Dream Unlimited Q3 2026 Earnings Results & Report

Dream Unlimited EPS Results

• Actual EPS: C$0.22
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A

Dream Unlimited Revenue Results

• Actual Revenue: C$112.19 million
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Dream is a leading real estate developer and has an established and successful asset management business, inclusive of $28 billion of assets under management (1) across three Toronto Stock Exchange ('TSX') listed trusts, our private asset management business and numerous partnerships. We develop land and housing in our master planned communities in Western Canada and hold a growing portfolio of income generating properties across Canada. Dream expects this area of our business to grow as investment properties under construction are completed and held for the long-term. Dream has a proven track record for being innovative and for our ability to source, structure and execute on compelling investment opportunities.

Dream Unlimited Q3 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Q3 standalone net margin rose to CAD 32.6 million from CAD 24.1 million a year earlier, while after-tax earnings were CAD 13.1 million. Management expects the fourth quarter to deliver the strongest margin of the year.
• Positive Sentiment: Asset management had a strong quarter, with CAD 17.8 million in net margin, and AUM currently stands at CAD 31 billion, including Chancerygate. Management cited more than CAD 2 billion of expected industrial acquisitions for clients and expects the platform to continue growing.
• Positive Sentiment: Income-property NOI increased to CAD 7.6 million from CAD 6.5 million, supported by apartment lease-up; the company has about 1,100 operating units and expects to deliver another 930 units during 2027. Western Canada development has secured CAD 100 million in fourth-quarter revenue through presales, though management’s forecast of roughly 30% annualized NOI growth over three years is an expectation, not a guarantee.
• Negative Sentiment: Impact Trust remains a key area of uncertainty, with apartment-market weakness and slow progress at master-planned communities including Zibi and Brightwater. Dream says it is providing secured support and expects to outline a longer-term plan by year-end, but the assets still require further progress.
• Neutral Sentiment: Dream reported CAD 264 million of available corporate credit-facility liquidity and said it is comfortable with near-term refinancing needs, including about CAD 205 million of debt maturing in Q1 2027. Quayside financing documents are nearing completion, but final rate-locking and the planned start before year-end remain dependent on volatile interest rates and coordination among multiple parties.

Presentation

[Operator]

Welcome to the Dream Unlimited Corp. Q3 2026 conference call for Wednesday, November 11, 2026. During this call, management of Dream Unlimited Corp. may make statements containing forward-looking information within the meaning of applicable securities legislation. Forward-looking information is based on a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond Dream Unlimited Corp.'s control, that could cause actual results to differ materially from those that are disclosed in or implied by such forward-looking information.

[Operator]

Additional information about these assumptions and risks and uncertainties is contained in Dream Unlimited Corp.'s filings with securities regulators, including its latest annual information form and MD&A. These filings are also available on Dream Unlimited Corp.'s website at www.dream.ca. Later in the presentation, we will have a question-and-answer session. To join the question queue, you may press star then one on your telephone keypad. Your host for today will be Mr. Michael Cooper, CRO of Dream Unlimited Corp. Mr. Cooper, please go ahead.

[Michael Cooper, CRO at Dream Unlimited Corp]

Thank you, operator, and I would like to thank everybody for joining us. I think this morning we want to go deep in a couple of topics on the business. I am going to ask Meaghan Peloso to speak to the financials in a minute, but I just want to start by saying a couple of points. Firstly, I have been saying for a while that this decade has been a long one so far, and we have been looking at how do we have the best company we can have for January 1, 2030. I think we have made a lot of progress on that. What I would say is, there is many parts of our business, ones that are going great and ones that are not going as great, that we are totally focused on growing.

[Michael Cooper, CRO at Dream Unlimited Corp]

We have multiple platforms that are growing quite quickly, and I think we are doing quite well for positioning ourselves to be the best company we can be in another 36 months or so. In the meantime, we seem to be making quite a bit of money, and we are creating a lot of value. People ask me quite often, "Do you care about the stock price or not?" I have said for 20 years, what I would like to see is the companies that we are involved in trade at net asset value. That way, people can come in and out at fair value. We have access to capital, and we can run the business and just focus on the business.

[Michael Cooper, CRO at Dream Unlimited Corp]

Our company's trading at quite a discount, and it's interesting because we're now like five years into building out asset management and building out income properties, and these businesses are becoming pretty big, and the discount hasn't gotten smaller. I've been doing more marketing lately, and I think we're providing a lot of detailed information, but today I'm happy to provide more detailed information. We've got new coverage, which has been great. I think the business is doing very well. We're quite advanced on our business plan for the next four years, and that's looking very good. I think we're making tons of progress across all the platforms. I'm going to get into that in a bit, but I just wanted you to know what I'm going to talk about today so you can think about it before I start. Meaghan, do you want to provide an update?

