Dream Residential REIT Reports Q2 2025 Financial Results
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 are in U.S. dollars.
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TORONTO — DREAM RESIDENTIAL REAL ESTATE INVESTMENT TRUST (TSX: DRR.U, TSX: DRR.UN) ('Dream Residential REIT' or the 'REIT' or 'we' or 'us') today announced its financial results for the three and six months ended June 30, 2025 ('Q2 2025').
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HIGHLIGHTS
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Comparative properties net operating income ('comparative properties NOI') 1 was $6.4 million in Q2 2025, a 1.1% increase from Q2 2024. Net rental income was $8.2 million in Q2 2025 or $0.2 million higher than the prior year comparative quarter mainly due to an increase in investment properties revenue.
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Diluted funds from operations ('FFO') per Unit 2 was $0.18 for Q2 2025, consistent with Q2 2024, comprising a slight increase in comparative properties NOI, offset by a decrease in interest and other income and an increase in interest expense on debt.
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Portfolio occupancy increased to 95.2% as at June 30, 2025, from 93.3% at the end of Q1 2025, with the Greater Oklahoma City region at 94.8%, Greater Dallas–Fort Worth region at 94.8% and Greater Cincinnati region at 96.3%. During the quarter, we completed renovations on six units in the Greater Cincinnati region.
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Average monthly rent at June 30, 2025 was $1,186 per unit compared to $1,182 per unit at March 31, 2025.
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Maintaining conservative balance sheet and financial flexibility. Net total debt-to-net total assets 3 was 33.1% as at June 30, 2025, compared to 33.0% as at December 31, 2024. Total mortgages payable were $124.4 million, consisting of nine fixed rate mortgages with a weighted average contractual interest rate of 4.0%. Total amounts outstanding on the revolving credit facility were $16.0 million. Total assets (per condensed consolidated financial statements) were $410.2 million as at June 30, 2025. Total assets comprised primarily $399.1 million of investment properties and $6.7 million of cash and cash equivalents.
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Strategic Review. The REIT's strategic review process (the 'Strategic Review') to identify, evaluate and pursue a range of strategic alternatives with the goal of maximizing unitholder value remains ongoing.
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_______________________________________________
1 Comparative properties NOI is a non-GAAP financial measure. The tables included in the Appendices section of this press release reconcile comparative properties NOI to net rental income for the three and six months ended June 30, 2025 and June 30, 2024. For further information on this non-GAAP financial measure, please refer to the statements under the heading 'Non-GAAP financial measures, ratios and supplementary financial measures' in this press release.
2 Diluted FFO per Unit is a non-GAAP ratio. Diluted FFO per Unit comprises FFO (a non-GAAP financial measure) divided by the weighted average number of Units. For further information on this non-GAAP ratio, please refer to the statements under the heading 'Non-GAAP financial measures, ratios and supplementary financial measures' in this press release.
3 Net total debt-to-net total assets is a non-GAAP ratio. For further information on this non-GAAP ratio, please refer to the statements under the heading 'Non-GAAP financial measures, ratios and supplementary financial measures' in this press release.
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Dream Residential REIT has not established a definitive timeline to complete the Strategic Review process nor any transaction and no decisions have been reached at this time. As such, the process is subject to unknown variables, including the costs, structure, terms, timing and outcome. There can be no assurance that the Strategic Review will result in any transaction or initiative or, if a transaction or initiative is undertaken, the terms or timing of such a transaction or initiative and its impact on the financial condition, liquidity, and results of operations of the REIT. The REIT does not intend to disclose further developments in connection with the Strategic Review until it is determined that disclosure is necessary, appropriate or required.
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'The REIT delivered solid operational and financial performance in Q2 2025,' said Brian Pauls, Chief Executive Officer of Dream Residential REIT. 'Dream Residential REIT continued to make incremental gains by growing rents and net operating income. We are encouraged by the REIT's performance through the first half of 2025 and will continue to operate the portfolio with a focus on prudent capital allocation, operational efficiency and maintaining a conservative balance sheet.'
