Dream Unlimited's (DRUNF) on Q4 2017 Results - Earnings Call Transcript

Dream Unlimited Corp. (OTCPK:DRUNF) Q4 2017 Results Conference Call March 1, 2018 11:00 AM ET

Executives

Michael Cooper - Chief Responsible Officer

Pauline Alimchandani - EVP and CFO

Analysts

Mark Rothschild - Canaccord

Dean Wilkinson - CIBC

Sam Damiani - TD Securities

David Spier - Nitor Capital Management

Operator

Good afternoon, ladies and gentlemen. Welcome to the Dream Unlimited Corp Fourth Quarter 2017 Conference Call for Thursday, March 1, 2018.

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 MD&A. 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, CRO of Dream Unlimited Corp. Mr. Cooper, please go ahead.

Michael Cooper

Thank you very much, operator. Good afternoon everybody. I'm here with Pauline Alimchandani, and we're pleased to discuss our year end results and answer your questions later. And today Pauline will go through her comments first, then I'd like to make some comments following and then we will be happy to answer your questions. Pauline?

Pauline Alimchandani

Thanks, Michael. Overall 2017 has been an exceptional year for Dream generating a 115.6 million in pretax earnings and an increase in book equity per share of 14% relative to the prior year which was double that of our internal business plan target at the start of the year. Comparative 2016 results included 24.5 million of margin generated from the sale of 172 acres in the province of Alberta, which was not considered normal course.

Excluding the land sale, earnings before taxes for the 12 months ended December 31st would have been more comparable to that of the prior year. Over and above this we have made a number of strategic investments in 2017 to further position ourselves as a prominent developer in Toronto, which includes acquiring equity interest in Port Credit and Frank Gehry development alongside Dream Alternative.

We also invested a total of 68.5 million in Dream Alternative and Dream Office stock as both vehicles have been substantially transformed to pursue Toronto development strategy. All of this accomplished while continuing to successfully manage our recurring business lines and achieving growth in our asset management business.

Furthermore, we expect that our development fee income will increase significantly in future years as lead or co-developer on behalf of Dream Alternatives and our new third-party partnership. We ended the year with a 120 million of available liquidity but expect this to increase to 170 million in short order following in closing in upside of our term loan facility. All in all we believe we have made exceptional strides this year increasing the value of Dream's business and platform.

In terms of financing and transactions achievements subsequent to year end we successfully obtained permanent financing from a life co on our completed retail development, Shops at South Kensington in Saskatoon closing at 22 million seven year term mortgage at a fixed rate of 3.7% per annum. Upon closing we were able to repatriate substantially all of our equity invested in the project which is our first success story in retail.

In addition we now have a commitment letter for total proceeds of 42.8 million which would encumber our Tamarack northeast and southeast income producing asset. The term of the loan is five years. The refinancing of all of our retail asset is significant as they represent the first development, as they represent the first development completed within Dream centers and now provided with recurring income streams going forward on the stabilize asset

We expect to complete the renewal of our 175 million term facility in the next two weeks upsizing the loan to 225 million and extending the maturity date to February 2021. The loan renewal and amendment will also enable us to more freely repurchase stock under our normal course issuer bid as a use of free cash flow over the term of the loan.

In terms of transaction activity in the fourth quarter of 2017, we closed on the acquisition of land for the Frank Gary design verse development located at King and Duncan Street in downtown Toronto. Dream acquired a 6.25 investing in a project within an additional 18.75% Dream Alternative. Dream and Great Gulf will act as co-developer for the project, the total purchase price for the site of 300 million approximately $150 per square foot funded with debt and equity. This development consists of two towers which are fully zoned and development ready, which will comprise 1500 residential units upon completion.

Subsequent to year-end the project secured an $85 million loan, today Dream and Dream Alternative jointly invested 21.1 million in the project 14.8, it was refunded through Dream Alternative and the rest was funded by Dream. We have significant made progress to develop certain nonstrategic retail or mixed use assets in Ontario and Emlenton which are classified as held for sale at year-end.