[Meaghan Peloso, CFO at Dream Unlimited Corp]

Thanks, Michael. Good morning, everyone. Our third quarter earnings reflect another period of solid operating results across our key segments. I'll briefly speak to our earnings for the Q and then touch on liquidity and debt maturity progress. Net margin on a standalone basis was CAD 32.6 million compared to CAD 24.1 million in the comparative period. This was largely driven by growth across our asset management and income property divisions, partially offset by our sales mix in Western Canada. Overall, we generated after-tax earnings for the period of CAD 13.1 million, and we expect fourth quarter margin to be our strongest of the year. At a more granular level, our asset management division had an exceptionally strong quarter with revenue and net margin of CAD 23.2 million and CAD 17.8 million respectively.

[Meaghan Peloso, CFO at Dream Unlimited Corp]

The increase in net margin of CAD 6.8 million from the prior year was driven by our AUM growth and performance fees on our various contracts. Inclusive of acquisitions post-quarter end, our AUM is currently CAD 31 billion, inclusive of mandates acquired through our Chancerygate platform acquisition and capital deployed across our various mandates this year. Western Canada development generated net margin of CAD 8.9 million in the third quarter, down modestly from prior year due to the specific mix and volumes sold in each period. Current period activity was primarily driven from lot and acre sales in our Alpine Park community in Calgary. Based on pre-sales commitments achieved to date, we have secured CAD 100 million in Western Canada revenue for the fourth quarter to round out another solid year of earnings for the division.

[Meaghan Peloso, CFO at Dream Unlimited Corp]

In the third quarter, our income properties portfolio generated NOI of CAD 7.6 million, up from CAD 6.5 million in the prior year, largely driven by lease-up activity across our apartment portfolio. Results for the division did include a bad debt expense of CAD 550,000 related to a tenant at one of our retail properties. At the period end, we had roughly 1,100 multifamily units that are currently operational and are on track to deliver another 930 units, which is at our share, over the course of 2027 in Saskatoon, Ottawa, and our very first apartment in Calgary. Our other investment segment generated CAD 0.2 million of negative net margin in the third quarter, an improvement compared to CAD 3.2 million of negative net margin in the comparative period.

[Meaghan Peloso, CFO at Dream Unlimited Corp]

We expect our development fee income in this segment to increase over time as new projects come online, but for 2026 specifically, don't anticipate earnings from the segment as we have minimal inventory available and fewer active development projects in Toronto today. As of September 30th, we had CAD 264 million of liquidity available under our corporate credit facilities. On a consolidated basis, the company had about CAD 596 million of debt presented as current. Our remaining 2026 maturities, which are included in this figure, will roll at the end of the year, and there's approximately CAD 205 million of debt maturing in the first quarter of 2027, which is very much well underway. This includes a CMHC-insured apartment mortgage and land loan for which we are in very advanced discussions for construction financing. The construction financing would effectively repay the in-place land loan on first draw.

[Meaghan Peloso, CFO at Dream Unlimited Corp]

Overall, we're quite comfortable with our near-term positions. While our intent is to be proactive in working with our lenders on these maturities, there's oftentimes break fees if we're to refinance too early, so a portion of these refinancings won't be looked at until later in 2027. Overall, we believe our remaining 12-month maturities present little refinancing risk due to the nature of the debt asset class and based on preliminary conversations with our lenders, and we'll provide further updates as we make progress. With that, I'll turn the call back over to Michael.

[Michael Cooper, CRO at Dream Unlimited Corp]

Thank you, Meaghan. I'd like to discuss the three major divisions that I talk about every quarter, just to give an update. Asset management's doing quite well. I think we're going to have over CAD 2 billion of acquisitions on behalf of our clients for the industrial business. Some of the other areas are growing out as well. We're working with the existing clients to do more of the same, maybe to do some new things, and we're also working with potential new clients to add them to our work. So it looks as if the momentum that we have is likely to continue pretty well. In the quarter, we closed on Chancerygate, which rounds out our ability to be an asset manager of scale in Europe.

[Michael Cooper, CRO at Dream Unlimited Corp]

We've just about completed all the documents for our previously announced first new joint venture in Europe since we acquired Chancerygate, and we've got lots of new prospects, so we're excited for that. It looks as if, based on the business that we just have now, our asset management business will continue to grow pretty rapidly, and we think we're going to be able to add new clients or new products and see it grow even more. So, it's been quite a success story to go from CAD 10 billion to CAD 30 billion to over CAD 30 billion since 2020. It's a lot of growth in AUM in a time where it's been hard for asset managers to get to scale. I think every step we take provides us with more opportunities to continue taking more steps. I think the team's doing a good job.

[Michael Cooper, CRO at Dream Unlimited Corp]

I think they're achieving good results. Our relationships with our clients are strong, and I think there's lots and lots of opportunities. If you take a look at our market cap, I'm just saying, and conceptually, our asset management business is likely to make about a 10% return on our market cap next year. So, it alone, more or less, is equal to the value that the company's trading at. I think the most important thing is, as we get to scale, it becomes much more valuable. I love the charts in asset management, same thing with income properties. They are consistently producing more and more profits for us. I would say that the expectation is asset management will be our largest division profit-wise this year, and probably throughout the budgeting period.

