Dream Office Real Estate Investment Trust (TSX:D.UN) (“Dream Office”, or “D.UN”) is a premier landlord in downtown Toronto with over 5.1 million square feet (“sf”) of owned and managed office space. Dream Office has carefully curated an investment portfolio of high-quality assets in irreplaceable locations in one of the finest office markets in the world.
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“The market is moving towards net zero buildings which is a catalyst for Dream Office REIT to do the work now.”
Gordon Wadley
Chief Operating Officer, Dream Office REIT
2023 Highlights
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>$70,000received in energy efficiency rebates and incentives from utility providers and various levels of government
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971,000 sf
of GLA certified as LEED Gold
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5
deep retrofit projects achieved Investor Ready Energy Efficiency (“IREE”) certifications, bringing total to 13(1)
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$16 millionin spending awarded to diverse vendors(2)
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$50,000
donated to charities
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Rick Hansen Foundation Accessibility Certification
received for Dream Office’s head office
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Completedinaugural Principles for Responsible Investment (“PRI”) submission and achieved scores above the PRI median in two out of three modules(3)
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Completed
second annual reporting requirements for the Net Zero Asset Managers (“NZAM”) initiative(3)
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Achieved
Four Star Rating in GRESB Real Estate Assessment, placing Dream Office in the top 40% of benchmark(4)
(1) The IREE certification is awarded by the Canada Green Building Council (CaGBC).
(2) Diverse vendors are defined as businesses that are majority-owned by people from equity seeking groups. D.UN collected this information in coordination with in coordination with MPCT.UN and DRM – and therefore includes tracked spending by both D.UN, DRM and MPCT.UN. Spending is tracked on specific categories that include development projects (Quayside and Dream LeBreton), decarbonization retrofits in office and multi-family buildings, and general operational spending.
(3) DRM completed the submission of behalf of the Dream group of companies
(4) All intellectual property rights to this data belong exclusively to GRESB B.V. All rights reserved. GRESB B.V. has no liability to any person (including a natural person, corporate or unincorporated body) for any losses, damages, costs, expenses, or other liabilities suffered as a result of any use of or reliance on any of the information which may be attributed to it.
ESG Scorecard
Absolute energy consumption, GHG emissions, and water consumption have decreased due to energy and water efficiency projects relative to the baseline. Reduced energy, GHG emissions, and water consumption in 2020 and 2021 can be attributed to COVID-related occupancy reductions.
| Indicator | 2019 Baseline | 2022 | 2023 | YoY% Change | % Change from Baseline |
| Energy | |||||
| Energy consumption (ekWh) | 176,812,514 | 151,792,207 | 130,058,311 | -14% | -26% |
| Energy intensity (ekWh/sf)(2) | 32.70 | 27.60 | 25.46 | -8% | -22% |
| Water | |||||
| Water Consumption (m3) | 448,106 | 296,527 | 288,951 | -3% | -36% |
| Water intensity (m3/sf)(2) | 0.083 | 0.053 | 0.057 | 7% | -32% |
| GHG Emissions(3) | |||||
| Scope 1 GHG Emissions (tCO2e) | 11,285 | 10,961 | 8,765 | -20% | -22% |
| Scope 2 GHG Emissions (tCO2e) | 14,782 | 10,576 | 8,891 | -28% | -48% |
| Total Scope 1 and 2 GHG Emissions (tCO2e) | 26,067 | 21,537 | 17,656 | -24% | -37% |
| Scope 1 and 2 GHG Emissions Intensity (kgCO2e/sf)(2) | 4.83 | 3.76 | 3.46 | -14% | -33% |
| Waste(4) | |||||
| Waste to Landfill (tonnes) | 674 | 799 | 528 | -34% | -22% |
| Waste Diverted (tonnes) | 539 | 553 | 1,074 | 94% | 99% |
| Total Waste Generated (tonnes) | 1,213 | 1,353 | 1,602 | 18% | 32% |
| Waste Diversion(2) | 44% | 41% | 32% | -9% | -12% |
| Certifications and Ratings | |||||
| Percent of Portfolio with Green Building Certification | 96% | 91% | 97% | 6% | 1% |
| Percent of Eligible Portfolio with an Energy Rating(5) | 83% | 100% | 100% | 0% | 17% |
| Indicator | 2020 | 2021 | 2022 | 2023 |
| Employees(7)(8) | 207 | 217 | 241 | 231 |
| Voluntary turnover rate(9) | 9% | 16% | 14% | 13% |
| Women employees(10) | 40% | 44% | 43% | 42% |
| Women managers(11) | 45% | 47% | 45% | 45% |
| Women executives(12) | – | – | – | – |
| Indicator | 2022 | 2021 | 2022 | 2023 |
| Women Directors | 50% | 50% | 57% | 57% |
| Independent Directors | 75% | 75% | 71% | 71% |
(1) Unless otherwise stated, each year’s energy, GHG, water, waste, building certification and energy rating data is based on the relevant owned-Canadian properties where D.UN has operational control. Excludes assets that are under development and major renovations. Co-owned assets are included at 100% of GLA. Represents. For US portfolio, please refer to the Supplemental Disclosures ↗ section.
