Dream Impact Trust
Q1 Report 2024
Table of Contents
Management's Discussion and Analysis | 1 |
Condensed Consolidated Financial Statements | 29 |
Notes to the Condensed Consolidated Financial Statements | 33 |
MANAGEMENT'S DISCUSSION AND ANALYSIS
(All dollar amounts in our tables are presented in thousands of Canadian dollars, except unit and per unit amounts, unless otherwise stated)
This Management's Discussion and Analysis ("MD&A") is dated as of, and reflects all material events up to, May 6, 2024, the date on which this MD&A was approved by the Board of Trustees of the Trust ("Board of Trustees").
When we refer to terms such as "we", "us" and "our", we are referring to Dream Impact Trust (the "Trust"), Dream Impact Master LP ("MPCT LP") and its subsidiaries. When we refer to the term "units" we are referring to the units of the Trust. When we refer to "unitholders" we are referring to holders of the units of the Trust.
Certain comparative results have been reclassified to conform to the presentation adopted in the current period.
1. OVERVIEW AND OVERALL FINANCIAL PERFORMANCE
1.1 OVERVIEW OF THE TRUST
Dream Impact Trust is an open-ended trust dedicated to impact investing. Impact investing is the intention of creating measurable positive, social, or environmental change in our communities and for our stakeholders, while generating attractive financial returns. The Trust's underlying portfolio is comprised of exceptional real estate assets reported under two operating segments: development and recurring income. The units of the Trust are listed on the Toronto Stock Exchange ("TSX") under the symbol "MPCT.UN".
The Trust is managed by Dream Asset Management Corporation ("DAM" or the "Asset Manager"), a subsidiary of Dream Unlimited Corp. ("Dream Unlimited" or "Dream") (TSX: DRM), which is one of Canada's leading real estate companies, with approximately $24 billion of assets under management in North America and Europe. On January 1, 2018, Dream acquired control of the Trust, for accounting purposes, based on Dream's increased exposure to variable returns resulting from increased ownership through units held in the Trust and from new real estate joint venture agreements. The ultimate controlling party of the Trust is Michael Cooper, President and Chief Responsible Officer of DAM and Dream. As of March 31, 2024, Dream has a 35.2% ownership interest in the Trust.
1.2 OUR STRATEGY AND OPERATING SEGMENTS
Our fundamental objectives are to:
- Create positive and lasting impacts for our stakeholders through our three impact verticals: environmental sustainability and resilience, attainable and affordable housing, and inclusive communities.
- Balance the growth and stability of the portfolio, increasing cash flow and unitholders' equity over time.
- Provide investors with a portfolio of high-quality real estate assets, concentrated in core geographic markets, leveraging an experienced management team.
We work towards these objectives by operating our business under two distinct segments:
- Recurring income - comprised of a portfolio of commercial real estate income properties and multi-family rental assets in the Greater Toronto Area ("GTA") and Ottawa/Gatineau, and a utility asset(1).
- Development - comprised of direct and indirect investments in residential and mixed-use developments.
- Relates to Zibi Community Utility. For further details, refer to Section 10.1, "Summary of Impact Investments" of this MD&A.
Recurring income is important to our business as it provides stable returns in order to fund our ongoing fixed operating costs and interest costs. Over time, we expect this segment to grow and represent approximately 70% of our portfolio, as we build out our extensive development pipeline and further invest in best-in-class income properties.
We believe the Trust's development segment represents a portfolio of high-quality assets located in core geographic markets that would not otherwise be accessible in a public vehicle. These assets represent a significant source of growth for the Trust, which we expect will generate future income and cash flows over time as the projects are developed. Assets may be built for sale or built to hold for the long term.
Due to the nature of development, the Trust expects fluctuations in earnings from period to period from this segment. Typically, assets may be acquired and held for a number of years before development commences or contribution to net
Dream Impact Trust 2024 First Quarter | 1
income is realized. However, depending on a variety of factors, including location, market conditions, density, and asset class, the value of these projects may appreciate as we progress through the rezoning and pre-development process. Our development segment is expected to generate attractive returns and value creation over time. We also believe our portfolio will be more resilient and valuable because it is comprised of assets that are considered impact investments.
