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Good morning, ladies and gentlemen. Welcome to the Dream Unlimited Corp. Fourth Quarter 2017 Conference Call for Thursday, March 1, 2018.During this call, management of Dream Unlimited Corp. may make statements containing forward-looking information within the meaning of applicable securities legislation. Forward-looking information is based on a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond Dream Unlimited Corp.'s control, that could cause actual results to differ materially from those that are disclosed in or implied by such forward-looking information. Additional information about these assumptions and risks and uncertainties is contained in Dream Unlimited Corp.'s filings with securities regulators, including its latest Annual Information Form and MD&A. The 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.
Thank you very much, operator. Good morning, everybody. I'm here with Pauline Alimchandani, and we're pleased to discuss our year-end results and answer your questions later. Today, Pauline will go through her comments first. Then I'd like to make some comments following, and then we'll be happy to answer your questions. Pauline?
Thanks, Michael. Overall, 2017 has been an exceptional year for Dream, generating $115.6 million in pretax earnings, and an increase in book equity per share of 14% relative to the prior year, which was double that of our internal business plan target at the start of the year. Comparative 2016 results included $24.5 million of margin generated from the sale of 172 acres to the Province of Alberta, which was not considered normal course. Excluding the land sale, earnings before taxes for the 12 months ended December 31 would have been more comparable to that of the prior year. Over and above this, we have made a number of strategic investments in 2017 to further position ourselves as a prominent developer in Toronto, which includes acquiring equity interest in Port Credit and the Frank Gehry development alongside Dream Alternatives. We also invested a total of $68.5 million in Dream Alternatives and Dream Office stock, as both vehicles have been substantially transformed to pursue Toronto development strategies. All of this was accomplished while continuing to successfully manage our reoccurring business lines and achieving growth in our asset-management business. Furthermore, we expect that our development-fee income will increase significantly in future years as lead or co-developer on behalf of Dream Alternatives and our new third-party partnerships. We ended the year with $120 million of available liquidity, but expect this to increase to $170 million in short order following the closing and upsize of our term loan facility. All in all, we believe we have made exceptional strides this year, increasing the value of Dream's business and platform. In terms of our key financing and transactions achievements, subsequent to year-end, we successfully obtained permanent financing from a life co on our completed retail development, Shops of South Kensington in Saskatoon, closing a $22-million, 7-year term mortgage at a fixed rate of 3.7% per annum. Upon closing, we were able to repatriate substantially all of our equity invested in the project, which is our first success story in retail. In addition, we now have a commitment letter for total proceeds of $42.8 million, which would encumber our Tamarack Northeast and Southeast income-producing assets. The term of the loan is 5 years. The refinancing of all of our retail assets is significant, as they represent the first developments completed within Dream Centres and now provide us with reoccurring income streams going forward on the stabilized assets. We expect to complete the renewal of our $175-million term facility in the next 2 weeks, upsizing the loan to $225 million and extending the maturity date to February of 2021. The loan renewal and amendment will also enable us to more freely repurchase stock under our normal-course issuer bid as a use of free cash flow over the term of the loan.In terms of transaction activity, in the fourth quarter of 2017, we closed on the acquisition of land for the Frank Gehry-designed Mirvish development located at King and Duncan streets in downtown Toronto. Dream acquired a 6.25% investment in the project, with an additional 18.75% held through Dream Alternatives. Dream and Great Gulf will act as co-developers for the project. The total purchase price for the site was $300 million, approximately $150 per square foot, funded with debt and equity. The development consists of 2 towers which are fully zoned and development-ready, which will comprise 1,500 residential units upon completion. Subsequent to year-end, the project secured an $85-million loan. To date, Dream and Dream Alternatives have jointly invested $21.1 million in the project, $14.8 million of which was funded through Dream Alternatives, and the rest was funded by Dream.We have made significant progress to sell certain nonstrategic retail or mixed-use assets in Ontario and Edmonton, which are classified as held for sale at year-end. At year-end, we had about $34 million of assets held for sale, which we are actively working on marketing for