This press release contains forward-looking information that is based upon assumptions and is subject to risks and uncertainties as indicated in the cautionary note contained within this press release. All dollar amounts are in U.S. dollars.
TORONTO--(BUSINESS WIRE)--August 06, 2025--
DREAM RESIDENTIAL REAL ESTATE INVESTMENT TRUST (TSX: DRR.U, TSX: DRR.UN) ("Dream Residential REIT" or the "REIT" or "we" or "us") today announced its financial results for the three and six months ended June 30, 2025 ("Q2 2025").
HIGHLIGHTS
-- Comparative properties net operating income ("comparative properties
NOI")1 was $6.4 million in Q2 2025, a 1.1% increase from Q2 2024. Net
rental income was $8.2 million in Q2 2025 or $0.2 million higher than the
prior year comparative quarter mainly due to an increase in investment
properties revenue.
-- Diluted funds from operations ("FFO") per Unit2 was $0.18 for Q2 2025,
consistent with Q2 2024, comprising a slight increase in comparative
properties NOI, offset by a decrease in interest and other income and an
increase in interest expense on debt.
-- Portfolio occupancy increased to 95.2% as at June 30, 2025, from 93.3%
at the end of Q1 2025, with the Greater Oklahoma City region at 94.8%,
Greater Dallas--Fort Worth region at 94.8% and Greater Cincinnati region
at 96.3%. During the quarter, we completed renovations on six units in
the Greater Cincinnati region.
-- Average monthly rent at June 30, 2025 was $1,186 per unit compared to
$1,182 per unit at March 31, 2025.
-- Maintaining conservative balance sheet and financial flexibility. Net
total debt-to-net total assets3 was 33.1% as at June 30, 2025, compared
to 33.0% as at December 31, 2024. Total mortgages payable were $124.4
million, consisting of nine fixed rate mortgages with a weighted average
contractual interest rate of 4.0%. Total amounts outstanding on the
revolving credit facility were $16.0 million. Total assets (per condensed
consolidated financial statements) were $410.2 million as at June 30,
2025. Total assets comprised primarily $399.1 million of investment
properties and $6.7 million of cash and cash equivalents.
-- Strategic Review. The REIT's strategic review process (the "Strategic
Review") to identify, evaluate and pursue a range of strategic
alternatives with the goal of maximizing unitholder value remains
ongoing.
_______________________________________________
(1) Comparative properties NOI is a non-GAAP financial measure. The tables
included in the Appendices section of this press release reconcile comparative
properties NOI to net rental income for the three and six months ended June
30, 2025 and June 30, 2024. For further information on this non-GAAP financial
measure, please refer to the statements under the heading "Non-GAAP financial
measures, ratios and supplementary financial measures" in this press release.
(2) Diluted FFO per Unit is a non-GAAP ratio. Diluted FFO per Unit comprises
FFO (a non-GAAP financial measure) divided by the weighted average number of
Units. For further information on this non-GAAP ratio, please refer to the
statements under the heading "Non-GAAP financial measures, ratios and
supplementary financial measures" in this press release.
(3) Net total debt-to-net total assets is a non-GAAP ratio. For further
information on this non-GAAP ratio, please refer to the statements under the
heading "Non-GAAP financial measures, ratios and supplementary financial
measures" in this press release.
Dream Residential REIT has not established a definitive timeline to complete the Strategic Review process nor any transaction and no decisions have been reached at this time. As such, the process is subject to unknown variables, including the costs, structure, terms, timing and outcome. There can be no assurance that the Strategic Review will result in any transaction or initiative or, if a transaction or initiative is undertaken, the terms or timing of such a transaction or initiative and its impact on the financial condition, liquidity, and results of operations of the REIT. The REIT does not intend to disclose further developments in connection with the Strategic Review until it is determined that disclosure is necessary, appropriate or required.
"The REIT delivered solid operational and financial performance in Q2 2025," said Brian Pauls, Chief Executive Officer of Dream Residential REIT. "Dream Residential REIT continued to make incremental gains by growing rents and net operating income. We are encouraged by the REIT's performance through the first half of 2025 and will continue to operate the portfolio with a focus on prudent capital allocation, operational efficiency and maintaining a conservative balance sheet."
