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Dream Office Real Estate Investment (TSE:D.UN)
TSX:D.UN
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Dream Office Real Estate Investment
(TSX:D.UN)
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Rating:53Neutral
Price Target:
C$18.00
â–²(4.71% Upside)
The overall stock score of 53 reflects significant financial challenges, with declining revenue and high leverage impacting financial stability. Technical indicators show a lack of clear momentum, while valuation concerns persist due to negative earnings. However, strong leasing performance and high occupancy rates provide some optimism for future progress.
Positive Factors
Strong Leasing Performance
The robust leasing activity, particularly in Toronto, indicates strong demand for the company's office spaces, supporting stable future revenue streams.
High Occupancy Rates
High occupancy rates in key assets ensure steady rental income, enhancing cash flow stability and reducing vacancy risks.
Improved Financial Metrics
Reduction in leverage through asset sales strengthens the balance sheet, providing more financial flexibility and reducing interest expenses.
Negative Factors
Declining Revenue
Continued revenue decline reflects challenges in maintaining tenant demand and rental rates, potentially impacting long-term profitability.
High Leverage
High leverage limits financial flexibility and increases risk, particularly in a rising interest rate environment, affecting future growth opportunities.
Interest Rate Impact on Debt
Rising interest rates increase borrowing costs, reducing funds available for reinvestment and impacting profitability.
Dream Office Real Estate Investment (D.UN) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$326.93M
Dividend Yield5.81%
Average Volume (3M)17.96K
Price to Earnings (P/E)―
Beta (1Y)1.24
Revenue Growth-1.06%
EPS Growth-20.07%
CountryCA
Employees500
SectorReal Estate
Sector Strength53
IndustryREIT - Office
Share Statistics
EPS (TTM)-3.13
Shares Outstanding16,368,755
10 Day Avg. Volume16,794
30 Day Avg. Volume17,962
Financial Highlights & Ratios
PEG Ratio-0.06
Price to Book (P/B)0.32
Price to Sales (P/S)1.76
P/FCF Ratio8.27
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$19.75Price Target Upside14.92% Upside
Rating ConsensusHold
Number of Analyst Covering4
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Dream Office Real Estate Investment Business Overview & Revenue Model
Company DescriptionDream Office REIT is an unincorporated, open-ended real estate investment trust. Dream Office REIT owns well-located, high-quality office properties, primarily in downtown Toronto.
How the Company Makes MoneyDream Office REIT generates revenue primarily through rental income from its portfolio of office properties. Tenants in these properties pay rent, which constitutes the main revenue stream for the company. The REIT typically enters into long-term leases with its tenants, providing a stable cash flow. Additionally, Dream Office may benefit from property appreciation over time, allowing for capital gains upon the sale of assets. The company may also explore management fees or partnerships with other real estate entities to enhance its income. Factors contributing to its earnings include occupancy rates, lease renewals, and the overall demand for office space in its targeted markets.
Dream Office Real Estate Investment Earnings Call Summary
Earnings Call Date:Nov 06, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Feb 12, 2026
Earnings Call Sentiment Neutral
Dream Office REIT demonstrated strong leasing performance and high occupancy rates in key assets, supported by a successful model suite program and improved financial metrics. However, challenges persist with certain assets, a decline in FFO due to asset sales, and increased interest rates impacting debt. Despite these challenges, the overall sentiment leans towards cautious optimism with a focus on steady progress.Q3-2025 Updates
Positive Updates
Strong Leasing Performance
Dream Office REIT achieved over 630,000 square feet of gross leasing year-to-date, surpassing their highest previous annual total. Specifically, Toronto achieved 520,000 square feet across 92 deals, with 252,000 square feet in new leases.
High Occupancy Rates in Key Assets
Adelaide Place reached a committed occupancy of 95.7%, with expectations for NOI to increase from $15.5 million to $18 million within the next year.
Successful Model Suite Program
The program led to the leasing of 85,000 square feet out of 120,000 square feet available, with an additional 15,000 square feet under conditional deals, achieving 90% occupancy of the suites.
Improved Financial Metrics
Debt-to-gross book value improved by 280 basis points due to asset sales, with $180 million in cash proceeds used to repay debt.
Development Project Progress
Significant progress reported on two development projects, expected to contribute over $4 million in annual NOI at stabilization.
Negative Updates
Challenges with 74 Victoria
Despite progress, 74 Victoria remains a challenge due to its classification and slower leasing velocity compared to Class AAA and A-class markets.
Decline in FFO
Funds from operations per unit decreased by $0.17 year-over-year, mainly due to asset sales, despite being in line with internal expectations.
