# Dream Office REIT (D.UN)



## tygrus

Seriously what gives. Interest rates lower 2 time already with another likely in Sept. Is this thing a dog? If it weren't for the yeild I might have dumped it months ago but I still have almost $600/month coming in off this.


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## HaroldCrump

It's the exposure to Western Canada office space market that's killing this REIT.
In general, there is a glut of office space in all major markets, but the prospects are particularly bad in the Calgary/Alberta markets.


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## godblsmnymkr

I don't know much about the fundamentals of the company, but technically there's been some warning signs to get out much earlier then now.










warning shot fired when it broke its upwards trend line june 12. time to sell some on june 26 when it started to breakdown. you know you had real problems in the stock when it sliced right through prior support of 25.60 without a pause was probably time to dump the whole position and put it into something else. 
not everyone believes in technicals but they can show you the warning signs of an unhealthy stock. 
you could draw a line in the sand @ 23.10 or something and move that money into DRG.UN. earnings come out today so might be a good time to invest after they're out if its good news. healthy chart too.
gl


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## supperfly17

godblsmnymkr said:


> I don't know much about the fundamentals of the company, but technically there's been some warning signs to get out much earlier then now.
> 
> 
> 
> 
> 
> 
> 
> 
> 
> 
> warning shot fired when it broke its upwards trend line june 12. time to sell some on june 26 when it started to breakdown. you know you had real problems in the stock when it sliced right through prior support of 25.60 without a pause was probably time to dump the whole position and put it into something else.
> not everyone believes in technicals but they can show you the warning signs of an unhealthy stock.
> you could draw a line in the sand @ 23.10 or something and move that money into DRG.UN. earnings come out today so might be a good time to invest after they're out if its good news. healthy chart too.
> gl


Hindsight is a helluva drug!


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## godblsmnymkr

hindsight has nothing to do with a stock breaking through trendlines and support. 
you should be on guard to reduce when a stock hits support. you should be reducing if it falls much past your support trendline most times, and breaking through 25.60 without even a pause was probably the time to get out. just because you need the yield doesnt mean you need to stay in some position. there's other REIT's yielding the same with healthy charts.


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## HaroldCrump

Similar to technicals, the fundamental warnings have been around for at least > 1 year now.
REIT analysts have been warning that there is a glut of office space in all major markets.
This was before the oil slide and its impact on Calgary.
Even REITs with partial exposure to office space and Western Canada have suffered, such as Artis.

The only one that has done relatively better is Brookfield Office Properties, partially because it has premium office space in major markets, and partially shielded because of its behemoth parent company.


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## AltaRed

HaroldCrump said:


> Similar to technicals, the fundamental warnings have been around for at least > 1 year now.
> REIT analysts have been warning that there is a glut of office space in all major markets.
> This was before the oil slide and its impact on Calgary.


I agree the warning signs were there more than a year ago. Even the REIT 'talking head' money managers on BNN were saying that. The only exposure I have in my REIT holdings to office space is what REF.UN has in its portfolio and that is probably the dullest most conservative REIT in Canada. Office space is very cyclical (like hotels). Given the lag/time it takes to plan, develop and build such 'big' projects, there will always seem to be a boom and bust (overbuild) cycle in these sectors.


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## CPA Candidate

If you consult technicals on a REIT, you don't understand the reason for owning them. I've held XRE for years, and it's gone between $14 and $17 in that time. The genius technical analysts out there would have told you to buy at $17 and sell at $14. I buy when they are weak and just hold when they are doing well. After years of distributions piling up the volatility in the unit price looks less and less important.


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## Nordic

CPA Candidate said:


> If you consult technicals on a REIT, you don't understand the reason for owning them. I've held XRE for years, and it's gone between $14 and $17 in that time. The genius technical analysts out there would have told you to buy at $17 and sell at $14. I buy when they are weak and just hold when they are doing well. After years of distributions piling up the volatility in the unit price looks less and less important.


Lol, technical analysis and chart-reading often equates to 'buy high, sell low' or just simply 'sell low'. :biggrin:


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## londoncalling

CPA Candidate said:


> If you consult technicals on a REIT, you don't understand the reason for owning them. I've held XRE for years, and it's gone between $14 and $17 in that time. The genius technical analysts out there would have told you to buy at $17 and sell at $14. I buy when they are weak and just hold when they are doing well. After years of distributions piling up the volatility in the unit price looks less and less important.


This would tell me that the trading range is between 14 and 17. If the range is known pretty easy to play the volatility and collect the distributions. buy at 14.XX and sell at 16.XX.


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## godblsmnymkr

I'm here to learn and not to get caught up in time wasting arguments, but I fear CPA and Nordic fear what they do not understand. I was trying to give OP some help with his position without knowing anything about the stock. Even if you do no believe that TA works, others do so you better be able to read a chart. 
as for consulting TA when looking at a REIT, it will absolutely help. obviously, TA is not as important for REIT investing as it is for some no divi paying growth stock, but it is important. Fundamentals are more important in REIT investing, and if you really feel like you understand a company better then Mr.Market, and believe that Mr.Market is miss pricing your REIT (doubtful) then there's nothing wrong with holding a stock through thick and thin regardless of momentum and TA.
I'm not sure if OP really understands this company. I am anxious for OP to chime in with his thoughts on the company when it comes to the companies fundamentals, rather then just that the yield is high. their earnings came out today so its a great time to break the company down here.


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## tygrus

Well my strategy was certainly not linked to any sort of TA. I am simply trying to hold ETFs for the most part like XRE, then for a little yield boost I hold a couple top performers in each ETF individually. XRE is yeilding 5% and Dream is one of the higher yeilders in the bunch. I don't know if this is scientific or not, but what I do know is I won't invest for 3 or 4% yeild, it has to be more than that.


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## Nordic

godblsmnymkr said:


> I'm here to learn and not to get caught up in time wasting arguments, but I fear CPA and Nordic fear what they do not understand. I was trying to give OP some help with his position without knowing anything about the stock. Even if you do no believe that TA works, others do so you better be able to read a chart.
> as for consulting TA when looking at a REIT, it will absolutely help. obviously, TA is not as important for REIT investing as it is for some no divi paying growth stock, but it is important. Fundamentals are more important in REIT investing, and if you really feel like you understand a company better then Mr.Market, and believe that Mr.Market is miss pricing your REIT (doubtful) then there's nothing wrong with holding a stock through thick and thin regardless of momentum and TA.
> I'm not sure if OP really understands this company. I am anxious for OP to chime in with his thoughts on the company when it comes to the companies fundamentals, rather then just that the yield is high. their earnings came out today so its a great time to break the company down here.


I have my CIM designation; I understand TA just fine. I've just seen enough instances of share-price movements make TA look silly, to the point I don't pay much attention to it. On the flip side, a stock may go against its fundamentals for a time, but eventually the market gets it right.


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## godblsmnymkr

this guy is a good follow http://seekingalpha.com/author/brad-thomas
he's bullish on REITs saying the rising rate risk is overblown. REIT's are really battered down here and not a good time to sell =)
its up 3% today so maybe the market liked their earnings yesterday? did you read their report/listen to the conference call?


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## Westerncanada

Morning. 

I also own this REIT and remain a very big fan of the company despite their recent downturn. I intend on increasing my position at these levels as well but also have a 30 year timeframe on this investment. 

That said, their fill rate remains quite high and their anchor tenants like Gov of Canada, Telus etc are not folding up shop anytime soon. 


May drop even further, but if so i will again increase my holdings.


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## godblsmnymkr

+3% friday so market must have liked their earnings. i did not read it as i'm focued on DRG.UN right now. uneducated guess is that this is a decent time to buy/add.


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## My Own Advisor

Westerncanada said:


> Morning.
> 
> I also own this REIT and remain a very big fan of the company despite their recent downturn. I intend on increasing my position at these levels as well but also have a 30 year timeframe on this investment.


+1 

I'm always happy to own companies and reinvest dividends (or distributions) when prices tank. If anything, I hope the price goes lower with my 40 year investment timeframe. Same can be said for about 40 other companies


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## Westerncanada

My Own Advisor said:


> +1
> 
> I'm always happy to own companies and reinvest dividends (or distributions) when prices tank. If anything, I hope the price goes lower with my 40 year investment timeframe. Same can be said for about 40 other companies


Absolutely. . The lower the price, the more shares my DRIPs can buy per month thus compounding even quicker.


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## tygrus

I bought all the way down on this so hopefully my greed in the face of panic will be rewarded now.


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## Davis

Is anyone concerned that it may not be able to maintain its distributions?


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## My Own Advisor

I figure if a distribution cut comes, that's good management. I will get share appreciation again over time. If no cut, I'll continue to get the same distributions as before. 

If the distribution continues to get paid at the current rate, and the price keeps dropping, same as WesternCanada: my distributions buy more units, more units pay more distributions, more distributions by more units next month.

Money that makes money makes more money. 

Just my take of course.


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## Westerncanada

Davis said:


> Is anyone concerned that it may not be able to maintain its distributions?


Exactly as MOA said.. any kind of distribution cut should lead to share appreciation as a result of cost management. 

https://www.google.ca/url?sa=t&sour...GAUPdzS8vByWCxDUQ&sig2=Tx7oXXlcvXfOTePpXobuYA


Have a look at page 67 to see their list of tenants.. some of the most world class companies.. bell, TD bank, government, telus, enbridge..


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## godblsmnymkr

so did anyone that owns this stock actually read their earnings report from last week? should tell you a little bit about the sustainability of their dividend.


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## godblsmnymkr

from the globe today

Desjardins Securities analyst Michael Markidis is taking an “increased conservatism” to his outlook for Dream Office Real Estate Investment Trust (D.UN-T), decreasing both his financial estimates and his target price for the shares.

However, given the stock is now trading at a 25-per-cent discount to his net asset value figure and yields are close to 10 per cent, he upgraded his rating for Dream to “buy” from “hold.”

