Morguard Corporation and Morguard Real Estate Investment Trust Acknowledge Proceeds from Target Settlement

MISSISSAUGA, ON, July 13, 2016 /CNW/ - Morguard Corporation (TSX: MRC) and Morguard Real Estate Investment Trust (TSX: MRT.UN) ("Morguard REIT") acknowledge total proceeds in the amount of $39.3 million (inclusive of sales tax) from a settlement with Target Canada, currently under the Companies' Creditors Arrangement Act ("CCAA") protection, and its parent, Target Corporation, related to lease guarantee claims at eight retail properties in Canada. 

The settlement proceeds include $12.6 million to Morguard Corporation, $12.4 million to Morguard REIT and $14.3 million to Morguard's co-owners and investor clients at impacted properties.

In 2011, Morguard negotiated lease assignments and amending agreements with Target Canada that had lease guarantees and recourse back to Target Corporation. Management's ability to negotiate lease guarantees resulted in a more favourable outcome compared to landlords that did not have guarantees.

Target Leases Included in Settlement
For clarity, Target Canada leases at the following eight properties in the Morguard owned and managed retail portfolio were part of the settlement with Target Corporation:

 

Target Leases Acquired by Retailers
In 2015, Target Canada leases in a further six properties in the Morguard owned and managed portfolio were acquired by retailers:

 

Target Lease Acquired by Morguard REIT
One further Target Canada lease was acquired by Morguard REIT to realize the long-term leasing opportunity:

 

Use of Proceeds
The proceeds from Target Corporation will be used for active redevelopment and remerchandising programs to create long-term value at retail centres. The management teams are actively executing on programs to enhance the tenant mix, increase rental rates and draw new traffic from primary and secondary markets. A full leasing and redevelopment update will be provided with the Q2 Financial Results for both Morguard Corporation and Morguard REIT.

Disposition of Office Property – Morguard Real Estate Investment Trust
During Q2, Morguard REIT also disposed of a non-strategic asset, Centre de la Cite in Point-Claire, QC, for $22.4 million (net of closing costs).  The 127,500-square foot Class A suburban office complex was sold unencumbered.  Proceeds from the sale were used to pay out an operating line and pay out non-strategic mortgages.

About Morguard Corporation
Morguard Corporation (TSX: MRC) is a major North American real estate and property management company.  It has extensive retail, office, industrial, multi–suite residential, and hotel holdings owned directly, or through its investment in Morguard REIT (TSX: MRT.UN) and Morguard North American Residential REIT (TSX: MRG.UN). Morguard also provides real estate management services to institutional and other investors. Morguard's combined real estate portfolio is valued at $16.0 billion.

About Morguard Real Estate Investment Trust
Morguard REIT (TSX: MRT.UN) is a closed-end real estate investment trust, which owns a diversified portfolio of 49 retail, office and industrial income producing properties in Canada with a book value of $2.9 billion and approximately 8.7 million square feet of leasable space. For more information, visit www.morguard.com.

SOURCE Morguard Corporation