Dream Impact Trust — Management Reports 2022

Feb 15, 2022

MANAGEMENT’S DISCUSSION AND ANALYSIS

(All dollar amounts in our tables are presented in thousands of Canadian dollars, except unit and per unit amounts, unless otherwise stated)

This Management's Discussion and Analysis ("MD&A") is intended to assist readers in understanding Dream Impact Trust (“Dream Impact” or the “Trust”), formerly Dream Hard Asset Alternatives Trust, and its business environment, strategies, performance and risk factors. This MD&A should be read in conjunction with the audited consolidated financial statements and the accompanying notes for the years ended December 31, 2021 and December 31, 2020, which can be found under the Trust’s profile on the System for Electronic Document Analysis and Retrieval (“SEDAR”) (www.sedar.com). The financial statements underlying this MD&A, including 2020 comparative information, have been prepared in accordance with International Financial Reporting Standards ("IFRS"), as issued by the International Accounting Standards Board. Certain disclosures herein are non-GAAP measures or other specified financial measures. Refer to the “Specified Financial Measures and Other Disclosures” section of this MD&A for further details.

All dollar amounts in our tables are presented in thousands of Canadian dollars, except unit and per unit amounts, unless otherwise stated. This MD&A is dated as of, and reflects all material events up to, February 14, 2022, the date on which this MD&A was approved by the Board of Trustees.

When we refer to terms such as "we", "us" and "our", we are referring to the Trust, Dream Impact Master LP (formerly Dream Alternatives Master LP) ("MPCT LP") and its subsidiaries. When we refer to the term "units" we are referring to the units of the Trust. When we refer to "unitholders" we are referring to holders of the units of the Trust.

1. OVERVIEW AND OVERALL FINANCIAL PERFORMANCE 1.1 OVERVIEW OF THE TRUST

Dream Impact Trust is an open-ended trust dedicated to impact investing. Impact investing is the intention of creating measurable positive, social and environmental change in our communities and for our stakeholders, while generating attractive financial returns. The Trust’s underlying portfolio is comprised of exceptional real estate assets reported under two operating segments: development and investment holdings, and recurring income. The units of the Trust are listed on the Toronto Stock Exchange ("TSX") under the symbol "MPCT.UN".

The Trust is managed by Dream Asset Management Corporation ("DAM" or the "Asset Manager"), a subsidiary of Dream Unlimited Corp. ("Dream Unlimited" or "Dream") (TSX: DRM), which is one of Canada’s leading real estate companies, with approximately $13 billion of assets under management in North America and Europe. On January 1, 2018, Dream acquired control of the Trust, for accounting purposes, based on Dream's increased exposure to variable returns resulting from increased ownership through units held in the Trust and from new real estate joint venture agreements. The ultimate controlling party of the Trust is Michael Cooper, President and Chief Responsible Officer of DAM and Dream. As of December 31, 2021, Dream has a 28% ownership interest in Dream Impact.

1.2 OUR STRATEGY AND OPERATING SEGMENTS

Our fundamental objectives are to:

• Create positive and lasting impacts for our stakeholders through our three impact verticals: environmental sustainability and resilience, attainable and affordable housing, and inclusive communities;

• Balance growth and stability of the portfolio, increasing cash flow, unitholders’ equity and net asset value ("NAV")[(1)] over time;

• Leverage our access to an experienced management team and strong partnerships in order to generate attractive returns for investors;

• Provide investors with a portfolio of high-quality real estate development opportunities, concentrated in core geographic markets; and

• Provide predictable cash distributions to unitholders on a tax-efficient basis.

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We work towards these objectives by operating our business under two distinct segments:

• Recurring income — comprised of a portfolio of stabilized office and commercial real estate income properties and multi-family rental assets in the Greater Toronto Area ("GTA") and Ottawa/Gatineau, interest-paying mortgages and corporate loans; and

• Development and investment holdings — comprised of direct and indirect investments in residential and mixed-use developments, a hospitality asset, and participating mortgage receivables.

Recurring income is important to our business as it provides stable returns in order to fund our ongoing fixed operating costs, interest cost and distribution. Over time, we expect this segment to grow and represent approximately 70% of our portfolio, as we build out our extensive development pipeline and further invest in best-in class income properties.

We believe the Trust’s development segment represents a portfolio of high-quality assets located in core geographic markets. These assets represent a significant source of growth for the Trust, which we expect will generate future income and cash flows over time as the projects are developed. Assets may be built for sale or built to hold for the long term.

Due to the nature of development, the Trust expects fluctuations in earnings from period to period from this segment. Typically, assets may be acquired and held for a number of years before development commences or contribution to net income is realized. However, depending on a variety of factors, including location, market conditions, density and asset class, the value of these projects may appreciate as we progress through the rezoning and pre-development process. Our development segment is expected to generate attractive returns and continued NAV[(1)] accretion over time.

We also believe our portfolio will be more resilient and valuable because it is comprised of assets that are considered impact investments.

In line with our overarching strategy to be a pure-play impact investment vehicle, we utilize assets in both operating segments to generate positive impact across our verticals. These verticals are aligned with the widely recognized and accepted United Nations Sustainable Development Goals and are:

• Environmental sustainability and resilience — develop sustainable real estate that optimizes energy use, limits greenhouse gas ("GHG") emissions, and reduces water use and waste while also creating resiliency against natural disasters and major climatic events.

• Attainable and affordable housing — invest in mixed-income communities that are transit-oriented, located close to employment opportunities, and support an overall lower relative cost of living with high quality of life.

• Inclusive communities — intentionally design and program communities that are safe and inclusive for everyone. This includes creating spaces that encourage mental and physical health, and wellness.

As the owner and developer of our real estate, we are focused on contributing to the betterment of our communities through managing our resource efficiency to minimize environmental harm to communities, incorporating attainable and affordable housing, and fostering inclusivity, as we pursue attractive financial returns.

The Trust has identified three main features of its approach to impact management:

• Intentionality — for each of the portfolio properties that qualify as impact assets, the Trust specifies impact pathways that set out the positive impacts expected to be achieved;

• Measurement — each impact pathway will be scored according to various dimensions. These dimensions will include who will be affected (an assessment of the number of people, and how well or underserved they are), the extent of the impact (an assessment of duration and degree), and what the Trust’s contribution is (an assessment of the outcome delivered by the Trust, relative to what would have happened otherwise). We intend to measure our impact efforts in a repeatable, systematic way; and

• Verification — our process surrounding our impact goals and impact management system will be verified by a recognized independent firm at regular intervals.

As of December 31, 2021, approximately 80% of NAV[(1) ] and unitholders' equity qualified under the Trust's definition of an impact investment. Over the next few years, we intend to deploy capital into new impact investment opportunities, winddown or exit remaining non-impact investments and increase our financial flexibility from our build-to-sell assets.

(1) Represents a non-GAAP measure. For the Trust's definition of the following non-GAAP financial measure: NAV, please refer to the Specified Financial Measures and Other Disclosures section of this MD&A. NAV is not a standardized financial measure under IFRS and might not be comparable to similar measures disclosed by other issuers.

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1.3 BUSINESS UPDATE - FOURTH QUARTER AND YEAR ENDED 2021

During the three months ended December 31, 2021, the Trust continued to expand its recurring income segment through acquisitions and development execution.

Block 211 ("the Natural Sciences Building") at Zibi achieved first tenant occupancy, adding 186,000 sf to the Trust's recurring income segment. The Natural Sciences Building is currently 86% leased to the Federal Government of Canada with a lease term of 15 years. Situated at the gateway of the development and with direct views of the Ottawa River and Parliament Hill, the Natural Sciences Building represents the state-of-the-art, class A office product that will be brought to market at Zibi. The Trust has a 50% ownership interest in the asset.

In addition, the Trust closed on an additional 228 multi-family rental units (at 100%) located in downtown Toronto in the three months ending December 31, 2021. Including this acquisition, in 2021 the Trust acquired a 33% interest in 1,140 multifamily rental units for a net investment of $56.9 million. Across this multi-family portfolio, the Trust will support over 300 affordable units and pursue various sustainability initiatives, in line with our impact strategy.

During the three months ended December 31, 2021, the Trust announced its new social procurement strategy. This provides a model for diversity in the supply chain cycle and commits to working with suppliers and partners that share the same ESG goals.

Subsequent to December 31, 2021, the National Capital Commission ("NCC") announced in partnership with CMHC that the Trust, along with Dream Unlimited, was selected to develop the first phase of the Building LeBreton project in Ottawa, Ontario. The project, "Dream LeBreton", will be part of Canada's largest residential zero-carbon project with approximately 600 new rental housing units, of which over 40% will be affordable. The transit-oriented site is adjacent to the Pimisi light-rail station, various pedestrian pathways and neighbouring the Trust's 34-acre Zibi development.

FINANCIAL HIGHLIGHTS OF THE TRUST

FINANCIAL HIGHLIGHTS OF THE TRUST
For the three months ended March 31,	Three months ended December 31, Year ended December 31,
	2021 2020 2021 2020
Consolidated results of operations Net income Net income per unit Distributions declared and paid per unit Units outstanding – end of period Units outstanding – weighted average	$ 26,959$ 14,868 $ 21,450$ 16,339 0.41 0.23 0.33 0.24 0.10 0.10 0.40 0.40 65,071,762 64,811,749 65,071,762 64,811,749 65,179,813 64,869,389 64,996,594 67,182,838
As at	December 31, 2021 September 30, 2021 December 31, 2020
Consolidated financial position Total unitholders' equity Total unitholders' equity per unit NAV(1) NAV per unit(1) Total debt payable Total assets Debt-to-asset value⁽¹⁾ Cash	$ 536,931 $ 515,626 $ 539,877 8.25 7.94 8.33 605,996 n/a 582,870 9.31 n/a 8.99 134,902 135,053 88,392 701,702 677,171 648,514 19.2 % 19.9 % 13.6 % 8,431 44,980 110,671

(1) For the Trust's definition of the following specified financial measures: NAV, NAV per unit and debt-to-asset value, please refer to the Specified Financial Measures and Other Disclosures section of this MD&A. NAV and NAV per unit are updated annually. NAV, NAV per unit and debt-to-asset value are not standardized financial measures under IFRS and might not be comparable to similar measures disclosed by other issuers.

During the three months ended December 31, 2021, the Trust reported net income of $27.0 million compared to net income of $14.9 million in the prior year. The change in earnings was primarily driven by the net increase in fair value adjustments on income properties and developments, specifically 49 Ontario Street, the Trust's wholly owned income property located in downtown Toronto that is subject to a rezoning application. In addition, the increase in earnings was driven by fluctuations in our income tax position, foreign exchange on the Trust's investment in the Virgin Hotels Las Vegas ("U.S. hotel"), and income contribution from the Natural Sciences Building, which achieved first tenant occupancy during this period.

During the year ended December 31, 2021, the Trust reported net income of $21.5 million compared to net income of $16.3 million in the prior year. The increase in earnings was primarily a result of the aforementioned fair value adjustments, partially offset by the reduced income contribution from our lending portfolio as a result of repayments in the prior year and higher interest expense from the convertible debentures issued in 2021.

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As at December 31, 2021, the Trust had $8.4 million of cash-on-hand. The Trust’s debt-to-asset value[(1)] as at December 31, 2021 was 19.2%, relatively consistent with the debt-to-asset value[(1) ] as at September 30, 2021 of 19.9%, and an increase relative to 13.6% as at December 31, 2020. The increase year over year was driven by the issuance of convertible debentures and financing obtained in relation to income properties acquired during the year. The Trust's debt-to-total asset value, inclusive of project-level debt[(1)] and assets within our development segment, including equity accounted investments, was 52.6% as at December 31, 2021 compared to 38.5% as at December 31, 2020, primarily due to additional project-level financing, including financing available through our Impact Financing Framework. As at December 31, 2021, the Trust has access to a credit facility to borrow up to $50.0 million.

(1) For the Trust's definition of the following specified financial measures: debt-to-asset value and debt-to-total asset value, inclusive of project-level debt, please refer to the Specified Financial Measures and Other Disclosures section of this MD&A. Specified financial measures do not have standardized meanings prescribed by IFRS and may not be comparable with similar measures presented by other issuers.

NAV AND RECONCILIATION OF NAV TO TOTAL UNITHOLDERS' EQUITY

Management considers NAV to be an important measure of intrinsic value for the Trust. Due to the nature of our portfolio, NAV is published annually to reflect various factors including the progression of each project toward completion, such as progress on zoning and/or reflecting information from recent market transactions. The Trust believes that incorporating an annual market value adjustment is a more useful measure to value certain development assets that would not ordinarily be captured within IFRS and the Trust's consolidated financial statements as they are accounted for under the equity accounted method. In calculating the annual market value adjustment, which is reflected in NAV, the Trust obtains independent thirdparty appraisals annually or as significant development milestones are achieved. Assuming consistent market conditions, the development projects are expected to continue to generate market value increases as they continue to advance closer to their completion dates.

The closest IFRS measure to NAV is total unitholders' equity. The table below provides the reconciliation of NAV to total unitholders' equity:

As at December 31, 2021		Total unitholders' equity(1)	Market value(2)adjustment to equityaccounted investments	Deferred income taxes adjustment	NAV(2)	NAV per unit(2)	% of total NAV(2)
Development and investment holdings	$	296,709 $	81,428 $	—$	378,137 $	5.81	62.4 %
Recurring income		283,612	—	—	283,612	4.36	46.8 %
Cash and other(3)		(43,390)	—	(12,363)	(55,753)	(0.86)	(9.2) %
Total	$	536,931$	81,428$	(12,363) $	605,996$	9.31	100.0 %
As at December 31, 2020		Total unitholders' equity(1)	Market value(2)adjustment to equityaccounted investments	Deferred income taxes adjustment	NAV(2)	NAV per unit(2)	% of total NAV(2)
Development and investment holdings	$	276,725 $	50,652 $	—$	327,377 $	5.05	56.2 %
Recurring income		169,040	—	—	169,040	2.61	29.0 %
Cash and other(3)		94,112	—	(7,659)	86,453	1.33	14.8 %
Total	$	539,877$	50,652$	(7,659) $	582,870$	8.99	100.0 %

(1) Total unitholders' equity includes working capital balances allocated to each respective segment.

(2) For the Trust's definition of the following specified financial measures: market value, NAV and NAV per unit, please refer to the Specified Financial Measures and Other Disclosures section of this MD&A. NAV and NAV per unit are updated annually. Market value, NAV, and NAV per unit are not standardized financial measures under IFRS and might not be comparable to similar measures disclosed by other issuers.

(3) Includes cash of $8.4 million as at December 31, 2021 (December 31, 2020 - $110.7 million) less convertible debentures of $30.0 million (December 31, 2020 - $nil) and other net working capital balances not included in the development and investment holdings or recurring income segments.

As at December 31, 2021, NAV per unit was $9.31 compared with total unitholders' equity per unit of $8.25. NAV per unit is higher than total unitholders' equity per unit as a result of cumulative market value adjustments of $81.4 million (December 31, 2020 - $50.7 million) related to the Lakeshore East and Brightwater developments, which the Trust accounts for as equity accounted investments. These market value gains were partially offset by a related deferred tax adjustment.

Total market value for Lakeshore East and Brightwater are based on expected density and price per sf. During the year ended December 31, 2021, market value adjustments for Lakeshore East and Brightwater were based on a price per sf of $190 and $95, respectively, an increase relative to the prior year driven by higher land values and supported by comparables through an independent third-party appraisal. Refer to sections 1.4, "Summary of Portfolio Assets" and 10.1, "Summary of Impact Investments" of this MD&A for density assumptions on each project, which are based on approved densities at December 31, 2021.

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SEGMENTED RESULTS OF OPERATIONS – THREE MONTHS ENDED DECEMBER 31, 2021

		Development
	and investment		Recurring
		holdings	income	Other⁽¹⁾	Total
INCOME
Fair value adjustments in development and investment holdings	$	(265) $	— $	—$	(265)
Lending portfolio interest income and lender fees		—	448	—	448
Income properties revenue		—	4,394	—	4,394
Share of income from equity accounted investments		1,481	1,335	—	2,816
TOTAL INCOME		1,216	6,177	—	7,393
EXPENSES
Income properties, operating		—	(2,204)	—	(2,204)
Interest expense		—	(905)	(611)	(1,516)
Provision for lending portfolio losses		—	(387)	—	(387)
General and administrative		—	—	(2,775)	(2,775)
TOTAL EXPENSES		—	(3,496)	(3,386)	(6,882)
Fair value adjustments to income properties		—	26,964	—	26,964
OPERATING INCOME (LOSS)		1,216	29,645	(3,386)	27,475
Interest and other income		—	14	295	309
Transaction costs		—	(24)	—	(24)
Fair value adjustments to financial instruments		—	—	210	210
EARNINGS (LOSS) BEFORE INCOME TAX EXPENSE		1,216	29,635	(2,881)	27,970
INCOME TAX EXPENSE
Deferred income tax expense		—	—	(1,011)	(1,011)
TOTAL INCOME TAX EXPENSE		—	—	(1,011)	(1,011)
NET INCOME (LOSS)	$	1,216 $	29,635 $	(3,892) $	26,959

SEGMENTED RESULTS OF OPERATIONS – THREE MONTHS ENDED DECEMBER 31, 2020

		Development
	and investment		Recurring
		holdings	income	Other⁽¹⁾	Total
INCOME
Fair value adjustments in development and investment holdings	$	(3,411) $	— $	—$	(3,411)
Lending portfolio interest income and lender fees		—	504	—	504
Income properties revenue		—	4,130	—	4,130
Share of income(loss)from equityaccounted investments		13,638	(97)	—	13,541
TOTAL INCOME		10,227	4,537	—	14,764
EXPENSES
Income properties, operating		—	(2,036)	—	(2,036)
Interest expense		—	(780)	(52)	(832)
General and administrative		—	—	(3,261)	(3,261)
TOTAL EXPENSES		—	(2,816)	(3,313)	(6,129)
Fair value adjustments to incomeproperties		—	10,165	—	10,165
OPERATING INCOME (LOSS)		10,227	11,886	(3,313)	18,800
Interest and other income		—	2	184	186
Transaction costs		—	(64)	—	(64)
EARNINGS (LOSS) BEFORE INCOME TAX EXPENSE		10,227	11,824	(3,129)	18,922
INCOME TAX EXPENSE
Deferred income tax expense		—	—	(4,054)	(4,054)
TOTAL INCOME TAX EXPENSE		—	—	(4,054)	(4,054)
NET INCOME (LOSS)	$	10,227 $	11,824 $	(7,183) $	14,868

(1) Includes other Trust amounts not specifically related to the segments.

