Michael Cooper - CEO Pauline Alimchandani - CFO

Sam Damiani - TD Securities Brett Reiss - Janney Montgomery Brian Goldstein - Benefit Street Partners David Spier - Nitor Capital Dean Wilkinson - CIBC World Markets Mark Rothschild - Canaccord Scott Bundy - Moors & Cabot

Thank you very much. Good morning, and welcome to our year end conference call.

I am here today with Pauline Alimchandani, our CFO. She will speak about our financial performance in a few minutes.

2014 was a very significant year for our business. We changed our name and brand.

We introduced cascading goal-setting performance system for every employee of the company, and we also introduced many initiatives that will have far-reaching effects on the way we do business and help profitability [indiscernible] for many years to come. 2015 will also be a significant year as we are introducing new people and approaches to our development business, as we continue to grow rapidly.

We have new leadership for Dream Industrial REIT and they bring deep experience and enthusiasm. While Dream Industrial performed well since its IPO, we expect to see more success with Brent and Lenis in charge.

Dream Office had a slow start to 2014, but the operating performance has picked up with the leasing team and property managers totally determined to keep existing tenants and attract new ones. We saw improved leasing results early this year, and we are looking forward to continued out-performance this year.

Dream Global had a breakout year for many reasons. Through the outstanding aspects of the creation of the POBA joint venture, that's solidified in our minds, we have a valuable platform in Germany.

The second is that although we have received the proceeds of the joint venture in September and December, we've already spent or committed to capitals and assets that are every bit as attractive as [indiscernible] to POBA, and we have locked in $0.03 of accretion for Dream Global in the process. Jane Gavan is overseeing all of this progress.

Jane and I just returned from Asia this past week, and we're very pleased with the reception our business received, and we're now planning how we can increase the business our organization is able to do with the institutions that we've met with. The creation of Dream Alternative Trust has added a new investment discipline to our business.

We are developing renewal power projects with our internal resources, but most of the investments are debt and equity and projects run by others. We are getting a lot of insight into how others run their businesses, and hopefully we will learn from them.

We've had great success recovering loans from borrowers and we invested in some extra real estate renewal power projects. There is still some work to be done with the original portfolio, but I don't think we can expect any more progress than we've made to-date.

On the development side of the business, we continue to have very good things happened to us. We were successful in receiving key approvals to the home with sector plan and specific approvals, which basically green lights about 3,000 acres of development that we own.

And we also received specific approval for over 500 acre that we are going to start this year. In 2015, we intend to receive more specific approvals for the urban center of the development, which will make up about another 1,100 acres.

In Regina, we are working closely with the city, and have about 2,300 acres of land under review with the city. We hope and expect to complete the approval of some of this land this year, and set up the balance of the land for approvals over the next year or two.

We are also working on approval of about 500 acres of land in Beaumont, just outside of Edmonton and north of the airport, which will give us another area of growth in addition to the Meadows, which we have been developing since 1998. In Calgary, we've acquired 160 acres of land in Crossfield, which is north of the city, and we are working on approvals for this year.

In addition, our application for approval of 650 acres in Providence is getting some attention. And we will see how we do getting specific approval for the first 160 acres.

In total, we have 5,100 acres in various stages of approvals. As these lands get approved and we commence development, our business will become much larger than it is now, but we expect it to become much more profitable as well.

We have a series of initiatives that are starting small, but if we are successful, it will become significant value drivers for our business. First, we currently have under development or about to be developed 400,000 square feet of retail centers.

In Edmonton, we have returned [ph] our very first retail space to a tenant with many more to follow. So far we have paid for about 50% of the space and we are seeing the pace of leasing pick-up.

We also have another 1.2 million square feet in the pipeline, and we are beginning to lease up some of that space as well. For the 400,000 square feet under development, we are using 38 acres of land and expect to generate over $1.5 million of margin per acre value.

Based on current lending norms, we expect to be able to finance the retail centers and recover all of our cost, including land. We plan to keep the properties as we invest to continue to grow recurring income.

The pipeline of 1.2 million square feet uses up another 114 acres, and we have an additional 300 acres of land for retail use at our holdings. The 440 acres when developed will generate substantial profits and significant recurring income.

Another new initiative in our development group is our first multi-family building that we are building on our Western Canadian land. The 36-unit building is 33% pre-sold, which is more impressive than it sounds as buyers are not used to buying before construction in Saskatoon.

We have both of the jobs bid and expect to achieve reasonable numbers on cost and we have offered the financing for construction. Although this project is relatively small, we have land for 40,000 multi-family units and as we are comfortable with our ability to build these projects we will build significantly more.

We expect to introduce our first rental project in Regina this year. Adding land to build on provides us an advantage in building multi-family.

As we learn from these initial projects, we will develop our strategy for multi-family for our entire business. We've completed our work for the Pan Am Games Village and will hand the site over the organizing committee later this month.

We will get the site back after the games to convert it for its final use. While there is still work to be done, the project has been greatly de-risked.

We've also received the approvals from Ottawa on Gatineau, and are now working through the final stages to be ready to acquire the land and commence our Ottawa project. There is excitement in the area about this project, and we are confident we will have a significant impact on a national capital region.

Just last Thursday we signed the documents for our joint venture with Canadian Pacific Railway to develop lands together. There is a list of 30 properties that we have commenced due diligence.

There are also some further specific properties that could be available. The joint venture acquires us to evaluate the lands and create developing concepts.

If both Canadian Pacific and us agree on the plan, we will begin predevelopment, including trying to attain the zoning necessary for the plan, design and development, and begin to get pricing, and begin to presale or lease the project. Once we've achieved our predetermined hurdles, the land will be transferred to joint venture company and Dream will invest 25% of the cost of the project including land.

As the development is completed and profits are realized, after appropriate preferred return on the equity, the profits is split 50-50 with Canadian Pacific. The list of properties exceeds 4,000 acres of land.

We have not attempted to value the lands; however, Hunter Harrison has said the lands are worth about $1 billion. Four parcels [ph] of land were specifically returned to a joint press release.

They include a 3-acre site adjacent to the Montreal farm [ph] with density of over 1 million square feet. In addition, there are three other sites that are over 200 acres in total at Edmonton, Toronto, and Chicago.

Each of these sites has tremendous development potential, but many more on the list have equal or better opportunities to develop. We are working as fast as we can to make progress on these lands.

So we think we will make some progress on some smaller sites in the near future. However, most of these sites are enormous opportunities to develop outstanding large scale developments in urban settings we have no way to estimate the potential profits at this time.

Any one project will generate profits in excess of $50 million or in some cases much, much more. We're very pleased that Canadian Pacific chose us as our joint venture partner.

It is unheard to have access to this much lands in cities that are having to bid for each piece of land. By working together with Canadian Pacific on these lands and hopefully potentially in much more lands, we have an essential unlimited pipeline of development with them.

We have a great core of development expertise but we are going to grow significantly so we are able to develop industrial retail residential and office properties on the scale needed for this project. As mentioned above, we continue to find excellent avenues for growth and I think we're managing our growth well.

Many of our initiatives will provide substantial value in the future, but are not contributing anything meaningful at this time. Our results from the fourth quarter were good.

However, we experienced a significant reduction in lot sales throughout the year and we've had a very competitive environment in our housing market. We're managing our business in an extremely volatile environment in the short-term.

Our businesses have been more volatile than ever before. We've undertaken a deep review of our markets and inventories and demand.

We have put together a business plan based on all of our research. However, with oil dropping, the Bank of Canada forecasting slowness of West, the Federal Government delaying their budget, this is an impossible time to predict the future.

We believe that we'll have success selling lots in Saskatoon this year as we present the first phase at Holmwood. Regina has a quite a bit because the inventories we think will be slower year than average.

Edmonton is likely to do what we have done every year. And in Calgary, we don't have much inventory, so although it is expected to slow down, it shouldn't have made their effect on us.

At this time, we're getting ready to be in a position to sell 1,200 lots in 2015. I'm certain that we will sell a number that is different than that.

But we want to let you know what we are planning on. As the year progresses and we get feedback on builders, we will continually adjust what we spend and what we sell.

We're expected to have our first value gain from retail this year. We expect that we will see new retail projects come online every year and there will be a significant addition to our earnings.

We're expect our asset management business to grow as profitable this year and many other parts of our business will contribute improve profitability. We had a gain on Distillery recognized on the fourth quarter.

It is not unique. Most of the assets on our balance sheet are not fair values.

There is a tremendous amount of value addition to the amount on our balance sheet in the lands and condominiums. One example that I'd like to feature today is our little ski hill that has EBITDA USD4.7 million last year.

Ski areas generally create eight to ten times EBITDA. So far this year we've had an even better year than last year and should exceed USD5 million or a value between USD40 million and USD50 million.

It is on our books for CAD14 million. We do not fair values ski hills, so we will remain at its appreciated cost.

However, we have grown the EBITDA from $500,000 to 5 million. We continued to see lots of opportunities to continue grow the cash flow.

So the increase in value that is still there may be a one-time thing for the Distillery. But we have many accesses that have significant unrealized gains.

I'd like to ask Pauline to discuss the quarter before we make final comments and answer your questions.

Thank you, Michael, and good morning. 2014 pre-tax income was reported at $109.3 million, down from $131.3 million last year and was ahead of expectations largely as a result of $21 million fair value increment recognized in the fourth quarter within investment properties related to the Distillery District in downtown Toronto.

The total fair value increment recognized in 2014 on the Distillery was 28.3 million. The value uplift in the fourth quarter reflected latest economic and market condition and less supported by an external appraisal obtained at December 31.

Subsequent to year end, a successful refinancing was executed on the Distillery for 85 million or 42.5 million at Dream's share. The financing holds a ten-year term at a fixed rate of 3.9%.

The financing is expected to generate additional net proceeds to Dream of $20.9 million, after expenses and repayment of the existing mortgage financing on the property. Aside from the fair value increment, we were pleased with our results in land, housing, condo, and the asset management divisions, and they out-performed in line with our expectation.

Looking at our balance sheet, we generated a 26% increase in our book equity value per share in 2014, which is a remarkable achievement considering our volume of lot sales were down 55% over the prior year. In 2014, we kept our overall debt level relatively stable and improved our liquidity position.

Subsequent to year end, we repaid another 15 million on our outstanding shareholder loan. We continue to de-risk our balance sheet and financial position while gearing our business for increased profits in 2016 and beyond.

Before I summarize results by major divisions, I want to highlight that year-over-year comparison in earnings are not meaningful while we execute on our strategy to develop more and more land ourselves. Our 2014 results included approximately 2.5 million of annual overhead costs related to our multi-family and retail development divisions, which are expected to contribute to margin starting in 2015.

In addition, we estimate that for our active retail projects under development on internal lands that we have deferred approximately 13 million of land margin. In 2014, we also decided to reserve 25 lots within our EvansRidge development in Calgary for future construction by your housing division which has deferred an additional 2.5 million in margin.

All in all, we estimate that our 2014 earnings could have been favorably impacted by approximately $18 million, if we focused on shorter term profitability decision over longer term one. We're confident that the decrease in current margin will be more than offset by increased profits from development of these lands over the next few years.

I will now summarize our results by major division. Net margin from land was 52.3 million in 2014, down from 89.1 million in the prior year, attributable towards a significantly lower volume of lot sales.

In 2014, we sold 821 lots versus 861 in the prior year attributable towards the short-term demand issues, and weather, and work delays. During 2014, we achieved 311 lots sales in Edmonton within our Meadows development, 252 lot sales in Regina within Harbour Landing, 180 lot sales in Saskatoon within Kensington and Stonebridge, and 77 lots primarily within our EvansRidge development in Calgary.

The lot sold in Calgary during the year, we developed in prior period has strategically held off the market by our land division as they are in a high demand area. As mentioned, there are further 25 lots in EvansRidge that are being held back for future construction by our internal housing division.

With respect to acre sales, we sold 61 in 2014, including the sale of a 12 acre parcels in Edmonton. Our 2014 net margin in land was 34%, which was in line with expectation although negatively impacted by approximately 215 basis points as a result of a prior period participation expense relating to Stonebridge being recognized last quarter.

Net margin from housing was 7.7 million before elimination, down from 17 million in the prior year attributable also to lower volumes relative to 2013. As discussed in prior quarters, housing unit occupancies have decreased relative to the prior year due to increased competition.

In 2014, we achieved 219 housing unit occupancies, which were down from 290 in the prior year, though slightly ahead of the guidance we provided last quarter. Our reported net margin percentage for the division was 8.3% for the year also in line with expectation.

At the end of the year, we had 430 housing units in inventory at a total cost of 71.6 million. Of these, 270 were in various stages of construction, which remains fairly consistent with last year's level.

Turning to condos, net margin from the condo division was 18.3 million in 2014, up from 10.8 million in the prior year, though results are not directly comparable as different projects were in occupancy in each time period. At December 31, 326 of the 328 units at Gooderham was occupied or 99.4%.

Our fourth quarter 2014 net margin in the condo division was negative 1.5 million, which impacted our full year results in margins. Almost all of this negative margin was explained by sales and marketing expenses incurred on future development or projects under construction that are expected to take occupancy in the next couple of years, which are required to be expensed as incurred under IFRS.

We have updated our condo disclosures within our MD&A year end to show both our condo occupancies that are directly owned by Dream and through equity-accounted investments. At year end, our unit sales in condo inventory and within equity-accounted investments consisted of 1,776 units or 785 units at Dreams Share.

In 2015 we expect Carla in Phase 1 of our Carnegie [ph] project that commence occupancy in the latter half of the year, which together comprise 528 units of which 35% is at Dream's share. In 2016, we will have 431 units in occupancy within three condo projects of which 44% is at Dream's share.

In addition, included in equity-accounted investments in 2016 over the occupancies of Blocks 4 and 11 in the canary District where we have 810 condo units at project level were 15 % at Dreams share. We're approximately 92% sold on our condo projects in occupancy in 2015 and 2016, and in the Canary District, we're 85% sold in Block 11 and 43% sold in Block 4, which did commence marketing earlier in 2014.

Moving to asset management, net margin from asset management was 28.4 million in 2014, up from 24.9 million in the prior year. Base fee revenue totaled 34 million, up from 26 million in the prior year with a net margin in the current year being driven by a higher proportion of recurring income, due to the addition of Dream Alternative to the platform.

Net margin as a percentage of revenues increased to 71% in 2014 versus 59% last year. In the fourth quarter, net margin as a percentage of revenue was 80.3% which is expected to be closer to our ongoing run rate in 2015.

Net margin from investment in rec properties was 4.5 million in 2014 relatively in line with the prior year. Our ski hill in Colorado continues to perform well.

The fair value increment recognized on the Distillery district was the most notable and material change within investment properties in 2014. With respect to corporate expense items, our interest expense was 17.1 million, ahead of 14.3 million in the prior year and generally in line with our internal expectations.

The prior year results included only two quarters of interest payment on the Series 1 profit shares with the remaining difference attributable to project specific in general debt, due to higher average interim borrowing on operating lines due to delayed deferred lot sales. G&A expense in 2014 was 14.3 million, which included approximately 3 million of expenses that were non-recurring in nature.

We expect our G&A run rate will be approximately 3 million for quarter going forward absent any one-time item. On the overall, 2014 was another transformational year for our company.

We continue to make financial and business decisions that support the long-term interest of our company and our shareholders. We look forward to continuing to drive higher value within each of our divisions and within our company as a whole in 2015.

I will now turn the call back over to Michael for his concluding remarks.

Thank you, Pauline. As a last point, in addition to preparing the business plans for 2015, we also prepared the plan for 2016.

Based on where our projects are at, and approvals we expect, and projects to be complete, we continue to estimate our pretax income for 2016 of about $250 million. The sources of the income we have changed from last year we expect to see continued volatility in the housing market in the general economy.

So I'm not sure how much weight to put on this number. I do expect that 2016 will be a very strong year in any case.

When we moved public in 2013, we started that year with $380 million of book equity. In 24 months since we started, book equity has increased almost $600 million.

Over the course of 2014 alone, we increased book equity by about $140 million. I'm very pleased that about $130 million shows up as an increase in asset and $10 million as a decrease in liabilities.

We have grown our equity base significantly and made our company safer. We're pleased with our progress so far, and believe that we have the best opportunity we ever had ahead of us.

We will be very happy to answer your questions now.

Thank you, and good morning.

Good morning, Sam.

Good morning. So just looking out to 2016, how are you preparing for that?

I understand you got a lot of spend to do in the near-term to be able to sell lots, for example, in Calgary in 2016; are you -- have you made the decision to proceed and assume that the demand is going to be there? Where is your head at in terms of where the market -- where you see the market, and how are you planning for that?

Well, it's an interesting question, and my answer is going to be probably more detail than you want to hear. So we moved the budgeting process actually to now, to February, so it's much closer to when the work [ph] would happen.

Our original plan was to spend $180 million on development this year; $30 million of which was to finish our cost to complete for sales in 2014, 60 million was to prepare land to be sold in 2015, and $90 million was to put on the grounds when we're ready to sell lots early in 2016. We are monitoring this everyday.

Our managers are speaking to builders. And I think that we're trying to keep our research and the decision-making as close together as possible, and we'll tailor it as we go along, but I think that there is a bunch of work that we're going to do for sure this year.

Does that make sense, Sam?

Yes, that's a good answer. I'm just wondering I mean given the weather constraints, is there a timeline that you kind of hit over the next little while that you kind of go to [indiscernible] kind of thing?

Yes, there is lots of timelines. For this year, I think that we've really -- that we're starting to brighten in Saskatoon, and that's the beginning of this huge development we got to get going on.

So that's really not dependent on demand initially. In Regina, we have a fair amount of inventory, so that's -- we have got a lot of flexibility there.

In Edmonton, they're going to go hard. We sell 300 lots in a good year or a bad year traditionally.

And in Calgary, we maybe into selling with lots we have earlier this year.

And how much of that 90, that you have got to spend to get ready for '16 is in Calgary?

I'm not sure. It's not a significant amount.

On this call, we'll get back to you, [indiscernible] now.

Okay, I'll turn it back. Thank you.

Anything else?

No, that's it. I'll turn it back, thank you.

Hi, good morning. Just a housekeeping item; you bought back about 2.9 million shares in 2014, how much did you layout to do that?

And then I think I'm reading you brought another 228,000 shares subsequent to that. What did you layout for that?

I think our average cost was in the -- just in the low $9 range. So we haven't actually outlaid a lot of capital to buy back shares, but we certainly see it as an opportunity at the current share price to participate in the market.

Great, thank you.

Brett, I'm not sure if I got your numbers right. I think in total, we spent how much money on stock?

We've purchased to-date about over 300,000 shares.

Yes, so that's the total. I'm not sure what your numbers were.

Roughly 3 million.

Okay, great. All right, thank you for taking my question.

Thank you. Just before we go to the next caller; Sam, your question about Calgary expenditures in 2015 is $7 million.

