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File photo of new home construction in Carlsbad, Calif. Consumer sentiment in the U.S. hit a nine-month low in April.MIKE BLAKE/Reuters

Investors looking for a long-term play on the merits of Saskatchewan and Alberta's housing boom will soon have their chance to plow money into a major land and residential developer.

In December, Dundee Corp. announced it would spin out DREAM, its private real estate company, through an initial public offering and the shareholder vote for this transaction is now less than a month away.

With the deadline looming, Michael Cooper, chief executive officer of Dundee REIT and soon-to-be chief of the new public company, met with Bay Street analysts on Tuesday to promote the organization.

The first key takeaway: DREAM Unlimited Corp. will be very different from a real estate investment trust. About half of the company's roughly $480-million in revenues last year came from land sales, and another 30 per cent came from residential housing and condo developments. That matters because it means revenues will be much choppier than that of a REIT, where monthly tenant income is always known well in advance.

Moreover, land can be held for decades, and DREAM is currently in the process of developing 7,500 acres across seven large master planned communities in Saskatoon, Regina, Calgary and Edmonton. These projects are expected to supply residential lots for between 10 and 25 years, and a lot can happen to the economy during that time frame.

This doesn't mean residential developers shouldn't be publicly traded. Brookfield Residential Properties Inc., for instance, is listed on the Toronto Stock Exchange. But investors should be aware that this isn't your typical REIT. For those comfortable with the risk, know that Ned Goodman referred to DREAM's early investment in western Canadian land as "probably the best investment I've ever made."

Second key point: sadly for the Bay Street investment banks, Michael Cooper admits that he won't need them to underwrite many deals for DREAM. When the company acquires land, it pays with cash or cash and short-term vendor financing. When it develops condos, it uses a mix of cash and debt. There doesn't appear to be much need for equity underwriting.

Knowing this, it will be interesting to see just how many dealers pick up research coverage on DREAM. Investment banks usually ask their research analysts to cover a specific company because they hope it will ultimately yield revenue for the brokerage. If DREAM was run by anyone other than Michael Cooper, the banks would probably ignore it.

But Mr. Cooper's family of companies churns out a lot of fees, and the investment banks may feel like they have to cover DREAM simply to stay in his other underwriting syndicates.

Third key point: the ownership is still a little messy. Currently, Ned Goodman owns 70 per cent of DREAM and Michael Cooper owns the other 30 per cent. Once it goes public, ordinary investors will get 60 per cent of DREAM's subordinate voting shares, yet Mr. Goodman will control the company by holding 99 per cent of the common shares.

However, according to the Bay Street presentation, Mr. Cooper will effectively control the company. So why won't he get Mr. Goodman's special shares? Tax purposes. This hiccup should be resolved in about five years and at that point the ownership structure will change.

DREAM's net profit hit $100-million for the first time in 2012 and its second highest annual income came in 2010 when the company brought home just shy of $80-million. The company's margins are the fattest on its land holdings - 59 per cent - following by housing and condos -18 per cent.

Aside from Western Canada, DREAM also has about 3,000 condo units under construction in Toronto that it expects to complete between 2013 and 2016, many of which are being built as part of the Pan/Parapan American Games Athletes' Village.

DREAM also holds a few unique assets, such as a stake in Toronto's King Edward Hotel, and the Arapahoe Basin ski area in Colorado.

The company also serves as the external manager for the Dundee family or real estate companies – Dundee REIT, Dundee International REIT, Dundee Industrial REIT. The fees generated from this work are quite stable, but they don't amount to much of total revenues.

(Tim Kiladze is a Globe and Mail Reporter.)

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