MORGUARD CORPORATION
2014 ANNUAL REPORT
MANAGING FOR GROWTH
MORGUARD CORPOR ATION
Morguard Corporation is a real estate operating company listed on the
Toronto Stock Exchange (TSX) under the symbol MRC. At December 31,
2014, the Company’s owned and managed real estate portfolio was
valued at $15.0 billion.
Morguard’s primary business strategy is to create shareholder value
through stable and increasing cash flow and asset value. This is achieved
by improving the performance of the real estate portfolio and by acquiring
and developing real estate properties in sound economic markets.
The Company has three diversified lines of business:
Investments in Real Property: Morguard owns a diversified portfolio of
high-quality multi-unit residential, retail, office and industrial, and hotel
properties in North America.
Real Estate Investment Trusts: Morguard owns a significant interest in
two real estate investment trusts (REITs): Morguard REIT (TSX: MRT.UN),
a closed-end Trust with a diversified portfolio of Canadian commercial
real estate assets; and Morguard North American Residential REIT
(TSX: MRG.UN), an open-end Trust with a diversified portfolio of
multi-unit residential assets across North America.
Advisory and Investment Services: Morguard provides real estate
advisory services and portfolio management services, specializing in
publicly traded equities and fixed-income securities, to institutional clients
and private investors.
On our cover: Performance Court, Ottawa, ON
FELLOW SHAREHOLDERS
In 2014, Morguard Corporation delivered outstanding financial
performance, benefiting from the quality of our real estate
portfolio, the diversification of our business and the experience
of our management team.
Our core strength is real estate – and our shareholders and
clients continue to benefit from our proven management
platform, strong cash flow, and a conservatively leveraged
balance sheet.
We are extremely proud of our performance in 2014.
The following pages speak about many of our important
strategic, operational and financial accomplishments during
the past year. Acknowledging that a strong company is not
built around the most recent year’s results we have also
detailed some of our important milestones and metrics
from our 17-year history as a real estate company. Morguard’s
long-term performance is gratifying and we remain committed
to our track record of building a stronger company.
In 2014, the contribution of the two real estate investment
trusts, Morguard REIT and Morguard North American
Residential REIT, in which Morguard Corporation is the
major shareholder, delivered increases in FFO per unit and
AFFO per unit. Both REITs continue to maintain a level of
distribution that is well covered from current levels of cash flow.
Looking ahead, we will continue to build shareholder value
and seek attractive real estate investment opportunities
in promising Canadian and U.S. markets.
Finally, I express my appreciation to our
management team and employees for their
dedication and commitment, to our directors
for their guidance and wisdom and to our
shareholders for their support.
K. (RAI) SAHI
Chairman and Chief Executive Officer
2
M O R G U A R D C O R P O R AT I O N
DELIVER
ING
STRONG
FINANCIAL
RESULTS
55 City Centre Drive, Mississauga, ON
2 014 A N N U A L R E P O R T
FUNDS FROM OPER ATIONS
$170
FINANCIAL PERFORMANCE
Morguard’s strong financial performance flows directly from the strength
of its real estate portfolio, the skilled management of its investments in
real property, and the highly diversified nature of our revenue streams.
Morguard has delivered to shareholders another year of strong and
reliable financial results and has exceeded key financial objectives.
$175
$149
$115
10
$129
11
12
13
3
Morguard’s portfolio was built through many acquisitions and development
projects, beginning in 1997 with the first real estate acquisition, a $36 million
investment in multi-unit residential properties through Goldlist Properties Inc.
From this acquisition, and our initial transitional year, we have never
looked back and our real estate portfolio of owned assets are valued at
$7.5 billion, while our managed portfolio is valued at an additional $7.5 billion.
Essential to our success is building a portfolio with long-term value while
delivering superior year-over-year results.
14
(in millions of dollars)
Our key financial metric is funds from operations1 (“FFO”), and Morguard
has reported an increase in FFO per share in 13 of the past 17 years.
Over this 17-year period, the compound annual growth rate in FFO per
common share was 12.4%.
In 2014, Morguard realized another significant year-over-year increase
in FFO. FFO reached $175.0 million, up from $169.8 million a year earlier,
an increase of $5.2 million, or 3.1%. FFO per common share, basic and
diluted, reached $13.98 in 2014, up from $13.39 in 2013, an increase of 4.4%.
Morguard Corporation recorded a year of strong financial results
in 2014, benefiting from its substantial and diversified portfolio of
real estate investments.
FINANCIAL HIGHLIGHTS
(in thousands of dollars, except per share amounts)
Revenue from real estate properties
Total revenue
20102011201220132014
$284,184 $297,265 $315,590 $417,376 $472,808
363,836392,958414,439516,882566,326
Net operating income
155,122164,330170,989201,496241,193
Funds from operations1
114,692128,609149,420169,782174,988
Funds from operations per share – basic
$8.46 $9.92 $11.63 $13.39 $13.98
Total assets
3,007,9623,486,1074,409,8165,452,9957,993,684
Shareholders’ equity
1,385,1801,683,1002,048,2882,329,9722,498,605
Shareholders’ equity, per common share
1
$106.83 $129.98 $160.37 $185.12 $202.27
FO is a real estate industry standard that supplements net income and evaluates operating performance but is not indicative of funds available to meet the Company’s future cash requirements.
F
The Company considers FFO a useful measure for reviewing its comparative operating and financial performance. FFO can assist with comparisons of the operating performance of the
Company’s real estate between periods and relative to other entities in the industry. FFO is computed in accordance with the current definition of the Real Property Association of Canada
and is defined as net income attributable to common shareholders plus (i) deferred income taxes, (ii) realty taxes accounted for under IFRIC 21, (iii) internal leasing costs and (iv) the Company’s
proportionate share of Morguard REIT’s FFO and excludes (i) fair value adjustments, (ii) gains/losses from the sale of real estate properties and (iii) other non-cash items.
