Dream Office REIT

D.UN-T

TSE:D.UN

30.22
0.22 (0.73%)
Dream Office REIT is one of the largest Real Estate Investment Trusts in Canada. The company owns office buildings across Canada totalling approx 23 million square feet of gross leaseable area.
More at Wikipedia

Analysis and Opinions about D.UN-T

Signal
Opinion
Expert
COMMENT
COMMENT
May 18, 2016

There is a lot of pressure on their portfolio. They have exposure to Calgary, and that market is weak, not only because of oil, but also there was a lot of new supply coming in. When new supply is coming onto the market on the office side, they tend to lease very well because it is brand-new and looks good, so older buildings tend to perform poorly. That has been impacting this company. There is a lot of value in the name. It is trading at a huge discount to NAV. For a long-term investor who thinks things are going to recover, this could be a good buy, but he sees a lot of risks. Dividend is greater than 7%, but he thinks they will try to hang onto it.

There is a lot of pressure on their portfolio. They have exposure to Calgary, and that market is weak, not only because of oil, but also there was a lot of new supply coming in. When new supply is coming onto the market on the office side, they tend to lease very well because it is brand-new and looks good, so older buildings tend to perform poorly. That has been impacting this company. There is a lot of value in the name. It is trading at a huge discount to NAV. For a long-term investor who thinks things are going to recover, this could be a good buy, but he sees a lot of risks. Dividend is greater than 7%, but he thinks they will try to hang onto it.

Steve Belisle
Senior Portfolio Manager & Managing Director, Manulife Asset Management
Price
$19.080
Owned
Unknown
COMMENT
COMMENT
May 10, 2016

This is a REIT that is in office space. You want to look at where they are located and where they’ve got their projects. This has a very good distribution, and it really comes down to occupancy rates.

This is a REIT that is in office space. You want to look at where they are located and where they’ve got their projects. This has a very good distribution, and it really comes down to occupancy rates.

Richard Croft
President, R.N. Croft Financial Group Inc.
Price
$19.130
Owned
Yes
WAIT
WAIT
May 6, 2016

Has been in a long-term decline due to its heavy exposure in the Alberta office market. Announced they were restructuring, slashed their dividend and were selling two thirds of the company. Just announced earnings which were in line with his expectations. When a company is going through a strategic restructuring, he tends to sit on the sidelines.

Has been in a long-term decline due to its heavy exposure in the Alberta office market. Announced they were restructuring, slashed their dividend and were selling two thirds of the company. Just announced earnings which were in line with his expectations. When a company is going through a strategic restructuring, he tends to sit on the sidelines.

Derek Warren
Asst Vice President, Lincluden Investment Mgmnt
Price
$20.210
Owned
No
WATCH
WATCH
April 11, 2016

He tracks it, but does not own it. They have a lot of Western Canada exposure. Great management. Longer term they will do well, but there are challenges short term.

He tracks it, but does not own it. They have a lot of Western Canada exposure. Great management. Longer term they will do well, but there are challenges short term.

Colin Stewart
CEO & Portfolio manager, JC Clark Investments Ltd.
Price
$20.680
Owned
No
COMMENT
COMMENT
February 3, 2016

This is tied more directly to the Alberta economy with pressures in Edmonton and Calgary offices. It’s Ontario portfolio is fine. 14% dividend yield which he feels should be cut.

Dream Office REIT (D.UN-T)
February 3, 2016

This is tied more directly to the Alberta economy with pressures in Edmonton and Calgary offices. It’s Ontario portfolio is fine. 14% dividend yield which he feels should be cut.

Derek Warren
Asst Vice President, Lincluden Investment Mgmnt
Price
$15.590
Owned
Unknown
HOLD
HOLD
January 28, 2016

Hold on to it if you have had it for a while. It is a case of their cash flow being under pressure and they have leverage on their balance sheet. Management is smart and as long as oil is not here for 5 years, this is not the time to sell but to hold on for sunnier days.

Dream Office REIT (D.UN-T)
January 28, 2016

Hold on to it if you have had it for a while. It is a case of their cash flow being under pressure and they have leverage on their balance sheet. Management is smart and as long as oil is not here for 5 years, this is not the time to sell but to hold on for sunnier days.

