Morguard Corporation Announces 2025 Third Quarter Results and Regular Eligible Dividend

MISSISSAUGA, ON, Nov. 5, 2025 /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, 2025.

Reporting Highlights

• Total revenue from real estate properties increased by $1.3 million, or 0.5%, to $254.7 million for the three months ended September 30, 2025, compared to $253.4 million for the same period in 2024.
• Normalized funds from operations⁽¹⁾ ("Normalized FFO") was $55.4 million, or $5.18 per common share, for the three months ended September 30, 2025. This represents an increase of $1.7 million, or 3.2%, compared to $53.7 million, or $4.97 per common share for the same period in 2024.
• Adjusted NOI⁽¹⁾ increased by $1.5 million, or 1.1%, to $140.9 million for the three months ended September 30, 2025, compared to $139.4 million for the same period in 2024.
• Comparative NOI⁽¹⁾ decreased by $2.3 million or 1.6% to $137.1 million for the three months ended September 30, 2025, compared to $139.4 million for the same period in 2024.
• Net income increased by $36.1 million to $44.0 million for the three months ended September 30, 2025, compared to $7.9 million for the same period in 2024, primarily due to a lower income tax provision and net fair value loss.

Operational and Balance Sheet Highlights

• The Company ended the third quarter in a strong liquidity position with $273.0 million, comprised of cash and available credit facilities, and has a $1.1 billion pool of unencumbered properties and other investments.
• Subsequent to quarter end, the Company issued $250.0 million principal amount of 5.00% Series I senior unsecured debentures due on October 14, 2028 and repaid $195.0 million under its operating lines of credit.
• As at September 30, 2025, the Company's total assets were $11.9 billion, compared to $11.8 billion at December 31, 2024.
• During the third quarter, the Company incurred $23.6 million of development expenditures, predominantly at the Company's residential project comprising 431 suites located in Mississauga, Ontario.
• During the third quarter, the Company refinanced maturing mortgages for gross proceeds of $415.3 million at an average interest rate of 4.83% and an average term of 5.9 years. The maturing mortgages had a balance of $359.2 million at an interest rate of 3.88%, resulting in net proceeds of $56.1 million, before financing costs.
• As at September 30, 2025, shareholders' equity per common share was $411.07, compared to $400.36 at December 31, 2024.
• The Company's remaining three Hudson's Bay Company ("HBC" or "The Bay") leases at Centerpoint Mall, Toronto, Bramalea City Centre (20.7%), Brampton, and St Laurent Centre, Ottawa, comprising 307,800 square feet of leasable space (at the Company's ownership share) have been disclaimed with an effective date of November 27, 2025.

^{1) Refer to Specified Financial Measures}

Financial Highlights

	Three months ended September 30		Nine months ended September 30
(in thousands of dollars)	2025	2024	2025	2024
Revenue from real estate properties	$254,665	$253,389	$774,303	$765,336
Revenue from hotel properties	9,133	8,462	23,649	27,725
Management and advisory fees	9,804	9,055	29,712	29,234
Interest and other income	4,618	5,967	13,174	14,775
Total revenue	$278,220	$276,873	$840,838	$837,070
Revenue from real estate properties	$254,665	$253,389	$774,303	$765,336
Revenue from hotel properties	9,133	8,462	23,649	27,725
Property operating expenses	(102,374)	(103,329)	(378,976)	(366,314)
Hotel operating expenses	(5,716)	(5,283)	(16,214)	(20,881)
Net operating income ("NOI")	$155,708	$153,239	$402,762	$405,866
Net income attributable to common shareholders	$37,844	$498	$149,980	$184,802
Net income per common share – basic and diluted	$3.54	$0.05	$14.01	$17.09
Funds from operations(1)	$59,599	$63,040	$163,360	$142,364
FFO per common share – basic and diluted(1)	$5.57	$5.83	$15.26	$13.17
Normalized funds from operations(1)	$55,453	$53,738	$161,456	$157,584
Normalized FFO per common share – basic and diluted(1)	$5.18	$4.97	$15.08	$14.57
(1) Refer to Specified Financial Measures.