(2) Includes assets (at 100% of GLA) operational for the full year.
(3) GHG emissions are calculated in accordance with the World Resource Institute Greenhouse Gas Protocol. Calculations in this table capture activities D.UN has direct and indirect operational control over: Scope 1 emissions generated directly from its operations, including heating with D.UN’s properties; Scope 2 emissions indirectly associated with generation of purchased electricity, heating, cooling, and steam consumed by properties.
(4) Includes 100% of waste generated at assets owned by D.UN and co-owned by D.UN and MPCT.UN.
(5) Represents the percentage of portfolio based on sf using ENERGY STAR Portfolio Manager (ESPM)
(6) Includes only employees 100% dedicated to D.UN and shared services functions for the Dream entities. Excludes employees on unpaid leaves of absence (e.g., permanent disability, long-term disability, parental leave) and interns.
(7) Numbers represented as total headcount, not full-time equivalent.
(8) Includes permanent part-time employees.
(9) Turnover is calculated as a percentage of average employee headcount in noted category.
(10) Based on employees at all levels.
(11) Managers includes Manager level employees and above.
(12) Executives include: the Chief Executive Officer, Chief Financial Officer, and Chief Operating Officer of D.UN.
(13) Board composition as at December 31, 2020.
(14) Board composition as at December 31, 2021.
(15) Board composition as at December 31, 2022.
(16) Board composition as at December 31, 2023.
Environmental
Prioritizing efficient and comfortable buildings has always been a part of Dream Office’s core values and connects to the Dream group’s mission to Build Better Communities.
IESO Energy Manager of the Year
In 2023, Sumit Khatri and Tugrul Kodaz, Senior Energy Managers at Dream Office, received the Energy Manager of the Year award from Ontario’s IESO Save on Energy program. The Save on Energy program has been presenting these industry leading awards since 2017 to recognize Ontario’s most creative and forward-thinking energy managers championing energy efficiency at their organizations. As part of the Technical Services team at Dream Office, the energy managers work closely with property managers and building operators to identify opportunities to drive energy efficiency and implement projects that generate energy, water, waste and GHG savings and improve tenant comfort across Dream Office’s portfolio.
A project focusing on HVAC, lighting system optimization, and other GHG reduction strategies at 50 and 90 Burnhamthorpe Road West in Mississauga, and at Adelaide Place in Toronto, resulted in electricity reductions of 23%, 11% and 12%, respectively, in 2022, yielding over $514,000 in cost savings. Other projects that are being overseen by the energy managers include piloting smart building technologies like smart LED lighting and new building automation systems, as well as real-time metering upgrades to identify operational energy and water efficiency opportunities. Dream Office is proud to be recognized for its energy management efforts which directly support its Net Zero by 2035 Action Plan and generate utility cost savings.
Building Certifications(1)
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97%BOMA BEST certification of
all Canadian properties -
38%LEED certified buildings,
downtown Toronto -
5 BuildingsReceived the Investor Ready Energy Efficiency (IREE) in 2023
(1) The chart is based on GLA of assets as at December 31, 2023, including all operational Canadian properties at 100% of GLA.
Social
Dream Office’s strength as an organization comes from its strong and diverse workforce. The people come from a wide range of backgrounds and experiences, bringing many valuable skills and perspectives to the Dream Office team. The people Dream Office hires all have one thing in common: they share the company values and contribute to the company culture.