sale to repatriate capital to redeploy towards more strategic uses. In the fourth quarter of '17, we completed the partnership reorganization of our Zibi development in Ottawa, whereby Dream reduced its investment from 50% to 40% while maintaining relatively the same amount of equity in the project in dollar terms. And Dream Alternatives subscribed for a 40% investment with the residual 20% retained by our existing partner, Windmill. As part of the reorganization, we also increased our ownership in the project's general partner to 80%, obtaining control of the partnership, which necessitated accounting for the transaction as a business combination. Previously, our investment in Zibi was recorded as an equity-accounted investment. The transaction has a number of impacts to Dream's financials, which I will discuss briefly.Effective October 2017, we de-recognized the carrying value of our investment in Zibi, which was $22.7 million, and we fully consolidated Zibi's assets and liabilities at their fair values. The change from the equity method of accounting to consolidation requires the re-measurement of the original equity investment. This re-measurement compares the carrying value of Dream's original equity investment to the proportion it shared the fair value of net assets acquired, determined as $36 million based on the implied purchase price by Dream Alternatives. This resulted in a noncash gain of $13 million, which was recorded in the 3 months ended December 31 within our financial statement. Noncontrolling interest is recognized for the partners' economic interest not held by Dream, which was 60% at December 31. We also recognized $13.6 million in goodwill as a result of the transaction. This goodwill has no bearing on the business terms of our investment or the underlying financial performance of the project. While the accounting within our financials was complicated, we are excited about leading the project, which is one of Canada's largest urban-development projects. Zibi comprises 37 acres of land, which will be developed into a mixed-use master-plan community located in Ottawa and Quebec, including over 3 million square feet of density, that consists of over 2,000 residual units and over 1 million square feet of commercial space. At the end of the year, there were 17 employees of Dream fully dedicated to Zibi, located directly in Ottawa, Ontario. These employees report directly to our development, finance, accounting, marketing and sustainability leads in Toronto, and the teams are working side by side to manage the project.In the fourth quarter of 2017, we successfully secured project financing from Zibi. The facilities, which amounted to $125.9 million in total borrowings and $22 million in letters of credit, will be used to service both the Ontario and Quebec lands and to fund vertical construction of the first 2 condominium blocks.I will now run through a brief overview by division. Net margin from land was $48.6 million, up 30% from the prior year. In 2017, we sold 913 lots, compared to 501 lots in the prior year. Approximately 84% of our lots sold in 2017 were within Brighton in Saskatoon, Harbour Landing and Eastbrook in Regina and the Meadows in Edmonton.In the fourth quarter, our land division recorded $10.5 million of favorable cost-to-complete adjustments during the period. These adjustments were largely related to new information, revisions to existing estimates and cost savings on completed or near-completed phases. Although the magnitude of the adjustment in Q4 was larger than the adjustments we've realized historically, cost-to-complete adjustments are considered normal course for any development business and they had a fairly minimal impact on the total gross margin recognized on the related completed developments.As I mentioned earlier, our 2016 results included the sale of 172 acres of undeveloped land in Providence to the Province of Alberta to construct the Southwest Calgary Ring Road. Excluding the $10.5 million of cost-to-complete adjustments and the margin generated by Providence in 2016, our net margin would have been $38.1 million, an increase of $25.4 million from the prior year, due to our increased lot sale volumes. Assuming current market conditions, we expect 2018 volumes will include 950 lot sales and 29 acre sales, primarily from active communities in Saskatoon and Regina. To date, we have secured deposits or sale commitments for approximately 586 lot sales that are expected to be realized in 2018, representing a significant portion of the lot sale volumes expected in the year. We expect our lot sale and condominium occupancy volume to increase further in future years, as we are currently in the planning stages for developing new master-plan communities in Western Canada, including Providence and Calgary, and several large residential mixed-use-development projects in Toronto and Ottawa.Moving to housing. Net margin from housing was $11.2 million before eliminations in 2017, up from $2.2 million of net losses in the comparative prior year period, due to the increase in the number of homes occupied year-over-year. In 2017 we occupied 300 housing units, up from 140 units in the prior year. In the fourth quarter, we also successfully closed