Dream Impact Trust ($MPCTUN)

It's 11:00, so we will now call the meeting to order. My name is Amar Bhalla, and I'm the Chair of the Board of Dream Impact Trust, and welcome to our Annual Meeting. I'll act as Chair of the meeting. Robert Hughes will act as Secretary of the meeting. With the consent of the meeting, I appoint Daniela Munoz and Mohammed Sayed of Computershare Trust Company of Canada as scrutineers of the meeting. We will first proceed with our formal business. To expedite the formal part of the meeting, Robert Hughes, a unitholder, will move and Shannon Macri, a unitholder, will second all motions. After our formal business has concluded, our management team will make a brief presentation, and then there will be an opportunity to ask questions. Please hold questions that do not relate to the formal business of the meeting until that time. We have an affidavit from Computershare as the mailing of the notice of availability of proxy materials and the form of proxy. Our circular and other meeting materials are made available through the notice and access system. I would ask the Secretary to place the affidavit before the meeting and to keep the affidavit with the trust records. The scrutineers have advised that there are at least 2 individuals present who are unitholders who represent by proxy unitholders who hold at least 10% of the votes attached to all outstanding units. As a result, we have a requisite quorum of unitholders present, and I declare the meeting to be properly constituted for the transaction of business. The first item of business is the presentation of the Trust 2025 annual report, which contains the Trust's audited financial statements for 2025 and the report of auditors thereon. I note that the secretary has placed the meeting -- placed before the meeting a copy of the 2025 annual report. The next item of business is the election of the trustees. As stated in our circular, 5 trustees are to be elected at the meeting and 5 nominees are named. They are Dr. Catherine Brownstein, Michael Cooper, Robert Goodall, Jennifer Lee Koss and myself. Rob, will you please propose the nominees for election?

I nominate the individuals listed in the management information circular dated April 16, 2026, for election as trustees of the trust to hold office for the upcoming term.

I second the motion.

Thank you. As the Trust did not previously receive timely notice of any further nominations for persons for election as Trustees in accordance with the advance notice regulations to its declaration of trust, I declare the nominations closed. Are there any questions on this motion? Seeing none, based on the proxies received, I would mention that each of the 5 nominees received a majority of votes cast in favor of their election as Trustee. After the meeting, we will issue a press release with the detailed voting results. Given the proxies received and as the number of persons nominated for election as a Trustee is equal to the number of trustees to be elected, I propose with the consent of the meeting not to take a formal vote on the election of trustees. Therefore, I confirm that the motion has been carried and the 5 persons who are nominated have been elected as trustees by acclamation. The next item of business is the appointment of auditors. The Audit Committee and the Board have recommended the reappointment of PricewaterhouseCoopers LLP, chartered professional accountants, as auditors. Can I have a motion?

I move that PricewaterhouseCoopers be appointed auditors of the trust and its subsidiaries for the ensuing year and the Board of Trustees be authorized to fix their remuneration.

I second the motion.

Are there any questions on this motion? The meeting will now vote on the motion. I propose to take the vote by show of hands. I would ask those registered unitholders and duly appointed proxy holders who are in favor of the motion to please raise your hand. [Voting]

The motion is carried. PricewaterhouseCoopers LLP have been reappointed as auditors and the trustees are authorized to fix their remuneration. The next item of business is to vote on the resolution authorizing the issuance and delivery of $3.592 million aggregate principal amount of 5.75% convertible unsecured subordinate debentures of the trust due December 31, 2027, to Dream Asset Management Corporation, the asset manager of the trust, and satisfaction of those -- of the base management fees and acquisition fees payable under the management agreement of the trust in respect of the period from January 1, 2026, to December 31, 2026, as more particularly described in the management information circular. In order to be effective, this resolution must be passed by a majority of votes cast by the unitholders who vote on this resolution. Dream and its associates and affiliates will not be voting on this resolution because of their interest in the transaction. Can I have a motion?