In line with our overarching strategy to be a dedicated impact investment vehicle, we utilize assets in both operating segments to generate positive impact across our verticals. These verticals are aligned with the widely recognized and accepted United Nations Sustainable Development Goals and are:
- Environmental sustainability and resilience - develop sustainable real estate that optimizes energy use, limits greenhouse gas ("GHG") emissions, and reduces water use and waste while also creating resiliency against natural disasters and major climatic events.
- Attainable and affordable housing - invest in mixed-income communities that are transit-oriented, located close to employment opportunities, and support an overall lower relative cost of living with a high quality of life.
- Inclusive communities - intentionally design and program communities that are safe and inclusive for everyone. This includes creating spaces that encourage mental and physical health, and wellness.
As of March 31, 2024, substantially all of our portfolio qualified under the Trust's definition of an impact investment or in the impact planning stage. Over the next few years, we intend to wind down or exit remaining non-impact investments and increase our financial flexibility from our build-to-sell assets.
1.3 BUSINESS UPDATE - Q1 2024
During the three months ended March 31, 2024, the Trust launched a sales process for two commercial properties located in downtown Toronto. Subsequent to March 31, 2024, the Trust entered into an agreement to sell 10 Lower Spadina and in advanced discussions for the disposition of 349 Carlaw. Through these asset sales, the Trust is reducing its commercial asset class exposure by 95,000 square feet ("sf") and is expected to generate gross proceeds in excess of $30.0 million upon close that would support the Trust's ongoing liquidity needs.
During the three months ended March 31, 2024, the Trust disposed of a passive investment in a non-core development project to Dream Asset Management Corporation ("DAM") the Trust's asset manager, and a subsidiary of Dream, for gross proceeds of $3.7 million, generating a gain on sale of $2.8 million. In a further effort to preserve liquidity, over the first quarter the Trust and DAM negotiated an extension to the existing amendment. Under the renewed arrangement, which is subject to unitholder approval at the upcoming annual meeting on June 12, 2024, the base management fees and acquisition fees payable for the 2024 fiscal year would be satisfied by the issuance of 550,000 units to DAM. The Trust has the right to request an extension of the arrangement for the 2025 and 2026 fiscal years pursuant to which the base management fees and acquisition fees payable for the 2025 and 2026 fiscal year would be satisfied by the issuance of 600,000 units and 650,000 units, respectively, if validly exercised. Aggregate cash savings of $38.5 million are expected to be realized by the Trust under the new arrangement over the full three-year term. Since July 2019, DAM has agreed to accept units of the Trust in lieu of cash to support the Trust's liquidity needs, demonstrating strong alignment with the Trust's overall strategic objectives. As at May 6, 2024, DAM has a 35.3% interest in the Trust.
Over the first quarter, just over 40% of occupancies were achieved at Brightwater II, the second residential building in the 72-acre waterfront community in Port Credit. Remaining occupancies for the 235-unit building are anticipated in the latter half of the year. In addition, approximately 65% of the 256 units at Ivy Condos were occupied, a project in downtown Toronto initially launched in 2017. The project is anticipated to close in the second quarter which will allow for the Trust to repay $57.7 million of construction debt. The Trust has a 23.25% and 75% interest in Brightwater and Ivy Condos, respectively.
During the three months ended March 31, 2024, Common (Zibi Block 206) commenced leasing. The innovative building concept features 48 co-living units, 140 traditional suites and 19 affordable units. In line with the Trust's accounting policy, Common will be moved to the recurring income segment once the development has substantially completed construction, which is anticipated in the second quarter of 2024. During the three months ended March 31, 2024, 19 units were sold to Ottawa Community Housing, which will own and operate the units.
During the three months ended March 31, 2024, the Trust, alongside its partners, secured a government affiliated loan for $233.0 million for a development in Ottawa. The project is expected to be a net zero carbon development with an affordable housing component.
