DREAM Unlimited Corp

TSX:DRM

Earnings Call Transcript 2021-Q4

[Operator]

Good morning, ladies and gentlemen, and welcome to the Dream Unlimited Corp Fourth Quarter Conference Call, for Wednesday, February 23, 2022.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 discussed 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. [Operator Instructions]Your host for today will be Mr. Michael Cooper, CRO of Dream Unlimited Corp. Mr. Cooper, please go ahead.

[Michael J. Cooper]

Thank you, operator. Good morning, everybody. I'm here today with Deb Starkman, CFO of Dream Unlimited. A lot has been happening in the company and we decided with the year end we'll provide information so that we can share with anybody who's interested in how we look at the company.What I would say is that in March of 2020 when the pandemic was declared and all turned upside down, there was a 12-week or 14-week period from that day until about a week after George Floyd was murdered, that really made a question all the kind of assumptions that we had had, that you could walk about your life, you don't have to think about getting sick, that I thought our community was really quite fair and it was really disruptive. And I mean, literally at the beginning it was like maybe we'll all die and I'll go broken stuff like. There was a lot of changes in what might be the new normal.But pretty quickly after that, we started to figure out that the things will continue to function and always find that we're under tremendous stress or emotional times, the best thing to do is try to figure out one step at a time trying to achieve little things. And our company was okay, the people were okay at the company. I think people really want to care about each other. We work with our tenants, working with the different government agencies that we work with. And we started to challenge ourselves as to what would be the business that we would want to have coming out of COVID. And we did it because we really wanted to have a better business, a business that was assumed for the future.But we also did it because everybody was locked inside their house and people need motivation, they need to think, they need to be working on exciting things. So we really drove our whole company and to try to figure out how do we change what we're doing, how do we adapt to the future. And it's been an incredible experience. I don't know that COVID is totally over, but I think we're back to the other side, and I think our Q4 results are starting to show how we create a different company. So that's why we put together what I would call our [Indiscernible] investor package. But just an idea of what's been going on since COVID, we created our impact framework, which really focused on the point that through all of these changes, through disappointments in government and everything else, like the expectation on companies to do more good is palpable. And we think there's a void there that's getting filled in and we decided to jump into it.We created a team for the impact that's worked out really well. And as a result, for every asset we have we set goals and pathways, a marketing system, and we've had our system audited. Now we just -- every time we buy an asset, we look at the financial due diligence, we look at the building condition due diligence, and we looked at what the impacts are. We've been able -- we've been very successful getting our CFI [ Phonetic ] financing, which helps us build affordable housing. We created a pilot project with CMHC, which was an idea our team had to try to figure out how to create affordable housing in existing buildings, because just building affordable housing is -- takes a long time, it's expensive and it's risky. And CMHC was wonderfully supportive of us, and that's how we got into buying apartments last year in Toronto. And what we worked on with them is now become something called MLI Select, which is based on the idea we had and is available across the country to encourage owners of apartments to reduce the carbon emissions from their buildings and to create affordable housing within existing buildings. And what's great about it is on the 1,200 units that we bought so far that we used with the pilot project, we're creating 40% of those 1,200 units will be affordable. But through the the MLI select, all the ideas we worked on with CMHC is new affordable housing that we had something to do with, and I think that's a pretty cool impact.We did along with Canadian Infrastructure Bank, the very first loan to a real estate company to decarbonize buildings and we're very close with CIB, having worked on this together with them. They encourage us to work with other builders, tell them about it. They like to create more buildings that are reducing the amount of carbon. We won a very important bid for us, LeBreton Flats in Ottawa, which is about 600 meters from our Zibi project, but it's actually in the entrance way. So we wanted that one. And the work that we're doing there, the social benefits are going to be astounding and we work very closely again with CMHC, the National Capital Commission, a whole bunch of not-for-profits, and we're going to create something very special there. And in fact, that's the first affordable housing project that we've done, that we've agreed to do where we're targeting who are the beneficiary of the affordable housing, and that will be single mothers, first nations, new Canadians, pelitmental [ Phonetic ] disabilities and veterans.So that's actually a way to really try to target our impact, not just reduce the amount of rent anybody has to pay, but really focus on who the beneficiaries are. I'm not sure if people know it, but Harvard Business School wrote a business case on what we're doing. And Jamie, Chris and I went to Harvard to hear them present to us, which was kind of cool, and was really interesting to hear because they're not teaching this in thousands of business schools. And what they're teaching about is, is there a way to contribute to making the world a fair place through market investing. And it was wonderful to see how global the class was and all the different views about what we're trying to do.We raised a private impact fund. We also raised 3 other funds. And we created the Dream Community Foundation, which over time will become obvious how important it is for us to achieve the goals we want socially, while also achieving the financial returns that we expected. That's just a small sampling of what we've done an impact since COVID started, but there's a lot more.So what I'd like to do this morning is have Deb present -- what Deb presents and then I think I'd just comment a little bit on the investor package we put up.

