Dream Hard Asset Alternatives Trust · 2015-03-04 · 2 For the periods ended December 31, 2014 Three months ended Six months ended (1) Results of operations Total income $ 14,163

Dream Hard Asset Alternatives TrustQ4 Results (February 23, 2015)

2

For the periods ended December 31, 2014 Three months ended Six months ended (1)

Results of operations

Total income $ 14,163 $ 36,146

Adjusted funds available for distribution (“AFAD”)(2)(3) 6,290 12,870

Annualized AFAD return on net assets(3)(4) 3.5% 3.6%

Trust Unit information

Distributions declared per Unit 0.10 0.19

AFAD per Unit (basic and fully diluted)(3) 0.09 0.18

As at December 31, 2014 (1) September 30, 2014 (1)

Financial position

Cash $ 80,157 $ 95,423

Net assets attributable to Unitholders of the Trust (5) 712,207 721,930

Total assets 997,260 1,002,871

Debt-to-gross book value(6) 25.15% 25.14%

Units outstanding – end of period 73,666,978 73,632,332

Market capitalization(7) 499,462 538,989

As at December 31, 2014 (1) September 30, 2014 (1)

Income properties $ 3.40 $ 3.34

Lending portfolio 2.91 2.94

Development and Investment holdings 2.29 2.37

Renewable power 0.27 0.15

Cash and other Trust consolidated working capital 0.88 1.10

Adjusted net asset value per Unit (8) $ 9.75 $ 9.90

See Endnotes at end of presentation.

• Successfully listed DAT on July 8, 2014 and have increased liquidity substantially for investors. Average daily trading volume of ~ 150,000 units. (As at February 23, 2015)

• Turned over 17% of the portfolio assets. (as at Feb 23, 2015).

• Increased portfolio allocation to renewable power, funded $19.5 million since inception with an additional $23.8 million committed as at December 31, 2014 with an expected average yield on equity of 12%.

• From inception to Feb 23, 2015 we have committed $77.3 million in mortgages at a weighted average interest rate of 8.2% and a weighted average term of 1.7 years.

• Increased the executed leases on the retail projects from 29.7% to 39.8% and the sales on residential developments from 59.0% to 66.5%.

• In place and committed occupancy of 91.2% in the co-owned properties with positive absorption of 34,695 square feet of vacant space during the quarter.

• Comparable properties NOI and AFAD increased by 2.5% and 7.3% respectively.

• Institutional support from at least five separate institutions.

• Ongoing dialogue with potential analysts regarding initiating coverage for DAT.

• Identifying many new and interesting investment opportunities through our Dream relationships with institutions, investment banks and partners.

3

• Since listing on July 8th DAT has traded over 23 million units or almost 32% of the portfolio.*

• New investors include retail and institutional investors; as well as one institution that currently holds ~5%** of the units.

• Michael Cooper and Dream Unlimited have purchased an aggregate of 871,000 units since inception.

• Additional insiders have purchased 56,200 units*

4

*As at February 23, 2015. **Per management’s estimate as at February 23, 2015.

ROI Funds - 6 Mths Prior to

Announcement

DAT - Since Inception

0

50

100

150

200

30

150

Relative Average Trading Volume Between Aggregate of 3 ROI Funds & DAT

Original Units

68%

Units Turned

Over

32%

Unitholder Turnover Since Listing On July 8

Continuing to manage the original investments while rebalancing and growing the portfolio to generate consistent and higher returns.

17%* of original portfolio has been reinvested since inception (as at Feb 23, 2015).

Over $43 million committed* to new investments at Dec. 31, 2014 of which $23.8 million* is in renewable power at an estimated average yield on equity of 12%*.

Increasing the overall quality of the assets in the portfolio.

5

IncomeProperties

33%

RenewablePower33%

33%

*Information is as at December 31, 2014, per Q4 Financial Statements.

New

Investments

17%

Initial portfolio

investments

83%

Investment Turnover

Current Portfolio Adjusted Net Asset Value ~ $712.2 Million*

Income Producing properties: 19 properties co-owned with Dream Office REIT, Canada’s largest

office REIT.

Lending Portfolio: mortgage/loan investments in hotel, land, multi-residential, condominium, retail, retirement home and commercial assets with fixed

interest rates.

Development & Investment Holdings: participating mortgage and co-ownership investments in

residential, mixed-use and retail development projects and the Bayfield LP Investments,

Renewable Power Commitments: operational solar power portfolio and a wind power portfolio that is

under development.

6

Real Estate Development

25%

Income Producing Properties

40%

Real Estate Loans 35%

Cash & Other

$64.1 million

9%

Lending Portfolio

$213.5 million

30%

Income Properties

$246.1 million

35%

Development &

Investment

Holdings

(Development &

Completed)

$152.1 million

21%

Development & Investment Holdings

(Income Producing)

$15.2 million

2%

Renewable Power

$19.9 million

3%

*Net of Non-Controlling interests as at December 31, 2014 per Q4 Financial Statements.

$-

$1.00

$2.00

$3.00

$4.00

$5.00

$6.00

$7.00

$8.00

$9.00

$10.00

Income

Properties

Lending

Portfolio

Development

& Investment

Holdings

Renewable

Power

Cash and

other

NAV Per Unit

$3.40 $2.91

$2.29

$0.27 $0.88

$9.75

Adjusted Net Asset Value* Per Segment

7

Current trading price is at a ~36% discount to adjusted net asset value*.