I move to approve the fee proposal resolution authorizing the issuance and delivery of $3,592,000 aggregate principal amount of 5.75% convertible unsecured subordinated debentures of the trust to Dream Asset Management Corporation as set out starting on Page 22 of the circular.

I second the motion.

The meeting will now vote on the motion. I've been advised by the scrutineers that a majority of the proxies received by management prior to the meeting have been voted and that more than 50% of the proxies received by management prior to the meeting have been voted for the fee proposal resolution. I propose to take the vote by a show of hands. I would ask those registered unitholders and duly appointed proxy holders who are in favor of the motion to please raise your hand. [Voting]

Any contrary? The motion is carried. I declare that the fee proposal resolution in the form set out in the circular relating to the issuance and delivery of $3.592 million aggregate principal amount of 5.75% convertible unsecured subordinated debentures of the trust to Dream Asset Management Corporation is approved. The next item of business is to vote on a resolution to amend the trust deferred unit incentive plan to increase the number of deferred unit trust units and income deferred trust units that may be granted or credited under the plan by a further 500,000 units. Can I have a motion?

I move to approve the resolution amending the deferred unit incentive plan as set out starting on Page 27 of the Trust's management information circular.

I second the motion.

Are there any questions on this motion?

[indiscernible]

But with regards to consultants, the trust doesn't have a lot of employees. So a lot of people, one way or another, are consultants to the trust. So the consultant part is to make sure that the people do the work are able to get the deferred units. In terms of the 3 to 5 years, we -- in all the companies, we have for a certain amount. This company doesn't actually award a lot. So 3 to 5 years isn't a lot in total dollars. So we're well under the max, and 3 to 5 years is convenient.

Dream Asset Management employees considered consultants...

No, because the asset manager -- I think the asset manager -- the people who work with the asset manager are entitled to it, not as consultants but as employees of the asset manager.

Okay. I've been advised by the scrutineers that a majority of the proxies received by management prior to the meeting have been voted and that more than 50% of the proxies received by management prior to the meeting have been voted for the deferred unit incentive plan amendment resolution. Therefore, I propose to take a vote by a show of hands. I would ask those registered unitholders and duly appointed proxy holders who are in favor of the motion to please raise your hand. [Voting]

Any contrary? The motion is carried. I declare that the resolution in the circular relating to the amendment of the trust deferred unit incentive plan to increase the number of deferred trust units and income deferred trust units that may be granted or credited under the plan by a further 500,000 units is approved. The formal items of business as set out in the notice of meeting have now been dealt with. As there is no further business to come before this meeting, I declare the formal part of the meeting to be concluded and the formal meeting adjourned. I now invite the management team to make a short presentation. After the presentation, we will have a question period.