[Deborah Joanne Starkman, Chief Financial Officer]

Thank you, Michael, and good morning. For the 3 and 12 months ended December 31, 2021, earnings before taxes after adjusting for fair value gains and losses taken on dream impact trusts units held by other unitholders was CAD99.1 million and CAD151 million, respectively compared to CAD29 million and CAD120 million in 2020. The change year-over-year is primarily due to our growing asset management rates, inclusive of Dream Industrial lease expansion, strong results at A-Basin, fair value gains on our investment properties and net operating income from our new GTA multi-family rentals acquired in the second half of 2021. Results for 2020 included the gain on our renewable power portfolio, the sale of 480 acres in Glacier Ridge in Calgary and condominium occupancies Canary District, Phase in Riverside Square, BT Town and Zibi.I'll now briefly go over the results by operating segments. In the fourth quarter, our Recurring Income segment generated revenue and net operating income of CAD35.9 million and CAD10 million respectively, compared to CAD19.8 million and CAD6.3 million for 2020. For the year ended December 31, 2021, our recurring income segment generated revenue and net operating income of CAD116.8 million and CAD40.4 million respectively, an increase of CAD24.5 million and CAD13.2 million over 2020. The change was primarily driven by improved results at A-Basin with all capacity restrictions lifted at the end of March, higher asset management fees largely driven by Dream Industrial REIT's acquisition activity and earnings from our newly acquired multi-family rental properties.Included in revenue for the 3 months ended December 31st is CAD11.4 million related to asset management and development contracts between industrial REIT, Dream Office REIT and our partnerships, up from REIT's5.1 million in 2020. We expect these revenues to grow over time as we actively pursue new asset management opportunities. In fourth quarter, our Development segment generated revenue and net margin of CAD114.2 million and CAD26.7 million respectively, compared to CAD28.9 million and CAD600,000 in the prior year.2021 results were largely driven by the sale of 690 lots in Western Canada, including our first sales at Alpine Park in Calgary, up from 164 lots in the comparative period. Year-to-date, revenue and net margin for the Development segment was down from the prior year results as the prior year results included the sale of Glacier Ridge in Western Canada and 190 occupancies at Dream share of condominiums. In 2021, we achieved 959 lot sales and 119 housing occupancies. To date, we have secured commitments for 794 lot sales, 19 and 69 houses that we expect to contribute to earnings in 2022, continuing our positive momentum from 2021.Given the gap between our view of NAV and share price, we believe that continuing to buy back stock is an attractive use of capital and a driver for value creation. In 2021, we purchased 2.4 million subordinated voting shares for cancellation at an average price of CAD25.29 per share for total proceeds of CAD61.4 million. We will continually look at the best investment opportunities. We're also considering how to best manage our liquidity. We also hold interest in both Dream Office REIT and Dream Impact Trust at 35% and 29% respectively, increases it senior management's holdings. During the year, we received CAD24.7 million in distributions from the trust. As of February 18, the market value of our interest in the trust is CAD561 million or approximately 32% of Dream's current market cap.I'll now turn the call back over to Michael.

[Michael J. Cooper]

