TORONTO--(BUSINESS WIRE)-- DREAM IMPACT TRUST (TSX: MPCT.UN) ("Dream Impact", "we", "our" or the "Trust") today reported its financial results for the three months and year ended December 31, 2024 ("fourth quarter").

"Our priority for 2024 was to create value for the Trust while managing liquidity in the most prudent manner," said Michael Cooper, Portfolio Manager. "In 2024, we accomplished many significant milestones for the Trust including selling assets, completing income properties thereby increasing our asset allocation to multi-family residential, progressing on the construction of 2,700 apartment units and major advancements for our large development assets. Nonetheless, the macro environment is beyond our control including 30 year lows for starts for new condos, diminution in land values, high construction costs and the potential for devastating tariffs, results in a very difficult and uncertain environment to navigate."

On December 17, 2024, the City of Toronto announced the waiver of development charges on selected projects to support the advancement of purpose-built rentals across the city. We were extremely pleased that two of the Trust's projects - 49 Ontario and Phase 1 of Quayside - were named as part of this development charge waiver for a combined 2,500 units (at 100% asset level). The savings achieved from this initiative are significant as it directly improves the projects' viability and better positions construction start for these developments to be accelerated. We are continuing to make progress with securing construction financing for the development of 49 Ontario and pursuing various partnership opportunities for the site. Upon first draw on the construction facility, the Trust would be able to pay off the in-place land loan of $80.0 million and achieve savings of $5 million in cash interest payments per year.

The Trust continues to make headway with its multi-family rental portfolio. In the fourth quarter, Birch House, a 238-unit purpose built rental building in downtown Toronto welcomed its first residents. The building adds to the growing Canary District residential node. Maple House, which welcomed residents in 2023, is 78.7% leased as of February 14, 2025 and is expected to achieve stabilization by the end of 2025. Construction at Cherry House continues to progress and based on current timelines, we expect to begin leasing towards the latter part of the year. Combined, these three buildings will make up 1,863 units of which the Trust owns 25%.

In the fourth quarter, the Trust started construction on the next residential building at Zibi, Block 204. The building is expected to comprise 244 units upon completion and will be financed through CMHC's Apartment Construction Loan Program. To preserve liquidity, the Trust strategically decided to sell its 50% ownership to DAM, which is expected to coincide with first draw on the construction facility in the second quarter of 2025. By advancing construction of Block 204, the existing infrastructure debt at Zibi will be reduced by $11.5 million, which helps de-risk the project itself and the Trust's land loan exposure. Zibi is held as an equity accounted investment in which the Trust owns 50%.

Selected financial and operating metrics for the three months and year ended December 31, 2024 are summarized below:

During the fourth quarter, the Trust reported a net loss of $8.3 million compared to $19.7 million in the prior year. The change in earnings was driven by fluctuations in fair value adjustments year over year ($8.9 million). In addition, the Trust recognized earnings from Brightwater condo occupancies ($3.6 million), partially offset by higher interest expense driven by the timing of completed multi-family rentals during the year ($1.1 million) which was previously capitalized as the buildings were under development.

Liquidity Update

As at December 31, 2024, the Trust had total cash-on-hand of $16.2 million and a debt-to-asset value⁽²⁾ of 40.2%, an increase from 39.7% at September 30, 2024, primarily driven by a modest increase in debt and fair value adjustments, partially offset by an increase in the Trust's deferred income tax recovery position. Refer to the "Capital Resources and Liquidity" section of the MD&A. Over the course of the year, the Trust, inclusive of debt held as equity accounted investments, repaid $100.3 million of construction debt from condo closing proceeds at Brightwater and Ivy Condos, repaid $11.5 million relating to its credit facility and refinanced $167.4 million of maturing debt.

As of December 31, 2024, the Trust's debt profile included $274.8 million of consolidated debt and $850.7 million of debt at its proportionate share from equity accounted investments. Of this, the Trust expects $323.8 million of debt to mature in 2025. We are currently in advanced lender discussions to extend $130.2 million, which we expect to close in the first quarter. Another $30 million of construction debt is expected to be repaid with condo closing proceeds at Brightwater. The residual balance primarily relates to land loans, which do not mature until the fourth quarter of 2025 or non-core investments we intend to exit. We continue to proactively manage the Trust's debt maturities with our lender group and look for ways to reduce our overall exposure to land loans from a debt profile perspective.

The Trust's total debt profile includes over $290 million of government debt at favourable terms.

For further details refer to the "Capital Resources and Liquidity" section of the Trust's management's discussion and analysis ("MD&A") for the three months and year ended December 31, 2024.

Recurring Income

In the fourth quarter, the Trust's recurring income segment generated a net loss of $2.5 million compared to $18.7 million in the prior year. The improvement year over year was largely driven by the composition of fair value adjustments in each respective period. While modest cap rate and discount rate expansion was recognized on the Trust's multi-family portfolio in the current period, comparative results included $15.0 million fair value losses on office properties.

