Dream Unlimited Corp.’s first half of 2024 was one of its most profitable periods in recent years, according to founder and chief responsible officer Michael Cooper.
Dream had consolidated net income of $73.73 million in the first six months of this year, which compares to a $39.65-million consolidated net loss during the same period in 2023.
Revenue rose to $131.19 million from $111.52 million and net operating income increased to $64.77 million from $46.14 million during the same periods.
“We’re producing a lot of money,” Cooper said during an Aug. 14 conference call to announce Dream’s second-quarter financial and operational results. “I think our business is growing. We have challenges in parts of our business, but the benefits of being a diversified company are really coming through.”
Dream has more than $25 billion in assets under management. This includes $18.9 billion through asset management in four public and four private funds, $3.6 billion in recurring income assets and $2.9 billion via ownership of almost 8,800 acres of land available for development in Saskatchewan and Alberta.
Dream had liquidity of $280.8 million as of quarter-end and it’s expected to increase in excess of $100 million when it closes on the sale of the 1,428-acre Arapahoe Basin ski and outdoor adventure resort near Denver to Alterra Mountain Company.
Stabilized properties generating good income
Dream’s portfolio of stabilized properties generated revenue and net operating income of $34.1 million and $13.9 million respectively in the second quarter ended June 30, up by $3.2 million and $2.1 million over the comparative period.
The increase is primarily attributable to the stabilization of three retail properties in Western Canada in late 2023, increased occupancy at Toronto’s Distillery District and improved yields and lower operating costs at Arapahoe Basin.
Dream continues to build out its residential rental pipeline, adding another 2,000 units to its projects at Toronto’s Canary Landing, Ottawa’s Dream LeBreton and Saskatoon’s Brighton neighbourhoods.
The residential rental portfolio includes more than 2,700 units and is 95 per cent occupied, excluding developments in initial lease-up.
“Trying to turn land into either condos or income properties in Toronto is increasingly challenging, and that’s an area that we have to continue to work on,” Cooper said.
The Canada Mortgage and Housing Corporation (CMHC) introduced its Frequent Builder program in July to accelerate the construction of affordable rental homes by expediting the application process for established housing providers. Dream is eligible for the program and will continue to pursue financing opportunities with CMHC for the development of new rental supply.
“While I hear everybody complain about every single thing the government does, we’ve never had more support from every level of government in areas that we need it the most to get these apartments and rental properties built,” Cooper said.
Western Canada land sales
There was a strong start to the year in Western Canada, which generated $66 million in revenue and $31 million in net margin for the second quarter. This was largely driven by the sale of two parcels of land in Edmonton.
Dream has a further $133.5 million and $51.7 million in land commitments for sales in the second half of 2024 and 2025 respectively.
“This is a significant level of pre-sale volume, reflecting some of the strongest performance in Western Canada in our history,” chief financial officer Meaghan Peloso said during the call.
“We’ve been hardly doing any spec development,” Cooper noted. “When the land’s ready, that’s driving when the sales are.”
Asset management business to grow
Dream’s asset management business continues to increase its profitability and the company is actively pursuing growth opportunities.
“We’re seeing that there’s foreign capital that finds Canada interesting, and we are trying to market Canada, Toronto and the West, and I suspect we’re going to find some investors who are interested in income properties in Canada,” Cooper said.
“I don’t see it as very likely that we’ll find foreign investors interested in development. I just think that’s more local and complicated.”
The asset management division generated revenue and net margin of $28.6 million and $20.5 million in the second quarter, up by $11.6 million and $12.3 million respectively from 2023.
Fee-earning assets under management have grown by $7.5 billion and assets under management are up 44 per cent since the end of 2022.