4
M O R G U A R D C O R P O R AT I O N
In 2014, Morguard’s total revenues increased to $566.3 million from
$516.9 million the previous year, an increase of $49.4 million, or 9.6%.
Revenue from our real estate properties accounted for 83% of total
revenues (or $472.8 million), while management and advisory fees
accounted for 13% of total revenues (or $73.4 million). Interest and
other income accounted for the remainder of total revenues (4%).
9.6
The 2014 increase in total revenues is primarily the result of the
Company’s 2013 acquisition program and our active development
program. Two development properties were completed during 2014
and contributed $4.7 million to total revenues. During 2013, $605 million
was spent on acquisitions, producing a $35.8 million increase in revenues
year over year. During 2014, Morguard chose to remain disciplined in a
competitive environment for real estate asset acquisitions and did not
acquire any properties.
19.7
For 2014, net operating income (“NOI”) (revenue from real estate properties
less operating expenses and property taxes) rose to $241.2 million from
$201.5 million a year earlier, representing an increase of $39.7 million,
or 19.7%. The increase in NOI was the result of acquisitions completed
during 2013, a more favourable foreign exchange rate used to translate
results of our U.S. portfolio and a non-recurring land lease charge
recorded in 2013. Morguard has reported an increase in NOI in 15 of
the past 17 years; and over this 17-year period the compound annual
growth rate in NOI was 17.2%.
%
I NCREASE IN
TOTAL REVENUE
%
I NCREASE IN NET
OPERATING INCOME
PORTFOLIO ANALYSIS
FAIR VALUE BY SEGMENT
On December 31, 2014, the portfolio of real estate properties that the
Company reports on was significantly altered due to the consolidation
of Morguard REIT. The most significant impact of this accounting change
requires the Company to combine Morguard REIT’s $2.9 billion real estate
portfolio with Morguard Corporation’s real estate portfolio and eliminate
the reporting of the investment in Morguard REIT, which had a book value
of $713.8 million.
December 31
2013
2014
Retail Canada
11%
28%
The composition of Morguard’s real estate properties at December 31, 2014,
is shown to the right, with a comparison to December 31, 2013 (which
excludes the assets of Morguard REIT).
The Company’s portfolio of real estate properties is highly diversified,
by value, by asset class and by geography. Approximately 23% of the
Company’s real estate properties are located in the U.S. (37% as at
December 31, 2013). The Canadian and U.S. properties are further
diversified, with NOI being generated from seven Canadian provinces
and eight U.S. states. We believe that the highly diversified nature of
the Company’s real estate portfolio is a key strength and insulates
shareholders from the cyclical nature of real estate downturns in any
particular asset class or location.
At December 31, 2014, Morguard’s total assets were $8.0 billion,
compared with $2.8 billion at January 1, 2010. During 2010, as part of
its adoption of International Financial Reporting Standards (IFRS), the
Company adjusted its balance sheet to reflect the fair value of its real
estate portfolio. The Company uses 2010 as its benchmark year to
measure growth in its balance sheet.
The increase in total assets has been driven by the consolidation of
Morguard REIT’s assets on December 31, 2014, significant acquisition
and development programs and increases in the value of the Company’s
Office17%
28%
Residential Canada
32%
19%
Residential U.S.
29%
18%
Retail U.S.
8%
5%
Hotel 3%
2%
2 014 A N N U A L R E P O R T
real estate properties. These value increases are a combination of capital
reinvestment, improved cash flows and compressed capitalization rates.
The five-year compound annual growth rate in total assets (January 1,
2010 to December 31, 2014) is 23.3%.
468M
$
I N REFINANCING
CAPITAL MANAGEMENT
The Company’s primary sources of capital are long-term debt and equity.
Prudent management of debt financing is a vital element in Morguard’s
success, and in 2014 the Company continued to take advantage of the
prevailing low level of interest rates. During 2014, the refinancing of
mortgages at amounts in excess of maturing balances was made possible
through value increases in the underlying secured assets. This allowed
Morguard to use leverage to improve total returns without negatively
affecting debt ratios. Over the year, Morguard refinanced $468 million of
maturing mortgage debt that yielded approximately $131 million of net
proceeds. The 2014 mortgage refinancing program lowered Morguard’s
weighted average interest rate at December 31, 2014, to 4.17%, compared
with 4.47% a year earlier. It also extended its weighted average term to
maturity to 5.7 years from 4.8 years at the end of 2013.
WEIGHTED AVER AGE
INTEREST R ATE
5.2%
10
5.1%
11
4.7%
12
4.5%
13
4.2%
Another key metric for Morguard is shareholders’ equity per common
share. Increases in total shareholders’ equity will reflect accumulated
earnings, dividends paid to shareholders and other capital transactions
such as common share repurchases. Shareholders’ equity per common
share is defined as shareholders’ equity (excluding non-controlling interest)
divided by the number of common shares outstanding. At December 31,
2014, Morguard’s shareholders’ equity per common share was $202.27,
compared with $89.42 at January 1, 2010. As with total assets, 2010
represents the benchmark year for this metric. The increase in shareholders’
equity per common share between January 1, 2010, and December 31,
2014, represents a compound annual growth rate of 22.6%.
14
PORTFOLIO DIVERSIFICATION
Portfolio diversification shown by percentage of NOI for the year
ended December 31, 2014:
Multi-unit
Residential
51%
NET
OPER ATING
INCOME
(NOI)
5
Retail
26%
Office and
Industrial
19%
Hotel
4%
58%
CANADA
42%
U.S.
6
M O R G U A R D C O R P O R AT I O N
GROWTH IN ASSETS OWNED AND UNDER MANAGEMENT
15B
$
Assets under management (“AUM”) is another important metric for
Morguard as increased AUM strengthens our management platform
and increases operational efficiencies.