Thank you, Amar, and good morning, everyone. Over the past year, we have made significant progress with focus on derisking our portfolio, growing our recurring income and enhancing our liquidity. The Trust has over $640 million in total assets, with $28 million of available liquidity as at May 1. Our portfolio comprises nearly 3,000 multifamily units with over 4,400 units in our development pipeline. At our share, this is equivalent to 1,037 completed units and approximately 2,000 units under development. We have made progress on our developments and maintained solid momentum across our completed multifamily assets. A couple of highlights include completing 855 units for Cherry House at Canary Landing and achieving a 36% year-over-year increase in same-property multifamily NOI with occupancy improving to 94.7%. At the same time, we remain focused on derisking our portfolio. We've reduced our land loan exposure, completed the sale of noncore assets, including both commercial properties as well as development land and maintain disciplined focus on managing our liquidity. With those highlights, I'll walk through some of our key projects. 49 Ontario is a cornerstone project, which is expected to comprise over 1,200 units, including an affordable housing component. The project is supported by 20-year low-cost government financing that minimizes refinancing risk. Construction is well underway and the project benefits from strong public sector support. This includes being in close proximity to a future Ontario Line subway stop and the waiver of development fees. Occupancy is set to commence in 2028 and upon stabilization, the project is expected to contribute meaningful income and drive long-term value. At Quayside, we have also made important progress. The Trust and Dream Impact Fund now own 100% of the Phase 1 multifamily site with no exposure to the condo development. Zoning is approved, and we are progressing on long-term government financing. Upon completion, the project will have over 1,700 units and Dream will manage the development of 572 affordable units in partnership with Waterfront Toronto and City of Toronto. Expected occupancy is in 2030, and Quayside will be adjacent to the future Waterfront East Line Transit stop. 49 Ontario and Quayside are significant development projects for the Trust, and we have a track record to point to. Canary Landing is a good example of how we take a development and turn it into an operating success. The first 2 buildings, Maple House and Birch House, are collectively stabilized at 96% occupancy. Third building, Cherry House, commenced leasing late last year and is now already 40% leased, a strong start. As we continue to advance our development pipeline, a key focus over the past 2 years has been to derisk our business. Part of our strategy to reduce risk includes shifting our debt composition towards longer-term government financing and away from higher risk and more expensive construction and land debt. This results in a more stable, lower-risk capital structure over time. Michael will provide some additional color on this later in the presentation. We have also strengthened our liquidity, including the following accomplishments: extending our $30 million of convertible debenture by 5 years, repaying higher cost construction debt and securing a $50 million corporate loan from Dream, which supports the trust's liquidity and demonstrates strong alignment from our asset manager. Collectively, these provide flexibility and support continued execution. With a stronger balance sheet and reduced risk, we are well positioned to focus on long-term growth and value creation for our unitholders. Today, multifamily comprises approximately 40% of our portfolio. By 2030, we expect that to be approximately 90%. This is a fundamental shift towards more recurring income, lower risk and a portfolio built for long-term cash flow. Returning to 49 Ontario. This project represents significant embedded value in our platform. Our equity is currently $60 million or approximately $3 per unit. As the project progresses, we expect value creation through a combination of development profits and long-term NOI growth. Importantly, and as previously noted, the project is supported by attractive financing with no refinancing risk until 2046. As NOI grows and principal is repaid, we expect the loan-to-value to be substantially lower than at the start. As we execute on our development pipeline, we expect multifamily units to grow over time. At share, we had under 500 units in 2021, and we think this will increase to approximately 2,300 units in 2030, with 49 Ontario and Quayside being significant drivers. As our portfolio becomes more focused on multifamily, the construction -- the contribution to net operating income is meaningful with the largest driver being 49 Ontario. Over the next few years, we are expecting NOI to grow at a 31% annual average rate. In summary, over 2025 and through 2026 to date, we have advanced on our development pipeline, stabilized recently completed assets and reduced expensive debt. We are positioning our business to deliver recurring income, lower risk and visible growth. With that, I will now turn it over to Michael to provide some additional portfolio insights.