Green Lease Leaders
After being the only Canadian company to achieve the Green Lease Leaders Platinum Landlord award in 2022, Dream Office continued its leadership by once again receiving the award in 2023. This achievement was announced at the Better Buildings, Better Planets Summit, hosted by the Institute for Market Transformation and the U.S. Department of Energy’s Better Buildings Alliance.
Through ambitious net zero commitments, GHG emissions reduction targets, and sustainability goals, as well as the use of its green leases, Dream Office strives to increase the positive environmental, social, and financial outcomes for its tenants and key stakeholders. This Platinum Level recognition reflects a proactive approach towards achieving net zero by 2035 by engaging with tenants across several environmental and social focus areas.
Dream Office(1)Gender Breakdown
(1) Includes employees employed by Dream Asset Management Corporation, which includes DRM and MPCT.UN employees, and Canadian DRR.U employees. Does not include employees at recreational properties,
employees on leaves of absence (e.g., permanent disability, long-term disability, parental leave), interns, and DRR.U employees of Pauls Corp.
(2) Includes employees at all levels.
(3) Includes Managers and above.
(4) For the purposes of this report, Executives include: the Chief Executive Officer, Chief Financial Officer, and Chief Operating Officer of D.UN.
Governance
As part of the ESG Framework, Dream Office links ESG considerations to executive goals and compensation.
Sustainability and ESG-related matters at
Dream Office are managed by the following:
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Board of Trustees
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The Dream Office board has delegated such oversight to the Governance, Environmental and Nominating Committee
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Governance, Environmental and Nominating Committee
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Oversees approach to environmental, social, governance and impact investing matters
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Chief Executive Officer
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Highest-level executive with oversight over ESG and impact matters, including sustainability and climate change, at Dream Office
Works with the Chief Financial Officer and Chief Operating Officer to provide leadership over the sustainability strategy and oversee adoption of the ESG Framework
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ESG Executive Committee (Members of the executive leadership team from each Dream entity)
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Receives regular updates from the Sustainability and ESG team on behalf of all departments and the sustainability
working groupsAdopts ESG Framework for Dream Office
Communicates sustainability strategy and commitment across the company and to key external stakeholders
Delegates implementations to Dream Office’s Sustainability and ESG team
Reports to the Governance, Environmental and Nominating Committee
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Sustainability and ESG Team
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Embeds sustainability strategies and commitments across the company and with key external stakeholders
Oversees the implementation of the ESG Framework for each Dream entity
Manages portfolio sustainability initiatives including building certifications, energy, water and waste management and monitoring, as well as strategic initiatives
Meets quarterly with the ESG Executive Committee
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Investment Committee
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Reviews each investment’s Acquisition Checklist and approves investments that meet both financial and impact goals
Holds the project team accountable to achieve goals and create impact
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Sustainability Working Groups
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Responsible for advancing sustainability initiatives and activities at company and property level
Includes three working groups covering the following focus areas: Green Property Operations, Employee Engagement,
Tenant EngagementIncludes representatives from central functions, regions, and properties
Each group reports regularly to the Sustainability and ESG team
Disclosure Frameworks
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Principles for Responsible Investment ↗The United Nations Principles for Responsible Investment (PRI) is the world’s leading responsible investor collaboration. It supports its signatories to incorporate ESG factors into their investment and ownership decisions. Signatories commit to follow PRI’s six principles and report annually on their progress through the PRI Reporting Framework. Dream Unlimited, on behalf of the Dream group of companies, became a signatory to the PRI in 2021, and completed the inaugural submission in 2023. -
United Nations Principles for Responsible Investment ↗The Sustainable Development Goals (SDGs), also known as the Global Goals, were adopted by all United Nations Member States in 2015 as a universal call to action to end poverty, protect the planet and ensure that all people enjoy peace and prosperity by 2030. There are 17 goals in total which provide a shared blueprint to achieve the 2030 goals. The Dream group has identified relevant SDGs throughout its investment strategy and considers how projects may contribute to the achievement of these goals. In particular, the Dream group of companies is dedicated to building safe, resilient, inclusive, and sustainable cities – expressed by Goal 11. -
Taskforce on Climate-related Financial Disclosures ↗In 2021, Dream Unlimited became an official supporter of the Taskforce on Climate-related Financial Disclosures (TCFD) recommendations. To align with TCFD recommendations and enable appropriate oversight, Dream Unlimited hosted board education sessions to increase understanding of ESG and climate-related risks and opportunities. To strengthen oversight, responsibility for ESG and impact matters was formally integrated into corporate board governance. Scenario analysis was also completed, which is a corporate strategy and risk/opportunity identification exercise to evaluate how Dream Unlimited prepares for the implications of climate change and climate-related financial disclosures. -
Net Zero Asset Managers ↗The Net Zero Asset Managers (NZAM) initiative is an alliance of global asset managers committing to supporting the goal of net zero greenhouse gas emissions by 2050 or sooner, in line with the global efforts to limit warming to 1.5 degrees Celsius. As one of the first Canadian companies to join the NZAM initiative, Dream Unlimited, on behalf of the Dream group of companies, made its initial target disclosure in 2022. In 2023, 69% of the Dream group of companies’ total assets under management were committed to be managed in line with net zero by 2050, an increase from 61% in 2022.(1)
(1) Assets under management as of December 31, 2023.
