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       President's Message…                                                  President's Message…




Hello everyone. For those of you with computer access, we           It has been an exciting few months for Morguard Residential
hope you enjoy the new electronic format of our Morguard            Inc. (“MRI”).
Newsletter. It saves paper, allows an easy link to the articles
that are of most interest to you, and will be available on-line     Construction is now substantially complete on The Bay Club,
so that you can access it at your convenience. For those of you     MRI's 293-unit rental apartment building located at corner of
without computer access, we’ll continue to provide the              Bay and Wellesley in downtown Toronto. I am happy to report
familiar printed version of the Newsletter.                         that we are leasing apartments at a vigorous pace: at press time
                                                                    we had rented 222 suites and traffic in our leasing office
A special focus of this edition is Human Resources. We will be      continues to be brisk. The building is beautiful and I am
reporting on a number of the initiatives we have underway in        confident this property will be a “jewel in the crown” of
response to the suggestions raised in last fall’s Employee          Morguard for years to come. I would like to thank and
Survey.     These include the new staff communications              acknowledge members of MRI’s Construction & Development
initiatives we have put in place, the program we have               and Marketing Departments. Each of Harry Lane (see below),
developed for identifying management strengths and staff            Ted Vanderklugt, Ghassan Wehbe, Daniela Giannone, Frank
development opportunities (using the “Caliper” system), and         DaSilva, Terry Lustig and Richard Kuchynski were instrumental
the employee recognition and training program we have               in completing the project on time, and most importantly, on
created (the “Keepers of the Flame” initiative). Your feedback      budget!
on any or all of the above would be appreciated. Our plan will
be to conduct another organization-wide survey next spring to       Hard work by all MRI staff, particularly the District Manager
see how we are doing in terms of improving our “quality of          team, has ensured that we continue to experience a trend of
employer” grades.                                                   increasing occupancy rates. Currently, MRI has an overall
                                                                    occupancy percentage of 96%, which has been achieved despite
We are also in the process of writing an article on Morguard’s      the current low-interest rate environment, that encourages many
history. MIL is celebrating its 30th anniversary this year - here   tenants to opt for home ownership.
are a few facts about the company that you might find
interesting:                                                        In June, MRI’s head office re-located to the 11th floor at 55 City
                                                                    Centre Drive. The move went very well due to sizeable
o   MIL was established in 1975 by a group of 8 of Canada’s         contributions made by several MRI and MIL staff members (far
    major pension funds as the first company in Canada to           too many to mention!). I would like to acknowledge and thank
    allow institutional investors to acquire real estate in a       Tullio Capulli and his team – who were responsible for ensuring
    meaningful way; we now number over 25 of Canada’s top           that the renovation of our space was completed before the
    pension funds among our clients                                 move-date. On a personal note, it has been very satisfying to see
                                                                    MRI’s staff integrate and interact with other Morguard staff at
o   Over our 30 year history, we have produced positive
                                                                    55 CCD. We have enjoyed many opportunities to get
    returns for our investors in every year but one (1993)
                                                                    acquainted with our MIL colleagues and have experienced many
                                                                    synergies from this combination.



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       Message Continued…



                                                                    After 25 years with MRI and predecessor companies, Harry Lane
o   If you had invested $1,000 in the Morguard Property             recently retired (at the tender age of 69!) from his position of
    Index in 1975, it would have grown to$28,221 today              Vice-President, Construction & Development. Harry oversaw
                                                                    and was responsible for the development of numerous
o   The company has been recognized with over 40 industry           condominium and rental apartment projects during his career
    awards for building and management excellence                   and has come to be known as one of the pre-eminent developers
                                                                    in the Toronto area. Of course, Harry was known to everyone
o   Over the past 20 years, Morguard has beat the real estate       at MRI as a consummate professional and as a “straight-shooting
    industry benchmark by 122 basis points per annum; this          Englishman”. I know I speak for everyone when I say that
    has created approximately $325 Million in additional value      Harry's skill, attitude and professionalism will be missed and we
    for our clients                                                 wish him all the best in retirement.

o   We currently have over $5 Billion in assets under               MRI acquired Square 104, a 278-unit rental apartment building
    management, including 39 million square feet of space           in Edmonton, Alberta in October. Located near Edmonton’s
    nationally; our portfolio is about the same size as the         financial district, this newly constructed building features large,
    entire city of Calgary’s office market                          well-appointed suites in an urban setting. MIL’s acquisition
                                                                    “machine” was instrumental in providing MRI with the
o   MIL has 900 employees and 8 regional offices across             resources to complete the transaction and many thanks go out to
    Canada; over 80% of our staff would recommend                   those who contributed. The occupancy rate of the building upon
    Morguard as a place to work to their friends                    closing was 60% but within the first 30 days of ownership we
                                                                    had leased 28 units – an incredible achievement – resulting from
o   Our CEO, Rai Sahi, is recognized as one of Canada’s             the strength of a new marketing program and intense, tenant-
    leading entrepreneurs, having completed over 40                 focused management. Congratulations go out to Theresa
    corporate acquisitions in his career, and having received       Llewellyn, our District Manager in Alberta, and her staff for
    several major industry awards (including “Turnaround            getting “out of the blocks” so quickly.
    Entrepreneur of the Year” in 1994).
At 30 years old, you can see the company is still going strong      I would like to thank everyone in the Morguard family who
and we’re just beginning to hit our stride!                         continue to contribute to our success.

I hope you also enjoy the articles on our latest acquisitions and   Paul
development projects – including an exciting new office tower
announced for Southland Park in Calgary and a major retail
development site acquired in Montreal’s east end. Our thanks
to all the staff who worked so hard in putting these projects
together.




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        Message Continued…




Finally, I would like to take this opportunity to express our
appreciation to Bill Kennedy and Bart Munn, both of whom
are leaving the Morguard family to take up new opportunities.
Bill will be joining Anthem Properties in Vancouver, while
Bart will be joining the Calloway REIT. Both men have made
great contributions to our company: Bill initially as President
of Revenue Properties, and more recently as President of the
REIT; and Bart over a 22 year span culminating in his role of
CFO of Morguard Investments and Morguard Corporation.
We wish both Bart and Bill all the best in their new
endeavours.

