MORGUARD CORPORATION
2015 ANNUAL REPORT
FOCUSED ON
PERFORMANCE
SPOTLIGHT
STRONG FINANCIAL
PERFORMANCE
PAGE 4
INCREASING OUR
PRESENCE IN CHICAGO
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TOP HONOURS FOR A
TOP-QUALITY DEVELOPMENT
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MORGUARD CORPORATION
Morguard Corporation (“Morguard” or the “Company”) is a real estate operating company
listed on the Toronto Stock Exchange (TSX) under the symbol MRC. At December 31, 2015,
the Company’s owned and managed portfolio of assets was valued at nearly $19 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 and manages a diversified portfolio of
high-quality residential, retail, office, 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-suite residential properties 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
The Heathview, Toronto, ON, recipient of FRPO’s Rental Development of the Year Award for 2015.
FELLOW SHAREHOLDERS
2015 WAS ANOTHER YEAR OF ACHIEVEMENT
AS WE MAINTAINED OUR FOCUS ON CREATING
VALUE IN OUR CORE LINES OF BUSINESS
AND STRENGTHENED THE COMPANY THROUGH
STRATEGIC INVESTMENTS.
Our goal is to be a leading owner and manager of real estate while providing our investors with a high level
of diversification. Our business model includes ownership and management of real estate assets, including
substantial interests in two real estate investment trusts, Morguard REIT and Morguard North American
Residential REIT. Further diversification comes from our portfolio of managed equities and fixed income products
recently enhanced by our acquisition of a 60% interest in Lincluden Investment Management Limited.
In 2015, we successfully grew Morguard’s portfolio with investments in the multi-suite residential segment
and in the hotel industry, and through our ongoing development activities. For the long term, our focus is on
increasing value for our shareholders while management continues to search for attractive real estate investment
opportunities in markets across North America. Our core portfolio of assets and conservatively leveraged
balance sheet continue to provide a high level of cash flow, allowing Morguard to grow without accessing
capital markets.
It is expected, in general, that real estate performance in 2016 will be similar to that seen in 2015, and that the
oil sector will continue have a negative impact on overall growth. In 2016, management is actively working on
remerchandising at a number of our enclosed retail centres with the prospect of achieving increased rental rates
and securing long-term tenancies.
Morguard’s achievements are made possible by the dedication and professionalism of our management team
and employees and through the guidance of our directors. I express my appreciation to them all and I thank
our shareholders sincerely for their support.
K. R AI SAHI
Chairman and Chief Executive Officer
2015 HIGHLIGHTS
OUR STRONG PERFORMANCE FLOWS
DIRECTLY FROM THE STRENGTH OF
OUR REAL ESTATE PORTFOLIO.
In 2015, Morguard again delivered strong financial results, building on its long record of
success. At the same time, Morguard also strengthened its portfolio through development
and strategic investments and earned recognition for its activities and for the quality of
its properties.
REVENUE AND EARNINGS
Morguard’s sources of revenue and earnings are diversified,
including rental revenue from owned properties, fees earned
from the advisory services business, changes in property
values, and management fees from investment clients, in
both Canada and the United States. At December 31, 2015,
our portfolio of owned real estate assets was valued at
$8.1 billion, while our managed portfolio was valued at an
additional $7.5 billion.
Our key financial metric is Morguard’s share of funds from
operations (“FFO”). In 2015, Morguard’s share of FFO
reached $183 million, up from $152 million a year earlier,
or 20%. Morguard’s share of FFO per common share
reached $14.96 in 2015, an increase of 23% over 2014.
The key reasons for the year-over-year increase were the
continued growth in net operating income (“NOI”) and the
refinancing of maturing term debt at prevailing low level
interest rates.
In 2015, Morguard’s total revenues increased to $884 million
from $566 million the previous year, an increase of 56%.
Revenue from our real estate properties accounted for 92%
of total revenues, while management and advisory fees
accounted for 7% of total revenues. On December 31, 2014,
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M O R G U A R D C O R P O R AT I O N
20% INCREASE
IN MORGUARD’S
SHARE OF FUNDS
FROM OPER ATIONS
(IN MILLIONS OF DOLL ARS)
$183
$144
$153 $152
$129
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the portfolio of real estate properties that the Company
reports was significantly altered because of the consolidation
of Morguard REIT. This accounting change, which added
$292 million of revenues for 2015, required the Company
to combine Morguard REIT’s real estate portfolio with
Morguard Corporation’s portfolio and to eliminate the
reporting of the investment in Morguard REIT.
Another key metric for Morguard is NOI, which is made up
of revenue from real estate properties less operating costs,
utilities and realty taxes. Increases in NOI demonstrate
our ability to grow and to manage our properties efficiently.
During 2015, NOI increased to $436 million from $241 million
a year earlier, which represents a rise of 81%. In addition to
the consolidation of Morguard REIT, which added $172 million,
the increase in NOI was driven by higher same-property
results, particularly in the multi-suite residential and office
segments, acquisitions and contributions from completed
developments. Excluding the impact of the consolidation of
Morguard REIT, the Company has reported an increase in
NOI in each of the past five years; and over this five-year
period the compound annual growth rate in NOI was 12%.
56% INCREASE IN
TOTAL REVENUE
81% INCREASE
IN NET OPER ATING
INCOME
(IN MILLIONS OF DOLL ARS)
(IN MILLIONS OF DOLL ARS)
$517
$393
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SPOTLIGHT
$566
$884
$436
$292
$172
$592
$241
$414
$201
$264
$164 $171
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MANAGING GROWTH
ACROSS THE BORDER
One of Morguard’s successful business models
in Canada has been to partner, or co-invest,
with institutional clients in the purchase and
management of major properties. Now that
same model has been applied in the U.S.
In 2015, Morguard and a Canadian pension fund client acquired
for $74 million (US$56 million) 2940 Solano at Monterra, a newlyconstructed, 252-suite, garden-style apartment property located in
Cooper City, Florida, about 16 miles southwest of Fort Lauderdale.
Morguard arranged for the sale of a 49% interest to one of its Canadian
pension fund clients, and continues to hold the remaining 51%.
This transaction represents Morguard’s first mandate to manage
a U.S. asset for a Canadian client.
The property has more than 281,000 square feet of space and offers its
residents a clubhouse, pool, summer kitchen, fitness centre, and walking trails.
Monterra itself is a community spanning more than 500 acres, and has been
described as a “family paradise.” It is located near fine dining, exclusive shopping,
and entertainment venues.
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SPOTLIGHT
STRONG FINANCIAL
PERFORMANCE
OVER FIVE YEARS
Strong financial performance over the longer term is a key
objective of Morguard Corporation and the results for the past
five years demonstrate its achievement. Key factors include
a strategic focus on growth, a prudent approach to financial
management and an increasingly diversified portfolio
and revenue streams.
