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<ul><li><p> Unaudited Condensed Consolidated Financial Statements and Notes </p><p> For the three and six months ended June 30, 2017 and 2016 </p></li><li><p> Northview Second Quarter 2017 2 </p><p> Northview Apartment Real Estate Investment Trust Unaudited Condensed Consolidated Statements of Financial Position (thousands of Canadian dollars) </p><p> Note June 30, 2017 December 31, 2016 </p><p>Assets </p><p>Non-current assets </p><p> Investment properties 3 3,162,361 3,059,825 </p><p> Property, plant and equipment 4 43,675 40,282 </p><p> Investment in joint ventures 6,437 6,274 </p><p> Other long-term assets 5,818 6,150 </p><p> Loans receivable 2,007 2,190 </p><p> 3,220,298 3,114,721 </p><p>Current assets </p><p> Assets held for sale 16 25,212 39,873 </p><p> Accounts receivable 11(b)(ii) 10,599 9,428 </p><p> Restricted cash 11,541 11,254 </p><p> Cash 9,202 4,148 </p><p> Prepaid expenses and other assets 8,272 3,187 </p><p> Loans receivable 2,750 3,061 </p><p> 67,576 70,951 </p><p>Total Assets 3,287,874 3,185,672 </p><p>Liabilities </p><p>Non-current liabilities </p><p> Mortgages payable 5 1,457,934 1,500,688 </p><p> Class B LP Units 9(b) 122,340 116,701 </p><p> Credit facilities 7 79,699 65,829 </p><p> Convertible debentures 6 24,127 23,460 </p><p> Unit based payments 11(a) 1,242 1,733 </p><p> 1,685,342 1,708,411 </p><p>Current liabilities </p><p> Mortgages payable 5 204,333 160,844 </p><p> Credit facilities </p><p>7 79,108 68,013 </p><p> Trade and other payables 62,599 68,106 </p><p> Distributions and Class B LP interest payable 7,573 7,571 </p><p> Liabilities related to assets held for sale 16 10,117 18,008 </p><p> Derivative instruments 5 1,228 1,499 </p><p> Unit based payments 11(a) 1,369 - </p><p> 366,327 324,041 </p><p>Total Liabilities 2,051,669 2,032,452 </p><p>Unitholders equity </p><p> Equity attributable to Unitholders 1,235,118 1,152,010 </p><p> Non-controlling interests 1,087 1,210 </p><p>Total Equity 1,236,205 1,153,220 </p><p>Total Liabilities and Equity 3,287,874 3,185,672 </p><p> See accompanying notes to the condensed consolidated financial statements. </p></li><li><p> Northview Second Quarter 2017 3 </p><p> Northview Apartment Real Estate Investment Trust Unaudited Condensed Consolidated Statements of Net and Comprehensive Income (Loss) </p><p> Three and six months ended June 30 (thousands of Canadian dollars) </p><p> Three months ended Six months ended </p><p> Note 2017 2016 2017 2016 </p><p>Revenue </p><p>Rental revenue 79,344 77,411 157,544 156,917 </p><p>Other revenue 3,085 3,701 5,834 10,502 </p><p> 82,429 81,112 163,378 167,419 </p><p>Operating expenses 33,760 36,782 72,371 76,106 </p><p>Net operating income 48,669 44,330 91,007 91,313 </p><p>Other expense (income) </p><p>Financing costs 13 16,542 17,705 33,487 34,948 </p><p>Administration 3,879 2,308 7,140 4,972 </p><p>Depreciation and amortization 1,179 1,224 2,354 2,658 </p><p>(Gain) loss on sale of properties (28) 66 661 65 </p><p>Equity income from joint ventures (70) (77) (263) (382) </p><p>Business combination transaction costs - 332 - 14,448 </p><p>Fair value (gain) loss 14 (96,570) 27,051 (76,043) 34,402 </p><p> (75,068) 48,609 (32,664) 91,111 </p><p>Net and comprehensive income (loss) 123,737 (4,279) 123,671 202 </p><p>Net and comprehensive income (loss) attributable to: </p><p>Unitholders 123,699 (4,239) 123,601 195 </p><p>Non-controlling interests 38 (40) 70 7 </p><p>Net and comprehensive income (loss) 123,737 (4,279) 123,671 202 </p><p> See accompanying notes to the condensed consolidated financial statements. </p></li><li><p> Northview Second Quarter 2017 4 </p><p> Northview Apartment Real Estate Investment Trust Unaudited Condensed Consolidated Statements of Changes in Unitholders Equity </p><p> Six months ended June 30 (thousands of Canadian dollars) </p><p> Note 2017 2016 </p><p>Units </p><p> Balance, January 1 1,157,774 1,053,626 </p><p> Long-term incentive plan units issued 