DREAM Unlimited Q3 2026 Earnings Call Transcript

DREAM Unlimited (TSX:DRM) reported third-quarter financial results on Wednesday. The transcript from the company’s third-quarter earnings call has been provided below.

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View the webcast at https://investors.dream.ca/

Summary

DREAM Unlimited reported a strong third quarter with a net margin of $32.6 million, up from $24.1 million year-over-year, driven by asset management and income property growth.

The company’s asset management division saw a significant increase in net margin, with AUM reaching $31 billion, aided by acquisitions and performance fees.

Western Canada development generated $8.9 million in net margin; pre-sales commitments have secured $100 million in revenue for the fourth quarter.

The income property portfolio showed growth with NOI rising to $7.6 million, despite a bad debt expense related to a retail tenant.

Liquidity stands at $264 million with $596 million of debt presented as current, and active refinancing efforts are underway.

Strategically, the company is focused on expanding its asset management presence in Europe, with growth initiatives in place following the Chancerygate acquisition.

Management highlighted the long-term vision for 2030, emphasizing the growth of asset management and income properties as key areas.

The company is addressing challenges and opportunities in the Impact Trust segment, with plans to secure a longer-term solution by year-end.

Despite the stock trading at a discount, the company is prioritizing strategic growth over share buybacks.

Future outlook includes continued momentum in Western Canada developments and stabilization efforts in master plan communities like Zibi and Brightwater.

Full Transcript

OPERATOR

Welcome to the DREAM Unlimited third quarter 2026 conference call for Wednesday, November 11, 2026. During this call, management of DREAM Unlimited may make statements containing 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 DREAM Unlimited’s control, that could cause actual results to differ materially from those that are disclosed in or implied by such forward-looking information.

Additional information about these assumptions and risks and uncertainties is contained in DREAM Unlimited’s filings with securities regulators, including its latest Annual Information Form and MD&A. These filings are also available on DREAM Unlimited’s website at www.dream.ca. Later in the presentation we will have a question and answer session. To join the question queue, you may press star then one on your telephone keypad. Your host for today will be Mr. Michael Cooper, CRO of DREAM Unlimited.

Mr. Cooper, please go ahead.

Michael Cooper (Chief Responsible Officer)

Thank you, operator, and I’d like to thank everybody for joining us. I think this morning we want to go deep in a couple of topics on the business. I’m going to ask Megan Peloso to speak to the financials in a minute, but I just want to start by saying a couple of points. Firstly, I’ve been saying for a while that this decade has been a long one so far and we’ve been looking at how do we have the best company we can have for January 1, 2030? And I think we’ve made a lot of progress on that.

But what I would say is there’s many parts of our business, ones that are going great and ones that aren’t going as great, that we’re totally focused on growing. So we have multiple platforms that are growing quite quickly and I think we’re doing quite well for positioning ourselves to be the best company we can be in another 36 months or so. In the meantime, we’re seeing people making quite a bit of money and we’re creating a lot of value. People ask me quite often, like why do you care about the stock price or not? And I’ve said for 20 years what I’d like to see is the companies that we are involved in trade at net asset value.

That way people can come in and out at fair value, we have access to capital, and we can run the business and just focus on the business. Our company’s trading at quite a discount and it’s interesting because we’re now like five years into building out asset management and building out income properties and these businesses are becoming pretty big and the discount hasn’t gotten smaller. So I’ve been doing more marketing lately and I think we’re providing a lot of detailed information, but today I’m happy to provide more detailed information and we’ve got new coverage which has been great and I think the business is doing very well.

We’re quite advanced on our business plan for the next four years and that’s looking very good and I think we’re making tons of progress across all the platforms, so I’m going to get into that in a bit, but I just wanted you to know what I’m going to talk about today so you can think about it before I start. So Megan, do you want to provide an update?

Megan Peloso (Chief Financial Officer)

Thanks, Michael. Good morning, everyone. Our third quarter earnings reflect another period of solid operating results across our key segments. I’ll briefly speak to our earnings for the quarter and then touch on liquidity and debt maturity progress. Net margin on a standalone basis was $32.6 million, compared to $24.1 million in the comparative period. This was largely driven by growth across our asset management and income property divisions, partially offset by our sales mix in Western Canada.

