KILLAM APARTMENT REIT ANNOUNCES Q1-2026 OPERATING PERFORMANCE AND FINANCIAL RESULTS

HALIFAX, NS, May 6, 2026 /CNW/ - Killam Apartment REIT (TSX: KMP.UN) ("Killam") today reported its results for the three months ended March 31, 2026.

"In the first quarter of 2026, Killam's portfolio continued to demonstrate its resilience and the benefit of geographic diversification. We achieved NOI [net operating income] growth of 4.0% in our same property apartment portfolio, primarily due to the strength of our Atlantic markets. NOI growth was driven by same property apartment revenue growth of 3.6% and healthy occupancy levels of 97.0%," noted Philip Fraser, President and CEO. "With positive leasing momentum continuing into the spring leasing season, we have increased our same property apartment revenue growth target to exceed 3.5% in 2026.

"Capital allocation remains a core focus, and we have prioritized unit repurchases through our NCIB [Normal Course Issuer Bid] program. In Q1, we deployed more than $6.0 million under the NCIB and, given the current discount to net asset value of Killam's Trust Units, we expect repurchase activity to accelerate throughout the remainder of the year.

"We are also pleased to announce that Brightwood, our newest development in Waterloo, is now complete, and we welcomed our first residents last week. Delivered in just 16 months, the project was completed ahead of schedule and below budget. With a mix of affordable and market units, leasing is progressing strongly and we expect the property to be fully leased by Q4. Brightwood demonstrates our ability to efficiently deliver high-quality housing, meeting local demand while expanding access to affordable options."

Q1-2026 Financial & Operating Highlights

• Reported net income of $50.3 million, compared to $101.9 million in Q1-2025. The decrease in net income is primarily driven by lower fair value gains on investment properties of $14.9 million in Q1-2026 compared to $70.2 million in Q1-2025.
• Generated NOI of $62.0 million, a 5.1% increase from $59.0 million in Q1-2025.
• Achieved a 3.6% increase in consolidated same property revenue compared to Q1-2025, and generated 3.9% consolidated same property NOI growth compared to Q1-2025.¹
• Earned funds from operations (FFO) per unit of $0.28, consistent with $0.28 earned in Q1-2025.²
• Earned adjusted funds from operations (AFFO) per unit of $0.24, a 4.3% increase from $0.23 in Q1-2025³, and improved the rolling 12-month AFFO payout ratio by 200 basis points (bps) to 68%, from 70% in Q1-2025.²
• Same property apartment occupancy remained healthy in Q1-2026 at 97.0%, compared to 97.4% in Q1-2025.¹ Occupancy within Killam's same property apartment portfolio dipped in January to 96.7% but improved throughout the quarter, ending at 97.3% in March.
• Ended the quarter with debt as a percentage of total assets of 42.2% and debt to normalized EBITDA of 9.71x.⁴

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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 and payout ratios, 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, if applicable, see "Non-IFRS Measures."

(3) The maintenance capital expenditures used to calculate AFFO per unit and AFFO payout ratio for the three months ended March 31, 2025, were updated to reflect the maintenance capex reserve of $1,110 per apartment unit, $310 per manufactured home community (MHC) site and $1.20 per square foot (SF) for commercial properties that were used in the calculation for the 12 months ended December 31, 2025.

(4) Debt to normalized adjusted earnings before interest, tax, depreciation and amortization (EBITDA) is a non-IFRS ratio. An explanation of the composition of this measure can be found under the heading "Non-IFRS Ratios." Total debt as a percentage of total assets is a capital management financial measure. An explanation of the composition of this measure can be found under the heading "Capital Management Financial Measure."