Environmental
Leading with Smart Building Certifications
Dream Office strives to be at the cusp of the intersection of technology and real estate, offering superior office spaces and a best-in-class tenant experience.
The BOMA BEST Smart Buildings certification serves as an industry benchmark to define how building owners and managers can leverage technology in their assets and drive sustainability. Dream Office is proud to be one of the founding pilot project members of BOMA BEST’s Smart Buildings certification and to have also achieved SmartScore Gold certification at the Victory Building.
WiredScore’s SmartScore certification helps landlords and developers build cutting-edge smart buildings that deliver exceptional user experiences, drive cost efficiency, meet high standards of sustainability, and are future ready.
Dream Office’s smart building program focuses on the following technologies and use cases:
- Smart Lighting combines occupancy and daylight sensors to automatically dim lights in response to natural light levels.
- Indoor Air Quality (“IAQ”) Monitoring ensures that tenants are provided with spaces that are healthy and flags issues to be addressed when contaminants of concern are identified.
- Tenant Experience App elevates how tenants interact with their building, communicate with property staff, and access amenities.
- Leak Detection sensors identify leaks and automatically shut off valves to prevent water damage in tenant spaces. This avoids tenant disruption, insurance claims and costly utility bills. Over time, this can also reduce insurance premiums.
- Utilizing advanced HVAC control optimization and fault detection and diagnosis allows for efficient energy use and quickly identifying and resolving faults in equipment.
- Metering tenant and key equipment loads provides visibility to operations teams and tenants on energy consumption that allows for data driven decisions.
- Occupancy sensing tracks the number of people entering the property, providing improved visibility into how and when the building is used.
- Cybersecurity and Connectivity is provided by a base building network tohelp ensure secure and monitored connectivity.
- Guest Wi-Fi is provided in public areas to improve visitor experience.
- 247 leak detection sensors installed across 11 properties.
- 287 energy meters in total across Dream Office’s portfolio.
- ~85,000 average loss due to water damage in commercial buildings, which means that 1-2 leaks prevented typically pays off the cost of installing a leak detection system.
- 586 individual users of Dream Office’s tenant experience mobile app (Dream+).
- ~15% estimated energy savings at Victory Building in 2023 vs 2019 baseline, in part due to smart building pilot program.
In 2023, Dream Office launched its second smart building pilot project at 6 Adelaide St E., Toronto, leveraging lessons learned from the inaugural pilot project at the Victory Building. As Dream Office’s centralized expertise and capabilities grow, these smart building technologies can be cost-effectively scaled across the portfolio where there is tenant interest, operational cost savings to be realized and asset value to be created.
Environmental
Championing Energy Efficiency Retrofits with Canada Infrastructure Bank Funding
Dream Office is taking concrete steps to achieve its ambitious net zero by 2035 targets
In 2023, Dream Office completed 24 energy efficiency projects across its portfolio. With CIB financing, Dream Office has 13 IREE certified projects underway, targeting
40% GHG emission reductions across these buildings by end of Q1 2027. This makes Dream Office the largest portfolio of IREE certified projects in Canada. Dream Office has already drawn $20.5 million(1) in total from CIB, which provides low-cost fixed-rate financing that will be repaid over a 20-year term.
