Killam Apartment REIT T.KMP.UN

RE:CIBC

[DanielDarden]

IMO the most relevant portion has been omitted and follows:

KMP trades at a ~23% discount to NAV, which compares to the five-year pre- pandemic average (2015-2019) of roughly NAV parity. We continue to believe there is an argument to be made that KMP’s valuation level should converge to the long-term average of parity to NAV. Valuation levels of Killam’s Ontario-centric peers have historically been anchored by the mark-to-market opportunity on turned suites. We estimate the mark-to- market opportunity at KMP at 25%-30%. To account for macroeconomic headwinds, as well the ~55% portion of Killam’s portfolio currently exposed to rental controls (thus limiting the amount of the MTM spread captured, absent unit churn), we utilize an arguably conservative parity to NAV (commensurate with the pre-pandemic average) in calculating our price target.