Q2 2025 net income for the three months ended June 30, 2025 was $0.8 million, which comprises net rental income of $8.2 million, fair value adjustments to investment properties of $(1.2) million and fair value adjustments to financial instruments of $(2.3) million, primarily from the revaluation of Class B units of DRR Holdings LLC, a subsidiary of the REIT ('Class B Units' – together with the units of the REIT ('Trust Units', 'Units')). Other income and expenses totalled $(3.9) million.
Total equity (per condensed consolidated financial statements) was $230.1 million as at June 30, 2025, compared to $240.5 million as at December 31, 2024, driven by the year-to-date net loss and distributions paid and payable.
Net asset value ('NAV') 4 per Unit was $13.44 as at June 30, 2025, compared to $13.39 as at December 31, 2024.
The REIT declared distributions totalling $0.105 per Unit during Q2 2025.
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Three months ended June 30,
Six months ended June 30,
(in thousands unless otherwise stated)
2025
2024
2025
2024
Operating results
Net income (loss)
$
843
$
3,346
$
(7,208)
$
4,162
FFO (1)
3,499
3,516
6,903
6,963
Net rental income
8,181
7,984
14,417
14,617
Comparative properties NOI (10)
6,435
6,362
12,566
12,443
Comparative properties NOI margin (11)
51.9%
52.6%
51.4%
51.6%
Per Unit amounts
Distribution rate per Trust Unit
$
0.105
$
0.105
$
0.210
$
0.210
Diluted FFO per Unit (2)(3)
0.18
0.18
0.35
0.35
See footnotes at end
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4 NAV per Unit is a non-GAAP ratio. NAV per Unit comprises total equity (including Class B Units) (a non-GAAP financial measure) divided by the number of Units. For further information on this non-GAAP ratio, please refer to the statements under the heading 'Non-GAAP financial measures, ratios and supplementary financial measures' in this press release.
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Net income for Q2 2025 was $0.8 million compared to $3.3 million in Q2 2024 and comprises fair value adjustments to investment properties of $(1.2) million and fair value adjustments to financial instruments of $(2.3) million. FFO for Q2 2025 and the prior year comparative quarter was consistent year-over-year at $3.5 million. Q2 2025 diluted FFO per Unit was $0.18, consistent with the prior year comparative quarter.
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Net rental income for Q2 2025 was $8.2 million and compares to $8.0 million in the comparative quarter. The increase in net rental income from the comparative quarter was largely driven by an increase in investment properties revenue. Comparative properties NOI for Q2 2025 was $6.4 million and consistent with the comparative quarter. Comparative properties NOI margin for Q2 2024 was 51.9%, compared to 52.6% in the comparative quarter. Q2 2025 comparative properties NOI includes comparative investment properties revenue of $12.4 million, which increased by $0.3 million from the comparative quarter. The increase was driven by positive blended lease trade-outs and rental premiums from our value-add program. Investment properties operating expenses were $6.0 million for Q2 2025, and $5.7 million for the comparative quarter when excluding the impact of IFRIC 21, 'Levies' ('IFRIC 21'), as a result of increased property taxes and utilities, generally offset by lower property insurance expenses.
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ORGANIC GROWTH
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Weighted average monthly rent as at June 30, 2025 was $1,186 per unit, compared to $1,182 per unit at March 31, 2025. Rental rates increased 1.3% in the Greater Cincinnati region, remained consistent in the Greater Oklahoma City region and decreased 0.4% in the Greater Dallas–Fort Worth region since March 31, 2025.
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During Q2 2025, blended lease trade-outs averaged 1.5% compared to 0.4% in Q1 2025. This comprises an average increase on renewals of approximately 3.7% (March 31, 2025 – increase of 4.0%) and an average decrease on new leases of approximately 1.3% (March 31, 2025 – decrease of 4.3%). As at June 30, 2025, estimated market rents were $1,235 per unit, or an average gain-to-lease for the portfolio of 4.1%. The retention rate for the quarter ended June 30, 2025 was 57.4% compared to 57.5% for the three months ended March 31, 2025.
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Value-add initiatives
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During Q2 2025, renovations were completed on six suites in the Greater Cincinnati region, with an additional five suites under renovation as at June 30, 2025. For the three months ended June 30, 2025, the average new lease trade-out on renovated suites was $90 per unit higher than expiring leases, or a lease trade-out of 7.3%.
