This REIT proves resilient in the face of the pandemic

Article Excerpt

Despite the impact of COVID-19, we still like the outlook for this REIT. Its high-quality properties should continue to attract tenants without having to offer them deep rent discounts. That should let Dream Office maintain its current distributions for investors. DREAM OFFICE REIT $18.52 (Toronto symbol D.UN; TSINetwork Rating: Extra Risk) (; Shares o/s: 55.0 million; Market cap: $1.1 billion; Dividend yield: 5.4%) has 31 office properties, including two under development. These properties have a total of 5.5 million square feet of gross leasable area. Also, the highly profitable downtown Toronto market supplies 84% of the REIT’s rental revenue. As a result of non-core asset sales, the trust’s overall revenue in the three months ended June 30, 2020, decreased 2.6%, to $50.7 million from $52.7 million a year earlier. Cash flow per unit fell 9.3%, to $0.38 a unit (or a total of $23.1 million) from $0.39 (or $24.1 million). Due to COVID-19, Dream let several of its smaller tenants defer some of…

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