Thank you, Deb, and just to be clear, those numbers are for both the interest in Dream Office as well as the interest in the Impact Trust. I'm going to turn now to the investor package that we put out last night. There's a couple of slides I'll refer to. What stands out on Page 3 is 51 million square feet of commercial and 27,000 units that we either own or have available to develop. I think it's actually higher than that, but the scale of the company is certainly getting to some significance.We have CAD15 billion of assets under management, but I would point out that between selling Dream Global, CAD4 billion of office assets plus our renewable power, that's CAD15 billion after selling CAD11 billion over the last 5 years. So we move a lot around, obviously, we put out the CAD60 per share. I'll get to that in a minute.On Page 5, we show how we look at our asset management business with the different public and private funds coming to about CAD10.7 billion. The recurring income owned assets is at CAD2.4 billion our share and I think that's something to keep an eye on because as you'll see, every year we'll be adding hundreds of millions of dollars of completed properties. Throughout this entire presentation, we really don't have anything in it for potential purchases of new properties. When we talk, I'll show it in a second, but all of the growth comes from assets that we build on the land we own and a lot of it is well underway. And that's part #3, which is CAD2.3 billion. And here what we do is we're providing out what we own in Western Canada, 9,000 acres from the urban assets in Toronto and Ottawa. The one thing I would say is we own so much land in Western Canada, if we start to say, oh, it's 63,000 housing units, it's enough for 200,000 people, and almost [Indiscernible] So we don't get into too much detail about what that's going to become, but we'll give you a few hints as we go along.The slide -- the money slide is Page 7 that says conservative fair value adjustment over book value. And I think what's really interesting is we wanted to share with everybody some values in how we get at it. I don't think there's a number here that we feel in any way we pushed. I think this is just exemplary. I look at it very simply. There's about CAD9 extra overbook from Western Canada, CAD9 from asset management and then about CAD9 from land in Toronto that's gone up in value, and A-Basin and our units and public companies. So it's pretty simple. I know people say we're complicated. I think you're complicated. And I think the company is pretty simple. So we thought that this would help. Let's see. So we'll go through the second a little bit. But a couple of things that we've done.Again, this is all during COVID. Geographically, we've gone from having 6% of our assets in Canada that we asset manage to 28%. That's a pretty dramatic change. And I think that we're going to grow a lot in Canada. I think we're going to grow a lot in Canada through development across the platform. I think we'll grow by acquisition as well, but I think developments would be the main driver. And then elsewhere, we'll be growing mostly by acquisition, but some development.If you look at the composition of the assets under management, you can see that like it's kind of flat in 2019, 2020, but underneath that there were some real changes, and industrial has grown a lot. And we've got 12% apartments now. Some of that's developed, some of it has been acquired, but that was 0 2 years ago. So everyone loves shades [ Phonetic ] in beds. We have a lot of that. We're producing a lot more. Office have been diluted. But I think we've been pretty active organizing the company in a way where we're in even more favorite asset classes.In 2021 alone, we raised over CAD2.2 billion of capital for our public business. And in our very first year, we've got about CAD1.4 billion in private capital. You'll see when we talk about conservative valuation, the private capital will be losing money because we're spending a lot of money to set up the business, and we don't put anything in for promotes. So when we talk about a 15x multiple of our 2022 numbers, that's basically saying that all of our work and all of our assets in the private business is worth about 0. So that's one example of how it could be conservative. Anyhow, we're pleased with the start on that business, but we have big aspirations for it.Over the last few years there has been a tremendous focus on -- if we're going to impact the business, we need to have the right credentials. And that's just the way it is, whether you like it or not, getting the GRESB score is important. We went about a lot [ Phonetic ] GRESB score, the numbers are off the charts. -- We went about an analytics score, it's off the charts. So it's really been amazing because we didn't pursue these scores to get legitimacy, we kind of pursue these scores to not lose legitimacy. So we're pleased to have them. And it's kind of an afterthought. The real thought was let's try to own our buildings and manage them right.There's some information on our private funds, which is new. I'm just now on Page 16. A lot of this information is expected, except that we have 5,300 apartment units that weren't there 2 years ago. We're working on doing some transactions now that are identified that will bring us another 3,000 or so and we're building a lot. So in the West Don Lands, we were partners with Tricon and Kilmer. We are building almost CAD400 million building. It will be complete this year. They'll start leasing it up. It won't be stabilized until next year. But that's the first 3rd of West Don Lands, the building that follows it is 18 months later. We delivered Block 11 earlier this year. And Zibi, we're leasing it up. By the way, when it's minus 20 outside and the truckers have taken over your land, it's hard to do apartment tours, but the truckers are gone now. And since they left on, I think like 3 days ago, we've done 3 new leases. So we're back in business, leasing up the apartments.We're building 2 more apartment buildings in Zibi right now. And each of these buildings has like 150 to 250 units. And you'll see as we go through things, it's great. We've got a lot of buildings. We were building 100 units here, 200 units there. In Saskatoon, we finished 121 unit building and leased up in under 6 months. It was about a 6 cap. And now we're building a sister building to it. And we decided to build townhouses for rent. And we try a lot of things and often it works and often it doesn't work. Our goal is when it doesn't work for it to be really small and when it works for it to be really big. So we started with 9 townhouses. They're not quite finished yet. They should be finished this month -- no, next month, but we're already leased, which we're excited about. So in keeping with the way we do things, we've now given the go ahead to do another 100 townhouses in Brighton in Saskatoon. And this is incredible. It takes maybe 8 months to build and we're building to fixed caps on those as well. So that's pretty exciting.On Page 17, we got a picture of A-basin. It has been crazy to try to run a ski area through COVID. And the first year of COVID was the first year we were operating it with Vail [ Phonetic ]. Absolutely nothing went according to plan. So last year we had CAD10.7 million adjusted EBITDA. It's the best we've ever had, and we are still dealing with COVID. This year started good, then there was no snow. We had a terrible