MISSISSAUGA, ON, Nov. 4, 2026 /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, 2026.

• The Company has advanced its previously announced joint acquisition with Morguard North American Residential REIT of a Canadian multi-suite residential portfolio, representing a combined gross purchase price of approximately $1.1 billion across 91 properties.
• During the three months ended September 30, 2026, the Company sold its leasehold interest in 131 Queen Street, Ottawa, Ontario, consisting of 328,500 square feet, for net proceeds of $147.8 million including closing costs, and repaid the mortgage payable secured by the property in the amount of $29.6 million.
• The Company ended the third quarter in a strong liquidity position with $723.5 million of cash and available credit facilities, and has a $1.2 billion pool of unencumbered properties and other investments.
• During the third quarter, the Company refinanced maturing mortgages for gross proceeds of $169.7 million at an average interest rate of 5.20% and an average term of 9.5 years.
• As at September 30, 2026, shareholders' equity per common share was $439.81, compared to $410.70 at December 31, 2025.

• Net income increased by $52.5 million to $96.4 million, for the three months ended September 30, 2026, compared to $43.9 million for the same period in 2025, primarily due to an increase in non-cash net fair value gain and an increase in management and advisory fees, partially offset by lower NOI and an increase in income tax expense (current and deferred).
• Total revenue from real estate properties increased by $4.0 million, or 1.6%, to $258.7 million for the three months ended September 30, 2026, compared to $254.7 million for the same period in 2025.
• Normalized funds from operations(1) ("Normalized FFO") was $55.5 million, or $5.20 per common share, for the three months ended September 30, 2026, compared to $55.5 million, or $5.18 per common share for the same period in 2025.
• Adjusted NOI(1) decreased by $3.7 million, or 2.6%, to $137.2 million for the three months ended September 30, 2026, compared to $140.9 million for the same period in 2025.
• Comparative NOI(1) increased by $0.5 million, or 0.3%, to $136.8 million for the three months ended September 30, 2026, compared to $136.3 million for the same period in 2025.

On February 25, 2026, Morguard Corporation and Morguard Residential REIT announced their joint investment in a Canadian multi-suite residential real estate portfolio currently owned by TD Asset Management Inc. ("TDAM"). Management has completed its due diligence review and the related purchaser conditions have been waived, and the allocation of individual property ownership interests between the Company and Morguard Residential REIT has been finalized. The transaction represents an approximate 26 percent undivided interest in a portfolio of 91 properties comprising 12,302 suites at a gross purchase price of approximately $1.1 billion, before closing costs, and is expected to close in a single tranche, subject to receiving CMHC and lender approval.

The following table details the regional distribution and ownership interest of the properties:

The transaction will be financed through a combination of cash on hand, assumed mortgages, approximately $225 million in vendor financing, and the remainder through short-term borrowings. The assumed mortgages are CMHC-insured and have an approximate loan-to-value ratio of 46%. As at September 30, 2026, the Company paid a $20 million non-refundable deposit in connection with the transaction and is included in prepaid expenses.

Total revenue during the three months ended September 30, 2026, increased by $8.9 million, or 3.2%, to $287.1 million compared to $278.2 million in 2025, mainly due to an increase in revenue from real estate properties in the amount of $4.0 million, primarily due to higher average monthly rent ("AMR") and higher ancillary income within the multi-suite residential segment, partially offset by an increase in vacancy in the multi-residential and office segments, and an increase in revenue from hotel properties in the amount of $0.4 million from an increase in average daily rate ("ADR"), partially offset by a decrease in occupancy, resulting in an overall increase in revenue per available room ("RevPar"). In addition, revenue from management and advisory fees in the amount of $4.1 million, primarily due to higher asset and property management fees earned from an expanded portfolio of Canadian residential properties under management valued at $5.4 billion.

