Morguard Corporation Announces 2025 Results and Regular Eligible Dividend

MISSISSAUGA, ON, Feb. 19, 2026 /CNW/ - Morguard Corporation ("Morguard" or the "Company") (TSX: MRC) is pleased to announce its financial results for the year ended December 31, 2025.

Operational and Balance Sheet Highlights

• The Company ended the year in a strong liquidity position with $483.0 million of cash and available credit facilities, and has a $1.1 billion pool of unencumbered properties and other investments.
• The Company has a commitment to sell its leasehold interest in an office property consisting of 328,500 square feet located in Ottawa, Ontario, for gross proceeds of $148.2 million (or $451 per square foot), excluding closing costs. The transaction is scheduled to close on August 31, 2026.
• The Company issued $250.0 million principal amount of 5.00% Series I senior unsecured debentures due on October 14, 2028.
• The Company incurred $97.2 million of development expenditures, predominantly at the Company's residential project comprising 431 suites located in Mississauga, Ontario.
• The Company refinanced maturing mortgages for additional net proceeds of $50.8 million at an average interest rate of 4.77% and an average term of 5.7 years.
• The Company acquired the remaining 40% ownership interest in Lincluden Investment Management Limited, for a purchase price of $4.0 million, including closing costs and recently rebranded to Morguard Lincluden Global Investments, bringing together Morguard's scale, financial strength, and institutional platform with Lincluden's established value investing expertise.
• As at December 31, 2025, the Company's total assets were $11.8 billion, consistent compared to December 31, 2024.

Reporting Highlights

• Total revenue from real estate properties was consistent at $1.0 billion for the year ended December 31, 2025, compared to the same period in 2024.
• Normalized funds from operations⁽¹⁾ ("Normalized FFO") was $220.5 million, or $20.61 per common share, for the year ended December 31, 2025. This represents an increase of $0.1 million, or 0.1%, compared to
• $220.4 million, or $20.39 per common share for the same period in 2024.
• NOI decreased by $5.3 million, or 0.9%, to $561.6 million for the year ended December 31, 2025, compared to $566.9 million for the same period in 2024, predominantly due to lower NOI in the office segment from Obsidian Energy's lease expiry at Penn West Plaza, partially offset by higher NOI in multi-suite residential segment, a favourable impact from a change in foreign exchange rate and the net impact of acquisitions and dispositions.
• Comparative NOI⁽¹⁾ decreased by $10.8 million or 1.9% to $551.2 million for the year ended December 31, 2025, compared to $562.0 million for the same period in 2024.
• Net income decreased by $60.7 million to $178.9 million for the year ended December 31, 2025, compared to $239.6 million for the same period in 2024, primarily due to a gain on sale of hotel properties in 2024 and decrease in net operating income, partially offset by a decrease in non-cash net fair value loss.

_{1) Refer to Specified Financial Measures}

Financial Highlights 

For the years ended December 31
(in thousands of dollars)	2025	2024
Revenue from real estate properties	$1,033,007	$1,032,802
Revenue from hotel properties	31,430	35,242
Management and advisory fees	41,243	39,679
Interest and other income	17,902	19,360
Total revenue	$1,123,582	$1,127,083
Revenue from real estate properties	$1,033,007	$1,032,802
Revenue from hotel properties	31,430	35,242
Property operating expenses	(480,948)	(475,143)
Hotel operating expenses	(21,878)	(25,998)
Net operating income ("NOI")	$561,611	$566,903
Net income attributable to common shareholders	$174,870	$261,799
Net income per common share – basic and diluted	$16.34	$24.23
Funds from operations^(1)	$221,599	$206,651
FFO per common share – basic and diluted^(1)	$20.71	$19.12
Normalized funds from operations^(1)	$220,491	$220,361
Normalized FFO per common share – basic and diluted^(1)	$20.61	$20.39
(1) Refer to Specified Financial Measures.