At year-end, we had about 34 million of asset held for sale which we are actively working on marketing for sales to repatriate capital to redeploy toward more strategic uses. In the fourth quarter of '17, we completed the partnership reorganization of our Zibi development in Ottawa, whereby Dream reduce this investment from 50% to 40% while maintaining relative the state line of equity project in dollars term.

And Dream Alternatives subscriber for a 40% investment with the residual 20% retained by our existing partner Windmill. As part of the reorganization we also increase our ownership in the projects general partner to 80% obtaining control of the partnership, which necessitated accounting for the transaction as a business combination. Previously, our investment in Zibi was recorded as equity accounted investment. The transaction had a number of impacts to Dream's financials, which I will discuss briefly.

Effective October 2017, we recognized the carrying value of our investment in Zibi which was 22.7 million, and we fully consolidated Zibi's asset and liability at their fair value. The change from the equity method of accounting to consolidation requires a re-measurement of the original equity investment.

This re-measurement compares the carrying value of Dream's original equity investment to the proportionate share of the fair value net assets required determinant as 36 million based on the implied purchase price by Dream Alternative. This resulted in a non-cash gain of 13 million which is recorded in three months ended December 31within our financial statement.

Non-controlling interest is recognized for the partner. Economic interest not held by Dream which was 60% at December 31. We also recognize 13.6 million in goodwill as a result of the transaction. This goodwill has no bearing on the business terms of our investment or the underlying financial performance of the project. While the accounting within our financials was complicated, we are excited about leading the project which is one of Canada's largest urban development projects.

Zibi comprises 37 acres of land which will redevelop into a mix use master plan community located in Ottawa and Quebec including over 3 million square feet of density that consist of over 2000 residential units and over 1 million square feet of commercial space. At the end of the year there were 17 employees of Dream fully dedicated to Zibi located directly in Ottawa Ontario. These employees report directly to our development, finance, accounting, marketing and sustainability leads in Toronto and the teams are working side by side and manage the project.

In the fourth quarter of 2017, we successfully secured project financing for Zibi. The facilities which amounted to a 125.9 million in total borrowings and 22 million in letters of credit will be use to service both the Ontario and Quebec plan and to fund vertical construction of the first two condominium blocks.

I'll now run through a brief overview by division. Net margin from land was 48.6 million up 30% from the prior year. In 2017 we sold 913 lots compared to 501 lots in the prior year, approximately 84% of our lots sold in 2017 were within Brighton Saskatoon Harbor Landing in Eastbrook in Regina and Meadows in Edmonton. In the fourth quarter our land division recorded 10.5 million of favorable cost to complete adjustments during the period.

These adjustments were largely related to new information provisions to existing estimate and cost-savings on completed or near completed phases. Although the magnitude of the adjustment in Q4 was large driven the investments through realized historically cost to complete adjustments are considered normal course for any development business and we had a fairly minimal impact on the total gross margin recognized on the related completed development.

As I mentioned earlier our 2016 results included the scale of the 172 aggregate of undeveloped land in Providence to the province of Alberta to construct the Southwest Calgary ring road. Excluding the 10.5 million across the new fleet adjustments and the margin generated by Providence in 2016 our net margin would have been 38.1 million, an increase of 25.4 million from the prior year, due to our increased block 12 volumes. Assuming current market conditions we expect 2018 volumes will include 950 lot sales and 29 acres sales primarily from active community in Saskatoon and Regina.

Today we have secured deposit of self commitment for approximately 586 lot sales that are expected to be realized in 2018 representing a significant portion of the lot sale volumes expected in the year. We expect our lot sale and condominium occupancy volume to increase further in future years as we are currently in the planning stages for developing new master-planned communities in Western Canada including Providence and Calgary and several large residential mix used development projects in Toronto and Ottawa.

