Dream Unlimited's (DRUNF) CEO Michael Cooper on Q2 2014 Results - Earnings Call Transcript

| About: Dream Unlimited (DRUNF)

Dream Unlimited Corp. (OTC:DRUNF) Q2 2014 Earnings Conference Call July 25, 2014 9:00 AM ET

Executives

Michael Cooper - President and CEO

Pauline Alimchandani - CFO

Analysts

Sam Damiani - TD Securities

Mark Rothschild - Canaccord Genuity

Dean Wilkinson - CIBC World Markets

Jeremy Binger

Operator

Good morning, ladies and gentlemen. Welcome to the Dream Unlimited Corp. Second Quarter’s 2014 Conference Call for Friday, July 25, 2014.

During this call, Management of Dream Unlimited Corp. may make statements containing forward looking information within the meaning of applicable securities legislation. Forward‐looking information is based on a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond Dream Unlimited Corp’s control that could cause actual results to differ materially from those that are disclosed in or implied by such forward‐looking information.

Additional information about these assumptions and risks and uncertainties is contained in Dream Unlimited Corp’s filings with securities regulators including its latest annual information form and MBNA. These filings are also available on Dream Unlimited Corp’s website at www.dream.ca.

Later in the presentation, we will have a question-and-answer session. (Operator Instructions) Your host for today will be Mr. Michael Cooper, President and CEO of Dream Unlimited Corp. Mr. Cooper, please go ahead.

Michael Cooper

Thank you, good morning and welcome to our second quarter conference call. I am here today with Pauline Alimchandani, our CFO, and she will speak about our financial performance. We have continually stated and written that our earnings are lumpy. 2014 has been a slow year in land and housing sales. Last year was a very strong for Saskatchewan overall and while the growth rate continues to be higher than the national average, compared to last year it’s been a bit of slowdown.

Housing starts in our four markets Western Canada vary but overall they’re in line with last year. We specially -- we substantially hit our budget for the year in total and in land sale although receptive to getting enough of the construction complete to be able to recognize income during 2014. Whether it reduced the amount of work, we have been able to complete so far this summer, builders are selling their current inventory and we expect our housing market will be reduced due to some competition. We are already taking action to be able to increase our margin next year to the introduction of more efficient construction methods.

I would like to ask Pauline to discuss the quarter before I make some further comment.

Pauline Alimchandani

Thank you, Mike, and good morning. Our headline Q2 and year-to-date results were below prior year although there is not much to read into the results as there has not been much volume in our land division during the first six months of 2014 largely due to delays and suboptimal weather condition. Nonetheless, we were still pleased with our results and our achievements during and thus pertain to the quarter. Our condo division is performing in line with our expectations with 92% interim project already occupied as of June and approximately 90% of our forecasted margin on the project recognized to-date.

Pan Am is now 83% complete and is on time and on budget. Our asset management division added the Dream Hard Asset Alternatives Trust or 1 billion of growth assets under management on July 8. It is very exciting to have concluded this transaction. Dream Alternatives survives Dream with the opportunity to combine all of these activities, relationships and expertise into one fund, which includes income properties, real estate loans, development and infrastructure including renewable power.

We continue to expand and diversify our asset management business and increase our reoccurring income sources. Our base fee run rate will increase by approximately 30% on an annualized basis with the addition of the trust to the platform. We are also pleased to have successfully increased our credit facility from 230 million to 290 million while maintaining existing pricing term. This new facility matures in November of 2016. The expansion of the facility provides us with additional flexibility to run the business and better deal with any timing issues and/or delays within our land business.

All in all despite the fact that there hasn’t been much activity in land and housing year-to-date, it has been an eventful and transformational period for the Company as a whole. I will no summarize our results by division.

