit calculations are calculated using the applicable non-IFRS financial measures note above, i.e. FFO and AFFO, divided by the basic or diluted number of units outstanding at the end of the relevant period.
• Payout ratios are calculated using the distribution rate for the applicable period divided by the applicable per unit amount, i.e. AFFO per unit.
• Debt to normalized adjusted EBITDA is calculated by dividing net debt by normalized adjusted EBITDA.

Capital Management Financial Measure

• Total debt as a percentage of total assets is a capital management financial measure and is calculated by dividing total debt by total assets, excluding right-of-use assets. This measure is reconciled in note 28 of Killam's Annual Consolidated Financial Statements for the year ended December 31, 2025.

Non-IFRS Reconciliation (in thousands, except per unit amounts)

Reconciliation of Net Income to FFO	Three months ended December 31,		Year ended December 31,
	2025	2024	2025	2024
Net (loss) income	($147,494)	$363,419	$29,412	$667,844
Fair value adjustments	183,392	(15,250)	117,451	(256,644)
Internal commercial leasing costs	74	54	300	246
Deferred recovery	--	(319,905)	--	(278,975)
Restructuring costs	466	5,904	466	5,904
Interest expense on Exchangeable Units	605	695	2,550	2,742
Loss on dispositions	214	1,446	2,523	3,678
Depreciation on owner-occupied building	23	24	93	96
Change in principal related to lease liabilities	(22)	6	(19)	23
FFO	$37,258	$36,393	$152,776	144,914
FFO per unit -- diluted	$0.30	$0.29	$1.23	$1.18

Reconciliation of FFO to AFFO	Three months ended December 31,		Year ended December 31,
	2025	2024	2025	2024
FFO	$37,258	$36,393	$152,776	$144,914
Maintenance capital expenditures	(5,527)	(5,650)	(22,437)	(22,722)
Commercial straight-line rent adjustment	50	(18)	(25)	(90)
Internal commercial leasing costs	(109)	(146)	(432)	(374)
AFFO	$31,672	$30,579	$129,882	$121,728
AFFO per unit – diluted	$0.25	$0.25	$1.04	$0.99
AFFO payout ratio – diluted ^(1)	71 %	72 %	69 %	71 %
Weighted average number of units – diluted (000s)	125,070	123,600	124,547	123,123

(1)	Based on Killam's distribution of $0.72 for the year ended December 31, 2025, and $0.70330 for the year ended December 31, 2024.

Normalized Adjusted EBITDA	Twelve months ended,
	December 31, 2025	December 31, 2024	% Change
Net income	$29,412	$667,844	(95.6) %
Deferred tax recovery	--	(278,975)	(100.0) %
Financing costs	84,451	79,712	5.9 %
Depreciation	1,017	1,065	(4.5) %
Loss on dispositions	2,523	3,678	(31.4) %
Restructuring costs	466	5,904	(92.1) %
Fair value adjustment on unit-based compensation	(941)	(931)	1.1 %
Fair value adjustment on Exchangeable Units	(2,075)	(3,352)	(38.1) %
Fair value adjustment on investment properties	120,467	(252,361)	(147.7) %
Adjusted EBITDA	235,320	222,584	5.7 %
Normalizing adjustment ^(1)	1,961	2,352	(16.6) %
Normalized adjusted EBITDA	$237,281	$224,936	5.5 %
Total interest-bearing debt	$2,301,686	$2,193,881
Cash and cash equivalents	(9,876)	(13,211)
Net debt	$2,291,810	$2,180,670	5.1 %
Debt to normalized adjusted EBITDA	9.66x	9.69x	(0.3) %

(1)	Killam's normalizing adjustment includes NOI adjustments for recently completed acquisitions, dispositions and developments to account for the difference between NOI booked in the period and stabilized NOI over the next 12 months.

For information, please contact:
Claire Hawksworth, CPA                              
Senior Manager, Investor Relations
[email protected]
[phone]  

Note: The Toronto Stock Exchange has neither approved nor disapproved of the information contained herein. Certain statements in this press release may constitute forward-looking statements. In some cases, forward-looking statements can be identified by the use of words such as "may," "will," "should," "expect," "plan," "anticipate," "believe," "commit," "estimate," "potential," "continue," "remain," "forecast," "opportunity," "future" or the negative of these terms or other comparable terminology, and by discussions of strategies that involve risks and uncertainties. Such forward-looking statements may include, among other things, statements regarding: Killam's strategy to optimize value from its portfolio and to increase geographical diversification outside Atlantic Canada; Killam's position and results for 2026; the effects of acquisitions and development projects on Killam's earnings and financial condition and the timing thereof; the continued expansion of Killam's portfolio, including through developments, and the timing thereof; the completion, costs, capacity, total investment and timing of development projects; Killam's commitment to ESG-related initiatives, and investment in energy projects; Killam's progress toward its sustainability targets; and Killam's priorities.

Readers should be aware that these statements are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those anticipated or implied, or those suggested by any forward-looking statements, including: the effects and duration of local, international and global events, any government responses thereto and the effectiveness of measures intended to mitigate any impacts thereof; competition; global, national and regional economic conditions (including interest rates and inflation); and the availability of capital to fund further investments in Killam's business. For more exhaustive information on these risks and uncertainties, readers should refer to Killam's most recently filed annual information form, as well as Killam's most recently filed MD&A, each of which are available on SEDAR+ at www.sedarplus.ca. Given these uncertainties, readers are cautioned not to place undue reliance on any forward-looking statements contained in this press release. By their nature, forward-looking statements involve numerous assumptions, inherent risks and uncertainties, both general and specific, that contribute to the possibility that the predictions, forecasts, projections and various future events may not occur. Although Management believes that the expectations reflected in the forward-looking statements are reasonable, there can be no assurance that future results, levels of activity, performance or achievements will occur as anticipated. Further, a forward-looking statement speaks only as of the date on which such statement is made and should not be relied upon as of any other date. While Killam anticipates that subsequent events and developments may cause Killam's views to change, Killam does not intend to update or revise any forward-looking statement, whether as a result of new information, future events, circumstances, or such other factors that affect this information, except as required by law. The forward-looking statements in this press release are provided for the limited purpose of enabling current and potential investors to evaluate an investment in Killam. Readers are cautioned that such statements may not be appropriate and should not be used for any other purpose. The forward-looking statements contained in this press release are expressly qualified by this cautionary statement.

SOURCE Killam Apartment Real Estate Investment Trust