[Michael Cooper, CRO at Dream Unlimited Corp]

Income properties is something that we really started in 2020, building apartments in Western Canada, and we don't even have that much in Toronto. We've got the shares of Zibi. So, it's a business line that is really getting momentum now. I think we have about 1,100 units at share in apartments currently operating, and we have 900 more coming in the next five quarters, less than five quarters, let's say 13 months. Behind that, we actually have quite a bit coming in Western Canada. The Western Canada properties have been operating ery well and pretty much hitting our numbers, well leased. As far as income property growth, it's positive, less than it has been, but it's still positive, and we've got best-in-class buildings. So, that's pretty exciting.

[Michael Cooper, CRO at Dream Unlimited Corp]

This quarter, I think Meaghan mentioned we had a bad debt at Distillery, and even having that bad debt, we're up, and I think it's going to see NOI increase. My best estimate is, like, annualized at least 30% per year on average for the next three years. So, that's really the work we've been doing there. It's really coming to fruition now. Our Western Canada development business, it's doing very well. We're underway in Homewood. We don't have the final approvals for the zoning, but we are doing the preparatory work. We're actually doing the servicing for the school site for the city. So, the city and Dream are working hand-in-hand to get that ready to be fully approved in 2027. That'll mean we're going to have the next 1,100 acres available on a consistent basis. We have Cooperstown going in Regina.

[Michael Cooper, CRO at Dream Unlimited Corp]

We've got Alpine Park and a few other developments. We've got land in Edmonton. It's looking much stronger because we have much more of our land in development, and we're expecting good things. Those are our three major divisions, which are about 82% or 83% of our business. That's what we were talking about a lot. To be blunt, I think what we hoped would happen is happening in those three divisions. On the 17% that isn't those three divisions, one of the things that's curious is 3% of that is working capital. We got the Dream Office shares in there, and that's a pretty good thing. We got our investments. We have a small investment in CentreCourt. We got an investment as a joint venture partner in apartments in the U.S., our apartments in the Netherlands, and a small amount in apartments here.

[Michael Cooper, CRO at Dream Unlimited Corp]

There's a lot of other assets there that are really quite good. There's a bit of land, and the land actually is great land, being 31A Parliament, which is adjacent to the distillery, Block 13 in the Canary District, which came as part of our development of the Pan Am Athletes' Village. We've got a site that's very exciting in Broadview and Eastern, just north of the major East Harbour transportation hub. We like those sites. It's not a great time to develop, but it's not a bad time to work on it. Especially with the, I mean, 31A Parliament, we bought for CAD 1.8 million. It's got zoning of 850,000 sq ft. Block 13 has 800,000 sq ft, and that was actually effectively just part of the profit that we put a nominal value of CAD 55 a foot on 400,000 sq ft.

[Michael Cooper, CRO at Dream Unlimited Corp]

Those are deep in the money, and they'll be good one day, but there's no pressure. What we've got is, and this will come up a little bit when I talk about Impact, our investment in Zibi, it's 50/50 with Impact. These master plan communities, large master plan communities are very difficult right now. We've also got Brightwater, and that one, there's four partners in it, and it kind of lost momentum, but hopefully we'll get, picks them up with townhouses, because that site has a lot of townhouses. Generally, in that 17%, most of the assets are quite strong. They don't need to be repositioned or anything, and there's a little bit of work to do.

[Michael Cooper, CRO at Dream Unlimited Corp]

Dream Unlimited is actually in very good shape, and it's getting better and better, and I think the team is doing a good job, and we're pleased with the progress. Impact Trust is a business that's where we've been putting all of our best-in-class new developments, a lot of our public-private partnerships, and it's very concentrated in Ontario in development and apartments, and that has not been a good place to be. The company has needed support, and Dream's provided the support. Dream has a fiduciary obligation to Dream Unlimited shareholders that whatever it does, it does in the best interest of the shareholders. We're being what I believe is quite prudent in how we're managing it. We're lending money, taking security.

[Michael Cooper, CRO at Dream Unlimited Corp]

We have a general security agreement, which effectively means that behind the first mortgage, we rank first on all other capital, ahead of unsecured creditors, ahead of the convertible debentures, ahead of any money that potentially may not get paid on an existing loan. We are quite confident that we have got great security and great assets that are just not at the right time. Apartments right now are not doing great. I want to dig into it a little bit. The way we look at Impact Trust is, these are the assets that we would have done ourselves if Impact Trust did not exist. We like them very much. An asset like Maple House in West Don Lands is an incredible asset. It has got a CAD 357 million loan on it. The loan is to CMHC. It comes up in 2029. We think there will be no issues.

