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 2026 2025 2025
as otherwise noted)
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 US$1,924 US$1,930 US$1,887
actual U.S. dollars)
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 necessarilycomparable to similar measures presented by
other
reporting issuers in similar or different industries.
This measure should be consideredas 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 necessarilycomparable to similar measures presented by
other
reporting issuers in similar or different industries.
This measure should be consideredas 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").
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