Interest Rate Impact on Debt
Weighted average interest on total debt increased by 23 basis points year-over-year, affecting FFO by $0.06 due to refinancing at higher rates.
High Leasing Commission Costs
Leasing commissions for brokers have more than doubled over the last two years, contributing to NER compression.
Company Guidance
During the Dream Office REIT Q3 2025 Conference Call, management highlighted several key metrics reflecting the company's performance and future outlook. The Toronto portfolio's committed occupancy, excluding the 74 Victoria property, reached over 90%, indicating strong leasing activity. Year-to-date, Dream Office achieved over 630,000 square feet of gross leasing, with 520,000 square feet in Toronto alone, surpassing the 3-year average of 530,000 square feet. New leases have seen net effective rents (NER) outperform the business plan, with average NERs at $18 per square foot compared to the budgeted $15, facilitated by longer average lease terms of 8.5 years. Additionally, the management team remains optimistic about reaching a committed occupancy of approximately 86.5% by the end of 2025. Financially, the company's diluted funds from operations (FFO) were $0.60 per unit for the quarter, aligning with internal expectations, despite a year-over-year decline due to asset sales and refinancing in a higher interest rate environment. The company's proactive leasing strategy and asset management have contributed to consistent growth in occupancy and net absorption, positioning Dream Office for continued progress into 2026.Dream Office Real Estate Investment Financial Statement Overview
Summary
Dream Office Real Estate Investment is facing financial challenges, with declining revenue and profitability, high leverage, and negative returns on equity. Despite some improvement in free cash flow, the overall financial health is concerning, with significant risks due to high debt levels and operational inefficiencies.Income Statement
The income statement shows declining revenue and profitability. The TTM data indicates a negative net profit margin of -88.74%, and a negative revenue growth rate of -3.78%. The EBIT and EBITDA margins are also negative, reflecting operational challenges. Historical data shows a consistent decline in revenue and profitability over the years.45
Neutral
Balance Sheet
The balance sheet reveals a high debt-to-equity ratio of 1.23 in the TTM period, indicating significant leverage. The return on equity is negative, suggesting inefficiencies in generating returns from equity. The equity ratio is not explicitly calculated, but the high leverage and declining equity over time are concerning.50
Neutral
Cash Flow
Cash flow analysis shows some positive aspects, such as a free cash flow growth rate of 58.19% in the TTM period. However, the operating cash flow to net income ratio is low at 0.62, indicating challenges in converting income into cash. The free cash flow to net income ratio is relatively stable but reflects the negative net income.55
Neutral
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 188.52M | 196.11M | 190.45M | 196.27M | 197.54M | 206.59M |
| Gross Profit | 101.69M | 106.13M | 102.33M | 106.12M | 108.74M | 112.94M |
| EBITDA | -33.90M | -40.74M | -14.27M | 120.29M | 214.29M | 238.22M |
| Net Income | -154.84M | -104.93M | -77.20M | 63.64M | 154.21M | 177.28M |
Balance Sheet | ||||||
| Total Assets | 2.30B | 2.58B | 2.67B | 3.07B | 3.07B | 2.89B |
| Cash, Cash Equivalents and Short-Term Investments | 19.40M | 18.27M | 13.27M | 8.02M | 8.76M | 13.07M |
| Total Debt | 1.23B | 1.31B | 1.34B | 1.38B | 1.29B | 1.20B |
| Total Liabilities | 1.37B | 1.50B | 1.47B | 1.53B | 1.52B | 1.39B |
| Stockholders Equity | 929.24M | 1.08B | 1.20B | 1.53B | 1.55B | 1.50B |
Cash Flow | ||||||
| Free Cash Flow | 44.64M | 41.61M | 45.62M | 41.24M | 95.80M | 59.58M |
| Operating Cash Flow | 74.07M | 72.39M | 70.72M | 76.67M | 95.81M | 94.29M |
| Investing Cash Flow | 143.03M | -21.07M | 286.12M | -19.24M | -29.38M | -4.50M |
| Financing Cash Flow | -231.87M | -47.15M | -351.41M | -58.59M | -70.74M | -172.15M |
Dream Office Real Estate Investment Technical Analysis
Negative
17.19
Price Trends
17.95
Negative
17.93
Negative
16.84
Positive
Market Momentum
-0.13
Negative
45.95
Neutral
13.74
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:D.UN, the sentiment is Negative. The current price of 17.19 is below the 20-day moving average (MA) of 17.20, below the 50-day MA of 17.95, and above the 200-day MA of 16.84, indicating a neutral trend. The MACD of -0.13 indicates Negative momentum. The RSI at 45.95 is Neutral, neither overbought nor oversold. The STOCH value of 13.74 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:D.UN.
Dream Office Real Estate Investment Peers Comparison
UnderperformOutperform
Sector (65)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | C$426.00M | 11.39 | 7.24% | 7.09% | 2.81% | 9677.19% | |
76 Outperform | C$468.24M | 12.18 | 7.14% | 6.62% | 4.53% | 197.86% | |
75 Outperform | C$355.72M | 8.49 | 8.60% | 7.44% | 0.92% | 92.93% | |
65 Neutral | $2.17B | 12.19 | 3.79% | 4.94% | 3.15% | 1.96% | |
55 Neutral | C$414.27M | -9.29 | -4.91% | 3.87% | -5.37% | 13.86% | |
55 Neutral | $1.83B | -3.16 | -10.26% | 13.87% | 1.86% | 1.84% | |
53 Neutral | C$326.93M | -2.15 | -14.98% | 5.81% | -1.06% | -20.07% |
* Real Estate Sector Average
TSE:D.UN
Dream Office Real Estate Investment
17.19
0.54
3.22%
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Allied Properties Real Estate Investment Trust
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Dream Office Real Estate Investment Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
Dream Industrial REIT Appoints New Chief Operating Officer
Positive
Nov 27, 2025
Dream Industrial REIT has appointed Gord Wadley as its new Chief Operating Officer, effective January 1, 2026. Wadley, currently COO of Dream Office REIT, brings extensive experience in operational excellence and strategic leadership, which is expected to enhance Dream Industrial’s operations and deliver value to stakeholders. His transition is seen as a growth opportunity within the Dream Group, ensuring continuity and leveraging his expertise to drive efficiencies and growth.
Dividends
Dream Office REIT Declares November 2025 Distribution
Positive
Nov 19, 2025
Dream Office REIT announced its November 2025 monthly distribution of 8.333 cents per REIT Unit, Series A, which will be payable on December 15, 2025, to unitholders of record as of November 28, 2025. This announcement underscores the company’s ongoing commitment to providing consistent returns to its stakeholders, reinforcing its position as a key player in the Toronto office real estate market.
Business Operations and StrategyFinancial Disclosures
Dream Office REIT Sees Positive Momentum in Toronto Market Amid Q3 2025 Results
Positive
Nov 6, 2025
Dream Office REIT reported its Q3 2025 financial results, highlighting a notable improvement in the downtown Toronto office market. The company observed increased demand from financial institutions, leading to a significant reduction in vacancy rates and sublease spaces. Despite ongoing challenges in the Canadian office real estate sector, Dream Office REIT remains committed to enhancing its portfolio, with renovations substantially completed on its prime buildings. The company secured substantial leasing agreements, reflecting growing tenant confidence and a strategic positioning for long-term success.
Business Operations and StrategyFinancial Disclosures
Dream Office REIT Sees Positive Trends in Toronto Market Amid Q3 2025 Results
Positive
Nov 6, 2025
Dream Office REIT reported its Q3 2025 financial results, highlighting improvements in the downtown Toronto office market driven by increased demand from financial institutions. Despite ongoing challenges in the Canadian office real estate sector, the Trust has seen a positive shift in occupancy rates and reduced sublease space, indicating growing tenant confidence. The company remains committed to enhancing its portfolio through strategic renovations and aims to maintain stable operational and financial performance amidst macroeconomic uncertainties.
Dividends
Dream Office REIT Declares October 2025 Distribution
Positive
Oct 22, 2025
Dream Office REIT has announced its October 2025 monthly distribution of 8.333 cents per REIT Unit, Series A, payable on November 14, 2025, to unitholders of record as of October 31, 2025. This announcement reflects the company’s ongoing commitment to providing consistent returns to its investors, reinforcing its position as a leading office space provider in Toronto’s competitive real estate market.
Financial Disclosures
Dream Office REIT to Release Q3 2025 Financial Results
Neutral
Oct 21, 2025
Dream Office REIT has announced it will release its financial results for Q3 2025 on November 6, 2025, followed by a conference call on November 7, 2025, to discuss the results. This announcement is significant for stakeholders as it provides insights into the company’s financial health and strategic positioning in the competitive Toronto office market.
Dividends
Dream Office REIT Announces September 2025 Distribution
Positive
Sep 19, 2025
Dream Office REIT announced its September 2025 monthly distribution of 8.333 cents per REIT Unit, Series A, payable on October 15, 2025. This announcement reflects the company’s ongoing commitment to providing returns to its unitholders and underscores its stable positioning in the competitive Toronto office market.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.