Multi-family rental properties

In the fourth quarter, same property NOI was $1.8 million compared to $1.7 million in the prior year, an increase driven by turnover partially offset by certain non-recurring operating expenses. In the fourth quarter, NOI from multi-family rentals, inclusive of assets in the lease-up phase, was $2.5 million, an increase of $1.0 million from the prior year due to Maple House at Canary Landing and Aalto II approaching stabilization.

In the fourth quarter, the Trust transferred Zibi Block 206, a 207-unit multi-family rental building, to the recurring income segment. As at December 31, 2024, in-place and committed occupancy was 53.3% for Zibi Block 206, which includes the co-living space component.

Debt from the Trust's multi-family portfolio, including buildings under construction, carries a weighted average term of 4.6 years at a weighted average interest rate of 2.9%.

Commercial

In the fourth quarter, NOI from commercial properties was $2.1 million compared to $2.7 million in the prior year. The decrease in NOI was primarily due to the sale of 10 Lower Spadina and 349 Carlaw earlier in the year and lease terminations. Partially offsetting this was the occupancy of the anchor tenant at 68-70 Claremont earlier in the year.

Development

During the three months ended December 31, 2024, the development segment reported a net loss of $6.0 million compared to $4.7 million in the prior year. The fluctuation in earnings was driven by the magnitude of fair value adjustments in each period, partially offset by occupancy income at Brightwater. Included in the fourth quarter results was a fair value loss taken on a commercial block at Zibi which had completed development, driven by an extended lease-up timeline and higher terminal cap rate. The write down was supported by a third-party appraisal.

The Brightwater development achieved major milestones during the year on the completion of its first condo units. At Brightwater I and II, nearly all of the 311 units were closed resulting in the repayment of the construction loan for $42.6 million (at the Trust's share). During the second half of the year, Brightwater Towns commenced occupancy. As at December 31, 2024, nearly half of the 106-unit building was occupied. Subsequent to December 31, 2024, a further 158 units from The Mason commenced occupancy. In aggregate, this represents 575 units (at 100% asset level) that have been completed within the last two years.

During the year ended December 31, 2024, the Trust transferred 105,000 sf of retail space from Brightwater Phase I into the recurring income segment. As of February 14, 2025, Brightwater Retail had in-place and committed occupancy of 65% of retail and commercial tenants. Tenants include LCBO, Farm Boy, Rexall, and BMO.

Income from this segment will fluctuate period to period and not contribute meaningfully to earnings until development milestones are achieved and/or project inventory is available for occupancy. While mindful of our capital spend and liquidity needs, on a strategic basis we continue to make advancements for select assets in the pre-development stage.

Other

In the fourth quarter, the other segment recognized net income of $0.1 million compared to $2.6 million in the prior year. The fluctuation was driven by the Trust's income tax recovery impacted by the earnings composition in each period and reduced earnings contribution from the lending portfolio as a result of a loan repayment.

Conference Call

Senior management will host a conference call on Wednesday February 19, 2025 at 10:00 am (ET). To access the call, please dial 1-844-763-8274 (toll free) or 647-484-8814. To access the conference call via webcast, please go to the Trust's website at www.dreamimpacttrust.ca and click on Calendar of Events in the News and Events section. A taped replay of the conference call and the webcast will be available for 90 days.

About Dream Impact

Dream Impact is an open-ended trust dedicated to impact investing. Dream Impact's underlying portfolio is comprised of exceptional real estate assets reported under two operating segments: development and recurring income, that would not be otherwise available in a public and fully transparent vehicle, managed by an experienced team with a successful track record in these areas. The objectives of Dream Impact are to create positive and lasting impacts for our stakeholders through our three impact verticals: environmental sustainability and resilience, attainable and affordable housing, and inclusive communities, while generating attractive returns for investors. For more information, please visit: www.dreamimpacttrust.ca.

Specified Financial Measures and Other Measures

The Trust’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 Accounting Standards, the Trust discloses and discusses certain specified financial measures, including total liquidity, debt-to-asset value, total debt payable, net income (loss) per unit, NOI — commercial properties, Same Property NOI - multi-family rental and debt-to-total asset value, as well as other measures discussed elsewhere in this release. These specified financial measures are not defined by or recognized measures under IFRS Accounting Standards, do not have a standardized meaning and may not be comparable with similar measures presented by other issuers. The Trust has presented such specified financial measures as management believes they are relevant measures of our underlying operating performance. Specified financial measures should not be considered as alternatives to unitholders' equity, net income, total comprehensive income or cash flows generated from operating activities, or comparable metrics determined in accordance with IFRS Accounting Standards as indicators of the Trust’s performance, liquidity, cash flow and profitability. Certain additional disclosures such as the composition, usefulness and changes as applicable are expressly incorporated by reference from the Trust’s MD&A for the three months and year ended December 31, 2024, dated February 18, 2025 in the section titled “Specified Financial Measures and Other Disclosures”, subsection “Non-GAAP Ratios”, heading “Debt-to-asset value”, subsection “Supplementary Financial Measures and Other Measures”, headings “Net income (loss) per unit”, "NOI — commercial properties", "NOI - multi-family rental" and "Same Property NOI - multi-family rental" and subsection “Non-GAAP Financial Measures”, heading “Total debt payable”, which has been filed and is available on SEDAR+ under the Trust’s profile.