FINANCIAL HIGHLIGHTS
(IN THOUSANDS OF DOLL ARS,
EXCEPT PER SHARE AMOUNTS)
2011 20122013 20142015
$297,265 $315,590 $417,376 $472,808 $808,595
392,958 414,439 516,882 566,326 883,559
164,330 170,989 201,496 241,193 435,899
128,609 144,133 153,073 152,053 183,139
$9.92 $11.22 $12.07 $12.14 $14.96
Total assets
3,486,107 4,409,816 5,452,995 7,993,684 8,602,132
Shareholders’ equity
1,683,100 2,048,288 2,329,972 2,498,605 2,697,724
Shareholders’ equity
per common share
$129.98 $160.37 $185.12 $202.27 $224.94
12,949 12,772 12,586 12,353 11,993
Revenue from real estate properties
Total revenue
Net operating income
Morguard’s share of FFO
1
Morguard’s share of FFO
per common share
Number of common shares
1
Morguard’s share of FFO eliminates the non-controlling interests of Morguard North American Residential REIT.
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M O R G U A R D C O R P O R AT I O N
72%
CANADA
28%
U.S.
THE MORGUARD PORTFOLIO
Morguard management is committed to maintaining the
diversified nature of the Company’s real estate portfolio.
We believe this diversification is a key strength as it helps
to insulate shareholders from any cyclical downturns in
a particular asset class or location and enhances the
long-term reliability of the revenue stream.
The Company’s portfolio of real estate properties is
highly diversified by asset class and by geography, with
28% (by value and NOI) of the Company’s real estate
properties located in the U.S. at December 31, 2015.
The Canadian and U.S. properties are further diversified,
with NOI being generated from seven Canadian provinces
and eight U.S. states.
NET OPER ATING INCOME
IS DIVERSIFIED BY
GEOGR APHY
NET OPER ATING INCOME
IS FURTHER DIVERSIFIED
BY ASSET CLASS
YEAR ENDED DECEMBER 31, 2015
Multi-suite
Residential
34%
Retail
34%
Other
4%
Office
28%
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Centerpoint Mall, Toronto, ON
The composition of Morguard’s real estate properties at
December 31, 2015, is shown in the table to the right,
with a comparison to December 31, 2014.
At December 31, 2015, Morguard owned a portfolio of
173 multi-suite residential, retail, office, industrial and hotel
properties, comprising 17,225 residential suites, approximately
16.3 million square feet of commercial leasable space and
1,056 hotel rooms.
At December 31, 2015, Morguard’s total assets were
$8.6 billion, compared with $3.5 billion at December 31, 2011.
The increase in total assets has been driven by the
consolidation of Morguard REIT’s assets on December 31,
2014, by significant acquisition and development programs
and by increases in the value of the Company’s real estate
properties. The compound annual growth rate over the
past five years in total assets is 23%.
FAIR VALUE BY SEGMENT
AS AT DECEMBER 31
2014
2015
Multi-suite residential
38%
41%
Retail33%
32%
Office26%
24%
Other3%
3%
TOTAL ASSETS
(IN BILLIONS OF DOLL ARS)
$8.6
$8.0
$5.5
CAPITAL MANAGEMENT
Morguard management devotes considerable attention to
the quality of the Company’s balance sheet, including prudent
management of debt financing because it is a vital element
in the Company’s success. Again in 2015, the Company took
advantage of the prevailing low level of interest rates.
$4.4
$3.5
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M O R G U A R D C O R P O R AT I O N
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5.1%
2011
4.7%
2012
4.5%
2013
4.2%
2014
3.9%
2015
During the year, Morguard refinanced $290 million of maturing
term debt that yielded approximately $406 million of gross
financing proceeds. The mortgage refinancing program
lowered Morguard’s weighted average interest rate at
December 31, 2015, to 3.91%, compared with 4.17% a year
earlier. It also extended its weighted average term to maturity
to 5.5 years. In addition, the Company has credit facilities
of nearly $350 million, which provide liquidity for further
investment opportunities.
Another important metric for Morguard is shareholders’
equity per common share. 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, 2015, Morguard’s
shareholders’ equity per common share was $225,
compared with $130 at December 31, 2011. The increase in
shareholders’ equity per common share over the past five
years, represents a compound annual growth rate of 16%.
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SPOTLIGHT
TAKING ADVANTAGE
OF LOW INTEREST
RATES
Minimizing operating costs is a key
business strategy for Morguard, and
that applies to the cost of financing
the Company’s portfolio of properties.
SHAREHOLDERS’
EQUITY PER
COMMON SHARE
$225
Over the past several years, as the general level
of interest rates have declined to historical lows,
management has taken the opportunity to refinance
many of the portfolio’s properties. By reducing
the interest rates paid on debt, management has
realized significant savings for the Company.
$202
$185
$160
$130
The 2015 mortgage refinancing program lowered
Morguard’s weighted average interest rate at
December 31, 2015, to 3.9%.
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SPOTLIGHT
INCREASING
OUR PRESENCE
IN THE HEART
OF CHICAGO
Since 2012, Morguard Corporation’s real estate
portfolio in the U.S. has included an important
multi-suite residential property in Chicago, Illinois.
Our first purchase was a LEED Gold certified high-rise
residential rental complex known as Alta at K Station
in the West Loop area of Chicago. Now our presence
in the Windy City is being dramatically increased,
with the addition of a major residential tower that
is being constructed atop an existing mixed-use
development known as Block 37.
The property, at 108 North State Street, comprises a commercial centre that features shopping,
dining and entertainment venues. It takes its unusual name from one of the original 58 Chicago
city blocks established in 1830.
For $62 million (US$44 million), Morguard purchased a 49% stake in the residential building
being built atop the northern end of Block 37. The residence will be known as The Marquee at
Block 37 and will include 691 luxury suites in a 34-storey tower. Leasing began in March 2016,
with the first occupancies set for June.
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M O R G U A R D C O R P O R AT I O N
A major attraction for potential tenants will be the access
provided to transportation, retail, dining and entertainment.
The Marquee at Block 37 will have direct access to the
complex’s retail centre, as well as access to a major Chicago
Transit Authority station.
The Marquee at Block 37 is designed as a sleek, glass-clad tower
with modern living spaces and several recreation and relaxation
areas, including a rooftop spa and fitness centre, taking advantage
of the building’s city views. There will also be a fifth floor amenity
deck, offering residents an outdoor pool and spa, cabanas, grilling
stations and an outdoor terrace.
Morguard’s investment in The Marquee at Block 37 is indicative of its
willingness to seek out unique development opportunities in Canada
and the U.S. In this case, Morguard has leveraged its relationship
with a U.S.-based investment principal that is known for its luxury,
multi-suite residential projects.
Alta at K Station, Chicago, IL
The Marquee at Block 37, Chicago, IL
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GROWTH IN ASSETS OWNED
AND UNDER MANAGEMENT
Assets under management (“AUM”) is another important
metric for Morguard. Growth in AUM strengthens our
management platform and increases operational efficiencies.
At December 31, 2015, Morguard’s real estate AUM totalled
$15.6 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.
In early 2015, Morguard began reporting AUM that includes
the value of our portfolio of managed equities and fixed
income. This addition to reported AUM results from
Morguard’s acquisition of Lincluden Investment Management
Limited (“Lincluden”), which closed on February 3, 2015.
The Lincluden acquisition added $3.3 billion of AUM,
increasing the critical mass of the Company’s existing
equity management entity, Morguard Financial Corp. As of
December 31, 2015, Morguard’s total AUM, including real
estate and managed equities, reached $18.9 billion.