Moving to housing. Net margin from housing was 11.2 million before eliminations in 2017 up from 2.2 million of net losses in the comparative prior year period due to the increase in the number of homes occupied year-over-year. In 2017 we occupied 300 housing units up from 140 units in the prior year. In the fourth quarter we also successfully closed on our efforts to affordable housing projects in Harbor Landing to Saskatoon Housing Corporation which comprised of 76 units.

With respect to condos we had net losses from the condos division of 2.8 million in 2017 versus positive net margin of 41 million in the prior year. The year-over-year results were not comparable as different projects were in occupancy in each period. While 2017 occupancies related to The Southwood which occupies 99 units about half of our share which generated a gross margin of 17%. In 2016, we have significantly more occupancies related to projects in downtown Toronto as well as blocks 4 and 11 at the Canary District, which in aggregate comprised over 1200 units or approximately 600 at Dream's share.

Although the year-over-year fluctuation is significant, the results were in line with our expectations given we have limited inventory available for occupancy this year. The division is actively working on a large pipeline of projects. As at December 31, our development pipelines for condominium projects included 8500 units and approximately 2.7 million of commercial and retail space. Today 1700 units have been taken to market and our currently 94% prefilled.

With respect to asset management, total fees earned from our publicly listed funds was 36.3 million in 2017 up 10.8 million from the prior year due to higher fee earnings assets in acquisition activity in the current year. In 2017 Dream successfully completed 1.4 billion of asset acquisitions for their REIT and Dream Alternatives which included Dream global investment in the nearing portfolio in the Netherlands.

Total fees from asset management were however 45.8 million down from 64 million in the prior year. The year-over-year decrease is to the recognition of significant development received in 2016 which were only partially offset by higher fees from the publicly listed funds in the current year. Net margin as a percentage of revenues was 79% in 2017 down slightly from 86% in the prior year due to the aforementioned developments.

I want to now provide an update on our investment in Dream Office and Dream Alternative. Given Dream's increasing ownership and Dream Office REIT in the fourth quarter '17, the Company prospectively reclassified its investment in the REIT to equity accounted investment. We realize our proportionate share of net earnings in the period which was 13.7 million of income in the 3 and 12 months ended December 31.

In the three months ended December 31 Dream Office REIT generated net income of 100.7 million from net rental income in fair-value gains on investment property. The fair-value gains primarily related to the REIT core downtown Toronto portfolio. Subsequent to year-end Michael Cooper was appointed as Dream Office REITs Chief Executive Officer. In the three months ended December 31 Dream Alternatives generated net income of 16.4 million, an increase of 31.8 million when compared to the prior year.

Net income of 1.6 million and net losses of 1 million for the three and 12 months ended December 31 at our share were picked up in Dream's result. Subsequent to year-end for accounting purposes the Company was deemed to acquire control of Dream Alternatives as it was determined that Dream's exposure to variable returns from its involvement with Dream Alternatives has increased substantially to increase units held and certain contractual arrangements that were entered into subsequent to year-end.

As a result, the Company will consolidate Dream Alternatives financial results effective January 1 2018. Our financial payments are expected to become more complicated as a result, but we intent to deconsolidate Dream and [DRAT's] financial results in our MD&A and potentially supplemental disclosures to help readers interpret the true financial performance of Dream.

In the 12 months ended December 31st Dream generated 67.3 million of pretax income from non-development business lines which are considered to be stable sources of income, which was at 28.8% from the prior year. The Company views income for investment in recreational properties such as the Distillery District, Arapahoe Basin ski hill and retail properties in Western Canada, and income associated with investments in the publicly listed funds, asset management contract and Firelight infrastructure is reoccurring income that can be used as a source of ongoing funds to meet interests and fixed operating costs of the business.

