Dream Impact Trust Reports First Quarter 2025 Results

National Post

05-05-2025

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This press release contains forward-looking information that is based upon assumptions and is subject to risks and uncertainties as indicated in the cautionary note contained within this press release. All dollar amounts in our tables are presented in thousands of Canadian dollars, except unit and per unit amounts, unless otherwise stated.
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TORONTO — DREAM IMPACT TRUST (TSX: MPCT.UN) ('Dream Impact', 'we', 'our' or the 'Trust') today reported its financial results for the three months ended March 31, 2025 ('first quarter').
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As previously announced, in the first quarter, the Trust secured financing for the redevelopment of 49 Ontario St. This was a significant milestone for the advancement of the redevelopment project which, upon completion, will deliver over 1,200 rental units in downtown Toronto. The financing provides for up to $647.6 million in construction debt, with a term of 10 years and a fixed interest rate to be locked at the time of first draw. Based on current pre-development timelines and discussions with the in-place tenant, the project is on track to commence construction by the fourth quarter. Subsequent to March 31, 2025, the Trust entered into an agreement to sell a 10% minority interest in the project at pricing aligned with the Trust's IFRS value for the asset and is expected to close upon first construction loan draw. The Trust's new partner is an experienced condominium developer which will work with us to attract further investors to reduce our ownership stake. With financing in place and waivers of development charges obtained in late 2024, we believe the project economics are extremely attractive and will provide further partnership updates as we progress to start construction.
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'Last year we were largely focused on asset sales and residential leasing as liquidity was our primary focus,' said Michael Cooper, Portfolio Manager. 'As we shift gears towards development execution, we are extremely pleased with progress made in 2025 so far, as we achieved two important milestones, securing construction financing for 49 Ontario St. and bringing in a minority partner for the project. This project is not only significant for the Trust but important for much needed housing in downtown Toronto and we look forward to starting construction on the site.'
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Selected financial and operating metrics for the three months ended March 31, 2025 are summarized below:
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As at
March 31, 2025
December 31, 2024
Condensed consolidated financial position
Total assets
$
680,836
$
684,421
Total liabilities
285,195
283,180
Total unitholders' equity
395,641
401,241
Total unitholders' equity per unit (1)
21.49
21.99
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During the first quarter, the Trust reported a net loss of $3.8 million compared to $5.4 million in the prior year. The improvement in earnings was driven by net fair value adjustments throughout the portfolio, higher earnings from the Trust's residential assets including Brightwater occupancy income and multi-family assets in the lease-up phase. Partially offsetting this was a gain on sale of a passive investment to DAM in the prior year, reduced net operating income ('NOI') contribution from commercial properties and a lower deferred tax recovery.
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Liquidity Update
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At March 31, 2025, the Trust had total cash-on-hand of $8.8 million and a debt-to-asset value (2) of 40.4%, comparable to December 31, 2024. During and subsequent to the first quarter, the Trust received $12.0 million in proceeds from scheduled loan repayments and the sale of its interest in Zibi Block 204.
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At March 31, 2025, the Trust's debt profile was comprised of $274.7 million of consolidated debt and $870.1 million of debt at its proportionate share from equity accounted investments. Included in the above was $352.2 million of debt, at the Trust's share, which is due in 2025. The Trust anticipates that the debt balance will be repaid or extended primarily in the second half of the year, including the expected repayment of construction debt from proceeds on condo closings at Brightwater and renewals of land loans on the Trust's investments in long-term developments.
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For further details refer to the 'Capital Resources and Liquidity' section of the Trust's management's discussion and analysis ('MD&A') for the three months ended March 31, 2025.
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During the first quarter, same property NOI (1) was $1.7 million compared to $1.4 million in the prior year, an increase primarily driven by NOI contribution from tenant turnover and higher operating expenses incurred in the prior year.
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Debt from the Trust's multi-family portfolio carries a weighted average term of 3.8 years at a weighted average interest rate of 2.8%.
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During the first quarter, NOI from commercial properties (1) was $1.4 million compared to $2.7 million in the prior year. The decrease in NOI was due to asset sales, general leasing softness and tenant support measures for a specific co-working tenant at Zibi. This was partially offset by the occupancy of the anchor tenant at 68-70 Claremont in the prior year.
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In aggregate, the recurring income segment generated a net loss of $3.7 million compared to $4.9 million in the prior year. The improvement in earnings was attributable to fluctuations in fair value adjustments in each respective period and the overall impact of NOI contribution from our multi-family and office properties, partially offset by interest expense from multi-family assets in lease-up, as described above.
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In the first quarter, the development segment reported net income of $2.1 million compared to $0.3 million in the prior year. The increase in earnings was primarily driven by the composition of fair value adjustments year over year and occupancy income from sales at Brightwater. Partially offsetting this was a gain on sale of a passive investment in the prior year and sales commissions on active blocks at Brightwater incurred as units have occupied.