9 47 11 </p><p> Units issued, net of issuance costs 9 157 31,300 </p><p>Balance, June 30 1,157,978 1,084,937 </p><p>Retained earnings </p><p>Cumulative net income </p><p>Balance, January 1 360,089 282,804 </p><p>Net and comprehensive income attributable to Unitholders 123,601 195 </p><p>Balance, June 30 483,690 282,999 </p><p>Cumulative distributions to Unitholders </p><p>Balance, January 1 (365,853) (289,134) </p><p>Distributions declared to Unitholders (40,697) (37,486) </p><p>Balance, June 30 (406,550) (326,620) </p><p>Cumulative retained earnings (deficit), June 30 77,140 (43,621) </p><p>Equity attributable to Unitholders 1,235,118 1,041,316 </p><p>Non-controlling interests </p><p>Balance, January 1 1,210 1,810 </p><p>Net and comprehensive income 70 7 </p><p>Distributions to non-controlling interests (193) (58) </p><p>Balance, June 30 1,087 1,759 </p><p>Total Unitholders equity 1,236,205 1,043,075 </p><p> See accompanying notes to the condensed consolidated financial statements. </p></li><li><p> Northview Second Quarter 2017 5 </p><p> Northview Apartment Real Estate Investment Trust Unaudited Condensed Consolidated Statements of Cash Flows </p><p> Three and six months ended June 30 (thousands of Canadian dollars) </p><p> Three months ended Six months ended </p><p> Note 2017 2016 2017 2016 </p><p>Operating activities: </p><p>Net and comprehensive income (loss) 123,737 (4,279) 123,671 202 </p><p>Adjustments: </p><p>Fair value (gain) loss 14 (96,570) 27,051 (76,043) 34,402 </p><p>Depreciation and amortization 1,179 1,224 2,354 2,658 </p><p>Mortgage and credit facilities interest expense 13,997 15,286 28,277 29,505 </p><p>Mortgage and credit facilities interest paid (14,384) (14,833) (28,999) (29,504) </p><p>Interest expense to Class B LP Unitholders 2,369 2,403 4,738 5,066 </p><p>Distribution interest paid to Class B LP Unitholders 9(c) (2,369) (2,403) (4,738) (5,325) </p><p>Interest expense on convertible debentures 330 348 656 678 </p><p>Interest paid on convertible debentures (656) (660) (656) (660) </p><p>(Gain) loss on sale of properties (28) 66 661 65 </p><p>Equity income from joint ventures (70) (77) (263) (382) </p><p>Long-term incentive plan compensation 723 211 905 491 </p><p>Changes in non-cash working capital 15 (6,330) (4,608) (11,669) 3,337 </p><p>Cash provided by operating activities 21,928 19,729 38,894 40,533 </p><p>Financing activities: </p><p>Proceeds from mortgages 19,887 29,964 38,094 383,962 </p><p>Repayment of mortgages (16,529) (35,530) (47,599) (55,836) </p><p>Borrowing (repayment) of credit facilities, net 19,656 31,596 27,965 (284,347) </p><p>Distributions paid to Unitholders 9(c) (20,350) (18,872) (40,697) (37,224) </p><p>Proceeds from unit issuance, net 157 - 157 - </p><p>Distributions to non-controlling interests (164) (29) (193) (58) </p><p>Cash provided by (used in) investing activities 2,657 7,129 (22,273) 6,497 </p><p>Investing activities: </p><p>Acquisition of investment properties and land for future development 3 - (135) - (141) </p><p>Capital expenditures on investment properties under development 3 (4,539) (12,629) (6,582) (24,093) </p><p>Capital expenditures on investment properties 3 (13,190) (11,484) (24,140) (22,652) </p><p>Proceeds from sale of assets and investment properties, net 80 702 22,968 703 </p><p>Acquisition of property, plant and equipment 4 (2,732) (1,297) (4,165) (2,326) </p><p>Distributions received from equity investees 50 42 100 85 </p><p>Changes in non-cash working capital 15 591 229 252 92 </p><p>Cash used in financing activities (19,740) (24,572) (11,567) (48,332) </p><p>Net increase (decrease) in cash 4,845 2,286 5,054 (1,302) </p><p>Cash, beginning of period 4,357 899 4,148 4,487 </p><p>Cash, end of period 9,202 3,185 9,202 3,185 </p><p> See accompanying notes to the condensed consolidated financial statements. </p></li><li><p>Northview Apartment Real Estate Investment Trust Notes to the Unaudited Condensed Consolidated Financial Statements Three months and