Dream Residential REIT Reports Q2 2025 Financial Results
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
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 theGreater Oklahoma City region at 94.8%, Greater Dallas–Fort Worth region at 94.8% andGreater Cincinnati region at 96.3%. During the quarter, we completed renovations on six units in theGreater Cincinnati region.
-
Average monthly rent at
June 30, 2025 was$1,186 per unit compared to$1,182 per unit atMarch 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 atDecember 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 atJune 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 |
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
-
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$(2.3) million , primarily from the revaluation of Class B units ofDRR Holdings LLC , a subsidiary of the REIT (“Class B Units” – together with the units of the REIT (“Trust Units”, “Units”)). Other income and expenses totalled$(3.9) million . -
Total equity (per condensed consolidated financial statements) was
$230.1 million as atJune 30, 2025 , compared to$240.5 million as atDecember 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 atJune 30, 2025 , compared to$13.39 as atDecember 31, 2024 . -
The REIT declared distributions totalling
$0.105 per Unit during Q2 2025.
FINANCIAL HIGHLIGHTS
|
|
Three months ended |
|
Six months ended |
||||
(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 |
Net income for Q2 2025 was
Net rental income for Q2 2025 was
PORTFOLIO INFORMATION
|
|
|
|
|
|
As at |
|
|
|
|
|
|
|
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
Weighted average monthly rent as at
During Q2 2025, blended lease trade-outs averaged 1.5% compared to 0.4% in Q1 2025. This comprises an average increase on renewals of approximately 3.7% (
Value-add initiatives
During Q2 2025, renovations were completed on six suites in the
“Occupancy has improved by 190 basis points since Q1 2025, driven by our emphasis on tenant retention and ongoing leasing efforts,” said
FINANCING AND CAPITAL INFORMATION
|
|
|
|
As at |
(unaudited) (dollar amounts presented in thousands, except for per Unit amounts) |
|
|
|
|
Financing |
|
|
|
|
Net total debt-to-net total assets(4) |
|
33.1% |
|
33.0% |
Average term to maturity on debt (years) |
|
4.3 |
|
4.8 |
Interest coverage ratio (times)(5) |
|
2.9 |
|
2.9 |
Undrawn credit facility |
$ |
54,000 |
$ |
55,000 |
Available liquidity(6) |
$ |
60,728 |
$ |
60,382 |
Capital |
|
|
|
|
Total equity |
$ |
230,066 |
$ |
240,489 |
Total equity (including Class |
$ |
264,772 |
$ |
263,528 |
Total number of Trust Units and Class |
|
19,696,492 |
|
19,678,695 |
Net asset value (“NAV”) per Unit(9) |
$ |
13.44 |
$ |
13.39 |
Trust Unit price |
$ |
9.40 |
$ |
6.24 |
See footnotes at end |
As at
Total equity of
NAV per Unit as at
OTHER INFORMATION
Information appearing in this press release is a select summary of financial results. The condensed consolidated financial statements and management’s discussion and analysis for the REIT will be available at www.dreamresidentialreit.ca and under the REIT’s profile on www.sedarplus.com.
Dream Residential REIT is an unincorporated, open-ended real estate investment trust established and governed by the laws of the
Non-GAAP financial measures, ratios and supplementary financial measures
The REIT’s condensed consolidated financial statements are prepared in accordance with IFRS Accounting Standards as issued by the
Forward-looking information
This press release may contain forward-looking information within the meaning of applicable securities legislation. Such information includes statements regarding future market conditions; our expectations regarding our Strategic Review process and the results thereof, including our ability to pursue strategic alternatives; that the Strategic Review will result in any transaction or initiative and our expectations regarding timing, structure, costs, terms and outcome thereof, including on the financial condition, liquidity and results of operations of the REIT; that we will continue to make incremental gains by growing rents and net operating income; our ability to operate the portfolio with a focus on prudent capital allocation, operational efficiency and maintain a conservative balance sheet; our ability to complete suites under renovation including in the
FOOTNOTES |
||
(1) |
|
FFO is a non-GAAP financial measure. The most directly comparable financial measure to FFO is net income. For further information on this non-GAAP measure, please refer to the statements under the heading “Non-GAAP financial measures, ratios and supplementary financial measures” in this press release. The table included in the Appendices section of this press release reconciles FFO for the three and six months ended |