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'Occupancy has improved by 190 basis points since Q1 2025, driven by our emphasis on tenant retention and ongoing leasing efforts,' said Scott Schoeman, Chief Operating Officer of Dream Residential REIT. 'We are pleased with the REIT's leasing momentum with blended lease trade-out accelerating from Q1 2025.'
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As at June 30, 2025, net total debt-to-net total assets (4) was 33.1%, total debt was $140.4 million and total assets were $410.2 million. The REIT ended Q2 2025 with total available liquidity (6) of approximately $60.7 million, comprising $6.7 million of cash and cash equivalents and $54.0 million available on its undrawn revolving credit facility.
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Total equity of $230.1 million decreased from December 31, 2024 by $10.4 million, primarily due to the year-to-date net loss and distributions paid and payable. As at June 30, 2025, there were approximately 16.0 million Trust Units and 3.7 million Class B Units.
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NAV per Unit as at June 30, 2025 was $13.44 compared to $13.39 as at December 31, 2024.
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OTHER INFORMATION
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Information appearing in this press release is a select summary of financial results. The condensed consolidated financial statements and management's discussion and analysis for the REIT will be available at www.dreamresidentialreit.ca and under the REIT's profile on www.sedarplus.com.
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Dream Residential REIT is an unincorporated, open-ended real estate investment trust established and governed by the laws of the Province of Ontario. The REIT owns a portfolio of garden-style multi-residential properties, primarily located in three markets across the Sunbelt and Midwest regions of the United States. For more information, please visit www.dreamresidentialreit.ca.
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The REIT'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, the REIT discloses and discusses certain non-GAAP financial measures and ratios, including FFO, diluted FFO per Unit, comparative properties NOI, comparative investment properties revenue, NOI, comparative properties NOI margin, net total debt-to-net total assets ratio, net total debt, net total assets, adjusted earnings before interest, taxes, depreciation, amortization and fair value adjustments ('Adjusted EBITDAFV'), trailing 12-month adjusted EBITDAFV, trailing 12-month interest expense on debt, interest coverage ratio (times), available liquidity, total equity (including Class B Units) and NAV per Unit as well as other measures discussed elsewhere in this press release. These non-GAAP financial measures and ratios are not defined by or recognized under IFRS Accounting Standards and do not have a standardized meaning under IFRS Accounting Standards. The REIT's method of calculating these non-GAAP financial measures and ratios may differ from other issuers and may not be comparable with similar measures presented by other issuers. The REIT has presented such non-GAAP financial measures and ratios as management believes they are relevant measures of the REIT's underlying operating and financial performance. Certain additional disclosures such as the composition, usefulness and changes, as applicable, of the non-GAAP financial measures and ratios included in this press release are expressly incorporated by reference from Management's Discussion and Analysis of the financial condition and results of operations of the REIT as at and for the three and six
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months ended June 30, 2025, dated August 6, 2025 (the 'Q2 2025 MD&A') and can be found under the section 'Non-GAAP Financial Measures and Ratios' and respective sub-headings labelled 'FFO and diluted FFO per Unit', 'NAV per Unit', 'Comparative properties NOI and comparative properties NOI margin', 'Adjusted earnings before interest, taxes, depreciation, amortization and fair value adjustments (Adjusted EBITDAFV)', 'Trailing 12-month adjusted EBITDAFV', 'Trailing 12-month interest expense on debt', 'Available liquidity', 'Total equity (including Class B Units)', 'Interest coverage ratio (times)' and 'Net total debt-to-net total assets'. In this press release, the REIT also discloses and discusses certain supplementary financial measures, including tenant retention ratio and weighted average number of Units. The composition of supplementary financial measures included in this press release is expressly incorporated by reference from the Q2 2025 MD&A and can be found in the section 'Supplementary Financial Measures and Other Disclosures'. The Q2 2025 MD&A is available on SEDAR+ at
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under the REIT's profile and on the REIT's website at
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www.dreamresidentialreit.ca
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under the Investors section. Non-GAAP financial measures and ratios should not be considered as alternatives to net income, net rental income, investment properties revenue, cash flows generated from (utilized in) operating activities, cash and cash equivalents, total assets, non-current debt, total equity, or comparable metrics determined in accordance with IFRS Accounting Standards as indicators of the REIT's performance, liquidity, cash flow and profitability.