	Three months ended March 31,
(000s)	2026	2025	Change
Property revenue	$96,676	$93,024	3.9 %
Net operating income	$61,979	$58,995	5.1 %
Net income	$50,265	$101,912	(50.7) %
FFO ^(1)	$35,253	$34,241	3.0 %
FFO per unit (diluted) ^(1)	$0.28	$0.28	-- %
AFFO ^(1)(2)	$29,568	$28,482	3.8 %
AFFO per unit (diluted)^(1)(2)	$0.24	$0.23	4.3 %
AFFO payout ratio – diluted ^(1)(2)	76 %	78 %	(200) bps
AFFO payout ratio – rolling 12 months ^(1)(2)	68 %	70 %	(200) bps
Same property apartment occupancy ^(3)	97.0 %	97.4 %	(40) bps
Same property revenue growth ^(3)	3.6 %
Same property NOI growth ^(3)	3.9 %

(1) FFO, FFO per unit, AFFO, AFFO per unit, and AFFO payout ratio are non-IFRS measures. A reconciliation from net income to FFO and a reconciliation from FFO to AFFO can be found under the heading "Non-IFRS Reconciliation."

(2) The maintenance capital expenditures used to calculate AFFO and AFFO payout ratio for the three months ended March 31, 2025, were updated to reflect the maintenance capex reserve of $1,110 per apartment unit, $310 per MHC site and $1.20 per SF for commercial properties that were used in the calculation for the 12 months ended December 31, 2025.

(3) Same property apartment occupancy, same property revenue, and same property NOI are supplementary financial measures. An explanation of the composition of these measures can be found under the heading "Supplementary Financial Measures."

Debt Metrics as at	March 31, 2026	December 31, 2025	Change
Total debt as a percentage of total assets ^(1)	42.2 %	41.9 %	30 bps
Weighted average mortgage interest rate	3.60 %	3.58 %	2 bps
Weighted average years to debt maturity	3.9	3.6	0.3 years
Interest coverage ratio ^(1)	2.90x	2.93x	(1.0) %
Debt to normalized EBITDA ^(1)	9.71x	9.66x	0.5 %

(1) Interest coverage ratio and debt to normalized EBITDA 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. An explanation of the composition of this measure can be found under the heading "Capital Management Financial Measure."

Summary of Q1-2026 Results and Operations

Achieved Same Property NOI Growth of 3.9%
Killam delivered same property NOI growth of 3.9% during the quarter, driven by a 3.6% increase in same property revenue. Revenue growth reflected a 4.0% year-over-year increase in same property apartment rental rates and higher ancillary revenue, partially offset by a 40 bps decline in same property occupancy to 97.0% compared to Q1-2025. Occupancy within Killam's same property apartment portfolio dipped in January to 96.7% but improved throughout the quarter, ending at 97.3% in March.

The weighted average rental rate increase on units that renewed and turned during the quarter was 3.6%, compared to a combined 5.1% increase in Q1-2025. This quarter's combined increased was comprised of a 5.0% increase on unit turnovers and a 3.2% increase on renewals. Rental incentives as a percentage of revenue increased by 30 bps year-over-year; however, they continued to represent a small portion of revenue, totalling less than 0.9% of same property apartment revenue in Q1-2026 (Q1-2025 – less than 0.6%).

Total same property operating expenses increased 3.2% in the quarter. Same property tax expense rose 5.0%, reflecting higher assessments and mill rate increases across the portfolio. Same property general operating expenses increased by 5.6%, primarily due to higher wage costs resulting from the timing of new hires compared to Q1-2025, as well as the timing of preventative maintenance costs. These increases were partially offset by a 2.3% decrease in same property utility and fuel costs, which were driven by lower natural gas costs related to the removal of the consumer carbon tax and lower commodity pricing in Alberta. These were partially offset by higher water and electricity costs.

