Morguard Real Estate Investment Trust (MRT-UN) Q3 2025 earnings summary

Executive summary

• Revenue from real estate properties declined 8.0% year-over-year for the nine months ended September 30, 2025, to $176.3 million, with net operating income down 13.0% to $82.6 million.

• Net income for Q3 2025 was $4.7 million, down 70% from Q3 2024, mainly due to fair value losses on real estate properties.

• Funds from operations (FFO) fell 21.3% year-over-year to $33.4 million for the nine months, while adjusted funds from operations (AFFO) dropped 70.1% to $7.2 million.

• Distributions per unit remained stable at $0.18 for the nine months.

• Q3 results were consistent with prior quarters, except for a $3.2 million one-time property tax refund for an enclosed shopping mall.

Financial highlights

• Net operating income for Q3 declined to $31.3 million from $32.2 million in 2024, mainly due to a $4.3 million decrease from Penn West Plaza, partially offset by the $3.2 million tax refund.

• Property operating expenses increased 6.1% year-over-year, mainly due to higher utilities costs.

• Interest expense declined by $1 million for the quarter and over $3 million for the nine-month period due to lower variable rates.

• Fair value losses on real estate properties totaled $10.3 million in Q3 2025, compared to a gain of $0.9 million in Q3 2024.

• Cash provided by operating activities for the nine months was $25.5 million, down from $34.2 million in 2024, due to lower NOI and higher leasing costs.

Outlook and guidance

• Management expects 2025 to remain tough but anticipates a rebound in Penn West Plaza net operating income in 2026 as leasing inducements expire.

• The Trust faces ongoing challenges in the office segment due to work-from-home trends and higher vacancy, particularly after the expiry of a major lease at Penn West Plaza.

• Cautious optimism for future office leasing as interest and tours increase in major urban areas.

• Continued positive fundamentals expected in the retail leasing environment.

• Management continues to focus on tenant retention, cost control, and selective development projects to enhance long-term value.