“The balance sheet is in good shape, liquidity is strong and [approximately] $160-million of 3Q property sales should provide added flexibility for continued buybacks,” said Mr. Markidis. “Notwithstanding a challenging office environment, we believe Dream presents an attractive trading opportunity.”

The REIT reported second-quarter results that were largely “in line” with expectations, including funds from operations of 72 cents. Though in-place occupancy at the end of the quarter fell to 91 per cent from 91.4 per cent in the first quarter, the total portfolio occupancy was flat at 92.8 per cent. Same property net operating income declined 0.1 per cent year over year, the first drop since 2011.

Though he maintained his 2015 estimate, Mr. Markidis lowered his funds from operations per unit estimate for 2016 by 3 cents to $2.85. He did so to account for an expectation that same-property net operating income would decline 1 per cent (previously forecasted to be flat). That lower figure and a higher cap rate in his projections dropped his net asset value projection by 5 per cent.

Accordingly, he lowered his price target for the shares to $27 (Canadian) from $28.50. The analyst consensus is $28.33.

“The recent [share] selloff has pushed the yield to 9.6 per cent,” he said. “A 90-per-cent payout ratio (based on our 2016 AFFO) gives us confidence in near-term sustainability. 2Q15 liquidity was $180-million ($15-million of cash and $165-million of credit), and low-cost secured debt financing is abundant. On our numbers, financial leverage is 50-per-cent and net debt/EBITDA is 8.0x.”


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## tygrus

Unfortunately, still getting pounded down despite good news. I bought all the way down before I guess I just keep doing it.


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## jamesbe

I bought in 4 years ago. With the decline of about 18% since I purchased but with dividend payouts of the 4 years I'm about even still on the stock.

Doesn't really help my decision to stay or leave. If the price holds flat I'll be up with the dividends over time, if the price jumps back up I'll actually be up considerably.


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## tygrus

The research on the stock says its going to exceed earnings estimates in the next two quarters, so thats probably the reason I am holding. Plus it kind of fits the bill for a stock thats been beaten down for no good reason.


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## Westerncanada

tygrus said:


> The research on the stock says its going to exceed earnings estimates in the next two quarters, so thats probably the reason I am holding. Plus it kind of fits the bill for a stock thats been beaten down for no good reason.


When do you want to access these funds from the stock? 

Buying all the way down would tell me you are thinking longer term ? 

I am increasing my position again this week, and the monthly amount of shares i am getting as a result of the DRIP is amazing at these price points


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## tygrus

Westerncanada said:


> When do you want to access these funds from the stock?
> 
> Buying all the way down would tell me you are thinking longer term ?
> 
> I am increasing my position again this week, and the monthly amount of shares i am getting as a result of the DRIP is amazing at these price points


Well I hold this in my LIF so I can only access 3-5% of the fund which is basically about half the dividend, the rest I buy more with. This fund is basically locked in and is just some extra cash flow. I don't need to get to it any time soon.


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## Financialplannerdude

tygrus said:


> Unfortunately, still getting pounded down despite good news. I bought all the way down before I guess I just keep doing it.





Nordic said:


> I have my CIM designation; I understand TA just fine. I've just seen enough instances of share-price movements make TA look silly, to the point I don't pay much attention to it. On the flip side, a stock may go against its fundamentals for a time, but eventually the market gets it right.


I'm in the same boat with Artis and my position is when a stock gets hammered is to take a look at it and see if anything has changed. Sometimes it's just the market over reacting other times it's a shot across the bow (as in the case of Aberdeen Asia Pacific FAP). With FAP I took my losses and sold it, but with Artis my feeling is the market is simply over reacting. It also helps remind me why I own ETFs as well as individual stocks.


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## godblsmnymkr

http://www.theglobeandmail.com/glob...ommerce-manufacturing-growth/article26009675/

bullish article on D.UN


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## Davis

^The article about DIR.un, not D.un. D.un is called "Dream Office", like anyone ever dreams of an office.

I picked up some D.un today at 10%+ yield.


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## My Own Advisor

DIR.UN and D.UN will come back...all in good time. Things that are out of season now have a way of coming around....big time. Think financial crisis. The banks survived and raised a bunch of dividends when they came back. 

Nobody said handling the emotions was easy. Investing is simple, but not easy; at least I feel this way.


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## godblsmnymkr

Davis said:


> ^The article about DIR.un, not D.un. D.un is called "Dream Office", like anyone ever dreams of an office.
> 
> I picked up some D.un today at 10%+ yield.


yah good catch.

@myownadvisor
agreed. mean reversion is a powerful force.


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## besmartrich

My Own Advisor said:


> DIR.UN and D.UN will come back...all in good time. Things that are out of season now have a way of coming around....big time. Think financial crisis. The banks survived and raised a bunch of dividends when they came back.
> 
> Nobody said handling the emotions was easy. Investing is simple, but not easy; at least I feel this way.


Agreed. As long as the company's free cash flow is sturdy, the stock will rebound!


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## godblsmnymkr

they've never cut the monthly distribution. held up through 2009.


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## godblsmnymkr

http://www.fool.ca/2015/08/21/is-dream-office-real-estate-investment-trusts-10-4-yield-safe/
nice article on D.UN


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## besmartrich

There are so many bargains lately but no cash...  I wish I could buy more oil &gas, REITs and railways considering current discounts.


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## godblsmnymkr

besmartrich said:


> There are so many bargains lately but no cash...  I wish I could buy more oil &gas, REITs and railways considering current discounts.


ya D.UN could be an amazing value here, or a value trap. if fear over its alberta tenants is overblown then this is a great deal trading at 1/2 book value and 10.5% yield!


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## besmartrich

godblsmnymkr said:


> ya D.UN could be an amazing value here, or a value trap. if fear over its alberta tenants is overblown then this is a great deal trading at 1/2 book value and 10.5% yield!


Agreed. What could go wrong with 1/2 book value in REIT that carries solid office buildings? 10.5% yield is superb as well.


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## godblsmnymkr

i think if the overall market continues to get worse this will come along with it so thats a big concern. I really want to take a small position now but I'm going to wait until things resolve a bit more.


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## Value

besmartrich said:


> Agreed. What could go wrong with 1/2 book value in REIT that carries solid office buildings? 10.5% yield is superb as well.


A correction in the real estate market of over 50%.


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## godblsmnymkr

Value said:


> A correction in the real estate market of over 50%.


it lost a lot a majority of its value in 2008/2009 but it never cut its dividend. i feel like you could just buy and hold this and trim when it got over bought.


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## besmartrich

Value said:


> A correction in the real estate market of over 50%.


Haha, I can't say confidently that would never happen. If that happens, I will buy my first house!


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## godblsmnymkr

i spent the morning looking at canadian office space Q2 reports and looking the client profile of D.UN
positives:
- only 8% of their tenants are in oil & mining
- majority of their tenants are in financial services and government 
negatives:
-federal government cuts in office space 
- calgary seeing big yoy drops in occupancy + a ton of new office space being developed which will put further pressure on rents.
- penn west (28th biggest tenant) announced job cuts in calgary today. cross referencing their address i couldnt tell if this was a dream building or not.

enbridge is their 7th biggest tenant. any opinions on how solid they are here in terms of job cuts? i feel like that could hurt them if endbridge got into trouble.
i feel like canada just isnt a good place to invest while oil prices are under pressure. it puts a dark cloud over almost every sector. i own DRG.UN for a big position but i think until energy prices improve it might be wise to avoid D.UN until things improve. if you own dream office i dont really see a reason to sell as there distributions seem rock solid and your yield is only going up with the price drop.

office space conditions in usa seem to be improving however so putting in some money their instead of canada is probably a good idea.


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## HaroldCrump

Looks like stock will break $20.
That will bring it back to 2009 days.
It seems the market is basically valuing this company as an oil stock.


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## godblsmnymkr

HaroldCrump said:


> Looks like stock will break $20.
> That will bring it back to 2009 days.
> It seems the market is basically valuing this company as an oil stock.


my main problem with them is that they are participating in building an office tower in calgary CBD while there is already a glut in office space there. 
i think if you own now just hold on. this cycle in oil will pass and your monthly distribution is safe. as for starting a new position i would just wait for a turnaround and not try to bottom fish.


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## tygrus

godblsmnymkr said:


> my main problem with them is that they are participating in building an office tower in calgary CBD while there is already a glut in office space there.


I would assume there is at least an anchor tenent in that building? 

Anyway, I am buying it all the way down. Nothing else to do. Counting on that divi staying put.


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## godblsmnymkr

tygrus said:


> I would assume there is at least an anchor tenent in that building?
> 
> Anyway, I am buying it all the way down. Nothing else to do. Counting on that divi staying put.


i will have to review their MD&A from last Q to remember. 
man, i really want to initiate a position here. technically it looks like an awesome time to buy at least for a few months. its hitting the bottom of a down trend line that could send it up 10-15% over the next weeks. plan would be to buy 1/3 now, add more above 21.57 and more after depending on different factors. ive got an almost empty TFSA right now and that yield + chance for Capital appreciation is very enticing. gotta wait until tomorrow tho to see what the market does.
its fun watching canadian banks and reits trade with oil prices.


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## HaroldCrump

godblsmnymkr said:


> its fun watching canadian banks and reits trade with oil prices.


Pretty much every Canadian stock is being treated as an oil stock.
I was recently surprised to see that Boston Pizza Royalty fund has dropped something like 20% since last summer because it has a lot of business in Alberta & BC.

Boston Pizza has basically dropped the exact same % as Suncor Energy in last 1 yr. 

Basically, other than Valeant Pharma, every other Canadian stock is now a de facto oil stock.


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## AltaRed

I agree the decline over the broader market is overdone (from an O&G point of view) but there are a few factors worth considering: a) the O&G depression will affect profitability in many other sectors and if the P/E or P/CF multiples were already stretched on some/many stocks, they will be disproportionately affected, b) the NDP election in AB raising corporate income tax rates will affect profitability of anything HQ'd in AB, and c) I suspect there is some market caution to the possibility of an NDP federal win with its attendant corp tax increases AND climate change/carbon tax effects. There are a lot of headwinds right now and O&G was simply the initial catalyst.