Christmas. But I think we had 8,000 skiers over the long weekend this weekend. Our numbers are fantastic again. So we'll see how it goes. But A-Basin, is another example, I think on the valuation we used 13x, something like that. We think there's tremendous growth potential in the next 24 months of A-Basin. So it could be worth more.The Distillery District has become the center of the east side of the city. And in a way, it really is our first urban impact project. We didn't use those words then. But Waterfront Toronto has at the middle of all their maps. And whenever they talk about developing the Portland everything else, the Distillery District is highly featured.I'll try to be brief on the rest of this. Parliament Parliament is part of the distillery. It's a piece of land we bought for CAD1.8 million. Now it's on for 800,000 square feet. We've got it zone. We're just about done the site plan and then the Ontario government told us we can't build it until the Ontario line is completed. So that's fine with us. So it'd just be worth more, and we've got enough around there.Alpine Park, we launched, that's the land that we started buying in 1997. So we had to be patient, but it is tremendous. We're selling as much there as we want. In fact, right now the demand is so high for lots and the demand is so high from purchasers that we kind of agree with the builders. We're just not going to over commit because the hard thing is to deliver. So we're monitoring how many houses we think can be built, and we're only selling that many.Zibi, everybody knows, but it's actually happening now. And federal government stand, we've got 3 buildings renovated. We've got tenants moving in, we got 2 condo buildings. Just this week -- just this week, the utility that we owned with Ottawa Hydro was connected from the Quebec side to the Ontario side, that's the major driver of our net zero. So it has been -- we have been using cold water from the river and excess heat from the industrial plant on the Quebec side. Just this week we connected, it now was heating on the Ontario side as well.Alpine ark is going to be sensational. Brighton is proving out a lot. It's got a 40% plus market share, and it's a community that everybody wants to be in, and that's really supporting our business of building to rent. So I think you'll see over time that we're going to end up owning a lot of rental units in Brighton. We'll do the same thing in Alpine Park. We're doing the -- in Zibi, we hope to have a 1,500 housing apartments or more, and we're doing it in Toronto. So it's going to add up to a lot of units over the next few years, and we've got a chart that chose that.We've talked about impact investing a lot on Page 25, which show a lot of things we are signed up for or achieved. There's a lot of talk about achieving that 0 by 2050. We've committed to net 0 by 2035. Just to -- so we're doing a loan Canadian Infrastructure Bank. We expect to reduce the carbon emissions by 40% on those buildings. So that's one step. But if you look at Quayside, which I'll talk about later. LeBreton Flats and Zibi, we are going to have well over CAD8 billion of net zero communities, but we're doing that today. So if we can build with net 0 now, we're very confident that over the next 14 years we'll be able to work with everything else we have and get it to net zero 2. So we think it's totally achievable. In 2022, we'll most likely publish or make available our road map to Net zero.Just want to go to 27. LeBreton is a very interesting community. We did really cool things on it. One of these we did was we partnered with a not-for-profit. A not-for-profit can get a different kind of financing than developers. And we work with them so that we could get extra affordable up to 41%, but we're able to do it in a way where we're going to make very good returns. Oddly enough, we're achieving net zero in this location because the major sewage pipes for Ottawa goes under it. And we're using the heat from sewage plus solar to create all the heating and cooling we need, which is something I didn't expect.LeBreton is public that we wanted and we've actually got a binding deal, everything has been done. Last week, we were informed that our team with great -- we've won the Quayside bid. And it was a tremendous accomplishment. At every level, the details that our teams put into winning this was astounding. And it started by saying what kind of -- who should be on our team. And we put together the most amazing international architects and landscape architects, and they did their best work. So we're indebted to them.But they're the guy never heard of and my wife Crystal said we got to get through David Ajay [ Phonetic ] And everybody said he can't, he doesn't do anything like this. I don't know who he was. But I just want to tell you a little bit about David Ajay, who is the lead architect on the development. He was born in Ghana. He's the youngest recipient ever that Royal Gold Medal, which is the highest medal for architects in England. He was knighted by the Queen in 2017 for the work he did for architecture, but a lot of it has to do with not-for-profit, accessibility and bringing the people and the real estate together. He designed the Nobel -- the Nobel Peace Center in Oslo. He designed the museum [Indiscernible] in Denver. He has won many awards for the 2 libraries he built in Washington, which have become the beacons of those communities. He designed the National Museum of African American history and culture at Smithsonian [ Phonetic ], whose opening was named a cultural event of the year by the New York Times. But he does half his work in Africa and his work in Africa is focused on how to improve the lives of people on the continent. He's never done work in Canada. He does whatever he feels like. He feels his work is important. He doesn't do a lot of projects.And I said earlier that as COVID hit, we tried to figure out what was changing and what makes sense and how we should be in the future. And I mentioned that we started to focus on impact on how real estate and social good. We need to look at that, and we need to make it work. We need to make all of our real estate be more meaningful in our communities. As a result of that conversation about how we look at our business, David Ajay said he would do it. He would work with us, which was amazing. That was just the start. But on every single level, our team killed themselves trying to put together a bid that was -- we wanted them to open it up, take a look at it and say, you guys just won. We don't know how their decisions went, but it was something out of this world. It was a moment where everything we've been working on came together now. Why am I saying that? LeBreton flat is about a CAD300 million development. This is 13 acres. This will probably be a CAD5 billion development. It's a cultural center. In our bid, we designed a 2-acre forest so that you could be on the water front and walk on pathways and feeling that you're in a forest.We built -- we proposed the largest outdoor roof farm in the country. It's actually the podium for all 5 buildings. It's amazing. There's pictures available at waterfront Toronto., you can actually go on Block TO and you can see comments. And the thing that hit me with the comments was this was a site that Google Sidewalk Labs is going to do. And there's a lot of ideas about technology, there's a lot of ideas about surveillance. My favorite comment in the blog was that -- I mean