Dream Office Real Estate Investment (D.UN) AI Stock Analysis

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Dream Office Real Estate Investment

(TSX:D.UN)

Select Model

Neutral 53 (OpenAI - 5.2)

Rating:53Neutral

Price Target:

C$18.00

▼(-4.05% Downside)

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$363.39M

Dividend Yield5.65%

Average Volume (3M)17.96K

Price to Earnings (P/E)―

Beta (1Y)1.27

Revenue Growth-1.06%

EPS Growth-20.07%

CountryCA

Employees500

SectorReal Estate

Sector Strength53

IndustryREIT - Office

Share Statistics

EPS (TTM)-3.13

Shares Outstanding16,368,880

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$19.75

Price Target Upside5.27% 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.

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.

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.

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

Technical Analysis Sentiment

Positive

Last Price18.76

Price Trends

50DMA

17.65

Positive

100DMA

18.17

Positive

200DMA

16.93

Positive

Market Momentum

MACD

0.30

Negative

RSI

61.88

Neutral

STOCH

82.72

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:D.UN, the sentiment is Positive. The current price of 18.76 is above the 20-day moving average (MA) of 17.87, above the 50-day MA of 17.65, and above the 200-day MA of 16.93, indicating a bullish trend. The MACD of 0.30 indicates Negative momentum. The RSI at 61.88 is Neutral, neither overbought nor oversold. The STOCH value of 82.72 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:D.UN.

Dream Office Real Estate Investment Peers Comparison

Overall Rating

UnderperformOutperform

Sector (65)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	65 Neutral	$2.17B	12.19	3.79%	4.94%	3.15%	1.96%
AX.UN	63 Neutral	C$761.01M	-8.92	-4.93%	7.28%	-20.06%	19.27%
MRT.UN	55 Neutral	C$418.53M	-9.20	-4.91%	3.85%	-5.37%	13.86%
AP.UN	55 Neutral	C$1.96B	-3.42	-10.26%	13.67%	1.86%	1.84%
D.UN	53 Neutral	C$363.39M	-2.35	-14.98%	5.65%	-1.06%	-20.07%
RPR.UN	53 Neutral	C$16.31M	-0.12	-141.77%	―	-6.21%	65.52%
HR.UN	52 Neutral	C$2.87B	-7.00	-8.74%	7.05%	-0.83%	-56.21%

* Real Estate Sector Average

Performance Comparison

TSE:D.UN

Dream Office Real Estate Investment

18.76

2.21

13.33%

TSE:HR.UN

H&R Real Estate ate Staple

10.94

2.17

24.74%

TSE:MRT.UN

Morguard Real Estate ate

6.32

1.04

19.60%

TSE:RPR.UN

Slate Office REIT

0.19

-0.32

-62.75%

TSE:AX.UN

Artis Real Estate Investment

7.93

1.42

21.76%

TSE:AP.UN

Allied Properties Real Estate Investment Trust

14.04

-0.92

-6.15%

Dream Office Real Estate Investment Corporate Events

Executive/Board ChangesDividends

Dream Office REIT Announces Distributions, Special Capital Gains Payout, and Leadership Update

Neutral

Dec 17, 2025

Dream Office REIT announced its December 2025 monthly cash distribution of $0.08333 per REIT A Unit, with a special non-cash distribution valued at $0.50 per unit, which will be satisfied through the issuance of additional units and consequential consolidation to maintain unit counts. The special distribution is attributed to capital gains from key transactions completed this fiscal year, with relevant tax implications for Canadian and non-Canadian unitholders. Furthermore, the departure of board member Karine MacIndoe was announced, recognizing her contributions since 2015, as she leaves to focus on other ventures.

The most recent analyst rating on ($TSE:D.UN) stock is a Hold with a C$18.00 price target. To see the full list of analyst forecasts on Dream Office Real Estate Investment stock, see the TSE:D.UN Stock Forecast page.

Business Operations and StrategyExecutive/Board Changes

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.

The most recent analyst rating on ($TSE:D.UN) stock is a Hold with a C$17.00 price target. To see the full list of analyst forecasts on Dream Office Real Estate Investment stock, see the TSE:D.UN Stock Forecast page.

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.

The most recent analyst rating on ($TSE:D.UN) stock is a Buy with a C$25.50 price target. To see the full list of analyst forecasts on Dream Office Real Estate Investment stock, see the TSE:D.UN Stock Forecast page.

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.

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.Date of analysis: Dec 11, 2025