Net margin to land was 16.2 million year-to-date, down from 27.8 million in the prior year. Today, we have sold 173 lots within our communities under development versus 619 in the prior year. As discussed last quarter, the prior year results benefited from delay of lots sales in our Stonebridge, development in Saskatoon, which resulted in a high volume of lot sales being recognized in the first quarter of 2013. To-date in 2014, most of our lot sales have occurred within Meadows and Edmonton, Harbor Landing Regina and to a less extent Stonebridge.

During the quarter, we received approval for our first new community in east Saskatoon called Brighton. Brighton is an 870 acre neighborhood of which Dream owns 510 acres. We have commenced our construction efforts with initial lot sales anticipated later this year. In addition to completing lot sales in Brighton, we expect to complete most of our lot sales in 2014 and 2015 within Meadows and Edmonton, Harbor Landing in Regina, and Blairmore in Saskatoon

During the quarter, we completed the sale of a 12 acre parcel in Edmonton to Wal-Mart for approximately 1 million per acre and growth margin of 7.8 million or 65%. Subsequent to the completion of the transaction, we broke ground on the first phase of a multi‐parcel retail site consisting of 180,000 square feet. The first phase of the development is expected to be completed by the spring/summer of 2015. Year-to-date net margins of 46.1% in land are well ahead of prior year’s 33.1% in our historical range of 30% to 35% due to the high margin on the Wal-Mart sale. Excluding the sale our overall land margins were in line with our expectation.

Net margin from our housing division to date was 3.5 million down from 7.8 million in the current year, largely attributable to a lower amount of occupancies in Virginia. Housing sales continue to be slower as builders work through their increased inventory level. Our net margins as a percent of revenues were 8.8% year-to-date well below 15.2% in a prior year, largely as a result of Stewart unit occupancies to observe indirect and other operating cost during the period.

Our net margin percentage is expected to be relatively flat over the balance of the year with volume being a large determinant factor. (Entering) [ph], Regina maintained a lowest level of unemployment in the country at 3.8% with good job growth across all sectors of employment. While the housing market may appear to be a bit bump at present, remain favorable in the overall fundamentals as a market.

At the end of the quarter, we had 376 housing units in inventory at a total cost of 65.8 million, of these, 281 units were in various stages of construction and 95 were lots held in inventory for future development. This is up from 272 units under construction at the end of 2013 and 81 lots held in inventory. We made a conscious decision at the end of 2013 to maintain higher levels of inventory than we have had historically to stay competitive with other builders and meet anticipated market demand.

Net margins from the condo division was 18.3 million year-to-date up from 10.6 million in the prior year. At June 30, 302 of the 328 units at Good Run or 92% were occupied with another 17 units sold that are expected to take occupancy next quarter which will bring our total occupancy to over 97%. The remaining 9 units in the project are expected to sell over the coming month. We remain on track to meet our forecasted margin expectation of just over 20 million on Good Run.

Our year-to-date net margin as a percent of revenues was 29% versus 18% in the prior year, our overall net margin percentage on Good Run year-to-date has been about 32%. Our reported margins are slightly lower as we are required to expend certain marketing cost related to projects that will take occupancy in future periods. In addition, we have almost 1,800 units in preconstruction or under construction of what's Dream’s interest is approximately 44%; they are expected to close before 2016.

Net margin from asset management was 10.1 million year-to-date down from 14.9 million in the prior year. The variance to prior year is due to lower acquisition activity year-to-date in the REIT with a 115 million of acquisitions completed in 2014 versus 1.7 billion in the prior year and higher headcount as we have added a number of senior management positions throughout 2013 and 2014. In Q2, we allocated some cost from asset management to G&A and other operating division. We believe these changes in geographies will help our stakeholders to better evaluate the performance of each of our division on a standalone basis.

Net margin as a percent of revenue in asset management year-to-date was 58.6% below 64.4% in a prior year due to aforementioned reason. We expect our overall margins to increase with the addition of Dream Alternative as part of our run rate next quarter. Net margin from investment in recreation of properties was 5 million year-to-date ahead of 3.2 million in the prior year. The strong performance was attributable to our ski resort in Colorado due to better snow condition. As of June 30 ski visits totaled over 300,000 which was 28% higher than the prior year.