This business has been facing a very hostile environment. The expectation was in Canada, we needed unlimited housing. We had low interest rates. There was very strong demand for apartments and that we have some growth in the population. And I think what we've seen is we have negative growth in the population, very difficult to get land turned into income properties and rents are down about 15% in Toronto. So it's really slowed the business that we had. When we look at 49 Ontario, we work with the city of Toronto to get a waiver development charges. Just for context, the waiver was somewhere between 100% and 150% of the market cap of the business, just the waiver. As we build the building, and we're getting great prices on it, we're also benefiting from the waiver of HST to get the waiver of the development charges and all the work we did on zoning and the funding we got, the $80 million loan was paid off on the first draw with CMHC, and there were $65 million of equity or double the market cap. We brought in a partner for 10% at that price. They're co-developing with us. They're very skilled at construction. This is a complicated project, and we were looking for somebody that we had a lot of confidence in. We've been working with the CenterCourt for 15 years. As a result, our expectation is we'll continue to add a lot of value at 49 Ontario and again, multiples of the current market cap. So that's a real positive. Quayside is the old Sidewalk Labs site. It's a really important site in Toronto. It's actually an important site nationally. We've had lots of help from the city, Waterfront Toronto, the federal government. We're getting very close to having that in a position we can start. The trust only owns 25% of that, but that will also add a lot of value. You saw that we've got almost 2,000 units that are complete. The last Block 347 is leasing up. The Trust share is 25%. What we're talking about are best-in-class apartments. In a different environment, the value of what we have would be quite high, our debt would be reasonable. But because of all that's happened, the equity has been damaged severely, although we're seeing a lot of growth in the value. This slide is the other thing that we've done, and I don't know if there's anybody else in the industry has done anything like this. In the last 3 years, we've reduced our -- sorry, so what's happening is the land that us and all the other developers had, we thought would be absorbed quite quickly. And with so few starts and so much difficulty starting, what's happening to a lot of people is they're carrying land, they're paying operating costs and they're paying interest. And there's not any real visibility as to when that's going to turn. So we focused on 2 things: Turning our assets into great quality, highly valued income properties and reducing our land loans. So in this slide, you can see that we've taken our land debt from $260 million down to $97 million, and that includes selling properties, bringing a partner at Scarborough Junction, which now we own 9% of their 0 debt on it, and we have 0 money in it. So that turned out pretty good. Of the $97 million, it's only 3 properties that have debt. One of them is Quayside. It's only $10 million. We expect that to be gone by the end of the year and we start construction. Victory Silos is an incredible site on the waterfront. It's adjacent to the Quayside site. We have a partner there. We have the same partner we have for Quayside. This year, we separated from them. We divided the property into 2. We're doing the complicated stuff, governments building apartments. They're going to hold the land and try to build condos at some point. On the adjoining site, we'd like to do something similar. That site is interesting because it has 3 buildings now. We hope it's going to have 4. One way or another, we'd like to split it where we have 2, they have 2. But those buildings are quite bite-sized. We think we'll have a really good shot at turning those into income properties. But I think that will be way outside of 2030. The last site is Forma West, which is the second tower of the Forma site. Forma is one of the most successful launches of condos in Canada this whole cycle. We've got $2,000 a foot on almost 1,000 units. There was a slide of it. It's going to look gorgeous, and it's being built right now across from Roy Thomson Hall. I think it's around the 35th floor with the Frank Gehry cladding up to at least 12 or 14 floors. If you have a chance to see it, you should. I think it's going to be very positive because people are going to love the building, tremendous Instagram and blog fascination with it. And I think that will help us stick the sales that we have into closings and attract. So that site is going to take a while because it's a partner who wants to do condos, but it's a great site. So the 97, we expect to come down to 87 by the end of the year, and then we'll work on unconverting the silos. So in a lot of ways, the money that's going into land has been reduced substantially. We're doing a really good job with income properties. And the numbers we're looking at is there's never been a decline in rents in Toronto for this amount of time before. So every day, rents stay low, it's a new record. The population is pretty flat in Toronto, but incomes are going up. So if rents are down 15% from where they were in 2023, they're now 85% of what they were, but people's income is up 10%. So it's really around 76%. People are spending $0.76 for every dollar they spend in 2023. Wage growth is actually pretty good. So next year, it will probably be $0.73. We think as the condo -- the oversupply of condos sort of gets reconciled to delivered over the next 18 months, immigration picks up and the apartment is going to be so affordable, we think it should turn around. If we get back to just what the rents were before, and by the way, this is the longest time ever that rents haven't surpassed the previous high. But at the previous high on a project like 49 Ontario, we would expect to get another double on the value of the project, another -- I use market cap as my metric, another 2x market cap just from returning to the rents that we had before. So we think there's lots of opportunities and upside, but it is a grind trying to reduce land, and it's a grind trying to deal with all the people we have to get everything lined up to develop. But I do believe that our team has done some of the best work in Impact Trust that we've done on anything we've ever done, and we continue to have a great success dealing with the governments and building projects that with the government help, we have a lot lower risk, and we have a lot more upside. At this stage in my career, I got 2 slides. We go to the second one. There you go. So this has come up a lot on what Derrick did. And what we're focused on is as we get to 2030, we expect to have 90% of the business in completed best-in-class apartments. Our expectation is the rents will be pretty good. And the 10% includes things like Gehry West a couple of passive investments. And we think they're all good assets, but they're going to take some time. 2,300 units, our share is going to be a pretty good thing. This is going to be a pretty attractive company. And what we're trying to do is continually feed it because liquidity is an issue, continually feed it so that we can get to the 2030 time and get the benefit of all the work we're doing for all the shareholders. So that's 100% of my presentation and happy to answer questions if anybody has any.