REAL ESTATE INVESTMENT TRUSTS
Contributing to Morguard’s financial success are its stakes
in two substantial real estate investment trusts, which are
valued at over $1.1 billion. Distributions received from our
two REITs contribute to Morguard Corporation’s cash flow.
During 2015, Morguard Corporation received distributions
from the two REITs totalling $42 million.
Morguard has a significant interest in Morguard REIT,
which, in turn, owns a Canadian portfolio of high-quality,
income producing real estate assets comprising retail,
office and industrial properties. The diversified portfolio of
50 commercial properties consists of 8.8 million square feet
of gross leasable area located in six Canadian provinces.
Morguard Corporation acquired approximately 2.5 million
units of Morguard REIT during 2015 for $41 million,
representing a weighted average price of $16.11 per unit,
raising its interest in the REIT to 50.4%. Purchasing these
units was seen as an attractive investment because the
REIT has been a strong financial performer, delivering
consistent distributions to unitholders. As well, because
cap rates in the industry have remained relatively low,
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M O R G U A R D C O R P O R AT I O N
GROWTH IN ASSETS
UNDER MANAGEMENT
(IN BILLIONS OF DOLL ARS)
$18.9
$3.3
$15.1 $15.0
$15.6
$12.9
$11.2
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MORGUARD’S TOTAL
ASSETS UNDER MANAGEMENT
REACHED $18.9 BILLION
Owned
Real Estate
$8.1 billion
Managed
Real Estate
$7.5 billion
Managed
Equities and
Fixed Income
$3.3 billion
Creekside Corporate Centre, Toronto, ON
the purchase of Morguard REIT units appeared attractive in
relation to direct investments in real property. Morguard REIT
had total assets of $2.9 billion as at December 31, 2015,
and for the year recorded NOI of $166 million, compared
with $170 million a year earlier.
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.
At December 31, 2015, Morguard North American Residential
REIT owned a portfolio of 13,102 residential suites, including
31 apartment communities located in seven U.S. states
and 14 residential apartment communities located in two
Canadian provinces, with a total appraised value of
$2.1 billion. In 2015, Morguard North American Residential
REIT recorded NOI of $104 million, up from $90 million
in 2014.
THIRD-PARTY SERVICES
AND INVESTMENT VEHICLES
Morguard’s extensive offering of third-party real estate
advisory services earned fees of $60 million in 2015.
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
advisory services through its investment, property
management and leasing groups.
In 2015, Morguard attracted a major provincial pension
fund as a new client and partner. Morguard was awarded
mandates to manage three properties located in Calgary
and Edmonton, Alberta, and in transactions that closed
in December 2015, Morguard and the pension fund client
became partners in two Winnipeg, Manitoba, office
properties. With these transactions, Morguard will have
retained or added to its managed portfolio more than
790,000 square feet of office space.
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. Morguard’s investment
in Lincluden established a platform for equities and
fixed income – and provides access to new capital and
enhanced products for Morguard’s institutional clients.
Following the acquisition, Morguard transitioned
Morguard Financial Corp. into Lincluden to add real
estate equity expertise to the product offerings.
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INVESTMENTS AND ACQUISITIONS
residential building in downtown Chicago, Illinois. During
2015, Morguard invested $38 million (US$30 million) toward
its development.
Morguard continues to enhance its portfolio through
judicious investments and acquisitions in a number of asset
classes. In the U.S. multi-suite residential market, Morguard
made strategic acquisitions and significant investments in
2015, including the following.
During 2015, Morguard also increased its stake in the
hotel industry through a series of investment transactions
in the shares of Temple Hotels Inc. (“Temple Hotels”).
Temple Hotels, whose primary business activity is the
ownership and development of hotel properties, owns
30 hotels across six Canadian provinces and one territory.
Management intends to employ our expertise to create
value in Temple’s portfolio. Following the most recent share
purchase, Morguard’s investment in Temple Hotels represents
a 38.9% ownership interest. This investment has made
Morguard the largest shareholder of Temple Hotels.
The Company acquired 2940 Solano at Monterra, a newly
constructed, 252-suite, garden-style apartment property
located in Cooper City, Florida. This property, which
complements our existing portfolio in the southern U.S.,
is owned by Morguard North American Residential REIT
and a Canadian pension fund client. The total acquisition
cost was $74 million (US$56 million).
The Company also acquired a 59% interest in Sunset &
Gordon, a newly constructed, 299-suite high-rise apartment
building with 47,500 square feet of commercial space in
Los Angeles, California, a new market for Morguard.
Morguard purchased the 59% investment for $77 million
(US$58 million). Leasing is expected to commence in the
fourth quarter of 2016.
On November 12, 2015, Morguard also entered into
an agreement to purchase three hotels that are adjacent
to Pearson International Airport in Toronto, Ontario.
This $34 million acquisition complements Morguard’s
existing hotel portfolio. The acquisition closed on
February 1, 2016.
Morguard previously completed a 49% investment in
The Marquee at Block 37, a 34-storey, 691-suite multi-suite
SPOTLIGHT
QUALITY ACROSS
THE BOARD MAKES
THIS CENTRE A WINNER
Exceptional asset management, development
activities and property management all came
together in Morguard’s Bramalea City Centre.
In 2015, it became the first super regional shopping centre in the world
to be named The Outstanding Building of the Year. The TOBY Award
is presented by BOMA, the international Building Owners and Managers
Association.
Bramalea City Centre is the fourth-largest enclosed shopping centre
in the province of Ontario. To remain competitive, Morguard undertook
a 300,000-square-foot expansion to consolidate area trade, improve
operational efficiencies and enhance the retail experience.
The benefits ranged from an enhanced retail mix to operational efficiencies to
increased value. Retail trade conducted at the shopping centre increased by
42% since the renovation and expansion in 2010, and annual pedestrian traffic
increased by four million visits. Improved operational efficiencies have meant
impressive reductions in energy, water, gas emissions and waste.
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M O R G U A R D C O R P O R AT I O N
DEVELOPMENT ACTIVITIES
Development of properties is another key activity of
Morguard. The market for acquisition of suitable properties
remains very competitive and, therefore, development
projects help enhance not only the size but also the quality
of the Company’s real estate portfolio. During the past two
years, Morguard has transferred over $310 million of
properties under development to “income producing” status,
mainly reflecting the completion of Performance Court, our
office development in Ottawa, Ontario, and The Heathview,
Morguard’s 30-storey, twin-tower, multi-suite residential
project in Toronto, Ontario.
Another recently completed project was the $25 million
major renovation and capital upgrade at St. Laurent in
Ottawa, Ontario, that has rejuvenated the centre – increasing
its competitiveness, enhancing its focus on fashion and
improving the customer experience. The modernization is
also expected to reduce operating costs. Looking forward,
light rail transit is expected to arrive at St. Laurent in 2018
and the City of Ottawa is undertaking master planning
studies to ensure adjacent land is ready for growth and
optimized for transit-oriented development.
Based on work completed during 2015, Morguard was
awarded a mandate for the design, construction and
operation of an ancillary services office building as part
of the Etobicoke General Hospital’s expansion plans.