At December 31, 2014, Morguard’s real estate AUM was $15.0 billion.
Included in the total are Morguard’s owned real estate investments
(including assets of Morguard Corporation, Morguard REIT and
Morguard North American Residential REIT) and the real estate assets
that Morguard manages for third-party clients, valued at $7.5 billion.
EAL ESTATE ASSETS
R
OWNED AND UNDER
MANAGEMENT
In early 2015, Morguard commenced reporting AUM that includes
the value of our portfolio of managed equities and fixed income.
The addition of managed equities and fixed income to reported AUM
is the result of Morguard’s acquisition of a 60% interest in Lincluden
Investment Management Limited, which closed February 3, 2015.
The Lincluden acquisition, which adds $3.6 billion of AUM, increases
the critical mass of the Company’s existing equity management entity,
Morguard Financial Corp. As of February 3, 2015, Morguard’s total
AUM, including real estate and managed equities, reached $18.9 billion.
Morguard’s owned portfolio of real properties includes 170 multi-unit
residential, retail, office, industrial and hotel properties, comprising
16,423 multi-unit residential suites, approximately 16.5 million square feet
of commercial leasable space and 1,056 hotel rooms.
Part of Morguard’s growth and overall financial success can be attributed
to its stake in two substantial real estate investment trusts.
Morguard currently has a 46.8% interest in Morguard REIT, which,
in turn, owns a Canadian portfolio of high-quality, income producing real
estate assets – including 53 commercial properties with approximately
9.2 million square feet of gross leasable area located in six provinces1.
1
xcluding assets held for sale, Morguard REIT has 49 commercial properties with approximately
E
8.6 million square feet of gross leasable area.
ASSETS OWNED AND UNDER MANAGEMENT
Assets under management (AUM) is another important metric for Morguard as increased AUM strengthens our management
platform and increases operational efficiencies.
As at February 3, 2015:
Owned Real Estate
$7.5B
TOTAL
ASSETS UNDER
MANAGEMENT
$18.9 BILLION
Real Estate
$15.0B
Managed Real Estate
$7.5B
Managed Equities and
Fixed Income
$3.9B
2 014 A N N U A L R E P O R T
46.8
Morguard REIT had total assets of $3.0 billion as at December 31,
2014, and in 2014 had net operating income of $169.7 million, up from
$161.3 million a year earlier.
48.7
Today Morguard North American Residential REIT owns a portfolio of
12,850 residential suites, including 30 apartment communities located
in seven U.S. states and 14 residential apartment communities located
in two Canadian provinces, with a total appraised value of $1.8 billion.
In 2014, Morguard North American Residential REIT earned normalized
NOI (excluding the impact of IFRIC 21) of $90.2 million, up from
$73.5 million in 2013.
%
I NTEREST IN
MORGUARD REIT
%
E FFECTIVE INTEREST
IN MORGUARD
NORTH AMERICAN
RESIDENTIAL REIT
7
Morguard also owns a 48.7% effective interest in Morguard North
American Residential REIT, which was launched with Morguard’s
sponsorship in 2012. This REIT was created to benefit from the demand
for high-quality residential rental properties in key markets across
North America.
THIRD-PARTY SERVICES AND INVESTMENT VEHICLES
Morguard’s extensive range of third party real estate advisory services
earned fees of $73.4 million in 2014, compared with $74.6 million in 2013.
Morguard provides a range of real estate investment and management
services to major institutional clients and private investors. As well, the
Company co-invests in a variety of properties. Morguard also supports
the two REITs in which it has substantial interests by providing valuable
advisory and management services offered by Morguard’s investment,
property management and leasing groups.
Morguard additionally offers a broad range of proven investment vehicles
and provides portfolio management services, specializing in publicly
traded equities and fixed-income securities, through Lincluden Investment
Management.
RESULTS FOR SHAREHOLDERS
19.3
I NCREASE IN
STOCK PRICE
%
The long-term growth in the value of Morguard shares is an important
goal for the Company’s management. During 2014, the Company’s stock
price increased from $125.77 on January 1 to $150.00 at year-end, an
increase of 19.3%. The Company believes that markets will usually reward
strong performance, sound strategies and skillful execution. Management
is extremely proud to report that, over the past 17 years, the compound
annual growth rate in the stock price was 17.3%.
Morguard has regularly made use of a normal course issuer bid to
repurchase common shares. During 2014, Morguard purchased 233,232
common shares for a total of $32 million, representing an average price
of $137.88 per common share. Management continues to believe that the
purchase and cancellation of common shares represents a prudent use
of the Company’s financial resources.
8
M O R G U A R D C O R P O R AT I O N
EVOLV
ING
THROUGH SKILL,
EXPERIENCE
AND DEPTH
Bramalea City Centre, Brampton, ON
2 014 A N N U A L R E P O R T
9
In the late 1990’s, Morguard Corporation (formerly Acktion Corporation)
disposed of businesses in the industrial, automotive and safety
products industries. The proceeds from those dispositions were allocated
to real estate investments. The first real estate investment was a $36 million
acquisition of common shares of Goldlist Properties Inc. in 1997.
Investment in units of Morguard REIT soon followed. The transformation of
Acktion Corporation into a diversified real estate company was advanced
considerably in 1998 with the acquisition of Morguard Investments Limited
and further investments in Goldlist, Revenue Properties Company Limited
and Devan Properties Limited.
The cornerstones of the real estate strategy remained consistent
throughout; acquire high-quality, well-located assets, remain disciplined
on acquisition opportunities, seek high levels of diversification within the
real estate portfolio and employ reasonable levels of debt.
2920 Matheson Blvd. E., Mississauga, ON
The outcome of this strategy is long-term growth in the Company’s stock
price for shareholders. Since embarking on the real estate strategy in
1998, Morguard has produced a compound annual growth rate (“CAGR”)
of 17.3%.