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SEGMENTED RESULTS OF OPERATIONS – YEAR ENDED DECEMBER 31, 2021

		Development
	and investment		Recurring
		holdings	income	Other⁽¹⁾	Total
INCOME
Fair value adjustments in development and investment holdings	$	(6,472) $	— $	—$	(6,472)
Lending portfolio interest income and lender fees		—	1,748	—	1,748
Income properties revenue		—	17,814	—	17,814
Share of income from equity accounted investments		6,623	1,409	—	8,032
TOTAL INCOME		151	20,971	—	21,122
EXPENSES
Income properties, operating		—	(8,564)	—	(8,564)
Interest expense		—	(3,514)	(1,166)	(4,680)
Provision for lending portfolio losses		—	(1,465)	—	(1,465)
General and administrative		—	—	(11,345)	(11,345)
TOTAL EXPENSES		—	(13,543)	(12,511)	(26,054)
Fair value adjustments to income properties		—	23,974	—	23,974
OPERATING INCOME (LOSS)		151	31,402	(12,511)	19,042
Interest and other income		—	101	930	1,031
Transaction costs		—	(348)	—	(348)
Fair value adjustments to financial instruments		—	—	524	524
EARNINGS (LOSS) BEFORE INCOME TAX RECOVERY		151	31,155	(11,057)	20,249
INCOME TAX RECOVERY
Current income tax recovery		—	—	7	7
Deferred income tax recovery		—	—	1,194	1,194
TOTAL INCOME TAX RECOVERY		—	—	1,201	1,201
NET INCOME (LOSS)	$	151 $	31,155 $	(9,856) $	21,450

SEGMENTED RESULTS OF OPERATIONS – YEAR ENDED DECEMBER 31, 2020

		Development
	and investment		Recurring
		holdings	income	Other⁽¹⁾	Total
INCOME
Fair value adjustments in development and investment holdings	$	(1,981) $	— $	—$	(1,981)
Lending portfolio interest income and lender fees		—	4,103	—	4,103
Income properties revenue		—	17,173	—	17,173
Share of income(loss)from equityaccounted investments		13,122	(447)	—	12,675
TOTAL INCOME		11,141	20,829	—	31,970
EXPENSES
Income properties, operating		—	(9,265)	—	(9,265)
Interest expense		—	(3,120)	(164)	(3,284)
Provision for lending portfolio losses		—	(2,882)	—	(2,882)
General and administrative		—	—	(8,352)	(8,352)
TOTAL EXPENSES		—	(15,267)	(8,516)	(23,783)
Fair value adjustments to incomeproperties		—	10,322	—	10,322
OPERATING INCOME (LOSS)		11,141	15,884	(8,516)	18,509
Interest and other income		547	387	988	1,922
Transaction costs		—	(209)	(18)	(227)
EARNINGS (LOSS) BEFORE INCOME TAX EXPENSE		11,688	16,062	(7,546)	20,204
INCOME TAX EXPENSE
Deferred income tax expense		—	—	(3,865)	(3,865)
TOTAL INCOME TAX EXPENSE		—	—	(3,865)	(3,865)
NET INCOME (LOSS)	$	11,688 $	16,062 $	(11,411) $	16,339

(1) Includes other Trust amounts not specifically related to the segments.

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TOTAL INCOME

Total income for the three months and year ended December 31, 2021 was $7.4 million and $21.1 million, respectively, compared to $14.8 million and $32.0 million, respectively, in the prior year. The decrease in total income was driven by changes in the fair value adjustments related to certain developments, reduced income contribution from the Trust's lending portfolio, partially offset by favourable foreign exchange fluctuations on the U.S. hotel.

TOTAL EXPENSES

Total expenses for the three months ended December 31, 2021 were $6.9 million compared to $6.1 million in the prior year, due to interest from the convertible debentures and a fair value write-down on a residual loan balance.

Total expenses for the year ended December 31, 2021 were $26.1 million compared to $23.8 million in the prior year. The increase was primarily related to the fluctuations on our deferred unit expense and the asset management fee payable to DAM, consulting fees incurred to further advance our impact strategy, and interest on the convertible debentures.

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1.4 SUMMARY OF PORTFOLIO ASSETS

The following table includes supplementary information on certain assets in our portfolio as at December 31, 2021. Please refer to Section 10.1, "Summary of Impact Investments" of this MD&A for additional information on certain of these investments in our development and recurring income segments.

RECURRING INCOME SEGMENT

Project/property Property type Dream Impact ownership Accounting treatment	Impact status(1) Total residential units Residential GFA(2) (at 100%) Residential occupancy Total commercial and retail GLA(2) (at 100%) In-place/ committed commercial occupancy
Commercial: Sussex Centre Office/retail 50.1% Joint operation 49 Ontario(3) Office 100.0% Consolidated 10 Lower Spadina Office/retail 100.0% Consolidated 349 Carlaw Office 100.0% Consolidated 68-70 Claremont Street Office 100.0% Consolidated 76 Stafford Street Office/retail 100.0% Consolidated 100 Steeles Avenue West⁽3⁾ Retail 37.5% Equity accounted Plaza Imperial Office/retail 40.0% Equity accounted Plaza Bathurst Office/retail 40.0% Equity accounted Multi-family rental: Weston Common Multi-family rental 33.3% Equity accounted 262 Jarvis Multi-family rental 33.3% Equity accounted Robinwood Portfolio Multi-family rental 33.3% Equity accounted	I, E — — — 655,000 79.1 % TBD — TBD — 88,000 91.5 % I, E — — — 61,000 100.0 % I, E — — — 34,000 83.5 % I, E — — — 30,000 39.7 % I, E — — — 25,000 99.0 % TBD — TBD — 59,000 97.1 % n/a — — — 35,000 100.0 % n/a — — — 24,000 100.0 % A, I, E 841 692,000 94.4 % 52,000 98.5 % A, I, E 71 35,000 62.0 % — — A, I, E 228 123,000 80.6 % — —
Total Downtown Toronto & GTA	1,140 850,000 91.0 % 1,063,000 83.9 %
Commercial: Natural Sciences Building (Block 211) Office/retail 50.0% Equity accounted 15 Rue Jos-Montferrand (Block 2-3) Office/retail 50.0% Equity accounted	I, E — — — 186,000 86.0 % I, E — — — 53,000 81.2 %
Total Zibi (Ottawa/Gatineau)	— — — 239,000 84.9 %
Total projects in the recurring income segment	1,140 850,000 91.0 % 1,302,000 84.1 %

(1) Investments will align with the following impact verticals as outlined in Section 1.2, "Our Strategy and Operating Segments": A - Attainable and affordable housing; I - Inclusive communities; E - Environmental sustainability and resilience.

(2) Total commercial and retail GLA, and residential gross floor area ("GFA").

(3) Represents projects that have been identified with redevelopment potential in the long term and have tenants currently occupying and paying rental income.

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DEVELOPMENT AND INVESTMENT HOLDINGS SEGMENT

Project/property Property type Dream Impact ownership Status/type Impact status(1) Total residential units/hotel rooms at completion (at 100%)(2) Residential GFA(3) (at 100%) Total commercial and retail GLA(3) (at 100%) In-place/ committed commercial occupancy Occupancy/ stabilization date	Project/property Property type Dream Impact ownership Status/type Impact status(1) Total residential units/hotel rooms at completion (at 100%)(2) Residential GFA(3) (at 100%) Total commercial and retail GLA(3) (at 100%) In-place/ committed commercial occupancy Occupancy/ stabilization date
Downtown Toronto & GTA 34 Madison Build to hold 40.0% Under construction I,E — — 8,000 100.0 % 2022 WDL Block 8 Build to hold 25.0% Under construction A, I, E 770 624,000 4,000 2023 Brightwater I and II Build to sell 23.3% Under construction I, E 311 244,000 98,000 36.7 % 2023 Brightwater Towns Build to sell 23.3% Planning I, E 106 237,000 — 2023 The Mason (Brightwater) Build to sell 23.3% Planning I, E 162 134,000 5,000 2024 Canary Block 10 Various 25.0% Under construction I, E 444(4) 335,000 26,000 2024 Ivy Build to sell/ Build to hold 75.0% Under construction n/a 268 193,000 — 2024 WDL Block 3/4/7 Build to hold 25.0% Under construction A, I, E 855 811,000 32,000 2025 Brightwater future blocks Build to sell 23.3% Planning I, E 2,416 2,825,000 257,000 2025-2032 Queen & Mutual Build to sell 9.0% Planning n/a 369 243,000 7,000 2025 WDL Block 20 Build to hold 25.0% Planning A, I, E 654 571,000 260,000 TBD Lakeshore East TBD 37.5% Planning TBD 1,500 1,200,000 100,000 TBD Frank Gehry Build to sell 25.0% Planning TBD 1,500 1,652,000 260,000 TBD Scarborough Junction Build to sell 45.0%(5) Planning n/a 6,619 5,270,000 165,000 TBD Seaton Build to sell 7.0% Planning n/a TBD TBD TBD TBD
Total Downtown Toronto & GTA 15,974 14,339,000 1,222,000	41.5 %
Zibi (Ottawa/Gatineau): Block 208 Build to hold 50.0% Under construction I, E — — 33,000 Aalto Suites(6) Build to hold 50.0% Under construction A, I, E 162 135,000 1,000 Block 206 Build to hold 50.0% Under construction A, I, E 207 196,000 11,000 Block 207 Build to hold 50.0% Under construction I, E — — 76,000 Block 11 Build to hold 50.0% Under construction A, I, E 148 127,000 4,000 Future blocks Various 50.0% Planning A, I, E 1,255 1,292,000 1,891,000	80.0 % Q2 2022 2022 2023 2023 2023
	TBD
Total Ottawa/Gatineau 1,772 1,750,000 2,016,000	80.0 %
U.S. Virgin Hotels Las Vegas ("U.S. hotel") Build to sell 10.0% Hospitality n/a 1,502 — —	2023
Total U.S. 1,502 — —
Total projects in the development and investment holdings segment 19,248 16,089,000 3,238,000

(1) Investments will align with the following impact verticals as outlined in Section 1.2, "Our Strategy and Operating Segments": A - Attainable and affordable housing; I - Inclusive communities; E - Environmental sustainability and resilience.

(2) Residential units and GLA are at 100% project level and include planned units and GLA, which are subject to change pending various development approvals. Planned residential units may be developed as condominium units or purpose-built rentals as supported by market demand, targeted studies and return objectives. For projects currently in occupancy, residential units reflect remaining units in inventory to be occupied in future periods.

(3) Total commercial and retail GLA, and GFA, includes planned GLA and GFA, which are subject to change pending various development approvals.

(4) This figure includes 238 rental units in which the Trust is considered build to hold, as well as a 206-unit condo building invested by Dream.

(5) The Trust's equity ownership interest in Scarborough Junction is 45%, and the Trust's effective economic interest is expected to be approximately 23%.

(6) As at December 31, 2021, 25% of the units at Aalto Suites were ready for occupancy, and 10% of the units were leased.

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2. REPORTABLE OPERATING SEGMENTS RESULTS OF OPERATIONS

2.1 RECURRING INCOME

As of December 31, 2021, the Trust's recurring income segment was comprised of 1.3 million sf of commercial and retail GLA and 1,140 multi-family rental units (at 100% asset level ownership).

The Trust holds a direct investment in seven commercial assets across the GTA, as well as indirect investments in commercial, retail, and multi-family rental properties held through various joint venture partnerships. Revenue from these income properties includes base rents, recoverable operating expenses and property tax recoveries, lease termination fees, parking income and ancillary income.

The Trust's lending portfolio includes investments in mortgages and loans secured by different types of residential and commercial real estate property that represent an acceptable underwriting risk.

A summary of the recurring income segment results is as follows:

	Three months ended December 31, Year ended December 31, 2021 2020 2021 2020
Net income - income properties(1) Share of net income (loss) from equity accounted investments - recurring income Net income (loss) - lending portfolio(1)	$ 28,259$ 11,485 $ 29,805$ 15,485 1,335 (97) 1,409 (447) 41 436 (59) 1,024
Net income - recurring income	$ 29,635$ 11,824 $ 31,155$ 16,062

(1) For the Trust's definition of the following specified financial measures: net income - income properties, and net income (loss) - lending portfolio, please refer to the Specified Financial Measures and Other Disclosures section of this MD&A. Net income - income properties and net income (loss) - lending portfolio are not standardized financial measures under IFRS and might not be comparable to similar measures disclosed by other issuers.

During the three months and year ended December 31, 2021, the Trust's recurring income segment generated net income of $29.6 million and $31.2 million, respectively, compared to net income of $11.8 million and $16.1 million in the prior year. The increase was primarily due to net fair value adjustments on commercial income properties. During the three months and year ended December 31, 2021, the Trust recorded a fair value gain of $25.0 million (three months and year ended December 31, 2020 - $10.0 million) on 49 Ontario Street, driven by increases in land values and supported by a third-party appraisal. 49 Ontario Street is a wholly owned commercial income property currently subject to a rezoning application. The increase was partially offset by reduced income contribution from the lending portfolio as a result of scheduled loan repayments and transaction costs incurred on income properties acquired during the year.

COMMERCIAL

The results of the Trust's commercial properties are as follows:

	Three months ended December 31, Year ended December 31, 2021 2020 2021 2020
Net operating income ("NOI") - income properties(1) NOI - commercial income properties included in equity accounted investments(1)("commercial equity accounted investments")	$ 2,190$ 2,094 $ 9,250$ 7,908 600 115 1,200 315
Net operating income - commercial	$ 2,790$ 2,209 $ 10,450$ 8,223

(1) For the Trust's definition of the following specified financial measures: NOI-income properties and NOI-commercial equity accounted investments, please refer to the Specified Financial Measures and Other Disclosures section of this MD&A. NOI - income properties and NOI - commercial equity accounted investments are not standardized financial measures under IFRS and might not be comparable to similar measures disclosed by other issuers.

During the three months and year ended December 31, 2021, NOI - income properties was $2.2 million and $9.3 million, compared to $2.1 million and $7.9 million in the prior year. The increase in net operating income was primarily driven by the income properties acquired during the year.

NOI - commercial equity accounted investments for the three months and year ended December 31, 2021 was $2.8 million and $10.5 million, compared to $2.2 million and $8.2 million in the comparative periods. The increase was due to the completion of certain blocks at Zibi that became operational in the period.

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Operating statistics for the commercial income properties portfolio are as follows:

Operating statistics for the commercial income properties portfolio are as follows:
As at	December 31, 2021 December 31, 2020(1)
Total commercial income properties portfolio, including those held as equity accounted investments
Number of properties	12	8
Owned GLA (in millions of sf)	0.7	0.6
Occupancy rate (period-end) — including committed	83.6 %	90.0 %
Occupancy rate (period-end) — in-place	82.3 %	89.5 %
Average tenant size (in sf)	7,547	6,272
Average in-place and committed base rent per sf (period-end)	20.76	20.65
Weighted average remaining lease term (years)	6.9	4.9

(1) These prior year comparative results have been reclassified to conform to the current year's consolidated financial statement presentation.

As at December 31, 2021, the committed and in-place occupancy rates for commercial income properties were 83.6% and 82.3%, respectively, compared to 90.0% and 89.5% at December 31, 2020. The decrease in occupancy rates was primarily driven by newly acquired income properties, the timing of lease renewals and early lease terminations since the prior year.

The Trust continues to monitor the impact of COVID-19 on the ability of our commercial tenants to continue paying rent, including the availability of certain government programs. In 2021, the Trust's monthly rent collection was between 96% - 99% for income properties that are wholly owned and jointly controlled.

MULTI-FAMILY RENTAL

During the three months and year ended December 31, 2021, NOI from multi-family rental properties included in equity accounted investments ("multi-family rental") was $0.8 million at the Trust's share. The Trust expects stabilized income from these assets to be approximately $5.1 million on an annualized basis.

	Three months ended December 31, Year ended December 31, 2021 2020 2021 2020
NOI - multi-family rental(1)	$ 817 n/a $ 848 n/a

(1) For the Trust's definition of the following specified financial measure: NOI-multi-family rental, please refer to the Specified Financial Measures and Other Disclosures section of this MD&A. NOI - multi-family rental is not a standardized financial measure under IFRS and might not be comparable to similar measures disclosed by other issuers.

