Morguard Corporation and Morguard Residential REIT are set to make a landmark investment in Canada’s apartment sector, committing $1.0 billion for a 20 per cent undivided interest in a national multi‑suite residential portfolio valued at approximately $5.0 billion. The portfolio, currently owned by TD Asset Management (TDAM), represents one of the largest institutional rental housing platforms in the country and marks a significant expansion of Morguard’s presence in the sector.
The agreement also establishes a new strategic relationship between Morguard and TDAM. As part of the transaction, Morguard will assume full property management responsibilities for the portfolio, creating a major institutional mandate that aligns ownership with operational oversight. This transition positions Morguard as a key operator across a broad and diversified collection of rental communities.
“This transaction represents significant growth in Morguard’s residential services, enabled by our depth of experience and success as an asset and property manager for institutional‑quality multi‑suite residential communities,” said Angela Sahi, President and Chief Executive Officer. “We are advancing our owner‑operator model, demonstrating our alignment with partners and strength in execution, and building upon our existing relationship with TDAM.”
The portfolio includes 106 properties and more than 15,500 suites, spanning major urban and suburban markets nationwide. Approximately 36 per cent of the assets are located in the Greater Toronto–Hamilton Area, with additional concentrations in Southwest Ontario, Ottawa, Alberta, Quebec, and Nova Scotia. These properties are situated in established rental markets supported by strong population growth and sustained housing demand. The portfolio also contains a select group of newly completed and in‑progress developments, offering embedded growth potential and opportunities for modernization.
For TDAM, the investment realignment supports a broader capital deployment strategy within its diversified open‑ended real estate fund. “The multi‑unit residential sector is a strategic allocation within our diversified open‑ended real estate fund, and this transaction positions the portfolio well to redeploy capital into exciting value‑add and development projects,” said Andrew Croll, Managing Director and Head of Global Real Estate Investments. “Morguard brings operational expertise and a long track record in this asset class, supporting both stability and future growth across the TDAM Real Estate platform.”
The transaction is expected to be immediately accretive to both Morguard Corporation and Morguard Residential REIT. It will also significantly expand Morguard’s third‑party residential management business and deepen its presence in Montreal, Calgary, and Edmonton, while adding new exposure in Halifax. Financing will be provided through a mix of vendor financing, assumed mortgages, cash on hand, and short‑term borrowings. Closing is anticipated in Q3 2026, subject to approvals and due diligence.
Morguard’s confidence in the multi‑suite residential sector is supported by strong fundamentals. Over the past four years, the company’s Canadian residential portfolio has delivered average same‑property NOI growth of approximately 7.4 per cent, reflecting resilient demand and consistent operational performance across high‑quality assets.
Beginning in the second quarter of 2026, Morguard and TDAM will initiate a structured transition plan focused on operational continuity, employee integration, and maintaining a consistent resident experience. Day‑to‑day operations are expected to continue without disruption as responsibilities shift to Morguard.
Upon completion of the transaction, Morguard’s owned and managed assets—including its investment management platform—will total approximately $24.0 billion. Its residential platform will expand to 162 properties and 33,300 suites across Canada and the United States, reinforcing multi‑suite residential as a central growth driver within a diversified real estate portfolio that also includes office, industrial, retail, and hotel assets.
According to Morningstar DBRS, the transaction—expected to close in the third quarter of 2026 pending approval of Canada Mortgage and Housing Corporation mortgage assumptions—will also transfer full property and asset management responsibilities for the 106‑property, 15,892‑suite portfolio to Morguard. The firm anticipates that the acquisition will strengthen Morguard’s business risk assessment by increasing its weighting toward stabilized multi‑suite residential assets, which offer lower cash‑flow volatility and higher asset‑quality characteristics. Residential net operating income is projected to rise to 48 per cent of Morguard’s total NOI, up from 37 per cent at year‑end 2024, as Morguard assumes management of the entire $5‑billion portfolio.
Morningstar DBRS noted that Morguard’s operating performance as of September 30, 2025, remained consistent with expectations, with leverage and coverage ratios of 9.3x and 2.1x, respectively, on a non‑consolidated basis. While leverage is expected to increase to the mid‑ to high‑10x range by year‑end 2026 due to acquisition‑related debt and ongoing development spending, the agency maintains visibility into a clear deleveraging path. Ratios are forecast to decline to the mid‑ to high‑9x range in 2027 and to the mid‑ to high‑8x range in 2028 as full‑year NOI contributions, stabilized management fee income, and the completed Cawthra development flow through results. EBITDA interest coverage is expected to remain stable around 2.0x in the near to medium term.
Although the transaction is modestly credit‑negative in the short term because of higher leverage, Morningstar DBRS believes the anticipated improvement in asset quality provides Morguard with greater long‑term financial flexibility. The agency maintains that, despite leverage temporarily exceeding the previously stated upgrade threshold referenced in its April 2025 release, the enhanced stability and quality of the portfolio could support stronger financial metrics over time.