Net income for the three months ended September 30, 2026 was $96.4 million, compared to $43.9 million in 2025. The increase in net income of $52.5 million for three months ended September 30, 2025 was primarily due to the following:

• A decrease in net operating income of $2.9 million, mainly due to higher vacancy within the office and multi-suite residential segments, partly offset by an increase in AMR and the change in foreign exchange rate;
• An increase in management and advisory fees of $4.1 million, mainly due to higher asset and property management fees earned from an expanded portfolio of Canadian residential properties under management;
• An increase in non-cash net fair value gain of $61.9 million, mainly due to and increase in fair value gain on Morguard Residential REIT units, a decrease in fair value loss on real estate properties and an increase in fair value gain on marketable securities; and
• An increase in income tax expense (current and deferred) of $9.9 million, mainly due to an increase in current tax relating to the disposal of properties, partially offset by a decrease in deferred tax due to the reversal of temporary differences relating to the disposed properties and a lower fair value loss recorded on the Company's Canadian and U.S. properties.

Total revenue during the nine months ended September 30, 2026, decreased by $1.0 million, or 0.1%, to $839.8 million compared to $840.8 million in 2025, mainly due to a decrease in revenue from real estate properties in the amount of $8.0 million, primarily due to an increase in vacancy within the multi-suite residential and office segments, partially offset by an increase in management and advisory fees in the amount of $3.4 million, primarily due to higher asset and property management fees earned from an expanded portfolio of Canadian residential properties under management, an increase in revenue from hotel properties in the amount of $2.7 million from an increase in occupancy and ADR, and an increase in interest and other income in the amount of $0.8 million.

Net income for the nine months ended September 30, 2026 was $246.3 million, compared to $153.6 million in 2025. The increase in net income of $92.7 million for nine months ended September 30, 2026 was primarily due to the following:

• A decrease in net operating income of $10.4 million, mainly due to higher vacancy within the office and multi-suite residential segments, lower non-recurring property tax refunds received and the change in foreign exchange rate, partly offset by an increase in AMR, an increase in RevPar, and a lower IFRIC 21 adjustment;
• An increase in management and advisory fees of $3.4 million, primarily due to higher asset and property management fees earned from an expanded portfolio of Canadian residential properties under management;
• An increase in interest expense of $4.3 million, mainly due to an increase in interest on debentures primarily due to the issuance of Series I and J senior unsecured debentures in October 2025 and in June 2026, respectively, and a loss on extinguishment of $2.6 million on the early redemption of the Series H senior unsecured debentures, partially offset by lower interest on bank indebtedness;
• An increase in non-cash net fair value gain of $115.9 million, mainly due to a increase in fair value gain on Morguard Residential REIT units, an increase in fair value gain on marketable securities, and an increase in fair value gain on real estate properties; and
• An increase in income tax expense (current and deferred) of $11.6 million, mainly due to an increase in current tax relating to the disposal of properties, partially offset by a decrease in deferred tax due to the reversal of temporary differences relating to the disposed properties and a higher fair value gain recorded on the Company's Canadian and U.S. properties.

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

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

For the three months ended September 30, 2026, Adjusted NOI decreased by $3.7 million, primarily due to a lower non-recurring lease cancellation fees received compared to 2025, a lower recovery of operating expenses and higher vacancy within the retail portfolio, and a decrease due to the sale of 131 Queen Street, Ottawa, partially offset by an increase due to the change in foreign exchange rate.

For the nine months ended September 30, 2026, Adjusted NOI decreased by $13.6 million, primarily due to an increase in vacancy and higher amortized concessions, net of an increase in AMR within the multi-suite residential portfolio, a decrease within the retail portfolio due to a lower non-recurring lease cancellation fees received compared

to 2025, a lower recovery of operating expenses and higher vacancy within the retail portfolio, and a decrease in the office portfolio mainly due to higher vacancy, lower non-recurring lease cancellation fees received compared to 2025, and the sale of 131 Queen Street, Ottawa, partially offset by an increase in revenue in the hotel portfolio due to an increase in occupancy and ADR mainly due to higher e-commerce and corporate demand resulting in an overall increase in RevPar.

The following tables provide a reconciliation of FFO and Normalized FFO to its closely related financial statement measurement for the following periods:

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