Killam Apartment REIT Announces Q3-2026 Operating Performance and Financial Results

HALIFAX, NS, Nov. 4, 2026 /CNW/ -- Killam Apartment REIT (TSX: KMP.UN) ("Killam") today reported its results for the three and nine months ended September 30, 2026.

"Killam delivered another solid quarter of operating performance, generating 2.2% same property NOI [net operating income] growth, including 3.0% NOI growth from our apartment portfolio, while maintaining strong same property apartment occupancy of  97.3%. Year-to-date same property apartment NOI growth of 3.8% positions us well to meet our increased target of above 3.5% growth for 2026," noted Philip Fraser, President and CEO.

"We are encouraged by the stabilization observed in sequential rental rate growth, with a weighted average rental increase of 3.5% on apartment units that renewed and turned during the quarter. This is largely consistent with the 3.6% achieved in each of the first two quarters of 2026 and signals stability in the market. With occupancy remaining strong and a mark-to-market opportunity of approximately 10% across our portfolio, we believe Killam remains well positioned to generate organic growth across our core markets.

"We also continued to execute on our capital recycling strategy, including the closing of a $50.5 million sale of 746 MHC [manufactured home communities] sites in Ontario during the quarter. With additional dispositions underway, we remain focused on recycling capital from non-core assets and allocating it toward opportunities that we believe will generate attractive long-term returns for unitholders."

Q3-2026 Financial & Operating Highlights

• Reported net income of $51.6 million compared to $41.9 million in Q3-2025. The increase in net income is primarily driven by fair value gains on investment properties of $10.0 million in Q3-2026 compared to fair value losses of $4.8 million in Q3-2025, driven by apartment revenue growth and year-over-year improvement in NOI.

• Generated NOI of $69.3 million, a 2.3% increase from $67.8 million in Q3-2025.

• Achieved a 2.4% increase in consolidated same property revenue compared to Q3-2025, and generated 2.2% consolidated same property NOI growth compared to Q3-2025.¹ 

• Increased revenue and NOI from the same property apartment portfolio were up 3.3% and 3.0%, respectively, compared to Q3-2025.¹ 

• Maintained funds from operations (FFO) per unit of $0.34 and adjusted funds from operations (AFFO) per unit of $0.29, consistent with Q3-2025, despite the temporary loss of income from the departure of a major office tenant at Westmount Place in Waterloo.^{2, 3} 

• Achieved a year-over-year weighted average rental increase of 3.3% in the same property apartment portfolio as at September 30, 2026.¹

• Improved same property apartment occupancy by 10 bps to 97.3% in Q3-2026, compared to 97.2% in Q3-2025.¹  

• Repurchased  2,347,838 Trust Units for cancellation at a weighted average purchase price of $18.41 per Trust Unit, a meaningful discount to net asset value per unit.

• Ended the quarter with total debt as a percentage of total assets of 42.8% and debt to normalized EBITDA of 9.87x.⁴

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

(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, if applicable, see "Non-IFRS Measures."

(3) The maintenance capital expenditures used to calculate AFFO per unit for the three and nine months ended September 30, 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 September 30,			Nine months ended September 30,
(000s)	2026	2025	Change	2026	2025	Change
Property revenue	$100,835	$98,473	2.4 %	$296,671	$287,142	3.3 %
Net operating income	$69,326	$67,785	2.3 %	$198,458	$190,856	4.0 %
Net income	$51,556	$41,860	23.2 %	$165,111	$176,907	(6.7) %
FFO ^(1)	$41,197	$41,877	(1.6) %	$116,052	$115,517	0.5 %
FFO per unit (diluted) ^(1)	$0.34	$0.34	-- %	$0.93	$0.93	-- %
AFFO ^(1)(2)	$35,524	$36,152	(1.7) %	$98,818	$98,210	0.6 %
AFFO per unit (diluted)^(1)(2)	$0.29	$0.29	-- %	$0.80	$0.79	1.3 %
AFFO payout ratio – diluted ^(1)(2)	62 %	62 %	-- bps	68 %	68 %	-- bps
AFFO payout ratio – rolling 12 months ^(1)(2)	69 %	71 %	(200) bps
Same property apartment occupancy ^(3)	97.3 %	97.2 %	10 bps
Same property revenue growth ^(3)	2.4 %			2.9 %
Same property NOI growth ^(3)	2.2 %			3.0 %
(1) FFO, FFO per unit, AFFO, AFFO per unit, and AFFO payout ratio are non-IFRS measures. See "Non-IFRS Measures" for more information. 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 and nine months ended September 30, 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	September 30, 2026	December 31, 2025	Change
Total debt as a percentage of total assets ^(1)	42.8 %	41.9 %	90 bps
Debt to normalized EBITDA ^(1)	9.87x	9.66x	2.2 %
Interest coverage ratio ^(1)	2.82x	2.93x	(3.8) %
Weighted average years to debt maturity	3.7	3.6	0.1 years
Weighted average mortgage interest rate	3.65 %	3.58 %	7 bps