Dream Impact Trust 2024 First Quarter | 2
FINANCIAL HIGHLIGHTS OF THE TRUST
Three months ended March 31, | 2024 | 2023 | ||
Condensed consolidated results of operations | ||||
Net loss | $ | (5,422) | $ | (3,357) |
Net income (loss) per unit(1) | (0.31) | (0.20) | ||
Units outstanding - end of period | 17,784,395 | 16,946,335 | ||
Units outstanding - weighted average | 17,722,214 | 16,894,351 | ||
As at | March 31, 2024 December 31, 2023 | |||
Condensed consolidated financial position | ||||
Total unitholders' equity | $ | 426,710 | $ | 428,657 |
Total unitholders' equity per unit⁽¹⁾ | 23.99 | 24.39 | ||
Total debt | 273,370 | 270,056 | ||
Total debt payable(2) | 276,130 | 273,065 | ||
Total assets | 707,063 | 707,426 | ||
Debt-to-asset value(3) | 39.1% | 38.6% | ||
Cash | 4,337 | 6,176 |
- Total unitholders' equity per unit and net income (loss) per unit are supplementary financial measures. Please refer to the "Specified Financial Measures and Other Disclosures" section of this MD&A.
- Total debt payable is a non-GAAP financial measure. Please refer to the "Specified Financial Measures and Other Disclosures" section of this MD&A. Total debt payable is not a standardized financial measure under IFRS Accounting Standards as issued by the International Accounting Standards Board ("IFRS Accounting Standards") and might not be comparable to similar measures disclosed by other issuers.
- Debt-to-assetvalue is a non-GAAP ratio. Please refer to the "Specified Financial Measures and Other Disclosures" section of this MD&A. Debt-to-asset value is not a standardized financial measure under IFRS Accounting Standards and might not be comparable to similar measures disclosed by other issuers.
During the three months ended March 31, 2024, the Trust reported a net loss of $5.4 million compared to $3.4 million in the prior year. The movement year-over-year was primarily driven by a fluctuation in fair value adjustments throughout the portfolio. This includes fair value losses on certain commercial/retail properties. Partially offsetting this were net fair value gains on the Trust's multi-family rental assets driven by rental growth and lease up activity, as well as a gain on sale of a non- core investment in the period.
As at March 31, 2024, the Trust had total liquidity(1) of $20.0 million, comprised of cash-on-hand and funds available under the Trust's credit facility. As at March 31, 2024, the Trust's debt-to-asset value(1) was 39.1%, an increase from 38.6% as at December 31, 2023 driven by drawings on the credit facility and net fair value adjustments, partially offset by a disposition in the period. For further details refer to the "Capital Resources and Liquidity" section of this MD&A.
The Trust anticipates that $105.7 million of its debt, inclusive of equity accounted investments, will come due in 2024. Of this amount, over 50% is expected to be repaid with proceeds from condominium unit closings at Ivy Condos next quarter and an additional $15 million is in the process of being extended until 2026. The remaining debt due relates to the Trust's third- party managed investments which we believe carry limited refinancing risk due to the low leverage at the respective investment levels.
- Debt-to-assetvalue is a non-GAAP ratio. Total liquidity is a supplementary financial measure. Please refer to the Specified Financial Measures and Other Disclosures section of this MD&A.
Dream Impact Trust 2024 First Quarter | 3
SEGMENTED RESULTS OF OPERATIONS - THREE MONTHS ENDED MARCH 31, 2024
Recurring | ||||||||
Development | income | Other⁽¹⁾ | Total | |||||
INCOME | ||||||||
Lending portfolio interest income and lender fees | $ | - | $ | - | $ | 164 | $ | 164 |
Income properties revenue | - | 4,501 | - | 4,501 | ||||
Share of losses from equity accounted investments | (1,944) | (1,781) | - | (3,725) | ||||
TOTAL INCOME (LOSS) | (1,944) | 2,720 | 164 | 940 | ||||
EXPENSES | ||||||||
Income properties, operating | - | (2,482) | - | (2,482) | ||||
Interest expense | (482) | (2,388) | (1,330) | (4,200) | ||||