because whoever wrote it got it, they were saying, look, Sidewalk was looking at real estate and technology, and this design is about real estate and people. And they called it a post-COVID design. So there you go.We think what we're doing is really meaningful. We've got partnerships with every level of government. We're making lots of money at it. And I think that there's a lot of glue that keeps our leaders and everybody at our company together and happy. So we're really excited about the work we're doing. We mentioned before about the foundation, that will become more clear what it does in a while. We just hired an executive director. We hired our first community ambassador, but that's going to be a big part of us being able to deliver the kind of communities that we want, the kind of communities where people are better off living there than living somewhere else. So that's just a few things, but just to see if there's anything else that's interesting.Page 30 shows the apartments. And you can see in it that we're saying 2,760 in acquisitions in 2022. Those are obviously identified. But we're going to get to 10,500 and the balance of that growth is just by finishing the buildings we're working on now. In the appendix, we gave some background on our conservative estimate of value. Quite honestly, it's up to everybody else in the world to decide anything they want. But we wanted to provide a little bit of a guideline that you guys could judge and do whatever you want with. But just a couple of ideas.The office REIT is what it is and it's one of the best portfolios of office buildings in the city of Toronto. City of Toronto is one of those desirable markets in North America, very hard to replace. The transactions that we do see are amazing. We just saw that the Royal Bank Plaza sold to one of the richest man in the world. And it's sold at CAD800 a foot. There's a lot of work to do. We understand that because we did Scotia Plaza and a building in Liberty Village sold for CAD925 a foot. That is astounding and we've sold to other really smart people to Blackstone. And I think that when you think about office generally, you might miss what we do because what we do is really boutique, luxury buildings. We've improved them a lot. The people like them. And you can just see in the Liberty Village example. These kind of interesting boutique buildings and sell for more than a bank tower. The impact draws to kind of wind about it on our conference call, that it's so cheap. It isOne of the things to keep in mind is, generally when we want to do a development, we already have the equity in in the land. So Dream Impact Trust is going to grow by CAD100 million a year minimum just from the construction work that it's doing, it's funded, but we'd love to be in a position to do more good work. I think that I mentioned that we saved 43%. When we say affordable, on an average the affordable units that we're building, it's saving about 43% of rent. We all said to CAD23 million.We haven't included anything Quayside, which has another 800. I think we have 150 in victory silos. So I would be surprised we get to CAD40 million of savings for renters pretty quick. And I guess like if we did CAD100 million of savings a year, we'd be housing maybe 10,000 people. Just for a scale, we're up to about 2,500 units, including Quayside. John Tory promised that for all Toronto they would do 10,000 units, new units of affordable during this term. So I mean, just for scale, we're contributing a lot.On the urban development lands, absolutely record prices for land today. Condo prices are through the roof. We're using CAD200 a foot for 31A Parliament, CAD250 per Canary Block 13. Canary Block 13, we're working on selling it. It's the last site left for the Pan Am Athletes Village. It will be about 600 units. 31A Parliament, I mentioned was 800,000 square feet or maybe 600 units, but it's got 300,000 square feet of commercial. Block 20, we haven't built yet. That's in West Don Lands with Quayside and we take Victory Silos. I mean, that's about another 8,000 units that we have to build. But we did finish 1,400 in this facility, 1,400 of the Pan Am games. We're just about finishing another 750. So that's almost 3,000. We got the indigenous hub under construction. We've got Block 3/4/7. So we're probably about 40% of our way through building in that area.And I would also add, that's probably one of the biggest assemblies of land in the downtown area that anybody is involved in. I think we're up to almost 70 acres of land that we have are or will be developing in downtown Toronto. So that's worth a fortune. Western Canada, we put in at -- we think the land would 80,000 to 100,000. We used 80,000 here, even do it the way you want. But Alpine Park is going, and that means we're getting a lot of money per acre. There's a lot of demand. So I think that's a reasonable value. A-basin, we're using 13x, CAD10.7 million to get to the value. We're hoping we can get that to CAD15 million in the next couple of years. So that's got lots of upside.And the asset manager, we're really at the beginning of creating an asset manager. Brookfield came out with their idea that maybe they split them up. Blackstone is trading at more than any Canadian bank and their asset life. So you pick a number of what an asset manager is worth, but it really hit us. So after we made our presentation to the Board in December for our 2022 plan, we actually went away, had another retreat and came back with more ambitious numbers and a plan as to how we could try to create an even larger asset manager. There will be more to come there, but we're really just showing the 15x multiple of a part of the asset management business hopefully will grow it and hopefully as we grow it, we'll even get better margins. So I think that's got a tremendous amount of upside. I think at some scale it goes from 15x to 25x. So we'll stick with the numbers that are fairly conservative. That's just our view. That's why we come into the office.One thing I would say before we answer questions is, Jason Lester and I used to raise sailboats a long, long time ago. We were pretty good at it. And every once in a while we'd have a different idea than everybody else, and we called it a flyer. Flyer was, when you went as far away from everybody else as you possibly could to try to get a different win. And it's risky because if you don't get the win you want, you're going to be behind everybody. But if you get the win you want, you're just in your own -- in your own sort of state of mind and you're going at a different speed.I would suggest that when COVID hit, we went on a flyer, and we started to think about our business differently than we ever had and then we tried to go as hard at it as we could. And we're just starting to see it coming together now. And Quayside was a real indication, that what we're doing is good enough to compete with the best -- the best. It doesn't matter if it is the best private developers, the best global developers, the best whatever. The competition for Quayside was amazing. I'm sure every one of their plans would have been outstanding. But I think that our team is really focused and we got through COVID well for our own well-being with us through COVID on what our role is. And as we head into 2022, we thought we'd share more with you in terms of what our company is and hopefully that will help you understand and come to your own conclusions on our business.Okay. Any questions?