on our first 2 affordable housing projects in Harbour Landing to the Saskatchewan Housing Corporation, which is comprised of 76 units.With respect to condos, we had net losses from the condo division of $2.8 million in 2017 versus positive net margin of $41 million in the prior year. The year-over-year results were not comparable, as different projects were in occupancy in each period. Our 2017 occupancy is related to The Southwood, which occupied 99 units, about half at our share, which generated a growth margin of 17%. In 2016, we had significantly more occupancies related to projects in downtown Toronto, as well as blocks 4 and 11 at the Canary District, which in aggregate comprised over 1,200 units, or approximately 600 at Dream's share. Although the year-over-year fluctuation is significant, the results were in line with our expectations, given we had limited inventory available for occupancy this year.The division is actively working on a large pipeline of projects. As of December 31, our development pipeline for condominium projects included 8,500 units and approximately $2.7 million of commercial and retail space. To date, 1,700 units have been taken to market and are currently 94% presold. With respect to Asset Management, total fees earned from our publicly listed funds were $36.3 million in 2017, up $10.8 million from the prior year, due to higher-fee-earning assets and acquisition activity in the current year. In 2017, Dream successfully completed $1.4 billion of asset acquisitions for the REITs and Dream Alternatives, which included Dream Global's investment in the Merin portfolio in the Netherlands. Total fees from Asset Management were, however, $45.8 million, down from $64 million in the prior year. The year-over-year decrease is due to the recognition of significant development and fees in 2016, which were only partially offset by a higher fee from the publicly listed funds in the current year. Net margin as a percentage of revenues was 79% in 2017, down slightly from 86% in the prior year due to the aforementioned development.I will now provide an update on our investments in Dream Office and Dream Alternatives. Given Dream's increasing ownership in Dream Office REIT in the fourth quarter of '17, the company prospectively reclassified its investment in the REIT to equity accounted investments. We realized a proportionate share of net earnings in the period, which was $13.7 million of income in the 3 and 12 months ended December 31. In the 3 months ended December 31, Dream Office generated net income of $100.7 million from net rental income and fair value gains on investment properties. The fair value gains primarily related to the REIT's core downtown Toronto portfolio. Subsequent to year-end, Michael Cooper was appointed as Dream Office REIT's chief executive officer. In the 3 months ended December 31, Dream Alternatives generated net income of $15.4 million, an increase of $31.8 million compared to the prior year. Net income of $1.6 million and net losses of $1 million for the 3 and 12 months ended December 31 at our share were picked up in Dream's results. Subsequent to year-end, for accounting purposes, the company was deemed to acquire control of Dream Alternatives, as it was determined that Dream's exposure to variable returns from its involvement with Dream Alternatives has increased substantially to increase units held and certain contractual arrangements that were entered into subsequent to year-end. As a result, the company will consolidate Dream Alternatives' financial results, effective January 1, 2018. Our financial statements are expected to become more complicated as a result, but we intend to deconsolidate Dream and DRAT's (sic) [ DAT's ] financial results in our MD&A and potentially supplemental disclosures to help readers interpret the true financial performance of Dream. In the 12 months ended December 31, Dream generated $67.3 million of pretax income from nondevelopment business lines, which it considers to be stable sources of income, which was up 28.8% from the prior year. The company views income from investment and recreational properties, such as the Distillery District, Arapahoe Basin ski hill, and retail properties in Western Canada, and income associated with investments in the publicly listed funds, asset management contracts and Firelight Infrastructure as recurring income that can be used as a source of ongoing funds to meet interest and fixed operating costs of the business. The company anticipates that reoccurring income sources will continue to increase as income properties are developed on owned lands in Toronto and Western Canada. On the overall, it was a fantastic year for Dream and the overall Dream group of companies. Our book equity per share has grown significantly year-over-year. We have strong financial flexibility. We have increased our reoccurring income sources and we have executed on world-class investments together with Dream Alternatives that will transform our Toronto development business. With our strong pipeline, best-in-class assets and experienced management team, we look forward to continued growth in 2018 and the years ahead across all our divisions.With that, I will now turn the call back over to Michael.