The Company anticipates that reoccurring income sources will continue to increase as income properties are developed on owned lands in Toronto and Western Canada. On the overall it was a fantastic year for Dream and the overall Dream Group of Company. Our book equity per share has grown significantly year-over-year. We have strong financial flexibility. We have increased our reoccurring income sources and we have executed on world class investments together with Dream Alternatives that will transform our Toronto development business. With our strong pipeline, best in class assets, and experienced management team, we look forward to continued growth in 2018 and the years ahead across all our divisions.

With that, I will now turn the call back over to Michael.

Michael Cooper

Thanks, Pauline. You covered everything. I just want to spend a couple minutes reviewing where we are now compared to five years ago. Five years ago we were in process going public, we paid down our shareholder loans, eliminated most of our prep shares, we have simplified the structure, we have record liquidity and flexibility, we have 100s of millions dollars invested in the securities. Our recurring income has increased and now exceeds our interest in G&A without any new development at all.

In Western Canada we have improved how we do things in land and housing, to manage five years of profitability with the declining sales prices for the entire time and volume reduction by 65%. We have created retail commercial and purpose built rental into our developments and we received major approvals at almost all remaining land expected to be approved in the next 18 months.

We internalized the management contract at Dream Office that manages through a strategic plan. We increased our ownership among our group from 2% to 21%. We created Dream Alternatives Trust which is a flexible exciting investment vehicle that works with our whole platform. Dream Global has become a leading European commercial REIT with lots of growth potential and has had a good increase in value.

The industrial REIT has performed well throughout the five years and has exciting future with the new management team and the asset class is really turning into something that's quite scarce and valuable. Our Arapahoe Basin's EBITDA has increased by about 300% over the last five years and we've rebalance our portfolio so the Western Canada is significant. But asset management has grown.

We have a substantial investment in Downtown Toronto through development with the huge residential pipeline and indirectly through our ownership of that in Dream Office. We completed the Pan Am Athletes' Village on time and on budget. So, our major focus has been on the structural elements of the Company, our capital and our quality.

In everything we have done we have increased the quality of our office assets -- we have increased the quality of everything we do. Our office assets are great locations and a great future, our mixed used projects among the best and we can create income properties and significant profits from development for sale.

In addition to all of the structural changes our balance sheet is much more conservative and its higher quality, we've increased our book value by 18% per annum and our perception is with increased net asset value by 12% a year over last five years overall managing through the permit of negative disruption in Alberta.

In 2003, Dream had negative equity since then we distributed more equity -- we've distributed more to the shareholders and equity we've raised, and we expect by the end of the year, our total earnings within the Company will be about $1 billion. The opportunities within the business continued to be better and better than what external opportunities. In the meantime, while we're getting better quality, better operations, we can get safer and safer.

We're pleased at Western Canada stabilized and is improving slowly. The balance of our business is also getting better. All in all very pleased with the progress. I'd like to thank our management team which has gone above and beyond over last few years and are board who provided wide counsel.

At this time, if there's any questions we'd be happy to answer them.

Question-and-Answer Session

Operator

[Operator Instructions] Our first question is from Mark Rothschild of Canaccord. Please go ahead.

Mark Rothschild

With your capital plans for the year, can we just talk a little bit about where you see your investment as far as whether it's going to be continued to invest in Dream Office or Dream Alternatives versus or buying back stock or perhaps other development that needs, of the needs that you might have for the capital for your development project?

Michael Cooper

For the most part, our capital that we generate from the business internally would go toward a little bit more office REIT stock, little bit more debt stock, probably paying down some debt and buying back some shares.

Mark Rothschild

Okay, and then in regard to providence. I see that you expect to have some approval this year. Can you talk about how much capital you would be investing in this community over the next year or two? And should we expect to see loss sales in 2019.

Michael Cooper

On the assumption that we get approval this year, in order, we would love to spend about $30 million that is likely to be funded through some of the more advanced communities of the land and housing business -- even with Providence and Coopertown producing cash. In addition, we think that the sales would be in 2019. In addition, the sales increased our born base. So, we don't need a lot of equity to get problems going.