Thank you all for your support and efforts through this past
summer and fall – keep up the great work and enjoy the
coming holiday season!

Steve




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     About Employees……
                                                          Morguard Investments…..
                                                          Kathryn Lowe, Temporary Help, Ottawa
                                                          Joseph Roszell, Temporary Help, Prairie Mall
Morguard Welcomes aboard……                                Lachlan Montague, Ice Ambassador, Cambridge Centre
                                                          Rosanne Rayfield, Retail Lease Administrator, HO
Morguard Investments…..                                   Abdulaziz Farah, Maintenance, St Laurent
                                                          Brittany Arnold, Food Court Attendant, Lawson Heights
Camille Francisco, Guest Services Rep, St. Laurent        Daniel Allard, Retail Manager, Coquitlam Centre
Nadira Kuma, Guest Services Rep, BCC                      Jillian Schettler, Guest Services Rep, Shoppers Mall
Nancy Sookdeo, Food Court Attendant, Cambridge Centre     Kamal Manhas, Administrative Assistant, Vancouver
Eduardo Enero, Maintenance, Edmonton                      Kathleen Nourse, A/R Accountant, Calgary
Gillian Kirby, Operations Administrator, Vancouver        Michael Bakk, Building Operator, Calgary
Justin Savoie, Ice Ambassador, Cambridge Centre           Ronald Funk, Project Accountant, Calgary
Kimberly Vachon, Receptionist, Ottawa                     Sandra Priestly, Food Court Attendant, Lawson Heights
Kirsten Binstock, Guest Services Rep, Centerpoint Mall    Valerie Storey, Administrative Assistant, Cottonwood Mall
Robert Whyte, Maintenance, Cambridge Centre               Walter Siegel, Bldg Engineer, Vanc/1500 West Georgia
Trevor Mayoh, Temporary Help, BCC                         Angela Matthews, Maintenance, Prairie Mall
Brigita Simonelis, Guest Services Rep, Coquitlam Centre   Cameron Moffat, Part-Time Help, Holt Renfrew
Carina Gaspar, Guest Services Rep, Cambridge Centre       Dax Marsh, Building Operator, Calgary
Garth Van Horne, Maintenance, Shoppers Mall               Jacqueline Andermacht, Temporary Help, Head Office
Kurtis Rasmussen, Cozeeland Attendant, Coquitlam          Larrisa Asapace, Food Court Attendant, Lawson Heights
Marty Padget, Maintenance, Calgary/Southland              Linda Lichtenberger, Mgr-Lease Info Integrity, HO
Monica Grift, Accounting Administrator, Shoppers Mall     Ronald Dinelle, Shopping Centre Mgr, Centerpoint Mall
Paul Luoma, Temporary Help, Coquitlam Centre              Sheila Rodrigue, Financial Analyst, Head Office
Samantha Perez, Cozeeland Attendant, Coquitlam Centre     Wayne Jacques, Ice Ambassador, Cambridge Centre
Blair Turner, Temporary Help, St Laurent                  Atefeh Johari-Shirazi, Guest Services Rep, Coquitlam
Daniel Torok, Temporary Help, Cottonwood Mall             Brittni Russell, Guest Services Rep, Coquitlam Centre
Khadija Khurshid, Temporary Help, Head Office             Danika Sherneck, Cozeeland Attendant, Coquitlam Centre
Livia Badulescu, Tempory Help, Calgary                    Jason Bernhardt, Building Engineer, Winnipeg
Rebecca Inker, Front Desk Attendant, Cambridge Centre     Joyce Ng, Cozeeland Attendant, Coquitlam Centre
Vincent Comeau, Temporary Help, St John City Hall         Judith Psenak, Guest Services Rep, Cambridge Centre
Jennifer Brickles, Security Officer, St Laurent           Melissa Potvin, Information Kiosk Attendant, Rosemere
Jocelyne Belanger, Temporary Help, Rosemere               Narda Khan, Environmental & Risk Administrator, HO
Jordan Satov, Security Officer, St Laurent                Sharlene Roth, Guest Services Rep, Coquitlam Centre
Joseph Rutledge, Temporary Help, Cambridge Centre         Shaun Griffin, Maintenance, Barrie
Ruth Grabel, Asset Manager, Head Office                   Vanessa Hiebert, Food Court Attendant, Lawson Heights
Heath MacKinlay, Maintenance, Victoria Shopping Centre    Bobby Larson, Maintenance, Red Deer Centre
Jenny Lam, Tempoary Help, Vancouver




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      About Employees……
                                                              HR News & Policies
Morguard Welcomes aboard……                                  Human Resources Initiatives

Morguard REIT……                                             As a result of several key issues raised in the 2004
                                                            Employee Opinion Survey, we are pleased to report on the
Andre Blondin, Superintendent, Hampton Park Plaza           progress of several key initiatives that have been
                                                            introduced in the last 12 months

Morguard Residential……                                      These initiatives have been introduced to demonstrate
                                                            management’s commitment to:
Alfredo Manalo, Superintendent, Building 423
Geldigarda Manalo, Superintendent, Building 423
                                                                   celebrate the positive
Lajos Illes, Assistant Superintendent, Thorncliffe Park
Lajosne Illes, Assistant Superintendent, Thorncliffe Park          provide more training and development for
Vladimir Golouschin, Temporary Help, Thorncliffe Park              employees
Barbara Tingley, Superintendent, Tomken Place                      keep lines of communication open
Don Singian, Temporary Help, The Colonnade
James Tingley, Superintendent, Tomken Place                        improve employee morale
Oscar Guitierrez, Superintendent, Tweedsmuir                       recognize employees for a job well done
Amor Manahan, Superintendent, Leaside Towers
Sergio Manahan, Superintendent, Leaside Towers
Nikolai Chtchoukine, Superintendent, Thorncliffe Park       Employee Recognition
Olga Chtchoukine, Superintendent, Thorncliffe Park
Pamela Kalsner, District Manager, The Colonnade             The “Keepers of the Flame” is a new initiative designed to
Cynthia McCormack, Superintendent, Building 457             communicate Morguard’s vision and to celebrate the
Ross McCormack, Superintendent, Building 457                achievements and efforts of our employees. As this is the
Albert Young, Assistant Superintendent, Building 430        first time we’ve tried such an initiative, we’re “learning by
Wanda Young, Assistant Superintendent, Building 430         doing”, therefore, your comments and observations are
Gloria Ines Ramirez, Superintendent, Brandywine             most welcome.
Jose Marta, Superintendent, Brandywine
Vladimir Boiko, Superintendent, Tomken Place                Overview of the project:
Carlos Reina, Superintendent, Thorncliffe Park              The overall idea came out of issues that were raised in last
Viginia Sturm, Building Manager, Square 104                 year's Employee Survey and was developed in conjunction
Walter Sturm, Building Manager, Square 104                  with a professional management consultant, Mike Lipkin.
Ximena Baena, Superintendent, Thorncliffe Park




