Dream Office Real Estate Investment Trust Class A · TSX:D.UN
Dream Office Real Estate Investment Trust Class A — Dream Office REIT — Investor Presentation (February 2023)
29 slides from Dream Office Real Estate Investment Trust Class A's investor presentation, February 2023
Slide 1: Investor Presentation
Investor Presentation Dream Office REIT TSX:D.UN February 2023
Slide 2: Dream Office REIT
Dream Office REIT D.UN Dream Office REIT (the “Trust” or “Dream Office”) is a premier office landlord in downtown Toronto with over 3.2 million square feet owned and managed. We have carefully curated an investment portfolio of high-quality assets in irreplaceable locations in one of the finest offi
Slide 3: Why Toronto?
Dream Office REIT 3 Why Toronto? 2nd largest ~75% 95.4 Financial Services Centre in North America of new immigrants in Global Liveability Ontario settle in Toronto Index score - HQ of Canada’s Largest Stock Exchange - Home to Five of Canada’s Six Largest Banks ~40% #1 ~20% of Canada’s Business Headq
Slide 4: A Carefully Curated Investment Portfolio of High-Quality Assets
Dream Office REIT 4 A Carefully Curated Investment Portfolio of High-Quality Assets Redevelopment Potential TTC Line 1 425 Bloor St. E High concentration of well connected assets in 655 Bay St. Downtown Toronto 250 Dundas St. W 80 Richmond St. 5.0 years $1.9 B 438 University Ave. weighted average le
Slide 5: Portfolio is Primarily Comprised of Assets in Downtown Toronto
Dream Office REIT 5 Portfolio is Primarily Comprised of Assets in Downtown Toronto GLA by Region Fair Value by Region Other Markets ($0.4B), 18% Other Markets (1.9MM sf), 37% Toronto Downtown (3.2MM sf), 63% Toronto Downtown ($1.9B), 82% Note 1 – Excluding properties under development, properties he
Slide 6: Sale of 720 Bay above IFRS value
Dream Office REIT 6 Sale of 720 Bay above IFRS value In Q4, we sold 720 Bay for $135M, above the asset’s IFRS value1. The property was pledged against our $375M revolving credit facility. We intend to use the proceeds from the sale to repay debt and opportunistically repurchase shares under our NCIB
Slide 7: Creating Shareholder Value Through Unit Repurchases Below NAV
Dream Office REIT 7 Creating Shareholder Value Through Unit Repurchases Below NAV 70,000,000 $35 60,000,000 $30 50,000,000 $25 40,000,000 $20 30,000,000 $15 20,000,000 $10 10,000,000 $5 0 $0 1/ 6 2/ 7 3/ 7 4/ 7 1/ 7 2/ 8 3/ 8 4/ 8 1/ 8 2/ 9 3/ 9 4/ 9 1/ 9 2/ 0 3/ 0 4/ 0 1/ 0 2/ 1 3/ 1 4/ 1 1/ 1 2/ 2
Slide 8: Strong Management Alignment Through Significant Insider Ownership
Dream Office REIT 8 Strong Management Alignment Through Significant Insider Ownership ~38.8%* investment in Dream Office REIT by Dream Unlimited Corp. and Insiders In addition, Dream Unlimited Corp. manages Dream Office REIT’s developments and Dream Office REIT manages Dream Unlimited Corp.’s proper
Slide 9: Well-Capitalized Balance Sheet and Staggered Debt Maturities
Dream Office REIT 9 Well-Capitalized Balance Sheet and Staggered Debt Maturities 44.6% Level of Debt* Mortgages Credit Facilities $172M 500 Available Liquidity* 400 $116M Unencumbered Assets* 300 200 19.8% Variable Debt Exposure 100 4.42% 0 W.A. Face Rate of Interest 2023 2024 2025 2026 2027 2028+ A
Slide 10: Strong Leasing Momentum with Elevated Rents
Dream Office REIT 10 Strong Leasing Momentum with Elevated Rents We have made meaningful progress in leasing: • In 2022, we executed leases totaling approximately 659,000 sf across our portfolio. 575,000 square feet 659,000 sf 2022 Leases of leases in Toronto downtown were executed at rents 34.6% hi
Slide 11: Dream Office REIT & Dream Industrial REIT
Dream Office REIT 11 Dream Office REIT & Dream Industrial REIT Dream Office REIT has a 9.7% interest in Dream Industrial REIT ($398M* investment) Dream Office REIT retained and generally increased number of units owned in Dream Industrial REIT from its IPO in 2012. Dream Industrial REIT owns and ope
Slide 12: Estimated Annualized Gross Rental Revenue by Tenant Industry
Dream Office REIT 12 Estimated Annualized Gross Rental Revenue by Tenant Industry 3.6% 5.7% Professional Services and 6.2% Management Finance and Insurance 6.9% 35.2% Government and Government Agencies Health Care and Social Assistance Real Estate and Construction 17.9% Retail, Food Services and Ent
Slide 13: Top 10 Tenants
Dream Office REIT 13 Top 10 Tenants Investment Rank Tenant % of Rent* Grade 1 Government of Canada 9.4% ! 2 Government of Ontario 6.6% ! 3 International Financial Data Services 3.6% - 4 U.S. Bank National Association 2.6% ! 5 State Street Trust Company 2.6% ! 6 Co-operators Life Insurance 2.4% ! 7 M
Slide 14: Future Development Potential
Dream Office REIT 14 Future Development Potential Rezoned Rezoned Current: 121,000 sf office building Current: 95,000 sf office buildings Current: 442,000 sf office building Future: 503,000 sf1 mixed-use building Future: 1.1 million sf mixed-use building Future: Targeting over 2.7 million sf (Dream
Slide 15: Properties Under Development Highlight – 366 Bay St.