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On March 31, 2025, the Trust closed on the sale of its interest in Zibi Block 204 to DAM. The sale generated cash proceeds of $6.2 million and was received subsequent to period-end. By DAM advancing vertical construction of this block, the project also repaid $5.4 million (at the Trust's share) of in-place infrastructure debt, reducing the Trust's land loan exposure at Zibi, further supporting our liquidity objectives.
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During the first quarter, 74% of condominium units at The Mason (Brightwater) occupied, with final closings expected in the second half of 2025. The Trust anticipates a further 36 condominium units to occupy in 2025 at Brightwater, between Blocks I and G.
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In addition, Birch House (Canary Landing) continued to welcome residents over the period. As at May 1, 2025, in-place and committed occupancy at the 238-unit building was 26%. Birch House continues to be presented in the development segment and will be transferred to recurring income upon substantial construction completion in 2025.
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Construction continues to progress on Odenak (608 units) and Cherry House at Canary Landing (855 units). Based on current timelines, the first 68 units at Cherry House will be available to lease in 2025 with the rest of the units online in 2026.
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Income from this segment will fluctuate period-to-period and not contribute meaningfully to earnings until development milestones are achieved and/or project inventory is available for occupancy. While mindful of our capital spend and liquidity needs, on a strategic basis we continue to make advancements for select assets in the pre-development stage.
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Other
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In the first quarter, the other segment recognized a net loss of $2.2 million compared to $0.8 million in the prior year. The fluctuation in earnings was driven by the deferred income tax recovery in the prior year. This was partially offset by proceeds received from a non-core investment and lower interest expense at a corporate level.
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Footnotes
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(1) Net income (loss) per unit, total unitholders' equity per unit, NOI – recurring income, NOI – multi-family rental, NOI – commercial properties, same property NOI – multi-family rental, are supplementary financial measures. Please refer to the cautionary statements under the heading 'Specified Financial Measures and Other Measures' in this press release and the 'Specified Financial Measures and Other Disclosures' section of the Trust's MD&A for the three months ended March 31, 2025.
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(2) Debt-to-asset value is a non-GAAP ratio, which is calculated as total debt payable, a non-GAAP financial measure, divided by the total asset value of the Trust as at the applicable reporting date. The most directly comparable financial measure to total debt payable is total debt.
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Conference Call
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Senior management will host a conference call on Tuesday May 6, 2025 at 10:00 am (ET). To access the call, please dial 1-844-763-8274 (toll free) or 647-484-8814. To access the conference call via webcast, please go to the Trust's website at www.dreamimpacttrust.ca and click on Calendar of Events in the News and Events section. A taped replay of the conference call and the webcast will be available for 90 days.
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Senior management will host its annual meeting of unitholders on Tuesday, June 3, 2025 at 10:00 am (ET), located at TMX Market Centre, 120 Adelaide Street West, Toronto, Ontario, M5H 1S3. The audio webcast and digital replay can be accessed here.
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About Dream Impact
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Dream Impact is an open-ended trust dedicated to impact investing. Dream Impact's underlying portfolio is comprised of exceptional real estate assets reported under two operating segments: development and recurring income, that would not be otherwise available in a public and fully transparent vehicle, managed by an experienced team with a successful track record in these areas. The objectives of Dream Impact 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, while generating attractive returns for investors. For more information, please visit: www.dreamimpacttrust.ca.
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The Trust's condensed consolidated financial statements are prepared in accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board ('IFRS Accounting Standards'). In this press release, as a complement to results provided in accordance with IFRS Accounting Standards, the Trust discloses and discusses certain specified financial measures, including total liquidity, total debt payable, net income (loss) per unit, NOI – commercial properties, Same Property NOI – multi-family rental, NOI – multi-family rental, NOI – recurring income, total unitholders' equity per unit, and debt-to-total asset value, as well as other measures discussed elsewhere in this release. These specified financial measures are not defined by or recognized measures under IFRS Accounting Standards, do not have a standardized meaning and may not be comparable with similar measures presented by other issuers. The Trust has presented such specified financial measures as management believes they are relevant measures of our underlying operating performance. Specified financial measures should not be considered as alternatives to unitholders' equity, net income, total comprehensive income or cash flows generated from operating activities, or comparable metrics determined in accordance with IFRS Accounting Standards as indicators of the Trust's performance, liquidity, cash flow and profitability. Certain additional disclosures such as the composition, usefulness and changes as applicable are expressly incorporated by reference from the Trust's MD&A for the three months ended March 31, 2025, dated May 5, 2025 in the section titled 'Specified Financial Measures and Other Disclosures', subsection 'Non-GAAP Ratios', heading 'Debt-to-asset value', subsection 'Supplementary Financial Measures and Other Measures', headings 'Net income (loss) per unit', 'NOI — commercial properties', 'NOI – multi-family rental', 'NOI – recurring income', 'total unitholders' equity per unit' and 'Same Property NOI – multi-family rental' and subsection 'Non-GAAP Financial Measures', heading 'Total debt payable', which has been filed and is available on SEDAR+ under the Trust's profile.