[Michael Cooper, CRO at Dream Unlimited Corp]

Sorry, that loan that comes up in 2029, it has an insurance certificate from CMHC, which means it is a guaranteed loan. We have full expectation that will be able to be renewed and sort of replaced with. Sorry, right now, the CAD 357 million is a direct loan from the government. In 2029, the idea would be that we would go to lenders who would have a guarantee from the federal government to the principal and interest, and we do not foresee any issue.

[Michael Cooper, CRO at Dream Unlimited Corp]

By the way, it is non-recourse. It is a great project, so we really like that one. All in all, there is a lot of debt in Impact Trust. There is CAD 630 million that is CMHC-insured debt, and that debt is very manageable. I mentioned that Maple House, which is about CAD 100 million, our share is non-recourse. One of the apartments in Zibi is non-recourse.

[Michael Cooper, CRO at Dream Unlimited Corp]

We have got a lot of value-add apartments that are non-recourse. In addition, Block 347, I think we are up to about 70% leased. We expect within the next 12 months that that building will become non-recourse. 49 Ontario, it is still early, but when you look at the October housing starts, 1,200 units of new purpose-built rental would be our building because we just went above grade. The building is moving along quite quickly. We are way ahead of schedule. The budget is in great shape. That building, we are very confident that once we start leasing it in the summer of 2028, at the current rents, it will become non-recourse in due course. That is a 20-year loan. We have over 19 years left on it.

[Michael Cooper, CRO at Dream Unlimited Corp]

What I am trying to say is, of that CAD 630 million of CMHC debt, we have got great assets with great debt, and a lot of it is non-recourse, and even more will become non-recourse over the next 18 to 24 months. We are quite comfortable with that. We have got about CAD 70 million of debt on commercial properties that Dream is involved in. A lot of that is the Zibi commercial assets and the retail at Brightwater.

[Michael Cooper, CRO at Dream Unlimited Corp]

The retail at Brightwater is a great asset. The Zibi commercial assets, they are very good assets, but the leasing has been very tough until recently. We have every expectation that we are going to make a lot of progress on Block 207, which is an office building we built. It is like 60,000 sq ft. We got a little bit of lease in there, but we think we are going to fill that up.

[Michael Cooper, CRO at Dream Unlimited Corp]

We think we are going to have 208 filled up. I think that commercial is going to be in great shape relatively soon. We got the Silos land, which is right next door to Quayside, and we think that one is going to be a great site. It has got a lot of density, but what is different than a lot of the other sites is we currently have zoning for three buildings. I think we are going to get approval for a fourth building, and each of those buildings are going to be right in the sweet spot for the type of buildings that people like today. I think that we will be able to develop it or sell it, but we are getting it into great shape. Not fussed about that.

[Michael Cooper, CRO at Dream Unlimited Corp]

The area that we are more fussed is, as I mentioned earlier, the master plan community, so Zibi, Brightwater, and also Forma East, which is under construction. I will take them separately. We have got about CAD 90 million of debt in Zibi and Brightwater. At Zibi, the Ontario side is going very well. We have got about five more sites for apartments, and that is all that is left. Block 206 is finishing in the next few months.

[Michael Cooper, CRO at Dream Unlimited Corp]

We will be leasing it, and we want to wait to see the progress on it, but we could easily start another building. I think we only have CAD 20 million of debt for the five buildings that are left, the five sites that are left. We think that is manageable. In Gatineau, we have a lot of land, and that has been going slow. That is where we really need to focus our efforts.

[Michael Cooper, CRO at Dream Unlimited Corp]

We have a new government. They want people back in the office. We really have not had any potential to lease to the government in seven years, but now it looks like there are opportunities. In addition to that, this government has put up a lot of money for culture and sports. The National Capital Commission is getting a little bit more aspirational, and we are right in the center of the National Capital Region. We are going to spend the next couple of years looking for ways to work with the government and others to use up more of the land in Gatineau. If we do that project will be fully stabilized. Brightwater is one of the best pieces of land I have seen. It is 72 acres on the water at the foot of Mississauga Road, and that one is stalled.

[Michael Cooper, CRO at Dream Unlimited Corp]

We are going to work on getting some townhouses done, same as what I said for Dream Unlimited. That is really all the assets that Dream is involved in. To make it clear, there is about CAD 900 million of debt. CAD 630 million is the CMHC loans. The commercial is CAD 70 million of debt. I think we are going to get that totally under control in the next six months. The Silos, we have got a lot of work on it. I think that is going to be in great shape. Then we will work our way through Brightwater and Zibi, and I think that is basically the whole company. What I would say is, and I said this before, Impact Trust owns a lot of our very best assets. Dream is very keen. We are putting money in in a way that we think is very secure.

[Michael Cooper, CRO at Dream Unlimited Corp]

The whole goal is to get to the other side of this current downturn where the markets react to higher interest rates and lower rent in apartments. What we've seen recently is a lot more volume on rental. We have about 96% on our leased, on our completed buildings. Good lease up. Our first choice is to see the market pick up and Impact Trust be very strong. Second choice is to support it and get to the other side. Then maybe, Dream's keen on the assets, so we'll manage our way through it. I think it's as much an opportunity as a risk, because right now the assets are in good shape and quite manageable. So, on Impact Trust, we said that both for Impact Trust and Dream said that at the year end, we hope to have a more longer term solution.