Overall, we generated after-tax earnings for the period of $13.1 million, and we expect fourth quarter margin to be our strongest of the year. Now, at a more granular level, our asset management division had an exceptionally strong quarter, with revenue and net margin of $23.2 million and $17.8 million, respectively. The increase in net margin of $6.8 million from the prior year was driven by our AUM growth and performance fees on our various contracts, inclusive of acquisitions post quarter-end. Our AUM is currently $31 billion inclusive of mandates acquired through our Transfer Gate platform acquisition and capital deployed across our various mandates this year.

Western Canada development generated net margin of $8.9 million in the third quarter, down modestly from prior year due to the specific mix and volume sold in each period. Current period activity is primarily driven from lot and acre sales in our Alpine Park community in Calgary. Based on pre-sales commitments achieved to date, we have secured $100 million in Western Canada revenue for the fourth quarter to round out another solid year of earnings for the division.

In the third quarter, our income property portfolio generated NOI of $7.6 million, up from $6.5 million in the prior year, largely driven by leasing activity across our apartment portfolio. Results for the division did include a bad debt expense of $550,000 related to a tenant at one of our retail properties. As of period end, we had roughly 1,100 multifamily units that are currently operational and are on track to deliver another 930 units, which is at our share, over the course of 2027 in Saskatoon, Ottawa, and our very first apartment in Calgary.

Our other investment segment generated $0.2 million of negative net margin in the third quarter, an improvement compared to $3.2 million of negative net margin in the comparative period. We expect our development fee income in this segment to increase over time as new projects come online, but for 2026 specifically, don’t anticipate earnings from the segment as we have minimal inventory available and fewer active development projects in Toronto today.

As of September 30, we had $264 million of liquidity available under our corporate credit facilities. Now, on a consolidated basis, the company had about $596 million of debt presented as current. Our remaining 2026 maturities, which are included in this figure, will roll at the end of the year, and there’s approximately $205 million of debt maturing in the first quarter of 2027, which is very much well underway. This includes a CMHC-insured apartment mortgage and land loan for which we are in very advanced discussions for construction financing.

The construction financing would effectively repay the in-place land loan on first draw. So overall, we’re quite comfortable with our near-term position. While our intent is to be proactive in working with our lenders on these maturities, there’s oftentimes break fees if we’re to refinance too early, so a portion of these refinancings won’t be looked at until later in 2027. Overall, we believe our remaining 12-month maturities present little refinancing risk due to the nature of the debt asset class and based on preliminary conversations with our lenders, and we’ll provide further updates as we make progress.

So with that, I’ll turn the call back over to Michael.

Michael Cooper (Chief Responsible Officer)

Thank you, Megan. I’d like to discuss the three major divisions that I talk about every quarter just to give an update, but asset management’s doing quite well. I think we’re going to have over $2 billion of acquisitions on behalf of our clients. For the industrial business. Some of the other areas are growing on as well and we’re working with the existing clients to do more of the same, maybe to do some new things. And we’re also working with potential new clients to add them to our work.

So it looks as if the momentum that we have is likely to continue pretty well in the quarter we closed on Chancerygate which rounds out our ability to be asset manager of scale in Europe. We’ve just about completed all the documents for our previously announced first new joint venture in Europe since we acquired Chancerygate and we’ve got lots of new prospects, so we’re excited for that. And it looks as if based on the business that we just have now, our asset management business will continue to grow pretty rapidly.

And we think we’re going to be able to add new clients or new products and see it grow even more. So it’s been quite a success story. To go from 10 billion to 30 billion to over 30 billion since 2020 is a lot of assets, a lot of growth in assets under management in a time where it’s been hard for asset managers to get to scale. And I think every step we take provides us with more opportunities to continue taking more steps. So I think the team’s doing a good job.

I think they’re achieving good results. Our relationships with our clients are strong and I think there’s lots and lots of opportunities. You know, if you take a look at our market cap, I’m not just saying conceptually, our asset management business is likely to make about a 10% return on our market cap next year. So it alone more or less is equal to the value that the company’s trading at. But I think the most important thing is as we get to scale, it becomes much more valuable.

I love the charts and asset management. Same thing with income properties. They are consistently producing more and more profits for us. And I would say that the expectation is asset management will be our largest division profit wise this year and probably throughout the budgeting period. Income properties is something that we really started in 2020, building apartments in Western Canada and we don’t even have that much in Toronto. We’ve got the shares in Zibi. So, you know, it’s a business line that is really getting momentum now. I think we have about 1100 units at share in apartments currently operating and we have 900 more coming in the next five quarters. Less than five quarters, let’s say 13 months. And behind that we actually have quite a bit coming in Western Canada.