Colin Stewart
CEO & Portfolio manager, JC Clark Investments Ltd.
Price
$15.860
Owned
Unknown
DON'T BUY
DON'T BUY
January 5, 2016

He has disliked this story for so long. He has a problem with their management contract and their fees. They are in a space that is struggling. They have suffered because of the properties outside of Calgary. The overall assets are not great. The dividend is safe.

He has disliked this story for so long. He has a problem with their management contract and their fees. They are in a space that is struggling. They have suffered because of the properties outside of Calgary. The overall assets are not great. The dividend is safe.

Paul Gardner, CFA
Partner and Portfolio Manager, Avenue Investment Management
Price
$16.860
Owned
Unknown
COMMENT
COMMENT
December 8, 2015

He has a little bit and thinks it is cheap. Trading well under NAV. It gets about 40% of its Net Operating Income from the West. There is a lot of capacity coming on in the office space, both in Toronto and Calgary. They are doing the right things on leasing. This is one that he hopes will rise after the pressures of this year come off. The company has said they are not looking at the 13% dividend as it is fine and their cash flow supports it at the moment.

Dream Office REIT (D.UN-T)
December 8, 2015

He has a little bit and thinks it is cheap. Trading well under NAV. It gets about 40% of its Net Operating Income from the West. There is a lot of capacity coming on in the office space, both in Toronto and Calgary. They are doing the right things on leasing. This is one that he hopes will rise after the pressures of this year come off. The company has said they are not looking at the 13% dividend as it is fine and their cash flow supports it at the moment.

Jeff Young
Co-CEO & CIO, NexGen Financial
Price
$17.200
Owned
Yes
DON'T BUY
DON'T BUY
December 3, 2015

Has been under pressure. It is because of the decline in the valuations for office space in Alberta. About 40% of their leasable space is in Alberta. He is not worried about a dividend cut. Real vacancy rates he thinks are much higher than published, for office space. He thinks it is 25%.

Dream Office REIT (D.UN-T)
December 3, 2015

Has been under pressure. It is because of the decline in the valuations for office space in Alberta. About 40% of their leasable space is in Alberta. He is not worried about a dividend cut. Real vacancy rates he thinks are much higher than published, for office space. He thinks it is 25%.

Ben Cheng
President and Chief Investment Officer, Aston Hill Financial Ltd.
Price
$17.940
Owned
Unknown
WAIT
WAIT
November 12, 2015

A very professional organization. It becomes difficult to value the company, however. They wrote down a Calgary office 15% as a part of their recent earnings. He is keeping an eye on Edmonton vacations and they will do a deeper dive into the company.

Dream Office REIT (D.UN-T)
November 12, 2015

A very professional organization. It becomes difficult to value the company, however. They wrote down a Calgary office 15% as a part of their recent earnings. He is keeping an eye on Edmonton vacations and they will do a deeper dive into the company.

Derek Warren
Asst Vice President, Lincluden Investment Mgmnt
Price
$19.320
Owned
Unknown
HOLD
HOLD
November 9, 2015

Stock vs. Stock. D.UN-T vs. CUF.UN-T. Both distributions are pretty safe. Interest rate rises are negatively affecting these. A lot of investors have a fear regarding Canadian Real Estate.

Dream Office REIT (D.UN-T)
November 9, 2015

Stock vs. Stock. D.UN-T vs. CUF.UN-T. Both distributions are pretty safe. Interest rate rises are negatively affecting these. A lot of investors have a fear regarding Canadian Real Estate.

Colin Stewart
CEO & Portfolio manager, JC Clark Investments Ltd.
Price
$20.240
Owned
No
DON'T BUY
DON'T BUY
November 9, 2015

Stock has fallen a great deal because a lot of their properties are located in Calgary.

Dream Office REIT (D.UN-T)
November 9, 2015

Stock has fallen a great deal because a lot of their properties are located in Calgary.