Operating statistics for the multi-family rental properties are as follows:

As at		December 31, 2021
Total multi-family rental portfolio
Number of properties		10
Number of units (at 100% project level)		1,140
Owned GFA (in millions of sf) (at the Trust's share)		0.3
Occupancy rate (period-end)		91.0 %
Net average monthly rent	$	1,272
Occupied average monthly rent	$	1,415

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FOUR-YEAR RECURRING INCOME PIPELINE

Based on the Trust's current development pipeline, we have an additional 2,380 residential units and 169,000 sf of retail and commercial GLA (at 100%) that will be completed and contribute to recurring income over the next four years. Details regarding the projects that we expect to complete during this time period are as follows:

Project/property	Dream Impact ownership Total rental residential units at completion(1) (at 100%) Residential GFA(2) (at 100%) Total commercial and retail GLA(2) (at 100%) In-place/ committed commercial occupancy Occupancy/ stabilization date Value on completion (3) Capitalization rate(3) Development yield(3)
34 Madison WDL Block 8 Canary Block 10 WDL Block 3/4/7 Zibi Block 208 Aalto Suites (Block 10) Block 206 Block 207 Block 11	40.0% — — 8,000 100.0 % 2022 $ 4,200 25.0% 770 624,000 4,000 2023 108,700 25.0% 238 182,000 — 2024 40,100 25.0% 855 811,000 32,000 2025 152,200 50.0% — — 33,000 80.0 % Q2 2022 10,100 50.0% 162 135,000 1,000 2022 35,200 50.0% 207 196,000 11,000 2023 60,300 50.0% — — 76,000 2023 23,900 50.0% 148 127,000 4,000 2023 33,700
Total	2,380 2,075,000 169,000 83.9 % $ 468,400 3.94 % 4.74 %

(1) Residential units and GLA are at 100% project level and include planned units and GLA that are subject to change pending various development approvals. Planned residential units include purpose-built rental units that are expected to be part of the Trust's recurring income segment within the next five years.

(2) Residential GFA and total commercial and retail GLA are subject to change pending various development approvals.

(3) As at December 31, 2021, these values are estimates only, are subject to change and are at the Trust's ownership interest. Refer to Section 10.4, "Forward-looking information".

LENDING PORTFOLIO

During the year ended December 31, 2021, the Trust received scheduled loan repayments of $10.4 million. In 2021, the Trust recognized a loan provision of $1.5 million related to one loan, the value of which was determined based on the net realizable value of the underlying real estate properties and estimated transaction costs (year ended December 31, 2020 - $2.9 million). As at December 31, 2021, the balance related to this loan included on the consolidated statement of financial position was $nil.

2.2 DEVELOPMENT AND INVESTMENT HOLDINGS

As of December 31, 2021, the Trust's development and investment holdings segment was comprised of best-in-class development projects representing over 17,700 residential units and 3.2 million sf of commercial and retail GLA (over 6,400 units and 1.3 million sf at the Trust's share).

The majority of the Trust’s development assets are located in the GTA and Ottawa, and are in various planning and construction phases and classified as equity accounted investments. These equity accounted investments are typically held at cost and are expected to contribute meaningfully to the Trust’s earnings in future periods as properties are developed and completed. Fair value adjustments may be recorded on an individual investment level as a result of certain factors, such as terms of a construction contract, stage of completion, location, type and quality of the property, current market rents for similar properties, reliability of cash inflows after completion, development risks specific to the property, past experience with similar constructions, status of approvals and/or permits, estimated costs to complete and market conditions.

Our developments are expected to provide attractive profits upon their respective completion dates and are expected to contribute to increased value for unitholders over the longer term. The Trust has historically targeted a pre-tax internal rate of return ("IRR")[(1)] of at least 15%-20% on equity investments in residential, commercial and mixed-use development projects.

Development holdings relate to the Trust's participating loans secured by Empire-related development projects (referred to as Empire Lakeshore and Empire Brampton). Investment holdings relate to the Trust's 10% investment in the U.S. hotel. These investments are not considered to be impact investments as they relate to the Trust's overall strategy.

The table below provides a continuity of the Trust's development and investment holdings, including development assets within equity accounted investments, for the periods indicated:

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					Equity
		Development	Investment		accounted
		holdings	holdings	investments		Total
Balance as at December 31, 2020	$	22,084 $	51,578	$	202,988$	276,650
Acquisitions		—	—		1,445	1,445
Advances		—	2,806		48,330	51,136
Transfer to recurring income segment		—	—		(16,660)	(16,660)
Distributions		(9,390)	—		—	(9,390)
Fair value loss		(6,258)	—		—	(6,258)
Foreign exchange loss		—	(214)		—	(214)
Balance as at December 31, 2021	$	6,436 $	54,170	$	236,103 $	296,709

During the year ended December 31, 2021, the Trust transferred certain investments between the development and investment holdings and recurring income segments. These included 15 Rue Jos-Montferrand (Block 2-3) and the Natural Sciences Building (Block 211) at Zibi, our 34-acre waterfront development in Ottawa, Ontario and Gatineau, Quebec.

During the year ended December 31, 2021, the Trust, along with DAM, increased its interest in Zibi from 44.5% to 50%. The Trust acquired the remaining third-party interest in the Zibi development through a combination of a cash payment of $9.1 million and a non-interest bearing promissory note with a discounted value of $5.3 million ($5.5 million face value) maturing in June 2023, which has been recorded in amounts payable and other liabilities.

During the year ended December 31, 2021, the Trust acquired a 40% interest in 34 Madison, an 8,000 sf commercial building slated for redevelopment in the Annex neighbourhood of downtown Toronto, for $1.4 million, including transaction costs. This is the Trust's first investment with the Black Tusk Group, a real estate asset management firm that is minority founded and led.

Empire Lakeshore, a non-core legacy investment for the Trust, is a high-rise condominium development that includes two towers, the Water Tower and Sky Tower, at 49 and 66 storeys, respectively, for an aggregate of 1,280 residential units, which are 99% closed, and 55,000 sf of retail and commercial GLA. During the year ended December 31, 2021, the Trust received repayments of $8.7 million from Empire Lakeshore, representing the Trust's return on the investment. During the year ended December 31, 2021, the Trust recorded a fair value write-down of $6.3 million on the investment as a result of changes in profit assumptions on unsold inventory. The Trust anticipates the timing for the remaining profit distributions to be based on the sale of the remaining commercial inventory expected to be over the next 15 months. As at December 31, 2021, the Trust has received total cash distributions of $51.9 million from the investment with $6.0 million remaining.

During the year ended December 31, 2021, the Trust made contributions of $27.9 million to its development projects. These contributions exclude the aforementioned acquisitions of 34 Madison and of the third-party interest in Zibi. We anticipate further capital investments in the range of $70 million to $80 million for our development projects over the next two years.

A summary of the development segment results, including development assets within equity accounted investments, is below:

below:
	Three months ended December 31, Year ended December 31, 2021 2020 2021 2020
Net loss - development and investment holdings Share of income from equity accounted investments - development and investment holdings	$ (265)$ (3,411) $ (6,472)$ (1,434) 1,481 13,638 6,623 13,122
Total net income - development and investment holdings	$ 1,216$ 10,227 $ 151$ 11,688

During the three months ended December 31, 2021, the development segment generated net income of $1.2 million, compared to net income of $10.2 million in the comparative period. The decrease in earnings was primarily attributable to the change in net fair value gains on development projects under construction, in addition to a gain on extinguishment of debt in the prior year. This was partially offset by the impact of foreign exchange on the U.S. hotel and fair value losses on a legacy investment in the prior year.

During the year ended December 31, 2021, the development segment generated net income of $0.2 million compared to net income of $11.7 million in the prior year. The decrease in income was primarily driven by changes in profit assumptions on unsold inventory as it relates to the Trust's investment in Empire Lakeshore, net of fair value gains and the fluctuation in foreign exchange on our investment in the U.S. hotel.

(1) For the Trust's definition of the following supplementary financial measure: IRR, please refer to the Specified Financial Measures and Other Disclosures section of this MD&A.

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DEVELOPMENT PIPELINE

Based on the timing and various stages of development, the Trust had minimal inventory available for occupancy in 2021. As our development projects progress towards completion and achieve various milestones, the Trust expects an increase in income and cash flows from this segment over time. Additionally, certain projects that are held by the Trust for the longer term, such as commercial or multi-family rental buildings, will be transferred to the recurring income segment, generating stabilized income for the Trust. For additional details, refer to Section 1.4, "Summary of Portfolio Assets".

Over the next four-year period, an additional 3,800 residential units and 0.3 million sf of retail and commercial product are expected to be completed (at the 100% project level). This includes both build-to-hold and build-to-sell assets. Build-to-hold assets, such as the West Don Lands development and future blocks at Zibi, are part of the Trust's long-term impact investing strategy.

SUMMARY OF DEVELOPMENT AND INVESTMENT HOLDINGS PARTNERS

We continue to leverage our relationships and expertise to attract world-class partners and investment opportunities. As a result of our partners and relationships, the Trust has access to unparalleled investment opportunities across North America. The table below provides an overview of some of the Trust's key partners within its development/redevelopment investments:

investments:
		Partner
Project	Partners	since
Empire Lakeshore and Brampton	Empire Communities	2014
Lakeshore East	Dream Unlimited, Great Gulf Residential	2016
Brightwater	Dream Unlimited, Kilmer Van Nostrand Co. Ltd., Diamond Corp., FRAM + Slokker	2017
Zibi(1)	Dream Unlimited	2017
Frank Gehry	Dream Unlimited, Great Gulf Residential, Westdale Construction Co. Ltd.	2017
Seaton	Fieldgate Homes, Mattamy Homes, Paradise Developments, TACC Construction Ltd.	2018
Virgin Hotels Las Vegas	Juniper Capital Partners, Fengate Real Asset Investments, Virgin Hotels	2018
100 Steeles	Dream Unlimited, Westdale Construction Co. Ltd.	2018
West Don Lands(1)	Dream Unlimited, Kilmer van Nostrand Co. Ltd., Tricon Capital Group	2018
Queen & Mutual	Harlo Capital, Parallax Development Corp.	2018
Canary Block 10(1)	Dream Unlimited, Kilmer van Nostrand Co. Ltd., Tricon Capital Group	2019
Scarborough Junction	Harlo Capital, Republic Developments	2020
34 Madison	Dream Impact Fund, Black Tusk Group	2021

(1) In the year ended December 31, 2021, Dream Unlimited's share of the Natural Sciences Building at Zibi, Canary Block 10 and West Don Lands Block 8 developments was acquired by Dream Impact Fund. Dream Unlimited has a 40.52% interest in Dream Impact Fund as at December 31, 2021, with the residual interests held by third parties.

2.3 OTHER SEGMENT

GENERAL AND ADMINISTRATIVE EXPENSES

During the three months ended December 31, 2021, general and administrative expenses were $2.8 million compared to $3.3 million in the prior year, a decrease of $0.5 million, as a result of fluctuations in the deferred unit compensation expense and consulting fees, partially offset by an increase in the asset management fee. General and administrative expenses were $11.3 million in the year ended December 31, 2021, compared to $8.4 million in the prior year, primarily related to an increase in the asset management fee, consulting fees related to our impact strategy and fluctuations on our deferred unit compensation year over year.

In the year ended December 31, 2021, the Trust renewed its arrangement to satisfy the management fees payable to DAM in units of the Trust converted at the most recent year-end NAV per unit[(1)] as determined and reported by the Trust ($8.99 per unit as at December 31, 2020), and recorded for accounting purposes based on the trading price on date of settlement. The Management Agreement permits the Trust to settle its asset management fee in units of the Trust until December 31, 2023.

INCOME TAX EXPENSE (RECOVERY)

For the three months and year ended December 31, 2021, the Trust recorded an income tax expense of $1.0 million and recovery of $1.2 million, respectively, compared to an income tax expense of $4.1 million and $3.9 million, in the prior year. The fluctuation from period to period was driven by the composition of earnings and the tax rate difference applied against earnings during the year.

Due to the Trust’s diversified asset mix and active asset management strategy, we expect some degree of variability in current and deferred income tax expense recognized each period through the consolidated statements of comprehensive

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income (loss) resulting in an income tax expense (recovery) position. The Trust intends to actively manage the portfolio in a tax-efficient manner.

We are subject to income taxes both federally and provincially in Canada and the U.S. Judgments and estimates are required in the determination of the Trust's tax balances. Our income tax expense/recovery and deferred tax liabilities/assets reflect management's best estimate of current and future taxes to be paid/recovered. The Trust is subject to tax audits from various government and regulatory agencies on an ongoing basis. As a result, from time to time, taxing authorities may disagree with the interpretation and application of tax laws taken by the Trust in its tax filings.

TAX ATTRIBUTES

INCOME PROPERTIES

We deduct mortgage interest and available tax depreciation on our buildings from our Canadian income properties that generate taxable net operating income. These deductions contribute to the overall tax efficiency of our structure and the tax depreciation helps provide the Trust with tax-sheltered cash flow. Any change in the fair value of income properties is not recognized in the determination of current taxes until the sale of the asset.

• (1) For the Trust's definition of the following non-GAAP ratio: NAV per unit, please refer to the Specified Financial Measures and Other Disclosures section of this MD&A. Specified financial measures do not have standardized meanings prescribed by IFRS and may not be comparable with similar measures presented by other issuers.

2.4 RELATED PARTY TRANSACTIONS

From time to time, the Trust and its subsidiaries enter into transactions with related parties that are contracted under commercial terms. DAM, which is a wholly owned subsidiary of Dream Unlimited, is the Trust’s Asset Manager and is a related party that provides management personnel services to the Trust under the terms of the Management Agreement.

DREAM ASSET MANAGEMENT

ASSET MANAGEMENT AGREEMENT

On July 8, 2014, the Trust entered into a management agreement (as amended from time to time, the "Management Agreement") with DAM, pursuant to which DAM provides a broad range of asset management services to the Trust for the following fees:

• Base annual management fee calculated and payable on a monthly basis, equal to 1.00% of the gross value of the initial assets at the Trust's listing, plus the gross cost of any asset acquired on the date of such acquisition, plus the gross amount invested in any assets following acquisition, less the gross amount previously included in the calculation of this amount in respect of any asset disposed of or repaid;

• Acquisition/origination fee equal to:

• (a) 0.40% of the principal amount of any loan originated by the Trust or a subsidiary having an expected term of less than five years;

• (b) 1.00% of the principal amount of any loan originated by the Trust or a subsidiary having an expected term of five years or more; and

• (c) 1.00% of the gross cost of any asset acquired or originated by the Trust or a subsidiary provided that in connection with the acquisition of an asset that will be a development or redevelopment project for the Trust excluding where DAM earns a development management fee; and

• Disposition fee equal to 0.25% of the gross sale proceeds of any asset (including all indebtedness) sold by the Trust or any subsidiary represented by loans, investments, assets or projects disposed of during the fiscal year, including any part of the initial assets, except for the disposition of individual loans having a term to maturity of twelve months or less and excluding the regular and scheduled repayment of loans.

In addition, the Trust will reimburse DAM for reasonable out-of-pocket costs and expenses incurred in connection with the performance of the management services described in the Management Agreement and the costs and expenses incurred in providing such other services that the Trust and DAM agree to in writing that are to be provided from time to time by DAM.

For the years ended	December	31, 2021 December	31, 2020
Fees paid/payable by the Trust under the Management Agreement with DAM:
Base annual management fee	$	6,327$	4,595
Acquisition/origination fee and disposition fees		1,920	326
Expense recoveries relating to financing arrangements and other		1,115	674
Total fees under Management Agreement	$	9,362$	5,595
Total payable to DAM under the Management Agreement	$	2,868$	1,569

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Effective April 1, 2019, the Trust agreed to settle the asset management fees payable pursuant to the Management Agreement in units of the Trust, until December 31, 2020. The Trust units were valued at $8.74 per unit, for purposes of determining the number of units to be issued and recorded based on the market price on the date of settlement. During the year ended December 31, 2021, the Trust extended its arrangement to satisfy the management fees payable to DAM in units of the Trust converted at the most recent year-end NAV per unit[(1)] as determined and reported by the Trust ($8.99 per unit as at December 31, 2020), and recorded for accounting purposes based on the trading price on the date of settlement. During the year ended December 31, 2021, the Trust settled the asset management fee payable through the issuance of 1,397,445 units (year ended December 31, 2020 - 1,108,424 units).

DEVELOPMENT FEES

The Trust has entered into various project-level development management agreements with DAM, and its third-party codevelopers where applicable, in which the Trust has equity ownership interests. Pursuant to these agreements, DAM provides development management services to the project. The corresponding development management fees are shared among the partners within each development.

Under these agreements, during the year ended December 31, 2021, fees of $5.7 million, respectively, were incurred by the projects, at the Trust's share (year ended December 31, 2020 – $5.5 million). As at December 31, 2021, at the Trust's share, $2.2 million was owed to DAM from the projects in respect of these fees (December 31, 2020 – $4.7 million).

Additionally, effective January 1, 2018, the Trust entered into a framework agreement (the "Framework Agreement") with DAM with respect to their management of development investments. During the year ended December 31, 2021, $0.9 million in development fees were paid or incurred to DAM in accordance with the Framework Agreement (year ended December 31, 2020 – $0.2 million).

DREAM OFFICE REAL ESTATE INVESTMENT TRUST ("DREAM OFFICE REIT")

PROPERTY MANAGEMENT AGREEMENTS

The Trust's co-owned office property is managed by Dream Office Management Corporation ("DOMC"). Effective February 1, 2018, the Trust's wholly owned office properties, previously managed by DAM, were also managed by DOMC. DOMC is owned by Dream Office REIT. As a result of Dream acquiring control of the Trust, as at January 1, 2018, Dream Office REIT is a related party to the Trust. Pursuant to the property management agreements, DOMC will perform property management services including tenant administration, accounting, etc., for a fee of 3.5% of income property revenues. Additionally, DOMC will perform services with respect to the leasing and construction management of the office properties for a fee equal to expenses incurred or a percentage of the expenses incurred for each property. The property management agreement can be terminated upon an unremedied default by the property manager, DOMC, or if there is a change in the ownership of the property.