Yes, thank you for taking my call here. You kind of touched on it a little bit earlier; it seems to me that you're monitoring the market very well, so that you can kind of keep your expenses inline if you do see a slow down.

With that, could you care to comment anymore on the Canadian housing market over the next few years? And if you could…

You know that sounds like a joke. Canadian housing market over the next two years, I can tell you what I know, but I can't tell you what I don't know.

What's the other part?

Well, I've read a number of articles about where the debt levels are for consumer in Canada relative to the U.S., and I didn't know if you had any comments on that. And the other question would be the shares outstanding, I don't know if I read it incorrectly or not -- is that right at $76 million.

Is that right? And it seems to be that was increasing over the past couple of years and I'm just trying to get a feel for why that might be the case?

No, the shares -- there was an equity raise in April. I think that was a $57 million or $15.70 which is just over 3 million shares.

Other than that, there's been no increase in shares.

All right, perfect.

Going back to the first question; last weekend in Toronto we sold 18 condominiums at the Canary District, which is part of the Pan Am Athletes village. Toronto has been very busy with housing, CMAT came out with some numbers last week that we're down really slightly, but Central Canada had more housing and Western Canada had less.

I don't know what we would know better than them, although I'm not saying, they know a lot. But we've been very pleased to see the demand in housing for Toronto.

And in Western Canada, we had some pretty good success this year selling our housing inventory and we are waiting to see how the builders are doing with their lots. So Saskatchewan is significantly different economy than Alberta, because it's more diverse, but oil is part of that economy.

So it's really -- there is a lot of changes quickly, and I don't think people have actually made their plans yet. So I haven't seen any big numbers, any big changes in numbers in housing starts from any source.

We are taking at the Saskatchewan may have advantage because like 3.2% unemployment in Regina and they can't get people if the Saskatchewan headings in there pretty good maybe some people comeback from Alberta who can help this build houses and do other things. So I guess we're in 2008, we decided that the whole world is blowing up and we will take out any money we could from the land development business as that everybody else in the industry.

We ended 2008 with the lowest backlog of sales we've ever had and we ended 2009 with the highest backlog. We totally misjudge what was going to happen and if you look at 2009 and 2010 and we got those numbers in our investor presentations and average them out, it would have been just two relatively similar years.

So that was a few of financial crisis we've seen and weakness play that so we're just technical making any big calls that has nothing to do with us thinking that this slowdown is going to be less of year or more of year, we're just totally focus or making sure our balance sheet can handle whatever comes.

All right, and you still feel comfortable with the 250 million pre-tax revenue for 2016?

That is what's come out of our business plan and with everybody using reasonable assumptions for what's happening now and like what the man is like now and what our properties are. But I wouldn't say I'm comfortable or I'll comfortable, we'll keep you to inform as we get closure.

Perfect. Thank you very much.

Thank you.

Yes, hi, thanks. So we're about half way into Q1 at this point.

You just comment on any changes in particularly the Alberta market that you seen in 2015 versus 2014?

It's minus 40, which is keeping people a lot of show homes and things like that. We don't have a lot of information on the first six weeks of housing purchases or stuff like that, it's really early January was quite a slowdown.

I think on the 8th of February CMHC came out that was the numbers and for Calgary they were pretty rough. But you can get that on the CMHC Web site.

Okay, great. Thanks.

How is it going, guys? Nice job on a very solid quarter, especially considering the amount of longer term projects that you seemed to have under your belt.

So I think the market and investors in general seem to making this mistake of especially, when you've been talking to last two callers of making this mistake and looking at you guys simply as a home builder and land owner with Western Canada exposure more or less relying on one-off sales of assets and also have a lot of exposure towards the single-family housing market in Canada. But you did a very good job early in the call describing the current development pipeline of the company.

But is it possible to give us a better understanding of the longer term value potential of the retail and commercial assets. So just the Canary District in various sized square also as well as in Ottawa in terms of potential contribution to your overall margin something that we can look at or they give us a better idea?

I think the condominium that we have now, I just want to make sure…

I'm not talking about the condominium, I'm talking more of the longer term NOI recurring generating margin there or retail commercial just trying to understand, because more or less the way we look at it is between your existing properties and between the fee margin which is looks to be going above 30 million annually, which one now what type of potential is there other potential to this business being a $50 million, $60 million, $70 million recurring margin business with this development. So I'm just trying to understand how big of a margin contribution will add to the overall company?

So just on retail we're doing like we're going to be using up about 13 acres a year right now we're probably going to pick it up but in total the 440 acres should produce something like $660 million of profit. And I think we should be our estimate and again it's going to be more in some years and less in others but I think we are expecting something around $20 million a year just from retail and that's maybe for 30 years.

And valuable assets such as the Canary District which seems to be a great piece of property you are going to have those condo sales but in addition to that is there going to be a longer asset that you are going to hold today in terms of commercial space, retail space that you are -– benefit?