There are few good reasons for being in the TSX any time soon. I am keeping my powder dry for the rest of this year, biting only where/when/if exceptional opportunities arise, e.g. Aug 24th. Short of an NDP collapse and a miracle in the O&G sector, I feel our market will likely be a global dog, potentially for years, along with Australia, Brazil, Russia and similar resource heavy economies.


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## tygrus

HaroldCrump said:


> Basically, other than Valeant Pharma, every other Canadian stock is now a de facto oil stock.


All the more reason to unpin this economy from oil because its going to be a tough slog for a while.


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## godblsmnymkr

AltaRed said:


> I agree the decline over the broader market is overdone (from an O&G point of view) but there are a few factors worth considering: a) the O&G depression will affect profitability in many other sectors and if the P/E or P/CF multiples were already stretched on some/many stocks, they will be disproportionately affected, b) the NDP election in AB raising corporate income tax rates will affect profitability of anything HQ'd in AB, and c) I suspect there is some market caution to the possibility of an NDP federal win with its attendant corp tax increases AND climate change/carbon tax effects. There are a lot of headwinds right now and O&G was simply the initial catalyst.
> 
> There are few good reasons for being in the TSX any time soon. I am keeping my powder dry for the rest of this year, biting only where/when/if exceptional opportunities arise, e.g. Aug 24th. Short of an NDP collapse and a miracle in the O&G sector, I feel our market will likely be a global dog, potentially for years, along with Australia, Brazil, Russia and similar resource heavy economies.


good post thanks.
also this: http://www.bloomberg.com/news/artic...ded-with-office-space-spurs-fears-of-new-bust


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## besmartrich

godblsmnymkr said:


> good post thanks.
> also this: http://www.bloomberg.com/news/artic...ded-with-office-space-spurs-fears-of-new-bust


It is going to be very interesting how this turns out in the future.


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## Davis

^That article was published on September 25, 2014. It would be interesting to see an update. You can predict a crash with 100% certainty as long as you don't specify *when* it's going to happen.


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## Value

tygrus said:


> I would assume there is at least an anchor tenent in that building?
> 
> Anyway, I am buying it all the way down. Nothing else to do. Counting on that divi staying put.


An anchor tenant by definition as to do with a commercial property. An anchor is like a grocery store, big retailer etc... It implies that you have a good big tenant that drives customers to your property and insures a proper flow to less big tenants so they can have proper visibility and sales. Nothing to do with office space. Just for general real estate culture.

Anyways, did you guys see the huge moves in reits today at 14:00... Right when the algorithms got turned back on :cower:


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## My Own Advisor

Davis said:


> ^That article was published on September 25, 2014. It would be interesting to see an update. You can predict a crash with 100% certainty as long as you don't specify *when* it's going to happen.


LOL.

Like all those people predicting the U.S. Fed rate hike today. Good luck to predictors


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## godblsmnymkr

i nibbled on a small position today for the TFSA. i just couldnt help from bottom fishing here. i could see it making a run back up to $24 in a reasonable amount of time.


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## Westerncanada

godblsmnymkr said:


> i nibbled on a small position today for the TFSA. i just couldnt help from bottom fishing here. i could see it making a run back up to $24 in a reasonable amount of time.


Personally i hope it stays at $20 or goes lower as it pays the same dividend at $27 as it does at $20.. and lower the price the more shares my DRIP buys. 

Whats your timeline on this in your TFSA?


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## besmartrich

godblsmnymkr said:


> i nibbled on a small position today for the TFSA. i just couldnt help from bottom fishing here. i could see it making a run back up to $24 in a reasonable amount of time.


I should be doing the same when my TFSA room replenished. Hope the price stays at $20 level


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## godblsmnymkr

Westerncanada said:


> Personally i hope it stays at $20 or goes lower as it pays the same dividend at $27 as it does at $20.. and lower the price the more shares my DRIP buys.
> 
> Whats your timeline on this in your TFSA?


this is more of a swing trade, but depending on how things develop i might keep it for awhile. if it gets over 21 today i might add. may sell it all at 50 day line depending on how it reacts but hopefully hold it for a move to $24. its looking especially strong today with the dip in oil.


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## My Own Advisor

Happy to DRIP at lower prices.


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## Value

Anyone know why they lost 88 million at Q2? 
Whats the 'unusual expenses' of 130 million?
I could search to find out, but Im a little lazy...
Could that lost be re-occuring?


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## godblsmnymkr

noi was flat YoY @ + 113 million. affo/unit was also flat. you are reading something wrong. please point out this 130 million unusual expense. 



Value said:


> Anyone know why they lost 88 million at Q2?
> Whats the 'unusual expenses' of 130 million?
> I could search to find out, but Im a little lazy...
> Could that lost be re-occuring?


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## jollybear

godblsmnymkr said:


> i nibbled on a small position today for the TFSA. i just couldnt help from bottom fishing here. i could see it making a run back up to $24 in a reasonable amount of time.


What info are you basing your prediction on that this will make a run up to $24 in a reasonable amount of time?


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## Value

Hello Godbls! Thanks for the help!

Goodle financials : 
https://www.google.ca/finance?q=TSE:D.UN&fstype=ii&ei=XGL8VbngO4Sk2Ab-_LII


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## godblsmnymkr

Value said:


> Hello Godbls! Thanks for the help!
> 
> Goodle financials :
> https://www.google.ca/finance?q=TSE:D.UN&fstype=ii&ei=XGL8VbngO4Sk2Ab-_LII


you need to read the quarterly reports. 
they restructured their administrative cost structure to their parent company DAM. they issued DAM units and no longer have to pay DAM a management like they have been for years. this is why it looks like they had a loss on this one time charge.

@jollybear. just basing it on technical analysis. its oversold and bouncing off its support trendling. if it goes much lower past its recent lows i will sell (-4% from here.) 34 would be + 3.50 from here so it offers good risk/reward.


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## Value

godblsmnymkr said:


> you need to read the quarterly reports.
> they restructured their administrative cost structure to their parent company DAM. they issued DAM units and no longer have to pay DAM a management like they have been for years. this is why it looks like they had a loss on this one time charge.
> 
> @jollybear. just basing it on technical analysis. its oversold and bouncing off its support trendling. if it goes much lower past its recent lows i will sell (-4% from here.) 34 would be + 3.50 from here so it offers good risk/reward.




Thanks buddy! Hey, I did say I could search to find out but was being lazy


----------



## jollybear

@godblsmnymkr

Curious what your reason for selling is if it drops another 4%. Are you worried it will continue to slide farther into the pits of hell without a fast enough run-up? (not questioning your actions, want to learn as much as possible about this stock from senior members as I`m watching it) Thanks!


----------



## godblsmnymkr

jollybear said:


> @godblsmnymkr
> 
> Curious what your reason for selling is if it drops another 4%. Are you worried it will continue to slide farther into the pits of hell without a fast enough run-up? (not questioning your actions, want to learn as much as possible about this stock from senior members as I`m watching it) Thanks!


i think i bought in around 20.55. around $20 is support as well as a round number psychological support. if it goes below that who knows how much farther it will go?


----------



## godblsmnymkr

interesting article providing come colour on the management buyout. derek warren always talks about how he doesnt like external management structures and i guess this is an example of why he would have that opinion:

http://www.theglobeandmail.com/repo...test-deal-puzzles-bay-street/article23828643/

*Dream Office’s deal to buy out its contract with Dream Asset Management features terms that Mr. Olin describes as “disturbing.” He cites the price, which at $127-million amounts to 7.3 times the previous year’s external-management fees. (Dream Asset Management is taking this fee in the form of 4.85 million Dream Office units.)

Also, Dream Asset Management will still earn an “incentive fee” – tied to the net asset value of Dream Office’s units. The expectation is that they will rise if properties are sold and analysts speculate that such fees could amount to $50-million over and above the value of the agreement.*


----------



## godblsmnymkr

doubled my position but its still a very small one. broke out from its 21.10 resistance. hopefully this is not a fakeout.


----------



## godblsmnymkr

constructive action today. it really looks like at least a short term bottom is in. it cleared early september resistance at 21.29. now looking for it to hold above as its a little over bought. next resistance is a big one @ 21.57. if it can clear that its green skys ahead and I might go balls deep on a position.


----------



## tygrus

godblsmnymkr said:


> if it can clear that its green skys ahead and I might go balls deep on a position.



I am still in hell but I bought all the way down. Still am. I mean what else can you do?


----------



## godblsmnymkr

tygrus said:


> I am still in hell but I bought all the way down. Still am. I mean what else can you do?


stock goes ex dividend tomorrow so we will see how much it drops on oct 1


----------



## Westerncanada

tygrus said:


> I am still in hell but I bought all the way down. Still am. I mean what else can you do?


Ride one of the highest dividend paying stock yields on the TSX? 

If its any consolation. .. look at the threads for cpg/baytex/transalta for all the folks that bought in the $40-55 range that are now sitting on a 80% losses and zero dividends


----------



## godblsmnymkr

broke out above late august resistance today. if oil prices cooperate, you could see +another 5% here pretty quick. may add today.


----------



## godblsmnymkr

broke out but didnt hold its gains. bounce right off the upper trendline. holding above 21.25 would be positive. looking to add more on positive consolidation here.


----------



## godblsmnymkr

added some more today.


----------



## 0xCC

Westerncanada said:


> Ride one of the highest dividend paying stock yields on the TSX?
> 
> If its any consolation. .. look at the threads for cpg/baytex/transalta for all the folks that bought in the $40-55 range that are now sitting on a 80% losses and zero dividends


I'm not sure CPG belongs in that list... Down from $48 to $15 so that is a 68.75% loss so not quite in the 80% range and although the dividend has been cut in half it is still paying a dividend.... You could pretty safely replace CPG with PWT in that list I think.