Within investment properties to-date we have recognized the 7 million as fair value increments on the distillery district in Toronto, which has the current IFRS value of 67 million. This is due to lower cap rate assumptions to reflect updated market conditions and the value of an iconic urban retail asset.

With respect to G&A we re-class expenses in Q2 related to a profit sharing agreement with an officer in the company which was included as part of interest expense last quarter. We believe this reclassification better reflects the underlying nature of the arrangement. For the six months ended we incurred 2.7 million of expenses related to this item of which 1.9 million related to accounting adjustments for prior periods and accordingly was non-reoccurring in nature.

With respect our balance sheet, during the quarter we were paid 14.7 million with available cash or 20% of the loan outstanding to Dundee Corporation, the residual amount outstanding is 59 million which we expect to gradually repay over the next few years. Since the end of 2013 we have increased the book equity value of Dream including non-controlling interest by 90 million which included our 55 million net equity rates and the rest from internally generated profit.

On a per share basis our book equity value has increased by 16% since the end of 2013, our desk to enterprise value ratio remains conservative at 18%. In terms of guidance, we will be in position to provide an update next quarter similar to what we provided last year. In the interim we remain comfortable with overall consensus pretax income estimates for 2014.

In summary we continue to remain focused on making good decisions that will translate into increased success and profitability of our business over the long term, delays in approvals and weather issues are all normal occurrences within the land development business. What is most important for us is that we are focus on establishing the crest framework that will enable us to deliver maximum value and create better community. We are confident that we are executing our strategy across all our business lines and that we will have even more exciting developments to report over the coming quarter.

I will now turn the call back over to Michael.

Michael Cooper

Thank you, Pauline. During the second quarter, we celebrated our one year anniversary. Over the last year, we made tremendous progress in both financial and nonfinancial areas. We have strengthened our management team by creating clear lines of operations with dedicated people [Audio Gap] and responsibility. We have created our constitution or D&A for compensation in value to describe their management information circular. They have been communicated and they are being adopted.

In the second quarter, we rolled out our new branding that appears to be well accepted by our colleagues, customers, and the investment community. In urban development, we have acquired the [old Jelly] site in east downtown Toronto, which is the fattest building that we will convert its use which will enhance the area and would be profitable. We've also bought a site on the eastside and adjacent to Don Valley, that will have 200,000 square feet of retail and 900 units of condos.

And of course we have agreed to buy into the large Ottawa project subject receiving zoning approvals. We’ve continued on schedule within budget to the Pan Athletes’ village and we will apply for our next condominium project within the Distillery. In addition, we have a team in Western Canada that started two condominium projects on our lands in Saskatoon and Regina. With intensification happening not just in downtowns but also in Greenfield developments, we have 1,000 of units of multifamily on our owned lands and we look forward to sharing in the development profit in some of our site. Not including the opportunity to develop thousands of multifamily units on our owned lands in Western Canada, we now have been interested in lands in Ontario that are capable being developed into over 5,000 condominium units.

For the first time I believe that we now have goodwill on our condominium business that provides some kind of enterprise value and addition to the value of the assets because of our ability to generate recurring income from the build-out and approved ability to continually find new opportunities. Within our land and housing group, we acquired much more land over the last year than we have consumed. The ring road has been agreed to in Calgary. The money has been put aside and the construction is being planned with an expected start next year.

We are in discussions with the province of Alberta for the sale of land that is required from us to complete the road and we expect that we will complete the details of this transaction in the next nine months. In Edmonton, we have required land just out in the city and we believe that we making progress of the municipality in line with our development timeframe. We've received our first approval for home win and we will begin this 2,500 acre community in Saskatoon immediately. Our Elk Point community is on track for approval later this year.

