Morguard North American Residential REIT Announces 2026 Third Quarter Results and an Increase to Monthly Cash Distribution

MISSISSAUGA, ON, Oct. 27, 2026 /CNW/ -- Morguard North American Residential REIT (the "REIT") (TSX: MRG.UN) today announced its financial results for the three and nine months ended September 30, 2026.

HIGHLIGHTS
The REIT is reporting the following corporate and portfolio highlights:

• The REIT has advanced its previously announced joint acquisition with Morguard Corporation of a Canadian multi-suite residential portfolio, with the REIT's share representing a gross purchase price of approximately $478 million across 60 properties.
• The REIT completed the refinancing of two U.S. properties located in Florida providing gross mortgage proceeds of $64.9 million (US$45.6 million) at an interest rate of 6.33% and a term of 10 years. The maturing mortgage had a balance at maturity of $47.5 million (US$33.4 million) at an interest rate of 3.53%, resulting in net proceeds of $17.4 million (US$12.2 million), before financing costs.
• As at September 30, 2026, the REIT has liquidity of $272 million, comprised of approximately $172 million in cash and $100 million in available credit under its revolving credit facility with Morguard Corporation.
• The REIT has also announced it will increase its annual cash distribution by $0.02 per Unit (2.53%). The increase is expected to be effective for the November 2026 distribution, payable in December 2026. This will bring the distributions to $0.81 per Unit on an annualized basis from the current level of $0.79 per Unit.
• As at September 30, 2026, average monthly rent ("AMR") in Canada increased by 2.2% compared to September 30, 2025, while occupancy was 93.8% at September 30, 2026, compared to 94.3% at September 30, 2025.
• As at September 30, 2026, AMR in the U.S. increased by 0.7% compared to September 30, 2025, while occupancy decreased to 91.4% at September 30, 2026, compared to 92.5% at September 30, 2025.
• As at September 30, 2026, indebtedness to gross book value ratio was 40.1%, compared to 39.5% as at December 31, 2025.

The REIT is reporting third quarter performance of:

• Net operating income ("NOI") of $53.7 million for the three months ended September 30, 2026, a decrease of $0.4 million, or 0.7% compared to 2025.
• Proportionate NOI for the three months ended September 30, 2026 decreased by 1.7% compared to 2025, comprised of a decrease in Canada of $0.4 million (or 2.5%), a decrease in the U.S. of US$0.6 million (or 2.8%), and the change in foreign exchange rate increased Proportionate NOI by $0.2 million.
• Net income of $31.1 million for the three months ended September 30, 2026, an increase of $18.6 million compared to 2025, predominantly due to a higher net non-cash fair value gain, partly offset by an increase in deferred income tax expense.
• Basic funds from operations ("FFO") of $0.38 per Unit for the three months ended September 30, 2026,  an 11.6% decrease as compared to $0.43 per Unit in 2025.
• Basic FFO of $19.7 million for the three months ended September 30, 2026, a decrease of $2.6 million, or 11.8% over the same period in 2025.

TRANSACTION UPDATE
On February 25, 2026, Morguard Corporation and the REIT announced its joint investment in a Canadian multi-suite residential real estate portfolio currently owned by TD Asset Management Inc. ("TDAM"). Management completed its due diligence review and the related purchaser conditions have been waived, including the determination of the allocation of individual property ownership interests to the REIT. The REIT's allocation of the transaction represents an approximate 22 percent undivided interest in a portfolio of 60 properties at a gross purchase price of approximately $478.1 million, before closing costs, and is expected to close in one 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 Properties	Ownership Interest	Total Suites	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
Mississauga	1	20 %	108	21
Toronto	7	20 %	929	186
Ottawa	2	20 %	229	46
Ontario	42	20 %	4,770	954
Montréal	6	20 %	996	199
Québec	6	20 %	996	199
Halifax	5	50 %	402	201
Nova Scotia	5	50 %	402	201
Total	60	22 %	7,574	1,635

The transaction will be financed through a combination of cash on hand, assumed mortgages, approximately $111 million in vendor financing, and the remainder through short-term borrowings. The assumed mortgages are CMHC-insured and have an approximate loan-to-value of 40%. As at September 30, 2026, the REIT paid a $10 million non-refundable deposit in connection with the transaction and is included in prepaid expenses.

FINANCIAL AND OPERATIONAL HIGHLIGHTS

As at	September 30,	December 31,	September 30,
(In thousands of dollars, except as otherwise noted)	2026	2025	2025
Operational Information
Number of properties	43	43	43
Total suites	13,089	13,089	13,089
Occupancy percentage – Canada	93.8 %	93.3 %	94.3 %
Occupancy percentage – U.S.	91.4 %	91.3 %	92.5 %
Average monthly rent – Canada (in actual dollars)	$1,878	$1,851	$1,837
Average monthly rent – U.S. (in actual U.S. dollars)	US$1,953	US$1,930	US$1,939
Summary of Financial Information
Gross book value^(1)	$4,756,095	$4,535,903	$4,595,681
Indebtedness^(1)	$1,908,392	$1,793,894	$1,817,530
Indebtedness to gross book value ratio^(1)	40.1 %	39.5 %	39.5 %
Weighted average mortgage interest rate	4.28 %	4.07 %	4.08 %
Weighted average term to maturity on mortgages payable (years)	5.3	4.8	5.1

(1)

Represents a non-GAAP financial measure/ratio that does not have any standardized meaning prescribed by IFRS and is not necessarily comparable to similar measures presented by other reporting issuers in similar or different industries. This measure should be considered as supplemental in nature and not as a substitute for related financial information prepared in accordance with IFRS.

	Three months ended		Nine months ended
	September 30		September 30
(In thousands of dollars, except per Unit amounts)	2026	2025	2026	2025
Summary of Financial Information
Revenue from real estate properties	$88,887	$87,664	$262,567	$266,475
NOI	$53,731	$54,132	$128,794	$131,852
Proportionate NOI^(1)	$44,775	$45,548	$135,836	$140,958
NOI margin – IFRS	60.4 %	61.7 %	49.1 %	49.5 %
NOI margin – Proportionate^(1)	50.6 %	52.2 %	52.0 %	53.2 %
Net income	$31,084	$12,469	$95,407	$80,850
FFO – basic^(1)	$19,653	$22,281	$63,108	$70,247
FFO – diluted^(1)	$20,493	$23,121	$65,628	$72,767
FFO per Unit – basic^(1)	$0.38	$0.43	$1.21	$1.33
FFO per Unit – diluted^(1)	$0.38	$0.42	$1.20	$1.32
Distributions per Unit	$0.19749	$0.18999	$0.59247	$0.56997
FFO payout ratio^(1)	52.4 %	44.6 %	49.0 %	42.8 %
Weighted average number of Units outstanding (in thousands):
Basic	52,170	52,280	52,166	52,702
Diluted	54,489	54,599	54,485	55,021

(1)

Represents a non-GAAP financial measure/ratio that does not have any standardized meaning prescribed by IFRS and is not necessarily comparable to similar measures presented by other reporting issuers in similar or different industries. This measure should be considered as supplemental in nature and not as a substitute for related financial information prepared in accordance with IFRS.

SPECIFIED FINANCIAL MEASURES
The REIT 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. 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 REIT's Management's Discussion and Analysis for the three and nine months ended September 30, 2026 and available on the REIT'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 REIT's management uses these measures to aid in assessing the REIT's underlying core performance and provides these additional measures so that investors may do the same. Management believes that the non-GAAP financial measures, which supplement the IFRS measures, provide readers with a more comprehensive understanding of management's perspective on the REIT's operating results and performance.

A reconciliation of each non-GAAP financial measure referred to in this earnings release is provided below.

PROPORTIONATE SHARE NOI ("PROPORTIONATE NOI")
Proportionate NOI is an important measure in evaluating the operating performance of the REIT's real estate properties and are a key input in determining the fair value of the REIT's properties. Proportionate NOI represents NOI (an IFRS measure) adjusted for the following: i) to exclude the impact of realty taxes accounted for under International Financial Reporting Interpretations Committee ("IFRIC") Interpretation 21, Levies ("IFRIC 21"). Proportionate NOI records realty taxes for all properties on a pro rata basis over the entire fiscal year; ii) to exclude the non-controlling interest share of NOI for those properties that are consolidated under IFRS ("NCI Share"); and iii) to include equity-accounted investments NOI at the REIT's ownership interest ("Equity Interest").