(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 Q3-2026 Results and Operations

Earned Same Property NOI Growth of 2.2%
Same property NOI increased 2.2% in Q3-2026 compared to Q3-2025, reflecting revenue growth of 2.4% and continued management of operating costs. The improvement in revenue was attributable to higher same property apartment rental rates and improved occupancy. Same property apartment weighted average rental rates increased 3.3% compared to Q3-2025, while occupancy improved 10 bps to 97.3%. These gains were moderated by higher rental incentives and a decline in same property commercial revenue following the departure of a major office tenant at Westmount Place in Waterloo, ON, in April 2026.

Rental rate growth remained relatively consistent with the first half of the year. Apartment units that renewed and turned during Q3-2026 generated a weighted average increase of 3.5%, compared to 3.6% during the first six months of 2026. Rental rate growth on unit turns averaged 5.6%, while renewal increases averaged 2.8%. Rental incentives were higher than in the prior year period but remained modest, representing less than 1.0% of same property apartment revenue in Q3-2026, compared to less than 0.7% in Q3-2025.

Same property operating expenses increased 2.9% compared to Q3-2025. Same property utility and fuel costs rose 5.3%, primarily reflecting higher water rates, particularly in Halifax, and increased natural gas costs, partially offset by lower electricity costs. Same property general operating expenses increased 3.4%, largely due to the timing of preventative maintenance activity as well as higher advertising and contract service costs. Same property tax expense increased 1.1%, reflecting higher assessments and mill rates across the portfolio, partially offset by the capitalization of property taxes related to the portion of Westmount Place under redevelopment.

Maintained FFO per Unit of $0.34
FFO per unit (diluted) was $0.34 in Q3-2026, consistent with Q3-2025, and AFFO per unit (diluted) also remained unchanged at $0.29. Total FFO and AFFO declined by 1.6% and 1.7%, respectively, compared to Q3-2025. Quarterly results were impacted by the departure of a major office tenant at Westmount Place, which reduced FFO by approximately $0.8 million during the quarter. Excluding the impact of this vacancy, FFO per unit would have increased by 2.2% compared to Q3-2025.

Per-unit results benefited from continued repurchases under Killam's Normal Course Issuer Bid (NCIB) program. During the quarter, Killam repurchased and cancelled 2,347,838 Trust Units at a weighted average purchase price of $18.41 per unit. The units were repurchased at a meaningful discount to net asset value per unit, providing an accretive use of capital and supporting FFO and AFFO on a per-unit basis. Q3-2026 represented the most active quarter of NCIB activity in Killam's history.

Generated Net Income of $51.6 Million
In Q3-2026, Killam generated net income of $51.6 million compared to $41.9 million in Q3-2025. The increase was driven by fair value gains on investment properties of $10.0 million, compared to fair value losses of $4.8 million in Q3-2025. The fair value gains recognized during the quarter were supported by a $1.5 million year-over-year improvement in NOI. Net income was also impacted by unrealized fair value gains of $2.1 million on the mark-to-market adjustments related to Killam's unit-based compensation and to recent unit price decreases of Exchangeable Units, compared to fair value gains of $6.3 million in Q3-2025.

Advancing Portfolio Optimization Through $50.5 Million MHC Disposition
Killam completed the disposition of 746 MHC sites in Ontario during the quarter for gross proceeds of $50.5 million, the net proceeds of which were used to fund NCIB activity. The disposition aligns with Killam's capital recycling strategy, which is focused on streamlining the portfolio and recycling capital from non-core, slower-growth and more capital-intensive assets.

Killam Advances ESG Performance with Improved GRESB Score
In Q3-2026, Killam received its 2026 GRESB results, based on performance for the 2025 reporting year. Killam achieved a score of 83.9 out of 100, representing a 2.2-point improvement year-over-year in its ESG performance. The improvement reflects continued progress across Killam's ESG initiatives related to energy consumption, greenhouse gas emissions, renewable energy generation and enhanced waste management practices.