In Regina, you see that we go to major growth plans study. In the quarter, they announced an interim growth plan which provides us the ability to start a portion of two new communities. We will be trying to work with the city over the next two years, post some great innovative ideas for our large land holdings, so with the city we can contribute to the quality of life in Regina. The interim plan will enable us to continue to grow Regina while the longer term plan is being established.

In the quarter, we received a vote on our acquisition of the management of the former ROI Funds. We now are the manager with $725 million fund that has tremendous flexibility to invest in hard assets and real estate and infrastructure. The fund intends to be owner of only renewable power projects that we develop. It is also the co-owner in 19 properties of Dream [indiscernible]. Now that we have control of both sides of that partnership, we will be able to execute on our asset strategies which will include holding some assets, enhancing some assets and selling some.

In addition in separate in Dream’s assets, we are the majority owner of 2,000 condo units under development and $350 million of retail development. There is also a loan portfolio that will decline overtime as we get paid. The trust provides us with opportunities to develop relationships with other real estate participants without using Dream’s capital. We see many interesting investment opportunities that will assist the Dream Alternatives Trust to generate higher returns that it had been with its whole mandate.

Last week, Dundee Corp sold all their interest in Dream Office REIT and most of their interest in Dream Global REIT. This is another step towards the separation of the two businesses, Dream and Dundee Corp. It is interesting that a little more than a year ago; interest rates increased and sent shippers to the REIT market. Interest rates have now reduced almost to where they were before last year’s increase and unit prices have recovered.

Dream Global continues to have good opportunities to grow and Dream Industrial is now seeing better opportunities to grow again. The management will have more to say at their conference call in two weeks. Both of these regions performed well this year and outperformed in next. Dream Office REIT not has covered as much but that is due to precede weakness in the office market. Our management continues to improve each REIT and we'll continue with the innovations in each of their businesses.

We are pleased with our asset management business although our pace of acquisitions has slowed, and within our revenue, we are taking the right steps on behalf of our unit holders. With the addition of the Dream Alternatives Trust and New Dream CMCC fund that raised $65 million in the quarter, we are continuing to see growth in our total asset management business. We will continue to strive to generate appropriate investment returns for our clients to provide us with the goodwill to help us grow our asset management platform.

Compared to a year ago, we are pleasantly surprised that the opportunities available to us to go our assets management business. Over the last five quarters, we contributed over $125 million retained earnings, pay down debt, create equity deal with redeemable feature of the preferred shares and increased our reliance. We now have the most liquidity we have ever had and we intend to continue to reduce risk in the business and increase liquidity as we pursue high returns from our existing assets and new opportunities.

Stated in total over the last five quarters, we have created a brand and have their culture, strengthen their management team, improved our land holdings, either received approval to make progress towards approval on many of our lands, we have identified opportunities to grow our urban development business, we have begun our first retail development and we’ve begun leasing on at least seven others retail sites. We diversified our asset management business and made each fund stronger. We earned and retained over $125 million and we’ve increased our liquidity to enhance our flexibility. In total we have added hundreds of millions of dollars of value to the business and positioned it to generate hundreds of millions of dollars of profit and cash flow over the next few years. Not bad for our first year in my opinion.

We’d be happy to answer any of your questions at this time.

Question-and-Answer Session

Operator

(Operator Instructions) And our first question is from Sam Damiani of TD Securities. Please go ahead.

Sam Damiani - TD Securities

So just on your 2014 outlook, I believe last quarter you said that, you find you do about at least 1600 lot sales, I just wondered if that's still the case or if you think your 2014 bottom line number is going to be made up by a different mix of earnings, may be a little bit more from acre sales versus lot sales?

Michael Cooper

Okay. I want to make sure I answer it precisely. We’re worried that we may not be able to get all of the construction done to register sales but that’s irrelevant because that would just be the latest 60 days on with that, did you get what I mean Sam?

Sam Damiani - TD Securities

Yes.