[indiscernible]

We've been working on it for 2 years. I'd like to say that 3 years ago, we had 2 million issues we had to resolve in order to get Quayside going, including separating from our partner. We're getting really close. We've got the conditional approval on CMHC. I just want people to understand the process. We're now dealing with how to make sure the covenant is good because this is going to be a $720 million loan more or less. The documentation is significant. This morning, we have 5 outstanding agreements with the city because this is a joint venture where the city is going to own the affordable units. We're going to own the market units, but they get built together and the city has got to backstop the affordable units paying their share of construction and whatever other costs come up. So we're down to very few issues. Our goal is October 1 to have closed and drawn on the loan and to be well under construction. The stuff going on in the site now. So we think it's happening as we speak. The one thing I would say is just if I'm going to use language totally inappropriate. But every single basis point that the interest rate goes up cost us $1.3 million over the 20-year term. This is extremely sensitive to the bond rate. And the type of financing we did on 49 Ontario, we got 20-year debt at 4% on $600 million. And that really takes the risk out of what the interest rate is when we refinance -- sorry, when you complete construction because normally you have floating rate debt while you do construction, then you get a takeout. We don't have that risk at all because we got it. In addition, we've gone from 10 years on many of our other projects to 20, so that we have a chance to reduce the loan outstanding as we amortize it as well as giving the building a chance to mature no matter what the economic environment is because on a building like in Ontario from the low rental rates we have now at 0.6% growth per year, which is effectively just inflation on realty taxes and operating costs. In 2046 when the loan comes up, we should have no trouble refinancing. So when you look at these things, we're able to build amazing buildings. They're going to cash flow. The refinancing risk is eliminated at the end of construction. It's eliminated in the 10 years, and we've got a lot of time to benefit if we have a very inconsistent recovery. But 10 years from now, we have an average of 3%. The average in Toronto over the last 20 years is 3.8%. If we have an extra -- we have 3.8%, 49 Ontario is probably worth $600 million more than the debt when it expires. So at 0.6%, it's worth a lot. We can refinance it in growth in rent at 3.6% or 3.8%, it's worth hundreds and hundreds of millions of dollars. So that's what we're working on. At Quayside, we're looking for 20-year debt. The construction cost, it's a bit more complicated project. But there, we don't have any affordable housing. So that's going to be best-in-class on the water. I don't know if you guys have seen the parks that the city and the Feds and the province have created on Cherry Street. They're creating Parliament Slip, which is going to be amazing. These are going to be special buildings. We're totally committed to making them happen. And I think we're going to be well underway by the end of the year.

[indiscernible]

We sold about 85% or 87%, and we wanted to get the information on how much it's going to cost because it was more expensive. We want to be able to get more condos. In retrospect, it would have been better to sell all of them, but you don't get retrospect. So it's probably not a bad idea to sell 85% of the chute, get your construction contracts, then sell the rest. So we got 85% sold at, I think, $1,993 a foot, and we got pretty good deposits. So that building will be finished pretty much the end of 2028. So it will be past the delivery of almost all the other condos, and we probably won't get registration until 2029. And by that time, we think that incomes will have increased, and we should be able to do better than if it closed down.