Total revenue during the year ended December 31, 2025, was $1.1 billion, a decrease of $3.5 million compared to 2024, mainly due to a decrease in hotel revenue from the sale of 14 hotels on January 18, 2024 (the "Hotel Portfolio Disposition") in the amount of $3.8 million, partially offset by a $1.6 million increase in management and advisory fees due to higher leasing, property and asset management fees earned, net of a decrease in disposition and project management fees earned. In addition, the increase in revenue was also due to an increase in revenue from real estate properties in the amount of $0.2 million, primarily due to higher average monthly rent ("AMR"), net of an increase in vacancy within the multi-suite residential segment and an increase in vacancy from the Obsidian Lease Expiry (defined below) at Penn West Plaza. In addition, revenue increased from the change in foreign exchange rate and from the net impact of acquisition and disposition of properties.

Net income for the year ended December 31, 2025 was $178.9 million, compared to $239.6 million in 2024. The decreased in net income of $60.7 million for year ended December 31, 2025 was primarily due to the following:

• A decrease in NOI of $5.3 million, mainly due to a decrease in gross rent and an increase in vacancy costs at Penn West Plaza, resulting from the Obsidian Lease Expiry, partially offset by an increase in AMR, higher non-recurring property tax refunds received, net of higher vacancy at multi-suite residential properties, the change in foreign exchange rate and from the net impact of acquisition and disposition of properties;
• A decrease in non-cash net fair value loss of $94.8 million, mainly due to a decrease in fair value loss on Morguard Residential REIT units, an increase in fair value gain on real estate properties and an increase in fair value gain on marketable securities;
• A decrease in gain on sale of hotel properties of $150.6 million due to the Hotel Portfolio Disposition; and
• An increase in income tax expense (current and deferred) of $2.7 million, mainly due to a deferred tax increase from a higher fair value gain recorded on the Company's Canadian and U.S. properties, partly offset by a decrease in current taxes resulting from the sale of properties in 2024.

Average Occupancy Levels

The following table provides occupancy by asset class for the following periods:

	Suites/GLA Square Feet	Dec. 2025	Sep. 2025	Jun. 2025	Mar. 2025	Dec. 2024
Multi-suite residential	17,798	92.4 %	93.5 %	94.9 %	96.0 %	95.5 %
Retail	7,758,000 ^(1)	89.7 %	90.6 %	90.0 %	92.2 %	93.1 %
Office^(2)	8,695,000	82.6 %	82.7 %	84.9 %	86.9 %	89.4 %

^{(1) Retail occupancy has been adjusted to exclude development space of 416,637 square feet of GLA.
(2) Office includes industrial properties with 1,014,500 square feet of GLA.}

Multi-suite residential occupancy averaged 94.2% during 2025, a strong metric given current leasing challenges.

Retail occupancy at December 31, 2025 was 89.7%, which includes vacancy from The Hudson's Bay Company leases disclaimed of 439,250 square feet.

Office occupancy at December 31, 2025 was 82.6%, and was impacted by Obsidian Energy's lease expiry at Penn West Plaza on February 1, 2025 ("Obsidian Lease Expiry"). As at December 31, 2025, the occupancy percentage for Penn West Plaza was 80.8% compared to 100% at December 31, 2024.

Adjusted Net Operating Income ("Adjusted NOI")

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

	Three months ended December 31		Years ended December 31
(in thousands of dollars)	2025	2024	2025	2024
Multi-suite residential	$77,339	$72,495	$301,504	$285,696
Retail	35,399	37,653	134,041	134,963
Office^(1)	27,459	34,652	116,514	137,000
Hotel	2,117	2,400	9,552	9,244
Adjusted NOI	142,314	147,200	561,611	566,903
IFRIC 21 adjustment - multi-suite residential	14,653	12,308	--	--
IFRIC 21 adjustment - retail	1,882	1,529	--	--
NOI	$158,849	$161,037	$561,611	$566,903

^{(1) Includes industrial properties with NOI for the three months and year ended December 31, 2025 of $2,162 (2024 - $2,722) and $9,886 (2024 - $10,631), respectively.}

For the year ended December 31, 2025, NOI decreased by $5.3 million, primarily due to a decrease in office portfolio mainly due to the impact of the Obsidian Lease Expiry and higher vacancy, as well as increased vacancy in the multi-suite residential segment, partially offset by an increase in AMR within the multi-suite residential segment and an increase from the acquisition of a 20% interest in Telus Garden in the office segment.