[Michael J. Cooper]

[Operator Instructions] And our first question is from Dean Wilkinson from CIBC.

[Dean Mark Wilkinson, Director of Institutional Equity Research]

Good morning, guys.

[Michael J. Cooper]

Good morning, Dean.

[Dean Mark Wilkinson, Director of Institutional Equity Research]

Michael, you're not complicated, you're misunderstood.

[Michael J. Cooper]

Any empathy is appreciated.

[Dean Mark Wilkinson, Director of Institutional Equity Research]

I share it with you. Thanks for the future disclosure. There is a lot of helpful of stock in there. I won't go through a lot of the detail [Indiscernible] ourselves. I just want to ask, when you look at the 3 rather large switches you've got now, the AUM and the growth in the private investment vehicles, the recurring income owned assets and the development over the next couple of years, which one of those levers is likely to sort of move the dial for us in terms of the financial results?

[Michael J. Cooper]

Yeah, so that's really interesting because it takes us 2.5 years to build a CAD100 million building and we own half of it. It's great. It's amazing. And it's an asset to hold forever. And all these things we're doing are to get amazing quality properties. However, if we're able to attract money to our bonds or create a new bonds, the leverage on our earnings and value, that's the fastest. That's why after we presented our business plan in December, we kind of looked at each other and said, okay, that was really interesting to hear and so speak. We got to go away and rethink it. So that's really been our realization.And we were doing this prior to Brookfield's announcement about how asset management work. But basically what Brookfield was saying if I read it right, was they're saying the trajectory on asset management is so steep. And if they do a great job on real estate, they might get a 9.5% return compared to 8%. That is if they're growing the business at 30% a year, that's just an anchor, so they should separate them. I think that's what they were saying. But that was -- we were already working on it. But when they said that it was pretty amazing to help us understand.

[Dean Mark Wilkinson, Director of Institutional Equity Research]

So in that, and when you look at those private investment vehicles, I mean, obviously the 2 biggest sleeves are the 2 most favored asset classes. Is that something that you could see going standalone? I mean, you've already got Dream Industrial, so I don't know how to compete with that. But from the multi-family side, like where do you hit scale in any of those vehicles and within that private stuff that you can look at doing something to that effect? Or is that not in the radar?

[Michael J. Cooper]

So yeah, yeah, for sure. I mean, it's interesting if you said like what would you do rather than use your capital to buy back stock. I mean, the one that's really occurred to us, what we've been doing is using capital to start an asset management vehicle. And the returns on that are very high. So are you talking about the residential that we're doing? We have a plan and we think that we should have a dedicated apartment vehicle. And that'll leave you with that expense.

[Dean Mark Wilkinson, Director of Institutional Equity Research]

Okay. You're good at that. Last one for me on the asset management. The guide is CAD29.5 million of EBITDA. What's the revenue assumption under that, the margin you baked into that estimate?

[Michael J. Cooper]

I have no idea. What we were doing was we doubled the size of our feed business last year and we did have the asset either invested or for the whole year. So 2021 wasn't a good number. So we sort of just applied to the numbers going forward. As I mentioned, our private business, the margin at this point is 0 basically. But that's okay. I mean, we're spending a lot of money. We're hiring a lot of people and it's going great. We just need to have a platform in order to attract the money. And then the margins on our public businesses, I think you can see them if you just -- you can see them before we started the private business. Because that's all we had. So I think if you look at 2020 numbers, that would be pretty clear. I don't know if it's changed. And I don't know -- do we, do we -- is there any division between the public and private assets in our disclosures?

[Deborah Joanne Starkman, Chief Financial Officer]

No, no.

[Michael J. Cooper]

One thing we haven't really emphasized much is for no reason at all, is that when we develop -- we're the active developer. Dream is the active developer for everything we talk about, whether it's in the office REIT, the industrial REIT, all sorts of things. And I think we'll start to see that those fees will be in excess of our overheads and will start to be a contributor.

[Dean Mark Wilkinson, Director of Institutional Equity Research]

Right. So the most torque would be in that side of the business as you would scale.

[Michael J. Cooper]

Yeah.

[Dean Mark Wilkinson, Director of Institutional Equity Research]

I will hand it back. Thanks again, thanks for disclosure and congrats on the Quayside. It's a great deal.

[Michael J. Cooper]

Thanks, Dean. Appreciate your interest in our business.

[Operator]

Our next question is from Sam Damani from TD Securities. Thanks. Good morning, everyone.

[Deborah Joanne Starkman, Chief Financial Officer]

Good morning.

[Sam Damiani, Director of Institutional Equity Research]

So, yeah, thanks again for all the details. Very much appreciate it and extremely interesting. Just to finish off on the asset management NAV, that CAD29.5 million, does that compare to the CAD17 million in the MD&A?

[Michael J. Cooper]

Yes.

[Sam Damiani, Director of Institutional Equity Research]

Okay. And so that's pretty significant growth. And what -- I'm not sure if you answered that or not, but is there an embedded AUM growth beyond the CAD15 billion today or CAD9 billion fee earning to get to that number in 2022?

[Michael J. Cooper]

No. It's really getting the money we raised, invested for a whole year.

[Sam Damiani, Director of Institutional Equity Research]

Okay. All right, that's helpful. And then, I guess, back to also one of Dean's other questions. I'm just looking at the scalability of the asset management platform. Clearly, you've been on a strong trajectory in the last few years. But, and I know we are implicitly in your guidance for the NAV is 0 growth, I guess. But realistically, when we look at this year and next, I mean, what do you see as the levers that you could pull to take that, how much higher, I guess?