[Michael Cooper, CRO at Dream Unlimited Corp]

The reason for that is we'd like to provide more certainty to everybody. Right now we're making progress on a lot of these areas. I think we'll be in a much better position to work with Impact Trust by then. We just need a few more months to get some more work done and work with the two boards to come up with something that gives both companies a little bit clearer runway. I think that's about it. Meaghan and I are happy to answer your questions. I hope I didn't overshare. Operator?

[Operator]

Thank you. We will now begin the question and answer session. If you have dialed in and would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star one again. If you are called upon to ask your question and are listening via speakerphone on your device, please pick up your handset to ensure that your phone is not on mute when asking your question. Again, press star one to join the queue. Our first question comes from the line of Sam Damiani with TD Cowen. Your line is open.

[Sam Damiani, Analyst at TD Cowen]

Thank you. Good morning, Michael. Good morning, Meaghan. Michael, I'm just going to pick up where you left off there briefly on Impact. Is there anything else you can share? Is that next quarter timing for, I guess, somewhat of a meaningful update? Is that fairly set in stone, or could that slip another quarter or two?

[Michael Cooper, CRO at Dream Unlimited Corp]

What is so difficult is everything within Impact is a lot of specifics, and we are making a lot of progress on things. There is probably about four or five parts of Impact we think we are going to make progress on during that time. In addition to that, we need the two boards to come to an agreement. So, written in stone is a very high standard, but I would say I am highly confident that we will have a big update then, which will not be a total solution, but a lot closer to one. Which would mean, what we are trying to do is have something that will give at least a year and a half runway, and then we can all get back to business. I do not really love the idea of lending 15 million if it does not fix it.

[Sam Damiani, Analyst at TD Cowen]

Yeah. Yeah. Okay. No, that is helpful. Thank you. And just switching over to the asset management side, a couple questions there. I guess, so the European industrial fund is kind of being finalized or imminently, sounds like. I guess generally, how do you look at that sort of expanded platform over in Europe with Chancerygate in terms of giving some torque to AM growth at this stage, post-acquisition here?

[Michael Cooper, CRO at Dream Unlimited Corp]

Yeah, I mean, what I would say is on the conservative end, I think we will be able to continue growing it and be able to make some reasonable amount of money, like grow assets at a steady pace. So we got one JV that is just about done. We are working with some others. So I think we are going to see some consistent business coming out of there.

[Michael Cooper, CRO at Dream Unlimited Corp]

So, I think it will prove out to be a good expenditure of our time. But that is a market that is huge, and having 6 billion of assets plus 100 real estate professionals, I think we are in a really good position to. What I am saying is on the low end, I think we can knock out a couple of JVs of 200 or 400 million euros or USD. They are getting pretty similar. And that we can make a living doing that.

[Michael Cooper, CRO at Dream Unlimited Corp]

But on the high end, I think there may be opportunities to grow in a major way, and I think we have just got to spend more time with the team, more time with clients. So I think it could be a bigger growth platform, because it is well-positioned in a huge market with a ton of people who like to invest there. I mean, what I am saying is Europe is easier to sell than Canada if you have got the right pitch. So, we are pretty focused on that.

[Sam Damiani, Analyst at TD Cowen]

Okay, great. Last one for me is on the base and development fees of, I guess, 14 million, I think, in this quarter. They were up a bit quarter-over-quarter. Was there anything unusual in there? This, of course, was the first quarter with Chancerygate. Is that a good run rate, or was it something unusual in Q3 that won't repeat in Q4?

[Meaghan Peloso, CFO at Dream Unlimited Corp]

From a base fee perspective? No, that should increase slightly. I mean, we only acquired Chancerygate at the end of August. I would just bear in mind that from a margin perspective, we aren't expecting it to have an overall impact this year. Base fees will increase slightly from it, but I wouldn't use Q3 as the go-forward run rate.

[Michael Cooper, CRO at Dream Unlimited Corp]

There's two points. One is, at the beginning of the year, Dream sold its first half, Dream Industrial sold the first half of its industrial to CPP. That was net zero for AUM. It just went from one fund to another.

[Sam Damiani, Analyst at TD Cowen]

Yep.

[Michael Cooper, CRO at Dream Unlimited Corp]

In June, they did the other half. Dream Industrial had money to invest, CPP's investing, GIC's been investing, and we are not reflecting the fees on a real run rate basis on that. I think we did a $600 million transaction late in the quarter. I don't know. I think we might have actually had two days of income from that. I think there's a bunch of things that, as we're invested, will build on the base fees. With Chancerygate, they had been a traditional developer. They got into the asset management business. They did not get to scale. Dream Industrial liked their assets a lot and the ability to access Europe and new development. Dream took over the asset management group at a nominal price. The goal for us is to drive that revenue.

[Michael Cooper, CRO at Dream Unlimited Corp]

I think we've got enough expenses to be a much bigger business, but we're going to add more revenue and more expenses, but they kind of net out to the same. We only had, I think, from around August 27th to September 30th, so the revenue and the expenses are both going to go up equally with regards to Chancerygate until we drive the revenue higher.

[Sam Damiani, Analyst at TD Cowen]

Thank you. That's helpful. I'll turn it back.

[Michael Cooper, CRO at Dream Unlimited Corp]

Thank you.

[Operator]

Our next question comes from the line of Mark Rothschild with Canaccord Genuity. Your line is open.

[Mark Rothschild, Analyst at Canaccord Genuity]

Thanks. Thanks. Good morning. The income properties portfolio of rental apartments in particular that has been growing, can you give some more information on what the occupancy rate is with that portfolio? What extent is it stabilized? Maybe the debt on those properties, is it all fixed? Is there variable rate debt? I am just trying to understand what we can expect from this portfolio in the coming quarters.

[Michael Cooper, CRO at Dream Unlimited Corp]

Okay. Great questions. Just in rough terms, the building we are doing in Saskatoon are like CAD 40 million buildings when they are finished. They probably are CAD 34 million costs. We finance them with a land equity, maybe a couple million dollars more, and then when we are finished, we kind of finance them out. We are probably at 75% or 80% debt when completed, and the construction debt generally is floating, but the takeout debt, like we did one at 3.89% for BVR3, Brighton Village Rentals, we did that at 3.89%. We built it to a six cap. Those are kind of the metrics in Western Canada. In Ottawa, we have 10-year fixed rate debt on Block 204, and we probably have eight years left, and I think that one is around 3.2%. It is pretty good. We are going to go through the lease-up.

[Michael Cooper, CRO at Dream Unlimited Corp]

I think that Odenak, we own a third of, that is finishing pretty soon as well. That, I think, is in the same range for the debt rate and probably a little less time, 7.5 years. I would say the loan-to-value is hard to determine right now. I am going to say that because I am not sure what the value is when we are finished. We will see. They are finally a fairly high lever. What we are seeing in Western Canada is, BVR 1, which we finished, I think, five years ago, the rents are up 20% from when we finished, and the debt that we have in place is now in the 60%-65% range. We are building not using a lot of our own equity, and we are growing into it.

[Michael Cooper, CRO at Dream Unlimited Corp]

49 Ontario, which is an indirect owned asset, that one is going to have a reasonable profit and reasonable equity. That one has got 19 years, two months left on the mortgage, so they are pretty secure. Did that help, Mark, or you need more details?

[Mark Rothschild, Analyst at Canaccord Genuity]

Oh, I guess I'm just trying to understand. That's definitely helpful. I'm just trying to understand what the occupancy is and

[Michael Cooper, CRO at Dream Unlimited Corp]

Oh

[Mark Rothschild, Analyst at Canaccord Genuity]

to what extent are the properties are developed, stabilized, and where we could see the NOI and the FFO from this portfolio go over the next few quarters.

[Michael Cooper, CRO at Dream Unlimited Corp]

The NOI, I don't know about the next quarters. I would say that the NOI should be growing at about a 30% compounded rate over the next three years.

[Mark Rothschild, Analyst at Canaccord Genuity]

Okay, great. Maybe I'll just follow up separately on that after.

[Michael Cooper, CRO at Dream Unlimited Corp]

Sure.

[Mark Rothschild, Analyst at Canaccord Genuity]

You started off with some commentary on the share price. It is notable that you haven't been repurchasing shares of late. To what extent is that just not a focus in the near term as you put capital into your development projects?

[Michael Cooper, CRO at Dream Unlimited Corp]

Yeah, we've been buying about 1% or 2% of the company back a year. I think the real focus is building out these divisions. I mentioned this $3 million investment in a development in our asset management group that will make a much higher return than buying back stock. The stuff in Western Canada is making a much higher return than buying back stock, because we're talking about 20% compounded for 10 years. So I guess we're kind of pushing on the things that are positive, and on the things that Impact Trust and stuff, we're wanting to be conservative. So, we buy back stock. We'll continue to buy back stock, but I'm going to say it again, we're really focused on having the best company for January 1, 2030, and that really has to do with building out our business and reducing risk to do with Impact.

[Michael Cooper, CRO at Dream Unlimited Corp]

But we'll be buying back stock. It's just like, I own 43% of the company. I owned 30 12 years ago, and it's almost all from buying back stock. So we bought back 25% of the float. Our stock price is the lowest now in years, and I know everybody I see says, "You know the answer is you should buy back more stock." So, we're going to see a lot more cash flow coming out of our businesses.

[Michael Cooper, CRO at Dream Unlimited Corp]

We want to make sure we're investing for the long term, and we'll definitely be buying back more stock. Just want to be certain. I would say that interest rates went up 13 basis points yesterday alone. It's gone up 90 basis points since June 30. Then it came back down 45, up 13. I don't know. This is a very uncertain environment. We're getting through it great, but I just don't think you should get rid of your cash, as I've been saying to you, Mark, for a while.

[Mark Rothschild, Analyst at Canaccord Genuity]

I understand. No, it is consistent. I appreciate that. Thanks.

[Michael Cooper, CRO at Dream Unlimited Corp]

But ask me tomorrow.

[Mark Rothschild, Analyst at Canaccord Genuity]

Right.

[Michael Cooper, CRO at Dream Unlimited Corp]

It could change then.

[Operator]

Again, if you would like to ask a question, press star, then the number 1 on your telephone keypad. Our next question comes from the line of Mario Saric with Scotiabank. Your line is open.

[Mario Saric, Analyst at Scotiabank]

Hi, good morning, and I apologize for extending the duration of the call.

[Michael Cooper, CRO at Dream Unlimited Corp]

After what I said, I would be so disappointed if there was just two little questions. Well, those were big questions, so I appreciate it, actually.

[Mario Saric, Analyst at Scotiabank]

There we go. Okay. I will stick to kind of Mark Rothschild's theme, just on the share price and your comments on people asking you whether you care about where the share price is. If the share price was double where it was today, how would you run the business differently, if at all?

[Michael Cooper, CRO at Dream Unlimited Corp]

I would probably be able to concentrate without people asking me about the stock price. No, we are running this business for the longer term. What is interesting is, if the stock was at CAD 36 and the asset management continues to grow, and we got 30% increases in our NOI for income properties, and we start to see a lot more with Homewood, as far as I am concerned, that may be the same stock price to value relationship that we have now, and we would probably deal with it similarly, where it is like, let us see what the opportunities are for our cash, and we might buy 1% or 2% of the company back a year then, too.

[Mario Saric, Analyst at Scotiabank]

Yeah. Okay. And maybe just a higher level question. The federal budget came out, I think it was last week. Any implications that you can see from a foreign investment perspective or home ownership demand in Alberta and Saskatchewan that you are either quite positive on or cautious on in terms of the details coming out of that?

[Michael Cooper, CRO at Dream Unlimited Corp]

Okay. I have been watching this show about the Austro-Hungarian Empire in the 1860s, and I did not know this, but they have 33 different countries that made it up, 17 different languages, and it was hard to keep together. I thought it was really interesting the way that they are trying to build a more prosperous nation, but at the same time, they have got to get more to the people so that the people are satisfied with the country. I do not usually use historical references to empires in the 1860s, but I think that is what the budget did. I think what they were doing with the budget was they were putting a whole bunch of money into new investments that will prove out the major projects. That has already been done, and I think it is good.

[Michael Cooper, CRO at Dream Unlimited Corp]

I mean, the BC Premier election was phenomenal, and I think we are going to see a tremendous amount of growth in the oil production and shipping to Asia. I do not think people get it. That is CAD 35 billion a year of revenue for every million barrels of oil of that CAD 35 million, about CAD 12 billion goes to Alberta and the federal government. It is a massive driver for our ability to take care of ourselves. So I think that is really powerful. The problem is, that is like 2032 to 2037, in my view, we are going to get an extra 10% of GDP growth, maybe like an extra 2% a year for those five years minimum, but we have got to get to 2032.

[Michael Cooper, CRO at Dream Unlimited Corp]

I think when you look at this budget, the Productivity Mega Deduction is something that as soon as they get that law done, it does say it is effective now as of September 15th or something, but as soon as the wording is finalized, there is going to be a tremendous amount of investments today. So I think that is very positive. I think a lot of things that they are doing are really to fill in that gap between now and when the major projects come online.

[Michael Cooper, CRO at Dream Unlimited Corp]

So I think that was really positive. I will say this, I think if Canada has higher GDP per capita, that is what we need for housing. We need people to be able to afford a house on their salary, just like they are able to do in Saskatchewan and Alberta, and the other places they are not, it is just because people do not make enough money.

[Michael Cooper, CRO at Dream Unlimited Corp]

I think we got to grow the economy in proportion to what people make. I think this major projects are focused on that, and I think by the big Productivity Mega Deduction, that's very helpful for that. Eradicating homelessness within the next 10 years, I think that's important, and I think it's one of the things that makes people pretty dissatisfied is the city isn't the way it should be. The other thing that people don't talk about is they have, I don't remember how much money, but they have it for dealing with addiction. I think that's really important because the injection sites and stuff like that, they just try to make safe injections. They're not trying to help the people get better, but the federal government's trying to get rid of homelessness and also get people in better shape.

[Michael Cooper, CRO at Dream Unlimited Corp]

I think that's going to be great. I think the idea of the grocery bonus being topped up and topped up again, it's probably what we should do to make sure that people feel that the country's working for them. I think it was a pretty balanced budget. Specifics, getting rid of the foreign buyer ban for new developments is going to be very helpful. They did say they're going to focus on more tax stuff for next time.

[Michael Cooper, CRO at Dream Unlimited Corp]

The CAD 44 billion that's going through Build Canada Homes is going to help overall, not that specifically for people like us, maybe a little. But overall, I think it's a constructive budget, and it will lead to better outcomes. I'd say it's probably more valuable in general for Canada than it is, let's say, for a real estate company, but there's enough stuff in there that's good for us. I think it's pretty good.

[Mario Saric, Analyst at Scotiabank]

Okay. Just maybe one more on my end, just switching to the land development business. I think one challenge is trying to understand where land values are, where they're going in Saskatchewan and Alberta. Any quarter-to-quarter change in kind of the internal view on land values in the two provinces based on any kind of independent third-party transaction activity that's taken place?

[Michael Cooper, CRO at Dream Unlimited Corp]

Yeah, I think I mentioned this before, but we bid on 320 acres in the area that Alpine Park is in, and this stuff is in the. There's 4,000 acres. One half has got a neighborhood plan now. The other one, we haven't done. The zoning's not done for it. We're by far the major owner of the other half as well. We bid on it. We carry the land in our NAV at. Well, we paid CAD 30,000 for the land, but we probably carry it at CAD 130 or CAD 140. We bid CAD 215,000. We were blown out. We didn't even get asked for a second number. I would say land values in Alberta are probably at their all-time high, and I think there's a relative depth. Right now in Calgary, they have a little bit of an oversupply, but there's going to be great growth.

[Michael Cooper, CRO at Dream Unlimited Corp]

Everything that's happening in Canada, Alberta and Saskatchewan are both getting much more than their per capita share. I think they're going to be attracting people, they're going to be growing, and the value of land is going to go up more. In Saskatchewan, we own so much land there's just not that many trades, but we're able to get a lot of value out of the land at the market value that we use in our NAV. I'll check, but I think every once in a while we buy some strategic land. It always surprises me how expensive it is. I mean, I'm not sure that we can sell 3,000 acres in Saskatoon in a minute, but I know when we see 20 or 100 acres, it sells for a lot higher than we reflect in the NAV.

[Mario Saric, Analyst at Scotiabank]

Okay.

[Michael Cooper, CRO at Dream Unlimited Corp]

I think when we put our NAV, we're higher than you are. We're quite comfortable that our number has a margin of safety in it.

[Mario Saric, Analyst at Scotiabank]

Okay. That's it for me. Thank you.

[Michael Cooper, CRO at Dream Unlimited Corp]

Thank you, Mario.

[Operator]

Our next question comes from the line of Ian Gillies. Your line is open.

[Analyst]

Yes, good morning. You may have covered it earlier, and I apologize for joining the call later, but is the financing for Quayside finalized at this point, and are you still planning on construction before December 31?

[Michael Cooper, CRO at Dream Unlimited Corp]

What a great question. Sorry you missed what we started with, but I did not address that. I am smiling because it is by far the most complicated development we have ever been involved in, and we have a history of complicated developments. We have four not-for-profits that are going to be responsible for the 500 units that the city is paying for and will own. We got Waterfront Toronto, the city is a partner, and we are dealing with CMHC. We imminently are going to be at a stage where we have completed in excess of 25 separate documents that are required in order to start. They will go into escrow shortly, and then all we need to do. That includes all the debt. Then, we need to focus on how to lock in the rate at a number that works. It is very much on my mind.

[Michael Cooper, CRO at Dream Unlimited Corp]

We are talking to everybody involved. There's a lot of players, and everybody is focused to make this work. I mentioned earlier how volatile interest rates are. Just for perspective on that development, one basis point is about CAD 1.3 million of cost over the 20 years. So if it goes up 10, it's CAD 13 million in total. Present value might be eight or nine for every 10 basis points, so it's a big factor. In June, that was a slam dunk, that project. The 20-year bond was great. Then it got terrible. It's come down a lot. Then yesterday was a hot U.S. number. So I think over the next seven weeks, we're going to try to get it going. But first, we have to have all the deal terms among all the parties complete.

[Analyst]

Okay, thank you very much.

[Operator]

There are no further questions at this time. I would like to turn the call back over to Mr. Cooper for closing remarks.

[Michael Cooper, CRO at Dream Unlimited Corp]

Closing remarks sounds a little haughtier than anything I have to say, but I do appreciate everybody spending their time with us and following the company. Meaghan Peloso and I are always available to discuss anything with you, to answer any questions, and we do appreciate your feedback. So thank you so much for participating in today's call.

[Operator]

Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.

Participants

Executives

• Michael Cooper, CRO
• Meaghan Peloso, CFO

Analysts

• Sam Damiani, Analyst at TD Cowen
• Mark Rothschild, Analyst at Canaccord Genuity
• Mario Saric, Analyst at Scotiabank
• Analyst