The Western Canada properties have been operating very well and pretty much hitting our numbers well leased. And as far as income property growth, it’s positive, less than it has been, but it’s still positive. And we’ve got best in class building. So that’s pretty exciting. And this quarter, I think Megan mentioned we had a bad debt at Distillery and even having that bad debt were up and I think it’s going to see net operating income increase. My best estimate is like annualize at least 30% per year on average for the next three years.

So that’s really the work we’ve been doing there. It’s really coming to fruition now. And then our Western Canada development business, it’s doing very well. We’re underway in Homewood. We don’t have the final approvals for the zoning, but we are doing the preparatory work. We’re actually doing the servicing for the school site for the city. So the city and DREAM Unlimited are working hand in hand to get that ready to be fully approved in 2027. And that’ll mean we’re going to have the next 1100 acres available on a consistent basis.

We have Coopertown going in Regina. We’ve got Alpine Park and a few other developments. We’ve got a land in Edmonton. So it’s looking much stronger because we have much more of our land in development and we’re expecting good things. So Those are our three major divisions, which are about 82 or 83% of our business. And that’s what we were talking about a lot. And you know, to be blunt, I think what we hoped was happen would happen is happening in those three divisions on the 17% that isn’t those three divisions.

You know, one of the things that’s curious is 3% of that is working capital. We got the DREAM office shares in there, and that’s a pretty good thing. We got our investment. We have a small investment in Center Court. We got investments in a joint venture partner in our apartments in the U.S. our apartments in the Netherlands, and a small amount in apartments here. So there’s a lot of other assets there that are really quite good. There’s a bit of land, and the land actually is great land being 31A Parliament, which is adjacent to the distillery, Block 13 in the Canary District, which came as part of our development of the Pan Am Athletes’ Village.

We’ve got a site that’s very exciting at Eastern Broadview, just north of the major East Harbour transportation hub. So we like those sites. It’s not a great time to develop, but it’s not a bad time to work on it. And especially with, I mean, 31A Parliament we bought for 1.8 million. It’s got zoning of 850,000 square feet, and Block 13 has 800,000 square feet. And that was actually effectively just part of the profit that we put a nominal value of $55 a foot on 400,000 square feet.

So, like, those are deep in the money and they’ll be good one day, but there’s no pressure. So what we’ve got is. And this will come up a little bit when I talk about Impact, our investment in Zibi, it’s 50, 50 with Impact and these master plan communities, large master plan communities, are very difficult right now. We’ve also got Brightwater and that one. There’s four partners in it, and it’s kind of lost momentum, but hopefully we’ll get pick some up with townhouses, because that side has a lot of townhouses. But generally in that 17%, most of the assets are quite strong.

They don’t need to be repositioned or anything, and there’s a little bit of work to do. So DREAM Unlimited is actually in very good shape and it’s getting better and better, and I think the team is doing a good job and we’re pleased with the progress. Now, Impact Trust is a business that. That’s where we’ve been putting all of our best in class. New developments, a lot of our public private partnerships, and it’s very concentrated in Ontario and development and apartments, and that has not been a good place to be. The company has needed support and DREAM Unlimited’s provided the support. DREAM Unlimited has fiduciary obligations to DREAM Unlimited shareholders that whatever it does, it does in the message of the shareholders.

So we’re being, what I believe is quite prudent in how we’re managing it. We’re lending money, taking security. We have a general security agreement, which effectively means that behind the first mortgage, we rank first on all other capital, ahead of unsecured creditors, ahead of the convertible debentures, ahead of any money that potentially may not get paid on an existing loan. So we’re quite confident that we got great security and great assets that are just not at the right time.

So apartments right now aren’t doing great, but I want to dig into it a little bit. The way we look at Impact Trust is these are the assets that we would have done ourselves if Impact Trust did exist. We like them very much. And, you know, an asset like Maple House in West Don Lands is. It’s an incredible asset. It’s got a $357 million loan on it. The loan is to CMHC. It comes up in 2029, and we think there’ll be no issues. Sorry. And that loan that comes up in 2029, it has an insurance certificate from CMHC, which means it’s a guaranteed loan from.

We have full expectation that will be able to be renewed and sort of Replaced with sorry. Right now the $357 million is a direct loan from the government in 2029. The idea would be that we would go to lenders who would have a guarantee from the federal government to the principal and interest and we don’t foresee any issue. And by the way, it’s non recourse and it’s a great project. So we really like that one. All in all, the debt, there’s a lot of debt in Impact Trust.