Development segment got a number of things in so-called planning stage as you described here. Are you looking to maybe dispose of some of those assets rather than actually developing them?

So it's fluid because one of the things that's really key is what could you transact at. And there's hundreds of millions of square feet of zoned land in Toronto, so that's not that easy to find a counterparty. But like at Zibi, we have a lot of land, and we're talking to people, maybe we'll find an arrangement where we sell some or maybe like 50% of some stuff or maybe sell some sites, we'd be very happy to do that. Brightwater, we have 3 partners. It's an incredible site. It was the old Texaco refinery. It's all cleaned up now. It's on the water at the foot of Mississauga Road, but it's been tough. We are starting another building. So we'll lighten it up where we can. But like 49 Ontario, Quayside, some of the value-add apartments and some of the stuff we've got at Zibi and at West Don Lands, it's really what's going to be the core of the business.

[Operator Instructions] to dispose some of those properties?

Yes, it really depends on the price. So what's happening now is with higher interest rates and lower rents, we have clients that we're buying apartments for. We think it's better to be a buyer than a seller. So that's been a little bit of a disappointment over the last 12 months because we thought that the apartments that are well leased would trade better. But these are apartments that were trading at 3.5% yield on like 3.5% caps. And now they're probably at 4.5%, maybe 4.6%. That's a pretty big movement. We don't think there's much value to the business in selling on block anything right now. But to the extent that we can find individual properties that we get great values for, and we have some that we might, we'll be selling individual properties. There's no limit here. It's an all-you-can-eat buffet.

[indiscernible]

Yes. I think that it would be inappropriate to sort of get too much in depth. It's 1.5 years away. And there's lots of examples of how they've been dealt with. So we'll see how it goes over the next little while. And that's clearly -- the 2 big events for 2027 are the convertible debentures and the Sussex remortgage refinancing. So those are 2 events that have a big significance on liquidity, and we're very focused on them.

[indiscernible] Strategy for the next 5 years. At what point does it appear that distributions might be possible?

Well, I would say that when you're focused on liquidity, you're not really focusing on how to have less liquidity. So it's not an issue that we deal with. But when we look at 2030, there should be opportunities to do that. But by 2030, we should have a pretty attractive portfolio to keep it a public company or sell or do something with. So distributions isn't a metric that we're looking at for our success at this time.

[indiscernible]

Quayside? So we have a waiver development charges at Quayside as well. And if I do my math right, that alone would probably be like that might be $0.30 or $0.40 of rent, just to save the development charges translates into you can make it work with $0.30 or $0.40 less. And then the cheap debt we're getting also helps. So Jamie, do you have a number? Is it $4.65 that we think works or? Yes. So we would -- and one thing I want people to think about for a second is if a rent was $5 in 2023, the expectation that it would grow by 3% a year, it's 3 years later, that $5 would have been about $5.50. And we're talking about maybe it's $4.60 now. And the idea that we're renting into a market where condos are being delivered and the population is declining is shocking. I mean, we all know it now, but it's shocking if you would have said to me like 3 years ago, why do you have an assumption that Toronto is going to grow. So what's interesting for Quayside is it would start in 2030. So let's say we use 4.65, and you argue it over the time as if it matters but let's say, you say 0% for '27, 0% for '28, 4% for '29 and then maybe 6% for 2030 or you take 2.5%, like we don't know. But 2030 would be a completely different set of circumstances. So it's not even really what the rate is now. But what we focus on is literally at 4%, what does it take to be able to cover the debt and amortization. And there's room. There's a bit of room there, so that's pretty good.

[indiscernible]

We could qualify. We're giving you notice now that in the spring of 2030, if you could put some time away, we're happy to meet with you. Okay. I'd like to thank you, especially you, sir, for, I think, setting my 32-year record for the longest amount of time spent on questions. So thank you for that, especially with the lesser slides. Thank you.