17.3
%
S TOCK PRICE CAGR
SINCE 1998
Morguard Corporation has been completely transformed since
embarking on a strategy to invest in real estate; a strategy that
dates back to 1997.
S
17. 3 %
First Real Estate
Investments
$103.6M
Acquisition of
Morguard
Investments
Limited
1997
1998
PR I CE
TO CK
Initiated
Dividend
$204M Office
and Multi-unit Res
Development
2000
2004
C AG R
Acquired
U.S. REIT
$478M
$89.42 Book
Value per Share
(After IFRS
Adoption)
2006
2010
Acquired
Chicago
Multi-unit Res
Building
US$302M
Acquired U.S.
Multi-unit Res
Portfolio
US$450M
The Heathview
and
Performance
Court
Development
2013
2014
MRG IPO
2012
10
M O R G U A R D C O R P O R AT I O N
PERFORM
ING
150 ELGIN
OTTAWA, ON
Performance Court, Ottawa, ON
2 014 A N N U A L R E P O R T
11
THE OPPORTUNITY
Execute on a vision to build a LEED Gold Class A office tower in
downtown Ottawa that meets the market demand for competitive
and sustainable workplaces, provides stable income and high yields
for Morguard’s shareholders and its co-investor client, and sets the
benchmark for public benefit spaces.
THE VALUE PROPOSITION
Performance Court, Ottawa, ON
The concept of Performance Court at 150 Elgin Street was born in a formal
design competition held by the City of Ottawa. Morguard’s proven track
record in managing LEED-standard urban development projects and its
financial capacity were instrumental in winning the bid to revitalize the site.
Morguard’s approved design called for a 360,000-square-foot Class A
office tower with commitments to public benefit spaces and preservation
of a designated heritage building on the site.
Morguard’s asset management, development and leasing teams worked
collaboratively to:
• secure a solid deal structure
• create long-term value for shareholders and investors
• develop and implement a lease strategy
Performance Court – a LEED Gold candidate Class A office
tower in the nation’s capital is an urban development that
realizes performance at every level.
THE RESULT
95
%
O
F SF COMMITTED
Leased at 75% by substantial completion and currently 95% committed,
Performance Court has attracted tenants such as the Canada Council for
the Arts, Shopify and KPMG, who required flexible workplace configurations
to engage and retain top talent and support their business, financial and
sustainability goals.
As a LEED Gold candidate, Performance Court has one of the smallest
carbon footprints of any multi-tenanted office tower in Canada. The target
is a 50% reduction in energy consumption compared to the Model
National Energy Code for Buildings (MNECB).
First-of-its-kind in Canada, interactive public benefit space including a
street level art gallery, a winter garden with a three-storey digital screen
and an outdoor terrace with sweeping views of the nation’s capital.
12
M O R G U A R D C O R P O R AT I O N
DEVELOP
ING
MAPLE LEAF FOODS
DISTRIBUTION CENTRE
Maple Leaf Foods Distribution Centre, Puslinch, ON
2 014 A N N U A L R E P O R T
13
THE OPPORTUNITY
Maple Leaf Foods, a leading Canadian consumer packaged meats
company, issued a request for proposal for a build-to-suit refrigerated
distribution centre to establish a critical hub for its Eastern Canada
distribution network that would serve to consolidate and improve productivity.
THE VALUE PROPOSITION
Maple Leaf Foods Distribution Centre
Morguard’s proven expertise in project management of complex industrial
developments and its financial capacity to provide equity were instrumental
to the success of the project.
Morguard structured the transaction to provide an acceptable risk-adjusted
yield for both the Company’s shareholders and investor clients, while
ensuring an appropriate and competitive rental rate for Maple Leaf Foods.
Morguard led a team of specialized experts through all phases of
pre-development and development. The team consulted closely with
Maple Leaf Foods to understand every detail of its supply chain to create
a facility that would reduce operational cost and complexity, increase
productivity and set a new standard for sustainable building performance
through LEED design.
Using exceptional project and process management, Morguard
and its team delivered the first LEED Gold refrigerated distribution
centre in Canada.
THE RESULT
$
47M
I NDUSTRIAL
DEVELOPMENT
Delivered a high quality, state-of-the-art facility that meets the tenant’s
business and distribution strategy while also enhancing Morguard’s
industrial portfolio.
Enhanced both income and real estate value for the Company’s
shareholders and investor clients through strong returns and rental growth
over the 15-year term. Cash returns from this $47 million development
project have exceeded initial expectations.
Awarded Industrial Development of the Year by NAIOP Greater Toronto
and was recognized as Canada’s first refrigerated distribution centre to
receive LEED Gold certification under the more stringent 2009 standards.
14
M O R G U A R D C O R P O R AT I O N
EXPAND
ING
OUR PRESENCE AND
SERVICE OFFERINGS
Block 37, Chicago, IL
2 014 A N N U A L R E P O R T
15
THE OPPORTUNITY
With real estate values holding at peak levels and limited acquisition
opportunities for core product, Morguard looked to a market expansion
strategy to generate new growth. The Company’s strategy was to leverage
its existing relationships and intellectual capital in the U.S. multi-unit
residential market – and public markets.
THE VALUE PROPOSITION
Multi-Unit Residential Investment
Block 37, Chicago, IL
Morguard acquired a 49% stake in a 691-suite, 34-storey luxury
residential rental development in Chicago, Illinois. The property is part
of a prominent, mixed-use development known as Block 37 and is located
at 108 North State Street – a prestigious downtown neighbourhood with
immediate access to subways, restaurants and high-end retail shops.
Equities and Fixed Income
Morguard acquired a 60% interest in Canadian money management
company Lincluden Investment Management Limited, which manages
$3.6 billion in equities and fixed income for institutional and private clients.