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       About Employees……                                             And, we identified the following values and actions that
                                                                     should be displayed by our employee in order to support
                                                                     this vision. Employees should:

                                                                             Powerful Thinking
HR News & Policies                                                           Openness & Communication
                                                                             Pride & Passion
Employee Recognition - continued
                                                                             Integrity
The first step was to confirm what values we wanted to                       Respect & Recognition
highlight in the organization. Some of these were self-
evident - integrity, hard work, intelligence - but there were                Ability to Use Resources to Deliver Superior
also other traits we felt were important - energy and                        Service
cheerfulness, sensitivity to customer needs, supportiveness of co-
workers, involvement in community ....                               This list isn't comprehensive, but it does indicate some of
                                                                     the kinds of values and approaches that we wanted to see
To settle on the characteristics we wanted to emphasize,             emphasized as the "Morguard way".
the senior management from each of the 5 major
companies in the Morguard Group (including the REIT,                 The Approach:
MIL, Morguard Residential, Morguard Corp and                         Senior management, regional managers and department
Revenue Properties) came together to discuss the                     heads were asked to provide names of individuals in their
corporate vision. This discussion generated the                      department(s) and/or region, who could act as role
following elements for Morguard’s vision:                            models. We had dozens of names put forward. We then
                                                                     took the list and scaled it down to get representation from
       To be the first name investors think of when they             each company and region, from each functional area, and a
       want consistently superior investment decisions               good cross-section by age, gender and experience. For this
       and performance                                               first initiative, selected staff members were interviewed on
                                                                     videotape. These conversations were edited into a DVD to
       To be the company that tenants are drawn to                   be shared with everyone. We believe this will be a way to
       when they want a safe, high quality environment               successfully spread a positive spirit and attitude throughout
       and excellent service; to be the company they are             the company.
       drawn to for doing lease deals because of fair
       treatment and creative problem-solving                        While the process is still in the early stages our aim is to
       To be the company that cities and communities                 use it to create a meaningful and motivational message to
       want as an owner because of the contribution we               all of our staff about the great company we work for and
       make to the quality of life                                   the values we share. We believe this is a good first step,
                                                                     which if successful and well received, we will be able to
       To be the company that the best and brightest
                                                                     make into an annual recognition process.
       individuals want to work for because of the
       rewarding work experience and environment.




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      About Employees……                                      Communication
                                                             One of the concerns raised in the Employee Opinion
                                                             survey conducted last year was that of “communication”.
                                                             27% of our employees ranked communication as “fair” or
                                                             “poor”.
HR News & Policies
                                                             To address this issue we have encouraged senior
Management Development                                       management staff to:
                                                                make employees aware of the decision making process
As part of the HR strategy for recruitment, training, job
                                                                that affects their job and their department’s role in the
development and succession planning for the company,
                                                                company
we are starting to assemble an inventory of basic
information on Morguard’s management team, including            increase face to face meetings
their educational and professional background, and their
                                                                encourage their managers to conduct department
work experience. The idea is that by having information
                                                                meetings on a regular basis
on each staff member's skills, experience and aptitudes
we can better develop training programmes to promote
                                                             As an organization we have:
job (and personal) growth, and ensure the best possible
fit between new job opportunities and the prospective           developed a company newsletter
candidates for the job. By taking an inventory of
management skills and aptitudes, we can tailor training         created a forum for feedback and sharing of ideas
programs to develop managers with greater leadership            through the newsletter email address
skills who can better work with, and motivate staff. The        made a commitment to ensure communication is
result is a better working environment for everyone.            filtered not only from the top down but also from the
                                                                “grass roots” up.
We have engaged Caliper Canada*, an executive
assessment firm, to help us assess Morguard’s                And finally……to keep the lines of communication
management team and to create developmental plans            open……here’s a question for you……
that will assist to leverage our collective strengths - to
help measure the strengths and weaknesses of our             In your opinion tell us:
workforce as they relate to what’s required in order to
successfully implement the company’s strategic business      WHAT MAKES A GOOD WORKPLACE?
plan.
                                                             WHAT DEFINES AN “EMPLOYER OF
The data collected, as well as the performance review,       CHOICE”?
and job description will be used to open dialogue
between the company and managers to help achieve a           WHAT WOULD YOU LIKE TO SEE CHANGED?
common understanding of areas of strength in their           Send your comments to MorguardNews@morguard.com
current job, as well as provide agreement on
developmental gaps. A plan of action can then be put         Your comments may be published in the next Newsletter.
into place to define the steps to assist Morguard’s          Please advise if you wish for your comment to be published
managers, whether it is through coaching, mentoring, or      anonymously – thank you.
more formal studies, to close the developmental gap.

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      About Employees……
                                                           Announcements……

Achievements……

Earlier this year Allan MacDonald received his RPA         On the 11th of June, Ruth MacLean, Operations
(Real Property Administrator) designation from BOMI        Assistant, Winnipeg wedded Ron Hiller.
(Building Owners and Managers Institute).

In order to obtain the designation, one must have a
minimum of 5 years property management experience in
commercial properties greater than 40,000 square feet.
One must then pass 8 courses which includes one
mandatory course on professional ethics. Choices of the
balance of the courses range from Budgeting and
Finance, Accounting, Asset Management, Real Estate
Law, Environmental Health & Safety and Building
Design.