Thanks, Pauline. You covered everything. I just want to spend a couple of minutes reviewing where we are now compared to 5 years ago. 5 years ago, we were in the process of going public. We've paid down our shareholder loans, eliminated most of our prep shares, we've simplified the structure, we have record liquidity and flexibility, we have hundreds of millions of dollars invested in liquid securities, our recurring income has increased and now exceeds our interest in G&A without any new development at all. In Western Canada, we've improved how we do things in land and housing to manage through 5 years of profitability with declining sales prices for the entire time and volume reduction by 65%. We've created retail, commercial and purpose-built rental into our developments and we received major approvals with almost all remaining land expected to be approved in the next 18 months. We internalized the management contract at Dream Office and managed us through a strategic plan. We increased our ownership among our group from 2% to 21%. We created Dream Alternatives Trust, which is a flexible and exciting investment vehicle that works with our whole platform. Dream Global has become a leading European commercial REIT with lots of growth potential and has had a good increase in value. The industrial REIT has performed well throughout the 5 years and has an exciting future with the new management team, and the asset class is really turning into something that's quite scarce and valuable. Arapahoe Basin's EBITDA has increased by about 300% over the last 5 years. And we've rebalanced our portfolio so that Western Canada is significant, but Asset Management has grown. We have a substantial investment in downtown Toronto through development, with a huge residential pipeline and indirectly through our ownership of that and Dream Office. We completed the Pan Am Athletes' Village on time and on budget. So our major focus has been on the structural elements of the company, our capital and our quality. In everything we've done, we've increased the quality of our office assets. We've increased the quality of everything we do. Our office assets have great locations and a great future. Our mixed-use projects are among the best and will lead to great income properties and significant profits from developments for sale. In addition to all the structural changes, our balance sheet is much more conservative and it's higher quality. We've increased our book value by 18% per annum and our perception is we've increased net asset value by 12% a year over the last 5 years, all while managing through the tremendous negative disruption in Alberta. In 2003, Dream had negative equity. Since then, we've distributed more equity -- we've distributed more to the shareholders in equity we have raised, and we expect by the end of this year our total earnings within the company will be at about $1 billion. The opportunities within the business continue to be better and better. Same with the external opportunities. In the meantime, while we're getting better quality, better operations, we continue to get safer and safer. We are pleased that Western Canada has stabilized and is improving slowly. The balance of our business is also getting better. All in all, we're very pleased with the progress. I'd like to thank our management team, which has gone above and beyond over the last few years, and our board, who has provided wise counsel. At this time, if there's any questions, we'd be happy to answer them.
[Operator Instructions] And our first question is from Mark Rothschild of Canaccord.
With your capital plans for the year, can you maybe just talk a little bit about where you see your investments as far as whether it's going to be continuing to invest in Dream Office or Dream Alternatives versus buying back stock, or perhaps other development needs, other needs that you might have for the capital for your development projects?
For the most part, our capital that we generate from the business internally would go towards a little bit more Office REIT stock, a little bit more DAT stock, probably paying down some debt and buying back some shares.
Okay. And then in regard to Providence, I see that you expect to have some approvals this year. Can you talk about how much capital you would be investing in this community over the next year or 2? Should we expect to see lot sales in 2019?
On the assumption that we get approval this year, in order, we would look to spend about $30 million that is likely to be funded through some of the more advanced communities. So the land and housing business is, even with Providence and Coopertown, producing cash. In addition, we think that the sales would be in 2019. In addition, the sales increase our borrowing base. So we don't need a lot of equity to get Providence going.
And can you give a range, maybe, for lot sales that you'd expect to be able to achieve in Providence in 2019-2020? Like a range of what your plans are?
Under 150. Probably between 100 and 150.
And is that what you'd expect to be an annual amount for the next several years once it gets going, or would that ramp up?
It should increase somewhat. But, I mean, this is all -- firstly, it's preliminary, and secondly, we waited 20 years to get this approved. Actually 21 now. And we think it's very, very valuable. We are going to work on getting the highest margin out of it, not getting the most sales fastest.
Okay. And then maybe if I could ask just a similar question, if you could expand on Zibi, as far as the capital plans over the next year or 2, and when we should expect to see some completion.
Well, one of the condos has topped off a few weeks ago, and that should be the next 18 months we get our first income there. We may be selling some sites to some other users over the next 18 months. So I'd say within the next 18 months we'll start to see activity every year that should contribute some profits.
Our next question is from Dean Wilkinson of CIBC World Markets.
Pauline, you've been busy, and it looks like you're going to continue to be so. I'm just trying to dig down to what the normalized EPS in the quarter would have been, so stripping out some of the extraordinary items. Should I be backing out the re-measurement gain on Zibi first?
In total between the accounting changes for Zibi and Dream Office, there were about $20 million, I would say, of gains in the quarter that would be sort of accounting-related adjustments.
$20 million in gains, okay. And then, was the $10.5 million, the cost recovery and contingencies, did that flow through the income statement, too, or does that go through the balance sheet?
It did. Yes, it did.
It did. But that's a normal -- like, that's a higher than normal amount, but it's a normal item that would come through sort of in any given quarter?
Yes. And you know, to put that $10.5 million in context, it was, like, 1% of the gross margin for those communities that we developed. It was just that it all sort of happened in one period, which shouldn't really be the case going forward, as we were closing out some pretty large legacy developments and phases.
Okay. So it was just really nothing more than a true-up, so.
Yes.
That'd be normal going forward. Okay. And then just a question: the margin facility that you opened in the quarter. Can you sort of talk a little about that? Like, what's -- what is that for? What have you done with that? Can you talk to the proceeds?
Sure. I mean, we've bought a fair amount of stock. I think it's public now. But like, for DAT, it's almost 100% tax-deferred, and we like that income. With Dream Office, it's going to have quite a deferral this rate year, too, so we've got a little bit of data on it, which gets a pretty high return with very low tax. So I think we got a $40-million borrowing against about $350 million of stock.
Okay. So it's just specific to those 2. You don't have other securities that you're sort of dabbling in.
No.
No. We don't own 10% of RioCan, if that's what you're asking.
And don't plan to, I assume.
No.
And then just turning to the condos, you've got nothing expected in 2018, but if you look forward to 2019, am I reading this right? About 223 from Riverside Square, 93 on the Canary Block, and am I reading 360 on the Stage 2 lands of Canary, or are they somehow interrelated?
No. So Canary Block is the first -- that was Block 16, so that's going to close in 2019. And the only 2 projects closing in 2019 are Riverside Square and Canary Block, so that's correct. We also have Canary -- yes. We also have Canary Commons, which will be closing, I believe, in 2021.
In 2021.
Sorry, our first [indiscernible] 2020 for Canary Commons.
2020.
Yes.
Okay, so for 2019, we should be thinking of the 223 and the 93?
That's correct.
For that, okay. And just the last question. It's probably more about interest than anything else. Michael, the -- on -- in the ski hill, the work that you've done there, you said it's going to allow for another 50,000 visitors to go through there. What's the base off of which that 50 sort of grows?
