Dream Impact 5 50 Convertible Unsecured Subordinated Debentures T.MPCT.DB

75% of 49 Ontario St Sale

[InvestSmarter]

The Value of 49 Ontario NAV is about $130-$150 Million

 

It has an ~$80M Loan against the development

 

Using the middle 140M valuation, MPCT is selling 75% in a partnership, which is $105 Million cash. 25% will be kept by MPCT.

 

MPCT Has Debt of $280M, and Assets of $706M

 

After Sale:

New Debt will be $175M

New Assets will be $601M

29.1% = Debt to Asset Ratio at the corporate level.

 

NAV remains unchanged ~$23/unit

 

This will remove around 6.5M a year in interest costs, bringing annual recurring income priperty interest costs down from around 9.6M to 3.1M, saving around 6M annually (slightly less due to rental NOI from 49 Ontario). 

 

MPCT is undergoing heavy lease up at Maple House, Aalto II, and Common at Zibi, which will materially increase free cash flow in 2025.

 

Then, already under construction, Birch House (2024) and Cherry House (early 2026) will start leasing up.

 

MPCT is going to be a residential reit with one of the best public purpose built rental portfolios in Toronto and Ottawa, currently trading at 15% of NAV.

[mikoola72]

Really great clear summary and gives me hope for the future. Still some hurdles to overcome but given a slow recovery in real estate investment sediment over the next year or two and hopefully close the NAV unit price gap. Thanks again and GLTA.

[DJ441c]

i  agree  and  thanks for doing the math       already  have too many shares  down  about 70 percent on average         could  "double down"  and   take  a fairly big chunk of this at  today's  price , expecailly with interest rates dropping The  main thing holding me

[mikoola72]

Agree this is the main reason why I haven't averaged down just yet..would send a vote of confidence to the market and to existing and perspective buyers of the trust..they keep mentioning the NAV..time to put their money where their mouth is in my opinion. I'm watching closely to see insiders step up. GLTA.

[DJ441c]

i  certainly am not a  market technician    but  looks like possibly double bottom   3.30  in July and  now  3.40      if  goes above the prior peak of 4   perhaps that would be bullish   if anyone is technical expert would like your opinion thanks

[rodbhar]

Any idea why Dream Unlimited can't be the development partner for 49 Ontario?

[InvestSmarter]

DRM can be, but likely won't. As DRM owns 36% of MPCT, it'll end up owning 9% through its MPCT ownership. MPCT won't have a problem finding a partner for 49 Ontario. There is no concerns about that. With CMHC 10 year interest only loan likely locked in at about 3%, the development will be very profitable for everyone. There is a lot of developers wanting to get in on PBRs right now.