$-

$2.00

$4.00

$6.00

$8.00

$10.00

NAVPU

Current Trading Price

$9.75

$6.20

Adjusted NAV vs Current Trading

Price**

36% discount

*Based on net asset value as of December 31, 2014 as disclosed in fourth quarter Financial Statements. ** Based on net asset value as at December 31, 2014 and TSX closing price as of January 30 2015.

As per page 57 of the Q4 Financial Statements, the Income Properties, Development and Investment Holdings, and Cash and Other Trust Consolidated Working Capital are measured at fair value and the Lending Portfolio and Renewable Power segments are measured at amortized cost. Please see Glossary of Terms at end of presentation for definitions of terms used throughout this presentation.

Sussex CentreMississauga, ON

55 Norfolk St. SouthSimcoe, ON

Valhalla CentreToronto, ON

80 Whitehall Drive Markham, ON

2010 Winston Park Dr.Oakville, ON

219 Laurier Ave. WestOttawa, ON

West Metro CentreToronto, ON

49 Ontario StreetToronto, ON

460 Two Nations Fredericton Inc. LP

Fredericton, NB

10 Lower SpadinaToronto, ON

Commerce WestToronto, ON

Gateway Business CtreVictoria, BC

London City CentreLondon, ON

2810 Matheson Blvd.Mississauga, ON

Wedgewood PlazaHalifax, NS

Lansdowne Village Kamloops, BC

Tillsonburg Gateway, Tillsonburg, ON

6501 Mississauga Rd.Mississauga, ON

6531 Mississauga Rd.Mississauga, ON

8

9

IncomeProperties

33%

33%

Portfolio Net Assets $246 Million

Gross Assets $499.3 Million

GLA (owned share) 2.1 million square feet

In Place & Committed Occupancy 91.2%

Positive Absorption 34,695 sq. ft.

Weighted Average Remaining Lease Term 4.9 YEARS

Average Tenant Size 12,536

In Place Rents $14.49 PSF

Estimated Market Rents $15.39 PSF

Cap Rate Range 6.25% - 7.75%

Comparable Properties NOI Growth (quarter-over-quarter) 2.5%

Financing Leverage Ratio 50.24%

Weighted Average Effective Interest Rate / Face Rate 3.31% / 4.05%

Weighted Average Remaining Term to Maturity of Debt (period end) 2.2 YRS

Operating Net Operating Income $7.79 Million

AFAD* (Adjusted Funds Available for Distribution) $4.6 Million

Annualized AFAD* Return on Net Income Properties Assets 7.5%

Net Asset Value Per Unit $3.40

19 Commercial properties co-owned with Dream Office REIT, Canada’s largest office REIT

Adjusted Net Asset Value per unit $3.40

*Information is for the three months ended Dec. 31, 2014 per Q4 Financial Statements. Please see Glossary of Terms at end of presentation for definitions of terms used throughout this presentation.

10

IncomeProperties

33%

RenewablePower33%

33%

Property Address CityOwned Share

Total GLA (in sq ft)

Owned GLA (in sq. ft.)

YearBuilt

Year Reno

Average Tenant Size (in sf. Ft.)

GTA & Southwestern OntarioLondon City Centre 380 Wellington St / 275 Dundas London 60.00% 540,933 324,560 1974 24,444Valhalla Executive Centre 300, 302 & 304 The East Mall Toronto 50.10% 326,389 163,521 1973 11,34050 Sussex Centre 50 Burnhamthorpe Road West Mississauga 50.10% 350,977 175,850 1987 9,16890 Sussex Centre 90 Burnhamthorpe Road West Mississauga 50.10% 304,750 152,679 1989 13,690West Metro Corporate Centre 185 The West Mall Toronto 50.10% 297,292 148,944 1989 2006 12,272West Metro Corporate Centre 191 The West Mall Toronto 50.10% 158,260 79,288 1985 18,467West Metro Corporate Centre 195 The West Mall Toronto 50.10% 160,812 80,567 1984 160,812Commerce West 401/ 405 The West Mall Toronto 60.00% 411,842 247,106 1985 2007 17,9062810 Matheson Mississauga 50.10% 140,123 70,201 1989 14,31280 Whitehall Markham 60.00% 60,805 36,483 1990 30,4036501-6523 Mississauga Road Mississauga 60.00% 84,725 50,835 1982 3,1726531-6559 Mississauga Road Mississauga 60.00% 71,192 42,715 1978 2,8662010 Winston Park Drive Oakville 60.00% 79,137 47,482 1990 6,62110 Lower Spadina Toronto 60.00% 60,255 36,153 1988 9,90149 Ontario Toronto 60.00% 87,105 52,263 1972 43,553Tillsonburg Gateway 680 Broadway Tillsonburg 50.10% 47,016 23,555 2003 11,75455 Norfolk Street South Simcoe 60.00% 12,887 7,732 1987 2000 12,887Western CanadaGateway Business Centr 2261 Keating Cross Road Victoria 60.00% 181,693 109,016 1999 21,542Lansdowne Village 350 - 450 Lansdowne Village Kamloops 60.00% 190,773 114,464 1970 2008 5,450Eastern Canada219 Laurier Ave West Ottawa 60.00% 187,783 112,670 1965 37,557460 Two Nations Crossing Fredericton 60.00% 50,945 30,567 2008 50,945

Wedgewood Plaza 117 Kearney Lake Road Halifax 65.00% 36,353 23,629 1994 2,555Overall portfolio 91.2% 3,842,047 2,130,280 12,536

Information is for the three months ended Dec. 31, 2014 per Q4 Financial Statements.