Dream Office REIT 15 Properties Under Development Highlight – 366 Bay St. Reclassification Start: Q1/21 Planned Completion: 2023 Est. Capital Spend: ~$16M Updated washroom Conceptual rendering Exterior Conceptual rendering The Alleyway
Slide 16: Bay Street Collection – Before and After
Dream Office REIT 16 Bay Street Collection – Before and After Bay Street Collection Revitalizing our Bay Street collection adds significant value to our core Downtown Toronto assets. Before After Before After
Slide 17: Environmental
Dream Office REIT 17 Environmental In 2022, we made our second submission to the GRESB assessment. We achieved a five-star rating United Nations Principles for with a score of 92/100, an improvement from our Responsible Investment↗ prior year score of 91/100. Our higher score is 92 attributable to p
Slide 18: Sustainability – Select Scoreboard
Dream Office REIT 18 Sustainability – Select Scoreboard Indicator Target 2019 2020 2021 % Change (v. 2019 baseline) (v. 2019 baseline) 10% reduction of energy Energy consumption (ekWh) 170,417,623 141,298,958 146,268,282 -14% consumption by 2025 20% reduction of emissions by 2025, 50% reduction by 2
Slide 19: Canada Infrastructure Bank and Sustainability-Linked Loans
Dream Office REIT 19 Canada Infrastructure Bank and Sustainability-Linked Loans Sustainability-Linked Loans Supporting Dream Office REIT’s target to achieve In September 2022, Dream Office net zero greenhouse gas (GHG) emissions by REIT negotiated a sustainability- 2035 or sooner for all its operati
Slide 20: Social & Governance
Dream Office REIT 20 Social & Governance Gender Balance Dream Group of Companies’ goal is to be an inclusive employer that fosters a workplace • D.UN’s strength as an organization comes from where diversity is recognized as our strength our strong and diverse workforce. and all employees enjoy equal
Slide 21: Investment in Alate - Using Technology to Rethink Real Estate
Dream Office REIT 21 Investment in Alate - Using Technology to Rethink Real Estate Alate Partners Dream Office REIT, along with Dream Unlimited Corp., entered into a strategic partnership with Relay Ventures to create Alate Partners to invest in technology companies that are rethinking how real esta
Slide 22: Feel free to contact us should you have any questions
Feel free to contact us should you have any questions Michael J. Cooper Jay Jiang Chairman & CEO CFO (416) 365-5145 (416) 365-6638 mcooper@dream.ca jjiang@dream.ca
Slide 23: Appendix I: Management Team
Dream Office REIT 23 Appendix I: Management Team Michael J. Cooper Chairman & CEO Service: 26 Years Industry Experience: 34 Years Jay Jiang CFO Service: 8 Years Industry Experience: 15 Years Gordon Wadley COO Service: 11 Years Industry Experience: 17 Years
Slide 24: Appendix II: Diverse and Independent Board
Dream Office REIT 24 Appendix II: Diverse and Independent Board Amar Bhalla Donald Charter Michael J. Cooper Jane Gavan Independent Independent The Hon. Dr. Kellie Leitch Karine MacIndoe Qi Tang Independent Independent Independent
Slide 25: Appendix III: Dream Office REIT History
Dream Office REIT 25 Appendix III: Dream Office REIT History 24% IRR** delivered to unitholders since our creation in 2003. We grew Dream Office REIT quickly and in 2007, we saw an opportunity to crystalize a premium value, selling two-thirds of our business and returning more than 100% of our unith
Slide 26: Appendix IV: Canada Immigration Targets
Dream Office REIT 26 Appendix IV: Canada Immigration Targets 600,000 Forecasted 500,000 CAGR 400,000 5.5% 300,000 200,000 100,000 - 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023E 2024E 2025E Canada is targeting 1.45 million immigrants between 2023 and 2025. Toronto was the most po
Slide 27: Appendix V: DT Toronto Vacancy Rate and Net Absorption
Dream Office REIT 27 Appendix V: DT Toronto Vacancy Rate and Net Absorption 16% 4,000,000 Vacancy Rate Absorption 14% 13.6% 3,000,000 12% 2,000,000 10% 9.7% 1,000,000 Absorption (sf) Vacancy (%) 8% 7.3% 0 7.2% 6.9% 6.1% 5.9% 6% -1,000,000 5.2% 5.0% 5.1% 4% 3.7% 3.7% -2,000,000 2.7% 2.2% 2% -3,000,00
Slide 28: Appendix VI: DT Toronto Class A Vacancy & Rent Growth
Dream Office REIT 28 Appendix VI: DT Toronto Class A Vacancy & Rent Growth 14% $40 12% $35 10% 8% Rents ($ PSF) Vacancy (%) $30 6% 4% $25 2% 0% $20 Q4 09 Q4 10 Q4 11 Q4 12 Q4 13 Q4 14 Q4 15 Q4 16 Q4 17 Q4 18 Q4 19 Q4 20 Q4 21 Q4 22 Downtown Office (Vacancy – Class A) Downtown Office (Avg. Class A Ne
Slide 29: Disclaimer
Dream Office REIT 29 Disclaimer Forward looking information This investor presentation may contain forward-looking information within the meaning of applicable securities legislation, including but not limited to statements regarding our objectives and strategies to achieve those objectives; the qua
Dream Office REIT — Investor Presentation (February 2023) on 6ix