(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) |
A description of the determination of diluted amounts per Unit can be found in the REIT’s Q2 2025 MD&A in the section “Supplementary Financial Measures and Other Disclosures”, under the heading “Weighted average number of Units”. |
|
(4) |
Net total debt-to-net total assets is a non-GAAP ratio. Net total debt-to-net total assets comprises net total debt (a non-GAAP financial measure) divided by net total assets (a non-GAAP financial measure). The most directly comparable financial measure to net total debt is non-current debt, and the most directly comparable financial measure to net total assets is total assets. For further information on this non-GAAP ratio and these non-GAAP financial measures, please refer to the statements under the heading “Non-GAAP financial measures, ratios and supplementary financial measures” in this press release. |
|
(5) |
Interest coverage ratio (times) is a non-GAAP ratio. Interest coverage ratio comprises trailing 12-month adjusted EBITDAFV (a non-GAAP financial measure) divided by trailing 12-month interest expense on debt (a non-GAAP financial measure). The most directly comparable financial measure to adjusted EBITDAFV is net income (loss). The table included in the Appendices section of this press release reconciles adjusted EBITDAFV to net income (loss) and trailing 12-month adjusted EBITDAFV and trailing 12-month interest expense on debt to adjusted EBITDAFV and interest expense on debt, respectively, for the trailing 12-month period ended |
|
(6) |
Available liquidity is a non-GAAP financial measure. The most directly comparable financial measure to available liquidity is cash and cash equivalents. The table included in the Appendices section of this press release reconciles available liquidity to cash and cash equivalents as at |
|
(7) |
Total equity (including Class |
|
(8) |
Total number of Units includes 16,004,408 Trust Units and 3,692,084 Class |
|
(9) |
NAV per Unit is a non-GAAP ratio. NAV per Unit comprises total equity (including Class |
|
(10) |
Comparative properties NOI is a non-GAAP financial measure. The most directly comparable financial measure to comparative properties NOI is net rental income. The table included in the Appendices section of this press release reconciles comparative properties NOI for the three and sixmonths ended |
|
(11) |
Comparative properties NOI margin is a non-GAAP ratio. Comparative properties NOI margin is defined as comparative properties NOI (a non-GAAP financial measure) divided by comparative investment properties revenue, as a percentage. 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. |
|
(12) |
Tenant retention ratio is defined as the number of renewed leases divided by the total number of leases signed during the period. Tenant retention ratio is a supplementary financial measure. |
Appendices
Reconciliation of FFO to net income
The table below reconciles FFO to net income for the three and six months ended
|
|
Three months ended |
|
Six months ended |
|||||||
(in thousands of dollars, unless otherwise stated) |
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
Net income (loss) for the period |
$ |
843 |
|
$ |
3,346 |
|
$ |
(7,208) |
|
$ |
4,162 |
Add (deduct): |
|
|
|
|
|
|
|
|
|||
Fair value adjustments to investment properties |
|
1,156 |
|
|
4,106 |
|
|
2,621 |
|
|
5,783 |
Fair value adjustments to financial instruments |
|
2,295 |
|
|
(2,706) |
|
|
12,002 |
|
|
(1,705) |
Property tax liability adjustment (IFRIC 21) |
|
(1,746) |
|
|
(1,622) |
|
|
(1,851) |
|
|
(2,174) |
Interest expense on Class |
|
388 |
|
|
392 |
|
|
776 |
|
|
897 |
Strategic review costs |
|
563 |
|
|
— |
|
|
563 |
|
|
— |
Funds from operations (“FFO”) for the period |
$ |
3,499 |
|
$ |
3,516 |
|
$ |
6,903 |
|
$ |
6,963 |
Diluted weighted average number of Units (in thousands) |
|
19,919 |
|
|
19,805 |
|
|
19,895 |
|
|
19,790 |
Diluted FFO per Unit |
$ |
0.18 |
|
$ |
0.18 |
|
$ |
0.35 |
|
$ |
0.35 |
Reconciliation of NOI and comparative properties NOI to net rental income
The table below reconciles NOI and comparative properties NOI to net rental income for the three and six months ended
|
|
Three months ended |
|
Six months ended |
||||
|
|
2025 |
|
2024 |
|
2025 |
|
2024 |
Investment properties revenue |
$ |
12,388 |
$ |
12,099 |
$ |
24,438 |
$ |
24,113 |
Less: Investment properties revenue from sold properties |