Dream Office is a proven leader in building decarbonization and doing so with financial discipline.
366 Bay Street was the first retrofit project financed by the CIB and one of the first projects in Canada to achieve the IREE certification. The building is part of Dream
Office’s sustainable redevelopment program, which leverages in-house expertise to re-use as much of the existing buildings as possible, instead of demolishing carbon
intensive materials, and lower the overall embodied carbon of the redevelopment. Dream Office has secured a commitment for a lease for the entire building with a global financial institution attracted by the asset’s location, modernization, and lower carbon footprint.
The IREE certification is a third-party certification offered through the CaGBC to help guide and verify retrofit projects. IREE recognizes retrofit projects that adhere to
industry best practices and standards for creating baseline energy usage, savings calculations, commissioning, operations, and maintenance, as well as measurement
and verification. The certification signals to investors that retrofit projects were developed by qualified professionals and meet the requirements of the Investor
Confidence Project protocols.
Environmental
Net Zero Roadmap for Victory Building
The Victory Building, a historical and architectural gem at 80 Richmond Street West in Toronto’s Financial District, combines old-world design and modern conveniences. Completed in 1937 and standing at 21 storeys, the Victory Building was the first office tower in Canada to be completely air conditioned, courtesy of General Electric.
Using the CIB credit facility and in alignment with the Net Zero by 2035 Action Plan, Dream Office developed a property-level net zero GHG emissions roadmap and
started executing a multi-year capital plan that decarbonizes the 88 year-old building, and repositions it to attract tenants and compete with modern downtown office buildings.
At the start of this redevelopment, Dream Office engaged a leading sustainability engineering firm to conduct an in-depth GHG audit, create a calibrated energy model,
and produce a comprehensive ASHRAE Level 2 energy audit in alignment with its Net Zero Action Plan. The sustainability engineering firm worked closely with Dream Office’s mechanical and electrical consultants to optimize a retrofit plan that created operational improvements while controlling for costs and construction risk.
Post-Retrofit Systems:
- R-30 roof insulation
- LEDs and smart lighting system
- 4-pipe hydronic fan coils spread over
6-8 zones per floor - Energy recovery ventilator (“ERV”) for fresh air
- Variable frequency drives (“VFDs”) on pumps
- Centralized heat pumps for heating and cooling
- Smart building technologies
Typically, this scale of retrofit requires a vacant building for construction. However, Dream Office was able to develop a cost-effective, multi-year retrofit plan that allows existing tenants to continue using their spaces without disruption.
Environmental
IESO Energy Manager of the Year
In 2023, Sumit Khatri and Tugrul Kodaz, Senior Energy Managers at Dream Office, received the Energy Manager of the Year award from Ontario’s IESO Save on Energy program.
The Save on Energy program has been presenting these industry leading awards since 2017 to recognize Ontario’s most creative and forward-thinking energy managers championing energy efficiency at their organizations. As
part of the Technical Services team at Dream Office, the energy managers work closely with property managers and building operators to identify opportunities to drive energy efficiency and implement projects that generate
energy, water, waste and GHG savings and improve tenant comfort across Dream Office’s portfolio.
A project focusing on HVAC, lighting system optimization, and other GHG reduction strategies at 50 and 90 Burnhamthorpe Road West in Mississauga, and at Adelaide Place in Toronto, resulted in electricity reductions of 23%, 11% and 12%, respectively, in 2022, yielding over $514,000 in cost savings.
Other projects that are being overseen by the energy managers include piloting smart building technologies like smart LED lighting and new building automation systems, as well as real-time metering upgrades to identify operational energy and water efficiency opportunities.
Dream Office is proud to be recognized for its energy management efforts which directly support its Net Zero by 2035 Action Plan and generate utility cost savings.
Social
Green Lease Leaders
After being the only Canadian company to achieve the Green Lease Leaders Platinum Landlord award in 2022, Dream Office continued its leadership by once again receiving the award in 2023. This achievement was announced at the Better Buildings, Better Planets Summit, hosted by the Institute for Market Transformation and the U.S. Department of Energy’s Better Buildings Alliance.
