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

Taken from another Forum almost 40M NOI 2026

[InvestSmarter]

Taken from another Forum. From Feb 23 earnings transcript. 16 cents then is 64 cents now due to reverse split. Cooper calls 64 cent distribution based on almost 40M annual NOI expected more than adequate to sustain the 64 cent distribution. Supports my H2 2025 distribution reinstatement estimate. That's over 16% yield today, and probably 50% payout ratio. 40M NOI on a sub 100M market cap Residential REIT.

"Effective with the trust February 2023 distribution, we have revised our distribution from $0.40 per unit to $0.16 per unit on an annualized basis. We believe the revised distribution preserves additional liquidity for the trust development commitments and is better aligned with our strategy. In 2022, we generated roughly $15 million of NOI from our current recurring income assets. By 2026, with an additional $500 million of assets completed from development, we expect stabilized NOI to be over 2.5 times our current level, which will be more than adequate to sustain our revised distribution level."

[canadian]

If they start dividend sometime end of next year or 2026, their DRIP almost creates 800k+ shares each year diluting existing shareholders which is very bad. What do you think?

[InvestSmarter]

They will probably turn off drip, as the 11M in distribution cost is FULLY covered by almost 40M in NOI from recurring assets. Why would they drip?

[canadian]

Digging deeper, I looked into 2023 Financial report report and looked at recurring income  https://dream.ca/wp-content/uploads/2024/02/Dream-Impact-Trust-2023-Annual-Report_FINAL.pdf In thousands (recurruing income only): recurruing income: 17,735 operating expense: 9,707 interest expense: 9,307 profit = 17,735 - (9,707 + 9,307) = negative looks pretty bad to me until interest

[InvestSmarter]

That is due to development land loans. If you dig into MPCT, you will understand those land loans are being moved to sub 3% CMHC Mortgages, Brining current 8% yield loans down to 3%, plus 120M sale of 49 Ontario is coming which will wipe out almost half the corporate level debt (along with the other 40M in Q2/Q3 asset sales with no mortgages).

[canadian]

I hope you are right. But 2022 interest expense on recurruing income is 4 million + while 2023 is 9 million + and the recurring income did not change from 2022. if they had moved any of the recurruing income properties from 2022 to 2023 to CMHC loans, interest expense should have come down in 2023 but it doubled. What am I missing?

[InvestSmarter]

No hope needed. Its fact. Recurring income properties will start producing positive income starting this quater, Q3, 2024. All these properties were in development phase, and started coming online the past 10 months. They take 12-14 months to get leased up. Until they are leased up, they are a drag. So all these projects will turn positive income from being a loss. Its a complete 360 from negative