This establishes a national platform for Morguard to transition its existing
equities division, Morguard Financial Corp. This market expansion
strategy increases the scale and scope of investment products and
services to investor clients and realizes opportunities to access new
capital pools in North America.
Through a market expansion strategy, Morguard is realizing
new growth for its shareholders and creating opportunities
for the future.
THE RESULT
3.6B
$
I NCREASE IN EQUITIES
AND FIXED INCOME
UNDER MANAGEMENT
Expanded investments and management capabilities resulting in access
to above-market returns for shareholders and investor clients and
continued investment potential in a tight real estate market.
Block 37 provided Morguard with an opportunity to expand its presence
in an existing market. The downtown Chicago market has rewarded
Morguard with strong performance in the past. When completed, Block 37
will complement our existing Chicago property, Alta at K Station.
Acquired a reputable management platform for equities and fixed income
that creates a scalable business for Morguard. It fits the market expansion
strategy of growing AUM through existing asset classes.
16
M O R G U A R D C O R P O R AT I O N
Creekside Corporate Centre, Toronto, ON
Residence Inn Marriot, Mississauga, ON
Alta at K Station, Chicago, IL
East York Town Centre, Toronto, ON
2 014 A N N U A L R E P O R T
PORTFOLIO SUMMARY
The real estate portfolio of Morguard Corporation is broadly
diversified and includes high-quality residential, retail, office,
industrial and hotel properties in Canada and the United States.
7.5B 52
R EAL ESTATE
PROPERTIES
ULTI-UNIT RESIDENTIAL
M
PROPERTIES
44
170
68
6
$
T OTAL PROPERTIES
FFICE AND INDUSTRIAL
O
PROPERTIES
R ETAIL PROPERTIES
H OTEL PROPERTIES
17
18
M O R G U A R D C O R P O R AT I O N
Mayfair Village South, Edmonton, AB
The Bay Club, Toronto, ON
MULTI-UNIT RESIDENTIAL PORTFOLIO
Ownership
Prov./
InterestOccupancy
Property
City
State
Ownership
(%)
Suites
(%)
CANADA
Mayfair Village South
Edmonton
AB
MRC
100
237
100
Square 104
Edmonton AB
MRG
100
277
99
Margaret Place
Kitchener
ON
MRG
100
472
98
The Arista
Mississauga
ON
MRG
100
458
98
The Elmwoods
Mississauga
ON
MRG
100
321
99
The Forestwoods
Mississauga
ON
MRG
89
300
98
The Maplewoods
Mississauga
ON
MRG
87
300
98
Meadowvale Gardens
Mississauga
ON
MRG
100
325
98
1563 Mississauga Valley Blvd.
Mississauga
ON
MRC
95
168
100
1405 Mississauga Valley Blvd.
Mississauga ON
MRC
95
168
100
Tomken Place
Mississauga ON
MRG
100
142
100
The Valleywoods
Mississauga
ON
MRG
91
373
98
The Bay Club
Toronto
ON
MRC
100
293
96
The Colonnade
Toronto ON
MRC
100
157
97
The Heathview1
Toronto
ONMRC
100 336
55
Leaside Towers
Toronto
ON
MRC
100
989
98
Rideau Towers 1
Toronto
ON
MRG
90
287
98
Rideau Towers 2
Toronto
ON
MRG
100
380
96
Rideau Towers 3
Toronto
ON
MRG
100
474
96
Rideau Towers 4
Toronto
ON
MRG
100
400
97
Condominium Units
Toronto
ON
MRC
100
4
100
Rouge Valley Residence
Scarborough
ON
MRG
100
396
98
126 Sparks Street
Ottawa
ON
MRC
100
36
SUBTOTAL7,293
1
Occupancy represents percentage north tower committed.
–
98
2 014 A N N U A L R E P O R T
210 Watermark, Bradenton, FL
19
Governors Gate, Pensacola, FL
Ownership
Prov./
InterestOccupancy
Property
City
State
Ownership
(%)
Suites
(%)
U.S.
Retreat at City Center
Aurora
CO
MRG
100
225
95
Settlers Creek
Fort Collins
CO
MRG
100
229
97
Grand Venetian
Irving
TX
MRG
100
514
96
The Retreat at Spring Park
Garland
TX
MRG
100
188
94
Verandah at Valley Ranch
Irving
TX
MRG
100
319
97
Colonial Manor
Harahan LA
MRG1004898
Garden Lane Gretna
LA
MRG
100
261
92
The Georgian New Orleans
LA
MRG
100
135
98
Greenbrier Slidell
LA
MRG
100
144
90
Magnolia Place New Iberia
LA
MRG
100
148
95
Steeplechase Lafayette
LA
MRG
100
192
96
Villages of Williamsburg Shreveport
LA
MRG
100
194
87
Alta at K Station
Chicago
IL
MRC
100
848
90
Bel Air Apartment Homes
Mobile
AL
MRG
100
202
92
The Estates at Lafayette Square
Mobile
AL
MRG
100
675
96
Hampton Park
Mobile
AL
MRG
100
300
95
Pine Bend
Mobile
AL
MRG
100
152
91
Barrett Walk
Kennesaw
GA
MRG
100
290
97
Briarhill Apartments
Atlanta
GA
MRG
100
292
93
The Savoy Apartments
Atlanta
GA
MRG
100
232
96
Blue Isle Coconut Creek
FL
MRG
100
340
98
Emerald Lake Lake Worth
FL
MRC
100
337
96
Governors Gate I Pensacola
FL
MRG
100
240
95
Governors Gate II
Pensacola
FL
MRG
100
204
95
Jamestown Estates
Pensacola
FL
MRG
100
177
93
Woodcliff Apartment Homes
Pensacola
FL
MRG
100
184
95
Mallory Square
Tampa
FL
MRG
100
383
91
Village Crossing
West Palm Beach