The planned six-storey, LEED Gold, office building will
comprise 156,000 square feet of gross leasable area and
will provide specialized care facilities as well as house
doctors’ offices. Morguard has been contracted to provide
facilities management for a 40-year term and, once tenant
occupancy is achieved, Morguard has arrangements
to sell a 50% interest to an institutional investor.
SPOTLIGHT
MORGUARD’S
GROWING STAKE IN
HOTEL PROPERTIES
During 2015, Morguard increased its
exposure to this asset class by entering
into agreements to acquire three hotel
properties and by purchasing shares
of Temple Hotels Inc.
In early 2016, Morguard completed an agreement
to purchase three hotels near Toronto’s Pearson
International Airport. The acquisition is in line with
Morguard’s strategy to acquire hotels in desirable
submarkets with established demand patterns.
The three hotels purchased are in close proximity
to Morguard’s full-service hotel, the Toronto
Airport Marriott hotel. With the completion of this
acquisition Morguard directly owns a portfolio of
nine hotels, located in high-demand submarkets
within the Greater Toronto Area, comprised of
1,473 rooms.
An additional element to our hotel strategy during
2015 was to acquire common shares and convertible
debentures of Temple Hotels. At December 31, 2015,
Morguard owned 30.2 million Temple shares,
representing a 38.9% interest and $3 million of
Temple’s convertible debentures.
During 2015 the Company experienced the departure of
Target Canada from several of our retail properties. We have
placed a strong focus on strategic redeployment of the space
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St. Laurent, Ottawa, ON
77 Bloor Street West, Toronto, ON
formerly leased to Target. With over 600,000 square feet of
gross leasable area, the redevelopment will result in larger
spaces being re-demised to suit multiple new tenants and is
expected to generate increased revenue and improve cash
flow over the long term.
During 2016, Morguard expects to commence a major
restoration of its 328-room hotel property located at
361 Queen Street, Ottawa, Ontario. This project will include
a complete renovation of all rooms, common areas and the
exterior of the building. Plans are currently being finalized
for this project.
SUSTAINABILITY
At Morguard, our focus on sustainability has resulted in
continual improvements across environmental, social and
governance indicators. To support property sustainability,
Morguard works collaboratively with property owners to
define goals and actions in a formal plan.
For 2015, Morguard’s sustainability initiatives resulted in a
measurable reduction in energy, water and waste, since the
baseline year of 2010. These results were achieved through
the identification and delivery of sustainable projects that were
right-sized for each property within the owned and managed
Canadian office and enclosed shopping centre portfolio.
In addition, Morguard works to achieve BOMA and LEED
certifications and participates in Ontario’s Certified Rental
Building Program in order to remain competitive in local
real estate markets. These designations result in improved
valuation and are attractive to tenants who are seeking
sustainable workplaces and living spaces.
Visit Morguard.com for the full report.
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M O R G U A R D C O R P O R AT I O N
AWARDS AND RECOGNITION
In 2015, Morguard Corporation continued to be recognized
for its accomplishments, including the quality of its
development projects.
Coquitlam Centre
Sustainability Innovator
LEAP Award
505 3rd St. SW
Vitality Award
Penn West Plaza
5-Star Energy Cost Index Award
Bramalea City Centre The Outstanding Building of the Year Award (TOBY)
Holt Renfrew Centre
Earth Award
60 Bloor St. W.
Greatest Energy Reduction Award, Race to Reduce
77 Bloor St. W.
Lowest Energy Use Award,
Race to Reduce
77 Bloor St. W.
Greatest Energy Reduction Award, Race to Reduce
The Heathview
Rental Development of the Year
Centre de la Cité
The Outstanding Building of the Year Award (TOBY)
Morguard Corporation Gold Award,
Canada’s Safest Employers
TENANT SATISFACTION
Morguard continually measures the effectiveness of
property programs designed to maintain high levels of tenant
satisfaction. In 2015, Morguard conducted an office tenant
satisfaction survey through Altus Insite (a commercial real
estate research firm). Overall, Morguard managed properties
scored notably high service levels – outperforming the
industry benchmark of market norms in every key area.
SPOTLIGHT
TOP HONOURS
FOR A TOP-QUALITY
DEVELOPMENT
The strength of Morguard’s development and
management teams continues to attract attention
– and win acclaim.
Most recently, a major Morguard residential development,
The Heathview in Toronto, Ontario, took top honours for the
2015 Rental Development of the Year, announced by the FRPO.
The awards recognize the province’s top landlords and property
managers for excellence in the rental housing industry.
Development of The Heathview was a long-term effort that
involved considerable planning, as well as discussion with
members of the local community. The Heathview replaced
two end-of-life residential buildings with a new Class A
LEED-designed project that has revitalized the community.
The completed project is a 30-storey, twin-tower, multi-suite
residential development located in Forest Hill, one of Toronto’s
most sought-after neighbourhoods. The transit-oriented
development is within steps of the St. Clair West subway
station and the St. Clair streetcar line.
2 015 A N N U A L R E P O R T
15
THE LONG-TERM GROWTH
IN THE VALUE OF MORGUARD SHARES
(AS AT DECEMBER 31)
$150
$133
$125
$115
RESULTS FOR SHAREHOLDERS
$76
$44
$49
$39
$33
$18
06
07
08
09
10
11
12
13
14
15
The long-term growth in the value of Morguard shares
is an important goal for the Company’s management.
During 2015, the Company’s stock price decreased from
$150 on January 1, 2015, to $133 at year-end, likely
reflecting investor concerns about weakness in the Canadian
and U.S. economies. Management continues to build the
Company with a sharp focus on the long-term health of the
balance sheet. In fact, the long-term performance of our
stock price has been strong. Over the past 10 years the
compound annual growth rate of Morguard’s stock is 16%.
The long-term appreciation in our stock price is a validation
of management’s strategy to build a strong, conservatively
leveraged company.
Morguard has regularly made use of a normal course
issuer bid to repurchase common shares. During 2015,
Morguard Corporation purchased 368,051 common shares
for a total of $54 million, representing an average price
of $146 per common share.
Morguard believes that its common shares have been
trading in price ranges that do not adequately reflect their
value in relation to the Company’s current business and its
future prospects. As a result, depending upon future price
movements and other factors, management believes that
the purchase and cancellation of common shares represent
a prudent use of the Company’s financial resources.
In September 2015, Morguard renewed its normal course
issuer bid for the purchase for cancellation of up to
602,752 common shares.