Mark Rothschild

Can you give a range maybe for lot sales that you would expect to be able to achieve in Providence in 2019, 2020 like arrange of where your plans are?

Michael Cooper

Under 150 Providence and 100 an 150.

Mark Rothschild

And is that what you'd expect to be an annual amount for the next several years once it get going or would that ramp up?

Michael Cooper

It should increase somewhat but this is all -- firstly it's preliminary and secondly, we waited 20 years get this approved actually 21 now, and we think is very valuable. We're going to work on getting highest margin out of it. Not getting the most sales fastest.

Mark Rothschild

And then maybe if could ask just similar question, if you could spend on Zibi as far as the capital plan over the next year or two? And when we should expect to see some completion?

Michael Cooper

Well one of the condos has topped off a few weeks ago. And that should be in that 18 month we got a first income there. We may be selling some site to some other users over the next 18 months. So I'd say within the next 18 months we will start to see activity every year that should contribute from profits.

Operator

Our next question is from Dean Wilkinson of CIBC Worlds Market. Please go ahead.

Dean Wilkinson

Pauline, you have been busy and looks like you are going to continue to be so. Just trying to dig down to what the normalized EPS in the quarter would have been to stripping out some of the extraordinary items? Should I be backing out the re-measurement gain on Zibi first?

Pauline Alimchandani

In total which mean, the accounting changes for Zibi and Dream Office they were about 20 million I would say gains in the quarter that would be accounting related adjustments.

Dean Wilkinson

20 million gains, okay. And then, with the 10.5 million in the cost recovery and contingency, did that flow through the income statement too? Or does that go through the balance sheet?

Pauline Alimchandani

Yes, it did.

Dean Wilkinson

It did. But that's in normal like that's a higher than normal amount but it's a normal item that would come through sort of any given quarter?

Pauline Alimchandani

Yes, and you know to put that 10.5 in context it was like 1% of the gross margin for those communities that we developed. It was just said it all for to happen in one period which should be really be the case going forward as we were closing out some pretty large legacy developments and phases.

Dean Wilkinson

So it was just really enough and more than a true up so.

Pauline Alimchandani

Yes.

Dean Wilkinson

That we know going forward, okay, and then just a question the margin facility that you opened could you talk a little about that like, what's -- what is that for what have you done with that can you talk to the proceeds?

Michael Cooper

Sure I mean we have bought a fair amount of stock I think its public now, but like through that it's almost a 100% tax-deferred. And we like that income. With Dream Offices it's going to have a quite a deferral rate a year or two so we have got to be little bit of debt on it which gets a pretty high return with very low tax. So I think we got $40 million borrowing against those 350 million of stock.

Dean Wilkinson

So it's just specific to those two you don't have other securities that you are doubling?

Michael Cooper

We don't own 10% of RioCan investment you are asking.

Dean Wilkinson

And don't plan to I assume. And just turning to the condos you have got nothing expected in 2018. But if you look forward to 2019 am I reading this right about 223 from Riverside where 93 on the Canary Block, and am I reading 360 on the stage II lands of Canary or they somehow interrelated?

Pauline Alimchandani

No, so Canary Block is the first that was Canary Block 16 so that's going to close in 2019. And the only two projects closing in 2019 are Riverside Square and Canary Block. Yes, we also have canary comment which will be closing I believe in 2021.

Dean Wilkinson

2021?

Pauline Alimchandani

Sorry first option in 2020 for our canary comment.

Dean Wilkinson

Okay, so it's 2019 we should be thinking of the 223 and 93?

Pauline Alimchandani

That's right.

Dean Wilkinson

And just the last question is probably more about interest than anything else. Michael on the ski hill the work that you've done there you said it's going to and allow for another 50,000 visitors to go through there. What's the base-off of which that 50 sort of grows?