Paul Harris, CFA
Partner and Portfolio Manager, Harris Douglas Asset Management
Price
$20.240
Owned
No
HOLD
HOLD
October 13, 2015

Primarily B level office space. Even though 30% of the portfolio is A class exposure, there is a compression in rents generally. As the A rents come down, B class tenants start to consider moving up, which puts pressure on the B’s. Good company and cash flow seems to be strong. Not really growing all that fast at this point.

Dream Office REIT (D.UN-T)
October 13, 2015

Primarily B level office space. Even though 30% of the portfolio is A class exposure, there is a compression in rents generally. As the A rents come down, B class tenants start to consider moving up, which puts pressure on the B’s. Good company and cash flow seems to be strong. Not really growing all that fast at this point.

John Stephenson
President & CEO, Stephenson & Company Capital Management
Price
$21.600
Owned
Unknown
COMMENT
COMMENT
September 11, 2015

Market has been overly harsh on this vehicle for some time. The 11% yield is quite high. There have been several transactions where similar properties to their GTA portfolio, especially the one they bought in 2011, are trading at significant improvements, basically 30% higher than what this company paid. There has been speculation if they will cut. They don’t really need to, but if they did they would be using that money to produce more CapX and renovations on existing office portfolios.

Dream Office REIT (D.UN-T)
September 11, 2015

Market has been overly harsh on this vehicle for some time. The 11% yield is quite high. There have been several transactions where similar properties to their GTA portfolio, especially the one they bought in 2011, are trading at significant improvements, basically 30% higher than what this company paid. There has been speculation if they will cut. They don’t really need to, but if they did they would be using that money to produce more CapX and renovations on existing office portfolios.

Derek Warren
Asst Vice President, Lincluden Investment Mgmnt
Price
$20.420
Owned
Unknown
PAST TOP PICK
PAST TOP PICK
August 20, 2015

(Top Pick Jul. 29/14, Down 18.67%) Good quality REIT. There are some concerns about some holdings in the West.

(Top Pick Jul. 29/14, Down 18.67%) Good quality REIT. There are some concerns about some holdings in the West.

Ross Healy
Chairman, Strategic Analysis Corp
Price
$21.820
Owned
Yes
SPECULATIVE BUY
SPECULATIVE BUY
July 27, 2015

He does now own it because of the negative pressure in Calgary office markets. He thinks the market is pricing in more rent erosion than there is. For the brave, there is a bit of an opportunity.

He does now own it because of the negative pressure in Calgary office markets. He thinks the market is pricing in more rent erosion than there is. For the brave, there is a bit of an opportunity.

Derek Warren
Asst Vice President, Lincluden Investment Mgmnt
Price
$23.560
Owned
No
COMMENT
COMMENT
July 24, 2015

Great managers. His stop losses kicked in, so he has greatly reduced his positions. REITs have room to go because of the decline in interest rates by the central bank in Canada. He is going to wait to see what happens. |Still likes it. His company’s target is $31 and have it is a sector perform.

Great managers. His stop losses kicked in, so he has greatly reduced his positions. REITs have room to go because of the decline in interest rates by the central bank in Canada. He is going to wait to see what happens. |Still likes it. His company’s target is $31 and have it is a sector perform.

Jaime Carrasco
Portfolio Manager, Canaccord Genuity
Price
$24.120
Owned
Yes
COMMENT
COMMENT
July 2, 2015

He has very little office exposure in his real estate portfolios. In the next 3-4 years you are going to see a lot of new supply come on to the market. Typically, what happens when you get these new buildings is they start really affecting rents. This one has a lot of suburban office which will be affected. It is decently valued here, but you have to be very, very patient and wait for the new supply to get absorbed into the market.

He has very little office exposure in his real estate portfolios. In the next 3-4 years you are going to see a lot of new supply come on to the market. Typically, what happens when you get these new buildings is they start really affecting rents. This one has a lot of suburban office which will be affected. It is decently valued here, but you have to be very, very patient and wait for the new supply to get absorbed into the market.

Andy Nasr
VP & Investment Strategist, Sentry Investments
Price
$24.320
Owned
No
COMMENT
COMMENT
May 15, 2015

Has been under pressure simply because of the overbuilding in the office market that we have been seeing in Calgary and Toronto. They have been losing tenants and it has been a bit of a struggle, but they are able to continue to lease up. While he believes their cash flow will continue to be under strain, the dividend is sustainable and it is a generous yield.