|
— |
|
— |
|
— |
|
— |
Comparative investment properties revenue |
|
12,388 |
|
12,099 |
|
24,438 |
|
24,113 |
|
|
|
|
|
|
|
|
|
Net rental income |
|
8,181 |
|
7,984 |
|
14,417 |
|
14,617 |
Property tax liability adjustment (IFRIC 21) |
|
(1,746) |
|
(1,622) |
|
(1,851) |
|
(2,174) |
Net operating income (“NOI”) |
$ |
6,435 |
$ |
6,362 |
$ |
12,566 |
$ |
12,443 |
Less: NOI from sold properties |
|
— |
|
— |
|
— |
|
— |
Comparative properties NOI |
|
6,435 |
|
6,362 |
|
12,566 |
|
12,443 |
Comparative properties NOI margin |
|
51.9% |
|
52.6% |
|
51.4% |
|
51.6% |
Reconciliation of adjusted EBITDAFV to net income
The table below reconciles adjusted earnings before interest, taxes, depreciation, amortization and fair value adjustments to net income for the three and six months ended
|
|
Three months ended |
|
Six months ended |
||||
(in thousands, unless otherwise stated) |
|
2025 |
|
2024 |
|
2025 |
|
2024 |
Net income (loss) for the period |
$ |
843 |
$ |
3,346 |
$ |
(7,208) |
$ |
4,162 |
Add (deduct): |
|
|
|
|
|
|
|
|
Interest expense – debt |
|
1,881 |
|
1,827 |
|
3,716 |
|
3,655 |
Interest expense – Class |
|
388 |
|
392 |
|
776 |
|
897 |
Fair value adjustments to investment properties |
|
1,156 |
|
4,106 |
|
2,621 |
|
5,783 |
Fair value adjustments to financial instruments |
|
2,295 |
|
(2,706) |
|
12,002 |
|
(1,705) |
Property tax liability adjustment (IFRIC 21) |
|
(1,746) |
|
(1,622) |
|
(1,851) |
|
(2,174) |
Strategic review costs |
|
563 |
|
— |
|
563 |
|
— |
Adjusted EBITDAFV for the period |
$ |
5,380 |
$ |
5,343 |
$ |
10,619 |
$ |
10,618 |
Reconciliation of available liquidity to revolving credit facility
The table below reconciles available liquidity to cash and cash equivalents as at
(in thousands of dollars) |
As at |
As at |
||
Cash and cash equivalents |
$ |
6,728 |
$ |
5,382 |
Revolving credit facility |
|
54,000 |
|
55,000 |
Available liquidity |
$ |
60,728 |
$ |
60,382 |
Trailing 12-month adjusted EBITDAFV and trailing 12-month interest expense on debt
|
|
Trailing 12-month period ended
|
Adjusted EBITDAFV for the six months ended |
$ |
10,619 |
Add: Adjusted EBITDAFV for the year ended |
|
21,238 |
Less: Adjusted EBITDAFV for the six months ended |
(10,618) |
|
Trailing 12-month adjusted EBITDAFV |
$ |
21,239 |
|
|
Trailing 12-month period ended
|
Interest expense on debt for the six months ended |
$ |
3,716 |
Add: Interest expense for the year ended |
|
7,371 |
Less: Interest expense for the six months ended |
|
(3,655) |
Trailing 12-month interest expense on debt |
$ |
7,432 |
Interest coverage ratio (times)
|
For the trailing 12-month period ended |
|||
|
|
|
|
|
Trailing 12-month adjusted EBITDAFV |
$ |
21,239 |
$ |
21,238 |
Trailing 12-month interest expense on debt |
$ |
7,432 |
$ |
7,371 |
Interest coverage ratio (times) |
|
2.9 |
|
2.9 |
Reconciliation of total equity (including Class
The table below reconciles total equity (including Class
|
As at |
|
As at |
||||
(in thousands of dollars, except number of Units) |
Units |
|
Amount |
|
Units |
|
Amount |
Unitholders’ equity |
16,004,408 |
$ |
151,008 |
|
15,986,611 |
$ |
150,864 |
Retained earnings |
— |
|
79,058 |
|
— |
|
89,625 |
Total equity per condensed consolidated financial statements |
16,004,408 |
|
230,066 |
|
15,986,611 |
|
240,489 |
Add: Class |
3,692,084 |
|
34,706 |
|
3,692,084 |
|
23,039 |
Total equity (including Class |
19,696,492 |
|
264,772 |
|
19,678,695 |
|
263,528 |
NAV per Unit |
|
$ |
13.44 |
|
|
$ |
13.39 |
Reconciliation of net total debt to non-current debt and net total assets to total assets, and calculation of net total debt-to-net total assets
The following table reconciles net total debt to non-current debt and net total assets to total assets, and calculates net total debt-to-net total assets as at
(in thousands of dollars, unless otherwise stated) |
|
As at |
|
As at |
Non-current debt |
$ |
140,310 |
$ |
138,835 |
Current debt |
|
59 |
|
19 |
Total debt |
|
140,369 |
|
138,854 |
Less: Cash and cash equivalents |
|
(6,728) |
|
(5,382) |
Net total debt |
$ |
133,641 |
$ |
133,472 |
Total assets |
$ |
410,161 |
$ |
409,664 |
Less: Cash and cash equivalents |
|
(6,728) |
|
(5,382) |
Net total assets |
$ |
403,433 |
$ |
404,282 |
Net total debt-to-net total assets |
|
33.1% |
|
33.0% |
View source version on businesswire.com: https://www.businesswire.com/news/home/20250806846536/en/
For further information, please contact:
Dream Residential REIT
Chief Executive Officer
(416) 365-2365
bpauls@dream.ca
Chief Financial Officer
(416) 365-2364
dlau@dream.ca
Chief Operating Officer
(303) 519-3020
sschoeman@dream.ca
Source: