Morguard Real Estate Investment Trust (MRT-UN) Q1 2026 earnings summary

Executive summary

• Revenue from real estate properties was $60.0 million for Q1 2026, nearly flat year-over-year, with net operating income of $25.6 million, down 0.4% from Q1 2025.

• Net income was $6.0 million, a significant turnaround from a net loss of $11.7 million in Q1 2025, mainly due to lower fair value losses on real estate properties.

• Funds from operations (FFO) per unit was $0.14, while adjusted funds from operations (AFFO) per unit was $0.01.

• Distributions per unit were $0.06 for the quarter, unchanged from the prior year.

• First quarter 2026 results were in line with expectations, with retail strength offsetting office softness.

Financial highlights

• Net operating income for Q1 2026 was CAD 25.6 million, slightly down from CAD 25.7 million in Q1 2025.

• Overall occupancy declined to 84.8% as of March 31, 2026, from 87.7% a year ago, mainly due to tenant failures and office vacancies.

• Liquidity at quarter-end was CAD 61 million, down from CAD 68 million at the end of 2025.

• Interest expense declined by 2.4% to $15.6 million due to lower mortgage renewal rates.

• Fair value losses on real estate properties dropped sharply to $3.6 million from $20.9 million in Q1 2025.

Outlook and guidance

• Retail results are expected to remain stable for the remainder of 2026, with continued positive fundamentals.

• Office softness is anticipated to persist as vacancies in Ottawa and Vancouver are addressed, but management is optimistic about future leasing.

• Net operating income for Penn West Plaza is projected to be CAD 2 million higher in 2026 than 2025, with improvements expected in the final three quarters.

• Most upcoming lease renewals are expected to be retained, with minimal impact from anticipated retail and industrial vacancies.

• The Trust continues to focus on maintaining stable distributions and prudent capital management, targeting a debt-to-assets ratio in the 50–55% range.