Morguard Corporation Announces 2026 Third Quarter Results and Regular Eligible Dividend
MISSISSAUGA, ON, Nov. 4, 2026 /CNW/ -- Morguard Corporation ("Morguard" or the "Company") (TSX:MRC) is pleased to announce its financial results for the three and nine months ended September 30, 2026.
- The Company has advanced its previously announced joint acquisition with Morguard North American Residential REIT of a Canadian multi-suite residential portfolio, representing a combined gross purchase price of approximately $1.1 billion across 91 properties.
- During the three months ended September 30, 2026, the Company sold its leasehold interest in 131 Queen Street, Ottawa, Ontario, consisting of 328,500 square feet, for net proceeds of $147.8 million including closing costs, and repaid the mortgage payable secured by the property in the amount of $29.6 million.
- The Company ended the third quarter in a strong liquidity position with $723.5 million of cash and available credit facilities, and has a $1.2 billion pool of unencumbered properties and other investments.
- During the third quarter, the Company refinanced maturing mortgages for gross proceeds of $169.7 million at an average interest rate of 5.20% and an average term of 9.5 years.
- As at September 30, 2026, shareholders' equity per common share was $439.81, compared to $410.70 at December 31, 2025.
- Net income increased by $52.5 million to $96.4 million, for the three months ended September 30, 2026, compared to $43.9 million for the same period in 2025, primarily due to an increase in non-cash net fair value gain and an increase in management and advisory fees, partially offset by lower NOI and an increase in income tax expense (current and deferred).
- Total revenue from real estate properties increased by $4.0 million, or 1.6%, to $258.7 million for the three months ended September 30, 2026, compared to $254.7 million for the same period in 2025.
- Normalized funds from operations(1) ("Normalized FFO") was $55.5 million, or $5.20 per common share, for the three months ended September 30, 2026, compared to $55.5 million, or $5.18 per common share for the same period in 2025.
- Adjusted NOI(1) decreased by $3.7 million, or 2.6%, to $137.2 million for the three months ended September 30, 2026, compared to $140.9 million for the same period in 2025.
- Comparative NOI(1) increased by $0.5 million, or 0.3%, to $136.8 million for the three months ended September 30, 2026, compared to $136.3 million for the same period in 2025.
1) Refer to Specified Financial Measures |
On February 25, 2026, Morguard Corporation and Morguard Residential REIT announced their joint investment in a Canadian multi-suite residential real estate portfolio currently owned by TD Asset Management Inc. ("TDAM"). Management has completed its due diligence review and the related purchaser conditions have been waived, and the allocation of individual property ownership interests between the Company and Morguard Residential REIT has been finalized. The transaction represents an approximate 26 percent undivided interest in a portfolio of 91 properties comprising 12,302 suites at a gross purchase price of approximately $1.1 billion, before closing costs, and is expected to close in a single tranche, subject to receiving CMHC and lender approval.
The following table details the regional distribution and ownership interest of the properties:
City/Region | Number of | Ownership Interest | Total | Ownership Suites |
Calgary | 3 | 20 % | 568 | 113 |
Edmonton | 4 | 20 % | 838 | 168 |
Alberta | 7 | 20 % | 1,406 | 281 |
Windsor | 9 | 20 % | 478 | 96 |
London | 9 | 20 % | 792 | 158 |
Kitchener | 5 | 20 % | 764 | 153 |
Waterloo | 4 | 20 % | 781 | 156 |
Hamilton | 5 | 20 % | 689 | 138 |
Burlington | 1 | 20 % | 185 | 37 |
Oakville | 2 | 50 % | 131 | 66 |
Brampton | 2 | 20 % | 390 | 78 |
Mississauga | 5 | 20 % | 623 | 124 |
Toronto | 18 | 26 % | 2,710 | 698 |
Ottawa | 2 | 20 % | 229 | 46 |
Ontario | 62 | 23 % | 7,772 | 1,750 |
Montréal | 13 | 20 % | 1,922 | 384 |
Québec | 13 | 20 % | 1,922 | 384 |
Halifax | 9 | 50 % | 1,202 | 601 |
Nova Scotia | 9 | 50 % | 1,202 | 601 |
Total | 91 | 25 % | 12,302 | 3,016 |
The transaction will be financed through a combination of cash on hand, assumed mortgages, approximately $225 million in vendor financing, and the remainder through short-term borrowings. The assumed mortgages are CMHC-insured and have an approximate loan-to-value ratio of 46%. As at September 30, 2026, the Company paid a $20 million non-refundable deposit in connection with the transaction and is included in prepaid expenses.