Through ambitious net zero commitments, GHG emissions reduction targets, and sustainability goals, as well as the use of its green leases, Dream Office strives to increase the positive environmental, social, and financial outcomes for its tenants and key stakeholders. This Platinum Level recognition reflects a proactive approach towards achieving net zero by 2035 by engaging with tenants across several
environmental and social focus areas.
Governance
Incorporating Climate Resiliency into Operations
Physical climate risks can impact operations and property
management by driving up repair and maintenance costs,
insurance costs, and disrupting business continuity. As a
result, Dream Office annually uses the physical climate risk analysis tool to identify risks and incorporate adaptation strategies into capital plans and property operations.
In 2023, the Dream group established a resiliency working
group, bringing together various teams to work across the
entities, including Dream Office, to share knowledge and
expertise and to standardize an approach to climate risk
adaptation and incorporate it into the property-specific
capital planning process and building operations.
Using a physical climate risk scenario analysis tool, the
working group has aggregated asset type-specific climate
risks and prioritized them on the basis of likelihood and
severity. In 2023, the working group focused on developing
tactical methodologies for reducing the exposure of assets
across the Dream Office portfolio in Toronto to relevant
climate perils.
In 2024 and beyond, the resiliency working group will work
towards creating additional tailored adaptation strategies
for other regions.
Case Studies
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Environmental Leading with Smart Building Certifications
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Environmental Championing Energy Efficiency Retrofits with Canada Infrastructure Bank Funding
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Environmental Net Zero Roadmap for Victory Building
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Environmental IESO Energy Manager of the Year
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Social Green Lease Leaders
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Governance Incorporating Climate Resiliency into Operations
Sustainability Reports
- Previous years +
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Policies
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Declaration of Trust
Dream Office REIT’s Declaration of Trust governs our operations and includes such topics as investment guidelines and operating policies, financing restrictions, units and distributions, and the responsibilities and obligations of the Trustees.
Disclosure PolicyThe objective of our disclosure policy is to ensure that communications to the investing public about Dream Office REIT are timely, factual and accurate, and disseminated in accordance with all applicable legal and regulatory requirements. The policy covers topics including trading restrictions and blackout periods, confidentiality, and designated spokespersons. This policy applies to all trustees, officers and employees of Dream Office REIT and its subsidiaries, including trusts and partnerships in which Dream Office REIT owns directly or indirectly at least a 50% equity interest.
Code of ConductOur Code of Conduct (the “Code) is our statement of the values and principles that guide us in our day-to-day business activities. The keystones are: integrity, respect, fairness, accountability and transparency. The Code supports our commitment to operate our business at the highest level of legal, moral and ethical standards. The Code applies to all trustees, officers and employees of Dream Office REIT and subsidiaries.
Whistleblower PolicyAt Dream Office REIT, we are steadfast in our commitment to maintaining the highest business and personal ethical standards by dealing openly and honestly with our investors, tenants, suppliers and employees. With our Whistleblower Policy we marry this commitment to that of securities laws and regulations with respect to accounting standards and internal control standards. We have contracted EthicsPoint Inc., an independent service provider, to manage any complaints or concerns on our behalf. This service reports directly to the Audit Committee of Dream Office REIT and is available seven (7) days a week, 365 days a year. Any concerns may be reported directly, confidentially, and, if preferred, anonymously, through www.ethicspoint.com
Majority Voting PolicyThe Trust has a majority voting policy, requiring that each Trustee nominee receive the support of a majority of the total number of votes cast by the unitholders entitled to elect such Trustee nominee, failing which such Trustee shall submit his or her resignation to the Board for consideration.
Diversity Inclusion u0026 Advancement CommitmentAs one of Canada’s leading real estate companies, we always invest with purpose, embracing creativity and diversity, passion and innovation, while positively impacting our communities and the world around us.
Board Diversity PolicyDream seeks to maintain a Board comprised of talented and dedicated trustees whose skills and backgrounds reflect the diverse nature of the business environment in which Dream operates. Accordingly, the composition of the Board is intended to reflect a diverse mix of skills, experience, knowledge and backgrounds, including an appropriate number of women trustees.
* All intellectual property rights to this data belong exclusively to GRESB B.V. All right reserved. GRESB B.V. has no liability to any person (inclusing a natural person, corporate or unincorporated body) for any losses, damages, costs, expenses or other liabilities suffered as a result of any use of or reliance on any of the information which may be attributed to it.