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'Total debt payable' is defined by the Trust as the balance due at maturity for its debt instruments. Total debt payable is a non-GAAP measure and is included as part of the definition of debt-to-asset value, a non-GAAP ratio. Total debt payable is an important measure used by the Trust in evaluating the amount of debt leverage; however, it is not defined by IFRS Accounting Standards, does not have a standardized meaning and may not be comparable with similar measures presented by other issuers. Total debt payable is reconciled to total debt, the most directly comparable financial measure, below.
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Forward-Looking Information
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This press release may contain forward-looking information within the meaning of applicable securities legislation. Forward-looking information generally can be identified by the use of forward-looking terminology such as 'outlook', 'objective', 'may', 'will', 'would', 'could', 'expect', 'intend', 'estimate', 'anticipate', 'timeline', 'potential', 'strategy', 'targets', 'believe', 'should', 'plans', or 'continue', or similar expressions suggesting future outcomes or events.
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Some of the specific forward-looking information in this press release may include, among other things, statements relating to the Trust's objectives and strategies to achieve those objectives; the Trust's leasing activities and the expected timing and results thereof; expectations regarding 49 Ontario St., including timelines, units delivered upon completion, construction commencement, the Trust's ability to consummate the sale of a 10% minority interest and attractiveness of project economics in the market; expectations regarding the Trust's disposition of assets, including timing thereof, and their expected impact on the Trust's asset class exposure and liquidity; the Trust's ability to secure construction financing and partnership opportunities for certain developments; the Trust's ability to secure CMHC financing for its projects; the Trust's ability to pay off certain indebtedness and expectations for related savings, including timing thereof; the Trust's ability to realize condo closings including timing, expected proceeds and uses thereof; the Trust's ability to achieve stabilization at certain assets within expected timelines; the Trust's expectations regarding upcoming debt maturities and the expectation of repayment, extension and/or renewal of debt; the status of the Trust's ongoing active development projects and the projected construction start and completion dates; the Trust's expectation regarding the impact of development charge waivers on the viability of certain developments; the Trust's expectations regarding the impacts of advancing construction at certain developments and the related impact on debt exposure and project risk; the Trust's ability to reduce overall exposure to land loans; and the Trust's plans and proposals for current and future development and redevelopment projects, including construction initiation, completion and occupancy/stabilization dates/timing and number of units. 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 the Trust's control, which could cause actual results to differ materially from those that are disclosed in or implied by such forward-looking information. These risks and uncertainties include, but are not limited to: adverse changes in general economic and market conditions; liquidity risk; financing and risks relating to access to capital; interest rate risks; public health risks; risks associated with unexpected or ongoing geopolitical events, including disputes between nations, terrorism or other acts of violence, and international sanctions; inflation; risks related to the imposition of duties, tariffs and other trade restrictions and their impacts; the disruption of free movement of goods and services across jurisdictions; the risk of adverse global market, economic and political conditions and health crises; risks inherent in the real estate industry; risks relating to investment in development projects; impact investing strategy risk; risks relating to geographic concentration; risks inherent in investments in real estate, mortgages and other loans and development and investment holdings; credit risk and counterparty risk; competition risks; environmental and climate change risks; risks relating to access to capital; interest rate risk; the risk of changes in governmental laws and regulations; tax risks; foreign exchange risk; the risk that corporate activities and reviews will not have the desired impact; acquisitions risk; and leasing risks. Our objectives and forward-looking statements are based on certain assumptions, including that the general economy remains stable; the gradual recovery and growth of the general economy in 2025; that no unforeseen changes in the legislative and operating framework for our business will occur; that there will be no material change to environmental regulations that may adversely impact our business; that we will meet our future objectives, priorities and growth targets; that we receive the licenses, permits or approvals necessary in connection with our projects; that we will have access to adequate capital to fund our future projects, plans and any potential acquisitions; that we are able to identify high-quality investment opportunities and find suitable partners with which to enter into joint ventures or partnerships; that we do not incur any material environmental liabilities; there will not be a material change in foreign exchange rates; that the impact of the current economic climate and global financial conditions on our operations will remain consistent with our current expectations and that inflation and interest rates will not materially increase beyond current market expectations; that no duties, tariffs or other trade restrictions will negatively impact us; our expectations regarding the availability and competition for acquisitions remains consistent with the current climate.
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All forward-looking information in this press release speaks as of May 5, 2025, unless otherwise noted. The Trust does not undertake to update any such forward-looking information whether as a result of new information, future events or otherwise, except as required by law. Additional information about these assumptions and risks and uncertainties is disclosed in the Trust's filings with securities regulators filed on the System for Electronic Document Analysis and Retrieval+ ( www.sedarplus.com), including its latest annual information form and MD&A. These filings are also available at the Trust's website at www.dreamimpacttrust.ca.
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Contacts
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Meaghan Peloso
Chief Financial Officer
416 365-6322
[e-mail]
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