11The table sets out the maturity balances on the mortgages payable to be repaid each year as at December 31, 2014 per Q4 Financial Statements.

Weighted Average

Effective Interest Rate 3.49% 3.43% 3.13% 3.16% 4.13%

(On Balance Outstanding)

$77 $44 $72 $53 $6

31%

17%

29%

21%

2%

0%

5%

10%

15%

20%

25%

30%

35%

$0

$10

$20

$30

$40

$50

$60

$70

$80

$90

2015 2016 2017 2018 2019 and thereafter

Mil

lio

ns

Amount Payable Percentage of Portfolio

Conservative balance sheet for our portfolio with a staggered maturity profile and non-recourse to DAT

Mortgages Payable

144285 330

221 96

864

7%15%

17%11%

5%

45%

0%

10%

20%

30%

40%

50%

-

200

400

600

800

1,000

2015

$14.23

2016

$16.45

2017

$15.07

2018

$13.88

2019

$15.14

2020 and

thereafter

$16.56

Year of lease expiry Pe

rce

nta

ge

of

in-p

lac

e a

nd

co

mm

itte

d o

cc

up

an

cy

GLA

(in

th

ou

sa

nd

s o

f s

q.

ft.)

GLA (in thousands of sq. ft.) Percentage of total in-place and committed occupancy

Average expiring in-place rent per

12

Increased in-place occupancy rate to 90.1%, up 150 bps from

the third quarter of 2014.

In-place and committed occupancy was 91.2%, which compares favourably with

the office market industry average of 86.6%* applicable

to the Trust’s portfolio.

Our rental rates remain below market which allow us to capture gains with new

leasing.

This chart summarizes contracted lease expiries in thousands of square feet and as a percentage in price and committed occupancy as at Dec 31, 2014 per Q4 financial statements. *The calculation of the market specific industry average occupancy rate applicable to the Trust’s portfolio was calculated using CBRE’s Canadian Market Statistics Fourth Quarter 2014 report. Please refer to page 9 of our MD&A for the detailed calculation.

Information is as at December 31, 2014, per Q4 Financial Statements.

Tenant

Number of

Buildings GLA

% of total

GLA

% of total

Gross Revenue

Remaining

Lease Term

Credit

Rating

TD Canada Trust 2 256,609 12.0% 9.9% 7.7 AA-

SNC-Lavalin Inc. 4 180,885 8.5% 9.9% 5.9 BBB

Government of Canada 1 109,592 5.1% 5.8% 1.4 AAA

Technicolor Creative Services 1 50,262 2.4% 3.0% 3.0 B+

Government of British

Columbia2 65,628 3.1% 3.0% 1.7 AAA

Trader Corporation 1 48,318 2.3% 2.8% 2.4 N/A

Parmalat Canada Inc. 1 45,941 2.2% 2.7% 8.7 BBB+

Edward D. Jones & Co. 1 39,256 1.8% 2.7% 5.0 N/A

Livingston International Inc. 1 37,646 1.8% 2.3% 2.1 N/A

Community Door Network

Service2 30,828 1.4% 1.4% 6.8 N/A

Total 864,965 40.6% 43.5% 5.1

• Tenant base includes municipal, provincial and federal governments as well as a wide range of high quality large international corporations (279 diversified tenants)

13

14

et Asset Value Per

Unit $0.88

$3.0

$3.2

$3.4

$3.6

$3.8

$4.0

$4.2

$4.4

$4.6

Third Quarter Fourth Quarter

$4.28

Million

$4.59

Million

AF

AD

In

Mill

ion

s

Income Properties AFAD - Quarter-over-Quarter

Comparable properties NOI and AFAD increased by 2.5% and 7.3%, respectively, largely due to an increase in the weighted average in-place occupancy and higher rental rates on lease renewals.

$3.0

$4.0

$5.0

$6.0

$7.0

$8.0

$9.0

Third Quarter Fourth Quarter

$7.56 $7.79

NO

I In

Mill

ion

s

Comparative Properties NOI Growth

Quarter-Over-Quarter

2.5 % increase


Icon Waterloo, ON

Hilldale RetirementGardens, Thunder Bay, ON

Isabella Developments Inc, Thunder Bay, ON

MMS Enterprises (Empire)Oakville, Ontario

Fairmont Tremblant Resort, Mt Tremblant, QC

Empire Communities Wyndance, Uxbridge, ON

15

InGastownVancouver, BC

St Clair Avenue WestToronto, ON

16

Net Assets $213.5 Million

Portfolio Mortgage / Real Property Loans (includes seven mortgages on development properties for a total of $58 million)

28

Corporate Loans / Other 2

Weighted Average Term To Maturity 0.9 YEARS

Weighted Average Face Rate 7.80%

Weighted Average Effective Interest Rate 8.38%

Average Loan Size (excluding portfolio based mortgage) $6 Million

Security Allocation 81% FIRST MORTGAGES

Operating Results AFAD* (Adjusted Funds Available for Distribution) $4.2 Million

Annualized AFAD* Return on Lending Portfolio 7.93%



To date, approximately one-half of the original portfolio has been repaid, including loans which were previously considered to be of higher risk. The proceeds from these repayments have been redeployed into attractive lending opportunities that provide for more favourable risk-adjusted returns.