There is only 30,000 square feet of retail in Ottawa there should be 1 million square feet of commercial.

Got it. So in the Ireland, that's a very valuable asset there more or less.

Yes and it's really well located so we think we're going to be great with the commercial space there we're going to go I mentioned earlier that we are going to build rental apartment if that could become big business we want to see how that goes first, but I would say that we're - for a business that's at least twice the size in a few years in terms of profitability.

Got it, because -- yes, as mentioned it seems like you are already doing close to around $5 million in recurring margin so anything on top of that, specially where the value of this company it would be pretty incredible.

We think we are going to get closer to $40 million on asset management margin, we're going to get another $7 million from our renewable power, $6 million from the ski area we've got investment properties have produced another $5 million or so. So what's that 47 it's almost $60 million now I think you are going to see that grow $80 million or $100 million over the next four or five years.

That's great I mean that seem to be our point as well in terms of the sector specially revaluation is now it seem to be and considering your minimal leverage that you guys are operating under that all the housing and all the land assets that's pretty much at this point. So that's just what it appears at these levels but…

What was surprising to us was and we did a bottom up budget it had nothing to do with what type of number we're trying to hit we got about $250 million but it came much more from condos, asset management and retail and less from housing and land.

Yes that's the way we are looking at it. So I am glad to see on the same page here.

And then more importantly not more importantly but in the M&A it's mentioned something regarding potential land development in California is that something significant can you speak to that a little bit?

There is a piece we own at the base of a ski hill that we are fortunate enough to have a piece of land in one of the hardest places in the world to get approvals and I would attach virtually nothing to it.

Got it, understood. And then just to clarify lastly how many just little bit confused on the previous caller how many shares overall in terms of Dream Unlimited did you purchased between 2014 and so far this year what's the total share count of buyback?

It's about 300,000 share.

So between this year and last year is 300,000?

Yes just over 300,000.

But you also did am I wrong as well as you purchased shares in the REITs subsidiaries?

We bought units in Dream Alternative as well sort of late 2014 early 2015.

Understood. Okay, all right.

That's it from me. I appreciate it guys.

Thanks a lot.

Thank you. Good morning Pauline, good morning Michael.

Good morning.

Just do you have more clarity on the sort of where you are with those 1,200 lots for 2015 in terms of breakdown more Saskatoon, more Regina more…

Yes I think I sort of referred to it I don't want to get into real specifics but I think what we are looking at is Saskatoon being inline with among our better years and then Regina probably like this year Calgary probably like this year Edmonton probably like this year. So in a way we are thinking 2015 is going to be a lot like 2014 except we'll have lots to sell in Holmwood.

So we think we could have sold a bunch of them last year we weren't really we are adding them to the mix of this year and I think that in a lot of way the builders in last year 2014-2015 is we're going to have Holmwood and that we should pick up in extra 400 lots of air over the last year at least.

Over last year. So that makes a difference between the 800 and the 1200.

Right.

Okay, just turning to both the housing and the condo in terms of the sales there, how do you think 2015 looks relative to 2014 and kind of like I'm trying to get to those 219 housing and 172 condos is that a number that you think is going to be better or lower in 2015?

I'll answer the condo question first. So this year in 2015 we have 528 units of the project level between Carla and Phase I of Carnegie [ph] of which 25% is that our share.

But it's going to be backend loaded; the occupancies towards the latter half of the year.

Towards the latter half; are those 528 at the pre-sold level right now?

I think those projects are 92% to 95% pre-sold currently.

Okay. So you're looking somewhere in the call of 180 and 200 units range.

Yes, that's a good estimate. Yes.

Okay, and then from the housing side?

Yes, we're expecting to sell more this year. But we're not predicting to have a big increase in margin.

Okay. So again, that's probably a lot of coming out of the home pricing that we're seeing out of Saskatoon where it looks like maybe there's more incentive to going into those deals?

There is another more incentives I think we've got the market moving so quick that what end to have happening was we have houses that maybe more desirable for a slightly different economy than what we're seeing now. So we're turning over some of our inventory and producing new style housing.

So I think it's -- you get caught sometimes.

Is that just like a smaller footprint or…

Yes.

Okay. Does that imply you're getting perhaps not five lots per acre, but may be something like seven?

Well, we're actually planning things now about 10 units per acre including multi-family. It's so mixed now.

We're now using the blended number of 10 units per acre rather than a number for a single family, because the way just people live on changed so much. We don't have that many acres just a single family.

But yes the density is increasing.

Then density is increasing. Okay.

I just wanted to clarify something you said, Michael, 38 acres coming out into that commercial development, the 400000 square feet. You said 1.5 million additional margins per acre off of that.

Is that right?

$1.5 million margin per acre after costs.

After costs; so we're looking at an additional 57 million coming in. is that in 2015?

It's over a couple of years.

Over couple of years.