General and administrative | - | - | (1,583) | (1,583) | ||||
TOTAL EXPENSES | (482) | (4,870) | (2,913) | (8,265) | ||||
Fair value adjustments to income properties | - | (2,853) | - | (2,853) | ||||
OPERATING LOSS | (2,426) | (5,003) | (2,749) | (10,178) | ||||
Interest and other income | 2,747 | 67 | (255) | 2,559 | ||||
Fair value adjustments to financial instruments | - | - | 7 | 7 | ||||
EARNINGS (LOSS) BEFORE INCOME TAX RECOVERY | 321 | (4,936) | (2,997) | (7,612) | ||||
INCOME TAX RECOVERY | ||||||||
Deferred income tax recovery | - | - | 2,190 | 2,190 | ||||
TOTAL INCOME TAX RECOVERY | - | - | 2,190 | 2,190 | ||||
NET INCOME (LOSS) | $ | 321 | $ | (4,936) | $ | (807) | $ | (5,422) |
OTHER COMPREHENSIVE INCOME | ||||||||
Share of other comprehensive income from equity accounted investments, net of tax | 1,061 | 506 | - | 1,567 | ||||
Fair value adjustments to derivative financial liabilities hedge, net of tax | - | 1,567 | - | 1,567 | ||||
TOTAL OTHER COMPREHENSIVE INCOME | 1,061 | 2,073 | - | 3,134 | ||||
TOTAL COMPREHENSIVE INCOME (LOSS) | $ | 1,382 | $ | (2,863) | $ | (807) | $ | (2,288) |
SEGMENTED RESULTS OF OPERATIONS - THREE MONTHS ENDED MARCH 31, 2023
Recurring | ||||||||
Development | income | Other⁽¹⁾ | Total | |||||
INCOME | ||||||||
Lending portfolio interest income and lender fees | $ | - | $ | - | $ | 395 | $ | 395 |
Income properties revenue | - | 4,411 | - | 4,411 | ||||
Share of loss from equity accounted investments | (556) | (326) | - | (882) | ||||
TOTAL INCOME (LOSS) | (556) | 4,085 | 395 | 3,924 | ||||
EXPENSES | ||||||||
Income properties, operating | - | (2,413) | - | (2,413) | ||||
Interest expense | (176) | (2,129) | (1,493) | (3,798) | ||||
General and administrative | - | - | (2,188) | (2,188) | ||||
TOTAL EXPENSES | (176) | (4,542) | (3,681) | (8,399) | ||||
Fair value adjustments to income properties | - | (457) | - | (457) | ||||
OPERATING LOSS | (732) | (914) | (3,286) | (4,932) | ||||
Interest and other income | - | 15 | 114 | 129 | ||||
Fair value adjustments to financial instruments | - | - | 93 | 93 | ||||
LOSS BEFORE INCOME TAX RECOVERY | (732) | (899) | (3,079) | (4,710) | ||||
INCOME TAX RECOVERY (EXPENSE) | ||||||||
Current income tax expense | - | - | (1) | (1) | ||||
Deferred income tax recovery | - | - | 1,354 | 1,354 | ||||
TOTAL INCOME TAX RECOVERY | - | - | 1,353 | 1,353 | ||||
NET LOSS | (732) | (899) | (1,726) | (3,357) | ||||
OTHER COMPREHENSIVE LOSS | ||||||||
Share of other comprehensive loss from equity accounted investments, net of tax | - | (668) | - | (668) | ||||
Fair value adjustment to derivative financial liabilities hedges, net of tax | - | (599) | - | (599) | ||||
TOTAL OTHER COMPREHENSIVE LOSS | - | (1,267) | - | (1,267) | ||||
TOTAL COMPREHENSIVE LOSS | $ | (732) | $ | (2,166) | $ | (1,726) | $ | (4,624) |
- Includes other Trust amounts not specifically related to the segments.
Dream Impact Trust 2024 First Quarter | 4
TOTAL INCOME
Total income for the three months ended March 31, 2024 was $0.9 million compared to $3.9 million in the prior year. The decrease was primarily a result of fair value adjustments and interest expense within the Trust's equity accounted investments, partially offset by Brightwater occupancy income.
TOTAL EXPENSES
Total expenses for the three months ended March 31, 2024 were $8.3 million, a decrease of $0.1 million from the prior year, driven by a reduction in the asset management fee expense as a result of the Trust's unit price. Partially offsetting this was higher interest expense from the timing of financing period over period and fluctuations in deferred compensation expenses.
Dream Impact Trust 2024 First Quarter | 5
1.4 SUMMARY OF PORTFOLIO ASSETS
The following table includes supplementary information on certain assets in our portfolio as at March 31, 2024. Please refer to Section 10.1, "Summary of Impact Investments" of this MD&A for additional information on certain of these investments in our development and recurring income segments.