SERVICES AGREEMENT

The Trust entered into a services agreement ("Service Agreement") with DOMC on July 8, 2014. The Service Agreement is for a one-year term and will be automatically renewed for further one-year terms unless and until the Service Agreement is terminated in accordance with its terms or by mutual agreement of the parties. Pursuant to the Service Agreement, DOMC provides administrative and support services including the use of office space, office equipment, communication services and computer systems, and the provision of personnel in connection with accounts payable, human resources, taxation and other services. DOMC receives a monthly fee sufficient to reimburse it for the expenses incurred in providing these services.

For the years ended	December	31, 2021	December	31, 2020
Fees incurred pursuant to the property management agreements	$	2,103	$	2,045
Fees incurred pursuant to the Service Agreement		552		332
Total fees incurred to DOMC	$	2,655	$	2,377
Total payable to DOMC for property management agreements	$	208	$	175
Total payable to DOMC for Service Agreement	$	66	$	29

(1) Represents a specified financial measure. For the Trust's definition of the following specified financial measure: NAV per unit, please refer to the Specified Financial Measures and Other Disclosures section of this MD&A. Specified financial measures do not have standardized meanings prescribed by IFRS and may not be comparable with similar measures presented by other issuers.

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3. DISTRIBUTION MEASURES

In any given period, the Trust anticipates that actual distributions paid and payable may differ from cash generated from (utilized in) operating activities. This difference is driven by a number of factors, including the impact of leasing incentives and initial direct leasing costs, which can fluctuate with lease maturities, renewal terms and the type of asset being leased; changes in non-cash working capital; and the longer-term nature and investment return profile of our development and investment holdings, including those held as equity accounted investments considered to be development projects.

These cash flows are relevant in the determination of distributions, as cash flows relating to a development project will ultimately be received upon project completion. The Trust considers these factors among others in evaluating its distribution policy as well as its assessment of cash generated from operating activities over the longer term.

In 2021, the Trust strengthened its liquidity position by extending the settlement of the management fee in units with DAM and amending the borrowing base on the Trust's credit facility. These initiatives are expected to improve the Trust’s operating cash flows and provide further security for our ongoing distributions. The Trust is expected to meet its ongoing obligations and continue to declare unitholder distributions over the near term based on our current liquidity position.

As required by National Policy 41-201, "Income Trusts and Other Indirect Offerings", the following tables outline the differences between cash generated from (utilized in) operating activities and distributions paid and payable in accordance with the guidelines:

For the three months ended March 31,	Three months ended December 31, For the year ended December 31, 2021 2020 2021 2020
Cash generated from (utilized in) operating activities Distributions paid and payable	$ 5,240$ (2,373)$ 15,425$ 6,331 6,517 6,493 25,991 26,820
Surplus/(shortfall) of cash generated over distributions paid and payable	$ (1,277)$ (8,866)$ (10,566)$ (20,489)

For the three months ended December 31, 2021, distributions paid and payable exceeded cash generated from operating activities by $1.3 million (three months ended December 31, 2020 - distributions paid and payable exceeded cash utilized in operating activities by $8.9 million). For the year ended December 31, 2021, distributions paid and payable exceeded cash generated from operating activities by $10.6 million (year ended December 31, 2020 – distributions paid and payable exceeded cash generated from operating activities by $20.5 million).

The following table summarizes net income and total distributions paid and payable for the periods indicated:

For the three months ended March 31,	Three months ended December 31, For the year ended December 31, 2021 2020 2021 2020
Net income Distributions paid and payable	$ 26,959$ 14,868 $ 21,450$ 16,339 6,517 6,493 25,991 26,820
Surplus/(shortfall) of net income over distributions paid and payable	$ 20,442$ 8,375 $ (4,541)$ (10,481)

For the three months ended December 31, 2021, the Trust's net income exceeded distributions paid and payable by $20.4 million (three months ended December 31, 2020 - net income exceeded distributions paid and payable by $8.4 million). For the year ended December 31, 2021, the Trust's distributions paid and payable exceeded net income by $4.5 million (year ended December 31, 2020 – distributions paid and payable exceeded net income by $10.5 million).

Certain assets and liabilities are recognized at fair value in the consolidated financial statements. Unrealized fair value adjustments and other non-cash items are included in net income and can fluctuate from period to period. As a result, the Trust anticipates that distributions declared will, in certain periods, continue to vary from net income. The total unrealized fair value adjustments and other non-cash items included in net income in the consolidated financial statements for the periods indicated are summarized in the following table:

For the three months ended March 31,	Three months ended December 31, For the year ended December 31, 2021 2020 2021 2020
Total adjustments to fair values and other non-cash items included in net income(1)	$ (26,658)$ (14,073)$ (19,204)$ (9,957)

(1) For the Trust's definition of the following specified financial measure: total adjustments to fair values and other non-cash items included in net income, please refer to the Specified Financial Measures and Other Disclosures section of this MD&A.

Dream Impact Trust 2021 Annual Report | 17

To the extent that there are shortfalls in cash flows from operations relative to distributions paid and payable, the Trust has used and may continue to use its existing cash-on-hand as a source of funding. For the year ended December 31, 2021, the Trust funded the amount of the shortfalls in cash flows relative to the distributions paid and payable by utilizing existing cash-on-hand. The Trust continuously reviews its distribution policy to ensure it is reflective of the Trust’s business and asset profile. As at December 31, 2021, based on current and expected liquidity, the Trust does not anticipate suspending cash distributions. Accordingly, distributions are considered an economic return of capital until cash distributions from completed development projects are received in future years. The Asset Manager reviews the estimated annual distributable cash flow with the Board of Trustees to assist the Board in determining the targeted distribution amount, taking into consideration the duration of the current assets within the Trust's portfolio and the future investment strategy.

To date, the COVID-19 pandemic has not had a significant impact on the Trust's available liquidity. The Trust's current available liquidity, including cash-on-hand and under its credit facility, is expected to be sufficient to address any reasonably foreseeable impacts that the COVID-19 pandemic may have on the Trust's cash requirements. Refer to Section 4, "Capital Resources and Liquidity" of this MD&A for further details.

4. CAPITAL RESOURCES AND LIQUIDITY

The Trust’s primary sources of financing are cash generated from operating activities, debt financing and refinancing. Our primary uses of capital include: investments in development and investment holdings and equity accounted investments, the acquisition of commercial and multi-family rental properties that align with our impact verticals, debt principal repayments, interest payments, distributions, costs of attracting and retaining tenants, recurring property maintenance and major property improvements. It is the Trust's objective to meet all our ongoing obligations with current cash, cash flows generated from operating activities, including profit from build-for-sale assets, cash from maturing lending portfolio investments, and cash from financing and refinancing activities.

During the year ended December 31, 2021, the Trust announced its impact financing framework (the "Impact Financing Framework") in support of its commitment to environmental and social impact initiatives. Under the Impact Financing Framework, the Trust may issue impact investing instruments including green, social or sustainability bonds, green loans, social loans, or other financial instruments to finance or re-finance eligible impact projects.

SUMMARY OF DEBT

Total debt relates to mortgages payable on the Trust's income properties and the convertible debentures as further disclosed below. The increase of $44.9 million relative to the prior year was primarily due to the aforementioned convertible debenture issuance and mortgage financing obtained in conjunction with asset acquisitions in the year. Partially offsetting this were scheduled lump sum mortgage repayments and deferred financing costs incurred.

As at		December 31, 2021	December 31, 2020
Mortgages payable	$	104,902$	88,392
Convertible debentures payable		30,000	—
Total debt payable	$	134,902$	88,392
Unamortized discount on host instrument of convertible debentures		(809)	—
Conversion feature		357	—
Unamortized balance of deferred financing costs		(1,300)	(197)
Total debt	$	133,150$	88,195

We use the following cash flow performance and debt level indicators to assess our ability to meet or refinance our debt obligations:

obligations:
As at		December 31, 2021		December 31, 2020
Weighted average face rate of interest (period-end)		3.8 %		3.4 %
Weighted average effective interest rate (period-end)(1)		3.9 %		3.4 %
Debt due within one year	$	77,402	$	10,975
Total assets	$	701,702	$	648,514
Debt-to-asset value(2)		19.2 %		13.6 %
Debt-to-total asset value, inclusive of project-level debt(2)and assets within our development segment,
including equity accounted investments		52.6 %		38.5 %
Debt – average term to maturity (years)		2.13		1.29

(1) Weighted average effective interest rate is calculated as the weighted average face rate of interest, net of financing costs of interest-bearing debt, weighted by the size of the respective interest-bearing debt instruments in the portfolio.

(2) For the Trust's definition of the following specified financial measures: debt-to-asset value and debt-to-total asset value, inclusive of project-level debt, please refer to the Specified Financial Measures and Other Disclosures section of this MD&A.

Dream Impact Trust 2021 Annual Report | 18

Principal repayments and maturity balances on total debt to be repaid each year are as follows:

				Total
				maturity	% of total debt		Weighted
		Outstanding	Scheduled	balance and	maturities and	Weighted	average
		balance due	principal	principal	principal	average interest	effective
Debt maturities		at maturity	repayments	repayments	repayments	rate (face)	interest rate
Total debt payable
2022	$	77,318 $	84 $	77,402	57.4 %	3.5 %	3.5 %
2023		—	—	—	— %	— %	— %
2024		—	—	—	— %	— %	— %
2025		—	—	—	— %	— %	— %
2026		57,500	—	57,500	42.6 %	4.2 %	4.6 %
2027 and thereafter		—	—	—	— %	— %	— %
Subtotal before undernoted	$	134,818 $	84 $	134,902	100.0 %	3.8 %	3.9 %
Unamortized discount on host instrument of
convertible debentures		(809)	—	(809)
Conversion feature		357	—	357
Unamortized balance of deferred financing costs		(1,300)	—	(1,300)
Total debt	$	133,066 $	84 $	133,150

The Trust holds $77.4 million of mortgages that are maturing in the next twelve months. The Trust expects to refinance these mortgages prior to the maturity date. If necessary, the Trust has unutilized borrowing capacity of $50.0 million under the revolving credit facility and has the ability to pursue debt or equity financing to provide the Trust with additional financial flexibility.

CREDIT FACILITY

During the year ended December 31, 2021, the Trust entered into a revolving credit facility ("the facility"), revising the collateral base to be more beneficial to the Trust, among certain other amendments from the previous credit facility. The facility agreement provides liquidity of up to $50.0 million based on a formula-based calculation which may be utilized to acquire income properties meeting our impact criteria. As at December 31, 2021, no funds were drawn on the revolving credit facility (December 31, 2020 – $nil). Subsequent to December 31, 2021, the Trust drew $10.0 million on the facility.

CONVERTIBLE DEBENTURES

During the year ended December 31, 2021, the Trust closed on a private placement offering of $30.0 million, before transaction costs. The private placement is in the form of impact convertible unsecured subordinated debentures ("the Debentures") and is part of Canada's first impact-dedicated offering.

The Debentures, bear a coupon interest rate of 5.50% per annum and an effective interest rate of 6.2% per annum, payable semi-annually on July 31 and January 31 of each year, commencing on January 31, 2022. The Debentures are convertible at the holder's option into units of the Trust at a conversion price of $7.755/unit, representing a conversion rate of 128.9491 units per $0.001 million principal amount of Debentures. The Debentures mature in July 2026 and are redeemable at the holders' option before the maturity date. An amount equal to the proceeds from Debentures has been used for eligible impact investments as described in the Impact Financing Framework.

FINANCIAL COVENANTS

The revolving credit facility, the financial guarantees and certain mortgages on income properties contain financial covenants that require the Trust and/or its subsidiaries to meet certain financial ratios and financial condition tests. A failure to meet these tests could result in default and, if not cured or waived, could result in an acceleration of the repayment in the underlying financing.

The following are financial covenants required to be met by MPCT LP, a wholly owned subsidiary of the Trust, under the terms of the revolving credit facility, as at December 31, 2021:

Financial covenant	Financial covenant requirement
Unitholders' equity	≥ $450,000
Debt-to-asset value	≤ 40.0%

As at December 31, 2021, the Trust was in compliance with these financial covenants.

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TOTAL EQUITY

As at December 31, 2021, the Trust had 65,071,762 units outstanding and a total unitholders’ equity balance of $536.9 million.

As at	December 31, 2021 December 31, 2020
	Number of units Amount Number of units Amount
Unitholders' equity Retained earnings/(deficit)	65,071,762 $ 543,772 64,811,749 $ 542,177 (6,841) (2,300)
Total unitholders' equity	65,071,762 $ 536,931 64,811,749 $ 539,877

The following table summarizes the changes in the outstanding units and unitholders' equity:

	Units	Unitholders' equity	Unitholders' equity
As at December 31, 2020	64,811,749	$	542,177
Deferred units exchanged for Trust units	82,004		539
Cancellation of Trust units	(1,219,436)		(7,843)
Units issued as settlement of asset management fees under the Management Agreement	1,397,445		8,899
Total units outstanding on December 31, 2021	65,071,762	$	543,772
Cancellation of Trust units	(148,100)		(888)
Units issued as settlement of asset management fees under the Management Agreement	375,848		2,236
Total units outstanding on February 14, 2022	65,299,510		545,120

The Deferred Unit Incentive Plan ("DUIP") provides for the grant of deferred trust units ("DTUs") to Trustees of the Trust, officers and employees, as well as affiliates, including the Asset Manager. DTUs are granted at the discretion of the Board of Trustees of the Trust and receive distributions in the form of income deferred trust units as they are declared and paid by the Trust. As at December 31, 2021, up to a maximum of 3.0 million DTUs were issuable under the DUIP. Distributions on the unvested DTUs are paid in the form of units converted at the market price on the date of distribution. As at December 31, 2021, there were 623,789 DTUs and income deferred trust units outstanding (December 31, 2020 – 546,164 units). As at February 14, 2022, 627,284 DTUs and income deferred trust units were outstanding.

During the three months and year ended December 31, 2021, 450,300 units and 1,397,445 units, respectively, were issued to DAM as part of the settlement of asset management fees. Subsequent to December 31, 2021, the Trust settled its management fee payable to DAM with the issuance of 375,848 units.

DISTRIBUTIONS

The distributable cash flow and amount of monthly distributions to unitholders are determined by the Board of Trustees of the Trust based on distributions received from MPCT LP, net of general and administrative expenses, operating and other expenses, and income tax expenses. The Asset Manager forecasts the annual distributable cash flow from the Trust’s operating segments to assist the Board of Trustees in determining the targeted distribution amount.

Our Declaration of Trust provides our Trustees with the discretion to determine the percentage payout of income that would be in the best interest of the Trust, which allows for any unforeseen expenditures. As at December 31, 2021, our monthly distribution rate was $0.033 per unit.

distribution rate was $0.033 per unit.
As at	2021 2020
	Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1
Annualized distribution amount Monthly distribution amount Annualized distribution rate of return⁽¹⁾	$ 0.400 $ 0.400 $ 0.400 $ 0.400 $ 0.400 $ 0.400 $ 0.400 $ 0.400 0.033 0.033 0.033 0.033 0.033 0.033 0.033 0.033 6.5 % 6.5 % 6.0 % 6.3 % 6.6 % 8.2 % 8.4 % 9.2 %

(1) Annualized distribution rate of return is calculated as the annualized distribution amount divided by the closing price per unit on the TSX at the period-end date of the quarter specified.

UNIT BUYBACK PROGRAM

The following table summarizes the Trust's unitholders' equity activity under its unit buyback program for the periods ended as indicated:

For the three months ended March 31,	Three months ended December 31, For the year ended December 31, 2021 2020 2021 2020
Units repurchased (number of units) Total cash consideration	317,900 183,200 1,219,436 5,185,995 $ 1,987$ 1,094 $ 7,843$ 24,610

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During the three months and year ended December 31, 2021, the Trust repurchased 0.3 million units and 1.2 million units, respectively, under its normal course issuer bid ("NCIB") at a weighted average price of $6.25 per unit and $6.43 per unit, respectively. From the inception of the Trust's unit buyback program in December 2014 to February 14, 2022, the Trust has purchased 15.4 million units for cancellation for a total cost of $95.7 million.

As at February 14, 2022, the Asset Manager, DAM, owns 18.6 million units of the Trust, inclusive of 1.3 million units acquired under the DRIP, 3.6 million units acquired in satisfaction of asset management fees payable under the Management Agreement, and the remainder acquired on the open market for DAM's own account. In aggregate, DAM owns approximately 29% of the Trust.

The Trust received acceptance of its Notice of Intention to renew its prior NCIB from the TSX on January 18, 2021. The Trust's NCIB commenced on January 20, 2021 and expired on January 19, 2022. Under the bid the Trust purchased for cancellation 1.2 million units through the facilities of the TSX at a weighted average price of $6.42 for a total cost of $7.8 million. Subsequent to December 31, 2021, the Trust renewed its NCIB, which commenced on January 20, 2022 and will remain in effect until the earlier of January 19, 2023, or the date on which the Trust has repurchased the maximum number of units permitted under the NCIB. Under the NCIB, the Trust will have the ability to purchase for cancellation up to a maximum of 4,625,500 of its units (representing 10% of the Trust's public float of 46,255,009 units) through the facilities of the TSX. Daily repurchases will be limited to 9,747 units, representing 25% of the average daily trading volume of the units on the TSX during the last six calendar months (being 38,991 units per day), other than purchases pursuant to applicable block purchase exemptions. The Trust has renewed its normal course issuer bid because it believes that units may become available during the period of the bid at prices that would make the purchase of such units for cancellation in the best interests of the Trust and its unitholders.