17

Weighted average effective interest rate of 8.38%

Weighted Average Term To Maturity: less than 1 year

First mortgages: 81%

27.2%

10.1% 9.6%8.2%

4.7% 3.6%

36.6%

27.2%

10.1% 9.6%8.2%

4.7% 3.6%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

Hospitality Land Corporate Loan /

Other

Retirement Home Industrial

(Self-Storage)

Multi-Residential Retail

Sector Allocation of Lending Portfolio


18

7.70%

8.02%

8.38%

7.20%

7.40%

7.60%

7.80%

8.00%

8.20%

8.40%

8.60%

Interest Rate at

Inception

30-Sep 31-Dec

Mortgage Portfolio Interest Rates

$13.0

$41.8

$54.8

6%

19%

25%

0%

5%

10%

15%

20%

25%

30%

$0

$10

$20

$30

$40

$50

$60

Funded First Quarter Funded Second

Quarter

Total ReinvestedM

illi

on

s

Mortgage Portfolio Turnover

We have received repayment for 49% of the original loan portfolio (at Feb 23, 2015)

Information is as at Dec. 31, 2014 per Q4 Financial Statements.

19

Over 60% of the lending portfolio matures by the end of 2015 which we expect will provide us with the opportunity to reinvest the proceeds at higher returns.

Since July 8, we have already increased the weighted average effective interest rate in the lending portfolio from 7.72% to 8.38%.

Many of the loans which had been considered higher risk have been repaid.

Weighted Average

Effective Interest Rate7.5% 8.7% 7.6%

0%

10%

20%

30%

40%

50%

60%

70%

$-

$20.0

$40.0

$60.0

$80.0

$100.0

$120.0

$140.0

2015 2016 2017

Maturity Summary of Lending Portfolio


Villarboit, 221 Henry StreetBrantford, ON

Empire CommunitiesEau Du SoleilToronto, ON

Villarboit, VillamarkMarkham, ON

Villarboit890 McKeown Rd

North Bay, ON

Villarboit, Brookdale Square

Cornwall, ON

Villarboit, Laurentian Square

Pembroke, ON

Villarboit, McLeod CentreNiagara Falls, ON

Villarboit, 2125 16th Street East

Owen Sound, ON

Empire CommunitiesBrampton, ON

20

Bayfield Mill Woods LP Edmonton, AB

Bayfield Retail 2009 LPKingston, ON; Winnipeg, MB

Castlepoint

Toronto, ON

21

Property InvestmentValue

Percentage Presold/Preleased

Current Occupancy

Expected ClosingDate Range

Villarboit Retail - Assets under Development $75.6 Million 30.6%* NA Q3 2015 – Q2 2017

Villarboit Retail – Completed Developments $4.7 Million NA 91.5%* Q2 2015 – Q4 2016

Empire Brampton (Lakeview) $22.3 Million 50.0% NA Q3 2017 – Q3 2018

Empire Lakeshore (Eau Du Soleil) $41.5 Million 75.5% NA Q1 2019 – Q2 2020

Castlepoint $9.4 Million NA NA NA

Bayfield LP’s (Income Producing) $15.2 Million NA 90.4% NA

Operating Results

Development Assets AFAD** $1.2 Million

Income Producing Assets AFAD** $170,000

Annualized AFAD* Return on Investment Holdings 3.18%


The Villarboit investments consist of 6 non recourse participating loan investments with initial terms of 10 years and one co-ownership interest. DAT’s interest in the participating mortgages ranges from 65% - 89%.

The Empire developments are participating mortgages in a high rise condominium development and a detached/semi-detached townhouse condominium.

Adjusted Net Asset Value Per Unit $2.29

*Total Current plus committed occupancy for the Villarboit retail development assets was 39.8%. As at December 31, 2014, the completed developments comprised 180,500 sq.ft. and had a leased and occupied rate of 91.5%, which includes leasable area where tenants have occupied the space but are not yet paying rent. The dates presented represent the timing of when all tenants become rent-paying within their respective development project Information is for the three months ended Dec. 31, 2014 per Q4 Financial Statements. Please see Glossary of Terms at end of presentation for definitions of terms used throughout this presentation.

22

et Asset Value Per

Unit $0.88

29.7%

35.6%40.3%

59.0% 60.8%

66.5%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

Inception Third Quarter Fourth Quarter Inception Third Quarter Fourth Quarter

Pe

rce

nta

ge

Le

ase

d o

r P

re-S

old

Empire Communities Multi Residential

Development Properties Leasing and Sales Progression

Villarboit Retail Developments


23

Net Assets $19.9 Million

Total Assets $31.8 Million

Portfolio Amount Committed to fund new projects (as at Dec. 31, 2014) $23.8 Million

Projected yield on new commitments 12%

Megawatt Capacity on Projects Under Development 16.4

Megawatt Capacity on Operational Projects at Period End 0.7

Operating Results



As both a landlord and a solar power investor DAT is well positioned in the Ontario rooftop solar space to

develop new partnerships as well as develop solar projects on existing commercial properties.

Information is for the three months ended Dec. 31, 2014 per Q4 Financial Statements. Please see Glossary of Terms at end of presentation for definitions of terms used throughout this presentation.

• $45.1 million of invested and committed equity in solar and wind power projects with a projected yield on equity of 12%.

• Ontario solar projects have a Feed In Tariff (FIT) contract (allows for sale of solar to Ontario Power Authority for a fixed price and a fixed term of 20 years) and are currently operational, (Megawatt (MW) capacity of 0.7 at period end)

• Nova Scotia wind projects have a community feed in tariff (ComFIT) for sale of electricity to NS Power Inc. at a fixed price for 20 years and are currently in development estimated to be operational by August 2015. (MW capacity of 16.4)

• 3 of these projects have community or aboriginal partners and will benefit from participation development and a share in project cash flows.