RECURRING INCOME SEGMENT
Total | ||||||||
In-place/ | commercial | In-place/ | ||||||
Dream | Total | Residential | committedresi | and retail | committed | |||
Impact Trust | Accounting | Impact | residential | GFA(2) | dential | GLA(3) | commercial | |
Project/property | ownership | treatment | status(1) | units | (at 100%) | occupancy | (at 100%) | occupancy |
Downtown Toronto & GTA: | ||||||||
Commercial: | ||||||||
Sussex Centre | 50.1% | Joint operation | I, E | - | - | - | 655,000 | 76.0 % |
49 Ontario Street(4) | 100.0% | Consolidated | TBD | - | TBD | - | 88,000 | 87.7 % |
10 Lower Spadina | 100.0% | Consolidated | I, E | - | - | - | 61,000 | 100.0 % |
349 Carlaw | 100.0% | Consolidated | I, E | - | - | - | 34,000 | 64.4 % |
68-70 Claremont Street | 100.0% | Consolidated | I, E | - | - | - | 30,000 | 100.0 % |
76 Stafford Street | 100.0% | Consolidated | I, E | - | - | - | 25,000 | 100.0 % |
Berkeley properties(4), (5) | 100.0% | Consolidated | TBD | - | - | - | 14,000 | 55.3 % |
100 Steeles Avenue West(4) | Equity | |||||||
37.5% | accounted | TBD | - | TBD | - | 59,000 | 97.1 % | |
Equity | ||||||||
Plaza Imperial | 40.0% | accounted | n/a | - | - | - | 35,000 | 100.0 % |
Equity | ||||||||
Plaza Bathurst | 40.0% | accounted | n/a | - | - | - | 24,000 | 100.0 % |
Multi-Family Rental: | ||||||||
Equity | ||||||||
Weston Common | 33.3% | accounted | A, I, E | 841 | 692,000 | 96.6 % | 52,000 | 98.5 % |
Equity | ||||||||
Robinwood Portfolio | 33.3% | accounted | A, I, E | 285 | 156,000 | 93.4 % | - | - |
Equity | ||||||||
70 Park | 50.0% | accounted | I, E | 210 | 257,000 | 95.2 % | - | - |
Equity | ||||||||
262 Jarvis | 33.3% | accounted | I, E | 71 | 35,000 | 88.7 % | - | - |
Equity | ||||||||
786 Southwood | 50.0% | accounted | A, I, E | 24 | 37,000 | 100.0 % | - | - |
Equity | ||||||||
111 Cosburn | 50.0% | accounted | I, E | 23 | 14,000 | 95.7 % | - | - |
Maple House at Canary Landing | Equity | |||||||
(WDL Block 8) | 25.0% | accounted | A, I, E | 770 | 624,000 | 50.0 % | 4,000 | - |
GTA | 2,224 | 1,815,000 | 79.7 % | 1,081,000 | 81.6 % | |||
Zibi (Ottawa/Gatineau): | ||||||||
Commercial: | ||||||||
Equity | ||||||||
Natural Sciences Building | 50.0% | accounted | I, E | - | - | - | 186,000 | 93.4 % |
Equity | ||||||||
15 Rue Jos-Montferrand | 50.0% | accounted | I, E | - | - | - | 53,000 | 81.2 % |
Equity | ||||||||
310 Miwate Private | 50.0% | accounted | I, E | - | - | - | 33,000 | 100.0 % |
Multi-Family Rental: | ||||||||
Equity | ||||||||
Aalto Suites | 50.0% | accounted | A, I, E | 162 | 135,000 | 90.1 % | 1,000 | - |
Equity | ||||||||
Aalto II | 50.0% | accounted | A, I, E | 148 | 127,000 | 43.2 % | 4,000 | - |
Other: | ||||||||
Equity | ||||||||
Zibi Community Utility | 20.0% | accounted | E | - | - | - | - | - |
Total Zibi (Ottawa/Gatineau) | 310 | 262,000 | 67.7 % | 277,000 | 90.2 % | |||
segment | 2,534 | 2,077,000 | 78.2 % | 1,358,000 | 83.8 % |
- Investments will align with the following impact verticals as outlined in Section 1.2, "Our Strategy and Operating Segments": A - Attainable and affordable housing; I - Inclusive communities; and E - Environmental sustainability and resilience.
- Residential gross floor area ("GFA").
- Gross leasable area ("GLA").
- Identified with redevelopment potential. Asset is currently occupied with tenants paying rental income. The above statistics do not reflect approved rezoning density.