During the year ended December 31, 2021, the Trust renewed its automatic securities repurchase plan (the "Plan") in order to facilitate purchases of its units under the NCIB. The Plan allows for purchases by Dream Impact of units at any time including, without limitation, times when the Trust would ordinarily not be permitted to make purchases due to regulatory restrictions or self-imposed blackout periods. Purchases will be made by the Trust based upon the parameters prescribed by the TSX and the terms of the parties' written agreement. Outside of such restricted or blackout periods, the units may also be purchased in accordance with management’s discretion. The Plan terminates on January 19, 2023.

LIQUIDITY

The following table summarizes the Trust's consolidated statements of cash flows for the periods indicated:

For the three months ended March 31,	Three months ended December 31, For the year ended December 31, 2021 2020 2021 2020
Cash generated from (utilized in) operating activities Cash generated from (utilized in) investing activities Cash generated from (utilized in) financing activities	$ 5,240$ (2,373)$ 15,425$ 6,331 (32,599) 6,251 (128,870) 38,992 (9,190) (7,806) 11,205 (52,439)

Cash generated from operating activities for the three months ended December 31, 2021 was $5.2 million compared to cash utilized of $2.4 million in the comparative period. The increase in cash generated from operating activities was driven by timing of proceeds received from certain development and investment holdings and changes in non-cash working capital. For similar reasons, cash generated from operating activities for the year ended December 31, 2021 was $15.4 million compared with $6.3 million in the prior year.

Cash utilized in investing activities for the three months and year ended December 31, 2021 was $32.6 million and $128.9 million, respectively, compared to cash generated of $6.3 million and $39.0 million, respectively, in the prior year. The change year over year was driven by the acquisition of commercial and multi-family rental properties, contributions to our development investments, and timing of principal repayments in the lending portfolio. Additionally, the increase in cash utilized in investing activities year over year was primarily due to return on capital from the Trust's investment in Empire Lakeshore in the prior year.

Cash utilized in financing activities for the three months ended December 31, 2021 was $9.2 million compared to $7.8 million in the prior year. The fluctuation was driven by an increase in units repurchased through the NCIB and deferred financing costs incurred. Cash generated from financing activities during the year ended December 31, 2021 was $11.2 million, compared to cash utilized of $52.4 million in the prior year. The increase in cash was primarily due to the issuance of convertible debentures during the year, NCIB activity and the net impact of financing related to the Trust's income properties.

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COMMITMENTS AND CONTINGENCIES

Dream Impact and its operating subsidiaries are contingently liable under guarantees that are issued in the normal course of business and with respect to litigation and claims that arise from time to time. In the opinion of the Asset Manager, any liability that may arise from such contingencies would not have a material adverse effect on the consolidated financial statements of Dream Impact.

COMMERCIAL MORTGAGE SERVICING AGREEMENT

On July 8, 2014, Dream MPCT Lending Services LP ("Lending Services LP"), a subsidiary of the Trust, entered into a commercial mortgage servicing agreement ("Mortgage Servicing Agreement") with Canadian Mortgage Servicing Corporation ("CMSC") to manage and service the loan portfolio and select other debt investments for the following fees:

• A monthly fee of 1.25 basis points ("bps") (15 bps annually), calculated on the principal amount of each mortgage in the loan portfolio outstanding at the beginning of each month; and

• Origination fees paid by a borrower of up to 1% of the principal amount of each new mortgage investment originated by CMSC and up to 50% of the origination fee paid by a borrower in excess of 1%.

In addition, Lending Services LP reimburses CMSC for all reasonable third-party disbursements and expenses made or incurred in connection with the performance of the services described in the Mortgage Servicing Agreement. The agreement can be terminated upon 90 days' written notice.

OTHER COMMITMENTS

As at December 31, 2021, guarantees on underlying loan amounts of third parties were $373.5 million (December 31, 2020 – $95.6 million), an increase resulting from multi-family rental assets acquired during the year. Our guarantees include contingent liabilities on our joint venture partner's obligations for certain investments. These exclude our share of the obligations based on our ownership interest in the investment, which is included in equity accounted investments on our consolidated statements of financial position. However, the Trust would have available the joint venture partners’ share of assets to satisfy any obligations that may arise. From time to time, the Trust may be required to fund capital contributions to its various investments.

As at December 31, 2021, the Trust no longer holds an obligation as a guarantor on certain debt from sold income properties as the underlying debt was fully repaid by the purchaser (December 31, 2020 – $2.6 million).

The Trust has entered into lease agreements that may require tenant improvement costs of approximately $0.1 million (December 31, 2020 – $0.1 million).

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5. SELECTED ANNUAL AND QUARTERLY FINANCIAL INFORMATION

The Trust's consolidated financial statements have been prepared in accordance with IFRS and are presented in Canadian dollars.

dollars.
For the years ended December 31,		2021		2020		2019(1)
Total income	$	21,122	$	31,970	$	54,454
Net income from continuing operations		21,450		16,339		27,977
Net income from discontinued operations		—		—		4,354
Net income		21,450		16,339		32,331
TOTAL NET INCOME ATTRIBUTABLE TO
Unitholders	$	21,450	$	16,339	$	32,121
Non-controlling interest		—		—		210
Total net income	$	21,450	$	16,339	$	32,331
For the years ended December 31,		2021		2020		2019(1)
Total assets	$	701,702	$	648,514	$	696,141
Total non-current liabilities		71,051		87,994		95,586
Total unitholders' equity		536,931		539,877		567,551
NAV(2),(3)		605,996		582,870		601,592
Annualized distributions per unit		0.40		0.40		0.40
Net income per unit		0.33		0.24		0.48
Net income from continuing operations per unit		0.33		0.24		0.42
Total unitholders' equity per unit		8.25		8.33		8.25
NAV per unit(2)		9.31		8.99		8.75

(1) Certain prior year comparative results have been reclassified.

(2) For the Trust's definition of the following specified financial measures: NAV, NAV per unit, please refer to the Specified Financial Measures and Other Disclosures section of this MD&A.

(3) For a reconciliation of NAV to total unitholders' equity, refer to section 1.3 of this MD&A.

			2021				2020
		Q4	Q3	Q2	Q1	Q4	Q3	Q2	Q1
Total income	$	7,393$	9,382 $	4,246 $	101 $ 14,764 $		4,554 $	3,253 $	9,399
Total net income (loss)		26,959	2,154	(1,451)	(6,212)	14,868	(47)	(3,634)	5,152
Net income (loss) per unit		0.41	0.03	(0.02)	(0.10)	0.23	—	(0.05)	0.07

As a result of the Trust's strategy to expand its development and investment holdings segment, results of operations may fluctuate from period to period.

6. SPECIFIED FINANCIAL MEASURES AND OTHER DISCLOSURES

We have presented certain specified financial measures because we believe these are important in evaluating the Trust's underlying operating performance, debt management and our ability to earn and pay cash distributions to unitholders. These specified financial measures do not have standardized meanings prescribed by IFRS and may not be comparable with similar measures presented by other issuers. Investors are cautioned not to view specified financial measures as alternatives to financial measures calculated in accordance with IFRS.

NON-GAAP RATIOS

"Debt-to-asset value" represents the total debt payable for the Trust divided by the total asset value of the Trust as at the applicable reporting date. This non-GAAP ratio is an important measure in evaluating the amount of debt leverage; however, it is not defined by IFRS, does not have a standardized meaning and may not be comparable with similar measures presented by other issuers.

Dream Impact Trust 2021 Annual Report | 23

As at December 31, 2021	December 31, 2020
Total debt $ 133,150 Unamortized discount on host instrument of convertible debentures 809 Conversion feature (357) Unamortized balance of deferred financing costs 1,300	$ 88,195 — — 197
Total debt payable $ 134,902 Total assets 701,702 Debt-to-asset value 19.2%	$ 88,392
	648,514
	13.6%

"Net asset value ("NAV") per unit" represents the net asset value of the Trust divided by the number of units outstanding at the end of the period. This non-GAAP ratio is an important measure used by the Trust in evaluating the Trust’s performance as it is an indicator of the intrinsic value of the Trust; however, it is not defined by IFRS, does not have a standardized meaning and may not be comparable with similar measures presented by other issuers. A reconciliation of NAV to unitholders' equity can be found in section 1.3 of this MD&A.

SUPPLEMENTARY FINANCIAL MEASURES AND OTHER MEASURES

"Debt-to-total asset value, inclusive of project-level debt" represents the Trust’s total debt payable plus the debt payable within our development and investment holdings, and equity accounted investments, divided by the total asset value of the Trust plus the debt payable within our development and investment holdings, and equity accounted investments, as at the applicable reporting date. This supplementary measure is an important measure in evaluating the amount of debt leverage inclusive of project-level debt within our development and investment holdings, and equity accounted investments; however, it is not defined by IFRS, does not have a standardized meaning and may not be comparable with similar measures presented by other issuers.

	December 31, 2021	December 31, 2021		December 31, 2020
Debt payable within our development and investment holdings, and equity accounted investments	$	493,217	$	262,221
Total assets		701,702		648,514
Total assets, inclusive of project-level debt	$	1,194,919	$	910,735
Debt payable within our development and investment holdings, and equity accounted investments		493,217		262,221
Total debt payable		134,902		88,392
Total debt, inclusive of project-level debt	$	628,119	$	350,613
Debt-to-total asset value, inclusive of project-level debt and assets within our development segment,
including equity accounted investments		52.6%		38.5%

"Internal rate of return ("IRR")" is calculated based on the estimated net pre-tax cash flow expected to be generated from each project considering revenues, expenditures as well as factors specific to the investment, such as the construction timeline and sale dates, including financing costs; however, this supplementary measure does not have a standardized meaning and may not be comparable with similar measures presented by other issuers.

"Market value" represents the carrying value of equity accounted investments as per the consolidated statements of financial position, adjusted for externally appraised values or internally prepared valuations using the most appropriate valuation methodology determined for each investment on a highest and best use basis, incorporating expected future cash flows, discount rates, other applicable market information and the change in the risk profile of the equity accounted investments as they are developed or achieve completion milestones. The Trust believes that incorporating this adjustment in determining the value of the asset is a more useful measure to value the equity investments that would not ordinarily be captured within IFRS and the Trust's consolidated financial statements. This supplementary measure is an important measure used by the Trust in evaluating the Trust’s and Asset Manager’s performance as it is an indicator of the intrinsic value of the Trust; however, it is not defined by IFRS, does not have a standardized meaning and may not be comparable with similar measures presented by other issuers.

"Net income - income properties" is defined by the Trust as including the sum of income properties revenue, income properties operating expenses, interest expense, interest and other income, transaction costs, and fair value adjustments to income properties.

Dream Impact Trust 2021 Annual Report | 24

For the three months ended March 31,	Three months ended December 31, Year ended December 31, 2021 2020 2021 2020
Income properties revenue Income properties operating expenses Interest expense Fair value adjustments to income properties Interest and other income Transaction costs	$ 4,394$ 4,130 $ 17,814$ 17,173 (2,204) (2,036) (8,564) (9,265) (905) (780) (3,514) (3,120) 26,964 10,165 23,974 10,322 14 2 101 387 (4) 4 (6) (12)
Net income - income properties	$ 28,259$ 11,485 $ 29,805$ 15,485

"Net income - lending portfolio" is defined by the Trust as lending portfolio interest income and lender fees less provisions for lending portfolio losses and transaction costs related to the lending portfolio.

For the three months ended March 31,	Three months ended December 31, Year ended December 31, 2021 2020 2021 2020
Lending portfolio interest income and lender fees Provision for lending portfolio losses Transaction costs	$ 448$ 504 $ 1,748$ 4,103 (387) — (1,465) (2,882) (20) (68) (342) (197)
Net income (loss) - lending portfolio	$ 41$ 436 $ (59)$ 1,024

"Net income (loss) per unit" represents net income (loss) of the Trust divided by the weighted average number of units outstanding during the period.

For the three months ended March 31,	Three months ended December 31, Year ended December 31, 2021 2020 2021 2020
Net income Units outstanding – weighted average Net income per unit	$ 26,959$ 14,868 $ 21,450$ 16,339 65,179,813 64,869,389 64,996,594 67,182,838 $ 0.41$ 0.23 $ 0.33$ 0.24

"Net income (loss) from continuing operations per unit" represents net income (loss) from continuing operations of the Trust divided by the weighted average number of units outstanding during the period.

For the three months ended March 31,	Three months ended December 31, Year ended December 31, 2021 2020 2021 2020
Net income from continuing operations Units outstanding - weighted average Net income from continuing operations per unit	$ 26,959$ 14,868 $ 21,450$ 16,339 65,179,813 64,869,389 64,996,594 67,182,838 $ 0.41$ 0.23 $ 0.33$ 0.24

"NOI - commercial equity accounted investments" is defined by the Trust as income properties revenue less income properties operating expenses at the equity accounted investment level. This supplementary measure is an important measure used by the Trust in evaluating operating performance; however, it is not defined by IFRS, does not have a standardized meaning and may not be comparable with similar measures presented by other issuers.

For the three months ended March 31,	Three months ended December 31, Year ended December 31, 2021 2020 2021 2020
Income properties revenue Income properties operating expenses	$ 1,311$ 440 $ 3,096$ 1,687 (711) (325) (1,896) (1,372)
Net operating income - income properties included in equity accounted investments - commercial Interest expense Fair value adjustments	600 115 1,200 315 (221) (92) (637) (350) 2,842 (120) 2,707 (412)
Share of net income (loss) - included in equity accounted investments - commercial	$ 3,221$ (97)$ 3,270$ (447)

"NOI - multi-family rental" is defined by the Trust as multi-family rental revenue less multi-family property operating expenses at the equity accounted investment level. This supplementary measure is an important measure used by the Trust in evaluating operating performance; however, it is not defined by IFRS, does not have a standardized meaning and may not be comparable with similar measures presented by other issuers.

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For the three months ended March 31,	Three months ended December 31, Year ended December 31, 2021 2020 2021 2020
Income properties revenue Income properties operating expenses	$ 1,387$ — $ 1,448$ — (570) — (600) —
Net operating income - income properties included in equity accounted investments - multi-family rental Interest expense Fair value adjustments	817 — 848 — (723) — (729) — (1,980) — (1,980) —
Share of net income (loss) - included in equity accounted investments - multi- family rental	$ (1,886)$ — $ (1,861)$ —

"Total unitholders' equity per unit" represents the total unitholders' equity of the Trust divided by the number of units outstanding at the end of the year.

"Total unitholders' equity per unit"represents the tota outstanding at the end of the year.	l unitholders' equity of the Tru	st divided by the	number of units
As at		December 31, 2021	December 31, 2020
Total unitholders' equity	$	536,931$	539,877
Units outstanding – end of year		65,071,762	64,811,749
Total unitholders' equity per unit	$	8.25$	8.33

"Total adjustments to fair values and other non-cash items included in net income" represents deferred income tax expense, fair value adjustments in development and investment holdings, share of income (loss) from equity accounted investments, fair value adjustments to income properties, deferred compensation expense (recovery), fair value adjustments to financial instruments, asset management fees and other non-cash items.

For the three months ended March 31,	Three months ended December 31, Year ended December 31, 2021 2020 2021 2020
Deferred income tax recovery (expense) Share of income from equity accounted investments Provision for lending portfolio losses Fair value adjustments to income properties Deferred unit compensation expense Asset management fee settled in units Fair value adjustments to financial instruments Fair value adjustments to development and investment holdings	$ (1,011)$ (4,054)$ 1,194$ (3,865) 2,816 13,541 8,032 12,675 (387) — (1,465) (2,882) 26,964 10,165 23,974 10,322 (18) (1,001) (940) (311) (1,651) (1,167) (5,643) (4,001) 210 — 524 — (265) (3,411) (6,472) (1,981)
Total adjustments to fair values and other non-cash items included in net income	$ 26,658$ 14,073 $ 19,204$ 9,957

NON-GAAP MEASURES

"Net asset value ("NAV")" , a non-GAAP measure, represents total unitholders' equity per the consolidated financial statements, adjusted for market value adjustments for equity accounted investments (including applicable deferred income tax adjustments). The market value adjustments account for the applicable deferred income tax estimates considering the timing of their realization and, if appropriate, will be incorporated into the determination of the NAV. The applicable deferred income tax estimates related to the market value adjustments are calculated either based on income or capital gain rates or a combination thereof. The income tax rates used to determine NAV are dependent on various factors such as anticipated development plans, stage of development and current market trends applicable to the future development plans, and will be reviewed on a regular basis and are subject to change. Excluded from the NAV calculation are any market value adjustments with respect to liabilities as well as commitments/contracts that are not otherwise recorded as liabilities on the Trust's consolidated statements of financial position. The Trust has not appraised the lending portfolio, as the Trust intends to hold certain investments in the lending portfolio until maturity and its term to maturity is over the next one to four years; as such, this portfolio is considered fairly liquid and fair value approximates amortized cost. This non-GAAP measure is an important measure used by the Trust in evaluating the Trust’s and Asset Manager’s performance as it is an indicator of the intrinsic value of the Trust; however, it is not defined by IFRS, does not have a standardized meaning and may not be comparable with similar measures presented by other issuers. A reconciliation of NAV to unitholders' equity can be found in section 1.3 of this MD&A.

"Net operating income - income properties ("NOI-income properties")" is defined by the Trust as income properties revenue less income properties operating expenses. This non-GAAP measure is an important measure used by the Trust in evaluating operating performance; however, it is not defined by IFRS, does not have a standardized meaning and may not be comparable with similar measures presented by other issuers.