[Michael J. Cooper]

So I'm smiling as you say that because I think the biggest lever is we need to get institutions to like us.

[Sam Damiani, Director of Institutional Equity Research]

So okay, lets assume that.

[Michael J. Cooper]

That's actually my full answer. But what I would get at is, I'm going to make up a number, it's just as an example, but it just seems like institutions have 50% more capital for real estate than they did before COVID. Like it's massive, okay? And then you got like Blackstone and Brookfield are killing it. I think they probably [ Phonetic ] doubled their assets under management during COVID from 250 to 500. So, so you can see that these mega global asset managers are doing great. There are some asset managers that didn't get enough scale and they're kind of going sideway. There's other ones that didn't have good numbers. What surprised me is I think there's lots of room for new entrants. And we've been well received, and I think something like Quayside, we knew that Sidewalk Labs with Google is exciting. I think all of these things help us get audiences and hopefully we'll be able to get out and see enough people and they'll find what we're doing compelling. So we're pretty confident that we are finding opportunities that get good returns. We're pretty confident that if we got the money, we would be able to execute not just with acquisitions, but also getting the returns. So a lot of it is just introducing ourselves to investors.

[Sam Damiani, Director of Institutional Equity Research]

On the private capital side of the business, it's pretty quick start when you launched that, I think CAD1.4 billion raised last year and you're guiding I think to CAD1 billion in 2022. What specific areas do you see targeting to raise that CAD1 billion on the private side?

[Michael J. Cooper]

It's a great question because it kind of changes every day. There's a series of meetings, again to foreshadow, there's something coming on the residential side. And that we're working a couple new segregated funds and then we're hoping to raise more money for the impact fund work on that now. We want to raise more money for the industrial funds. So we're probably saying if 6 out of 7 -- 6 or 7 out of 10 work, we should get to CAD1 billion.

[Sam Damiani, Director of Institutional Equity Research]

Okay. Over to A-Basin, I mean, pretty huge recovery last year and you think the EBITDA can grow to CAD15 million. What sort of time frame was that? And what needs to happen? And I guess where you see 2022...

[Michael J. Cooper]

What needs to happen, okay? We need the same rules for a while. We need to have an average snowfall, and then I think we get there. There's a few other things. We did a deal with Icon and we have a limited access to Icon. People are loving our ski area. The experiences are amazing. When I say that, I mean like statistically based on all these things were 4.8 or 5 [ Phonetic ] And by the way, just out of curiosity, if you can't sleep, just look at the kind of comments that Vail is getting. Vail reduce their season pass tickets by 20%. We had a bad start to the snow season, so they didn't bring on employees. There's -- I can't get it at J.D. can. He showed me a video in Breckenridge [ Phonetic ] weekend of a line of over 2 hours to get on a gondola at Breckenridge to get to the chair lift line. So we went to the office, again, a bit of a flyer. We reduced the number of skiers, we raised our prices. We limited the number of seasonal the passes and feel like we had a great, great time.So at 3,000 skiers a day, we have no trouble with lines, no trouble with anything. We think we can do more. But what we did with Icon, we limited the access to those holders too much. So we're hoping to -- if we make some changes there that could help us. The big news previously unannounced is that we have bought a high-speed new chair lift to go up to the top of the mountain from midway and will have 6 seats. It's a very large sophisticated lift, and now we'll get people access to the top of the mountain to our expansion to Montezuma [ Phonetic ] and our expansion into the Beavers and Gullies, and that's going to make the experience even better.So I think if we have a consistent snow through the fall, a little more icon visitors and then in the spring, I don't know, it's getting pretty exciting. We've got decent snow, decent weather this weekend. We had huge yields on our tickets. People are spending money. So like, we just need a -- I don't understand it's almost like, you have 1 week and you have another week, and they seem similar. Oh, by the way, we had 25 people a day dropping with Omicron over Christmas. We only have like 350 employees. We lost 25 every day. We closed -- the ski rental shop, we reduced it to like 2 items of food. The guys are [Indiscernible] the way that they're managing with nothing and it was our best year, but when we see that they are just -- if you can get employees and if you can use the ski rental shop and if you can have all your restaurants open, we should be able to do a lot better than 10.7%. I know it's a long answer. Oh, yeah, A-Basin this year was a National Geographic's 10 best worldwide adventures.

[Sam Damiani, Director of Institutional Equity Research]

And I don't know why I haven't been there yet.

[Michael J. Cooper]

But I do want people to hear that we have a [Indiscernible] in everything we're doing is just absolutely excellent assets.

[Sam Damiani, Director of Institutional Equity Research]

And maybe just to finish off on the Western Canada. Obviously, a huge year for sales [ Speech Overlap ] Okay, I'm not going to go there, but the MD&A kind of guides to higher lot sales in 2022. Just wanted to be clear on that. And when we look at the average sale price, which included Alpine Park in Q4, really, really jumped up to 141,000 a lot. Is that a good sale price to use for, I guess for 2022 and going forward? And how do you think about sales going forward and build your inventories? And I don't think you're planning on getting back to 1,800 lots like you were doing years ago, but how should -- how do we think about the market and the healthiness of it, I guess?