"Total debt payable" is defined by the Trust as the balance due at maturity for its debt instruments. Total debt payable is a non-GAAP measure and is included as part of the definition of debt-to-asset value, a non-GAAP ratio. Total debt payable is an important measure used by the Trust in evaluating the amount of debt leverage; however, it is not defined by IFRS Accounting Standards, does not have a standardized meaning and may not be comparable with similar measures presented by other issuers. Total debt payable is reconciled to total debt, the most directly comparable financial measure, below.

Forward-Looking Information

This press release may contain forward-looking information within the meaning of applicable securities legislation. Forward-looking information generally can be identified by the use of forward-looking terminology such as “outlook”, “objective”, “may”, “will”, “would”, “could”, “expect”, “intend”, “estimate”, “anticipate”, "timeline", "potential", "strategy", "targets", “believe”, “should”, “plans”, or “continue”, or similar expressions suggesting future outcomes or events.

Some of the specific forward-looking information in this press release may include, among other things, statements relating to the Trust’s objectives and strategies to achieve those objectives; the Trust’s leasing activities and the expected results thereof; expectations regarding the Trust’s disposition of assets, including timing thereof, and their expected impact on the Trust’s asset class exposure and liquidity; the Trust’s ability to secure construction financing and partnership opportunities for certain developments; the Trust’s ability to secure CMHC financing for its projects; the Trust’s ability to pay off certain indebtedness and expectations for related savings, including timing thereof; the Trust’s ability to achieve stabilization at certain assets within expected timelines; the Trust’s expectations regarding upcoming debt maturities and the expectation of repayment, extension and/or renewal of debt; the status of the Trust’s ongoing active development projects and the projected construction start and completion dates; the Trust’s expectation regarding the impact of development charge waivers on the viability of certain developments; the Trust’s expectations regarding the impacts of advancing construction at certain developments and the related impact on debt exposure and project risk; the Trust’s ability to exit its passive investments, including anticipated proceeds; the Trust’s ability to reduce overall exposure to land loans; and the Trust's plans and proposals for current and future development and redevelopment projects, including construction initiation, completion and occupancy/stabilization dates/timing and number of units. 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 the Trust’s control, which 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: adverse changes in general economic and market conditions; liquidity risk; financing and risks relating to access to capital; interest rate risks; public health risks; risks associated with unexpected or ongoing geopolitical events, including disputes between nations, terrorism or other acts of violence, and international sanctions; inflation; risks related to the imposition of duties, tariffs and other trade restrictions and their impacts; the disruption of free movement of goods and services across jurisdictions; the risk of adverse global market, economic and political conditions and health crises; risks inherent in the real estate industry; risks relating to investment in development projects; impact investing strategy risk; risks relating to geographic concentration; risks inherent in investments in real estate, mortgages and other loans and development and investment holdings; credit risk and counterparty risk; competition risks; environmental and climate change risks; risks relating to access to capital; interest rate risk; the risk of changes in governmental laws and regulations; tax risks; foreign exchange risk; the risk that corporate activities and reviews will not have the desired impact; acquisitions risk; and leasing risks. Our objectives and forward-looking statements are based on certain assumptions, including that the general economy remains stable; the gradual recovery and growth of the general economy continues in 2025; that no unforeseen changes in the legislative and operating framework for our business will occur; that there will be no material change to environmental regulations that may adversely impact our business; that we will meet our future objectives, priorities and growth targets; that we receive the licenses, permits or approvals necessary in connection with our projects; that we will have access to adequate capital to fund our future projects, plans and any potential acquisitions; that we are able to identify high-quality investment opportunities and find suitable partners with which to enter into joint ventures or partnerships; that we do not incur any material environmental liabilities; there will not be a material change in foreign exchange rates; that the impact of the current economic climate and global financial conditions on our operations will remain consistent with our current expectations and that inflation and interest rates will not materially increase beyond current market expectations; that no duties, tariffs or other trade restrictions will negatively impact us; our expectations regarding the availability and competition for acquisitions remains consistent with the current climate.

All forward-looking information in this press release speaks as of February 18, 2025, unless otherwise noted. The Trust 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 and risks and uncertainties is disclosed in the Trust’s filings with securities regulators filed on the System for Electronic Document Analysis and Retrieval+ (www.sedarplus.com), including its latest annual information form and MD&A. These filings are also available at the Trust’s website at www.dreamimpacttrust.ca.

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