Allan started the course in April 2000 and completed his
last course in June 2004. He's been the Shopping Centre
Manager at South Centre Mall in Halifax for the past 11           Picture courtesy of: Debbie Payment
years.
                                                           Ruth and Ron, all here at Morguard are.....
"The RPA designation is well respected within the real
estate industry and Allan's achievement of same is         Wishing you all good things the world has to offer
commendable" says Mark Robinson, VP, Property
Management, Retail, Eastern. "It also goes to furthering
                                                           Hoping that the love you share today and the kind
one of our corporate goals of a higher standard of
                                                           blessings being sent your way follow you throughout
excellence within our own industry."
                                                           your years together to ease the struggles and deepen
                                                           the joys of a lifetime
  "WAY TO GO ALLAN"!!!




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     About Employees……
                                                      Dawn O’Toole, here at Head
                                                      Office, welcomed Hayley Lauren
                                                      Darvill on July 19 @ 11:39 am.
                                                      Weighing in at 6 lbs 9 oz, Hayley
                                                      is bringing much happiness to
                                                      Dawn and Trevor!



                       Announcements

Congratulations to Annie Chu                                              Jason Mann of our Ottawa office
(Calgary Office) who welcomed                                             welcomed his third son – Jayden
her first on April 03 @ 11:00 am –                                        Jackson Fischer Mann on August
Austin weighed in at 8 lbs!                                               4 @ 2:24 pm. Jayden, who couldn’t
                                                                          wait to meet is his brothers,
                                                                          arrived two weeks early, weighing
                                                                          in at 8 lbs 7oz!

                           Liz Mancuso, here at
                           Head Office welcomed
                           her first on June 03 @
                           7:09pm Alyssa, weighing
                           in at 6 lbs 9 oz is
                                                      Congratulations to Anitha
                           bringing much joy to Liz
                                                      Uppalapati (Head Office)
                           and Angelo!
                                                      who welcomed her first on
                                                      October 09 @ 2:47pm.
                                                      Ankitha weighed in at 7lb
Accepting awards has led                              4 oz!
our very own Cottonwood
Mall Manager – Franca Aere
into a state of bliss – Baby
Zahra arrived June 18 @ 4:30
am weighing in at 6 lbs 7 oz.
Both Franca and Tofik are
thrilled!




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      About Employees……                                        National Denim Day.….
                                                               Morguard's first-ever National Denim Day in May in
                                                               support of breast cancer research was a resounding
                                                               success. We had participation from staff in our
                                                               shopping centres across the country, MIL regional
Helping Others                                                 offices and Head Office and Morguard Residential
                                                               locations, resulting in a total of $2,757 raised.
And walked they did.…..
                                                                Cambridge Centre              Centerpoint
The 21st annual World Partnership Walk raised more than
$4 million and brought out 35,000 on Walk Day!

The funds raised from this year's World Partnership Walk
will help finance long-term initiatives that improve lives
and livelihoods in poor communities in the developing
world.

Team Morguard were among the 35,000 who walked the                         Ottawa Office
walk and raised $7,465! (Team Goal - $5,000). Way to go
Team Morguard!




                                                                 Victoria Office               EYTC




The World Partnership Walk is a national annual event
started in Vancouver in 1985, and is now held in nine cities
across Canada. The Walk is designed to increase public
awareness about global poverty and to raise funds that
support poverty reduction programs in Asia and Africa. It
is an initiative of Aga Khan Foundation Canada.


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      About Employees…
                                                              A Great Story......
                                                              Our very own Theresa Llewellyn (District Manager, MRI-
Relay for Life......                                          Calgary) is the Sponsorship Chairman (Volunteer) for the
                                                              Leukemia Society. In October, the first-ever "Light the
The Bonnie Doon Shopping Centre sponsored "Relay for          Night" walk was held.
Life" team came in #1 out of 220 teams for the 4th year in
                                                              A fundraiser was held prior to the walk in September at
a row.
                                                              The Pinnacle and Wyldewood Estates. The Building
                                                              Managers, Gord Wilkie and Earl Boyd boldly threw out a
                                                              challenge that if $5,000 was raised they would shave their
                                                              heads!
                                                              Well it was Theresa's personal mission to make this
                                                              happen. The Residents donated in total $1,000 and Theresa
                                                              personally raised $7,000. Both gentlemen had their heads
                                                              shaved in the lobby of the Pinnacle - Rob's Barber Shop
                                                              did this as a great deed to Blood Cancer Research.




The Lifesavers (hence the stripes!) raised over $17,000 for
the Canadian Cancer Society, bringing their total monies
raised to date of $60,000. Way to go Team Lifesavers!!!!!




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      About Employees…
                                                                “We are proud to be part of this great golf experience that
                                                                contributes to helping young people to build better
                                                                futures,” said Rai Sahi, Morguard’s Chairman. “We take
Over $200,000 Raised for Covenant                               great pride in being able to support the community in
                                                                which we work.”
House......
On August 29, 2005 Morguard hit the links at the                “We are most grateful to Morguard for supporting us to
Morguard Covenant House Celebrity Golf Classic to help          create a high-quality event that attracts, players, celebrity
raise more than $200,000 for homeless young people and          guests and other corporate sponsors,” said Christine Foisy-
Covenant House. The event took place at the exclusive           Monk of Covenant House. “Since we rely on donors for 80
Glencairn Golf Club in Milton, where Morguard joined            percent of our annual $16-million budget, support for our
216 golfers and several sports celebrities including hockey     events is important to enable us to continue to help our
legend Guy LaFleur and Argo Adrion Smith.                       kids.”

Morguard has been the title sponsor of the event for the        Covenant House Toronto is the country’s largest shelter
past two years in support of Covenant House Toronto             for homeless youth offering thousands of kids a second
youth shelter. And in addition to being the title sponsor, 32   chance as well as safe refuge. Covenant House provides
of Morguard’s staff volunteered to make this year’s event a     services including counseling, education and vocational
success. In addition, the sons of three staff members           assistance to give kids the tools they need to build
participated to earn volunteer credits for high school          independent lives.
graduation: Nelson Waters (Suzanne Wiles), Jordan Hamer
(Fran Hamer) and Ben Tran (Ruth Ivison). They helped
bring in a record tally, which provided net funds of over
$100,000 for Covenant House.