Has been under pressure simply because of the overbuilding in the office market that we have been seeing in Calgary and Toronto. They have been losing tenants and it has been a bit of a struggle, but they are able to continue to lease up. While he believes their cash flow will continue to be under strain, the dividend is sustainable and it is a generous yield.

Derek Warren
Asst Vice President, Lincluden Investment Mgmnt
Price
$26.880
Owned
No
COMMENT
COMMENT
April 22, 2015

He still doesn’t see sunshine through the clouds when it comes to the Calgary and Toronto office markets. There is still a lot of supply coming on. This company will continue to face those headwinds for some time.

He still doesn’t see sunshine through the clouds when it comes to the Calgary and Toronto office markets. There is still a lot of supply coming on. This company will continue to face those headwinds for some time.

Derek Warren
Asst Vice President, Lincluden Investment Mgmnt
Price
$28.130
Owned
No
COMMENT
COMMENT
March 31, 2015

Focuses on office, retail and a bit of industrial. They used to be focused only in Alberta, but have diversified out of that, but are still about 40%. He doesn’t like the story or their assets and thinks there is going to be real softening in their core businesses in Alberta. Also, doesn’t like the management agreement where they get paid on asset growth, not profitability. Company pays out about 90%, which is a little high, but distribution should be fine.

Focuses on office, retail and a bit of industrial. They used to be focused only in Alberta, but have diversified out of that, but are still about 40%. He doesn’t like the story or their assets and thinks there is going to be real softening in their core businesses in Alberta. Also, doesn’t like the management agreement where they get paid on asset growth, not profitability. Company pays out about 90%, which is a little high, but distribution should be fine.

Paul Gardner, CFA
Partner and Portfolio Manager, Avenue Investment Management
Price
$26.350
Owned
No
BUY
BUY
March 26, 2015

Not the most highly regarded trust out there. Decent exposure to Calgary office space. But everyone knows about these concerns. It has an 8% yield. The dividend is safe.

Not the most highly regarded trust out there. Decent exposure to Calgary office space. But everyone knows about these concerns. It has an 8% yield. The dividend is safe.

Jeff Young
Co-CEO & CIO, NexGen Financial
Price
$26.260
Owned
Yes
DON'T BUY
DON'T BUY
March 19, 2015

The office sector is not one he really loves. There will be an increase in supply. Thinks you will see pressure on rents and on occupancy, so avoid it. The dividend is sustainable.

The office sector is not one he really loves. There will be an increase in supply. Thinks you will see pressure on rents and on occupancy, so avoid it. The dividend is sustainable.

Andy Nasr
VP & Investment Strategist, Sentry Investments
Price
$26.020
Owned
Unknown
HOLD
HOLD
March 3, 2015

Has a lot of Toronto, Calgary and Edmonton office exposure, and for that reason the stock has not done that well. He thinks the worse has probably been seen when it comes to this company. While there still is a big supply, he thinks they are doing a very good job of maintaining the stability of their properties, creating a positive leasing environment. Although he doesn’t see a lot of growth to the upside, your yield is very safe and you will see slow growth from now on.

Has a lot of Toronto, Calgary and Edmonton office exposure, and for that reason the stock has not done that well. He thinks the worse has probably been seen when it comes to this company. While there still is a big supply, he thinks they are doing a very good job of maintaining the stability of their properties, creating a positive leasing environment. Although he doesn’t see a lot of growth to the upside, your yield is very safe and you will see slow growth from now on.

Derek Warren
Asst Vice President, Lincluden Investment Mgmnt
Price
$27.330
Owned
No
DON'T BUY
DON'T BUY
January 29, 2015

Has western Canada exposure. Office leases are done normally with investment grade blue chip companies so there is really is little risk of the leases being broken. Their stock no longer trades at a premium. Acquisition growth is predominantly off the table. They have to prove to the market that they are good operators.

Dream Office REIT (D.UN-T)
January 29, 2015

Has western Canada exposure. Office leases are done normally with investment grade blue chip companies so there is really is little risk of the leases being broken. Their stock no longer trades at a premium. Acquisition growth is predominantly off the table. They have to prove to the market that they are good operators.