It's been growing rapidly. We had, in 2017, I think we had 540,000 skiers, which was up a lot, I think over 50,000, from the prior year. This year is looking quite good, although [indiscernible] calendar year is not ski season. And next year when we open the terrain, we estimated 50,000. It's just a guess, but with the new terrain, we think we're going to attract a lot more people.
So that's going to be an over-10% growth. So that looks like that's just going to continue to be moving along.
Our next question is from Sam Damiani of TD Securities.
Just on the guidance. Didn't mention house closings. Typically you've been around 30% of lots represented by house closings. Is that sort of what you're expecting for 2018 and going forward?
Yes, sure. That's a reasonable assumption.
Okay. And when I look at Page 25 of the slide deck [indiscernible]...
Sorry, you're talking -- Sam, before you get to that, we expect to start to introduce building our own houses in Providence. We started in High River this year, maybe with the land. So we'll just have more lots in the future. We might inch up from 30%. But we do think that the housing business is a growth business.
Makes sense. And then when I flip to Page 25 of the slide deck, sort of a target, sort of long-term annual or run rate of nearly 1,500 lot sales, is that basically just sort of factoring in Providence and maybe Coopertown? Or like, how does -- is that the market, what the market can absorb given your market share, or like, how should we think about that and when that could be achieved?
Okay, so it's the first. That's basically using similar production as we have now, adding Providence, Coopertown and Elan. Oh, sorry, and Willows in Saskatoon.
And all those should be going pretty smoothly by 2020?
Oh, yes.
2019, 2020, yes.
Yes. By maybe late 2019. And your confidence in terms of initial lot sales? I know you mentioned this, touched on this, earlier, but in Providence by late 2019, is that, would you say, pretty high confidence at this point?
It's the highest confidence we've had in the last 15 years that it'll be going next year. Meaning, this is a tricky business. The road is supposed to open in 2020; they're a year ahead of schedule. We're talking about selling lots in 2019. There's going to be 3 exits off the highway onto our lands. I've always thought that prior to the road being completed, we should be approved. We're working very closely with the city of Calgary, but the city of Calgary has not been that easy with approvals, but it looks very good.
Okay. Just a few kind of quick ones: The Obico site.
Obico?
Is there any definitive plans on that one? Obico, yes. In terms of potentially monetizing that site?
Well, it's being expropriated, and that will lead to it being monetized. We're working very closely with the city. We've spent over 1.5 years with them on this, and I want to be polite; it's moving.
Okay. And just with...
So having said that, it's 74 acres beside a subway stop. That generally has been very, very valuable land, and it's going up in that value.
Absolutely. The Q4 recreational properties' revenues jumped quite a bit year-over-year. I think it was $11 million in the quarter. Was there anything unusual in there, or just strength out of A-Basin and the [indiscernible].
Well, A-Basin was something like 30% ahead. And a lot of that's had to do with timing of snow. It actually wasn't even more snow. And I think some of it was, our ski area is the highest in the state, I think, and it holds snow better, so I think we had a lot more market share. That was a big chunk.
Yes. We had a bit of income from the Broadview Hotel as well in that number, but A-Basin would have been the lion's share.
Okay. And just finally, Pauline, that $20-million number you mentioned for the gains from the Office REIT and Zibi, is that a pretax number or an after-tax number?
I always look at everything pretax, but I think in this case it's pretty close after tax.
I think the -- I think Dream Office was after tax.
Yes.
[Operator Instructions]Our next question is from David Spier of Nitor Capital Management.
Just the first question, are there any covenants on your loans that are currently restricting you from buying back stock? Your own stock?
Today there is.
So there currently is?
