Michael Cooper – CEO Pauline Alimchandani – CFO

Sam Damiani – TD Securities Mark Rothschild – Canaccord Genuity Dean Wilkinson – CIBC World Markets

Thank you, good morning and welcome to our third quarter conference call. I am here today with Pauline Alimchandani, our CFO; she will speak about our financial performance in a few minutes.

Since before we became a public company, I have been saying that our business is unpredictable and lumpy, unfortunately 2014 is becoming one of the more unpredictable years in our history. Lot sales in Regina have slowed down, and weather delays due to extreme rain have prevented us from being able to sell in our new master-planned community in Saskatoon until next spring.

In addition, the housing market in Saskatchewan has been competitive this year and margins are down. Our lot sales in [indiscernible] will be significantly lower than we’ve planned for the year.

Ironically, Toronto condominium sales are up by over 20% in 2014, and we had a great success selling our condos. After year’s above press about the overbuilding of condos in Toronto, I would never consider the Toronto’s condos which show a big increase over the last year, and Regina’s would have slowed down.

Despite the slowdown of lot sales I think this quarter is very important for us building out our business plan. Three of our business lines are showing tremendous improvement, with addition of our Dream Alternative Trust, we’ve added $1 billion of assets management entity that requires portfolio management.

Dream Alternative Trust invests in private alternative assets but unlike our REITs, we invest in assets managed by others as well as their selves. The additional assets have increased our profitability significantly, and I believe that this will naturally lead us to grow our asset management into new areas.

We now have over 2,500 condominium units in predevelopment and underdevelopment, and land for further 5,000 units, with approvals obtained last month in our Ottawa project and the commencement of our first condominium project in Saskatoon. I believe that our condominium business is now sufficiently large with a long term pipeline of projects that is best valued with multiple earnings, not just a discounted cash flow of identified projects.

The third area of major improvement this quarter is in our retail development group. We have over 500,000 square feet that we will be building out over the next three years.

We have letter intent, official lease or leases for over 50% of the space, and we’ve commenced construction on our center at Edmonton. Our rough estimate is that we can build the properties out to an 8.5% cap rate which is significantly higher than the current market of 6% in the quarter.

Normally they are effective 40% value gain on every dollar we spend, but we can obtain long term financing for all of our costs in the development and generate a yield on cost with no equity of 4.5% of the total construction cost. We have a total of 4.3 million square feet that we can build out over the next 20 years; as a result we think that retail development is a very profitable division for us starting next year.

I’m disappointed that results are down for the quarter in the year; however, I do think that we are building a very strong platform for future profitability. Our two historic drivers of earnings, land and housing have opportunities to grow.

We’re working on getting land approvals so we have much more land available than ever before. We are stepping up our housing operations, Saskatchewan, to be more competitive and we are looking to extend our housing business into Alberta.

In addition, our three other lines of business are evolving to drive the growth factor than we had anticipated. We are diversifying our asset management business in increasing our profitability.

We have created a large pipeline of future condominium projects in Toronto, Ottawa, and we’ve commenced building in Western Canada where we have almost unlimited multi-family sites. And the retail development is taking shape faster than we thought, and we expect this contribution to begin next year with value gains and cash flow.

I would ask Pauline to discuss the quarter before I make any more comments.

Thank you, Michael, and good morning. Pre-tax income was reported at $9.3 million and $55.6 million for Q3 and year-to-date respectively.

Our Q3 results are relatively in line with our internal expectations as we were not expecting much volume within our land division during the quarter. As Michael discussed, we had guided on our last conference call which we had hosted at the end of July that we had expected to sell 1,600 lots this year which will be very backend loaded.

Since then, our teams on the ground have significantly decreased their volume expectations and now expect to sell approximately 860 housing lots this year. This decrease is being driven by changes in builder demand, and increased inventory levels in Regina, and weather and work delays in Saskatoon leading to fewer lots being available for sale.

Before I discuss our results by division in more detail, I want to reiterate that our earnings result this period and this year and not indicative of the long term value of our business or the future cash flow generation potential of our assets. By continuing to have higher returns from land development over a long term, having profits and reoccurring income from building multi-family and retail on our own land, and by continuing to grow our asset management business, we believe the market will see increasing value in our business.