24

Renewable power investments have typically provided predictable returns at levels that are higher than from income properties.

Information as at December 31, 2014 per Q4 Financial Statements.

25

et Asset Value Per

Unit $0.88

* Includes fourth quarter renewable power gross asset purchases plus 2015 unfunded renewable power gross asset purchase commitments as at Feb 23, 2015 per Q4 Financial Statements.

$0

$14.4

$31.8

$73.0*

-$10

$0

$10

$20

$30

$40

$50

$60

$70

$80

Inception Third Quarter Fourth Quarter 23-Feb-15

In M

illio

ns

Allocation to Renewable Power (Gross Asset Value)

We continue to increase our allocation to renewable power

as it provides a stable and attractive risk adjusted return.

We remain optimistic that we will be able to source and

execute new renewable power investments which provide

contractual, long term, high returns.

All committed projects are expected to reach commercial

operation within 2015, and generate an average yield on

equity of approximately 12%.

26

Dream Alternatives Trust (DAT) provides investors the opportunity to gain exposure to hard asset alternative investments, including real estate, real estate loans and infrastructure including renewable power which are generally less correlated to the public markets and have not traditionally been available to retail investors.

DAT is managed by Dream, an experienced asset manager with an extensive platform with in house expertise in real estate, development and renewable energy infrastructure.

Tax efficient distribution with an implied yield of 6.5%* (estimated to be ~ 75% return of capital in 2014).

DAT is structured so that it has tremendous flexibility in that it does not need to comply with non-SIFT legislation or the MIC rules allowing it to take advantage of unique opportunities with limited competition that most MICs and alternative managers aren’t able to access. This allows DAT to be opportunistic and react quickly and pursue higher risk adjusted returns.

Low leverage and conservative balance sheet 25% Debt to Gross Book Value.

Potential for increased returns and capital appreciation through Dream’s active management as the portfolio is rebalanced.

*Implied yield is based on fixed distribution of $.40 per unit and TSX closing price as of February 20, 2015. Unlike fixed income securities, there is no obligation on the Trust to distribute to unitholders any fixed amount, and reductions in, or suspensions of, cash distributions may occur that would reduce the yield based on market price

27

28

Dan MarinovicSVP Land & Housing

Jason LesterSVP Urban Development

Victor SettinoVP, Commercial Development

Michael KosiancicVP, Firelight Infrastructure

Partners

Adam ReedsDirector, Renewable Power

Investments

Joshua KaufmanVP, Retail & Commercial

Development

Kevin HardySVP, Portfolio Management

Andrew ReialSVP, Portfolio Management

Paul SkeansSVP, Portfolio Management

Real Estate Opportunities

Jane Gavan President, Asset Management;

CEO Dream Office; CEO Dream Global

Ayesha ShafiqDirector, Real Estate

Investments

Kim LefeverSenior Manager, Investor Relations

Michael CooperCEO Dream, Portfolio Manager DAT

Joshua KaufmanVP, Retail & Commercial

Development

Adam ReedsDirector, Renewable Power

Investments

Michael KosiancicVP, Firelight Infrastructure

Partners

Lindsay BrandInvestments

Renewable Power and

Development Opportunities

Portfolio Management

Real Estate Asset Management

Finance

Real Estate Asset

Management

Renewable Power and

Development Opportunities

Real Estate Opportunities

Pauline Alimchandani CFO Dream

CFO Dream Alternatives Trust

Brian RoweController, DAT

Jay JiangVP Finance, DAT

Pauline AlimchandaniCPA, CA, CFA

James Eaton

Jane Gavan

• CFO –Dream Unlimited Corp

• Vice President, Research Analyst, Real Estate & REITs - BMO Capital Markets

• Assurance, Consulting & Deals - PricewaterhouseCoopers LLP

• President - Weatons Holdings Ltd.

• Board/Trustee Member - J.C. Clark Ltd., Defyrus Inc. True Patriot Love Foundation, Canadian Art Foundation, John David and Signy Eaton Foundation

Joanne FerstmanCPA, CA

• Board Member – Dream Unlimited Corp., Dream Office REIT, Excellon Resources Inc., Aimia Inc., Osisko Mining Corporation

• President & CEO – Dundee Capital Markets Inc.

• Vice-Chair, Head of Capital Markets – Dundee Wealth Inc.

• President, Asset Management – Dream Unlimited Corp.

• CEO – Dream Office REIT, Dream Global REIT

• Board Member – Dream Unlimited Corp., Dream Office REIT, Dream Industrial REIT

David Kaufman CAIA, Chair of the Board of Trustees

• Founder, President & CEO – Westcourt Capital Corporation

• Host/Writer/Contributor – BNN “Alternative Investing”, Financial Post “Alternative Investor”, CBC “Lang & O’Leary Exchange”

• Real Estate/Private Equity – Magna Golf Club, Menkes Developments, Lynx Equity

Andrew Lapham• Executive Advisor – The Blackstone Group, Canada

• Private Equity/Hedge Fund - Onex Partners, Odyssey Partners, John A. Levin & Co.

Michael Cooper• President & CEO –Dream Unlimited Corp.