There’s 630 million. That is CMHC insured debt and that debt is very manageable. I mentioned that Maple House, which is about 100 million. Our share is non recourse. One of the apartments in Zibi is non recourse. We’ve got a lot of value add apartments that are non recourse. In addition, Blocks 3/4/7, I think we’re up to about 70% leased. We expect within the next 12 months that that building will become non recourse. 49 Ontario, it’s still early, but when you look at the October housing starts, 1200 units of new purpose built rental would be our building because we just went above grade.

The building is moving along quite quickly. We’re way ahead of schedule. The budget is in great shape. That building, we’re very confident that once we start leasing it in the summer of 2028 at the current rents, it will become non recourse and due course. So that’s a 20 year loan. We have over 19 years left on it. So what I’m trying to say is of that $630 million of CMHC debt, we’ve got great assets with great debt and a lot of it’s non recourse.

And even more will become non recourse over the next 18 to 24 months. So we’re quite comfortable with that. We’ve got about $70 million of debt on commercial properties that DREAM Unlimited’s involved in and a lot of that is the Zibi commercial assets and the retail at Brightwater, the retail at Brightwater is a great asset. The Zibi commercial assets, they’re very good assets. But the leasing has been very tough until recently and we have every expectation that we’re going to make a lot of Progress on Block 207, which is an office building we built. It’s like 60,000 square feet.

We’ve got a little bit of lease in there, but we think we’re going to fill that up. We think we’re going to have 208 filled up. So I think that commercial is going to be in great shape relatively soon. We’ve got the Silos land, which is right next door to Quayside, and we think that one is going to be. It’s a great site. It’s got a lot of density. But what’s different than a lot of the other sites is we currently have zoning for three buildings. I think we’re going to get approval for a fourth building, and each of those buildings are going to be right in the sweet spot for the type of buildings that people like today.

So I think that we’ll be able to develop it or sell it, but we’re getting it into great shape. Not fussed about that. The area that we’re more fussed is, as I mentioned earlier, the master plan community. So Zibi, Brightwater, and also Forma East, which is under construction. So I’ll take them separately. But we’ve got about $90 million of debt in Zibi and Brightwater at Zibi, the Ontario side, is going very well. We’ve got about five more sites for apartments, and that’s all that’s left. Block 206 is finishing in the next few months. We’ll be leasing it, and we want to wait to see the progress on it, but we could easily start another building.

I think we only have $20 million of debt for the five buildings that are left, the five sites that are left. So we think that’s manageable. In Gatineau, we have a lot of land, and that’s been going slow. So that’s where we really need to focus our efforts. We have a new government. They want people back in the office. So we really haven’t had any potential to lease to the government in seven years. But now it looks like there are opportunities. In addition to that, this government has put up a lot of money for culture and sports.

The National Capital Commission is getting a little bit more aspirational, and we’re right in the center of the National Capital region. So we’re going to spend the next couple of years looking for ways to work with the government and others to use up more of the land in Gatineau. And if we do that, that project will be fully stabilized. Brightwater is one of the best pieces of land I’ve seen. It’s 72 acres on the water at the foot of Mississauga Road, and that one is stalled. We’re going to work on getting some townhouses done, same as what I said for DREAM Unlimited, but that’s really all the assets that DREAM Unlimited is involved in to make it clear there’s about $900 million of debt. 630 million is the CMHC loans. The commercial is $70 million of debt. I think we’re going to get that totally under control in the next six months.

The Silos we’ve got a lot of work on and I think that’s going to be in great shape and then we’ll work our way through Brightwater and Zibi and I think that’s basically the whole company. What I would say is, and I said this before, Impact Trust owns a lot of our very best assets. DREAM Unlimited is very keen. We’re putting money in in a way that we think is very secure. The whole goal is to get to the other side of this current downturn where the markets react to higher interest rates and lower rent in apartments. And what we’ve seen recently is a lot more volume on rental. We have about 96% leased on our completed buildings. Good lease up and, you know, our first choice is to see the market pick up and Impact Trust be very strong.