Total revenue during the three months ended September 30, 2025, increased by $1.3 million to $278.2 million compared to $276.9 million in 2024, mainly due to an increase in revenue from real estate properties in the amount of $1.3 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 at Penn West Plaza, resulting from the expiry of Obsidian Energy's lease ("Obsidian Lease Expiry"). 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 three months ended September 30, 2025 was $44.0 million, compared to $7.9 million in 2024. The increase in net income of $36.1 million for the three months ended September 30, 2025, was primarily due to the following:

• An increase in NOI of $2.5 million, mainly due to higher non-recurring property tax refunds received, an increase in AMR, 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, partially offset by a decrease in gross rent and an increase in vacancy costs at Penn West Plaza, resulting from the Obsidian Lease Expiry;
• A decrease in non-cash net fair value loss of $19.3 million, mainly due to a decrease in fair value loss on Morguard Residential REIT units, partially offset by an increase in fair value loss on real estate properties and a decrease in fair value gain on marketable securities; and
• A decrease in income tax expense (current and deferred) of $14.5 million, mainly due to a lower fair value gain recorded on the Company's Canadian and U.S. properties.

Total revenue during the nine months ended September 30, 2025, increased by $3.7 million to $840.8 million compared to $837.1 million in 2024, mainly due to an increase in revenue from real estate properties in the amount of $9.0 million, primarily due to higher AMR, net of an increase in vacancy within the multi-suite residential segment and an increase in vacancy at Penn West Plaza. In addition, revenue increased from the change in foreign exchange rate and decreased from the net impact of acquisition and disposition of properties, which includes a decrease in revenue from the sale of 14 hotels on January 18, 2024 (the "Hotel Portfolio Disposition") in the amount of $4.1 million.

Net income for the nine months ended September 30, 2025 was $153.6 million, compared to $180.1 million in 2024. The decrease in net income of $26.5 million for nine months ended September 30, 2025, was primarily due to the following:

• A decrease in NOI of $3.1 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 higher non-recurring property tax refunds received, an increase in AMR, 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;
• An increase in non-cash net fair value gain of $127.7 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, a decrease in fair value loss on other real estate funds investments, and an increase in fair value gain on marketable securities; and
• A decrease in gain on sale of hotel properties of $150.6 million due to the Hotel Portfolio Disposition.

Average Occupancy Levels

During the third quarter, occupancy was strong and consistent across the multi-suite residential and retail asset classes, supporting the Company's business objective of generating stable and increasing cash flow through its diversified portfolio of real estate assets.

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

	Suites/GLA Square Feet	Sep. 2025	Jun. 2025	Mar. 2025	Dec. 2024	Sep. 2024
Multi-suite residential	17,798	93.5 %	94.9 %	96.0 %	95.5 %	94.6 %
Retail	7,758,000 (1)	90.6 %	90.0 %	92.2 %	93.1 %	93.2 %
Office(2)	8,687,000	82.7 %	84.9 %	86.9 %	89.4 %	88.9 %

(1)	Retail occupancy has been adjusted to exclude development space of 379,572 square feet of GLA.
(2)	Office includes industrial properties with 1,011,500 square feet of GLA.

On February 1, 2025, Obsidian Energy's lease expired at Penn West Plaza, an office building located in Calgary, Alberta. As at September 30, 2025, the occupancy percentage for Penn West Plaza was 80.8% compared to 100.0% at September 30, 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 September 30		Nine months ended September 30
(in thousands of dollars)	2025	2024	2025	2024
Multi-suite residential	$72,925	$69,699	$224,165	$213,201
Retail	36,603	32,958	98,642	97,310
Office(1)	27,929	33,511	89,055	102,348
Hotel	3,417	3,179	7,435	6,844
Adjusted NOI	140,874	139,347	419,297	419,703
IFRIC 21 adjustment - multi-suite residential	13,288	12,268	(14,653)	(12,308)
IFRIC 21 adjustment - retail	1,546	1,624	(1,882)	(1,529)
NOI	$155,708	$153,239	$402,762	$405,866

(1)	Includes industrial properties with NOI for the three and nine months ended September 30, 2025 of $2,200 (2024 - $2,793) and $7,724 (2024 - $7,909), respectively.