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For the three months ended March 31,	Three months ended December 31, Year ended December 31, 2021 2020 2021 2020
Income properties revenue Incomeproperties operatingexpenses	$ 4,394$ 4,130 $ 17,814$ 17,173 (2,204) (2,036) (8,564) (9,265)
Net operating income - income properties	$ 2,190$ 2,094 $ 9,250$ 7,908

7. DISCLOSURE CONTROLS AND PROCEDURES AND INTERNAL CONTROL OVER FINANCIAL REPORTING

The Trust does not have a Chief Executive Officer or a Chief Financial Officer. At December 31, 2021, the President and Chief Responsible Officer of DAM and Chief Financial Officer of Dream Impact Master GP (the "Certifying Officers") are responsible for and, along with the assistance of senior management of the Asset Manager, have designed or caused to be designed under the Certifying Officers' supervision, disclosure controls and procedures ("DC&P") as defined in National Instrument 52-109, “Certification of Disclosure in Issuers’ Annual and Interim Filings”, to provide reasonable assurance that material information relating to the Trust is made known to the Certifying Officers in a timely manner and information required to be disclosed by the Trust is recorded, processed, summarized and reported within the time periods specified in securities legislation, and have designed internal controls over financial reporting ("ICFR") to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the consolidated financial statements in accordance with IFRS.

As at December 31, 2021, the Certifying Officers, together with other members of management, have evaluated the design and effectiveness of the Trust’s DC&P. Based on that evaluation, the Certifying Officers have concluded that, as at December 31, 2021, the DC&P are adequate and effective in order to provide reasonable assurance that material information has been accumulated and communicated to management to allow timely decisions of required disclosures by the Trust and its consolidated subsidiary entities within the required time periods.

The Trust’s ICFR is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with IFRS. Using the framework established in “2013 Committee of Sponsoring Organizations (COSO) Internal Control Framework”, published by the Committee of Sponsoring Organizations of the Treadway Commission, the Certifying Officers, together with other members of management, have evaluated the design and operation of the Trust’s ICFR. Based on that evaluation, the Certifying Officers have concluded that the Trust’s ICFR was effective as at December 31, 2021.

During the year ended December 31, 2021, there have not been any changes that have materially affected, or are reasonably likely to materially affect, the Trust's disclosure controls and procedures and internal controls over financial reporting.

8. RISKS AND RISK MANAGEMENT

Dream Impact is exposed to various risks and uncertainties, many of which are beyond our control. The following is a review of material factors that may impact our business operations. Additional risks and uncertainties are described in our most recent Annual Report and our current Annual Information Form, which are posted on our website at www.dreamimpacttrust.ca and under the Trust's profile on SEDAR at www.sedar.com. The occurrence of any of such risks could materially and adversely affect our investments, future prospects, cash flows, results of operations or financial condition and our ability to make cash distributions to unitholders. Although we believe that the risk factors described below and in our Annual Information Form are the most material risks that we will face, they are not the only risks. Additional risk factors not presently known to us or that we currently believe are immaterial could also materially adversely affect our investments, future prospects, cash flows, results of operations or financial condition and our ability to make cash distributions to unitholders and thereby adversely affect the value of our units.

PUBLIC HEALTH RISK

Adverse Canadian, U.S. and global market, economic and political conditions, including dislocations and volatility in the credit markets and general global economic uncertainty, could have a material adverse effect on our business, results of operations and financial condition with the potential to impact, among others: (i) the value of our properties; (ii) the availability or the terms of financing that we have or may anticipate utilizing; (iii) our ability to make principal and interest payments on, or refinance any outstanding debt when due; (iv) the occupancy rates in our properties; and (v) the ability of our tenants to enter into new leasing transactions or to satisfy rental payments under existing leases.

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In late 2019, the novel coronavirus (COVID-19), spread around the world, with resulting business and social disruption. On March 11, 2020, the World Health Organization declared COVID-19 a global pandemic. Public health crises, pandemics and epidemics, such as those caused by new strains of viruses such as H5N1 (avian flu), severe acute respiratory syndrome (SARS) and, most recently, COVID-19, could, particularly if prolonged, adversely impact our and our customers’ businesses, and thereby our and our customers’ ability to meet payment obligations, by disrupting supply chains and transactional activities, causing reduced traffic at our properties, leading to mobility restrictions and other quarantine measures, precipitating increased government regulation and negatively impacting local, national or global economies. Contagion in one of our properties or markets or the quarantine of one of our properties could negatively impact our reputation, the reputation of our customers and the attractiveness of that market. All of these factors may have a material adverse effect on our business, results of operations and our ability to make cash distributions to unitholders.

The speed and extent of the spread of COVID-19, and the duration and intensity of resulting business disruption and related financial and social impact, are uncertain, and such adverse effects may be material. Efforts to slow the spread of COVID-19 could severely impact the operation of our properties and development projects and our customers’ businesses. The Trust is continuously monitoring the situation but is unable to accurately predict the impact that COVID-19 will have on its results of operations, due to uncertainties including the ultimate geographic spread of the virus, the severity of the disease, the duration of the outbreak, the rise of COVID-19 variants of concern and actions that may be taken by governmental authorities to contain COVID-19 or to treat its impact. While governmental agencies and private sector participants will seek to mitigate the adverse effects of COVID-19, the efficacy and timing of such measures remains uncertain. If the outbreak of COVID-19 and related developments lead to a prolonged or significant impact on global, national or local markets or economic growth, the Trust’s cash flows, financial condition or results of operations and our ability to make cash distributions to unitholders may be materially and adversely affected.

Furthermore, the outbreak of COVID-19 may affect our and our customers’ businesses by disrupting supply chains and transactional activities. The Trust and many of our customers rely on third-party suppliers and manufacturers, many of which are located outside of Canada. This outbreak has resulted, or may result, in the extended shutdown of certain businesses, which may in turn result in disruptions, delays or reductions to our and our customers’ supply chains. These may include disruptions from the temporary closure of third-party supplier and manufacturer facilities, interruptions in supply or restrictions on the export, import or shipment of products, including those sourced from China, Europe or the U.S.

The outbreak of COVID-19 may also negatively impact consumer demand for residential, retail or commercial real estate products and services or our customers’ products or services as well as consumer spending, which may negatively impact our business or the business of our customers. These factors may impact our customers’ ability to meet their payment and other obligations due to the Trust, which could have a material adverse effect on the Trust.

Finally, the actual and threatened spread of COVID-19 globally could adversely affect global economies and financial markets resulting in a prolonged economic downturn and a decline in the value of the Trust’s unit price. The extent to which COVID-19 (or any other disease, epidemic or pandemic) impacts business activity or financial results, and the duration of any such negative impact, will depend on future developments, which are highly uncertain and cannot be predicted, including new information that may emerge concerning COVID-19 and the actions required to contain or treat its impact, among others.

GENERAL INVESTMENTS RISK

Our investments include direct and indirect investments in real estate, mortgages and other loans, and development and investment holdings, each of which can be relatively illiquid. While investments in illiquid assets have the potential to produce above-average growth opportunities, they may be difficult to value or sell at the time and price preferred by the owner. Accordingly, there is a risk that we would be unable to dispose of our illiquid assets in a timely way in response to changing economic or investment conditions. In recessionary times it may be difficult to dispose of certain of our assets, including certain types of real estate. The costs of holding certain of our assets, including real estate, are considerable and during an economic recession we may be faced with ongoing expenditures with a declining prospect of rental income. In such circumstances, it may be necessary for us to dispose of properties, or interests in properties, at discounted prices in order to generate sufficient cash for operations and making distributions. Where we are unable to dispose of illiquid assets, or we are forced to sell such assets at a discounted price, our ability to make cash distributions, our financial results and the value of our units may be adversely affected.

The Trust may undertake strategic property dispositions from time to time in order to recycle its capital and maintain an optimal portfolio composition but may experience significant delays in the repositioning of our portfolio as a result of the

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certain illiquid assets. The Trust may also be subject to unexpected costs or liabilities related to such dispositions, which could adversely affect the Trust's financial position and results of operations and its ability to meet its obligations.

DEVELOPMENT RISK

The Trust is involved in several residential and mixed-use development projects, often set up as joint ventures or partnerships. These developments are often carried out with an experienced developer or co-developers as the Trust's coventurers/partners. The Trust expects to be increasingly involved in investments that develop residential and mixed-use developments.

Before a development project generates any revenues, material expenditures are incurred. This includes, but is not limited to, expenditures incurred to acquire land, obtain development approvals and construct significant portions of project infrastructure, amenities, model suites and sales facilities. It generally takes several fiscal periods for a development to achieve cumulative positive cash flow. If the development projects in which we participate are not developed and marketed successfully or costs of development exceed original estimates and do not generate positive cash flows in a timely manner, this may have a material adverse effect on our business and results of operations.

There are also several factors that impact development risk, including, but not limited to, rising construction costs and development charges, shortage of experienced labour in certain construction-related trades, and structure for municipal zoning approvals due to its unclear mandate at an early stage of development. These factors could impact our development profit margin or development yield potential. As a result, there can be no assurance that all of our proposed residential projects as described herein will be undertaken, and if so, with what mix of residential and commercial development, at what costs, and generating what profit margin or development yield. There could also be changes to the mix of condominium versus multi-family rental units for certain projects. As well, any change in the revenue or costing estimates or development timeline could have a significant impact on the value of the development and investment holdings.

In addition, purchaser demand with regards to residential condominiums is cyclical and is significantly affected by changes in general and local economic and industry conditions, such as employment levels, availability of financing for home buyers, interest rates, consumer confidence, levels of new and existing homes for sale, demographic trends and housing demand. As well, an oversupply of homes or residential condominium units in the market, such as resale properties, including properties held for sale by investors and speculators, foreclosed homes and rental properties, may reduce the Trust’s ability to sell residential development units and may depress prices and reduce margins from the sale of residential development units.

The Trust is also subject to the risk that purchasers of such properties may become unable or unwilling to meet their obligations or that the Trust may not be able to close the sale of a significant number of units in a development project on economically favourable terms. To mitigate these risks, the Trust monitors the market trends and development risks to adapt to any changes to market conditions.

IMPACT INVESTMENT STRATEGY RISK

In light of the Trust’s impact investment strategy, the Trust will be adopting objectives and deploying its capital into new impact investment opportunities that are intended to align with the Trust’s three impact verticals. Our ability to achieve our investment objectives and to continue to pay distributions will be dependent on our ability to successfully identify and realize investment opportunities that align with our investment framework. There can be no assurance that we will achieve these objectives or that our impact investments or developments will generate positive returns in a timely manner. In addition, we adapted our own impact investing framework, which we believe will be aligned with existing frameworks in this field. However, these may or may not be interpreted differently from other issuers or other participants in the impact investing space. While the Trust intends to responsibly create positive social and environmental change in our communities, the success of our impact investment strategy and our ability to generate market returns will be based on various and unpredictable factors, including investor perceptions and reactions and future economic or investment conditions.

MULTI-FAMILY RENTAL BUSINESS RISK

The Trust expects to acquire and increasingly be involved in mixed-use development projects that include multi-family rentals. Purchaser demand for multi-family rentals is cyclical and is affected by changes in general market and economic conditions, such as consumer confidence, employment levels, availability of financing for home buyers, interest rates, demographic trends, housing supply and housing demand. As a landlord in its properties that include rental apartments, the Trust is subject to the risks inherent in the multi-family rental business, including, but not limited to, fluctuations in occupancy levels, individual credit risk, heightened reputation risk, tenant privacy concerns, potential changes to rent control regulations, increases in operating costs, including the costs of utilities, and the imposition of new taxes or increased

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property taxes. Multi-family rental business risk may result in a significant loss of earnings to the Trust; however, to mitigate these risks, the Trust's portfolio includes well located and professionally managed properties.

JOINT VENTURE OR PARTNERSHIP RISK

Several investments, including the Trust’s property developments and income properties, are often made or developed as joint ventures or partnerships with third parties. These structures involve certain additional risks, including, but not limited to, co-venturers/partners that might experience financial difficulties or fail to fund their share of required capital contributions or suffer reputational damage that could have an adverse impact on the Trust.

In addition, our co-venturers/partners may, at any time, have economic or business interests inconsistent with ours and we may be required to take actions that are in the interest of the partners collectively, but not in the Trust’s sole best interests. Accordingly, we may not be able to favourably resolve issues with respect to such decisions or we could become engaged in a dispute with any of them that might affect our ability to develop or operate the business or assets in question efficiently. Any failure of the Trust or our co-venturers and partners to meet their obligations, or disagreements with respect to strategic decision-making, could have an adverse effect on the joint ventures or partnerships, which may have an adverse effect on the Trust.

We attempt to mitigate these risks by performing due diligence procedures on potential partners and contractual arrangements, and by closely monitoring and supervising the joint ventures or partnerships.

GENERAL REAL ESTATE RISK

Returns on real estate and real estate related assets and investments are generally subject to a number of factors and risks, including changes in general economic conditions (which could affect the availability, terms and cost of mortgage financings and other types of credit), changes in local economic conditions (such as an oversupply of properties or a reduction in demand for real estate in a particular area), the attractiveness of properties to potential tenants or purchasers, competition with other landlords with similar available space, and the ability of the owner to provide adequate maintenance at competitive costs.

These factors and risks could cause fluctuations in the value of the real estate and real estate related assets and investments owned by us or in the value of the real estate securing mortgages and other loans we issue. These fluctuations could materially adversely affect us.

LEASE RENEWALS AND RENTAL RATES RISK

The income-producing properties in our investment portfolio generate income through rent payments made by our tenants. Upon the expiry of any lease, there can be no assurance that the lease will be renewed or that the tenant will be replaced. Furthermore, the terms of any subsequent lease may be less favourable than those of the existing lease. The Trust’s income and cash flows would be adversely affected if we were unable to lease a significant amount of the available space in any particular property on economically favourable lease terms or on a timely basis.

TENANT DEFAULT RISK

In the event of default by a tenant, we may experience delays or limitations in enforcing our rights as the lessor and incur substantial costs in protecting our investment. Furthermore, at any time, a tenant may seek the protection of bankruptcy, insolvency or similar laws, which could result in the rejection and termination of the lease of the tenant and, thereby, cause a reduction in the cash flows available to us, which may adversely affect us. The Trust mitigates this risk by attracting tenants of sound financial standing and by diversifying its tenant mix. The outbreak of COVID-19 and the measures introduced by the government and other parties to reduce its impact have created significant uncertainty in the general economy. A deterioration in the economy may impact the ability of tenants to meet their obligations under their leases or contracts.

CREDIT RISK

There is a risk that a borrower or issuer of an investment security will not make a payment on debt or that an originating lender will not make its payment on a loan participation interest purchased by us or that an issuer or an investment security or an originating lender retaining the original loan in which it grants participations may suffer adverse changes in financial condition, lowering the credit quality of its security or participation and increasing the volatility of the security or participation price. Such changes in the credit quality of a security or participation can affect its liquidity and make it more difficult to sell if we wish to do so. In addition, with respect to loans made or held by us, a change in the financial condition of a borrower could have a negative financial impact on us.

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While we intend to diversify our investments to ensure that we do not have excessive concentration in any single borrower/ counterparty or related group of borrowers/counterparties, the Trust currently holds certain lending instruments and investments with the same counterparty or related counterparties within its lending portfolio and development and investment holdings portfolio, as discussed in Note 26 to the consolidated financial statements. A change in the financial condition of any single borrower/counterparty or related group of borrowers/counterparties to which the Trust has concentrated exposure could significantly and adversely affect the overall performance of the Trust.

Credit risk may also arise from a borrower that may not be able to honour its debt commitments as a result of a negative change in market conditions that could result in a loss to the Trust. Credit risk related to financial guarantees provided by the Trust arises from the possibility that counterparties default on their financial obligations. The Trust mitigates these risks by actively monitoring the mortgage receivables, loan investment and financial guarantees, and initiating recovery procedures in a timely manner when required.

CONCENTRATION RISKS AND OTHER SIMILAR RISKS

While our intention is to diversify our investments, our current investments are relatively concentrated in a limited number of market sectors or asset types or in a limited number of issuers. An investment in the Trust may therefore involve greater risk and volatility than an investment in an issuer with a broader portfolio of assets since the performance of one particular industry, market or issuer could significantly and adversely affect the overall performance of the Trust.

COMPETITION FOR INVESTMENT OPPORTUNITIES AND ABILITY TO SOURCE SUITABLE INVESTMENTS

Our performance depends on our ability to source or acquire assets including mortgage and other loans, real estate, and other investment opportunities at favourable yields or potential rates of return. We will compete with other investors, managers, corporations, institutions, developers, and owners of real estate for investment opportunities in the financing and/or acquisition of assets, including real estate and other lending. Certain competitors may have a higher risk tolerance, greater financial and other resources, and greater operating flexibility than us, allowing these competitors to more aggressively pursue investment opportunities. Accordingly, we may be unable to acquire sufficient real property, real property lending assets, or other assets or investment opportunities at favourable yields or terms or at all.

Our strategy involves investing and reinvesting in suitable investment opportunities, pursuing such opportunities, consummating investments and, in the case of real estate property, effectively leasing and operating such properties and assets. There can be no assurance as to the pace of growth through investments and/or acquisitions or that we will be able to acquire assets on an accretive basis, which could adversely impact our financial performance.

ENVIRONMENTAL AND CLIMATE CHANGE RISKS

As an owner of real estate property, we are subject to various federal, provincial, municipal and state laws relating to environmental matters. Such laws provide that we could be liable for the costs of removal and remediation of certain hazardous, toxic substances released on or in our properties or disposed of at other locations, as well as potentially significant penalties. We have insurance and other policies and procedures in place to review and monitor environmental exposure, which we believe mitigates these risks to an acceptable level. Some of the properties in which we have an interest currently have or have had occupants that use hazardous substances or create waste. Such uses can potentially create environmental liabilities. A few issues have been identified through site assessments, including the need to remediate or otherwise address certain contaminations. These issues are being carefully managed with the involvement of professional consultants. Where circumstances warrant, designated substance surveys and/or environmental assessments are conducted. Although environmental assessments provide some assurance, we may become liable for undetected pollution or other environmental hazards on our properties against which we cannot insure, or against which we may elect not to insure where premium costs are disproportionate to our perception of relative risk.