We work very hard to communicate how to value our company, so admittedly our business is difficult to forecast in any one quarter or year. Year-over-year comparisons are also not relevant in the land development business and there should rather be a focus on our longer term growth trend.

Furthermore, we estimate that our current results include approximately $2.5 million as annual costs related to staffing and setting up our multi-family and retail development divisions which are not expected to contribute to our profit margin until next year. We estimate that for our active retail projects in leased out or underdevelopment which aggregate to over 0.5 million square feet at Dream Share that we have deferred approximately $13 million of land margin.

This decrease in current margin will be more than offset when these properties are completed. To this point, we expect to generate $12 million of reoccurring stabilized net operating income when the assets are fully income producing over the next few years and we expect there will be a further $60 million in value creation from our retail development activity.

As such, retail will be a key driver of Dreams profits going forward. I will now summarize our results by major division.

Net margin from land was $20 million year-to-date, down from $45.3 million in the prior year attributable to a lower volume of lot sales. To date we have sold 336 lots and expect to sell further 520 or so lots next quarter, approximately half of which are in Edmonton and Calgary, and are Meadows and EvansRidge developments; and the other half in Saskatoon and Regina, in our Kensington and Harbour Landing developments respectively.

With respect to acre sales, we have sold 40 year-to-date including the sale of a 12 acre site in Edmonton last quarter to Wal-Mart. We expect to complete another 18 acre sales next quarter for a total of 58 acres for the full year.

Our year-to-date net margin on land declined to 28.8% as a result of $4 million adjustment booked in the quarter relating to amounts owing to a prior land owner for their share of profits associated with sales in our Stonebridge development that were recognized in 2013. Excluding this adjustment, our reported year-to-date land margin would have been approximately 35%.

As our Stonebridge development is winding down, we will have limited external sales in future years with the large majority of our remaining inventory to be help for and constructed upon by our housing division over the next few years. Our year-to-date net margin from housing was $6 million before elimination, down from $14.2 million in prior year, also fully attributable to a lower volume of housing unit occupancies.

To-date, we have achieved a 160 occupancies and are expecting at least 210 for the year based on what has already been committed to-date. Due to a combination of competitor discounting and lower volumes, we expect our reported margins will be in the range of 8% for the year so our longer range view of our markets remain favorable.

At the end of the quarter we had 392 housing units in our inventory at a total cost of $68 million. Of these 269 were in various stages of construction and 103 were in lots held for future development.

This is up from 281 units under construction and 95 lots held in inventory for future development last quarter. Moving over to condos.

Net margin from the condo division was $19.8 million year-to-date versus $11.3 million in the prior year, though results are not directly comparable as different projects were in occupancy in each time period. At September 30, 322 of the 328 units at Good Run were occupied or 98.2%.

Our condo revenue in Q3 included about $0.8 million of guarantee and management fees or non-active projects, and $1.4 million of revenue from ancillary sources such as tucking, walkers and upgrades, which were quantified and recognized on closing of Good Run. In 2015 we will have 528 units in occupancy within two condo projects of which 35% is at Dream Share, and in 2016 we will have 431 units in occupancy within three condo projects of which 44% is at Dream Share.

In addition, including an equity accounted investment in 2016 will be the occupancies of Blocks 4 and 11 in the Canary District where we have 810 condo units, or 50% at Dream Share. We are approximately 92% sold on our condo projects in occupancy in 2015 and 2016, and in the Canary District we are 84% sold in Block 11 and 34% sold in Block 4 which just connects marketing earlier this year.

Moving to asset management. Net margin from asset management was $19.6 million year-to-date down slightly from $20.7 million in the prior year.

Year-to-date Phase 3 revenue totaled $24 million, up from $19 million in the prior year with a net margin in the current year being driven by a higher proportion of reoccurring income due to the addition of Dream Alternative to the platform in Q3. Net margin as a percentage of revenues increased to 81% in Q3 versus 69% last quarter.

We expect our margin to end the full year just over 70% with our run rate expected to be in the mid 70% range, including a full year’s contribution from the Dream Alternative management contract. We are pleased with the progress we have made within the Trust since closing on July 8, and the first MBNA in financials will be released on November 6.