For three months ended September 30, 2025, Adjusted NOI increased by $1.5 million, primarily due to an increase in AMR, net of higher vacancy within the multi-suite residential segment, an increase in the retail portfolio due to higher non-recurring property tax refunds, partially offset by decrease in office portfolio primarily due to the impact of the Obsidian Lease Expiry and higher vacancy, net of an increase from the acquisition of Telus Garden.

For nine months ended September 30, 2025, Adjusted NOI decreased by $0.4 million, primarily due to a decrease in office portfolio mainly due to the impact of the Obsidian Lease Expiry, higher vacancy and lower non-recurring lease cancellation fees, partially offset by an increase in AMR, net of higher vacancy within the multi-suite residential segment, an increase in retail portfolio due to higher non-recurring property tax refunds, and from the net impact of acquisition and disposition of properties.

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 September 30		Nine months ended September 30
(in thousands of dollars)	2025	2024	2025	2024
Multi-suite residential	$72,925	$69,699	$224,165	$213,201
Retail	36,603	32,958	98,642	97,310
Office	27,929	33,511	89,055	102,348
Hotel	3,417	3,179	7,435	6,844
Adjusted NOI Other Revenue	140,874	139,347	419,297	419,703
Management and advisory fees	9,804	9,055	29,712	29,234
Interest and other income	4,618	5,967	13,174	14,775
Equity-accounted FFO	683	568	1,895	2,216
	15,105	15,590	44,781	46,225
Expenses and Other
Interest	(64,299)	(64,258)	(190,894)	(192,374)
Principal repayment of lease liabilities	(396)	(244)	(1,539)	(1,027)
Property management and corporate	(23,351)	(21,394)	(70,065)	(66,334)
Internal leasing costs	850	1,075	3,581	3,212
Amortization of capital assets	(533)	(277)	(1,099)	(867)
Current income taxes	(405)	(2,775)	(4,659)	(7,595)
Non-controlling interests' share of FFO	(12,388)	(13,665)	(36,700)	(41,234)
Unrealized changes in the fair value of financial instruments	4,151	9,890	648	(17,016)
Other income (expense)	(9)	(249)	9	(329)
FFO	$59,599	$63,040	$163,360	$142,364
FFO per common share amounts – basic and diluted	$5.57	$5.83	$15.26	$13.17
Weighted average number of common shares outstanding (in thousands):
Basic and diluted	10,701	10,813	10,707	10,813

 

	Three months ended September 30		Nine months ended September 30
(in thousands of dollars)	2025	2024	2025	2024
FFO (from above)	$59,599	$63,040	$163,360	$142,364
Add/(deduct): Unrealized changes in the fair value of financial instruments	(4,151)	(9,890)	(648)	17,016
SARs plan increase (decrease) in compensation expense	102	800	(116)	1,110
Lease cancellation fee and other	(121)	(254)	(1,484)	(3,690)
Tax effect of above adjustments	24	42	344	784
Normalized FFO	$55,453	$53,738	$161,456	$157,584
Per common share amounts – basic and diluted	$5.18	$4.97	$15.08	$14.57
Fourth Quarter Dividend

The Board of Directors of Morguard Corporation announced that the fourth quarterly, eligible dividend of 2025 in the amount of $0.20 per common share will be paid on December 31, 2025, to shareholders of record at the close of business on December 15, 2025.

Specified Financial Measures

The Company reports its financial results in accordance with International Financial Reporting 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, 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), * 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) bank indebtedness, and (v) loans payable.

The Company's unaudited condensed consolidated financial statements for the three and nine months ended September 30, 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 $19.0 billion. As at September 5, 2025, Morguard owns a diversified portfolio of 156 multi-suite residential, retail, office, industrial and hotel properties comprised of 17,798 residential suites, approximately 16.9 million square feet of commercial leasable space and 472 hotel rooms. Morguard also currently owns a 68.4% interest in Morguard Real Estate Investment Trust and a 48.5% 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