Morguard North American Residential REIT Announces 2026 First Quarter Results

Morguard North American Residential Real Estate Investment Trust, Morguard Corp

Morguard North American Residential REIT Announces 2026 First Quarter Results

Apr 28 2026 21:15 BST

MISSISSAUGA, ON , April 28, 2026 /CNW/ - Morguard North American Residential REIT (the "REIT") (TSX: MRG.UN) today announced its financial results for the three months ended March 31, 2026.

HIGHLIGHTS

The REIT is reporting first quarter performance of:

Net operating income ("NOI") of $20.8 million for the three months ended March 31, 2026, consistent compared to 2025.
Proportionate NOI for the three months ended March 31, 2026 decreased by 4.2% compared to 2025, comprised of a decrease in Canada of $0.3 million (or 1.7%), a decrease in the U.S. of US$0.3 million (or 1.2%), and the change in foreign exchange rate decreased Proportionate NOI by $1.4 million.
Net income of $38.2 million for the three months ended March 31, 2026, a decrease of $0.1 million, or 0.4% compared to 2025, predominantly due to offsetting net non-cash charges.
Basic funds from operations ("FFO") of $0.41 per Unit for the three months ended March 31, 2026, a 6.8% decrease as compared to $0.44 per Unit in 2025.
Basic FFO of $21.4 million for the three months ended March 31, 2026, a decrease of $1.8 million, or 7.6% over the same period in 2025.

The REIT is reporting the following corporate and portfolio highlights:

As at March 31, 2026, the REIT has liquidity of $218.5 million, comprised of approximately $81.5 million in cash and $137.0 million in available credit under its revolving credit facility with Morguard Corporation. In addition, the REIT has approximately $87.0 million of additional net mortgage financing proceeds expected to close in the second quarter of 2026.
As previously announced on February 25, 2026, the REIT and Morguard Corporation agreed to jointly invest $1.0 billion in a Canadian multi-suite residential real estate portfolio currently owned by TD Asset Management Inc. ("TDAM"). This represents an approximate 20 percent undivided interest in a portfolio of 106 properties valued at approximately $5.0 billion. Management is currently progressing through due diligence including determining the allocation of individual property ownership interests to the REIT. The transaction is expected to close in one tranche during the second half of 2026, subject to completion of due diligence and customary approvals and will be financed through a combination of vendor financing, assumed mortgages, cash on hand, and the remainder through short-term borrowings.
As at March 31, 2026, average monthly rent ("AMR") in Canada increased by 3.9% compared to March 31, 2025, while occupancy was 91.6% at March 31, 2026, compared to 96.4% at March 31, 2025.
As at March 31, 2026, AMR in the U.S. increased by 2.0% compared to March 31, 2025, while occupancy decreased to 91.7% at March 31, 2026, compared to 95.6% at March 31, 2025.
As at March 31, 2026, indebtedness to gross book value ratio was 39.0%, compared to 39.5% as at December 31, 2025.

FINANCIAL AND OPERATIONAL HIGHLIGHTS

As at	March 31,	December 31,	March 31,
(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	91.6 %	93.3 %	96.4 %
Occupancy percentage – U.S.	91.7 %	91.3 %	95.6 %
Average monthly rent – Canada (in actual dollars)	$1,872	$1,851	$1,801
Average monthly rent – U.S. (in actual U.S. dollars)	US$1,924	US$1,930	US$1,887

Summary of Financial Information
Gross book value⁽¹⁾	$4,619,115	$4,535,903	$4,652,330
Indebtedness⁽¹⁾	$1,803,658	$1,793,894	$1,856,137

Indebtedness to gross book value ratio⁽¹⁾	39.0 %	39.5 %	39.9 %
Weighted average mortgage interest rate	4.07 %	4.07 %	3.91 %
Weighted average term to maturity on mortgages payable (years)	4.6	4.8	5.3

(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.

For the three months ended March 31
(In thousands of dollars, except per Unit amounts)	2026	2025
Summary of Financial Information
Revenue from real estate properties	$86,466	$90,274
NOI	$20,849	$20,823
Proportionate NOI⁽¹⁾	$45,072	$47,056
NOI margin – IFRS	24.1 %	23.1 %
NOI margin – Proportionate⁽¹⁾	52.4 %	52.4 %
Net income	$38,182	$38,322

FFO – basic⁽¹⁾	$21,438	$23,201
FFO – diluted⁽¹⁾	$22,278	$24,041
FFO per Unit – basic⁽¹⁾	$0.41	$0.44
FFO per Unit – diluted⁽¹⁾	$0.41	$0.43
Distributions per Unit	$0.19749	$0.18999
FFO payout ratio⁽¹⁾	48.0 %	43.7 %
Weighted average number of Units outstanding (in thousands):
Basic	52,159	53,321
Diluted	54,478	55,640

(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 months ended March 31, 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

March 31

NCI

Equity

Basis

NCI

Equity

Basis

(In thousands of dollars)

IFRS

Share

Interest

IFRIC 21

(Non-GAAP)

IFRS

Interest

IFRIC 21

(Non-GAAP)

Revenue from properties

$86,466

($4,605)

$4,178

$--

$86,039

$90,274

($4,827)

$4,298

$--

$89,745

Property operating expenses

65,617

(4,351)

4,272

(24,571)

40,967

69,451

(4,899)

4,434

(26,297)

42,689

Total NOI

$20,849

($254)

($94)

$24,571

$45,072

$20,823

$72

($136)

$26,297

$47,056

NOI Margin

24.1 %

52.4 %

23.1 %

52.4 %

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:

For the three months ended March 31
(In thousands of dollars, except per Unit amounts)	2026	2025
Net income for the period attributable to Unitholders	$37,386	$38,068
Add/(deduct):
Realty taxes accounted for under IFRIC 21	24,571	26,297
Fair value gain on conversion option on the convertible debentures	(381)	(110)
Distributions on Class B LP Units recorded as interest expense	3,401	3,272
Foreign exchange loss	1	2
Fair value gain on real estate properties, net	(39,994)	(51,076)
Non-controlling interests' share of fair value gain on real estate properties	2,046	1,499
Fair value loss (gain) on Class B LP Units	(9,817)	3,617
Deferred income tax expense	4,225	1,632
FFO – basic	$21,438	$23,201
Interest expense on the convertible debentures	840	840
FFO – diluted	$22,278	$24,041
FFO per Unit – basic	$0.41	$0.44
FFO per Unit – diluted	$0.41	$0.43

Weighted average number of Units outstanding (in thousands):
Basic	52,159	53,321
Diluted	54,478	55,640

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	March 31,	December 31,
(In thousands of dollars)	2026	2025
Total Assets / Gross book value	$4,619,115	$4,535,903
Mortgage payable	$1,710,614	$1,700,117
Add: Deferred financing costs	18,981	19,831
Mark-to-market adjustment	847	1,007
	1,730,442	1,720,955
Convertible debentures, face value	56,000	56,000
Lease liabilities	17,216	16,939
Indebtedness	$1,803,658	$1,793,894
Indebtedness / Gross book value	39.0 %	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 months ended March 31, 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.

SUBSEQUENT EVENT

The REIT entered into agreements for the CMHC-insured refinancing of three Canadian multi-suite residential properties, providing gross proceeds of up to $163.9 million for a weighted average term of 11.2 years. The maturing mortgages amount to $76.8 million and have a weighted average interest rate of 2.88%. The REIT expects to close the refinancings during the second quarter of 2026.

CONFERENCE CALL DETAILS

Morguard North American Residential Real Estate Investment Trust will hold a conference call on Friday, May 1, 2026 at 3:00 p.m. (ET) to discuss the financial results for the three months ended March 31, 2026 and 2025. To participate in the conference call, please dial 1-416-945-7677 or 1-888-699-1199. Please quote conference ID 20459.

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 April 28, 2026) located in Alberta, Ontario, Colorado, Texas, Louisiana, Illinois, Georgia, Florida, North Carolina, Virginia and Maryland with an appraised value of approximately $4.3 billion at March 31, 2026. For more information, visit the REIT's website at www.morguard.com.

SOURCE Morguard North American Residential Real Estate Investment Trust