-- Q2 2025 net income for the three months ended June 30, 2025 was $0.8
million, which comprises net rental income of $8.2 million, fair value
adjustments to investment properties of $(1.2) million and fair value
adjustments to financial instruments of $(2.3) million, primarily from
the revaluation of Class B units of DRR Holdings LLC, a subsidiary of the
REIT ("Class B Units" -- together with the units of the REIT ("Trust
Units", "Units")). Other income and expenses totalled $(3.9) million.
-- Total equity (per condensed consolidated financial statements) was
$230.1 million as at June 30, 2025, compared to $240.5 million as at
December 31, 2024, driven by the year-to-date net loss and distributions
paid and payable.
-- Net asset value ("NAV")4 per Unit was $13.44 as at June 30, 2025,
compared to $13.39 as at December 31, 2024.
-- The REIT declared distributions totalling $0.105 per Unit during Q2
2025.
FINANCIAL HIGHLIGHTS
Three months ended June 30, Six months ended June 30,
--------------------------- ---------------------------
(in thousands
unless
otherwise
stated) 2025 2024 2025 2024
-------------- ---------- ----------- ----------- ----------
Operating
results
Net income
(loss) $ 843 $ 3,346 $ (7,208) $ 4,162
FFO(1) 3,499 3,516 6,903 6,963
Net rental
income 8,181 7,984 14,417 14,617
Comparative
properties
NOI(10) 6,435 6,362 12,566 12,443
Comparative
properties
NOI
margin(11) 51.9% 52.6% 51.4% 51.6%
Per Unit
amounts
Distribution
rate per
Trust Unit $ 0.105 $ 0.105 $ 0.210 $ 0.210
Diluted FFO
per
Unit(2)(3) 0.18 0.18 0.35 0.35
-------------- ---------- ----------- ----------- ----------
(See footnotes at end)
_______________________________________________
(4) NAV per Unit is a non-GAAP ratio. NAV per Unit comprises total equity
(including Class B Units) (a non-GAAP financial measure) divided by the number
of Units. For further information on this non-GAAP ratio, please refer to the
statements under the heading "Non-GAAP financial measures, ratios and
supplementary financial measures" in this press release.
Net income for Q2 2025 was $0.8 million compared to $3.3 million in Q2 2024 and comprises fair value adjustments to investment properties of $(1.2) million and fair value adjustments to financial instruments of $(2.3) million. FFO for Q2 2025 and the prior year comparative quarter was consistent year-over-year at $3.5 million. Q2 2025 diluted FFO per Unit was $0.18, consistent with the prior year comparative quarter.
Net rental income for Q2 2025 was $8.2 million and compares to $8.0 million in the comparative quarter. The increase in net rental income from the comparative quarter was largely driven by an increase in investment properties revenue. Comparative properties NOI for Q2 2025 was $6.4 million and consistent with the comparative quarter. Comparative properties NOI margin for Q2 2024 was 51.9%, compared to 52.6% in the comparative quarter. Q2 2025 comparative properties NOI includes comparative investment properties revenue of $12.4 million, which increased by $0.3 million from the comparative quarter. The increase was driven by positive blended lease trade-outs and rental premiums from our value-add program. Investment properties operating expenses were $6.0 million for Q2 2025, and $5.7 million for the comparative quarter when excluding the impact of IFRIC 21, "Levies" ("IFRIC 21"), as a result of increased property taxes and utilities, generally offset by lower property insurance expenses.
PORTFOLIO INFORMATION As at
--------- --------- --------
June 30, March 31, June 30,
2025 2025 2024
------------------------------------- --------- --------- --------
Total portfolio
Number of assets 15 15 15
Investment properties fair value (in
thousands) $ 399,093 $ 399,555 $ 396,800
Units 3,300 3,300 3,300
Occupancy rate -- in place
(period-end) 95.2% 93.3% 94.0%
Average in-place base rent per month
per unit $ 1,186 $ 1,182 $ 1,167
Estimated market rent to in-place
base rent spread (%) (period-end) 4.1% 3.0% 8.8%
Tenant retention ratio(12) 57.4% 57.5% 59.2%
------------------------------------- --------- --------- --------
(See footnotes at end)
ORGANIC GROWTH
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