Performance Court, Ottawa, ON
16
M O R G U A R D C O R P O R AT I O N
BALANCE SHEETS
IN THOUSANDS OF CANADIAN DOLL ARS
AS AT DECEMBER 31,
20152014
ASSETS
Non-current assets
Real estate properties
$7,925,645$7,453,226
Equity-accounted and other investments
329,320147,635
Other assets
158,245146,130
8,413,2107,746,991
Current assets
Mortgages and loans receivable
26,57962,949
Amounts receivable
52,05048,522
Prepaid expenses and other
16,78912,074
Cash
93,504123,148
188,922246,693
$8,602,132$7,993,684
LIABILITIES AND SHAREHOLDERS’ EQUITY
Non-current liabilities
Mortgages payable
$3,367,638$3,016,549
Unsecured debentures
134,228133,964
Convertible debentures
154,440154,758
Morguard Residential REIT units
229,416215,211
Deferred income tax liabilities
538,197446,546
4,423,9193,967,028
Current liabilities
Mortgages payable
231,916316,170
Construction financing payable
143,489165,271
Loans payable
9,5682,320
Accounts payable and accrued liabilities
175,840179,381
Bank indebtedness
135,4034,927
Total liabilities
696,216668,069
5,120,1354,635,097
EQUITY
Shareholders’ equity
Non-controlling interest
Total equity
2,697,7242,498,605
784,273859,982
3,481,9973,358,587
$8,602,132$7,993,684
2 015 A N N U A L R E P O R T
17
STATEMENTS OF INCOME
IN THOUSANDS OF CANADIAN DOLL ARS, EXCEPT PER COMMON SHARE AMOUNTS
FOR THE YEARS ENDED DECEMBER 31,
Revenue from real estate properties
Property operating expenses
Property operating costs
Utilities
Realty tax expense
Net operating income
20152014
$808,595$472,808
195,548137,519
54,05334,671
123,09559,425
435,899241,193
OTHER REVENUE
Management and advisory fees
Interest and other income
Sales of product and land
59,53673,440
7,81914,970
7,6095,108
74,96493,518
EXPENSES
Interest
Property management and corporate
Cost of sales of product and land
Amortization of capital assets and other
148,784105,377
72,55868,977
5,1303,541
8,2765,375
234,748183,270
OTHER INCOME (EXPENSE)
Fair value gain (loss), net
Equity income from investments
Loss on business combination, net
Other expense
(87,301)24,277
6,25852,921
—(16,254)
(12,822)(8,488)
(93,865)52,456
Income before income taxes
182,250203,897
Provision for income taxes
Current
14,00520,690
Deferred
64,72545,950
Net income for the year
78,73066,640
$103,520$137,257
Net income attributable to:
Common shareholders
$80,542$136,703
Non-controlling interest
22,978554
$103,520$137,257
Net income per common share attributable to:
Common shareholders – basic and diluted
$6.58$10.92
18
M O R G U A R D C O R P O R AT I O N
STATEMENTS OF COMPREHENSIVE INCOME
IN THOUSANDS OF CANADIAN DOLL ARS
20152014
FOR THE YEARS ENDED DECEMBER 31,
Net income for the year
$103,520$137,257
OTHER COMPREHENSIVE INCOME
Items that may be reclassified subsequently to net income:
Unrealized gain on investments in real estate funds
9,8984,732
Unrealized foreign currency translation gain
150,92859,231
Other
(432)11,812
Deferred income tax provision
160,39475,775
(4,330)(3,084)
156,06472,691
Items that will not be reclassified subsequently to net income:
(5,698)(1,401)
1,494349
Actuarial loss on defined benefit pension plans
Deferred income tax recovery
(4,204)(1,052)
151,86071,639
Other comprehensive income
Total comprehensive income for the year
$255,380$208,896
Total comprehensive income attributable to:
Common shareholders
$230,893$208,216
Non-controlling interest
24,487680
$255,380$208,896
STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
IN THOUSANDS OF CANADIAN DOLL ARS
ACCUMUL ATED
OTHER
TOTAL
NON
RETAINEDCOMPREHENSIVE
SHARE SHAREHOLDERS’ CONTROLLING
EARNINGS
INCOME
CAPITAL
EQUIT Y
INTEREST
TOTAL
Shareholders’ equity, January 1, 2015
$2,265,779
$122,616 $110,210
$2,498,605
$859,982 $3,358,587
Changes during the period:
Net income
80,542
—
—
80,542
22,978103,520
Other comprehensive income
—150,351—150,351 1,509
151,860
Dividends
(7,305)
— —
(7,305)
—(7,305)
Distributions
——
——
(33,000)
(33,000)
Contribution from non-controlling interest
——
——
17,354
17,354
Issuance of common shares
—
—1,201
1,201
— 1,201
Repurchase of common shares
(50,387)
—(3,314)
(53,701)
—(53,701)
Change in ownership of Morguard REIT 28,031
—
—
28,031 (89,208)(61,177)
Business combination
——
——
4,658
4,658
Shareholders’ equity, December 31, 2015
$2,316,660
$272,967
$108,097
$2,697,724
$784,273 $3,481,997
2 015 A N N U A L R E P O R T
19
STATEMENTS OF CASH FLOWS
IN THOUSANDS OF CANADIAN DOLL ARS
FOR THE YEARS ENDED DECEMBER 31,
20152014
OPER ATING ACTIVITIES
Net income
Add (deduct) items not affecting cash
Distributions from equity-accounted investments
Land held for residential development and sale
Additions to tenant incentives and leasing commissions
Net change in operating assets and liabilities
Cash provided by operating activities
$103,520$137,257
138,046(16,465)
4,44529,049
71345
(7,434)(2,198)
(13,794)(5,694)
225,496141,994
INVESTING ACTIVITIES
Additions to real estate properties and tenant improvements
Additions to capital assets
Proceeds from sale of real estate properties
Investment in properties under development
Contributions to equity-accounted investments, net
Investment in publicly traded securities
Decrease (increase) in mortgages and loans receivable, net
Proceeds from sale of publicly traded securities
Business combination
Cash assumed on business combination
(177,921)(60,726)
(7,174)(1,863)
20,75115,634
(21,004)(43,731)
(120,514)(20,190)
(26,051)(15,611)
34,313(44,672)
31071,781
(8,427)—
85312,612
Cash used in investing activities
(304,864)(86,766)
FINANCING ACTIVITIES
Proceeds from new mortgages
405,749467,593
Financing costs on new mortgages
(5,342)(7,100)
Repayment of mortgages
Repayments on maturity
(230,704)(332,492)
Repayments due to early extinguishments
—(75,670)
Principal instalment repayments
(85,880)(46,251)
Proceeds from (repayment of) bank indebtedness, net
123,564(111,157)
Proceeds from (repayment of) construction financing, net
(21,782)61,405
Proceeds from loans payable
8,122—
Dividends paid
(7,277)(7,423)
Contribution from non-controlling interest
15,762—
Distributions to non-controlling interests
(33,000)(1,372)
Payments from Morguard REIT, net
—30,000
Common shares repurchased for cancellation
(53,701)(32,160)
Investment in Morguard REIT
(61,177)(8,362)
Increase in restricted cash
(10,527)(2,486)
Cash provided by (used in) financing activities
43,807(65,475)
Net decrease in cash during the year
Net effect of foreign currency translation on cash balance
Cash, beginning of year
(35,561)(10,247)
5,9174,034
123,148129,361
Cash, end of year
$93,504$123,148
20
M O R G U A R D C O R P O R AT I O N
SPOTLIGHT
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.
56
ULTI-SUITE
M
RESIDENTIAL
PROPERTIES
$
8.1B
69
REAL ESTATE
PROPERTIES
O FFICE AND
INDUSTRIAL
PROPERTIES
173
42
TOTAL
PROPERTIES
R ETAIL
PROPERTIES
6
H OTEL
PROPERTIES
2 015 A N N U A L R E P O R T
21
MULTI-SUITE RESIDENTIAL PORTFOLIO
Leaside Towers, Toronto, ON
The Colonnade, Toronto, ON
CANADA
Ownership
Interest
Property
City
Prov.