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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. Such information includes statements regarding future market conditions; our expectations regarding our Strategic Review process and the results thereof, including our ability to pursue strategic alternatives; that the Strategic Review will result in any transaction or initiative and our expectations regarding timing, structure, costs, terms and outcome thereof, including on the financial condition, liquidity and results of operations of the REIT; that we will continue to make incremental gains by growing rents and net operating income; our ability to operate the portfolio with a focus on prudent capital allocation, operational efficiency and maintain a conservative balance sheet; our ability to complete suites under renovation including in the Greater Cincinnati region; and our expectations regarding leasing momentum and expected results thereof. Forward-looking information generally can be identified by the use of forward-looking terminology such as 'will', 'expect', 'believe', 'plan' or 'continue', or similar expressions suggesting future outcomes or events. 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 Residential REIT's control and 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, risks inherent in the real estate industry; financing risks; inflation, interest and currency rate fluctuations; global and local economic and business conditions; risks associated with unexpected or ongoing geopolitical events; changes in law; tax risks; competition; environmental and climate change risks; insurance risks; cyber security; risks related to the imposition of duties, tariffs and other trade restrictions and their impacts; and uncertainties surrounding public health crises and epidemics. Our objectives and forward-looking statements are based on certain assumptions, including that the general economy remains stable; that there are no unforeseen changes in the legislative and operating framework for our business; that we will have access to adequate capital to fund our future projects and plans and that we will receive financing on acceptable terms; that inflation and interest rates will not materially increase beyond current market expectations; that future market and economic conditions will occur as expected; and that geopolitical events, including disputes between nations or the imposition of duties, tariffs, quotas, embargoes or other trade restrictions (including any retaliation to such measures), will not disrupt global economies. All forward-looking information in this press release speaks as of the date of this press release. Dream Residential REIT 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, risks and uncertainties is contained in Dream Residential REIT's filings with securities regulators, including its latest Annual Information Form and Management's Discussion and Analysis. These filings are also available on the REIT's website at
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.
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FOOTNOTES
(1)
FFO is a non-GAAP financial measure. The most directly comparable financial measure to FFO is net income. For further information on this non-GAAP measure, please refer to the statements under the heading 'Non-GAAP financial measures, ratios and supplementary financial measures' in this press release. The table included in the Appendices section of this press release reconciles FFO for the three and six months ended June 30, 2025 and June 30, 2024 to net income.
(2)
Diluted FFO per Unit is a non-GAAP ratio. Diluted FFO per Unit comprises FFO (a non-GAAP financial measure) divided by the weighted average number of Units. For further information on this non-GAAP ratio, please refer to the statements under the heading 'Non-GAAP financial measures, ratios and supplementary financial measures' in this press release.
(3)
A description of the determination of diluted amounts per Unit can be found in the REIT's Q2 2025 MD&A in the section 'Supplementary Financial Measures and Other Disclosures', under the heading 'Weighted average number of Units'.
(4)
Net total debt-to-net total assets is a non-GAAP ratio. Net total debt-to-net total assets comprises net total debt (a non-GAAP financial measure) divided by net total assets (a non-GAAP financial measure). The most directly comparable financial measure to net total debt is non-current debt, and the most directly comparable financial measure to net total assets is total assets. For further information on this non-GAAP ratio and these non-GAAP financial measures, please refer to the statements under the heading 'Non-GAAP financial measures, ratios and supplementary financial measures' in this press release.
(5)
Interest coverage ratio (times) is a non-GAAP ratio. Interest coverage ratio comprises trailing 12-month adjusted EBITDAFV (a non-GAAP financial measure) divided by trailing 12-month interest expense on debt (a non-GAAP financial measure). The most directly comparable financial measure to adjusted EBITDAFV is net income (loss). The table included in the Appendices section of this press release reconciles adjusted EBITDAFV to net income (loss) and trailing 12-month adjusted EBITDAFV and trailing 12-month interest expense on debt to adjusted EBITDAFV and interest expense on debt, respectively, for the trailing 12-month period ended June 30, 2025. For further information on this non-GAAP ratio and non-GAAP financial measure, please refer to the statements under the heading 'Non-GAAP financial measures, ratios and supplementary financial measures' in this press release.