six months ended June 30, 2017 and 2016 (Tabular amounts expressed in thousands of Canadian dollars except where indicated) </p><p> Northview Second Quarter 2017 6 </p><p>1. Description of the consolidated entities Northview Apartment Real Estate Investment Trust (Northview) (formerly Northern Property Real Estate Investment Trust (NPR)) is an unincorporated, open-ended real estate investment trust created pursuant to a declaration of trust (DOT) dated January 2, 2002, and last amended May 5, 2016, under the laws of the Province of Alberta (and the federal laws of Canada applicable therein). Northview is primarily a multi-family residential real estate investor and operator, providing a broad spectrum of rental accommodations with a portfolio of approximately 24,000 quality residential suites in more than 60 markets across eight provinces and two territories. Northviews registered office is located at 200, 6131 6th Street SE, Calgary, Alberta. Northview is listed on the Toronto Stock Exchange (TSX) under the symbol NVU.UN. Northview is a real estate investment trust for tax purposes. </p><p>2. Significant accounting policies a) Basis of preparation and statement of compliance These condensed consolidated financial statements have been prepared in accordance with International Accounting Standard (IAS) 34 Interim Financial Reporting, using accounting policies consistent with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB). </p><p> These condensed consolidated financial statements should be read in conjunction with Northviews annual financial statements for the year ended December 31, 2016, prepared in accordance with IFRS. There have been no changes to Northviews accounting policies from those disclosed in the consolidated financial statements of Northview for the year ended December 31, 2016. </p><p> These condensed consolidated financial statements were approved by the trustees of Northview (the Trustees) on August 9, 2017. </p><p> b) New accounting standards and interpretations Northview has applied a revised IFRS issued by the IASB that is mandatorily effective for an accounting period that begins on or after January 1, 2017. </p><p>Revised Standard Description Impact of Application Effective Date </p><p>Amendments to IAS 7 Statement of Cash Flows </p><p>The amendments to IAS 7 require entities to provide disclosures that enable users of the financial statements to evaluate changes in liabilities arising from financing activities. </p><p>No direct replacement. Additional disclosure for mortgages payable is provided in the notes to the condensed consolidated financial statements. </p></li><li><p>Northview Apartment Real Estate Investment Trust Notes to the Unaudited Condensed Consolidated Financial Statements Three months and six months ended June 30, 2017 and 2016 (Tabular amounts expressed in thousands of Canadian dollars except where indicated) </p><p> Northview Second Quarter 2017 7 </p><p>c) Recent accounting pronouncements The IASB has issued the following standards that have not been applied in preparing these unaudited condensed consolidated financial statements as their effective dates fall within annual periods subsequent to the current reporting period. </p><p>Revised Standard Description Impact of Application Effective Date </p><p>IFRS 15 Revenue from Contracts with Customers </p><p>Introduces a principle to report information about the nature, timing, and uncertainty of revenue from contracts with customers in a single, comprehensive revenue recognition model. </p><p>Northview is in the process of assessing the impact that IFRS 15 may have on the consolidated financial statements and plans to adopt the new standard on the effective date. Northview does not expect significant impact on the consolidated financial statements. </p><p>Effective date for annual periods beginning on or after January 1, 2018. </p><p>IFRS 9 Financial Instruments </p><p>The IASB has undertaken a three-phase project to replace