MISSISSAUGA, ON, Feb. 10, 2026 /CNW/ - Morguard North American Residential REIT (the "REIT") (TSX: MRG.UN) today announced its financial results for the year ended December 31, 2025.
Highlights
The REIT is reporting performance of:
- Net operating income ("NOI") of $189.7 million for the year ended December 31, 2025, an increase of $8.3 million, or 4.6% compared to 2024.
- Proportionate NOI for the year ended December 31, 2025 increased by 4.1% compared to 2024, comprised of an increase in Canada of $0.4 million (or 0.6%), an increase in the U.S. of US$3.3 million (or 3.9%), and the change in foreign exchange rate increased Proportionate NOI by $3.7 million.
- Net income of $111.5 million for the year ended December 31, 2025, an increase of $12.1 million, or 12.2% compared to 2024, predominantly due to a higher net fair value gain.
- Basic funds from operations ("FFO") of $1.79 per Unit for the year ended December 31, 2025, an 8.5% increase as compared to the $1.65 per Unit in 2024.
- Basic FFO of $94.1 million for the year ended December 31, 2025, an increase of $4.2 million, or 4.7% over the same period in 2024.
The REIT is reporting the following corporate and portfolio highlights:
- As at December 31, 2025, the REIT has liquidity of $226.5 million, comprised of approximately $114.5 million in cash and $112.0 million in available credit under its revolving credit facility with Morguard Corporation. In addition, the REIT has approximately $86.6 million of additional net mortgage financing proceeds expected to close in the first and second quarters of 2026.
- During the year, the REIT refinanced maturing mortgages for gross proceeds of $245.6 million at a weighted average interest rate of 4.92% for a weighted average term of 5.3 years. The maturing mortgages had a balance of $186.7 million at a weighted average interest rate of 3.29%, resulting in net proceeds of $58.9 million, before financing costs.
- During the year ended December 31, 2025, 1,398,709 Units were repurchased under the REIT's normal course issuer bid program for cash consideration of $24.3 million at a weighted average price of $17.40 per Unit.
- As at December 31, 2025, average monthly rent ("AMR") in Canada increased by 4.5% compared to December 31, 2024, while occupancy decreased sequentially to 93.3% at December 31, 2025, compared to 94.3% at September 30, 2025.
- As at December 31, 2025, AMR in the U.S. increased by 1.2% compared to December 31, 2024, while occupancy decreased sequentially to 91.3% at December 31, 2025, compared to 92.5% at September 30, 2025.
- As at December 31, 2025, indebtedness to gross book value ratio was 39.5%, compared to 39.7% as at December 31, 2024.
Financial and Operational Highlights
As at December 31 |
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(In thousands of dollars, except as otherwise noted) | 2025 | 2024 |
Operational Information |
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Number of properties | 43 | 43 |
Total suites | 13,089 | 13,089 |
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Occupancy percentage – Canada | 93.3 % | 97.2 % |
Occupancy percentage – U.S. | 91.3 % | 93.8 % |
Average monthly rent - Canada (in actual dollars) | $1,851 | $1,772 |
Average monthly rent - U.S. (in actual U.S. dollars) | US$1,930 | US$1,907 |
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Summary of Financial Information |
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Gross book value(1) | $4,535,903 | $4,571,631 |
Indebtedness(1) | $1,793,894 | $1,816,598 |
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Indebtedness to gross book value ratio(1) | 39.5 % | 39.7 % |
Weighted average mortgage interest rate | 4.07 % | 3.88 % |
Weighted average term to maturity on mortgages payable (years) | 4.8 | 5.2 |
(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. |
| Three months ended | Year ended |
| December 31 | December 31 |
(In thousands of dollars, except per Unit amounts) | 2025 | 2024 | 2025 | 2024 |
Summary of Financial Information |
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Revenue from real estate properties | $88,173 | $87,888 | $354,648 | $344,188 |