As discussed last quarter, we have relocated some cost to Master Management to their respective divisions to better reflect the performance of each of our divisions on standalone basis, and we have revised presentation of our prior year results to allow for year-over-year comparability. Net margin from investment in rec properties was $3.6 million year-to-date, relatively in line with the prior year but down from $5 million last quarter due to negative margin at $1.8 million in the current quarter.

The negative margin resulted from higher salary and wage expenses that Ski Hill in Colorado in preparation for the upcoming Ski season. With respect to corporate expense items, our year-to-date interest expense was $12.8 million, ahead of $10.4 million in the prior year, and generally in line with our internal expectations.

Prior year results only included two quarters of interest payments on the Series 1 pref shares, with the remaining difference attributable to project specific and general debt due to higher average interim borrowings on our operating line due to delayed and deferred lot sales. On September 15 of this year we funded the cash redemption of 570,000 preference shares for $4.2 million.

Since the end of 2013, we have increased the book equity value of Dreams including non-controlling interest by $98 million which included our $55 million net equity raise, and the rest from internally generated profits. On a per share basis, our book equity has increased by 18% since the end of 2013, a notable metric.

Our debt-to-enterprise value remains conservative at 21% with leverage relatively unchanged from the end of 2013. In summary, while our earnings results were lower than we expected earlier in the year, we continue to have a positive outlook on our markets, people, external relationships, land positions, asset management platform, and the work our teams are doing across all our divisions.

We expect to achieve increased profitability and value creation in 2015 and 2016. With that I’ll turn the conference call back over to Michael.

Thanks, Pauline. Now let me provide a bit more detail about our operations in color through what’s happening in the markets.

Last week CMHC came out with a new forecast for 2014 through 2016 for Regina and Saskatoon. Their estimate for new starts of single-family homes was reduced by 35% for Regina from the estimate in the spring, and their estimate from multi-family starts actually increased by 6%.

The new effort for housing starts in Regina is 2,350 for this year, which is down by 25% compared to last year, yet it’s the third highest year for housing starts in the last 10 years, with our significant market share will suffer on the lower sales. In Saskatoon, the forecast has increased by 15% over the spring forecast with an expectation of 3,330 new housing starts which is the second highest in the last 10 years.

The estimate for single-family starts increased marginally as expected to be the same as last year. However the forecast for multi-family starts has increased by 32% since the spring and is now more than 20% higher than last year.

On our last earnings call, I reiterated our expectation to deliver 1,600 lot sales. We will miss this substantially due to a slowdown in sales in Regina, and 400 less lot sold in bright in the first neighborhood in Holmwood because the constructions aren’t sufficiently complete.

We lost 60 days of work during our peak construction time due to rain. In fairness to on our last call, I did say that making our numbers for the years was conditionally all of our construction completed which we’re not able to do.

For the second year in a row the Canadian Conference Board predicted as the fastest growing four season Canada for 2014 and 2015, our Edmonton, Saskatoon, Calgary, and Regina. These are the four cities that we are active in Western Canada.

We now have over 10,000 acres owned or under contract in these four cities. We are actively advancing 5,100 acres of land for future approval.

I think we own the best positioned lands in the best markets in Canada. Although there are similar trends in all of our land markets regarding increased density, completing developments before new ones proceed, and the focus on the cost of growth; each of the four cities have a different approach to development.

We have approvals in Saskatoon in principal for all of our lands, and have over 1,000 acres currently as owned. At Regina, the city is changing its approach to planning and it has made some changes in direction of growth for the city, over the next two years they will determine the long term growth plans.

In the meantime, we have all three of our large land holdings going through different levels of planning review with the city. In Edmonton, the city administration is backed up so we didn’t get some final approvals, some final permits that set us back a bit but we do have the general owning approvals for all of our lands in Meadows.

We are also making progress on approvals for about 325 acres of land just south of Edmonton in the town of Wal-Mart. We are optimistic that this land between the City of Edmonton and the airport will be in development in the next few years.

In Calgary, the city continues to review its approach to suburban development. We have a meeting with the city and our development what we believe to be exciting plans for our Providence that will be attracted to the city especially as the ring road construction begins in 15 months.

We also acquired a 160 acres of land about 40 kilometers north of Calgary and 15 kilometers north of Green [ph], and we hope that we will be able to attain approval more easily in this community. In addition to the land we acquired, we also have the first right to acquire adjoining 640 acres.