- The Berkeley properties are a land assembly adjacent to 49 Ontario Street and part of the asset's longer-term development plan.
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DEVELOPMENT SEGMENT
Total | Total | |||||||
residential | commercial | |||||||
Dream | units at | Residential | and retail | |||||
Property | Impact Trust | Impact | completion | GFA(3) | GLA(3) | Occupancy | ||
Project/property | type | ownership | Status/type | status(1) | (at 100%)(2) | (at 100%) | (at 100%) | date |
Development segment | ||||||||
Downtown Toronto & GTA: | ||||||||
Brightwater Towns | Build to sell | 23.3% | Under | I, E | 106 | 237,000 | - | 2024 |
construction | ||||||||
Birch House at Canary Landing | Various | 25.0% | Under | I, E | 444(4) | 335,000 | 26,000 | 2024 |
construction | ||||||||
The Mason (Brightwater) | Build to sell | 23.3% | Under | I, E | 158 | 128,000 | 5,000 | 2025 |
construction | ||||||||
Cherry House at Canary Landing | Build to hold | 25.0% | Under | A, I, E | 855 | 811,000 | 32,000 | 2026 |
construction | ||||||||
Bridge House (Brightwater) | Build to sell | 23.3% | Planning | I, E | 484 | 392,000 | - | 2027 |
Brightwater future blocks | Build to sell | 23.3% | Planning | I, E | 1,952 | 2,441,000 | 257,000 | 2025-2032 |
Forma - East Tower | Build to sell | 25.0% | Under | I, E | 864 | 590,000 | 1,000 | 2028 |
construction | ||||||||
Quayside(5) | ||||||||
Various | 12.5% | Planning | A, I, E | 4,600 | 3,220,000 | 240,000 | 2031-2035 | |
West Don Lands Block 20 | Build to hold | 25.0% | Planning | A, I, E | 653 | 571,000 | 255,000 | TBD |
Victory Silos | TBD | 37.5% | Planning | TBD | 1,500 | 1,200,000 | 100,000 | TBD |
Forma - West Tower | Build to sell | 25.0% | Pre- | n/a | 1,170 | 885,000 | 223,000 | TBD |
development | ||||||||
Scarborough Junction | Build to sell | 45.0% | Planning | n/a | 6,619 | 5,270,000 | 165,000 | TBD |
BlackTusk Partnership | Build to sell/ | 2.5%-40.0% | Various | I | TBD | TBD | 8,000 | TBD |
Build to hold | ||||||||
Seaton | Build to sell | 7.0% | Planning | n/a | TBD | TBD | TBD | TBD |
Total Downtown Toronto & GTA | 19,405 | 16,080,000 | 1,312,000 | |||||
Zibi (Ottawa/Gatineau): | ||||||||
Common at Zibi (Block 206) | Build to hold | 50.0% | Under | A, I, E | 188 | 196,000 | 11,000 | 2024 |
construction | ||||||||
Block 207 | Build to hold | 50.0% | Under | I, E | - | - | 76,000 | 2024 |
construction | ||||||||
Future blocks | Various | 50.0% | Planning | A, I, E | 1,978 | 1,292,000 | 1,891,000 | TBD |
Other (Ottawa/Gatineau): | ||||||||
Dream LeBreton(6) | Build to hold | 33.3% | Planning | A, I, E | 608 | 410,000 | 26,000 | 2027 |
Total Ottawa/Gatineau | 2,774 | 1,898,000 | 2,004,000 | |||||
Total projects in the development and investment holdings segment | 22,179 | 17,978,000 | 3,316,000 |
- Investments will align with the following impact verticals as outlined in Section 1.2, "Our Strategy and Operating Segments": A - Attainable and affordable housing; I - Inclusive communities; E - Environmental sustainability and resilience.
- Residential units and GLA are at 100% project level and include planned units and GLA, which are subject to change pending various development approvals. Planned residential units may be developed as condominium units or purpose-built rentals as supported by market demand, targeted studies and return objectives. For projects currently in occupancy, residential units reflect remaining units in inventory to be occupied in future periods.
- Total commercial and retail GLA and GFA, include planned GLA and GFA, which are subject to change pending various development approvals.
- This figure includes 238 rental units, which the Trust considers build to hold, as well as a 206-unit condo building invested in by Dream.