Generated AFFO per Unit Growth of 4.3%
During Q1-2026, Killam generated FFO growth of 3.0% and AFFO growth of 3.8% compared to Q1-2025. FFO per unit (diluted) was $0.28, consistent with Q1-2025, while AFFO per unit (diluted) grew 4.3% to $0.24, up from $0.23 in the same period in 2025. The growth in FFO and AFFO was driven by same property NOI, contributions from The Carrick, a recently completed development, and lower administrative costs, partially offset by higher interest expense. The increase in AFFO per unit highlights the effectiveness of Killam's capital recycling strategy, which is focused on disposing of older, capital-intensive properties and reinvesting in newer, more efficient assets, and in Killam's NCIB program.

NCIB Activity and Suspension of Dividend Reinvestment Plan
During the first quarter of 2026, Killam increased its NCIB activity, repurchasing 400,601 Trust Units for cancellation at a weighted average purchase price of $16.44 per unit, reflecting a meaningful discount to Killam's net asset value per unit during the quarter. This represents the most active quarter of NCIB activity in Killam's history. In addition, Killam suspended its Dividend Reinvestment Plan (DRIP) effective April 24, 2026, until further notice.  

Earned Net Income of $50.3 Million
In Q1-2026, Killam earned net income of $50.3 million, compared to $101.9 million in Q1-2025. The decrease in net income was primarily driven by lower fair value gains on investment properties of $14.9 million recognized in the quarter, compared to fair value gains of $70.2 million in Q1-2025. This was partially offset by a $3.0 million increase in NOI, as well as $0.8 million in unrealized fair value gains on the mark-to-market adjustments on Killam's unit-based compensation and Exchangeable Units, compared to fair value losses of $1.7 million for the same period in 2025.

Developments Contribute to FFO Growth
The Carrick, Killam's 139‑unit development in Waterloo, ON, which opened in June 2025, is fully leased and contributed to FFO growth during the first quarter. Brightwood (150 Wissler), a 128‑unit affordable development in Waterloo, ON, was completed in 16 months, ahead of schedule and below budget, and has received its occupancy permit. The property is now in lease‑up, with approximately 23% of units leased, and is welcoming its first tenants in May.

Update to Strategic Targets
Following a strong first quarter, Killam has increased both its same property apartment NOI and revenue growth targets to exceed 3.5% (previously, both 3.0%) and its same property consolidated NOI growth target to exceed 2.5% (previously 2.0%). As previously announced, Killam has increased its target for dispositions of non-core assets to up to $150 million, from $50 million, with a focus on its MHC portfolio. Transactions are expected to be completed in the second half of the year. Use of sale proceeds will prioritize investment in the NCIB. As well, Killam is on track to meet its development target, with the completion of Brightwood in May 2026, and the completion of Eventide expected by the end of the year.

Results Conference Call

Management will host a webcast and conference call to discuss these results and current business initiatives on Thursday, May 7, 2026, at 9:00 AM Eastern 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 at the same link for one year after the event.

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 $5.5 billion portfolio of apartments and manufactured home communities. Killam's strategy to enhance value and profitability focuses on three priorities: 1) increase earnings from its existing portfolio; 2) expand the portfolio and diversify geographically through accretive acquisitions which target newer properties and through the disposition 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.

Non-IFRS Financial Measures

• 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, internal commercial leasing costs, depreciation on an owner-occupied building, and land lease adjustments. 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, 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. In addition, adjustments have been made to eliminate earnings associated with properties sold in the last 12 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.

Non-IFRS Ratios

• Interest coverage is calculated by dividing 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 noted above, i.e. FFO and AFFO, divided by the 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.

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 2026 and 2025. Same property revenue is a supplementary financial measure defined as revenue for stabilized properties that Killam has owned for equivalent periods in 2026 and 2025. Same property results represent 97.1% of the fair value of Killam's investment property portfolio as at March 31, 2026. Excluded from same property results in 2026 are acquisitions, dispositions and developments completed in 2025 and 2026.
• 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 2026 and 2025.

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 21 of the unaudited condensed consolidated interim financial statements.