Michael Cooper

It's been growing rapidly we had in 2017 that simply hit 540,000 skiers which is up a lot I think over 50,000 from the prior year. This year is looking quite good, although and to both calendar year is not ski season and next year when we opened the terrain we estimated 50,000 it's just the gap but with the new Dream we think we're going to attract a lot more people.

Dean Wilkinson

So it's going to be in over 10% gross so that looks like that's just going to continue to be moving the long.

Pauline Alimchandani

Okay.

Operator

Our next question is from Sam Damiani of TD Securities. Please go ahead.

Sam Damiani

Just on the guidance. Didn't mention house closings? Typically, you've been around 30% of lots represented by house closings. Is that sort of what you're expecting for 2018 and going forward?

Pauline Alimchandani

Yes, so that's the reasonable assumption.

Sam Damiani

Okay. And when I look at these 25 of the slide deck…

Michael Cooper

Sorry, just want to understand before you get that. We expect to start to introduce building our own houses in providence. We started in High River this year maybe with the LAM, so well this will have more lots in the future we might in shop from 30%. But we do think that the housing business is the business.

Sam Damiani

Make sense. And then when I flip to Page 25 of the slide deck, sort of a target, sort of long-term annual or run rate of nearly 1,500 lot sales, is that basically just sort of factoring in Providence and maybe Coopertown? Or like, how does -- is that the market, what the market can absorb given your market share, or like, how should we think about that and when that could be achieved?

Michael Cooper

Okay, so it's the first that basically using similar production we have now adding Providence Coopertown and Elan. Oh, sorry, and Willows in Saskatoon.

Sam Damiani

And all those should be going pretty smoothly by 2020?

Pauline Alimchandani

2019 and 2020, yes.

Sam Damiani

Yes, by maybe you aim late 2019. And your confidence in terms of initial lot sales, I know you mentioned this, touched on this, earlier, but in Providence by late 2019. Is that, would you say, pretty high confidence at this point?

Michael Cooper

It's the highest confidence we've had in the last 15 years that are being scoring next year. Meaning this is tricky business the road is suppose to open in 2020 to the year ahead of schedule. We're time it's going a lots in 2019 so there will be three exits off the highway on to our lands, I've always thought that prior to the road being completed we should we approved, we're working very closely with the city of Calgary, but the city of Calgary has not been that easy in approvals but it looks very good.

Sam Damiani

Okay. Just a few kind of quick ones, the Obico site.

Michael Cooper

Obico.

Sam Damiani

Is there any definitive plan on that one? Obico, yes, in terms of potentially monetizing that site.

Michael Cooper

Well it's being expropriated and that will lead to have being monetized but we are working very closely with the city we have said over a year and a half with them on this and I want to be polite it's moving. You said that 74 acres is at a subway stop, that generally has been very-very valuable land and it's going up on value.

Sam Damiani

The Q4 recreational properties' revenues jumped quite a bit year-over-year. I think it was $11 million in the quarter. Was there anything unusual in there or just strength out of A. Basin and [indiscernible]?

Michael Cooper

So, A. Basin was something like 30% ahead, and a lot of it had to do with timing of snow, it actually wasn't more snow, and I think some of it was, our ski area is the highest in the states I think, and it holds snow better so I think we had a lot more market share, that was a big chunk.

Pauline Alimchandani

Yes and we had a better income from Broadview hotel as well in that number, but A. Basin would have been online share.

Sam Damiani

And just finally, Pauline, that $20-million number you mentioned for the gains from the Office REIT and Zibi, is that a pretax number or an after-tax number?

Pauline Alimchandani

I was looking everything pretax but I think in this case it's pretty close after tax.

Michael Cooper

I think the office was after tax.

Operator

Thank you. [Operator Instructions] Our next question is from David Spier of Nitor Capital Management. Please go ahead.

David Spier

Just first question, are there any covenants on your loans that are currently restricting you from buying back stock, your own stock?

