Management’s Discussion and Analysis Dollar amounts are in thousands of Canadian dollars (except as noted) Consistent with the Company’s strategy to continue to add to its portfolio through developments, a second project in St. John’s was started  during the second half of 2013 within close proximity to Bennett House. The design and site planning for the 101‑unit complex is completed  and construction commenced at the end of the third quarter of 2013. In order to generate higher returns, the Company has approved a lower  per unit development cost. The Company has spent $7.1 million on this project to date including the cost of land and has satisfied the equity  component in order to obtain construction financing. Management expects an all cash yield of approximately 6% on this project. Killam acquired land in Cambridge in early 2013, which consisted of a 5.2 acre site and developed a two‑phase plan for development for 244  units. Phase one will include 122 units and construction commenced in the fourth quarter of 2013, with development expected to be completed  in the spring of 2015. The Company has already contributed $6.0 million to phase one of the project, which represents approximately 82% of the  required equity contribution and the expected yield on this project is approximately 6%.  Capital Improvements Killam invests capital to maintain and improve the operating performance of its properties. During the year ended December 31, 2013, Killam  invested a total of $21.6 million in its portfolio, compared to $22.5 million in 2012. Apartments ‑ Capital Spend A summary of the capital spend on the apartment segment is included below: Killam estimates that $450 per unit of the capital spending relates to maintenance capital, and the remainder relates to value enhancing  upgrades. Maintenance capital varies with market conditions and relates to investments that are not expected to lead to an increase in NOI,  or increased efficiency, of a building; however, it is expected to extend the life of a building. Examples of maintenance capital include roof  and structural repairs and are in addition to regular repairs and maintenance costs that are expensed to NOI. Value enhancing upgrades are  investments in the properties that are expected to result in higher rents and/or increased efficiencies. This includes unit and common area  upgrades and energy investments, such as natural gas conversions.  50  Killam ProPerties inc | 2013 For the years ended December 31, 2013 2012 % change apartments $18,100 $19,039 (4.9)% mHcs 3,505 3,345 4.8% other 42 84 (50.0)% $21,647 $22,468 (3.7)% For the years ended December 31, 2013 2012 % change Building improvements $8,545 $9,353 (8.6)% Suite renovations 7,390 4,945 49.4% land improvements 53 1,374 (96.1)% Boilers and heating equipment 371 1,902 (80.5)% appliances 1,188 808 47.0% Parking lots 133 211 (37.0)% equipment 211 237 (11.0)% other 209 209 ‑% total capital spend $18,100 $19,039 (11.6)% average number of units outstanding 12,210 11,312 7.9% capital spend per unit $1,482 $1,683 (11.9)%