Morguard North American Residential REIT (MRG-UN) Q3 2024 earnings summary

Executive summary

• Total assets reached $4.4 billion at Q3 2024, up from $4.1 billion at year-end 2023, driven by fair value gains, FX, and increased cash.

• Net loss of CAD 18.8 million in Q3 2024, compared to net income of CAD 39.2 million in Q3 2023, mainly due to non-cash fair value losses and higher deferred taxes.

• IFRS net operating income was CAD 52 million, down 0.7% year-over-year.

• FFO per unit remained flat at CAD 0.40; payout ratio at 45.9%.

• Annual cash distribution increased by 2.7% to CAD 0.76 per unit, effective November 2024.

Financial highlights

• Revenue from real estate properties for Q3 2024 was $85.8 million, up from $83.6 million in Q3 2023.

• Cash on hand at quarter-end was $103.3 million, with $100 million available under a revolving credit facility.

• Long-term debt obligations totaled $1.7 billion; weighted average term to maturity increased to 5.1 years.

• Weighted average interest rate rose to 3.87% from 3.72% at year-end 2023.

• Debt-to-gross book value ratio increased slightly to 38.9%.

Outlook and guidance

• U.S. rent growth expected to normalize to 3–5% annually in 2025, down from recent double-digit growth.

• Canadian rents expected to plateau at current high levels, with some incentives offered in select cases.

• Acquisition opportunities being actively screened in both Canada and the U.S., with disciplined capital deployment.

• The REIT expects to close a CMHC-insured refinancing of two Mississauga properties in Q4 2024, providing up to $109.3 million in gross proceeds.

• The refinancing will replace maturing mortgages totaling $49.5 million at a weighted average interest rate of 3.15%.