The Trust has formal policies and procedures which cause the review and monitoring of environmental exposure. These policies include the requirement to conduct a Phase I environmental site assessment, or review a current Phase I, before we acquire real properties or originate any real estate lending.

Climate change continues to attract the focus of governments and the general public as an important threat, given the emission of greenhouse gases and other activities continue to negatively impact the planet. We face the risk that our properties will be subject to government initiatives aimed at countering climate change, such as reduction of greenhouse gas emissions, which could impose constraints on our operational flexibility or cause us to incur financial costs to comply with various reforms. Any failure to adhere and adapt to climate change reform could result in fines or adversely affect our reputation, operations or financial performance. Furthermore, our properties may be exposed to the impact of events caused by climate change, such as natural disasters and increasingly frequent and severe weather conditions. Such events could interrupt our operations and activities, damage our properties and may potentially decrease our property values or

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require us to incur additional expenses including an increase in insurance costs to insure our properties against natural disasters and severe weather.

FOREIGN EXCHANGE RISKS

The Trust is exposed to foreign exchange risks, particularly with respect to fluctuations of the U.S. dollar against the Canadian dollar, in respect of our investment in the Virgin Hotels Las Vegas. The Trust's results are reported in Canadian dollars and the Trust pays distributions to unitholders in Canadian dollars; therefore, fluctuations in the value of the U.S. dollar impacts the fair value or future cash flows of these investments and our ability to pay cash distributions to unitholders. The Trust does not hedge this exposure.

UNEXPECTED CAPITAL EXPENDITURES AND OTHER FIXED COSTS

Certain significant expenditures, including property taxes, maintenance costs, mortgage payments, insurance costs and related charges, must be made throughout the period of ownership of real property, regardless of whether the property is producing sufficient income to pay such expenses. This may include expenditures to fulfill mandatory requirements for energy efficiency. In order to retain desirable rentable space and to generate adequate revenue over the long term, the condition of the properties in which we have an interest must be maintained or, in some cases, improved to meet market demand. Maintaining or upgrading a rental property in accordance with market standards can entail significant costs, which we may not be able to pass on to our tenants. Numerous factors, including the age of the relevant building structure, the material and substances used at the time of construction or currently unknown building code violations, could result in substantial unbudgeted costs for refurbishment or modernization.

If the actual costs of maintaining or upgrading a property in which we have an interest exceed our estimates, or if hidden defects are discovered during maintenance or upgrading that are not covered by insurance or contractual warranties, or if we are not permitted to raise rents due to legal constraints, we will incur additional and unexpected costs. If competing properties of a similar type are built in the area where one of our properties is located or similar properties located in the vicinity of one of our properties are substantially refurbished, the net operating income derived from and the value of such property could be reduced.

Any failure to undertake appropriate maintenance and refurbishment work in response to the factors described above could materially adversely affect the rental income that we earn from such properties; for example, such a failure could entitle tenants to withhold or reduce rental payments or even to terminate existing leases. Any such event could have a material adverse effect on our cash flows, financial condition and results of operations and our ability to make distributions on units.

UNEXPECTED COSTS OR LIABILITIES RELATED TO ACQUISITIONS

Our external growth prospects depend in part on identifying suitable acquisition opportunities, pursuing such opportunities and consummating acquisitions, including direct or indirect acquisitions of real estate. Notwithstanding pre-acquisition due diligence, it is not possible to fully understand a property before it is owned and operated for an extended period of time and there may be undisclosed or unknown liabilities concerning the acquired properties, and the Trust may not be indemnified for some or all of these liabilities. To mitigate this risk, our Asset Manager conducts an appropriate level of due diligence and investigation in connection with its acquisition of properties and seeks, through contractual arrangements, to ensure that risks lie with the appropriate party.

FINANCING RISKS, LEVERAGE AND RESTRICTIVE COVENANTS

Ownership of certain of our assets and the industries in which we operate are capital intensive. We will require access to capital to maintain the real estate and other assets in which we have an interest, as well as to fund our growth strategy and significant capital expenditures from time to time. There is no assurance that capital will be available when needed or on favourable terms. Our access to third-party financing will be subject to a number of factors, including general market conditions; the market’s perception of our growth potential; our current and expected future earnings; our cash flow and cash distributions, and cash interest payments; and the market price of our units. Our failure to access required capital could materially adversely impact our investments, cash flows, operating results or financial condition, our ability to make distributions on the units and our ability to implement our growth strategy.

A significant portion of our financing is debt. Accordingly, we are subject to the risks associated with debt financing, including the risk that our cash flows will be insufficient to meet required payments of principal and interest, and that, on maturities of such debt, we may not be able to refinance the outstanding principal under such debt or that the terms of such refinancing will be more onerous than those of the existing debt. If we are unable to refinance debt at maturity on terms acceptable to us or at all, we may be forced to dispose of one or more of our properties on disadvantageous terms, which may result in

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losses and could alter our debt-to-equity ratio or be dilutive to unitholders. Such losses could have a material adverse effect on our financial position or cash flows.

The degree to which we are leveraged could have important consequences to our operations. A high level of debt will reduce the amount of funds available for the payment of distributions to unitholders; limit our flexibility in planning for and reacting to changes in the economy and in the industry, and increase our vulnerability to general adverse economic and industry conditions; limit our ability to borrow additional funds, dispose of assets, encumber our assets and make potential investments; place us at a competitive disadvantage compared to other owners of similar assets that are less leveraged and, therefore, may be able to take advantage of opportunities that our indebtedness would prevent us from pursuing; make it more likely that a reduction in our borrowing base following a periodic valuation (or redetermination) could require us to repay a portion of then outstanding borrowings; and impair our ability to obtain additional financing in the future for working capital, capital expenditures, acquisitions, general trust or other purposes.

INTEREST RATE RISK

When negotiating financing agreements or extending such agreements, we will depend on our ability to agree on terms, including in respect of interest payments and amortization. In addition, we may enter into financing agreements with variable interest rates. An increase in interest rates could result in a significant increase in the amount paid by us to service debt that could materially adversely affect our cash flows.

We may implement hedging programs in order to offset the risk of revenue losses and to provide more certainty on our cash flows should current variable interest rates increase. However, to the extent that we fail to adequately manage these risks, our financial results and our ability to make interest payments under future financings may be adversely affected. Increases in interest rates generally cause a decrease in demand for properties. Higher interest rates and more stringent borrowing requirements, whether mandated by law or required by financial institutions, could have a material adverse effect on our ability to sell any of our investments.

In addition, the value of our lending portfolio at any given time may be affected by the level of interest rates prevailing at such time. The income we earn on our lending portfolio is primarily from interest payments. If there is a decline in interest rates (as measured by the indices upon which the interest rates of our mortgages are based), we may find it difficult to make additional mortgages bearing rates sufficient to achieve our investment objectives. This could have a materially adverse impact to the Trust’s cash flows. A decline in interest rates could depress the housing market, which may affect our investment holding mortgage investments in condominium and home development and have a materially adverse impact on our cash flows. As well, if interest rates increase, the value of our lending portfolio may be negatively impacted.

GOVERNMENT AND REGULATORY RISKS

We are subject to laws and regulations governing the development, ownership, operation and leasing of certain of our assets, employment standards, environmental matters, taxes and other matters. It is possible that future changes in applicable federal, provincial, municipal, state, local, or common laws or regulations, or changes in their enforcement or regulatory interpretation, could result in changes in the legal requirements affecting us (including with retroactive effect). Any changes in the laws to which we are subject could materially adversely affect the distributions received by the Trust from Dream Impact Master LP ("DIM LP") or by unitholders from the Trust. It is not possible to predict whether there will be any further changes in any regulatory regime to which we are subject or the effect of any such change on our investments.

The real estate development process is subject to a variety of laws and regulations. In particular, governmental authorities regulate such matters as zoning and permitted land uses, levels of density and building standards. We will have to continue to obtain approvals from various governmental authorities and comply with local, provincial and federal laws, including laws and regulations concerning the protection of the environment in connection with such development projects. Obtaining such approvals and complying with such laws and regulations may result in delays, which may cause us to incur additional costs that impact the profitability of a development project, or may restrict development activity altogether with respect to a particular project.

TAX RISK

There can be no assurance that Canadian federal income tax laws and the administrative policies and assessing practices of the Canada Revenue Agency ("CRA") respecting the treatment of "mutual fund trusts" will not be changed in a manner that adversely affects unitholders. If we cease to qualify as a "mutual fund trust" under the Tax Act, the income tax considerations applicable to us would be materially and adversely different in certain respects, including that units may cease to be qualified investments for Plans.

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Although we are of the view that all expenses to be claimed by us will be reasonable and deductible, all input tax credits claimed by us are appropriate, and that the cost amount and capital cost allowance claims of entities indirectly owned by us will have been correctly determined, there can be no assurance that the Tax Act, or the interpretation of the Tax Act, will not change, or that the CRA will agree with our determinations. If the CRA successfully challenges the deductibility of such expenses or the amount of input tax credits claimed, our taxable income will change.

The extent to which distributions will be non-taxable in the future will depend in part on the extent to which entities indirectly owned by us are able to deduct depreciation, interest and loan expenses relating to our investments for purposes of the Tax Act.

We will endeavour to ensure that units continue to be qualified investments for Plans; however, there can be no assurance that this will occur. The Tax Act imposes penalties for the acquisition or holding of non-qualified investments.

We are subject to tax audits from various government and regulatory agencies on an ongoing basis. As a result, from time to time, taxing authorities may disagree with the interpretation and application of tax laws taken by the Trust, which could lead to reassessments. These reassessments could have a material impact on the Trust in future periods.

LENDING PORTFOLIO DEFAULT RISK

If a borrower under a loan defaults under any terms of the loan, we may have the ability to exercise our enforcement remedies in respect of the loan. Exercising enforcement remedies is a process that requires a significant amount of time to complete, which could adversely impact our cash flow. In addition, as a result of potential declines in real estate values, there is no assurance that we will be able to recover all or substantially all of the outstanding principal and interest owed to us in respect of such loans by exercising our enforcement remedies. Our inability to recover the amounts owed to us in respect of such loans could materially adversely affect us.

There can be no assurance that any of the loans comprising our borrowers' portfolio can or will be renewed at the same interest rates and terms, or in the same amounts as are currently in effect. The lenders, the borrowers or both may elect to not renew any loan. If loans are renewed, the principal balance, the interest rates and the other terms and conditions will be subject to negotiation between the lenders and the borrowers at the time of renewal.

In addition, the composition of our lending portfolio may vary widely from time to time and may be concentrated by type of security, industry or geography, resulting in it being less diversified during certain periods. A lack of diversification may result in exposure to economic downturns or other events that have an adverse and disproportionate effect on particular types of securities, industries or geographies.

CYBER SECURITY RISK

Cyber security has become an increasing area of focus for issuers and businesses in Canada and globally, as reliance on digital technologies to conduct business operations has grown significantly. As we continue to increase our dependence on information technologies to conduct our operations, the risks associated with cyber security also increase. We rely on management information systems and computer control systems. Business interruptions, utility outages, and information technology system and network disruptions due to cyber-attacks could seriously harm our operations and materially adversely affect our operating results. Cyber-attacks against organizations are increasing in sophistication and can include but are not limited to intrusions into operating systems, theft of personal or other sensitive data and/or cause disruptions to business operations. Such cyber-attacks could compromise the Trust’s confidential information as well as that of the Trust’s employees, customers and third parties with whom the Trust interacts and may result in negative consequences, including remediation costs, loss of revenue, additional regulatory scrutiny, litigation and reputational damage. Our exposure to cyber security risks includes exposure through third parties on whose systems we place significant reliance for the conduct of our business. We have implemented security procedures and measures in order to protect our systems and information from being vulnerable to cyber-attacks. However, we may not have the resources or technical sophistication to anticipate, prevent, or recover from rapidly evolving types of cyber-attacks. Compromises to our information and control systems could have severe financial and other business implications.

INSURANCE RISKS

We carry, or cause to be carried, general liability, umbrella liability and excess liability insurance with limits, which are typically obtained for similar operations in Canada and otherwise acceptable to the Trust Board on the recommendation of DAM. For the property risks, we cause “All Risks” property insurance, including, but not limited to, flood, earthquake and loss of rental income insurance (with at least a 24-month indemnity period), to be carried. We also cause boiler and machinery insurance, covering all boilers, pressure vessels, HVAC systems and equipment breakdown, to be carried. There are,

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however, certain types of risks (generally of a catastrophic nature such as from war or nuclear accident) that are uninsurable under any insurance policy. Furthermore, there are other risks that are not economically viable to insure at this time. Should an uninsured or underinsured loss occur, we could lose our investment in, and anticipated profits and cash flows from, one or more of our properties, but we would continue to be obligated to repay any recourse mortgage indebtedness on such properties. We may carry, or may cause to be carried, title insurance on certain of our real estate assets but will not necessarily insure all titles. If a loss occurs resulting from a title defect with respect to a property where there is no title insurance or the loss is in excess of insured limits, we could lose all or part of our investment in, and anticipated profits and cash flows from, such property.

RELIANCE ON DAM FOR MANAGEMENT SERVICES

We rely on DAM with respect to the asset management of our investments. Consequently, our ability to achieve our investment objectives depends in large part on DAM and its ability to properly advise us. Although the Management Agreement does not have a fixed term, DAM has the right to terminate the Management Agreement with 180 days’ prior written notice if DIM LP and/or the Trust defaults in the performance or observance of any material term, condition or agreement of the Management Agreement in a manner that results in material harm and such default continues unremedied for a period of 60 days. The Management Agreement may also be terminated in other circumstances, such as upon the occurrence of an event of default or insolvency of DAM within the meaning of such agreement. Accordingly, there can be no assurance that DAM will continue to be our Asset Manager. If DAM should cease for any reason to be our Asset Manager, our ability to meet our objectives and execute our strategy may be adversely affected. We may be unable to duplicate the quality and depth of management available to DAM by becoming a self-managed Trust or by hiring another asset manager. In addition, the cost of obtaining substitute services may be greater than the fees we will pay DAM under the Management Agreement.

We depend on the management and administration services provided by DAM under the Management Agreement. DAM personnel and support staff that provide services to us under the Management Agreement are not required to have as their primary responsibility the management and administration of the Trust or MPCT LP or to act exclusively for either of us, and the Management Agreement does not require that the services we receive be provided to us by any specific individuals employed by DAM. Any failure to effectively manage our operations or to implement our strategy could materially adversely affect us.

RELIANCE ON MPCT LP

The Trust’s sole material asset is its limited partnership interest in MPCT LP. The cash distributions to unitholders are dependent on the ability of MPCT LP to pay distributions in respect of its LP A Units. The ability of MPCT LP to pay distributions or make other payments or advances to us may be subject to contractual restrictions contained in any instruments governing the indebtedness of MPCT LP or investments held by it. The ability of MPCT LP to pay distributions or make other payments or advances is also dependent on the ability of MPCT LP’s subsidiaries to pay distributions or make other payments or advances to MPCT LP. The Trust depends on distributions and other payments from MPCT LP and, indirectly, its subsidiaries and investments, to provide the Trust with the funds necessary to pay distributions to its unitholders and to meet its financial obligations.

9. SIGNIFICANT ACCOUNTING POLICIES

9.1 CRITICAL ACCOUNTING JUDGMENTS, ESTIMATES AND ASSUMPTIONS

The preparation of the consolidated financial statements requires management to make judgments, estimates and assumptions that affect the amounts reported. Management bases its judgments and estimates on historical experience and other factors it believes to be reasonable under the circumstances, which are inherently uncertain and unpredictable, the result of which forms the basis of the carrying amounts of assets and liabilities. Uncertainty about these assumptions and estimates could result in outcomes that could require a material adjustment to the carrying amount of the affected asset or liability in the future. Refer to Note 4 of the consolidated financial statements for the year ended December 31, 2021 for a summary of the Trust's accounting judgments, estimates and assumptions in applying accounting policies.

9.2 FUTURE CHANGES TO SIGNIFICANT ACCOUNTING POLICIES

Standards issued but not yet effective up to the date of issuance of the Trust's consolidated financial statements that are likely to have an impact on the Trust are listed below. This listing is of standards and interpretations the Trust reasonably expects to be applicable at a future date. The Trust intends to adopt these standards when they become effective.

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AMENDMENTS TO IAS 1, PRESENTATION OF FINANCIAL STATEMENTS

The amendments clarify that liabilities are classified as either current or non-current, depending on the rights that exist at the end of the reporting period. Classification is unaffected by expectations of the entity or events after the reporting date. The amendments also clarify that the settlement of a liability refers to the transfer by the counterparty of cash, equity instruments, and/or other assets or services. Early application is permitted. The Trust intends to adopt the amendments to IAS 1 on the required effective date of January 1, 2023. The Trust is in the process of assessing the impact of this amendment.

10. ADDITIONAL INFORMATION

10.1 SUMMARY OF IMPACT INVESTMENTS

In developing the Dream Impact Management System, we created pathways for each of our impact investments, which align with our three verticals and the United Nations Sustainable Development Goals. For further details, refer to our inaugural impact report published on our website, www.dreamimpacttrust.ca.