Second choice is to support it and get to the other side and then maybe like DREAM Unlimited’s keen on the assets, so we’ll manage our way through it. But I think it’s as much an opportunity as a risk because right now the assets are in good shape and quite manageable. So on Impact Trust, we said that both for Impact Trust and DREAM said that at the year end we hope to have a more longer term solution. The reason for that is we’d like to provide more certainty to everybody and right now we’re making progress on a lot of these areas and I think we’ll be in a much better position to work with Impact Trust by then. And we just need a few more months to get some more work done and work with the two boards to come up with something that gives both companies a little bit clearer Runway.

I think that’s about it. And Megan and I are happy to answer your questions and I hope I didn’t overshare. Operator.

OPERATOR

Thank you. We will now begin the question and answer session. If you have dialed in and would like to ask a question, please press Star one on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press Star one again. If you are called upon to ask your question and are listening via speakerphone on your device, please pick up your handset to ensure that your phone is not on mute. When asking your question, again, press Star one to join the queue.

Our first question comes from the line of Sam Damiani with TD Cowen. Your line is open.

Sam Damiani (Analyst)

Thank you. Good morning, Michael. Good morning, Megan. Michael, I’m just going to pick up where you left off there briefly. On Impact, is there anything else you can share? Is that next quarter timing for, I guess, somewhat of a meaningful update, is that fairly set in stone or could that slip another quarter or two?

Michael Cooper (Chief Responsible Officer)

You know, what’s so difficult is everything with Impact is a lot of specifics and making a lot of progress on things. So there’s probably about four or five parts of Impact we think we’re going to make progress on during that time. In addition to that, we need the two boards to come to an agreement. So written in stone is a very high standard. But I would say I’m highly confident that we’ll have a big update then which will not be a total solution, but a lot closer to one, which will mean like what will happen.

What we’re trying to do is have something to give at least a year and a half runway and then we can all get back to business. I don’t really love the idea of lending $15 million if it doesn’t fix it.

Sam Damiani (Analyst)

Yeah, yeah. Okay, well that’s helpful. Thank you. And just switching over to the asset management side. A couple questions there, I guess. So the European Industrial Fund is kind of being finalized, or imminently sounds like. I guess, generally, how do you look at that sort of expanded platform over in Europe with Chancerygate in terms of giving some torque to AUM growth at this stage post acquisition here?

Michael Cooper (Chief Responsible Officer)

Yeah, I mean, what I would say is on the conservative end, I think we’ll be able to continue growing it and be able to make some reasonable amount of money, like grow assets at a steady pace. And we got one JV that’s just about done. We’re working with some others. So I think we’re going to see some consistent business coming out of there. So I think it’ll prove out to be a good expenditure of our time. But that’s a market that is huge. And having $6 billion of assets plus 100 real estate professionals, I think we’re in a really good position to, like, what I think is on the low end I think we can knock out a couple of JVs, $200 or $400 million euros or US dollars; they’re getting pretty similar, and that we can make a living doing that. But on the high end, I think there may be opportunities to grow in a major way and I think we’ve just got to spend more time with the team, more time with clients.

So I think it could be a bigger growth platform because it’s well positioned in a huge market with a ton of people who like to invest there. I mean, what I’m saying is Europe is easier to sell than Canada if you’ve got the right pitch. So we’re pretty focused on that.

Sam Damiani (Analyst)

Okay, great. And last one for me is on the base and development fees of, I guess, 14 million. I think in this quarter they were up a bit quarter over quarter. Was there anything unusual in there? This, of course, was the first quarter with Chancerygate. So is that a good run rate or was it something unusual in Q3 that won’t repeat in Q4?

Megan Peloso (Chief Financial Officer)

From a base fee perspective? No, that should increase slightly. I mean, we only acquired Chancerygate at the end of August. I would just bear in mind that from a margin perspective, we aren’t expecting it to have an overall impact this year. So base fees will increase slightly from it. But I wouldn’t use Q3 as the go-forward run rate.

Michael Cooper (Chief Responsible Officer)

So there’s two points. One is at the beginning of the year, DREAM Industrial sold the first half of its Industrial CPP. That was net zero for assets under management; it just went from one fund to another. And in June they did the other half. But then DREAM Industrial had money to invest. CPP’s investing, GIC has been investing, and we are not reflecting the fees on a real run-rate basis on that. I think we did a $600 million transaction late in the quarter.

So I don’t know. I think we would have actually had two days of income from that. So I think there’s a bunch of things that, as we’re invested, will build on the base fees. With Chancerygate, they had been a traditional developer. They got into the asset management business. They did not get to scale. DREAM Industrial liked their assets a lot and the ability to access Europe and new development. DREAM took over the asset management group at a nominal price, and the goal for us is to drive that revenue. I think we’ve got enough expenses to be a much bigger business. But we’re going to add, like, more revenue and more expenses.