FL
MRG
100
189
98
210 Watermark
Bradenton
FL
MRG
100
216
97
Woodbine Apartment Homes
Riviera Beach
FL
MRG
100
408
99
The Lodge at Crossroads
Cary
NC
MRG
100
432
94
Perry Point
Raleigh
NC
MRG
100
432
93
SUBTOTAL9,130
95
TOTAL MULTI-UNIT RESIDENTIAL 96
16,423
20
M O R G U A R D C O R P O R AT I O N
The Colonnade, Toronto, ON
Woodbridge Square, Vaughan, ON
RETAIL PORTFOLIO
Ownership
TotalOwnership
Prov./
InterestAreaArea
Occupancy
Property
City
State Ownership
(%)
(SF)
(SF)
(%)
Major Tenants
CANADA
Shelbourne Plaza
Victoria BC
MRT
100
57,000
57,000
100
Burquitlam Plaza
Coquitlam
BC
MRT
100
67,500
67,500
96
Shoppers Drug Mart, Dollarama, CIBC
Fairway Market, TD Canada Trust, Scotiabank
Pine Centre Mall
Prince George
BC
MRT
100
476,000
476,000
99
Sears, Sport Chek, Shoppers Drug Mart
Prairie Mall Grande Prairie
AB
MRC/MRT
100
296,000
296,000
96
Mark’s Work Wearhouse, Shoppers Drug Mart
Airdrie Co-op Centre
Airdrie AB
MRT
100
65,000
65,000
100
Airdrie Rona Centre
Airdrie
AB
MRT
100
44,000
44,000
100
Heritage Towne Centre
Calgary
AB
MRT
100
133,500
133,500
95
Home Outfitters, Ashley Furniture, Dollarama
Parkland Mall
Red Deer
AB
MRT
100
429,500
429,500
90
Walmart, Sport Chek, Dollarama
The Centre at Circle and Eighth
Saskatoon
SK
MRT
100
489,500
489,500
95
Sport Chek, Shoppers Drug Mart
Brandon Shoppers Mall
Brandon
MB
MRT
100
366,500
366,500
98
Capitol Theatre, Sport Chek
Charleswood Centre
Winnipeg
MB
MRT
100
116,000
116,000
100
Southdale Mall
Winnipeg
MB
MRT
100
175,500
175,500
97
Dollarama, Rexall, Bank of Montreal
Wonderland Corners
London
ON
MRT
100
47,500
47,500
91
Swiss Chalet
Cambridge Centre
Cambridge
ON
MRT
100
726,500
726,500
96
Sears, Hudson’s Bay, Sport Chek, H&M
Kingsbury Centre
Mississauga
ON
MRT
100
70,000
70,000
95
Longo’s, Shoppers Drug Mart
Bramalea City Centre Brampton
ON
MRC
21
1,423,500
295,000
96
Hudson’s Bay, Forever 21, Sport Chek, Old Navy
Woodbridge Square
Vaughan
ON
MRT
50
113,000
56,500
98
Nations Fresh Foods, Scotiabank
Aurora Centre
Aurora ON
MRT
100
288,500
288,500
99
Sobeys, Cineplex Odeon
Yonge & McGill1
Co-op Grocery Store, TD Canada Trust
Rona
Safeway, Shoppers Drug Mart, Dollarama
Toronto
ON
MRC
100 Cavell Avenue1 Toronto
ON
MRC
1007,5007,500 100
1005,5005,500
84
Centerpoint Mall
Toronto
ON
MRC
100
606,500
606,500
99
Hudson’s Bay, No Frills, Canadian Tire
The Colonnade Toronto
ON
MRC
100
97,000
97,000
98
Prada, Chanel, Cartier
East York Town Centre
Toronto
ON
MRC
100
382,500
382,500
93
Food Basics, Shoppers Drug Mart, Dollarama
Guildwood Village
Toronto ON
MRC
100
52,500
52,500
100
Market Square
Kanata
ON
MRT
100
58,000
58,000
100
Farm Boy, LCBO, TD Canada Trust
Hampton Park Ottawa
ON
MRT
100
102,000
102,000
89
Food Basics, Rexall, Swiss Chalet
Home Base
Ottawa
ON
MRT
100
10,000
10,000
100
St. Laurent Centre
Ottawa
ON
MRT
100
850,000
850,000
97
SUBTOTAL7,556,5006,371,500
97
Valu-mart
Royal Bank
Hudson’s Bay, Sears, Toys “R” Us
2 014 A N N U A L R E P O R T
Boynton Town Center, Boynton Beach, FL
21
Lantana Plaza, Lake Worth, FL
Ownership
TotalOwnership
Prov./
InterestAreaArea
Occupancy
Property
City
State Ownership
(%)
(SF)
(SF)
(%)
Major Tenants
U.S.
Alta at K Station1
Chicago
ILMRC
10013,00013,000
100
Airline Park Matairie
LA
MRC
100
54,000
54,000
100
Azalea Gardens Jefferson LA
MRC
100
45,000
45,000
100
Colonial Harahan
LA
MRC
100
44,000
44,000
38
Dollar General
Gonzales Plaza
Gonzales
LA
MRC
100
73,000
73,000
95
Big Lots, Dollar Tree, Aaron’s Rent
North Shore Square
Slidell
LA
MRC
100
429,500
429,500
72
JC Penney, Footlocker, Forever 21, Victoria’s Secret
Southland Mall
Houma
LA
MRC
100
445,000
445,000
92
Sears, JC Penney, Victoria’s Secret, American Eagle
Westgate
Alexandria
LA
MRC
100
168,000
168,000
97
Big Lots, Autozone, Rite Aid, Aaron’s Rent
Westland Kenner
LA
MRC
100
109,000
109,000
83
Herzing University, Houston Marine, Family Dollar
Boynton Town Center
Boynton Beach
FL
MRC
100
209,500
209,500
94
Best Buy, Shoe Carnival, Michael’s
Florida Shores Edgewater
FL
MRC
100
79,500
79,500
91
Winn Dixie, Beall’s Outlet
Lantana Plaza
Lake Worth
FL
MRC
100
245,500
245,500
99
Home Depot, Publix, Office Depot, Dollar Tree
Rainbow Square
Dunnellon
FL
MRC
100
116,000
116,000
94
Beall’s Outlet
Town & Country Palatka
FL
MRC
100
196,500
196,500
100
Weeki Wachee Village
Brooksville
FL
MRC
100
82,500
82,500
81
Winn Dixie
Westward West Palm Beach FL
MRC
100
225,000
225,000
68
Office Depot, Chuck E. Cheese, Aldi, Dollar Tree
SUBTOTAL2,535,0002,535,000
87
TOTAL RETAIL 10,091,500
94
No major tenant listed due to GLA.