(6)
Available liquidity is a non-GAAP financial measure. The most directly comparable financial measure to available liquidity is cash and cash equivalents. The table included in the Appendices section of this press release reconciles available liquidity to cash and cash equivalents as at June 30, 2025 and December 31, 2024. For further information on this non-GAAP financial measure, please refer to the statements under the heading 'Non-GAAP financial measures, ratios and supplementary financial measures' in this press release.
(7)
Total equity (including Class B Units) is a non-GAAP financial measure. The most directly comparable financial measure to total equity (including Class B Units) is total equity. For further information on this non-GAAP financial measure, please refer to the statements under the heading 'Non-GAAP financial measures, ratios and supplementary financial measures' in this press release. The table included in the Appendices section of this press release reconciles total equity (including Class B Units) to total equity (per the condensed consolidated financial statements) as at June 30, 2025 and December 31, 2024.
(8)
Total number of Units includes 16,004,408 Trust Units and 3,692,084 Class B Units, which are classified as a liability under IFRS Accounting Standards.
(9)
NAV per Unit is a non-GAAP ratio. NAV per Unit comprises total equity (including Class B Units) (a non-GAAP financial measure) divided by the total number of Units. For further information on this non-GAAP ratio, please refer to the statements under the heading 'Non-GAAP financial measures, ratios and supplementary financial measures' in this press release.
(10)
Comparative properties NOI is a non-GAAP financial measure. The most directly comparable financial measure to comparative properties NOI is net rental income. The table included in the Appendices section of this press release reconciles comparative properties NOI for the three and six months ended June 30, 2025 and June 30, 2024 to net rental income. For further information on this non-GAAP financial measure, please refer to the statements under the heading 'Non-GAAP financial measures, ratios and supplementary financial measures' in this press release.
(11)
Comparative properties NOI margin is a non-GAAP ratio. Comparative properties NOI margin is defined as comparative properties NOI (a non-GAAP financial measure) divided by comparative investment properties revenue, as a percentage. For further information on this non-GAAP ratio, please refer to the statements under the heading 'Non-GAAP financial measures, ratios and supplementary financial measures' in this press release.
(12)
Tenant retention ratio is defined as the number of renewed leases divided by the total number of leases signed during the period. Tenant retention ratio is a supplementary financial measure.
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The table below reconciles FFO to net income for the three and six months ended June 30, 2025 and June 30, 2024:
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Reconciliation of NOI and comparative properties NOI to net rental income
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The table below reconciles NOI and comparative properties NOI to net rental income for the three and six months ended June 30, 2025 and June 30, 2024:
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Three months ended June 30,
Six months ended June 30,
2025
2024
2025
2024
Investment properties revenue
$
12,388
$
12,099
$
24,438
$
24,113
Less: Investment properties revenue from sold properties
—
—
—
—
Comparative investment properties revenue
12,388
12,099
24,438
24,113
Net rental income
8,181
7,984
14,417
14,617
Property tax liability adjustment (IFRIC 21)
(1,746)
(1,622)
(1,851)
(2,174)
Net operating income ('NOI')
$
6,435
$
6,362
$
12,566
$
12,443
Less: NOI from sold properties
—
—
—
—
Comparative properties NOI
6,435
6,362
12,566
12,443
Comparative properties NOI margin
51.9%
52.6%
51.4%
51.6%
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Reconciliation of adjusted EBITDAFV to net income
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The table below reconciles adjusted earnings before interest, taxes, depreciation, amortization and fair value adjustments to net income for the three and six months ended June 30, 2025 and June 30, 2024:
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Three months ended June 30,
Six months ended June 30,
(in thousands, unless otherwise stated)
2025
2024
2025
2024
Net income (loss) for the period
$
843
$
3,346
$
(7,208)
$
4,162
Add (deduct):
Interest expense – debt
1,881
1,827
3,716
3,655
Interest expense – Class B Units
388
392
776
897
Fair value adjustments to investment properties
1,156
4,106
2,621
5,783
Fair value adjustments to financial instruments
2,295
(2,706)
12,002
(1,705)
Property tax liability adjustment (IFRIC 21)
(1,746)
(1,622)
(1,851)
(2,174)
Strategic review costs
563
—
563
—
Adjusted EBITDAFV for the period
$
5,380
$
5,343
$
10,619
$
10,618
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Reconciliation of available liquidity to revolving credit facility