But they kind of net out to the same. We only had, I think, from around August 27 to September 30. So the revenue and the expenses are both going to go up equally with regards to Chancerygate until we drive the revenue higher.

Sam Damiani (Analyst)

Thank you, that’s helpful. I’ll turn it back.

OPERATOR

Thank you. Our next question comes from the line of Mark Rothschild with Canaccord Genuity. Your line is open.

Mark Rothschild (Analyst)

Thanks. Good morning. The income properties portfolio of rental apartments in particular, that has been growing. Can you give some more information on what the occupancy rate is with that portfolio, to what extent is it stabilized, and maybe the debt on those properties — is it all fixed? Is there variable-rate debt? I’m just trying to understand what we can expect from this portfolio in the coming quarters.

Michael Cooper (Chief Responsible Officer)

Okay, so great questions. Just in rough terms, the buildings we’re doing in Saskatoon are like $40 million buildings. When they’re finished, they probably are $34 million costs. We finance them with land equity, maybe a couple million dollars more. And then when we’re finished we kind of finance them out. So we’re probably at 75% or 80% debt when completed, and the construction debt generally is floating. But the takeout debt — like we did one at 3.89 for BVR3, Brighton Village Rentals — we did that at 3.89.

We built it to a 6 cap. So those are kind of the metrics in Western Canada. In Ottawa we’ve got 10-year fixed-rate debt on Block 204 and we probably have eight years left, and I think that one is around 3.2%. So it’s pretty good. We’re going to go through the lease-up. I think that Odenac, we own a third of the — that’s finishing pretty soon as well. And that, I think, is in the same range for the debt rate and probably a little less time, seven and a half years.

And I would say the loan-to-value is hard to determine right now. It was — I mean, I’m going to say that because I’m not sure what the value is. When we’re finished we’ll see. But they’re fairly high levered. But what we’re seeing in Western Canada is, you know, BVR1, which we finished I think five years ago — the rents are up 20% from when we finished, and the debt that we have in place is now, you know, in the 60 to 65 range. So, you know, we’re building not using a lot of our own equity and we’re growing into it.

And then 49 Ontario, which is an indirectly owned asset, that one’s going to have a reasonable profit and reasonable equity. But yeah, we’ve got — that one’s got 19 years, two months left on the mortgage. So they’re pretty secure. Does that help, Mark, or do you need more details?

Mark Rothschild (Analyst)

I guess I’m just trying to understand — that’s definitely helpful. I’m just trying to understand what the occupancy is and to what extent are the properties that developed stabilized, and where we could see the NOI and the FFO from this portfolio go over the next few quarters.

Michael Cooper (Chief Responsible Officer)

The NOI — I don’t know about the next quarters. I would say that the NOI should be growing at about a 30% compounded rate over the next three years.

Mark Rothschild (Analyst)

Okay, great. Maybe I’ll just follow up separately on that after. Sure. You started off with some commentary on the share price. It’s notable that you haven’t been repurchasing shares of late. To what extent is that just not a focus in the near term as you put capital into your development projects?

Michael Cooper (Chief Responsible Officer)

Yeah, we’ve been buying about 1% or 2% of the company back a year. And I think the real focus is building out these divisions. And, you know, if we’ve got — I mentioned this — like this $3 million investment in a development in our asset management group, that will make a much higher return than buying back stock. And the stuff in Western Canada is making a much higher return than buying back stock because we’re talking about 20% compounded for 10 years.

So I guess we’re kind of pushing on the things that are positive. On the things that, like Impact Trust and stuff, we’re wanting to be conservative. So we buy back stock. We’ll continue to buy back stock. But, you know, I’m going to say it again: we’re really focused on the best company for January 1, 2030, and that really has to do with building out our business and reducing risk to do with Impact. But we’ll be buying back stock. It’s just, like, I own 43% of the company.

I owned 30% 12 years ago, and it’s almost all from buying back stock. We bought back 25% of the float. Our stock price is the lowest now in years. And I know everybody I see says, you know, the answer is you should buy back more stock. So we’re going to see a lot more cash flow coming out of our businesses. We want to make sure we’re investing for the long term, and we’ll definitely be buying back more stock. Just want to be certain. And I would say that interest rates went up 13 basis points yesterday alone.