1
8,906,500
Dollar Tree, Rite Aid
Winn Dixie, Family Dollar, Aaron’s Rent
Publix, K-Mart, Beall’s Outlet, Dollar Tree
22
M O R G U A R D C O R P O R AT I O N
OFFICE AND INDUSTRIAL PORTFOLIO
Ownership
TotalOwnership
InterestAreaArea
Occupancy
Property
City
Prov.
Ownership
(%)
(SF)
(SF)
(%)
Major Tenants
CANADA
Seymour Place
Victoria
BC
MRT
100
239,000
239,000
100
Province of British Columbia
Chancery Place
Vancouver
BC
MRT
100
142,500
142,500
100
Ministry of Citizens’ Service and Open Government
111 Dunsmuir
Vancouver
BC
MRT
100
222,000
222,000
100
AMEC Americas, Stantec Consulting
Alberta Treasury
Calgary
AB
MRT
100
41,500
41,500
100
Alberta Treasury Branches
7315 – Eighth Street
Calgary
AB
MRT
100
19,500
19,500
100
Centre 810
Calgary
AB
MRT
100
77,500
77,500
95
Deerport Centre
Calgary
AB
MRT
100
47,500
47,500
100
Duncan Building
Calgary
AB
MRT
505 Third Street Calgary
AB
MRT
50
142,000
71,000
100
Horizon Logistics, Strike Energy, Step Energy
Citadel West
Calgary
AB
MRT
100
78,500
78,500
100
CH2M Hill Canada
Penn West Plaza
Calgary
AB
MRT
100
636,500
636,500
100
Scotia Place Edmonton
AB
MRT
20
572,500
114,500
85
Petroleum Plaza Edmonton
AB
MRT
50
304,000
152,000
100
Alberta Infrastructure
4211 Albert Street
Regina
SK
MRC
100
37,500
37,500
100
Regina Health Region
444 St. Mary Avenue Winnipeg
MB
MRC
20
247,500
49,500
91
Maple Leaf Foods Distribution Centre
Puslinch
ON
MRC
59
283,898
167,500
100
33 City Centre Drive
Mississauga
ON
MRC
50
211,000
105,500
69
Accenture, Easyhome, Royal Bank, Aviva
55 City Centre Drive
Mississauga
ON
MRC
50
175,000
87,500
93
Morguard, Sunguard, Bier Markt
77 City Centre Drive
Mississauga
ON
MRC
50
194,000
97,000
89
Mississauga Board of Trade, Pallett Valo LLP
201 City Centre Drive
Mississauga
ON
MRC
50
215,000
107,500
70
City of Mississauga, ACS HR, Merit Loyalty
2920 Matheson Blvd. East
Mississauga
ON
MRC
50
233,000
116,500
100
Bramalea City Centre Brampton
ON
MRC
21
79,614
16,500
48
Hanson International, Municipality of Peel
77 Bloor Street West
Toronto
ON
MRT
50
393,000
196,500
98
TD Canada Trust, Harry Rosen, Realstar
200 Yorkland
Toronto
ON
MRT
100
149,000
149,000
87
Ferring, Investors Group, AG Simpson
Creekside Corporate Centre Toronto
ON
MRC
100
301,500
301,500
100
945 Wilson Avenue Toronto
ON
MRC
32
228,125
73,000
100
Leaside Corporate Centre Toronto
ON
MRC
95
93,684
89,000
94
OMVIC, Mount Pleasant Group
1875 Leslie
Toronto
ON
MRT
100
52,000
52,000
96
Body and Soul Fitness, Goose & Firkin
5591-5631 Finch1
Toronto
ONMRT
100210,000210,000
92
20-24 Lesmill1
Toronto
100
10081,00081,000
Genesis Land Development
Tektelic Communications Inc., The MI Group
Colleaux Engineering, Aerotek, State Farm
100
RCMP
Penn West Petroleum
City of Edmonton, APEGA, Grant Thornton
Great West Life
Maple Leaf Foods
Bayer Inc.
TD Financial Group
Sevencontinents Corporation, Picadilly Fashions
ON
MRT
10027,50027,500
2041-2141 McCowan1 Toronto
ONMRT
100196,500196,500
279 Yorkland
Toronto
ON
MRT
100
18,000
18,000
100
Loblaw Properties Ltd.