• Board Member – Dream Unlimited Corp., Dream Office REIT, Dream Global REIT, Dream Industrial REIT, Atrium Mortgage Investment Corporation

29

30

Description Two Class A office towers Two Class A, LEED Gold, office buildings

Three building Class A office complex

Two Class A office towers with excellent exposure along arterial highways.

Three office buildings, (one 9 storey and two 6 storey)

5 storey suburban office building with high visibility from the QEW.

7 storey, Class A office Building, with ground floor retail space

Total (Owned GLA)(square feet)

324,560 175,850 and 152,679 148,944, 79,288 and80,567

247,106 163,521 47,482 36,153

Location Centrally located in the heart of downtown London, Ontario

Mississauga, Ontario Mississauga, Ontario Located in a high visibility area on the Highway 427 corridor of the GTA.

Mississauga, Ontario along Highway 427

Mississauga, Ontario Located near Highway 427, 401, Gardiner and QEW

Oakville, Ontario Toronto, Ontario South core with direct views of Lake Ontario

31

London City Centre Sussex Centre West Metro Corporate Centre

Commerce West Valhalla Executive Centre

2010 Winston Park Drive

10 Lower Spadina

Description 8 storey office building within the AirportCorporate Centre

Contemporary office building in East node of downtown Toronto, near public transit and amenities

10 building shopping centre with an array of national and local retailers and professional and medical offices

2 storey Class B office building in Victoriaslargest business park,.

Sobey’s anchored shopping centre, comprised of a single storey retail centre, a 10 pump gasoline station and a two tenant strip plaza.

14 storey Class B office building located steps from Parliament Hill.

Newly constructed three storey office building with easy access to the major arterial road.

Total (Owned) GLA

70,201 52,263 114,464 109,016 23,555 112,670 30,567

Location Mississauga, Ontario near Pearson International Airport and major arteries

East End Downtown Toronto, Ontario

Downtown Kamloops, BC Victoria BC, short drive from downtown Victoria and Victoria international airport.

Tillsonburg, Ontario Downtown Ottawa, Ontario

Fredericton, NB

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2810 Matheson Blvd 49 Ontario Street Lansdowne Village Gateway Business Centre

Tillsonburg Gateway 219 Laurier Ave West

460 Two Nations Crossing

Description 2 storey Class B building which serves as one of the main Royal bank branches in Simcoe Ontario

Suburban retail plaza with excellent frontage on a high traffic street providing great visibility.

2 storey Class A office building in the heart of Markham, close to Buttonville Airport and Highway 407 & 404

Several single storey office buildings located in Meadowvale,bungalow style buildings and an excess of green space

Several single storey office buildings located in Meadowvale, bungalow style buildings and an excess of green space

Total(Owned) GLA (square feet)

7,732 23,629 36,483 50,835 42,715

Location Simcoe, Ontario Halifax, Nova Scotia Markham, Ontario Mississauga, Ontario Mississauga, Ontario

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55 Norfolk St S. Wedgewood Plaza 80 Whitehall 6501-6523 Mississauga Road

6531 – 6559 Mississauga Road

Description 440,000 square feet of GLA, 32 acre site.

Five acre, 65,000 square foot retail development.

Mixed use site, 11 acre retail, 4.5 acre residential 2 phase 94,000 sq ft of GLA.

2 phase development 116,000 square feet of GLA, 12 acre site.

2 phase development, 160,000 square feet of GLA, 14 acre site.

Mixed Use site, 30 acres 20 of which is retail (2 phases, phase 1-145,000 sq. ft. of GLA, phase 2-75,000 GLA).

133,000 square feet of GLA, 11.5 acres.

Location Corner of Highway 48 and Major Mackenzie Drive East, Markham, Ontario.

Immediately south of the city of Pembroke, Ontario.

7959 Mcleod Road, Niagara Falls, Ontario

Intersection of two major roads in Cornwall,Ontario directly across from a Home Depot.

West side of Brantford, Ontario on the corner of a major arterial road.

16th Street East, Owen Sound, Ontario in the largest retail node in the East quadrant of city.

North Bay, Ontario on the main north south highway adjacent to a Canadian Tire.

Stage Zoning is ongoing. Major tenants: Winners, SportChek and Michaels

100% leased.

Income Producing

First phase is partially leased with construction in progress.

Fully zoned, first phase fully occupied with SportChek, Michaels, Winners and PetSmart.

2nd phase of development is substantially completed.

Fully zoned, first phase fully occupied with Michaels, PetSmart and Bed Bath and Beyond.

2nd phase is in lease up with construction expected to begin upon substantially leasing up the balance.

Retail is substantially zoned. Phase 1 is partially occupied with Michaels, Winners and Value Village.

Leasing for the balance continues with construction to start once finalized.

Fully zoned and will be anchored by fivenational mid box retailers. Leasing is substantially complete and construction has started with an expected completion date of summer 2015.

Total GLA Projected on Completion : 1.2 million square feet34

VillamarkMarkham, ON

Laurentian SquarePembroke, ON

Mcleod CentreNiagara Falls, ON

Brookdale SquareCornwall, ON

221 Henry StreetBrantford, ON

Heritage GroveOwen Sound, ON

890 Mckeown RoadNorth Bay, ON

Description Mixed use development, 165,000 square feet of GLA of residential space and 172,000 square feet of commercial space.

Eau Du Soleil: 1258 unit, two tower condominium development on prime waterfront at Lakeshore Blvd. West and Parklawn Road.

Lakeside: 96 acre site, 686 units, low-rise residential.