----------



## Huestar

*DRIP Option*

I'm fairly new to this board, but saw the discussion on the Dream REITs which have an appeal to me. Has anyone done some analysis that included the 4% bonus that you can get if you sign up for the DRIP? If you include that with the current yield, you're looking at a 15% yielder (yes math is not 100% accurate). 

I'm trying to decided how deep to go on this one. They're selling at a minimum 30% discount and the current payout ratio is in decent shape, and they own some fairly strong assets. Given time I would think the stock price should turn around at some point. But, some of the arguments brought up here are strong too. If there's a serious market correction, the discount could be wiped out quickly. On top of that, the occupancy levels could drop and that payout ratio could jump over 100% in a hurry. 

But, if you can live through those problems and hold for 10-30 years, I would think this could be a good entry point. 

I'm looking for reasons not to buy this...


----------



## Davis

I think your math is 100% inaccurate.

I'll round the numbers:

Let's say you spend $10,000 to buy 500 shares at $20 each. Let's say the yield is 10%, and you DRIP with a 4% discount.

In your first year, you will get a $1,000 distribution. Through the DRIP, you buy $1,000 / $19.20 (the 4% discount from $20 if the share price has not changed) = 52 shares.

Your 52 shares at fair market value of $20 each are worth $1,040, which makes for a 10.4% yield in the first year, not 15%.

Which is still pretty darn good, especially if you think that the share price will rise and you will get capital gains on top of that, which is what I am hoping for too.


----------



## godblsmnymkr

breaking out to recent highs today, loving it. might fire off one more bullet if it can hold above 21.75. holding until earnings and then will probably sell 50% or something just before. need to look into it more.


----------



## godblsmnymkr

http://business.financialpost.com/i...nvestments-paying-off-but-beware-office-space

guys short selling D.UN.
the way i look at it, they didnt cut the distribution during the financial crisis, i dont think they're going to start now. they are not over distributing. AFFO/distributions is healthy. the whole reit sector getting hit today like they are going to raise interest rates tomorrow.


----------



## HaroldCrump

godblsmnymkr said:


> the way i look at it, they didnt cut the distribution during the financial crisis, i dont think they're going to start now. they are not over distributing. AFFO/distributions is healthy. the whole reit sector getting hit today like they are going to raise interest rates tomorrow.


Dream Office (then Dundee) is amongst a small group of Canadian REITs that have raised distributions in last 5 years.
They raised once, in May 2013.


----------



## godblsmnymkr

http://www.bloomberg.com/news/artic...w-vacancies-new-norm-for-calgary-tower-owners

"Some owners are already feeling the pain. Two-thirds of Dream Office’s space in Calgary expires in the years up to 2019 and only 13 percent has been picked up, according to company documents."

they report Q3 friday morning. don't see how it can be good. i guess price is already at support levels. going to hold through report and sell if it breaks support. long term fundamentals do not look good here.


----------



## Value

Closed under 20 yesterday and is heading lower today... 

Im not sure where it will go from here, bounce back or plummet...

The way I see it is there can't be much upside till 2016... People will dump this one in December to take in the fiscal lost and if the fed does raise the rates in December, it will go down hard!!!

I'm thinking it could go up after Friday's announcement, but the rally won't last for too long... However, mid to late December (20th to 24th) would be a great time to buy...

This is my personnal opinion only!


----------



## godblsmnymkr

i bought on the rebound off the support trendline that happened recently and added on the way up hoping for a bounce back to 24 or so. seemed to be bouncing with oil. in retrospect that was pretty silly to bet on a rebound there. i dont think anyone should have $ in oil names right now. inter pipeline announced amazing earnings last week and the stock is only sinking lower. 

D.UN earnings are *tomorrow*
going to hold for that unfortunately. with the stock so low maybe a bad report is priced in? anyway with a cost basis of 21.25 i'm going to start selling under 19.50 and see how that goes. good luck tomorrow longs. report will probably be coming out after close.


----------



## Value

I don't think the report will be catastrophic... But it'll definitely be looking at how it acts


----------



## Huestar

I think there will be some difficult circumstances out west, but long term there is still potential here in my opinion. Ride through the lows, keep adding monthly and let the dividends reinvest. Over 5, 10, 20 years the returns will come. Oil will come back or Western Canada will come up with another industry. 
As of right now, only 24% of Dream's GLA is from Alberta and 5% from BC. 
30% of the portfolio won't break the stock completely and they will continue to own the assets. 
If NAV is to be believed, it's at an almost 40% discount already. If it continues down we're talking a 50%+ discount. 
There has to be a floor somewhere. 
I'm not sure what the impact is yet, but Dream has been buying stock back fairly aggressively lately as well. This will impact the numbers over the long term as well.


----------



## godblsmnymkr

ok took a quick look at the Q3 report. it doesnt look that bad. 
-payout ratio 89% to 92% YoY. their drip participation was way up this quarter at 38%. ive never seen drip participation that high before. that brings their cash payout ratio to only 62%. 
-NOI down 3%
- AFFO + 2% 
- AFFO/unit - 3%

this really is not a bad report so far. i think what i am most worried about is them getting 2018 expires leased. also, going a little deeper for the YoY comparison you stip out the contributions to DAM for management fees this year so depending on the difference in that this might actually be a really bad report. havent got to that part of the report yet. 
comparing this report to BOX.UN (some say the top quality office reit in canada) their affo is down big YoY and their payout ratio is well over 100% with 1/2 the dividend %.

another way to look investing in D.UN is their average interest rate is 4.12%. their cap rate is 6.04. thats less then the risk free rate on the canada long term bond yield of 2.4% so this might not be a very good investment :upset:

interesting tidbit from the beginning of the report:
*Calgary continues to be a challenging environment for owners of office buildings. However, our average tenant size in Calgary is approximately 11,000 square feet. In our view, a portfolio with a smaller average tenant size provides greater cash flow stability during an economic downturn and reduces leasing rollover risk in future periods. 
For perspective, our IFRS Net Asset Value (“NAV”)as at Q3 2015 is approximately $33 per unit.
If we completely discount the value of the Alberta portfolio, the IFRS NAV of the remaining portfolio would be approximately $24 per unit, well above the current unit price. However, our Alberta properties continue to contribute approximately $117 million of annualized net operating income (“NOI”) in the third quarter
.* 

i'll add more later if i find anything interesting. should be an interesting day tomorrow.


----------



## godblsmnymkr

ok listened to the conference call. they touched on a few things. i need to wait for the transcript to come out to confirm but based on what i heard:
-about 25% of the rent in the quarter was basically free from providing concessions to tenants. not sure if that was just calgary or whole portfolio
-enbridge is leaving enbridge place. they talked about turning the building into apartments
-no plans to cut divy or drip. analyst made good point that the drip is very dilutive at 40% participation. 
-ahead of where they were last year with leasing activity for the following year

stock seems to be recovering a bit. 
i think the main point here is the stock is trading at a level that ONLY values the ontario portfolio. they talked about selling calgary towers but said there are no bids.


----------



## Value

Gez...

Dont know what's happening... 
-5.21% as I write here!!!

Yikes... I don't own this equity, but it looks more interesting with every passing day!


----------



## godblsmnymkr

Value said:


> Gez...
> 
> Dont know what's happening...
> -5.21% as I write here!!!
> 
> Yikes... I don't own this equity, but it looks more interesting with every passing day!



http://www.theglobeandmail.com/glob...lyst-upgrades-and-downgrades/article27247314/

wow 13% yield now. whats strange to me about this is that interest rates in canada arent going anywhere for awhile. do improbable usa rate hikes effect this stock that much? reit index is barely even down today. 
anyway, I got trapped in this one and did not sell when it broke support =( 2016 may look grim but still, Alberta portfolio is not a 0. looks like capitulation day so i'm not selling today. also, the blackout period for buybacks before earnings day is over so now would probably be a good time to buy back the stock lol.


----------



## AltaRed

Anything with an AB/SK centric focus is getting beaten up. So is Boardwalk BEI.UN.


----------



## OptsyEagle

TD Research on Dream REITs Q3:



> TD Investment Conclusion
> 
> In our view, the REIT’s unit price is too heavily discounted, particularly in
> light of the recent elimination of external management fees. The current
> unit price attributes no value to the Alberta and Suburban Toronto
> portfolios. With the unit price 38% below our NAV/unit estimate,
> investors are ascribing no value to the Calgary, Edmonton, and Suburban
> Toronto properties, which in aggregate represent 35% of our total
> portfolio valuation. Using our estimated AFFO run rate of $1.92/unit at
> Q4/17 (which we believe to be a cyclical trough), the units are trading at just
> 10x, and at the bottom of the peer-group range on 2016 estimates. We do not
> expect a cut in the REIT’s double-digit yield, based on our view that 2017
> will likely be the bottom of the leasing cycle for Dream Office. We are
> reiterating our BUY recommendation and $27.00 target price.


----------



## Value

No doubt... It's a great buy and hold position...

The question is when to buy? I know you should'nt try to time the market, but the downward slope can't be denied. Buying at 18 is 11,11% better than buying at 20.


----------



## namelessone

Oil is causing the CAD REIT crash.I started to increase positions in REIT. I take small bites. It helps that IB only charge $1 commission fee.


----------



## godblsmnymkr

for fun i quickly skimmed dreams 2007-2009 Quarterly reports to see how they held up. remarkably, better then now with alberta then being 68% of their portfolio as apposed to 26% now. really shows you how much harder oil companies have been hit this time around. throughout the financial crisis occupancy remained around 95%. now its around 90%. AFFO was actually in the black YoY from last report. however, what is worrisome is Q3 2014 they gave guidance for 2015. this Q they said they would have to wait until Q4 to give guidance. the street hates uncertainty and might be a reason why its getting punished so hard.
looked like capitulation day today. could see a short term recovery here. XRE reit index held up today and might see a bounce in oil for the next few weeks.