Another important development in this quarter is the launch of our first condominium project in Saskatchewan. This 36 unit project is important because as we mentioned earlier, multi-family developments are continuing to be a higher and higher proportion of new housing starts.

At Regina, multi-family starts have been higher than single-family starts since 2012. And it appears that this maybe the first year the multi-family starts exceed single-family starts in Saskatoon.

We have 25% presales so far on the condominium that was started last month, and are confident that we will continue to sell units and start construction next spring. We are planning a few other multi-family projects for launch next year as we begin to compete in the multi-family space.

Our urban development group has been very busy. We will achieve substantial completion of the Pan Am Athletes’ Village in the next 90 days.

We remain on budget and on time, and after the games we will get the project back to finish the buildings for their permanent use. In January expected payment of $390 million which will be used to pay down our project debt.

We continue to reduce risk on this significant project, and we’re hitting all of our milestone leading to completion in 2016. As Pauline mentioned, condominiums make up 25% of the total revenue from the project and consist of 810 units of which 462 are sold.

In the last 60 days we sold 46 units, and we have 18 months to sell the remaining 348 units. We launched the first phase of Riverside Square at Queen Street East of the Don Valley Parkway.

This is a site we bought this year with around 900 condo units and 200,000 square feet of retail when it’s completed. The first phase with 250 units was launched last month and were currently over 80% sold.

We have achieved our zoning goals at Ottawa and hope to have our approvals in place before year end which allow us to commence developing a very special community for 7,000 next year. The community will consist of 3 million square feet of residential, retail and commercial space.

We are aiming to create the most sustainable community in North America, and the community is expected to take up to 15 years to complete. Our condominium business is growing with projects in Toronto, Ottawa, and Saskatoon.

Just our Toronto and Ottawa projects consist of land for over 5,000 units, not including the tens of thousands of units that can be built on our lands of west. We are actively developing 1,769 units currently, and excluding the Pan Am gains, they are over 90% sold.

We have just over 700 units in pre-marketing which we are developments under construction, pre-development and our pipeline. We have a consistent stream of projects for the next 10 years or more.

I believe we now have a condominium development enterprise in Dream as we have a pipeline of proprietary projects and our condo division can be [ph] values in multiple earnings plus book value. Our retail development division is growing rapidly and having success with approvals and leasing.

We have lands of 4.3 million square feet, we are currently working on about 2.4 million square feet, and we have about 500,000 square feet plus that will become income producing in next three years. We are doing relatively well drawing interest in our community shopping centers with interest in over 50% of the space.

If we are successful at leasing we expect that the 530,000 square feet will cost us about $130 million, and their development should add $50 million to $60 million of value increment over the next three years. Based on today’s lending environment, we would able to borrow all of our cost at 3.5% from five to seven years, and have net operating income from these centers after-debt of $8 million.

In addition, with all the land we have we could develop 200,000 square feet per year for over 20 years. Retail development is looking like it will make a much bigger contribution to our profitability and increase our net asset value.

Just like the condos, I think our retail division will be valued based on its ability to generate profits, not just based on the profitability of one-off projects. Our asset management division continues to grow.

The three REITs report next week so won’t comment on any details. We completed the first closings with POBA, the Korean Pension Fund acquiring interest in $7 billion in Germany.

We have also found very attractive new opportunities to reinvest the proceeds from POBA. Real estate is very – Germany is very sought after globally and we have the ability to generate attractive opportunities.

As a result we are seeing more value in the German platform than before. We also completed a $130 million of acquisition of the industrial REIT, and $40 million of equity was issued to the vendors, and the real estate is attractive to tenants and yields about 7% cap.

We’ve put in place debt for seven years of 3.5% so they haven’t filled as high and the transaction is accretive. So far this year Dream Industry Global has performed better than the REIT index, and Dream office slightly trails the index.

Although had a strong quarter for asset management, we increased our assets under management by about 9% and altogether we had a strong quarter for asset management. We increased our assets under management by about 9% and the business is profitable.

We had a very active quarter, our land and housing in Saskatchewan has been disappointing, but we’ll make significant gains with the creation of Dream Alternative Trust, approvals for our community in Ottawa, sales of units in our Toronto condominium projects, and our retail development looks like they will bring much more value to the business. Altogether the third quarter has been an important time for our business.