It’s gone up 90 basis points since June 30th. Then it came back down 45, up 13. Like, I don’t know. This is a very uncertain environment. We’re getting through it great, but I just don’t think you should get rid of your cash as I’ve been saying to you, Mark, for a while,

Mark Rothschild (Analyst)

I understand. I appreciate that. Thanks.

Michael Cooper (Chief Responsible Officer)

But ask me tomorrow. It could change then.

OPERATOR

And again, if you would like to ask a question, press Star then the number one on your telephone keypad. Our next question comes from the line of Mario Saric with Scotiabank. Your line is open.

Mario Saric (Analyst)

Hi, good morning. And I apologize for extending the duration of the call.

Michael Cooper (Chief Responsible Officer)

After what I said, I would be so disappointed if there was just two little questions. Well, those are big questions, but — so I appreciate it, actually.

Mario Saric (Analyst)

There we go. Okay. I’ll stick to kind of Mark’s theme. Just on the share price and your comment on people asking you whether you care about where the share price is. How would you — if the share price was double where it was today, how would you run the business differently, if at all?

Michael Cooper (Chief Responsible Officer)

I’d probably be able to concentrate without people asking me about the stock price. We are running this business for the longer term. And I’d say what’s interesting is if the stock was at $36 and the asset management continues to grow and we got 30% increases in our NOI for income properties, and we start to see a lot more with Homewood — as far as I’m concerned, that may be the same stock price-to-value relationship that we have now. And we probably deal with it similarly where it’s like, let’s see what the opportunities are for our cash.

And we might buy 1% or 2% of the company back a year then, too.

Mario Saric (Analyst)

Okay. And maybe just a higher-level question. The federal budget came out, I think it was, last week. Any implications that you can see from a foreign investment perspective or homeownership demand in Alberta and Saskatchewan that you’re either quite positive on or cautious on in terms of the details coming out of that.

Michael Cooper (Chief Responsible Officer)

Okay. I’ve been watching this show about the Austro-Hungarian Empire in the 1860s, and I didn’t know this, but it had like 33 different countries that made it up, 17 different languages, and it was hard to keep together. And I thought it was really interesting the way that they’re trying to build a more prosperous nation, but at the same time, they’ve got to get more to the people so that the people are satisfied with the country. And I don’t usually use historical references to empires in the 1860s, but I think that’s what the budget did.

I think what they were doing with the budget was they were putting a whole bunch of money into new investments that will prove out the major projects that’s already been done and I think it’s going to. I mean, the B.C. premier election was phenomenal. And I think we’re going to see tremendous amount of growth in the oil production and shipping to Asia. And I think, like, I don’t think people get it. That’s $35 billion a year of revenue for every million barrels of oil.

Of that 35 million, about 12 billion goes to Alberta and the federal government. So it’s a massive driver for our ability to take care of ourselves. So I think that’s really powerful. The problem is, you know, that’s like 2032 to 2037, in my view. We’re going to get an extra 10% of GDP growth, maybe like an extra 2% a year for those five years minimum, but we got to get to 2032. So I think when you look at this budget, the mega deduction is something that as soon as they get that law done, it does say it’s effective now as of September 15th or something. But as soon as the wording is finalized, there’s going to be a tremendous amount of investments today.

So I think that’s very positive. So I think a lot of things that they’re doing are really to fill in that gap between now and when the major projects come online. So I think that was really positive. I’ll say this. I think if Canada has higher GDP per capita, that’s what we need for housing. We need people to be able to afford a house on their salary, just like they are able to do in Saskatchewan and Alberta and the other places. They aren’t. It’s just because people don’t make enough money. So I think we got to grow the economy in proportion to what people make. And I think this major projects are focused on that. And I think by the big mega deduction, that’s very helpful for that.

Eradicating homelessness within the next 10 years, I think that’s important and I think it’s one of the things that makes people pretty dissatisfied is the city isn’t the way it should be. The other thing that people don’t talk about is they have, I don’t remember how much money, but they have it for dealing with. And I think that’s really important because, you know, the injection sites and stuff like that there, they just try to make safe injections.

They’re not trying to help the people get better, but the federal government is trying to get rid of homelessness and also get people in better shape. So I think that’s going to be great. You know, I think that the idea of the grocery bonus being topped up and topped up again, it’s probably what we should do to make sure that people feel that the country’s working for them. So I think it was a pretty balanced budget. Specifics. Getting rid of the home buyers ban for new developments is going to be very helpful. They did say they’re going to focus on more tax stuff for next time. The 44 billion that’s going through Canada Builds Housing is going to help overall.