Zibi, including Zibi Community Utility (Ottawa, Ontario; Gatineau, Quebec) (Carrying value $77.7 million)

Zibi is our 34-acre community, located in Ottawa, Ontario and Gatineau, Quebec, overlooking the Ottawa River. This community is expected to welcome approximately 5,000 residents and 6,000 workers upon completion. The project is a multi-phase development that includes over 4.0 million sf of density consisting of approximately 1,900 residential units, including purpose-built rental units, over 2.0 million sf of commercial space and 8 acres of riverfront parks and plazas.

Environmental Sustainability and Resilience

The Zibi development includes Ottawa and Gatineau's first net-zero carbon heating and cooling system for all tenants and residents in the Zibi community. The District Energy System ("Zibi Community Utility" or "ZCU") utilizes post-industrial waste energy for heating and the Ottawa River for cooling. ZCU will enable the entire Zibi development to reach its goal of being carbon-neutral, consistent with the Federal Government's mandate to move to net-zero emissions by 2050. Subsequent to December 31, 2021, the District Energy System commenced operations. Construction at Zibi is environmentally conscious, using 20% recycled content in its construction materials, 20% of which are locally sourced. The development will feature nearly 8 acres of riverfront green space and 2.0 million sf of vibrant commercial space. Zibi is also among the first One Planet Master-Planned Communities in the country, making it one of Canada's most sustainable neighbourhoods.

Attainable and Affordable Housing

The Trust plans to incorporate affordable housing at each of the multi-family rental buildings at Zibi. Aalto Suites, the 15storey, 162-unit multi-family rental building that commenced leasing and occupancy during the year, has over 95% of its units designated as affordable.

Inclusive Communities

Zibi is developed beneficially with and for the Algonquin Anishinábe nation, as we are engaging with the Algonquin Anishinábe nation to ensure that First Nations history, presence and culture are reflected throughout the development. The development has formalized a partnership to ensure this continues throughout the life of the project, which includes, but is not limited to, mandates for Algonquin employment, youth engagements and annual meetings with an advisory council of Algonquin Anishinábe.

West Don Lands (Toronto, Ontario) (Carrying value $29.7 million)

West Don Lands is a purpose-built multi-family rental apartment community in Toronto's downtown east-end, adjacent to the Canary and Distillery Districts. The development is expected to feature over 2,000 rental units, as well as ancillary retail and office components, which are expected to include 5,000 sf of dedicated community space. Significant progress has been made on the West Don Lands development over the last few years, including progress on construction on Block 8 and Block 3/4/7 (approximately 1,600 residential units), with zoning approval received on Block 20 in 2020.

Environmental Sustainability and Resilience

Each of the buildings at West Don Lands will be built to LEED Gold standard and will have green roofs. The development will also incorporate water efficiency fixtures and generate clean energy in the form of solar panels. Each of these features will contribute to the Trust's goal of being carbon neutral by 2035.

Attainable and Affordable Housing

West Don Lands is the largest affordable housing community currently under construction in Canada and the first within the Provincial Affordable Housing Lands Program to break ground. The development will help address housing affordability, one of the most challenging issues facing Canadian cities. Upon completion, the development is expected to include 684

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affordable units, priced at an approximate 50% discount to market rent in downtown Toronto, with 231 of these affordable units expected to be ready for occupancy in 2023 at Block 8.

Inclusive Communities

West Don Lands will be an inclusive community. The affordable housing units will be distributed throughout the building, with all tenants having access to the building amenities, unit quality and finishes equivalent to the suites rented at market price. The Trust is working towards establishing an inclusive process for determining how to fairly distribute access to the affordable units.

Brightwater Development (Mississauga, Ontario) (Carrying value $37.2 million)

Brightwater, a 72-acre waterfront development in Mississauga's Port Credit area, is expected to transform the site to a complete, vibrant and diverse community, which will include an elementary school, YMCA and 18 acres of parks and outdoor space. The development won the Building Industry and Land Development Association Pinnacle Award in 2020 for Best New Community-Planned/Under Development. In 2020, the first two condo buildings were brought to market and sold out. In 2021, units brought to market at Brightwater Towns and The Mason were fully sold.

Environmental Sustainability and Resilience

When the Trust entered into the development in 2017, it was contaminated due to its history as an oil refinery, requiring the excavation of 1.4 million tonnes of soil. The source remediation program has since been completed and vertical construction commenced in 2021. The new community will incorporate a number of features that will result in a transit-friendly ecosystem, including installing electric vehicle charging stations, bike lanes and bike parking, and providing a shuttle bus to the Port Credit GO station to promote sustainable commuting. All buildings across the development will incorporate best-inclass stormwater management systems and energy efficiency features, including 18,000 sf of green roofs.

Inclusive Communities

The Brightwater community is expected to include nearly 3,000 residential units and over 350,000 sf of vibrant retail and commercial space. It will embody waterfront living while promoting connectivity, mental and physical health, and well-being in the community. To facilitate this, the development will include 18 acres of new parks and green space, which will include the Village Square, a planned hub for community programming.

Canary Block 10 (Toronto, Ontario) (Carrying value $6.9 million)

Canary Block 10 is a mixed-use project in downtown Toronto that is expected to include a 238-unit multi-family rental building, a 206-unit condo building, and the first purpose-built Indigenous Hub in any major North American city. The development will be located within the Canary District, adjacent to the West Don Lands and Distillery District in downtown Toronto.

Environmental Sustainability and Resilience

Each of the buildings at Canary Block 10 will be built to LEED Gold standard as well as include features that will have a lower energy and water consumption to market standard.

Inclusive Communities

Canary Block 10 features an innovative partnership with Anishinábe Health Toronto ("AHT"). AHT is a community health centre with the mission to improve the health and well-being of Indigenous People by providing Traditional Healing within a multi-disciplinary health care model. The Indigenous Hub will provide a state-of-the-art five-storey facility that draws from Indigenous architectural and design influences, and will combine essential health and education facilities to create a thriving centre of community for the city's Indigenous People.

Multi-Family Rental Income Properties (GTA, Ontario) (Carrying value $55.4 million)

During the year ended December 31, 2021, the Trust acquired several multi-family rental investments that includes Weston Common, 262 Jarvis and the Robinwood Portfolio. Weston Common is a two-tower 841-unit, multi-family apartment building that includes 42,800 sf of commercial space and an 8,800 sf community hub. 262 Jarvis is a 71-unit, Art Deco style apartment building located near Ryerson University in downtown Toronto. The Robinwood Portfolio includes 228 units, located at 161 St. George Street, 391 Sherbourne Street, 608 Church Street, 83/85 Silver Birch Avenue, 723 Bloor Street West and 372 Davenport Road, which have added 123,000 sf to the Trust's recurring income segment.

Environmental Sustainability and Resilience

The Trust intends to reduce GHG emissions by 15% within the first three years of ownership and implement water efficiency features, by retrofitting building systems and by engaging and educating tenants to reduce consumption.

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Attainable and Affordable Housing

The Trust intends to preserve and create new affordable housing units at each of the multi-family apartment buildings. Currently, Weston Common has 53 affordable housing units and 26 live/work artist studios.

Inclusive Communities

The Trust intends to implement social programming to the residents and community. Weston Common currently includes an existing community hub occupied and programmed by Artscape, a non-profit with a mission to make space for creativity and transform communities.

Commercial Income Properties (GTA, Ontario, Ottawa, Ontario, Gatineau, Quebec) (Carrying value $318.4 million)

The Trust's commercial income properties contribute to delivering impact under the Trust's environmental sustainability and resilience, and inclusive communities verticals.

Environmental Sustainability and Resilience

The Trust is committed to improving resource efficiency across our commercial income properties located in the GTA, with significant capital expenditures anticipated over the next five years. By 2025, the Trust is targeting a 20% reduction in GHG emissions across the income property portfolio. Certain of these capital expenditures include retrofitting all lighting to LED, installing low-flow fixtures in all washrooms, installing real-time utility metering and pursuing Building Owners and Managers Association of Canada ("BOMA") certifications for buildings not currently certified.

During the year ended December 31, 2021, the first commercial buildings were substantially completed with first tenant occupancies at our Zibi developments at 15 Rue Jos-Montferrand and the Natural Sciences Building. These buildings will have net-zero carbon emissions as they will utilize the District Energy System at Zibi.

Inclusive Communities

The Trust is promoting tenant health and wellness by building and promoting the use of amenity packages to encourage a more active lifestyle for our tenants, including end-of-trip facilities and bike storage. The Trust is also modifying its procurement process to be more inclusive and promote opportunities for underserved populations.

10.2 GEOGRAPHIC ALLOCATION

The following table summarizes our consolidated net assets as at December 31, 2021 by geographic allocation, excluding cash and the Trust's other consolidated working capital and tax.

As at	December 31, 2021	December 31, 2020
Toronto and GTA	73.2 %	69.4 %
Ottawa/Gatineau	17.3 %	16.8 %
United States	9.5 %	11.6 %
Saskatchewan	— %	2.2 %
Total	100.0 %	100.0 %

10.3 BASIS OF PRESENTATION

The Basis of Presentation section of this MD&A includes important information concerning certain information found in this MD&A that contains or incorporates comments that constitute forward-looking information within the meaning of applicable securities laws. Readers are encouraged to read the Risks and Risk Management section of this MD&A for a discussion of the risks and uncertainties regarding this forward-looking information as there are a number of factors that could cause actual results to differ materially from those disclosed or implied by such forward-looking information.

This MD&A contains a discussion of the operating results, cash flows and financial position of Dream Impact and should be read in conjunction with the consolidated financial statements of Dream Impact for the years ended December 31, 2021 and December 31, 2020, prepared in accordance with IFRS.

Certain comparative results have been reclassified to conform to the presentation adopted in the current period.

10.4 FORWARD-LOOKING INFORMATION

Certain information herein contains or incorporates statements that constitute forward-looking information within the meaning of applicable securities legislation, including, but not limited to, statements relating to the Trust’s objectives and

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strategies to achieve those objectives, the Trust’s beliefs, plans, estimates, projections and intentions, and similar statements concerning anticipated future events, future growth and drivers thereof, results of operations, performance, business prospects and opportunities, market conditions, acquisitions or divestitures, leasing transactions, future maintenance and development plans and costs, capital investments, financing, the availability of financing sources, income taxes, litigation and the real estate and lending industries in general, in each case, that are not historical facts; as well as statements regarding: our development, redevelopment and acquisition pipelines and our intention to further invest in best-in class income properties; the Trust's focus on impact investing, including its intention to align its investments with its impact verticals and implement its Social Procurement Strategy by 2025; the Trust's ability to achieve its impact and sustainability goals, including the Trust’s goal of achieving net zero GHG by 2035, that the Dream Lebreton project will be part of Canada’s largest residential zero-carbon project, and implementing other sustainability initiatives throughout its projects; the Trust's intention to wind-down or exit remaining non-impact investments and deploy capital into new impact investment opportunities, and increase our financial flexibility from our build-to-sell assets; our plans and proposals for current and future development projects, including projected sizes, densities, uses, costs, development milestones and their expected sustainability impact; development timelines, including commencement of construction and/or revitalization of our development projects, completion and expected timing on occupancy dates; anticipated appreciation of and returns from our developments and their effect on the Trust's overall returns, profits, future cash flows and unitholder value as milestones are achieved; our belief that our development segment will be a significant source of growth for the Trust; the expected increase in income and cash flows from the development segment over time; the Trust's expectations to make further capital investments in the range of $70 million to $80 million to development projects over the next two years; expectations for the Trust's development segment to generate returns and continued NAV[(1) ] accretion; the Trust’s expectation to transfer certain projects held for the longer term to the recurring income segment; the timing for the remaining profit distributions from the Empire Lakeshore development; the Trust's forecasted equity to invest, estimated value upon completion and development yield in respect of its development projects, as well as total residential units and hotel rooms at completion, residential GFA, total commercial and retail GLA and occupancy/stabilization dates; the Trust's expectations to use its credit facility to acquire income properties meeting its impact criteria; the Trust’s expectation to refinance its mortgages maturing in the next twelve months prior to the maturity date; the expectation that operating cash flows will improve and distributions will be further secured as a result of the Trust’s extension of the settlement of DAM’s management fee in units and amending the borrowing base on the credit facility; timing of distributions; our income and cash flow growth, and targeted pre-tax IRR[(1) ] on equity investments in residential, commercial and mixed-use development projects; our methodologies for valuing investments, including market value[(1)] adjustments; the anticipated future variability in our results of operations; the Trust's sufficiency of cash-on-hand to fund normal course debt repayments, cash requirements and ongoing distributions; the Trust’s expectation that its available liquidity will be sufficient to address any reasonably foreseeable impacts of the COVID-19 pandemic on the Trust’s cash requirements; the Trust's expectation to continue making cash distributions, and that such distributions will, in certain periods, vary from net income; anticipated growth in our recurring income segment, its effect on the Trust's operating cash flows and distributions and our expectations for such segment to ultimately comprise 70% of the portfolio; our expectations that our portfolio will be more resilient and valuable because of our impact investments; the 2,380 residential units and 169,000 sf of retail and commercial GLA (at 100%) which are expected to be completed and contribute to recurring income over the next four years; and our expectations regarding the Trust’s income tax expense/recovery, deferred tax liabilities/assets and the Trust’s ability to manage its portfolio in a tax-efficient manner. Forward-looking statements generally can be identified by words such as "objective", "may", "will", "would", "expect", "intend", "estimate", "anticipate", "believe", "should", "could", "likely", "plan", "project", "continue", “strive”, “target”, “forecast”, “outlook” or similar expressions suggesting future outcomes or events. 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 the Trust's control, which could cause actual results to differ materially from those disclosed in or implied by such forward-looking information. The assumptions, which may prove to be incorrect, include, but are not limited to, the various assumptions set forth herein as well as assumptions including but not limited to: that the general economy remains stable; the gradual recovery and growth of the general economy continues over 2022; that no unforeseen changes in the legislative and operating framework for our business will occur; that there will be no material change to environmental regulations that may adversely impact our business; that we will meet our future objectives, priorities and growth targets; that we receive the licenses, permits or approvals necessary in connection with our projects; that we will have access to adequate capital to fund our future projects, plans and any potential acquisitions; that we are able to identify high-quality investment opportunities and find suitable partners with which to enter into joint ventures or partnerships; that we do not incur any material environmental liabilities; interest rates remain stable; there will not be a material change in foreign exchange rates; that the impact of the current economic climate and global financial conditions on our operations will remain consistent with our current expectations; our expectations regarding the impact of the COVID-19 pandemic and government measures to contain it, including the impact of COVID-19 on our operations, liquidity, financial condition or results; our expectation regarding ongoing remote working arrangements; and competition for and availability of acquisitions remains consistent with the current climate.

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All the forward-looking statements contained in this MD&A are based on what we believe are reasonable assumptions; there can be no assurance that actual results will be consistent with these forward-looking statements. Factors or risks that could cause actual results to differ materially from those set forth in the forward-looking statements and information include, but are not limited to; the impact of the novel coronavirus (COVID-19 and variants thereof) pandemic on the Trust; the risk of adverse global market, economic and political conditions and health crises; risks inherent in the real estate industry; risks relating to investment in development projects; impact investing strategy risk; risks relating to geographic concentration; risks inherent in investments in real estate, mortgages and other loans and development and investment holdings; credit risk and counterparty risk; competition risks; environmental and climate change risks; risks relating to access to capital; interest rate risk; the risk of changes in governmental laws and regulations; tax risks; foreign exchange risk; acquisitions risk; and leasing risks and other risks and factors described under or referenced under "Risks and Risk Management" in this MD&A and described from time to time in the documents filed by the Trust with securities regulators.

All forward-looking information is as of February 14, 2022. Dream Impact does not undertake to update any such forwardlooking information, whether as a result of new information, future events or otherwise, except as required by applicable law. Additional information about these assumptions and risks and uncertainties is contained in our filings with securities regulators. Certain filings are also available on our website at www.dreamimpacttrust.ca.

Certain market information has been obtained from Standard & Poor's publications prepared by independent, third-party commercial firms that provide information relating to the real estate industry. Although we believe this information is reliable, the accuracy and completeness of this information is not guaranteed. We have not independently verified this information and make no representation as to its accuracy.

In addition, certain disclosures incorporated by reference into this report including, but not limited to, information regarding our development and investment holdings' development partners were obtained from publicly available information. We have not independently verified any such information.

(1) For the Trust's definition of the following specified financial measures: NAV, IRR and market value, please refer to the Specified Financial Measures and Other Disclosures section of this MD&A.

10.5 TAX INFORMATION

The Trust pays a monthly distribution to its unitholders of which only a portion is taxable. A taxable Canadian holder of the Trust units is required to include the taxable portion of the distribution in income. Any amount in excess of the after-tax net income of the Trust payable to the unitholder will generally not be included in the unitholders' income for the year. The nontaxable portion of the distribution received by a unitholder will reduce the unitholders' tax cost of their investment. On an annual basis, the unitholders will be provided with information relating to the tax treatment of the monthly distributions.

The Trust has determined that the distributions should be treated in the following manner:

	2020	2019	2018	2017	2016	2015
Non-eligible dividends	— %	— %	0.02 %	0.06 %	— %	— %
Eligible dividends	— %	— %	— %	— %	— %	28.60 %
Return of capital	100.00 %	92.83 %	95.00 %	99.94 %	100.00 %	71.40 %
Foreign non-business income	— %	7.17 %	4.98 %	— %	— %	— %

10.6 ADDITIONAL INFORMATION

Additional information relating to Dream Impact Trust, including the Trust's Annual Information Form and audited consolidated financial statements and accompanying notes, is available under the Trust's profile on SEDAR at www.sedar.com. The Trust’s units trade on the TSX under the symbol "MPCT.UN".

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