Dream Impact five-year plan includes 49 Ont., Quayside

Executive Summary

• Dream Impact Trust released a comprehensive business update highlighting a new five-year strategic plan focused on crystallizing value in commercial assets, selling multifamily assets for liquidity, and targeting a portfolio of ~2,300 residential rental units by 2030.
• The Trust reported significant progress on its two milestone projects: 49 Ontario (construction commenced, 10% interest sold to CentreCourt for $6.5M) and Quayside (predevelopment advanced, ~9 months behind 49 Ontario).
• Financial restructuring includes reducing land loan exposure from $237M to $144M (with further reductions expected), upsizing a related-party loan from Dream Asset Management to $50M, and extending/amending $5.50% convertible debentures due 2026 to 2031 with an increased interest rate.

Key Details

• Strategic Plan:
  • Approved five-year plan focusing on developing 49 Ontario and Quayside, while continuing Zibi and Brightwater.
  • Goal: Own ~2,300 residential rental units (at share) by 2030.
  • Target Portfolio Composition: ~90% multifamily (Toronto and National Capital Region), ~72% debt via CMHC affordable construction loan program, ~9% via MLI Select CMHC financing.
  • Strategy includes crystallizing value on commercial assets/passive investments and selling multifamily assets as needed for liquidity.
• 49 Ontario Project:
  • 1,226-unit, two-tower purpose-built rental development (including 308 affordable units).
  • Demolition commenced in November; construction tendering/pricing described as encouraging.
  • Secured 20-year government-affiliated financing, locking in low-cost debt with no refinancing required until 2046.
  • Sold 10% interest to co-developer CentreCourt (also acting as construction manager) for $6.5 million.
  • Remaining equity value in development: $58.5 million.
  • Trust to recover $4.9 million of predevelopment costs.
  • Benefits from federal HST waiver and City of Toronto development charge waivers.
  • Surplus land at site to be sold in 2026.
  • Financial Outlook: Assuming 2.5% annual rental growth, Net Operating Income (NOI) expected to increase ~63% over loan term; principal balance expected to decline ~13%.
• Quayside Project:
  • Two-tower development on Toronto waterfront; ~9 months behind 49 Ontario development start.
  • Expected to include >1,100 market rental units and >500 affordable units (not owned by Dream Impact).
  • Dream Impact to own 25% of the development via public-private partnership with Waterfront Toronto and City of Toronto.
  • Expected to benefit from same HST and development charge waivers as 49 Ontario.
  • Significant updates expected within next 90 days.
• Debt and Liquidity Management:
  • Land Loans: Reduced from $237 million (beginning of 2025) to $144 million (early 2026). Expected to reduce by additional $56 million in 2026 (Scarborough Junction, Quayside, Forma West, Lakeshore East), bringing total non-started project land loans to $87 million (>60% reduction from 2025 levels).
  • Dream Asset Management (DAM) Loan: Previously $15 million; expected to be upsized to $50 million in early 2026. Interest rate: higher of 10% or 6% above Canadian overnight repo rate average. Maturity: 5 years. Secured by general collateral.
  • 2026 Debenture Extension: Closed agreement to extend and amend 5.50% convertible unsecured subordinated debentures (due July 31, 2026).
    • New Maturity: July 31, 2031.
    • New Interest Rate: 6.50% (effective Feb 2, 2026).
    • New Conversion Price: $2.75 per unit.
    • Trust has option to satisfy conversion requests in cash.
    • Beneficially owned by affiliates of Fairfax Financial Holdings Ltd.
• Fee Arrangement Change:
  • 2026 management fee to DAM settled via issuance of ~$3.6 million in unsecured convertible debentures (instead of units) to preserve liquidity.
  • Debentures on similar terms to existing 5.75% convertible debentures maturing Dec 31, 2027.
  • Subject to TSX, regulatory, and unitholder approvals.
  • DAM and joint actors own 39.3% of the Trust as of Jan 7, 2026.

Notable Quotes

• Michael Cooper, Portfolio Manager: "In 2025, we made significant progress in supporting the trust's value. Pursuant to our business plan, we expect the portfolio to be 90 per cent multifamily in Toronto and the National Capital Region by 2030 with stable and low-cost government financing and one of the most attractive multifamily rental portfolios in the industry... We have commenced construction of 49 Ontario with low-cost 20-year financing, [and] we have significantly advanced the predevelopment of Quayside, dramatically increased occupancy in our recently completed purpose-built rentals, reduced our land debt substantially and secured long-term corporate debt resulting in a better positioned business as 2025 ended."
• Michael Cooper, Portfolio Manager: "With the support of the federal and provincial governments and the City of Toronto, 49 Ontario is well positioned as we have realized significant development savings that offset current lower rental rates. With this condo cycle coming to an end and a return to historic immigration growth, we anticipate a more constructive rental rate environment during the development period of our new buildings, which ultimately results in a fair return to our unitholders, while also providing new housing adjacent to public transit and over 300 affordable units."
• Derrick Lau, Chief Financial Officer: "The steps taken to reduce our land debt, extend our convertible debt for five years and increase the loan from DAM are improving our financial position... While we still have much work to do to achieve the plan, given the swift and significant negative changes to the housing market, the steps taken in 2025 and the recently approved strategic business plan provide a road map for a stronger business in the future."