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      About Employees……                                       His ability to pick real estate securities has produced a five-
                                                              year return of 15.9%, the best of the real estate funds
                                                              ranked by the Globe's Real Estate Peer Index.

                                                              Dillingham's core, long-term holdings include large, quality
                                                              names like RioCan Real Estate Investment and Brookfield
In the News                                                   Properties. He likes their transparency, diversification and,
                                                              often, above-average yield. But he also trades actively,
                                                              trying to capture short-term capital gains in issues like
                         On a quiet summer afternoon,         Canadian Apartment Properties REIT and Quebec City-
                         Charles Dillingham seems the         based Cominar REIT.
                         sole occupant of Morguard
                         Financial Corp.'s executive          In a career that has included running portfolios and
                         offices in Toronto. Yet he           pension funds for the predecessor of Sun Life Financial
                         makes it seem bustling. Dressed      Inc., Consolidated-Bathurst Inc. and the Hospitals of
                         in a worn, short-sleeved shirt,      Ontario Pension Plan, Dillingham says he's learned to
                         saggy slacks and wingtips, he        "look at the consensus and see where it's wrong."
                         breezes through our tour,
                         naming the occupants of              He starts by studying interest rates, and what they portend
                         vacant, unadorned offices,           for real estate equities. He then seeks well-managed
before settling in his own cluttered nest. Piles of papers    companies or trusts with strong incomes, clean balance
on his desk frame a double-screened Bloomberg                 sheets and quality assets. "Having done a lot of direct real
monitor. Books, magazines and reports overpopulate            estate deals, I know a lot of the people who run these
bookcases, pushing knick-knacks to the edge. On the           trusts and companies," he says. "It doesn't mean I get
wall, a Frederic Remington print shows U.S. cavalrymen        secrets, but I know what they like and how they think."
reining in stampeding horses, an apt metaphor for the
scarcely controlled chaos of the room.                        Lately, Dillingham has seen a bubble looming in the
                                                              United States. American commercial and industrial real
Dillingham speaks softly, in rapid-fire phrases that rarely   estate hasn't swollen in value as much as the housing
make it to completed sentences, his hands cutting the air     market, but he's been cutting stateside content anyway. It's
as if he's tossing pizza dough. His monologue is              now at 24%, a third less than in January. These days, he
random-access; details of 20-year-old deals segue into a      prefers cash or Canadian REITs, small Canadian corporate
story about buying his children used police cruisers at       issues and the odd European stock. Dillingham likes safe,
bargain prices. "There isn't a car in our family that has     high-yielding territory and, besides, he has a reputation to
less than 200,000 clicks on it," he says proudly.             protect. "Virtually everything I've managed institutionally
                                                              has had very good numbers," he says. --Charles Davies
It's good that he has an eye for value. Morguard Corp.
owns or manages property assets worth $5.5 billion. As a
vice-president and portfolio manager at Morguard's
financial arm, Dillingham is responsible for $115 million
in investment assets, $51 million of which sits in CIBC
Canadian Real Estate Fund. An investment manager for
more than 30 years, Dillingham has run the fund since
its inception in September 1997.

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      About Employees……                                        “Having a Little Fun”

                                                                                                On July 13th, Ken
                                                                                                Moffat together with
“Going Above and Beyond”                                                                        the Red Deer
At approximately 11:30 p.m. on Tuesday, September 13,                                           Maintenance, Security
Paul Drozdowski (Night Maintenance, Shoppers Mall,                                              and Administration
Brandon) was cleaning the floor of the common area in                                           Satff cruised around
our Shopping Centre in front of W.K. Chan Jewellers.                                            Sylvan Lake. Fun was
                                                                                                had by all at the staff
Paul noticed something on the floor in the Mall close to                                        "Zoo Cruise”
security gate of the jewellers. Upon further inspection he
discovered it was a diamond ring that the staff at the
jewellers must have dropped when closing at 9:00 p.m.
The price tag on the ring was $1,099.00. Paul                  “Lunch You Say”
immediately called Security and turned in the ring.
                                                             The management of Bramalea City Centre had extended
We certainly appreciate Paul's honesty and take pride in     an invitation to all Morguard Head Office staff to be their
having such a loyal employee as part of our Morguard         guests for lunch in their brand-newly renovated food court
team. Paul was rewarded with a Shoppers Mall gift            this past September. A group of us accepted and off we
certificate as thanks.                                       went.....
Way to go Paul!!!
                                                                 “We arrived”
“Congratulations Are In Order”
                                                                                             “We listened”
                       The Olympic Basin hosts several
                       rowing, canoeing and kayaking
                       competitions a year. As a
                       member of the Rideau Canoe
                       Club, Benoit Gauthier (second
                       from the right), Maintenance
                       Supervisor at St Laurent Centre         “We Ate”
                       participated in the Montreal
                       Olympic Bassin (2005 Canadian
                       Master’s Championship).
Benoit won the Gold medal in the K4 race (4 paddlers);
won the Bronze medal in the K2 race (2 paddlers) and
won the Silver medal in the K1 race (1 paddler).
Way to go Ben - Congratulations!!!


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                                            NEWS
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                                                             Roberta Tower, Manager,Victoria Properties

      About Employees……                                      18 years with Morguard.
                                                             Hired upon the acquisition of Town & Country Shopping
                                                             Centre in 1987. When Roberta is not running the Victoria
                                                             office she can be found running around the trails and
                                                             streets of Victoria and just completed her first 56k ultra-
                                                             marathon in 5hrs 23min.whew! Roberta loves to travel, so
   Featured Office……                                         it’s a good thing that her husband Lloyd owns a travel
                                                             agency. Two kids, Tara and Dana complete the “all
MEET THE REGIONAL OFFICE                                     inclusive package”.