I think that third quarter shows increased predication [ph] during income with condominiums retail development and asset management expected to contribute more in the future. We are really happy to answer questions now.

Thanks, and good morning. I just wanted to talk about the lot sale business, how much of this downward revision in 2014 sales guidance is really a deferral due to delays, construction delays as you say and how much of it is just a slowing of demand in the marketplace?

It’s a great question, and sort of theoretical. We’ve got a lot of land so I think that what happened was there was probably more lot sold and more houses built in prior years, and now the demand is catching up with it.

So I think this is – I don’t think this is timing, we still own the land that we built it out but I think that it was overbuilt and it’s not really deferral.

In what markets was the overbuilding concentrated, I am assuming Regina was one of them.

Last summer we had really good weather, people built a lot. So in Saskatoon and Regina there is lot of building.

Regina has had a tough goal at this year, Saskatoon much less sold but a little bit of overbuilding.

And what does that mean for your outlook for 2015 and also 2016, where you’ve projected pretty substantially, earning increases.

Well, based on our track record of predicting for 2014, I’m not really sure what to say but based on all of our numbers look, CMHC came out and what they said is Regina is probably going to stay around where it is, which is lower, and Saskatoon is going to be higher than we expected. We’ve got a lot of land approved in Saskatoon, net-net I think the overall performance in the company for 2015 and 2016 appears to be where we thought they would be.

And I guess the slowdown that you are seeing is really a market slowdown, I mean everyone I assume in the marketplace is feeling the same impacts, be it weather delays of market demand impacts.

I think it’s city-wide, I mean like in Regina the MRS listings are at 20-year high. Last year I think the GDP growth in Saskatchewan was 4.9%, this year it’s going to be about 1.5%, next year it will go back upto 3%.

So there has been a slowing. Unemployment in Regina, it’s still at 3.2%, there are jobs that have gone – aren’t being filled because migration is down, because it’s actually harder to get into Canada and do get to Saskatchewan now, so the numbers are going to be a little bit lower, I think that’s affected the business and the slowdown in GDP but I think that’s relatively temporary as I said with the conference Board, the prospects for Saskatchewan and Regina seem to be very good for a long period of time.

Just on the margins in the lot business, they were quite low and I think the one thing that was unique here, there were no lot sales in Calgary, was that mix change the key driver from the lower margin percentage or is there anything else going on?

No, we had the onetime adjustment of $4 million in Stonebridge that related to the prior year. If you excluded that, our land margins would have about 35% year-to-date which has been in line with our historical level.

Right.

Yes, we haven’t seen pressure on the margins for land.

Alright, that’s it for me. Thanks very much.

And by the way, we just got information this morning that the MLS sales average on, it was very strong this month, it changes pretty quickly. Sorry, operator.

Hi, good morning. In regard to the homebuilding, you’ve been talking about the increasing demand that you’re actually doing internally as opposed to selling to home builders.

At this point how much capacity do you have, how many homes do you believe the U.S. [ph] builds in a year?

Well we just started to do some offsite construction, we put up three houses so far that have been done in modular, the framing, and we’ve put them up in days, we’re increasing our capacity. What we’ve really done is we’ve been studying each of the markets, every house that’s sold, what’s selling and we’re redesigning how we’re managing our housing business, we’re excited about the opportunities.

We opened our first marketing center in Saskatoon, it’s the first marketing center opened in Saskatoon, and we’re selling single-family homes, multi-family town houses and condos out of there. As while we’re assessing everything, I think that what we’ve seen is, as the markets have grown, I mean when we first invested in Saskatoon there was 200 housing starts, this year it will be 3,300.

We’ve got a bunch of builders that have come in over the years and I think we got an opportunity, or we need to upgrade the way we develop and build houses but all these have capacity problem.

Okay.

I mean everything is getting away from custom building and much more into production because it’s in need to in order to reach the numbers we want, the customer wants to take up a lot of time.

Maybe I can rephrase the question, in the past you have built maybe 200 rooms a year when you talked about getting upto 500. Do you believe that currently you have the capacity to do 500 homes a year?