Not that specifically for people like us, maybe a little. But overall I think it’s a constructive budget and it will lead to better outcomes. So I’d say it’s probably more valuable in general for Canada than it is, let’s say for a real estate company. But there’s enough stuff in there that’s good for us. I think it’s pretty good.

Ariel (Analyst)

Okay, maybe one more on my end, just switching to the land development business. I think one challenge is trying to understand where land values are, where they’re going in Saskatchewan and Alberta, any quarter-over-quarter change and the internal view on land values in the two provinces based on any kind of independent third-party transaction activity that’s taking place.

Michael Cooper (Chief Responsible Officer)

Yeah, I think I mentioned this before, but we bid on 320 acres in the area the Alpine Park is in, and this stuff is in the—there’s 4,000 acres. One half has a neighborhood plan now. The other one we haven’t done. The zoning’s not done for. We’re by far the major owner of the other half as well. We bid on it. We carry the land in our NAV. Well, we paid 30,000 for the land, but we probably carried 130 or 140. We bid 215,000. We were blown out. We didn’t even get asked for a second number.

So I would say land values in Alberta are probably at their all-time high. And I think there’s a relative depth right now in Calgary—they have a little bit of an oversupply—but there’s going to be great growth. Everything that’s happening in Canada, Alberta and Saskatchewan are both getting much more than their per capita share. So I think they’re going to be attracting people, they’re going to be growing and the value of land is going to go up more. In Saskatchewan, you know, we own so much land there, there’s just not that many trades.

But we’re able to get a lot of value out of the land at the market value that we use in our NAV. I’ll check, but I think like every once in a while we buy some strategic land. It always surprises me how expensive it is. So, I mean, I’m not sure that we can sell 3,000 acres in Saskatoon in a minute. But I know when we see 20 or 100 acres, it sells for a lot higher than we reflect in the NAV. And I think when we put our NAV, we’re higher than you are.

We’re quite comfortable that our number has a margin of safety in it.

Ariel (Analyst)

Okay, that’s it for me. Thank you.

Michael Cooper (Chief Responsible Officer)

Thank you, Ariel.

OPERATOR

Our next question comes from the line of Ian Gillespie. Your line is open.

Ian Gillespie (Analyst)

Yes, good morning. You may have covered it earlier, and I apologize for joining the call later, but is the financing for Quayside finalized at this point and are you still planning on construction before December 31st?

Michael Cooper (Chief Responsible Officer)

What a great question, and sorry you missed what we started with, but I did not address that. I’m smiling because it is by far the most complicated development we’ve ever been involved in, and we have a history with complicated developments. We’ve got four not-for-profits that are going to be responsible for the 500 units that the City is paying for and will own. We’ve got Waterfront Toronto. The City is a partner, and we’re dealing with CMHC. We imminently are going to be at a stage where we’ve completed in excess of 25 separate documents that are required in order to start.

They will go into escrow shortly and then all we need to do—and that includes all the debt—so then we need to focus on how to lock in the rate at a number that works. So it is very much on my mind. We are talking to everybody involved. There are a lot of players and everybody is focused to make this work. I mentioned earlier how volatile interest rates are. Just for perspective on that development, one basis point is about $1.3 million of cost over the 20 years. So if it goes up 10, it’s $13 million in total. You know, present value might be 8 or 9 for every 10 basis points. So it’s a big factor. In June, that was a slam dunk, that project.

The 20-year bond was great. Then it got terrible. It’s come down a lot. Then yesterday was a hot U.S. number. So I think over the next seven weeks we’re going to try to get it going. But first we have to have all the deal terms among all the parties complete.

Ian Gillespie (Analyst)

Okay, thank you very much.

OPERATOR

There are no further questions at this time. I would like to turn the call back over to Mr. Cooper for closing remarks.

Michael Cooper (Chief Responsible Officer)

Closing remarks sounds a little haughtier than anything I have to say, but I do appreciate everybody spending their time with us and following the company. Megan and I are always available to discuss anything with you, to answer any questions. And we do appreciate your feedback. So thank you so much for participating in today’s call.

OPERATOR

Ladies and gentlemen, that concludes today’s call. Thank you all for joining. You may now disconnect.

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