Subsequent Events
Subsequent to September 30, 2026, and up to October 31, 2026, Killam repurchased 434,060 Trust Units for cancellation under its NCIB at a weighted average purchase price of $17.29 per Trust Unit.

On October 9, 2026, Killam entered into a purchase and sale agreement to sell 3,021 MHC sites for gross proceeds of $93.8 million. The sale is expected to close in early 2027.

On October 16, 2026, Killam announced a distribution of $0.06 per unit, payable on November 16, 2026, to unitholders of record on October 30, 2026.

Results Conference Call
Management will host a webcast and conference call to discuss these results and current business initiatives on Thursday, November 5, 2026, at 9:00 AM Eastern Time. The webcast will be accessible on Killam's website at the following link: https://investors.killamreit.com/events. 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 that 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 mortgages and loans payable, credit facilities and construction loans (total debt), 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/or 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 96.2% of the fair value of Killam's investment property portfolio as at September 30, 2026. Excluded from same property results in 2026 are acquisitions, dispositions and developments completed in 2025 and 2026. 

• Same property apartment occupancy is a supplementary 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. 

• Same property weighted 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 units per region for stabilized properties that Killam has owned for equivalent periods in 2026 and 2025. 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.

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 22 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 September 30,		Nine months ended September 30,
	2026	2025	2026	2025
Net income	$51,556	$41,860	$165,111	$176,907
Fair value adjustments	(12,089)	(1,472)	(52,055)	(65,942)
Internal commercial leasing costs	100	75	300	225
Interest expense on Exchangeable Units ^(1)	494	605	1,483	1,945
Loss on disposition	1,123	784	1,175	2,310
Depreciation on owner-occupied building	23	24	69	70
Land lease adjustment	(10)	1	(31)	2
FFO	$41,197	$41,877	$116,052	$115,517
FFO per unit – diluted	$0.34	$0.34	$0.93	$0.93
Weighted average number of units – diluted (000s)	122,484	124,745	124,204	124,371

Reconciliation of FFO to AFFO	Three months ended September 30,		Nine months ended September 30,
	2026	2025	2026	2025
FFO	$41,197	$41,877	$116,052	$115,517
Maintenance capital expenditures^(1)	(5,598)	(5,575)	(16,791)	(16,909)
Commercial straight-line rent adjustment	(47)	(10)	(98)	(75)
Internal and external commercial leasing costs	(28)	(140)	(345)	(323)
AFFO	$35,524	$36,152	$98,818	$98,210
AFFO per unit – diluted	$0.29	$0.29	$0.80	$0.79
AFFO payout ratio – diluted	62 %	62 %	68 %	68 %
AFFO payout ratio – rolling 12 months^(2)	69 %	71 %
Weighted average number of units – diluted (000s)	122,484	124,745	124,204	124,371

(1) The maintenance capital expenditures for the three and nine months ended September 30, 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 year-ended
December 31, 2025.

(2)  Based on Killam's annual distribution of $0.72000 for the 12-month period ended September 30, 2026, and $0.71833 for the 12-month period ended September 30, 2025.

Normalized Adjusted EBITDA	Twelve months ended,
	September 30, 2026	December 31, 2025	% Change
Net income	$17,617	$29,412	(40.1) %
Financing costs	90,994	84,451	7.7 %
Depreciation	1,007	1,017	(1.0) %
Loss on disposition	1,389	2,523	(44.9) %
Restructuring costs	466	466	-- %
Fair value adjustment on unit-based compensation	(1,059)	(941)	12.5 %
Fair value adjustment on Exchangeable Units	(1,654)	(2,075)	(20.3) %
Fair value adjustment on investment properties	134,050	120,467	11.3 %
Adjusted EBITDA	242,810	235,320	3.2 %
Normalizing adjustment ^(1)	135	1,961	(93.1) %
Normalized adjusted EBITDA	$242,945	$237,281	2.4 %
Total interest-bearing debt	$2,406,081	$2,301,686	4.5 %
Cash and cash equivalents	(7,016)	(9,876)	(29.0) %
Net debt	$2,399,065	$2,291,810	4.7 %
Debt to normalized adjusted EBITDA	9.87x	9.66x	2.2 %

(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 ability to achieve its annual NOI targets and achieve organic growth across its core markets; the amount, nature and timing of Killam's dispositions; Killam's commitment to its capital recycling program and the benefits thereof, including  repurchases under Killam's NCIB; Killam's ability to achieve its development and other targets and the timing thereof; 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" section 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 applicable 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