Location 158 Sterling Road in the Junction Triangle (south of Bloor St West and Dundas St West).

Lakeshore Blvd. West and Parklawn Road. Located in north Brampton close to Highway 410.

Stage Substantially rezoned. Construction to commence early 2015 with projected completion in 2020.

75.5% presold. (Dec. 31, 2014)

Construction started in October 2014 with first home closings expected in second quarter of 2015 and final closings projected for second quarter 2020.

50% presold (Dec 31, 2014)

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Castlepoint Empire (Eau du Soleil) Empire (Lakeside)

Total GLA Mill Woods Town Centre: 539,252

Office Building: 47,265

Frontenac Mall: 289,715.

Garden City Mall: 287,854

Description Retail mall located in the Mill Woods region. The LP is also the 100% owner of an office building in the same area.

Bayfield Retail (2009) LP is invested in Frontenac Mall in Kingston, Ontario and Garden City Mall in Winnipeg, Manitoba.

Location Mill Woods Region, Southeast of Edmonton, Alberta.

Frontenac Mall is a partially enclosed community centre inKingston, ON.

Garden City Mall is an enclosed mall located in Winnipeg, Manitoba.

Currently 90.4% Occupied.36

Bayfield Mill Woods LP Edmonton, AB

Bayfield Retail 2009 LPKingston, ON; Winnipeg, MB

The Bayfield LP Investments consist of an approximately 20% limited partnership interest in two separate L.P.’s with an investment value of approximately $15 million. The LP’s are currently 90.4% occupied.

Bayfield Retail (2009) L.P. owns a 70% co-ownership interest in two shopping centres.

Bayfield Mill Woods LP (together with Bayfield Retail (2009) LP, owns approximately 60% of a shopping centre and 100% of an office building. RioCan REIT owns the balance of these shopping centres


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Dream Hard AssetAlternatives Trust

Pauline AlimchandaniChief Financial [email protected]


Kimberly LefeverSenior Manager, Investor [email protected]


Michael Cooper

Portfolio Manager

416-365-5145

[email protected]

Contact Information:

Dream Hard Asset Alternatives Trust

Jay JiangVice President, [email protected]

Forward Looking Information

This presentation may contain forward-looking information within the meaning of applicable securities legislation. 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 general and local economic and business conditions, employment levels, mortgage and interest rates

and regulations, regulatory risks, environmental risks, consumer confidence, the financial condition of tenants and borrowers, local real estate

conditions, adverse weather conditions and variability in wind conditions and solar irradiation, reliance on key clients, partners and personnel, the

uncertainties of acquisitions and new projects, inflation and competition. All forward looking information in this presentation speaks as of February

23, 2015. The Trust does not undertake to update any such forward looking information whether as a result of new information, future events or

otherwise. Additional information about these assumptions and risks and uncertainties is disclosed in filings with securities regulators filed on

SEDAR (www.sedar.com). These filings are also available at the Trust’s website at www.dreamalternatives.ca.

Non-IFRS Measures

The Trust’s consolidated financial statements are prepared in accordance with International Financial Reporting Standards (“IFRS”). In this

presentation, as a complement to results provided in accordance with IFRS, the Trust discloses and discusses certain non-IFRS financial measures

including adjusted funds available for distribution (“AFAD”), annualized AFAD return on net assets, net assets attributable to unitholders of the Trust,

debt-to-gross book value, adjusted net asset value per unit, and average yield on equity, as well as other measures discussed elsewhere in this

release. These non-IFRS measure are not defined by IFRS, do not have a standardized meaning and may not be comparable with similar measures

presented by other issuers. The Trust has presented such non-IFRS measures as Management believes they are relevant measures of our underlying

operating performance and debt management. Non-IFRS measures should not be considered as alternatives to net income, total comprehensive

income or cash flows generated from operating activities or comparable metrics determined in accordance with IFRS as indicators of the Trust’s

performance, liquidity, cash flow and profitability. For a full description of these measures and where applicable a reconciliation to the most

directly comparable measure calculated in accordance with IFRS please refer to the “Non-IFRS Measures” in the Trust’s Management’s Discussion

and Analysis for the year ended December 31, 2014. 38

http://www.dreamalternatives.ca/

We have presented certain non-IFRS measures because we believe these non-IFRS measures represent our ability to earn and pay cash distributions to Unitholders and to evaluate the Trust’s

performance. These non-IFRS measures do not have standardized meanings prescribed by IFRS and should not be construed as alternatives to net income (loss) or cash flows from operating activities

determined in accordance with IFRS as indicators of the Trust’s performance and may not be comparable with similar measure presented by other income trusts. Investors are cautioned not to view

non-IFRS measures as alternatives to financial measures calculated in accordance with IFRS.

“Adjusted funds available for distribution (“AFAD”)” The Asset Manager believes AFAD is an important measure of our economic performance. This non-IFRS measurement is commonly used for

assessing real estate performance; however, it does not represent cash flow from operating activities, as defined by IFRS, and is not necessarily indicative of cash available to fund Dream Alternatives’

needs.