Funds From Operations and Normalized FFO

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 December 31		Years ended December 31
(in thousands of dollars)		2025	2024	2025	2024
Multi-suite residential		$77,339	$72,495	$301,504	$285,696
Retail		35,399	37,653	134,041	134,963
Office		27,459	34,652	116,514	137,000
Hotel		2,117	2,400	9,552	9,244
Adjusted NOI Other Revenue		142,314	147,200	561,611	566,903
Management and advisory fees		11,531	10,445	41,243	39,679
Interest and other income		4,728	4,585	17,902	19,360
Equity-accounted FFO		667	540	2,562	2,756
		16,926	15,570	61,707	61,795
Expenses and Other
Interest		(65,034)	(64,369)	(255,928)	(256,743)
Principal repayment of lease liabilities		(445)	(365)	(1,984)	(1,392)
Property management and corporate		(21,718)	(21,533)	(91,783)	(87,867)
Internal leasing costs		2,888	900	6,469	4,112
Amortization of capital assets		(342)	(301)	(1,441)	(1,168)
Current income taxes		(1,560)	599	(6,219)	(6,996)
Non-controlling interests' share of FFO		(14,652)	(14,505)	(51,352)	(55,739)
Unrealized changes in the fair value of financial instruments		(182)	755	466	(16,261)
Other income (expense)		44	336	53	7
FFO		$58,239	$64,287	$221,599	$206,651
FFO per common share amounts – basic and diluted		$5.45	$5.96	$20.71	$19.12
Weighted average number of common shares outstanding (in thousands):
Basic and diluted		10,678	10,784	10,700	10,806

	Three months ended December 31		Years ended December 31
(in thousands of dollars)	2025	2024	2025	2024
FFO (from above)	$58,239	$64,287	$221,599	$206,651
Add/(deduct): Unrealized changes in the fair value of financial instruments	182	(755)	(466)	16,261
SARs plan increase (decrease) in fair value	16	(532)	(100)	578
SOP increase in fair value	742	--	742	--
Lease cancellation fee and other	(198)	(264)	(1,682)	(3,954)
Tax effect of above adjustments	54	41	398	825
Normalized FFO	$59,035	$62,777	$220,491	$220,361
Per common share amounts – basic and diluted	$5.53	$5.82	$20.61	$20.39

First Quarter Dividend

The Board of Directors of Morguard Corporation announced that the first quarterly, eligible dividend of 2026 in the amount of $0.20 per common share will be paid on March 31, 2026, to shareholders of record at the close of business on March 16, 2026.

Subsequent Event

The Company entered into agreements for the Canada Mortgage and Housing Corporation ("CMHC") insured refinancing of four Canadian multi-suite residential properties, providing gross proceeds of up to $252.4 million for a weighted average term of 10.8 years. The maturing mortgages amount to $118.7 million and have a weighted average interest rate of 2.92%. The Company expects to close the refinancings during the first and second quarters of 2026.

Specified Financial Measures

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 years ended December 31, 2025 and are 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

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

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.

Funds From Operations and Normalized FFO

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

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 audited consolidated financial statements for the years ended December 31, 2025, 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.

About Morguard Corporation

Morguard Corporation is a real estate company, with total assets owned and under management valued at $18.9 billion. As at February 19, 2026, Morguard owns a diversified portfolio of 156 multi-suite residential, retail, office, industrial and hotel properties comprised of 17,798 residential suites, approximately 16.7 million square feet of commercial leasable space and 472 hotel rooms. Morguard also currently owns a 68.6% 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