NOI | $57,882 | $54,153 | $189,734 | $181,420 |
Proportionate NOI(1) | $47,609 | $45,554 | $188,567 | $181,211 |
NOI margin – IFRS | 65.6 % | 61.6 % | 53.5 % | 52.7 % |
NOI margin – Proportionate(1) | 54.3 % | 52.2 % | 53.5 % | 53.0 % |
Net income | $30,685 | $42,878 | $111,535 | $99,396 |
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FFO – basic(1) | $23,838 | $22,788 | $94,085 | $89,859 |
FFO – diluted(1) | $24,678 | $23,628 | $97,445 | $93,219 |
FFO per Unit – basic(1) | $0.46 | $0.42 | $1.79 | $1.65 |
FFO per Unit – diluted(1) | $0.45 | $0.42 | $1.78 | $1.64 |
Distributions per Unit | $0.19499 | $0.18833 | $0.76496 | $0.74336 |
FFO payout ratio(1) | 42.7 % | 44.3 % | 42.7 % | 45.0 % |
Weighted average number of Units outstanding (in thousands): |
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Basic | 52,199 | 53,649 | 52,575 | 54,387 |
Diluted | 54,518 | 55,968 | 54,894 | 56,706 |
(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 December 31, 2025, NOI from the REIT's properties increased by $3.7 million (or 6.9%) to $57.9 million, compared to $54.2 million in 2024. The increase in NOI is due to a decrease in Canada of $0.2 million (or 1.0%), an increase in the U.S. of US$1.9 million (or 7.0%), and the change in foreign exchange rate which increased NOI by $2.0 million.
For the three months ended December 31, 2025, Proportionate NOI from the REIT's properties increased by $2.0 million (or 4.5%) to $47.6 million, compared to $45.6 million in 2024. The increase in Proportionate NOI is due to an increase in the U.S. of US$1.7 million (or 8.2%), a decrease in Canada of $0.2 million (or 1.0%), and the change in foreign exchange rate which increased Proportionate NOI by $0.5 million, due to the following factors:
- In Canada, lower gross rental revenue (0.7%) resulting from higher vacancy, net of an increase in AMR. Operating expenses were consistent year over year as a decrease in utilities offset higher realty taxes.
- In the U.S., an increase in revenue of US$0.5 million (or 1.2%) from higher gross rental revenue (1.1%) resulting from an increase in AMR and ancillary revenue, net of higher vacancy, and a decrease in operating expenses of US$1.2 million (or 5.4%). The decrease in operating expenses is primarily due to lower realty taxes of US$1.5 million (or 24.9%) mainly due to final 2024 Chicago tax bills received which concluded a triennial reassessment cycle.
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 year ended December 31, 2025 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:
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| 2025 |
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| 2024 |
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| Non-GAAP Adjustments |
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| Non-GAAP Adjustment |
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For the three months ended |
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| Proportionate |
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| Proportionate |
December 31 |
| NCI | Equity |
| Basis |
| NCI | Equity |
| Basis |
(In thousands of dollars) | IFRS | Share | Interest | IFRIC 21 | (Non-GAAP) | IFRS | Share | Interest | IFRIC 21 | (Non-GAAP) |
Revenue from properties | $88,173 | ($4,787) | $4,216 | $-- | $87,602 | $87,888 | ($4,733) | $4,085 | $-- | $87,240 |
Property operating expenses | 30,291 | (381) | 645 | 9,438 | 39,993 | 33,735 | (1,680) | 1,171 | 8,460 | 41,686 |
NOI | $57,882 | ($4,406) | $3,571 | ($9,438) | $47,609 | $54,153 | ($3,053) | $2,914 | ($8,460) | $45,554 |
NOI Margin | 65.6 % |
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| 54.3 % | 61.6 % |
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| 52.2 % |
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| 2025 |
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| 2024 |
| Non-GAAP Adjustments |
| Non-GAAP Adjustments |
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For the year ended |
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| Proportionate |
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| Proportionate |
December 31 |
| NCI | Equity | Basis |