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

Reconciliation of Net Income to FFO	Three months ended March 31,
	2026	2025
Net income	$50,265	$101,912
Fair value adjustments	(15,641)	(68,537)
Internal commercial leasing costs	100	75
Interest expense on Exchangeable Units ^(1)	494	702
Loss on disposition	22	67
Depreciation on owner-occupied building	23	24
Land lease adjustment	(10)	(2)
FFO	$35,253	$34,241
FFO per unit – diluted	$0.28	$0.28

(1) Exchangeable Units are Class B limited partnership units of Killam Apartment Limited Partnership. Exchangeable Units are intended to be economically equivalent to and are redeemable on a one-for-one basis for Trust Units of Killam at the option of the holder and are accompanied by Special Voting Units of Killam that provide their holders with equivalent voting rights to holders of Trust Units.

Reconciliation of FFO to AFFO	Three months ended March 31,
	2026	2025
FFO	$35,253	$34,241
Maintenance capital expenditures^(1)	(5,594)	(5,691)
Commercial straight-line rent adjustment	(6)	(19)
Internal and external commercial leasing costs	(85)	(49)
AFFO	$29,568	$28,482
AFFO per unit – diluted	$0.24	$0.23
AFFO payout ratio – diluted	76 %	78 %
AFFO payout ratio – rolling 12 months^(2)	68 %	70 %
Weighted average number of units – diluted (000s)	125,257	123,967

(1) The maintenance capital expenditures for the three months ended March 31, 2025, were updated to reflect the maintenance capex-reserve of $1,110 per apartment unit, $310 per MHC site and $1.20 per SF for commercial properties that were used in the calculation for the 12-months ended December 31, 2025.

(2) Based on Killam's annual distribution of $0.72000 for the 12-month period ended March 31, 2026, and $0.70831 for the 12-month period ended March 31, 2025.

Normalized Adjusted EBITDA	Twelve months ended,
	March 31, 2026	December 31, 2025	% Change
Net loss (income)	$(22,235)	$29,412	(175.6) %
Financing costs	86,305	84,451	2.2 %
Depreciation	1,015	1,017	(0.2) %
Loss on disposition	2,478	2,523	(1.8) %
Restructuring costs	466	466	-- %
Fair value adjustment on unit-based compensation	(1,222)	(941)	29.9 %
Fair value adjustment on Exchangeable Units	(4,249)	(2,075)	104.8 %
Fair value adjustment on investment properties	175,819	120,467	45.9 %
Adjusted EBITDA	238,377	235,320	1.3 %
Normalizing adjustment ^(1)	2,661	1,961	35.7 %
Normalized adjusted EBITDA	$241,038	$237,281	1.6 %
Total interest-bearing debt	$2,350,713	$2,301,686	2.1 %
Cash and cash equivalents	(9,323)	(9,876)	(5.6) %
Net debt	$2,341,390	$2,291,810	2.2 %
Debt to normalized adjusted EBITDA	9.71x	9.66x	0.5 %

(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", "proposed" 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; Killam's same property apartment NOI and revenue growth and the timing thereof; Killam's same property consolidated NOI growth and the timing thereof; the amount, nature and timing of Killam's dispositions; the use of proceeds from Killam's dispositions; repurchases under Killam's NCIB; expected occupancy rates of Killam's properties; Killam's ability to achieve its development and other targets and the timing thereof; Killam's commitment to its capital recycling program; the amount, timing and consideration for or proceeds of Killam's future acquisitions and dispositions, as applicable; and Killam's priorities.

Readers should be aware that these forward-looking 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; government legislation and the interpretation and enforcement thereof; litigation to which Killam may be subject; global, national and regional economic conditions (including interest rates and inflation); the availability of capital to fund further investments in Killam's business; Killam's ability to refinance its existing debt; and other factors identified under the "Risk Factors" section of Killam's most recently filed annual information form, under the "Risks and Uncertainties" of Killam's most recently filed MD&A, and in other documents Killam files from time to time with securities regulatory authorities in Canada, each of which is 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 its 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