Yes, but if you think about it, you match that up with what I was saying about what retail would contribute annually. I was saying you can probably count on an average about 20 million a year.

So that might be like 3 years.

Three years; okay, that makes sense.

But it's not going to be even but over a certain time period that it will total around 60 million.

Okay, that's fair enough; just a clarification on that joint venture with CP, you put in 25% of the cost that's including the land. So I'm assuming that you're basically going to probably fund and load a lot of the soft development costs and then you'll go into traditional construction financing.

Its 50-50 was that after a cost recovery and a hurdle to CP or is that just 50-50 after cost recovery?

No, its 50-50 after cost recovery and a competitive hurdle. Like the same kind of hurdle that people would use in this business.

Okay. So you're looking sort of high single digit kind of thing probably.

Well, they say it works is generally developments are always performed to be 20% or higher IRRs. So there is a reasonable hurdle -- I'm not going to comment but you're not far off.

But we would ask not to CP has a big shareholder base. They don't want to saying things that's going to affect what they disclose to shareholders.

So basically we run everything by them as we're saying and we'd also read what they said to people.

Okay. It's going to be basically a normal deal what you're saying there.

Kept this on a massive amount of land.

On a huge amount of land; and this is something that's going to run a longer than most people are willing to commit to the venture like we're talking decades.

Well, you know what the idea is we got a specific list of assets. Then we got another list of assets that could be included if they are good ideas for, but I think that we want to blow them away with what we can do with the land.

So, effectively, it will be a forever relationship on an infinite amount of land…

Just trying to unload the concept, and then let it just continue to run out from that point. Okay, that's fair enough.

There's no agreement about that, but clearly that's what our goal would be

How long is that term that you've entered into, can you disclose that?

It's a couple of decades.

Okay, fair enough, that's enough.

But it doesn't who in our earnings this year.

No, that's again down to the long-term value, that's clear.

One thing on that one, CP put out some information as to four pieces of land. If anybody has any interest just take a look at those four pieces of land.

It is extremely rare to have pieces of land between 60 and 90 acres where everything around them has been developed already. And if you Google it, you'll find out that in Edmonton on the 92 acre piece, I think it takes up 45 blocks.

And what I read in the newspaper was that people can't have street fairs because there not enough crossroads. And that the city really want this to get developed so that people can have excellent lives.

And what we're seeing in a lot of these pieces of land are really strategic to the cities, and how they want to grow. And we were just talking to Ottawa City the other day, who has plans done for some land that's not even on our list, it's on the possible list, because the cities want this land to be part of their city, and of better and higher use for what the city's goals are.

So these are important pieces of land on a massive scale.

I can imagine, across that portfolio with it. It's just been a land bank that they've been sitting on for a long time.

Most of these pieces of land are bigger than the distilleries, the Pan Am Athletes Village, and our project in Ottawa, combined.

It's pretty big. Just a few housekeeping items; Pauline, the bump up in the direct expenses on the condo selling, you mentioned that was for, you saw some pre-sales and stuff that was to come down the road.

What would a normalized run rate figure on that be? I'm assuming it's a lot less than $1.7 million.

Yes, I mean I think particularly this quarter because we launched Riverside Square. So I wouldn't expect that to be ongoing.

But I think typically, if you model in your margins around 15% for condos, on average, those include the marketing expenses.

That would include the marketing expenses.

Yes.

So more like Q2, Q3, the $400,000-$500,000 would be reasonable. Were some of the salaries out of the asset management side pushed into corporate G&A?

Yes, that happened in Q1 of this year, so some of the costs have been reallocated

That's going to continue to run out. So corporate G&A we should be looking somewhere in the $12 million to $13 million range?

Yes, so the Q4 run rate, exactly. During the year there was $3 million of non-recurring G&A expenses.

But you're right it should about $12 million to $13 million next year.

Okay. And then it looks like there was $9 million or $10 million of investments in the other assets category.

It looks like $3.5 million in Dream Alternatives, and another $5.6 million in non-quoted active market investments. Can you talk a little about what those were?

Yes, that's a 5% investment in Cologne Tower [ph]. That's the asset that Dream Global purchased, and that was to help facilitate the structure.

Okay, fair enough. So that's a buy and hold.

And has there been any other thought, discussion, or change of mind in terms of the potential for a dividend sometime down the road?

It's Michael on that one. I think we'd like to put in place a dividend.

And we sort of got that modeled out. But the only thing is first we have to make sure the Company is bulletproof, and that volatility is making it harder, and harder to do that.

But we plugged, beginning of 2017, in some of our numbers, but we'll see.

Okay, fair enough. That's all I've got.

Thanks a lot guys.

Thank you.

Hi, guys. I was just wondering if you can comment a little bit how we should think about the Ottawa project in terms of value, and contribution in the next few years.

I know it's a big one, but just in terms of putting some numbers around it.

I think that there are pretty distinct buildings. So it's not going to be one big project that we realized at once, sort of like the Pan Am.