Michael Cooper

That’s not a real issue. So the real issue is, will we sell the lots that we want to, is it a whole bunch of movements with the city in terms of approvals, but I think we are generally aligned with the 1600, so we’re not -- at this stage we’re not concerned about the market because it’s been pretty strong, so the land side we’re comfortable with those numbers give or take a bit.

Sam Damiani - TD Securities

Okay. So it’s going to be more back half weighted than perhaps typical, I guess given what we have seen so far this year?

Michael Cooper

It’s always backend loaded this year, it’s really, really loaded. We’ve got the approvals to brighten and we’ve got a lot of work before we can sell the lots, we have a kind of interest in fact [indiscernible] at yesterday’s meeting, we’re saying that at the open house of the city hall where you normally deal with people who want to make sure that every detail about the development is to their liking, using approach by people who wanted to start buying there. So I think a lot of this has to do with it’s taken us longer to get approval this year and then we’re starting some new communities, we got to get more constructions under normal to start to get sales.

Sam Damiani - TD Securities

Okay. And just looking out to 2016 is your outlook for pre-tax profits any different than it was at the annual meeting?

Michael Cooper

No. And the only thing I would say that I want to make it clear, we’re developing retail and the value increment in that would be included in the 250 in our math and we showed that. And I am just saying -- that’s incomprehensive the income -- obviously the income statement I think, but I am saying, I would include that but otherwise the 250 is the number we mean.

Sam Damiani - TD Securities

Right. Okay. And just on the asset management side, I noticed the base fees, that should tick down about a $1 million versus the first quarter to $7 million or I think it was $8 million in the first quarter, is there any reason for that?

Michael Cooper

We’re just writing to each other.

Pauline Alimchandani

I think we reallocated, there was a one-time success key, there was an asset sale last quarter. I think I mentioned it on our conference call so there was some one time income in the asset management, line item last quarter.

Michael Cooper

And that was to do with an institutional client.

Sam Damiani - TD Securities

So that was baked into the base fees in the first quarter?

Pauline Alimchandani

Okay. I’ll get back to you on that, but I believe so.

Operator

Thank you. Our next question is from Mark Rothschild with Canaccord Genuity. Please go ahead.

Mark Rothschild - Canaccord Genuity

Just following up on Sam’s first question as far as the budget for the year, it sounds like some of it might be pushed in 2015, s how much do you think that you’re confident that you can actually get to into 2014 as far as closing for the last year?

Michael Cooper

Our guys think they can get it all done. There’s 360 lots in Brighton, that maybe if there was some [indiscernible] they might go over New Year would be that, but that’s just how with the lumpy earnings and like it’s not really indicative, it’s just a question of getting payment down before the [indiscernible].

Mark Rothschild - Canaccord Genuity

And the 510 acres that you took at the Brighton number 510 acre they have approved how many lot sales would that equate to, and over what timeframe?

Michael Cooper

It includes retail as well, but generally, I think it’s about -- I am just estimating, I think we’re probably looking something like 1,800 single family homes over six years and it might be faster.

Mark Rothschild - Canaccord Genuity

Okay. Now, one thing you just mentioned earlier which turns out to be the value increment from retail that’s in that $250 million, what’s the number, do you have a number for that, what’s the detail increment that you included in that $250 million that's not actual --

Michael Cooper

I think it’s between $10 and $15 million.

Mark Rothschild - Canaccord Genuity

10 and 15?

Michael Cooper

Yes.

Mark Rothschild - Canaccord Genuity

Okay. Thanks.

Michael Cooper

But it’s real.

Mark Rothschild - Canaccord Genuity

I assume it’s not cash flow, it’s just probably from sales land, it's not lost sales?

Michael Cooper

Yes.

Mark Rothschild - Canaccord Genuity

Yes, okay. There has been as you mentioned the sell down in the REIT from Dundee, Dundee obviously owns shares of Dream Unlimited, is there -- did you expect them to reduce their position or sell their position in Dream at some point?