----------



## godblsmnymkr

looks like the buyback program was initiated again today. 2 50 k blocks of shares bought already.


----------



## besmartrich

It is very tempting now. I may want to wait a couple more days to see whether it is going to go down further.


----------



## JP*

I want to buy more today but I am carrying consumer debt that should be paid off. I think I am going to end up buying more and putting a bit of cash towards my debt. A little of both.


----------



## OptsyEagle

Wow, this stock just keeps howling at the moon.

I would like to think that Investors do understand that even if a dividend cut is required, Dream can't just cut it to zero. A big difference from most public companies, is that a REIT is required to distribute their free cash flow to investors ...so for the investors that are expecting a cut, how much of the 12.5% yield are they expecting Dream to cut? Are they expecting all cash flow that was recorded last quarter to simply disappear? Cash flow that was recorded at around 108% of that 12.5% dividend they are still paying? That is a big hit when only 10% of their leases are coming due over the next 3 years.

For the investors not expecting a cut, what is wrong with a 12.5% yield. Oh, I know. The stock has gone down and it now sports a 12.5% yield, so only hardship can come from owning such a thing. Maybe hardship will come to the owner of this over the next 3 months, 6 months or year, but I doubt it will come to the holder of this over the next 3, 5 or 10 years.

Lastly for real estate companies, pension funds and sovereign wealth funds, etc. What is the problem with buying a company whose price has already zeroed out the cost to buy all the Alberta and GTA properties?

Anyway, I must be missing something. All the above is just my opinion.


----------



## tygrus

Riding, riding, riding.

god I hate stocks


----------



## godblsmnymkr

OptsyEagle said:


> Lastly for real estate companies, pension funds and sovereign wealth funds, etc. What is the problem with buying a company whose price has already zeroed out the cost to buy all the Alberta and GTA properties?
> 
> Anyway, I must be missing something. All the above is just my opinion.


management doesnt strike me as the kind to want to sell the business but i could be wrong.


----------



## godblsmnymkr

wow. management is going hard today on the buy backs. 2 50k lots. usually dont see them buy at the lows so this is a nice price for them.


----------



## My Own Advisor

They are smart. In a few years after the oil slump is over they will be wealthier for it. Recall this happening during the financial crisis. People buying up JPM, WFC, BAC. Look at those share prices now.


----------



## tygrus

P/E is now 250x? WTF?


----------



## AltaRed

P/E is an in appropriate measure for a REIT due to distortions in DD&E. Use metrics like Cap rate, payout ratio as % of AFFO, P/NAV.


----------



## tygrus

Turning? fingers crossed. I reinvested the dividend all the way down.


----------



## Value

Yikes Tygrus... Right now, with the stock at 52 week lows, it continues to burn more and more... Sincerely, with mortgage rates raising however slightly at RBC, with the FED changing trajectory for their rates, with the federal government recognizing the issues to the real estate markets (especially the housing market), with OIL barely at 34$... It's not looking like it has bottemed yet, I`m afraid... 

Personally, I will jump on the dream when its deeply in the pits of hell and always seems like the recoveries are short lived and followed by more 52 week lows.


----------



## tygrus

Yeah, yield is approaching 14%. I guess I will take the dividend reinvestment off now and start buying something else each month to offset this POS. Dont you dare touch that divi Dream execs


----------



## godblsmnymkr

Value said:


> , *with OIL barely at 34$*... It's not looking like it has bottemed yet, I`m afraid...


that's the only part of your sentence that is effecting D.UN right now.
broke through to fresh lows today. technically next support @ 15. this is what i get for trying to bottom fish in the 20-21 range and then not selling. no plans to sell really. think the divi is sustainable. 
next earnings is out mid febuary.


----------



## My Own Advisor

If oil wasn't at $34 you wouldn't see an issue here with Dream. That's not the reality I know!

I have to wonder if oil gets to $30, and stays there for a year or so, if a serious crisis won't erupt in this country.


----------



## Value

It's well recongnized that the issue with D.UN is exposure to Alberta... Some would argue that the real estate market as a whole is overvalued and perhaps that is priced in too... Also , the cost of debt as nowhere to go but up...

But the fact of the matter is something as to give with oil and energie producers... There is a market share war going on and some will loose... The cold hard fact is that unless others give up (Saudis), there will be no recovery in crude and Small cap canadian compagnys are the first in line of loosers... Dream will lose some tenants in Alberta and their investment in the region will lose some returns... Is it irrationally sold, YES... So there is opportunity... 

Tygrus, having already a foot in the stock, I would keep your stategy and wait it out... It will be a rough year for sure... perhaps a lot longer... It could get realllllly hugly... especially if Poloz changes his mind and follows the US (which he is saying he wont, and of course he wouldn`t want to crash the real estate market, the only performing one... But then again, who knows what the future holds) ...The dividend might get reduced... to 15 cent... 10 cent if things are REALLY bad. But thats still a huge yield on dividend... Look at it on the long horizon and I think you will be a winner... 

For my part, having no exposure to the equity, I will wait it out and try to catch the bottom.


----------



## treva84

Value said:


> The dividend might get reduced... to 15 cent... 10 cent if things are REALLY bad. But thats still a huge yield on dividend... Look at it on the long horizon and I think you will be a winner...


As a REIT, by law the D.UN has to pay out nearly all of it's income as distributions right? Thus, as I understand, when income drops (less tenants paying rent) there would be less to distribute to shareholders. Conversely when income rises, distributions would increase.

I am by no means an expert in REITS, but as long as there are buildings standing with some tenants the REIT would exist continue to exist right? Is the only way a REIT can go "bankrupt" would be if they lost all their buildings (i.e. some major catastrophe like an earth quake or something) or if they had no tenants? Does anyone know of any REITS that have gone bankrupt?


----------



## godblsmnymkr

here's my take as a trapped long and what is stopping me from selling. yes, this is now officially the biggest price drop in oils history. worse then the financial crisis so maybe this time Dream will cut the divi. however, the financial crisis was the BIGGEST FINANCIAL CRISIS SINCE THE GREAT DEPRESSION. people were taking out all of their $ from ATMs because they thought the financial system was broken. dream did not cut the divi. think about that...
they actually performed pretty well through it all if you go back and look at their Quarterly Reports from that time. 
ya your investment in D.UN was a bad one and you (and I. my ACB is 21.20) should have sold awhile ago. you might lose a lot more. however, i think theres a good chance the divi is save and I'm using the proceeds to fund other purchases.


----------



## Value

http://www.edmontonjournal.com/busi...n+office+buildings+nearly/11639210/story.html


----------



## bmoney

It's not just the West. Living/working in downtown Toronto core and working with nearly every one of the major financial institutions there are several major trends I see unfolding. I think it will be tougher for Dream than some of the other players, they also seem to own many older buildings. I sold my shares at $26 about a year ago and took a very small loss.

1) Some financial institutions are moving admin/operations staff out of the financial core to lower rents further out.
2) Other large firms are relocating to newly completed towers, more recent examples KPMG, RBC
3) New and reno'd office space still under construction and coming online (Brookfield phase 2&3 of Bay/Adelaide Centre, Oxford 100 Adelaide)
4) Downsizing in the financial services industry. Several mergers/acquisitions of players on the insurance, investment and banking side have left lots of people stranded.


----------



## godblsmnymkr

thanks for the insight guys


----------



## tygrus

I am sitting on a 46% loss in this stock. I would suggest the management team better do something to start supporting this sucker. Sell some assets...anything.


----------



## Value

tygrus said:


> I am sitting on a 46% loss in this stock. I would suggest the management team better do something to start supporting this sucker. Sell some assets...anything.


Might be an idea for the management to start selling assets in Alberta, just to reduce some exposure. The Chinese would probably step up to buy (seems like they are buying anything)...

On the other hand, management is doing a good job and the balance sheet + income is still doing great, so no reason to panic... The market is just over reacting, for now, and don't want to have the stock when Arbenta's Oil and Gas compagnies start going under. However, the management is not feeling your stress. They do their jobs and the market does it's job. Both aren't synched right now.


----------



## My Own Advisor

I would agree the market is out of sync with some stocks. D.UN comes to mind, so does POT.


----------



## godblsmnymkr

http://www.theglobeandmail.com/glob...icle28079098.ece/BINARY/2016 REIT Outlook.pdf

interesting and comprehensive 2016 REIT outlook.


----------



## Davis

Value said:


> Might be an idea for the management to start selling assets in Alberta, just to reduce some exposure.


That's a good strategy. Buy high when the oil industry is booming and sell low now.


----------



## Value

Davis said:


> That's a good strategy. Buy high when the oil industry is booming and sell low now.


Im not saying they should sale at a lost... At worse at break even! Whatever capital gain the properties have made in the past years would be lost...

On the other hand, for foreign investors, there is a massive discount present nowadays! Currency, my friend, your CAD has been bleeding!

The Chinese could buy it cheap (in their YUAN or Renmembi) and Dream could reduce exposure and risk without loosing much, if anything. BUT they have to act fast! 

Then again, the Chinese could buy the assets at 50% discount by simply buying D.UN shares presently...


----------



## tygrus

This dog is close to touching the 2009 lows and not far off the 1999 all time lows. yuck.

I knew they had offices but I never thought they were this susceptible to oil.


----------



## tkirk62

I saw a very good analysis (and confirmed it by looking at the financial statements myself) that even if you value the Calgary properties as worthless Dream Office is still trading at ~55% of book value. That seems like a deal to me.

Personally I have had my eye on this for a long time. If they ever cut the dividend, lots of income investors will flee, dropping the price irrationally. That is when I will step in.


----------



## Eclectic12

tygrus said:


> This dog is close to touching the 2009 lows and not far off the 1999 all time lows. yuck.
> I knew they had offices but I never thought they were this susceptible to oil.


Are they?
Or like other stocks in the past (ex. oil stocks when the US coalition started to liberate Kuwait) is the market missing the boat?