Our calculation of AFAD includes a deduction for an estimated amount of normalized initial direct leasing costs and lease incentives that we expect to incur based on our current portfolio and

expected average leasing activity. Our estimates of initial direct leasing costs and lease incentives are based on the average of our expected leasing activity multiplied by the average cost per square

foot that we incurred and committed to during the period, adjusted for properties that have been acquired or sold. Our calculation of AFAD includes interest income earned and accrued on the Empire

residential participating mortgage investments based on the stated interest rates in the agreements. The interest accrual represents a conservative measure of the expected future cash return from

the development projects and more appropriately reflects returns that are being earned over time to the completion dates. The amounts included in AFAD represent the interest only portion of the

return on these investments and do not include the Trust’s estimate of the participation profit that it expects to receive upon completion of a project pursuant to the participation agreements. No other

adjustments have been made with reference to the other development and investment holdings properties. AFAD also includes adjustments to remove the impact of one time or non-recurring expenses,

including Trust start-up costs incurred during the quarter.

In compliance with Canadian Securities Administrators Staff Notice 52-306 (Revised), “Non-GAAP Financial Measures”, AFAD has been reconciled to net income in this section under the heading

Reconciliation of FAD and AFAD for the Period Ended December 31, 2014 on page 23 and 24.

“Annualized AFAD return on net assets” is AFAD for the applicable period divided by total net assets attributable to Unitholders of the Trust at the end of the period calculated on an annualized basis

by prorating the AFAD for the period over 12 months (for example, the quarterly results are multiplied by four to derive the annualized AFAD). The measure is not adjusted to reflect the timing of when

the AFAD was earned or for fluctuations in balance of net assets attributable to Unitholders of the Trust over the period. This non-IFRS measurement is an important measurement used by the Trust in

evaluating the Trust’s operating performance.

“Adjusted net asset value (“Adjusted NAV”)” represents the net assets attributable to Unitholders of the Trust including adjustments to remove deferred income taxes payable or receivable, Deferred

Unit Incentive Plan payable, and the unamortized balance of the net lending portfolio discount and mortgages payable premiums that are included in net assets on the Trust’s consolidated

statements of financial position. The net lending portfolio discount and mortgages payable premiums represent the current unamortized balance of fair market value adjustments recorded for these

instruments at Closing. Since the Trust intends on holding the lending portfolio investments and mortgages payable to maturity, this historical fair value adjustment is removed for the calculation of

the adjusted net asset value. Adjusted NAV also includes fair value adjustments on renewable power projects, which are recognized at amortized cost on the financial statements. This non-IFRS

measurement is an important measurement used by the Trust in evaluating the Trust’s and Asset Manager’s performance. A reconciliation of net asset value per Unit can be found on page 21 of this

MD&A under the heading Reconciliation of Adjusted Net Asset Value as at December 31, 2014.39

“Adjusted Net asset value per Unit” represents the adjusted net asset value attributable to Unitholders of the Trust divided by the number of Units outstanding at the end of the period. This non-IFRS

measurement is an important measurement in evaluating the Trust’s and Asset Manager’s performance. A reconciliation of adjusted net asset value per Unit can be found on page 21 of this MD&A

under the heading Reconciliation of Adjusted Net Asset Value as at December 31, 2014.

“Effective interest rate” is a calculation of the interest rate using the contractual interest amounts received based on the value of the mortgage at the time it was acquired or originated, includingupfront fees received or paid as well as the impact of compounding. The effective interest rate reflects the impact of any discount, premiums or lender fees recorded on acquisition or originationrelated to the mortgages.

“Debt to gross book value” represents the contractual balance of debt payable divided by the gross asset value of the Trust as at the applicable reporting date. This non-IFRS measurements is animportant measure used in the management of the Trust’s debt levels.

“Weighted average face (or effective) interest rate” is the average face (or effective) rate of interest on a portfolio of mortgages payable or receivable, weighted by the size of the mortgages in thatportfolio.

“Face interest rate” is the contractual interest rate stated in the loan agreement and paid by the borrower.

“Net assets” refers to the net difference between total assets and total liabilities presented on the consolidated statements of financial position or balance sheet by segment in the MD&A.

“Net assets attributable to Unitholders of the Trust” refers to the net difference between total assets and total liabilities less the amount of assets and liabilities attributable to non-controllinginterests. This non-IFRS measurement is an important measurement in evaluating the Trust’s and Asset Manager’s performance. A reconciliation of net assets attributable to Unitholders of the Trustcan be found on page 21 of this MD&A under the heading Reconciliation of Adjusted Net Asset Value as at December 31, 2014.

“Net operating income (“NOI”)” is defined by the Trust as the total income property revenue less income property operating expenses, including the share of rental income from investment in jointventures and property management income, if any. This non-IFRS measurement is an important measurement used by the Trust in evaluating property operating performance. Since the Trust didnot have any investments in joint ventures, NOI is calculated as the difference between income properties revenue and income properties operating expenses as presented in the consolidatedstatements of comprehensive income.

“Stabilized NOI” for an individual property is defined by the Trust as investment property revenues less property operating expenses adjusted for items such as average lease-up costs, long-termvacancy rates, non-recoverable capital expenditures, management fees, straight-line rents and other non-recurring items. This non-IFRS measurement is an important measurement used by theTrust in determining the fair value of individual investment properties.

“Weighted average face (or effective) interest rate” is the average face (or effective) rate of interest on a portfolio of mortgages payable or receivable, weighted by the size of the mortgages in thatportfolio.

“Yield” refers to cash flow generated from renewable power operations, net of operating expenses and debt service costs, determined as a percentage of an equity investment in renewable powerassets. This non-IFRS measurements is an important measure used by the Trust in the management of the Trust’s debt levels.

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Documents

Dream Hard Asset Alternatives Trust · 2015-03-04 · 2 For the periods ended December 31, 2014 Three months ended Six months ended (1) Results of operations Total income $ 14,163