Three months ended | Nine months ended | |||
(in thousands of dollars) | 2026 | 2025 | 2026 | 2025 |
Revenue from real estate properties | $258,740 | $254,665 | $766,301 | $774,303 |
Revenue from hotel properties | 9,581 | 9,133 | 26,363 | 23,649 |
Management and advisory fees | 13,875 | 9,804 | 33,109 | 29,712 |
Interest and other income | 4,891 | 4,618 | 14,014 | 13,174 |
Total revenue | $287,087 | $278,220 | $839,787 | $840,838 |
Revenue from real estate properties | $258,740 | $254,665 | $766,301 | $774,303 |
Revenue from hotel properties | 9,581 | 9,133 | 26,363 | 23,649 |
Property operating expenses | (109,599) | (102,374) | (382,371) | (378,976) |
Hotel operating expenses | (5,928) | (5,716) | (17,906) | (16,214) |
Net operating income ("NOI") | $152,794 | $155,708 | $392,387 | $402,762 |
Net income attributable to common shareholders | $85,441 | $37,844 | $228,613 | $149,980 |
Net income per common share – basic and diluted | $8.00 | $3.54 | $21.41 | $14.01 |
Funds from operations(1) | $62,104 | $59,599 | $168,332 | $163,360 |
FFO per common share – basic and diluted(1) | $5.82 | $5.57 | $15.76 | $15.26 |
Normalized funds from operations(1) | $55,531 | $55,453 | $155,149 | $161,456 |
Normalized FFO per common share – basic and diluted(1) | $5.20 | $5.18 | $14.53 | $15.08 |
(1) Refer to Specified Financial Measures. | ||||
Total revenue during the three months ended September 30, 2026, increased by $8.9 million, or 3.2%, to $287.1 million compared to $278.2 million in 2025, mainly due to an increase in revenue from real estate properties in the amount of $4.0 million, primarily due to higher average monthly rent ("AMR") and higher ancillary income within the multi-suite residential segment, partially offset by an increase in vacancy in the multi-residential and office segments, and an increase in revenue from hotel properties in the amount of $0.4 million from an increase in average daily rate ("ADR"), partially offset by a decrease in occupancy, resulting in an overall increase in revenue per available room ("RevPar"). In addition, revenue from management and advisory fees in the amount of $4.1 million, primarily due to higher asset and property management fees earned from an expanded portfolio of Canadian residential properties under management valued at $5.4 billion.
Net income for the three months ended September 30, 2026 was $96.4 million, compared to $43.9 million in 2025. The increase in net income of $52.5 million for three months ended September 30, 2025 was primarily due to the following:
- A decrease in net operating income of $2.9 million, mainly due to higher vacancy within the office and multi-suite residential segments, partly offset by an increase in AMR and the change in foreign exchange rate;
- An increase in management and advisory fees of $4.1 million, mainly due to higher asset and property management fees earned from an expanded portfolio of Canadian residential properties under management;
- An increase in non-cash net fair value gain of $61.9 million, mainly due to and increase in fair value gain on Morguard Residential REIT units, a decrease in fair value loss on real estate properties and an increase in fair value gain on marketable securities; and
- An increase in income tax expense (current and deferred) of $9.9 million, mainly due to an increase in current tax relating to the disposal of properties, partially offset by a decrease in deferred tax due to the reversal of temporary differences relating to the disposed properties and a lower fair value loss recorded on the Company's Canadian and U.S. properties.
Total revenue during the nine months ended September 30, 2026, decreased by $1.0 million, or 0.1%, to $839.8 million compared to $840.8 million in 2025, mainly due to a decrease in revenue from real estate properties in the amount of $8.0 million, primarily due to an increase in vacancy within the multi-suite residential and office segments, partially offset by an increase in management and advisory fees in the amount of $3.4 million, primarily due to higher asset and property management fees earned from an expanded portfolio of Canadian residential properties under management, an increase in revenue from hotel properties in the amount of $2.7 million from an increase in occupancy and ADR, and an increase in interest and other income in the amount of $0.8 million.
Net income for the nine months ended September 30, 2026 was $246.3 million, compared to $153.6 million in 2025. The increase in net income of $92.7 million for nine months ended September 30, 2026 was primarily due to the following:
- A decrease in net operating income of $10.4 million, mainly due to higher vacancy within the office and multi-suite residential segments, lower non-recurring property tax refunds received and the change in foreign exchange rate, partly offset by an increase in AMR, an increase in RevPar, and a lower IFRIC 21 adjustment;
- An increase in management and advisory fees of $3.4 million, primarily due to higher asset and property management fees earned from an expanded portfolio of Canadian residential properties under management;
- An increase in interest expense of $4.3 million, mainly due to an increase in interest on debentures primarily due to the issuance of Series I and J senior unsecured debentures in October 2025 and in June 2026, respectively, and a loss on extinguishment of $2.6 million on the early redemption of the Series H senior unsecured debentures, partially offset by lower interest on bank indebtedness;
- An increase in non-cash net fair value gain of $115.9 million, mainly due to a increase in fair value gain on Morguard Residential REIT units, an increase in fair value gain on marketable securities, and an increase in fair value gain on real estate properties; and
- An increase in income tax expense (current and deferred) of $11.6 million, mainly due to an increase in current tax relating to the disposal of properties, partially offset by a decrease in deferred tax due to the reversal of temporary differences relating to the disposed properties and a higher fair value gain recorded on the Company's Canadian and U.S. properties.
The following table provides occupancy by asset class for the following periods:
Suites/GLA Square Feet | Sep. 2026 | Jun. 2026 | Mar. 2026 | Dec. 2025 | Sep. 2025 | |
Multi-suite residential | 17,762 | 92.9 % | 92.4 % | 91.9 % | 92.4 % | 93.5 % |
Retail(1) | 7,487,000 | 90.3 % | 89.8 % | 89.9 % | 89.7 % | 90.6 % |
Office(2) | 8,379,000 | 80.0 % | 80.4 % | 80.1 % | 82.6 % | 82.7 % |
(1) | Retail occupancy has been adjusted to exclude development space of 319,783 square feet of GLA. |
(2) | Office includes industrial properties (September 30, 2026 - 71.1%) with 1,014,500 square feet of GLA. |
The following table provides a reconciliation of Adjusted NOI to its closely related financial statement measurement for the following periods:
Three months ended | Nine months ended | |||
(in thousands of dollars) | 2026 | 2025 | 2026 | 2025 |
Multi-suite residential | $73,783 | $72,925 | $220,113 | $224,165 |
Retail | 32,648 | 36,603 | 93,972 | 98,642 |
Office(1) | 27,101 | 27,929 | 83,150 | 89,055 |
Hotel | 3,653 | 3,417 | 8,457 | 7,435 |
Adjusted NOI | 137,185 | 140,874 | 405,692 | 419,297 |
IFRIC 21 adjustment - multi-suite residential | 13,974 | 13,288 | (11,563) | (14,653) |
IFRIC 21 adjustment - retail | 1,635 | 1,546 | (1,742) | (1,882) |
NOI | $152,794 | $155,708 | $392,387 | $402,762 |
(1) | Includes industrial properties with NOI for the three and nine months ended September 30, 2026 of $2,118 (2025 - $2,200) and $6,482 (2025 - $7,724), respectively. |
For the three months ended September 30, 2026, Adjusted NOI decreased by $3.7 million, primarily due to a lower non-recurring lease cancellation fees received compared to 2025, a lower recovery of operating expenses and higher vacancy within the retail portfolio, and a decrease due to the sale of 131 Queen Street, Ottawa, partially offset by an increase due to the change in foreign exchange rate.
For the nine months ended September 30, 2026, Adjusted NOI decreased by $13.6 million, primarily due to an increase in vacancy and higher amortized concessions, net of an increase in AMR within the multi-suite residential portfolio, a decrease within the retail portfolio due to a lower non-recurring lease cancellation fees received compared
to 2025, a lower recovery of operating expenses and higher vacancy within the retail portfolio, and a decrease in the office portfolio mainly due to higher vacancy, lower non-recurring lease cancellation fees received compared to 2025, and the sale of 131 Queen Street, Ottawa, partially offset by an increase in revenue in the hotel portfolio due to an increase in occupancy and ADR mainly due to higher e-commerce and corporate demand resulting in an overall increase in RevPar.
The following tables provide a reconciliation of FFO and Normalized FFO to its closely related financial statement measurement for the following periods:
Three months ended | Nine months ended | |||
(in thousands of dollars) | 2026 | 2025 | 2026 | 2025 |
Multi-suite residential | $73,783 | $72,925 | $220,113 | $224,165 |
Retail | 32,648 | 36,603 | 93,972 | 98,642 |
Office | 27,101 | 27,929 | 83,150 | 89,055 |
Hotel | 3,653 | 3,417 | 8,457 | 7,435 |
Adjusted NOI Other Revenue | 137,185 | 140,874 | 405,692 | 419,297 |
Management and advisory fees | 13,875 | 9,804 | 33,109 | 29,712 |
Interest and other income | 4,891 | 4,618 | 14,014 | 13,174 |
Equity-accounted FFO | 714 | 683 | 2,117 | 1,895 |
19,480 | 15,105 | 49,240 | 44,781 | |
Expenses and Other | ||||
Interest | (64,302) | (64,299) | (195,225) | (190,894) |
Principal repayment of lease liabilities | (463) | (396) | (1,371) | (1,539) |
Property management and corporate | (24,406) | (23,351) | (72,725) | (70,065) |
Internal leasing costs | 1,579 | 850 | 3,808 | 3,581 |
Amortization of capital assets | (330) | (533) | (1,002) | (1,099) |
Current income taxes | (2,473) | (405) | (3,893) | (4,659) |
Non-controlling interests' share of FFO | (10,610) | (12,388) | (32,858) | (36,700) |
Unrealized changes in the fair value of financial instruments | 6,243 | 4,151 | 17,156 | 648 |
Other income (expense) | 201 | (9) | (490) | 9 |
FFO | $62,104 | $59,599 | $168,332 | $163,360 |
FFO per common share amounts – basic and diluted | $5.82 | $5.57 | $15.76 | $15.26 |
Weighted average number of common shares outstanding (in thousands): | ||||
Basic | 10,678 | 10,701 | 10,678 | 10,707 |
Diluted | 10,678 | 10,701 | 10,680 | 10,707 |
Three months ended | Nine months ended | |||
(in thousands of dollars) | 2026 | 2025 | 2026 | 2025 |
FFO (from above) | $62,104 | $59,599 | $168,332 | $163,360 |
Add/(deduct): | ||||
Unrealized changes in the fair value of financial instruments | (6,243) | (4,151) | (17,156) | (648) |
SARs plan increase (decrease) in fair value | (660) | 102 | (165) | (116) |
SOP increase in fair value | 397 | -- | 1,203 | -- |
Loss on extinguishment of debentures payable | -- | -- | 2,582 | -- |
Lease cancellation fee and other | (86) | (121) | 1,255 | (1,484) |
Tax effect of above adjustments | 19 | 24 | (902) | 344 |
Normalized FFO | $55,531 | $55,453 | $155,149 | $161,456 |
Per common share amounts – basic and diluted | $5.20 | $5.18 | $14.53 | $15.08 |
The Board of Directors of Morguard Corporation announced that the fourth quarterly, eligible dividend of 2026 in the amount of $0.20 per common share will be paid on December 31, 2026, to shareholders of record at the close of business on December 15, 2026.
The Company reports its financial results in accordance with IFRS Accounting Standards ("IFRS"). However, this earnings release also uses specified financial measures that are not defined by IFRS, which follow the disclosure requirements established by National Instrument 52-112 Non-GAAP and Other Financial Measures Disclosure for non-GAAP financial measures. Specified financial measures are categorized as non-GAAP financial measures, non-GAAP ratios, and other financial measures. Additional details on specified financial measures including supplementary financial measures, capital management measures and total segment measures are set out in the Company's Management's Discussion and Analysis for the three and nine months ended September 30, 2026 and available on the Company's profile on SEDAR+ at www.sedarplus.ca
The following non-GAAP financial measures do not have any standardized meaning prescribed by IFRS and are not necessarily comparable to similar measures presented by other reporting issuers in similar or different industries.
These measures should be considered as supplemental in nature and not as substitutes for related financial information prepared in accordance with IFRS. The Company's management uses these measures to aid in assessing the Company's underlying core performance and provides these additional measures so that investors may do the same. Management believes that the non-GAAP financial measures described below, which supplement the IFRS measures, provide readers with a more comprehensive understanding of management's perspective on the Company's operating results and performance.
A reconciliation of each non-GAAP financial measure referred to in this earnings release is provided above.
Adjusted NOI is an important measure in evaluating the operating performance of the Company's real estate properties and is a key input in determining the fair value of the Company's properties. Adjusted NOI represents NOI (an IFRS measure) adjusted to exclude the impact of realty taxes accounted for under IFRIC 21 as noted below.
NOI includes the impact of realty taxes accounted for under the International Financial Reporting Interpretations Committee ("IFRIC") Interpretation 21, Levies ("IFRIC 21"). IFRIC 21 states that an entity recognizes a levy liability in accordance with the relevant legislation. The obligating event for realty taxes for the U.S. municipalities in which the REIT operates is ownership of the property on January 1 of each year for which the tax is imposed and, as a result, the REIT records the entire annual realty tax expense for its U.S. properties on January 1, except for U.S. properties acquired during the year in which the realty taxes are not recorded in the year of acquisition. Adjusted NOI records realty taxes for all properties on a pro rata basis over the entire fiscal year.
Comparative NOI is presented in this earnings release because management considers this non-GAAP financial measure to be an important measure of the Company's operating performance for properties owned by the Company continuously for the current and comparable reporting period and does not take into account the impact of the operating performance of property acquisitions and dispositions as well as properties subject to significant change as a result of recently completed development. In addition, Comparative NOI is presented in local currency, isolating any impact of foreign exchange fluctuations, and eliminates the impact of straight-line rents, realty taxes accounted for under IFRIC 21, lease cancellation fees and other non-cash and non-recurring items.
FFO (and FFO per common share) is a non-GAAP financial measure widely used as a real estate industry standard that supplement net income (loss) and evaluates operating performance but is not indicative of funds available to meet the Company's cash requirements. FFO can assist with comparisons of the operating performance of the Company's real estate between periods and relative to other real estate entities. FFO is computed in accordance with the current definition of the Real Property Association of Canada ("REALPAC") and is defined as net income (loss) attributable to common shareholders adjusted for: (i) deferred income taxes, (ii) unrealized changes in the fair value of real estate properties, (iii) realty taxes accounted for under IFRIC 21, (iv) internal leasing costs, (v) gains/losses from the sale of real estate or hotel property (including income tax on the sale of real estate or hotel property), (vi) transaction costs expensed as a result of a business combination, (vii) gains/losses on business combination, (viii) the non-controlling interest of Morguard North American Residential REIT, (ix) amortization of depreciable real estate assets (including right-of-use assets), (x) amortization of intangible assets, (xi) principal payments of lease liabilities, (xii) FFO adjustments for equity-accounted investments, (xiii) provision for (recovery of) impairment, (xiv) other fair value adjustments and non-cash items. The Company considers FFO to be a useful measure for reviewing its comparative operating and financial performance. FFO per common share is calculated as FFO divided by the weighted average number of common shares outstanding during the period.
Normalized FFO (and normalized FFO per common share) is computed as FFO excluding non-recurring items on a net of tax basis and other non-cash fair value adjustments. The Company believes it is useful to provide an analysis of Normalized FFO which excludes non-recurring items on a net of tax basis and other non-cash fair value adjustments excluded from REALPAC's definition of FFO described above.
Non-consolidated indebtedness to gross book value ratio is a compliance measure and establishes the limit for financial leverage of the Company on a Non-Consolidated Basis. Non-consolidated indebtedness to gross book value ratio is presented in this earnings release because management considers this non-GAAP measure to be an important compliance measure of the Company's financial position.
Non-consolidated gross book value is a measure of the value of the Company's assets and is calculated as total assets less right-of-use assets accounted for under IFRS 16, Leases.
Non-consolidated indebtedness is defined as the sum of the current and non-current portion of: (i) mortgages payable, (ii) Unsecured Debentures, (iii) convertible debentures, (iv) construction financing payable, (v) bank indebtedness, and (vi) loans payable.
The Company's unaudited condensed consolidated financial statements for the three and nine months ended September 30, 2026, along with Management's Discussion and Analysis will be available on the Company's website at www.morguard.com and will be filed with SEDAR+ at www.sedarplus.ca.
Morguard Corporation is a real estate company, with total assets owned and under management valued at $24.1 billion. As at November 4, 2026, Morguard owns a diversified portfolio of 154 multi-suite residential, retail, office, industrial and hotel properties comprised of 17,762 residential suites, approximately 16.2 million square feet of commercial leasable space and 472 hotel rooms. Morguard also currently owns a 69.0% interest in Morguard Real Estate Investment Trust and a 48.6% effective interest in Morguard North American Residential Real Estate Investment Trust. Morguard also provides advisory and management services to institutional and other investors. For more information, visit the Company's website at www.morguard.com.
SOURCE Morguard Corporation
For further information, please contact: Morguard Corporation, K. Rai Sahi, Executive Chairman, T 905-281-3800; Angela Sahi, Chief Executive Officer, T 905-281-3800; Paul Miatello, Chief Financial Officer, Senior Vice President, T 905-281-3800
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