Cheers


----------



## Value

tkirk62 said:


> I saw a very good analysis (and confirmed it by looking at the financial statements myself) that even if you value the Calgary properties as worthless Dream Office is still trading at ~55% of book value. That seems like a deal to me.
> 
> Personally I have had my eye on this for a long time. If they ever cut the dividend, lots of income investors will flee, dropping the price irrationally. That is when I will step in.


http://www.fool.ca/2016/01/18/dream-office-real-estate-investment-trst-the-cheapest-stock-in-canada/

I believe it's probably this article... If not, then for your info.

I'm also on the sidelines for this one and will definitely jump in eventually... It's a fantastic deal and a solid reit... 
However, I think there is more downside to come... As long as the oil and gas outlook remains as is, this one will go down... Just got to wait.


----------



## Eclectic12

Wait or put a bit now with more planned for later ... there are many choices.


Cheers


----------



## Value

Averaging down is always an option... However, that's a better strategy if you expect the stock can turn around tommorrow morning and this could be the bottom...

I don't think it's the bottom for this one... Got to wait for some oil and gas compagnies to go under, in canada or elsewere... But some have to go under.


----------



## Eclectic12

... unless that's not what happens.


IAC, as long as a "one size fits all" philosophy is not what is driving it - it's all good.


Cheers


----------



## tkirk62

Value said:


> http://www.fool.ca/2016/01/18/dream-office-real-estate-investment-trst-the-cheapest-stock-in-canada/
> 
> I believe it's probably this article... If not, then for your info.
> 
> I'm also on the sidelines for this one and will definitely jump in eventually... It's a fantastic deal and a solid reit...
> However, I think there is more downside to come... As long as the oil and gas outlook remains as is, this one will go down... Just got to wait.


Not that article specifically but one by the same guy on his own blog.

Personally I'm waiting to see if they cut the dividend. I think if they do (and they'd be wist to) that a lot of irrational income investors will dump the it, creating a better buying opportunity. I don't think a dividend cut has been fully priced in yet.


----------



## Value

tkirk62 said:


> Not that article specifically but one by the same guy on his own blog.
> 
> Personally I'm waiting to see if they cut the dividend. I think if they do (and they'd be wist to) that a lot of irrational income investors will dump the it, creating a better buying opportunity. I don't think a dividend cut has been fully priced in yet.


Legally, they can only cut the dividend so much however... They have to payout 90% of earnings... So, if they cut it, you can still expect a big dividend... If Alberta really hurts and loose lots of money on the operation there, it could go down significally, otherwise, their hands are somewhat tied.


----------



## tkirk62

Value said:


> Legally, they can only cut the dividend so much however... They have to payout 90% of earnings... So, if they cut it, you can still expect a big dividend... If Alberta really hurts and loose lots of money on the operation there, it could go down significally, otherwise, their hands are somewhat tied.


I am aware of that. I would have to look at the numbers but I think cutting the payout in half would still put them above their minimum required payout, since right now they are so far above it (~100% of AFFO).


----------



## Value

let us know when u jump in!
I'll let you know as well!! might be in a little while however


----------



## OptsyEagle

Obviously no one can rule out a reduction in the dividend but as was just stated, Dream REIT is not like most of the companies out there that we see reducing their dividend. Most dividend reductions that we have seen lately are happening, not because those companies cannot afford to pay it today, but because they are worried about whether they will be able to afford to pay it tomorrow. Dream REIT does not have that luxury since it is required to payout a large percentage of its cash flow regardless of its expectations for the future. So even a cut would not be 100% since it really cannot do that.

That in mind, would you not think that if management was as worried about the future as investors are, that they would not be buying back 25,000 shares, each and every day. In other words, not only are they electing to pay the dividend but also they have decided to pay an additional $350,000 every day, to buy back stock, on top of the dividend.

https://www.canadianinsider.com/company?menu_tickersearch=D | Dream Office REIT

If I was the manager of Dream REIT and I thought a dividend cut was likely, which would also likely cause a share price reduction, I would NOT be buying back stock now. I would be preserving that cash for the future and possibly using it to buy back those shares at even better prices.


----------



## CPA Candidate

Prime example of the market being inefficient and over discounting an investment. Investors think Dream will struggle, so they sell it.....at any price.

Dream office is currently valued at 40% of it's book. Since investment properties are revalued quarterly using a formula that considers average rental fees, occupancy and cap rate, etc, it is an up to date value, not historic. Investment properties will likely be written down further in the coming year, but not to the extent that the market has obliterated the stock.

(disclosure - I have no position)


----------



## livewell

Looking at Dreams financials their 2016 estimated payout ratio to AFFO is 100% , but it was 100.9% in 11, 96%in 12, 95% in 13, 92% in 14 and (estimate) 97% in 15. There is obviously concern that pending tenant vacancies will further reduce the AFFO. The Scotia analyst report that I am reading estimates a worse case of 119% if all vacancies are not re-leased.

To OptsyEagles point that they are buying back shares, they have been doing that for some time to offset dilution from the dividend DRIP but the fact they continue to do this is still very positive.

I've owned this REIT for 6 years now, so have rode it all the way down. Does look good value here even with the risk of a distribution cut. Hoping I can riding it all the way back without getting too scarred.


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## tygrus

Serious talk now about a dividend cut;

From Motely Fool;

_`It’s been a tough year for investors of Dream Office Real Estate Investment Trst (TSX.D.UN), myself included.

Shares of Canada’s largest pure-play office REIT are down more than 45% as investors exit the stock en masse based on concerns about Calgary’s office market. Vacancy in the city is soaring, and with oil’s continued weakness and new office buildings coming on the market soon, the market expects even more weakness.

According to Dream’s own estimates, the dividend is also at risk. The company pays a dividend of $2.24 annually and is only expected to earn $2.25 in adjusted funds from operations (AFFO) in 2016`_

I think they better look hard at selling some non core, or maybe turning offices into condos or something.


----------



## londoncalling

don't think the downtown Calgary condo market is about to take off in the current economic climate. Still better to own this than TPH. So don't take my advice when it comes to REITs


----------



## besmartrich

If dividend was too high lowering would not make differences for me to stay invested in. Bought Dream at $16.98 and I don't mind the stock to stay around that price as long as I get sizable dividends.


----------



## Davis

Dream REIT just announced hey are cutting the distribution by one third from $2.24 to $1.50 and suspending the DRIP program to prevent dilution. Gah.
http://www.theglobeandmail.com/report-on-business/dream-office-reit-looks-to-sell-12-billion-of-properties/article28806112/


----------



## tygrus

Davis said:


> Dream REIT just announced hey are cutting the distribution by one third from $2.24 to $1.50 and suspending the DRIP program to prevent dilution. Gah.
> http://www.theglobeandmail.com/repo...ell-12-billion-of-properties/article28806112/



Well its not unexpected. Maybe the stock will rise now. Glad I bought some shares at the bottom and try to keep all that yield I can.


----------



## besmartrich

tygrus said:


> Well its not unexpected. Maybe the stock will rise now. Glad I bought some shares at the bottom and try to keep all that yield I can.


Look at their strategic plans that include div cut.
http://www.dream.ca/office/wp-content/uploads/sites/4/2016/02/Dream-Office-Q4-2015-PR.pdf

Very interesting. I wonder how the market will react today. I have about $6K of shares in my TFSA. If it drops further then I am buying a lot more in my wife's TFSA. I can't wait! :tiger:


----------



## My Own Advisor

besmartrich said:


> Look at their strategic plans that include div cut.
> http://www.dream.ca/office/wp-content/uploads/sites/4/2016/02/Dream-Office-Q4-2015-PR.pdf
> 
> Very interesting. I wonder how the market will react today. I have about $6K of shares in my TFSA. If it drops further then I am buying a lot more in my wife's TFSA. I can't wait! :tiger:


Smart.

Dividend cut. Current yield down. Price will go up.


----------



## besmartrich

My Own Advisor said:


> Smart.
> 
> Dividend cut. Current yield down. Price will go up.


The share price is going up now which isn't what I wanted... it is alright. I will find other REITs for my wife's TFSA.


----------



## Value

Yikes... I did not expect such a positive move from a distribution cut... 
:-/


----------



## tygrus

Value said:


> Yikes... I did not expect such a positive move from a distribution cut...
> :-/


Some analyst put a price target of $9.50C on this thing last night. Isn`t going that direction right now. Cutting divi and raising capital and divesting non-core assets should be a long term positive.


----------



## OnlyMyOpinion

In my experience, when the dividend gets cut on one of my long term holdings, its time to move on to another investment. I'm sure there are exceptions but I'd prefer my money in something that isn't digging itself out a of a hole before it can get ahead  But I'm primarily in it for the income now.


----------



## damaaster

tygrus said:


> Some analyst put a price target of $9.50C on this thing last night. Isn`t going that direction right now. Cutting divi and raising capital and divesting non-core assets should be a long term positive.


Was waiting for my tax return to buy about 1000 shares of this...of course now it jumps right before I get it


----------



## Synergy

Great opportunity to exit IMHO - sell-sell-sell:biggrin:


----------



## tygrus

Synergy said:


> Great opportunity to exit IMHO - sell-sell-sell:biggrin:


I somewhat concur. If this thing could even approach the mid 20s again I would dump it and buy a more diversified fund. Its only single stock I own.


edit; up almost $2 today and trading higher than the Nov 2015 price target of $17.50. They are in for a long 3 yr recovery plan if they can even find renters & buyers. Calgary crashed but TO and Van are in bubbles. Not liking the story - Dumped it.


----------



## Synergy

^ good call IMO. It's always hard to sell.

10-15-20 yrs down the road they may be okay. Short term 3-5 years my outlook for them wasn't great so I dumped the stock and a few other REITs back in 2014. Kept a small position in REI and CSH.


----------



## maxandrelax

IMO REITS have bottomed. For years now, there has been talk of rising rates knocking them down. This has now been baked in. Buy, hold, collect distributions as part of your diversified strategy.


