Dream Office Real Estate Investment Trust T.D.UN

Sell Toronto Assets like SL Green in New York

[Reece1986b]

If DAM/Cooper and Artis all want out, put some Toronto assets up for sale. Look what SL Green has achieved. They are up 30% since Friday. What might a $400 million sale of Adelaide Place ($600/foot) do for the Dream Office unit price?

Cooper has previously said that 655 Bay and 438 University were not commodity buildings and that he felt they could maybe sell for a higher price. The Dream Office full NAV assumes a value of ~$600/foot for Toronto properties as an average. We are trading in public markets for around 36% of the suggested NAV of $35.85 following the fully subscribed SIB. A 64% discount to NAV.

Between Adelaide Place, 655 Bay and 438 University is 1.3 million square feet of downtown Toronto real estate. At $600/foot, that would be $780 million.

[Frankie10]

Discount on equity does not equal discount on assets. There is a leverage effect. Discount on IFRS asset valuations is 35% - implied cap rate of 8.4% (updated numbers as of today D@13, DIR@13.13). 

[Reece1986b]

Yes, you are absolutely right Frankie. But right now every single asset owned by Dream Office is being discounted as you have said even though a few of the better assets like 655 Bay Street may very well be able to be sold for near their full IFRS value to the right buyer. Kind of like how Artis is realizing approximately the full value of their retail/industrial properties which is not reflected