Yes. But we expect it to be gone very soon. When I say that, I'm not trying to be cheeky. Just so everybody gets it. We bought a tremendous amount of stock last May. We bought 3.1 million shares. And in dealing with our syndicate of banks, kind of had a discussion of whether it's offside or not. We agreed that we won't buy any more stock until we redo the facility. The facility is all signed up. We're waiting for some land to be registered, and within the next -- as of -- just so everybody gets it, when we deal with cities, we have no control. So in this case, we're waiting for it to be registered. We thought it would have been done 2 weeks ago. It should probably be done in the next 2 weeks, and then we're free to be buying back some stock.
And then, how do you think about your own stock versus some of the subsidiaries? Because if you were to take, I mean, the land -- the difference in the land value you put out in the presentation versus where it's held in your book, or you even add, put a 10x multiple on the Asset Management earnings, one could argue that the NAV is probably closer to 15 or even higher versus the current stock price. So I'm just trying to understand how you look at your own stock versus the subsidiaries.
Well, I think -- look, we spend a lot of time with this at the board, and a lot of it has to do with, how do we get the core business where we want it? And so a lot of that has been to expand in Toronto. A lot of it has been, like, a Dream Office is a liquid security that we can borrow against, we can get access to it. Buying back stock, that capital's gone forever. Our board is actually quite negative on concentrating a lot of resources on buying back stock and making the company riskier after what's been an incredibly long expansion with Toronto housing prices, consumer -- so it's all a risk management issue. But we don't think that the risk management issue -- how do I put it? We definitely want to -- we're more focused on making sure that we continue to make some money, reduce our risk, but we will start buying back stock, probably 15,000 a day on average, by the end of March.
Got it. Because you could also argue you're buying back Dream Office and Dream Hard Asset by buying back your stock, and maybe even at a greater discount than the actual market price is right now.
Yes. But when everything turns to poo, mighty we would wish we had that money back. That's what we're -- like, I mean, look. If you take a look at asset-backed paper and all the mortgages in 2006 and stuff, everybody had a spreadsheet that knew it was a phenomenal, phenomenal triple-A piece of paper. We're worried about what happens when everything goes bad. But I'm -- what I'm saying is, once we've gotten through this with the bank, we're going to start buying back stock.
Yes, got it. Okay, I appreciate that. And then between the activity in Dream and also Dream Hard Asset, I get the impression that you feel pretty good about the long-term fundamentals of the Toronto condo market. Could you share your views there and why you feel positive about it?
Sure. There's some fundamental drivers like -- I'm trying not to go onto an anti-government rant, so let me get my thoughts together. There's a lot of people coming to Toronto, and the governments have done a good job reducing supply. So the demand-supply equation's pretty good. Our sense is that people are actually making a lot of money in Toronto, and there continues to be a lot of demand. There is clearly a need for more housing, and there's tremendous reference materials for that. So we think there's a -- we're very positive that 5 years from now, there's going to be a lot more people in the city and we need a lot more housing. We happen to have some pretty extraordinary sites that we think will be among some of the most attractive choices for people, so I think generally, our take is that Toronto is going to continue to do better. Housing prices are relatively high. We think income is catching up. There is definitely downside risk for a whole bunch of reasons. But we do think over time, the lands that we have will turn into really great properties that will be needed. So we're just being careful about how we manage the development process, but the lands we have, most of them are at a fraction of their current market value, so even if there's a reversal, there's lots of value there.
Yes. I was going to ask, based on what you were originally selling, condo dev in both Canary and then a few years back as well in Distillery, I'd imagine, based on current market prices, you're able to sell on a price per square foot at a substantially higher number right now.
Well, just for a point of reference, I saw this yesterday and I guess all of us feel the same way. We sold a condo in the Canary Distract for $520,000. It closed in 2016. It just sold for $905,000.
That's -- yes. That's pretty material.
Pretty material.
We have no further questions at this time.
I'd like to thank everybody for their continued interest in the company and we look forward to sharing our progress and our success with you. Thank you.
Thank you. And thank you, ladies and gentlemen. This concludes today's conference. Thank you for participating. You may now disconnect.