Morguard Real Estate Investment Trust Announces 2025 Third Quarter Results

Executive Summary

• Morguard Real Estate Investment Trust reported a sharp decline in net income for Q3 2025, posting $4.7 M versus $15.6 M a year earlier, driven primarily by fair‑value losses on properties.
• Revenue from real estate properties fell 8.9% YoY to $57.7 M; net operating income decreased 3.1% to $31.3 M.
• Funds from operations (FFO) were essentially flat year‑over‑year at $15.0 M, while adjusted funds from operations (AFFO) fell 29% to $6.2 M.

Key Details

• Revenue: $57,688 K in Q3 2025 vs. $63,293 K in Q3 2024 (‑8.9%).
• Net Operating Income: $31,263 K vs. $32,248 K a year earlier (‑3.1%).
• Fair‑value Adjustments: Loss of $(10,345) K in Q3 2025 versus a gain of $868 K in Q3 2024; nine‑month loss of $(41,914) K vs. $(65,597) K gain previous year.
• Net Income: $4,664 K (loss) vs. $15,571 K profit YoY (‑70%).
• Funds from Operations (FFO): $14,980 K (basic) vs. $14,917 K prior period (+0.4%); diluted $17,084 K vs. $17,021 K (+0.4%).
• Adjusted Funds from Operations (AFFO): $6,200 K (basic) vs. $8,750 K YoY (‑29%); diluted $8,304 K vs. $10,854 K (‑23.5%).

Segment Performance – Net Operating Income (Three Months)

• Enclosed Regional Centres: $14,802 K (+29.6%)
• Community Strip Centres: $5,415 K (+6.1%)
• Single/Dual‑Tenant Buildings: $7,343 K (‑2.7%)
• Multi‑Tenant Buildings: $2,083 K (‑19.0%)
• Penn West Plaza: $653 K (‑86.3%) – loss driven by expiry of Obsidian Energy lease and rent reset.
• Industrial: $967 K (+13.5%)

Revenue Breakdown (Three Months)

• Rental revenue down $4,142 K to $34,881 K.
• CAM recoveries up $733 K to $12,680 K.
• Property tax & insurance recoveries down $2,782 K to $7,033 K.

Expense Highlights

• Property operating expenses rose 10% YoY to $18.2 M (higher utilities in Ontario).
• Interest expense decreased 5.9% to $15.8 M due to lower rates despite a $4.9 M increase in total debt.

Fair‑Value Adjustments by Segment (Three Months)

• Retail – Enclosed Regional Centres: $(3,905) K loss vs. $6,495 K gain prior year.
• Office: $(6,234) K loss vs. $2,582 K gain prior year.

Other Notable Items

• Tax refund of $3.2 M received at an Ontario property partially offset revenue declines.
• Bad‑debt expense of $1.0 M (including Comark Holdings and The Bay) increased YoY.
• Sale of Heritage Towne Centre contributed to lower community strip centre NOI.

Notable Quotes

(No direct CEO/President quotes were included in the release.)