285 Yorkland
Toronto
ON
MRT
100
25,000
25,000
100
Mitchell Partnership
Quinte Courthouse Belleville
ON
MRC
50
173,000
86,500
100
Superior Court of Justice, Legal Aid Ontario
525 Coventry Ottawa
ON
MRT
100
42,500
42,500
100
TD Waterhouse
Green Valley Office Park
Ottawa
ON
MRT
100
123,000
123,000
94
Canadian Centre for Ethics in Sports
Heritage Place Ottawa
ON
MRT
50
227,000
113,500
81
Public Works
St. Laurent Business Centre Ottawa
ON
MRT
100
88,000
88,000
69
Intact Insurance Company, The Pythian Group
Standard Life Ottawa
ON
MRT
50
381,000
190,500
99
Public Works
Time Square
Ottawa
ON
MRT
100
111,000
111,000
98
Public Works, Le Droit, Empire Grill
301 Laurier Ave Ottawa
ON
MRT
50
26,000
13,000
100
Unifor
181 Queen Street
Ottawa
ON
MRC
100
251,500
251,500
100
CBC
131 Queen Street
Ottawa
ON
MRC
100
329,500
329,500
100
350 Sparks Ottawa
ON
MRC/MRT
100
173,000
173,000
85
93
Public Works
Morguard, Morneau Shepell
Performance Court2
Ottawa
ON
MRC
50
361,000
180,500
95
Shopify, Canada Council for the Arts, KPMG
Centre de la Cité
Montreal
QC
MRT
100
127,500
127,500
79
On-Line Executive Centre, Sun Life Assurance
825 Des Érables Salaberry-de-
QC
MRT
50
485,000
242,500
100
Diageo
Valleyfield
Place Innovation Saint-Laurent
QC
MRC/MRT
100
896,000
896,000
100
Saint John City Hall Saint John
NB
MRC
50
157,000
78,500
52
City of Saint John
Industrial Portfolio
Various
Various MRC
100
526,000
526,000
87
Acklands Grainger, Carquest
TOTAL OFFICE AND INDUSTRIAL 10,452,822
7,619,000
93
1
Properties held for sale and excluded from Morguard REIT portfolio summary.
2
Occupancy represents percentage committed.
Bombardier, AJW Technique, Amdocs
2 014 A N N U A L R E P O R T
23
HOTEL PORTFOLIO
Ownership
Interest
Property
City
Province
Ownership (%)
Suites
CANADA
Courtyard Marriott Mississauga
Mississauga
ON
MRC
100
144
Residence Inn Marriott
Mississauga
ON
MRC
100
100
Toronto Airport Marriott
Toronto
ON
MRC
95
424
Courtyard Marriott Vaughan
Vaughan
ON
MRC
100
144
Courtyard Marriott Markham
Markham
ON
MRC
100
144
Residence Inn Marriott
Markham
ON
MRC
100
TOTAL HOTEL Penn West Plaza, Calgary, AB
Place Innovation, Saint-Laurent, QC
Courtyard Marriott, Mississauga, ON
100
1,056
CORPORATE INFORMATION
BOARD OF DIRECTORS
K. (Rai) Sahi 4
Chairman and
Chief Executive Officer
David A. King 2, 4
Vice Chairman
Morguard Corporation
Corporate Director
Andrew Edmundson
Corporate Director
Timothy J. Murphy 2, 3
Partner, McMillan LLP
Michael S. Robb 1, 3
Corporate Director
Bruce K. Robertson 1, 4
Vice President, Investments
The Woodbridge Company
Limited
1
Audit Committee
2Human
Resources, Compensation
and Pension Committee
3C orporate
Governance and
Nominating Committee
4Investment
Committee
L. Peter Sharpe 1, 3, 4
Corporate Director
EXECUTIVE DIRECTORY
K. (Rai) Sahi
Chairman and
Chief Executive Officer
Paul Miatello
Chief Financial Officer
Beverley G. Flynn
General Counsel
and Secretary
Robert Wright
Vice President,
Chief Financial Officer,
Morguard North American
Residential REIT
Pamela McLean
Chief Financial Officer
Morguard REIT
Senior Vice President,
Finance, and
Chief Financial Officer
Morguard Investments
Limited
John Levac
Vice President,
Asset Management,
Morguard REIT
W. Scott MacDonald
Executive Vice President, Retail
Morguard Investments
Limited
Principal Bankers
Royal Bank of Canada
Toronto-Dominion Bank
For additional information,
please contact:
Paul Miatello
Chief Financial Officer
pmiatello@morguard.com
Gordon Vollmer
Executive Vice President,
Office and Industrial
Morguard Investments
Limited
Margaret Knowles
Senior Vice President,
Development
Morguard Investments
Limited
Brian Athey
Vice President,
Operations (Canada)
Morguard North American
Residential REIT
John Talano
Vice President,
Operations (U.S.),
Morguard North American
Residential REIT
Robert McFarlane
Vice President, Internal Audit
Registered Office
55 City Centre Drive
Suite 1000
Mississauga, ON
L5B 1M3
Tel: 905-281-3800
info@morguard.com
Transfer Agents
Computershare Trust
Company of Canada
1-800-387-0825
inquiries@canstockta.com
Auditors
Ernst & Young LLP
Share Listing
Toronto Stock Exchange
Symbol
MRC
Investor Relations
Visit our website at
www.morguard.com or view
our filings on SEDAR at
www.sedar.com.
Beverley G. Flynn
General Counsel
and Secretary
bflynn@morguard.com
Tel: 905-281-3800
info@morguard.com
Annual Shareholder Meeting
Wednesday, May 13, 2015
at 10:30 a.m.
Rattlesnake Point Golf Club
5407 Regional Road 25
Milton, ON
L9T 2X5
Design: www.jumpcommunicationsinc.com
INVESTOR INFORMATION
The selected annual financial information in the 2014 Annual Report
highlights certain key metrics for the Company. As a result, this
Report should be read in conjunction with Morguard’s Consolidated
Financial Statements for the year ended December 31, 2014, related
Management’s Discussion and Analysis (“MD&A”) and the Annual
Information Form (“AIF”).
These documents are available on the Company’s website at
www.morguard.com. All continuous disclosure documents required
by securities regulators are also filed on the System for Electronic
Document Analysis and Retrieval (“SEDAR”) and can be accessed
electronically at www.sedar.com.
55 City Centre Drive
Suite 1000
Mississauga, ON L5B 1M3
905-281-3800
MORGUARD.COM