Michael Cooper

Today there is.

David Spier

So, there currently is?

Michael Cooper

Yes, but we expect to be gone very soon. When I say that I am not trying to be cheeky, just where we get it, we brought a tremendous amount stock last May, we bought 3.1 million shares and then dealing with our syndicated banks, had discussions whether it's off side or not, we agreed that we won't buy any more stock, until we redo the facility. The facility is all signed up, we are waiting for some land to be registered and within the next -- look, just so everybody gets its, when we deal with cities, we have no control. So in this case, we were waiting for to be registered, we thought it would have been done two weeks and then we're free to go be buying back some stock.

David Spier

And then how do you think about your stock versus some of the subsidiaries because if you would take I mean the rent the different field land that you put out in the presentation where it's helping your book, or you even had for the 10 times multiple on the asset management earnings, one could argue that NAV probably closed to the '15 earnings or even higher versus the current stock price. So I am just trying to understand how you look at your own stock versus the subsidiaries?

Michael Cooper

I think look we spent a lot of time with the board and a lot of it has to do with how do we get the core business where we want it and so a lot of that has been to expand in Toronto, a lot of it had been like a Dream Office is a liquid security we can borrow against we can get access to it, buying back stock, that capital is gone forever. Our board is actually quite negative on concentrating a lot of resource on buying back stock and making the Company riskier after what's been an incredibly expansion with Toronto housing prices. So it's all a risk management issue, but we don't think that the risk management issue -- how do I put it, we definitely want to -- we are more focused on making sure that we continue to make some money, reduce our risk, but we will start buying back stock probably 15,000 a day on average by the end of March.

David Spier

Because you could argue buying back Dream Office and Dream Hard Asset by buying your stock and maybe you have another greater discount then the actual market prices right now?

Michael Cooper

Yes, but when everything turns to poo, mighty we would wish we have that money back, that's what we were -- look, if you take a look at asset back paper and all the mortgages in 2016, everybody had a spread sheet that with a phenomenal, AAA piece of paper. We're worried about what happened when everything goes bad. But what I'm saying is once we've gotten through this with the bank we're going to start buying back stock.

David Spier

Okay I appreciate that and then between activity in Dream and also Dream Hard Asset, get the impression that you feel pretty good about the long-term fundamentals to Toronto condo market. Could you share your views there and why you feel positive about it?

Michael Cooper

Sure, there are some fundamental drivers like I'm not going to go on to antigovernment ramps so let me get my thoughts together. There's a lot of people coming to Toronto and the government has done a good job reducing supply. So, the demand supply equation is pretty good are sense that the people are actually making a lot of money in Toronto and that continued to be a lot of demand. There is clearly a need for more housing and there are tremendous reference materials for that.

o we think there were very positive that five years from now there will be a lot more people in city and we need a lot more housing. We happen to have some pretty extraordinary sites that we think will be among some of the most attractive choices for people. So I think generally are taken continue to do better, housing prices are relatively high, we think income is catching up.

There is definite downside risk for whole bunch of reason. But we do think over time the land of the have will turn into really great property that will be needed. So it is been careful about how we manage the development process but land we have most of them are to fraction of the current market value, so reserve lots of value there.

David Spier

I was going to ask, based on what you're originally selling condos that in both Canary and the few years back as well in Distillery. I'd imagine based on current market prices, you'll be able to sell on the price per square foot and substantially higher number right now.

Michael Cooper

Well, just for a point of reference, I saw this yesterday and I guess all of us feel the same way. We thought a condo in the Canary district areas that were for $520 to close in 2016 its just all for 905

Operator

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

Michael Cooper

I'd like to thank everybody for their continued interest in the Company and we look forward to sharing our progress and our success with you. Thank you.

Operator

Thank you and thank you, ladies and gentlemen, this concludes today's conference. Thank you for participating. You may now disconnect