Morguard News will now feature regional offices or           Brian McCandless, Operations Supervisor
departments to highlight the interesting lives of some of    11 years with Morguard.
our Morguard staff. With staff of about 900 we thought       Brian is the creator of the infamous annual Victoria
there would be some interesting stories across the           Christmas cards. Captain McCandless spends his spare
country – accomplishments, hobbies, families etc. In         time sailing the seas and visiting the local pubs and ports
this edition, we are featuring the Victoria office – after   on his 37-foot Ex-Commercial salmon troller
all it was their idea.                                       affectionately called “Girlfriend”. Brian’s other girlfriends
                                                             are his wife of 27 years, Joan and his two daughters Elaine
The Victoria Office                                          and Jaclyn.
Our Vancouver Island office is responsible for five          Bev Bain, Senior Administrative Assistant
properties in Greater Victoria totaling 580,895 square
feet and representing MREIT, Retail and Commercial;          aka JDE guru, lease administrator and social director
PRL, Retail and Commercial; and one Acktion property.        13 years with Morguard.
The staff of eight are highlighted below:                    You wouldn’t know it by looking at her but this prairie
                                                             girl’s claim to fame is that she opened Portage La Prairie
                                                             Mall with Daon in 1979. Once you’re in the business,
                                                             you’re in for life. Bev’s husband is a famous
                                                             radio/television personality in Victoria and her 14-year-old
                                                             son Carson holds a black belt in karate just to keep his
                                                             Mom in line.

                                                             Janet Adams, Administrative Assistant
                                                             aka marketing director, accounts payable clerk,
                                                             secretary/receptionist - 1 year with Morguard.
                                                             Janet, our Brit, (“what can I help you with love”) has been
                                                             busy this year learning the new Imaging system and getting
                                                             her triplets, Victoria, Katie and Courtney, through
                                                             graduation. To get away from it all, Janet’s passion is to
                                                             travel and she has extensively. Janet is also a relative of the
                                                             famous Actor John Cleese whom she tells us changed his
                                                             name from his birth name of Cheese. Sounds like a Monty
                                                             Python skit in itself doesn’t it.


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     About Employees……
                                                          Joe DeOliveira
Our Support Staff:                                                           Joe       is    our       gardener
                                                                             extraordinaire. After retiring
Derrick Coates                                                               from an agricultural research
                                                                             facility operated by the federal
                            Derrick and his fiancé                           government we were fortunate to
                            Michelle          recently                       retain Joe and his green thumb
                            welcomed baby Azlynn to                          for all of our Victoria properties.
                            the family. Derrick is our                       Joe is also a skilled masonry
                            main man at Town &                               craftsman. Joe has built six
                            Country Shopping Centre,                         homes for his family to date.
                            keeping        everything
                            running smoothly for the
                            last 5 years.

Bruce Ball                                                Dan Vaillancourt
                     Bruce is one of our most versatile                      Dan is the most recent and
                     maintenance staffers eager to                           youngest addition to the Victoria
                     assist with any minor repairs at                        team. Prior to joining the
                     any of our Victoria properties.                         maintenance crew at Town and
                     Bruce is an enthusiastic supporter                      Country shopping centre Dan
                     of local softball activities                            worked in the landscaping and
                     spending the last 15 plus years as                      construction industry. Dan
                     a fund raising director. Bruce has                      enjoys the ever changing pace of
                     been with us for 9 years.                               maintaining a large outdoor
                                                                             shopping centre. I think we can
Greg MacKinley                                                               accommodate him in this regard.
                     Greg is a recent addition to
                     Shelbourne Plaza recently retiring
                     from     operating     his   own
                     landscaping business for about
                     20 years. The tenants of
                     Shelbourne Plaza are thrilled to
                     have a keeper of their gardens.




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                                                    NEWS
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       About Business……                                                This reduction in bulbs saves electricity and greatly reduces
                                                                       maintenance time and costs.

                                                                       Jamie Hopkins (Power Smart Commercial Sales) and Eric
                                                                       Witkowski (Senior Electrical Systems Engineer) recently
                                                                       completed a preliminary walk-through of the building to look at
                                                                       examples of some of the areas to be changed.
In the News                                                            “Improving the efficiency of the existing fixtures by installing
                                                                       reflectors is great way to save while still getting the desired light
444 St. Mary Ave, 155 Carlton St. and 363 Broadway                     output,” said Jamie. “In most situations, the reflectors are
Undergo Total Power Smart Lighting Retrofit By                         increasing the fixture efficiency by 50 per cent.”
Morguard Investments
                                                                       The retrofit will provide estimated electrical savings of 170
PUBLISHED IN THE MANITOBA HYDRO NEWS LETTER                            kilowatts and 933,216 kilowatt-hours, valued at approximately
                                                                       $32,663 annually.
Everyday more and more people enjoy the benefits of Power
Smart in their workplace, and soon that will include Hydro             The retrofit will also provide a much better working
staff located at 444 St. Mary Avenue in Winnipeg.                      environment for staff through improved light uniformity, flicker-
                                                                       free operation and higher colour rendering in the workspaces.
                                Morguard Investments Limited,
                                property managers for 444 St.          “We’re very pleased with how the installations look so far. In
                                Mary, have recently undertakin88       executing this retrofit, Morguard Investments is taking a
                                an entire retrofit of the building’s   proactive approach to energy savings that will save them money
                                fluorescent lighting system. The       and benefit the building occupants,” said Rob Cox (Manager,
                                retrofit    involves     converting    Retail Sales – East), who also works in the building.
                                almost 6,000 T12 magnetic
                                ballasts to more energy efficient       “This project is a great example of the impact the program is
                                T8 electronic ballasts, and            having on the downtown office sector,” said Glenn Cayer
converting the two-lamp T12 fixtures to single lamp T8                 (Supervisor, Power Smart Commercial Sales). “With our
fixtures with a hi-efficiency reflector. In addition, a detailed       downtown customers now eligible to participate in Power Smart
lighting analysis has also been carried out to ensure the proper       programs, we’ve been focusing our sales efforts in this area and
utilization of lighting fixtures in the various workspaces.            it’s really paying off.”

