NexLiving Communities (NXLV) investor relations material

Market context and strategy

• Focus on high-growth secondary Canadian markets, avoiding overheated Toronto and Vancouver.

• Rising home ownership costs and high interest rates are pushing more people into rentals.

• Secondary markets offer better value for tenants and landlords, with higher cap rates and lower property costs.

• Population growth and job opportunities in these regions are driving rental demand.

• Company targets downsizers and long-term tenants to minimize turnover and CapEx.

Growth, performance, and financials

• Apartment portfolio grew from 500 to 2,200 units in a few years, with high occupancy and 18% three-year cash flow CAGR.

• Share price trades at about half of property NAV, with insiders owning over 50% of shares.

• Cash profit margin is 51%, outperforming the industry average of 40%.

• Free cash flow increased from CAD 2 million to CAD 8 million in three years.

• Dividend payout reduced to 16% of cash flow per share, with retained capital fueling growth.

Capital allocation and operational model

• Prioritizes buying properties, paying down debt, and share buybacks, with low CapEx due to newer assets and stable tenants.

• Organic and acquisition-driven growth model, aiming to double portfolio every two years.

• Typical acquisition cost is CAD 210,000–220,000 per door, well below replacement cost.

• Value-add projects aim to recover equity in 2–3 years, then generate ongoing cash flow.

• Management and board have deep experience in building and selling businesses in secondary markets.