[Michael J. Cooper]

So I would say about like A-Basin hasn't had like 2 weeks that were similar. In Western Canada, I mean, we reduced our staff by half. We didn't build anything that wasn't sold. So when we talk about numbers for 2022, effectively we're not spending any money developing land that we don't have a lot sold. So whatever we're saying, it's right because we've got contracts. We're not developing anything now and saying hey let's see what happens or anything like that. So -- we're trying to manage it without taking on a lot of risk. But who knows? I mean, if we have another year or 2 like this, we may want to be a little bit more expansive.The part that is interesting is on the first apartment that we built in Brighton, if you use land at fair value, we made CAD5 million by building that building on 1.5 acres and we're doing it again. So we're going to try to get a lot more value out of less real estate going forward. So I think you'll see that with the townhouse and everything else, it will be good.

[Sam Damiani, Director of Institutional Equity Research]

That's great. Thanks very much.

[Michael J. Cooper]

Thank you.

[Operator]

Our next question is from Chris Koutsikaloudis from Canaccord Genuity.

[Christopher Koutsikaloudis, Associate]

Thanks. Good morning, everyone. I guess as we look out kind of over the longer term, Michael, just wondering if you have an ideal or maybe a target asset allocation for the business between asset management, recurring income and development?

[Michael J. Cooper]

So, will you repeat that?

[Christopher Koutsikaloudis, Associate]

Just thinking about your NAV for the long term and where you kind of wanted to drive value or where you see the value of the business kind of being allocated?

[Michael J. Cooper]

I think we're going to continue to look for opportunities. But I would say that we hope the asset management business grows really big. And if it does, it will dwarf our income properties. So the allocation will be determined primarily by how much money we raise. The second thing I would say is with the Impact Trust and the Impact Fund, more and more of the ownership of the developments are happening there are not in Dream. So Dream is likely going to own less of new pieces of land in the future than we have in the past. So we'll be doing more and more development. We'll own our interest through the funds. We might own a little bit, if it's too much money. The Quayside, Dream may take a piece because it's so big, we'll see. But a lot of the properties will end up owning through the funds. And we want to make sure that Dream manages risk okay. But we want to develop and keep assets. And as I said earlier, it takes a lot longer to build a CAD100 million building than it does to raise CAD1 Billion [ Phonetic ] that might be worth a lot more than that in our asset management business.So we're not going to do the allocation that way. We look at the income properties and say how do we make sure that we got a lot of recurring income, how do we make the company safe. In a wild dream, and we got to CAD30 billion of institutional assets in 5 years, let's say, it will be -- it will overwhelm our income properties and value. So we don't say what's the right balance there. Kind of we have a balance on how we manage their development assets and how we get to recurring income, and then we go as much as we can on the asset management from third parties.

[Christopher Koutsikaloudis, Associate]

Got it. That's helpful. And then just on the development side, having now expanded the pipeline with LeBreton and Quayside, Just wondering are you guys kind of happy with the projects that you have now? Or would you still be adding projects? Or is the capacity of the team kind of satisfied with the amount that you have going on?

[Michael J. Cooper]

Yeah, it's a great question. We ask the team to have -- like No, we're going for more. So I think they're feeling quite confident. We're having continual meetings on strategic partnerships so that we can share some of the work with people. But there is a big shift going on. And what -- the way it works is every level of government looks for land that they are not using very well and they try to figure out how to pass it up so that they can sell it to a developer to create affordable housing. And I think I heard there was like 36 different opportunities in 2022. I made up that number. It's significant. So we're definitely going to continue. And those projects if you get them right, they can be not too capital heavy and we feel there's less risk in them, especially because they might have 30% or 40% affordable, which we would expect to be leased all the time. So yes, we're still going to -- we're still looking -- we're looking a lot.

[Christopher Koutsikaloudis, Associate]

Okay. Great. And then just last one for me. Your investor presentation reference is a U.S. multi-family portfolio. It's expected to be acquired later this year. Just wondering if there's any more detail you can give us about these properties and where we should assume this portfolio will sit, whether that's going to be in one of the private funds or Dream itself?

[Michael J. Cooper]

So at the Impact Trust conference call, I was asked if I could say anything about Quayside. And I had just heard about it 10 minutes earlier. So I said at this time I can't say anything. And I could 2 hours later. On the residential, it's not that soon. But I would say within 6 weeks or 8 weeks there should be lots of information, but there's no point providing any more than that. We're going to pursue something new, and it will be in the asset management bucket.

[Christopher Koutsikaloudis, Associate]

Okay. Thank you. That's it for me.

[Michael J. Cooper]

Thank you. [Operator Instructions] I show no further questions at this time. Okay. Well, thanks, everybody for tuning in. We did spill our guts in that presentation. We will not be doing that every quarter, and I don't even know we'll ever do it again. But we've just been thinking of the company so different than we used to. We felt that we needed to share that with you so you could judge us on how we look at the company. So it's there and sort of some ideas, you do your best to come up with your own conclusions, but I do think that our goal was to show you what we're doing and what we think about it. So thanks for sharing it with us, open to your feedback and by the Impact Trust. Thanks. Speak soon. Goodbye.

[Operator]

[ Operator Closing Remarks ]