Ownership
(%)
Total
Suites
Ownership Suites
Occupancy
(%)
Mayfair Village South
Edmonton
AB
MRC
100
237
237
Square 104
Edmonton AB
MRG
100
277
277
98
Margaret Place
Kitchener
ON
MRG
100
472
472
99
Aspen Grove I
Mississauga ON
MRC
95
168
160
100
Aspen Grove II
Mississauga
ON
MRC
95
168
160
100
Meadowvale Gardens
Mississauga
ON
MRG
100
325
325
95
The Arista
Mississauga
ON
MRG
100
458
458
100
The Elmwoods
Mississauga
ON
MRG
100
321
321
99
The Forestwoods
Mississauga
ON
MRG
89
300
267
96
The Maplewoods
Mississauga
ON
MRG
87
300
261
97
The Valleywoods
Mississauga
ON
MRG
91
373
339
99
Tomken Place
Mississauga ON
MRG
100
142
142
97
126 Sparks
Ottawa
ON
MRC
100
36
36
84
Leaside Towers
Toronto
ON
MRC
100
989
989
95
Rideau Towers I
Toronto
ON
MRG
90
287
258
100
Rideau Towers II
Toronto
ON
MRG
100
380
380
97
Rideau Towers III
Toronto
ON
MRG
100
474
474
99
Rideau Towers IV
Toronto
ON
MRG
100
400
400
97
Rouge Valley Residence
Toronto
ON
MRG
100
396
396
98
The Bay Club
Toronto
ON
MRC
100
293
293
98
The Heathview
Toronto
ON
MRC
100
587
587
59
The Colonnade
Toronto ON
MRC
100
157
157
96
Condominium Suites
Toronto
ON
MRC
100
4
4
100
SUBTOTAL7,544 7,393
22
M O R G U A R D C O R P O R AT I O N
98
97
As at December 31, 2015
Village Crossing Apartment Homes, West Palm Beach, FL
Barrett Walk Luxury Apartment Homes, Kennesaw, GA
U.S.
Property
City
State
Ownership
Ownership
Interest
(%)
Total
Suites
Ownership Suites
Occupancy
(%)
Sunset & Gordon
Los Angeles
CA
MRC
59
299
176
–
Retreat at City Center
Aurora
CO
MRG
100
225
225
94
Settlers’ Creek
Fort Collins
CO
MRG
100
229
229
94
The Retreat at Spring Park
Garland
TX
MRG
100
188
188
97
Grand Venetian at Las Colinas
Irving
TX
MRG
100
514
514
93
Verandah at Valley Ranch
Irving
TX
MRG
100
319
319
94
Garden Lane Gretna
LA
MRG
100
261
261
92
Colonial Manor Apartment Homes
Harahan
LA
MRG
100
48
48
94
Steeplechase Apartment Homes
Lafayette
LA
MRG
100
192
192
88
Magnolia Place Apartment Homes
New Iberia
LA
MRG
100
148
148
89
The Georgian Apartments
New Orleans
LA
MRG
100
135
135
93
Villages of Williamsburg Shreveport
LA
MRG
100
194
194
89
Greenbrier Estates
Slidell
LA
MRG
100
144
144
92
Alta at K Station
Chicago
IL
MRC
100
848
848
92
Bel Air Apartment Homes
Mobile
AL
MRG
100
202
202
90
Hampton Park
Mobile
AL
MRG
100
300
300
91
Pine Bend
Mobile
AL
MRG
100
152
152
91
The Estates at Lafayette Square
Mobile
AL
MRG
100
675
675
89
Briarhill Apartments
Atlanta
GA
MRG
100
292
292
90
The Savoy Luxury Apartments
Atlanta
GA
MRG
100
232
232
94
Barrett Walk Luxury Apartment Homes
Kennesaw
GA
MRG
100
290
290
97
210 Watermark
Bradenton
FL
MRG
100
216
216
97
Blue Isle Coconut Creek
FL
MRG
100
340
340
95
2940 Salano at Monterra
Cooper City
FL
MRG
51
252
129
97
Emerald Lake Lake Worth
FL
MRC
100
337
337
96
Governors Gate I Pensacola
FL
MRG
100
240
240
93
Governors Gate II
Pensacola
FL
MRG
100
204
204
97
Jamestown Estates
Pensacola
FL
MRG
100
177
177
97
Woodcliff Apartment Homes
Pensacola
FL
MRG
100
184
184
94
Woodbine Apartment Homes
Riviera Beach
FL
MRG
100
408
408
94
Mallory Square
Tampa
FL
MRG
100
383
383
91
Village Crossing Apartment Homes
West Palm Beach
FL
MRG
100
189
189
92
The Lodge at Crossroads
Cary
NC
MRG
100
432
432
95
Perry Point
Raleigh
NC
MRG
100
432
432
91
SUBTOTAL9,681 9,435 93
TOTAL MULTI-SUITE RESIDENTIAL
17,225
16,828
2 015 A N N U A L R E P O R T
95
23
RETAIL PORTFOLIO
Centerpoint Mall, Toronto, ON
Prairie Mall, Grande Prairie, AB
CANADA
Ownership
Total
Ownership
Occu
Owner-
InterestAreaArea
pancy
Property
City
Prov.
ship
(%)
(SF)
(SF)
(%)
Top Tenants
Burquitlam Plaza
Coquitlam
BC
MRT
100
67,500
67,500
89
Shoppers Drug Mart, Dollarama, CIBC
Pine Centre Mall
Prince George
BC
MRT
100
476,000
476,000
100
Sears, Sport Chek, Shoppers Drug Mart
Shelbourne Plaza
Victoria BC
MRT
100
57,000
57,000
100
Fairway Market, TD Canada Trust, Scotiabank
Airdrie RONA Centre
Airdrie
AB
MRT
100
44,000
44,000
100
RONA
Airdrie Co-op Centre
Airdrie AB
MRT
100
65,000
65,000
100
Co-op Grocery Store, TD Canada Trust
Heritage Towne Centre
Calgary
AB
MRT
100
131,000
131,000
100
Home Outfitters, Dollarama
Prairie Mall Grande Prairie
AB
MRC/MRT
100
297,000
297,000
98
Mark’s Work Wearhouse, Shoppers Drug Mart
Parkland Mall
Red Deer
AB
MRT
100
429,500
429,500
89
Walmart, GoodLife, Sport Chek, Dollarama
The Centre
Saskatoon
SK
MRT
100
489,500
489,500
99
Sport Chek, Shoppers Drug Mart
Shoppers Mall
Brandon
MB
MRT
100
367,000
367,000
98
Capitol Theatre, GoodLife, Sport Chek
Charleswood Centre
Winnipeg
MB
MRT
100
116,000
116,000
100
Southdale Centre
Winnipeg
MB
MRT
100
175,500
175,500
98
Walmart, Dollarama, Rexall, Bank of Montreal
Aurora Centre
Aurora ON
MRT
100
288,500
288,500
99
Canadian Tire, Sobeys, Cineplex, GoodLife
Bramalea City Centre Brampton
ON
MRC
21
1,407,000
295,500
94
Hudson’s Bay, Forever 21, Sport Chek
Cambridge Centre
Cambridge
ON
MRT
100
726,500
726,500
97
Sears, Hudson’s Bay, Galaxy, H&M
Market Square
Kanata
ON
MRT
100
58,000
58,000
95
Farm Boy, LCBO, TD Canada Trust
Wonderland Corners
London
ON
MRT
100
47,500
47,500
91
Swiss Chalet
Kingsbury Centre
Mississauga
ON
MRT
100
70,000
70,000
95
Longo’s, Shoppers Drug Mart
Hampton Park Plaza
Ottawa
ON
MRT
100
102,000
102,000
91
Food Basics, Rexall, Swiss Chalet
Home Base
Ottawa
ON
MRT
100
10,000
10,000
100
St. Laurent
Ottawa
ON
MRT
100
853,000
853,000
99
Safeway, Shoppers Drug Mart, Dollarama
Royal Bank
Hudson’s Bay, Sears, Toys “R” Us
100 Cavell Avenue1 Toronto ON
MRC 1005,5005,500
84
Centerpoint Mall
Toronto
ON
MRC
100
606,000
606,000
98
Hudson’s Bay, No Frills, Canadian Tire
East York Town Centre
Toronto
ON
MRC
100
382,500
382,500
87
Food Basics, Shoppers Drug Mart, Fit4Less
The Colonnade Toronto
ON
MRC
100
97,000
97,000
100
Yonge & McGill1
Toronto ON
MRC 1007,5007,500
100
Guildwood Village Toronto
ON
MRC
100
52,500
52,500
100
Woodbridge Square
Vaughan
ON
MRT
50
113,000
56,500
99
SUBTOTAL7,541,5006,373,500 972
No major tenant listed due to GLA.