----------



## tygrus

maxandrelax said:


> IMO REITS have bottomed. For years now, there has been talk of rising rates knocking them down. This has now been baked in. Buy, hold, collect distributions as part of your diversified strategy.


Maybe but if I do I will hold them in XRE and not individually anymore.


----------



## Davis

Annnnnnd... we're up 8.4% so far today. Maybe all REITs should cut their distributions. 

Dream Office cut its annual distribution by 75 cents, and its share price has risen by almost $5 -- it's like getting about 6.5 years of the distribution cut paid to us upfront and taxed as capital gains instead of other income.


----------



## Synergy

Davis said:


> Annnnnnd... we're up 8.4% so far today. Maybe all REITs should cut their distributions.
> 
> Dream Office cut its annual distribution by 75 cents, and its share price has risen by almost $5 -- it's like getting about 6.5 years of the distribution cut paid to us upfront and taxed as capital gains instead of other income.


I think it has less do with the dividend cut and more to do with their forward guidance, earning release, etc.?


----------



## besmartrich

Synergy said:


> I think it has less do with the dividend cut and more to do with their forward guidance, earning release, etc.?


This clearly shows how irrational investors are. The company had been hated and punished so badly for a while then here comes a PLAN, a new lovely company is born. Oh right. it is exactly the same company that I am talking about.  Not complaining here as I own $6K worth of stock then this plan comes and made me uncrystalized $1K of capital gain.


----------



## tygrus

This is why I like to point out that you are not just investing in a company, you are investing in its people and management too. The stock had to be pounded for a year before they stood up and did anything.


----------



## OptsyEagle

tygrus said:


> This is why I like to point out that you are not just investing in a company, you are investing in its people and management too. The stock had to be pounded for a year before they stood up and did anything.


What would you of had them do. Their plan is almost solely based on the fact that investors were currently valuing their stock at about 50% of what it was worth. Did you really want them to implement a similar plan when investors were valuing their stock at 25% more then it was worth?


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## tygrus

When something nosedives for 9 consecutive months and breaks all support level and analysis price targets, you get out there in front of it.

Too many people thought the oil thing was a blip. It wasnt. ANd now too many people are thinking the Canadian economy is a blip. It might not be either.


----------



## OptsyEagle

tygrus said:


> When something nosedives for 9 consecutive months and breaks all support level and analysis price targets, you get out there in front of it.


Again, what would you have done if you were running this company?


----------



## Pano

Showing RTN OF CAP (return of capital) in my account history for each month of 2015. What is the deal with this? Do I get money back? I haven't seen any come in yet.


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## Spudd

Pano said:


> Showing RTN OF CAP (return of capital) in my account history for each month of 2015. What is the deal with this? Do I get money back? I haven't seen any come in yet.


It would be part of the dividends you've been receiving. On your T3 you can see the breakdown of what each dividend consisted of, like so (where 42 = return of capital):
16.01.15 234 DREAM OFFICE REIT T/U ( 21) 6.23 
16.01.15 234 DREAM OFFICE REIT T/U ( 26) 12.29 
16.01.15 234 DREAM OFFICE REIT T/U ( 42) 25.16


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## damaaster

Sorry to revive an old thread...but just curious what people's thoughts are on D.UN these days.

Management has said they have a plan - though doesn't seem they have done much yet (other than reduce dividend). Stock price had a nice pop for a while - but seems to be settling back down in the 19 range.


----------



## Eclectic12

Pano said:


> Showing RTN OF CAP (return of capital) in my account history for each month of 2015.
> What is the deal with this?
> Do I get money back?


No additional money will be deposited. 

Return of capital (RoC) is the tax class of that part of the total cash paid to the investor. The RoC can at maximum be equal to the cash paid but is usually less than the total cash paid.

As for how to deal with it, in a registered account (ex. TFSA or RRSP), one can ignore it. There's no Canadian tax to pay yearly on the cash paid or when the units are sold. In a taxable account, one has to subtract the yearly amount of RoC from one's adjusted cost base (ACB). This means the capital gains tax is deferred until the units are sold. If a lot of RoC is paid year after year, it can be possible for the ACB to reach zero, at which point any additional RoC is reported as a capital gain on one's yearly tax return.

http://howtoinvestonline.blogspot.ca/2010/07/return-of-capital-separating-good-from.html
http://www.dividendninja.com/reit-taxation/


In a taxable account, if say $2.40 in cash is paid over the tax year, where $1.20 was classed as RoC ... one needs to subtract $1.20 from the ACB for that tax year. 


Cheers


----------



## AltaRed

^+1 Well said/explained.


----------



## GalacticPineapple

So they just wrote down their Alberta holdings by three-quarters of a billion. Anyone care to speculate on how the market reacts tomorrow morning? :smilet-digitalpoint


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## AltaRed

GalacticPineapple said:


> So they just wrote down their Alberta holdings by three-quarters of a billion. Anyone care to speculate on how the market reacts tomorrow morning? :smilet-digitalpoint


7.21% decrease so far today. Glad I never looked at anything like this especially from this cast of characters.


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## Quotealex

8.98% down at closing....


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## tygrus

Everyone in AB played the oil crash wrong thinking it was a 6 month downturn instead of a permanent one. Companies missed opportunities to sell high quality assets. Dream included. I sold this way back when they announced their first restructure. Glad I did.


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## AltaRed

The downturn won't be permanent but it will be persistent for some time yet to come and won't return to the high level it was at $100 oil. Probably 10 years of supply to be absorbed. 

Surprisingly, housing, at least at more affordable middle class levels, remains strong. Large mutli-family housing developments started even in the last year have sold out.


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## getliquid

approaching the low in jan, good time to jump in, collect some divs and wait it out?


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## My Own Advisor

They will likely need to sell assets...but it will come back. Dividend cut on the way I think.


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## pastorash

My Own Advisor said:


> They will likely need to sell assets...but it will come back. Dividend cut on the way I think.


You believe another dividend cut is inevitable after the February one? Can you share your thoughts on that?


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## financialuproar

I disagree about the dividend cut. Alberta has likely bottomed and the AFFO payout ratio is approximately 60%. The last thing they want is to cut again.


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## My Own Advisor

pastorash said:


> You believe another dividend cut is inevitable after the February one? Can you share your thoughts on that?


No, not inevitable. Just a hunch. If the worst is over, that's a good thing. I've been buying more anyhow. I can't predict the future


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## Tawcan

My Own Advisor said:


> No, not inevitable. Just a hunch. If the worst is over, that's a good thing. I've been buying more anyhow. I can't predict the future


Been DRIPing every month and we're down quite a bit on this one. Hopefully the worst is over and the share price will start to recover.


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## GalacticPineapple

I disagree about the dividend cut - their current AFFO is among the lowest in the REIT industry and things in the oilpatch seem to be stabilizing, if not improving. In at 16.16.


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## AltaRed

I think that there is likely to be stability soon, though don't be surprised at some asset writedowns. NAVs aren't what they once were. Don't these Dream REITS also still have external management? If so, that is less than an ideal commitment unless management is in for a very significant unit holding themselves.


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## GalacticPineapple

They literally just wrote down their assets by $750M. Suspect we're good on that front for a little while.


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## pastorash

Bought 90 shares today for $16.51 each, I think I'm done now looking at REIT's, building my portfolio in my RRSP, emphasizing dividend stocks, now have 3 of 12 as REITs, a few financials, some US. Trying to build some very moderate diversification.

Trusting the dividend will be fine, hoping I'm not chasing it.


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## My Own Advisor

Happy to keep DRIPping this one. I hope it comes back but at the same time, as long as they never cut their dividend, I hope the stock price stays low. Low stock prices are a good thing.


----------



## Market Lost

It's rather sad that I looked into D.UN back in 2009, and it was the same price, but just starting to rocket higher. Seems it crashed back to earth rather hard.


----------



## Stackempennies

The next Quarterly is coming up and they have managed to sell a fair amount of assets way before the 2018 goal..... Any comments???


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## pastorash

Things are looking up, a long term play for me, but as long as the dividend stays stable I'm happy.


----------



## 1980z28

pastorash said:


> Things are looking up, a long term play for me, but as long as the dividend stays stable I'm happy.


Most long term plays work out unless you ?


----------



## john.cray

Hello everyone,

Reviving this old thread with a quick observation. Today D.UN dropped by 6.12%. I was tempted to buy, but eventually held off due to not having good understanding of their fundamentals at this point. A quick read tells me that they are in a much better shape than before the dividend cut. For those of you who have been following this REIT, how do you find its current price and why do you think it dropped so much today?

Appreciate your insight.

Cheers,
JC


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## AltaRed

They issued results last Thursday. Continued decline in FFO/unit and NAV/unit might be a reason. Stlll, price is well below NAV....if the NAV is to be believed. NAVs are often hard to nail down on illiquid RE. Beyond that, I don't have a clue since I've never followed this REIT.


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## mordko

Based on a few minutes of googling, they made a loss last year. Nevertheless they are paying a huge dividend, which is like eating next year's seed. And getting rid of properties in the markets which have already suffered RE downturn while keeping downtown properties in the markets which are peaking.

Like I say - just 2 minutes of googling, so I am probably missing something obvious.


----------



## AltaRed

My 2.5 minutes of googling would suggest they are actually 'improving' their balance sheet by selling properties at NAV and then buying back units which are trading well below NAV, perhaps as low as 60-70% of NAV. That improves the remaining business even if it results in a smaller business. Not dissimilar to buying back beaten down stock.


----------



## mordko

...but the value of any unique about to be sold property's NAV is a guess made by someone who is payed for by the REIT and using recently sold comparables in falling markets. And the above claim implies that Dream is being real clever by selling at full price while buying on the cheap. It also implies that others are being incredibly dumb, presumably because these buyers of commercial properties were born yesterday. 

I don't know, the Canadian real estate is a bit scary right now.


----------



## john.cray

Thanks for the comments guys.