| NCI | Equity | Basis |
(In thousands of dollars) | IFRS | Share | Interest | (Non-GAAP) | IFRS | Share | Interest | (Non-GAAP) |
Revenue from properties | $354,648 | ($18,966) | $17,022 | $352,704 | $344,188 | ($18,142) | $15,929 | $341,975 |
Property operating expenses | 164,914 | (8,109) | 7,332 | 164,137 | 162,768 | (9,067) | 7,063 | 160,764 |
NOI | $189,734 | ($10,857) | $9,690 | $188,567 | $181,420 | ($9,075) | $8,866 | $181,211 |
NOI Margin | 53.5 % |
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| 53.5 % | 52.7 % |
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| 53.0 % |
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:
| Three months ended
December 31 | Year ended
December 31 |
(In thousands of dollars, except per Unit amounts) | 2025 | 2024 | 2025 | 2024 |
Net income for the period attributable to Unitholders | $27,879 | $48,602 | $102,968 | $101,858 |
Add/(deduct): |
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Realty taxes accounted for under IFRIC 21 | (9,438) | (8,460) | -- | -- |
Fair value gain on conversion option on convertible debentures | (448) | (1,649) | (650) | (770) |
Distributions on Class B LP Units recorded as interest expense | 3,358 | 3,244 | 13,174 | 12,802 |
Foreign exchange loss | -- | 7 | 7 | 565 |
Fair value loss (gain) on real estate properties, net | 14,092 | 28,093 | (39,666) | (70,530) |
Non-controlling interests' share of fair value gain (loss) on real estate properties | 3 | (7,650) | 3,005 | (6,854) |
Fair value loss (gain) on Class B LP Units | (13,434) | (36,513) | 3,789 | 40,991 |
Deferred income tax expense (recovery) | 1,826 | (2,886) | 11,458 | 11,797 |
FFO – basic | $23,838 | $22,788 | $94,085 | $89,859 |
Interest expense on convertible debentures | 840 | 840 | 3,360 | 3,360 |
FFO – diluted | $24,678 | $23,628 | $97,445 | $93,219 |
FFO per Unit – basic | $0.46 | $0.42 | $1.79 | $1.65 |
FFO per Unit – diluted | $0.45 | $0.42 | $1.78 | $1.64 |
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Weighted average number of Units outstanding (in thousands): |
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Basic | 52,199 | 53,649 | 55,575 | 54,387 |
Diluted | 54,518 | 55,968 | 54,894 | 56,706 |
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 December 31 |
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(In thousands of dollars) | 2025 | 2024 |
Total Assets / Gross book value | $4,535,903 | $4,571,631 |
Mortgage payable | $1,700,117 | $1,721,080 |
Add: Deferred financing costs | 19,831 | 20,162 |
Mark-to-market adjustment | 1,007 | 1,744 |
| 1,720,955 | 1,742,986 |
Convertible debentures, face value | 56,000 | 56,000 |
Lease liabilities | 16,939 | 17,612 |
Indebtedness | $1,793,894 | $1,816,598 |
Indebtedness / Gross book value | 39.5 % | 39.7 % |
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.
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 $77.3 million and have a weighted average interest rate of 2.88%. The REIT expects to close the refinancings during the first and second quarters of 2026.
The REIT's audited consolidated financial statements for the years ended December 31, 2025, and 2024, 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.
Conference Call Details
Morguard North American Residential Real Estate Investment Trust will hold a conference call on Thursday, February 12, 2026 at 3:00 p.m. (ET) to discuss the financial results for the years ended December 31, 2025 and 2024. To participate in the conference call, please dial 1-416-945-7677 or 1-888-699-1199. Please quote conference ID 98216.
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 239,500 square feet of commercial area (as of February 10, 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 December 31, 2025. For more information, visit the REIT's website at www.morguard.com.
SOURCE Morguard North American Residential Real Estate Investment Trust
View original content: http://www.newswire.ca/en/releases/archive/February2026/10/c2232.html
For further information, please contact: Morguard North American Residential REIT: Angela Sahi, Chief Executive Officer, (905) 281-3800; Christopher A. Newman, Chief Financial Officer, (905) 281-3800