1
Excludes components of properties not available for occupancy due to redevelopment or remerchandising.
2
24
M O R G U A R D C O R P O R AT I O N
Prada, Chanel, Cartier
Valu-mart
Nations Fresh Foods, Scotiabank
As at December 31, 2015
Westward Shopping Center, West Palm Beach, FL
Boynton Town Center, Boynton Beach, FL
U.S.
Ownership
Owner-
Interest
Property
City
State ship
(%)
Total
Area
(SF)
Ownership
Area
(SF)
Occupancy
(%)
Top Tenants
Westgate Shopping Center
Alexandria
LA
MRC
100
168,000
168,000
97
Big Lots, AutoZone, Rite Aid, McDonald’s
Gonzales Plaza
Gonzales
LA
MRC
100
73,000
73,000
95
Big Lots, Dollar Tree, Aaron’s Rent
Colonial Shopping Center
Harahan
LA
MRC
100
44,000
44,000
43
Dollar General, Anytime Fitness
Southland Mall
Houma
LA
MRC
100
445,000
445,000
87
Sears, JC Penney, Dillard’s, Victoria’s Secret
Westland Shopping Center
Kenner
LA
MRC
100
109,000
109,000
87
Herzing University, Family Dollar
Airline Park Shopping Center
Matairie
LA
MRC
100
54,000
54,000
100
Dollar Tree, Rite Aid, McDonald’s
North Shore Square
Slidell
LA
MRC
100
429,500
429,500
67
Alta at K Station
Chicago
IL
MRC
100
13,000
13,000
100
Boynton Town Center
Boynton Beach
FL
MRC
100
209,500
209,500
95
Best Buy, Shoe Carnival, Michael’s, Total Wine
Weeki Wachee Village
Brooksville
FL
MRC
100
82,500
82,500
90
Winn Dixie
Rainbow Square
Dunnellon
FL
MRC
100
116,000
116,000
62
Beall’s Outlet, Tractor Supply
Florida Shores Plaza
Edgewater
FL
MRC
100
79,500
79,500
94
Winn Dixie, Beall’s Outlet
Lantana Plaza
Lake Worth
FL
MRC
100
245,500
245,500
100
Town & Country Palatka
FL
MRC
100
196,500
196,500
100
Publix, K-Mart, Beall’s Outlet, Dollar Tree
Westward Shopping Center
West Palm Beach FL
MRC
100
225,000
225,000
92
Burlington Coat Factory, Office Depot, Aldi
SUBTOTAL2,490,000 2,490,000
JC Penney, Burlington Coat Factory, Dillards
Blue Agave Restaurant
Home Depot, Publix, Office Depot, Dollar Tree
87
TOTAL RETAIL 10,031,500
8,863,500
94
2 015 A N N U A L R E P O R T
25
OFFICE AND INDUSTRIAL PORTFOLIO
131 Queen Street, Ottawa, ON
201 City Centre Drive, Mississauga, ON
OFFICE
Ownership
Total
Ownership
Occu
Prov./
Owner-
InterestAreaArea
pancy
Property
City
State
ship
(%)
(SF)
(SF)
(%)
Top Tenants
111 Dunsmuir
Vancouver
BC
MRT
100
222,000
222,000
100
AMEC Americas, Stantec Consulting
Chancery Place
Vancouver
BC
MRT
100
142,500
142,500
100
Province of British Columbia
Seymour Place
Victoria
BC
MRT
100
235,500
235,500
100
Province of British Columbia
505 3rd Street SW Calgary
AB
MRT
50
142,000
71,000
92
7315 8th Street NE
Calgary
AB
MRT
100
19,500
19,500
100
Genesis Land Development
Alberta Treasury
Calgary
AB
MRT
100
41,500
41,500
100
Alberta Treasury Branches
Centre 810
Calgary
AB
MRT
100
77,500
77,500
100
Tektelic Communications Inc., The MI Group
Citadel West
Calgary
AB
MRT
100
78,500
78,500
100
CH2M Hill Canada
Deerport Centre
Calgary
AB
MRT
100
47,500
47,500
100
Colleaux Engineering, Aerotek, State Farm
Duncan Building
Calgary
AB
MRT
10081,00081,000
100
RCMP
Penn West Plaza
Calgary
AB
MRT
100
636,500
636,500
98
Penn West Petroleum
Petroleum Plaza Edmonton
AB
MRT
50
304,000
152,000
100
Alberta Infrastructure
Scotia Place Edmonton
AB
MRT
20
567,500
113,500
89
Keewatin Square
Regina
SK
MRC
100
37,500
37,500
100
400 St. Mary
Winnipeg
MB
MRC
20
134,500
27,000
72
444 St. Mary
Winnipeg
MB
MRC
20
247,500
49,500
92
Quinte Courthouse
Belleville
ON
MRC
50
173,000
86,500
100
Superior Court of Justice, Legal Aid Ontario
Bramalea City Centre (Office) Brampton
ON
MRC
21
78,570
16,500
53
Hanson International, Municipality of Peel
201 City Centre Drive
Mississauga
ON
MRC
50
215,000
107,500
76
City of Mississauga, Merit Loyalty
2920 Matheson East
Mississauga
ON
MRC
50
233,000
116,500
100
33 City Centre Drive
Mississauga
ON
MRC
50
213,000
106,500
72
Accenture, Easyhome, Royal Bank, Aviva
55 City Centre Drive
Mississauga
ON
MRC
50
175,000
87,500
97
Morguard, Sunguard, Bier Markt
77 City Centre Drive
Mississauga
ON
MRC
50
194,000
97,000
91
Mississauga Board of Trade, Pallett Valo LLP
131 Queen Street
Ottawa
ON
MRC
100
329,500
329,500
100
Public Works
301 Laurier Avenue Ottawa
ON
MRT
50
26,000
13,000
100
Unifor
350 Sparks Street
Ottawa
ON
MRC 100
173,000
173,000
74
525 Coventry Ottawa
ON
MRT
100
42,500
42,500
100
CBC Ottawa Broadcast
Centre
Ottawa
ONMRC
100251,500251,500
100
CBC
Green Valley Office Park
Ottawa
ON
MRT
100
123,000
123,000
96
Canadian Centre for Ethics in Sports
Heritage Place Ottawa
ON
MRT
50
218,000
109,000
93
Public Works
Performance Court
Ottawa
ON
MRC
50
367,000
183,500
85
Shopify, Canada Council for the Arts, KPMG
St. Laurent Business Centre Ottawa
ON
MRT
100
88,000
88,000
68
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
92
Public Works, Le Droit, Empire Grill
26
M O R G U A R D C O R P O R AT I O N
Horizon Logistics, Strike Energy, Step Energy
City of Edmonton, APEGA, Grant Thornton
Regina Health Region
Taylor McCaffrey LLP, Public Works
Great West Life
Bayer Inc.
