Morguard North American Residential Real Estate Investment Trust

For Q2 2026, net income was $26.1 million versus $30 million in 2025. IFRS net operating income was $54.2 million, down $2.7 million or 4.7% year over year, and basic FFO was $22 million, down $2.7 million or 11.1%, or $0.42 per unit versus $0.47 per unit. The FFO payout ratio was 46.8%. Total assets ended the quarter at $4.8 billion versus $4.5 billion at December 31, 2025; IFRS NAV per unit was $45.55. On the debt side, debt to gross book value was 40%, the weighted average mortgage term was 5.2 years, and the weighted average interest rate was 4.18%. The REIT had approximately $204 million of cash and $100 million available on its revolver. During the quarter it completed $162.8 million of CMHC-insured refinancings at a weighted average rate of 4.26% and a 11.2-year term, plus a USD 29.2 million U.S. refinancing at 5.4% for five years, producing $86.4 million of additional proceeds net of financing costs. The Canadian portfolio’s average monthly rent rose to $1,885, up 3.5%, while U.S. AMR was USD 1,933, up 1.8%. Looking ahead, management expects Canadian occupancy to improve from the Q2 low, U.S. occupancy to grow moderately in the summer leasing season, and modest AMR growth in the U.S.; it also expects the TDAM portfolio transaction to close in the second half of the year, subject to CMHC and lender consents.

Chris Newman emphasized balance-sheet strength and strategic flexibility, pointing to $4.8 billion of assets, $204 million of cash, and a successful refinancing program that boosted liquidity. He also said the REIT is actively progressing due diligence on the roughly $1 billion TD Asset Management portfolio and expects to close in the second half. His tone was constructive but measured, with a focus on leasing momentum and disciplined capital management rather than aggressive growth claims.

The financial discussion highlighted a modest deterioration in quarterly earnings metrics but improved liquidity and debt profile. Newman said total assets rose to $4.8 billion, debt to gross book value was 40%, mortgages payable had a 5.2-year weighted average term and a 4.18% weighted average rate, and the REIT held approximately $204 million of cash plus $100 million of revolver capacity. He noted the refinancings closed in the last 15 days of the quarter, so the higher interest expense will show more fully next quarter, and said the FFO payout ratio of 46.8% leaves significant cash retention.

Analysts focused on Canadian occupancy, TDAM transaction approvals, U.S. operating expenses, and whether higher interest expense is now the run rate. Management said Canadian occupancy may have marked the low point in Q2, with better leasing activity, lower incentives, and net occupancy improvement expected as the back half progresses. On TDAM, Paul Miatello said the remaining approvals are lender consents and CMHC, with debt from the new assets not expected to materially change leverage, and on interest expense Newman said the refinancing impact will be more visible next quarter because the deals closed late in the quarter.