Michael Cooper

I think they view it very differently and in fact we were speaking about Dream and Dundee Corp yesterday. So there is certainly no issue about it now but if you lookout two years and like that and who knows what their business would be like, but at this stage they’re pretty wedded to Dream.

Mark Rothschild - Canaccord Genuity

Okay and then lastly, as far as the Dream Alternatives, the new fund that you’ve created taken with ROI fund, is there a plan to actually (base anything) [ph] to grow this fund, maybe you can talk a little bit more what's the strategy and how material is this fund to what you’re doing at Dream?

Michael Cooper

We are having a conference call on Tuesday and we’re going to give a whole bunch more information because you saw that how much information in the market on that business. When we -- Dream has committed to put in $50 million into this business as part of raising more money, so our model was, we'd like to take it from over 700 million to 1 billion over the next three years, that’s our own model. At the rate that 300 million we set, we would be a lead order along the way for basically 15% until we get there. So we would hope that we could and it’s just like everything else and we get the right valuation, have the right opportunity as we go raise money.

So I think it does have legs, we got to get through -- we got to get out there and let people know what it is, but I think that we can grow it, and I think it’s quite material. I think Pauline mentioned the contribution to our asset management business because we’ve got all overheads covered, it’s pretty significant. I think it will increase it by maybe 30%. It’s significant not just by its financial contribution; what's more significant about it is I think it’s our first stage into more portfolio management and general money management. And I think that has an opportunity for asset management to grow within our business more than we thought originally.

Operator

Thank you. Our next question is from Dean Wilkinson of CIBC World Markets. Please go ahead.

Dean Wilkinson - CIBC World Markets

Just circling back again on the lot sales of 1,400 or so that you would expect that finished through Q3 and into Q4, where would the majority of those lie more towards the Regina markets or the Saskatoon side?

Pauline Alimchandani

So our communities, I mentioned, so it would be Meadows and Edmonton, Harbor Landing in Regina, Blairmore in Saskatoon, and Brighton.

Dean Wilkinson - CIBC World Markets

And would it be sort of equal between say the four of those or would it skew towards one market overtime?

Pauline Alimchandani

No, I think roughly equal.

Dean Wilkinson - CIBC World Markets

Roughly equal, okay. And then…

Pauline Alimchandani

Or actually to correct Harbor Landing (to the past) [ph] is the remainder of the three are [indiscernible].

Dean Wilkinson - CIBC World Markets

Okay and then it’s between the other three.

Pauline Alimchandani

Yes.

Dean Wilkinson - CIBC World Markets

Perfect. On the 12 acre sale to Wal-Mart which obviously bumped up the margin significantly, are there more opportunities to carve out land like that and sell at higher levels than what you would say be receiving for the sale of just a residential plots?

Michael Cooper

It’s ironic, but we’re actually trying to avoid that. We would prefer to have leased it to Wal-Mart.

Dean Wilkinson - CIBC World Markets

Just like on done a design build and then leased it back to them.

Michael Cooper

Yes, so that’s a direct move on with the Company because we think that long-term we'll make more money that way and create more value. So what we'll do is we will be selling pieces like that where we have to because that's what it takes to get a very influential tenant to anchor something we’re doing.

Dean Wilkinson - CIBC World Markets

And that sort of ties back to the remain 180,000 square feet that you’re just going to develop by yourselves and then just lease off as sort of the ancillary to the shadow anchor at Wal-Mart?

Michael Cooper

Yes, we have actually started construction two weeks ago. So we’re excited about that. We got a lot of leases signed. And I think that our conference calls and our materials you’re going to see a lot more of what's happening in retail on a quarterly basis.

Dean Wilkinson - CIBC World Markets

Okay, that’s good. There seemed to be a big jump in the condo pricing; was there anything there or was that just the combination of sales that had already been entered into?

