Morguard REIT Q2 NOI Rises 5.5% to $27.1M on Retail Strength
Morguard REIT posted Q2 2026 NOI of $27.1M, up 5.5%, driven by retail growth and office demand despite specific vacancies.
Key points
- Morguard REIT Q2 2026 NOI reached $27.1M, a 5.5% year-over-year increase.
- Same-asset growth totaled 7.5%, with Penmas Plaza adding $1.2M to NOI.
- Overall occupancy improved to 85.2%, with $61M in liquidity held for strategic initiatives.
Morguard Real Estate Investment Trust reported second-quarter 2026 net operating income of $27.1 million, a 5.5% increase from $25.7 million in the same period last year. The Trust achieved a 7.5% combined same-asset growth rate, driven primarily by resilience in its retail portfolio and a recovering demand for urban office space in key Canadian markets.
Year-to-date net operating income is up 2.5% over 2025 levels. While office results absorbed the impact of 84,000 square feet of returned space in Ottawa and Vancouver, management attributes the broader growth to improved occupancy and leasing momentum in high-demand urban centers, as noted in the earnings call transcript provided by Benzinga.
Retail segment drives significant NOI growth
The retail division served as the primary engine for quarterly performance, with Penmas Plaza contributing a $1.2 million increase in net operating income. This asset reached approximately 80% occupancy as the Trust moved past the initial lease-up inducement period established in 2025. Management highlighted positive lease negotiations at St. Laurent Centre, signaling continued momentum in the retail sector.
Office vacancies remain localized in key hubs
Office results were tempered by two large vacancies, totaling 84,000 square feet, that were returned by tenants in Ottawa and Vancouver early in the year. Despite these specific losses, the Trust reported that all other office assets maintained similar or improved occupancy levels compared to the prior year. Management characterized these vacancies as short-term, citing the favorable urban locations of the properties and ongoing demand for return-to-work space.
Liquidity and leasing outlook for late 2026
The Trust concluded the quarter with $61 million in liquidity, supporting strategic plans for unsecured preferred share financing and new tenant additions. With overall occupancy improving to 85.2%, management expects significant leasing activities and tenant renewals to accelerate in the latter half of 2026. Key focus areas include re-tenanting former Sears spaces and executing development projects that drive long-term asset value.
