Dream Office Real Estate Investment Trust (D-UN) Q1 2026 earnings summary

Executive summary

• Achieved 89.8% in-place and committed occupancy in Downtown Toronto in Q1 2026, with strong leasing momentum, five consecutive quarters of occupancy gains, and a weighted average lease term of 6.2 years.

• Portfolio transformation since 2016 reduced property count from 166 to 23, focusing on core Toronto assets and divesting non-core markets.

• Net income for Q1 2026 was $10.1 million, a turnaround from a net loss of $33.2 million in Q1 2025, driven by fair value adjustments and foreign currency translation gains.

• Significant insider alignment, with Dream Unlimited Corp. and insiders holding approximately 33.7% ownership.

• Major leasing deals, property sales, and redevelopment projects advanced, including the sale of 212 King Street West and progress on 606-4th Street in Calgary.

Financial highlights

• Comparative NOI increased 4.7% year-over-year to $24.5 million, with Toronto comparative NOI up 6.5% to $19.9 million.

• Funds from operations (FFO) for Q1 2026 were $11.2 million ($0.57 per unit), down from $13.3 million ($0.68 per unit) in Q1 2025, mainly due to asset sales.

• Net asset value per unit was $49.61, down from $49.92 at year-end 2025, reflecting fair value losses and lower asset base.

• Total assets at March 31, 2026 were $2.25 billion; total debt was $1.22 billion, with a weighted average interest rate of 5.04%.

• Total liquidity stood at $166.3 million, including $91.7 million in cash and undrawn credit facilities.

Outlook and guidance

• Committed occupancy target for Toronto raised to 88%-90% by year-end 2026, with in-place occupancy expected between 84%-86%.

• Downtown Toronto comparative NOI growth target maintained at 2%-5%, and total portfolio comparative NOI growth at 1%-3% for 2026.

• FFO guidance for 2026 increased to $2.30–2.35 per unit, reflecting the accretive impact of the 212 King sale.

• Management expects continued positive absorption and portfolio value growth in Toronto, supported by return-to-office mandates and strong leasing pipeline.

• No new office construction starts in Q1 2026, supporting stable fundamentals and high net rents.