- Of the 4,600 units, 869 units will not be held by the Trust for the long term. These stats reflect the full 12 acre site build-out and are subject to change.
- Of the 608 units, 133 units are expected to be owned by a not-for-profit.
Dream Impact Trust 2024 First Quarter | 7
2. REPORTABLE OPERATING SEGMENTS RESULTS OF OPERATIONS
2.1 RECURRING INCOME
The Trust holds a direct investment in 11 income properties across the GTA, as well as indirect investments in commercial, retail, and multi-family rental properties held through various joint venture partnerships. In aggregate, the Trust's portfolio is comprised of 1.4 million sf of commercial and retail GLA, and 2,534 multi-family rental units (at 100% asset level ownership). Of these rental units, approximately one-third were designated as affordable as at March 31, 2024.
A summary of the recurring income segment results is as follows:
Three months ended March 31, | 2024 | 2023 | ||
Net loss - income properties(1) | $ | (3,155) | $ | (573) |
Share of net loss from equity accounted investments ("EAI") - recurring income | (1,781) | (326) | ||
Net loss - recurring income | $ | (4,936) | $ | (899) |
- Net income (loss) - income properties is a supplementary financial measure. Please refer to the Specified Financial Measures and Other Disclosures section of this MD&A. Net income (loss) - income properties is not a standardized financial measure under IFRS Accounting Standards and might not be comparable to similar measures disclosed by other issuers.
During the three months ended March 31, 2024, the Trust's recurring income segment generated a net loss of $4.9 million compared to $0.9 million in the prior year. The decrease was largely due to fair value adjustments on certain commercial properties and higher interest expense due to the timing of financing completed in the prior year. Partially offsetting this were net fair value gains on the Trust's multi-family rental properties driven by rent growth and lease-up activity.
As at January 1, 2024, the Trust removed the lending portfolio from the recurring income segment. Subsequent to March 31, 2024, a loan of $2.5 million was repaid with the remaining loans in our portfolio expected to mature between 2025 and 2027. The Trust does not anticipate entering into new loans in the near term.
MULTI-FAMILY RENTAL
The Trust's multi-family rental portfolio is comprised of 2,534 market and affordable rental units across the GTA and Ottawa/ Gatineau.
Operating statistics for the multi-family rental properties are as follows:
As at | March 31, 2024 | December 31, 2023 | March 31, 2023 | |||
Total multi-family rental portfolio | ||||||
Total number of units (at 100% project level) | 2,534 | 2,534 | 1,592 | |||
Number of affordable units (at 100% project level) | 765 | 765 | 389 | |||
Same property occupancy rate (period-end) - in-place and committed(1) | 94.8% | 94.5% | 95.3% | |||
Occupancy rate (period-end) - in-place and committed(2) | 78.2% | 71.2% | 95.3% | |||
Occupied average monthly rent - units at market(3) | $ | 2,470 | $ | 2,066 | $ | 1,856 |
Occupied average monthly rent - total | $ | 2,103 | $ | 1,866 | $ | 1,592 |
- Excludes properties acquired or transferred into the recurring income segment in 2024 and 2023.
- This includes multi-family rental buildings in the lease-up period.
- Excludes units designated as affordable.
Based on the Trust's current development pipeline, we have an additional 1,889 residential units that are expected to be completed by the end of 2027, which will contribute to recurring income as they come online, as summarized below.
Location | Market units | Affordable units(1) | Total units | GFA (sf) | Occupancy date | |
Common | Ottawa | 43 | 145 | 188 | 196,000 | 2024 |
Birch House at Canary Landing | Toronto | 238 | - | 238 | 182,000 | 2024 |
Cherry House at Canary Landing | Toronto | 598 | 257 | 855 | 811,000 | 2026 |
Dream LeBreton | Ottawa | 357 | 251 | 608 | 410,000 | 2027 |
Total units added over four years (at 100%) | 1,236 | 653 | 1,889 | 1,599,000 | ||
Balance, March 31, 2024 | 1,769 | 765 | 2,534 | 2,077,000 | ||
Pro-forma balance, December 31, 2027 | 3,005 | 1,418 | 4,423 | 3,676,000 |
- In line with certain government programs' affordability definition that each project is governed by.
Dream Impact Trust 2024 First Quarter | 8
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Dream Impact Trust published this content on 06 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 06 May 2024 21:26:35 UTC.