Morguard, Morneau Shepell
TD Waterhouse
As at December 31, 2015
Heritage Place, Ottawa, ON
77 City Centre Drive, Mississauga, ON
Ownership
Total
Ownership
Occu
Prov./
Owner-
InterestAreaArea
pancy
Property
City
State
ship
(%)
(SF)
(SF)
(%)
Top Tenants
200 Yorkland
Toronto
ON
MRT
100
149,500
149,500
91
Ferring, Investors Group, AG Simpson
77 Bloor Street West
Toronto
ON
MRT
50
393,000
196,500
98
TD Canada Trust, Harry Rosen, Realstar
945 Wilson Avenue Toronto
ON
MRC
32
228,125
73,000
100
Sevencontinents Corporation
Creekside Corporate Centre Toronto
ON
MRC
100
301,500
301,500
100
TD Financial Group
Leaside Corporate Centre Toronto
ON
MRC
95
94,211
89,500
100
OMVIC, Mount Pleasant Group
Centre de la Cité
Montreal
QC
MRT
100
128,500
128,500
90
Place Innovation Saint-Laurent
QC
MRC/MRT
100
894,000
894,000
100
Saint John City Hall Saint John
NB
MRC
50
157,000
78,500
52
Palm Aire1
Pompano Beach
FL
MRC 1009,0009,000
100
TOTAL OFFICE 8,761,906
6,185,000
On-Line Executive Centre, Sun Life Assurance
Bombardier, AJW Technique, Amdocs
City of Saint John
95
INDUSTRIAL
Ownership
Total
Ownership
Occu
Owner-
InterestAreaArea
pancy
Property
City
Prov.
ship
(%)
(SF)
(SF)
(%)
Maple Leaf Foods Distribution Centre
Puslinch
ON
MRC
59
1875 Leslie
Toronto
ON
MRT
100
2041-2151 McCowan
Toronto
ON
MRT
100
279 Yorkland
Toronto
ON
MRT
100
285 Yorkland
Toronto
ON
MRT
825 Des Érables Salaberry-de-
Valleyfield
QC
Industrial Portfolio
Various
Various
282,203
Top Tenants
166,500
100
Maple Leaf Foods
52,000
52,000
93
Body and Soul Fitness, Goose & Firkin
196,500
196,500
94
Canadian Standard Floor
18,000
18,000
100
Loblaw Properties Ltd.
100
25,000
25,000
100
Mitchell Partnership
MRT
50
485,000
242,500
100
Diageo
MRC
100
525,500
525,500
88
TOTAL INDUSTRIAL 1,584,203
1,226,000
93
Acklands Grainger, Carquest
No major tenant listed due to GLA.
1
2 015 A N N U A L R E P O R T
27
HOTEL PORTFOLIO
As at December 31, 2015
Courtyard Marriott, Mississauga, ON
Residence Inn Marriott, Markham, ON
Courtyard Marriott Markham, Markham, ON
CANADA
Ownership
Interest
TotalOwnership
Property
City
Province
Ownership (%)
Rooms
Rooms
Markham
ON
MRC
100
144
144
Residence Inn Marriott
Markham
ON
MRC
100
100
100
Courtyard Marriott Mississauga
Mississauga
ON
MRC
100
144
144
Residence Inn Marriott
Mississauga
ON
MRC
100
100
100
Toronto Airport Marriott
Toronto
ON
MRC
95
424
403
Courtyard Marriott Vaughan
Vaughan
ON
MRC
100
144
144
TOTAL HOTEL
1,056
1,035
Design: www.jumpcommunicationsinc.com
Courtyard Marriott Markham
28
M O R G U A R D C O R P O R AT I O N
CORPORATE INFORMATION
BOARD OF DIRECTORS
Chris J. Cahill 3
Corporate Director
Timothy J. Murphy 2, 3
Partner, McMillan LLP
Andrew Edmundson 2
Corporate Director
Michael S. Robb 1, 3
Corporate Director
David A. King 2, 4
Vice Chairman
Morguard Corporation
Corporate Director
Bruce K. Robertson 1, 2, 4
Vice President, Investments
The Woodbridge Company
Limited
K. Rai Sahi 4
Chairman and
Chief Executive Officer
L. Peter Sharpe 1, 3, 4
Corporate Director
1
Audit Committee
2Human
Resources,
Compensation
and Pension Committee
3Corporate
Governance and
Nominating Committee
4Investment
Committee
EXECUTIVE DIRECTORY
K. Rai Sahi
Chairman and
Chief Executive Officer
Paul Miatello
Chief Financial Officer
Beverley G. Flynn
Vice President,
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
George Schott
President and
Chief Operating Officer,
Morguard Investments
Limited
Gordon Vollmer
Executive Vice President,
Office and Industrial
Morguard Investments Limited
Margaret Knowles
Senior Vice President,
Development
Morguard Investments Limited
W. Scott MacDonald
Executive Vice President,
Retail
Morguard Investments Limited
Sanjay Ratejay
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
Brian Athey
Vice President,
Development
INVESTOR INFORMATION
Registered Office
55 City Centre Drive
Suite 1000
Mississauga, ON
L5B 1M3
T 905-281-3800
[email protected]
Transfer Agent
Computershare Trust
Company of Canada
1-800-564-6253
www.computershare.com
Auditors
Ernst & Young LLP
Principal Bankers
Royal Bank of Canada
Toronto-Dominion Bank
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.
For additional
information, please
contact:
Paul Miatello
Chief Financial Officer
Beverley G. Flynn
Vice President,
General Counsel
and Secretary
T 905-281-3800
[email protected]
Annual Shareholder Meeting
Wednesday, May 11, 2016
at 10:30 a.m.
Rattlesnake Point Golf Club
5407 Regional Road 25
Milton, ON
L9T 2X5
The selected annual financial information in the 2015 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, 2015, related Management’s Discussion and Analysis and
the Annual Information Form.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