Ben Cheng
President and Chief Investment Officer, Aston Hill Financial Ltd.
Price
$27.330
Owned
No
TOP PICK
TOP PICK
January 23, 2015

A good conservative company. Well-managed and a good dividend. Solid.

Dream Office REIT (D.UN-T)
January 23, 2015

A good conservative company. Well-managed and a good dividend. Solid.

Jaime Carrasco
Portfolio Manager, Canaccord Genuity
Price
$27.280
Owned
Yes
SELL
SELL
January 20, 2015

Had been solely focused on B category real estate out West. During the 2009-2010 crisis, they had subpar real estate and got hurt. They then focused on buying office in Ontario. It used to be 70% weighted to Alberta, but is now about 40% out West which is good. However, it missed its targets and had some small vacancy issues. He still has trouble with it owning office space in the towers in Toronto and the industrial and office space in Alberta. Has never liked this story. He would look to sell.

Dream Office REIT (D.UN-T)
January 20, 2015

Had been solely focused on B category real estate out West. During the 2009-2010 crisis, they had subpar real estate and got hurt. They then focused on buying office in Ontario. It used to be 70% weighted to Alberta, but is now about 40% out West which is good. However, it missed its targets and had some small vacancy issues. He still has trouble with it owning office space in the towers in Toronto and the industrial and office space in Alberta. Has never liked this story. He would look to sell.

Paul Gardner, CFA
Partner and Portfolio Manager, Avenue Investment Management
Price
$26.860
Owned
No
COMMENT
COMMENT
January 9, 2015

This really hasn’t been a name for him. Has sold off a lot and he has always had a tone of caution when talking about this, because of the big increase in office supply. This REIT gets negatively impacted by nice new shiny buildings popping up in major city centres like Toronto and Calgary which tends to depress vacancy on a short-term basis. Have had several tenants that have announced their intention to exit when their leases are up, so they have been busy trying to re-tenant some vacant space. Longer-term they should be fine with occupancy moving back to the low 90%s. Payout ratio is a little bit high in the mid-90%s. Biggest risk currently is in re-tenanting some of that vacant space and what they are paying for it. Currently this is exceptional value and very cheap. The only knock on it is that it is externally managed, but you are getting a good dividend. If you are long term oriented, it is a decent name. (See Top Picks.)

This really hasn’t been a name for him. Has sold off a lot and he has always had a tone of caution when talking about this, because of the big increase in office supply. This REIT gets negatively impacted by nice new shiny buildings popping up in major city centres like Toronto and Calgary which tends to depress vacancy on a short-term basis. Have had several tenants that have announced their intention to exit when their leases are up, so they have been busy trying to re-tenant some vacant space. Longer-term they should be fine with occupancy moving back to the low 90%s. Payout ratio is a little bit high in the mid-90%s. Biggest risk currently is in re-tenanting some of that vacant space and what they are paying for it. Currently this is exceptional value and very cheap. The only knock on it is that it is externally managed, but you are getting a good dividend. If you are long term oriented, it is a decent name. (See Top Picks.)

Andy Nasr
VP & Investment Strategist, Sentry Investments
Price
$26.960
Owned
Unknown
PAST TOP PICK
PAST TOP PICK
January 5, 2015

(A Top Pick Jan 2/14. Down 2.96%.) Still likes this stock. It is very, very cheap and has a superb yield.

(A Top Pick Jan 2/14. Down 2.96%.) Still likes this stock. It is very, very cheap and has a superb yield.

Ross Healy
Chairman, Strategic Analysis Corp
Price
$25.630
Owned
No
HOLD
HOLD
December 29, 2014

Dividend is relatively safe and is attractive. Does not see good things happening in the office space because of all the building. Hold if dividend is your main focus.

Dream Office REIT (D.UN-T)
December 29, 2014

Dividend is relatively safe and is attractive. Does not see good things happening in the office space because of all the building. Hold if dividend is your main focus.

Derek Warren
Asst Vice President, Lincluden Investment Mgmnt
Price
$24.870
Owned
No
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