The following table provides a reconciliation of Proportionate Share NOI to its closely related financial statement measurement for the following periods:

						2026						2025
		Non-GAAP Adjustments						Non-GAAP Adjustments
For the three months ended						Proportionate						Proportionate
September 30		NCI	Equity			Basis		NCI	Equity			Basis
(In thousands of dollars)	IFRS	Share	Interest	IFRIC 21		(Non-GAAP)	IFRS	Share	Interest		IFRIC 21	(Non-GAAP)
Revenue from properties	$88,887	($4,961)	$4,524	$--		$88,450	$87,664	($4,666)	$4,262		$--	$87,260
Property operating expenses	35,156	(1,561)	1,172	8,908		43,675	33,532	(1,398)	1,154		8,424	41,712
Total NOI	$53,731	($3,400)	$3,352	($8,908)		$44,775	$54,132	($3,268)	$3,108		($8,424)	$45,548
NOI Margin	60.4 %					50.6 %	61.7 %					52.2 %

						2026						2025
		Non-GAAP Adjustments						Non-GAAP Adjustments
For the nine months ended						Proportionate						Proportionate
September 30		NCI	Equity			Basis		NCI	Equity			Basis
(In thousands of dollars)	IFRS	Share	Interest	IFRIC 21		(Non-GAAP)	IFRS	Share	Interest		IFRIC 21	(Non-GAAP)
Revenue from properties	$262,567	($14,231)	$13,123	$--		$261,459	$266,475	($14,179)	$12,806		$--	$265,102
Property operating expenses	133,773	(7,394)	6,641	(7,397)		125,623	134,623	(7,728)	6,687		(9,438)	124,144
Total NOI	$128,794	($6,837)	$6,482	$7,397		$135,836	$131,852	($6,451)	$6,119		$9,438	$140,958
NOI Margin	49.1 %					52.0 %	49.5 %					53.2 %

FUNDS FROM OPERATIONS
FFO (and FFO per Unit) is a non-GAAP financial measure widely used as a real estate industry standard that supplements net income and evaluates operating performance but is not indicative of funds available to meet the REIT's cash requirements. FFO can assist with comparisons of the operating performance of the REIT's real estate between periods and relative to other real estate entities. FFO is computed by the REIT in accordance with the current definition of the Real Property Association of Canada ("REALPAC") and is defined as net income attributable to Unitholders adjusted for fair value adjustments, distributions on the Class B LP Units, realty taxes accounted for under IFRIC 21, deferred income taxes (on the REIT's U.S. properties), gains/losses on the sale of real estate properties (including income taxes on the sale of real estate properties) and other non-cash items. The REIT considers FFO to be a useful measure for reviewing its comparative operating and financial performance. FFO per Unit is calculated as FFO divided by the weighted average number of Units outstanding (including Class B LP Units) during the period.

The following table provides a reconciliation of FFO to its closely related financial statement measurement for the following periods:

	Three months ended September 30		Nine months ended September 30
(In thousands of dollars, except per Unit amounts)	2026	2025	2026	2025
Net income for the period attributable to Unitholders	$24,448	$7,849	$84,978	$75,089
Add/(deduct):
Realty taxes accounted for under IFRIC 21	(8,908)	(8,424)	7,397	9,438
Fair value gain on conversion option on the convertible debentures	(185)	(391)	(700)	(202)
Distributions on Class B LP Units recorded as interest expense	3,401	3,272	10,203	9,816
Foreign exchange loss	--	3	2	7
Fair value loss (gain) on real estate properties, net	30,814	19,282	(12,379)	(53,758)
Non-controlling interests' share of fair value gain on real estate properties	4,785	2,692	8,173	3,002
Fair value loss (gain) on Class B LP Units	(37,202)	(1,895)	(46,158)	17,223
Deferred income tax expense (recovery)	2,500	(107)	11,592	9,632
FFO - basic	$19,653	$22,281	$63,108	$70,247
Interest expense on the convertible debentures	840	840	2,520	2,520
FFO - diluted	$20,493	$23,121	$65,628	$72,767
FFO per Unit - basic	$0.38	$0.43	$1.21	$1.33
FFO per Unit - diluted	$0.38	$0.42	$1.20	$1.32
Weighted average number of Units outstanding (in thousands):
Basic	52,170	52,280	52,166	52,702
Diluted	54,489	54,599	54,485	55,021

INDEBTEDNESS AND GROSS BOOK VALUE
Indebtedness (as defined in the REIT's Declaration of Trust) is a measure of the amount of debt financing utilized by the REIT. Indebtedness is presented in this earnings release because management considers this non-GAAP financial measure to be an important measure of the REIT's financial position.

Gross book value (as defined in the REIT's Declaration of Trust) is a measure of the value of the REIT's assets. Gross book value is presented in this earnings release because management considers this non-GAAP financial measure to be an important measure of the REIT's asset base and financial position.

The following table provides a reconciliation of gross book value and indebtedness as defined in the REIT's Declaration of Trust from their IFRS financial statement presentation:

As at	September 30,	December 31,
(In thousands of dollars)	2026	2025
Total Assets / Gross book value	$4,756,095	$4,535,903
Mortgage payable	$1,810,237	$1,700,117
Add: Deferred financing costs	23,794	19,831
Mark-to-market adjustment	554	1,007
	1,834,585	1,720,955
Convertible debentures, face value	56,000	56,000
Lease liabilities	17,807	16,939
Indebtedness	$1,908,392	$1,793,894
Indebtedness / Gross book value	40.1 %	39.5 %

NON-GAAP RATIOS
Non-GAAP ratios 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 REIT's management uses these measures to aid in assessing the REIT's underlying core performance and provides these additional measures so that investors may do the same. Management believes that the non-GAAP ratios described below, provide readers with a more comprehensive understanding of management's perspective on the REIT's operating results and performance.

The following discussion describes the non-GAAP ratios the REIT uses in evaluating its operating results:

Proportionate NOI Margin
Proportionate NOI margin is calculated as Proportionate NOI divided by revenue (on a Proportionate Basis) and is an important measure in evaluating the operating performance (including the level of operating expenses) of the REIT's real estate properties. Proportionate NOI margin is presented in this earnings release because management considers this non-GAAP ratio to be an important measure of the REIT's operating performance and financial position.

FFO Payout Ratio
FFO payout ratio compares distributions declared (including Class B LP Units) to FFO. Distributions declared (including Class B LP Units) is calculated based on the monthly distribution per Unit multiplied by the weighted average number of Units outstanding (including Class B LP Units) during the period and is an important metric in assessing the sustainability of retained cash flow to fund capital expenditures and distributions. FFO payout ratio is presented in this earnings release because management considers this non-GAAP ratio to be an important measure of the REIT's operating performance and financial position.

Indebtedness to Gross Book Value Ratio
Indebtedness to gross book value ratio is a compliance measure in the REIT's Declaration of Trust and establishes the limit for financial leverage of the REIT. Indebtedness to gross book value ratio is presented in this earnings release because management considers this non-GAAP ratio to be an important measure of the REIT's financial position.

The REIT's unaudited condensed consolidated financial statements for the three and nine months ended September 30, 2026, along with the Management's Discussion and Analysis will be available on the REIT's website at www.morguard.com and will be filed with SEDAR+ at www.sedarplus.ca.

CONFERENCE CALL DETAILS
Morguard North American Residential Real Estate Investment Trust will hold a conference call on Thursday, October 29, 2026 at 3:00 p.m. (ET) to discuss the financial results for the three and nine months ended September 30, 2026 and 2025. To participate in the conference call, please dial 1-416-945-7677 or 1-888-699-1199.  Please quote conference ID 75868.

ABOUT MORGUARD NORTH AMERICAN RESIDENTIAL REIT
The REIT is an unincorporated, open-ended real estate investment trust established under and governed by the laws of the Province of Ontario. The Units of the REIT trade on the Toronto Stock Exchange under the ticker symbol MRG.UN. With a strategic focus on the acquisition of high-quality multi-suite residential properties in Canada and the United States, the REIT maximizes long-term Unit value through active asset and property management. The REIT's portfolio is comprised of 13,089 residential suites and 230,000 square feet of commercial area (as of October 27, 2026) located in Alberta, Ontario, Colorado, Texas, Louisiana, Illinois, Georgia, Florida, North Carolina, Virginia and Maryland with an appraised value of approximately $4.4 billion at September 30, 2026. For more information, visit the REIT's website at www.morguard.com.

SOURCE Morguard North American Residential Real Estate Investment Trust

For further information, please contact: Morguard North American Residential REIT, Angela Sahi, Chief Executive Officer, [phone]; Christopher A. Newman, Chief Financial Officer, [phone]