Anybody here considering buying D.UN these days?
It seems like the analysts' are giving them a price between 17.50 and 19.50. It recently hit the low 16's so I wonder if this is another dip down to this level.

Anyway, those are questions I've got trying to find a REIT deal with good dividend and potential for growth in the long run ...

Cheers,
JC


----------



## OptsyEagle

In the conference call, Chairman Michael Cooper said he "would not be surprised if the distribution will be lower in 2 years".

Pretty dumb statement. I like the honesty but he really should have just advised the board to cut it yesterday or just kept his suspicions to himself. Investors will fret over this coming cut for the next two years and I am sure will over worry it to the downside on the stock price. TD expects a 27% cut, so I would expect about that amount of decline in the share price over the next two years. I doubt investors will accept a dividend yield of less then the current 7.5% and a stock price decline would be the only way to get their if they do cut the dividend at some point.


----------



## AltaRed

mordko said:


> ...but the value of any unique about to be sold property's NAV is a guess made by someone who is payed for by the REIT and using recently sold comparables in falling markets. And the above claim implies that Dream is being real clever by selling at full price while buying on the cheap. It also implies that others are being incredibly dumb, presumably because these buyers of commercial properties were born yesterday.


An existing property's NAV is the value at which it sells. That is the only thing that is certain. So if the REIT had been carrying NAVs of those properties at 'near' to the values they actually sold at, it means the REIT is doing a pretty good job (honesty) at establishing NAV of their assets. Still, since you and I don't know any of those details (and don't care to know since we don't give a poo about this REIT), it is pure speculation on our part. It is just that like other things in the market, a lot of stocks/REITs can be mispriced due to investor sentiment. 

Off-topic for this thread, but one REIT that I do own that I believe is oversold right now is Boardwalk. That one I understand because I own it. Again, estimated NAV of circa $60 may, or may not, be correct but they are active in the market highgrading their portfolio so there is some basis for establishing NAV. Even if NAV is $55 or $50, current market prices in the $45 range is 'oversold'. The AB ship is righting itself with some expected GDP growth in 2017 and there will be more folks filling up apartments. The residential rental market is a lot faster to rebound than the office market (the latter lags by a fair bit). We will see price recovery sometime later this year or early 2018. There's a tip for you John! Worth everything that you paid for that one.


----------



## OptsyEagle

Here is the snapshot of TD's analysis of Dream REIT after their 4th quarter results. I can't say they will be right about the lower distribution coming in at $1.10 versus the current $1.50, but if they do I doubt investors will pay $19 a share for a poorly managed REIT that just lowered their distribution to $1.10. I imagine the Chairman's comments about lowering the dividend was in response to the future levels of distributable cash flow they will have when all of their divestures are completed. I kind of wondered how they were going to sell cash flow generating assets and keep up the dividend at the same time. I guess Dream REITs management is a little skeptical about it as well.


----------



## AltaRed

They could keep the distribution if they buy back a proportional number of units with the proceeds of asset sales. It is not a given distributions would be cut.


----------



## tygrus

Advice from someone who owned this. Buy your REITs in an ETF.


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## My Own Advisor

A small part of my portfolio, <1%. Not worried here.


----------



## OnlyMyOpinion

Down nearly 50% over 4 years, payout at risk. 
I'd be asking myself if there isn't a better investment to have my money working in.
Especially if I have any rebalancing of winners to do that could offset the crystailized loss.


----------



## john.cray

Definitely having second thoughts about D.UN now. Standing by for now ...


----------



## tygrus

This stock crashed because they were over exposed to the Alberta market in the oil crash and over exposed to office and rentals. There are towers in down town calgary sitting empty. How does this thing recover? Even if oil magically jumped to $100 tomorrow, I can guarantee they wont be hiring as much there. Rental market is also dead.


----------



## My Own Advisor

OnlyMyOpinion said:


> Down nearly 50% over 4 years, payout at risk.
> I'd be asking myself if there isn't a better investment to have my money working in.
> Especially if I have any rebalancing of winners to do that could offset the crystailized loss.


Certainly not a pretty picture, agreed.


----------



## gibor365

> This stock crashed because they were over exposed to the Alberta market


 AX.UN was over exposed to Alberta even more, but performed much better.

I don't hold D.UN, but hold DRG.UN, pretty happy so far with it and have another limit buy order (sold some CUF.UN).
DRG.UN dropped a bit because of new offering at $9.6 ( that was sold in 1 day) and now it trades even cheaper


----------



## My Own Advisor

Distribution cut from $1.50 per year to $1.00 per year (33% reduction):
http://business.financialpost.com/r...outs/wcm/dfc96542-fcdd-423c-8569-a02ccf6acf32


----------



## OptsyEagle

OptsyEagle said:


> In the conference call, Chairman Michael Cooper said he "would not be surprised if the distribution will be lower in 2 years".
> 
> Pretty dumb statement. I like the honesty but he really should have just advised the board to cut it yesterday or just kept his suspicions to himself. Investors will fret over this coming cut for the next two years and I am sure will over worry it to the downside on the stock price. TD expects a 27% cut, so I would expect about that amount of decline in the share price over the next two years. I doubt investors will accept a dividend yield of less then the current 7.5% and a stock price decline would be the only way to get their if they do cut the dividend at some point.


This was my post from February 28, 2017. I really could not believe that the share price did not respond negatively to the Chairman's comments on that conference call. I can't imagine why anyone would want to pay $19 for this thing now, but they had to know this was coming so perhaps I am missing something. It seems to be barking like a dog to me.


----------



## pastorash

Is the distribution more sustainable now? I see there has been one distribution increase since 2004, and several cuts.

Considering my options here. Stick it out with a still decent distribution or cash out for a small profit.


----------



## pastorash

And more news that interest rates in Canada are on the move up. As I'm relatively new to the REIT game I'm painfully unaware of what effect rates have on REITS, any knowledgeable ones out there can put me in the know.


----------



## Tea Lady

Just received a Corporate Action Notice - Purchase offer for D.UN

I have 1,000 that I paid 31.19 

The purchase offer seems to be $24 Option 1: Tender (subject to proration)

Proration if more than 10,000,000 are tendered for purchase units will be purchased on a pro rata basis (NOT sure what that means)

What Are You Guys doing hold or sell? 

Thank You for any answers.


----------



## Tea Lady

Just received Corporate Action Notice Purchase Offer D.UN

Option 1: Tender $24 (subject to Proration)

I paid $31.19, 6 years ago 

Unsure what to do? Any suggestions? Thank you for any replies.


----------



## AltaRed

Proration means Dream has made a bid to purchase back 10 million units (I think) at $24/unit. If all the aggregate holders of Dream units offer up 15 million units to Dream for $24, it means that if you offered all 1000 of your units, they would only be obliged to buy 10/15 x 1000 = 666 or maybe 667 of those units from you. You won't know how much they will buy from you until the offer closes.

Whether you tender or not depends on your belief that Dream units will appreciate over the next few years to beyond $24, or whether you want to cut and run now and take your losses.


----------



## Tea Lady

Oh Thank You for that clear explanation.

I will ponder some more on this. 

Thanks again much appreciated.


----------



## My Own Advisor

I don't understand...usually Corporate Action Notices apply to all shareholders... ??


----------



## AltaRed

My Own Advisor said:


> I don't understand...usually Corporate Action Notices apply to all shareholders... ??


Well, I imagine it would be... All shareholders would have the opportunity to tender their shares, but Dream will only buy up 10-15 million on a prorated basis of those being offered.


----------



## My Own Advisor

OK...so what happened to Dream again?


----------



## MrTT

*DREAM OFFICE REIT*

Hi,
Would someone explain to me when the issuer is offering to buy back stock, how does the selling works? I own D-UN, bought at $16.50, earned dividend over the years, and now I got noticed that they are willing to buy back for $24? I need to make a decision and inform my broker by April 30. So if I sell, at $24, the price can go up or down, just like anything else and I am wondering what to do and how process works.


----------



## jargey3000

is this the same reit?
http://canadianmoneyforum.com/showt...ffice-REIT-to-the-pits-of-hell?highlight=hell


----------



## twa2w

Yes, same REIT.
So basically you tell your broker if you wish to tender some or all of your units to this offer.
Depending on how many people accept this offer, you may or may not have all your tendered units purchased back. This offer is on a proration basis so if they are offering to buy back $10,000,000 units at 24.00 per unit and they get more units tendered than they anticpate, they will prorate how much they buy from each unit holder. If they get less, then they will buy all the units tendered unless they have a minimum threshold to obtain before they are commited.
You would not pay a commission on the sale and it may be a few weeks to see your money. Any shares tendered cannot be sold on the market.
I have not read the whole offer yet so not familuar with the details yet,

Generally a company will do this sort of thing if they have the cash( or cheap borrowing) and they feel either the units are undervalued, and/or they cannot find ways to deploy the cash for a more effective yield. Or reducing the number of unit holders and resulting dividends is a more effective use of the money than paying down debt.
It can be a good sign that the management feels shares are undervalued, or it could be a bad sign that the management is unable to invest capital effectively.
It is of course more complicated than this and will take some analysis that is beyond me to determine ifvthis is a good deal.
No doubt there will be lots of discussion and opinions in the next while.


----------



## james4beach

I merged these threads and changed the title to a more generic one for this thread.

Let me know if anyone finds any other stray Dream REIT threads.


----------



## MrTT

So I tried to sell all of my 800 shares, but D.UN told the my broker that only 310 will be sold at $24 on prorate basis. It means lot of people are bailing out on this company. It is trading today at $23.68, so if I sell remaining 490 shares, it will be around $157 less than what D is offering. But I am waiting for April 30 so I can get my monthly dividend and then sell.

My question is; come next week, once this offer closes May 3, does the stock price typically go up or down substantially? or nobody knows? I can sell today but then I will miss on dividend. And not sure what will happen to stock price once this offering is over...not sure what happens once buyback pd is over...


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