Analyst Mark Rothschild from Canaccord Genuity maintained a Buy rating on Dream Office Real Estate Investment and decreased the price target to C$22.75 from C$25.50.
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Mark Rothschild has given his Buy rating due to a combination of factors that highlight the potential for Dream Office Real Estate Investment to deliver strong returns. Despite a 22% year-over-year decline in funds from operations per unit, the results were in line with expectations, and the company has made significant progress in leasing vacant spaces, which is expected to improve future performance. The management’s efforts in leasing have led to a committed occupancy rate of 90% in the core downtown Toronto portfolio, excluding one property, with further leasing progress anticipated.
Additionally, the REIT’s units are trading at a significant discount to the net asset value (NAV) estimate, offering an attractive entry point for investors. The implied cap rate of 7.4% and the current trading discount of 21.7% to the NAV estimate suggest that the stock is undervalued compared to its peers. These factors, combined with management’s positive outlook on leasing velocity and the potential for improved occupancy rates, underpin Rothschild’s Buy rating for Dream Office Real Estate Investment.
Based on the recent corporate insider activity of 18 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of DRETF in relation to earlier this year.