It's probably what, 30 buildings, and we hope to start soon. There's 2.5 million square feet of residential, and we expect to have the same margins on that as elsewhere.

And maybe on a percentage basis, maybe I'd use maybe $400 per foot for sales -- yes , so it will be as same as Toronto. So I'd use the same numbers for there.

So what I'm getting at is, if it's 2.5 million square feet I just look at what we're doing in Toronto, and use the same kind of 15% margin, and we get half of the project. And I would think we're going to need a couple of years to realize it.

And after that there should be -- they're saying 10-15 years, I'd just work it out over that time period.

So you're saying you will realize this initial 2.5 million square feet over the next couple of years, you said?

Probably 10-15 years.

Oh, I see.

So effectively -- I'm just using typical numbers in the industry. But we did 2.5 million square feet; let's say that's 200,000 square feet a year.

Our share is 100,000. At $500 per foot, 100,000 times 15% might be $75 times -- is that $7.5 million a year or so.

Yes.

I think something like that. Again, those are just -- that's not a prediction; that's just saying.

As a developer that's what I would generally look at, and use that maybe as a guide.

Okay, thank you.

Thank you.

Hey, good morning, Mark.

Good morning. The sale of land to the province in Alberta for the highway, when do you expect that to happen?

Is there any risk maybe that with the government trying to conserve capital that that wouldn't go through? And can you quantify what that profit is expected to be?

I think that the premier of Alberta has been trying to say they will look at anything and everything. This project is extremely important infrastructure.

And it's actually a 30-year private-public-partnership. So it's not taking up a lot of money upfront.

It's also taken 50-60 years to get this deal sold. We're pretty confident about it.

We think that we'll be looking at about maybe $21 million of margin late this year, or early 2016. And we're looking at this stage, we're hoping to do a trade and not get cash.

Would this be included in your $250 million budget number for 2016?

Oddly enough, at this point it is not. But if it creeps into 2016 then it would.

But on the face of it, it's not.

Okay. And for that 2016 number, the $250 million, how much of that would come from cash flow, and how much of that would come from increases in value in, let's say, completing a retail development, or an appraisal, or something like that?

I think it's just what I said, like $20 million a year in retail or something like that.

The rest would be cash flow.

So about $230 million would be a more proper cash flow?

There's not more proper cash flow.

Thank you very much.

Any other questions, Mark?

Great. Sorry to take up more of your time, I just wanted to clarify, and I hope you guys would agree, just a comment on one of the previous callers regarding a dividend.

That if these, especially at the level where your stock is, and especially considering the value you guys seem to have, I think paying a dividend at this point should be the last thing you consider. If anything, you'd be buying back shares with your capital.

But I think it would be the least prudent thing to do to pay a dividend over the next few years at least. So I just wanted to make sure that that was said.

Because the way the markets are reflecting the value of the Company, especially where the true value seems to be. It's a pretty big discrepancy.

And paying a dividend would be I think the last thing we want to do.

Yes, I've probably talked to my children about that one. But yes, I think you are right on everything else, and my children don't actually care at all.

You know what, we are nowhere near it now, because what we are doing -- we put out the potential of a dividend year ago, I just talked it was a much higher price. If we pay a dividend out, everybody can buy more stock if they want or not.

So I'm not sure about it, but in the meantime…

I would say in 25 years now your children will be a lot happier when you bought back the shares than they would be right now. So I will just clarify on that point.

If we were to take money out, the best investment around seems to be this company. So…

I'm just feeling embarrassed at them having dinner with my kids, and I know I'm going to get -- for this. So, instead I didn't mean it.

What I do think is we've been astounded at the opportunities we are finding to put more money into our land at very high return and the new opportunities that we are finding, in addition to the valuation of the stock. So right now, there is quite a few -- I thought we were going to run out of opportunities in what looks like a world full of cash.

So we are very, very pleased with what we are seeing. So let's -- we've been modeling that dividend, I think that we will make more decisions later, but why don't we talk about this next year and maybe the year after.

Yes. Listen, I'm trying not talking about dividend, but anyways I do appreciate it and looking forward to what is to come.

Great, thank you.

Hey, guys. So what are you authorized to buy back?

I have never seen that number.

The number would be about 7 million units.

There was a press release approving in MCIB. We can buy under that approval.

We can buy the 13,000 shares a day.

And for those people who don't know the Canadian laws, out of the normal course issuer bid, there's a whole bunch of rules that we have. Obviously, we can't mark the stock up, but based on the daily volume and the percentage of this and that, they come up with a number like the 13,000 -- for us, it's 13,000 per day.

Thank you very much.

Thank you.

I would like to thank everybody for their participation in the call. We are trying to provide anybody who is interested with a lot of information about what we are working on.

We appreciate that there are so many of you that are looking on our business. So, thank you very much, and we look forward to our next call with you.

All right. Take care.