Michael Cooper

It was exactly what we had budgeted. Everything is in line. There is no information there about what’s happening in the market on price. I think almost all of them were sold two years ago.

Dean Wilkinson - CIBC World Markets

Okay so that's just closing those. And then finally just the reshuffle of some of those salaries from the asset management pushed into G&A, it looks like the salary side from the asset management dropped by about 1.8 million and then the G&A went up by close to 1 million, just trying to get a sense of what the correct run rates for both of those things would be Pauline?

Pauline Alimchandani

Those would be the correct run rate going forward. The other piece of that would have been reallocated to our operating division.

Dean Wilkinson - CIBC World Markets

To the operating division, so using two and three would be about the right numbers?

Pauline Alimchandani

Yes.

Dean Wilkinson - CIBC World Markets

Okay. That’s all I have got. Thanks.

Michael Cooper

Great. Thank you.

Operator

Thank you. Our next question is from Jeremy Binger. Please go ahead.

Jeremy Binger

Yes, Michael, from what I reading is eventually you’ve got a significant number of shares that have a conversion option into the Dream Common, if that was exercised would that be a dilutive event?

Michael Cooper

No. It’s all tax driven. The way I look at the business is, I look at total on a fully diluted basis, I think it’s a 114 million shares. Okay, Pauline says 113 but no, it’s -- so I just look at 114 million shares, I look -- I don’t give what the minority interest and it wouldn’t be dilutive, it’s designed to be as if my personal shares were the same as everybody else's.

Operator

Thank you. And we have a follow-up question from Sam Damiani of TD Securities. Please go ahead.

Sam Damiani - TD Securities

Thanks. Just with the credit facility being increased, do you feel now that you’ve got more than ample liquidity to meet the sort of net investment requirement this business is going to have over the next 12 to 18 months?

Michael Cooper

We feel that we have that plus a bunch more. That we have -- remember we were [indiscernible] Dundee Corp. and then we’ve been dealing with a lot of issues, the goal was to create liquidity within the business that helps us withstand shocks. We believe that between the credit facility and a couple of other things that we are doing we have accomplished that. So your answer is yes, we do not expect, we have the capital to fund everything we can imagine and we have a cushion on top of that.

Sam Damiani - TD Securities

And you mentioned an acquisition site in East Toronto, condo site for I think 900 to 2000 square feet retail, is there any more detail you can provide at this point on the location of that site and if you have a partner on that site?

Michael Cooper

We have a partner, its (Streetcar Developments) [ph] we do a lot of those projects with. I am not sure exactly what the contract say, so I don’t want to disclose anything and piss anybody off. Actually I it’s going to be -- we’re going to (start) [ph] the market this fall so we should be able to tell you a lot more. But I think we just closed it three weeks ago.

Operator

Thank you. And we do have another follow-up from [indiscernible]. Please go ahead.

Jeremy Binger

Yes. It seemed to me that I read that the book value of the land on -- was around -- if I am not mistaken around $300 million to $400, but in the statement there it said it could -- the market value could be significantly higher, could you kind of ballpark what significantly higher might be?

Michael Cooper

Yes. I mean on the ballpark I am going to quote the other three -- well the other two people who called, I think they got it somewhere around 1.1 or 1.2 billion above, but that’s Dean Wilkinson from CIBC and Mark Rothschild from Canaccord Genuity is a very first analyst to cover us, they both have numbers out there. I don’t know anything, they got a lot of work, I have my own views, but we’re comfortable that their approaches make sense to us. Does that help?

Operator

Thank you. We have no further questions at this time.

Michael Cooper

Operator, I’d like to thank you for your help on this call. And I’d like to thank everybody for their continued interest in our business. And Pauline and I and the whole team are available to talk to anybody who wants to talk us about our business. Thank you very much and looking forward to reporting to you next quarter. Have a good day.

Operator

Thank you. And thank you ladies and gentlemen. This concludes today’s conference. Thank you for participating. You may now disconnect.

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