IAS 39 with IFRS 9. The new standard replaces the current multiple classification and measurement models for financial assets and liabilities with a single model that has only two classification categories: amortized cost and fair value; and introduces a new hedge accounting model. The standard was finalized in July 2014. </p><p>Northview is in the process of assessing the impact that IFRS 9 may have on the consolidated financial statements and plans to adopt the new standard on the effective date. Northview does not expect significant impact on the consolidated financial statements. </p><p>Effective date for annual periods beginning on or after January 1, 2018. </p><p>IAS 40 Investment Properties </p><p>During December 2016, the IASB issued an amendment to IAS 40 to state that an entity shall transfer a property to, or from, investment property when, and only when, there is evidence of a change in use. A change in use occurs if property meets, or ceases to meet, the definition of investment property. A change in managements intentions for the use of a property by itself does not constitute evidence of a change in use. </p><p>Northview is in the process of assessing the impact that amendment to IAS 40 may have on the consolidated financial statements and plans to adopt the new standard on the effective date. Northview does not expect significant impact on the consolidated financial statements. </p><p>Effective date for annual periods beginning on or after January 1, 2018. </p><p>IFRS 16 Leases The IASB issued IFRS 16 Leases, which provides a single lessee accounting model, requiring lessees to recognize assets and liabilities for all leases unless the lease term is 12 months or less or the underlying asset has a low value. </p><p>Northview is in the process of assessing the impact that IFRS 16 may have on the consolidated financial statements and plans to adopt the new standard on the effective date. Northview will determine the potential impact on the consolidated financial statements. </p><p>Effective date for annual periods beginning on or after January 1, 2019. </p><p>IFRS 2 Share Based Compensation </p><p>IASB issued an amendment to IFRS 2 to clarify the classification and measurement of cash settled share based payment transactions that include performance condition, classification of share based payment transactions with net settlement features and accounting for modifications of share based payment transactions from cash-settled to equity settled. </p><p>Northview is in the process of assessing the impact that amendment to IFRS 2 may have on the consolidated financial statements and plans to adopt the new standard on the effective date. Northview does not expect significant impact on the consolidated financial statements. </p><p>Effective date for annual periods beginning on or after January 1, 2018. </p><p> Management continues to evaluate the potential qualitative and quantitative impact of these new standards on Northviews consolidated financial statement measurements and disclosures. Northview is not early adopting these standards. </p></li><li><p>Northview Apartment Real Estate Investment Trust Notes to the Unaudited Condensed Consolidated Financial Statements Three months and six months ended June 30, 2017 and 2016 (Tabular amounts expressed in thousands of Canadian dollars except where indicated) </p><p> Northview Second Quarter 2017 8 </p><p>3. Investment properties </p><p> June 30, 2017 December 31, 2016 </p><p>Investment properties 3,125,160 3,010,817 </p><p>Investment properties under development 14,991 14,471 </p><p>Land held for development 22,210 34,537 </p><p> 3,162,361 3,059,825 </p><p> Changes to investment properties for the periods: </p><p> June 30, 2017 December 31, 2016 </p><p>Balance, January 1 3,059,825 3,025,468 </p><p>Acquisitions of land for future development - 5,630 </p><p>Transfers to property, plant and equipme...</p></li></ul>

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