I think we probably have the capacity to do 370 or 380 this year, and I don’t think – I think we’ll get to 500 in the timeframe we’ve set, so yes, not this year but next year.

Okay. And then just regards to lot sales, you spoke about how just the past few months of change quite a bit and you just made a comment in regard to one of Sam’s question that just this month being recovered somewhat.

When we look at 2015 and 2016, maybe this has connected some of the projects that you have that have been completed and maybe it’s worth getting into that but how should we think about what the realistic numbers are ranged but they – to expect for lot sales and for home sales from the company knowing that the market can shift away from what you expect today.

We’ve got our numbers right here and it’s subject to all the things I would have said before but I think we’re looking at 1,600 houses for next year, I know the number is familiar. And housing, just after that – just under 300.

And that’s for 2015?

Yes.

And presumably, going out further, the numbers won’t necessarily drop as more of your communities receive approvals then?

Sorry, I can’t hear you.

Going out, passed that would there be any reason why that number would decline?

No, we expect it to go up.

Okay. And in regards to the 1,600 that you believe you can do in 2015, would that be backend loaded again?

Probably yes, almost every year is backend loaded. Although this year we – remember we were saying like in Holmwood, we didn’t get it done this year so we’ll probably have some earlier sales.

Okay. And for the 1,600 that you say you can do in 2015, is any of that just sales that would have been in 2014 but were pushed off or is the a good number to look at as what you would have done anyway in 2015?

The answer is yes to both, we’re going to sell lots that we didn’t put into production or didn’t sell this year in 2015. But we’re not going to sell lots that we have planned for 2015 because I think – what I’m going to get at is, in 2014 we didn’t sell as many lots as we’re planning on, we will sell those lots in 2015 instead of some of the lots we are planning on selling in 2015.

Okay. And I assume that with the softer or lower forecast and CMHC and from yourself in regards to Saskatchewan, even in spite that you still favor out comfortable that 1,600 is achievable?

The numbers from CMHC are lower in Regina and higher in Saskatoon than they were before.

So that would be correct [ph]?

It’s probably little lower in total but we’ve got Brighton coming on, and we think that people have been waiting for Brighton because that’s really – sorry, Brighton is the first neighborhood in Holmwood. We had hoped to launch it this year, it’s been delayed but we think there is – from the public meetings in elsewhere, there has been a lot of people with lot of interest in that development so we think we’ll do pretty good next year.

Okay. And just lastly, in year 2015 should we expect any income at all from Providence in Calgary?

No, we don’t.

Okay, great. Thank you.

Thanks a lot.

Good morning, guys. Could you just please talk a little bit more on the short term oversupply that you had mentioned before, how can – what should be the timeline for a short term oversupply?

And also could you please talk about the local economies in Regina and Saskatoon, what do you think they should be in next couple of years? Thank you.

I think we mentioned the Conference Board of Canada has all the economies read in very strong shape among the best from the country. I think Saskatoon is the second highest, Regina is the fourth highest in Canada, all of them well over 3%.

I think the economies are in good shape. Interesting in Canada, we might have a surplus next year on our federal budget.

Alberta has – Saskatchewan has a surplus as well, so with the cities have a lot of flexibility, they have the youngest population in general and we think all of those are good demographics and good levers for the government to have helped promote growth. As I said earlier, in Regina there is 3.2% employment, for the entire Province is 4% which is the lowest in the country.

So, I mean I think they are all in good shape but some of the construction got ahead. As far as, actually with the general economy I think, I mean I think that…

Yes, you mentioned the term short term oversupply, I mean what is short term, will it be couple of quarters, one quarter, how do you see this?

I think we’re eating probably two or three quarters.

Okay. Thank you.

Thank you.

Good morning.

Hi, Dean.

Pauline, congratulations on the top 40 under 50-50, under 40, however I got that around.

Thanks, Dean.

Just a question on the acres that you sold, both I Regina and Saskatoon, or no, Regina and Calgary, were those commercial development acres?

I believe most of them were mal piece [ph], I think there was one retail site which was a daycare, which was in EvansRidge, but other than that they were multi sites.

Multi sites, okay. So it’s not similar to last quarter what we sold to Wal-Mart?

No, it wasn’t.

Okay. And then, just on the ancillary revenue on the condo occupancy, does that seem to add somewhere in the area of $120,000 a door.