“The Power Smart Lighting Program has been great for us,”              Morguard Investments also manages 155 Carlton and 363
said Mike Bartman, Operations Manager for Morguard in                  Broadway and is retrofitting the lighting systems in those
Winnipeg. “It’s allowed us to undertake these lighting retrofits       buildings. The three projects alone represent a total of almost
much sooner than we would have been able to otherwise and              one million square feet of office space.
has assisted in creating more competitive properties by
reducing operating costs. The projects are basically self                                              Shaun Corbett, a building engineer
funding due to lower consumption of electrical expenses”                                               with Morguard Investments Ltd.,
                                                                                                       standing left, and Jamie Hopkins
As part of Morguard’s proactive approach to energy savings,                                            (Power Smart Commercial Sales),
                                                                                                       kneeling left, hold some of the new
they enlisted Shawn Clarry of Dynamic Energy Services Inc.,                                            single-lamp T8 reflectorized fluorescent
to assist with the lighting design. Shawn recommended the use                                          fixtures being installed at 444 St. Mary
of high performance fixtures. In this case, high performance                                           Avenue in Winnipeg. Shawn Clarry,
fixtures allowed for a two-bulb lighting system to be replaced                                         Dynamic Services Inc., kneeling right,
                                                                                                       holds one of the nearly 6,000 T12 dual-
by a one-bulb lighting system with a high performance                                                  lamp fixture that are being removed
reflector. As a result, the savings come not only from the                                             from the building. The retrofit is
superior T8 technology, but also from the decrease in bulbs.                                           expected to save an estimated 933,216
                                                                                                       kilowatt-hours annually

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                                             NEWS
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      About Business……
                                                              Site work will begin at the end of next month and PCL
                                                              Construction will start building in January, working to a
                                                              schedule that will enable tenant improvements to
                            Around Town                       commence by spring of 2007.

                            Calgary Herald                    Leasing is in the hands of Alex Brough of Royal LePage
                            September 29, 2005                Commercial who has been pre-marketing since last
                                                              November. He says interest is high with those looking for
                                                              large floor plates and others attracted by low rents and
                                                              operating costs and an abundance of parking

Southland Park brings office space to the suburbs             Morguard bought the 630,000-square-foot Southland
                                                              Complex eight years ago. Its Calgary portfolio has more
It must be around 18 months since I first got word that       than four million square feet of real estate, including the
Morguard Investments was planning to add to its               Remington Development, 129,000-square-foot Foothills
award-winning Southland Park complex on the south-            South industrial/warehouse building it will acquire at
west corner of the major intersection at Southland Drive      completion later this year.
and Macleod Trail. Designs were completed by Gibbs
Gage Architects and a development permit has been
granted.

Now Andy Edmundson, senior vice-president, has
made the decision to go ahead with construction of the
fourth building on spec, but given the demand for
quality suburban office space, there seems little risk that
it won't be leased out before it's completed.

The new tower will rise 12 storeys between the Calgary
Health Region building and Real Canadian Superstore,
adjacent to the Southland LRT station. Morguard plans
to build a bridge connector to the south end of the
platform, a direct link that will be a great convenience
for tenants of the park. It will flow through a new two-
level parkade that will accommodate 734 vehicles, 43
underground stalls will be available beneath the tower
itself.

The 144,406 square-foot building will provide
spectacular views of the city and mountains, particularily
from the eight corner offices on each floor and the
balcony areas available to top-floor tenants.

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                                            NEWS
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      About Business……


Working Together
A GREAT STORY ON MORGUARD
FINANCIAL

By Derek Warren

For years we (Charles Dillingham - Derek Warren) have        This is a perfect example of how Morguard works
been hyping Morguard Financial as the leading portfolio      together, and illustrates the advantage that Morguard
manager of real estate securities in Canada, and I wanted    Financial offers over other portfolio managers. Please
to share with you all the following example that             keep Morguard Financial in mind as you discuss ways to
illustrates the Morguard Advantage.                          grow Morguard's business and our street reputation of
                                                             excellence. Any opportunity for Charles or myself to talk
At the end of July an opportunity arose to purchase a        to prospective clients, existing clients, or to be included in
block of stock in an Edmonton based company called           market review meetings that happen internally would be
Melcor Developments (MRD.to). This stock is very thin        greatly appreciated.
and only rarely is there an opportunity to purchase a
reasonable sized block. It had already gone up
significantly over the last few months, and we had only a
few hours to decide.

After doing a brief analysis of the company, it looked
solid, but was it value going forward? So we called Glen
Scheuerman of our Edmonton office. With Glen's
intimate knowledge of the Edmonton markets (and even
2 of Melcor's golf courses!) we were able to see that this
was a strong group with a fine reputation for creating
value. He was familiar with the individual properties
they managed, their tenant mix, and their development
projects. This additional insight gave us the comfort
that we needed, and we purchased the block.

As of this morning (Sept 08), 5 weeks after purchase, the
stock is up 29.5% compared to 3.8% for the REIT index
over the same period (now we wish we had bought it
personally!).


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                                                 NEWS
                                                                                                                     Third
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         About Business……


Awards
                                                                                      On an annual basis, the British Columbia
                                                                                      Shopping Centre Association (BCSCA) holds
Congratulations to Team Bonnie Doon (Gene Fisher - Dale                               a Gala and Awards of Excellence event to
Sherman – Emmy Mills – Charles Swanwick – Kal                                         recognize outstanding performance in the
Sandhu)and to Team St Laurent (Bernice Rachkowski – Greta          Shopping Centre industry. Centres are classified by size,
Bloskie – Gord McMillan) for winning ICSC Merit Awards!!!          according to ICSC standards, and awards presented in five
                                                                   different categories. This years event was held on June 16th in
The Conference held at the Metro Toronto Convention                Vancouver, and Cottonwood Mall came away a major winner.
Centre September 12 to 14 awarded Bonnie Doon for their
very innovative project called “Take Another Look” at Bonnie       In the Community Shopping Centre size category, Cottonwood
Doon and St Laurent for their “St Laurent Now” newsletter.         Mall was one of three finalists in the categories of
                                                                   Housekeeping, Marketing and Security. In addition, Cottonwood
About ICSC......                                                   was declared the winner in two categories, Operations and
                                                                   Customer Service. Since the inception of the BCSCA Awards of
Founded in 1957, the International Council of Shopping             Excellence, this dominance of awards by a single centre in it's
Centers (ICSC) is the global trade association of the shopping     size category is unprecedented.
center industry. Its 54,000 members in the U.S., Canada and
more than 80 other countries include shopping center owners,       Franca Aere, Centre Manager, Dawn Lamotte, Marketing
developers, managers, marketing specialists, investors, lenders,   Director and Kevin Mack, Operations Supervisor were all in
retailers and other professionals as well as academics and         attendance at the ceremony and accepted the awards on behalf
public officials. As the global industry trade association, ICSC   of the Shopping Centre. This was a special evening for Franca,
links with more than 25 national and regional shopping center      little did she know that the day after she started her maternity
councils throughout the world.                                     leave that she would give birth to Baby Zahra!!!