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The table below reconciles available liquidity to cash and cash equivalents as at June 30, 2025 and December 31, 2024:
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Trailing 12-month period ended
June 30, 2025
Interest expense on debt for the six months ended June 30, 2025
$
3,716
Add: Interest expense for the year ended December 31, 2024
7,371
Less: Interest expense for the six months ended June 30, 2024
(3,655)
Trailing 12-month interest expense on debt
$
7,432
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Interest coverage ratio (times)
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The table below reconciles total equity (including Class B Units) and NAV per Unit to total equity as at June 30, 2025 and December 31, 2024:
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Reconciliation of net total debt to non-current debt and net total assets to total assets, and calculation of net total debt-to-net total assets
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The following table reconciles net total debt to non-current debt and net total assets to total assets, and calculates net total debt-to-net total assets as at June 30, 2025 and December 31, 2024:
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Contacts
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For further information, please contact:
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Dream Residential REIT
Brian Pauls
Chief Executive Officer
(416) 365-2365
bpauls@dream.ca
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Derrick Lau
Chief Financial Officer
(416) 365-2364
dlau@dream.ca
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Virtual Flip Formula Launches Rebranded Mentorship Program for New Real Estate Wholesalers
Phoenix, Arizona--(Newsfile Corp. - August 17, 2025) - Virtual Flip Formula, a real estate education company founded by Tyson Smith, has announced the formal launch and rebranding of its mentorship-based training program for aspiring real estate wholesalers. Based in Phoenix, Arizona, the company provides remote coaching and support designed for individuals seeking to break into the real estate industry without the need to purchase or own property. To view an enhanced version of this graphic, please visit: A Streamlined Approach to Entry-Level Real Estate Business Models Virtual Flip Formula focuses on real estate wholesaling - a model where individuals earn fees by connecting property sellers with buyers. This approach allows participants to operate without purchasing real estate themselves, which makes the model accessible to those without substantial upfront capital. Rather than relying on traditional real estate investment strategies that require financing or ownership, Virtual Flip Formula provides an alternative route that emphasizes hustle, outreach, and structured negotiation. From Informal Demand to Structured Support The concept originated after founder Tyson Smith began receiving requests from his social media audience to share how he had built his wholesaling business. What began as informal guidance grew into a structured program featuring weekly coaching calls, digital tools, and peer support. "Once I saw the kind of life-changing results people were getting after learning the process, I knew there was an opportunity to build something more formal and supportive," said Tyson Smith, CEO of Virtual Flip Formula. The company initially launched in 2023 but underwent a rebrand and operational refinement in early 2025 to better align with the needs of its growing student base. To view an enhanced version of this graphic, please visit: Program Designed for Accessibility and Sustainability The mentorship program includes weekly coaching sessions, operational frameworks, and guided exercises aimed at helping new wholesalers close their first deal. According to the company, the core objective is to take students from zero experience to generating consistent income through repeatable systems. "What sets our model apart is the focus on accessibility," said Smith."Most beginners don't have tens of thousands in capital to purchase real estate. With wholesaling, you don't need to. What you need is structure, support, and the discipline to take action." Building a Supportive Community of First-Time Wholesalers Looking ahead, Virtual Flip Formula plans to support over 1000 new wholesalers in closing their first deal within the next 12 to 24 months. Long-term, the company aspires to build a national community where students can share resources, partner on deals, and create business momentum together. "We're creating an environment where students aren't just learning from us - they're learning from each other," Smith noted."It's about building something that lasts beyond one course or one deal." About Virtual Flip Formula Virtual Flip Formula is a mentorship-based program designed to help beginners launch real estate wholesaling businesses. The company operates remotely and provides coaching, strategy, and support for aspiring entrepreneurs seeking a practical entry point into the real estate industry. To follow Tyson Smith's work, connect with him on Instagram or YouTube. Media Contact