Am I reading that right or is that an extraordinary?

So the $1.4 million that was booked in the quarter actually related to all 322 units that occupied in prior period. When we actually did the closing adjustments that’s when they got quantified.

Okay, so it’s just a catch-up?

Actually it’s a higher number for the quarter but not for the entire project.

So just going forward it would be more sort of $5,000 per unit…

Yes, probably.

Alright, that makes a lot more sense. And then the acquisition fee that was earned on the asset management side of things, was that related to the Hard Asset Alternative Trust or were there other acquisitions in the quarter on the other?

There was the third-party industrial acquisition, and there were couple of acquisitions in Dream Global.

Okay.

As well as Hard Asset Trust.

It was very nominal in the quarter being not so heard often.

Okay. And then just on the 500,000 square feet of retail development, Michael you said it’s about $130 million budget, that’s the all end cost?

Yes.

And then you’re looking at an 8.5% yield on that?

Yes, that’s the all in cost with land at our cost with them, all expenses paid but it’s our cost price, yes.

Landed the book value there. And then that’s the – so $12 million or so NOI Pauline that you referenced would be showing up sort of over the next three years under that vertical?

Yes, it’s correct. So $12 million is stabilized NOI so it maybe a little bit longer than three year’s depending on when…

On lease and those things, right. And would that tend to be more towards the back part of the three years in terms of completion on that development or would it say be equal over the next three years?

We’ve got Edmonton under construction now, so that will happen pretty quick. Our estimates are that 2016 won’t have a lot but 2017 will have more, so it’s barbell.

Okay, perfect. I think that’s all I’ve got.

Thanks guys.

Thank you.

Hi, good morning Pauline and Michael. Just a quick question on pricing for the launch, it seemed like that’s a decline in housing and condos prices went up.

I know that lots have gotten smaller but is that the only reason or is there some pressures on pricing?

No, our margins – I guess we’re building smaller and smaller lots going out into the future, so we actually focus on our margins which is the good indicator of our economics which have not changed, it was about 35% year-to-date excluding the onetime adjustment which is in line or slightly better than historical average.

So basically you wanted to convert acres into lots, is the ratio fine or is it higher now, what’s the right ratio for conversion?

It’s higher, I think it would be leaving using 7 now, but it might be higher than that still. But just on the margins, for the year we’ve sold our lots at $113,000 compared to $119,000 and our acres by 786 compared to 648 I don’t see a real – it’s – that’s more lot by lot that I think any other indication of trends.

Okay. Only if I missed it, but can you comment on the negative net margin in your investment properties?

That was related to our Ski Hill in Colorado. So we had a really good snow season last year, and so expecting another snow season this year we’ve staffed up quite considerably.

So that’s a seasonal – it’s a seasonal thing, I think there was negative margin last quarter as well, last quarter last year.

There is less snow in the summer, which is really – well that’s the big driver. And we’re closed, and we have a lot of cost but we have increased the negative in the summer because we’ve added some more people.

We had about 60% increase I think in margin in 2014 over 2013, and we’re also making more improvements in this summer so I think that we’re looking for another good year. The Ski area has been opened for couple of weeks already.

Okay. That’s all I had, thank you.

Thank you.

Thank you.

Thanks. Just wondering if your thoughts longer term on the initiation of a dividend of changed norm since the summer.

Nothing has changed at all, I think that we paid out Dundee Corp, we paid 20% of the debt than we had some of the – $5 million of it. So we’re probably $20 million of corporate debt that we paid back.

I either see we’re not buying in much land but we are finding some opportunities when we talk about having $12.5 million in margin not realized because we’re putting into the retail and condo, that’s increased in our working capital. Also go to say as we get through this growth and the increase in our working capital and get rid of those things, we said the annual meeting at 2.5% dividend and I think everybody is online with that as long as we don’t need the money.

So I think we’re looking forward to introducing a dividend in the next couple of years.

Okay. And Pauline you talked about cost reallocation in the asset management division, that was done last quarter or is there something changed at the end of this quarter?

No, you’re correct, it was in last quarter.

Thank you.

I would love to thank everybody for their continued interest in the company. Pauline and I are available to answer any questions that you might have at your leisure.

Thank you very much for calling in. Bye.