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                                             NEWS
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      About Business……
                                                                                           30     Struck     Court    in
                                                                                           Cambridge, Ontario is a 4
                                                                                           year old, 115,000 square foot,
                                                                                           single     tenant   industrial
Acquisitions                                                                               property located near the
                                                                                           intersection of Hwy 401 and
                                                              Hwy 24. It is leased to Yazaki Inc., one of the largest
2005 continues to be a stellar year for new Acquisitions      privately owned auto parts companies in the world with
with over $200 million of properties either acquired or       world wide sales of US$10 billion.
under contract so far. In total over 1.4 million square
feet will be added to the portfolio throughout the
country.      New properties added since our last
Newsletter include:                                                                     22401      Dumberry         Road,
                                                                                        Montreal is a 2 year old, 147,700
                          Carrefour       Lachenaie      in                             square foot, single tenant
                          Montreal is a 173,000 square                                  industrial property located in
                          foot new format retail centre                                 Vaudreuil-sur-le-lac, fronting on
                          under development located on        Transcanda Highway about 15 minutes west of Dorval
                          the north shore of Montreal at      Airport. It is a sale-leaseback transaction with Induspac
                          the intersection of Highways        Packaging Group Inc.
                          40 and 640. Phase 1 and 2of
                          the development is complete
                          and Phase 3 will be completed
                          and leased by Morguard’s retail                            3131 St. Martin Boulevard,
                          group. The initial purchase                                Laval is a Class A, 100,815 sf
price for the existing centre is $23 million plus a further                          multi-tenant office building
$8 million of costs will be invested to complete the                                 constructed in 1983, renovated in
development. We also acquired an adjacent 68 acre                                    1989 and 2002. The property
development site that can accommodate up to 750,000                                  was purchased on behalf of
sf of new retail development.                                 Greystone Investments and Morguard will provide asset
                                                              management services with a third party property manager.
The centre is shadow anchored by Maxi and other
tenants include Fly America Furniture, Wendy’s/Tim
Hortons, National Bank, Dollarama, and Yellow Shoes.
The property was purchased by Morguard on behalf of
Greystone Investments.       Morguard will provide
property, asset and development management services.

Morguard acquired two properties for our Industrial
Pooled Fund in July for a total of $15.8 million.



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                                           NEWS
                                                            Third
                                                           Edition




      About Business……


Developments

CHARLESWOOD CENTRE……

Located at the intersection of Grant Avenue and Laxdal
Road in Winnipeg the Centre has undergone an
extensive redevelopment over the past 18 months and
now strongly presents itself as an integral part of the
Charleswood Community shopping experience. The
115,000 sq. ft. Charleswood Centre has been
transformed into a 16 store strip centre featuring
Shoppers Drug Mart, Canada Safeway, Manitoba Liquor
Mart, Dollarama, City Looks Salon & Spa, Tim Hortons,
McDonalds and more.

Charleswood Centre, part of the Morguard REIT
portfolio, is managed by the Morguard Investments
team from Shoppers Mall in Brandon. Kim James -
Shopping Centre Manager, Ian Douglas - Operations
Manager and staff took over management of
Charleswood and Southdale Centres in Winnipeg in May
and are enjoying the challenges of these two operations.




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                                             NEWS
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                                                                                                           Edition




      All About Fun……                                        And finally, These friars were behind on their belfry
                                                             payments, so they opened up a small florist shop to raise
                                                             funds. Since everyone liked to buy flowers from the men
                                                             of God, a rival florist across town thought the competition
                                                             was unfair. He asked the good fathers to close down, but
                                                             they would not. He went back and begged the friars to
A smile – A chuckle – A laugh ……                             close. They ignored him. So, the rival florist hired Hugh
                                                             MacTaggart, the roughest and most vicious thug in town
Two antennas met on a roof, fell in love and got             to persuade them to close. Hugh beat up the friars and
married. The ceremony wasn't much, but the reception         trashed their store, saying he'd be back if they didn't close
was excellent.                                               up shop. Terrified, they did so; thereby proving that only
                                                             Hugh can prevent florist friars.

A dyslexic man walks into a bra
                                                             IT WORKS!!!
Doc, I can't stop singing 'The Green, Green Grass of
Home.' That sounds like Tom Jones Syndrome. Is it            If you lock your keys in the car and the spare keys are at
common? Well, It's Not Unusual.                              home, call someone on your cell phone. Hold your cell
                                                             phone about a foot from your car door and have the other
                                                             person at your home press the unlock button of your key
Deja Moo: The feeling that you've heard this bull            fob (clicker), holding it near the phone on their end.
before
                                                             Your car doors will unlock. Saves someone from having to
                                                             drive your keys to you. Distance is no object you could be
I went to a seafood disco last week...and pulled a mussel.   hundreds of miles away, and if you can reach someone
                                                             who has the other "remote" for your car, you can unlock
                                                             the doors (or the trunk!)
Two fish swim into a concrete wall.                          Editor's note: It works fine! We tried it out, and it
The one turns to the other and says.... "Dam!".              unlocked our car. I locked the car, had my youngest
                                                             daughter call me while I was far away from the car. I
                                                             clicked open into the phone and I could hear the car doors
Did you hear about the Buddhist who refused Novocain
                                                             unlock through her cell phone.
during a root canal? His goal: transcend dental
medication.                                                  My daughter confirmed that sure enough the doors
                                                             opened.
                                                             Who needs AAA or On Star.
                                                             Pass this one on to your friends and family……




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